Biden estimated the bill should lead to an average monthly increase of $360 for certain public employees and their spouses and survivors. The outgoing president said more than 2.5 million Americans will receive a lump sum payment worth "thousands of dollars" to compensate for the benefits they should have received last year.

A previous law from the 1980s has prevented many workers with public service jobs from being able to receive Social Security benefits, despite paying into the system.