Millions of public workers are set to get higher Social Security benefits. Here's why

President Biden has signed the Social Security Fairness Act into law, which will enhance Social Security benefits for nearly three million current and former public employees. This new legislation repeals provisions that previously limited benefits for workers with other pensions, allowing a wider array of public sector employees—such as teachers, firefighters, and police officers—to receive full benefits.

During the signing ceremony in the White House, President Biden emphasized that the bill promotes economic security and dignity for Americans who have dedicated their lives to hard work. The legislation targets the Windfall Elimination Provision and the Government Pension Offset, both of which were enacted over 40 years ago and have been criticized for unfairly penalizing public workers.

The Windfall Elimination Provision reduced benefits for public employees with pensions not covered by Social Security payroll taxes, while the Government Pension Offset cut benefits for those who also received public pensions. Unions representing public service workers argued that these provisions unjustly treated them as "second-class citizens."

Beneficiaries affected by these provisions can expect significant increases in their monthly payments, with averages estimated at $360 for those impacted by the Windfall Elimination Provision and $700 for spouses affected by the Government Pension Offset. Surviving spouses could see increases averaging $1,190. Additionally, these benefits will be adjusted for cost-of-living increases over time, with some recipients also entitled to back-dated payments.

While the Social Security Fairness Act aims to provide relief for affected public workers, the Social Security Administration is concurrently addressing another critical issue: the program's impending insolvency, projected for November 2033. This legislation is estimated to cost around $196 billion over a decade but is expected to slightly accelerate the timeline towards insolvency by approximately six months.