Resident incomes could increase under bill that would repeal retirement earnings test for Social Security benefits

Some senior living and care residents and other Social Security beneficiaries could see a boost in their monthly payments under a bill introduced by lawmakers in the House and Senate.

The Senior Citizens’ Freedom to Work Act, sponsored in the House by US Rep. Greg Murphy, MD (R-NC) and in the Senate by Sen. Rick Scott (R-FL), chairman of the Senate Special Committee on Aging, would repeal the retirement earnings test, which reduces monthly payments for Social Security beneficiaries who claim early retirement but choose to continue working and have income above a certain threshold. 

Although older adults can start receiving Social Security retirement benefits as early as age 62, the RET affects Americans who collect Social Security benefits before reaching full retirement age — which, for the purposes of benefits, now is age of 66 or 67, depending on their year of birth. Those who have not reached full retirement age and are still working receive reduced benefits until they either attain full retirement age or leave the workforce. Once beneficiaries reach full retirement age, benefits are adjusted to account for the benefits that had been withheld.

“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 in a statement earlier this month. “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. 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.” 

Scott announced his sponsorship of the Senate version of the bill last month during an Aging Committee hearing entitled “Experience Matters: Seniors and the Workforce.” That hearing followed a December committee hearing that explored the value of older workers to the economy. 

“The truth is that retirement doesn’t have to be the end of one’s career. …The fact is, there are laws on the books that penalize older workers unfairly,” Scott said in a statement. 

The RET is outdated, according to the senator, who said the idea was born during the Great Depression so that older adults would make way for younger workers. 

“But as we are all aware — it’s not the 1930s anymore, and we shouldn’t expect our seniors to be punished today by outdated policies passed then,” he said. “This bill will get rid of the unfair Retirement Earnings Test so that seniors who want to stay in the workforce can do so without being punished or robbed of their hard-earned benefits.”