In order to be eligible for Social Security and Medicare benefits, you must have worked long enough and in some cases, recently enough, to qualify. As you work and pay taxes, you earn Social Security quarters of coverage or credits. The amount of money you must earn each quarter to obtain one credit goes up every year based on wage inflation.  For example, in 2008 a worker will get one credit for each $1,050 of annual earnings on which Social Security taxes are paid.  A maximum of four credits can be earned within one calendar year.

The number of credits needed to qualify for benefits also depends upon the type of benefit. A general "rule of thumb" is that people need 40 credits (or 10 years of work) to obtain retirement benefits. It does not matter when the credits are earned, nor is the dollar amount of the benefit based on the number of credits. All credits that you have earned remain on your record, even if you have not worked for a period of time. Your benefit amount is based on your earnings averaged over most of your working career—higher lifetime earnings result in higher benefits. If you have some years of no or low earnings, your benefit amount will probably be lower than if you worked steadily.