WASHINGTON (AP) — President Joe Biden is set to sign into law a measure on Sunday that will increase Social Security payments for nearly 3 million current and former public employees. These individuals, including teachers, firefighters, police officers, and others in public service roles, stand to benefit from the Social Security Fairness Act, which rectifies a long-standing disparity in benefits. However, this change will also strain the Social Security Trust Funds, which are already facing an impending insolvency crisis.
The bill repeals two provisions — the Windfall Elimination Provision and the Government Pension Offset — that have been limiting Social Security benefits for recipients who also receive retirement payments from other sources, such as state or local government pension programs.
According to estimates from the Congressional Research Service, in December 2023, around 745,679 individuals, representing about 1% of all Social Security beneficiaries, had their benefits reduced by the Government Pension Offset. Additionally, approximately 2.1 million people, or roughly 3% of all beneficiaries, were impacted by the Windfall Elimination Provision.
The Congressional Budget Office projected that eliminating the Windfall Elimination Provision would lead to an average increase of $360 in monthly payments for affected beneficiaries by December 2025. Ending the Government Pension Offset would result in an average monthly benefit increase of $700 by December 2025 for 380,000 recipients receiving benefits based on living spouses. For 390,000 surviving spouses receiving widow or widower benefits, the average increase would be $1,190.
These payment adjustments will be subject to Social Security’s regular cost-of-living adjustments over time. The changes will be effective from January 2024 onwards, and the Social Security Administration will need to issue backdated payments. The legislation specifies that the Social Security commissioner will be responsible for adjusting primary insurance amounts as needed to accommodate the law changes, though the exact process remains unclear.
Edward Kelly, president of the International Association of Fire Fighters, expressed enthusiasm for the change, emphasizing the impact on firefighters and their surviving spouses. Kelly highlighted the significance of rectifying a longstanding issue in the pension system that disadvantaged public servants.
Various union leaders, including Lee Saunders of the American Federation of State, County and Municipal Employees and Becky Pringle of the National Education Association, lauded the law as a significant victory that will enhance the lives of public service workers across different sectors. The passage of this legislation represents a milestone achievement for those who have dedicated their careers to serving their communities.
The law’s implementation has garnered bipartisan support, with figures like Maine Sen. Susan Collins backing the initiative.
Some senators, such as Sens. John Thune of South Dakota, Rand Paul of Kentucky, and Thom Tillis of North Carolina, voted against the legislation. “We caved to the pressure of the moment instead of doing this on a sustainable basis,” Tillis told The Associated Press last month. However, Republican supporters of the bill argued that there was a rare opportunity to address what they deemed an unfair section of federal law that negatively impacts public service retirees.
The future of Social Security has emerged as a prominent political issue and was a significant point of contention during the 2024 election. Approximately 72.5 million individuals, including retirees, disabled individuals, and children, currently receive Social Security benefits.
The policy adjustments introduced by the new law will impose additional administrative burdens on the Social Security Administration, which is presently operating with its smallest staff levels in decades. Despite serving a larger population than ever, the agency, currently under a hiring freeze, maintains a staff of around 56,645 — the lowest count in over 50 years.
The annual Social Security and Medicare trustees report issued last May projected that the program’s trust fund may be unable to sustain full benefit payments starting in 2035. The recent legislation will accelerate the program’s insolvency date by approximately six months.
Associated Press writer Stephen Groves contributed to this report.
