The Social Security Fairness Act is moving through the Senate and might be passed by the end of the year, allowing millions of Americans to enhance their pensions.
The House of Representatives passed a bipartisan vote to abolish two laws that unfairly cut Social Security payouts for persons receiving both private and public pensions. The provisions include the Windfall Elimination Provision (WEP) and the Government Pension Offset.
How do the WEP and the GPO affect Social Security beneficiaries
The “WEP” method adjusts Social Security worker payments for those with “non-covered pensions” based on their other Social Security-covered incomes.
Non-covered pensions are paid by employers who do not deduct Social Security taxes from salaries, such as state and municipal governments or non-U.S. companies.”The GPO adjusts Social Security spousal or widow(er) benefits for those receiving non-covered pensions.”
In 2022, the WEP affected 3.1% of all beneficiaries (2.01 million out of 65.99 million total beneficiaries). In 2022, the GPO affected around 12.6 percent of the 5.84 million spousal or widow(er) beneficiaries (734,601).
Beneficiaries affected by the GPO received an average monthly non-covered pension of $2,690, about $865 higher than the average Social Security retired worker payment of $1,825 in 2022.
Approximately 70% of recipients affected by the GPO had their entire spousal or widow(er) benefit offset, with an average monthly non-covered pension of $3,502. Individuals with partially offset benefits reported an average non-covered pension of $999.
Why is the repeal of the provisions such good news
This is wonderful news for many people, especially considering that surveys have indicated that 53% of workers seek to depend on Social Security to meet their bills when they retire, and a further 73% are anxious that the payments will no longer be available.
Eliminating these provisions will allow persons who worked and contributed to get the full extent of the benefits they are entitled to, rather than a reduced amount because they are receiving two separate types of payment.
Senators Sherrod Brown and Susan Collins, along with Representatives Abigail Spanberger and Garret Graves, addressed an open letter to the Senate, highlighting the significance of the law and its impact on average Americans.
“For the first time in history, you have the opportunity to see this bill passed. We encourage you to bring the Social Security Fairness Act (H.R.82) to the U.S. Senate for a vote on behalf of approximately 2.5 million pensioners affected by WEP and GPO in every state across the nation.
The deletion of these safeguards would have a significant influence on the lives of many retirees, the majority of whom are blue collar workers such as firefighters and teachers, whose benefits will be cut if they get a pension from jobs not covered by the retirement program.
The bill must be passed before December 31st, when the second session of Congress concludes. If the bill does not receive a vote or is not passed, it must be redrafted, submitted by someone else, and sent to the House of Representatives when it reconvenes in the new year.
If passed, the cost of additional and higher benefits is anticipated to be roughly $190 billion over a decade. Given the shortfall in Social Security, this would threaten the program and require Congress to act sooner.
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