What Are Work Credits For Social Security?

When learning about Social Security, consumers are sure to hear the term “work credits.” Each adult needs a certain amount of credits before they can qualify for Social Security benefits. What are these credits and how do consumers earn them?

The Lowdown On Work Credits

Work credits are credits used to determine whether a person is eligible to receive Social Security benefits. These credits also determine how much a person will receive. Credits are earned by paying Social Security tax. The more you pay into Social Security, the more you will receive in the future. According to the Social Security Administration, one credit will be given for each $1,120 a person earns in 2011. Consumers may only earn up to four credits each year. Therefore, if a person earns $4,480 in 2011, they will be awarded four credits.

How Many Credits You Need To Qualify For Social Security Retirement Benefits

To be eligible for Social Security retirement benefits, a person born after 1929 must have earned 40 credits during their working years. People born before 1929 may qualify with fewer credits. These credits may be earned throughout a person’s lifetime. They do have have to be earned consecutively.

How Many Credits You Need To Qualify For Social Security Disability Benefits

To qualify for disability benefits, adults 31 years of age and older must have earned at least 20 credits in the last 15 years. Applicants younger than 31 years of age may be eligible to receive benefits, even if they have less than 20 credits. Applicants 24 years of age and younger may be eligible for benefits if they have earned six credits in the last three years. However, applicants must also be considered, by the Social Security Administration, to be disabled before being receiving disability benefits.

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