What is the Social Security Special Minimum Allowance?

Social Security’s special minimum benefit was created in 1972 to provide benefits for those earning a low income. This program provides a minimum amount of primary insurance, or PIA from the government, for low-earning workers. It is used to calculate your monthly payment. Special minimum benefits are different from regular Social Security which is based on your past income. They are calculated based upon how many years you have worked.

The special minimum benefit allows you to qualify for $49.40 per monthly as the minimum primary insurance amount. This is if you have at least 11 years’ work experience. You can get the full minimum primary insurance amount with at least 30 year of work for $1,033.50 per monthly.

The monthly amount that you actually receive if this benefit is available to you will depend on when you apply for Social Security retirement benefits.

• If you file early, you’ll get less. Although you can apply for benefits beginning at age 62 (and less for those born before 1960), the amount you receive will be lower if your application is made before full retirement age.

• At full retirement age, you’ll get 100%. The Social Security Administration confirms that you will not receive a greater payout if your filing deadline is past the full retirement age.

You must have been working for at least 11 years and have earned at least a certain level of taxable income to be eligible for the special minimum Social Security benefits. The minimum income threshold for 2023 is $17 820.

After 30 years of service, the benefit is capped. At that time, you will be eligible for the special minimum amount as your primary insurance amount. This amounts to $1,033.50 per monthly in 2023. If you file early, your monthly benefit will be lower. If you file after full retirement age, your monthly benefit will be reduced.

When you retire, you will receive either the regular Social Security retirement benefits or the special minimum benefit. Both payments cannot be received at once.

The number of people who have taken advantage of the minimum special benefit has decreased over time as wages have increased. According to the Social Security Administration, this program was used by approximately 200,000 people in the 1990s. This number is now below 23,000.

You are eligible for the special minimum. Two main factors affect your monthly payment:

• What length of time you have worked. How long you have worked directly impacts the amount of income you will receive. After 11 years of service, you are eligible for the special prorated minimum benefit. However, if you work for 30 years or more, you will receive the highest monthly payment.

• You must file for benefits. Your monthly payments for retirement benefits will be lower when you file your application as soon as possible after you turn 62. For those born after 1960, the full retirement age is 67. However, it may be lower for those who were born earlier.

You’ll get 30% less if you retire at 62 than if your benefits were started when you were 67.

Although filing early may result in a lower monthly payment, it could still be worthwhile in certain situations.