Two Politicians Want to Change a Rule That's Been Penalizing Working Seniors for Years
Experts often say that collecting Social Security in retirement should be viewed as a supplemental payment, and not your full retirement plan. As a result, many people opt to collect their payments while working part-time. But, current rules-like the Retirement Earnings Test (RET)-can penalize workers below the Full Retirement Age (FRA) who are collecting Social Security while earning a paycheck.
However, two politicians are looking to repeal the RET, which would do away with the claw-back rules that allow the Social Security Administration (SSA) to reclaim benefits from workers who earn more than the annual limit, which was $24,480 in 2026, according to the SSA. And supporters of this proposal say it will give seniors much more freedom to work in retirement.
Two Politicians Want to Change the Rules for Working Retirees
Senator Rick Scott and House Representative Greg Murphy introduced the Senior Citizens' Freedom to Work Act in April 2026 to repeal the earnings test that can take benefits away from those who are collecting Social Security prior to reaching the Full Retirement Age (FRA), according to Murphy's website.
"American seniors' ability to earn income and enjoy the dignity of work should not be penalized by arbitrary parameters to receive Social Security benefits," Murphy said in a statement on his website. "Current law unnecessarily complicates seniors' right to access the benefits they paid into for the entirety of their careers and must be done away with."
Murphy went on to note that certain guardrails are useful for ensuring that Social Security can remain solvent while also encouraging people to remain in the workforce, but that the RET fails to serve that purpose, calling it "A bureaucratic hurdle that does more harm than good."
Here's What Would Change for Seniors If the Bill Passes
According to the United States Senate Special Committee on Aging, passing this legislation will allow seniors to access their full Social Security benefits without facing penalties for remaining in the workforce. "This bill will encourage workforce participation among aging Americans and provide greater financial flexibility in retirement so they can enjoy their golden years to the fullest," the website says.
Transcripts from a December 2025 meeting on the topic shared some statistics about who would be most affected by this change. "The fact is, workers age 55 or older have been the fastest-growing age group in the labor force for more than two decades," Scott was quoted as saying at the time. "In 1994, they made up just 10 percent of the workforce. In 2022, they made up 24 percent."
However, in 2023, a Congressional Research Service report found that repealing the rule could actually cost seniors in the long run, since it would allow them to collect benefits earlier, reducing the total they could receive over their lifetimes.
"With no recalculation for later benefits remaining after RET removal, these lifetime lower benefits would increase the likelihood of poverty incidence for certain groups, especially women and those aged 80-89,"
How Much Can Seniors Make Now?
As it stands now, someone who will reach their FRA in 2026 can continue to collect a paycheck without changing their Social Security benefits as long as they make $65,160 or less. For every $3 they earn above that amount, the SSA will deduct $1 from their benefits until they reach FRA, according to CNBC.
Once they reach their FRA, those deductions stop, and seniors are free to earn as much as they'd like.
While a change like this could benefit seniors, some worry it could also affect how much money remains available to Social Security recipients in the future, especially since the SSA says the program's funding remains uncertain, as experts believe the administration will become insolvent between 2032 and 2035.
Sources:
- Social Security Administration
- Congressman Greg Murphy
- United States Senate Special Committee on Aging
- CNBC
- Congressional Research Service report
Related: The Social Security 'Penalty' for Working in Retirement Isn't What Most People Think It Is
Copyright 2026 The Arena Group, Inc. All Rights Reserved
This story was originally published June 22, 2026 at 12:59 PM.