Major Social Security Law Change: Increased Benefits for Millions

the Social Security benefits of roughly 3 million US citizens have just gotten considerably bigger you see on January 5th Joe Biden signed into law something known as the Social Security Fairness Act prior to him signing it this bill passed both chambers of Congress overwhelmingly back in November it passed the house by a vote of 327 to 75 and then later it passed the Senate with a vote of 76 to 20 meaning that it had broad bipartisan support and what the this new law does is that it eliminates two Provisions that have been in place within the Social Security framework for the past several decades quote the new law will get rid of the windfall elimination provision the WEP and the government pension offset the gopo which previously limited the federal pension that public sector employees could receive based on their other income sources from State and other government pensions indeed these two separate Provisions were put into place roughly 40 years ago the windfall elimination provision it trimmed the benefits for public employees who also receive pensions that are not covered by Social Security taxes and so for instance firefighters and cops they get their own separate pensions and so the amount that they receive elsewhere from state and local pensions was deducted from their social security benefits because of this particular provision it also created a sort of awkward situation for people who happen to switch jobs going from the private sector over to Public Service quote the previous windfall elimination PR ision rule impacted when someone switched jobs from one where they were contributing to Social Security to one where they contributed only to a pension and not social security for example let's say you worked in a high earning executive role for 25 years and opted to transition to teach for the last 15 years of your career before you retire under the prior rules your social security benefit based on those 25 years of work would shrink based on your pension income from the last 15 years of work and so that was all the first provision the second provision was called the government pension offset this provision it cuts Social Security benefits for the spouses and widows if they likewise receive public pensions outside of Social Security such as state and local pensions the idea behind these two Provisions was that it prevented people from being able to so-called double dip into retirement benefits since public sector workers like again teachers firefighters uh police officers as well as all their spouses and all their widows since they were eligible for state and or local pensions they were largely excluded from Social Security however here's the thing many of these employees were still paying into Social Security millions of teachers cops and firefighters were still having Social Security deductions taken out of their paycheck it's only when it came time for them to actually retire that their social security benefits were lessened because of their state pensions now there is a bit of a Nuance here since not every public sector employee was paying into social security it depended on many factors such as the state you lived in as well as what the terms of the section 218 agreement that that state had with the Social Security Administration and so basically some public sector employees did not pay into Social Security at all while some did and the ones who did got jipped on the back end when it was actually time for them to retire and collect their benefits and this affected a lot of people according to the most recent estimates that came from the Congressional research service about 2.1 million people had their benefits cut because of the windfall elimination provision and then roughly another 746,000 people were affected by the government pension offset meaning that by eliminating these two Provisions this new law it gives roughly 3 million Americans a significant increase in their retirement benefits and the increases are indeed significant according to the Congressional budget office getting rid of the windfall elimination provision will raise monthly benefits by roughly $360 on average for about 2 million Social Security recipients that's $360 more per month than by eliminating the government pension offset the monthly benefits for spouses of public sector employees they will increase by about $700 per month while for surviving spouses meaning widows the increase will be an average of $1,190 per month and of course that's only for year one these amounts will continue to increase with the annual cost of living adjustment so given the average adjustment over the last decade if you extrapolate it out 8 years into the future those same spouses they will now be getting $86 more per month while these surviving spouses will be getting an additional $1,520 per month while the average public SE employee themselves will be getting an additional $460 per month more 8 years from now regardless though while signing the bill into law Joe Biden said the following quote by signing this bill we're extending Social Security benefits from millions of teachers nurses and other public employees and their spouses and survivors also the White House actually emailed us here at The Epic Times with a statement saying that Biden signing this piece of legislation made him quote the first president in 20 years to expand Social Security benefits and indeed looking back through recent history this was the first eligibility expansion of Social Security benefits in the last two decades which is great for the reci however it comes at a time when the entire social security system is facing the real Prospect of becoming insolvent in the next 8 years now we actually did do a full Deep dive episode on why exactly it's heading for insolvency if you want to pause this video and check it out I'll throw that earlier episode uh the link to it will be right there at the top right corner and or it'll also be down in the description box below if you want to watch uh the episode in its entirety but the basic premise if I can sum it up for you is that for about 30 years the taxes that the social Security Administration was able to collect covered all the benefits that they had to pay out plus a little bit was left over for the agency to invest they set up a fund and they were able to earn a decent return on their investment in the form of interest payments on this social security trust fund however eventually because of the growing amount of people who are receiving benefits as well as the growing size of the retiring age population compared to the number of workers who were supporting the system the taxes by themselves no longer covered the benefits and so the agency had to start using the interest that they were earning to cover the actual Social Security payments that were going out but then eventually even that wasn't enough and so now the agency is using the taxes they collect every year the interest they generate every year as well as the actual princible in the trust fund to pay out benefits every single year which is a non-sustainable model eventually in approximately 8 years time the money will run out and so that is the general backdrop against which this most recent Social Security expansion took place the one for public sector workers all right just to pause here for a super quick moment I'd like to introduce today's sponsor by telling you about a new crime that's seemingly sweeping the whole nation right now cyber criminals are targeting the equity in people's homes by stealing the title to those homes basically the scam is that a criminal can transfer the title of your home into their name by forging a simple one-page document and then then filing that document with the county the document is completely fake but on paper at least they really did transfer the title of your home to their name and then what the scammer does is they take out loans against 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they're offering a great promotional sale you can get a free title history report and a 30-day free trial of triple lock protection just heading over to their website it's hometitlelock.com and use promo code Roman that's r m an to get your free title history report as well as a 30-day free trial of triple lock protection again that's home title lock use promo code Roman the positive though in terms of the insolvency problem is that these public sector workers represent a relatively small amount of the population in total these two changes will only affect about 4% of all Social Security beneficiaries however these 4% are getting a sizable increase which translates to a decent chunk of money going out according to the Congressional budget office over the next 10year period these two changes will increase off budget direct spend by roughly $211 billion again over the next 10 years which sounds like a lot but really it is only a drop in the bucket of the entire social security administration spending and also there is the elephant in the room which is that if nothing else changes the fund that supports the whole Social Security program will actually run dry within roughly eight years so well before that 10year span and all Social Security recipients across the board will be forced to take a 23% haircut on all their benefits altogether so that's sort of the pro pro and con of it regardless though the unions representing public sector workers were thrilled with this new change as you would imagine for instance after Joe Biden signed this bill into law the president of the International Association of firefighters said the following quote after 40 years of being treated like second-class citizens a wrong has finally been writed and millions of retirees can afford to retire with dignity and with these Social Security benefits they earned and paid into now in terms of the next steps if you happen to be one of the people cover covered by this change then you really don't have to do anything in fact the Social Security Administration they released a statement shortly after this bill was signed into law saying that they working to implement the change ASAP and they only advise people to make sure that their addresses and their direct deposit information that's on file is correct so that they can get their money as soon as it's ready if You' like to go through the details of anything that we discussed regarding this new change including the text of the law itself as well as the statement that came out of the social Security Administration I'll throw all those links down into the description box below so you can peruse them at your own Leisure and the only thing I ask in return is that as you're making your way down there to that description box take a small detour to smash those like And subscribe buttons so that this information can reach ever more people via the YouTube algorithm and then until next time I'm your host Roman from The Epic Times stay informed and most importantly Stay Free