Independent Contracting and Supplimentary Income

[Dr.Starfish]

Hello. I’d like to know, if someone receives supplimentary income/benefits from Social Security, and the person returns to work, would that person neccessarily jeopardize their benefits? I’m aware of of the fact that with most vocations, the income is reported to Social Security-does that include work-at-home programs (via the internet or through mail order, etc.)? I’m also aware that there’s a maximum amount you can earn if you decide to work, and still keep your benefits? What is the cut-off point?
What types of vocations can you work as in independent contractor?

[Phlosphr]

I believe that depends on what state you are in. There are federal regulations that your state has to remain in compliance with, but your state ultimately decides the rate at which you can earn after you start collecting SS benefits. I am not 100% sure about that, but I believe you can earn only up to a certain amount, depending on your specific SS benefits regulations…A call to your administrator should take care of your Q rather quickly.

[Gfactor]

@Dr. Starfish

Hello. I’d like to know, if someone receives supplimentary income/benefits from Social Security, and the person returns to work, would that person neccessarily jeopardize their benefits? I’m aware of of the fact that with most vocations, the income is reported to Social Security-does that include work-at-home programs (via the internet or through mail order, etc.)? I’m also aware that there’s a maximum amount you can earn if you decide to work, and still keep your benefits? What is the cut-off point?
What types of vocations can you work as in independent contractor?

A. No working does not necessarily jeopardize your benefits, as long as you make less than the threshold.

B. It doesn’t matter whether you are an independend contractor or a W-2 employee. Social Security has ways of finding out. But more to the point. If you make more than $600 as an independent contractor, the person paying you is required to file a form 1099, which lets the IRS know that you got the money. Social Security gets this info from the IRS.

C. You can learn more about SSI here http://www.ssa.gov/notices/supplemental-security-income/

Hope this helps.

[Dr.Starfish]

@Gfactor

A. No working does not necessarily jeopardize your benefits, as long as you make less than the threshold.

B. It doesn’t matter whether you are an independend contractor or a W-2 employee. Social Security has ways of finding out. But more to the point. If you make more than $600 as an independent contractor, the person paying you is required to file a form 1099, which lets the IRS know that you got the money. Social Security gets this info from the IRS.

C. You can learn more about SSI here http://www.ssa.gov/notices/supplemental-security-income/

Hope this helps.

Where did you obtain your information? I recall seeing somewhere at the social security website that $810/month is the cut-off point, whether you get supplimentary income from SSI or SSD. I could be at an error-I should go back and double-check.
What kind of work can you do as an independent contractor? I’m assuming that implies freelancing? If you become affiliated with work-at-home businesses, can you work as an IC, or is the income reported to Social Security, and you’re automatically part of the company network?
What about working as a temp, or out of a staffing company?
Does unemployment income confct with Social Security?
Besides participating in online surveys, are they any other ventures online in which you’ll be paid quickly, or if you need cash right away?

[C_K_Dexter_Haven]

Does unemployment income confct with Social Security?

IANAL, but my educated guess is that it’s the other way about: if you’re collecting retirement benefits from Social Security, you’ll fail to get unemployment. If you’re retired, it would be hard to argue that you’re “able, available, actively seeking work.”

[barbitu8]

Refer to the following regs: http://www.ssa.gov/OP_Home/cfr20/416/416-1100.htm

http://www.ssa.gov/OP_Home/cfr20/416/416-1102.htm

http://www.ssa.gov/OP_Home/cfr20/416/416-1104.htm

Earnings over $810 a month (the amount has been steadily increasing; a few years ago it was only $500 a month, and a few years before that $300) is considered SGA. However, there is a big difference between Title II (those who get disability benefits based on their work history) and Title XVI (SSI - those who do not qualify based on their quarters of coverage).

Under Title II, a person is entitled to a trial work period of 9 months, during which his earnings is unlimited to still get benefits. Once he has used up those 9 months (they need not be consecutive), he will be granted an “extended period of eligibility” for 27 more months. During those months, he will get benefits for any month he does not engage in SGA, but not for those for which he engages in SGA.

However, SSI (Title XVI) is based on need. Your earnings and assets (including deemed earnings and deemed assets, but not those assets which are specifically excluded [for which you will have to check the SSI regs which were referenced above]) must be below the amount specified. Once either your earnings or assets exceed the minimum amount to make you eligible, you are no longer eligible. This means that you do not get a TWP or an EPE. You don’t get benefits for any month for which your earnings or assets exceed the eligibility requirements. However, if you stop working before 12 months, you will once again be eligible for benefits without filing a new application. If your benefits have been suspended for 12 months, you must file a new application.

[barbitu8]

I should add that once you are found eligible for Title II disability benefits (not the SSI benefits to which the OP referred), and you resume work, you will be entitled to a 9-month TWP; however, you need not earn SGA levels for a month to be considered a trial work month. The present law is that any amount over $530 is considered services and will count as a trial work month. But consider this: during the years 1979-1989 $75 was considered services and from 1999-2000, a paltry $200 was considered services. So the amounts have been raised considerably, and about time. (20 CFR 404.1592)

[Gfactor]

@barbitu8

However, SSI (Title XVI) is based on need. Your earnings and assets (including deemed earnings and deemed assets, but not those assets which are specifically excluded [for which you will have to check the SSI regs which were referenced above]) must be below the amount specified. Once either your earnings or assets exceed the minimum amount to make you eligible, you are no longer eligible. This means that you do not get a TWP or an EPE. You don’t get benefits for any month for which your earnings or assets exceed the eligibility requirements. However, if you stop working before 12 months, you will once again be eligible for benefits without filing a new application. If your benefits have been suspended for 12 months, you must file a new application.

Thanks for the elaboration. I think barbitu8 and I agree on the points that I made before regarding SSI.

1. The fact that you work doesn’t disqualify you, your earnings do.

2. It doesn’t matter how you get the money. The Social Security Administration
   looks at your income.

Income is anything you receive in cash or in kind that you can use to meet your needs for food, clothing, and shelter. Sometimes income also includes more or less than you actually receive (see §416.1110 and §416.1123(b)). In-kind income is not cash, but is actually food, clothing, or shelter, or something you can use to get one of these.

So your questions about independent contractor work miss the point. Whatever you get paid will be counted as earnings. Independent contractor work may be slightly easier to conceal. But I have represented people who thought that they could do independent contractor work and not tell social security. They were assessed an overpayment when social security figured it out. The overpayment was then deducted from their current benefits, which they did not like very much.

IANAL, but my educated guess is that it’s the other way about_: if you’re collecting retirement benefits from Social Security, you’ll fail to get unemployment. If you’re retired, it would be hard to argue that you’re “able, available, actively seeking work.”

Right point, wrong program. You qualify for SSI if you are disabled, and therefore unable to work in the national economy. Hence you would not be able to work. The two benefits are quite inconsistent. E.g., http://www.web.ucrc.state.oh.us/abstract/Court/c0000025.htm (recipient of SSD benefits ineligible for unemployment).

Now workers’ compensation benefits are another matter. http://www.ssa.gov/OP_Home/cfr20/416/416-1121.htm

Also there is some interesting caselaw out there about what happens if you first file a disability claim and lose, and then seek unemployment benefits.

Besides participating in online surveys, are they any other ventures online in which you’ll be paid quickly, or if you need cash right away?

I’m still trying to get this one to work for me . . .
and I seem to remember seeing something on latenight television about tiny little ads. . .

[Dr.Starfish]

@barbitu8

Refer to the following regs: http://www.ssa.gov/OP_Home/cfr20/416/416-1100.htm

http://www.ssa.gov/OP_Home/cfr20/416/416-1102.htm

http://www.ssa.gov/OP_Home/cfr20/416/416-1104.htm

Earnings over $810 a month (the amount has been steadily increasing; a few years ago it was only $500 a month, and a few years before that $300) is considered SGA. However, there is a big difference between Title II (those who get disability benefits based on their work history) and Title XVI (SSI - those who do not qualify based on their quarters of coverage).

Under Title II, a person is entitled to a trial work period of 9 months, during which his earnings is unlimited to still get benefits. Once he has used up those 9 months (they need not be consecutive), he will be granted an “extended period of eligibility” for 27 more months. During those months, he will get benefits for any month he does not engage in SGA, but not for those for which he engages in SGA.

However, SSI (Title XVI) is based on need. Your earnings and assets (including deemed earnings and deemed assets, but not those assets which are specifically excluded [for which you will have to check the SSI regs which were referenced above]) must be below the amount specified. Once either your earnings or assets exceed the minimum amount to make you eligible, you are no longer eligible. This means that you do not get a TWP or an EPE. You don’t get benefits for any month for which your earnings or assets exceed the eligibility requirements. However, if you stop working before 12 months, you will once again be eligible for benefits without filing a new application. If your benefits have been suspended for 12 months, you must file a new application.

Where are you getting your figure of $810/month?

[Gfactor]

@Dr. Starfish

Where are you getting your figure of $810/month?

I believe that standard applies to Title II, which is different. . .

[barbitu8]

The amount considered substantial gainful activity [SGA} is determined each year as published in the Federal Register. There is a provision in the Federal Regulations referring to this but it’s late at night (actually early morning) and I’m not going to look it up now.

The distinction one must keep in mind is that SGA is important to determine eligibility for benefits (title II or title XVI), but once you are determined to be “disabled” the test for the TWP is not SGA but “services” as I noted above. Under SSI, one of the continuing tests to determine eligibility is whether your income or assets exceed the allowable amounts. (You don’t get TWP under SSI.) Once you have used up your 9 months of TWP, the test to determine whether you will get any benefits for the next 27 months is once again SGA. After the EPE ends, you must file a new application if you wish to get benefits again. If you do so, and you are found entitled to benefits, you no longer get the TWP and EPE.

As to retirement benefits: No limitations on the amount you earn now exist for retirement benefits. (Thank God. This was a hassle in the past, to determine whether one was actually retired or not, which arose quite frequently in small businesses - the owner would allegedly retire and “sell” the business to his wife or other family members. I’m not going to get more detailed in this digression, as it is not the issue in this thread.) If you are entitled to Disability Benefits, once you attain the full retirement age, those benefits are terminated but are replaced by “Old Age Benefits” (the official name for retirement benefits). Full retirement age was 65, but it is being increased slowly each year so that it will eventually be 67, unless the Act is amended again.

[barbitu8]

OK. Here’s the reg:
http://208.56.213.87/cfrssaframe.html

2. Earnings that will ordinarily show that you have engaged in substantial gainful activity. We will consider that your earnings from your work activity as an employee (including earnings from sheltered work, see paragraph (b)(4) of this section) show that you engaged in substantial gainful activity if:

(i) Before January 1, 2001, they averaged more than the amount(s) in Table 1 of this section for the time(s) in which you worked.

(ii) Beginning January 1, 2001, and each year thereafter, they average more than the larger of:

(A) The amount for the previous year, or

(B) An amount adjusted for national wage growth, calculated by multiplying $700 by the ratio of the national average wage index for the year 2 calendar years before the year for which the amount is being calculated to the national average wage index for the year 1998. We will then round the resulting amount to the next higher multiple of $10 where such amount is a multiple of $5 but not of $10 and to the nearest multiple of $10 in any other case.

Table 1 For months: Your monthly earnings averaged more than:
In calendar years before 1976 $200
In calendar year 1976 230
In calendar year 1977 240
In calendar year 1978 260
In calendar year 1979 280
In calendar years 1980-1989 300
January 1990-June 1999 500
July 1999-December 2000 700

(3) Earnings that will ordinarily show that you have not engaged in substantial gainful activity. If your earnings for months beginning January, 2001, are equal to or less than the amount(s) determined under paragraph (b)(2)(ii) of this section for the year(s) in which you work, we will generally consider that the earnings from your work as an employee will show that you have not engaged in substantial gainful activity. If your earnings for months before January, 2001, were less than the amount(s) in Table 2 of this section for the year(s) in which you worked, we will generally consider that the earnings from your work as an employee will show that you have not engaged in substantial gainful activity.

Table 2 For months: Your monthly earnings averaged less than:
In calendar years before 1976 $130
In calendar year 1976 150
In calendar year 1977 160
In calendar year 1978 170
In calendar year 1979 180
In calendar years 1980-1989 190
In calendar years 1990-2000 300

(4) Before January 1, 2001, if you worked in a sheltered workshop. Before January 1, 2001, if you worked in a sheltered workshop or a comparable facility especially set up for severely impaired persons, we will ordinarily consider that your earnings from this work show that you have engaged in substantial gainful activity if your earnings averaged more than the amounts in table 1 of paragraph (b)(2) of this section. Average monthly earnings from a sheltered workshop or a comparable facility that are equal to or less than those amounts indicated in table 1 of paragraph (b)(2) of this section will ordinarily show that you have not engaged in substantial gainful activity without the need to consider other information, as described in paragraph (b)(6) of this section, regardless of whether they are more or less than those indicated in paragraph (b)(3) of this section. When your earnings from a sheltered workshop or comparable facility are equal to or less than those amounts indicated in table 1 of paragraph (b)(2), we will consider the provisions of paragraph (b)(6) of this section only if there is evidence showing that you may have engaged in substantial gainful activity. For work performed in a sheltered workshop in months beginning January 2001, the rules of paragraph (b)(2), (3), and (6) apply the same as they do to any other work done by an employee.

(5) If there is evidence showing that you may have done substantial gainful activity. If there is evidence showing that you may have done substantial gainful activity, we will apply the criteria in paragraph (b)(6) of this section regarding comparability and value of services.

(6) Earnings that are not high enough to ordinarily show that you engaged in substantial gainful activity.

(i) Before January 1, 2001, if your average monthly earnings were between the amounts shown in paragraphs (b)(2) and (3) of this section, we will generally consider other information in addition to your earnings (see paragraph (b)(6)(iii) of this section). …

The “amount adjusted for national wage growth,” etc. is published annually in the Register. This is a good amendment, keeping SGA more in tune with inflation.

As to my previous post, I want to make clear that the conversion of disability benefits to old-age insurance benefits occurs only in Title II. This does not apply to SSI. In fact, even if one is not “disabled,” once an individual attains full retirement age, he or she is entitled to SSI if he or she does not have enough earnings for old-age insurance benefits.

[barbitu8]

…Provided, of course, that the other requirements for SSI eligibility are met, namely the limited earnings and assets.

[Gfactor]

@barbitu8

…Provided, of course, that the other requirements for SSI eligibility are met, namely the limited earnings and assets.

And of course, the reason one would be getting SSI instead of SSD is that they have not paid enough into the Social Security trust fund through wages to earn a disability benefit that exceeds the paltry SSI Federal Benefit Rate.

[barbitu8]

@Gfactor

And of course, the reason one would be getting SSI instead of SSD is that they have not paid enough into the Social Security trust fund through wages to earn a disability benefit that exceeds the paltry SSI Federal Benefit Rate.

Generally that’s true, but in addition to being fully insured one must also be currently insured for SSD benefits (20 quarters of coverage in 40 quarters). One must be both fully insured (usually this will be 40 QCs) in addition to being currently insured to get SSD benefits.

[Gfactor]

@barbitu8

Generally that’s true, but in addition to being fully insured one must also be currently insured for SSD benefits (20 quarters of coverage in 40 quarters). One must be both fully insured (usually this will be 40 QCs) in addition to being currently insured to get SSD benefits.

Right on.