Social Security Disability & The Self-Employed: Is it Possible?

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Is Social Security Disability for Self-Employed Possible?

Is Social Security Disability Insurance (SSDI) available for the self-employed? The answer is a definite yes. Social Security Disability & the self employed definitely go together. If you are self-employed and unable to work for at least a year due to a medical condition, you can apply for SSDI benefits. The requirements to qualify are the same for both the employed and self-employed.

Two earnings requirements must be met: one based your age at time of the disability, and one based on the length of time you worked under Social Security, referred to as “work duration”. The younger you are at the time you became disabled, the shorter the eligible work duration. For example, if you became disabled at age 30, you would need to have worked two years to be eligible for SSDI. If you became disabled at age 45, you would need to have worked five years to be eligible.

Work activity for the purposes of determining eligibility is referred to as substantial gainful activity, or SGA. The SGA can include any income earned from work performed for pay or profit, work generally performed for pay or profit, or work intended for profit whether or not profit is earned. Income from self-employment is considered SGA if:

  • it provides significant services and is over the SGA average income limit of $1,000;
  • it is similar or comparable to work being performed by individuals in your area who are not disabled; and
  • the work performed is worth the same as SGA earning levels when compared to what it would cost to pay an employee to do the work.

If your monthly SGA is less than $1,000, it is not considered gainful work activity. However, you must still report the income to Social Security.

You will need to provide documentation pertaining to your condition, such as contact information for all of the doctors you have seen, as well as hospitals and clinics where you received medical treatment. Also include medical records, a list of medications you are taking, and any lab tests performed and their results. You will also need to provide your Social Security number, birth certificate, and a detailed summary of your work history. Your doctors will be required to provide a statement of your medical history pertaining to your condition and how it impacts your ability to work, and you will need to complete and sign forms giving them permission to provide this information.

Eligibility for SSD benefits is decided by your state’s Disability Determination Services agency. Your medical condition will be reviewed to determine its severity and whether it is on your state’s List of Impairments. The List of Impairments contains medical conditions severe enough to automatically deem an individual disabled by law. If your condition is not on this list, your work history will then be reviewed to determine how or if your condition prevents you from performing the work you did prior to becoming disabled. Your work experience will be evaluated to see if all or part of it can be incorporated into other types of work you could possibly perform. If it is determined that you can perform other types of work, you will not be considered disabled and your application denied. If your application is approved, you will receive a letter showing the amount of the monthly benefit and when payments will begin. If denied, you will receive a letter stating the reasons why and instructions on how to appeal.

The application process can run anywhere from three to five months, even longer if your application is denied and you decide to file an appeal. You should apply for benefits as soon as you become disabled. You can apply online at the Social Security Administration’s website or call their toll-free number to apply over the phone or find your local Social Security office to apply in person.