Will WEP/GPO Repeal Increase Your Social Security Benefits?

by Prof. Robert Bloink and Prof. William H. Byrnes

For decades, clients who worked in various state and local government positions have seen their Social Security benefits slashed because of two key provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Each of those rules reduced Social Security benefits based on an individual’s participation in a government-sponsored pension plan. As the name suggests, the provisions were enacted to prevent government workers from receiving “windfall” Social Security benefits in addition to their government retirement benefits. Early in 2025, the Social Security Fairness Act was signed into law and repealed each of those two provisions completely. Clients who worked in government positions at any point in their careers should carefully review their retirement planning strategies to determine whether they continue to make sense considering changes to their Social Security payments.

WEP/GPO Repeal: Background

Social Security benefits are typically based on a taxpayer’s earnings history. Exceptions exist for certain government workers who are covered by separately funded pension plans if their wages were exempt from Social Security tax withholding.

Since 1983, the WEP and GPO have reduced the Social Security benefits for some public sector workers. Congress passed the Social Security Fairness Act to repeal the WEP and GPO entirely. The law will also provide retroactive Social Security benefits for public workers whose benefits were reduced during the 2024 tax year.

What Are the WEP and GPO?

The WEP impacted individuals’ direct Social Security benefits. Impacted individuals included those who worked both in jobs that were covered by Social Security (i.e., “covered employment”) and jobs that were not covered by Social Security throughout their working careers. The WEP did not completely eliminate the individual’s right to receive Social Security benefits upon retirement, but it did reduce their benefits.

The amount of an individual’s Social Security benefits is calculated by multiplying their average earnings by a factor, or a percentage. The WEP reduced that factor based on the amount of time the individual worked in non-covered employment.

The maximum reduction during 2024 was $587 per month (or, if the individual’s Social Security benefits were lower, 50%). The exact amount of the reduction was calculated based on the number of years the individual paid Social Security taxes (and the amount they paid). Individuals with more significant Social Security tax-paying history received lower reductions.

The WEP did not apply to individuals with 30 or more years of covered employment. A partial reduction applied for individuals with between 21 and 29 years of covered employment.

The GPO impacts individuals who are eligible for spousal or survivor Social Security benefits. The GPO served to reduce the individual’s otherwise available spousal or survivor Social Security benefit by two-thirds of the individual’s government pension benefit.

For example, if the individual was receiving a $1,500 government pension benefit each month, the GPO reduced their survivor or spousal Social Security benefit by $1,000. Many individuals lost the entire amount of their Social Security survivor or spousal benefit as a result.

Action Steps for Clients

The Social Security Administration has not indicated exactly when impacted taxpayers will receive their retroactive Social Security benefits. However, the SSA has stated that individuals who are currently receiving Social Security don’t have to take any action to receive those benefits, aside from making sure the SSA has their correct mailing address and bank direct deposit information. Clients can do so by visiting www.ssa.gov/myaccount or calling (800) 772-1213 for help.

The recalculation in benefit amounts will be automatic. Impacted clients should begin to see increases this year. Retroactive payments for 2024 will be paid as a lump sum to Social Security beneficiaries who have seen their benefits reduced under the WEP or GPO.

Taxpayers who have never filed for Social Security can file online at ssa.gov/apply.

Individuals who have been impacted by the WEP and GPO reductions should, of course, review their retirement income strategies. Those with private retirement accounts may be able to reduce their withdrawals from those accounts (after satisfying annual RMD requirements).

Conclusion

Advisors should ensure that clients who have been impacted by the WEP and GPO understand that their Social Security benefits will no longer be reduced due to these rules. Action steps, of course, will depend on the client’s unique financial circumstances going forward.

Your questions and comments are always welcome. Please post them at our blog, AdvisorFYI, or call the Panel of Experts.