How To Claim Disability Benefits If You’re Self-Employed

by Legal 15 December 2021

disability benefits

Many people opt to become self-employed workers due to various reasons. In most cases, self-employment allows individuals to work from the comfort of their homes or have freedom in the workplace. There are a number of benefits that may come with self-employment.

However, if you’re self-employed and became disabled, you may wonder if you’re eligible to claim disability benefits from the Social Security Administration, like those working under employers.

Typically, you may qualify to file a disability claim with the SSA if you meet the requirements. A disability claim refers to a claim for income assistance, filed with the Social Security Administration. It’s usually filed by individuals who believe that a physical or mental disability makes them unable to work and maintain a normal life.

If you have a disability and you’re self-employed, here’s how you can claim disability benefits.

1. Know If You Qualify

1. Know If You Qualify

As mentioned, self-employed individuals can qualify for the Social Security disability benefits as long as they fulfill specific qualification requirements. Hence, if you’ve become disabled, you need to determine first if you qualify before you can file a claim with the SSA. Some eligibility requirements can include the following.

You’ve Worked Long Enough To Qualify For The Benefits

It’s essential to show you’ve worked long enough to be eligible for the disability benefits. To determine this, you need to have sufficient work credits. Typically, the number of credits you should earn to file a claim depends on when you became disabled and your age. Thus, if you’ve already gained 40 work credits within ten years, the SSA would consider it sufficient for you to recover full disability benefits.

To know how you can earn certain work credits, you have to look at your annual earnings. For example, if you can make approximately USD$1,260 in a year when you pay your taxes, you can get one work credit for it. This means that if you report a net profit of USD$5,040 in a year, you can earn a maximum of four work credits. So, to know if you qualify for the benefits, check the work credits you’ve earned first to ensure you have a valid claim.

However, if you haven’t met the required work credits for a disability claim, you may apply for Supplemental Security Income (SSI). It’s a form of financial assistance benefit that doesn’t consider your earnings records as a disability claim qualification requirement.

Although the benefits you receive under the SSI program are less than what you can recover from Social Security Disability Insurance (SSDI), it’ll entitle you to Medicaid immediately. So, if you want to understand better how this entitlement works, set a free lawyer consultation with a legal professional in your area.

You’ve Paid Social Security Taxes

While employees pay their Social Security taxes by deducting a certain amount from their paychecks, self-employed workers should also pay the taxes on their own to be eligible for disability benefits.

For instance, if you’re self-employed, you need to pay your self-employment tax, composed of your Medicaid and Social Security taxes. Generally, the rate for self-employment tax is approximately 15.3%, of which more or less 12.4% is allocated to Social Security, and the remainder goes to Medicaid.

So, to make sure you have the right to seek disability benefits from the SSA, you should pay your self-employment tax on time. Not paying your tax obligations may prohibit you from filing a claim for your disability.

You’ve Reported Your Earnings Accurately

This is another qualification you need to consider before claiming disability benefits. As a self-employed worker, it’s essential to report your income when filing federal income taxes. This is because, aside from the self-employment tax, you’re also required to pay your federal income taxes before you can avail of the benefits offered by the SSA.

Moreover, reporting your income is essential to determine the number of disability benefits you can recover. Your failure to do so may affect the amount of the actual benefit, which is known as the average indexed monthly earnings (AIME). Typically, your AIME is computed based on some factors, including the dollar amount you earned and the workers’ average wage in the base years subject for computation.

You Have A Qualifying Disability

Like other employees seeking disability benefits, self-employed workers should also demonstrate that they have a long-term disability to qualify. If you’re disabled, your condition should stop you from working and earning an adequate income.

The most common disabilities that may qualify someone for disability benefits include musculoskeletal system problems, mental disorders, nervous system and sense organs conditions, and other similar conditions.

Your Self-Employment Is No Longer A Substantial Gainful Activity

If you’re self-employed, the Social Security Administration will evaluate whether your self-employment is a substantial gainful activity (SGA). It means you’re engaged in significant labor that allows you to earn enough money for a living. If the SSA finds you have an SGA, you may be denied the benefits.

To determine if your self-employment is an SGA, you can use the ‘three tests.’ When using the ‘three tests,’ you need to consider three factors, which are as follows:

Significant Services And Substantial Income Test: Your services are considered significant if you’re the sole owner of your business. If you have a co-owner, your services are still treated as significant if you allocate more than half the time to manage the business, or 46 hours or more each month.

On the other hand, the income you obtain from self-employment is substantial if your average income is more than USD$1,000 a month. However, even if your monthly income is less than the said amount, your income is still considered substantial if it’s still the same as your earnings before the disability started.

Comparability Test: If you don’t make substantial income or do significant services, the SSA will use this test to determine whether your self-employment is an SGA. Under this test, the SSA will compare your work to that of a non-disabled person in your community who does business similar to yours.

They’ll look at some factors, such as duties, skills, time worked, and work efficiency, for the comparison. If they find that the work you do is comparable to that of the unimpaired person, your work is an SGA, and therefore, you may not be entitled to disability benefits.

Worth Of Work Test: It’s used to gauge the value of the work you do as a self-employed worker. For instance, your work is considered an SGA if the value is worth more than USD$1,000 each month.

2. File The Claim And Submit Supporting Documents

2. File The Claim And Submit Supporting Documents

Once you determine your Social Security disability benefits qualification, the next step is to fill out an application online or visit the SSA office. Along with the application form, you may also be required to submit sufficient medical documentation of your disability. Without these supporting documents, the SSA may deny your claim. Thus, make sure to secure copies of your medical records to streamline the claims process and ensure approval.

Apart from the medical documentation, you also have to sign release forms that allow SSA to obtain other documents necessary to review your claim and determine its full merit. Lastly, don’t forget to present the past tax returns you filed as a self-employed worker.

3. Hire A Lawyer

3. Hire A Lawyer

Filing a disability claim when you’re self-employed can be a complex process. With all the things you need to consider, it’s best to hire a dedicated lawyer for legal assistance. They prove beneficial in navigating the claims process and ensuring you receive a favorable outcome. Having a lawyer at your side can help you in the following ways:

  • They can prepare all the paperwork required to file the disability claim. Aside from the application form, they can also assist you in securing copies of your tax receipts and other income-related documents.
  • They can also help in the evidence collection process to ensure you have adequate pieces of evidence to prove your disability claim. They have professional connections that allow you to obtain proof about your case. For example, they can tap an expert doctor to explain the severity of your condition and how it impacts your life.
  • They can follow up on your disability application with SSA regularly. Since SSA handles thousands of claims now and then, they can help ensure your claim is reviewed promptly. This can improve your chances of getting the disability benefits as soon as possible.
  • They can file an appeal in case your claim is denied. Generally, there are many reasons the SSA may deny an application. One of them is your failure to provide evidence that establishes the severity of your condition. Because of this, it’s best to entrust the matter to your lawyer. Since they’re familiar with the disability laws and other legal processes, they can appeal the decision of the SSA to increase the odds of having your disability claim approved. They’ll fight for your rights by ensuring you get the benefits you deserve as a self-employed worker.


Being self-employed doesn’t prohibit you from claiming disability benefits from the SSA. As long as you’re eligible to file one, you can get the benefits you need easily and quickly. Therefore, if your disability starts to impair your self-employment, keep the information mentioned above in mind so you’ll know how to file a disability claim. The better you understand the processes, the more confident you’ll be that you’ll get a positive outcome for your situation.

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Sumona is a persona, having a colossal interest in writing blogs and other jones of calligraphies. In terms of her professional commitments, she carries out sharing sentient blogs by maintaining top-to-toe SEO aspects. Follow more of her contributions at SmartBusinessDaily and FollowtheFashion

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