The OASDI, or federal old-age, survivors, and disability insurance program within the US, provides monthly benefits to individuals. The Act itself was passed into law in 1935. Various amendments to the Act have been enforced over the years.
The system, run by the Social Security Administration (SSA), covers various social insurance and welfare programs. Depending on key factors, variable benefit amounts are paid at a certain time during the month to select individuals.
Understanding the whole Social Security system
Funding for Social Security is mostly derived from payroll taxes, which are governed by the Self-Employment Contributions Act (SECA) and the Federal Insurance Contributions Act (FICA). The Social Security payroll tax provides guidance on how much of wages and salaries are to be taxed. A good example is that during 2024, the maximum taxable amount of earnings was $168,600.
The total amount of money allocated to social security is calculated according to the monthly number of working-class people in the labor force. 94% of the Individuals in the US work under covered employment, with approximately 6.6 million state and local government workers. 28% of these workers are covered by pension plans, which are operated at the local or state level.
The changes brought about by the Social Security Fairness Act
Trump’s New Move Cuts Off Social Security for Select Americans— What You Need to Know
The Social Security Fairness Act was signed into law on 5 January 2025. It repeals the Government Pension Offset provision as well as the Windfall Elimination Provision (WEP). Both of these provisions had at their core to elimination or reduction of Social Security benefits for the better part of 2.8 million people. Specifically, those who received pensions that were based on work not covered by Social Security.
With these new amendments that were put in place, Social Security’s announcement on retroactive payments and monthly benefit payment increases came as positive news. This is specifically applicable to those who were disadvantaged by the WEP and GPO. Seeing as the system is applicable from January 2024, a once-off retroactive payment will also be made to these beneficiaries. These lump-sum payments were rolled out during February.
What will the long-term and short-term effects of these payments be
The amended monthly benefit checks will roll out from April 2025. The April checks will be effective for the March 2025 payments, as they work a month behind. The normal ‘birthday system’ still applies concerning payment dates:
- 9 April 2025 for birth dates on the 1st and the 10th of the month.
- 16 April 2025 for birth dates on the 11th and the 20th of the month.
- 23 April 2025 for birth dates on the 21st and 31st of the month.
These retroactive payments have been expedited by the use of automation. More complex cases will require manual intervention, specifically to update records and allocate and schedule the retroactive payments. Individuals are requested to query outstanding payments only from April 2025, specifically for the retroactive payments. The payments were incrementally processed throughout March 2025.
Approximately 2.3 million have already been completed by 28 March. That equates to about 75% or 2.3 million people. The rest of the payments will run as the processing is completed. Those who were not affected by the GPO and WEP will not see any amendments on their monthly benefit checks. They will also not be eligible for the retroactive payments.
For those individuals affected by the WEP and GPO, this new system will provide a welcome relief, long-term and short-term. Any form of payment (retroactive and monthly adjusted) not received is advised to be taken up with the SSA. Those individuals who have not previously claimed Social Security because of the restrictions imposed by the WEP and GPO are advised to apply. There is a lot of information available online that will provide relevant guidance on this.
