Social Security Fairness Act: What It Means for You

On January 5, 2025, President Biden signed the Social Security Fairness Act into law. This major change could positively impact the incomes of 2-3 million seniors across the United States, including retired teachers, nurses, and government employees.

What Does the Act Do?

The Act officially repeals two provisions that reduced Social Security benefits for certain retirees:

1. Windfall Elimination Provision (WEP): Reduced Social Security benefits for retirees who also received public sector pensions, such as state or federal employees.
2. Government Pension Offset (GPO): Reduced benefits for the spouses, widows, or widowers of retired government employees.

How Much More Will You Receive?

If you were previously affected by WEP or GPO, you can expect an average increase of $360 per month in your Social Security benefits. Additionally, Social Security will issue lump-sum back payments for the entire year of 2024—some retirees could receive over $4,000 in back pay!

Important Considerations for Public Benefits

While this is excellent news for many seniors, the changes could affect eligibility for public benefits, such as Medicaid. Here’s how:

1. Lump-Sum Payments:
   • If not spent in the month received, these payments might count as a resource and could temporarily make you ineligible for Medicaid.
2. Monthly Benefit Increases:
   • If the increase pushes your income above Medicaid’s monthly cap of $2,901, you may lose eligibility unless you set up a Qualified Income Trust (QIT). It’s essential to establish and properly manage a QIT to maintain benefits.

Have more questions?

If you have questions about how the Social Security Fairness Act could affect you or your loved ones, our team at Hurley Elder Care Law is here to help. Contact us at 404-843-0121 for guidance on protecting your Medicaid benefits and navigating these changes.