A new report says that there will be a rise in Social Security checks that will only help one group of retired Americans in the country. At the moment, enough people in Congress have signed a bill to make it a law. This could mean that some retirees get more money from Social Security.
The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) rules would be thrown out by the Social Security Fairness Act. Some retirees may get less money each month because of these two Social Security rules, which can make their finances even worse as they get closer to retirement.
Understanding the bill that could potentially increase Social Security checks for retirees in the US
The Social Security Fairness Act is a joint bill that would help retired government workers. As of Thursday afternoon, it had 218 signatures, which is what it needs to go to a vote.
This includes firefighters, police officers, teachers, and other public workers who are often affected by the GPO and WEP. About 3 million Americans are likely to be affected by the WEP and GPO rules.
CNBC reports that Rep. Garret Graves (R-LA) said, “We took on ourselves, in a bipartisan way, something that’s definitely not fair.” It’s been going on for over 40 years. Discrimination is happening against people who work in some of the most important jobs and make important contributions to our community.
This means that some Americans may get less money from their pensions if their companies didn’t take Social Security taxes out of their pay.
It’s important to note that the fact that your pension comes from “covered” work (work for which you paid Social Security taxes) doesn’t change your payments. The AARP website says that most Americans have jobs that qualify them for Social Security payments.
Take the case of someone who worked for a “non-covered” company (one that didn’t deduct Social Security taxes) and got a salary from them. However, they also worked enough hours in “covered” jobs to be eligible for benefits.
Reps. Abigail Spanberger (Democrat, Virginia) and Graves (Republican, Louisiana) filed a discharge petition earlier this month. This will allow the lawmakers to force a vote. The GPO says that more than 745,000 Americans have had their benefits cut.
The WEP affects 2 million workers and cuts retired workers’ benefits if they worked for a company that didn’t require them to pay taxes into the program. In this group are widows and spouses who also get a salary from the GPO. The bill has more support in the House, but experts are less sure that it will pass in the Senate, where support is lower.
Further, Kevin Thompson, founder and CEO of 9i Capital Group and an expert in finance, told Newsweek that even though the proposal has enough signatures to force a vote, past attempts to pass laws have failed at this point.
Thompson also said that he doesn’t think it will pass because the Windfall Elimination Provision (WEP) was created to stop people from getting Social Security checks that were too high compared to how much they paid into the system. The goal was to make rewards and contributions more equal.
Some money problems would happen if it passed. A report from the Congressional Budget Office said that the move would cost $196 billion over ten years. Because the Social Security Administration is short on money, benefit cuts could happen as early as 2033.
That being said, this could be a big financial game changer for seniors who lose almost all of their Social Security income every month because of the GPO or WEP.
Finally, Alex Beene, a teacher of financial literacy at the University of Tennessee at Martin, thinks that giving a certain group full Social Security payments would be very helpful for them when they stop working.