The recent signing of the Social Security Fairness Act into law has created a massive spike in benefit applications from government sector retirees all over the United States.
The law, signed into effect by President Joe Biden earlier this year, abolishes the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which previously lowered Social Security benefits for public pension recipients.
The Social Security Administration (SSA) said it will start making retroactive payments right away, with nearly all beneficiaries receiving their lump-sum payments by the end of March. Newly increased monthly benefit levels will start in April.
The change will apply to more than 3.2 million retirees, including teachers, firefighters, police, and other public workers who had their benefits trimmed because of the WEP and GPO provisions.
The WEP and GPO created many years ago, were intended to avoid the payment of full Social Security benefits to individuals who receive pensions from non-Social Security-covered employment.
However, critics said that these provisions unfairly deprived public sector workers of retirement income by greatly decreasing their income. The elimination of these provisions by the Social Security Fairness Act seeks to address this long-standing injustice so that public servants will be entitled to the full amount of benefits they have worked for.
Though the act has been praised for eliminating disparities in the distribution of benefits, there are also challenges. The SSA is currently at its lowest level of staffing in 50 years, and it may affect the timely processing of the added workload due to the increase in claims.
Moreover, the repeal is estimated to contribute about $195 billion in additional federal deficits over the decade and could push the insolvency of the Social Security Trust Funds forward by an estimated six months. Beneficiaries are asked to update their contact and bank information with the SSA so as to allow quick payment delivery.
The SSA has also asked beneficiaries not to make inquiries on the status of payments until after April so as to enable timely processing of the claims. Enactment of the Social Security Fairness Act is a great milestone for government retiree members and has been at the forefront of lobbying for more than two decades.
Members of Congress and the advocates note that the repeal of the legislation balances an unfair deduction on government retirees, considering their service and preserving their fiscal soundness in the golden years of their lives. As the SSA rolls out these changes, only time will tell how the additional financial responsibilities will affect the larger Social Security program.
Policymakers continue to debate possible reforms to meet the long-term solvency of the system, as they balance the short-term needs of beneficiaries with the financial well-being of the program.
Meanwhile, the abolition of the WEP and GPO provisions is a testament to the constant pressure brought by advocates and policymakers committed to providing fair treatment for all retirees, especially those who have spent their careers in public service.
