The Social Security Administration bases benefits on credits. Credits are earned by working. When you work and pay in taxes to Social Security, you can earn as many as four credits per year. Throughout the years, the ways that credits are earned have changed.
For those who were working before 1978, earnings were reported to the SSA by employers every three months. These credits were called “quarters of coverage”. During that time, you received a credit for earning at least $50 during a three-month period. During 1978, employers started reporting earnings annually.
How Credits are Calculated
Now credits are based on your self-employment income and total wages that were earned during that year, regardless of when you did the work during that year. You may have worked all year to earn four credits, or you might have worked enough to earn all four credits in much less time.
During 2017, you must earn $1,280 in covered earnings to get one Medicare or Social Security work credit. To earn the four maximum credits for the year, you must earn $5,120. During the average person’s lifetime, more credits are usually earned than needed to receive full retirement benefits.
Calculating Credits for SSDI
The Social Security Administration (SSA) oversees Social Security Disability Insurance (SSDI). To qualify for this program, you must have worked to earn sufficient credits so you can receive benefits. The specific number of credits required to qualify depend on your age at disability.
As an example, if you were born after 1929 and you are from ages 31 through 42, you must have earned 20 credits to qualify for SSDI. So, in general, that means unless you are considered legally blind you must have worked the equivalent of 5 years full-time out of the last 10 years.
Work Means Taxes Paid In
When the SSA refers to work, they are basically referring to the amount of taxes paid in to FICA, and the amount of taxes that must have been paid in – or credits earned – for an individual to qualify for disability benefits from the Social Security Administration.
You can use an online calculator or contact the SSA to see what your monthly benefits would be based on your earnings. Your advocate, an attorney, or the SSA can tell you if you have earned enough credits to qualify for SSDI benefits.
Qualifying Without the Credits
If you are disabled, but you haven’t earned enough credits to qualify for SSDI, you may still be eligible to receive Supplemental Security Income (SSI) which is also administered by the SSA. SSI offers monthly benefits to those who are qualified as disabled per the SSA guidelines.
However, SSI is a needs-based programs and to be eligible you must meet stringent financial guidelines set forth by the SSA. Disabled children and adults who haven’t worked enough to earn sufficient credits may qualify for SSI benefits. Consult with a disability advocate or attorney for further clarification about the requirements.