Q & A
I was denied for Social Security benefits and I’m shocked! What should I do?
Complete Question: I will be 66 years old this March and here I thought I was doing a good thing by waiting until I was full retirement age to file for my benefits. I even got a statement that estimated my benefit amount last fall. So I was shocked when I just applied and my application was denied! Social Security told me that I haven’t worked long enough. They told me I have 37 credits as of the end of 2014 – I don’t really even know what that means. They also told me I don’t qualify for spousal benefits because I’m single and wasn’t married to my ex-husband long enough. I know I have a spotty work history because I was a stay-at-home mom when my children were young, but I never expected this to happen. I already stopped working full time in December and now only work part-time since I knew my benefit check wasn’t going to be quite enough to cover my expenses. But now I don’t know what to do – I already reduced my hours and I can’t get Social Security. Is that it for me? Do I have any other options?
Answer: The bad news here is that it sounds like all the information you have been given is correct. Even though you got a statement of estimated benefits, the statement is just an estimate and is based on an assumption that you will continue to work and earn enough credits. The good news is that you do have the opportunity to become eligible for benefits. Social Security requires 40 “quarters of coverage” (QC), also called “credits” to be eligible for benefits. Since you already have 37, you do not have much further to go. To earn a QC in 2015, you have to earn $1,220. Therefore, for you to earn 3 credits in 2015, you only have to earn $3,660 (assuming you are paying Social Security taxes at your current job).
Even though you are now working part-time, you can still earn the $3,660 and quickly become eligible for Social Security benefits. The law changed many years ago and you no longer need to earn the credit in a calendar quarter. In other words, you can earn the entire $3,660 in the beginning of 2015 and not worry about it anymore for the rest of the year. However, there is a catch. You will not be credited with the QC until the actual calendar quarter has passed. For example, say that you earn $4,000 by February 15, 2015. Even though you earned enough credits in regards to the dollar amount, three actual calendar quarters need to pass before they are credited to you. Therefore, you will be eligible for Social Security benefits at the end of the third quarter of 2015, which is September 30th.
There are a couple good things about this situation. First of all, by adding earnings to your Social Security record, you are increasing your potential benefit amount. Even though you need a minimum of $3,660, if you earn more, you will increase your benefit payment. (This assumption is made based on your situation of not having enough work credits; therefore, you will be increasing your average earnings used to calculate your benefit amount. This may not be the case for everyone.) Secondly, since you will be eligible for benefits in October 2015, you can earn delayed retirement credits. Specifically, at the age of 66 and 7 months, you will earn an increase of 4.67% of your base benefit amount.
So do not give up – your eligibility is just around the corner.