The WEP Repeal: Do I Get More Social Security Now?

By Yarik Yarosh, CPA ·August 21, 2026 ·7 min read

Written by Yarik Yarosh, CPA (US & Canada) August 21, 2026 · FL CPA license AC61704 · CPA Ontario

If you receive both CPP and US Social Security, yes, your Social Security benefit likely increased. The Social Security Fairness Act of 2025, signed into law on January 5, 2025, repealed both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), effective retroactively to benefits payable after December 2023. The SSA began issuing retroactive payments and adjusted ongoing benefits through 2025. Roughly 3.2 million people were affected.

For cross-border workers who split careers between Canada and the US, the WEP was the provision that reduced their Social Security benefit because they also received a pension from a system (like CPP) that did not withhold Social Security taxes. Its repeal means the full Social Security formula now applies, without the modified bend-point reduction that WEP imposed.

✓Key takeaway

The WEP reduced your Social Security benefit if you received a pension from employment not covered by Social Security (including CPP). The reduction used a modified formula that replaced the 90% factor on the first bend point with a lower percentage, sometimes as low as 40%. The repeal restores the 90% factor, which increases the monthly benefit. The increase is retroactive to January 2024, and the SSA issued lump-sum retroactive payments for the difference. If you were already receiving both CPP and Social Security, your ongoing benefit should be higher, and you should have received a retroactive payment. If you have not, contact the SSA.

What was the Windfall Elimination Provision?

The WEP was enacted in 1983 to prevent a perceived “windfall” for workers who split careers between Social Security-covered and non-covered employment. For current guidance, see IRS international tax resources. The concern: someone who appeared low-income to Social Security but had substantial earnings (and a pension) from non-covered work would get a disproportionately large benefit from the formula designed to replace more income for lower earners.

The WEP modified the benefit formula. Social Security calculates benefits using a three-bracket formula applied to Average Indexed Monthly Earnings (AIME):

90% of the first $1,174 of AIME (2025 bend point)
32% of AIME between $1,174 and $7,078
15% of AIME above $7,078

The WEP replaced the 90% factor on the first bend point with a lower percentage, as low as 40% for workers with fewer than 20 years of “substantial earnings” under Social Security. The maximum WEP reduction in 2024 was $558 per month. For a cross-border worker who spent 15 years in Canada (earning CPP) and 15 years in the US (earning Social Security), the WEP could reduce the Social Security benefit by several hundred dollars per month.

What changed with the repeal?

The Social Security Fairness Act of 2025 (Public Law 119-4) eliminated both the WEP and the GPO, effective for benefits payable after December 2023.

What changed:

WEP: the modified bend-point formula is gone. Benefits are now calculated using the standard 90/32/15 formula for all workers, regardless of non-covered pensions. If your benefit was reduced, the full formula now applies.
GPO: the offset that reduced spousal and survivor benefits by two-thirds of a government pension (including CPP) is repealed. Those benefits are now paid in full.
Retroactivity: effective for benefits payable after December 2023. The SSA issued retroactive lump-sum payments covering January 2024 through the adjustment date, throughout 2025.

How does this affect dual CPP and SS recipients?

If you worked in both countries and receive CPP and Social Security, the WEP was reducing your Social Security benefit. The repeal increases it, and the higher base changes the claiming-timing math.

The size of the increase depends on your years of substantial earnings under Social Security:

Fewer US coverage years meant larger WEP reductions (down to the 40% factor), so those workers see the largest increases
Workers with 30+ years of substantial earnings were already exempt from WEP and see no change

The CPP benefit itself is unchanged. The repeal affects only the US Social Security calculation.

Hypothetical example

A hypothetical with made-up numbers. A Canadian citizen worked in Canada for 20 years (contributing to CPP) and then moved to the US and worked for 12 years (contributing to Social Security). He is now retired and receiving both CPP ($800/month) and Social Security.

Before the repeal: his Social Security benefit was calculated using the WEP-modified formula. With 12 years of substantial earnings, the 90% first-bracket factor was reduced to approximately 55%. His AIME from US employment was $2,500. The WEP formula gave him: 55% of $1,174 + 32% of ($2,500 - $1,174) = $645.70 + $424.32 = $1,070.02 per month.

After the repeal: the standard formula applies. 90% of $1,174 + 32% of ($2,500 - $1,174) = $1,056.60 + $424.32 = $1,480.92 per month.

The monthly increase: approximately $411. The retroactive payment for January 2024 through the date of adjustment (say, June 2025, 18 months): approximately $7,398.

His CPP benefit of $800/month is unchanged. His total retirement income from both systems went from $1,870 to $2,281 per month, plus the lump sum.

Illustrative numbers only, not a real client and not advice for your facts.

Is the retroactive payment taxable?

Yes. Social Security benefits are taxable in the US under IRC 86 if combined income exceeds certain thresholds (up to 85% included in taxable income). The retroactive lump sum is income in the year received, though the lump-sum election under IRC 86(e) can allocate it to the years it relates to, often producing a lower tax.

On the Canadian side, US Social Security is reported on your Canadian return at 85% inclusion under Article XVIII(5). Key points:

US tax on the benefit generates a foreign tax credit under ITA 126(1)
The retroactive payment must be allocated to the correct tax year; a lump sum received in 2025 covering 2024 may require an amended 2024 Canadian return

What about the Totalization Agreement?

The US-Canada Totalization Agreement is a separate mechanism that lets workers combine credits from both systems to qualify for benefits they’d otherwise miss. The WEP repeal doesn’t change how the agreement works; it remains in force.

Before the repeal, the combination of totalization and WEP was particularly harsh: totalization gave you just enough credits to qualify, and WEP then reduced the benefit. The repeal removes the reduction while keeping the qualification pathway open.

What if I haven’t received a retroactive payment?

The SSA processed most retroactive payments through 2025. If you were affected by WEP or GPO and have not received a retroactive payment or a benefit increase:

Check your mySocialSecurity account online for an updated benefit amount
Call the SSA at 1-800-772-1213 (TTY 1-800-325-0778)
If you are living in Canada, contact the nearest US consulate or the SSA’s Office of International Operations

Some cases required manual review, particularly where the WEP reduction was based on pension information that the SSA did not have on file. If you never reported your CPP income to the SSA, the WEP may not have been applied in the first place, and no retroactive increase would be due.

Practitioner note

The retroactive lump sum is the piece that creates the tax problem. A client who receives $5,000 to $10,000 in retroactive payments in 2025, on top of their regular Social Security and CPP, may push into a higher combined-income bracket for IRC 86 purposes, causing a larger share of their ongoing Social Security to become taxable in that year. The lump-sum election under IRC 86(e) can help by allocating the retroactive amount to the prior year, which is usually a lower-income year (because the WEP was still reducing the benefit). On the Canadian side, the 85% inclusion under Article XVIII(5) applies to the lump sum the same way it applies to regular benefits, and the FTC mechanics are the same. The main action item is making sure the 2024 Canadian return reflects the correct Social Security amount, including any portion of the retroactive payment attributable to 2024, and that the US return uses the lump-sum election if it helps.

What should I do next?

If you receive both CPP and Social Security, check your benefit statement for the increase. If the increase has not appeared, contact the SSA. Review your 2024 and 2025 tax returns (both US and Canadian) to make sure the higher benefit and any retroactive payment are reflected correctly. If the lump sum landed in 2025 and pushed your combined income higher, check whether the IRC 86(e) lump-sum election saves tax by allocating the retroactive amount to 2024.

US-Canada Totalization Agreement, the mechanism for combining work credits across both systems
Getting the 15% treaty rate on IRA and 401(k) income in Canada, because SS and IRA income often arrive together
CPP and OAS in the US: how are they taxed?, the treaty treatment going the other direction

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Cite this page

Yarik Yarosh, CPA. "The WEP Repeal: Do I Get More Social Security Now?." Blue Cloud CPA, August 21, 2026. https://bluecloudcpa.com/guides/wep-repeal-social-security-fairness-act-cross-border

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.