Social Security Equality Law: Current Insights
In a significant move for retirees, President Biden signed the Social Security Fairness Act into law on Jan. 5. This act aims to bring fairness to Social Security benefits for certain groups of retirees, particularly those under the Civil Service Retirement System (CSRS) Offset.
The Social Security Fairness Act eliminates the reduction of Social Security benefits based on work record for public pension recipients from work not covered by Social Security. This change will largely affect CSRS retirees who were retired under the CSRS Offset system and worked at least 15 years under CSRS without paying FICA taxes. The new law will restore reductions in CSRS retirement payments caused by the CSRS Offset system.
CSRS Offset retirees who have over 15 years of work without FICA payment and over 12 years covered under the CSRS Offset retirement plan are the primary beneficiaries of this act. It's important to note that the impact of the Social Security Fairness Act on Federal Employee Retirement System (FERS) employees and retirees is not mentioned in the current paragraph.
The act also addresses the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which can affect CSRS Offset employees and retirees, as well as some employees or retirees who transferred to FERS after more than five years of creditable service under CSRS.
If a CSRS Offset retiree has over 30 years of work meeting substantial Social Security earning minimum requirements, they are not affected by the WEP. Moreover, if a CSRS Offset retiree has over five years covered under CSRS Offset, they are not impacted by the GPO. However, it's essential to note that the Social Security Fairness Act does not specify if it will restore the full amount of the reduction or a partial amount.
The repeal of the WEP and GPO will increase the Social Security benefit entitlements of CSRS employees and retirees who are married or were married to a spouse who paid Social Security taxes. It's estimated that this change will impact about two million beneficiaries.
Eligible individuals can file for Social Security retirement, spousal, or widow's benefits online or schedule an appointment. For more information on entitlement to Social Security benefits, one can refer to the following publications, although they have not yet been updated to reflect the passage of the Social Security Fairness Act.
For those interested in understanding the potential impact of the WEP and GPO on their Social Security benefits, a tool is available to provide an estimate. It's worth noting that details on how much the Social Security Fairness Act will increase the benefits for specific individuals are not provided in the current paragraph.
Social Security has a complete list of pamphlets and fact sheets in audio and pdf versions for further reading. The National Active and Retired Federal Employees Association had opposed the WEP and GPO since their inception.
In conclusion, the Social Security Fairness Act is a significant step towards fairer Social Security benefits for CSRS Offset retirees. The Act's full implications and benefits for individual retirees are yet to be fully understood, with more updates expected in the coming months.
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