Social Security Benefits: Your Questions about Social Security Credits

07/13/08

Your Social Security Benefits Questions: Social Security Credits

Q: Social Security tells me that I don't have enough credits to qualify for benefits. What are Social Security credits, and how can I not have enough of them when I've worked and paid taxes for years?

A: Credits that go towards qualifying you for benefits from Social Security are earned by working and paying your Social Security taxes. The Social Security service bases the number of credits a person receives on the amount of money they earn and the amount of time they have worked. The necessary income level for receiving social security benefits credits rises a bit each year; as of 2008, you receive one credit for every $1,050 you earn. These credits are also called quarters, as you can earn a maximum of four of them a year; any social security "quarters" that you earn during your working career will remain on your record even during times of unemployment.

A certain number of credits or quarters are required in order to qualify you to receive social security benefits. This number is based on age, and is generally calculated by number of years worked. Most people looking to qualify for retirement social security benefits (that is, over the age of 62) will need 40 credits, or 10 years of work, to be eligible for benefits.

It does occur, however, that a person of retirement age who has worked for what seems to be the correct number of years does not have enough credits to qualify him or her for social security benefits. This can happen to workers who didn't (or don't) have social security taxes deducted from their wages. In general, this sort of situation occurs with Federal employees who were hired before 1984, employees of railroads who have more than ten years of service, and the employees of governments (both state and local) which have chosen not to participate in the social security program.