Failing to understand social security disability laws might mean that you lose your income. If you’re thinking about starting a business while on disability, there are some important things you need to know.

Read through the following article carefully to learn what you need to know about social security disability and business ownership today.


Must-Know Social Security Disability Facts

Owning a business and being an employee have different laws when it comes to your disability benefits. While you will be eligible for social security disability insurance as a business owner that has paid in self-employment taxes if the government determines that your business equals gainful employment — no disability compensation.

If you already are getting social security disability compensation and don’t yet have a business, you might be worried that it is going to hurt your payments if you start a business.

When you’ve already been approved for SSI, the test used to see if you still get benefits is different than the one used for getting approved for it.


Substantial Income

If the government determines that you are earning a substantial income, you will not be able to get social security disability monies.

In 2019, if you’re earning over $1,220 a month, you’re not going to be able to get social security disability benefits in most cases. Even if you’re not earning $1,220 a month, you may not qualify for disability.

If you’re earning money similar to what you earned before you had your disability or if the income is similar to that of non-disabled people in your community, you will no longer be able to get your disability.


Significant Services

Another test the government does is a significant services test. If you are the primary owner or primary worker in your business, your services are automatically deemed significant.

If your services are deemed significant and you are making $1,220 a month, you won’t be able to get social security disability any longer.


Comparability Test

If it is determined that you aren’t offering significant services and you also aren’t earning significant income, there are still more tests.

The comparability test looks at the type of work that you’re doing and compares it to that of others without disabilities in your community.

The factors considered are duties of the job, skills needed for the job, the amount of working time, work efficiency and how much energy is spent working this position.

The test doesn’t consider the value of work but instead only looks at work activity.


Worth of Work

This test looks at the worth of the work that you do in your business. If the work that you do is worth more than $1,220 a month or if the work that you do is worth more than $1,220 a month compared to the cost to hire an employee to do your work for the month then you no longer qualify for disability payments.


The Main Points to Remember

While it is great knowing the whole process, the main thing that you need to remember is that if your countable income is less than $1,220 a month — your benefits will not be affected. You can do as much work as you want and they won’t touch them.

On the other hand, if your countable income is more than $1,220 a month — your benefits will end unless you can show that you didn’t provide significant services that month. If you prove you didn’t provide significant services, your benefits won’t be cut off no matter the amount of money you make for the month.


Living Off of Social Security Disability Benefits

Even if your spouse is working, it can be difficult to live off of social security disability benefits. This is especially true if you have children living at home.

The best thing that you can do is stick to a tight budget that will allow you to stay on track with your money goals. Sometimes it isn’t possible to take care of unexpected expenses and people often turn to social security loans.

If you take out a loan, make sure to have a plan to pay it off in a timely manner. Ask the lender about the terms and make sure you are clear on them before you sign on the dotted line.


Starting a Business While on Disability

If you’ve decided that you want to start a business while you’re on disability, keep the above information in mind but don’t let it deter you from creating a better quality of life.

Even if you only work a business part-time, this can be a great way to keep your mind sharp and give you something to look forward to working on. There are many businesses that won’t cause a lot of bodily stress like working online instead of doing something that requires strenuous physical activity.

Before starting your business, make sure to have a plan and outline when you’re going to work and how much you expect to make off the business. If you don’t want to go over your $1,220 a month, make sure that you plan properly. If your business takes off and you start making a lot of money, you might not care if you no longer receive your disability benefits anymore.


Learn More About Interesting Topics

Now that you know more about social security disability, why not continue learning? We have many helpful articles on our site that will allow you to educate yourself on important topics. Continue through our blog today to learn about more interesting topics.