Millions of Americans who collect Social Security while continuing to work could receive larger immediate payments under a new proposal introduced by Republican lawmakers.
Senator Rick Scott of Florida and Representative Greg Murphy of North Carolina introduced the Senior Citizens’ Freedom to Work Act of 2026 in April.
The legislation would repeal the Social Security Retirement Earnings Test, which can temporarily reduce benefits for people who claim retirement payments before reaching full retirement age and continue earning income.
How the Retirement Earnings Test Works
Americans can begin claiming Social Security retirement benefits at age 62. However, people who claim before reaching their full retirement age receive permanently reduced monthly benefits.
Those who continue working may also be affected by the Retirement Earnings Test. In 2026, beneficiaries who remain below full retirement age for the entire year can earn up to $24,480 without having benefits withheld.
For earnings above that limit, Social Security withholds $1 in benefits for every $2 earned. During the year a beneficiary reaches full retirement age, the limit rises to $65,160, and $1 is withheld for every $3 earned above that amount before the qualifying month.
Once beneficiaries reach full retirement age, earnings no longer reduce their payments.
What the Proposed Legislation Would Change
The bill would eliminate the earnings test, allowing early Social Security claimants to continue working without having their current benefits reduced because their wages exceed the annual limit.
Supporters argue that the existing policy discourages older Americans from remaining in the workforce or earning additional income. Some beneficiaries may limit their hours because they mistakenly believe the withheld money is permanently lost.
Murphy said seniors should not be penalized for continuing to work while receiving benefits they funded throughout their careers. Scott introduced companion legislation in the Senate.
If enacted, the proposal would apply to taxable years beginning after the law’s date of enactment. It would also remove comparable deductions under the Railroad Retirement program.
Would Retirees Permanently Receive More Money?
The proposal could increase the amount certain working beneficiaries receive immediately, but it would not necessarily provide a permanent increase in lifetime benefits.
Under current rules, money withheld through the earnings test is not simply forfeited. When a person reaches full retirement age, the Social Security Administration recalculates the benefit to provide credit for months in which payments were reduced or withheld.
The result is generally a higher monthly benefit after full retirement age. Over a typical lifetime, an affected retiree may recover most or all of the withheld amount.
Repealing the test would therefore change when eligible retirees receive their money rather than automatically creating an additional benefit.
Who Could Be Affected?
The plan would primarily affect people between age 62 and full retirement age who claim Social Security while earning more than the applicable annual limit.
Retirees who have already reached full retirement age would see no direct change because the earnings test no longer applies to them. People who delay claiming benefits would also be unaffected until they begin receiving payments.
Proposal Has Not Become Law
The legislation remains a congressional proposal. Current Social Security rules will continue unless the bill passes both chambers of Congress and receives presidential approval.
Beneficiaries should therefore avoid changing their retirement or employment plans based solely on the proposed measure.
The Senior Citizens’ Freedom to Work Act could give working early retirees access to larger immediate Social Security payments by eliminating earnings-based withholding.
However, it would not necessarily raise lifetime benefits because withheld payments are already credited after full retirement age. Its future now depends on congressional action.