Signed into law on January 5, 2025, the Social Security Fairness Act (SSFA) (HR 82) repeals two provisions that reduce Social Security benefits for some individuals who receive other benefits, such as certain state or local government pension benefits. The Social Security Administration (SSA) is evaluating how to implement the law and will post updates on a dedicated page.

Why it matters: Affected people receiving reduced Social Security benefits because of their own pension will see an increase in their Social Security payment amount. Three million Social Security recipients are expected to see an average increase of $360 per month in Social Security payments. Spouses and survivors who receive their own public sector pensions may be newly eligible for Social Security benefits under the law and can file for Social Security now.  

SSFA Centered on Non–Social Security–Covered Work

SSFA repeals two Social Security provisions called the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) that are centered on noncovered workers or noncovered employment, meaning the workers do not pay Social Security payroll taxes based on those earnings (nor do their employers) because they weren’t required to, and they do not receive Social Security benefits based on those earnings.

Social Security Coverage of State and Local Government Workers

Unlike employees in the private sector, state and local government employees are not universally covered by Social Security. Government employers may opt out of Social Security coverage for their employees if they are already covered by an “alternative” state or local retirement system. However, most state and local government employees do participate in Social Security. SSA estimates that 27% of state and local government employees did not have Social Security coverage through their employment. The largest group of noncovered workers is a segment who work at the local government level, and of those, most are police officers, firefighters, and teachers, according to the Congressional Research Service’s report, “Social Security Coverage of State and Local Government Employees.” SSA FAQs emphasize that not every police officer, firefighter or teacher will receive a benefit increase.

Social Security History

Social Security is nearly a 100-year-old system. The nature of work and households have changed in two major ways relevant to the SSFA.

1. First, take the metaphor of the three-legged stool that makes up retirement income. The “legs” are pension or other employer contributions, personal savings and Social Security as a safety net. Generally, employees without Social Security coverage receive higher benefit formulas in their state or local pension plan to make up for the lack of Social Security benefits. In other words, the state or local retirement system covers two of the three legs: the employer pension portion and the safety net portion, with the caveat that an individual has the same position for an entire career. However, that’s not how careers have played out. People change jobs or work second jobs or seasonal jobs that are covered by Social Security. In this career situation, the safety net leg is affected by WEP (enacted in 1983).
2. Second, Social Security spousal benefits were designed as a safety net for spouses who didn’t work. The spousal benefit can be as much as half of the worker’s own benefit amount. When two-income households became the norm and each person had a record of earnings that generated a Social Security payment, the provision for spousal benefits changed by adding GPO in 1977. If a spouse is eligible for a retirement benefit based on their own earnings, and if that benefit is higher than the spousal benefit, Social Security pays the higher amount.

GPO and WEP Basics

GPO affects people who have worked in noncovered government employment and also qualify for Social Security benefits as the spouse or surviving spouse of a Social Security–covered worker. SSFA repeals the GPO, which in various instances reduces Social Security benefits for certain spouses, widows and widowers who also receive government pensions of their own. The impact of the GPO was that a benefit could be eliminated entirely. Affected spouses and survivors may be eligible for a benefit under SSFA and can now file for Social Security benefits. Learn more: SSA Explainer on GPO

WEP affects people who have worked in both covered and noncovered employment. SSFA repeals the WEP, which in some instances reduces Social Security benefits for individuals who also receive a pension or disability benefit from an employer that did not withhold Social Security taxes. The impact of the WEP was that a benefit could be reduced. Learn more: SSA Explainer on WEP

Effective Date

SSFA changes are effective for benefits payable after December 2023. Back payments covering 2024 are expected as a lump sum because of the retroactive effective date. Going forward, Social Security payments will not be impacted by WEP or GPO.

Public Pension Plan Communications

Many state and local retirement systems that have a noncovered workforce have posted notices on their websites to inform their retirees and participants about the new law. The main message to communicate is that SSA is evaluating how to implement the new law and will provide more information as soon as possible. SSA will provide ongoing updates regarding implementation on this page. As of January 24, 2025, SSA guidance highlights are as follows.

• If you are a retiree who previously filed for Social Security benefits and they are partially or completely offset (i.e., If you are entitled to spouses’ or surviving spouses’ benefits, and your benefits are currently being reduced or eliminated by GPO; OR if you are entitled to retired or disabled workers’ benefits, and your benefits are currently being reduced by WEP)
  • At this time, you do not need to take any action except to verify that SSA has your current mailing address and direct deposit information if it has recently changed. Most people can do this online with their personal my Social Security account without calling or visiting Social Security. Visit www.ssa.gov/myaccount to sign in or create your account.
• If you are a retiree who has not previously filed for Social Security benefits and you are receiving state or local pension benefits; OR if you are not sure whether you ever applied for spouses’ or survivor benefits
  • You may need to file an application. The date of your application might affect when your benefits begin. Filing sooner might help you get a higher benefit amount.
  • The spousal benefit application may be filed online at ssa.gov/apply. 
  • The survivor benefit application is not available online. People who cannot apply online for benefits should call 1-800-772-1213 Monday through Friday from 8:00 a.m. to 7:00 p.m. to learn other ways to apply.
• The SSA webpage provides guidance for people who pay their Medicare premium directly to the Centers for Medicare & Medicaid Services due to the WEP or GPO reduction.

Plans with noncovered workforce could communicate that retirees who were hired in or after 2004 might have a record of signing a statement that says this: “Your earnings from this job are not covered under Social Security. When you retire, or if you become disabled, you may receive a pension based on earnings from this job. If you do, and you are also entitled to a benefit from Social Security based on either your own work or the work of your husband or wife, or former husband or wife, your pension may affect the amount of the Social Security benefit you receive.”

In addition, plans could communicate whether they have provided other documentation in the past to retirees about Social Security coverage or noncoverage under the plan.

All public plans could consider that their pensioners may not know whether they were covered or noncovered for Social Security purposes. Retirees who worked their whole career in covered employment could mistakenly believe they will receive increases or back payments. Plans with such retirees could communicate to their pensioners that SSFA wouldn’t apply to them.

Unanswered Questions That SSA Guidance Could Answer

Here are four areas to watch for further guidance.

1. State and local government employers have Social Security coverage notice requirements. The Social Security Protection Act of 2004 requires newly hired public employees to sign a statement that they are aware the job is not covered by Social Security and a possible reduction in their future Social Security benefit entitlement. Presumably, this notification requirement would end for newly hired workers after SSFA was enacted; hopefully, guidance will address the applicable date.
2. Some people affected by SSFA are already receiving Social Security payments and are in the SSA system. It’s possible that SSA would contact those individuals directly and perhaps could automatically increase payments. SSA said these people do not need to take any action now.
3. SSFA has a provision to pay some recipients retroactively for 2024. Key questions that remain unanswered about the back payments include who, when, how and what amount. SSA cannot yet provide an estimated timeframe for when the agency will adjust a person’s past or future benefits (as of January 24, 2025).
4. By how much future benefit payments would increase depends on employment and earnings history is also unknown. “The amount monthly benefits may change can vary greatly. Depending on factors such as 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 over $1,000 more each month,” according to SSA FAQs.

Implementation challenges

SSA is finalizing its plan to implement the law while limiting negative effects on our regular workloads and services to the public. There are several implementation challenges both within the SSA and among public pension retirees.

1. Government transition: Implementation began while the presidential administration and executive branch were in transition. An acting commissioner was named in January 2025 to oversee operations until the commissioner nominee is confirmed by the Senate.
2. Funding: SSA FAQs state that its ability to implement SSFA in a timely manner and without negatively affecting day-to-day customer service relies on funding, but SSFA did not provide money to implement the law. It’s unclear whether Congress would consider increasing SSA’s budget.
3. Prioritization: The law requires SSA to adjust benefits (past and future) for over three million people. Processing these changes is very complex and much of the work must be done manually, on an individual case-by-case basis. SSA is currently processing pending or new claims involving future benefits and developing procedures and automated solutions for computing retroactive benefits. Though SSA is helping some affected beneficiaries now, under SSA’s current budget, SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefits.
4. Hiring freeze likely to continue: Helping people with this new and unfunded workload is made more difficult by SSA’s ongoing staffing shortages, including operating under a hiring freeze since November 2024. All SSA customers, including those not affected by SSFA, will face delays and increased wait times.
5. Volume of calls: “Callers to SSA’s National 800 Number hear a message about the Act. This message has helped tens of thousands of people avoid holding for a representative. However, more than 7,000 people each day still choose to wait to speak to a representative about the Act. These calls, as well as visitors and appointments in local offices, will continue to increase over the coming weeks and months,” SSA FAQs said.
6. Some people express concern about the financial impact on the Social Security trust fund, which already projects insolvency within the next ten years. CBO estimated the repeal of GPO and WEP would make the trust fund insolvent six months sooner than otherwise projected.

On the plus side, ssa.gov has updated GPO and WEP calculators and web pages to reflect the new law and distinguish those tools and descriptions as historical policy.

What’s Next?

The SSFA is a significant development for educators and public safety professionals who have had Social Security payments reduced because of their public sector employment. SSA estimates that roughly one quarter of state and local government employees did not have Social Security coverage through their employment. Those plans are alerting their pensioners about this new law.

SSA guidance from January 24, 2025 provided more detailed information for affected Social Security recipients while explaining the complexity and challenges the agency is facing. SSA wants people to avoid unnecessarily calling or visiting at this point. SSA will update the web page as implementation continues; anyone can subscribe to receive alerts when SSA updates the web page. SSA is directing callers to the web page as it has more detailed information.

SSA plans to share updates with state retirement boards, labor unions, financial planners, and human resources and benefits professionals.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.