WHAT IS THE EARNINGS TEST?
The earnings test determines whether a person receiving Social Security benefits is retired or otherwise depending on his/her benefits.
A beneficiary who is still employed or later returns to work will have his benefits reduced if he/she is earning more than a specific amount. Read more below if you are among those affected by the earnings test.
WHO IS AFFECTED?
Retirement, disability, and child insurance beneficiaries under the age of 65 earning over $1,800 a quarter:
If you are a retirement, disability, or child insurance beneficiary under the age of 65, and you continue to work, your benefits will be reduced by $1.00 for every $3.00 of wages in excess of $1,800 earned during a quarter.
Click here for a sample of how to calculate your benefits when the earnings test is applied.
Surviving Spouse under the age of 60 earning over $1,500 a quarter:
If you are a surviving spouse under the age of 60 that continues to work, your benefits will be reduced by $1.00 for every $3.00 of wages in excess of $1,500 earned during a quarter.
A sample of how to calculate your benefits when the earnings test is applied is provided here.
WHEN WILL THE REDUCTION TO MY BENEFITS BE APPLIED?
The reduction will be applied two quarters after the earned wages were reported. For example, if a 63 year-old beneficiary reported wages in January to March in excess of $1,800, his/her benefits for July to September will be reduced.
HOW LONG WILL THE EARNINGS TEST APPLY TO MY BENEFITS?
The earnings test will no longer apply in the quarter in which the beneficiary turns 65 years old.
WHAT SHOULD I DO IF I AM A BENEFICIARY NO LONGER RESIDING IN PALAU?
If you are a beneficiary residing outside of Palau and still working, you must submit a certified or notarized statement of your gross earnings. If you are not employed, then you must also submit a notarized sworn statement stating that fact.
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