Social Security Changes for Public Service Employees

What To Know About the Social Security Fairness Act

On Sunday, January 5, President Biden signed the Social Security Fairness Act into law, marking one of the most significant changes to Social Security in decades. This legislation directly affects around three million public service employees, including teachers, firefighters, police officers, and their families. Beneficiaries will also receive retroactive payments for 2024.

This new law eliminates two longstanding provisions: the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). Here is what the changes mean and what steps you may need to take.

What Is the Windfall Elimination Provision (WEP)?

The WEP reduced Social Security benefits for individuals who worked both in the private sector (where they paid into Social Security) and in public service jobs (where they did not). Under this rule, benefits were adjusted based on the size of the individual’s public pension, often leaving retirees with lower Social Security payments than expected.

The repeal of WEP removes this reduction, allowing public service employees to receive their full Social Security benefits, regardless of their pension income.

What Is the Government Pension Offset (GPO)?

The GPO affected spousal and survivor benefits for public service employees. Traditionally, spouses could collect up to 50 percent of their partner’s Social Security benefits. But under the GPO, that amount was reduced or eliminated entirely if the spouse worked in public service and earned a pension.

With the new law, public service employees receiving a pension are eligible for full spousal or survivor benefits without reductions tied to the GPO.

Retroactive Payments for 2024

The Social Security Fairness Act is retroactive to January 2024. Beneficiaries affected by the repealed provisions will receive lump-sum payments to account for any benefits lost during 2024.

What Action Should You Take?

If you previously filed for Social Security and your benefits were reduced, you do not need to take any action beyond verifying that your contact and banking information are up to date. This may be done online via your personal “my Social Security” account at www.ssa.gov/myaccount.

If you have not filed for Social Security but are now eligible, visit www.ssa.gov to file online or schedule an appointment with the Social Security Administration to explore your options.

What This Means for Public Service Employees

The Social Security Fairness Act is a milestone in addressing the financial inequities public service employees and their families faced under the GPO and WEP. These changes ensure that individuals who dedicated their careers to public service may now access their full Social Security benefits.

How We Help Optimize Social Security Benefits

At AAF Wealth Management, we emphasize the importance of exploring all potential sources of benefits. Our team uses simulation software to analyze claiming strategies, ensuring clients make the most informed decisions about when and how to claim benefits. For many, early claiming can reduce benefits and potentially trigger earning limits or paybacks. And for same-sex couples, there’s the added complexity.

Social Security benefits should never be left unexplored. With professional advice and the right strategies, these benefits can provide a welcome boost to income—one that’s worth the effort it takes to claim.

If you have questions, please contact Andrew Hammond, CFP®, Co-Managing Partner & Wealth Advisor at 774.512.4143 or ahammond@nullaafwealth.com—or your AAF Wealth Management advisor.

AAF Wealth Management is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where AAF Wealth Management and its representatives are properly licensed or exempt from licensure. This blog is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by AAF Wealth Management unless a client service agreement is in place.