Recently I had an opportunity to talk about Social Security disability benefits with a group of folks ( and their families) who are all experiencing young-onset Parkinson’s Disease. Some common themes emerged from their questions. I thought this might be of interest to other folks as well, so I’m going to address their questions here, over my next few blogs.
Today, I’ll address the questions related to self-employment. These questions arise most frequently when an individual applies and Social Security finds that he/she is making too much money to be considered disabled. The presumption is that if you earn over $1000/month, you are not disabled. If you’re salaried, it’s easy to see whether you’ve earned over $1000/month. It’s more difficult if you’re self-employed so Social Security has special rules to compute income for self-employed folks. These rules are complicated!
In general, SSA will determine substantial gainful activity (SGA=$1000/month) for self-employed individuals based on either the general criteria, which consist of three tests described below or, when applicable, the countable income test.
The countable income test (see DI 10510.010C.) is used to evaluate work in self-employment performed by a beneficiary after he/she has received title II disability benefits for 24 months, if the purpose of the evaluation is to determine whether disability has ceased due to SGA.
The three tests are used (see DI 10510.010B.) in all other cases to determine if the self-employed individual has engaged in SGA, including the question of initial eligibility for disability, the question of whether work in self-employment performed by a beneficiary before he/she has received title II disability benefits for at least 24 months is SGA
- determining whether work performed in or after the EPE/reentitlement period is SGA after an SGA cessation has been determined; and
- determining SGA during the initial reinstatement period (IRP) for expedited reinstatement (EXR) cases.
1. Test One: Significant Services and Substantial Income: The individual’s work activity is SGA if he or she renders services that are significant to the operation of the business, and if he or she receives from it a substantial income; or
2. Test Two: Comparability of Work Activity: The individual’s work activity is SGA if, in terms of all relevant factors such as hours, skills, energy output, efficiency, duties, and responsibilities, it is comparable to that of unimpaired individuals in the same community engaged in the same or similar businesses as their means of livelihood; or
3. Test Three: Worth of Work Activity: The individual’s work activity is SGA if, although not comparable to that of unimpaired individuals, it is, nevertheless, clearly worth more than the amount shown in the SGA Earnings Guidelines (see DI 10501.015) when considered in terms of its effect on the business, or when compared to the salary an owner would pay to an employee for such duties in that business setting.
Consult an attorney if these questions arise for you.
In my next blog entry, I’ll address questions related to reasonable accomodation and workplace discrimination.