Social Security: Who Is Covered Under the Program?

Social Security: Who Is Covered Under the Program?

Updated January 18, 2022
Social Security: Who Is Covered Under the Program?
Social Security pays cash benefits to over 65 million people
the workforce at the time). Initially, the program provided
each month. In all cases, a Social Security beneficiary
monthly pensions for insured workers aged 65 or older.
becomes eligible for benefits either by working in a job that
is covered by Social Security (a covered worker), by having
Over the years, Congress expanded Social Security
a close family relationship to a covered worker, or both
coverage, bringing most employees and self-employed
(among other requirements). For people who work in jobs
workers into the system. Today, most jobs in the United
that are covered by Social Security, participation is
States are covered by Social Security, whether the work is
mandatory. Covered workers and their employers are
performed by U.S. citizens or noncitizens, with some
required to pay Social Security payroll taxes. In 2022,
exceptions. In this context, the United States is defined as
workers pay 6.2% of earnings in covered employment up to
the 50 states, the District of Columbia, the Commonwealth
a maximum earnings of $147,000. The maximum is
of Puerto Rico, the territories of Guam and American
adjusted annually based on average wage growth in the
Samoa, the U.S. Virgin Islands, and the Northern Mariana
national economy. Employers pay a corresponding
Islands. In some cases, work performed outside the United
amount—6.2% of the worker’s covered earnings up to the
States by U.S. citizens or resident aliens (noncitizens) is
annual maximum. Self-employed workers pay 12.4% of net
covered by Social Security (for example, if the person is
earnings up to the annual maximum.
employed by an American employer, employed by a
foreign affiliate of an American employer that has elected
To become eligible for benefits, a worker must have a
coverage for its employees, or, under certain circumstances,
sufficient connection to covered employment, which is
self-employed). See Internal Revenue Service (IRS), Social
measured in terms of Quarters of Coverage (QCs). In 2022,
Security Tax Consequences of Working Abroad. Over the
a worker earns one QC for every $1,510 in covered
years, Congress also expanded the types of benefits
earnings up to a maximum of four QCs for the year (based
available under the program. For example, benefits were
on covered earnings of $6,040 or more). The amount
provided for the worker’s dependents and survivors in 1939
needed to earn one QC is adjusted annually based on
and for disabled workers in 1956.
average wage growth in the national economy. When a
worker has earned a sufficient number of QCs, he or she is
Major Categories of Work Not Covered
insured under the program. The number of QCs needed for
The rules surrounding Social Security coverage and
insured status varies depending on the circumstances and
exceptions are extensive. This In Focus provides an
type of benefit, ranging from a minimum of six QCs to a
overview of the major categories of work that are not
maximum of 40 QCs. Insured status allows a worker to
covered by Social Security. If the work is not covered, the
establish eligibility for retired-worker or disabled-worker
earnings are not subject to Social Security payroll taxes,
benefits and for the worker’s family members to establish
and they do not count toward the worker gaining insured
eligibility for benefits in the event of the worker’s
status under the program (i.e., they do not count toward
retirement, disability, or death. See CRS Report R42035,
establishing benefit eligibility for the worker and his or her
Social Security Primer.
family members). For detailed information on the definition
of employment for Social Security purposes, see Section
Most jobs in the United States are covered by Social
210 of the Social Security Act (42 U.S.C. §410); Title 20,
Security. Recent estimates by the Social Security
Part 404, of the Code of Federal Regulations, Subpart K;
Administration (SSA) show that about 176 million people
and SSA, Coverage and Exceptions.
were expected to work in covered employment in 2021 and
that about 94% of workers in paid employment and self-
 Civilian federal employees hired before 1984. Most
employment are covered under the program. This In Focus
civilian federal employees hired before 1984 are
discusses Social Security coverage and the major
covered by the Civil Service Retirement System, which
exceptions to mandatory participation in the program.
does not have a Social Security component. Civilian
federal employees hired in 1984 or later are covered by
Nearly Universal System
the Federal Employees’ Retirement System, under
Social Security began as a compulsory federal old-age
which participation in Social Security is mandatory. See
benefits program established under Title II of the Social
CRS Report 98-810, Federal Employees’ Retirement
Security Act of 1935 (P.L. 271, 74th Congress). The original
System: Benefits and Financing.
program covered employees under the age of 65 in
 Some state and local government employees. State and
commerce and nonagricultural industry (excluding
local government employees are not required to
railroads) in the 48 states that existed at the time, plus
participate in Social Security if they participate in public
Alaska, Hawaii, and the District of Columbia (about 56% of
retirement systems through their employers that meet
certain requirements. (In general, the public retirement
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Social Security: Who Is Covered Under the Program?
system must provide a retirement benefit that is
covered by Social Security; however, there are
comparable to Social Security.) However, in all states,
exceptions. For example, work performed by a person
they may elect coverage on a group basis through
who is a citizen of a foreign country with which the
coverage agreements between the state and SSA known
United States has a totalization agreement is not covered
as Section 218 agreements. Coverage is mandatory only
if the person works in the United States for less than five
for those state and local government employees who do
years. See SSA, International Agreements. In addition,
not participate in public retirement systems that qualify
work performed by noncitizens under certain
as an alternative to Social Security. SSA data shows that
nonimmigrant (temporary) visas is not covered. For
there were 23.2 million state and local government
example, work performed by foreign academic students
employees in 2018. Of those, 16.6 million (71.5%) were
(F-1 visa), foreign vocational students (M-1 visa),
covered by Social Security; 6.6 million (28.5%) were
foreign exchange visitors (J-1 visa), international
not covered. Across the states, the percentage of state
cultural exchange visitors (Q visa), and foreign
and local government employees with Social Security
agricultural workers (H-2A visa) is not covered. See
coverage varied widely, ranging from 3% to 97%. See
SSA, Coverage of Work Performed by Certain
CRS Report R46961, Social Security Coverage of State
Nonimmigrant Aliens; and IRS, Aliens Employed in the
and Local Government Employees.
U.S.—Social Security Taxes.

For certain types of work, there are specific coverage
Railroad workers. Railroad workers have their own
thresholds, as described below.
federal insurance system that dates back to the 1930s.
Today, programs administered by the U.S. Railroad
 Farm work is excluded from coverage if the employer
Retirement Board provide retirement, survivor,
pays the individual less than $150 in cash for the year
disability, unemployment, and sickness benefits to
and the employer’s total expenses for agricultural labor
workers who have spent substantial portions of their
are less than $2,500 for the year. Work performed by
careers in railroad employment and their family
seasonal farm workers (hand-harvest laborers) is
members. Although a separate system, it is closely tied
excluded if the employer pays the individual less than
to the Social Security program. For example, if a
$150 in cash for the year. See IRS, Pub. 51, Circular A,
railroad worker does not meet the minimum
Agricultural Employer’s Tax Guide
requirements for a railroad pension, his or her railroad
(Section 4).
earnings count toward his or her Social Security
 Self-employed workers with net earnings below $400
earnings credits. See U.S. Railroad Retirement Board.
for the year are generally excluded from coverage. See
 Certain family employment. Certain family
SSA, Pub. No. 05-10022, If You Are Self-Employed.
employment is excluded from Social Security coverage.

For example, the service of a child under the age of 18 is
Election officials and election workers with earnings
not covered if the child works for his or her parent in a
below $2,000 in 2022 are generally excluded from
trade or business, and the trade or business is a sole
coverage. The dollar threshold is adjusted annually
proprietorship or a partnership in which each partner is a
based on average wage growth in the national economy.
parent of the child. See IRS, Family Help.
See SSA, Election Officials and Election Workers.
 Certain work performed by students. Work performed
 Household employees with earnings below $2,400 in
by students who are employed by the schools, colleges,
2022 are excluded from coverage. The dollar threshold
or universities where they are pursuing courses of study
is adjusted annually based on average wage growth in
is generally not covered if education is predominant in
the national economy. See IRS, Employment Taxes for
the student’s employment relationship with the
Household Employees.
academic institution. If the institution is operated by a
Social Goals of the Program
state or local government, the work may be covered
under the terms of a Section 218 agreement between the
Social Security is the nation’s largest federal program. As a
state and SSA. See IRS, Student Exception to FICA Tax.
social insurance system, Social Security is funded primarily

with payroll taxes paid by covered workers and employers,
Certain members of the clergy and others. Ministers,
and it provides monthly cash benefits to insured workers
members of religious orders who have not taken a vow
and their family members when the worker experiences a
of poverty, Christian Science practitioners, and
loss of earnings due to the worker’s retirement, disability,
members of recognized religious sects (such as the
or death. Social Security provides benefits to people of all
Amish and Mennonites) are automatically covered by
ages, including retired workers, disabled workers, spouses,
Social Security, but they may file for an exemption with
former spouses, surviving spouses, and dependent children.
the IRS on the grounds of conscience or religious
For many beneficiaries, Social Security represents a sizable
principle. Members of religious orders who have taken a
share of total income and serves to keep them out of
vow of poverty are not automatically covered, but the
poverty. Given Social Security’s role in reducing poverty,
religious order may elect coverage for its members by
which benefits the nation as a whole, some argue that some
filing a request with the IRS. See IRS, Pub. 517 (2020),
noncovered workers should be brought into the system to
Social Security and Other Information for Members of
share in the program’s broader social goals. For example,
the Clergy and Religious Workers.
the Social Security Advisory Board and others have
 Certain work performed by noncitizens. In general,
proposed making Social Security coverage mandatory for
work performed by noncitizens in the United States is
all newly hired state and local government employees.
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Social Security: Who Is Covered Under the Program?

IF11824
Dawn Nuschler, Specialist in Income Security

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