Getting SSDI if You’re Self-Employed

People who are self-employed may be eligible to receive Social Security Disability Insurance benefits. The Social Security Administration bases benefit determinations for self-employed workers on their medical impairments and whether their disabilities prevent them from engaging in substantial gainful activity. For the self-employed, this may create challenges, as their efforts to own and operate their businesses may impede their eligibility for SSDI benefits.

Determining Substantial Gainful Activity

To receive SSDI benefits, the work of self-employed applicants cannot qualify as a substantial gainful activity. The SSA uses three tests to determine whether claimants’ self-employment activity is substantially gainful – the significant services and substantial income, comparability, and worth of work tests.

The Significant Services and Substantial Income Test

The significant services and substantial income test assesses whether claimants’ work activity is significant and if they earn substantial income due to that work. As the sole owner or worker in a business, applicants’ services automatically qualify as significant. Their work activity is also considered substantial if they share ownership or have employees and contribute over half the time necessary to manage the business each month or manage the company for at least 46 hours per month.

For 2019, the substantial countable income amount is $1,220. Average monthly earnings over this amount qualify as substantial income, and thus, may disqualify applicants from receiving benefits. Should the SSA determine claimants’ work does not qualify as significant and substantial, the agency further considers applicants’ activities under the comparability and worth of work tests.

The Comparability Test

The comparability test measures the work self-employed applicants perform in relation to the work performed by unimpaired people in their communities working in similar businesses. To make such determinations, the SSA looks at factors such as:

• Job skills used
• Job duties
• Time worked
• Energy spent working
• Work efficiency

In looking at these factors, the SSA considers only applicants’ work activity; no consideration is given to the value of the work they performed in this test.

The Worth of Work Test

The worth of work test assesses the value of the work SSDI claimants perform for their businesses, regardless of whether it is comparable to others in their communities and fields. To qualify for benefits, the work people do for their businesses cannot be valued worth more than $1,220 per month or worth more than $1,220 each month as compared to the cost of hiring an employee to perform the job.