Retired persons who want to work now have more opportunity to earn without suffering Social Security penalties, thanks to new legislation that eliminates income limits.

Wednesday, April 26, 2000

Retired persons who want to work now have more opportunity to earn without suffering Social Security penalties, thanks to new legislation that eliminates income limits.

The new law, which is retroactive to Jan. 1, 2000, enables beneficiaries age 65 through 69 who have had benefits withheld this year because of earnings to receive payments based on the retroactive date, said Kenneth Apfel, Social Security commissioner.

"President Clinton signed a bill eliminating the retirement earnings test for beneficiaries reaching the normal retirement age (currently age 65)," Apfel said. "Previously, beneficiaries aged 65 through 69 had a limit on how much they could earn before their benefits were affected."

One of the biggest benefits of the law change comes from easing confusion about what Social Security withholds from checks when retired workers continue working, said Bette Backus, Ironton Social Security office administrator.

Basically, the change gives retired and retiring people better earning potential, Ms. Backus said.

"Even if you’re turning 65 later on this year, it’s best to come in and check with us," Ms. Backus said. "You qualify for more if you turn 65 this year."

Increasing the private-sector income allowed at age 65 also follows the recent trend in private pension plans, Ms. Backus said.

About 900,000 people will immediately be affected by the changes.

"We expect to make these payments by early May, and regular monthly benefits will be changed to reflect the new law by June," he said. "There are some 800,000 beneficiaries in this age category who are affected and will benefit this year from the elimination of the earnings test."

There are about another 100,000 people who have not filed claims for benefits because they are working; the legislation will allow these people to receive benefits this year when they file claims for benefits, Apfel explained.

"I think it’s been a long time in coming," said Ava Lucas, 68, of Proctorville. "Anything that makes this process easier to understand and increases payments is a welcome change."

But, those changes could mean longer hours for those who help process the information, and the new legislation also takes this aspect of the effects of the changes into consideration.

"President Clinton has asked Congress for an additional $35 million for SSA administrative expenses to fund overtime and one-time costs of repealing the earnings test, and I strongly support this effort," Apfel said.

The changes make obvious improvements to the system, said Burlington resident Jack Adams, 71.

"We’ve needed something like this for a long time," Adams said. "I’m not surprised it’s taken so long, though. It seems like the good changes are few and far between."