Earnings Test
Earnings Test
Pursuant to Section 144 of the Social Security Act (the Act) found at 49 MIRC 144, recipients of retirement benefits who are under 65 and are working, the benefit amount shall be reduced by $1.00 for every $3.00 earned in a quarter in excess of $1,500. The adjustment in benefits will be applied as soon as practicable following the quarter in which the earnings were made and reported. No adjustment is made for claimants who have attained the age of 65 years.
Example
If a retired worker continues to work and earns a total of $7,000 in a quarter, while receiving Retirement Benefit of $700.00 per month, the benefit will be reduced during the three-month period, beginning with the first month after the quarter in which the earnings were made and reported.
The ET and Net Benefit are calculated as follows:
It is important to note that the calculation of Earnings Test prior to March 6, 2017 is based on the maximum gross tax able wages (GTW) per quarter of $5,000 and ET was applied until age 62. When the new MISSA law was passed on March 6, 2017, the maximum GTW per quarter was increased to $10,000 and ET is applied until age 65.