How is a "work credit" defined in the context of Social Security?

A "work credit" in the context of Social Security is defined as being earned through specified earnings within a year. This system is designed to track an individual's work history and contributions to Social Security. Typically, workers earn credits based on their annual income, with a maximum number of credits that can be earned in a given year. As of 2023, for example, one work credit is earned for every $1,640 in earnings, up to a maximum of four credits per year.

This earnings-based framework ensures that those who contribute more to the system through employment benefit more in terms of future Social Security payouts, such as retirement, disability, or survivor benefits. Thus, accumulating the necessary number of work credits is essential for eligibility for various Social Security benefits.