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A Word of Caution about SSI and Self-employment

Updated on December 23, 2009
If you are limited to working from home, you are penalized instead of applauded for doing what you can.
If you are limited to working from home, you are penalized instead of applauded for doing what you can.


Many people who get SSI and Social Security Disability (SSDI) for anxiety disorders receive these payments partially because they cannot leave the house alone. Not everyone with an anxiety disorder on SSDI has this difficulty, but it is one of the qualifying criteria for SSDI for anxiety disorders. However, the practices of the Social Security Administration (SSA) seem to penalize those who want to work but cannot work outside the home.

If a person receives SSI and not just Social Security Disability and the individual starts working from home as being self-employed, the Social Security Administration calculates the self-employment earnings from the beginning of the year. So, if someone started working from home in July (or any other month), the SSA treats it as if the person has started working from home in January.

Therefore, the Social Security Administration can decide that you need to repay the SSI you received during the months that you weren't working! I started working from home with freelance writing in July. I reported my new employment and income beginning July. The SSA decided that I should no longer get SSI since my work from home income was above their monthly income limit for SSI. I was totally fine with that since I make much more from home than my small SSI check.

The shock came when I received the letter months later that said that I owe the Social Security Admnistration the SSI money that I received from January-July. People have the option of appealing this or claiming hardship. Even if the person does not appeal the decision or claim hardship, the amount is recalculated for the year when the person files their income tax the following year. If the amount calculated from the income tax shows that the person did not make enough to have the SSI taken back for the year, the Social Security Administration may return some or all of the money that was paid back according to the SSA representative.

Obviously, this is not logical. You would think that the SSA would use the person's start date to do their calculations for SSI. It's just another example of how the Social Security Admnistration makes it more difficult for people who need to work from home due to anxiety disorders like agoraphobia.

To recap, if you work from home instead of having a traditional job, you will have to pay back the SSI from the beginning of the year if the SSA decides you no longer qualify for SSI. Also, people who work from home who are on SSI or SSDI can only work 45 hours a month. People who work outside the home can work more hours. (Again, I don't see the logic in that at all. I think it should be a straight income limit for everyone.)

If ANYONE understands the logic for these SSA practices, please share!
I am not an authority on SSA practices. Please contact the SSA and discuss your case and situation if you have any questions.



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