Starting a Small Business While on Social Security Disability 101

If you’re on social security disability, you can still start your own business. A lot of people on social security disability assume that their benefits will be revoked the moment that they start earning money.

But this isn’t the case.

Social Security will look at three tests to see if your work is substantial gainful activity.

  1. Significant Services and Substantial Income Test. Social security will look at substantial income to determine if you’re still able to receive benefits. “Substantial income” was $1,170 per month in 2017. But then there’s also “comparable.” If you earned $900 a month before becoming disabled, you may lose benefits when you reach this figure. People in your community that run a similar business will also be considered into the equation. If the average person earns $1,000 in the same type of business and maintains their livelihood, you may have a $1,000 cutoff.
  2. Comparability Test. The comparability test compares you to an unimpaired person in your community doing the same type of business. This test compares responsibilities, duties, skill, energy output, efficiency and hours you work.
  3. Worth of Work Test. The Social Security Administration will also look at what’s called the “worth of work test.” This test will look at the value of your business to determine if the work that you do is worth more than $1,170 per month.

Yes, your small business can lead to you losing your Social Security benefits. The issue is if your countable income exceeds the $1,170 threshold – or the threshold limit for the year. You’ll need to find the threshold if you’re reading this and it’s no longer 2017.

Countable income is classified as your share of the profits, or the portion of your salary based on productivity.

“Social Security disability benefits are available if you are unable to ‘work for pay’ for at least 12 consecutive months due to illness or injury. Social Security Disability Insurance (SSDI) is a federal program that is funded by payroll taxes. It was designed as a safety net for disabled workers to provide regular income,” states the website of Ankin Law Office LLC.

When these circumstances change, you should consult with the Social Security Administration to determine how your benefits may change, too.

Trial Work Month

Social Security wants you to get up and working, so they offer what’s called a “trial work month.” A self-employed person will have a “trial work month” for any month that they earn $840 after expenses, or work for more than 80 hours on their own business.

You can ask for an extended period of eligibility that offers 36 months where you can receive benefits for months when your earnings aren’t substantial.

So, say you worked the following and earned:

  • September – $800 after expenses
  • October – $1,200 after expenses
  • November – $1,500 after expenses
  • December – $900 after expenses

You’ll receive benefits for the months of September and December because you didn’t have substantial earnings.

And if your business fails or your condition causes you to not be able to continue with your work, you can have your benefits reinstated within five years. You don’t need to file a new application or wait for your benefits to restart.

Grants are Available

Small business owners with disabilities will find that there are funding options to help them get started with their businesses. The Federal government sets aside grants for disabled business owners, and there are many other institutes that offer grants, including:

  • Private organizations
  • Foundations

If you want to find grants that can help you get your business off the ground, the Small Business Association is a great place to start. offers a variety of resources at your fingertips. The SBA will provide you with the best source of grants and loan options.

You’ll also find a great list of SBA lenders that will be able to provide you with funding to help get your business up and running.

It’s a resource that every new business owner should leverage when they need funding or advice. You can also find your local SCORE that will help you with everything, from your business plan to finding funding and helping mentor you on your business.

It’s a great opportunity for a disabled person who wants to start their own business the right way.