SOCIAL SECURITY: You say quarter ? I say credit
The end of March marks the end of the first calendar quarter in 2003. And this might be a good time to remind you that calendar quarters no longer are significant time periods when it comes to earning Social Security coverage.
I will bet you still use the term “quarters” when referring to the amount of time you’ve spent paying into Social Security. It is very common to hear someone say something like: “I’ve got my 40 quarters for Social Security.”
For the first four decades Social Security was in place, coverage was earned on a calendar quarter basis. The general rule was you earned one “quarter of coverage” if you made at least $50 in a specific three-month period: January through March, April through June, July through September or October through December. The number of so-called “quarters” you needed to be eligible for Social Security benefits depended on your age and the type of benefit in question. Most people needed 40 quarters for retirement benefits.
But for the last quarter-century, Social Security coverage has not been tied to calendar quarters. Since 1978, it has been based on the amount of money earned. For example, in 1978, you were given the maximum of four credits once you earned $1,000. If you made less than $1,000, you received one credit for each $250 you earned.
We started calling them credits because they were no longer earned on a quarterly basis. But old habits must die hard because, 25 years later, most Americans still refer to them as quarters.
Whether you call them credits or quarters, you still need 40 to be eligible for Social Security retirement benefits. Younger people need fewer credits to qualify for disability and survivors benefits. The number of credits required depends on your age.
For example, if you were born in 1960 and became disabled this year, you would need 21 credits to be insured for disability benefits.