Recent Social Security Updates and What You Should Do Now

Major changes are underway (and rumored) for Social Security (SS) beneficiaries, impacting everything from benefit calculations to government staffing and the program’s long-term future. Here’s what you need to know to stay informed and act where necessary. 

Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)

The most significant news is the elimination of the WEP and GPO provisions. These adjustments reduced benefits for beneficiaries receiving non-covered pensions from an employer that did not pay into the Social Security system. The new law is retroactive to January 1, 2024. Beneficiaries will receive lump sum payments for WEP/GPO reductions imposed after December 31, 2023.

Beneficiaries will receive a Benefit Verification Letter showing the new gross benefit amount without the WEP/GPO, less Medicare premium deductions, and the net amount. You can also obtain this letter by logging in to your MySocialSecurity account at www.ssa.gov.

The WEP and GPO provisions were still in effect before January 1, 2024, and any reductions are not subject to reimbursement under the new law. Therefore, it is important to report any changes in non-covered pensions received before January 1, 2024 (when the WEP and GPO were still law) to avoid benefit overpayments and potential clawbacks.

We recommend that spouses who did not file for spousal benefits due to the GPO affecting eligibility do so as soon as possible.

How to Apply for Spousal Benefits

1. If you have never applied for your own retirement benefit, go online and apply for a spousal benefit.
2. If you have previously applied for your retirement benefit, make an appointment on the phone or at a local office to apply for spousal.

Staffing Issues and Budget Cuts

Effective March 5, 2025, all non-bargaining union employees returned to the office 5 days/week. Bargaining employees (those who take your application) will still work from home 3 days/week and come to the office 2 days/week.

The Social Security Administration (SSA) has approximately 57,000 employees. On February 28, 2025, the SSA announced plans to cut 7,000 jobs (12% of the workforce) in order to reduce federal bloat. There will be no new hires at this time. The job cuts will exclude those in mission-critical positions, such as claim representatives and service representatives. Local offices will probably not be affected.

Payment centers (offices established to handle payment issues and benefit check errors) have been consolidated from 7 to 4 centers nationwide. The proposed staffing cuts will mostly affect these offices and regional offices.

Another area that budget cuts could impact is the manual processing of certain applications, such as SSDI. Such applications cannot be done online; they must be manually processed. The budget cuts could make an already slow process even worse.

Are Millions of Deceased People Receiving SS Benefits?

A 2023 report from the Office of the Inspector General identified nearly 19 million individuals over 100 years old without death records in the SS system, largely due to outdated database controls deemed too costly to fix. However, the internal audit found that only a tiny fraction of these individuals, about 2 percent, are still receiving benefits. The Trump administration has not specified how it intends to solve the alleged proliferation of dead Social Security recipients.

There is a rumor (which cannot be confirmed) that SSA assigned a default birth date of 1885 to someone who did not provide proof of age or date of birth. There was a time when proof was required, and many beneficiaries could not provide it. For example, in Alabama, many people were not issued birth certificates. Assigning this date prevented benefit checks from going out until the missing info was provided or corrected.

Is the SSA Reducing Benefits?

No proposed cuts to SS benefits have been made. Congress is the only body with the authority to do this; to accomplish such a change, Congress would need to pass a bill and have the president sign it. It would be unpopular, so much of the media news reporting in this area should be taken with a “grain of salt.”

That said, the Annual Report from the Social Security Board of Trustees (May 6, 2024) has projected that the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds will become depleted in 2035. If no changes are made, the trust fund could pay out 83% of benefits at that time (representing a 17% reduction in benefits).

The Proposal for Reducing Tax on Social Security Income

The number of people who owe taxes on their benefits is rising. While SS benefits adjust for inflation, the income thresholds for taxation on those benefits haven’t changed since 1993, pulling more and more people into taxation over time. The proposal wouldn’t completely eliminate taxes on benefits, but it would raise the base income levels for recipients so that many recipients would no longer have to pay taxes.

Mission Wealth Strategy Team

At Mission Wealth, your Wealth Advisor works with a team of experienced experts for tax planning, estate and trust management, investment specializations, and Social Security and Medicare projections. We are with you through every life stage and can opine on many subjects.

Book a complimentary call with one of our advisory team members here.