FINANCIAL PLANNING TIDBITS: SOCIAL SECURITY WEP AND GPO REPEALED

SUMMARY

The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) previously reduced an individual’s Social Security benefits, but new legislation has repealed these provisions.

THE WEP AND THE GPO

Many federal and state employees, including some teachers, firefighters, and police officers, receive a government pension instead of paying into Social Security while working in those roles. Because of this, two rules—the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO)—have been used to reduce Social Security benefits for which they might otherwise qualify.

The WEP diminished or completely eliminated a person’s Social Security benefit, even if he or she had paid into Social Security through another job. Similarly, the GPO reduced, and often entirely erased—spousal or survivor benefits if the individual also received a government pension. The rules were meant to prevent people from collecting from both systems, but critics argued they unfairly penalized workers who had contributed to Social Security as well.

THE SOCIAL SECURITY FAIRNESS ACT

In December, Congress passed the Social Security Fairness Act, which effectively repeals both the WEP and GPO. This means that affected retirees will no longer see their Social Security benefits reduced due to their government pensions. The legislation also includes provisions for backpay going back to January 2024, meaning individuals who had their benefits reduced in the past may receive compensation for those lost funds.

The repeal will primarily help retired government workers who also worked in jobs that paid into Social Security but who were receiving benefits reduced by the WEP. It will also benefit spouses and widows or widowers of government pension recipients who lost some or all of their Social Security benefits due to the GPO. The Social Security Administration (SSA) is still working out how to implement these changes and notes that it may take some time before backpay is distributed.

If you believe you are affected, stay informed through the SSA (ssa.gov) and relevant government agencies to make sure you receive any backpay or benefit adjustments for which you qualify.

Natalie G. Brown, CFP®
Director of Client Services & Financial Planning
Day Hagan Private Wealth

—Written 1.30.2025.

Print PDF Copy of the Article: Day Hagan Private Wealth Financial Planning Tidbits: Social Security WEP and GPO Repealed (pdf)

Disclosure: The data and analysis contained herein are provided “as is” and without warranty of any kind, either express or implied. Day Hagan Private Wealth (DHPW), any of its affiliates or employees, or any third-party data provider, shall not have any liability for any loss sustained by anyone who has relied on the information contained in any Day Hagan Private Wealth literature or marketing materials. All opinions expressed herein are subject to change without notice, and you should always obtain current information and perform due diligence before investing. DHPW accounts that DHPW or its affiliated companies manage, or their respective shareholders, directors, officers and/or employees, may have long or short positions in the securities discussed herein and may purchase or sell such securities without notice. The securities mentioned in this document may not be eligible for sale in some states or countries, nor be suitable for all types of investors; their value and income they produce may fluctuate and/or be adversely affected by exchange rates, interest rates or other factors.

Investment advisory services offered through Donald L. Hagan, LLC, a SEC registered investment advisory firm. Accounts held at Raymond James and Associates, Inc. (member FINRA, SIPC) and Charles Schwab & Co., Inc. (member FINRA, SIPC). Day Hagan Asset Management and Day Hagan Private Wealth are both dbas of Donald L. Hagan, LLC.