Since quite some time, the future of Social Security has been uncertain, and now, after months of deliberation, the House of Representatives is going to make an effort to approve a bill that will address one of the concerns that has plagued the program for a considerable amount of time.
The Social Security Fairness Act is a plan that has received support from both the Democratic Party and the Republican Party. Its purpose is to ensure that workers who are also qualified for other pensions are able to collect payments from Social Security.
What is the Social Security Fairness Act?
There is a bill that would remove the so-called “government pensions offset,” sometimes known as the GPO. This bill is called the Social Security Fairness Act.
For individuals who are receiving “non-covered pensions,” this is the metric that “adjusts Social Security spousal or widow(er) benefits with regard to those individuals.”
A pension that is paid by an employer that does not deduct Social Security taxes from your income is known as a non-covered pension. This type of pension is often provided by state and municipal governments or firms who are not based in the United States. […]
According to the website of the Social Security Administration, the GPO reduces the spouse or widow(er) benefit by two-thirds of the monthly non-covered pension. Additionally, the GPO has the ability to partially or completely offset an individual’s spousal or widow(er) benefit, depending on the amount of the non-covered pension.
Additionally, the “windfall elimination provision,” also known as the WEP, would be eliminated by the new bill.
The WEP is a formula that is used to adjust Social Security worker benefits for individuals who receive “non-covered pensions” and qualify for Social Security benefits based on other Social Security–covered earnings.
In some cases, the WEP reduces Social Security benefits for individuals who also receive a pension or disability benefit from an employer that did not withhold Social Security taxes.
Both a Republican, Representative Garrett Graves of Louisiana, and a Democrat, Representative Abigail Spanberger of Virginia, were responsible for the introduction of the bill, which was met with considerable success in the House of Representatives, with the support of 300 MPs, including House Speaker Mike Johnson.
Unfortunately, the bill was unable to move forward as a whole, and Representatives Graves and Spanberger were forced to resort to the discharge petition process in order to dislodge the bill from committee and bring it to the floor for a vote.
They collected the minimum number of signatures required from House legislators, which was 218. In most cases, this procedure is not utilized because it is considered to be an insult to the leaders of the House, notably the speaker of the House and the majority leader who are responsible for determining the floor schedule.
However, in this particular instance, House Speaker Johnson had previously supported the bill, thus the ramifications would not have been as severe.
Still, there is sufficient support for the bill to be passed, despite the fact that it will now require a greater number of votes than the simple majority it required in the past, which means that it will need to pass with a supermajority threshold.
The bill appears to be pretty popular, and with the support of so many members of the House, it has the potential to have a considerable bit of support.
However, even if it were to succeed in the House, it would still need to clear the Senate, where we do not know if it is supported widely enough to do so.
In the event that the measure is approved, it will be required to be signed by the President of the United States. If the bill is passed into law, it will then be applicable to any benefits that are payable after December 2023.
The impact of the bill on real people
Sometimes it is difficult to tell how proposals like this one might effect the people that they are seeking to protect when they are introduced into the legislative process. For this reason, it is essential to take into consideration real-life instances such as the one that is presented below.
According to the GPO, for example, a person who receives a spousal benefit from Social Security in the amount of $900 and also has a non-covered pension in the amount of $1,000 would have their Social Security payment reduced by $667, which is equivalent to two-thirds of the value of the non-covered pension. Therefore, they are left with a spousal benefit of $233 that is still open.
In the event that the GPO legislation is repealed, the same individual would be eligible to receive the full dollar amount of the spousal benefit, which is $900, without any reduction for offsets.