Social Security Fairness Act

Key Takeaways

• The Social Security Fairness Act repealed both the GPO and WEP effective for benefits payable January 2024 and later, ending reductions that had affected over 3.2 million beneficiaries
• The Government Pension Offset previously reduced Social Security spousal and survivor benefits by two-thirds of government pension amounts from non-covered employment, affecting 745,679 beneficiaries
• The Windfall Elimination Provision previously reduced Social Security retirement and disability benefits for those with pensions from non-covered work, with maximum reductions of $587 per month in 2024
• Retroactive payments totaling $17 billion were distributed to affected beneficiaries between February and July 2025, with an average payment of $6,710 per person
• Public sector employees most affected include teachers, firefighters, police officers, and federal CSRS employees whose pensions came from jobs not paying Social Security taxes
• The repeal applies automatically with no application required for current beneficiaries, though those who never applied due to GPO/WEP must file new applications
• The legislation passed with bipartisan support in both House (327-75 vote) and Senate (76-20 vote) before being signed into law January 5, 2025
• Fiscal impact includes estimated costs of $196 billion over 10 years and acceleration of Social Security trust fund insolvency by approximately six months
• December 2023 was the last month GPO and WEP applied, with full benefit restoration beginning January 2024 retroactively

What Was the Government Pension Offset?

The Government Pension Offset was a Social Security rule that reduced spousal or survivor benefits for individuals who also received a government pension from employment not covered by Social Security. Enacted in 1977, the GPO applied a two-thirds reduction formula to Social Security benefits based on the amount of the non-covered pension received. For example, an individual receiving a $900 monthly government pension would have their Social Security spousal benefit reduced by $600 (two-thirds of $900). If the reduction equaled or exceeded the Social Security benefit amount, the individual received no Social Security payment at all.

The provision primarily affected public sector workers whose employment did not withhold Social Security taxes, including teachers in certain states, firefighters, police officers, and federal employees under the Civil Service Retirement System (CSRS). According to Social Security Administration data, as of December 2023, the GPO affected 745,679 beneficiaries, representing approximately 1 percent of all Social Security beneficiaries receiving spousal or survivor benefits. Notably, 83 percent of those affected by the GPO were women, reflecting historical patterns in public sector employment and survivor benefits.

Congress created the GPO to replicate Social Security's dual entitlement rule for individuals with non-covered pensions. The dual entitlement rule prevents spouses with their own Social Security benefits from receiving full benefits on both their own record and their spouse's record. The GPO was intended to create similar treatment for those with non-covered government pensions. Originally, the GPO applied a dollar-for-dollar offset, but Congress reduced the offset to two-thirds in 1983 under the Social Security Amendments of that year. The rationale was that approximately one-third of a government pension represents the employee's own contributions, which should not trigger a Social Security reduction.

What Was the Windfall Elimination Provision?

The Windfall Elimination Provision was a modified Social Security benefit formula that reduced retirement and disability benefits for individuals who also received pensions from employment not covered by Social Security. Enacted in 1983 as part of major Social Security reforms, the WEP adjusted the progressive benefit formula to prevent what legislators considered an unintended advantage. Under the regular Social Security formula, the first portion of a worker's average indexed monthly earnings is replaced at 90 percent, providing higher proportional benefits to lower earners. The WEP reduced this first factor from 90 percent to as low as 40 percent for those with non-covered pensions and fewer than 30 years of substantial Social Security-covered earnings.

For individuals who became eligible for benefits in 2024, the maximum WEP reduction was $587 per month. However, the WEP included a guarantee provision ensuring the reduction could never exceed one-half of the non-covered pension amount. The impact of the WEP diminished for workers with more years of substantial Social Security-covered earnings. For each year beyond 20 years of coverage, the reduction factor increased by 5 percent, and workers with 30 or more years of substantial covered earnings faced no WEP reduction at all. In 2024, substantial earnings were defined as $31,275 annually, with this threshold adjusted each year for wage growth.

As of December 2023, approximately 2.1 million Social Security beneficiaries were affected by the WEP, representing about 3 percent of all beneficiaries. Nearly 2 million of those affected were retired-worker beneficiaries, comprising roughly 4 percent of all retired workers receiving Social Security. The WEP affected workers in various public sector roles including educators, law enforcement officers, and federal employees, as well as some individuals with foreign pensions. The provision applied to retired-worker and disabled-worker beneficiaries and their eligible dependents, but did not affect survivor benefits. When a person subject to the WEP died, survivor benefits were recalculated using the regular formula without the WEP reduction.

The Social Security Fairness Act: What Changed

Legislative History

The Social Security Fairness Act (H.R. 82) was introduced in the 118th Congress on January 9, 2023, with bipartisan sponsorship. After nearly two years of legislative process, the House of Representatives passed the bill on November 12, 2024, by a vote of 327 to 75. The Senate followed with passage in the early hours of December 21, 2024, voting 76 to 20 in favor. President Joe Biden signed the legislation into law on January 5, 2025, as Public Law 118-273. The strong bipartisan support reflected decades of advocacy from public sector unions, teacher associations, firefighter organizations, and affected retirees who argued that the GPO and WEP unfairly penalized public servants.

Complete Repeal Provisions

The Social Security Fairness Act completely repeals both the Government Pension Offset and Windfall Elimination Provision from Title II of the Social Security Act. The repeal is not a modification or partial reform but a total elimination of both provisions. The legislation specifies that the amendments apply with respect to monthly insurance benefits payable under Title II for months after December 2023, making the effective date January 2024. This means December 2023 was the last month in which GPO and WEP reductions were applied to Social Security benefits.

The retroactive effective date creates a significant benefit restoration for affected individuals. Those who had been receiving reduced benefits throughout 2024 became entitled to retroactive payments covering the difference between what they received and what they would have received without the GPO or WEP. The Social Security Administration undertook the complex task of recalculating benefits for millions of beneficiaries and issuing both ongoing benefit adjustments and lump-sum retroactive payments. The law did not change standard Social Security retroactivity rules for new applications, meaning individuals applying for the first time after the law's passage remain subject to the typical six-month retroactivity limitation for retirement and survivor benefits.

Who Benefits from the Repeal

Public sector employees who worked in positions not covered by Social Security represent the primary group benefiting from the repeal. Teachers in states like Ohio, Massachusetts, Texas, California, and Illinois, where many teaching positions do not participate in Social Security, see restored spousal, survivor, or retirement benefits. Similarly, firefighters and police officers with state or local pensions from non-covered employment now receive full Social Security benefits they earned through other covered work or through their spouse's earnings record. Coverage of state and local government employees varies dramatically by state, with some states having less than 5 percent of public employees covered by Social Security while others approach 95 percent coverage.

Federal employees hired before 1984 under the Civil Service Retirement System (CSRS) particularly benefit from the repeal. These federal workers contributed to CSRS rather than Social Security and many also earned Social Security credits through second jobs, military service, or employment before or after federal service. Both the WEP and GPO had significantly reduced their combined retirement income. In contrast, federal employees under the Federal Employees Retirement System (FERS), implemented in 1984, paid into both FERS and Social Security and were never subject to these provisions.

Spouses and surviving spouses of workers with non-covered pensions also gain from the GPO repeal. Many surviving spouses, particularly women who worked as teachers or in other public sector roles, had seen their Social Security survivor benefits reduced or eliminated despite their deceased spouse having paid Social Security taxes throughout their career. Additionally, individuals who previously chose not to apply for Social Security benefits because the GPO or WEP would have eliminated their payments can now apply and receive benefits. The repeal also affects some individuals with pensions from foreign social security systems who were subject to the WEP, though the GPO did not apply to foreign pensions.

Implementation and Payment Process

Payment Timeline

The Social Security Administration began issuing retroactive payments on February 25, 2025, approximately seven weeks after the law was signed. Initially, SSA estimated the implementation could take a year or more given the complexity of recalculating millions of benefit records and the age of existing computer systems. However, by developing automated processes for most cases, SSA completed the distribution of retroactive payments by July 7, 2025, five months ahead of the original schedule. The agency distributed over 3.1 million payments totaling $17 billion to eligible beneficiaries. The average retroactive payment was $6,710, though individual amounts varied significantly based on factors including the size of the non-covered pension, the extent of previous WEP or GPO reductions, and the number of months between January 2024 and when payments were processed.

Most affected beneficiaries began receiving their adjusted monthly benefit amounts in April 2025, reflecting their March 2025 benefits. Social Security benefits are paid one month in arrears, meaning the January benefit is paid in February, the February benefit in March, and so forth. This timeline meant that beneficiaries received both their retroactive lump-sum payments covering January 2024 through early 2025 and began seeing increased monthly amounts simultaneously in spring 2025.

What Beneficiaries Need to Know

Individuals who were already receiving Social Security benefits that were reduced by the WEP or GPO did not need to take any action. The Social Security Administration automatically recalculated benefits and deposited retroactive payments into the bank accounts on file. Beneficiaries received mailed notices from SSA explaining the benefit changes and retroactive payment amounts. For individuals who had never applied for Social Security benefits because the WEP or GPO would have reduced or eliminated their payments, action is required. These individuals must contact SSA to file applications for benefits. The standard retroactivity rules apply to these new applications, typically limiting retroactive payments to six months before the application date for retirement benefits.

The SSA established a dedicated webpage at ssa.gov/benefits/retirement/social-security-fairness-act.html with ongoing updates about implementation. Individuals can call the Social Security Administration at 1-800-772-1213 and say "Fairness Act" when prompted to speak with representatives knowledgeable about the changes. As of July 2025, SSA reported receiving 289,715 new applications since the law passed, with 92 percent of these applications completed. Complex cases requiring manual review continue to be processed beyond the July completion date for automated adjustments.

Before and After the Repeal

The following comparison reflects changes implemented by the Social Security Fairness Act effective January 2024. Individual impact varies based on pension amounts, work history, and benefit types.

Fiscal Impact and Policy Considerations

Cost and Solvency Impact

The Congressional Budget Office estimates that repealing the GPO and WEP will increase Social Security outlays by $196 billion between 2024 and 2034. When accounting for the cost of financing this additional spending through increased federal borrowing, the total fiscal impact reaches approximately $233 billion. The additional benefit payments represent roughly 1 percent of Social Security's annual costs. More significantly for the program's long-term sustainability, the repeal accelerates the projected depletion of the Social Security trust funds by approximately six months. Current projections indicate the combined Old-Age, Survivors, and Disability Insurance (OASDI) trust funds will be exhausted in 2034, at which point Social Security will be able to pay only about 83 percent of scheduled benefits. The repeal moves this date earlier by about six months and reduces the long-term benefit payment rate from 78.3 percent to 77.8 percent over a 75-year projection period.

Arguments Supporting and Opposing Repeal

Supporters of the repeal argued that the GPO and WEP unfairly penalized public servants who dedicated careers to teaching, public safety, and government service. Advocates emphasized that these workers earned Social Security benefits through covered employment or through their spouses' work records and deserved to receive full benefits. The provisions disproportionately affected women, with more than 80 percent of GPO-affected beneficiaries being female, often widows who had worked as teachers and lost survivor benefits. Organizations including teacher unions, firefighter associations, and federal employee groups maintained that the provisions broke the Social Security promise and created financial hardship for retirees with modest incomes. The complexity and frequent misunderstanding of the rules led many eligible individuals not to apply for benefits they had earned.

Critics of the repeal, including fiscal policy organizations and some economists, contend that eliminating the GPO and WEP worsens Social Security's financial challenges without addressing broader reform needs. Analysis from the Urban Institute indicates that the repeal disproportionately benefits higher-income individuals, with those in the top income quintile seeing average annual benefit increases of $1,900 compared to only $400 for those in the bottom quintile. Opponents argue that the original provisions, while imperfect, attempted to create fairness between workers who paid Social Security taxes throughout their careers and those who did not. Some policy experts advocated for reforming rather than repealing the provisions, potentially using improved data systems to calculate more precise benefit adjustments rather than applying blanket formulas. The Committee for a Responsible Federal Budget and similar organizations warn that the repeal exemplifies the difficulty of enacting comprehensive Social Security reform when popular but costly expansions pass while revenue increases or benefit adjustments remain politically challenging.