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Social Security Beneficiaries To Get $1.4 Billion in Refunds

Wed, 03/29/2000 - 1:00am — Karen Stevenson
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The repeal of the earnings test for Social Security benefits now awaits President Clinton's signature, since the House voted unanimously last night to affirm amendments made by the Senate to the bill initiated in the House. This bill will repeal the earnings test for Social Security beneficiaries between the ages of 65 and 70. The "earnings test" reduced Social Security benefits by $1 for every $3 of earned income over $17,000 for beneficiaries under the age of 70.

Because the repeal is retroactive to January 1, about 415,000 working seniors or dependents will get refunds for the money already deducted this year from their Social Security checks. This will total $1.4 billion, or an average of $3,500 per person. The repeal directly affects 800,000 Social Security recipients who are working this year and another 100,000 who haven't sought benefits because they have jobs.

Social Security Commissioner Kenneth Apfel said that if Clinton signs the bill by mid-April, the checks should be sent by early May, and monthly benefits adjusted by June. He said each of beneficiary will receive an average of $6,700 in additional Social Security this year, due to the elimination of the earnings test.

Special Note: The amended bill states that the repeal of the earnings test applies only to people who have reached the "normal retirement age" (NRA) and beneficiaries who start receiving Social Security benefits prior to their normal retirement age will still be subject to the earnings test until they reach NRA. The NRA is age 65 for most people currently receiving Social Security benefits, but that age is gradually being increased to age 67 for current and future retirees.

The repeal of the earnings test for Social Security benefits now awaits President Clinton's signature, since the House voted unanimously last night to affirm amendments made by the Senate to the bill initiated in the House. This bill will repeal the earnings test for Social Security beneficiaries between the ages of 65 and 70. The "earnings test" reduced Social Security benefits by $1 for every $3 of earned income over $17,000 for beneficiaries under the age of 70.

Because the repeal is retroactive to January 1, about 415,000 working seniors or dependents will get refunds for the money already deducted this year from their Social Security checks. This will total $1.4 billion, or an average of $3,500 per person. The repeal directly affects 800,000 Social Security recipients who are working this year and another 100,000 who haven't sought benefits because they have jobs.

Social Security Commissioner Kenneth Apfel said that if Clinton signs the bill by mid-April, the checks should be sent by early May, and monthly benefits adjusted by June. He said each of beneficiary will receive an average of $6,700 in additional Social Security this year, due to the elimination of the earnings test.

Special Note: The amended bill states that the repeal of the earnings test applies only to people who have reached the "normal retirement age" (NRA) and beneficiaries who start receiving Social Security benefits prior to their normal retirement age will still be subject to the earnings test until they reach NRA. The NRA is age 65 for most people currently receiving Social Security benefits, but that age is gradually being increased to age 67 for current and future retirees.