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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: When you work and pay Social Security taxes, you earn credits that are used to qualify you for social security benefits. The number of credits you receive is based on both income and the number of years 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.

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. 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).

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 didnt (or dont) have social security taxes deducted from their wages. This situation mostly occurs among Federal employees hired before 1984, railroad employees with ten years or more of service, and state and local government employees whose employers do not participate in social security.

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