Social Security recipients will see modest benefit increases in 2025, while Congress considers legislation that could significantly boost payments for millions of public sector workers.
The Social Security Administration announced just a 2.5% cost-of-living adjustment for 2025, translating to approximately $50 more per month for the average recipient.
This marks the lowest increase since 2021, following higher adjustments of 8.7% in 2023 and 3.2% in 2024.
“Although price increases have moderated, it’s not as though inflation is over,” said Joe Elsasser, president of Covisum, a Social Security claiming software company.
Medicare Part B premiums will also increase modestly.
The standard monthly premium will rise by $10.30 to $185 in 2025, while the annual deductible will increase by $17 to $257. These premiums are typically deducted directly from Social Security payments.
Meanwhile, the House of Representatives passed the Social Security Fairness Act on November 12, which could increase benefits for approximately 2.8 million Americans who work in federal, state, and local jobs.
The bipartisan legislation would eliminate two provisions: the Windfall Elimination Provision and Government Pension Offset, which currently reduce benefits for public sector workers who receive pensions.
A 2020 Urban Institute study found that eliminating these provisions would increase benefits by an average of $7,300 annually for affected recipients, though the Congressional Budget Office estimates it would add $195 billion to federal deficits over ten years.
The bill’s sponsors, including Reps. Abigail Spanberger, D-V.A., and Garret Graves, R-L.A., along with Sens. Sherrod Brown, D, and Susan Collins, R, urged Senate leadership to bring the bill to a vote.
In a letter to Senate leaders, they argued that Americans subject to these provisions “are being punished for supporting and protecting our neighbors and families, educating our children, providing healthcare to our Veterans, delivering our mail, and more.”
If passed by the Senate and signed by the president, the changes would apply to all benefits payable after December 2023. The Senate has not yet scheduled a vote on the measure.