The United States Social Security Administration has implemented a significant change in its policies with the approval of the Social Security Fairness Act (SSFA). This measure eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), two rules that had reduced Social Security payments to millions of retirees who worked in public jobs not covered by the program. As a result, retroactive payments and an increase in monthly benefits for those affected have been approved.
These changes directly benefit 3.2 million people, including 28% of state and local employees. Before the elimination of these provisions, those who received a benefit for work not covered by Social Security saw their benefits reduced, even if they had contributed to the program in other jobs. Now, these retirees will be able to recover some of the withheld money and get an increase in their monthly pension.
The adjustment has already begun to be applied in the form of retroactive payments, which were sent out for the first time in February and will continue throughout March and April. Beneficiaries will receive an official notification by mail with details of the amount and the date on which they will receive the payment in their bank accounts registered with Social Security. In addition, from April 2025, those affected will start to receive their new updated monthly amount.
Who qualifies for SSA retroactive payment
Retroactive payments are aimed at retirees who receive benefits from employment not covered by Social Security and, therefore, did not pay taxes to the program during those years of service. Among the main beneficiaries are teachers, firefighters, police officers and other public service employees who contribute to the Civil Service Retirement System. These workers will be able to recover part of the money that had previously been deducted from them through the application of the WEP and the GPO.
We continue sending payments owed due to the Social Security Fairness Act. Social Security is issuing 263,636 payments totaling $1,259,759,476.27 today. This makes 1,875,484 payments so far totaling $11,226,404,498.40. Stay tuned!
— SocialSecurity_Press (@SSAPress) March 6, 2025
It is important to clarify that the new regulations do not grant benefits to those who have never paid Social Security taxes. Only those who have contributed at some point, but were affected by the eliminated provisions, will receive these payments. Beneficiaries are advised to keep an eye out for official notifications and verify information through official Social Security channels to avoid fraud or confusion.
Tax implications of additional payments
Although this reform represents financial relief for many retirees, it can also have significant tax implications. Social Security income is subject to federal taxes based on the beneficiary’s total income level. This means that those who receive retroactive payments could see an increase in their taxable income, which could result in a higher tax liability when filing their tax return.
To avoid inconveniences, it is recommended that retirees consult with a tax advisor before using the money they get. This will help them plan their financial situation better and avoid surprises when it comes to paying taxes. In addition, it is advisable to check if there are any exemptions or tax strategies that can help minimize the impact of these additional payments.
