Most of us assume that Social Security is a given—work, pay taxes, earn benefits. Simple, right? But here’s the twist: not everyone pays into the Social Security system, and that means not everyone can count on it for retirement or disability benefits.
Social Security currently provides benefits to over 47 million people, including retirees, people with disabilities, and family members of eligible workers. The majority of American workers automatically contribute to the program through payroll taxes (known as FICA), earning Social Security credits along the way. But there are exceptions—some workers don’t pay in and, as a result, won’t receive benefits.
Who Doesn’t Pay Social Security Taxes?
In 15 states, many teachers and public sector workers don’t pay Social Security taxes and therefore don’t earn Social Security benefits. If you work in one of these states, your earnings might not count toward your Social Security record. These states include:
- Alaska
- Arizona
- Arkansas
- California
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maryland
- Massachusetts
Instead of participating in Social Security, many state and local government employees in these states are covered by separate public pension programs. While these pension plans may provide retirement income, they don’t offer Social Security benefits, including spousal or survivor benefits, unless the worker has also earned enough Social Security credits elsewhere.
How Do Social Security Credits Work?
For most workers, earning Social Security benefits is straightforward:
-
- Employees pay 6.2% of their wages into Social Security through payroll taxes, and employers match that contribution.
-
- Workers earn up to 4 credits per year based on their income.
-
- After 40 credits (typically 10 years of work), they qualify for retirement benefits.
-
- For Disability Benefits (SSDI), workers generally need 20 credits in the last 10 years to be considered “insured.”
The longer you work and the more you earn, the higher your eventual Social Security benefit will be. But if you work in a non-covered position and don’t pay Social Security taxes, your earnings don’t count, and you’ll need to rely on other retirement income sources.
Why Aren’t Some Workers Covered by Social Security?
When Social Security was first introduced in 1935, it applied only to private-sector employees. At the time, there were legal concerns about whether the federal government could require states to participate. It wasn’t until the 1950s that states were given the choice to enroll their public employees in Social Security. Many states opted in—but some did not, leaving certain workers without Social Security coverage to this day.
What If You Work Both in a Covered and Non-Covered Job?
Many teachers and public employees work part of their careers in jobs that do pay into Social Security. If you’ve worked both types of jobs, your benefits could be affected by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)—rules that can reduce the amount of Social Security benefits you receive.
If you’re in a profession that doesn’t contribute to Social Security, make sure you understand how your pension plan works and whether you’ll need additional retirement savings to supplement it.
Final Thoughts – What is my Social Security Eligibility?
For most workers, Social Security is an automatic safety net—but not for everyone. If you or someone you know works in a job that doesn’t pay Social Security taxes, planning for retirement is even more important. Be sure to check your Social Security statement and understand your eligibility so there are no surprises later on!
