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2. Who can collect, and when?

The best source of practical information about Social Security benefits is the literature made readily available by Social Security. District offices provide a multitude of readable brochures, and materials can be accessed on the Web and by calling Social Security (1-800-772-1213), but here are some basics:

Qualifying for Retirement Benefits (OASI)

To qualify for Social Security retirement benefits you must be credited with at least 40 “quarters of coverage”.
A quarter of coverage is earned by working for a “covered” employer (almost all are covered) and earning a certain minimum amount in a given period.
Since 1978 workers who earn a certain dollar amount any time within a calendar year earn coverage credits. A worker who earns $1,090 in 2009 will be credited with one quarter of coverage. If she earns $4.360 or more during the year she will be credited with four quarters.
The dollar amount increases from time to time, and no one can earn more than four quarters’ credit in any one year.

Qualifying for Disability Benefits (SSDI)

For disabled workers the number of quarters required for benefit entitlement may be different. Depending on your age, you may need fewer quarters of coverage to collect benefits, but you must have earned a minimum number of credits, some of which were earned just prior to disability: the "recent work test" and "duration work test").

Example: An individual disabled at age 48 must have worked for at least six years, including the five years just before the date of disability.
Workers found to be qualified for SSD, or Social Security Disability, may collect benefits for themselves and for their families.

"Disability" is defined as being so severely impaired, physically or mentally, that you are unable to perform any substantial gainful work that exists anywhere in the economy. Benefits are not payable to anyone unable to work only because of substance addiction.

It can be difficult to establish entitlement to disability benefits. Age can be a factor. A person claiming disability at age 60 might be considered disabled based on the problems similar to those of a 50-year-old whose application is denied. Workers who by any measure of common sense would appear to be disabled may be denied benefits when they first apply. If that is your experience and you feel you are entitled, you should appeal within the time stated. At that point it would be wise to obtain the assistance of an attorney who specializes in Social Security work. The average time for resolving an appeal is two years, but by far the majority of those who appeal are ultimately successful.

Once determined disabled, a beneficiary may do some work but may not exceed $980 a month in substantial gainful activity. A disabled beneficiary who wishes to and is able to do some work should get information about work parameters from SSA or a knowledgeable attorney or advocate.

Social Security Disability Insurance (SSDI) is a completely different program from Supplemental Security Income (SSI). SSDI is based on earnings and tax contributions; SSI is a means-tested program for seriously impaired children and for disabled adults unable to work or to contribute enough to the Social Security program to be eligible for benefits. See more about SSI in the article "Income Assistance" on this web site.

Check Earnings Statements

Social Security sends periodic statements of earnings to workers. You should always check to be sure all earnings are correctly recorded. The process of calculating benefits is briefly outlined below.

When to begin collecting benefits

You can collect as early as age 62, but your benefits will be reduced each month you collect prematurely, and the reduction is permanent. If your Full Retirement Age (FRA) is 66 and you start collecting benefits at age 62 your benefits will be reduced by 25%. Your spouse's benefits will be reduced by 30%. On the other hand, you will have four years of additional benefits. If you are not working it generally takes as much as 15 years for you to begin to "lose" money by collecting early-(assuming you live the anticipated life span.) If you continue working, however, the calculation is more complicated and it is different in each case.

If you wait to start collecting until age 70, your benefits will increase for each month you delay collecting. In any case, eligible spouses may collect one half of a husband’s or wife’s benefit amount.

There may be less incentive to delay retirement since the "work penalty" for earnings of those from Full Retirement Age until age 70 was eliminated in 2000.. Currently a worker may earn up to $37,680 in the year (s)he attains FRA but before reaching that birthday (S)he loses $1.00 for every $3.00 earned after that point. Those who collect Social Security retirement benefits at ages 62 - FRA forfeit $1.00 of every $2.00 over a specified amount ($ $14,160 a year or $ 1,180 a month in 2009).

Eligible spouses may collect one half of a husband’s or wife’s benefit amount. For spouses who have worked themselves, Social Security automatically calculates and pays the most favorable benefit between 100% of the individual’s benefit, and 50% of the spousal benefit.

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