On January 5th of this year, with bipartisan congressional support, President Biden signed into law the Social Security Fairness Act. Some workers (including certain state or local government employees, and teachers) are now entitled to higher Social Security payments. This means a retired Missouri public school teacher who never paid into Social Security may now see a boost.

Additionally, the cost of the additional benefits is expected to be $195 million over the next 10 years putting further stress on the Social Security system.

The Social Security Fairness Act eliminates two provisions which previously reduced or eliminated social security benefits for some workers and their survivors.  The WEP, or Windfall Elimination Provision was enacted in 1984 and was designed to prevent workers from receiving social security benefits if they received a pension from a job that did not pay into social security.  The GPO, or Government Pension Offset, enacted in 1977, reduced benefits for these same workers spouses and survivors.

The Social Security Fairness Act eliminated these two provisions as they relate to Social Security, meaning some people may be entitled to higher benefits including retroactive pay back to January of 2024.  It is estimated that 2.5 million people are impacted.

How do I know if I am impacted?  Non-covered employees who did not participate in social security may include some federal workers, state and local government employees, railroad workers, and some teachers.  These workers, and their spouses or beneficiaries, may be eligible for payments or higher payments based on the new law.

The Social Security Administration has already started paying out some of these benefits.  If you think you may be eligible for a higher payment, and have not been contacted, you can find your local Social Security office by visiting https://www.ssa.gov/ and schedule an appointment to review your personal circumstances.

Another issue for consideration, how will the Social Security system pay for these additional benefits?  That in unclear at this point but Congress and the SSA will need to address how to cover these additional costs—options could include modest tax adjustments, further means testing, or other reforms

(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)