Work Credits

Definition - What does Work Credits mean?

Work credits refer to the system through which the United States Social Security Administration (SSA) keeps score of an individual's eligibility to receive Social Security benefits. Individuals earn work credits when they work and pay taxes. The credits are based on the individual's earned income. Before 1978, work credits were called quarters of coverage (QC).

Justipedia explains Work Credits

Whether an individual is entitled to receive Social Security Disability or retirement benefits is determined by SSA through a system of credits. These are commonly referred to as work credits. An individual earns credits by working, earning money, and paying taxes. The amount of money an individual has to earn in order to earn a work credit is prescribed by the SSA each year. For the year 2014, an individual receives one work credit for every $1,200 earned; they are subject to a maximum of four work credits per year. The amount of earnings required for earning a credit increases every year in line with the increase in average earnings.

Regardless of a person's job, city of residence, or employer, the credits earned remain on the individual's Social Security record. There are special rules that apply to earning work credits for certain types of work. The number of work credits required in order to be eligible for Social Security benefits depends on the age and type of benefit sought by the individual.

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