The government has a new plan to raise Social Security checks, which could be good news for people who get them. However, this has nothing to do with the cost of living adjustment (COLA). A group of lawmakers from both parties is pushing for a bill that would double the benefits of Social Security for some Americans who are qualified for pensions.
Representatives Abigail Spanberger (Democrat from Virginia) and Garret Graves (Republican from Louisiana) filed a discharge petition this week. This could lead to a vote on the Social Security Fairness Act. The act aims to get rid of two rules that lower Social Security checks for people who receive pensions, like a worker, their partner, or a widow.
A new plan to increase Social Security checks for beneficiaries in the US
The law has the backing of both parties, so experts say it has a chance of passing. A vote would have to happen if the petition gets 218 signatures.
People who worked for the government, like teachers, police officers, firefighters, and mail workers, can get smaller Social Security checks when they retire, even though they paid into the system like everyone else.
Most Americans have jobs that make them eligible for Social Security. However, people with certain pensions may get less money from Social Security if their companies don’t pay their Social Security taxes, which would make them “covered.”
Don’t forget that the fact that your pension comes from what Social Security calls “covered employment” (work for which you paid taxes) won’t change your payments. On its website, AARP says that most Americans have jobs that let them get Social Security payments.
Meanwhile, let’s say you worked for a company that wasn’t covered by Social Security and didn’t take out any taxes from your pay. But you did work enough hours in covered jobs to be eligible for benefits. The windfall elimination provision (WEP) says that your monthly payment may be lowered if these things happen.
American wages can go down because of the Work Experience Pay (WEP) and the Government Pension Offset (GPO). The WEP’s benefits are cut down if a retired worker’s company doesn’t have to pay taxes to the program. More than 2 million workers will get less money from Social Security because of this.
Also, GPO benefits for widows and wives who also get a pension will be cut in the same way. This will touch more than 745,000 Americans.
Alex Beene, a teacher of financial literacy at the University of Tennessee at Martin, told Newsweek that people may not be able to get as many Social Security checks if they are also getting money from a pension that belonged to a partner or other family member.
Beene also said that the rules will mean that some people will no longer get Social Security checks every month, which could be a shock to their retirement income. Seniors who are touched by the rules have long said they don’t like having to work as much or wait longer to retire because their Social Security checks aren’t as big.
But not everyone wants to get rid of the WEP and GPO. Some people think that doing so would unfairly help people who don’t pay much into Social Security. It would also cost a lot for the Social Security Administration, whose current budget problems mean that payments will be cut by half by the middle of the 2030s.
The Congressional Budget Office says that getting rid of the GPO and WEP would cost $196 billion over ten years. The extra money could speed up the process for people across the country who are supposed to benefit.
Even with these worries, a lot of politicians think the law needs to be changed in a big way. According to Beene, having these people get their full Social Security benefit would be very helpful for them when they stop working.
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