President Biden signed the Social Security Fairness Act into law in January of 2025. This law will have the effect of increasing the entitlement to Social Security benefits to as many as 3.2 million people who receive public pensions based on employment when Social Security was not withheld. In New Jersey, that would include any retiree under the US Civil Service Retirement System and most members of the New Jersey Police and Firemen’s Retirement System.
What has changed?
The law eliminates two onerous calculations designed to decrease or completely eliminate Social Security benefits for the government employee. Gone are the:
- Windfall Elimination Provision (WEP) that reduced, often to zero, the Social Security benefits a non-covered government employee could collect on his/her own Social Security record.
- Government Pension Offset (GPO) that adjusted the spousal or Widow(er)’s benefit of the non-covered employee, again often to zero.
These provisions are retroactive to January of 2024, but it is expected to take some time for the Social Security Administration to adjust the benefits for affected workers. For those who have never applied for benefits because they expected the WEP or GPO to be in play, it would be wise to contact a Social Security office as soon as possible
Contributed by Lois S. Fried, CPA, CFE, CVA, ABV
