The U.S. Senate recently voted to proceed with the Social Security Fairness Act, a bipartisan bill that could expand Social Security benefits for nearly 3 million Americans. The bill passed in the House of Representatives in November and is now on its way to President Biden’s desk.

If passed, the landmark legislation could significantly impact retirees’ benefits. Here are the people who may be most affected.

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What is the Social Security Fairness Act?

The Social Security Fairness Act would repeal two federal policies: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

The WEP can affect those who have worked long enough to qualify for Social Security benefits under one job but are also entitled to a workplace pension from a different job that doesn’t pay into Social Security. This includes many state and local government employees, such as teachers, postal workers, and police officers.

You generally only need to work and pay Social Security taxes for 10 years to qualify for retirement benefits. However, if you’ve worked for fewer than 30 years in a job that entitles you to Social Security and you can receive a workplace pension, those benefits could be substantially reduced.

The GPO affects those who are entitled to spousal or survivors benefits, as well as a workplace pension. Under this policy, your benefit could be reduced by two-thirds of what you’re collecting from your pension.

For example, if you’re entitled to $1,000 per month from your pension, your spousal or survivors benefit could be reduced by two-thirds of that amount, or $660 per month. The average spouse of a retired worker only collects around $900 per month from Social Security, as of November 2024, so it’s possible that most or even all of your benefit could be withheld if you fall under this policy.

Around 2.1 million Americans are affected by the WEP, while the GPO impacts more than 700,000 people. If both of these policies are repealed under the Social Security Fairness Act, around 2.8 million Americans could potentially see their benefits increase.

A potential downside

Critics of the Social Security Fairness Act argue that paying out more in benefits could deplete the program’s trust funds faster, potentially creating more problems down the road. Right now, both of Social Security’s trust funds covering retirement and disability benefits are set to run out by 2035. At that point, the program will need to rely on payroll taxes and other forms of revenue to fund benefits.

If the trust funds are depleted, those income sources will only be enough to cover around 83% of future benefits, according to the most recent estimates from the Social Security Administration Board of Trustees. According to a 2024 report from the Congressional Budget Office, the Social Security Fairness Act could result in both trust funds running out approximately six months sooner than expected. With the clock already ticking closer to 2035, that could put Congress on an even tighter timeline to find a solution.

Still, though, with millions of Americans feeling an immediate impact by the repeal of the WEP and GPO, this legislation is a step in the right direction for many. While it’s not law just yet, the Social Security Fairness Act could potentially boost your benefits by hundreds or even thousands of dollars per month.

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