Work credits are used by the Federal government to determine a person’s eligibility for Social Security benefits, Social Security Disability Insurance (SSDI) benefits, and Medicare. A person earns a credit for a certain amount earned in wages, up to four credits every year. In 2021, a person earns a credit for $1,470 in wage earnings. Each program has its own policies for how many credits are needed for benefits. For Social Security, a person must earn 40 credits in order to receive benefits. Medicare requires 40 credits in order to receive full Part-A coverage, but if a person does not have enough credits, they can pay reduced premiums to receive Part-A coverage according to the amount of credits worked. SSDI benefits require a bit more calculation to determine eligibility requirements based on the age the person becomes disabled:
- Ages 62+ = 40 credits
- Ages 44-61 = 22 credits + 2 credits for every two years over the age of 44
- For example: Age 52 would require 30 credits (22+(2*4)=30)
- Ages 31-43 = 20 credits
- Ages 24-30 = your age above 21 multiplied by 2
- For example Age 26: (26 - 21)*2 = 10 credits
- Ages below 24= 6 credits
[Last updated in November of 2021 by the Wex Definitions Team]