Disability for Individuals who are Self-Employed

When SSA evaluates work activity for a self-employed person (non-blind) to determine substantial gainful activity (SGA), they apply the Three Tests general evaluation criteria (for individuals who are still working or have received benefits for less than 24 months) or the Countable Income test (for individuals who have been receiving SSDI benefits for 24 months or more).

  1. 1.   If a person is applying for benefits or has been receiving Social Security disability insurance (SSDI) benefits for less than 24 months, SSA applies the Three Test rules:
  2. Under the Three Test rules, SSA counts self-employment work activity towards SGA if a person:
  • -   renders significant services to the business, and had average monthly earnings over the SGA level ($1,040 in 2013); or
  • -  has work that is comparable to the work of persons without a disability in the community who is engaged in the same or similar businesses; or
  • -  has work that is worth more than the SGA level earnings in terms of its effects on the business or when compared to what the person would pay an employee to do the work.
  1. 2.   If a person has been receiving SSDI benefits for at least  24 months, then SSA uses the Countable Income Test:

Under the Countable Income Test, if a person received SSDI benefits for at least 24 months, SSA will only use the countable income test to determine SGA, and if disability has ended as a result of that SGA. SSA compares countable earnings to the SGA earnings guidelines ($1,040 in 2013). If a self-employed person’s monthly countable earnings average more than $1,040, SSA will decide that work is SGA.

  1. SSA has  different rules for individuals who are blind

For persons under age 55, SSA decides SGA based on whether the person received a substantial income from the business and rendered significant services to the business (test one of the Three Tests).  SSA has special rules for blind persons age 55 or older; if  earnings demonstrate SGA but work requires a lower level of skill and ability than the work performed before age 55, or when the person became blind, whichever is later, SSA suspends, but does not terminate, disability benefits. Eligibility for SSDI benefits continues indefinitely, and SSA pays benefits for any months earnings fall below SGA.

NOTE: For individuals receiving SSDI, when SSA determines countable income, they can deduct any unpaid help, un-incurred business expenses, or impairment-related work expenses

Click here for more information on self-employment and work incentives

Learn more by going to the SSA Red Book