I remember watching cable news constantly last month as Congress raced to avoid a shutdown. For two days it was wall-to-wall coverage detailing a variety of plans to keep the government open. Thankfully, a government shutdown was averted. Given the chaos on Capitol Hill at the same time, you may have missed that the Senate passed the Social Security Fairness Act (SSFA), with bi-partisan support following the House’s approval in November.
On Jan. 5th, President Joe Biden signed the bill into law, marking a big win for millions of Social Security recipients like Evelyn Paternostro, an 84-year-old from Louisiana who works part time at the Dollar Tree. According to CBS News, Paternostro, a former teacher and principal, currently receives a state pension. However, because of a quirk in the system she was not eligible for her husband’s Social Security survivor benefits. Losing her husband’s benefits was a hardship, forcing her to work at the Dollar Tree to make ends meet.
Paternostro’s benefit reduction was emblematic of about 2.8 million people around the country. Some people, such as teachers, firefighters, and police officers did not pay into Social Security because they received a government pension instead. Many of these retirees then took on another job that did pay into Social Security. However, under the previous law, these individuals and living spouses (people who get Social Security because of their spouse) received less Social Security than what they were entitled to because the government offset their pension from the non-covered job. Thankfully, the SSFA helps correct these benefit reductions.
So, what does this mean in actual dollars?
According to USA Today, Don Hillbish, from Reading, Pennsylvania, is a retired police Sergeant, who receives a pension from a job not covered by Social Security. In addition to serving as a police officer from 1969 to 2018, Hillbish worked part time jobs and paid into Social Security. Sadly, his Social Security benefits were reduced from $1,100 to $350 a month due to his pension. That was a whopping $9,000 a year!
According to the Congressional Budget Office (CBO), the SSFA increase benefits by $360 a month for those with a pension from a non-covered job who have worked other jobs where they paid into Social Security.
Senator Bill Cassidy (R-La.) told colleagues last month that the current Social Security system, “penalize families across the country who worked a public service job for part of their career with a separate pension.” He said, “We’re talking about police officers, firefighters, teachers, and other public employees who are punished for serving their communities.”
Unfortunately, not everyone agrees. People argue that the legislation speeds up the Social Security Trust Fund’s insolvency date by six months. While I appreciate that argument, people’s earned benefits should not be cut to save money. Social Security’s long-term solvency will need a solution around 2033. Six months either way is not a reason to reduce benefits.
At the signing ceremony Biden said, “By signing this bill, we’re extending Social Security benefits for millions of teachers, nurses and other public employees and their spouses and survivors.” Public servants perform a critical role helping to deliver government services at the federal, state and local level. Working a non-covered Social Security job with a pension should not be a reason to reduce a person’s Social Security benefits. Your benefits should be based on your contributions to the system, regardless of other sources of income. To me it’s a basic rule of fairness that all seniors deserve.
Evan Carmen, Esq. is the Legislative Director for Aging Policy at the B’nai B’rith International Center for Senior Services. Click here to read more from Evan Carmen.