The Earnings Test for Social Security Beneficiaries

HRD-79-89: Published: Jul 2, 1979. Publicly Released: Jul 2, 1979.

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An analysis was made of the procedures used by the Social Security Administration (SSA) in adjusting the benefits of persons who earn more than the allowable amount. The benefits of persons under age 72 must be reduced if they work and have earnings that exceed an annual exempt amount. For beneficiaries age 65 and over, the 1978 exempt amount was set at $4,000, but this will increase by $500 each year through 1982. The 1978 exempt amount for beneficiaries under age 65 was $3,240.

Weaknesses in controls of SSA over earnings enforcement cases resulted in SSA failing to follow through on an estimated 83,000 cases involving about $39 million in overpayments and $5 million in underpayments. About 76 percent of the cases with potential overpayments or underpayments involved beneficiaries still receiving payments in August 1978. Overpayments to such beneficiaries should be readily collectible. An additional $8.9 million in overpayments went undetected because of practices that disregarded enforcement cases involving terminated student beneficiaries. Overall, the Social Security Trust Fund could lose about $43 million because SSA did not take proper action on these earnings enforcement cases.

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