Boosted Social Security Benefits: Who’s Eligible After Biden Signs the Bill?

The Social Security Fairness Act recently signed by President Joe Biden is the first major expansion of Social Security benefits since 20 years ago. This historic legislation removes two provisions that have reduced millions of public sector workers’ benefits, thus much-needed relief and financial security. Let’s have a look at what it means for you, who qualifies, and potential impact.

Changes

The Social Security Fairness Act eliminates the following provisions:

  • Windfall Elimination Provision (WEP): This provision previously reduced Social Security benefits for workers who earned “non-covered” pension income, such as pensions not covered by Social Security, like those from state or local government jobs.
  • Government Pension Offset (GPO): It trimmed the spousal or survivor benefits in proportion to individuals with non-covered pensions.

These provisions avoid the act of penalizing the retirees, their spouses, and survivors for their time spent serving in the public.

Who Qualifies?

It mainly concerns public sector employees, including:

  • Police officers
  • Firefighters
  • Postal personnel
  • Nurses
  • Teachers in the public schools
  • Other federal workers

According to the U.S. Department of Labor, public sector employees include any employee working for government-funded organizations, schools, or local/state governments. About 2.5 million Americans will benefit from the Act right away.

Benefits Increase

In public comments, President Biden said the individuals affected would benefit from the increase as follows:

  • An average monthly increase of $360 in Social Security benefits.
  • Lump-sum payments of “thousands of dollars” for retroactive compensation that will cover last year’s missed benefits.

This is a major revamp for many retirees who were financially penalized for years.

Concerns

Not everyone supports the Social Security Fairness Act. Critics of the bill argue that it would create long-term financial risks to the Social Security system.

  • Funding Concerns: The Congressional Budget Office estimated that the bill would cost $196 billion over the next 10 years. Lawmakers have expressed concerns that this could hasten the insolvency of the Social Security trust fund, which is already expected to be depleted in the next decade.
  • Equity Issues: The Act, critics such as Sen. Chuck Grassley argue, unfairly benefits certain workers at the expense of increasing hardships for others who rely on Social Security.
  • Sen. Thom Tillis also expressed these concerns, arguing that the bill could undermine the overall sustainability of Social Security.

When Will Benefits Increase?

The Social Security Administration (SSA) is already working on implementing the Act. Here’s what you need to know:

  • For Current Beneficiaries: If you are a beneficiary who experienced benefit reduction from the WEP or GPO, SSA has advised updating your mailing address and direct deposit information. No further action is necessary.
  • For New Applicants: This means those people eligible to apply under the Act but have not yet applied may now do so online or by scheduling an appointment with the SSA.

The SSA has not announced when these changes will be implemented but promises to update the beneficiaries as soon as possible.

The Bigger Picture

The Social Security Fairness Act is an important step forward in rectifying decades of public sector worker disparity. While there is much to be said on the financials of the bill, it speaks to President Biden’s promise that Americans can retire with dignity and economic security.
This legislation means a lot for retirees who dedicated their lives to public service; it is something they have earned for society over the years.

FAQs:

What does the Social Security Fairness Act do?

It removes the WEP and GPO provisions, increasing benefits for public workers.

Who qualifies for the increased benefits?

Public sector workers like teachers, firefighters, and postal employees qualify.

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