3.2 Million Retirees Getting Bigger Social Security Checks—Here’s Why

3.2 Million Retirees Getting Bigger Social Security Checks—Here’s Why
Bigger Social Security checks are coming—see if you qualify!|©iStock/Douglas Rissing

You may be among the 3.2 million Social Security beneficiaries who will see an increase in your benefit amount scheduled for April of this year. In fact, you are also likely to be eligible for a retroactive payment ranging from several thousand dollars to tens of thousands of dollars! And even if this change doesn’t apply directly to you, it may apply to a family member, friend, or colleague—you will want to be sure to share this information with them.

Two provisions of the Social Security laws passed in the 1970s and 1980s substantially reduced the benefit amount paid to certain workers who earned non-covered pensions from public sector jobs (public school teachers, police officers, firefighters, city, county, and state employees, public hospital workers, etc.) in certain states. These workers spent much, if not most, of their careers working in positions where they did not pay Social Security taxes.

Some of these government workers also worked at other times in their careers in jobs where they did pay into Social Security and qualified to receive a benefit. However, the Windfall Elimination Provision reduced that benefit by up to $500 or more, depending on your birth year and other factors.

Alternatively, some of these government workers were married (or married for at least ten years before a divorce) to an employee fully covered under Social Security and would otherwise qualify for spousal and/or survivor benefits. However, the Government Pension Offset (GPO) often eliminated the spousal benefit and most, if not all, of the survivor benefit for these workers. It reduced any benefit amount by two-thirds of the government pension, which was almost always enough to eliminate a spousal benefit and substantially reduce any survivor benefit.

For instance, a government pension of $3,600 would reduce a spouse or survivor benefit by $2,400 (two-thirds of the pension amount).

These two provisions were repealed when President Biden signed the Social Security Fairness Act into law on January 5 of this year. As a result, approximately 3.2 million workers will no longer be subject to these reductions. Instead, they will receive their full work-based benefit and the full amount of any spousal or survivor benefit to which they are otherwise entitled.

Current indications from the Social Security Administration (SSA) suggest that the increase in base benefits should begin appearing in payments starting in April of this year.

What’s more, the law was written to be retroactive to the start of 2024. That means qualifying beneficiaries will receive lump sum payments for the twelve months of 2024 and the first months of 2025—a total of about 14 months of retroactive payments.

For a work-based benefit recipient who previously saw their benefit reduced, this could add up to $7,000 or more.

Someone previously ineligible for a spousal benefit could receive a retroactive benefit of up to $2,000 per month and a lump sum payment of up to $30,000.

A survivor previously ineligible could receive tens of thousands of dollars more in retroactive payments.

A client recently informed me that he received notice of a work-based retroactive benefit of over $7,600; I’ve also heard of a widow receiving a survivor retroactive payment exceeding $30,000! These payments are currently being processed.

If you, or someone you know, qualified for a Social Security benefit that was reduced or eliminated due to employment in one of these public sector jobs, be on the lookout for a notice from Social Security regarding both a retroactive payment and a benefit increase going forward. If you believe you qualify and haven’t been notified by the end of March, I recommend contacting the SSA for an explanation.

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