Thousands of retirees and public workers will benefit from the new Fairness Act, promoted by former President Joe Biden, which eliminates cuts in their benefits and improves access to Social Security payments. The United States Congress has given the green light to the well-known Social Security Fairness Act, a measure that came into force on January 5, 2025 with the promise of improving the monthly incomes of retirees and pensioners.
Thanks to this law, two provisions that penalized public employees, teachers, firefighters and police officers, among others, have been eliminated. In some cases, the increase is expected to reach up to $360 per month, although the final figure will depend on the type of pension and the employment status of each beneficiary.
New requirements to collect the monthly benefit of up to $360 following the Social Security Fairness Act
The main change is the repeal of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Both mechanisms reduced or eliminated Social Security benefits for those receiving a pension outside the Social Security contribution system.
With the new legislation, only those who are entitled to a retirement or pension based on employment not covered by Social Security and who were therefore affected by WEP or GPO will see their benefit increased. In other words, not all public workers will necessarily receive this increase. Most state and local employees, who already contributed to Social Security, will see no change in their pensions.
Automatic adjustment and refunds: how and when the increase will be applied in 2025
The Social Security Administration (SSA) confirmed that, as of January 2024, the WEP and GPO cuts will no longer apply. Thus, the first payment affected by the old rule will be for the month of December 2023, so in practice those who meet the requirements will see the increase reflected in the January monthly payment.
Although there is no need to submit a specific application to receive the $360 increase, those who have never applied for spousal or survivor benefits may have to do so. This is because the GPO reduced or eliminated these benefits, and it is possible that in the past it did not make sense to claim them.
What documentation should be reviewed so as not to miss the opportunity to collect more?
The SSA recommends making sure that personal details (postal address and deposit account) are up to date. The easiest way to do this is to log on to the My Social Security portal.
If you are receiving a public pension not covered by Social Security and you never applied for a spouse’s or survivor’s benefit, the application process cannot be completed entirely online. In that case, it is advisable to call 1-800-772-1213 for further guidance or to schedule an in-person appointment.
New income and Medicare contribution ceilings in 2025: this is how the tax burden changes
In addition to pension reform, Social Security updates earnings ceilings and Medicare contributions every year, which can affect both retirees and active workers. Below are some of the most relevant changes for 2025:
| Concept | 2024 | 2025 |
|---|---|---|
| Maximum Taxable Salary (Social Security) | 168,600 USD | 176,100 USD |
| Employee/Employer Rate | 6.2% | 6.2% |
| Self-Employed Rate | 12.4% | 12.4% |
| Standard Medicare B Premium | 174.70 USD/month | 185 USD/month |
Before filing your annual tax return (such as the IRS or the Income Tax Return in other countries), it is advisable to verify these new limits and analyze the implications they may have on salary deductions or additional contributions for income above certain thresholds. To keep up to date with more economic news, don’t hesitate to visit the section specialized in the subject.
