Senate Backs Higher Benefits for Working Pensioners

The Senate voted Thursday to allow nearly a million Social Security recipients who are still working between the ages of 65 and 69 to keep more of their retirement benefits.

In a rare display of unanimity, the 100 senators voted to increase to $10,560 the amount that these Social Security recipients would be able to earn next year without a reduction in benefits. Under current law, the ceiling was scheduled to reach $9,360 next year.

For every $3 earned above the ceiling, Social Security recipients would lose $1 from their monthly benefit checks.

The Senate attached the provision to a bill to authorize new federal support for child care. A measure similar to the Senate’s Social Security amendment is working its way through the House, and some kind of change in the law appears to be a political certainty this year.

Labor Shortages Foreseen

The Senate measure is aimed at encouraging older Americans to keep working as the nation enters an era of anticipated labor shortages.

More than 900,000 people between 65 and 69 now suffer some loss of Social Security benefits because they earn more at work than the ceiling, which is $8,880 this year. Millions more may intentionally work only part time or just part of the year to avoid hitting the ceiling and losing some of their Social Security payments, experts believe.

“We can’t afford to keep healthy and vigorous older Americans out of the work force,” said Sen. Lloyd Bentsen (D-Tex.), chairman of the Senate Finance Committee, which oversees Social Security legislation.

“It’s like keeping your best hitters on the bench,” Bentsen said. “I’d rather have them in the lineup. It’s unlikely they’ll make rookie of the year, but their experience will produce some important hits for our team.”

Federal law is already geared to relax the penalty that senior citizens face when they earn more than the ceiling. This year, beneficiaries lose $1 in benefits for every $2 in income above the ceiling. But Congress previously had enacted a change in the ratio to $1 in benefits for every $3 in earnings in 1990.

The Senate amendment applies only to people between 65 and 69. Those 70 and older may keep all of their Social Security benefits, no matter what their earnings.

Because of the unanimous vote in the Senate, Congress appeared certain to approve an increase in the earnings ceiling, even if it does not approve the child-care bill to which the Senate attached its Social Security provision. Congress could find another legislative vehicle for the Social Security measure if the child-care bill should die.

In the House, the Ways and Means Committee this week approved raising the earnings ceiling to $9,720 next year and to $10,440 in 1991. The differing House and Senate numbers would have to be resolved in a conference of the two legislative chambers. The Senate also voted Thursday to give a special break to older workers who provide child-care services. They would be exempt from all earnings ceilings under another amendment, also approved by a unanimous vote.

This provision, sponsored by Sen. William V. Roth Jr. (R-Del.), would leave the Social Security benefits of child-care providers untouched, regardless of how much they earned.