Social Security Is Changing in 2025. Here’s How it Might Affect You

Social Security forms the bedrock of income for millions of retirees, survivors and disabled people across the United States. As the New Year quickly approaches, some notable changes will be made that beneficiaries should be aware of.

Benefit Increases

In October, the Social Security Administration (SSA) announced a 2.5 percent boost to benefits issued in 2025.

The cost-of-living adjustment, more commonly known as COLA, increases benefits administered by the SSA on a yearly basis to keep payments in line with the rising cost-of-living as well as inflation.

The first adjusted payments will be made in December 2024 for those who collect Supplemental Security Income (SSI) and in January 2025 for people who get regular Social Security payments.

The 2.5 percent increase will mean a benefit recipient receiving $1,870 per month from SSA could see their monthly payment rise about $46.80 next year, according to independent Social Security and Medicare policy analyst Mary Johnson.

“The 2025 COLA will be the lowest received by Social Security beneficiaries since 2021, at the same time inflated prices persist on key essentials such as housing, meats, auto insurance, any type of service and repairs,” she said in a statement to Newsweek. “Despite it being the lowest COLA since 2021, a 2.5 percent COLA would be considered about average.”

Taxable Earnings Increase

All U.S. workers are required to pay federal taxes that support Social Security, with employees contributing 6.2 percent and employers matching this rate. There is an annual cap on taxable earnings, which is adjusted each year.

In 2025, the maximum taxable income will rise to $176,100, an increase from the 2024 limit of $168,000.

Social Security Fairness Act

The Social Security Fairness Act is currently making its way through the legislative process—and could be approved sooner rather than later.

If it becomes law, the Social Security Fairness Act would eliminate two provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

The WEP reduces Social Security benefits for individuals who receive pensions from public sector jobs—such as state and federal employees—that did not require Social Security payroll tax contributions. This reduction applies even if the individuals contributed to Social Security through other jobs and are otherwise eligible for benefits. Currently, this provision affects about 2 million beneficiaries.

The GPO lowers spousal or survivor benefits for retired federal, state, and local government workers who did not contribute to Social Security through payroll taxes. This rule impacts approximately 800,000 retirees.

The bill passed with considerable support in the U.S. House of Representatives, and it remains to be seen if it will get a similar reception in the Senate. Majority Leader Chuck Schumer, a New York Democrat, has confirmed he will bring the bill to the floor and urged Republicans to back it.

“The Senate is going to take action on Social Security…I’ve got my Democrats lined up to support it,” he said at a labor rally in Washington, D.C., last week. “We need 15 Republicans—let’s get them—and we’re going to have the vote. What’s happening to you is unfair, un-American and I will fight it all the way.”

Senators have a deadline of December 20 to vote on it.

Newsweek has contacted Schumer’s office via email for clarification on when the vote will be held.

Change of Commissioner

With a new administration comes a new appointee to the SSA’s commissioner role. President-Elect Donald Trump has nominated Frank Bisignano, a GOP donor and CEO of fintech and payments firm Fiserv, to the role. His confirmation is still subject to Senate approval.

Changes to Customer Service

The SSA has enjoyed improved service standards over the last year, but this could be subject to change in 2025 if a funding request from the outgoing Biden administration is further denied.

In November, the SSA was forced to implement a hiring freeze after Congress denied additional funding for the government agency in its September continuing resolution (CR). These resolutions, intended to prevent a government shutdown, maintain existing spending levels until lawmakers come to an agreement on a full-year fiscal plan.

In September, however, House Republicans blocked a budget anomaly request from the Biden administration to increase the SSA’s 2024 annual funding from $14.2 billion to $15.4 billion, aligning with the administration’s fiscal year 2025 proposal. With a December 20 deadline looming for another stopgap funding bill, it remains uncertain whether this request will be approved to sustain the agency until March 2025.

Failure to secure the funding could hinder the SSA’s ability to provide timely customer service.

“If SSA does not receive increased appropriation through March, over 2,000 additional employees will be lost through attrition in the next three months, including experienced staff,” the SSA told The Hill in a statement last week.

“The loss of over 2,000 SSA employees will make it harder for people to get help, whether they’re filing a claim, fixing an issue, or just trying to speak to someone for guidance,” Antwyne DeLonde, founder of VisionX Finance and former financial adviser, previously told Newsweek. “Long wait times and backlogs can turn what should be a straightforward process into a stressful and frustrating ordeal, especially for those who are already stretched thin financially or emotionally.”

He added: “This situation is a reminder of how important it is to properly fund essential services like Social Security. It’s not just a bureaucratic system—it’s a lifeline for millions of people. Delays like this can cause unnecessary stress and financial strain, and it’s critical for Congress to act quickly to ensure the SSA has the resources it needs to serve those who rely on it.