AN American recently found that their Social Security benefits were cut dramatically due to certain federal policies.
While those policies are changing soon, some have still lost about half of the money in their monthly distributions for decades.
About 72 million Americans depend on programs from the Social Security Administration (SSA) for their livelihood.
Still, some find they aren’t able to access their funds after retiring because of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
Each provision reduces or eliminates all Social Security benefits for select Americans if they received a public pension that didn’t withhold tax for Social Security.
Essentially, because taxes weren’t taken out, they don’t get the cash.
This mostly affects former teachers, firefighters, and other public servants who are done working and looking for retirement benefits through Social Security.
That accounts for around a whopping 2.8 million Americans who are state, county, municipal, or special district employees.
FAIRNESS THEORY
Both WEP and GPO were passed in the 1970s and 80s to prevent select Americans from getting cash from both a federal pension and Social Security, effectively receiving doubled benefits.
WEP was specifically created to decrease the payments of those who qualify for Social Security benefits by up to half of their pension value if they also received another pension through their job where they didn’t pay Social Security taxes.
This process is exactly what will happen to California resident Michelle Cosgrove, with her benefits reduced by a whopping $557, per CBS News.
Cosgrove would’ve been getting over $1,100 monthly Social Security distributions had she not decided to start working again after having children.
She had initially worked as a paralegal and paid Social Security taxes for years before becoming a stay-at-home mom.
Some years afterward, she decided to go back to work as a public school teacher in San Francisco, paying into the California educator pension fund known as CalSTRS.
Around the time she was about to retire, the payments were reduced under the rules of the WEP.
Additionally, the GPO also affected Cosgrove as after her husband died from a rare cancer in 2022.
What are the different Social Security payments?
Social Security provides a source of income when you retire or if you cannot work due to a disability.
There are four main types of Social Security benefits:
Retirement – a monthly check that replaces part of your income when you reduce your hours or stop working altogether. Social Security Disability Insurance (SSDI) or “disability” provides monthly payments to people who have a disability that stops or limits their ability to work. Supplemental Security Income (SSI) – provides monthly payments to people with disabilities and older adults who have little or no income or resources. Survivor benefits – monthly payments to eligible family members of people who worked and paid Social Security taxes before they died.WIDOW RULE
Under the rules of the GPO, if a pension recipient is a widow of someone who had received Social Security benefits, they could have reduced survivor benefits or not get them at all.
Considering the WEP and GPO and the tight financial position each now put her in, Cosgrove said she almost wished she hadn’t taught.
“If I’d have stayed home and done nothing, I’d have gotten all the money,” she told CBS News.
“Had I known this I might not have gone into teaching. I’d have picked something different.”
The GPO also disproportionately affects women, with about 83% of impacted individuals being female, per Congressional Research Service findings.
While the results can be devastating, the SSA emphasized in a statement to the publication that “state and local government employers are required [by law] to disclose potential effects of WEP/GPO on newly hired non-covered employees.”
“We work to pay the right people the right amounts at the right time, and Social Security issues correct payments in most cases,” a spokesperson noted.
“However, there is room to improve, as people count on the agency to prevent overpayments and underpayments from happening.”
REMOVAL IMMINENT
Even so, the WEP and GPO will be repealed as part of the Social Security Fairness Act, which was passed and approved by the Senate on December 21, 2024.
The bill will soon be signed into law by the White House.
It will likely take several months for the SSA to recalculate benefits for the around 3 million affected Americans and only affects current and future retirees, per MissionSquare Retirement.
That means adjustments won’t be seen immediately.
The Social Security Fairness Act ultimately seeks to correct the Social Security Administration’s cost and revenue system.
Current projections show Social Security funds to run out entirely by 2035, but
Many Social Security recipients should also watch out for a 2.5% boost that’s on the way for monthly payments.
An expert also told The U.S. Sun in an exclusive conversation that there’s “extraordinary” money to be saved if President-elect Donald Trump makes a crucial change to Social Security.
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Finally We wish PressBee provided you with enough information of ( My Social Security payments were slashed all because I worked after kids – I would have gotten 100% if I stayed at home )
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