Social security retirement benefits and disability benefits provide valuable financial support to millions of Americans. More than 37 million Americans, that is, about 12% of the population are classified as disabled, the U.S. Census Bureau says. Eligible applicants are granted disability benefits after a detailed medical record analysis which makes medical review services highly significant. Many people are covered by Social Security and the Social Security Administration (SSA) puts long-term disability protection at 90% of the current workforce between the ages of 21 and 64 whereas 96% of the workforce between 20 and 49 has survivors’ insurance protection in place for their spouse and/or young children.
It is important though, to understand that social security retirement benefits are not a privilege but must be earned through work credits. You have to earn 40 lifetime credits – a maximum of 4 can be earned each year. Regarding disability benefits, there is a minimum amount of time you need to have worked in the past to even qualify for social security disability benefits. You have a better chance of getting approved, the older you are and the more consistently you have been earning wages. If you become disabled, the SSA uses two calculations to determine if you have paid enough into the program to qualify:
- The “recent work test” that is based on your age at the time you became disabled. A person becoming disabled during or before the quarter she turns 24 must have worked at least 1.5 years during the 3-year period leading up to her disability. A 31-year-old person must have worked 5 years out of the previous 10.
- The second is the “duration of work test” to find out if the person has worked long enough (not during any particular period of time) in general to qualify for benefits.
Apart from the number of years a person worked, the SSA will also consider her current income.
Disability benefits apart, not everyone will receive a retirement benefit from the SSA. Let us consider the categories of people who are unlikely to receive a social security retirement benefit.
- Occasional or infrequent workers: If you don’t accumulate enough work credits, you will not qualify for retirement benefits. There are people who stop working to become full-time parents or to take care of a sick parent or friend. It is important to understand that the bar for earning these credits is quite low – each credit works out to $1,360 in earned income in the year 2019. To max out your work credits for this year, you will need only $5,440 in earned income. If you can do this for ten years, you can qualify for retirement benefits.
- Immigrants who are not documented: Undocumented immigrants will not qualify for retirement benefits from social security. They may get SSI benefits that are funded in a different way and are paid to refugees, asylum seekers, and people admitted for lawful permanent residence. But SSI is not a traditional social security benefit. There are undocumented workers who use a false social security number (SSN) or a friend’s SSN to receive their wages, which may be taxed. However they will not receive any of the money they give to social security.
- Legal but older immigrants: Typically, migrants to the United States are young and likely to spend many years in the workforce. They contribute to the social security program by paying payroll tax, and can receive social security benefits when they retire. However, older immigrants in the 50+ age group may not have the physical calibre to work long enough and earn the mandatory 40 work credits. Therefore, this group of workers also may not receive retirement benefits.
- People who die before receiving benefits: A worker may die before reaching the age of 62, which is the earliest point at which he/she can retire and claim social security benefits. Also, some workers may choose to claim at a later time than age 62 and pass away before that age. In both these instances, workers who have the 40 lifetime work credits may not be able to claim retirement benefits.
- Workers who are not covered: There is a category of workers who may have worked long enough to acquire the 40 work credits needed to receive a social security benefit but may not receive it. These non-covered employees such as state and local government workers usually have pension plans in their respective state or county. For them, the pension program takes the place of the social security benefit they would have received if they had been part of the 175 million covered employees. According to the SSA, approximately 170,000 Americans aged 60 to 89 do not receive a benefit because they are non-covered employees. Non-covered employees include:
- Some state, municipal, and county employees who are covered by state-funded pension plans instead of social security.
- Railroad employees covered by a separate pension system introduced in the 1930s, around the same time as social security.
- U.S. government employees hired before 1984, the year federal agencies came under social security. These workers get pensions under the old Civil Service Retirement System.
- Foreign nationals working in the United States for their home governments or for international organizations such as the United Nations.
Though the above mentioned employees are not covered by social security, they may have accumulated sufficient earnings in part-time or second-career jobs in the private sector and may qualify for a non-covered pension as well as social security benefits. However, their social security payments could be reduced via social security’s Windfall Elimination Provision.
A social security lawyer will be able to guide people planning to claim retirement or disability benefits. When reviewing a claim for disability benefits, lawyers utilize medical review services to determine eligibility of the applicant. There is no doubt that the SSA is very efficient and will continue to function in the same manner providing the much needed financial support for retired and disabled Americans. It spends $5 billion to $6 billion a year, i.e. around 6% of the total revenue collected. According to the SSA, the program is designed to compensate for approximately 40% of a worker’s wages during retirement. Regarding disability, the SSA estimates that more than a quarter of today’s 20-year-olds will become disabled before reaching their 67th birthday (the full retirement age for those born in or after 1960). Though not everyone will reach 40 work credits, they can still be covered. There is a staggered work-credit scale for disabled persons, which allows them to qualify with lesser than 40 credits. Moreover, survivor benefits may enable a spouse to qualify for benefits without having worked even a day in his/her life.
