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  • Writer's pictureChris Stein, CFP®

When Is a Quarter Not a Quarter?

Today I bring you what turns out to be a bit of a tragic story.  We had a reader contact us who had been denied Survivor Benefits, even after an appeal, on the grounds that the deceased had not earned enough QCs (Quarters of Coverage) to become “fully insured”.

Quarter of Coverage

In summary, a person needs to earn 40 QCs to be eligible for a Social Security Retirement Benefit and for their spouse to be eligible for Spousal and Survivor Benefits on the worker’s record.  Our previous blog outlined what a person had to earn to be awarded a QC in the past, but in 2016 the magic number is $1,260.  Every year you can earn up to 4 QCs (no more) as long as you earn $1,260 x 4 = $5,040 ANYTIME during the year.  You no longer have to earn money in each quarter, but instead they just look at the yearly total.

Let me now describe our reader’s situation.  Our reader’s husband died in June of 2015.  As of the end of 2014 he had earned 36 QCs.  So as we now know he needed 4 more QCs to be considered insured and enable his widow to collect Survivor Benefits.  He earned over $15,000 in 2015 before he died in June.  In July the reader (the widow) applied for Survivor Benefits on her deceased husband’s record thinking he had earned well over the amount needed to earn 4 QCs in 2015 (in 2015 the amount was only $4,880).  Her application was DENIED.

POMS Manual

The reader appealed the decision and once again was denied, but the letter was not very clear as to why.  Well, if we turn to the Social Security “Rulebook”, which is called the POMS manual, we can see the reason for the denial.  A copy of this rule is found here:

“2.  Individual dies

Do not count any quarter after the quarter in which an individual dies (consider wages paid to the survivor, or number holder’s (NH) estate in the quarter of death paid to the NH and therefore, may yield a QC).”

So since he died in June he can only be credited with 2 QCs, not 4.  This brings him to a total of 38 QCs on his record.  This means he is not eligible for a Retirement for himself, nor  Survivor Benefits for his widow.  The reader will get NOTHING from her husband’s Social Security record since he was 3.5 months short in earning QCs.  A very tragic story indeed.

Bottom line is that a calendar quarter is not a quarter of coverage, and a QC is not just a function of earnings, but you also have to live long enough to get the credit.

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