Ask Larry

Will My Self-Employment Earnings Make Me Ineligible For Disability Benefits?

Larry, I've got a rather complicated SSDI question. I retired from my career in 2012, and became self employed. I was self employed till August 2016, at which point I became disabled and unable to work. Note that I had a net loss for every tax year of my self employment through the end of tax year 2016. This year, 2017, would have been the first year that I turned a profit.

I filed for SSDI in November of 2016, and received notification that my claim was approved in February 2017, with a date of disability of December 2016. My first month of benefit is 6/2017, and my first payment will be 7/2017.

Here's where it gets confusing... The SSA's rules for determining SGA for self employment are complicated.

This site:, says that:

“Countable income” from the business does not average more than the amount referred to above, but the livelihood which he or she derives from the business is:

Comparable to that which he or she had before becoming seriously impaired, or

Comparable to that of unimpaired self-employed individuals in his or her community engaged in the same or similar businesses as their means of livelihood."

Since I operated at a loss for the entire period of my self employment, does this mean that if a make a net income of $1 during my first 24 months (these rules apply only to the first 24 months of benefits, there are different rules for after 24 months, which are based on the 2017 $840/$1170 SGA #'s) of receiving benefits, I could lose my benefits (because my net income is higher than the years of loss)?

Also, would the same answer apply to any net earnings that occur during the 5 month waiting period?



This is a complicated issue that can't be fully addressed in this type of forum. Basically, you can't perform substantial gainful activity and still be eligible for disability benefits. The guideline for substantial gainful activity in 2017 is $1170 per month.

You should be okay if your net profit averages less than $1170 per month, unless Social Security feels like your work activity is reasonably worth more than $1170 per month even if you aren't showing that much of a profit. For example, if a person is working 10 hours per week as a doctor, Social Security could consider that to be substantial gainful activity even if they weren't showing a profit due to business conditions.

For more detailed information, refer to this section of Social Security's operations manual:

Best, Jerry

May 25 2017 - 7:37am
MaxiFi software running on a laptop
Get What's Yours!
Discover tens of thousands in extra retirement dollars with Maximize My Social Security software!
  • Find your maximized strategy
  • Unlimited what-ifs
  • Step-by-Step filing instructions
  • Our software's lifetime-benefit increase for an illustrative couple earning $65K each and planning to take retirement benefits at 62.

    Results will differ based on your specific case and filing strategy.

Getting Started is Easy
Web-based software. Works on ALL browsers. No download.
$40 Annual Household License
$299 Annual Financial Advisor License