Why Are Social Security Retroactive Payments And Increases Being Delayed?

The Social Security Fairness Act of 2023, signed into law by former President Biden, aims to enhance benefits for over three million retirees, particularly those from the public sector and individuals entitled to spousal or survivor benefits.

However, the Social Security Administration (SSA) has announced delays in disbursing these retroactive payments and benefit increases, citing administrative challenges and funding constraints.

Social Security Fairness Act Overview

The Social Security Fairness Act repeals two provisions:

• Windfall Elimination Provision (WEP): Enacted in 1983, WEP reduced benefits for retirees or disabled workers who had less than 30 years of substantial earnings covered by Social Security and also received non-covered pensions, typically from state and local government employment.
• Government Pension Offset (GPO): Implemented in 1977, GPO reduced spousal or survivor benefits for individuals receiving pensions from non-Social Security-covered employment.

The Act intends to provide full Social Security benefits to affected retirees by eliminating these provisions.

Reasons for Payment Delays

The SSA faces several challenges in implementing the Act:

• Manual Adjustments: The process requires recalculating benefits for over three million individuals, much of which must be done manually on a case-by-case basis.
• Funding Shortfalls: The Act did not allocate additional funds for its implementation, leading to resource constraints within the SSA.
• Staffing Limitations: A hiring freeze since November 2024 has resulted in staffing shortages, further hindering the timely processing of benefit adjustments.

Due to these factors, the SSA anticipates that it could take more than a year to adjust benefits and issue all retroactive payments.

Estimated Benefit Increases

According to the Congressional Budget Office, the repeal of WEP and GPO is expected to result in significant benefit increases:

These increases aim to rectify previous benefit reductions and provide equitable support to affected retirees.

In conclusion, while the Social Security Fairness Act represents a significant step toward equitable benefits for public sector retirees and those entitled to spousal or survivor benefits, administrative challenges and funding constraints have delayed disbursing the anticipated retroactive payments and benefit increases.

The SSA is working to address these issues, but affected individuals may need to wait over a year to receive their adjusted benefits.

FAQs

What is the Social Security Fairness Act?

The Social Security Fairness Act of 2023 repeals the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), aiming to provide full Social Security benefits to affected retirees.

Why are the retroactive payments and benefit increases delayed?

The delays are due to the need for manual benefit recalculations, lack of additional funding for implementation, and staffing shortages within the SSA.

How much of an increase can affected individuals expect?

Depending on the specific provision, affected individuals can expect average monthly increases ranging from $360 to $1,190 by December 2025.