Retirement Social Security

GPO Repeal Boosted Social Security for Some Widows by $1,100 a Month - But There's a Tax Catch

It might seem like a big windfall, but there's more to the story.

By Maurie Backman , Edited by Laura Hohenstein

Updated June 5, 2026

Add Us On Google

You'll often hear that depending too heavily on Social Security benefits is one of the biggest financial mistakes you can make in retirement. That's because those benefits generally will not come close to replacing your pre-retirement wages in full.

But some Social Security recipients may now be getting much larger monthly checks than they once received. Thanks to a new rule, some federal widows could see as much as a $1,100 boost to their benefits each month, which is a good thing in theory.

Additionally, some widows may also be eligible to receive a one-time retroactive lump sum payment to make up for Social Security benefits that were previously withheld. But that mega-payment, coupled with larger benefits, could have unwanted tax consequences.

Get a protection plan on all your appliances

Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.

A home warranty from Choice Home Warranty could pick up the slack where insurance falls short.

For a limited time, you can get your first month free with a Single Payment home warranty plan.

Get a free quote

How the Government Pension Offset (GPO) worked

The Government Pension Offset (GPO) was a rule that previously reduced Social Security spousal or survivor benefits of public workers who were eligible for a non-covered pension — meaning, a government pension where they were not required to pay into Social Security.

The GPO used to reduce Social Security spousal or survivor benefits by two-thirds of the monthly non-covered pension. In some cases, the GPO fully eliminated those spousal and survivor benefits, leaving some widows with nothing.

Shopping for cheaper auto insurance? Enter your zip code here to get started.

The GPO repeal has been a lifeline for Social Security recipients

In early 2025, the Social Security Fairness Act was signed into law, and it repealed the GPO as well as another old rule that used to result in reduced benefits for some recipients — the Windfall Elimination Provision. These provisions once reduced benefits for more than 2.8 million people.

Beginning February 25, 2025, the Social Security Administration (SSA) began adjusting monthly benefits for seniors impacted by the GPO and WEP. The SSA said at the time that while some retirees would see just a modest increase in their monthly benefits following the repeal, others could see their benefits rise by over $1,000 a month.

Meanwhile, under the Social Security Fairness Act, the repeal of the GPO and WEP is effective as of January 2024. As a result, the SSA has been issuing lump sum payments to eligible recipients to make up for withheld benefits dating back to that time.

The GPO repeal could have hidden tax consequences

Larger Social Security checks each month are a good thing to have. And a lump sum payment is a crucial windfall for many retirees. But that extra money could have big tax implications.

First, any time a retiree gets a lump sum of money, they risk being pushed into a higher tax bracket. But that's not all. A large increase in income in a single year could mean having to pay more for Medicare premiums in the form of income-related monthly adjustment amounts, or IRMAAs.

IRMAAs are based on income from two years prior, and they can apply to both Medicare Part B and Part D. So Social Security recipients who get a lump sum payment as a result of the Social Security Fairness Act may not feel the impact from a Medicare perspective right away.

IRMAAs are not automatically a permanent thing. A single year with a boosted income could result in just one year of IRMAAs two years later. But for people who may be looking at $1,100 more per month in Social Security coupled with retirement plan withdrawals and other income, the risk of IRMAAs may be ongoing.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today— because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $15 the first year with auto-renewal.

It's important to work with a tax professional

If you've seen your Social Security checks increase substantially as a result of the Social Security Fairness Act and GPO repeal, you may want to consult a tax professional to get some advice. You should also seek guidance if you're getting a large lump sum of money, as it could have consequences beyond the tax year in which you receive it.

In some cases, there may be strategies you can explore to minimize your tax liability. That could include withdrawing from retirement savings strategically, doing Roth conversions, and taking advantage of tax-loss harvesting. A professional can walk you through different options based on your income needs, tax-filing status, and other circumstances.

Bottom line

Even if you have a lot of savings for retirement, it's a nice thing to see your Social Security checks increase. But it's important to recognize that more income from Social Security can translate into more taxes.

It's especially important to be prepared for an increase in your Medicare premiums if you're in line for a lump sum retroactive payment from Social Security. The good news is that if you are hit with an IRMAA, it may only apply for a single year. But being prepared could help you eliminate some stress living on Social Security.

More from FinanceBuzz: