Social Security Fairness Act Retroactive Payments and 2025 Increases Are Delayed

Over three million retirees who worked in the public sector, or are entitled to spousal or surviving spousal benefits, will see delays as the SSA manually adjusts benefits as a result of the Social Security Fairness Act.

By Donna LeValley

last updated 29 January 2025

in Features

A conceptual look at government spending.

(Image credit: Getty Images)

Retired public sector employees entitled to retroactive payments and upward adjustments to their current benefits will have to wait longer than expected to see the additional money. Former President Biden stated at the signing ceremony of the Social Security Fairness Act of 2023 that the benefits would be paid in 2025. However, the Social Security Administration (SSA) is unsure when the additional past and present benefits will be delivered. Some reports suggest that the delay could be as long as a year if not more.

The Social Security Fairness Act of 2023, also known as H.R. 82, amends Title II of the Social Security Act by repealing the Government Pension Offset (GPO), enacted in 1977, and the Windfall Elimination Provision (WEP), enacted in 1983.

The WEP reduced benefits for retired or disabled workers with fewer than 30 years of employment in which they paid into the social security system, if the workers also received non-covered pensions. A non-covered pension is a pension paid by an employer that does not withhold Social Security taxes from your salary, typically, state and local governments.

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The GPO reduced the spousal or surviving spousal benefits of people who receive pensions based on noncovered employment. The Social Security Fairness Act has repealed both reductions.

The Social Security Administration is facing a number of challenges meeting the complex task of recalculating past and present benefits for over 3 million Social Security beneficiaries. For starters, the agency has been working under a hiring freeze, with current staffing levels below fiscal 2023 levels. Additionally, no provision was made in the SSFA bill to fund its implementation.

Current staff that are already stretched thin will be working to make adjustments to both retroactive and current benefit amounts. "Processing these changes is very complex and SSA's analysis shows that much of the work must be done manually, on an individual case-by-case basis. SSA is currently processing pending or new claims involving future benefits and developing procedures and automated solutions for computing retroactive benefits" says the SSA on its dedicated Social Security Fairness Act: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) update page.

To estimate how much the back payments and 2025 increases will be, use the SSA tool that was previously available to calculate pension reductions when the Windfall Elimination Provision (WEP) was applied. A tool that used to tell you how much you would lose will now help you determine how much more you'll should receive.

Follow the instructions of the SSA's "See how your pension may affect your benefits" to see how much you will no longer lose and now stand to gain after the SSA is able to recalculate and pay the additional benefits due to retirees.

The Congressional Budget Office (CBO) estimates that eliminating the WEP would increase monthly benefits in December 2025 by $360, on average, for 2.1 million Social Security beneficiaries, or about 3 percent of all Social Security beneficiaries. The average increase is expected to reach $460 by 2033.

By eliminating the GPO, the CBO estimates monthly benefits in December 2025 will increase by an average of $700 for 380,000 spouses and by $1,190 for the 390,000 surviving spouses.

For some context, the average monthly Social Security retirement benefit for December 2024 was $1,925.66.

How the Windfall Elimination Provision reduced benefits

When the WEP was in effect, a formula was applied to a retiree's potential monthly benefit and it would reduce the benefit. The formula used by the SSA was keyed to the number of years worked at a job where you paid social security taxes on your "substantial earnings." In this case, you must have earned over a minimum amount to have had substantial earnings for a particular year. That's important because if you worked 30 or more years with substantial earnings, you were fully exempt from the WEP reduction.

Social Security benefits are calculated by applying three different percentages to a person's lifetime average indexed monthly earnings (AIME) and adding them up to obtain the worker's monthly benefit (primary insurance amount (PIA) at full retirement age (FRA). The WEP PIA replicated the regular PIA but scaled it down the first percentage from 90% to 40% in increments of five percentage points for workers with less than 30 years of paying into the SS system. As a result, workers subjected to the WEP saw substantially lower benefits than other workers.

The table below shows the percentage used to reduce the standard 90% factor depending on the number of years of substantial earnings you may have. If you have 21 to 29 years of substantial earnings, the 90% factor is reduced to between 45% and 85%. If the WEP was still in effect, the maximum reduction in 2025 would have been $613 a month. The corollary of the maximum reduction is that number should be equal to the maximum increase retirees could expect for 2025.

You can use the formula below to get a rough idea of how much you are owed for back benefits in 2024 and how much more you should be receiving in 2025. Basically, we are turning the formula on its head. What used to be a way to figure a reduction in benefits, will now give you an idea of how much more (not less) you are entitled to.

Swipe to scroll horizontally

Years of substantial earnings	Percentage
30 or more	90 %
29	85 %
28	80 %
27	75 %
26	70 %
25	65 %
24	60 %
23	55 %
22	50 %
21	45 %
20 or less	40 %

Bottom line

The Social Security Administration is doing everything it can to facilitate getting eligible public sector retirees their back benefits and increases for 2025. Retirees are encouraged to sit tight and wait for a notice regarding their expected benefits. As long as the SSA has your current address and direct deposit information, you will receive your notice and payments and no further action is necessary.

Donna joined Kiplinger as a personal finance writer in 2023. She spent more than a decade as the contributing editor of J.K.Lasser's Your Income Tax Guide and edited state specific legal treatises at ALM Media. She has shared her expertise as a guest on Bloomberg, CNN, Fox, NPR, CNBC and many other media outlets around the nation. She is a graduate of Brooklyn Law School and the University at Buffalo.