Over 3 Million Social Security Fairness Act Beneficiaries May Wait Over a Year for Higher Payments

The Social Security Fairness Act, signed into law in December 2023, aims to expand benefits for millions of Americans by eliminating two federal policies that previously reduced Social Security benefits for certain workers with public pensions. However, the Social Security Administration (SSA) has warned that over 3 million beneficiaries may have to wait more than a year to receive their increased benefits and retroactive payments due to the agency's current budget and staffing shortages.



The Social Security Fairness Act eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which reduced Social Security benefits for certain workers who also had pension income from employment where they did not contribute Social Security payroll taxes. The law affects benefits paid after December 2023, and consequently, affected beneficiaries will receive increases to their monthly benefit checks, as well as retroactive lump sum payments for benefits payable from January 2024 and after.

The SSA has stated that the benefit increases may vary greatly depending on an individual's type of Social Security benefits and the amount of pension income they receive. Some people's benefits may increase very little, while others may be eligible for over $1,000 more each month. However, the agency cannot yet provide an estimated timeline for when the benefit adjustments will happen, and beneficiaries may have to wait up to a year or longer to reap the benefits of the newly enacted law.

The SSA's ability to implement the law in a timely manner relies on funding, and the agency is advising beneficiaries to update their mailing address and bank direct deposit information, if necessary. Non-covered pension recipients may now want to apply for benefits if they are newly eligible following the enacted changes. The SSA is also reminding beneficiaries that they do not need to reapply for Social Security benefits, as the agency will reach out if necessary.

The delayed implementation of the Social Security Fairness Act will have a significant impact on the financial planning and retirement strategies of affected beneficiaries. The delay in receiving increased benefits and retroactive payments may force them to adjust their expectations, reconsider their retirement timelines, and adapt their financial plans accordingly. The SSA's ongoing staffing shortages and hiring freeze since November 2024 will make the task of servicing people more difficult, leading to longer wait times for all Social Security recipients.

In conclusion, the Social Security Fairness Act aims to expand benefits for millions of Americans, but the delayed implementation may have a significant impact on the financial planning and retirement strategies of affected beneficiaries. The SSA is advising beneficiaries to update their information and remain patient as the agency works to adjust benefits and pay retroactive payments. The broader economy may also feel the effects of the increased workload on the SSA, as beneficiaries may reduce their spending while waiting for their increased benefits, potentially slowing down economic growth.