The Social Security Fairness Act was recently passed by Congress. This is a big step forward for seniors in the US. The goal of this new law is to fix problems with the current system that keep some retirees on government pensions from getting all of their Social Security payments.
The bill has moved quickly because of a legislative process called a “discharge petition.” This lets a bill go from a committee to the full floor of Congress without having a prior report. Over a million retirees could have their monthly income go up if the bill passes.
New boost for Social Security benefits for retirees
Two members from different parties, Abigail Spanberger (Democrat) and Garrett Graves (Republican), have been leading the charge on this bill. They got 218 signatures on the bill, with 47 from Republicans and 171 from Democrats. This was enough to move it forward. Now that this bill has this backing, the whole Congress will vote on it in just a few days.
Spanberger and Graves said in a joint statement how important this legislative milestone was. They pointed out that this is the first time since 2015 that a bill related to Social Security has moved forward using this method.
The impact of the Social Security Fairness Act
The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) have been controversial for decades, and their removal is one of the main parts of the new law. At the moment, these rules limit the benefits that some retirees can get. This is especially true for people who worked for the government and didn’t pay into Social Security.
At the moment, the WEP is thought to affect about two million Social Security recipients, and the GPO is thought to affect about 800,000 pensioners. These rules lower the income these people should get, even though they have worked for years and paid into other pension plans.
How does the Windfall Elimination Provision (WEP) affect retirees?
People who get pensions from jobs where they didn’t pay into Social Security will get less money from their Social Security payments because of the Windfall Elimination Provision (WEP). This is true for a lot of retired people who worked for federal, state, or local governments and put money into other retirement plans, like the Civil Service Retirement System (CSRS).
The main goal of the WEP at first was to stop people from getting what was called a “double benefit”—that is, getting a full pension from a public-sector job and also getting full Social Security payments. But some people say that this rule unfairly hurts a lot of seniors who paid into both systems but now see their Social Security payments cut.
Many seniors would feel a lot better if the WEP wasn’t around. Their benefits have been cut for years. People who started working before 1985 but didn’t have to pay into Social Security have seen their monthly earnings go down a lot because of the WEP.
What is the Government Pension Offset (GPO)?
The GPO mostly affects retired people who get Social Security payments as survivors or spouses. If these people also get a pension from a government job where they didn’t pay into Social Security, this rule lowers the amounts they get. The GPO affects about 800,000 people right now. Most of them are former federal, state, or local government workers.
If this rule was taken away, spouses and survivors who are eligible to joint benefits would be able to get the full amount they are owed without the cuts that are happening now. This would be especially helpful for people who work for the government and didn’t have the choice to pay into Social Security while they were working.
How much will this increase in benefits cost?
The Congressional Budget Office (CBO) says that the new law will cost about $196 billion over the next ten years if it is passed at the start of fiscal year 2025.
This number shows how getting rid of the GPO and WEP affected the economy and how the extra money for millions of retirees affected the economy.
Even though it will cost a lot, both Spanberger and Graves have said that this is the right thing to do for retired workers, many of whom have been waiting for Congress to do something about this for over 40 years. People who are retired in Virginia, Louisiana, and other states have been very vocal in their support of this change. They want the benefits they think their work has earned them.
What’s next for retirees?
As this bill goes through Congress, retirees should keep an eye out for when it might be signed into law. Millions of people would get a lot more money from Social Security if the bill passes. This is especially true for people whose payments have been cut by the WEP and GPO provisions.
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