The Senior Citizens' Freedom to Work Act, a bill signed by president Clinton on April 7, 2000, repeals the $17,000 Social Security earnings limit on workers between the ages of 65 and 69. Seniors who continue to work past retirement age are now entitled to full Social Security benefits no matter how much money they earn.
Prior to the enactment of this law, the Social Security benefits of workers between the ages of 65 and 69 were cut by $1 for every $3 earned over the $17,000 limit.
Because the repeal is retroactive to January 1, 2000, 415,000 people are due refunds averaging $3,500 each because of deductions made from their Social Security checks since January 1.
In total, the new law affects about 800,000 people who will receive an average benefit increase of $6,700, and 100,000 more who haven't filed for benefits because they have jobs.
The Social Security Administration will send notices to all Social Security beneficiaries affected by the earnings test repeal, and automated systems will quickly identify affected beneficiaries and make payments.
According to the Social Security Administration, individuals should receive their retroactive reimbursement check in early May, 2000. Seniors age 65 to 69 can expect regular checks to include the new benefits beginning in June, 2000. Social Security beneficiaries need to contact the Social Security Administration only if they have recently moved or changed banks.
The Seniors Citizens' Freedom to Work Act is an especially important piece of legislation in a time when the U.S. labor force is shrinking and job openings for skilled professional and technical workers exceed the available supply. One potential source of qualified workers needed to fill these job openings are aging baby boomers who are receiving Social Security benefits, and for whom the earnings limits have been a disincentive to continuing to work after 65. The removal of this disincentive allows older people to remain productive in the work force and to continue to contribute to the country's economic growth.