Social Security Fairness Act’s boosted payments to 3M public employees ‘could take more than 1 year’
Right before President Biden left office, he signed the Social Security Fainess Act, a measure that has been decades in the making. However, the new law, which will boost Social Security retirement payments to nearly 3 million public sector retirees who draw public pensions, will now be delayed.
Since the passage, callers to SSA’s National 800 number hear a message about the Act, however, SSA announced last week that “more than 7,000 people each day still choose to wait to speak to a representative about the Act.” On its new online update of the new law, which posted last week, the SSA includes frequently asked questions. “SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefit,” was one of the messages on the site.
The Social Security Fairness Act will boost Social Security retirement payments to nearly 3 million public sector retirees who draw public pensions – such as former police and firefighters – which critics warned will further weaken the program’s finances. Now, those beneficiaries may have to wait a little longer than expected for those higher payments.
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SSA further explains: “SSA’s ability to implement the law in a timely manner and without negatively affecting day-to-day customer service relies on funding. The Act did not provide money to implement the law.” The law will cost more than $195 billion over 10 years, while accelerating the insolvency of Social Security trust funds that are already projected to be depleted by 2035.
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“The law requires SSA to adjust benefits for over 3 million people,” said the SSA. “Since the law’s effective date is retroactive, SSA must adjust people’s past benefits as well as future benefits. Though SSA is helping some affected beneficiaries now, under SSA’s current budget, SSA expects that it could take more than one year to adjust benefits and pay all retroactive benefits.”
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The Social Security Fairness Act will repeal two decades-old provisions that limited benefits for people who also receive a pension. Currently, public service employees are unable to receive their full Social Security benefits if they also receive other forms of retirement benefits, such as a pension.
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“Proponents of the bill argue that these reductions are unfair, as the affected individuals contributed to Social Security funding during their working years,” said Romi Savova, founder and CEO of fintech retirement firm PensionBee. “Opponents of the bill argue that affected individuals are already receiving abundant retirement funds. Ultimately those who were previously affected by the Windfall Elimination Provision or the Government Pension Offset, will receive higher retirement benefits through Social Security.”
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The new law will eliminate the Windfall Elimination Provision, enacted in 1983, which reduces the Social Security benefits of workers who receive government pensions not covered by Social Security. It will also repeal the Government Pension Offset, enacted in 1977, which reduces benefits for spouses, widows and widowers whose spouses receive public sector pensions.
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After Congress passed the Social Security Fairness Act in December, the Social Security Administration did release a statement that seemed to warn of the payment delays: “At this time, the Social Security Administration is evaluating how to implement it if it is signed into law. We will provide more information on our website, ssa.gov as soon as it is available.”