The new Social Security law is the Social Security Fairness Act, signed on January 5, 2025, and it ended two rules that had reduced benefits for millions of people who worked in jobs not covered by Social Security. The Windfall Elimination Provision and the Government Pension Offset are gone, retroactive to benefits payable from January 2024 forward.1Social Security Administration. Social Security Fairness Act: Windfall Elimination Provision and Government Pension Offset Update If you earned a pension from non-covered work, your monthly Social Security check is larger than it would have been under the old rules, and you were owed back pay for the months in between.
What the Fairness Act Repealed
Two provisions did the damage the new law undoes.
The Windfall Elimination Provision reduced retirement benefits for workers who split their careers between Social Security-covered jobs and non-covered positions such as certain state and local government roles. A teacher who spent 15 years in a public school system without Social Security coverage and another 15 years in the private sector could see hundreds of dollars a month cut from the Social Security benefit their private-sector earnings would otherwise produce.
The Government Pension Offset worked on the spousal side. It reduced spousal or survivor benefits by two-thirds of the non-covered pension amount. A retired firefighter collecting a $2,400 municipal pension could lose $1,600 from a spousal benefit they would otherwise receive.
Both provisions no longer apply.1Social Security Administration. Social Security Fairness Act: Windfall Elimination Provision and Government Pension Offset Update The change is described as the largest structural change to Social Security benefit calculations in decades.
Who Benefits and How Much
The law helps people whose careers touched public-sector or other non-Social-Security-covered employment: many state and local government workers, some public school teachers in specific states, certain police officers and firefighters, and their spouses and survivors. If you never worked in a job outside Social Security coverage, WEP and GPO never applied to you, and the repeal doesn’t change your benefit.
For people it does cover, the effect shows up two ways. Monthly benefits are higher going forward, and a one-time lump payment covers the difference back to January 2024.
When Payments Are Arriving
SSA began adjusting monthly payments on February 25, 2025, and most affected beneficiaries started receiving their new monthly amounts by April 2025. The retroactive lump sum is deposited into the bank account SSA already has on file.
As of July 7, 2025, SSA had completed over 3.1 million payments totaling $17 billion, finishing five months ahead of schedule.1Social Security Administration. Social Security Fairness Act: Windfall Elimination Provision and Government Pension Offset Update If you receive a pension from non-covered work and haven’t seen an adjustment, contact SSA directly. You may need to provide updated pension information for the recalculation to run.
The 2.8% COLA for 2026
Separately from the Fairness Act, benefits rose 2.8% in January 2026 through the annual cost-of-living adjustment. The average retired worker’s monthly benefit is now approximately $2,071, and an aged couple both receiving benefits averages around $3,208.2Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
The COLA compares the average Consumer Price Index for Urban Wage Earners and Clerical Workers from the third quarter of one year to the third quarter of the next. When prices rise, the percentage increase is applied to benefits automatically under the statute. SSI recipients get the same percentage bump; the 2026 federal SSI standard is $994 per month for an individual and $1,491 for an eligible couple.2Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet Many states add a supplement on top of the federal SSI amount.
Working While Collecting Benefits
If you claim Social Security retirement benefits before your full retirement age and keep working, an earnings test can temporarily reduce your monthly checks. The 2026 thresholds moved up.
- Under full retirement age all year: you can earn up to $24,480 without any reduction. Above that, SSA withholds $1 in benefits for every $2 you earn over the limit.2Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
- Reaching full retirement age during 2026: the limit is $65,160 for the months before you hit full retirement age, and SSA withholds $1 for every $3 above that.3Social Security Administration. Exempt Amounts Under the Earnings Test
- At or past full retirement age: no earnings test applies. You can earn any amount without a reduction.
Money withheld under the earnings test isn’t lost. Once you reach full retirement age, SSA recalculates your benefit to credit you for the months benefits were reduced, and your monthly amount goes up permanently.
There’s also a first-year rule that helps mid-year retirees. If you stop working partway through the year after already earning above the annual limit, SSA can test your earnings monthly instead of annually for that one year. As long as your earnings in a given month don’t exceed the monthly exempt amount ($2,040 in 2026), you get a full benefit for that month.4Social Security Administration. Retirement Earnings Test Calculator This grace-year rule applies only once in your lifetime.
Full Retirement Age and What You Can Collect
Your full retirement age determines when you can collect your full benefit without any reduction. For anyone born in 1960 or later, full retirement age is 67.5Social Security Administration. Retirement Age and Benefit Reduction Those born between 1955 and 1959 have a full retirement age somewhere between 66 and 2 months and 66 and 10 months, depending on the birth year.
Claiming early cuts your benefit for good. If your full retirement age is 67 and you claim at 62, that’s 60 months early, and the reduction works out to about 30% less than your full benefit: roughly 6.7% per year for the first three years early and 5% per year for additional years before that.6Social Security Administration. Benefit Reduction for Early Retirement Waiting past full retirement age earns delayed retirement credits of 8% per year, up to age 70.
For 2026, the maximum monthly benefit at full retirement age is $4,152. Delaying to 70 pushes the maximum to $5,181.7Social Security Administration. What Is the Maximum Social Security Retirement Benefit Payable Those maximums assume 35 years of earnings at or above the taxable wage base; most workers will collect less. The 2026 taxable wage base itself rose to $184,500, up from $176,100 in 2025.2Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
What the New Law Did Not Change
Federal income tax on Social Security benefits still works the same way. Whether yours are taxable depends on your combined income (adjusted gross income plus tax-exempt interest plus half of your Social Security benefits), and the thresholds that trigger taxation have not been adjusted for inflation since the 1980s. Single filers with combined income above $25,000 can see up to 50% of benefits taxed, and above $34,000 up to 85%. Married couples filing jointly cross those tiers at $32,000 and $44,000.8Office of the Law Revision Counsel. 26 USC 86 – Social Security and Tier 1 Railroad Retirement Benefits “Up to 85% taxable” means that share of your benefits gets added to your taxable income, not that 85% becomes your tax bill.
Most states don’t tax Social Security. Nine states still do at some level in 2026, though several offer exemptions based on age or income, and West Virginia completed its phase-out in 2026. If your state taxes benefits, check its specific thresholds.
If you think WEP or GPO once reduced your benefit and you still haven’t seen a change, that’s the loose end worth chasing. Everyone else in that group has already been paid.