Social Security Fairness Act: What Federal Employees Need to Know
WEP and GPO repealed in 2025. How the Social Security Fairness Act affects FERS vs CSRS employees and 5 optimization strategies.
The Social Security Fairness Act changed the retirement landscape for millions of federal employees and retirees. If you've been confused about WEP, GPO, and how Social Security actually works with your federal pension, you're not alone.
Here's the bottom line: WEP and GPO are gone. Repealed. Over $17 billion has already been paid out in retroactive benefits. But the details matter, and most articles still get the FERS vs CSRS distinction wrong.
Key Takeaways
- WEP and GPO were repealed by the Social Security Fairness Act on January 5, 2025
- $17 billion in retroactive payments was distributed to 3.1+ million beneficiaries by July 2025
- Standard FERS employees were never affected by WEP or GPO (you already pay Social Security taxes)
- CSRS employees who had Social Security credits are the primary beneficiaries of the repeal
- 2026 focus shifts from avoiding reductions to optimizing your claiming strategy
What Were WEP and GPO?
Before we move on, let's understand what these provisions actually did.
The Windfall Elimination Provision (WEP)
Established in 1983, WEP reduced Social Security benefits for workers who:
- Earned a pension from work not covered by Social Security (like CSRS)
- Also earned Social Security credits from other employment
The logic was to prevent "windfall" benefits for workers who appeared to be low earners (because only part of their career showed up in Social Security records) but actually had substantial retirement income from a government pension.
How it worked:
- Applied to workers with less than 30 years of "substantial earnings" under Social Security
- Reduced the 90% factor in Social Security's benefit formula to as low as 40%
- Maximum reduction in 2024: $558 per month
The Government Pension Offset (GPO)
Established in 1977, GPO reduced Social Security spousal or survivor benefits for those receiving a government pension from non-covered work.
How it worked:
- Reduced spousal or survivor benefits by 2/3 of the government pension
- Often eliminated benefits entirely
- Example: A $3,000/month CSRS pension triggered a $2,000 GPO reduction, wiping out most or all of any spousal benefit
Both provisions are now history. Repealed effective January 2024.
Who Was Actually Affected (And Who Wasn't)
This is where most articles get it wrong. Let's be clear about who these provisions affected.
FERS Employees: You Were Never Affected
If you're a standard FERS employee, WEP and GPO never applied to you. Here's why:
- FERS was designed in 1987 specifically to integrate with Social Security
- You pay the standard 6.2% Social Security payroll tax on every paycheck
- Your FERS pension and Social Security benefits are calculated completely separately
- Neither system reduces the other
The Social Security Fairness Act didn't change anything for standard FERS employees because there was nothing to change. You already receive full benefits from both systems.
CSRS Employees: You're the Ones Who Benefited
CSRS employees and retirees are the primary beneficiaries of the repeal. If you:
- Worked under CSRS (didn't pay Social Security taxes from your federal job)
- Also earned 40+ quarters of Social Security credits from private sector work
- Were receiving reduced Social Security benefits due to WEP
You should have received a retroactive payment by July 2025.
Similarly, if your Social Security spousal or survivor benefits were reduced or eliminated by GPO, those benefits have now been restored.
Trans-FERS Employees: Check Your Status
Trans-FERS employees transferred from CSRS to FERS after having at least 5 years of CSRS service. This is an edge case:
- If you had Social Security credits from work before or outside federal employment
- WEP may have reduced your Social Security benefits
- You should verify you received any applicable retroactive payments
CSRS Offset: Different Situation
CSRS Offset employees are a separate category. These employees had their CSRS coverage modified to include Social Security taxes during their last 5+ years of federal service. They were generally not affected by GPO because they paid Social Security taxes.
The Social Security Fairness Act: Implementation Timeline
The Social Security Fairness Act (H.R. 82) was signed into law by President Biden on January 5, 2025. Here's how it rolled out:
| Date | Milestone |
|---|---|
| January 5, 2025 | Social Security Fairness Act signed into law |
| January 2024 | Effective date (retroactive) |
| February 24, 2025 | SSA began processing retroactive payments |
| March 2025 | First wave complete (~$7.5 billion paid) |
| July 7, 2025 | All retroactive payments complete (5 months ahead of schedule) |
By the Numbers
- 3.1+ million beneficiaries received retroactive payments
- $17 billion total distributed
- $6,710 average retroactive payment
- 289,715 new applications processed through July 2025
Some beneficiaries saw their monthly Social Security increase by $1,000 or more.
Verification Checklist for CSRS Employees
If you're a CSRS employee or retiree who should have benefited from the repeal, verify your status:
Step 1: Determine If You Were Affected
You were potentially affected by WEP if you:
- Retired under CSRS (not FERS)
- Earned Social Security credits from private sector work (40+ quarters)
- Were receiving Social Security benefits before January 2025
You were potentially affected by GPO if you:
- Retired under CSRS
- Were eligible for Social Security spousal or survivor benefits
- Had those benefits reduced or eliminated due to your CSRS pension
Step 2: Check Your Payment Status
- Log into my Social Security at ssa.gov
- Review your benefit history for any lump-sum payments in 2025
- Compare your current monthly benefit to what you received in December 2023
Step 3: If You Didn't Receive a Payment
- Call SSA at 1-800-772-1213 (TTY 1-800-325-0778)
- Visit your local Social Security office
- Bring documentation of your CSRS pension and any private sector earnings
FERS Employees: Optimizing Social Security in 2026
Since FERS employees receive full Social Security benefits, your focus should be on optimization. Here are 5 strategies for 2026.
Strategy 1: Coordinate with Your FERS Supplement
The FERS Supplement bridges the gap from your retirement to age 62. Understanding how it interacts with Social Security is critical.
Key facts:
- The Supplement approximates what your Social Security benefit would be based on FERS service
- It ends automatically at age 62, regardless of when you claim Social Security
- Quick formula: (Your Social Security estimate at 62 / 40) x years of FERS service
The decision point: When your Supplement ends at 62, you can claim Social Security immediately or delay for higher benefits. Delaying to age 70 earns 8% per year in delayed retirement credits.
Strategy: If you have TSP savings, consider using TSP withdrawals to bridge from 62 to 67 or 70, allowing your Social Security to grow. The 8% annual increase (guaranteed, risk-free) often beats what you'd earn keeping money invested.
For more on the Supplement earnings test, see our guide on the FERS Supplement Earnings Limit 2026.
Strategy 2: Understand Your Three-Legged Stool
FERS retirement rests on three income sources:
| Income Source | Typical % of Retirement Income |
|---|---|
| FERS Pension | 30-40% |
| Social Security | 30-40% |
| TSP/Savings | 20-40% |
Optimization requires analyzing all three together, not Social Security in isolation. Standard "break-even analysis" that only looks at Social Security fails for federal employees because it ignores:
- How TSP withdrawals affect taxation of Social Security
- IRMAA thresholds for Medicare premiums
- Roth conversion opportunities in early retirement
Strategy 3: Time Your Claiming Age
| Claiming Age | Impact | Best For |
|---|---|---|
| Age 62 | 30% reduction from FRA benefit | Need income now; health concerns; short life expectancy |
| Age 67 (Full Retirement Age) | 100% of your Primary Insurance Amount | Standard recommendation |
| Age 70 | 24-32% increase over FRA | Good health; want maximum monthly; spouse needs survivor benefit |
For married federal employees: The higher earner delaying to 70 often makes sense because it locks in a larger survivor benefit. If one spouse passes, the survivor keeps the higher of the two Social Security benefits.
Strategy 4: Manage the Earnings Test
If you plan to work before Full Retirement Age (67 for most current retirees), the Social Security earnings test still applies:
2026 limits:
- Under FRA: $24,480/year (lose $1 for every $2 over)
- Year you reach FRA: $65,160 limit ($1 for every $3 over)
- At FRA and beyond: No limit
Important: Benefits withheld by the earnings test aren't lost forever. They're added back after you reach FRA through a recalculation that increases your monthly benefit.
Strategy 5: Consider Tax Implications
Social Security benefits can be taxable depending on your "provisional income" (AGI + tax-exempt interest + half your Social Security). For federal retirees with FERS pensions and TSP withdrawals, this is almost always relevant.
2026 thresholds:
- Single filers: Up to 85% of benefits taxable if provisional income exceeds $34,000
- Married filing jointly: Up to 85% taxable if provisional income exceeds $44,000
Strategy: Consider Roth conversions in early retirement (before claiming Social Security) to reduce future RMDs and manage provisional income in later years.
For tax strategies, see our Tax Planning for Federal Retirees 2026 guide.
CSRS Employees: What Changed for You
With WEP and GPO repealed, CSRS employees with Social Security credits now receive:
Full Social Security Benefits
If you earned 40 quarters (10 years) of Social Security-covered work from private sector employment:
- Your benefit is now calculated using the standard formula
- No more WEP reduction (which could have been up to $558/month)
- Ongoing monthly benefits should reflect the full amount
Full Spousal and Survivor Benefits
If you're married to (or a widow/widower of) a Social Security-covered worker:
- Spousal benefits: Up to 50% of your spouse's Primary Insurance Amount (at FRA)
- Survivor benefits: Up to 100% of your deceased spouse's benefit
- No more GPO reduction (which eliminated benefits for many)
Tax Implications of Retroactive Payments
The retroactive lump-sum payments received in 2025 are taxable in the year received. This means:
- You'll see the payment on your 2025 Form SSA-1099
- It may push you into a higher tax bracket for 2025
- Consider whether to file an amended return if you had significant income in prior years
2026 COLA Update
While we're discussing Social Security, here are the 2026 Cost-of-Living Adjustments:
| System | 2026 COLA |
|---|---|
| Social Security | 2.8% |
| CSRS | 2.8% |
| FERS | 2.0% |
FERS receives Social Security's COLA minus 1% when the COLA is between 2% and 3%. This is a feature of FERS, not a reduction due to the Fairness Act.
Proposed Changes to Watch
The following legislation has been proposed but is not yet law:
- Eliminate FERS Supplement for new retirees (passed House committee; no Senate action)
- Change High-3 to High-5 for pension calculations
- Increase FERS employee contributions
Monitor these proposals through 2026-2027. They could affect your retirement planning timeline.
Calculate Your Federal Retirement Income
Social Security is one piece of your retirement puzzle. Use our free FERS Retirement Calculator to see how your pension, FERS Supplement, and TSP work together.
Frequently Asked Questions
Does my FERS pension reduce my Social Security benefits?
No. FERS employees pay Social Security taxes throughout their career, and your FERS annuity is calculated completely separately from Social Security. You receive full benefits from both systems. Neither reduces the other. This has always been true for FERS employees, both before and after the Social Security Fairness Act.
What happened to WEP and GPO in 2025?
Both the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) were repealed by the Social Security Fairness Act, signed into law on January 5, 2025. The repeal is retroactive to January 2024. The SSA completed over $17 billion in retroactive payments to 3.1+ million affected beneficiaries by July 2025, five months ahead of schedule.
Were FERS employees affected by WEP or GPO?
No. Standard FERS employees were never affected by WEP or GPO because FERS was designed to include Social Security coverage. You've always paid the 6.2% Social Security tax from your federal salary. The only exception is Trans-FERS employees (who transferred from CSRS after 5+ years), who may have been affected if they also had Social Security credits from other employment.
Should I claim Social Security at 62 when my FERS Supplement ends?
Not necessarily. While your FERS Supplement ends at age 62 regardless of when you claim Social Security, delaying your claim earns you an 8% increase per year up to age 70. If you have TSP savings or other income to bridge the gap, delaying can significantly increase your lifetime Social Security benefits. Consider the guaranteed 8% annual increase against what you'd earn by keeping that money invested.
I'm CSRS. How do I know if I got my retroactive payment?
Log into your my Social Security account at ssa.gov to check your benefit history. Look for any lump-sum payments in 2025 and compare your current monthly benefit to what you received in December 2023. If you were affected by WEP or GPO and believe you didn't receive your retroactive payment, contact SSA at 1-800-772-1213.
How do I estimate my FERS Supplement amount?
The quick formula is: (Your estimated Social Security benefit at 62 / 40) x your years of FERS service. For example, if your Social Security estimate at 62 is $24,000 and you have 25 years of FERS service, your annual supplement would be approximately ($24,000 / 40) x 25 = $15,000, or $1,250 per month. Use our FERS Retirement Calculator for a more comprehensive estimate.
Related Resources
- FERS Retirement Calculator: Estimate your complete retirement income
- FERS Retirement Guide: Everything about FERS eligibility, formulas, and benefits
- FERS Supplement Earnings Limit 2026: Rules for working in retirement
- Tax Planning for Federal Retirees 2026: Manage taxes in retirement
- TSP Withdrawal Guide 2026: Strategies for withdrawing your TSP
Sources:
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