SSDI for the Self-Employed

Social Security Attorneys Guiding Claimants throughout Massachusetts

Social Security Disability Insurance (SSDI) is tied to employment in many respects. Applicants typically must have worked a certain number of years and obtained a certain amount of work credits to qualify to receive benefits. Additionally, benefits are typically connected to prior wages, and eligibility requires a consideration of whether an individual has been gainfully employed. For all of these reasons, applying for SSDI when you are self-employed can be more complicated than usual. At Kantrovitz & Associates, our Social Security lawyers have helped guide many self-employed Massachusetts residents through the application process and can advise them on how to strengthen a claim.

Seeking SSDI when Self-Employed

In order for any individual to qualify for SSDI, he or she must have worked enough in past years to have accumulated the necessary work credits to be eligible for benefits. Individuals earn one work credit for each $1,220 that they earn in income and pay Social Security taxes on. While the exact number of credits required varies depending on age, most people who have earned 40 credits in the past 10 years typically qualify for benefits. Self-employed individuals obtain work credits in the same way that any other employee does, but they must make sure that they are paying self-employment taxes, which include taxes to the Social Security Administration. If an individual does not pay these taxes, he or she will not be able to obtain work credits and will be ineligible for SSDI benefits.

Defining Substantial Gainful Activity

One of the first factors that disability examiners consider when determining whether an individual qualifies for disability benefits is whether the applicant is engaged in “substantial gainful activity” (SGA). For typical wage earners, SGA is determined by looking at how much income an individual has received. For self-employed individuals, however, the Social Security Administration utilizes two different tests: the countable income test or the “three tests.”

If you are a new applicant for SSDI or have been on SSDI for less than 24 months, the SSA will use the “three tests” to determine whether you are engaged in substantial gainful activity. The first test is known as the “significant services and income test.” It considers whether the work you are doing constitutes significant services and whether you derive substantial income, usually more than $1,090 a month, from that work. If your work does not qualify as significant services or as substantial income, the SSA will then employ a comparability test to determine whether your work is comparable to that of an unimpaired person in your community. If so, it will be considered SGA. Finally, the SSA may also use a “worth of the work” test, which considers whether, even though you may not be making $1,090 a month from your work, the value of your work is equivalent to that amount or higher.

For those who have been on SSDI for longer than 24 months, instead of using one of the “three tests,” the SSA will focus on the countable income test. The countable income test first determines the total amount of your countable income. If it is less than $1,090 a month, a disability recipient will not have his or her benefits terminated. If it is more than that amount, the SSA will next consider if the services you are performing are significant. If so, your benefits will likely be terminated. If not, you can continue to receive benefits no matter how much your income may be.

Legal Guidance for Government Benefits Claimants in Massachusetts

If you are currently self-employed or own your own business, figuring out whether you qualify for SSDI can be difficult. Factors to be considered include whether you receive a steady income from your employment and how much that income is, and whether you are providing services that the SSA considers to be significant. At Kantrovitz & Associates, our government benefits attorneys can help individuals in Massachusetts evaluate their employment situation to help them determine whether they may qualify for benefits. To schedule an initial consultation, contact us at (800) 367-0871 or online. From our Boston office, we represent residents of Norfolk, Middlesex, Suffolk, and Plymouth Counties.