“Substantial Gainful Activity” For Self-Employed Claimants

As an Ocala disability lawyer, I have helped many individuals who are self-employed with their Social Security disability applications and appeals. In every case, the Social Security Administration uses a five-step process to determine disability. The first step requires the applicant to prove that he or she is not currently engaged in “substantial gainful activity” (SGA).

For most employees, this step is relatively straightforward and involves checking their employment records to see how much they are earning each month.  If the monthly total is below a specified amount ($1010 in 2012), as a general rule, they are not engaged in SGA.  The SGA amounts change every year with changes in the national average wage index.

However, any work, regardless of income level, can be used as evidence that a claimant is able to work because the Social Security Administration can decide that the claimant is able to work more but has chosen not to in order to receive disability benefits.

For self-employed applicants, overcoming the SGA requirement can be a challenge.

If you are self-employed, the Social Security Administration uses three tests to determine if you are engaged in SGA by evaluating your work activity and its value to your business. Your self-employment work activity is SGA if:

1. You render significant services to the business and receive substantial income (income greater than the Earnings Guidelines set forth in the Social Security regulations); or
2. Your work activity (measured in terms of hours, skills, responsibilities, duties, efficiency and other relevant factors) is comparable to the work activity of persons without disability in your community who are engaged in the same or similar businesses; or
3. Your average monthly work activity is worth the SGA level earnings in terms of its effects on the business or when compared to the salary an owner would pay an employee to do the work.

If you are self-employed and would like more information about your eligibility for Social Security disability benefits, you are encouraged to contact experienced Ocala disability lawyer Claudeth Henry for a free initial consultation.  To schedule an appointment, fill out the form on this page or call (352) 304-5300.