Do Veterans Get Special Credit for Social Security?

Yes, and here's how it works

by: Stan Hinden, from: AARP Bulletin, January 6, 2011

En español | Q. In the December AARP Bulletin article "25 Top Questions & Answers on Social Security," you mentioned (Question 12) that Social Security grants many veterans "special credit" for military service. Can you give me more information about these "special credits"?

A. Yes, I can. The credits are extra Social Security wage credits, which are added to the Social Security earnings records of people who were on active military duty during certain time periods.

As the Social Security agency describes the process: "In all cases, the additional earnings are credited to the earnings that we average over your working lifetime, not directly to your monthly benefit amount." But because benefits are calculated based on your earning record, these credits generally result in higher monthly Social Security checks for qualifying veterans.

Since 1957, people on active duty in the military have been covered by Social Security and thus have paid Social Security taxes. And since 1988, Social Security has also covered people on inactive duty in the armed forces reserves (such as taking part in weekend drills). They, too, have paid Social Security taxes.

As a result, these veterans are able to draw Social Security retirement benefits along with their military retirement benefits.

Here are some details about those special wage credits. The following applies only to people who were on active duty or active duty for training during these time periods:

1940 though 1956. Veterans with active service during World War II (for bookkeeping purposes, this is defined as Sept. 16, 1940, through July 24, 1947) or the post-World War II period (July 25, 1947, through Dec. 31, 1956) may be credited with an extra $160 in Social Security earnings for each month of military service.
1957 through 1977. Veterans of this period are credited with $300 in additional Social Security earnings for each calendar quarter in which they received active duty basic pay.
1978 through 2001. For every $300 in active duty basic pay, these veterans are credited with an extra $100 in Social Security earnings, up to a maximum of $1,200 a year. If you enlisted after Sept. 7, 1980, and didn't complete at least 24 months of active duty or your full tour, you may not be able to receive these added earnings. Check with Social Security.

For credits due for service between 1957 and 1967, Social Security tells veterans, "We will add the extra credits to your record when you apply for Social Security benefits." For credits due for service from 1968 through 2001, Social Security adds, "You do not need to do anything … the credits were automatically added to your record."

For additional information about special earnings credits and the relationship between Social Security and the military, read the fact sheet "Military Service and Social Security."

For personal information, call Social Security at 1-800-772-1213. Lines are open 7 a.m. to 7 p.m. Monday-Friday.

Longtime financial journalist Stan Hinden is the author of How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire.