TN 36 (11-23)

RS 02510.001 Administering the Earnings Test

A. Background

To administer the earnings test (ET), we:

  • identify working beneficiaries during the claims process, explain the Social Security ET and code the master beneficiary record (MBR) with work and earnings information.

  • ask beneficiaries to report any change in their work activity that will result in significant changes in their earnings level,

  • send a mid-year mailer letter to certain beneficiaries asking them to update their estimate for the current year and give us an estimate of their next year's earnings,

  • ask certain beneficiaries to report their earnings to us at the end of the year,

  • use the earnings posted to the Master Earnings File (MEF) along with other pertinent information in our records to adjust benefits under the earnings test and ensure proper payment of benefits.

B. Policy

1. Statutory Basis For ET


    Section 203(b) of the Act provides for deductions on the basis of excess earnings.

    Section 203(h) of the Act requires filing of a report of earnings for a taxable year when a beneficiary:

    • is entitled to benefits for one or more months during the year; and

    • earns over the exempt amount; and

    • is under full retirement age in at least one month and is not receiving disability benefits.

NOTE:In 1997, we amended our regulations to state that for annual reports due on and after April 15, 1997, SSA may consider the Wage and Tax Statement (W-2) information and self-employment (SE) tax return information to be the report required under Section 203(h). Beneficiaries will need to contact us to provide additional information only when the information on the W-2 (Wage and Tax Statement) and self-employment (SE) tax return, along with other information on our records will not allow us to correctly determine benefits payable.

Although we may accept W-2 information and special payment information from employers, the beneficiary still has primary responsibility for making sure that the earnings we use for deduction purposes is correct.

2. SSA's Authority

Section 203(f) and (h) require SSA to:

  1. a. 

    Ask a beneficiary what they expect to earn in a year.

  2. b. 

    Suspend all or some benefits during the year when there is a justifiable reason to believe that earnings will exceed the exempt amount.

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RS 02510.001 - Administering the Earnings Test - 11/16/2023
Batch run: 11/16/2023