Over 2.7 million Seniors Denied Social Security Benefits

In May, millions of Americans received Social Security benefits, a crucial financial lifeline for retired workers. However, a significant number

Nik Richie

Jun 25, 2023

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In May, millions of Americans received Social Security benefits, a crucial financial lifeline for retired workers. However, a significant number of seniors, approximately 2.7 million individuals aged 60 and over, will never receive these benefits. Let’s explore the factors that contribute to their exclusion from America’s top retirement program.

1. The Standard Path

Most Americans Earn Their Social Security Benefits
The majority of retirees qualify for Social Security benefits by accumulating 40-lifetime work credits through employment. These credits are earned based on income, with each credit equating to $1,640 of earned income in 2023. Full-time or part-time workers can meet the credit requirement, making it accessible to a broad range of individuals.

2. Exceptions to the Standard Path

While work credits form the basis for eligibility, certain exceptions allow individuals to receive benefits even without meeting the 40-credit threshold. Workers with long-term disabilities can qualify for benefits through a scaled age-to-credits table. Additionally, surviving spouses who did not work may qualify for survivor benefits if their deceased partner was the sole earner.

3. The “Never Beneficiaries”

Among the 76.9 million Americans aged 60 and older, approximately 3.5% (around 2.7 million seniors) fall into the category of “never beneficiaries.” The Social Security Administration classifies them into four distinct groups:

a) Late-Arriving Immigrants: Late-arriving immigrants aged 50 and above often lack the necessary time to accumulate the required 40 work credits. This group constitutes 45.8% of all never beneficiaries.

b) Infrequent Workers: Some individuals, despite being American citizens, fail to work or earn enough to accumulate the necessary work credits. They account for 39.6% of never-beneficiaries.

c) Non-Covered Workers: This category includes state and local government employees who have their own pension coverage, excluding them from Social Security benefits. Non-covered workers make up 13.4% of never-beneficiaries.

d) Deceased Before Benefits: A small percentage, 1.2%, includes seniors who pass away before reaching the age to claim benefits. These individuals never receive a payout from the program.

4. Poverty Rates and Impact

Among the four categories, non-covered workers and those who pass away before claiming benefits have lower poverty rates due to other sources of income. However, the poverty rates among infrequent workers and late-arriving immigrants are relatively high, affecting 67.2% and 57.3% of these groups, respectively.