Ask Larry

Could My Contracting Work Cause Problems With My SSDI?

I've been on SSDI for almost 4 years. I started working as a Independent Contractor as a sports official. It's seasonal work. I get paid 2-3 times per season. One check may be $400 the next $1200. I keep all my work schedules showing what I have worked. In no month have I made over $900. I make sure I never get near the SGA amount. My concern is SSA is now wanting information on my employment. Could this be a problem?

Hi. It's certainly possible. When you receive Social Security disability (SSDI) benefits, there are limits on how much work for earnings that you can perform without losing your benefits. Initially, you get a 9-month trial work period (TWP) during which you can do any amount of work and earn any amount of money without losing your benefits. However, after your TWP is completed then you can't do work that Social Security defines as substantial gainful activity (SGA) without causing your SSDI benefits to be suspended or terminated.

Since you're working as an independent contractor, Social Security will evaluate your work based on the rules applied to self-employed individuals. The SGA rules for people who are self-employed consider a number of factors in addition to the dollar amounts that the person receives for their work. There are 3 SGA tests that Social Security considers when deciding whether or not a person's self-employment is SGA (

The first is whether or not the person is performing significant services for a substantial income. Basically, that just means that if the person's net self-employment earnings average over the SGA and if they perform physical or mental services to produce those earnings, then they are performing SGA. The second test is whether or not the person's services are comparable to the services performed by unimpaired individuals in the same community engaged in the same or similar businesses as their means of livelihood. And the third test is whether or not the worth of the services performed by the disabled person exceeds the SGA earnings guidelines, regardless of the amount of income that the person actually receives.

The reason that Social Security looks beyond a person's actual earnings when evaluating self-employment is because the amount of self-employment income that a self-employed individual receives does not necessarily accurately reflect the amount of work that they actually perform. For example, a self-employed farmer could work full-time or more while suffering a net loss from their business due to weather conditions or grain prices.

For specific information on how Social Security applies the 3 SGA tests for self-employed individuals, refer to the following references from Social Security's operations manual: &

Best, Jerry

Mar 25 2023 - 12:48pm
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