On January 5, 2025, President Biden signed the Social Security Fairness Act of 2023 into law. This legislation repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), reportedly resulting in increased Social Security benefits to approximately 2.5 million retirees, spouses, and survivors,¹ retroactive to January 2024.

Windfall Elimination Provision (repealed)

The WEP adjusted how Social Security benefits were calculated for individuals who received pensions from employment not covered by Social Security, such as many governmental employer public sector positions. Specifically, the WEP affected those who worked in jobs where they did not pay Social Security taxes but were also eligible for Social Security benefits due to other employment where they did contribute to Social Security, with the WEP applying if they had fewer than 30 years of Social Security-covered employment.

Social Security benefits are based on a progressive formula designed to replace a higher percentage of earnings for low-income workers. For individuals with both covered and non-covered employment, this formula treats them as if they were long-term, low-income workers, because their non-covered earnings are not considered when calculating their benefit. As a result, these workers could receive a higher replacement rate from Social Security than if their non-covered earnings had been included. The WEP reduced the Social Security benefit amount to prevent what was perceived as a "windfall" benefit from having dual pensions.

The WEP primarily applied to retirees who worked in both Social Security-covered employment and non-covered employment, such as certain state and local government employees, federal workers under the Civil Service Retirement System (CSRS), and some teachers. The repeal of the WEP could raise monthly Social Security benefits for individuals currently impacted by this provision by as much as $613 in 2025.²

Government Pension Offset (repealed)

The GPO reduced the Social Security spousal or survivor benefits of individuals who received a government pension from work not covered by Social Security. It was intended to prevent individuals from receiving disproportionately high spousal or survivor benefits in addition to their government pensions.

The repeal of the GPO will eliminate the reduction to Social Security spousal or survivor benefits. Individuals currently affected by the GPO will see an increase in their Social Security spousal or survivor benefits of two-thirds of the government pension amount. For example, as a retiree Jill receives a government pension of $1,200, and as a spouse is eligible for $1,000 from Social Security based on her husband Jack’s work history. The GPO would have reduced the $1,000 Social Security spousal benefit by $800 (two-thirds of $1,200). Repeal of the GPO will restore Jill’s Social Security spousal benefit in this example back to $1,000.

Please contact your Milliman consultant with any questions.

¹ Congressional Research Service (November 13, 2024). Social Security: Beneficiaries Affected by Both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Retrieved January 13, 2025, from https://crsreports.congress.gov/product/pdf/R/R45845/2.

² Social Security Administration (2025). Windfall Elimination Provision. Retrieved January 13, 2025, from https://www.ssa.gov/pubs/EN-05-10045.pdf.