(877) 370 - 5788

Are Self-Employed People Covered By Social Security Disability Insurance (SSDI)?

Our economy relies on the contributions of self-employed workers—from small business owners to freelancers. The Bureau of Labor Statistics (BLS) estimates that more than 10 percent of the U.S. workforce is classified as self-employed. What happens if a self-employed person develops a disabling injury, illness, or other medical impairment? Can they qualify for SSDI?


The short answer is “yes”—it is possible for a self-employed person to apply for and be approved for SSDI benefits. At the same time, it is important to note that self-employed workers do face some unique challenges in the claims process. In this article, our Phoenix Social Security disability attorney provides a guide to SSDI for self-employed individuals in Arizona. 


Self-Employed People Pay FICA Taxes, Covered By Social Security Disability Insurance (SSDI)


As a starting point, it is important to emphasize that self-employed people can be covered by Social Security Disability Insurance (SSDI). Not every adult is covered by SSDI. To be “insured” by the federal disability program, you have to earn a sufficient number of “work credits” based on your age. Doing so requires paying enough into the program. 


Self-employed individuals are required to pay FICA (Federal Insurance Contributions Act) taxes, just like employees of a company. FICA taxes are paid to fund important social programs, such as Social Security and Medicare. One of the benefits that self-employed individuals are entitled to through their FICA tax contributions is SSDI coverage. 


How the SSA Evaluates the SSDI Claim of a Self-Employed Worker 


How does the government determine if a self-employed individual is actually disabled? As the applicant works for themselves, it can be complicated. The SSA has a specialized section of the law that it refers to when evaluating an SSDI claim for a self-employed worker. It is called Code of Federal Regulations § 404.1575. Unlike with hourly and salaried employees, self-employed individuals are not actually guaranteed to generate “income” through their work. As such, the SSA does not look purely at income of a self-employed person to determine financial eligibility for SSDI benefits. Instead, the SSA will apply the following tests: 


  • Test One: The SSA also starts with Test 1 when assessing the eligibility of self-employed workers. A self-employed worker will be deemed ineligible to receive SSDI benefits if they rendered any services deemed “significant to the operation of the business” and they received “substantial income from the business.”
  • Test Two and Test Three: If a self-employed worker is deemed eligible for SSDI benefits after Test One is applied by the SSA, the agency will use either Test Two or Test Three. These tests are more complicated, but they are effectively used to determine whether or not the applicant has done anything for a commercial purpose that is “comparable” to what would be done by an unimpaired individual. 


Medical Evidence is an Essential Component of Any SSDI Claim


If a self-employed person in Arizona is filing for Social Security Disability Insurance (SSDI), providing medical evidence is crucial to support their claim. Medical evidence includes everything from documentation from healthcare providers that confirm the severity and nature of the person’s disability to the results of diagnostic tests. Without adequate evidence, the Social Security Administration (SSA) may deny an SSDI claim on medical records. When you file for SSDI benefits in Arizona, make sure that you submit a comprehensive and well-supported initial application. The more medical evidence that you have, the better position you will be to get your disability benefits. 


Self-Employed Individuals Have a Right to Appeal a Social Security Disability Denial


Are you a self-employed worker who has had your SSDI claim denied? You are far from alone. Unfortunately, many hard-working self-employed people face challenges when filing for SSDI benefits. There is some good news: You are not out of options. You have every right to appeal an SSDI denial. That being said, you should act quickly. You have 60 days from the date on your SSDI denial letter to file a request for reconsideration. Reconsideration is the first stage of appeal in the Social Security disability claims process. Do not delay: Consult with a Phoenix SSDI appeals attorney as soon as possible after a denial. 


Speak to Our Phoenix, AZ Social Security Disability Lawyer for Immediate Help


At Snow, Carpio and Weekley, PLC, our Phoenix Social Security disability attorneys are standing by, ready to protect your financial interests. If you have any questions about applying for SSDI benefits as a self-employed individual, we are here to help. Contact us for a no cost, no commitment review of your case. With a law office in Phoenix, our law firm handles SSDI claims and SSDI appeals in Maricopa County and throughout all of Arizona. 


google icon