Millions of Public Employees to See Boosted Social Security Payments After Biden Signs Social Security Fairness Act

President Joe Biden signed the Social Security Fairness Act into law on Sunday, January 13, 2025, which will significantly increase Social Security payments for nearly 3 million current and former public employees. The new law repeals two provisions—the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO)—that reduced Social Security benefits for public sector workers who receive pensions.

The Windfall Elimination Provision (WEP) trimmed benefits for public employees who received pensions not covered by Social Security payroll taxes. The Government Pension Offset (GPO) cut Social Security spousal or widow benefits for those who also received public pensions not covered by Social Security. These provisions were intended to prevent beneficiaries from "double-dipping" into retirement benefits but were criticized for unfairly penalizing public service workers.

The repeal of these provisions means that workers who previously received reduced payments will now receive benefits in the full amount. According to the Congressional Budget Office (CBO), the repeal of the WEP would increase monthly payments to affected Social Security recipients by an average of $360 by December 2025. The repeal of the GPO would increase monthly benefits in December 2025 by an average of $700 for 380,000 recipients getting benefits based on living spouses and an average of $1,190 for 390,000 surviving spouses getting a widow or widower benefit.

These increased payments will also grow over time in line with Social Security's cost-of-living adjustments. Changes will apply to benefits from January 2024 onward, meaning some recipients will also receive back-dated payments.

The Social Security Fairness Act comes at a critical time for Social Security, as the program's trust fund is expected to be exhausted by November 2033, leading to an automatic reduction of benefits by 21%. The CBO estimated that repealing the WEP and GPO would shorten the time before the program's insolvency by roughly six months.

The increased Social Security payments for public employees could have several potential economic impacts. First, it could provide a much-needed boost to the retirement income of millions of public employees, helping them maintain their standard of living and economic security in retirement. Second, it could stimulate local economies as retirees spend their increased benefits on goods and services. Third, it could help address the looming insolvency crisis of the Social Security program by providing additional revenue to the trust fund. However, it could also put further strain on the Social Security Trust Funds and increase the federal deficit by more than $196 billion over a decade.

The Social Security Administration (SSA) will face an increased workload and the task of processing backdated payments due to the repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) under the Social Security Fairness Act. The SSA will need to allocate additional resources and potentially hire more staff to handle the increased workload. They may also need to leverage technology and automation to streamline processes and reduce the workload on human staff. The SSA may prioritize the processing of backdated payments to ensure that those who have been waiting the longest receive their benefits first. They will also need to communicate effectively with beneficiaries to ensure they are aware of the changes and understand how to verify their mailing address and direct deposit information.

In conclusion, the Social Security Fairness Act signed into law by President Biden will significantly increase Social Security payments for nearly 3 million current and former public employees. While the repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) will provide much-needed relief to public service workers, it also raises concerns about the financial sustainability of the Social Security program. The Social Security Administration will need to manage the increased workload and backdated payments effectively to ensure that beneficiaries receive their increased benefits in a timely manner.