No one automatically qualifies for Social Security benefits. To be eligible for certain kinds of Social Security benefits credits are needed. A person earns Social Security credits by paying Social Security taxes through employment. The amount of credits a worker earns will partially determine eligibility for retirement and disability programs.
How Credits Are Earned
The way you earn a credit has changed over the years. Currently, when you work and pay Social Security taxes, you earn up to a maximum of four “credits” per year. Before 1978, employers reported your earnings every 3 months and we called credits “quarters of coverage,” or QCs. Back then, you got a QC or credit if you earned at least $50 in a 3-month calendar quarter. In 1978, employers started reporting your earnings just once a year. Credits are now based on your total wages and self-employment income throughout the year, no matter when during the year you did the work. You might work all year to earn four credits, or you might earn enough for all four in a much shorter length of time. The amount of earnings it takes to earn a credit may change each year. In 2018, you must earn $1,320 in covered earnings to get one Social Security or Medicare work credit and $5,280 to get the maximum four credits for the year. During your lifetime, you will probably earn more credits than the minimum number you need to be eligible for benefits. These extra credits do not increase your benefit amount. The average of your earnings over your working years, not the number of credits you earn, determines how much your monthly payment will be.
Credits Needed For Retirement
The number of work credits you need to get retirement benefits depends on your date of birth. If you were born in 1929 or later, you need 40 credits (10 years of work).
Credits Needed For Disability
The number of work credits needed for disability benefits depends on your age when you become disabled. Generally, you need 40 credits, 20 of which being earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify with fewer credits.
These are the rules; if you become disabled:
- Before age 24 – You may qualify if you have 6 credits earned in the 3-year period ending when your disability starts.
- Age 24 to 31 – You may qualify if you have credit for working half the time between age 21 and the time you become disabled. For example, if you become disabled at age 27, you would need credit for 3 years of work (12 credits) out of the past 6 years (between ages 21 and 27).
- Age 31 or older – Find your age below to learn the number of work credits needed.
