As a worker, you receive four credits each year that you work corresponding to the quarter of each year. The first quarter of the year is January thru March; the second quarter is April thru June; the third quarter is July thru September and the fourth quarter is October thru December. For 2011, you earn one (1) work credit for each $1,120 of earnings.
Social Security uses your work history to determine your eligibility for retirement benefits, disability benefits and survivors’ benefits for your family when you die. Your work credits remain on your work record with Social Security even if you change jobs or do not work for periods. Additionally you can earn work credits if you are self employed, or in the military. There are special rules about work credits for people who are employed as domestic or farm work and persons who work for church organizations that do not pay social security taxes.
The amount of work credits you need to be eligible for benefits depends upon your age and the type of benefit.
- Retirement benefits – if you were born in 1929 or after you generally need 40 work credits to be eligible for retirement benefits.
- Disability benefits – it depends upon your age when you become disabled. Generally, if you become disabled at age 31 or older you need 20 work credits in the 10 years before you became disabled.
- Survivors’ benefits – the deceased worker must have earned up to 10 years of work is needed to be eligible for benefits, depending on the person’s age at the time of death.
- Medicare – work credits also affect your eligibility for Medicare when you are 65 or disabled.
Some types of employment do not qualify for work credits such as some jobs with the federal government or state and local governments. It is important to review you work record annually and correct any errors you find.