By Chip Hollingsworth, CRP, CFEBS
As you well know, our military veterans have sacrificed much for the good of our country.
There is the obvious – the potential of losing life and limb in the name of liberty. But there is also the less obvious, like accepting lower compensation for military work as compared to civilian wages.
Up until World War II, military personnel weren’t covered by Social Security. Soldiers did not pay into the system, so they were denied benefits for their work while serving.
Thankfully, Congress realized the disparity and took action. After the war, legislation granted those in the military “extra credits” toward Social Security for service rendered.
It’s important to note these work credits are based on your military time and added to your lifetime earnings, as Social Security is calculated using lifetime earnings. The benefit is added to the Social Security check amount, not to your monthly veteran check.
So veterans must ask themselves – do I qualify for these benefits and am I getting the “special credits” I should?
Do You Qualify?
Unfortunately, not all veterans qualify. The credits are granted in various amounts to some veterans, all depending on the dates and lengths of their service.
To find out if you qualify, you should check the Social Security Administration (SSA) website and also inquire with your SSA representative. In general, these benefits apply to veterans who served from 1940-2001.
1940 - 1956
Extra $160 for each month of military service
1957 - 1977
Extra $300 for each calendar quarter in which you received active duty basic pay
1978 - 2001
Extra $100 for every $300 in active duty basic pay, up to a maximum of $1,200 per year
If you enlisted after Sept. 7, 1980, and didn't complete at least 24 months of active duty or a full tour, you may not be able to receive these added credits.
Unfortunately, Congress eliminated the program in 2001. Thus, military service in calendar year 2002 and later years no longer qualifies for the special credits.
How Do You Get The Credits?
The SSA says you don’t need to do anything – the extra credits are added to your earnings when you apply for either retirement or disability.
But I firmly believe that you should always inspect what you expect!
Question your SSA representative about whether or not your work record accounts for the time. You may be asked to verify or prove your military record, so be prepared. Most veterans rely on DD Form 214, the certificate of release or discharge from active duty, to do so.
If you need to obtain copies of your military records, including DD Form 214, the National Archives can help. You’ll need to provide some basic information to get the process started, and it’s usually completed in a few weeks or less, but can take more time for complex requests.
Social Security benefits can increase your income tax liability, so be sure to work with a Certified Federal Employee Benefits Advisor or well-trained tax professional to plan. Many investment accounts can shelter your earnings, decreasing your total taxable income and the resulting hit on your Social Security check.
If you’re already receiving federal benefits based on your years of service, normally the special earnings credit cannot be applied, except in rare cases. The SSA applies the extra earning credits to your record when you apply for
The bottom line is it’s important to work with advisors you trust. This will help ensure you’re receiving credits you earned for defending our country. Get the benefits you deserve! And please accept my sincere thanks for your service.
Chip Hollingsworth, founder of the Federal Employee Benefits Assistance Agency, has been successfully providing his clients with sound financial guidance for over 30 years. Chip has been a trusted advisor to Federal employees and retired/disabled veterans for over a decade, managing thousands of clients across the country. For more information visit him online or call 256-467-4520.