Illinois seniors who received a windfall deposit as a result of the Social Security Fairness Act are now finding that the consequences of that unexpected benefit can be costly.

As a reminder, early last year seniors who had been receiving reduced Social Security benefits because they also had public pension benefits, suddenly received a boost in their Social Security to a full benefit check – and a large one-time deposit. That occurred because the legislation was made retroactive to all of 2024.
When the windfall make-up payments arrived in early 2025, they contained at last 12 months, and perhaps even more months of the differential. Plus, their monthly benefit rose for the full year.

At the time, I reminded seniors to set aside money for taxes on that extra income. But the subsequent tax bill increased the standard deduction to $6,000 for most seniors (up to certain income levels), likely negating much of the potential income tax.

But income taxes weren’t the only impact created by the Fairness Act windfall. Some seniors are finding the extra earnings (along with other significant income) moved them into an increase in their Medicare Part B and D premiums – the IRMAA adjustment that requires higher income seniors to pay more for Medicare.

The Low Income Senior Property Tax Freeze
There was one more hidden hit for seniors who received the unexpected extra income last year: The Low Income Senior Property Tax Freeze!

In addition to the homestead exemption of $10,000, for many years seniors who were in a household that earned less than $65,000 could establish a “freeze” on their property taxes, designed to protect them from the rising property values that come with gentrification.

That Fairness Act Windfall suddenly boosted many seniors above the freeze level of income. That adjusted grows income income used to qualify for the freeze is calculated differently than your taxable income. For example, it does not include veteran’s pension, but you cannot used business losses to lower your income.
When I contacted the Cook County Assessor’s office about this issue last spring, Assessor Fritz Kaegi said they were aware of problems with the income threshold, which hadn’t increased in years. He assured me they were working on a fix with the state legislature to raise that cap.

Last spring, bills were introduced into each house, but it wasn’t until the last week of the veto session, last October, that a bill was finally passed, under pressure from the Assessor and community groups. It raised the cap to $75,000 – with a $2,000 increase in the cap for the next two succeeding years.

BUT, — and this is a big but — the legislature did NOT make this law go into effect for 2025 – the year in which many seniors received their increased income. David Morrison, who runs the assessor’s government relations department, explained that many downstate assessors requested more time to make the procedural changes.

Happening Now
Even in this age of technology, seniors must apply for this freeze every year, by proving their taxable income. Either online or paper applications must be submitted to the Assessor’s office, before the county clerk calculates tax rates and the county treasurer sends out tax bills. Typically, that means the applications should be submitted by early April.

If household income for 2025, has risen over the current $65,000 freeze cap level which has been in place since 2017, seniors will find that when they receive their property tax bills later this year, the amount due could increase substantially. We are talking thousands of dollars in additional property taxes. When those increased property bills start arriving, you can be sure they will make headlines.

One Bright Spot
Losing the freeze for 2025 is frightening and will be expensive for many seniors. But Morrison reminds everyone that if incomes move below the new higher cap for 2026, seniors will regain the freeze. And, critically, the freeze level will remain at their original freeze valuation. That is, if the home property value was originally frozen at perhaps $325,000, but current market valuations are significantly higher, the reinstated 2026 freeze will stay at that original, lower valuation.

The “gift” of higher social security benefits and the one-time catchup payment clearly have a downside – potentially a much higher property tax bill. That should generate an outcry to all Illinois legislators, asking them to follow the 29 other states that offer property tax relief for homeowners whose bills spike suddenly.

The place to start voicing your complaints is at the Illinois legislature. Homeowners can call the Illinois House Clerk at (217) 782-8223 and ask to speak to their state legislator, asking them to support a “circuit-breaker” bill for property tax relief.

Often the wheel that squeaks loudest gets the fix. And that’s The Savage Truth.