Categories: Fedweek

Earnings Test Also Targeted

Shaw’s measure also would repeal a Social Security provision primarily of interest to those retiring under the FERS retirement system: the earnings test, a reduction in an individual’s Social Security payments or special retirement supplement (paid to FERS retirees in certain situations) made when he or she continues to work after benefits begin and earns over an allowable amount ($11,520 currently). For every $2 earned over this amount, the individual currently must give up $1 in benefits if age 62-64. In the year an individual reaches “full” Social Security retirement age (currently 65 and 2 months, phasing up to 67 over the next two decades) individuals can earn up to a limit ($30,720 currently) in the months before they reach that age with no reduction in benefits but for every $3 they earn over that limit in that time, $1 is withheld from benefits. There is no earnings test for those above “full” retirement age; a prior test for those aged 65-69 was repealed in 2000.

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