Social Security Fairness Act boosts retiree benefits: What to know

SACRAMENTO, Calif. — Millions of retired Americans, including teachers, firefighters and police officers can expect to see their benefits expanded by hundreds of dollars a month.

ABC10 spoke with a financial expert about the new Social Security Fairness Act just signed into law this year and how it could help retirees make ends meet, however it might be a while before they see the money.

President Joe Biden signed the bill into law on January 5, repealing two decades-old policies.

“What happened was the Social Security Administration in the late-70s and early-80s put into place two new rules,” said Towerpoint Wealth president Joseph Eschleman.

Known as the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), the two rules reduced payments to certain retirees who receive pension income. The new law aims to correct that.

“Because of these provisions and that they passed this legislation, those individuals who had paid into Social Security are able to reap the full benefits which previously were limited — if not eliminated,” Eschleman said.

But just how many people might benefit from the change?

“I think total beneficiaries is estimated to be 3 million people nationwide should benefit from this increase. The Congressional Budget Office estimates $360 for those individuals,” Eschleman said.

The amount will vary depending on the situation. The Social Security Administration says it’s based on factors like the type of Social Security benefit received and the amount of the person’s pension. Some people’s benefits will increase very little while others may be eligible for more than $1,000 each month. It’s not just retirees who could benefit.

“Spouses now are able to receive a much higher benefit than what they were seeing previously, which is an important point,” Eschleman said.

The benefits hike under the new law would be retroactive after December 2023. Experts say it could take more than a year to adjust the benefits and pay all retroactive benefits.

“The flipside of it is the cost,” Eschleman said. “The Congressional Budget Office estimates the cost to be $195 billion over the next 10 years.”

Beneficiaries don’t need to take any action to receive the enhanced payments, other than verifying the Social Security Administration has their current mailing address and direct deposit information. The SSA says most people can do that online with their “My Social Security Account,” meaning no call or visit to the SSA office is necessary.

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