New Social Security proposal would do away with major benefits cut

A new proposal from a pair of Republican lawmakers would clear the way for Social Security recipients to earn more money without a reduction in benefits.

Rep. Greg Murphy, R-North Carolina and Sen. Rick Scott, R-Florida, introduced the Senior Citizens’ Freedom to Work Act earlier this month. The proposal would do away with the retirement earnings test, or RET, which reduces benefits for Social Security beneficiaries who claim early retirement.

“Current law unnecessarily complicates seniors’ right to access the benefits they paid into for the entirety of their careers and must be done away with,” Murphy said in a statement. “While certain guardrails are in place to ensure the viability of Social Security and incentivize participation in the workforce, the Retirement Earnings Test does neither and is a bureaucratic hurdle that does more harm than good.”

Under existing law, people who claim Social Security benefits before their full retirement age – currently age 67 for people born in 1960 or later – get reduced monthly payments if they earn more than a set amount from work. Those benefits are added back once they reach full retirement, the Social Security Administration said, but critics said it disincentivizes older Americans who want to work.

For 2026, RET is $24,480 for those under full retirement age. If a person earns more than that, $1 is withheld for every $2 over the threshold. Those reaching FRA in 2026 can earn up to $65,160 a year with $1 withheld for every $3 over that amount. If a beneficiary keeps working after full retirement age, the earnings cap is removed.

Murphy said many seniors are unaware of the limitations.

“American seniors’ ability to earn income and enjoy the dignity of work should not be penalized by arbitrary parameters to receive Social Security benefits,” Murphy said.

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