Over 2 Million People to Get Increased Social Security Benefits Under New Law

The Senate passed a bill early Saturday morning that is set to expand Social Security benefits for millions of Americans who have pensions. Called the Social Security Fairness Act, it eliminates two provisions of current Social Security law that reduce certain people's benefits. The Senate's approval follows that of the House; President Joe Biden is expected to sign the legislation soon.

Most workers contribute to Social Security through payroll taxes, funding the main program that supports Americans with monthly checks in retirement. However, many people who work in the public sector — such as teachers and police officers — are exempt from these taxes because they are covered by separate pension plans. Government workers hired before 1984 were also part of a different retirement plan.

In total, the bill will affect more than 2 million Social Security recipients as well as some future retirees.

Even though the affected public-sector workers with pensions are exempt from paying Social Security tax for those roles, many qualify for Social Security through other work. That could be a second job or private sector employment at other times in their life. (To qualify for Social Security benefits, you need to work in an eligible position and pay taxes for at least 10 years.)

The two provisions the Social Security Fairness Act nix — the Windfall Elimination Provision and the Government Pension Offset — were created to prevent "double-dipping" with pensions and Social Security, according to those who defended the old laws.

The windfall provision applied to retirees and workers with disabilities, and the Congressional Budget Office (CBO) estimates it would net 2.1 million affected beneficiaries a $360 bump in monthly checks, based on projected benefits in December 2025. The other provision applied to spousal benefits.

Large bipartisan coalitions in Congress, as well as Biden and President-elect Donald Trump, wanted to repeal these policies, disagreeing with the notion that they were necessary to stop folks from "double-dipping." The House voted 327 to 75 to pass the Social Security Fairness Act in November, and the Senate voted 76-20.

Supporters of the bill argued that public-sector workers who pay Social Security taxes deserve to receive benefits in retirement just like anyone else.

Eliminating the two provisions and expanding Social Security benefits for millions comes with a price tag. The act will cost $196 billion over 10 years, per the CBO, and it will bump up Social Security’s looming insolvency by about six months, according to the Committee for a Responsible Federal Budget, a nonprofit focused on fiscal responsibility.

Just a few weeks ago, the bill's fate was uncertain in this lame-duck session of Congress. Despite the bipartisan support, it was unclear if Senate leadership would want to spend precious floor time bringing it to a vote. But at a Dec. 11 rally, Sen. Chuck Schumer, D-N.Y., told union workers he was committed to having a vote.

"You're going to find out which senators are with you and which are against you… What's happening to you is unfair, un-American, [and] I will fight it all the way," he said to cheers as rain started to pour down in Washington, D.C.

From there, passage appeared likely given that over 60 senators were already co-sponsors. While some Republican senators tacked on "poison pill" amendments to the bill in the final days, the legislation ultimately had enough supporters to overcome that challenge before the Senate adjourned until the new year.

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