Over 3.2 million people have just gained a legislative win thanks to a new law that will bump up their Social Security benefits. This is great news, yet many of these individuals are likely to face a bit of a wait before they see the extra cash in their pockets.
The Social Security Fairness Act, signed by former President Joe Biden on January 5th, makes significant changes by removing the Windfall Elimination Provision and the Government Pension Offset. These had previously slashed benefits for those with pensions from non-covered jobs. Now, with the law in play, monthly payments are expected to go up by anywhere between $360 and $1,190, depending on individual circumstances. On top of this, there will be lump-sum payments for the benefit increases dating back to January 2024.
The Social Security Administration’s website mentions that it’s already started assisting some beneficiaries, but it doesn’t commit to a specific timeline for processing all these benefit adjustments. According to the SSA website, under the current budget, it could take over a year to adjust everyone’s benefits and issue all retroactive payments.
On February 5th, a group of Senators from both parties urged Acting Social Security Commissioner Michelle King to ensure the swift rollout of these changes, which affect various public servants, including teachers, police officers, and firefighters. Yet experts believe that without additional funding, the agency may struggle to meet these demands. David A. Weaver, a former SSA executive now teaching statistics, points out that Congress must allocate funds for these implementation costs—or else the SSA will have a tough time handling all these cases.
Despite gaining broad bipartisan support, the Social Security Fairness Act has faced criticism, particularly concerning its financial implications. With an estimated cost of $200 billion over a decade, and no clear offsets, this expenditure is predicted to move Social Security’s trust fund depletion forward by six months.
Currently, the SSA is working with a continuing resolution, which expires mid-March. Weaver notes that it would be beneficial for Congress to boost the SSA’s budget to help implement the changes efficiently, estimating at least $200 million will be needed. Reflecting on past experience, Weaver cited the Senior Citizens Freedom to Work Act of 2000, which had a similar implementation cost adjusted for today’s dollars. However, the new law will impact about three times as many people. Dan Adcock from the National Committee to Preserve Social Security and Medicare highlights that SSA staffing levels are at a historic low, which poses an additional challenge.
Implementing this new law comes with its complexities. Initial plans aimed for changes to take effect in January 2024, but the rush to pass the legislation left the effective date unchanged, adding to the SSA’s workload. Furthermore, with about 4% of beneficiaries passing away annually, the agency needs to identify those affected and distribute funds to the appropriate survivors or estates. Another layer of complexity involves dealing with individuals previously ineligible for benefits due to GPO, who may now qualify but lack updated records or contact information.
While Weaver suggests automation could handle the majority of cases involving the Windfall Elimination Provision, unique situations might require manual processing, necessitating extra time and resources. The good news is that even amid these challenges, there are efforts underway to streamline the process and ensure all eligible individuals receive the benefits they deserve.
