Workers Who Die Before Age 62
The minimum age to start claiming Social Security retirement benefits is 62. If someone dies prematurely, then dependent children and spouses may be entitled to survivor benefits. At age 60, for example, widows and widowers can begin receiving Social Security benefits based on their deceased spouses earnings record . Terminally ill patients can apply for Social Security Disability Insurance , which means they will still receive some benefit from their contributions to the system.
What if you are terminally ill and have reached the minimum retirement age? If you are single, claiming right away may be the most sensible strategy. However, if you have a spouse, postponing may provide your spouse with greater benefits. The spousal benefit can be as much as 50% of the worker’s benefit, depending on the spouse’s age at retirement and if the spouse is eligible for retirement benefits based on their own earnings record. The Social Security Administration has an online calculator that helps determine benefits for spouses.
If you do not qualify for Social Security payments, then you will need to ensure that you have sufficient income to support your lifestyle in retirement.
Check The Social Security Administration’s Math
Your statement includes a record of the earnings on which you’ve paid taxes and an estimate of the benefits you will receive at various retirement ages: 62, 67, and 70. It is always wise for you to check the SSA’s numbers. Don’t be surprised if you uncover an error. Some government-watchers estimate that the SSA makes mistakes on at least 3% of the total official earnings records it keeps.
When you check your record, make sure that the Social Security number noted on your earnings statement is your own, and make sure the earned income amounts listed on the agency’s records mesh with your own records of earnings as listed on your income tax forms or pay stubs.
Why Ssdi Requires Work Credits
As the acronym indicates, SSDI is an insurance program. You pay the premiums of this program through the Social Security deductions that your boss takes out of your paycheck and sends to the government on your behalf. That money helps to fund the monthly Social Security disability and retirement checks that people receive.
On the other hand, the source of funding for SSI benefits is general revenues, like income taxes and additional money that the government collects. Because SSI does not use payroll deductions for Social Security taxes as its source of funding, you do not have to pay into the system and accumulate work credits to be eligible for these benefits.
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Report The Death Of A Social Security Or Medicare Beneficiary
You must report the death of a family member receiving Social Security or Medicare benefits. The Social Security Administration processes death reports for both. Find out how you can report a death and how to cancel benefit payments. In addition to canceling SSA and Medicare benefits, find out what other benefits and accounts you should cancel.
Is Your Condition Found In The List Of Disabling Conditions
For each of the major body systems, we maintain a list of medical conditions that we consider severe enough that it prevents a person from doing substantial gainful activity. If your condition is not on the list, we have to decide if it is as severe as a medical condition that is on the list. If it is, we will find that you are disabled. If it is not, we then go to Step 4.
We have two initiatives designed to expedite our processing of new disability claims:
- Compassionate Allowances: Certain cases that usually qualify for disability can be allowed as soon as the diagnosis is confirmed. Examples include acute leukemia, Lou Gehrigs disease , and pancreatic cancer.
- Quick Disability Determinations: We use sophisticated computer screening to identify cases with a high probability of allowance.
For more information about our disability claims process, visit our Benefits For People With Disabilities website.
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What We Mean By Disability
The definition of disability under Social Security is different than other programs. Social Security pays only for total disability. No benefits are payable for partial disability or for short-term disability.
We consider you disabled under Social Security rules if all of the following are true:
- You cannot do work that you did before because of your medical condition.
- You cannot adjust to other work because of your medical condition.
- Your disability has lasted or is expected to last for at least one year or to result in death.
This is a strict definition of disability. Social Security program rules assume that working families have access to other resources to provide support during periods of short-term disabilities, including workers’ compensation, insurance, savings, and investments.
Social Security Credits Required For Medicare
Technically, there are no credits required for Medicare. The credits for Medicare purposes simply reduce, or eliminate, your Part A premium. The chart below lists the part A premium amounts for the corresponding Social Security credits.
For part B, everyone pays a premium. For most, it is $148.50 per month . However, its important to note that the premiums are higher for individuals over certain income amounts.
There are a few other exceptions to receiving free part A Medicare. See the Medicare website for more information.
As with retirement benefits, you may qualify for free part A Medicare on a spouses work record.
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What Kind Of Income Qualifies To Earn Social Security Credits
Not all of your income counts for purposes of determining how many Social Security credits you’ll get in a given year. Social Security looks only at “earned income” in its calculations. For most people, that includes wages and salaries. Tips are included in the mix as long as those tips get reported to the IRS. Certain benefits, such as vacation pay and severance pay, also go into the credit calculation.
Self-employment income is treated the same way as earned income is, especially since the self-employment tax paid by those who work for themselves includes both the worker and employer shares of the payroll taxes that go to fund Social Security.
One exception to the rules above applies to those who work for certain state and local government entities. Some of these government bodies elect to maintain their own pension plans as alternatives to Social Security. If they do so — rather than choosing to participate in Social Security voluntarily — then participants will typically get their retirement benefits solely from the government-run pension rather than through Social Security.
There are special rules governing what happens when someone works a portion of their career at such an employer and another part at a job covered under Social Security, but that typically affects the amount of the benefit checks that they’ll receive rather than their initial eligibility to get any benefits from the program at all.
An Overview Of Work Credit Requirements For Ssdi
The Social Security Administration says that you generally need at least 40 work credits over your lifetime to qualify for Social Security benefits at retirement. However, the number of credits required to qualify for SSDI varies by age. You do not want to assume that you lack the right amount of work credits based on the facts of another persons situation. We can use the following scenario to explain the work credit system.
Suppose you worked with a 50-year-old man who became too ill to work because of Parkinsons disease, and he had only worked at a job that paid into Social Security for 5 years. You can earn up to 4 work credits a year. In this situation, your coworker would only have 20 work credits, and likely would not qualify for benefits.
If you worked at the same place of employment for 5 years and became disabled, you might assume that you do not have enough work credit but that assumption could be incorrect. For example, if youre 35 years old, you would only need 20 work credits to qualify for SSDI benefits. Again, your age and how long and how recently you worked a job that paid into Social Security will determine how many work credits you need to apply for SSDI.
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Work Credits For Social Security: How Much Work Is Required For Ssdi
In order to qualify for regular disability you must have worked long enough, paid in long enoughand recently enoughunder Social Security to qualify for disability benefits .
Social Security work credits are based on your total yearly wages or self-employment income. You can earn up to four credits each year.
The amount needed for a credit changes from year to year. In 2013, for example, you earn one credit for each $1,160 of wages or self-employment income. When youve earned $4,640, youve earned your four credits for the year.
The number of work credits you need to qualify for disability benefits depends on your age when you become disabled. Generally, you need 40 credits, 20 of which were earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify with fewer credits.
IMPORTANT: Remember that whatever your age is, you must have earned the required number of work credits within a certain period ending with the time you become disabled. Your Social Security Statement shows whether you meet the work requirement at the time it was prepared. If you stop working under Social Security after the date of the Statement, you may not continue to meet the disability work requirement in the future.
How Many Social Security Credits Does It Take To Get Disability Benefits
Social Security also pays benefits to disabled people who meet certain guidelines. Typically, you have to be disabled for at least a year and unable to have gainful employment in order to get disability benefits under Social Security. You also need to have a minimum number of Social Security credits — but figuring out that minimum number is a lot more complicated than it is in the retirement situation.
Specifically, the SSA breaks people down into three main categories:
- If you’re younger than 24 when you become disabled, then the SSA will look at the three years immediately before you became disabled. If you have at least six credits from that three-year period — half the maximum number of credits you could earn over that time frame — then you’ll qualify to receive disability benefits.
- If you’re between age 24 and age 30, then there’s a quick calculation that you’ll have to do to determine eligibility. Take the amount of time in years that’s passed since your 21st birthday and then multiply it by two. That’ll typically tell you how many credits you need. For example, if you just turned 26 and became disabled, then it’s five years since you turned 21, and so you’ll need 10 Social Security credits to claim disability benefits.
- If you’re 31 or older, then there’s a table that you’ll need to look at. Depending on your age, you could need as little as 20 credits or as many as 40 in order to receive disability benefits under Social Security.
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How Do You Earn Credits For Years After 1977
For the years after 1977, the Commissioner of the Social Security Administration determines the amount of earnings that will equala credit for each year. The amount of earnings is determined by usinga formula in the Social Security Act that reflects a national percentageincrease in average wages. The amount the Commissioner determinesis published in the Federal Register onor before November 1 of the preceding year.
The table below shows the amount of wages or self-employmentincome needed to obtain a quarter of coverage:
What Are Work Credits For Social Security Disability
If you choose to apply for Social Security disability benefits, there are two programs for which you may be eligible: supplemental security income and disability insurance benefits , also known as Social Security disability insurance .
Both programs require you to meet specific disability requirements, but they also have other restrictions. For SSI, your household income has to be below a certain level in order to qualify. For DIB, whether or not you qualify is dependent upon your work credits.
But what are work credits? How many do you need for DIB? And how do you earn them?
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How To Stop Social Security Check Payments
The SSA can not pay benefits for the month of a recipients death. That means if the person died in July, the check received in August must be returned. Find out how to return a check to the SSA.
If the payment is by direct deposit, notify the financial institution as soon as possible so it can return any payments received after death. For more about the requirement to return benefits for the month of a beneficiarys death, see the top of page 11 of this SSA publication.
Family members may be eligible for Social Security survivors benefits when a person getting benefits dies. Visit the SSA’s Survivors Benefits page to learn more.
Beware The Social Security Earnings Test
Bringing in too much money in earned income can cost you if you continue to work after claiming Social Security benefits early. With what is commonly known as the Social Security earnings test for annual income, you will forfeit $1 in benefits for every $2 you make over the earnings limit, which in 2021 is $18,960. Once you are past full retirement age, the earnings test no longer applies, and you can make as much money as you want with no impact on benefits.
Any Social Security benefits forfeited to the earnings test are not lost forever. At your full retirement age, the Social Security Administration will recalculate your benefits to take into account benefits lost to the test. For example, if you claim benefits at 62 and over the next four years lose one full years worth of benefits to the earnings test, at a full retirement age of 66 your benefits will be recomputed — and increased — as if you had taken benefits three years early, instead of four. That basically means the lifetime reduction in benefits would be 20% rather than 25%.
How Benefits Can Be Paid
If you have Social Security credits in both the United States and Canada, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one countrys system, you will get a regular benefit from that country. If you do not meet the basic requirements, the agreement may help you qualify for a benefit as explained below.
How Many Work Credits Do You Have
Work credits are currently awarded on a yearly basis and are based on the amount of money you earned and paid FICA taxes on. If you earn even a modest amount of money in a calendar year, you’ll likely receive the maximum four credits for that year.
Here are the specifics. For the year 2021, every $1,470 you make earns you another work credit for Social Security purposes, up to the maximum of four per year. For example, if you made $5,880 or more in 2021, you’ll receive the maximum four work credits available for the year.
The amount of money you must make to earn one credit changes every year. To see exactly how much you had to make in each year to earn work credits for that year, see the Social Security Administration website at .
Not all income counts towards work credits. Only wages and self-employment income are counted. Income from pension payments or investments does not count toward work credits.
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Coverage And Social Security Taxes
Before the agreement, employees, employers and self-employed persons could, under certain circumstances, be required to pay Social Security taxes to both the United States and Canada for the same work.
Under the agreement, if you work as an employee in the United States, you normally will be covered by the United States, and you and your employer will pay Social Security taxes only to the United States. If you work as an employee in Canada, you normally will be covered by Canada, and you and your employer will pay Social Security taxes only to Canada.
On the other hand, if your employer sends you from one country to work for that employer or an affiliate in the other country for five years or less, you will continue to be covered by your home country and you will be exempt from coverage in the other country. For example, if a U.S. company sends an employee to work for that employer or an affiliate in Canada for no more than five years, the employer and the employee will continue to pay only U.S. Social Security taxes and will not have to pay in Canada. Even if your occupation requires you to make frequent short trips from one country to the other over a period of more than five years, each trip can be considered separately so that you remain covered only by the country from which you are sent.
If you are self-employed and residing in the United States or Canada, you generally will be covered and taxed only by the country where you reside.