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Self-Employment And SSDI: 3 Tests For Meeting Business Activity Standards


Of the two different disability programs administered by the federal government, Social Security Disability Insurance (SSDI) is one in which benefits depend upon your work history. Under rules established by the Social Security Administration (SSA), you must have accumulated sufficient work credits on an annual basis. For 2022, you earn one credit for each $1,510 in wages; you can get up to four work credits per year. Some of them must be earned within the last 10 years, so recent work history is important.

When your income is from self-employment at a business in which you are a stakeholder, the work credits factor can be quite complicated. SSA reviews how your involvement and participation might constitute business activity for purposes of SSDI eligibility. If you expend too much effort, SSA’s view is that you are not truly disabled. There are three tests in assessing this issue, which a Maryland Social Security disability lawyer can explain in more detail. An overview of the basics is also helpful.

Basics on SSDI and Self-Employment: Regardless of whether you work for a traditional employer or are self-employed, the measurement of disability is Substantial Gainful Activity. SGA is expressed in terms of a dollar value. It is $1,350 for 2022 and $2,260 for blind applicants. An income above the threshold level disqualifies you for SSDI, while those who earn wages under SGA are eligible with respect to this factor.

For those who are self-employed by a business they own, a dollar value is not the best measurement of SGA. Many do not take a salary or pay themselves, so income goes to the company. Therefore, SSA evaluates what you are actually doing to support the entity. If you are engaged in business activity that exceeds SGA, your application for SSDI benefits may be denied. This is where SSA applies the three tests.

Three Tests for Determining SGA: Business activity for the self-employed will be considered SGA and render your ineligible for SSDI, if:

  1. You provide significant services to the business and receive a substantial income from your efforts;
  2. You perform tasks that are similar to what other individuals without a disability perform, for a company in the same industry and under the same general work conditions; and,
  3. You perform work that is worth $1,350 in terms of the value you provide to the business OR what it would cost to hire an employee to do the same tasks.

Note that the other important factor for SSDI is the medical requirement, which you meet if you have a disabling medical condition expected to last at least 1 year or result in death.

 Discuss Self-Employment Factors with Our Maryland SSDI Attorneys

This information about the three tests for SGA is useful, but there are additional factors when you are applying for Social Security disability benefits. For personalized details, please contact the Law Offices of Steinhardt, Siskind and Lieberman, LLC to set up a free consultation with an experienced SSDI lawyer. We can meet with you at our offices in Glen Burnie, Owings Mills, Ellicott City, or Annapolis, MD.


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