The Social Security Administration (SSA) has made significant progress in implementing the Social Security Fairness Act. As of March 4, 2025, the SSA had paid more than $7.5 billion in retroactive payments to 1,127,723 people, with the average retroactive payment amounting to $6,710.
Acting Commissioner of Social Security Lee Dudek said, “President Trump made it very clear he wanted the Social Security Fairness Act to be implemented as quickly as possible. We met that challenge head-on and proudly deliver for the American people.”
The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) previously reduced or eliminated Social Security benefits for over 3.2 million people who receive a pension based on work not covered by Social Security because they did not pay Social Security taxes. The SSA continues to process remaining retroactive payments and is prepared to begin paying higher monthly benefit payments starting in April, reflecting people’s March benefits.
The Social Security Fairness Act, signed by former President Joe Biden on Jan. 5, repeals the WEP and GPO. Eliminating the WEP will increase benefits by an average of $360 for 2.1 million Social Security beneficiaries, rising to $460 for 1.8 million recipients by December 2033.
The removal of the GPO is expected to increase monthly benefit payments by around $700 for spouses and $1,190 for surviving spouses in December 2025.
Social Security Fairness Act updates
By December 2033, these amounts may increase to $860 and $1,520, respectively.
Although only a small percentage of all Social Security recipients are affected by the WEP and GPO, the financial impact on those households could be substantial. The Congressional Budget Office (CBO) estimates reduced Supplemental Nutrition Assistance Program (SNAP) payments for individuals participating in both programs. Qualifying individuals do not need to take action other than ensuring their mailing address and direct deposit information are current with the SSA.
Updates can be made online or by calling the SSA directly at 1-800-772-1213. However, financial advisers warn that the income boost might push some recipients into higher tax brackets or affect their Medicare premiums. Taxes may not be due until 2025 because the additional income is recorded when received.
Taxation of Social Security benefits depends on the total income, including half of the Social Security benefits for the taxable year. The base amounts for taxing Social Security income are $25,000 for single filers, head of household, or qualifying surviving spouse; $32,000 for married couples filing jointly; and $0 for married individuals filing separately who lived with their spouse during the tax year. To mitigate the tax impact of the increased Social Security payments, experts suggest several strategies, such as spreading the lump-sum retroactive payment over previous years, using Qualified Charitable Distributions (QCDs) from IRAs, reducing withdrawals from retirement accounts, and harvesting tax losses to manage taxable income.
Image Credits: Photo by Katie Moum on Unsplash
