The Social Security Administration actually encourages claimants to work while their application for Social Security Disability Insurance or Supplemental Security Income is pending.
While there are some exceptions to the rule, generally speaking, if you are consistently making more than $1,180 per month while your application is pending, you are engaging in what Social Security calls “substantial gainful activity” (SGA) and ineligible for benefits.
SGA issues are fairly clear cut if a claimant is employed by a retailer, restaurant, or manufacturer, but it becomes more complicated if a claimant is making money from self-employment.
If a claimant is engaged in self-employment, he or she may actually be making less than SGA, but still be ineligible for benefits. And in some really complicated cases, a claimant can exceed SGA and still be eligible for disability.
Social Security uses three tests to determine whether self-employment earnings exceed SGA.
The first is called the Worth of Work Test. Basically, if you are getting paid very little, but the worth of your work clearly exceeds $1,180 per month, or it would cost that much to pay someone else to perform your duties, Social Security considers the work to be above SGA.
The Comparability Test is the second test. With this test, you may be making less than SGA, but Social Security considers your work hours, energy output, efficiency, skills, duties, and responsibilities compared to an unimpaired person.
You may only be making $800 per month, but if you’re working 30-40 hours per week to make that much money, Social Security will consider your work to be SGA.
The final test is called the Significant Services and Substantial Income Test. With this test, your monthly income must exceed $1,180 and your services for the business must be significant. If you’re the business’s only employee, your services are presumed to be significant, but if the business has more than one employee, Social Security then must consider how much time you put into managing the business.
You may make $1,250 per month from the business, but if you’re just going in for a couple hours a month to meet with employees, that shouldn’t count as SGA.
Ultimately, self-employment is one of the most complicated issues that come up in disability cases, so if you are running a small business and seeking benefits, it’s important to consult with an attorney about how this might affect your case.