US Social Security Releases 1.1M Retroactive Payments: Here's the Average Amount

The Social Security Administration (SSA) announced in a 4th March press release that it paid over £5.85 billion ($7.5 billion) in retroactive payments to 1.12 million people with public pensions, including teachers, firefighters, and police officers, federal employees covered by the Civil Service Retirement System, and people whose work was covered by a foreign social security system.

The average retroactive payment was £5,240 ($6,710) per person. The agency continues to release retroactive benefits to eligible recipients and is ready to start paying higher monthly cheques in April, reflecting March benefits.

What Are These Retroactive Social Security Payments?

The retroactive payments and monthly benefits hike are due to a new law called the Social Security Fairness Act, which former US President Joe Biden signed early this year.

The new law eliminated the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) policies, which prevented over 3 million public pension recipients from collecting their full Social Security benefits because they received a pension from work that wasn't covered by Social Security. The rules even reduced payouts for workers' surviving spouses and family members.

The latest benefits hike is retroactive to December 2023, meaning that eligible beneficiaries who previously received partial benefits will receive a full payment retroactive to a year ago.

'President Trump made it very clear he wanted the Social Security Fairness Act to be implemented as quickly as possible,' said Lee Dudek, Acting Commissioner of Social Security, in the press release. 'We met that challenge head on and are proudly delivering for the American people.'

Social Security Benefit Hike Projections Under New Law

Before signing the Social Security Fairness Act, Biden said that repealing WEP and GPO policies would increase the average monthly cheque by £281 ($360) for over 2.5 million people, which is a 'big deal in middle-class households.'

The change in benefits will mostly depend on the type of Social Security benefits received and public pension amounts.

The SSA previously stated that some people might witness marginal increases to their monthly benefits while others could be eligible for a £780 ($1,000) hike.

The agency highlighted that the new benefits will be deposited into bank accounts registered with Social Security, and recipients will receive detailed notices about the changes in their mail. These notices are expected to arrive a few weeks after the payments are made as the SSA overhauls its working mechanism through automation to expedite the process.

The agency also urged eligible recipients to wait until April to inquire about the status of their retroactive payments as more payments are released through March.