By John Scorza, CCH Washington Staff Writer

Following the lead of the House, the Senate on March 22, 2000, unanimously approved legislation to repeal the Social Security earnings test. The Clinton administration supports the bill, which would allow seniors between the ages of 65 and 69 to earn money without having their Social Security benefits reduced.

"Many seniors today want to continue to work. Repealing the earnings limit will help improve the retirement security of seniors by giving them the choice to work longer and save more," said William V. Roth (R-Del.), chairman of the Finance Committee.

Currently, Social Security beneficiaries who work have their benefits reduced by $1 for every $3 earned over $17,000. Beneficiaries over 70 are exempt from this earnings test.

Proponents of the measure also believe that, by encouraging seniors to continue working or pursue new employment, the nation's tight labor market will benefit from the influx of skilled workers. Across the country, many businesses, large and small, are having a difficult time finding qualified workers.

The legislation, approved by the House on March 1, would lower the age at which beneficiaries are exempt from the test to 65, which is the current normal retirement age. The earnings limit would rise to $25,000 in 2001 and $30,000 in 2002. The bill would be retroactive to the beginning of this year.

President Clinton said he would sign the bill into law if it was "clean," or free of unrelated amendments. Congress obliged, but the bill first must go back to the House for approval before Clinton receives it. The Senate added a technical correction to the bill to ensure that 64-year-old workers would not be subject to the earnings penalty during the months prior to turning 65.

Related items:

House Votes Unanimously to Repeal Social Security Earnings Penalty

Lawmakers May Lift Social Security Earnings Test To Encourage More Senior Workers

Employment Options in a Tight Labor Market, Part I