The Social Security Fairness Act – Receiving a higher benefit due to the elimination of Windfall Elimination Provision and Government Pension Offset rules? You still may be missing out on thousands of entitled benefits! 

On January 5th, 2025, congress passed the Social Security Fairness Act (SSFA), eliminating Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) rules, both of which reduced social security benefit payments for individuals with non-covered pensions. Non-covered pensions are pensions in which workers contributed to instead of social security during their working years. WEP/GPO did not impact workers in the private sector as they were contributing to both their employer pension, and social security. WEP/GPO primarily impacted those individual in the public sector. In Ohio, the largest non-covered pensions are the State Teachers Retirement System (STRS) and the Ohio Public Employee Retirement System (OPERS).

With the passing of the SSFA, individuals impacted by WEP/GPO will no longer have a reduction on their social security benefits and are expected see those changes come in April. In addition, they will be sent a one-time retroactive payment to cover the amount of increase dating back to January 2024. Let’s look at an example of how this played out for one of my clients.

I have a client (we will call her Debbie) who was a teacher most of her career and was receiving minimal social security benefits based on her own record (<$150 per month) due to WEP/GPO. Her spouse (we will call him Tom), was receiving ~$2,300 per month based on his record as he spent his entire career in the private sector. Ordinarily, Debbie would be eligible for a “spousal benefit” from Tom’s record and be eligible to receive 50% of his social security benefit making her eligible to collect $1,150 per month in social security benefits. Because of the prior WEP/GPO rules though, she was not eligible to receive this spousal benefit and instead qualified for a minimal benefit off her own record.

With the passing of the SSFA, and the elimination of WEP/GPO, she is now entitled to her 50% spousal benefits and eligible to collect ~$1,150 per month in social security benefits, a nice increase of roughly ~$1,000 per month relative to what she was receiving before. However, issues arose when she received her benefit letter from the Social Security Administration.

As expected, Debbie received a timely letter in the mail from SSA informing her that they will be making changes to her benefit payments. Unexpectedly though, instead of the $1,000 per month increase, they mentioned her monthly benefit would only be increasing ~$100 to ~$250 per month. In addition, she noticed a direct deposit into her checking for back payments of $1,800, significantly lower than the ~$15,000 we were expecting (payments from January 2024 to March 2025). Why would this be? I was perplexed. After stewing on it for a while though, the answer dawned on me. The clients are in their mid-70’s meaning they originally filed for benefits and “deemed filing” rules for social security benefits were in effect.

The Bipartisan Budget Act of 2015 made changes to how individuals can collect social security benefits and introduced “Deemed Filing” rules. Before this act, individuals could file two separate social security applications, one for personal retirement benefits, and a second application for spousal benefits. This allowed individuals to start these benefits at two different times and create unique filing strategies to obtain greater benefits. With the introduction of deemed filing though, individuals can no longer separate their personal retirement benefits from their spousal benefits in terms of timing and must file for both benefits at the same time. Ultimately, individuals will qualify for the higher of the two benefits. In Debbie’s situation, because she filed for benefits before deemed filing rules were in effect, she was only collecting her personal social security benefit and never filed for her spousal benefits (as there was no point due to prior GPO reductions). Social security did not automatically adjust her personal retirement benefit to her higher spousal benefit because of this. Our solution was to file a separate spousal application for Debbie, and she will now receive the $1,150 per month in spousal benefits.

There are a couple key takeaways from this:

• Had Debbie only relied on the mailing from social security, she would have never known about her eligibility for a higher benefit. By working with her advisor, she was able to uncover an additional $1,000 per month of income.
• If you filed for benefits before January 2nd of 2016, are married, previously married (for at least 10 years without remarrying), or widowed, you should contact the social security office and see if you are entitled to additional benefits from a spouse/ex-spouse/deceased spouse’s record. 

HORAN Wealth is the marking name of HORAN Securities, INC. ("HSI") and HORAN Capital Advisors, LLC ("HCA"). Securities Offered Through M Holdings Securities, Inc. a Registered Broker/Dealer, Member FINRA/SIPC. HORAN Wealth Management ("HWM") is the investment advisory firm. HCA is an affiliated investment advisory firm.