Will you be impacted by the Social Security Fairness Act?

The Social Security Fairness Act is a bill introduced with the intention of repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These are aimed at persons who have worked in the private sector, where they earned Social Security benefits, and in the public sector, where they get a pension for work with state or federal government agencies. The Social Security Fairness Act would reduce or eliminate the penalty which these workers experience when they attempt to receive both Social Security benefits and public pension payments.

What is the Windfall Elimination Provision (WEP)?

The Windfall Elimination Provision reduces Social Security benefits to individuals who worked in both Social Security-covered employment and non-Social Security-covered public sector jobs. The WEP could reduce Social Security benefits by up to $500 a month for certain workers, depending on years worked in the private sector and wages earned. The benefit was meant to prevent excessive payments to public pensioners who earn pensions under both systems, which some find to be unfair.

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What is the Government Pension Offset (GPO)?

The Government Pension Offset is a reduction that extends to individuals who become eligible for Social Security spousal or survivor benefits but receive a government pension for work they did not pay Social Security taxes on. The GPO shortens the receiving of Social Security benefits as a spouse or survivor by two-thirds of a government pension. For example, if an individual gets a government pension of $1,500 monthly, he or she may lose $1,000 of his or her spousal Social Security benefit.

What is the Social Security Fairness Act?

The Social Security Fairness Act is intended to repeal the WEP and GPO, which have been universally criticized as unfairly penalizing those who have worked in the private and public sectors. Both in the House of Representatives and the Senate, the act has been proposed as an attempt to shield those who have contributed to both public pensions and Social Security from being penalized when they retire and receive benefits.

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How Will the Social Security Fairness Act Impact You?

1. If You’re a Current Worker with a Public Pension:
   If you’re currently employed in the public sector and paid into Social Security, the Social Security Fairness Act can guarantee that you get a fairer benefit calculation at retirement. Without the WEP penalty, your Social Security will be calculated on your actual earnings and not on a suppressed formula, which means higher payments at retirement.
2. If You’re Retired or Nearing Retirement:
   If you are retired or will be retired soon and have been negatively impacted by the GPO or WEP, this law can have a significant impact on your bottom line. Without them, you would likely have higher Social Security benefits if you’re a public pension recipient. That translates to more dollars in retirement and less financial stress for the majority of retirees who have worked in the public and private sectors.
3. If You’re a Spouse or Survivor:
   For government worker spouses and survivors who are hit by the GPO, the Social Security Fairness Act is also equal to more money. Once the GPO is repealed, government employees’ spouses or survivors who work for the government will no longer see their government pension cut their benefits by two-thirds of the government pension so that they can retain more of their Social Security spouse or survivor benefit.

Why should the Social Security Fairness Act care?

This legislation is important in the sense that it responds to complaints about fairness under the Social Security system. Overwhelmingly, public employees believe they have been unfairly penalized for having worked for a government service pension not covered by Social Security. The Social Security Fairness Act presents a solution to this problem in the form of full Social Security benefits, equal to their career-long contributions to the system.

Conclusion

If passed, the Social Security Fairness Act will remove the penalties that have been suffered by those who have worked in the public and private sectors. The victims of this bill, those who are currently being penalized by the WEP and GPO, would be treated more equitably and receive higher retirement benefits from this act. If you feel that you would be impacted by the Social Security Fairness Act, it is in your best interest to keep current on the progress of the bill and how it can impact you down the line.

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