If you or your spouse retired from a government job — such as a teacher, police officer, firefighter, or postal worker — your Social Security benefits may change in 2025. The Social Security Fairness Act (SSFA) could increase your Social Security retirement payments administered after December 2023, making the changes retroactive to January 2024.
The SSFA became law Jan. 5, 2025, and is expected to benefit more than 2.5 million U.S. public workers.1 The Act eliminates a two decades-old provision that reduced or eliminated Social Security benefits for many individuals receiving government pensions or disability benefits, as well as for spouses or widow(er)s receiving government pension benefits.
Impacts of the law
The Windfall Elimination Provision (WEP), established in 1983, impacted individuals who have worked in both Social Security-covered jobs and non-covered jobs, and who also receive pensions. This provision adjusted their Social Security benefits to account for the mixed earnings history, creating a reduction of up to $613 per month in 2025. Similarly, the Government Pension Offset (GPO), enacted in 1977, affected qualifying spouses and survivors of employees in jobs —primarily government — that did not pay Social Security taxes but received pensions. The provision aimed to reduce their Social Security benefits to align them with those who contributed to the system.
For example, if you are receiving a pension for a 20-year government job that did not take taxes out of your paycheck for Social Security, and you worked 10 years for a private sector job that withdrew Social Security taxes from your pay, WEP reduced your Social Security payments, and you could see a boost in them due to the Act. If you’re a surviving spouse of an individual who received a government pension prior to death and you’re receiving Social Security survivor benefits, you were impacted by GPO and could see an increase in Social Security payments.
The retroactive changes as of January 2024 will result in a lump sum paid to eligible Social Security recipients. Average monthly payments for those affected by the WEP could increase by $360, according to the Congressional Budget Office.2 Those impacted by the GPO could see an average monthly increase of $700 if benefits are based on living spouses, or an average increase of $1,190 if based on being a surviving spouse. The payment increase amount will likely depend on the reduced Social Security benefits based on WEP or GPO calculations.
The following chart indicates where approximately 2 million Americans are impacted by the WEP, and 800,000 retirees are impacted by the GPO. Both provisions generally reduced Social Security benefits for public workers.3
*Only some school districts affected
Note: Data as of February 2024
Chart: Taylor Johnston / CBS News • Source: Congressional Research Service
What’s next
If you already filed for Social Security and your payments were affected by WEP or GPO, the Social Security Administration (SSA) has stated that you don’t need to take action and it will provide ongoing updates regarding implementation on their website.3
As with any change in your financial life, we recommend connecting with your wealth advisor to help determine how much the Act might affect you and whether your financial plan needs adjusting. The potential additional income could have an impact on your taxes, retirement account distributions, and more.
If you’re not a Mercer Advisors client and want help with understanding laws like the Social Security Fairness Act and what it means for your situation, or are interested in having the support of a team that can help amplify and simplify your financial life, let’s talk.
1 “Who gets increased Social Security benefits? What to know after President Biden signs bill.” USA Today, 6 Jan. 2025.
2 “Congress passed the Social Security Fairness Act. Millions of people could see more in benefits as a result.” MSN, 22 December 2024.
3 “Senate approves bill to expand Social Security to millions of Americans.” CBS News, 23 December 2024.
4“Social Security Fairness Act: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) Update.” Social Security Administration, 6 January 2025.
