Social Security recipients could see big benefit increase under new bill: Who qualifies

If you’re collecting Social Security before full retirement age and still working, a new bill could put thousands of dollars back in your pocket each year.

Rep. Greg Murphy, R-N.C., introduced H.R. 8344, the Senior Citizens’ Freedom to Work Act of 2026, which would repeal Social Security’s Retirement Earnings Test (RET).

Sen. Rick Scott, R-Fla., is sponsoring companion legislation in the Senate.

Who qualifies

Anyone collecting Social Security before their full retirement age who earns income above current thresholds would qualify.

Under 2026 SSA rules, the agency withholds $1 for every $2 earned above $24,480 annually.

Someone earning $34,480 — just $10,000 over the limit — loses $5,000 in benefits under the current rule. This proposal eliminates that penalty entirely.

Those reaching full retirement age during 2026 face a higher threshold — $65,160 — with $1 withheld for every $3 earned above that limit in the months before their birthday.

The bill would also extend to railroad retirees, eliminating similar earnings-based deductions under the Railroad Retirement Act.

According to the Congressional Research Service, roughly 520,000 Social Security recipients — about 11% of those below full retirement age, out of more than 71 million total beneficiaries — were subject to the RET as of 2019, the most recent year for which data is available.

The catch

Withheld benefits aren’t gone forever.

The SSA recalculates benefits upward once a recipient reaches full retirement age, crediting months when payments were withheld.

But a Congressional Research Service analysis found that a repeal could increase poverty risk for certain groups — particularly women and recipients aged 80 to 89.

The concern is eliminating the RET could prompt more people to claim benefits at 62, locking in permanent reductions for early retirement.

Because the RET recalculation would no longer exist to offset that reduction later, some recipients — especially those with lower lifetime benefits who live into their 80s — could end up worse off in the long run.

What’s next

The real debate is short-term cost — repealing the RET means paying out more benefits immediately, adding pressure to a trust fund already under strain.

The 2026 Social Security Trustees Report, released June 9, now projects the OASI trust fund will be depleted in the fourth quarter of 2032 — one quarter earlier than last year’s projection — at which point only 78% of scheduled benefits could be paid out.

The bill has been referred to the Senate Finance Committee and the House Ways and Means Committee with no vote currently scheduled.

If passed, changes would take effect for tax years ending after Dec. 31, 2026.

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