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Social Security Benefits: Your Questions about Social Security Credits

Q: According to Social Security, I havent obtained enough credits to be eligible for benefits. What are Social Security credits, and how can I not have enough of them when Ive 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. With each year that passes, the amount of money you need to make in order to earn social security credits rises; in 2008, it is one credit for $1,050 of earnings. You can receive a maximum of four credits annually (which is why credits are also called ‘quarters’), and any credits you earn will remain on your record even during periods in which youre not working.

In order to qualify for social security benefits, you need to reach a certain number of credits. This number is based on age, and is generally calculated by number of years worked. If youre looking to be eligible for social security benefits for retirement (and are of more than 62 years of age), you will need to have 40 credits (the equivalent of 10 years of work).

However, it can happen that a person who has worked a seemingly appropriate number of years does not gain the necessary credits for social security benefits. This can happen to workers who didnt (or dont) 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.

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