If you receive Social Security benefits and have been affected by the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO), you may soon see an increase in your payments. The bipartisan Social Security Fairness Act, signed into law by former President Joe Biden in January of 2025, rescinds these provisions, impacting more than 3.2 million retirees who previously received reduced benefits due to their work in public service roles such as teaching, firefighting, law enforcement, railroad workers, and some federal employees.1
Federal employees impacted by the WEP were covered under the old pension plan called the Civil Service Retirement System (CSRS). That plan was later replaced by the Federal Employee Retirement System (FERS) in 1987. The recipients of FERS are not impacted by the new act. However, there are still many retired federal employees who are under CSRS and will be positively impacted by the Social Security Fairness Act.2
What are WEP and GPO?
The WEP, enacted in 1983, impacted people who received noncovered pensions (i.e. Social Security taxes were not withheld from their paycheck). The GPO was enacted in 1977 and reduced the social security benefits of spouses and widows who already had a pension of their own.3 The WEP and GPO provisions were designed to adjust Social Security benefits for retirees who receive pensions from jobs that did not withhold Social Security taxes. The WEP affects individuals collecting benefits based on their own work history, while the GPO applies to spousal or survivor benefits. These provisions were originally introduced to prevent individuals with earnings from non-covered employment from receiving disproportionately high Social Security benefits. However, both policies have faced criticism for being complex and unfairly reducing benefits for many public sector employees.4
Who might be impacted?
The Social Security Fairness Act primarily benefits:
- Retirees who worked in both government and private-sector jobs.
- Public sector employees who receive a government pension.
- Surviving spouses affected by GPO reductions.
- Anyone whose Social Security benefits were previously reduced due to WEP or GPO.
If your benefits were previously reduced due to these provisions, you may now be eligible for:
- A higher monthly Social Security benefit moving forward.
- Retroactive payments to compensate for past reductions.
When will you see the changes?
The Social Security Administration has begun processing these adjustments, but due to the complexity of the changes, updates will be implemented in multiple phases:
- Retroactive payments: Most recipients will receive their one-time retroactive payment deposited into the bank account on file with Social Security by the end of March 2025.4
- Increased monthly benefits: Adjusted payments will begin in April 2025.4
- Ongoing processing: While the Social Security Administration uses automation to implement many changes, some cases require manual adjustments, which may take longer to resolve.4
What about Social Security’s future?
While the repeal of WEP and GPO is a victory for those affected, it also has broader implications. According to the 2024 Social Security and Medicare Trustees Report, Social Security’s trust fund was projected to be unable to pay full benefits beginning in 2035. The new law is expected to accelerate the program’s insolvency by about six months.5
Additionally, as of December 2023, the Congressional Research Service estimated that:
- About 745,679 beneficiaries (approximately 1% of all Social Security recipients) had their benefits reduced by the GPO.5
- About 2.1 million people (around 3% of all beneficiaries) were affected by the WEP.5
Will there be an impact on taxes?
If you are receiving additional benefits under the new act, you may need to adjust your tax withholdings. According to the Social Security website, Social Security Fairness Act adjustments can vary greatly due to your personal circumstances and some people may receive very little while others may be eligible for over $1,000 a month.1 As a reminder, the amount of your Social Security benefit that is taxed depends on your income:
- If your income is less than $25,000 (filing single) or $32,000 (married filing jointly), 0% of your Social Security benefits are taxed.6
- If your income is $25,000 to $34,000 (filing single) or $32,000 to $44,000 (married filing jointly), 50% of your Social Security benefits are taxed.6
- If your income is $34,000 or more (filing single) or $44,000 or more (married filing jointly), 85% of your Social Security benefits are taxed.6
What should you do?
If you believe you or a relative are affected by the Social Security Fairness Act, you do not need to take any immediate action. The Social Security Administration is reviewing claims and making adjustments. However, to stay informed, consider checking your Social Security account online.
Changes to Social Security benefits can be complex, but understanding your rights and potential payment adjustments is essential. For more information, visit the Social Security Administration website and read our library of Social Security articles. If you’re not a client and would like to speak with a wealth advisor, let’s talk.
1 “Social Security Fairness Act: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) Update.” Social Security Administration, Feb. 25, 2025.
2 “Q&A: The Social Security Fairness Act and Its Impact on Railroad Retirement Annuities.” RRB.Gov, U.S. Railroad Retirement Board, March 2025.
3 Stimac, Black. “Social Security Fairness Act: Over $7.5B in Retroactive Payments Sent So Far.” CNET, March 5, 2025.
4 Henry-Moreland, Ben. “Social Security Fairness Act: Planning Considerations For The Repeal Of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).” Kitces, Jan. 15, 2025.
5 Hussein, Fatima. “Social Security Says Higher Payments Are on the Way for Millions of Former Public Workers.” AP News, Feb. 25, 2025.
6 “IRS Reminds Taxpayers Their Social Security Benefits May Be Taxable.” Social Security Administration, Nov. 7, 2024.
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