The Social Security Fairness Act Could Restore Benefits for Millions—But Why Are These Policies Still Causing Struggles?

Evelyn Paternostro is 84 years old and works part-time as a cashier at Dollar Tree. She dedicated her life to education for decades, working as a teacher and principal in Louisiana. However, despite her years of public service, she struggles to make ends meet. “People at the store always ask me, ‘Are you doing this for fun?'” “Why aren’t you retired?” she said. “Because I need to eat.” After her husband died, Paternostro realized she couldn’t collect his Social Security benefits because of two government laws known as the Windfall Elimination Provision and the Government Pension Offset. 

Who is infected?

WEP and GPO affect around 2.8 million people in the United States. It affects all state, county, municipal, and special district employees in 26 states. Teachers in 13 states, including specific districts in Kentucky and Georgia, also feel the effects. In Massachusetts and some districts in Rhode Island, only teachers are affected. The goal of these two 1980s-era initiatives was “so that there was no way you could ‘double dip’ into a federal pension and Social Security,” explains Jill Schlesinger, CBS News business expert.

The Windfall Elimination Provision affects people eligible for Social Security benefits through their employment but also get a pension from another job where they did not contribute to Social Security. It might reduce their Social Security income by up to half the amount of their retirement. Cosgrove spent the first part of her career as a paralegal, contributing to Social Security, before returning home to raise her children.

Later, she became a public school teacher in the San Francisco Bay Area, contributing to CalSTRS, California’s educator pension fund. The other scheme, the Government Pension Offset, had an even more significant impact on Cosgrove after her husband, Mike, died in 2022. Despite decades of working in the commercial sector and subscribing to Social Security, his payments were primarily inaccessible to her owing to GPO restrictions. Mike, a welding supervisor, was diagnosed with a rare cancer at 52 but continued to work until his condition worsened. He died at the age of 63 . Suppose a pension recipient is the widow or widower of someone who receives Social Security benefits. In that case, their survivor payments may be decreased, or they may not receive any benefit. “If I’d have stayed home and done nothing, I’d have grown all the money,” Cosgrove said. “If I had known this, I might not have chosen to become a teacher. “I would have chosen something different.”

The Social Security Fairness Act enjoys bipartisan support:

The Social Security Fairness Act, one of Congress’ most bipartisan proposals this session, seeks to repeal WEP and GPO. The House voted to pass the proposal on November 12. The Senate is set to vote on the Social Security Fairness Act this week. Social Security is expected to run out of funds by 2035 unless the fund’s cost and revenue arrangement is changed. Even though supporters of the Social Security Fairness Act claim it will only drain the Social Security fund six months earlier than expected, some critics believe there are better solutions, arguing that states should restructure their retirement systems to address the root causes rather than relying on federal fixes.

Carroll illustrates how difficult it might be to predict future Social Security payouts. The benefits formula contains “bend points,” changed annually for wage inflation. These changes are critical since the exact amount of the WEP decrease is calculated when a person turns 62. “You have to make a few projections, certain presumptions about forward-looking inflation, both price and wage inflation,” Carroll told me. “Once you do, you can start to work with that and use a calculator like the SSA has that will do a lot of that for you, and it will tell them what your WEP adjusted for retirement age payment should be.”