Understanding how Social Security Disability Insurance (“SSD” or “SSDI”) Credits work and how this can affect you can be a daunting experience. If you’re trying to make the most of the benefits you’re entitled to receive, it’s vital that you understand how the SSDI process works. Understanding what you deserve and how much of the benefits you can get depends on a lot of factors.

Even if you aren’t eligible for the benefits, determining something like this isn’t necessarily simple. One of the factors involved in the process that often gets overlooked is Social Security’s work credit requirement. Ironically, they are one of the most critical factors one has to focus on if they are trying to determine their eligibility for disability benefits. To put it simply, if your work history has not earned you the necessary amount of credits, then you will not be eligible to get the Social Security Disability benefits that you may need if you become disabled.  (However, you may be eligible for Supplemental Security Income if you fall below certain asset and income requirements.)

In this article, we’re going to go through how Social Security work credits can affect the process of your disability benefits, what you’re going to have to do to earn them, and the number of credits you’re going to need to receive Social Security Disability Insurance benefits.

Earning Social Security Disability Work Credits

Back when the process of earning work credits started, a person only needed to earn $250 in a year to receive one work credit. This happened for the first time in 1978, and this amount represented the wages of that time and the rate of inflation. But since 1978, this number has gone up dramatically. The increase in the amount of money required to earn a single credit has gone hand in hand with an increase in wages.

The average wages increased from $9,200 per year back in 1976 to more than $50,000 year annually in 2017. Because of these figures, the Social Security Administration changed the amount needed to earn a singular social security credit to $1,410.

What Does this Mean?

In practical terms, if you’re earning 1,410 from your salary in 2020 under a job that is covered by the SSA, you’re going to get a single work credit. The maximum number of credits a worker can receive in a year are 4, and to earn these, you’re going to have to earn an amount of $5,640 in a year.

If this sounds fairly reasonable, that is because the U.S Government has said that they want work credits to be available even to people who earn low wages. These benefits can also be available to people, who work a part-time job.

Qualifying for Social Security Disability Work Credits

There are different ways for all of us to earn money. Some individuals invest their earnings in the stock market. Some invest in real estate, while others choose to start a business that will provide them with a small secondary income stream. However, while each of these will increase the amount of money you earn, this does not necessarily mean that the number of credits you earn will also increase.

The Social Security Administration considers only your “earned income” for calculation purposes. For most people in the working class, this means the wages that you have earned. If you have received tips, that can be included in the calculations as long as you’re reporting everything you’ve earned to the IRS. Any additional monetary benefits people earn, such as paid time off or severance allowance, may also be taken into account when calculating your credits.

With that said, you don’t have to worry if you’re self-employed. The income from a business is treated the same way as long as you’re paying the necessary taxes. The taxes you pay will cover your share, and the share of your employees, for Social Security Disability Insurance purposes.

To learn more about your rights under the Social Security Disability laws, call our FREE Disability Hotline at 1-866-4-MY-SSDI (469-7734) to speak with one of our friendly disability rights advocates who will evaluate your claim in 60 seconds. Alternatively, you can fill out our FREE Disability Case Assessment form and one of our representatives will contact you immediately.

Exceptions to the System

Some outliers can be those people who work for the local and state governmental bodies, for example. These organizations or agencies create their own pension plans that act as an alternative to Social Security Disability Insurance. But even if a person decides to work for these entities, they still may have the option of selecting disability insurance for Social Security instead, or may be available if they work other non-government jobs as well that pay into the SSDI system.

To that end, if a person works for a limited time for a governmental body and spends the rest of their life working a job covered by Social Security, the rules can change. In this situation, the amount of benefits they’ll receive can change and not their ability to earn work credits altogether.

Another exception that is not included when calculating your work credits is your “unearned income.” This is the money people typically earn from:

• Interest
• Stocks
• Rent payments
• Mutual funds
• Bonds
• Other sources

Wrapping Up

If you are disabled and your long-term disability is a hindrance in your ability to work and make a living for your family, you should think of applying for disability benefits. Your disability attorney will collect the necessary information and will get a claim filed on your behalf right away, and will be sure to do it the RIGHT way utilizing all their experience to avoid technicalities and other pitfalls that you may encounter by applying on your own.

Here at Kahn and Associates we take cases on a contingency fee basis, which means we do not require any payment unless they are successful in securing benefits for you.

To learn more about your rights under the Social Security Disability laws, call our FREE Disability Hotline at 1-866-4-MY-SSDI (469-7734) to speak with one of our friendly disability rights advocates who, once they obtain all the required information, will evaluate your claim in 60 seconds or less. Alternatively, you can fill out our FREE Disability Case Assessment form and one of our representatives will contact you immediately.