Military, Veterans Military Service & Social Security: Special Extra Earnings

  1. If you served in the military, you may be entitled to special extra earnings credits as a veteran which could increase the amount of social security payments you receive. Anyone employed by the military should have paid Social Security taxes the same way general civilian employees have paid them. Social Security taxes on military earnings have been required since 1957. The process of obtaining Social Security benefits is similar process to the way non-veterans obtain them with some minor differences. The extra earnings credits that you may receive help you qualify for Social Security or increase the amount of the benefit you could receive from Social Security.

    Eligibility and Social Security Credits

    “Credits” are earned by paying Social Security taxes for a particular period of time. You must accrue a certain amount of credits in order to be able to qualify for retirement benefits, determined based upon the year you were born. For most people born after 1930 the required number of credits will be 40, which would equate to roughly ten years of full time work. For years prior to 1930, you may deduct one credit per year. You may earn a maximum of four credits per year, which is based on work performed in each quarter of the year.

    Amount of Social Security Benefits Paid

    Your total earnings during the time you worked will determine the amount of Social Security Benefits that you will be paid. If you earned fewer credits and may not have worked for a specific number of years, your benefits would be lower.
    Benefits to be received are also dependent upon your retirement age. While you can retire beginning at 62, you will only be entitled to full retirement benefits by reaching the full retirement age, which is determined according to the year you were born.

    Military Service Special Extra Earnings Credits

    If you are a veteran and have military service, you may be entitled to higher benefit amounts. The amount of time of your service in the military will determine the amount of extra earnings to which you are entitled. The eligibility for extra earnings mandates that you spent time on active duty or time training during active duty. There are also time frames that determine your extra earnings benefits.

    Military Service 1940 Through 1956

    If you served in the military between 1940 and 1956, you did not pay Social Security taxes. However, you can still receive a $160 credit for each month provided the following is met:
    • An honorable discharge after service of 90 or more days
    • A honorable discharge and release from duty due to an injury or disability received on active duty
    • The application made is for survivor’s benefits based upon military service of a veteran who died on active duty

    Military Service 1957 Through 1977

    Starting in 1957, people serving in the military paid Social Security taxes. They receive a $300 credit for every calendar quarter of military service when they were also on active duty. These credits are added to your earnings for the duration of your military career.

    Military Service 1978 Through 2001 and Beyond

    For those who served in the military between 1978 and 2001, a credit of $100 is added to every $300 earned for service while on active duty, resulting in a maximum credit awarded of $1,200 per year. Any earnings after 2001 are not awarded with extra credits.

    Survivor’s Benefits and Social Security Disability

    Disability benefits are also available to you if you have a serious disability. The disability must prevent you from engaging in significant employment. Social Security benefits do not cover short term disabilities – the disability must be expected to result in your death or to last greater than one year. The survivors of a veteran can also apply for survivor’s benefits. “Survivors” means the veteran’s spouse and children, including parents who are dependent on the veteran/child for support.

    Questions to Ask a Lawyer or Financial Advisor

    • What age would make the most sense for me to retire? What are the financial implications?
    • What are the requirements to prove being on active duty during my military service?
    • I have a disability and stopped working for a few years – how might this affect my qualification for Social Security benefits?
    Legal Topics:
    Military Benefits

    Michael M. Wechsler

    Michael M. Wechsler
    Michael M. Wechsler is an experienced attorney, founder of TheLaw.com and of-counsel to Kaplan, Williams & Graffeo, LLC. He was also an SVP and chief Internet strategist at Zedge.net and legal consultant at Kroll Ontrack, a leading service e-discovery and computer forensics service provider.

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