How the Social Security Fairness Act Affects Your Benefits

By Matthew Allen

Background

First of all, if you (or a spouse) have never worked in a job where you did not pay into Social Security, you can stop reading this right now because the Social Security Fairness Act would not directly impact you.

The Social Security Fairness Act gets rid of two long-standing laws: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

These laws would only have affected you if you are receiving a pension from a job where you did not pay into Social Security. This includes many teachers, police officers, firefighters, those with a foreign pension, etc.

The Windfall Elimination Provision impacted someone’s own Social Security benefits.

The Government Pension Offset was a law that impacted the ability to receive spousal, ex-spousal or survivor benefits.

The elimination of these laws is being made retroactive to January 2024 which means anyone impacted should qualify for a lump-sum of retroactive benefits.

If You’re a Single Person

It’s nearly automatic.

If you’re a single person and have never been married and the Social Security Administration has been reducing your benefits due to the WEP, you likely don’t have to do anything. The Social Security Administration should automatically recalculate your benefits back to January 2024.

They have accelerated their recalculation timeframe for these simple WEP cases and are now targeting to have these done and paid by April 2025, retroactive to January 2024.

If You’re Married, Divorced (Married More Than 10 Years) or a Survivor

You very likely need to file for new benefits and you need professional Social Security advice.

For anyone that’s not strictly a single person, you should seek professional help from a Social Security adviser. Why? Because those that are married, divorced or a survivor and have a non-covered pension (a pension from a job where they did NOT pay into Social Security), have a far more complicated situation than a single person.

In many cases, for someone that is married, divorced or a survivor, your recalculations will not be automatic and in many cases you will need to apply.

As an example, take a married couple that are both over full retirement age, and the full retirement age benefit amount of the higher-earning spouse was $3,000 while the lower-earning spouse has a pension from a job where he/she did not pay into Social Security. In this example that pension per month is $6,000. Under the old GPO rule, the Social Security Administration would not pay any spousal benefits. This is because under the GPO they would reduce any potential Social Security spousal benefits by two-thirds of the non-covered pension ($6000*.6667=$4000) and because the $4,000 reduction is higher than the maximum spousal benefit ($1,500—which is a maximum of 50% of the higher earner’s Full Retirement Age amount), they would not have received ANY spousal benefits.

The elimination of the GPO changes that and in this case, the lower-earning spouse would now be able to receive 50% of the $3,000, or $1,500, per month. However, they are likely going to need to file for it. In this type of case and basically in situations like this for spouses, ex-spouses and survivors where someone has never filed for a spousal benefit, the Social Security Administration would otherwise not likely be able to figure out that this person should have filed and therefore will not make any automatic adjustments.

Professional Help Available:

It’s going to be very easy for those that receive a pension from a job where they did not pay into Social Security and are married, divorced or a survivor to miss extra benefits available under the Social Security Fairness Act because of this. As a result, anyone that is in this position should seek professional help from a Social Security adviser.

About the author: Matthew Allen

Matthew Allen is the co-founder and CEO of Social Security Advisors, which is dedicated to maximizing social security benefits for its clients through customized Social Security strategies. Matthew has helped thousands of seniors maximize their Social Security benefits and avoid costly mistakes when filing and has been at the forefront of financial services for over two decades. He is frequently quoted for his expertise in Social Security planning by leading financial publications such as Forbes, Time Magazine, The Wall Street Journal, InvestmentNews, USA Today, and others.

Free Initial Consultations are available at http://socialsecurityadvisors.com/appointment for those that are in this situation. A professional Social Security adviser can speak with you about your specific scenario and help you evaluate what needs to be done to maximize your Social Security under the Social Security Fairness Act and can even handle your new Social Security filing for you.