Social Security has a program to assist those persons who are not working while taking care of children under the age of three. They call this the Childhood Dropout Year (CDY). This program is so little known and so complicated that a recent study showed precisely 1 person got the benefit between 2005 and 2016. This was 1 person out of the 165,000 were potentially eligible.
So, what is CDY?
In essence, CDY allows SSA to drop certain years of non-earnings when calculating disability benefits. Social Security calculates all their benefits (except for SSI) on the applicant’s earnings history. Years with no earnings will lower the benefit amount.
Four Steps To Qualify
To qualify for CDY, an applicant has to meet four requirements.
Requirement 1: The beneficiary must have been living with a child under age 3 for at least 9 months of a year. For partial years (that is, years during which the child was born, attained age 3, or died), the period during which the child was not living with the beneficiary cannot exceed 91 days, or half the period in question, whichever is less.
Requirement 2: The beneficiary must have no earnings for the CY(s) he/she has been living with the child mentioned in Requirement 1.
Requirement 3: The beneficiary must be age 25 through 36 in the year disability began, which means the beneficiary would have 3 to 14 elapsed years (see Table 2) and fewer than 3 disability dropout years. SSA will drop out up to 5 of a beneficiary’s elapsed years (SSA counts from age 22 through the year before the disability began to compute the number of elapsed years) with the lowest earnings in calculating the average monthly earnings amount, known as the 1-for-5 rule. The rule is applied as every 5 elapsed years of earnings, the lowest year(s) of earnings will be dropped, up to a maximum of 5 total disability dropout years for a worker with 25 or more years of earnings. When SSA computes the average monthly earnings, it must use a minimum of 2 elapsed years
Requirement 4: The no earnings year(s), which meets Requirement 2, must be used to calculate the primary insurance amount as a computation year(s). To meet this requirement, the number of computation years11 must be greater than the number of base years.12 When base years are higher than computation years, a CDY would not apply because a year of no earnings would not be included in the primary insurance amount computation.
Understand Now Why Nobody Ever Gets This Benefit?
Even a cursory reading of this dense wording tells you why only 1 person got the benefit in 12 years. There is no simple way to explain this. The important thing, however, is to tell Social Security about any years without earnings if you were taking care of a child under age 3.
With a little honest effort, we can easily double the number of people who got this benefit in the next 12 years.
