The Social Security Fairness Act was signed into law on January 5, 2025.
The Act ends the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These provisions reduced or eliminated the Social Security benefits of over 3.2 million people who receive a pension based on work that was not covered by Social Security (a “non-covered pension”) because they did not pay Social Security taxes. This law increases Social Security benefits for certain types of workers, including, but not limited to, some:
Starting February 25, 2025, The Social Security Administration:
If a resident is due retroactive benefits as a result of the Act, they will receive a one-time retroactive lump-sum payment, deposited into the bank account SSA has on file (or deposited to the resident’s Direct Express Card) by the end of March. This retroactive payment will cover the increase in their benefit amount back to January 2024, the month when WEP and GPO no longer apply. Anyone whose monthly benefit is adjusted, or who will get a retroactive lump-sum payment, will receive a mailed notice from Social Security.
NOTE: A beneficiary may receive two mailed notices, the first when WEP or GPO is removed from their record, and a second when their monthly benefit amount is adjusted for their new monthly payment amount. They may receive the retroactive payment before receiving the mailed notice. For any complex cases that cannot be processed automatically, additional time is required to manually update the records and pay both retroactive benefits and the new benefits amount.
Most affected residents/applicants will begin receiving their new monthly benefit amount in April 2025 (for their March 2025 benefit). Residents are urged to wait until April to inquire about the status of their retroactive payment, since these payments will process incrementally throughout March. Residents should also wait until after receiving their April payment before contacting SSA to ask about their monthly benefit amount because the new amount will not be reflected until April for their March payment. We assume that the Enterprise Income Verification System (EIV) will be updated accordingly.
You can view the amount Social Security has paid by state and zip code.
How to Treat These Income Changes – HUD Multifamily Housing Programs
First, let’s address the one-time retroactive payment. For HUD income purposes, we are referencing HH 4350.3 Exhibit 5-1 which describes the following income exclusion.
(13) Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump-sum amount or in prospective monthly amounts;
In light of this guidance, the retroactive lump sum payment should be excluded. We have asked HUD’s MFH division to confirm this interpretation.
Next, owner/agents will need to determine whether or not a resident who qualifies for an increase to their monthly benefit, must report for an Interim Recertification.
Under the current (Pre-HOTMA) HUD Multifamily Housing leases, residents are required to report income changes between certifications when the family experiences an increase that will result in a $2400 annual increase ($200 per month). Please note that owner/agents should not implement HOTMA changes to required interim reporting requirements until:
See HH 4350.3 Paragraph 7-10-A-4:
7-10 Key Requirements
… 4. The family’s income cumulatively increases by $200 or more per month.
Since the monthly Social Security benefit is expected to result in an average increase of $360 for public sector retirees and potentially much higher increases for some, owner/agents may want to remind residents of their requirement to report such a change.
If a resident’s Annual Recertification is due April 1, 2025 or later, you may need to conduct additional investigation/verification. We expect the EIV database to be updated, but remember, it takes 90 days for information to be updated for all residents.
If a resident has online access to their Social Security Records, additional information can be found there. If your residents need information about establishing an account, they (or their representatives) may access updated information from the SSA web site. Obtaining access to their account can save applicants and residents time and can help them avoid trips to the local Social Security Administration office for an in-person meeting.
For help with a Social Security online account, residents can call a dedicated “my Social Security” Hotline 1-800-772-1213, and say “helpdesk” at the voice prompt. The help desk is available to callers between 8:00 a.m. and 7:00 p.m. (Eastern Time).
Residents can also contact your local Social Security office directly. Look for the general inquiry telephone number using the Social Security Office Locator. Applicants/residents should note that wait times will probably be long in light of this and other recent changes.
Helping Residents Avoid Scams
Unfortunately, there are people who might attempt to take advantage your residents. Please advise residents that the Social Security Administration will never ask or require a person to pay either for assistance or to have their benefits started, increased, or paid retroactively. If a resident receives such a call, they should hang up; they should not enter numbers, click on a link or otherwise respond to anyone offering to increase or expedite benefit payments. Residents can learn more about Social Security-related scams, and how to report them to SSA's Office of the Inspector General, at www.ssa.gov/scams.
Resident Notice
Currently, HUD does not require owner/agents to provide residents with notices advising them of this potential change.
However, some of our customers have requested new notices so we will be offering two forms as part of our RBD FASTForms. The first new form is a notice advising residents of the change (proactive) Notice Income SS Fairness Act.
The second new form is a Lease Violation Notice advising residents that they have failed to report a change (lease violation). See HH 4350.3 Paragraph 7-12 for additional information.
Forms are provided in Microsoft Word or Microsoft Excel format and can be edited to create a standard document used by your entire portfolio, or edited to create a document specific to each property. RBD FASTForms are licensed to the owner/agent so that they may be used for any property that is part of the ownership/management portfolio.
Click here and join Mary Ross for a quick explanation of how RBD FASTForms works or, for additional information, contact us at info@rbdnow.com.