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Social Security Isn't an Entitlement -- Here's How to Qualify for Benefits

By Sean Williams - Updated Mar 15, 2018 at 12:29PM

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If you want to be covered by Social Security, here's what you'll need to do.

Social Security is probably the single most important program in this country for seniors since it provides a financial foundation that allows low- and middle-income individuals and families to meet their basic expenses later in life.

According to the March 2016 snapshot from the Social Security Administration, 60.3 million people were receiving benefits. Due to the poor savings habits of Americans, Social Security currently accounts for a majority of income for roughly 3 in 5 seniors. In 2016, based on the federal budget, this amounts to $944.3 billion being set aside to cover benefits to Social Security recipients, two-thirds of whom are retired workers.

How to qualify for Social Security benefits

Yet in spite of popular belief, Social Security isn't an entitlement program that you're simply born into. You need to meet certain requirements in order to ensure that you'll qualify for these benefits as you age. "What are those requirements?" you ask? Let's take a look.

Social Security pays out three types of benefits: retired worker, survivor, and disability. Let's briefly examine how you'd potentially qualify for each category.

Retired worker benefits

It should come as no shock that the vast majority of Social Security recipients receive their benefits via the retired worker benefit (43.5 million people as of March 2016). Most of these recipients are retired workers themselves who've qualified for Social Security benefits based on their work history.

The Social Security Administration requires workers to collect 40 work credits over their lifetime in order to be eligible to receive benefits. The downside is a maximum of four credits can be collected per year, so you'll need to work at least 10 years to qualify. The good news is the value of each credit is pretty easy to obtain. In 2016, you'll earn one credit for each $1,260 in income you earn. Thus, if you make $5,040 in 2016, you'll have maxed out your work credits for the year. The value of one work credit typically rises each year in step with average wage increases. If you nab the maximum of four credits per year over a 10-year stretch, you'll have qualified for retired worker benefits, which can be accessed as early as age 62.

Keep in mind that the Social Security Administration bases your monthly benefit payment on your work history and income, so you'll want to do your best to work as long as possible and earn as much as possible (the SSA takes your 35 highest-earning years into consideration).

In addition to the 40.5 million retired workers currently receiving benefits, spouses and/or children of retired workers may qualify to receive benefits of up to half of the retired worker benefit. Note that the cumulative household benefit varies, but cannot exceed 150% to 180% of the retired worker benefit. However, if they qualify, a spouse and/or child can receive income without it affecting the benefit payment to the retiree. As long as you're of retirement age (62 or higher), your spouse is also at least 62 years old, and your children are younger than 18 and unmarried, a full-time high school student up to age 19, or is older than 18 with a disability that started before age 22, they, too, may be able to receive benefits based on your work history, even if they have no work history themselves.

An older couple using a tablet together and enjoying tea.

Image source: Getty Images.

Survivor benefits

As of March, nearly 6.1 million people were receiving survivor benefits. Most of these were children of deceased workers (1.92 million) and nondisabled widows or widowers (3.77 million).

Just as with retired worker benefits, a worker would qualify to protect their spouse and/or children once they've accumulated 40 work credits. It's important to understand that while Social Security is viewed as a program to protect our nation's elderly in retirement, it's also protecting workers' families well before they hit age 62 in case something does happen. Based on data from the SSA in June 2015, some 96% of workers aged 20 to 49 who worked in covered employment in 2013 had survivors insurance protection in place for their young children and surviving spouses.

Understandably, the program also has fail-safes in place to factor in untimely deaths, because not all workers may be able to reach 40 work credits. Survivor benefits can be paid if the deceased worker in question earned six work credits over the prior three-year period, or in easier-to-understand terms, worked one-and-a-half out of three years.

Survivor benefit payouts can vary depending upon your situation, but they usually range from a low of 71.5% to as high as 100% of the deceased workers' benefit.

An older man sitting inside drinking coffee.

Image source: Getty Images.

Disability benefits

The final way to qualify for Social Security benefits is by having an approved disability that keeps you from reentering the workforce. March data shows that nearly 10.8 million people are receiving monthly disability payments, 8.9 million of whom are disabled workers, with the remainder being children or spouses of these disabled workers.

Not surprisingly, the number of lifetime work credits needed to fully qualify for disability insurance benefits is also 40, but exceptions are made by the SSA here as well. In general, disabled workers can qualify for disability benefits if they've earned at least 20 work credits over the past 10 years, or in other words worked five of the past 10 years. Younger workers can also qualify, as you can see based on this table provided by the SSA. In general, if you've earned half of the work credits you could have earned over "X" years, you're in good shape. Of course, that doesn't mean Social Security will approve your disability request. It merely means that if it is approved, you'd qualify for benefits.

Similar to survivor benefits above, your spouse and/or children may qualify to receive disability benefits based on your earnings history; and like the above, the cumulative total paid out cannot exceed 150% to 180% of your disability benefit.

Overall, it's not too tough to qualify for Social Security, but it's not a given, either.

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