Social Security Fairness Act Kentucky: How the WEP and GPO Repeal Affects DAC Benefits

What the Social Security Fairness Act Changed

The Social Security Fairness Act (H.R. 82), signed into law on January 5, 2025, permanently repealed two provisions that had reduced or eliminated Social Security benefits for millions of public employees and their dependents: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

WEP reduced the Social Security retirement or disability benefit for anyone who also received a pension from employment not covered by Social Security — such as Kentucky public school teachers contributing to the Kentucky Teachers' Retirement System (KTRS) or state employees in the Kentucky Employees Retirement System (KERS). GPO reduced or eliminated spousal and survivor benefits for people receiving non-covered government pensions.

Both provisions are now gone. The repeal applies retroactively to benefits payable after December 2023. SSA paid retroactive adjustments starting in February 2025, and implementation is complete. If a Kentucky teacher or state employee had their Social Security benefit reduced under WEP, their benefit has been recalculated using the full formula. If a spouse or survivor had their benefit zeroed out under GPO, it has been restored.

Why This Matters for Disabled Adult Child Benefits in Kentucky

The repeal has a direct impact on families navigating the age-18 disability transition, specifically through Disabled Adult Child (DAC) benefits — sometimes called Childhood Disability Benefits (CDB).

DAC benefits are Social Security payments made on the work record of a parent who is retired, disabled, or deceased. If the adult child became disabled before age 22 and remains disabled, they can collect up to 50% of the parent's full retirement benefit (or 75% of a deceased parent's benefit). This is separate from SSI and does not depend on the child's own work history.

Before the repeal, Kentucky families with a parent who worked in non-covered public employment were disproportionately affected. A retired Kentucky teacher whose Social Security benefit was reduced by WEP had a lower Primary Insurance Amount, which meant their disabled adult child's DAC benefit was also lower. In some cases, the WEP-reduced PIA was low enough that the DAC benefit was negligible or zero.

Under current law, the parent's PIA is calculated without the WEP reduction. The DAC benefit is based on the full, unreduced amount. For Kentucky families where a parent spent their career in the public school system or state government, this can mean hundreds of additional dollars per month for their disabled adult child.

The DAC Medicaid Trap — and How to Avoid It

Higher DAC benefits create a separate administrative problem that catches families off guard. When a young adult transitions from SSI to DAC benefits, the DAC payment often exceeds the SSI Federal Benefit Rate ($994/month in 2026). Once the DAC benefit exceeds the FBR, the SSI cash benefit drops to zero.

Federal law protects Medicaid eligibility in this situation — Section 1634(c) of the Social Security Act ensures that former SSI recipients who lose SSI cash due to DAC benefits retain their Medicaid coverage. But Kentucky's automated eligibility systems frequently fail to recognize this protection. The system sees SSI reduced to zero and triggers a Medicaid termination notice.

This is not a policy denial — it's a systems error. Families must proactively establish "protected DAC Medicaid" status with the Kentucky Cabinet for Health and Family Services. This means contacting your DCBS caseworker, explaining the SSI-to-DAC transition, and ensuring the case is coded correctly to prevent automated termination. If a termination notice arrives despite this, request an administrative fair hearing through kynect within 30 days of the notice. To have Medicaid continued while the hearing is pending, the hearing request must be received within 10 days of the advance notice or notice of discontinuance.

Who Should File or Refile Now

Three groups of Kentucky families should take action:

Families already receiving DAC benefits whose parent worked in non-covered employment should verify that SSA recalculated the benefit amount. Check the benefit statement on my Social Security (ssa.gov) and compare the current monthly amount to the pre-repeal amount. If no adjustment appears, contact your local SSA field office and reference the Social Security Fairness Act.

Families who never applied for DAC benefits because the WEP-reduced parent PIA made the benefit too small to bother with should apply now. The full, unreduced PIA may produce a meaningful monthly benefit.

Surviving parents or guardians of disabled adults whose deceased spouse worked in non-covered employment should check whether survivor or DAC benefits that were previously denied under GPO can now be approved. SSA is processing these claims, but some require a new application rather than an automatic adjustment.

The Kentucky SSI at 18 & Adult Disability Benefits Guide covers the DAC application process, the SSI-to-DAC Medicaid transition, and the specific steps to establish protected DAC Medicaid status with Kentucky's state Medicaid system.

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