In order to qualify for SSDI (Social Security disability insurance) you need to have enough credits paid into the system to be fully insured. With a few exceptions for younger workers, you will need 20 credits within the ten year period prior to becoming disabled to achieve fully insured status. What exactly does this mean?
What is a Social Security Credit?
First, let’s define the term Social Security credit. In 2016, you will generate one credit after you have earned $1,260 gross wages in a calendar year. You will generate additional credits for each $1,260 of gross wages you earn:
1 credit = $1,260
2 credits = $2,520
3 credits = $3,870
4 credits = $5,040
Unfortunately, you can earn no more than 4 credits in any one calendar year. However, your earnings do not need to be spread out over the year. For example, if your gross wages were $6,000 in January, 2016, you would generate all 4 credits for 2016 even if your earnings for the rest of 2016 were zero.
$1,260 represents the earnings requirement for 2016. In years past, this earnings requirement was different, and the requirement will be different in the future. Here are the earnings requirement for one credit for the past 10 years:
2015: $1,220
2014: $1,200
2013: $1,160
2012: $1,130
2011: $1,120
2010: $1,120
2009: $1,090
2008: $1,050
2007: $1,000
2006: $970
(Source: https://www.ssa.gov/oact/cola/QC.html)
Five Out of Ten Rule
Since you can earn a maximum of 4 credits per calendar year, you will need five years of full time earnings to generate 20 credits. This is why you sometimes hear that in order to qualify for SSDI you need to have worked for five out of the past 10 years.
Take note that you must have generated your 20 credits within the ten year period prior to becoming disabled. The disability program does not look at lifetime earnings. So if you have 20 credits within the past twenty years, you will not be insured for SSDI.
As a rule, if you have been working full time, and you have earned at least $5,040 per year during the past ten years, you will be fully insured now, and for the next five years. In other words, your insured status remains alive for approximately 5 years after you stop working.
The month your SSDI eligibility runs out is called your date last insured (DLI). Again, your DLI will fall approximately 5 years after you stop working full time.
When you apply for SSDI, you always want to allege an onset (start) date for your disability before your DLI. If you allege a date after your DLI, you will only be considered for SSI.
Social Security Credit Example
Here’s an example: Sam worked full time for ABC Company for almost 20 years – 1990 – March, 2010. He suffered a stroke on March 12, 2010 and has not been able to return to work. Sam’s DLI will be approximately March 31, 2015, which is 5 years after he stopped working.
Sam is eligible for SSDI because his onset date of March 12, 2010 was well before his DLI of March 31, 2015. Even if Sam applies for SSDI after March 31, 2015 he will still be eligible for disability because his onset was before his DLI.
- If, however, Sam got laid off in March, 2010 and could not find a job thereafter because of a poor job market, and he suffered his stroke on August 7, 2015, he would not be insured for SSDI since his onset date (August, 2015) was after his DLI (March 31, 2015).
Finally, note that the question of whether Sam was insured for SSDI when he became disabled has nothing to do with the amount that Sam would receive in monthly benefits. The amount of your SSDI payment will be calculated based on what you have paid into the system in taxes. So, in our example, if Sam generated his credits while earning $17,000 per year, he will get a much smaller check than he would if he earned $85,000 per year.
Big Picture Take-Aways
Questions about insured status for SSDI can be confusing, so here are a few “big picture” takeaways:
- apply for SSDI as soon as you realize that your medical condition is severe enough to prevent you from working full time
- use the earliest possible onset date that is reasonable. Typically a good date to use is the last date you were able to work full time
- if you work part time and earn less than $5,000 per year, you could find yourself running out of credits
- if you have questions about earnings credits, your date last insured or choosing an onset date, please pick up the phone and call me at 770-393-4985, or use the form on this page to email me. Don’t guess.
