Earnings Test


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Earnings Test

In Social Security in the United States, a test to determine whether a person under normal retirement age (between 62 and 67) is eligible for reduced benefits. The test sets two levels of income (which vary year to year); if one's own income is above the lower level but below the upper level, one may receive benefits at a $1 reduction for every $2 in wages. One receives full benefits in later years after one has passed proper retirement age.
References in periodicals archive ?
In an effort to encourage workers to remain in the labor force longer in the United States, legislation was passed in 2000 to eliminate the "retirement earnings test" for those above the full age of retirement (SSA, 2005).
A typical definition of disability has 2 parts--an occupation test and an earnings test. In most situations the claimant must meet each of these tests in order to be considered disabled and entitled to benefits.
In April 2000, the earnings test was lifted for workers age 65 and over in the United States.
Before 2000, Social Security's earnings test removed benefits from workers aged 65 to 69 who claimed benefits and had earnings above a given limit.
Today, companies qualify on financial standards and distribution; for a long time before that, there was an earnings test. Last year, revenue and market cap standards were added, permitting acceptance of companies with $100 million in revenue and $1 billion market cap, even if they had no earnings.
* Increase their awareness of the Social Security Earnings Test Elimination Act, which did away with the tax that Social Security recipients formerly paid on earnings over $17,000.
The slowdown in transfer payments reflected a return to normal trends after the second-quarter upward shift in benefit payments that resulted from the Senior Citizens' Freedom to Work Act of 2000, which eliminated the "retirement earnings test" and allowed social security beneficiaries to receive full benefits regardless of their earnings.
Retroactively effective January 1, 2000, it eliminated the retirement earnings test for beneficiaries between the ages of 65 and 69.
By age seventy, however, the earnings test would lapse; and they would thereafter receive their full SSA retirement benefits, regardless of how much they earned.
Interest in the SGA level for SSDI beneficiaries was raised earlier this year when Congress eliminated the earnings test for retired Social Security beneficiaries.
The inclusion of part of social security benefits as taxable income, together with the earnings test in social security, diminishes work incentives to almost zero among those who are subjected to these rules.
The so-called earnings test would be eliminated for all beneficiaries age 62 and over, beginning in 2003.