• Chris Stein, CFP®

Qualifying for Disability Benefits

A question about qualifying for Social Security Disability Benefits:

“I am 58 and worked from 2015 to February 2019, with very remote work before then. I have 16 quarters of Social Security contributions paid in and need 20 quarters to qualify for disability. I am self-employed and my CPA projects I will earn about $13,000 by June. If each quarter requires $1,360 in earnings, can I pay myself enough now through my corporation to cover four quarters, so Social Security recognizes enough earnings for disability? I have cancer and would like to file for disability as soon as possible, but the local Social Security office says I do not have enough credits. Can you explain what the problem might be?”

Qualifying ‘Quarters’ or ‘Credits’ for Social Security Disability Benefits:

By ‘quarters,’ Social Security is referring to you earning ‘credits’ within its system. Today those words are used interchangeably. You used to earn one of them every three months, or each quarter.

Because it was unfair to seasonal workers, several years back Social Security changed how they calculated credits, so you no longer have to earn money in every quarter of the year. Today you can earn up to four credits per year, regardless of when the earnings occur. A credit represents $1,360 of earned income, or $5,440 for a year’s four quarters.

However, they still have this foundational idea that the system is somehow based on quarterly earnings. While Social Security no longer cares when you earn the money (as long as you cover the minimum), they still award the credits to you on a quarterly basis: one each on January 1, April 1, July 1 and October 1.

How This Applies

For retirement benefits, you need 40 quarters to qualify. Qualifying for disability benefits requires 20, and you have 16, so you are pretty close. And you have more than enough earnings available to cover the $1,360 per quarter minimum, or $5,440 for four quarters.

However, there is a glitch. Even if Social Security recognizes contributions on $5,440 or more now, it is not going to grant you the fourth credit officially until October 1. Therefore, if you wait to October 1 to file, you will have the 20 credits needed to qualify for disability benefits, but you do not have them now.


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