New Bill Loosens Social Security Earnings Restrictions

If workers “earn more than that amount their Social Security benefit can be reduced $1 for every $2 over the restricted amount,” Johnson said. “They can earn more in the year in which they attain full retirement age.”

The extra amount these workers would be allowed to earn — $416.67 — Johnson said, “could certainly make a big difference over two years. That could cover a rental increase, a car payment, several weeks’ worth of groceries, without penalizing this group of younger Social Security recipients for working and trying to make ends meet.”

The bill also holds the Trust Fund harmless “for the added benefits that these folks receive over the period,” Johnson said. These benefits, she continued, “are the same benefits those individuals have earned and paid for through payroll tax deductions. This would not be benefits that others who are not working won’t get. In other words, they are just getting more of what they are already entitled to.”

The extra earnings “could potentially also yield a slightly higher benefit in the future,” Johnson added. “Social Security recalculates the benefit annually when individuals work after starting benefits, and that could potentially modestly strengthen the benefit they receive when they stop working.”