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Qualify for Medicare Part A On Your Own Work Record

Copyright © 2014 AARP. All rights reserved.

You need to earn 40 work credits — sometimes called quarters of coverage — before becoming eligible for premium-free Medicare Part A benefits at age 65 or over or to qualify for Social Security retirement benefits. Here’s how credits are calculated:

  • Work credits are calculated on income that you work for and that’s taxable — that is, earnings on which you pay Social Security and Medicare payroll taxes. This category includes wages from an employer and earnings from self-employed work. It doesn’t include income from pensions or from interest or dividends on investments and savings.

  • You must earn a certain amount of money to get one work credit; the amount tends to go up a little each year. In 2013, the amount is $1,160.

  • You can earn a maximum of only four work credits in any one year. In 2013, this limit amounts to earnings of $4,640. When in the year you earn your credits doesn’t matter. You may have to work all year to earn four credits, or you may earn all four much earlier in the year, even within the first three months.

  • Racking up 40 credits usually takes at least 10 years of work, but these years need not be consecutive. You earn credits whenever you work and pay payroll taxes, even if you have long breaks between spells of work.

Not everyone works in jobs that require paying Social Security taxes. For example, federal workers have their own retirement system and don’t have to contribute to Social Security. However, since 1983, all federal workers have been required to pay Medicare payroll taxes, which entitles them to Part A benefits without paying premiums but not to Social Security retirement benefits.

Different rules relating to work credits may apply in certain circumstances. Contact Social Security to discuss your credits if you’re

  • Self-employed and earning less than $400 a year

  • In the military (you may get additional credits in some situations)

  • Performing domestic work or farm work

  • Working for a church or church organization that doesn’t pay Social Security taxes

Social Security keeps a record of your earnings and work credits, compiled from employers’ reports and tax records. It sends out statements telling people age 60 or older how near they are to being “fully insured” — meaning entitled to Medicare and retirement benefits.

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