The Three Tests

Massachusetts Attorneys Helping Small Business Owners Apply for SSDI

If you are a small business owner who has recently found yourself unable to keep up your operations due to lingering medical issues, you may mistakenly believe that you do not qualify for disability because you are not employed in the traditional sense. In reality, business owners and self-employed individuals can, and often do, qualify for disability benefits with a bit of research and legal advice. At Kantrovitz & Associates, P.C., our SSDI attorneys have years of experience helping business owners in Massachusetts to qualify for benefits and are available to assist you.

Self-Employment and SSDI

One of the bigger hurdles that small business owners and self-employed individuals face when applying for disability benefits is establishing that they are not engaged in substantial gainful activity (SGA). This is a threshold requirement that must be met in order to qualify for benefits and is a way of determining that an applicant is truly unable to work in any significant capacity. Because determinations of employment and income are more complicated for the self-employed, the Social Security Administration utilizes special tests to determine their income. For new disability applicants, or recent recipients, this evaluation is known as “the three tests.”

The Three Tests

The three tests used to determine income for new self-employed disability applicants are: (1) the significant services and substantial income test; (2) the comparability test; and (3) the worth of work test.

Significant services and substantial income test: Under this test, if the work you provide to your business is a significant service and the income you receive is substantial, you will be precluded from applying for disability benefits. Significant services is defined as any work done to support a one-person business or more than half the time required to run a multi-person business (or more than 45 hours a month). Substantial income is countable income averaging more than $1,090 a month, or a livelihood that is comparable to what you had before you became disabled (or to what self-employed individuals running a business similar to yours typically receive).

Comparability test: The comparability test is the test used to evaluate whether the work you do for your business is comparable to what a non-disabled person who has a similar type of business would do. If it is, this will count as SGA. Under the comparability test, the SSA will consider factors such as the hours you work, the skills you utilize, and your responsibilities. A small distinction separates this test from the test above: while the substantial income test considers whether your livelihood is comparable, the comparability test focuses on the work that you do.

Worth of Work test: This test considers the ultimate value of the business and the work you perform. It will find your business to be SGA if your contribution to the business is clearly worth more than the SGA limit of $1,090 a month, or it would cost more than $1,090 a month to pay someone else to perform the work that you do.

SSDI Lawyers Helping You Seek Benefits in Massachusetts

Small businesses and enterprises are started for many different reasons. Some pursue independence or the chance to do what they love, others find it as a means to explore a hobby, while a few hope to support themselves financially through their own means. Because the purposes and structures of small businesses and self-employment are so varied, the SSA must go to great lengths to determine whether this type of work constitutes SGA. At Kantrovitz & Associates, P.C., our disability benefits lawyers can help you to analyze the nature of your self-employment and how it might be evaluated when applying for disability in Massachusetts. If you live in the Norfolk, Sussex, or Middlesex counties, or surrounding communities, contact us for more information at (800) 367-0871 or online.