Social Security Fairness Act Adds an Average $360 Benefit for Some: Will You Be Getting a Bigger Social Security Check?

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If you are a current or former public sector employee or a survivor, spouse or ex-spouse of someone like that, you may receive more from Social Security as a result of new federal legislation. The Social Security Fairness Act repeals two federal laws that for decades have reduced or eliminated Social Security benefits for some people who had pensions and worked in jobs that didn’t pay into Social Security at some point in their careers. As a result, millions of recipients could get an average of $360 more per month for life.

A financial advisor can help you project your Social Security benefits and plan claiming strategies.

On January 5, 2025, President Joe Biden signed the Social Security Fairness Act into law. The act increases the ability of millions of retirees to claim government retirement benefits. It does this by turning back the clock, repealing two laws enacted more than 40 years ago that limited benefits available to people who were covered by pensions and had at some point worked in jobs that don’t pay Social Security taxes.

The two repealed laws are the Windfall Elimination Provision (WEP), enacted in 1984, and the Government Pension Offset (GPO), which became law in 1977. The original laws were passed at a time when Social Security funding was being strengthened. They pursued this goal by reducing the benefits paid to people who worked part of their careers in government, religious and non-profit sector jobs that had pensions but didn’t withhold Social Security taxes.

With the new law, millions of people now become eligible for benefits or for increases to their existing benefits. The average benefit increase will be $360, according to a statement from Biden. And the law makes increases retroactive to 2024, so eligible retirees may receive a lump sum payment for benefits they would have gotten for that year under the new law.

The Social Security Fairness Act will likely affect some retirees’ claiming strategies. One of the biggest impacts is more filings for benefits by people whose monthly payments would have been reduced to zero by the GPO. With no financial advantage to filing, some of these people didn’t file to receive Social Security. Now that they can expect a payment, many probably will submit the paperwork.

WEP reduced but did not eliminate benefits for affected retirees. As a result, Social Security-eligible retirees impacted by WEP typically have already filed for their benefits. These retirees don’t have to do anything but wait in order to get the larger benefit afforded by the Social Security Fairness Act. As Social Security processes the changes, these retirees will receive the new, larger checks.

WEP-affected retirees who have not filed may immediately receive the higher payment when they submit their initial Social Security benefit claims. However, some who were about to file may decide to delay their claims because waiting results in higher benefit amounts.

A financial advisor can help you navigate changing Social Security rules and build a plan to maximize your retirement income. Get matched with an advisor today.

As an example of how the new law could work, consider a married couple with one spouse who receives $4,000 each month from a pension provided by a public-sector job that did not pay into Social Security. The other spouse worked in the private sector, paying into Social Security enough to be eligible for a $2,000 monthly government retirement benefit.

Under now-repealed GPO rules, spousal benefits were only paid if half the benefit amount exceeded two-thirds of the pension amount. Half the $2,000 benefit amount, or $1,000, is less than two-thirds of the $4,000 pension, or $1,333. So, this spouse has until now gotten nothing from Social Security. With the new act, this couple can now potentially receive another $2,000 per month, a sizable boost to their retirement budget.

In a typical year, about 6% of workers don’t earn credits that would entitle them to Social Security, according to a Congressional Research Report that looked at 2021. Some of these workers are eligible for pensions, making them directly impacted by the new Fairness Act.

However, the law may affect a much bigger population consisting of everyone who pays Social Security taxes and can expect to receive these benefits in retirement. According to Social Security, that’s a large group, with nearly nine of 10 people age 65 and older receiving Social Security benefits in June 2024.

The Fairness Act will impact all recipients by adding to the costs of Social Security and, therefore, potentially moving forward the date at which the financially stressed government retirement program is unable to pay benefits at the current rate. That point has been forecast to arrive in 2033, but the new law likely moves the date forward about six months.

To avoid having to reduce benefits, possible fixes include increasing the age, currently 67, when recipients are eligible for full retirement benefits or increasing the amount of Social Security taxes withheld from workers’ paychecks. Another option is to tax wages of higher earners.

You can use this free tool to match with a financial advisor if you have questions about your Social Security benefits, taxes and other retirement elements.

The Social Security Fairness Act makes it possible for millions of workers to receive more retirement income. It does this by repealing two laws that limited Social Security benefits to people who worked for a time in jobs that had pensions and did not pay into Social Security. The average affected retiree will get $360 each month as a result of the change. Because the boost is retroactive, retirees can expect lump sum payments for increased amounts that would have been paid in 2024. The change will also influence filing strategies for affected workers, spouses and survivors.

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