Applying for disability benefits can be a complex process for anyone, but if you’re self-employed, there are additional challenges to consider. As a self-employed individual, business owner, or entrepreneur, you’ve spent years working hard, building something from the ground up. Just like anyone else, you’ve earned the right to access disability benefits if your health no longer allows you to work. If you’ve been paying Social Security taxes—which self-employed individuals must handle on their own—you may be eligible for disability benefits. Whether you’ve been running your own business for years or have recently turned to self-employment, it’s important for you to know how to navigate the disability benefits process.
Understanding the Self-Employment Challenge
Applying for disability benefits as a self-employed individual can feel complicated, but it’s important to remember that it’s still possible to get the support you need. When you’re self-employed, documenting your income, work history, and the nature of your work is often more complex than for someone with a traditional job setting. The Social Security Administration (SSA) looks at your ability to work, and this includes any work you might do, even on a part-time or intermittent basis.
As someone who has built a career independently, you’ve likely worn many hats—managing finances, working directly with clients, and handling countless other tasks. If your health has made it difficult or impossible to continue in these roles, it’s essential to know how to present your work effectively to maximize your chance of a successful outcome.
Documenting Your Work History and Income
Unlike traditional employees, self-employed individuals don’t receive a standard W-2, and your income may vary significantly from year to year. Your tax returns will play a critical role in documenting your income. Make sure you have accurate and complete returns for the past several years, as these will help establish your earnings history. Additionally, keeping detailed logs of your work activities can demonstrate how your disability has affected your ability to keep up with your business responsibilities. By presenting clear and comprehensive documentation, you can paint a full picture of how your condition(s) has affected your work activity.
Proving the Impact on Your Ability to Work
The SSA will want to know how your condition affects your ability to perform the duties required by your business. If you’ve had to reduce your workload, delegate tasks, or if you’ve had periods where you couldn’t work at all, these are all important details to include in your application.
Medical documentation is key here. Make sure your healthcare providers understand the nature of your work and how your condition might limit your ability to perform your job. It’s important that this is clearly documented in your medical records, as it can significantly support your claim.
Navigating Substantial Gainful Activity (SGA)
One significant hurdle for self-employed individuals is the concept of Substantial Gainful Activity (SGA). The SSA uses SGA as a benchmark to determine if you’re able to engage in significant work activity that is considered to be inconsistent with disability. The amount that one can earn while still qualifying for disability benefits is adjusted yearly due to inflation. For the most current SGA amounts, visit this page.
However, for self-employed individuals, SGA isn’t just about income. The SSA has a three-pronged test to assess the value of your work to the business, even if your earnings are below the SGA level. This means the time you spend on your business, even if it’s less profitable, could still impact your claim.
Takeaway Tips for Strengthening Your Application:
1. Keep Thorough Financial Records: Ensure your tax returns are accurate and complete for the past several years. Detailed records of your income, expenses, and work activities can help establish your earnings history and the impact of your disability on your business.
2. Document Changes in Your Work Capacity: Record any reductions in workload or periods where you couldn’t work. These details show how your condition has affected your ability to manage and work in your business.
3. Ensure Clear Medical Documentation: Work closely with your healthcare providers to make sure they understand how your condition(s) limits you and affects your ability to perform your job responsibilities. This should be clearly reflected in your medical records.
4. Consult a Disability Attorney: Navigating the disability process is challenging, especially with the added complexities of self-employment. A knowledgeable disability attorney can help you gather the necessary documentation and present your case in the best possible light.
5. Stay Informed: Understanding how the SSA views self-employment is critical. The more you know about the process, the better you can prepare your application.
The Roose & Ressler Team is located in Lorain, Toledo, and Wooster, Ohio. You can count on us as your local disability advocates to analyze your case thoroughly in order to determine what is necessary for you to receive benefits. We assess the best methods to prove the crucial facts of your case and gather the necessary evidence. Having 40+ years of experience serving Northern Ohioans, we know the ins and outs of the local disability process.