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

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 The Social Security Fairness Act of 2025, signed into law on January 5, 2025, repealed both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), effective retroactively to benefits payable after December 2023.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.

What was the Windfall Elimination Provision?

The WEP was enacted in 1983 to prevent a perceived “windfall” for workers who split careers between employment covered by Social Security and employment covered by a separate pension system. The concern was that the Social Security benefit formula, which is designed to replace a higher percentage of earnings for low-income workers, would give a disproportionately large benefit to someone who appeared low-income to Social Security but actually had substantial earnings (and a pension) from non-covered employment.

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.

For WEP: the modified bend-point formula is gone. Social Security benefits are now calculated using the standard 90/32/15 formula for all workers, regardless of whether they receive a pension from non-covered employment. If your benefit was being reduced by WEP, the full formula now applies, and the monthly benefit is higher.

For GPO: the Government Pension Offset reduced spousal and survivor Social Security benefits by two-thirds of the amount of a government pension (including CPP) the beneficiary received. Its repeal means that spousal and survivor benefits are now paid in full without the offset.

Retroactivity: the effective date is benefits payable after December 2023. The SSA recalculated affected benefits and issued retroactive lump-sum payments covering the difference from January 2024 through the date of adjustment. These payments were issued throughout 2025.

How does this affect someone receiving both CPP and Social Security?

If you worked in Canada (contributing to CPP) and in the US (contributing to Social Security), and you are receiving benefits from both systems, the WEP was reducing your Social Security benefit. The repeal increases it, and the higher base changes the claiming-timing math between CPP and Social Security.

The size of the increase depends on how many years of substantial earnings you had under Social Security. Workers with fewer years of US coverage saw larger WEP reductions (down to the 40% factor), so they see larger increases from the repeal. Workers with 30 or more years of substantial earnings under Social Security were already exempt from WEP and see no change.

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

Is the retroactive payment taxable?

Yes. Social Security benefits are taxable in the US under IRC 86 if your combined income exceeds certain thresholds. Up to 85% of Social Security benefits can be included in taxable income. The retroactive lump sum is income in the year you receive it, though IRC 86 provides an optional method for allocating it to the years it relates to (the lump-sum election under IRC 86(e)), which may produce a lower tax if the allocation spreads the income across years where your total income was lower.

On the Canadian side, if you are a Canadian resident, US Social Security benefits are reported on your Canadian return under Article XVIII(5) of the treaty. Only 85% of the benefit is included in Canadian income. The US tax on the Social Security (if any) generates a foreign tax credit under ITA 126(1).

The retroactive payment needs to be allocated to the correct tax year on the Canadian side as well. If you received a lump sum in 2025 that covers 2024 and 2025, the CRA may require you to report the 2024 portion on an amended 2024 return.

What about the Totalization Agreement?

The US-Canada Totalization Agreement is a separate mechanism that allows workers to combine credits from both systems to qualify for benefits they would not otherwise be eligible for. The WEP repeal does not change how the Totalization Agreement works. The agreement remains in force, and if you used totalized credits to qualify for Social Security, the WEP repeal increases the benefit you receive under that qualification.

Before the repeal, the combination of totalization and WEP was particularly harsh: totalization gave you just enough credits to qualify for a benefit, and WEP then reduced that benefit because you had CPP income. 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.

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

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