work credits
Work credits are used by the Federal Government to determine a person’s eligibility for benefits such as Social Security benefits, Social Security Disability Insurance (SSDI) benefits, and Medicare. Work credits are earned by paying taxes and working/earning income. A person can earn up to four credits in a year. A person’s monthly payments when they receive benefits are based on their average income over the years they worked, not the number of credits they earned.
The amount of income necessary to earn one credit can change each year. As of 2026, $1,890 in wage earnings equals one credit for Social Security and Medicare. A person must earn $7,560 to earn all four credits in a year. Each program has its own policies for how many credits are needed for benefits. For Social Security retirement benefits, a person must earn 40 credits in order to receive benefits. Social Security credits automatically count towards Medicare credits once a person turns 65 years old. Medicare requires 40 credits in order to receive full Part-A coverage. If a person does not have enough credits, they can pay reduced premiums to receive Part-A coverage based on the credits they have earned. SSDI benefits have a more complicated calculation to determine eligibility requirements based on the person's age when they became disabled.
For more information, see Social Security Administration Credits and Benefits Eligibility.
[Last reviewed in April of 2026 by the Wex Definitions Team]
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