Can You Own Or Run A Small Business And Collect Social Security Disability Benefits
By Melissa Linebaugh, Contributing Author
If you’ve paid self-employment taxes for many years, you’ll be eligible for Social Security disability insurance just as if you worked for an employer who pays FICA taxes on your behalf. But if you still own a business or do some type of work, Social Security will not grant you disability benefits if it considers you to be doing “substantial gainful activity” .
For wage earners, Social Security uses an earnings cutoff amount, which is $1,310 in 2021, to determine whether you’re doing SGA. But for the self-employed, Social Security knows that income is not necessarily a good measure of how much you are working. Self-employment includes freelance work, contract work, or any other work you do for a business you own.
Instead, if you are self-employed, Social Security will assess whether your work is substantial gainful activity by using either the “Countable Income Test” or the “Three Tests.” Which test Social Security uses depends on whether your initial application is being evaluated or Social Security is reviewing your work activity after you’ve been receiving benefits.
There Are Income Limits On Earned Income But Not On Passive Investments
If you receive Social Security benefits due to a disability, theres a strict limit on how much income you can earn each month from working before you risk losing your benefits. Still, theres no limit to the amount of unearned income you can have, which means investments can be a valuable way to build wealth.
The Countable Income Test
Social Security will use the “Countable Income Test” to see if your work is SGA if you start your own business or begin to do contract or freelance work more than 24 months after you began receiving benefits.
First Social Security comes up with your countable income, as discussed above in the Three Tests. If your countable income is less than $1,310 a month, your benefits will not be terminated, no matter how much you are working.
If your countable income is more than $1,310 per month, your benefits will cease unless you can prove that you didn’t provide significant services to your business during that month. Whether you are doing significant services for your business is determined as discussed above in the Three Tests.
If you can show that your services are not significant, your benefits won’t be terminated, no matter how much money you make. Social Security cannot compare your work to what you used to do, to what business people in your community do, or judge what your work is actually worth .
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Why You Have To Tell Social Security About Your Assets If You Want Ssi Benefits
Supplemental Security Income , however, is a type of benefit for those Iowans who are both disabled and show significant financial need. You do not need to have worked a certain amount of time to qualify for this type of benefit. However, you need to show that you have a financial need for these benefits.
That means if you have any assets to your name, the SSA needs to know about them.
The general rule is that if you have more than $2000 as a single person or $3000 as a married couple, then you will likely not be able to receive SSI benefits even if you are disabled. These assets can include:
- Any money in any bank accounts, including savings, or any cash you have
- More than one vehicle to your name
- Any property besides the house that you live in
Buying A House On Disability Benefits Or Ssi
Brittan Jenkins19 Jan 2018
By on 23 Mar 2018
The dollars and cents that go into moving vary greatly depending on a number of factors.
Know how to navigate the system so you can find the home youre looking for.
The complexities of Social Security Disability Insurance and Supplemental Security Income benefits leave many people wondering not only if they can buy a home, but if buying a home will, in turn, affect their benefits in the future. The short answer is many people who receive SSDI and SSI benefits can and do qualify to buy a home, but will also likely face some additional hurdles unique to receiving these benefits.
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Choose Your Mortgage Agent Carefully
What Happens If I Am On Disability And Sell A Mobile Home Or Other Property
I’m already on disability but my trailer house and maintenance have become very difficult for me. It’s too much. I lease the lot it’s on. I was wondering if I should sell it would it affect my disability funds or cause it to cease? I have medical bills and expensive auto repairs that need to be taken care of. I’m looking into getting into section 8 living if possible. Can you tell me the result of such a move would cause me in the long run. I’d greatly appreciate your input. Thxcap on how much a person can have in countable assetsSSI does not count everything as an assethaving an overpaymentMost popular topics on SSDRC.com
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Social Security Will Not Usually Count Your Home Toward The Asset Limit For Ssi Purposes
By Melissa Linebaugh, Contributing Author
To qualify for disability benefits through the Supplemental Security Income program, you must meet the Social Security Administration’s definition of disabled and meet certain income and asset limits. SSI allows a single person to have only $2,000 in assets to stay eligible for SSI, and a married couple can only have $3,000 in assets. Fortunately, some assets, like the home you live in, will not be counted when determining your eligibility if you meet certain requirements. This is is called the “home exclusion.”
Care And Support Services
If you receive any care or support services or direct payments to arrange your own care and services, you should contact your local trust and let them know you’re moving.
Your local trust will then set up the same support and services you have been receiving, on a short-term basis, so that there is no gap in your care and support services when you move.
Later, your local trust will do their own health and social care assessment and decide what services and equipment you’re entitled to, according to their own standards.
If you move without telling your local trust, there may be a delay before you can receive any services.
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Disability Benefits For Veterans
You may be eligible for disability benefits if you’re on disability from your service in the Canadian Armed Forces or Merchant Navy.
You may get social assistance payments from:
- your province or territory
- your First Nation
These payments will depend on your household income, savings and investments.
You may also be eligible for health-related benefits from your province or territory. These benefits may include benefits that help cover the cost of:
- medications
- medical aids or devices
Can A Family Member Or Special Needs Trust Pay Bills Other Than For Food Or Shelter
BASICALLY YES. âPayment of your bills by someone else directly to the supplier is not income.â This is perhaps the most important of the âsafe harborâ expenditure provisions in the federal regulations because this provision explicitly permits all payments made to vendors, if for goods and services other than for food or shelter. This SSA regulation then provides some helpful examples to illustrate this important distribution rule: âExamples: If your daughter uses her own money to pay the grocer to provide you with food, the payment itself is not your income because you did not receive it. However, because of your daughterâs payment, the grocer provides you with food the food is in-kind income to you. On the other hand if your brother pays a lawn service to mow your grass, the payment is not income to you because the mowing cannot be used to meet your needs for food or shelter. Therefore, it is not in-kind incomeâ¦.â
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Consult A Disability Benefits Lawyer To Help You Understand The Ssdi Application And Appeals Process
In order to catch fraud attempts, the Social Security Administration can be quick to deny initial applications for Social Security Disability Insurance . One of the most common reasons your application can be denied is that you make too much money. Many applicants wonder why this matters if they are truly disabled. The SSA considers how much money you make before awarding you monthly disability benefits because SSDI is intended to provide financial assistance to individuals who have suffered a disability that prevents them from working and making a substantial income to support themselves.
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Income Limits For Social Security Disability Benefits
For 2021 the monthly income limit is $1,310 its $2,190 per month for people who are blind. If you can earn more than these amounts, the SSA deems you capable of engaging in substantial gainful activity, which prevents you from qualifying for benefits.
If you work while receiving SSD benefits, you have to report the income to the SSA, no matter how little you earn. During a trial work period of up to nine months , you can have unlimited earnings and still receive full benefits. Once the trial work period is over, the SSA will determine if youre still entitled to disability benefits.
SSD recipients are allowed to earn some income for a limited time and limited amount, mainly to fully test their potential ability to return to work and leave the SSD rolls, says David Gantt, an Asheville, N.C., lawyer who handles a large volume of SSD cases. “Once these very limited times and amounts are exceeded, the Social Security Administration will review any reported income and make inquiry and/or an investigation.
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Housing Executive Or Housing Association Home
Most Housing Executive and housing association tenants are allowed to transfer from or exchange their property. If you are already a tenant of the Housing Executive or a housing association and you wish to move, you can apply for a transfer. You will need to fill in a Housing/Transfer application form.
Your landlord will assess your housing needs and place you on the list for a transfer to other accommodation owned by any of the participating landlords within your areas of choice.
Asking for a transfer will not normally be considered where:
- your existing tenancy is less than two years old
- you have arrears of four weeks or more
- the existing property is not in a good state of repair or you own recoverable charges for repairs
- you are guilty of any other serious break of the tenancy conditions
- Home exchange and mobility schemes
Savings Limits And Social Security Disability
Whether there are limits on the amount of money you can have in a savings account and remain eligible for disability benefits through Social Security depends on which kinds of benefits you receive.
As long as you have a qualifying disability under the law, your prior work history determines your eligibility for Social Security Disability Insurance . You have to work long enough to earn a specific number of work credits before you become disabled. As a result, there are no limits on the amount of money you can have in a savings account and remain eligible for SSDI benefits because financial need is not part of the disability determination process.
Although SSDI does not limit your assets, if you receive substantial income from unearned sources such as investments or interest, or your spouse makes additional money from work, you will be taxed on a portion of your SSDI benefits.
If you receive Supplemental Security Income , on the other hand, you are far more limited in how much money you can have set aside in a savings account. SSI is a disability program designed to help financially destitute individuals, and you need to fit within strict financial parameters to qualify for benefits.
To be eligible for SSI benefits, therefore, you cannot have more than $2,000 in assets as a single person or more than $3,000 if you are part of a couple. For purposes of SSI, any money in a checking or savings account counts toward this asset limit.
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by Jason BarilAug 8, 2016
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The Significant Services And Substantial Income Test
If you provide significant services to your business and you earn substantial income from it, you are engaging in SGA. Whether or not your services are significant depends on what kind of business you have.
Significant Services
If you are the sole owner or worker in your business, your services are automatically considered significant. If this is your situation and your income from the business is more than $1,310 per month, you are doing SGA and you will not be considered for disability benefits.
If you have employees or co-owners, Social Security will conclude that your services are significant if you either contribute more than half of the total time needed to manage the business each month or you manage the company for 46 hours or more a month.
If you rent your land to someone else but you manage or help produce the farm’s crops or livestock, your services will be considered significant if your participation is “material.”
Substantial Income
In considering the income you make, Social Security will subtract some items from your business revenue. If you get unpaid help receive free rent, equipment, or other items or you have to pay disability-related expenses so you can work , Social Security will subtract the value of these items from your income before considering whether it’s substantial. The result is called your countable income.
Social Security will use your average income in these tests because earnings from self-employment generally change from month to month.
How A Lawyer With Our Firm Can Help You Apply For Disability Benefits
An attorney from our firm can offer assistance as you prepare an application for Social Security disability benefits. We can help you determine whether you have enough work credits for SSDI or should apply for SSI benefits. The law does not require you to work with a lawyer on the application and evaluation process for disability benefits, but having someone guide you can make the process go smoother.
Every year, thousands of qualifying individuals are denied Social Security Disability benefits because of errors they made on their applications. Many people have to appeal a denial of benefits to get the assistance they need. Our team can help you avoid this costly mistake or represent you during your appeal if you have already received a denial.
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Va Home Loans For Disabledveterans
The VA loan program, backed by the Department of VeteransAffairs, is one of the best home loans available. It does not require a downpayment and offers ultra-low mortgage rates. This makes it an attractive optionfor any veteran or service-member.
But there are additional VA loan benefits for veterans withservice-related medical problems or disabilities:
- VA disability income can be counted on your mortgage application
- You are exempt from paying the VA loan funding fee. Spouses of veterans whove died in the line of duty may also be exempt
- There are no minimum service requirements: If you have a service-connected disability, there is no minimum time to serve before youre eligible for a VA home loan
- You may be eligible for a property tax exemption and/or a mortgage tax credit to reduce your taxable income. Requirements vary by state, level of disability, and other factors. Check with your states tax authority for more information
Youll also need to meet the VAs standard lendingrequirements to qualify for one of these loans.
VA loan income requirements can be met by disability income.Technically, theres no minimum credit score to qualify for a VA loan however,many lenders require a FICO score of at least 580-620.
Rules If Somebody Else Helps Pay For Your Food And Shelter
If you are single and pay for your own food and shelter, you get up to $794 per month in SSI benefits. Shelter expenses can include rent, mortgage payments, property taxes, heating fuel, gas, electricity, water, sewer service, and garbage collection. To qualify for this benefits amount if you live alone, you cannot get help paying for these expenses. If you live with other people, you must pay your fair share without getting help.
If someone else pays for some or all of your food and shelter, Social Security may reduce the maximum SSI benefits amount you can get. This is called in-kind support and maintenance and how Social Security counts it depends on your situation.
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