Some of the 273 senior federal judges, who are retired but continue voluntarily to hear cases, have stopped working because Congress failed last month to correct a legal provision that lowers their retirement benefits if they work.

Under existing law, retired federal judges who continue to work are required to join the Social Security system beginning this month. That means that they are subject to the Social Security payroll tax on their judicial pensions, that many may lose Social Security pension benefits earned in earlier careers and that Medicare and other insurance benefits may be jeopardized.

Senior judges, who routinely handle cases to help reduce backlogs, contend that the law now effectively makes them pay for the privilege of working. There is no official count of senior judges who will stop working rather than face losses of as much as $1,000 per month, according to congressional and court sources.

Bill Weller, legislative affairs officer for the courts, said yesterday that there is major "confusion" over the numbers. He said he believes that as many as 50 percent of the judges might stop working until the matter is corrected.

Chief Judge John C. Godbold of the 11th Circuit Court of Appeals, which covers Alabama, Florida and Georgia, said he is facing major problems.

"It's a very serious matter," he said yesterday. In 22 weeks of court scheduled through June 30, involving 22 three-judge panels, all but one of those panels include a senior judge, he said.

Godbold said he has checked with the seven senior judges scheduled to sit in January and February. Of those, he said, three will sit, two have refused and two have not decided.

"These are the difficult cases that require oral arguments . . . criminal cases, civil cases, civil rights cases . . . . If a significant number do not sit, it disrupts us very seriously," he said.

Godbold added that one of the most difficult situations will be the southern district of Florida, based in Miami, where he and other judges have worked for several years to bring in senior judges from around the country to help with the large number of multi-defendant drug cases.

"A senior judge does not have to sit. He's a volunteer. A senior judge who does volunteer will do this at a substantial loss," he said.

Until 1983, federal judges, like other federal employes, were not covered by Social Security. That year Congress changed the law to require certain categories of federal workers, including judges, to pay Social Security taxes.

Judges already on senior status were exempted from the tax by a special provision that expired Dec. 31. Now, because they work -- even though they receive no extra compensation beyond their judicial pensions -- some lose Social Security and other benefits they would otherwise receive.

As of this month, senior judges have been informed by the Administrative Office of the U.S. Courts that the only way to avoid the payroll tax is to stop working.

Under the law, federal judges can retire at full salary at age 65 with 15 years of federal service. Under current pay levels, appeals court judges can retire at $83,200 per year and district court judges at $78,700. They may also receive whatever Social Security benefits they qualify for based on earlier private employment.

The House and Senate agreed in December to language that would continue to exempt senior judges from the Social Security provisions. But the language was part of the budget reconciliation bill that got snagged in arguments over the federal Superfund. Congress will take up the reconciliation measure when it returns Jan. 21.