In January 2025, as one of the last acts of his administration, President Biden signed the Social Security Fairness Act.

This new act included the repeal of the Windfall Elimination Provision (WEP) and the removal of the Government Pension Offset (GPO).

The WEP and GPO were landmines you might have inadvertently set off when moving from the UK to the US, which could have affected the amount of income you received in retirement. The “defusing” of both of these is likely to have significant implications for many British expats living in the US.

Read on to discover what these are, and how you may benefit financially from the repeal of the WEP.

You could benefit from the new act if you are eligible for a UK State Pension

Previously, if you received a pension from “non-covered” employment on which you did not pay Social Security contributions, the WEP would have reduced the payments you received.

Importantly, as a British expat, non-covered employment could relate to earnings covered by an overseas social security system, such as any UK State Pension eligibility you had accrued while you were working in the UK.

Additionally, it could have also affected your benefits if you worked for a non-US employer while living in the US.

As a British expat who qualified for a UK State Pension, as well as US Social Security benefits through your US work history, you may well have seen a reduction in your Social Security payments. This could have been up to 50% of the value of your non-covered pension.

Furthermore, the GPO would also have reduced the amount of Social Security payments for your surviving spouse.

The repeal of the WEP and removal of the GPO means that if you are a British expat and have worked in the US for long enough to qualify for Social Security benefits, but also receive a UK State Pension, you will now be eligible to receive your full entitlement of US benefits, without any reduction.

You may be eligible to receive a lump sum adjustment payment

In terms of quantifying what these changes could mean for you, data produced by the Congressional Budget Office confirms that the:

  • Repeal of the WEP is likely to increase average Social Security benefits by $360 a month by the end of this year
  • Removal of the GPO will increase monthly payments by an average of $1,190 for surviving spouses.

Furthermore, these benefits will rise in line with the cost-of-living adjustments (COLAs) each year. Taken together with your UK State Pension, these could provide a handy guaranteed income underpinning your retirement.

Additionally, the new act backdated the repeal of the WEP to December 2023. This means that the increases effectively came into effect from January 2024, with a lump sum adjustment to be paid by the Social Security Administration (SSA) to all those eligible.

It’s sensible for you to check your eligibility

According to the SSA website, the government started the process of retroactive payments from 25 February and has confirmed that all payments would be made by the end of March.

If you believe you are eligible for a payment but have not yet received it, we recommend that you check your Social Security records and enquire directly to the SSA.

At the same time, it’s worth checking your State Pension eligibility via the UK government website as well as finding out when you will start to receive it. This will give you an idea of the pension you can expect to receive, so you can factor this into your retirement income planning.

You could benefit from more income in retirement

There are several potential benefits you could enjoy if you are affected by these changes. These include:

  • An increase in your retirement income, above the amount previously assumed
  • A simplified retirement income planning process, as you don’t need to assume a reduction when calculating your Social Security payments
  • The ability to continue to accrue benefits without any subsequent penalty.

If you stand to benefit from the introduction of the Social Security Fairness Act, you may want to consider reviewing how this could affect your income in retirement and adjusting your wider retirement income plans accordingly.

Get in touch

If you are a British expat living in the US, it’s important for you to understand how these changes will affect you.

If you would like to find out more and discuss how we can help you prepare for retirement, please get in touch to arrange an exploratory Zoom call to talk through your plans.

Please note

Plan First Wealth (PFW) is an SEC-registered investment adviser.

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