Breaking Down Social Security Credits

What Are Social Security Credits?

Social Security is a program that provides individuals with a range of benefits, including retirement, disability, and survivor benefits. Benefits are provided credits are the tools that the Social Security Administration (SSA) uses to determine eligibility for Social Security Benefits. To determine who is eligible for various benefits, the SSA uses this system of credits that establish whether minimum work requirements have been met. Credits are based on the amount of time that someone spends in the workforce and, to a lesser extent, on compensation.

How Social Security Credits Work

The number of credits required to be eligible for retirement benefits is 40. A single credit is earned over a quarter or three months, which means individuals earn four credits during a calendar year. Because you can’t earn more than four credits per year, it takes a minimum of 10 years in the workforce to accrue the credits necessary to apply for benefits.

The SSA assigns credits to your paid taxes. You earn one credit for every $1,510 in earnings in 2022 and $1,640 in 2023. It is possible to earn all four annual credits in a short amount of time. Once you earn $6,040 ($6,560 in 2023) in taxable income, you have acquired the maximum number of credits for the year.

Credit Requirements for Disability Benefits

There are some situations in which benefits may be granted when the standard 40-credit threshold has not been met. One such scenario applies to the payment of disability benefits, known as Social Security Disability Insurance (SSDI). The 40-credit rule holds for those ages 62 and older, but if you become disabled at a younger age, then you may qualify for disability benefits with fewer credits.

Let's say you become disabled before age 24, you can apply for benefits with only six credits, as long as they were earned within the three years prior to your disability. For those who are between 24 and 31, eligible applicants must have credit for working half the number of years between 21 and the age at which they became disabled. This means that if you become disabled at age 29, you need to have worked for four years (for a total of 16) within the eight years since you turned 21.

For those who are over the age of 31 and become disabled, credit requirements vary by age. This can range from as few as 20 credits up to the maximum requirement of 40. You can see the specific amounts for each age on the SSA’s website. Unless you are legally blind, at least 20 of these credits must have been earned in the 10 years leading up to your disability.

Credit Requirements for Survivor Benefits

Even if you have not met the 40-credit minimum, your family may be eligible to collect survivor benefits on your account in the event of your untimely death. Benefits may be payable to your children and your spouse who cares for them if you have acquired six credits within the three years preceding your death.

Applying for Social Security

Depending on the type of benefits for which you are eligible, you may be able to apply online at the SSA website, over the phone, or by making an appointment at your local Social Security office. Although offices reopened following the COVID-19 pandemic for walk-in consultations, the administration still recommends making an appointment, going online, or calling to apply for benefits or if you have any questions.

The SSA website also has updated information about credit requirements for disability benefits, as well as online calculators to help you estimate your potential benefit amount.