Senate approves Hansen legislation designed to help public employee retirees

LANSING—The Senate has overwhelmingly approved legislation allowing public employee retirees to exempt their Social Security benefits from the Michigan Income Tax, said Sen. Goeff Hansen, who sponsored the measure.

Senate Bill 409 seeks to correct an unintended consequence of the recent changes to the income tax.  The reform is targeted at the more than two-thirds of Michigan’s public safety officers, including police and firefighters, who receive no Social Security benefits because their state or local unit was allowed to opt-out of the Social Security system.

“The pensions of these public employees are probably their only retirement income, unlike most older Michigan residents who have both Social Security benefits and retirement income,” said Hansen, R-Hart.

Some public safety officers may work another decade after retirement in jobs covered by Social Security.  Unfortunately, any Social Security benefits they earn are greatly reduced by special provisions in the law.

“This measure seeks to reverse this hardship and prevent any further financial burden on these public employee retirees,” said Hansen.  “Many of these hard-working people, who served in public safety roles, repeatedly put their lives on the line to protect us.  They deserve to be treated fairly after decades of service, and this reform aims to make that happen.”

SB 409 now goes to the House for further consideration.