Beneficiaries affected by the annual earnings test in 1978.

Before 1983, beneficiaries under age 72 had benefits offset because of the earnings test provision of the Social Security Act if they had income from employment or self-employment exceeding certain exempt amounts. Beginning with 1983, the earnings test no longer applies as of the month the beneficiary attains age 70. This study presents detailed statistical data about persons affected by the earnings test in 1978. During 1978, about 1 million retired workers aged 62-71, representing about one-tenth of those on the rolls and about one-twelfth of those eligible for benefits, had benefits offset because of the earnings test (table 1). An individual is considered eligible for benefits if he or she meets the insured status and age requirements, whether or not he or she has filed for benefits. When assessing the effects of the earnings test, it should be noted that the number of beneficiaries on the rolls would be larger if not for the earnings limitation. Many eligible persons, particularly those aged 62-64, do not file for benefits because they realize that the earnings test means either a limitation on earnings or the withholding of some or all of their benefits. These individuals are indirectly affected by the earnings test even though they are not on the Social Security rolls. Most of the data here are for retired-worker beneficiaries, but limited data on dependent and survivor beneficiaries who had benefits offset because of their own earnings are also presented. Excluded are disabled beneficiaries, who are subject to a test of “substantial gainful activity,” and persons residing in foreign countries, who are subject to a different earnings test. Most of the data have been derived from the Social Security Administration’s Master Beneficiary Record.