Murphy Introduces Bill to End Social Security Penalty Above $24,480 as Trust Fund Nears 2032 Shortfall
Updated
Updated · MassLive.com · Jun 24
Murphy Introduces Bill to End Social Security Penalty Above $24,480 as Trust Fund Nears 2032 Shortfall
3 articles · Updated · MassLive.com · Jun 24
Summary
H.R. 8344 would scrap Social Security’s retirement earnings test for people claiming before full retirement age, ending the current benefit reduction for those who keep working.
Under 2026 rules, the SSA withholds $1 for every $2 earned above $24,480; someone making $34,480 now loses $5,000 in benefits, while those reaching full retirement age this year face a $65,160 threshold.
About 520,000 recipients—roughly 11% of beneficiaries below full retirement age—were subject to the test in 2019, and the bill would also remove similar earnings-based deductions for railroad retirees.
CRS said repeal could raise poverty risk for some groups, especially women and recipients aged 80 to 89, because today’s withheld benefits are later restored through higher payments after full retirement age.
The measure, backed in the Senate by Rick Scott, has gone to the House Ways and Means and Senate Finance committees as the OASI trust fund is projected to run dry in late 2032, leaving 78% of scheduled benefits payable.