Overview
- Republican sponsors in both chambers have introduced the Senior Citizens’ Freedom to Work Act to end the retirement earnings test, and the measures now sit in the Senate Finance and House Ways and Means committees with no floor votes scheduled.
- The retirement earnings test reduces current checks for people who claim before full retirement age and keep working, with $1 withheld for every $2 earned over $24,480 in 2026 and $1 for every $3 over $65,160 in the year someone reaches full retirement age.
- Withheld amounts are credited back when someone hits full retirement age through a higher monthly benefit, yet the near‑term loss can halt checks for months and strain budgets for people counting on that income.
- Backers say the rule deters work and hurts middle‑ and lower‑income seniors who need steady pay, while critics warn repeal would raise short‑term benefit payments and could weigh on trust funds that face depletion projections around 2034.
- The rule dates to 1935 and no longer applies after full retirement age under a 2000 law, it counts wages and self‑employment income but not investments or pensions, and it touches a large group since many beneficiaries earn income at some point.