The United States Congress is focused on Social Security, and for good reason. During the final days of the current legislative session, the Senate will vote on a bill that has the potential to significantly impact the lives of thousands of Americans.
The Social Security Fairness Act seeks to eliminate some provisions that reduce Social Security benefits for certain professions that receive public pensions. This legislation was already passed by the House of Representatives on November 12 with bipartisan support.
However, the Senate, which has a busy schedule that includes a hot topic like avoiding a federal government shutdown, now makes the final call.
What’s happening with this Social Security law?
Essentially, the Social Security Fairness Act proposes eliminating two rules that have affected some public pensioners for many years: the Windfall Elimination Provision (WEP) and the Government Pension Offset.
What are the WEP and the GPO?
WEP (Windfall Elimination Provision): reduces Social Security payments for people who also receive pensions from jobs where no Social Security taxes were deducted.
It was enacted in 1983 to prevent those with uncovered pensions from receiving benefits as low-income workers.
GPO (Government Pension Offset): This affects spousal and survivor benefits. It reduces payments for people receiving a pension from a government job that is not subject to Social Security taxes. It began in 1977 with the goal of better aligning benefits and contributions.
Both rules have been in place for decades and have been heavily criticized for being unfair to certain pensioners, particularly those in the public sector.
Who is affected by these rules?
In 2022, the WEP affected 2.01 million people, or 3.1% of all Social Security beneficiaries. Meanwhile, the GPO affected nearly 735,000 beneficiaries, or about 1% of the total.
However, not everyone is subject to these regulations. For example, individuals with 30 or more years of substantial Social Security earnings are not affected by the WEP. It also excludes certain groups, such as railroad workers, nonprofit employees, and those who only worked in non-covered jobs prior to 1957.
The GPO, on the other hand, does not apply to spouses or widows receiving government pensions based on the work of others, nor to those who worked in jobs that required them to pay Social Security taxes. If you have any questions about how these rules may affect you, the Social Security website provides a tool for estimating the impact of your pension on your benefits.
Does this law have a chance of passing?
This is where things become interesting. Last week, Senate Majority Leader Chuck Schumer announced that he would put the bill to vote. The process could move quickly if it receives the 60 votes required in the first critical vote, known as “cloture.”
This law has received bipartisan support from the start. Representatives Abigail Spanberger (D-Va.) and Garret Graves (R-La.) introduced the bill in the House, and Senators Sherrod Brown (D-Ohio) and Susan Collins (R-Maine) support it.
Although the path appears promising, nothing is guaranteed in politics. Everything will depend on how the Senate’s priorities align in the final days of the session.
What does this mean for you?
If you are a public sector pensioner or know someone who may be impacted by the WEP or GPO, this could be a watershed moment. Passing this legislation could result in a significant increase in monthly Social Security benefits for thousands of people.
For the time being, the best thing you can do is stay informed and ensure that you understand how these rules may affect you. Naturally, it is critical to monitor the news, as such decisions can change dramatically in a matter of days.
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