Self-employed workers sometimes suffer from feelings of isolation. Even worse, they suffer because they lack the safety net of employer-offered benefits. And there may be confusion when it comes to disability benefits for the self-employed worker. How can the worker qualify for benefits based on a non-traditional work history? In this article, we will look at disability benefits for the self-employed worker.
Disability Benefits, in General
Two major benefits based, in part, on disability are Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). We will look chiefly at SSDI.
To qualify for SSDI benefits, an applicant must satisfy the following tests:
- Meet the Social Security Administration’s definition of disability; and
- Have accumulated the correct number of work credits.
People earn up to 4 work credits per year based on how much they made that year. In 2019, a worker with an income of $5,440 or above has earned their four work credits.
But where to people who work for themselves fit in?
Specifics for the Self-Employed Worker
Employers of traditional workers deduct disability insurance called FICA from the workers’ paychecks. Someone who is self-employed, however, may pay self-employment taxes (SECA). To qualify for SSDI benefits, they would have to pay SECA – or have a combination of SECA and FICA taxes paid – for an appropriate number of years.
Applicants provide supporting documents to prove eligibility for SSDI. Since there is no employer involved, a self-employed applicant may be required to submit different documents than a traditional worker. For example, instead of W-2 forms, a self-employment tax return will be submitted.
If still working, a self-employed worker’s substantial gainful activity (SGA) will be evaluated. If the worker makes more than the Social Security Administration’s SGA limit, SSDI benefits may be reduced or terminated.
Self Employed? You Still Have Disability Benefit Options.
Social Security Administration rules regarding disability are often hard to understand, especially when it comes to the self-employed worker. Even if you are used to going it alone, you need someone on your side. The attorneys at The Law Offices of Martin Taller have more than 50 years’ experience. For a free consultation, call us at 714-385-8100. Though our office is located in Anaheim, we assist clients throughout Southern California.