Enhancing Social Security benefits for low earners: Effects of reducing
eligibility requirements for Social Security retirement benefits
Version of November 14, 2008
A research project for the National Academy of Social Insurance
Andrew G. Biggs, Ph.D.
Resident Scholar, American Enterprise Institute
Acknowledgements: I wish to acknowledge the National Academy of Social Insurance for its
financial support for this project; Martin Holmer for advice and programming assistance with the
GEMINI model; Russ Walker and David Weaver of the Social Security Administration for
useful tabulations of administrative data; Adam Paul, for research assistance; and the participants
in a discussion group organized by NASI for very helpful advice.
1 | P a g e
Under current law, eligibility for Social Security retirement benefits requires 40 quarters
(roughly 10 years) of earnings in covered employment. While individuals with less than 40
quarters of employment may receive benefits based on the earnings record of an eligible spouse,
a small number of unmarried individuals fail to qualify for retirement benefits due to a short
earnings record. These non-qualified individuals often must depend on Supplemental Security
Income (SSI) for support in retirement. However, SSI eligibility requirements limit earnings and
asset accumulation, making it more difficult for beneficiaries to work or save.
This paper explores the effects of eliminating the 40 quarters eligibility requirement.
Doing so would allow retirement benefit eligibility for individuals with very short work histories
and reduce dependency on SSI benefits. The effects of reducing the 40 quarters eligibility
requirement are analyzed for the 1950 birth cohort using the Policy Simulation Group’s GEMINI
and PENSIM microsimulation models of the Social Security population and private pensions.
Eliminating the 40 quarters eligibility requirement would increase benefits for
approximately 5.8 percent of indivi