Recently, there have been discussions of a proposal which would have a significant impact on millions of Social Security benefits recipients. Existing legislation such as the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) have consistently reduced Social Security benefits for over three million beneficiaries. However, discussions of changes in legislation could provide these beneficiaries with an additional $360 a month to combat this.
Current regulations significantly reduce Social Security benefits.
Social Security is designed to support retirees, survivors, and disabled individuals through their relevant funds. However, some beneficiaries are unable to receive the full amount they are entitled to each month. Because of the WEP law, beneficiaries who receive retirement or disability pension income from public employers that don’t withhold Social Security taxes from their salaries will see a mass reduction in Social Security benefits.
Additionally, the GPO law can negatively impact spousal benefits against pension income if you receive pensions from a federal, state, or local government entity but haven’t paid Social Security taxes. GPO can reduce Social Security benefits for spouses and surviving spouses to zero. These pieces of legislation are devastating the millions of recipients who rely on their Social Security benefits to pay for their daily expenses.
The proposed change aims to eliminate these existing laws
The Social Security Fairness Act is currently being voted on in Congress. If passed, this piece of legislation could repel these laws for certain beneficiaries who meet eligibility requirements. Representative Abigail Spanberger, serving Virginia’s congressional district, along with Congressman Garret Graves of Louisiana spearheaded the petition outside Congress which has received enough signatures to sufficiently warrant a vote.
“We have taken on, on a bipartisan basis, something that’s just completely unjust, that has been going on for over four decades,” Graves said. “This is a situation where you have some of the most important occupations, some of the most important contributors to our community, that are being discriminated against.” The petition received 218 signatures.
Repealing WEP could increase monthly benefits by an average of $360
Should the bill be passed, eliminating the WEP law could mean an increase in monthly benefits for those missing out by an average of $360. Further, if GPO was eradicated, benefits could increase between $700 to over $1,000 per month. However, by eradicating these laws, the spending budget would increase by $195.65 billion between 2024 and 2034.
An increased budget for Social Security would be difficult for law makers to navigate. Currently, Social Security is set to be depleted by 2033. By eradicating these laws, this Day Zero would be significantly accelerated. There are currently talks in place about reducing benefits for all to increase the longevity of the fund. Adding extra funding may be an impossible challenge.
While many lawmakers are confident that the bill could get passed, the question of raising the longevity of the fund becomes an imperative question. One method is to reduce current Social Security benefits. However, considering the outrage that decreased payments have caused, the most likely scenario would be that is is more likely that Social Security taxes would be raised.
Social Security is a foundational piece of legislation which millions of Americans rely on each year. With the upcoming presidential elections, the future of Social Security is sure to be at the forefront of voters minds. Whether or not the bill gets passed is to be determined, but it is clear that these payments make a substantial difference to the lives of beneficiaries and withholding them cause significant financial distress.
However, beneficiaries should bear in mind that Social Security is not going to disappear. While the future of the fund is uncertain, it would be a political disaster for the acting party if it was eradicated all together.
