Social Security Update: When New Benefits Will Go Into Effect

view original post

Now that the House of Representatives approved the Social Security Fairness Act, millions could be able to get higher Social Security benefits.

The House approved the bill 325 to 75 and ultimately reversed the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) Provision.

These two rules have historically prevented Americans who also receive pensions and their spouses from getting the full Social Security benefits each month.

But now that the Social Security Fairness Act was approved in the House, those American workers could receive full Social Security benefits once they retire and file for the program.

“The plan is to enhance Social Security, not to cut it…” Representative John Larson, a Connecticut Democrat, said Tuesday before the House vote. “Now is the time for us to act and to vote.”

If the Senate also passes the bill and President Joe Biden gives the final approval, the law will apply to all SSA-administered retirement benefits for December 2023 and after.

The WEP affects people with less than 30 years of significant earnings from employment covered by Social Security if they also get a “non-covered pension.”

Meanwhile, the GPO lowers the benefits for spouses of those receiving a non-covered pension by around two-thirds.

Both provisions impacted around 3 million former public service workers, including teachers, police officers, firefighters, and their spouses.

“WEP and GPO can lower and in certain situations fully eliminate Social Security benefits for Civil Service Retirement System annuitants and public sector employees from state and local government entities, including their spouses, widows and widowers,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.

There was some pushback to the Social Security Fairness Act, as some representatives remained concerned the law would speed up the Social Security fund’s incoming insolvency.

Analysts have warned that the Social Security system is due to run out of money for full payments by as early as 2035.

“We’re gonna accelerate the insolvency of the Social Security trust fund,” Representative Jodey Arrington, a Texas Republican, said Tuesday. “We should be responsible in how we do this. We should consider retirees in every state, and we should consider future retirees.”

The Social Security Fairness Act was estimated to cost $196 billion across 10 years. These costs could potentially cause issues in the Senate, although the Social Security Fairness Act is still predicted to pass.

“The passing of this bill in the House is an encouraging sign that these recipients will finally get access to the full benefits they should receive, but it’s not the final step,” Beene said. “The next and most crucial step will be making the bill a priority for passage in the Senate. With the overwhelming support the bill already has, it should be an easy final step if it’s made a priority.”