President Joe Biden signed the Social Security Fairness Act (SSFA) into law on January 5th, eliminating regulations that reduce Social Security payouts for people who also receive public pensions.
According to CNBC, the measure will increase the Social Security payments of approximately three million public sector employees who receive pension income, such as teachers, firefighters, and police officers.
If you currently qualify for Social Security benefits, you should learn more about the new changes to avoid future financial problems.
The Fairness Act will directly impact millions of Social Security beneficiaries this year
The Social Security Fairness Act completely repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), according to an email from Devin Carroll, CFP, owner and principal adviser at Carroll Advisory Group.
These regulations have historically impacted those who receive pensions from jobs for which they did not pay Social Security taxes. He also mentioned that these provisions have existed since 1983.
While the GPO reduces spousal or survivor benefits that a person would otherwise be entitled to, Carroll claims that the WEP reduces payments based on a person’s employment history.
Consider a teacher who receives a pension from their teaching job, which is exempt from Social Security taxes, but also works at another job that qualifies them for Social Security benefits.
The method used to compute Social Security benefits under WEP results in a lower benefit amount than the regular formula. The Government Pension Offset (GPO), like WEP, affects the spousal and survivor benefits that a person receiving a pension from a job not covered by Social Security receives.
Carroll clarified that the repeal will result in all benefits being determined using the same guidelines and formulas.
Previous attempts to amend these clauses were unsuccessful. This legislation completely eliminates the WEP, unlike previous bills that attempted to replace it with a different calculating technique, Carroll stated.
Furthermore, while the majority of previous proposals did not address the GPO, the Social Security Fairness Act does. Both sections are eliminated. According to the financial counselor, the modified payments will go into effect retroactively in January 2024, now that the bill has been signed into law.
He did, however, state that it is still unclear whether retroactive payments will be made in one lump sum or over time.
How do Social Security beneficiaries know if this law will affect them?
The International Association of Fire Fighters (IAFF) recommends reviewing your employment history to determine whether you worked in the public sector and/or received a pension from your public employment to determine whether the SSFA applies to you.
You can also contact the Social Security Administration to find out how these changes will affect your benefits. Additionally, the IAFF recommends contacting your financial advisor to learn more specific details about how these changes will affect your monthly benefits.
Social Security payment schedule for January 2025 was confirmed
The Social Security Administration has confirmed the full January schedule, so all beneficiaries are aware of when they will receive their benefits.
According to the confirmed payment schedule, beneficiaries of the retirement, survivor, and disability insurance (RSDI) and Supplemental Security Income (SSI) programs will receive their benefits on the following days:
- On January 8th, or the 2nd Wednesday, all RSDI recipients who were born between the 1st and the 10th will get their monthly paychecks.
- On January 15th, or the 3rd Wednesday, all RSDI recipients who were born between the 11th and the 20th will get their monthly paychecks.
- On January 22nd, or the 2nd Wednesday, all RSDI recipients who were born between the 21st and the 31st will get their monthly paychecks.
- On January 31st, beneficiaries from the SSI program will receive their February benefits in advance.
