A recent legislative change could lead to an increase in Social Security benefits for some retirees with public pensions, experts say. The new law, which eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), promises to offer a modest boost in monthly Social Security checks for workers who previously faced reductions due to their pensions.
According to Richard L. Kaplan, an expert in U.S. tax policy and retirement law at the University of Illinois Urbana-Champaign, the bipartisan Social Security Fairness Act, which took effect with this change, directly addresses the long-standing issue affecting some public pensioners. The reform alters how Social Security benefits are calculated for those who did not pay into the system for the majority of their careers.
“Under the previous system, individuals who worked in the private sector, paid into Social Security for several years, and later transitioned to public sector jobs, such as teaching, saw their benefits reduced due to their pension,” Kaplan explains. “Now, these retirees will receive the full Social Security benefits based on their earnings that were subject to the Social Security payroll tax, which could result in a significant increase in their monthly payments, as well as a one-time lump-sum retroactive payment for the benefit increase, dating back to January 2024.”
The potential boost could range from a modest amount to several hundred dollars per month, depending on the individual’s work history and age, Kaplan noted. It is estimated that roughly 3% of all Social Security beneficiaries will be impacted by this change, with states like Illinois, where many local and state government employees do not participate in Social Security, likely seeing a higher percentage of affected retirees.
However, Kaplan cautions that retirees shouldn’t expect immediate results. The changes require the Social Security Administration (SSA) to undertake a significant review of beneficiary records to identify those who will be impacted, which could take time. “This is a massive undertaking for an already understaffed SSA,” Kaplan said. “It will likely take some time before the benefit increases are reflected in people’s checks.”
While the new law offers a welcomed benefit to many retirees, it is not without its broader financial implications. Kaplan indicated that the reform will likely accelerate the insolvency of the Social Security Trust Fund by an estimated six months. “It’s not a huge change, but it’s significant,” he explained. “This legislation, while popular, does bring the impending financial challenges of Social Security into sharper focus.”
The new law may provide relief for some retirees, but the road to implementation remains a complex process, one that both retirees and the Social Security Administration will need to navigate carefully in the coming months.
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