If you work for an employer and apply for Social Security Disability Insurance benefits (“SSDI” or “disability benefits”), to decide whether you qualify for disability benefits, in addition to looking at your medical condition(s), the Social Security Administration (“SSA”) looks at how much you paid in federal taxes (“FICA”) through your employer while you were working, and how much money you make per month to decide if you are engaged in “substantially gainful activity” or not.
But if you work for yourself, things don’t quite go that way.
Disability Benefits and Self-employment.
To begin with, since the SSA cannot look at how much you paid in FICA taxes through your employer, as long as you paid self-employment taxes (SECA) for a sufficient number of years, you should be eligible for SSDI just as if you had worked for an employer.
However, deciding whether you engage in “substantial gainful activity” (“SGA”) is another matter.
First of all, if you still have your business, or you still work for yourself, the SSA may consider you to be engaging in SGA.
For employees, it’s fairly simple. The SSA looks at how much money they make per month. If they make the cutoff amount of $1,180 (the 2018 level), then they are considered to be engaging in substantial gainful activity and will be denied benefits.
For people who are self-employed, however, it doesn’t go like that. The SSA recognizes that when you are self-employed, your income level can vary quite a good bit and isn’t always an accurate assessment of how much you are working.
So for self-employed SSDI applicants, the SSA uses one of 3 separate tests to determine whether that person is working to an SGA level.
The 3 SGA Tests Social Security Uses for the Self-employed.
The 3 tests that the SSA uses to determine if self-employed individuals are working to SGA level are the:
- Significant Services and Income test,
- Comparability test, and the
- Worth of Work test.
Depending on the type of work you do, the SSA will use one or all 3 tests to determine if you are working at SGA level. If they find your self-employment is at SGA level, you will be denied benefits.
Ask a Disability Attorney.
If you have questions about disability benefits or have been denied benefits, call us. We offer FREE consultations and we do not get paid unless you win your claim. We have offices in Springfield, Kansas City, Mountain Grove, Liberty, and other cities in Missouri. We also have offices in Overland Park, Topeka and other cities Kansas. We also have offices in Belleville/Swansea, Illinois, and in Tulsa and Oklahoma City, Oklahoma. Call us at 855-727-8625 or send us an e-mail or connect with us on Facebook.