Everything You Need to Know about the Social Security Fairness Act in 2025

The Social Security Fairness Act has been reintroduced in 2025 — and it could change retirement benefits for millions of workers. If passed, it would repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which currently reduce Social Security benefits for those with certain government pensions. In this video, you’ll learn what the bill actually proposes, who it affects, and what’s likely to happen next. I’ll break down how it could impact your retirement income and whether you should change your plans. If you’re a teacher, firefighter, police officer, or government employee, this is one you don’t want to miss.

Resources:

- Alliance of Comprehensive Planners: https://www.acplanners.org

- John's firm website: https://www.trinfin.com

- Find us on Facebook: https://www.facebook.com/friendstalkfinancialplanning

TRANSCRIPT:

John: A government worker, like my uncle, never paid into Social Security, so he never got Social Security benefits, but now he's eligible. Wait a minute, what does this mean? I'm John Scherer, and I run a fee-only financial planning practice in Middleton, Wisconsin.

Bridget: I'm Bridget Sullivan Mermel. I've got a fee-only financial planning practice in Chicago, Illinois. And before we talk about Social Security, we just want to remind you to like and subscribe so that other people can find us. So, John, the Social Security Fairness Act. You've had some recent experience with this, and we wanted to talk about it some more. So why don't you kick us off?

John: Yeah, no, this is kind of exciting for me because we had a guest on the show not long ago, Denny Haywood, who runs Social Security Solutions and does consulting work for individuals about Social Security. He used to work for SSA for a long time. We'll put a link in the show notes to that episode. You should check it out. But one of the things that I learned from him in that episode, Bridget, was about the Social Security Fairness Act, which was signed, I believe in December of 2024, or late last year anyway.

And it basically eliminated the government pension offset for certain government workers, among other things. There are some other provisions in the bill, but the one big one, the one that I have some direct experience with, is this government pension offset. And in short, what that means is that certain government employees were exempt from Social Security, so they didn't pay into the system, and then, therefore, they didn't get any benefits, and they weren't allowed to get any benefits, even as a spouse or as a survivor.

And we'll talk about that in a minute and what that means. But the new bill, the Social Security Fairness Act, allowed them to be eligible for benefits like anybody else would. And the big thing is that there are many people who fall into this category, like a lot of folks down in Illinois in the public sector, teachers and state local government employees. I know it really affects folks in your area. It’s a little bit less so here in Wisconsin, other than certain federal employees.

But it doesn’t affect everybody who's a government employee, so you have got to look and pay attention to this. I'll just give an example. I've got an uncle who used to work for the federal government, and he was at a time when he did not pay into Social Security, so he never got Social Security benefits. And now he's eligible. Wait a minute, what does this mean? So if you have to think about how Social Security works is that when a person gets to retirement age, I can claim all of my benefit or I can claim half of my spouse's benefit, whichever is higher.

And if you think about this, if I was a stay-at-home parent my whole career, let's say I never earned a nickel, never paid a dime into Social Security, and my wife Allison worked her whole career, and let's say her Social Security benefit was $3,000 a month. Even though I didn't pay in a dime, I get to claim all of mine, zero or half of hers, $1,500. So even though I stayed at home and took care of the family, that’s no problem. For a government worker, like my uncle, he didn't pay into Social Security.

My aunt did pay in. She had a regular job, so she paid in, but he's not eligible to claim on her spousal benefit. So I didn't pay anything in, and I get to claim on my spouse's benefit. He didn't pay anything in, but he doesn't get the claim on his spouses. That's a government pension offset. So that's where the sort of core of why this is eligible now. That's some of the background on it. And of course, I'm giving the high level, there's some more specific nuances, but that's generally how this thing works.

The Social Security Fairness Act, implemented last year, says, “No, those people are allowed to claim a spousal benefit or a survivor benefit.” And that's what happened with my uncle. And I don't know their exact numbers, but his wife, my aunt, was a regular worker. If her Social Security benefit was $2,000 a month, he's never been able to claim the spousal benefit all these years. Now he can claim his $1,000 a month as a spouse, and it's retroactive.

And I know that he got six months’ worth of payments that he should have gotten, so it was backdated. I think that might change depending on the circumstances, but my understanding is that it's six months of backpay. So it's one of those things that, hey, if you're in this situation, you need to be aware of it.

Bridget: Exactly. And so, from what I've seen with clients and friends, if you're in the Social Security system, they've been pretty good about proactively changing things and sending you a check. Knowing how life is, it's probably not 100% accurate and some people will need to change things and call them and deal with it.

But I would say that they’ve been surprisingly good about reaching out and saying, “Hey, here you go.” It's worth it to check and see, especially if you're not in their system. I wasn't eligible. I never applied. Those are people who might benefit from this bill and that the Social Security system wouldn't just reach out to you.

John: And my understanding on that one, Bridget, is that if somebody has applied and had their benefits reduced by the government pension offset, or there's another thing called the windfall elimination provision that applies here, it may be different. If you've already applied and maybe you're getting some, but they're reduced, or you applied and were rejected, you're in the system. That's when it’s automatic; they know you're here.

Somebody like my uncle had never applied, because he thought, “I don't get benefits.” And so those are the people that for sure have to check. But it's one of those things to be aware of and double check. If you've already gotten a big check, you probably know it. But if you haven't, just check on that and see if you're eligible. And I appreciate your comment about how they do a good job but nothing's perfect.

I helped my uncle walk through this. It was one phone call. We were on hold for a long time, but they called back, and it was within a matter of weeks that things got filed, approved, and a check got sent out. So they've got some folks that are dedicated to this and understand it. And again, less than a month from starting the whole process to being in the system, getting the payment that they were due. So it's worth calling in, finding out about this, and just being aware.

Bridget: Great place to wrap it up. I’m Bridget Sullivan Mermel. I've got a fee-only financial planning practice in Chicago, Illinois.

John: And I'm John Scherer. I've got a fee-only financial planning practice in Middleton, Wisconsin. Both Bridget and I are taking on new clients. We'd love to hear from you, but we're also both members of the Alliance of Comprehensive Planners. So if you like what you hear on our show and would like to find an advisor in your area, please check out acplanners.org.

Bridget: And don't forget to subscribe.

At Sullivan Mermel, Inc., we are fee-only financial planners located in Chicago, Illinois serving clients in Chicago and throughout the nation. We meet both in-person in our Chicago office and virtually through video conferencing and secure file transfer.