If you apply for Social Security Disability Insurance (SDDI), chances are, you won’t be able to work for at least one year due to specific mental and physical conditions.
While waiting for your benefit approval, you may engage in revenue-generating activities to boost your SSDI monthly payments. One option is being an entrepreneur, especially if your disability prevents you from working long term.
There are many parameters that the Social Security Administration (SSA) looks at before deciding whether to keep or terminate a worker’s disability benefits. Here’s how you can continue to benefit from SSDI until you become self-sufficient.
Who Can Benefit From SSDI?
Employees who develop occupational diseases and injuries that prevent them from working may be eligible for SSDI. That’s if they managed to gain enough work credits and have been paying their Social Security taxes on time. It may be open for younger workers who have brief work histories.
Those who can’t work or find it challenging to adjust because of their disabilities, or those whose conditions may prevent them from reentering the workforce for at least one year, are eligible. An SSDI beneficiary can expect to receive benefits as long as their disability remains.
5 Tips For Maintaining SSDI Benefits
A continuing disability that prevents a former worker from seeking gainful employment is the key to receiving SSDI benefits. However, there may be other factors that may cause you to lose your payments. Check out these tips to ensure you get the disability benefits you deserve.
1. Find Out Which Types Of Income Won’t Affect Your SSDI
When applying for SSDI benefits, the SSA will also look at the other forms of assistance the applicant receives. These payments may include workers’ compensation benefits, private insurance disability payments, and foreign government pension. In these instances, the amount you’ll regularly receive from your SSDI benefit may be affected.
A passive income, for instance, a rental property, may not affect SSDI eligibility. Such may be the case if the owner/SSDI beneficiary isn’t directly participating in the business activities, such as managing the property. Some business set-ups where the beneficiary isn’t fully involved in running the enterprise may also be considered as passive income. Consult with a skilled attorney or learn more about passive income to get more information.
2. Avail Of The PASS Program
The Plan to Achieve Self-Support (PASS) allows SSDI beneficiaries to gather resources and income needed to operate a new business venture while receiving SSDI funds simultaneously. While other types of income may impact the amount of disability insurance you receive, the PASS will not affect it.
Former employees who want to open a new business will have to prepare a business plan and other pertinent documents. Moreover, they need to consult with a disability lawyer to ensure they don’t get disqualified for an SSDI benefit while planning to grow their business.
3. Get Qualified For The Trial Work Period
Thanks to the Trial Work Period (TWP), an SSDI beneficiary won’t lose their disability insurance payments when they open a new business. A disabled beneficiary can avail TWP if their Net Earnings from Self Employment or NESE—calculated by subtracting business expenses from gross receipts and multiplying by 0.9235—reaches more than USD$940. The same holds true if you’ve been working for over 80 hours while you’re self-employed or running your business.
A TWP lasts for at least nine months within five years following the disability. It guarantees an SSDI beneficiary’s receipt of benefits no matter how much their business earns during the period. Also, the nine-month TWP doesn’t have to be consecutive.
What Happens After The TWP?
After nine months, the SSA will review the business performance and revenues collected. The business income will be measured based on the substantial gainful activity or SGA levels. As of 2021, this amount is set at USD$1,310 for non-blind persons, while the SGA cap for blind persons is at USD$2,190. If your enterprise hasn’t reached SGA levels, expect to continue receiving SSDI benefits and Medicare access.
Inversely, even if your business earns favorably during the review period, the SSA will continue to provide disability insurance payments for three more months before cutting it off. If your self-employment income drops below SGA levels, the agency will reinstate your benefits without you having to reapply.
The Extended Period Of Eligibility
As stated, the Extended Period of Eligibility or EPE begins the month following the nine-month cessation of the Trial Work Period. This reinstatement lasts for 36 consecutive months following the TWP.
The individual will report all earnings to the SSA for evaluation. If proven that income levels from self-employment are below SGA, the agency will continue sending benefit checks. Once a drop in self-employed earnings is reported, the SSA will perform the necessary actions to restore your SSDI access.
4. Maintain Contact With The SSA
Keeping in touch with the SSA is required if you’re a beneficiary of any of their insurance programs. If you’re a former employee who decided to open a small business following a disability, you have to inform the SSA regarding your plans so they can provide you with sound advice on how to move forward.
When availing of the incentives mentioned above, such as PASS, TWP, and EPE, you would have to contact SSA to report your income and working hours regularly. A recipient will also have to update the agency about any changes, for instance, when moving out, or while embarking on a business venture.
5. Continue Seeing Your Physician
One of the keys to maintaining your SSDI benefits is through regular physician visits. Seeing your doctor ensures your medical condition is assessed periodically.
Doctor’s diagnosis and medical records are crucial, as the SSA conducts disability reviews every few years to verify your eligibility as an SSDI beneficiary. You’ll be asked to provide medical evidence that your condition hasn’t improved. If the SSA confirms that you still can’t go to work, you’ll be receiving monthly SSDI payouts. Inversely, if you lose your benefits, you’ll have a chance to appeal.
Final Thoughts
The Social Security Administration provides benefits to persons who can no longer work because of disability through the SSDI Program. As the disability may limit the job opportunities of a former employee, setting up a business may be a good option. When starting a new venture, these SSDI benefits can reduce the financial hurdles a beneficiary faces in achieving self-sufficiency.
