Summary
Ends the rule that lowers Social Security payments for older adults who continue to work and earn income after they start receiving benefits.
What problem does this solve?
Currently, seniors who claim Social Security benefits before their full retirement age can have their payments reduced if they earn over a certain amount of money. This bill removes that earnings limit, allowing seniors to receive their full benefits no matter how much they earn from work.
Who does this affect?
- Seniors receiving Social Security benefits
- Railroad retirees
What does this bill do?
Repeals the retirement earnings test
Eliminates the rule that reduces Social Security benefits for individuals who earn income above a certain limit before reaching their full retirement age.
Reference
Text:
Section:
Sec. 2(d)
Header:
Repeal of deductions on account of work under the Railroad Retirement Program
Ends similar earnings test for railroad workers
Removes a similar rule for the Railroad Retirement Program, so railroad retirees can also work without having their benefits reduced.
Makes technical updates to existing laws
Makes several technical changes to the Social Security Act and Railroad Retirement Act to remove all references to the old earnings test, ensuring the laws are consistent.
What is the real world impact?
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Encourages seniors to continue working
Removes a penalty for working, which could help older adults who need or want to keep earning money. It may also help businesses by increasing the number of available experienced workers.
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Could increase strain on Social Security funds
Critics might argue that removing the earnings test could speed up the use of Social Security's funds. It would allow individuals who are still earning significant income to also collect full retirement benefits, which some may see as an unnecessary expense for the program.
When does this start?
The changes would take effect for tax years ending after December 31, 2026.