Senior Citizens’ Freedom to Work Act of 2026
- Sponsor
- Rep. Murphy, Gregory F. [R-NC-3]
- Committees
- Ways and Means Committee (primary)
- Last action
- Apr 16, 2026
Bottom line
The bill eliminates the Social Security retirement earnings test, allowing early retirees to earn unlimited income without reductions to their benefits, potentially encouraging more work among older Americans but also impacting the Social Security trust funds.
What it actually does
This bill proposes to repeal the Social Security retirement earnings test (RET), which currently reduces benefits for individuals who claim Social Security before their full retirement age and earn above a certain threshold. It also includes numerous conforming amendments to the Social Security Act and repeals similar earnings deductions under the Railroad Retirement Act. The repeal would allow beneficiaries to earn any amount without their Social Security benefits being withheld.
Proponents argue
Proponents argue that the retirement earnings test unfairly penalizes older Americans for continuing to work, discouraging them from contributing to the economy and saving for retirement. They contend that repealing the test would empower seniors to work as much as they desire, boost their financial security, and potentially increase tax revenues from their earnings, aligning with the principle that earned benefits should not be reduced by continued work.
Opponents contend
Opponents typically argue that repealing the retirement earnings test would primarily benefit higher-income earners who continue to work, while placing additional strain on the Social Security trust funds. They contend that the RET helps reserve benefits for those who truly retire and rely on Social Security as a primary income source, and that its repeal could accelerate the depletion of the trust funds without providing significant relief to the most vulnerable seniors.
The bill text is concise and relatively easy to read, but a full understanding of its implications requires familiarity with existing Social Security law.
Section 2(a)
Repeal of Social Security Retirement Earnings Test
This provision directly repeals several subsections of section 203 of the Social Security Act, which collectively establish and govern the retirement earnings test. The earnings test currently reduces Social Security benefits for individuals who are below their full retirement age and earn income above a specified annual limit. By repealing these sections, the bill would eliminate this benefit reduction.
Supporters argue
Supporters argue this provision removes a significant disincentive for older Americans to remain in the workforce, allowing them to supplement their retirement income without penalty and continue contributing to the economy. It ensures that individuals receive the full benefits they have earned, regardless of their continued employment.
Critics contend
Critics contend that repealing the retirement earnings test would significantly increase Social Security outlays, further straining the program's finances and potentially accelerating the depletion of the Trust Funds. They argue it primarily benefits higher-income earners who are financially able to continue working.
Tradeoffs
This provision balances the goal of empowering seniors to work without penalty against concerns regarding the long-term fiscal solvency of the Social Security program and the equitable distribution of benefits.
Section 2(b) and 2(c)
Conforming Amendments to Social Security Act
These subsections introduce numerous technical adjustments throughout the Social Security Act to align with the repeal of the retirement earnings test. This involves redesignating existing subsections, striking outdated references to the repealed provisions, and updating language related to noncovered work, exemptions from benefit reductions, and penalties for misrepresentations concerning earnings. For instance, it redefines 'wages' for Supplemental Security Income (SSI) purposes, as the previous definition relied on a now-repealed section.
Section 2(d)
Repeal of Railroad Retirement Program Earnings Deductions
This provision amends the Railroad Retirement Act of 1974 to eliminate similar earnings deductions that apply to Railroad Retirement benefits. Specifically, it strikes subsection (f) and amends subsection (g) of Section 2 of the Act, along with making conforming amendments in Sections 3 and 4. This ensures that beneficiaries of the Railroad Retirement program also face no penalties for continuing to work past retirement age, mirroring the changes to Social Security.
This provision amends Section 1612(a) of the Social Security Act, which defines income for Supplemental Security Income (SSI) purposes. It strikes a reference to a repealed section (203(f)(5)(C)) and explicitly adds a new, detailed definition of 'wages' for SSI, including specific exclusions for retirement payments and certain employer-provided benefits.
Section 2(c)(9)
Why it matters:This is standard legislative practice for ensuring legal consistency when a core definition is removed. The original definition was tied to the earnings test, so a new standalone definition is required to prevent unintended consequences for SSI eligibility.
Case for: This amendment ensures that SSI eligibility criteria remain clear and consistent after the repeal of the earnings test, preventing unintended consequences for low-income beneficiaries. It clarifies what counts as income for a vulnerable population, maintaining program integrity.
Case against: No direct case against, as it is a technical fix. However, if the new definition subtly alters who qualifies for SSI or how much they receive in a way not intended, it could face scrutiny for its impact on low-income individuals.
Estimated impact: Clarifies income calculations for millions of SSI recipients, ensuring continued program integrity and consistent application of eligibility rules.