The Voice is the e-mail newsletter of The Special Needs Alliance. This installment was written by Special Needs Alliance member Gregory Wilcox, of the Law Office of Gregory Wilcox in Berkeley, California. His firm focuses on government benefits and estate planning for the elderly and for individuals with disabilities. Greg is a Certified Elder Law Attorney (CELA); co-author of Special Needs Trusts: Planning, Drafting, and Administration and California Elder Law Resources, Benefits, and Planning; and a board member of California Advocates for Nursing Home Reform (CANHR) in San Francisco. Other articles he has written can be found on the CANHR website.
Most people know that a worker must have worked and paid into the Social Security system in order to collect Social Security retirement and disability benefits. People who are particularly aware of their retirement rights may even know that in order to collect Social Security retirement benefits they must have worked and received at least 40 “quarters” in order to qualify for such benefits. But when it comes to qualifying for Social Security Disability Insurance (SSDI) coverage, the work history requirements become much cloudier in the minds of most people. This article is intended to dispel these clouds.
Earning Work Credits
Title II of the Social Security Act provides retirement, disability, dependents, and survivors benefits (“Old-Age, Survivors, and Disability Insurance Benefits,” commonly known as “OASDI”). However, to receive any kind of Title II Social Security benefit a worker on whose work record the benefit is to be calculated must have accumulated enough work credits.
A worker can earn up to four Social Security credits per year, maximum. Before 1978 a worker had to earn a certain amount in each quarter of the year to earn a credit. Hence the credits were called quarters. In that year Congress changed the rules so that workers could earn up to four credits if they earned over a certain amount in one calendar year, no matter when in the year the income was earned. Nevertheless, the credits are still referred to as quarters, and eligibility is said to depend on the number of quarters of coverage (or QC’s) earned. The terms “credits” and “quarters” are now used interchangeably.
The amount that needs to be earned to receive a credit increases each year; in 2011 the amount is $1,120 (thus, in 2011 $4,480 earns the maximum four “quarters of coverage” even if it is all earned in the same quarter of the year). In 2012 the amount that must be earned to receive a credit goes up to $1,130, and $4,520 will earn the maximum four quarters. Of course, the work must have been done in “covered employment” that was subject to Social Security taxes.
Most important here, the number of credits needed to qualify for benefits (referred to as “insured status”) depends on the particular Social Security benefit being claimed and the age of the claimant. For example, compare retirement coverage with disability coverage.
Social Security Retirement Benefits vs. Disability Benefits
To be insured for Social Security Retirement Insurance (RIB) benefits, a worker must be “fully insured.” He or she becomes fully insured by having 40 earned quarters – typically four per year for 10 years of work. There is no requirement that these credits have been earned during any particular time period. On the other hand, in order to claim Social Security Disability Income (SSDI) benefits a worker must be “insured for disability” – which is a different and more complicated standard. First, the worker must have accumulated a certain number of credits that vary with the worker’s age. Second, depending on the age of the worker at the time of disability, credits must be acquired during a certain time period.
The Number of Credits Required
The number of credits a worker needs to be insured for disability goes up with age.
When Credits Earned
In addition to the number of credits required for disability coverage, workers over the age of 30 must have acquired their credits recently. Specifically, these workers must have acquired at least 20 work credits within the ten year (i.e. 40 quarter) period just before the occurrence of the disability. This is often called the “20/40 rule.”
There are two limited exceptions to this rule. First, a worker will be insured for disability without having to meet the 20/40 rule if he or she is disabled under the Social Security statutory standard for blindness (i.e., having no better than 20/200 vision in the better eye with glasses or other corrective lenses, or having a visual field of 20 degrees or less). Second, there is a rare exception for workers over the age of 31 who were previously disabled before reaching the age of 31.
The following is a summary of the work credit requirements for SSDI for most individuals:
|Became Disabled||Required Credits for SSDI||When Credits Earned|
|Before 24||6 credits in 3 years before disability began||Credits can be earned before 21|
|24-30||1 credit for each year between 21 and date disability began||Credits start with quarter after the quarter worker turned 21|
|31-42||20||20 in prior 10 years|
|43-61||1 credit for each calendar year between 21 and year before disability began||20 in prior 10 years|
|62 to full retirement age||40||20 in prior 10 years|
Failing to Qualify for Disability Benefits
There are a surprising number of ways that a worker can fail to be insured for disability benefits. For example:
Workers should be aware that their hard work and faithful payment of Social Security taxes may not be enough to guarantee them disability benefits if they become disabled. Eligibility for such benefits will depend on complex calculations that take into account the age of the worker, the amounts he or she has earned, and when the income was earned.
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