Lawmakers Push Plan That Would Increase Social Security Payments

A group of bipartisan lawmakers is pushing a plan that would increase Social Security payments for some Americans who receive pensions.
Representatives Abigail Spanberger, a Virginia Democrat, and Garret Graves, a Louisiana Republican, filed a discharge petition this week that could potentially force a vote on the Social Security Fairness Act. The act seeks to repeal two rules that currently lower Social Security benefits for some workers and their spouses and widows if they also receive pensions.
If the petition reaches 218 signatures, a vote would be forced, and experts predict the bill has a chance of passing because of its bipartisan support.
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Currently, pension workers, including those working for the government as police officers, firefighters, teachers and postal employees, sometimes see reduced Social Security benefits despite paying into the system like other Americans.
While most Americans work in jobs covered by Social Security, some pensions could lead to reduced payments if they aren’t “covered” because their employers did not withhold Social Security taxes.
“If your pension is from what Social Security calls ‘covered’ employment, in which you paid Social Security payroll taxes, it has no effect on your benefits. The vast majority of Americans work in jobs covered by Social Security,” AARP said on its website.
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“But say you worked for and get a pension from a “non-covered” employer, one that did not withhold Social Security taxes, but you also did enough work in covered jobs to qualify for benefits.”
In these cases, the windfall elimination provision (WEP) can bring down your monthly payment.
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“Get a hold of your representative or your senator to get on it, because this is part of a broken system,” Senator Mike Braun, an Indiana Republican, said during a Social Security hearing this week. “It’s an inequity that needs to be fixed.”
The WEP and government pension offset (GPO) both can cause lower payments for Americans.
The WEP reduces the benefits of pension workers if they worked for a company that did not require them to contribute taxes into the program. More than 2 million workers see their monthly benefits lowered as a result.
Meanwhile, the GPO impacts more than 745,000 Americans and sees benefits similarly reduced for spouses and widows who also bring in a pension.
“It’s really overdue to get some support for the small but significant group of recipients this covers,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “There are situations in which someone may be receiving the benefits from a pension that belonged to a spouse or other family member, and, by law, that reduces the benefits they can receive from Social Security.”
Beene said for a select few, the rules wipe out virtually their entire monthly check from Social Security, which could come as an “income shock” in retirement.
Seniors impacted by the rules have long been complaining that the lower benefits force them to delay retirement or keep working entirely.
Not everyone is in support of eliminating the WEP and GPO entirely, though, as some feel it would disproportionately support those who paid Social Security only some of the time.
It would also cost the Social Security Administration, which is already facing a funding crisis that would see payments reduced by the mid 2030s.
The extra cost could speed up the timeline for beneficiaries across the country, as the Congressional Budget Office predicted repealing both the GPO and WEP would cost $196 billion over the span of a decade.
Despite these qualms, many lawmakers strongly feel a major update to the rules is needed.
“Assisting this group by allowing them to access the full Social Security amount they’re entitled to would go a long way in helping them in their post-working years,” Beene said.