What Military Service Members Need to Know About Social Security

Maggie Schott
January 1, 2021

Military service members abide by many of the same rules as civilians when it comes to Social Security bar a few key differences. Certain military members may be entitled to extra earnings credits on their record while others may not. It’s important to consult a qualified Social Security claims attorney to ensure you’re getting all that’s owed to you.

Here in Washington and northern Idaho, we value our military servicemen and women who have given everything to serve their country. We want to help them get all of their hard-earned benefits, but the process can be complicated. Below is an outline of what returning service members need to know about earning Social Security and disability benefits.

All Military Members Are Eligible for Social Security

For those who served 1957-present, a portion of military pay has been set aside for Social Security taxes, much like regular civilian income. For those who served before 1957, special credit is issued for some of the service. In most cases, Social Security benefits are not affected by military retirement benefits and both can be earned at the same time.

How Military Income is Taxed for Social Security and Medicare

Income is taxed at 6.2% up to $137,700 for Social Security while Medicare is 1.45% on all amounts. High-income earners pay an additional 0.9% above certain earning levels. In order to qualify for benefits, military service members have to work and earn a certain number of credits. In 2020, those who made at least $5,640 will receive four credits (the maximum credit allotment). That minimum earning level goes up annually and no one needs to work more than 10 years or the equivalent of 40 credits.

Special Military Extra Earnings

For those who have served on active duty or active duty for training from 1957 through 2001, there are potential extra credits that could be awarded to an account. These could potentially increase the amount of monthly benefits.

For service 1957-1977, a credit of $300 is awarded for each calendar quarter in which active duty basic pay was received.

For service 1978-2001, for every $300 in active duty basic pay, a credit of $100 is awarded up to a maximum of $1,200 per year. (If enlistment wasn’t until after September 7, 1980, and a minimum of 24 months of active duty or a full tour wasn’t completed, the beneficiary may not qualify for extra earnings.)

For those who served 1940-1956, Social Security might credit the person’s account with $160 a month in earnings if:

The beneficiary was honorably discharged after 90 or more days of service or released because of a disability or injury received in the line of duty; or
The beneficiary is still on active duty
A survivor is applying for survivor’s benefits and the veteran died while on active duty.

These extra earnings credits are added to a record when applying for Social Security benefits and the additional earnings are credited to the earnings that the SSA averages over the applicant’s working lifetime, not directly to his or her monthly benefit amount.

For those disabled while on active military service on or after October 1, 2001, expedited processing may be possible. Go here for more information.

The decision age for taking Social Security can make a big impact on the benefits received. There are a number of options open to military service members and consulting a Social Security claims attorney can be a good way to ensure that you’re getting everything you deserve.

Schott Law takes pride in helping Washington and Idaho veterans with any and all Social Security needs, including disputes. Call (509) 328-5789 to learn more and schedule a free consultation.