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   Laws that Penalize Older Workers are Set to Fall

New Law Makes Earnings Limit for Retirees a Thing of the Past
By Alice Ann Love   Associated Press
Hundreds of thousands of Americans over age 65 will no longer lose Social Security benefits because they work.

And many senior citizens who have suffered that fate in the past can anticipate a refund check in the mail after President Clinton signs legislation repealing the Depression-era penalty in a White House ceremony scheduled today.

At the same time, Clinton planned to unveil a new Internet service offered by the Social Security Administration for younger Americans who want to get an online estimate of future retirement benefits.

"Our new Internet service ... will accomplish step one of retirement planning, helping workers to understand the amount of Social Security benefits they can expect in retirement," said Social Security Administrator Kenneth S. Apfel.

Congress passed legislation repealing Social Security's earnings limit last month, without a dissenting vote. It was hailed by Republicans and Democrats alike as long overdue.

The penalty is left over from an era of high unemployment when policymakers wanted to encourage older Americans to retire and make room for younger workers. It has reduced Social Security payments by $1 for every $3 a beneficiary between the ages of 65 and 69 earned in wages over a certain amount — $17,000 in 2000.

Now, employers facing a tight labor market are clamoring for more workers and there are many jobs in retail and services that are a perfect fit for people over age 65.

The repeal is retroactive to Jan. 1 and directly affects 800,000 Social Security recipients who are working this year and another 100,000 who haven't sought benefits because they have jobs. With the earnings test eliminated, each of these people could receive an additional $6,700 in Social Security this year.

Because the repeal is retroactive to Jan. 1, about 415,000 working seniors or dependents will get refunds for the money already deducted this year from their Social Security checks — a total of $1.4 billion or an average of $3,500 per person.

Apfel has said those checks should be sent by early May and monthly benefits adjusted by June.

For younger Americans interested in planning for retirement, Social Security's new Internet service offers three increasingly detailed levels of benefit estimates, each requiring the user to type in more information about themselves.

The simplest, "quick calculator," asks only for a person's age and current-year earnings. The most sophisticated requires the user to download software onto their home computer and allows him or her to try out various retirement scenarios.

The new online retirement calculators will not tap into private records that Social Security keeps about individuals' work and earnings histories. They rely solely on information provided by online users.

The Social Security Administration met with privacy concerns raised by Congress and in 1997 dismantled a service giving people the opportunity to check their Social Security records online.

Starting this year, the agency is providing that information — including official earnings records and benefit estimates based on them — to all Americans over age 25 the old-fashioned way: in annual mailings, via the post office.

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