Social Security Fairness Act of 2023 Heads to the President for Signature

The Social Security Fairness Bill (H.R. 82), introduced in January of 2023, has passed the Senate and House and is on the desk of President Biden awaiting his signature by year-end. While supporters and critics of the bill still have concerns as to how it would be funded over the long-term, it appears poised to be signed by the President having received largely bipartisan support in Congress.

This legislation is designed to eliminate the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These two provisions currently reduce Social Security benefits for people with retirement from non-covered employers such as public-school educators, state university employees, police officers, firefighters, and many other local, state, and federal employees. If signed into law, this repeal will be effective as of December 2023. 

History of WEP and GPO 

In 1977 and 1983, Congress established the Government Pension Offset (GPO) and the Windfall Elimination Provisions (WEP) respectively to reduce Social Security benefits for individuals receiving retirement benefits from employers who were not required to withhold for Social Security taxes.  

The WEP provision applies to individuals with non-covered pensions who were employed for fewer than 30 years by a Social Security-covered job. The GPO provision reduces the benefits that would be received by spouses and widow(er)s of covered workers. Currently, the WEP reduces the Social Security benefits of 1.7 Million Americans and the GPO affects 420,000. Those who are critical of these policies state that the WEP and GPO over-correct the unintended windfall and disproportionately affect lower and more moderate-income retirees. Two-thirds of retirees affected by these two provisions were formerly employed by state or local government employees.

How Could This Bill Affect You?

Windfall Elimination Provision – If you are eligible to receive retirement benefits from a ‘non-covered’ employer and have at least 40 quarters of Social Security earnings history, your Social Security benefits may no longer be reduced.

Government Pension Offset – Married, Divorced (with a marriage of at least 10 years), and widow(er) individuals who are eligible to receive retirement benefits from a non-covered employer may be entitled to Social Security Spousal or Survivor Benefits.

What Should You Do If You Believe These Changes May Affect You?

Gather your information.

• Start by creating your login with Social Security and downloading your most recent benefit estimate statement or your Social Security retirement statement at SSA.GOV.
• Obtain information about your non-covered retirement benefits. If you are receiving benefits, what is the gross amount? If you are not yet receiving benefits, obtain a copy of a benefits estimate.
• Contact the team at Sterling to discuss your unique situation and provide us with this updated information.

We will continue to keep you informed as information becomes available. Have a wonderful holiday season and a very happy new year!

Sources

2019, Springstead, Glenn R., The Social Security Windfall Elimination Provision: Issues and Replacement Alternatives, Social Security Bulletin, Vol. 79 No. 3, (https://www.ssa.gov/policy/docs/ssb/v79n3/v79n3p1.html#:~:text=Congress%20established%20the%20Windfall%20Elimination,pension%20income%20from%20noncovered%20employment).

2024 May, Social Security Program Explainers. Government Pension Offset & Windfall Elimination Provision, (https://www.ssa.gov/policy/docs/program-explainers/government-pension-offset.html#:~:text=Congress%20created%20the%20GPO%20in,earnings%20would%20be%20roughly%20equal).

2024 December, US Congressman Garret Graves Press Release, U.S. Senate Passes Graves-Spanberger Social Security Fairness Act to Eliminate the WEP & GPO, Sends Bill to President’s Desk to Provide Long Overdue Fairness to Police Officers, Firefighters, Educators, & Local & Governmental Employees, (https://garretgraves.house.gov/news/documentsingle.aspx?DocumentID=4136#:~:text=According%20to%20a%20nonpartisan%202024,the%20WEP%20and%20the%20GPO).

2024 December, H.R.82 – Social Security Fairness Act of 2023, https://www.congress.gov/bill/118th-congress/house-bill/82