Are You One of the 3 Million+ Receiving the Upcoming Social Security Boost?

More than 3.2 million Americans are due a retroactive lump sum payment from the Social Security Administration (SSA). While the agency once believed it would take a year or more to distribute payments, automation has sped the process up considerably. Most people have already received their checks or will have them by the end of March.

What's this all about?

Shortly before leaving office in January, former President Joe Biden signed the Social Security Fairness Act into law. The Act ended the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Both the WEP and the GPO reduced or eliminated Social Security benefits for those who received a pension based on work but didn't pay Social Security taxes because Social Security did not cover their position. WEP and GPO primarily affected the following:

• Teachers
• Firefighters
• Police officers
• Federal employees covered by the Civil Service Retirement System
• Spouses and surviving spouses of workers whose benefits were reduced due to their spouse's public pension
• Those whose work was covered by the social security system of another country

Image source: Getty Images.

Who's eligible?

Not every teacher, police officer, or federal worker is eligible for the lump sum retroactive payment. According to the SSA, the only people who can expect a check and increase in benefits are those who have earned a pension based on work not covered by Social Security and who have also earned a Social Security benefit based on other employment.

Let's say a pension covered a person's teaching job, but each summer, they were paid to work at a summer camp, and Social Security covered that job. When WEP and GPO were in effect, the fact that they had a pension-covered job reduced their Social Security benefit. The newly signed Social Security Fairness Act restores those reduced benefits to their full amount.

Because Social Security is paid one month in arrears, eligible beneficiaries already receiving benefits before January 2024 should see their monthly payments increase in April, when they receive a check covering March. In the meantime, they can expect a lump sum payment for the benefits they've missed out on since January 2024 to be deposited into the bank account the SSA has on file.

Example: Terry's monthly check was reduced by $100 due to WEP or GPO. Since retroactive payments go back to January 2024, Terry's lump sum payment should be around $1,400. That's $1,200 for 2024 and $200 for January and February 2025. Terry can expect the extra $100 for March on their April check.

What about future checks?

Beginning in April, most affected beneficiaries will receive a new, higher benefit amount on their Social Security checks (for March). Those who haven't applied for Social Security benefits yet will qualify for the full amount they're entitled to when they begin receiving benefits.

What if I haven't received my lump sum retroactive benefits?

The SSA urges beneficiaries to wait until April to inquire about the status of their lump sum payment. Payments are expected to be processed incrementally throughout March, and some may not hit bank accounts until April.

If you're one of the roughly 3.2 million people expected to receive a check, you should have received a mailed notification from the SSA explaining the situation. If you believe you should receive a check but haven't received a letter, make sure the SSA has your correct mailing address.

The Social Security Fairness Act aims to ensure that people who work for Social Security benefits receive the full amount they've earned.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.