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Repeal of Social Security Earnings Restrictions for People Over 65 and its Impact on Railroad Retirement
(Posted March 2, 2000)
Question 48: If Congress ends earnings restrictions for Social Security receipients over 65, will they also end for Railroad retirees?
This change represents a "benefit increase" for working beneficiaries -- how can the Social Security fund afford this, when there are long-term financial problems?
Answer: The proposal unanimously passed the House of Repersentatives on March 1, 2000. If it is passed by the Senate and signed into law by President Clinton, it would end the unpopular earnings restrictions for those working Social Security beneficiaries who are ages 65 to 69, retroactive to January 1, 2000. (Those restrictions for people age 70 and older were eliminated many years ago.)
The new rules also would apply to Railroad Retirement. However, it would not change the special Railroad Retirement restrictions for post-retirement employment in the rail industry or for the last non-rail company worked before retirement.
It also would not change the more restrictive earnings restrictions for Social Security and Railroad Retirement beneficiaries between age 60 and 65, or the special restrictions for disabled beneficiaries under 65.
Financing the change in the short-term is not a problem if the projected budget surplus continues. The costs are partially offset by increases in both income tax and Social Security(Railroad Retirement) tax receipts if more people decide to work after 65. SSA estimates that about 3% of their beneficiaries lose part or all of their benefits due to working.
The restrictions always have been unpopular, from the beginning of the Social Security program. Although they have been liberalized considerably over the years, Congress seems to have grown tired of the complaints, and with the budget surplus feels it can now deal politically with the change. Look for final action later this year.
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