What are Social Security Credits?

To determine who is eligible for various Social Security benefits, the Social Security Administration (SSA) uses a system of credits that establish whether minimum work requirements have been met. Typically, the number of credits required in order to be eligible for benefits is 40. Credits are based on the amount of time in the workforce and, to a lesser extent, on compensation. As of 2017, the maximum number of credits that can be earned in any given year is four, but because you only need to earn $1,300 in compensation to acquire each credit, it is possible to earn all four annual credits in a short amount of time. Once you have earned $5,200 in taxable income, you have acquired the maximum number of credits for the year. This means that a minimum of 10 years in the workforce are required in order to accrue the 40 credits necessary to apply for benefits. Since no one can earn more than four credits per year regardless of income, this system levels the playing field somewhat, so that those who have very large incomes are not able to take advantage of benefits any earlier than those with more meager earnings.

However, 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, or Social Security Disability Insurance (SSDI). While the general 40-credit rule holds for those 62 or older, if you become disabled at a younger age, you may qualify for disability benefits with fewer credits. For example, if 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 age 21 and the age at which they became disabled. This means that if you become disabled at age 29, you will need to have worked for four years, or 16 total credits, within the eight years since you turned 21. For those over the age of 31, credit requirements vary by year from as little as 20 up to the maximum requirement of 40.

In addition, your family may be eligible to collect survivor's benefits on your account in the event of your untimely death even if you have not met the 40-credit minimum. 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.

Depending on what type of benefits you are eligible for, 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. 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.