How Disability Benefits Are Calculated

What Are Work Credits?

Social Security Disability benefits are distributed, with very few exceptions, to adults who have had a working career before they became disabled. The recipient has to have worked for a minimal amount of time in order to be eligible; the time period is measured in blocks called “work credits.” The number of work credits you need in order to receive benefits depends on the age at which you became disabled. This system is based on the fact that each paycheck you have received has been tapped for a FICA (Federal Insurance Contributions Act) contribution which funds Social Security and Medicare.

Typically, you need 40 work credits, 20 or which you’ve earned during the last 10 years before you became disabled. Some younger workers, however, may qualify with fewer credits. The system is a complicated one and complications are the last thing you need when you have recently become disabled and lost income. At such a time it is essential to consult with a skilled and knowledgeable disability attorney, one who will be able to guide you through the process of obtaining disability benefits as quickly and painlessly as possible.

In the event that you stop working before you have accumulated enough credits to qualify for benefits, your existing credits will remain on your record so they will be added to later credits if you return to work in the future. In spite of this flexibility, no benefits will be paid to you if you don’t have enough credits at the time you become disabled.

How Work Credits Are Recorded

During periods when you work and pay Social Security taxes, you earn up to a maximum of four “credits” annually, though the way credits are earned has evolved over recent decades. Prior to 1978, employers reported earnings quarterly. At that time, the credits were called “quarters of coverages (QCs). You were credited with a QC if you earned at least $50 during a calendar quarter.

In 1978, employers started reporting workers’ earnings just once annually. Now, credits are based on your total wages and self-employment income over the course of the year; it is not consequential during which part of the year you have earned that income. What this means is that it is possible to earn four credits in only a few months if your income is high enough. As one would expect, during the nearly 40 years that have elapsed since the way of recording has changed, the amount of money necessary to earn a credit has increased a good deal. Now, in 2017, for example, you earn one credit for each $1,300 of wages or self-employment income. When you’ve earned $5,200, you’ve earned your maximum of four credits for the year.

Are you likely to accumulate all the credits you may need?

The chances are that you will earn more than the minimum number of credits you will need in order to be eligible for benefits. Unfortunately, these extra credits will not increase your benefit amount; that amount will be determined by your average earning over the entire period of your working years.

The number of work credits you must accrue to get disability benefits depends on the age at which you became disabled. Typically, you need 40 credits, 20 or which must have been earned during the last 10 years before you became disabled. If you are a younger individual, however, you may qualify with fewer credits. If you become disabled before age 24, for example, you need only have earned 6 credits in the 3 years prior to the onset of your disability.

By the Numbers…

If you are only 24 years of age when you apply, you can qualify for benefits if you earned 6 credits in the 3-year period ending at the time you became disabled. If you are between the ages of 24 and 31, you may qualify if you have credits for working half the time between the age of 21 and the time you became disabled.

If you are between 31 and 42 years old, you need the 20 work credits. Between the ages of 44 and 60 years, you will require two more work credits for every two years of age until you turn 62. Once you are 62 years or older, you will need 40 work credits no matter how old you are. Unless one of your disabilities is blindness, you have to have earned at least 20 work credits in the 10 years immediately before you became disabled.

Having an experienced and compassionate disability attorney is invaluable when you are seeking benefits to help you and your family recover from the trauma of your disability. Your disability attorney will help you regain your footing and help you to get your cash flowing again.