US Lawmakers Propose Ending Social Security Earnings Test to Boost Senior Workforce

Senators and Representatives have introduced the Senior Citizens' Freedom to Work Act, a legislative effort to repeal the long-standing retirement earnings test. The bill, sponsored by Sen. Rick Scott and Rep. Greg Murphy, targets the provision that reduces Social Security payments for individuals who claim benefits early while continuing to earn income. The retirement earnings test currently applies to beneficiaries who have not yet reached their full retirement age (FRA), which typically falls between 66 and 67. Under current 2026 guidelines, those under FRA face benefit reductions if their annual earnings exceed $24,480, with the Social Security Administration deducting $1 for every $2 earned above that limit. For those reaching full retirement age in 2026, the earnings threshold is higher at $65,160, with a reduction of $1 for every $3 earned over the limit. Once a beneficiary reaches their full retirement age, these earnings-based reductions cease entirely. Proponents argue the test is a relic of the Great Depression designed to clear jobs for younger workers. With workers aged 55 and older now the fastest-growing segment of the labor force, advocates including the Society of Human Resource Management (SHRM) argue that the current system creates a significant financial disincentive for middle- and lower-income seniors. The bill has been referred to the Senate Committee on Finance and the House Committee on Ways and Means. While the proposal seeks to increase labor participation, its ultimate passage remains uncertain in the current legislative environment.