Legal Definitions - work credits

Definition: Work credits are a way for the Federal government to determine if a person is eligible 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 benefits, a person must earn 40 credits to receive benefits.
• For Medicare, a person must earn 40 credits to receive full Part-A coverage. 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.
• For SSDI benefits, the number of credits needed depends on the age the person becomes disabled. For example, a person who becomes disabled at age 52 would need 30 credits (22 + (2*4) = 30).

These examples illustrate how work credits are used to determine eligibility for different government benefits. The number of credits needed varies depending on the program and the age of the person. Work credits are earned by working and earning a certain amount of money in wages. The more credits a person earns, the more likely they are to be eligible for benefits.