Your Social Security checks probably don't cover all your monthly living expenses, and if they're all you have, you may find it difficult to afford even basic necessities. Cost-of-living adjustments (COLAs) help a little, but these only happen once per year.
So when the news came out that 3.2 million Americans could expect not only a huge monthly benefit increase but also a one-time retroactive payment, it's natural to get excited. However, this change only applies to a subset of Social Security beneficiaries.
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Even among the affected seniors, there's a lot of variation in how much each person's check will increase. Some groups are more likely to see significant increases than others.
Who is affected by the Social Security Fairness Act?
The Social Security Fairness Act applies to seniors who receive a pension from an employer that wasn't covered by Social Security. This includes many state and local government employees, like firefighters, teachers, and police officers. However, only some in these professions will see an increase. Approximately 72% of state and local public employees were covered by Social Security during their careers, according to the Social Security Administration, and they won't notice a change.
The law removed the Windfall Elimination Provision (WEP), which reduced benefits for these non-covered workers. It also eliminated the Government Pension Offset (GPO), which reduced spousal benefits for current and ex-spouses of these workers. Both groups are now eligible for increased monthly benefits going forward, as well as a one-time retroactive payment covering all benefits payable after December 2023.
The monthly benefit change is expected to take effect for most affected seniors with the April 2025 payment. Retroactive payments should go out to most eligible seniors by the end of March. However, there are complex cases that the Social Security Administration could not automate. If yours is among them, you may have to wait up to a year to receive your payment adjustment and retroactive benefits.
You should have received a notice from the Social Security Administration if you're affected by the change. If you're not sure, wait until after your April benefit payment comes through, and then reach out to the Social Security Administration with any questions.
Who will benefit the most from the Social Security Fairness Act?
Every affected senior's benefit increase will be different depending on the type of benefit they're claiming and their work history or the work history of the person whose record they're claiming on. However, the Congressional Budget Office has released some data on the average benefit increases for key groups.
Retired workers who had their benefits reduced under the WEP will see an average monthly benefit increase of $360 per month. If you're entitled to retroactive benefits for all of 2024, that would give you a one-time payment of over $4,300. The Social Security Administration will deposit this money into the bank account it has on file for you.
Spousal beneficiaries can expect a larger average increase of about $700 per month. That comes out to about $8,400 in retroactive benefits due for 2024. But it's surviving spouses -- those claiming benefits on a deceased partner's record -- who will see the largest average benefit increase at $1,190 per month. Their retroactive payments for 2024 could be well over $14,000.
But again, these are only averages. You may be entitled to more or less than this, depending on your work history. The notice you receive from the Social Security Administration when it makes your benefit adjustment should let you know how much more you'll actually get per month going forward and what your retroactive payment will be.
