March 29, 1996 in Nation/World

Bill Passed To Raise Social Security Income Limits Provision Lets Those Aged 65 To 69 Earn More Without Losing Benefits

Spencer Rich Washington Post
 

Fulfilling a pledge from their Contract with America, the Republican-controlled House passed legislation Thursday long sought by millions of older Americans who want to keep working after 65 but fear losing their Social Security benefits if they do.

The provision, part of a bill to extend the nation’s debt ceiling, would raise the amount of wages from a job that a Social Security recipient age 65 through 69 can earn and still not lose any Social Security benefits.

Under the new law, the earnings limit would rise from the current $11,520 to $30,000 by 2002, a major increase in how much can be earned without penalty and far above the $14,400 ceiling to which it would have automatically risen under previous law. For job earnings above the limit, Social Security benefits would be reduced $1 for each $3 earned under a provision already on the books. There is no earnings limit for those 70 and over.

Current estimates are that about 1 million people 65 to 69 would benefit from the bill

These provisions are backed by the Clinton administration, the American Association of Retired Persons (AARP), the nation’s largest senior group, and the National Committee to Preserve Social Security and Medicare.

AARP executive director Horace Deets, in a March 25 letter to House Ways and Means Committee Chairman Bill Archer, R-Texas, said, “The earnings limit hurts moderate and middle-income beneficiaries who work out of necessity, not by choice. For many of these beneficiaries, employment is the only way to make ends meet or to prepare for a time when they can no longer work.”

However, the raise to $30,000 is opposed by the National Council of Senior Citizens as a “giveaway” to well-to-do seniors who, at $30,000 or more, “can hardly be considered truly retired.”

A second major provision of the bill would bar alcoholics and drug-abusers from receiving disability benefits under Social Security or the federal Supplemental Security Income welfare program.

Since the Social Security system was created beneficiaries have always been subject to an earnings test.. Now, people who are under 65 and eligible for benefits can earn up to $8,280 a year without losing Social Security. That limit would not be changed by the new bill.

Last year when Republicans first proposed raising the limit to $30,000 by 2002, some Democrats complained that the well-to-do would benefit most. According to Social Security estimates, nearly half of the additional benefits paid will go to families with total incomes over $57,800.

Social Security actuaries have estimated that the long-range costs of paying the extra benefits to those with job earnings up to $30,000 would be more than offset by several other provisions, including savings from cutting off alcoholics and drug-abusers from disability benefits.

They also expect to accrue savings by doing more reviews of people on the disability rolls to identify those who have recovered and should be cut off.

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