John E. Chapman
Chief Executive Officer
On January 5th, 2025, President Joe Biden signed the Social Security Fairness Act into law. This law repeals two provisions – the Windfall Elimination Provision (1983) and the Government Pension Offset (1977), commonly referred to as the WEP and GPO respectively.
The WEP reduced Social Security benefits for individuals who receive a pension benefit from employment where Social Security taxes were not withheld. The GPO reduced spousal (or surviving spousal) benefits for individuals otherwise eligible to receive them.
Who is Affected?
Any recipient of a public pension could see an increase in Social Security benefits. Teachers, firefighters, police officers, and other public sector workers are those most likely to see a change. Those married to private sector employees with large Social Security benefits may see the largest increases.
When Will the Changes Be Implemented?
The Social Security Fairness Act is effective as of January 2024, so anyone impacted by the offsets in 2024 should see a lump sum payment at some point in the future, as well as experience the increased benefit moving forward. President Biden stated that there are about 2.5 million individuals who will receive a lump sum payment. When pensioners can expect to receive their increased Social Security benefits is still uncertain. This is the largest administrative change to the Social Security system and may be mechanically difficult to execute.
For more information regarding the Social Security Fairness Act, visit SSA.gov.
Contact your Clearwater Capital Partners Advisor or the Planning Department if you would like to discuss how this change may impact your personal plan.
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