Those due to receive retroactive payments as a result of the recently implemented Social Security Fairness Act will see an increase in their monthly amount in their April payment.
The Social Security Administration announced Tuesday, Feb. 25, that it is “beginning to pay retroactive benefits and will increase monthly benefit payments to people whose benefits have been affected by the WEP [Windfall Elimination Provision] and GPO [Government Pension Offset].” Because Social Security benefits are paid based on the previous month, this change will affect individuals’ March benefits.
“Social Security’s aggressive schedule to start issuing retroactive payments in February and increase monthly benefit payments beginning in April supports President Trump’s priority to implement the Social Security Fairness Actas quickly as possible,” Lee Dudek, Acting Commissioner of Social Security, said. “The agency’s original estimate of taking a year or more now will only apply to complex cases that cannot be processed by automation. The American people deserve to get their due benefits as quickly as possible.”
The SSA also said that “anyone whose monthly benefit is adjusted, or who will get a retroactive payment, will receive a mailed notice from Social Security explaining the benefit change or retroactive payment.” Beneficiaries are actually scheduled to receive two notices from the SSA – the first when the WEP or GPO is removed from their record and a second when the monthly benefit amount is adjusted for their new monthly payment amount.
For Kentucky, this means 34,661 people will be impacted, while in Ohio, some 231,104 will see an increase, according to a Congressional Research Service report.
This law increases Social Security benefits only for certain types of workers, including some:
Teachers, firefighters and police officers in many states (including Kentucky and Ohio).
Federal employees covered by the Civil Service Retirement System.
People whose work had been covered by a foreign social security system.
An additional consideration is the impact of an individual’s Primary Insurance Amount (PIA), which is the benefit (before rounding down to the next lower whole dollar) a person would receive if they elect to begin receiving retirement benefits at their normal retirement age. “The PIA is the sum of three separate percentages of portions of average indexed monthly earnings. The portions depend on the year in which a worker attains age 62, becomes disabled before age 62, or dies before attaining age 62,” according to the SSA. The chart below is a representative example.
Some other items to keep in mind about the act:
If a beneficiary is due retroactive benefit, they will receive a one-time retroactive payment, deposited into the bank account SSA has on file, by the end of March. This retroactive payment will cover the increase in their benefit amount back to January 2024, the month when WEP and GPO no longer apply.
Beneficiaries should wait until after receiving their April payment before contacting SSA to inquire about their monthly benefit amount.
The amount of monthly benefits may change and can vary greatly. Depending on factors such as the type of Social Security benefit received and the amount of the person’s pension, some people’s benefits will increase very little while others may be eligible for over $1,000 more each month.
The SSA said on its website it is experiencing high call volumes as this change is implemented and is fielding as many as 6,000 calls a day. However, Joseph Duffey at Everest Financial in Fort Mitchell, KY, is National Social Security Administration (NSSA). This organization “equips advisors with the necessary knowledge and skills to navigate the complexities of Social Security benefits.” He brings over 30 years of experience to the financial and retirement planning industry.
Everest Financial also will be holding several seminars on Social Security:
- March 20 in Cincinnati
- May 6 and 8 in Kentucky.
Click here to register or call 859-291-9290 if you have questions about Social Security or other financial/retirement issues.