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Old Age, Disability, and Survivors Insurance

Nine out of ten workers in the U.S. are in employment or self-employment covered by the retirement, survivors, disability, and hospital insurance programs. The major groups not covered are:

  • A. Federal civilian employees hired before 1984.
  • B. Employees of state and local governments who are members of their employer's retirement system and who have not been covered by a voluntary Federal/State Social Security Agreement.
  • C. Certain agricultural and domestic workers.

Cash tips count for Social Security if they amount to $20 or more in a month from employment with a single employer.

To qualify for benefits or make payments possible for your survivors, you must be in work covered by the law for a certain number of “quarters of coverage,” or credits. Before 1978, a credit was earned if a worker was paid $50 or more in wages in a 3-month calendar quarter. A self-employed person got 4 credits for a year in which his or her net earnings were $400 or more.

In 1978, a worker, whether employed or self-employed, received one credit for each $250 of covered annual earnings up to a maximum of four for a year. The credit measure was increased as shown above, and will increase automatically in future years to keep pace with increases in average wages.


The number of credits needed differs for different persons and depends on the date of your birth; in general, it is related to the number of years after 1950, or after the year you reach 21, if later, and up to the year you reach 62, become disabled, or die. One credit is required for each such year in order for you or your family to get benefits. Credits earned at any time are used to decide if you have the number needed to qualify. No one will need more than 40 credits. Your local Social Security office can tell you how long you need to work.

Information Please® Database, © 2007 Pearson Education, Inc. All rights reserved.

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