It seems that beneficiaries might get good news regarding their Social Security checks as the government has a new plan to increase them, but it has nothing to do with the cost of living adjustment (COLA). A bipartisan group of lawmakers is advocating for a measure that would raise Social Security benefits for certain pension-eligible Americans. Possibly forcing a vote on the Social Security Fairness Act, Representatives Abigail Spanberger, a Democratic from Virginia, and Garret Graves, a Republican from Louisiana, filed a discharge petition this week. If a worker, their spouse, or widow receives pensions, the act aims to eliminate two regulations that now reduce Social Security checks for those individuals.
A new plan to increase Social Security checks for beneficiaries in the US
Experts say the law has a possibility of passing because of its bipartisan support, and a vote would be compelled if the petition receives 218 signatures. Retired workers, which include government employees such as teachers, police officers, firefighters, and postal workers, can receive lower Social Security checks even though they have paid into the system like all other Americans. Although most Americans have jobs that qualify them for Social Security, some pensions can result in lower benefits if their employers fail to withhold Social Security taxes, making them “covered.”.
Moreover, keep in mind that it does not affect your benefits if your pension comes from what Social Security calls covered employment where you paid payroll taxes. On its website, AARP states that the vast majority of Americans have jobs that qualify for Social Security benefits. On the other hand, let’s say you worked for and received a pension from an employer who was not covered by Social Security and did not withhold taxes, but you also spent enough time in covered jobs to qualify for benefits. Under these circumstances, your monthly payment may be reduced under the windfall elimination provision (WEP).
American payments can be reduced by the Government Pension Offset (GPO) and the Work Experience Pay (WEP). If a retired worker’s employer is not required to make tax contributions to the WEP, the program’s benefits are reduced. This will reduce Social Security checks for more than 2 million workers. Meanwhile, GPO benefits for wives and widows who also receive a pension will be similarly reduced, affecting more than 745,000 Americans. As Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek recently, in certain cases, a person’s eligibility for Social Security checks may be lowered if they are getting benefits from a pension that belonged to their spouse or another family member.
Beene added that the regulations effectively eliminate Social Security checks for a small number of people each month, which could be a shock to their retirement income. Seniors affected by the rules have long complained that they are forced to work longer or delay retirement because their Social Security checks aren’t as large. However, not everyone is in favor of eliminating the WEP and GPO, believing that it would unfairly benefit people who rarely pay into Social Security. Additionally, it would be expensive for the Social Security Administration, whose current financial problems would result in lower benefits by the middle of the 2030s.
Given that the Congressional Budget Office estimates that eliminating the GPO and WEP would cost $196 billion over ten years, the additional cost could accelerate the timetable for beneficiaries across the country. Despite these concerns, many lawmakers believe that a significant change in the law is necessary. According to Beene, helping these individuals receive their full Social Security benefit would be extremely beneficial to them in their post-working years.