How a Side Hustle Can Affect Eligibility for Social Security Disability Insurance

The Social Security Administration (SSA) defines “disabled” as an individual who cannot perform the work they were able to do before the onset of their disability. This definition is essential for determining eligibility for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits. To qualify for these programs, individuals must meet the SSA’s definition of disability.

However, if an individual owns a small business or is working a side hustle, their eligibility for SSDI benefits could be affected. If the SSA determines that the work put into the business or side hustle is a “substantial gainful activity,” the individual could lose their benefits or not qualify for benefits at all.

Substantial Gainful Activity (SGA)

A “substantial gainful activity” is any work activity that generates a certain level of income, as determined by the SSA. Any side hustle that earns money, including freelancing, tutoring, affiliate marketing, blogging, consulting, and e-commerce, could be considered a substantial gainful activity and could cause the SSA to stop your disability benefits.

When determining whether a side hustle or small business qualifies as a “substantial gainful activity,” the SSA takes into consideration several factors, including the amount of income generated from the activity, the time and effort invested in the activity, and the type of work involved.

For instance, let’s say an individual is receiving SSDI benefits due to a back injury that prevents them from doing heavy lifting or sitting for prolonged periods. However, they have started a small business selling handmade crafts online. Suppose the individual’s earnings from this business exceed a certain threshold determined by the SSA. In that case, the activity may be considered a substantial gainful activity, and the individual may lose their SSDI benefits.

Another example could be an individual who is receiving SSI benefits due to a mental health condition that prevents them from working a full-time job. However, they have started a side hustle as a freelance writer, and they earn a moderate income from their writing work. If the SSA determines that freelance writing is a substantial gainful activity, it may reduce or terminate the individual’s SSI benefits.

Similarly, an individual who is receiving disability benefits due to a chronic illness that makes it difficult for them to maintain a regular job may decide to start a tutoring service as a side hustle. Suppose the SSA determines that the tutoring work generates a significant income and requires substantial effort and time investment. In that case, they may consider it a substantial gainful activity and potentially stop the individual’s disability benefits.

Any Type of Work Can Be SGA

Therefore, it’s essential to understand that any type of work, whether freelancing, tutoring, affiliate marketing, blogging, consulting, or e-commerce, could be considered a substantial gainful activity and may affect an individual’s eligibility for disability benefits.

It’s important to note that the SSA considers the amount of income generated from the side hustle and the amount of work put into it. Suppose the work put into the side hustle is substantial enough to be considered a gainful activity. In that case, the SSA may conclude that the individual is capable of working and, thus, may terminate their disability benefits.

In summary, while owning a small business or working a side hustle is not prohibited for individuals receiving disability benefits, it’s crucial to understand that the income generated from these activities could affect their eligibility for benefits. It’s essential to consult with an experienced disability attorney or the SSA to determine how a side hustle or small business could affect one’s eligibility for disability benefits.

It’s crucial to consult with a disability attorney or the SSA to determine how a side hustle or small business could affect one’s eligibility for disability benefits.

References for Side Hustles with a Disability

Social Security Administration: The Red Book – A Guide to Work Incentives – https://www.ssa.gov/redbook/

Nolo’s Guide to Social Security Disability: Getting & Keeping Your Benefits Eleventh Edition (Amazon) – https://amzn.to/3GOGxO9