Retirement & Financial Planning Report

Federal employees covered by the FERS retirement system and by the CSRS Offset system pay into Social Security and for many of them, qualifying for later benefits under that system is not an issue. However, employees under “pure” CSRS don’t pay into Social Security as federal employees. Many of them have some Social Security-covered employment from before they joined the federal government, including through military service, leaving them with the question of whether they will qualify.

In some cases, employees may be closer than they think and even limited employment (or self-employment) after retiring from the government will be sufficient to make them eligible. Many end up taking at least part-time jobs primarily to gain that coverage entitlement.

Social Security work credits are measured in quarters of coverage. The minimum requirement is six credits for death and disability benefits and the maximum is 40 credits of coverage. An employee who has accumulated the required number of credits is considered to be fully insured and eligible for most types of benefits.

An additional insured status test must be met by employees in order to qualify for disability insurance benefits. For example, employees who become disabled after age 31 must have worked under Social Security at least five of the last 10 years preceding the onset of disability.

Fully insured employees are eligible for benefits as early as age 62, but benefits are permanently reduced for each month of entitlement prior to the full-benefit retirement age. The “full” retirement age, at which unreduced benefits are payable, is now 66.

Employees who are fully insured and who become disabled are eligible for unreduced benefits, regardless of age. Under the Social Security law, a person is considered disabled if he or she is unable to engage in any substantial gainful activity due to a physical or mental impairment that lasts for at least 12 months or is expected to result in death. The term “substantial gainful activity” refers to the performance of significant productive physical or mental duties, generally for pay or profit. This standard is higher than the one for disability retirement under CSRS/CSRS-Offset and FERS.

Employees should with Social Security, (800) 772-1213 or, to determine their coverage status. In many cases, CSRS employees who qualify will have their benefit reduced by the windfall elimination provision, however. That reduction, which reduces Social Security for those who have less than 30 years of substantial Social Security earnings, can result in a maximum reduction of around $400 a month.