Social Security Changes Mean Higher Benefits for Certain Public Workers

As part of its year-end deliberations to avoid a government shutdown, Congress passed legislation to eliminate two provisions that have reduced or eliminated Social Security benefits for certain public employees. The bill was signed into law on January 5, 2025.

The Social Security Fairness Act will eliminate the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which have impacted public pension workers trying to claim Social Security benefits. The WEP affects a worker’s own Social Security retirement benefits, while the GPO may impact spousal or survivor benefits.

Since these provisions were introduced decades ago, the number of individuals affected by the rules has grown. Today, nearly three million individuals receive reduced Social Security benefits annually, according to the Congressional Research Service.1

The WEP was introduced with legislation in 1983 to address emerging solvency issues associated with Social Security. Both the WEP and GPO (established in 1977), were intended to modify Social Security benefit formulas for people who received compensation not subject to Social Security payroll taxes from receiving overly generous payments based on their earnings covered by Social Security.

WEP and GPO only apply for workers in certain states where public employers don’t participate in the Social Security system, such as public-school teachers in 15 states. These states include Alaska, California, Connecticut, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, Maine, Missouri, Nevada, Ohio, Rhode Island and Texas. There are additional states where other public employees may be impacted.

The law eliminates these provisions effective at the beginning of 2024, so impacted program beneficiaries will receive retroactive adjustments to their benefit payments. Retirees affected by the change may receive benefits that would have been due to them in 2024. The Social Security Administration is expected to announce how these retroactive benefits will be paid.