If you’ve paid self employment taxes for years, you can be eligible for SSDI just as if you’d worked for an employer and paid FICA taxes. If you own a business or work for yourself after filing for benefits, your claim will not be granted if you’re considered to be doing gainful activity. For a wage earner, the cutoff is $1040 for SGA (substantial gainful activity).
For the self employed, however, income isn’t a good measure of how much work is being done. The SSA determines whether you’re engaging in SGA by using certain tests. Exactly which test they use depends on whether this is your initial application, or your work activity is being reviewed after a claim approval. Your SSDI Attorney in Middletown, NY can advise you further on these tests.
The Tests
If you’re applying for SSI or SSDI, or you’ve been on SSDI for less than two years, the SSA will use one of these three test to determine whether your work is SGA. The first test is the Significant Services and Income test, followed by the Comparability and Worth of Work tests. If you’re found to be engaging in SGA, your benefits will be denied. If you’re found to be in SGA after approval, you can earn over the limit and not lose your benefits.
The Substantial Income and Significant Services Tests
If you provide a high level of service to your business and you earn most of your income from it, you are in SGA. Whether your services are considered ‘significant’ depends on your business type.
Significant services: If you are your business’ sole employee or owner, your services are considered significant. If your income is more than $1040 per month, you are in SGA and will not be approved for benefits. If you have co-workers or employees, the SSA will deem your services as significant if you manage the business more than half the time, or 46 hours per month.
Substantial income: When considering your income, the SSA will take some items from your revenue. If you get free help, equipment, rent or other items, or if you pay disability expenses so you can work, the SSA will subtract those items’ value from your income before considering its substantiality. Self employment income is considered substantial if it’s similar to what you earned before the disability, or is comparable to what able-bodied people in your community make. Click here for more information.
