Lawmakers push plan to boost Social Security payments

A group of bipartisan lawmakers is pushing a plan that would increase Social Security payments for some Americans receiving retirement benefits.

Reps. Abigail Spanberger, a Virginia Democrat, and Garret Graves, a Louisiana Republican, filed a waiver petition this week that could potentially force a vote on the Social Security Fairness Act. The bill seeks to repeal two laws that currently reduce Social Security benefits for some workers and their spouses and widows if they also receive retirement benefits.

If the petition gets 218 signatures, it will be a forced vote, and experts predict the bill has a chance of passing due to bipartisan support.

Currently, pension plan workers, including those employed by the government as police officers, firefighters, teachers and postal workers, sometimes pay lower Social Security benefits even though they pay taxes like other Americans.

Although most Americans work in jobs covered by Social Security, some pensions may result in lower payouts if they are not “covered” because their employers do not withhold Social Security taxes.

“If your retirement income comes from what Social Security calls “covered” employment in which you paid Social Security payroll taxes, your benefits are not affected. The vast majority of Americans work in jobs covered by Social Security,” AARP said on its website.

“But let’s say you worked and received a pension from a ‘non-covered’ employer, one that didn’t collect Social Security taxes, but you did enough work in covered jobs to qualify for benefits.”

In such cases, the Unexpected Loss Elimination (WEP) clause can lower your monthly payment.

“Contact your representative or senator to address this because this is part of a broken system,” Sen. Mike Braun, R-India, said during a hearing on Social Security this week. “It’s an inequity that needs to be fixed.”

Both the WEP and the Government Pension Plan (GPO) could result in reduced payments to Americans.

WEP reduces employees’ retirement benefits if they worked for a company that did not require them to pay taxes into the plan. As a result, more than 2 million workers see their monthly benefits reduced.

Meanwhile, the GPO affects more than 745,000 Americans and similarly reduces benefits for spouses and widows who also receive a pension.

“We really are long overdue for support for the small but significant audience that this affects,” said Alex Beene, a financial education instructor at the University of Tennessee at Martin. Newsweek. “There are situations where someone may be receiving benefits from a pension that belonged to a spouse or other family member, and under the law, that reduces the benefits they can receive from Social Security.”

For a few people, the rules would wipe out virtually their entire monthly Social Security paycheck, Beene said, which could be an “income shock” in retirement.

Older people affected by these rules have long complained that lower benefits force them to delay retirement or continue working.

However, not everyone supports the complete abolition of WEP and GPO, as some believe that such a solution would disproportionately support people who pay social security contributions only occasionally.

It would also cost the Social Security Administration, which is already struggling with a financial crisis, a move that could result in reduced payments until the mid-2030s.

The additional costs could shorten wait times for beneficiaries across the country, as the Congressional Budget Office has projected that repealing both the GPO and WEP will cost $196 billion over a decade.

Despite these concerns, many lawmakers believe a thorough overhaul of the rules is necessary.

“Helping this group by giving them access to the full amount of Social Security they are entitled to would go a long way in supporting them in their years after they leave work,” Beene said.