House OKs Lifting Social Security Earnings Limit

Thousands of working senior citizens will be able to earn as much outside income as they want without losing Social Security benefits under legislation given final passage Tuesday by the House. President Clinton intends to sign the bill into law.

“They deserve the freedom to choose to work without losing their Social Security benefits,” said Rep. E. Clay Shaw Jr. (R-Fla.), a prime sponsor of the bill. “It’s their money. It should be their choice.”

The bill, passed on a 419-0 vote, repeals a Depression-era law that reduces Social Security payments for workers ages 65 to 69 by $1 for every $3 over $17,000 a beneficiary earns this year in wages.

About 800,000 people are directly affected, including 415,000 who will be due refunds averaging $3,500 each because of deductions made since Jan. 1 from their Social Security. In all, older workers or their dependents stand to gain $6 billion in Social Security benefits this year, or $6,700 each on average, according to the Social Security Administration.

The fast action by lawmakers means retirees whose benefits were reduced because they were earning more than the limit could receive a check for retroactive payments as early as May, the Social Security Administration said. June checks could be adjusted to reflect the change in the law.

The House had previously passed the bill unanimously, followed by the Senate 100-0 last week. The House’s action Tuesday was necessary because of minor changes made by the Senate.

Rep. Charles B. Rangel of New York, senior Democrat on the House Ways and Means Committee, called the legislation “long overdue” and said it demonstrates that Democrats and Republicans can work together.

“There are plenty of differences between our parties,” Rangel said. “Certainly, there should be a lot of things we can agree on.”

Although the legislation would not affect the financial soundness of the Social Security trust fund over the long term, it does carry a price tag of $35 million to implement this year. Clinton has asked Congress to approve that amount for administrative costs and additional claims expected from people who delayed retirement because of the cap.

Social Security Commissioner Kenneth Apfel said the agency’s computers will identify which people are affected and who gets retroactive payments. People should only contact the agency, he added, if they’ve recently changed their address or their bank.

About 7.5 million people between the ages of 62 and 70 who receive Medicare, Social Security or both will receive notices in the mail detailing the change.