Retired Middlebury, Connecticut school teacher Bill Callahan waited 40 years for Congress to pass a bill to eliminate the reduction in Social Security benefits he receives because he also has a pension.
Now, the Social Security Administration (SSA) says Callahan and about three million other affected public sector workers will have to wait a year or more before seeing any money the Social Security Fairness Act promised to bring. The Social Security Fairness Act eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which reduce Social Security benefits for certain retirees who also receive pension income. Together, WEP and GPO affect nearly 3 million Americans including police officers, firefighters, postal workers and public school teachers.
Since the Social Security Fairness Act’s “effective date is retroactive (to January 2024), SSA must adjust people’s past benefits as well as future benefits,” the agency said. “Though SSA is helping some affected beneficiaries now, under SSA’s current budget, SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefits.”
A frustrated Callahan, 67, said “at the end of the day, it’s going to turn out to be a temporary fix for three million citizens. The Congress will devise another poorly conceived fix and another group will become the new pariah.”
How much more money monthly would affected workers receive?
The amount of additional monthly money each affected worker would receive can vary depending on factors such as the type of Social Security benefit received and the amount of the person’s pension, the SSA said.
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“Some people’s benefits will increase very little while others may be eligible for over $1,000 more each month,” it said.
Why is there a delay in paying the additional Social Security benefits?
It requires money and staff the SSA said it doesn’t have.
“SSA’s ability to implement the law in a timely manner and without negatively affecting day-to-day customer service relies on funding,” the agency said. “The Act did not provide money to implement the law…Helping people with this new and unfunded workload is made more difficult by SSA’s ongoing staffing shortages, including operating under a hiring freeze since November 2024” which is likely to continue.
SSA must recalculate past and future benefits for about three million people.
“They have created a multi-faceted problem in accounting to solve,” Callahan said. “Think about it: one year of retroactive payments, additonal two years of COLAs (cost-of-living adjustments) to calculate, spousal issues, etcetera.”
What happens now?
Nearly 3 million Americans will have to keep waiting and continue getting the same Social Security benefits as if the bill never passed.
And all Social Security beneficiaries, including the other roughly 68 million Americans unaffected by the new law, “will face delays and increased wait times as SSA prioritizes this new workload,” the agency said.
When was the Social Security Fairness Act signed into law?
Former President Joe Biden signed the Act into law on January 5 to eliminate WEP and GPO, which were established in 1983.
- The Windfall Elimination Provision (WEP) reduces Social Security for those who receive so-called “non-covered” pension income from jobs, typically public sector roles, that didn’t contribute Social Security payroll taxes. The reduction can be significant – up to half the pension amount.
- The Government Pension Offset (GPO) reduces survivor or spousal benefits if a person’s pension is non-covered. GPO affects fewer people, but it cuts the Social Security benefit by two-thirds of the pension amount. If two-thirds of your government pension is more than your Social Security benefit, your benefit could be reduced to zero.
The rules were intended to prevent Social Security from overpaying people who worked in non-covered pension jobs, policy experts said. People with earnings outside the Social Security system can look like low earners.
Since Social Security replaces a higher percentage of prior earnings for low-paid workers than for higher-paid workers, those who received healthy government salaries for decades would receive the same advantage in Social Security calculations as longtime low-income workers, proponents of the rules argued.
The bipartisan nonprofit Committee for a Responsible Federal Budget (CRFB) warned the Act would cost $196 billion over the next decade, hasten Social Security’s insolvency by about six months and increase the automatic benefit cuts when they occur.
