Congress passed the Social Security Fairness Act in late 2024, which was signed into law by the president in early January. The act repeals two provisions from the 1983 Social Security reforms: the government pension offset and the windfall elimination provision. This change will retroactively increase Social Security benefits for people who qualify for or receive pensions from state and local governments or certain other employers.
Before the 1983 reforms, benefit calculations assumed a person had worked their entire career in jobs covered by Social Security. However, some employers like state and local governments could opt out of Social Security if they provided retirement benefits. This led to higher-than-intended benefits for people who divided their careers between covered and non-covered jobs, since the calculations did not account for pensions from non-covered employment.
Congress fixed this in 1983 by introducing the government pension offset and the windfall elimination provision. But last year, it decided to repeal these provisions and retroactively increase benefits for those affected.
Impact of the fairness act
The change is expected to deplete the Social Security trust fund faster and increase the annual benefit payout. Affected workers will get higher benefits, and some will receive lump-sum payments for retroactive increases. The Social Security Administration (SSA) says it may take over a year to adjust current benefits and distribute retroactive payments.
This is because of the complex case-by-case analyses needed, much of which will be done manually. The law did not provide extra funding for SSA staffing or the benefit payments. About three million people are estimated to be impacted by the changes.
This applies to those who worked in Social Security-covered jobs and are also eligible for pensions from jobs that were not covered by Social Security. The SSA has a webpage with frequently updated information about the transition. Those affected or potentially affected should check the webpage regularly for new developments and necessary actions.
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