Latest news with #WindfallEliminationProvision
Time of India
21-07-2025
- Business
- Time of India
July Social Security boost for teachers, firefighters and more
Hard-earned fairness finally delivered Before, elementary school teachers spent his/her career educating children and paying into Social Security, but watched those benefits shrink once he/she retired with a state pension. The Social Security Fairness Act , which became law in January 2025, fixed that. It repealed two rules, the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), that unfairly reduced her benefits. Explore courses from Top Institutes in Select a Course Category Product Management Data Science Operations Management Finance Data Science Data Analytics Design Thinking Others CXO Artificial Intelligence Leadership Degree Digital Marketing Public Policy MCA Cybersecurity MBA healthcare Healthcare Project Management PGDM Management others Technology Skills you'll gain: Product Strategy & Competitive Advantage Tactics Product Development Processes & Market Orientations Product Analytics & Data-Driven Decision Making Agile Development, Design Thinking, & Product Leadership Duration: 40 Weeks IIM Kozhikode Professional Certificate in Product Management Starts on Jun 26, 2024 Get Details Skills you'll gain: Product Strategy & Roadmapping User-Centric Product Design Agile Product Development Market Analysis & Product Launch Duration: 24 Weeks Indian School of Business Professional Certificate in Product Management Starts on Jun 26, 2024 Get Details Skills you'll gain: Creating Effective Product Roadmap User Research & Translating it to Product Design Key Metrics via Product Analytics Hand-On Projects Using Cutting Edge Tools Duration: 12 Weeks Indian School of Business ISB Product Management Starts on May 14, 2024 Get Details Also read: Paper checks ending! 500,000 seniors must act fast as social security goes digital this fall Real lives, real boosts Earlier, firefighters, who retired with a smaller-than-expected income due to GPO, recently saw an extra $700–1,190 per month, enough to ease bills and rebuild savings. Janine, a surviving spouse, now receives the full Social Security benefit she was entitled to, reversing a penalty that wiped out most of her income before. Live Events Why this matters Closing long-standing gaps: About 3 million people had seen their benefits reduced. The reversal aims to correct that, though it has added strain on the Social Security trust fund, which could face earlier shortfalls. But it's not instant Some people still haven't seen their full adjustment. The Social Security Administration expects to automate simpler cases, delivering benefits quickly, most recipients saw increases by April. Check if your pension was non-covered by Social Security (WEP/GPO rules applied). Make sure the SSA has your correct banking and mailing info. Look for two letters from SSA: one for the retroactive 'lump sum,' another for your ongoing higher monthly benefit. If you haven't received your payment yet, call SSA at 1‑800‑772‑1213 or use your mySocialSecurity account. Economic Times WhatsApp channel )
Newsweek
08-07-2025
- Business
- Newsweek
Social Security Update: Payout Shift Triggers Drop in Personal Income
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Personal income in the United States declined by 0.4 percent in May, marking the first monthly drop since 2021, according to recently released government data. The decrease was not driven by Americans earning less, but was instead attributed to a shift in Social Security benefit payouts. This change comes amid ongoing concerns about the financial sustainability of the program, as its trust fund is forecast to run out of cash within the next 10 years unless legislative action occurs. Why It Matters The decline in personal income underscores the significant influence that Social Security has on the nation's economic well-being. With more than 60 million Americans receiving benefits, even modest adjustments in payouts can affect broader measures of household income and economic stability. Concerns about Social Security's solvency have been mounting, with the program facing automatic benefit reductions if Congress does not intervene before the trust fund is depleted. According to a report released by Social Security trustees last month, once the trust fund is exhausted, payroll taxes would only be sufficient to cover about 77 percent of scheduled benefits. Advocates and policymakers warn that such cuts could increase poverty rates among older Americans and disrupt finances of millions who depend on these payments. A Social Security Administration office in Washington, D.C., is pictured on March 26. A Social Security Administration office in Washington, D.C., is pictured on March 26. SAUL LOEB/AFP via Getty Images What To Know In May, there was a 0.4 percent dip in personal income, following a 0.8 percent rise in April. Analysts have attributed the decline not to lower wages or earnings, but to a specific change in how Social Security benefits were distributed. Since the Social Security Fairness Act went into effect, retroactive payments were sent out to beneficiaries in March and April, triggering monthly income to temporarily rise for nearly 3 million recipients. The law affects former public sector workers whose jobs previously did not receive equal coverage from Social Security. Due to the boost, it appeared income dropped in May, but moving forward, the extra benefits will be factored into monthly payments. "What really happened is that the Social Security Fairness Act eliminated two provisions. The Windfall Elimination Provision (WEP) & the Government Pension Offset (GPO). They previously reduced benefits for individuals who also receive income from public pensions," Michael Ryan, finance expert and founder of told Newsweek. "These retired teachers, firefighters, and government workers had been getting the short end of the stick for years. Having their Social Security benefits slashed just because they'd also earned a pension from their public service jobs," Ryan added. The Social Security trust fund is projected to run out of cash by 2033, about nine months sooner than anticipated last year, due in part to the new Social Security Fairness Act. Trustees have warned that, without legislative intervention, benefits for over 60 million recipients would automatically be slashed by 23 percent once the fund is empty. A recent analysis from the Committee for a Responsible Federal Budget projected that a typical couple could see annual Social Security benefits drop by up to $16,500 in 2033 if no fix is enacted, while a middle-income single worker could face a reduction of $8,200 per year. This amounts to an automatic 21 percent cut to monthly checks. More than 11,000 baby boomers now reach retirement age daily, resulting in fewer workers supporting a growing population of beneficiaries. Decades of surplus payroll taxes have created a large, but dwindling, trust fund buffer. Once depleted, incoming payroll taxes would only sustain partial payments, covering 77 percent to 79 percent of promised benefits, according to current estimates. Potential solutions discussed include raising payroll taxes, lifting the income cap on taxable wages, cutting benefits or raising the retirement age. However, these proposals face political resistance and there have been no specific plans proposed by the president or Congress. What People Are Saying Ryan also told Newsweek: "When May rolled around and those lump sums disappeared from the monthly calculations, it looked like everyone suddenly got poorer. It's like if you got a big tax refund in April. Your income would spike that month, then 'drop' in May even though you're not actually making less money." Martha Shedden, president and co-founder of the National Association of Registered Social Security Analysts, told Newsweek: "Beneficiaries affected by the Social Security Fairness Act were issued retroactive checks by the SSA for their new monthly amounts, some for as many as 16 months back to January 2024. "Those individuals are now receiving higher monthly benefit checks that will not change going forward except for the annual COLAs each January." What's Next Congress faces increasing pressure to address Social Security's funding gap before the trust fund depletion deadline in 2033. Should legislators fail to take action, automatic benefit cuts will be enacted under current law, significantly impacting retirees' incomes and potentially further reducing nationwide personal income figures. At the moment, the Social Security Fairness Act is adding even more strain to the financially overrun system. "This is fantastic news for about 2.8 million public sector retirees who've been getting shafted by these arcane rules. But it's also adding pressure to Social Security's already strained finances. We're talking about billions in additional payouts at a time when the program's trustees are warning about fund depletion," Ryan said. "It's honestly a perfect storm of good intentions meeting fiscal reality. We're essentially robbing from tomorrow's beneficiaries to pay today's."
Newsweek
08-07-2025
- Business
- Newsweek
Social Security Hits Major Milestone for Millions
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Social Security Administration (SSA) has confirmed it has completed sending payments to those who were impacted by the Social Security Fairness Act, five months ahead of schedule. Why It Matters Under the Biden administration, the federal agency, which pays benefits to tens of millions every month, said the process of issuing new and backdated payments could take considerably longer. At the time, the SSA told Newsweek it was "determining the timelines for implementing this new law." What To Know In January, lawmakers passed a bipartisan bill that repealed two provisions—the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO)—that limited retirement benefits for certain workers, including teachers, firefighters, and police officers, some federal employees, and their spouses. The agency first started issuing these payments in February. The new payments included updated benefits amount and backdated payments to January 2024. Despite previous longer timelines being for implementation, the SSA has now confirmed it has sent out 3.1 million payments to those impacted by the repeal of the WEP and GPO. To date, over $17 billion in payments has been distributed. The WEP reduced Social Security benefits for individuals who received pensions from public-sector jobs—such as state or federal positions—that did not require paying Social Security payroll taxes. This reduction applied even if they also worked in jobs where they paid into Social Security and qualified for benefits. The GPO lowered spousal or survivor benefits for retired federal, state, or local government workers who had not contributed to Social Security through payroll taxes. File photo: The Social Security Administration sign is seen on a field office building in San Jose, California, in 2020. File photo: The Social Security Administration sign is seen on a field office building in San Jose, California, in 2020. GETTY Other Changes The SSA also said it has made "significant progress in its ongoing efforts to improve customer service," including upgrading telephone systems in 841 field offices—70 percent nationwide—and cut the average wait time on its 800 Number to 13 minutes, a 35 percent drop from last year. A new service model in field offices has reduced wait times by 10 percent year-over-year, the agency reported, and the initial disability claims backlog has been cut by 25 percent, from 1.2 million to 950,000 cases. Disability hearings have reached a low of 276,000 still pending, with wait times down by 60 days compared to last summer, the agency added. What People Are Saying SSA Commissioner Frank Bisignano said in the press release: "My top priority is to transform SSA into a model of excellence—an organization that operates at peak efficiency and delivers outstanding service to every American. "The American people have waited long enough for better service, and they deserve the absolute best from their government. I am deeply grateful to our dedicated employees who are already making this turnaround a reality." What Happens Next The SSA said the agency is continuing to make improvements across its services.
Yahoo
26-06-2025
- Business
- Yahoo
Social Security Retirees Just Got Bad News
Two new reports spend a good deal of time examining the solvency of the Social Security program. While Social Security's finances have been on the fritz for quite some time, the situation appears to be worsening. The $23,760 Social Security bonus most retirees completely overlook › Although Congress has yet to act, it is well known that Social Security's rainy-day funds will soon run dry, and revenue from Social Security's payroll taxes will not be enough to cover projected future benefits. Each year, the board of trustees of the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust Fund releases annual reports, updating the country on the financial situation of the trust funds and the Social Security program as a whole. While the message over the years has been fairly consistent, the 2025 annual report just gave Social Security retirees bad news. Social Security has begun to encounter financial challenges due to shifting demographics. More baby boomers are reaching retirement, and there are fewer young workers than there once were to pay taxes into the system. According to the Population Reference Bureau (PRB), the population of Americans age 65 and older is expected to jump from 58 million in 2022 to 82 million in 2050. Their proportion of the population is projected to increase by 6% to 23%. When revenue from Social Security payroll taxes can no longer cover scheduled benefits, the Social Security Administration draws from the OASI trust fund, which it has been doing for a while now. Once that fund is tapped, it can get approval from Congress to draw from the much smaller DI fund. Last year's trustees report indicated that when accounting for both trust funds, Social Security's reserves will be depleted by 2035, at which point revenue generated from Social Security taxes would be enough to cover only 83% of scheduled benefits at that time. This year's report suggests an expedited timeline. The trust funds are now expected to be depleted by 2034, at which point there will be enough tax revenue to cover only 77% of scheduled benefits, significantly lower than last year. It's common for the annual reports to show different projections, but this year was heavily affected by a new Social Security law that will either increase benefits or provide benefits to retirees who may not have previously received them. The Social Security Fairness Act eliminated two provisions: the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). Both provisions reduced or eliminated benefits for some federal and state workers who received pensions from jobs that didn't necessarily pay Social Security taxes. The group includes teachers, firefighters, and police officers in many states, as well as federal workers under the Civil Service Retirement System and workers under a foreign social security system. Additionally, the annual report noted changes in assumptions, including a longer recovery in fertility rates off of current low levels and slightly lower long-term wages as a percentage of gross domestic product, resulting in lower payroll taxes. Given the number of voters who claim Social Security, I think most Americans expect Congress to eventually shore up the program, even if they leave it to the very last minute. A sizable portion of Social Security retirees relies on benefits as the primary source of income, so any potential cuts could lead to a crisis among this population if they no longer have the funds needed to cover critical expenses, such as housing, healthcare, and food. Like most other financial issues, the main ways to solve Social Security are to cut benefits or raise taxes. Social Security payroll taxes are currently 12.4%, evenly divided among employers and employees. Self-employed employees must cover the total amount on their own. Republicans typically favor curbs to the program, such as raising the age at which retirees can claim full benefits, while Democrats seem largely in favor of tax hikes. Taxes are only levied on a maximum of $176,100 of a worker's income (in 2025), so Congress could raise this cap to cover the shortfall or increase taxes on the wealthiest Americans. Either way, difficult decisions will need to be made over the next eight or nine years. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Social Security Retirees Just Got Bad News was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Economic Times
19-06-2025
- Health
- Economic Times
US healthcare almost broke, Medicare and Social Security's trust funds will have no money by this date
ETHealthWorld The Medicare hospital insurance trust fund is expected to deplete in 2033, three years earlier than last year's projection. Social Security's combined trust funds will run out by 2034, a year earlier than previously forecast. The financial health of America's two most critical safety-net programs, Medicare and Social Security, is deteriorating faster than expected. An annual report released Wednesday, June 18, by program trustees shows that rising health care costs, demographic pressures, and a new law expanding Social Security benefits have accelerated the timeline for when the programs become out of money and cannot pay full benefits. The Medicare hospital insurance trust fund is now expected to run out of money in 2033, three years earlier than projected just last year. Meanwhile, Social Security's combined trust funds, which support retirement and disability benefits, will be depleted by 2034, a year earlier than previously forecast. At that point, beneficiaries would see a significant reduction in monthly payments unless Congress updated projections concern the long-term solvency of these programs, which tens of millions of Americans depend on for health care and income security. The report highlights that Medicare's hospital insurance (Part A) trust fund faces a steeper decline due to higher-than-expected health care expenses in 2024. The fund posted a surplus of $29 billion last year, but deficits are expected to begin after 2027, leading to full depletion by exhausted, Medicare will only be able to cover 89% of inpatient care costs, such as hospital visits, hospice services, and post-hospital nursing care. Currently, about 68 million people are enrolled in Medicare, including Americans over age 65 and those with severe illnesses or Security's combined trust funds, which support retirees and disability recipients, are projected to be depleted by 2034, one year earlier than last year's forecast of 2035. After that date, the program would only be able to pay 81% of scheduled benefits, if no changes are made. This accelerated timeline results in part from the Social Security Fairness Act passed in January 2025. This law repealed the Windfall Elimination Provision and Government Pension Offset, increasing benefits for some workers. Trustees confirmed that this legislative change worsened the trust fund's depletion. Trustees of both programs urged lawmakers to act swiftly. 'Medicare still faces a substantial financial shortfall that needs to be addressed with further legislation,' the report said. Frank Bisignano, the newly appointed Social Security Commissioner, said that stabilizing the trust funds is a top priority for the Trump administration, which has so far pledged not to cut benefits. Despite this, experts warn that without new revenue or cost controls, both programs risk serious disruption. Nancy Altman of Social Security Works argued that lawmakers must decide: raise revenue or cut benefits. 'There are two options for action,' she said. 'Any politician who doesn't support increasing Social Security's revenue is, by default, supporting benefit cuts.' AARP CEO Myechia Minter-Jordan added that with over 69 million Americans relying on Social Security, 'the stability of this vital program only becomes more important.'The Congressional Budget Office has repeatedly warned that an aging population is the main driver of rising debt related to Social Security and Medicare. The last major Social Security reform occurred about 40 years ago, when the eligibility age was raised from 65 to 67. Medicare eligibility remains at age legislative proposals are currently being considered to address the trust funds' financial outlook. However, none have yet been passed.
