Can You Get Disability If You Are Self-Employed in California?

If you’re self-employed and facing a disabling condition, you may wonder, “Can you get disability if you are self-employed?” Yes, self-employed individuals can receive disability benefits, but obtaining these benefits can be challenging, as the criteria for eligibility can be more complex than for traditional employees. The Social Security Administration (SSA) closely examines the nature of self-employment to determine if applicants qualify, considering both earnings and the extent of work involvement. This guide will explain what it takes for self-employed Californians to qualify for disability benefits, the tests the SSA uses to evaluate self-employment claims, and how to strengthen your case for approval.

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How Does Self-Employment Affect Social Security Disability Benefits?

Self-employment impacts eligibility for Social Security Disability Insurance (SSDI) because applicants must meet the SSA’s requirements for both income and work activity, known as substantial gainful activity (SGA). SGA is a measure the SSA uses to decide if someone is earning too much or working too actively to qualify for disability benefits.

For self-employed individuals, SGA doesn’t just look at income; it also considers the type and amount of work being done. To qualify for SSDI, you must show that your income stays below a certain limit and that your work isn’t “substantial.” This means that even if you don’t earn much, the SSA may still look at your daily activities. If you are heavily involved in business management, customer service, or other essential tasks, the SSA may consider this work “substantial” and deny benefits.

The SSA also looks at whether your income changes month to month. Self-employed people with income that fluctuates, such as those who work seasonally or on contracts, may find it harder to prove they meet SGA standards. The SSA wants to see that your income and work activity consistently fall within disability guidelines.

Consulting an experienced Social Security disability attorney can help you understand how SGA applies to your situation. They can guide you in gathering and presenting the right documentation to improve your chances of qualifying for SSDI as a self-employed person.

Eligibility Criteria for Self-Employed Workers

To qualify for SSDI, self-employed individuals must:

• Accumulate enough work credits based on Social Security taxes paid, generally requiring a certain amount of earnings over recent years.
• Have a disability severe enough to limit your ability to perform substantial work for at least 1 year or result in death.
• Show that your work activity and income consistently fall below the SGA threshold, considering both income and the type and significance of work performed.

An attorney can help ensure your claim accurately reflects these criteria, offering strategies for presenting your work and income levels to maximize your chances of qualifying for benefits.

Can You Get Temporary Disability If You Are Self-Employed?

In California, self-employed individuals can access temporary disability through the State Disability Insurance (SDI) program. However, SDI is not automatically provided to self-employed individuals. Here’s what you need to know about eligibility:

• Opting Into California’s SDI Program: Self-employed workers can opt into SDI coverage by paying the necessary state contributions. This can help provide income if you experience a short-term disability.
• Temporary Disability Benefits: If you have opted into SDI and suffer a disabling condition that prevents you from working, you may be eligible for temporary disability benefits.
• Situations Covered: Temporary disability benefits typically cover injuries, illnesses, and certain medical conditions that limit your ability to perform substantial work temporarily.

Key Tests for Determining Eligibility for Self-Employed Individuals

The SSA applies specific tests for self-employed individuals to assess whether their work and income exceed the SGA threshold. These tests are designed to determine if a self-employed person’s work activity is substantial enough to impact SSDI eligibility.

• Significant Services and Substantial Income Test: This test evaluates whether the individual’s work provides significant services to the business and if the income earned reaches or surpasses the SGA limit. “Significant services” generally means tasks critical to running the business, such as management or customer-facing roles, especially in smaller operations where the owner is essential to daily functioning. The SSA examines the role’s impact and the amount earned from it.
• Comparability Test: This test compares the work done by the self-employed individual to similar work in other businesses of the same type and size. If the individual performs similar tasks to those typically required in a comparable business, it may indicate that they are capable of SGA. This test considers whether the individual’s efforts are necessary for business continuity and success, aligning with what others in the industry do.
• Worth of Work Test: This test assesses whether the value of the work performed is equivalent to the SGA threshold, regardless of actual income. For example, even if income falls below the SGA, the SSA may consider whether the work’s intrinsic value or what it would cost to hire someone to perform the same tasks meets the threshold, potentially impacting eligibility.

Meeting these tests can be challenging, as self-employment often blurs the lines between income and activity levels. A skilled disability attorney can help you navigate these tests, working to ensure all necessary criteria are met and presented clearly to support eligibility.

Common Challenges in Getting Disability as a Self-Employed Person

Proving disability as a self-employed person can be complex, as self-employment often lacks the straightforward documentation that traditional employment provides. Here are some common challenges self-employed individuals face when applying for SSDI:

• Record Keeping: Maintaining precise records of income, hours worked, and tasks performed is important, as the SSA may closely examine these to determine if SGA is present. Self-employed workers must be diligent in tracking all business activities and financial transactions, as incomplete records can weaken your claim.
• Income Fluctuations: Unlike salaried employees, self-employed individuals often experience fluctuating monthly income. This variability can complicate the SGA determination, as the SSA needs to see consistent evidence that earnings remain below the SGA threshold. Income spikes, even for one month, can lead to questions about eligibility, making it crucial to document periods of reduced work and income carefully.
• Credibility of Evidence: The SSA tends to scrutinize self-reported income and work activities more heavily than formal employment records. Self-employed individuals must be able to back up their claims with credible documentation, such as receipts, invoices, and detailed logs of daily activities. Without this, the SSA may question the legitimacy of the reported work limitations.
• Proving Reduced Work Capacity: Demonstrating that a disability limits your ability to perform essential business tasks can be more challenging than showing reduced capacity in a traditional job. Self-employed individuals may need to document how their disability affects specific tasks or hours worked, proving they are unable to sustain regular business operations.

Due to these challenges, working with a disability attorney can help ensure that all necessary documentation is organized and presented effectively to strengthen the case. An attorney can assist in verifying income records, structuring evidence, and addressing potential SSA concerns about the nature and extent of work activities.

What To Do If You Are Denied Disability for Self-Employment

If you’re denied benefits for self-employment, don’t give up. Many self-employed applicants succeed on appeal, especially when they gather additional documentation and present their case more clearly. Here are steps to take after a denial:

1. Review Your Denial Letter: The SSA’s denial letter will explain why your claim was denied. Understanding these reasons can help you focus on areas to strengthen, such as providing more details about your work limitations or clarifying your income records.
2. Gather Stronger Evidence:
   • Medical Records: Include thorough documentation from doctors and specialists that outlines how your disability affects your daily functioning and ability to work.
   • Work Activity Records: Keep detailed logs of your business activities, hours, and any assistance you need to complete tasks. Showing how your disability impacts specific work duties can strengthen your case.
   • Income Records: Provide clear records of your income, especially if it’s irregular, to help demonstrate how your earnings stay below the SGA threshold.
3. File for Reconsideration or Appeal Promptly: The SSA has strict deadlines for filing appeals. Make sure to submit your request within the specified timeframe to keep your claim moving forward.
4. Consider Hiring a Disability Attorney: A Social Security disability attorney can assist in building a stronger case for appeal. They can help you address any issues raised in the denial letter, organize your evidence effectively, and represent you in front of an Administrative Law Judge if necessary. With an attorney’s help, you’ll improve your chances of successfully proving your eligibility.

Taking these steps can increase your likelihood of approval on appeal, especially with a well-prepared case that addresses the SSA’s criteria for self-employed individuals.

Ready to Secure Your Disability Benefits? Let Dr. Bill LaTour Help

If you’re wondering, “Can you get disability if you are self-employed?”, know that you don’t have to face the challenges alone. Dr. Bill LaTour and his experienced team understand the unique obstacles that self-employed individuals face in proving eligibility for disability benefits. With the right support, you can effectively navigate the appeals process, gather strong evidence, and increase your chances of success. Don’t wait to get the assistance you need—contact us today for a free consultation. We’re here to help you every step of the way, so you can focus on your health and future while we handle the complexities of your disability claim.