Some People May See an Increased Social Security Benefit – And the Action You Might Have to Take

Glenn Kirst is a lead planning excellence consultant at Northwestern Mutual. 

You likely know Social Security as the program that provides Americans with income in retirement. During your working years, you pay taxes into the system. Then, in retirement, you can file for benefits and receive a paycheck for the rest of your life. 

While the system covers most Americans, for years it has paid reduced benefits or no benefits at all to millions of people who worked in certain types of jobs that didn’t require them to pay into the system. These reductions were the result of something known as the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These provisions also affected the ability of these workers’ spouses or families to be able to claim based on their work records. 

In many cases, people impacted will automatically get higher benefits. But some people need to take action—and could be leaving benefits on the table if they wait.  

Earlier this year, President Biden signed a law called the Social Security Fairness Act, which eliminated the WEP and GPO. That means people affected by them may be able to claim Social Security (if they previously could not) or see a larger monthly benefit. 

Who is impacted by the Social Security Fairness Act? 

People impacted by the WEP and GPO tend to have worked in government jobs—teachers, firefighters, police officers and many federal employees. People who worked in jobs that were covered by another country’s social security system may also be impacted.  

However, simply working one of these jobs doesn’t mean you have higher benefits headed your way. This covers only people who receive a pension for work that was not covered by Social Security. The Social Security Administration estimates that about 72 percent of state and local employees work in Social Security-covered employment and, therefore, are not eligible. 

What should you do if you think you’re impacted by the WEP or GPO? 

The action you need to take depends on your situation. 

You’re the spouse or survivor of someone who was impacted and are subject to the GPO 

Depending on your situation, you should contact Social Security right away. There is not a way for survivors to apply online. Social Security will apply retroactively for only six months, so if you’re in a position now in which it makes sense to claim benefits, it’s important to claim (either online or by scheduling a meeting) as soon as possible, or you could be leaving some benefits on the table. The window to collect benefits is typically determined by the date you schedule the meeting, not the date on which the meeting is scheduled. So it’s OK if the meeting doesn’t happen right away, but get it scheduled now. If you fall under these criteria, this likely applies to you. 

• You have income from a state or local government pension.  

• You do not currently receive spousal or survivor benefits. 

• You have a current or former spouse (or deceased spouse or former spouse) who receives(d) Social Security benefits under their own name. 

You have been subject to the WEP and you have already claimed your Social Security Benefits 

The Social Security Administration recommends verifying that your address and direct deposit information are correct. However, assuming Social Security has the correct information, there isn’t any additional action you need to take. Your benefit will automatically increase once the Social Security Administration implements the changes. However, the system will not identify spouses who are eligible for a spousal benefit that is greater than their own accrued benefit. If, under these new rules, you may be eligible for a spousal benefit that is greater than your own benefit, call Social Security now. If you’re unable to file online (survivors cannot file online), as we mentioned above, the window to collect benefits is determined by the date you schedule the meeting, not the date on which the meeting is scheduled. So, it’s ok if the meeting doesn’t happen right away, but get it scheduled right away.  

You have never claimed Social Security benefits 

You may need to apply for benefits. You can apply on the Social Security Administration’s website. You can also apply over the phone at 1-800-772-1213. The Social Security Administration says that when the system asks, “How can I help you today?” reply, “Fairness Act.” 

Social Security and your financial plan 

If you’re impacted by the change, that’s likely good news—you will have additional guaranteed income for life. Your Northwestern Mutual financial advisor can work with you to determine how this change impacts your broader financial plan. Reach out to your advisor to schedule time to discuss whether any changes to your plan are warranted.