Entrepreneurship and Starting a Business on Disability Income

Many people can’t work because of their physical disabilities. So, they need disability benefits because. If you’re receiving disability benefits but still want to work, you may have to start your own business to earn income. However, starting a business while on disability has complications. This includes having limited income and possibly losing your disability status.

If you have questions about disability benefits or whether you might lose them by starting a business, contact a Social Security disability lawyer.

Social Security Disability Eligibility

Social Security Disability Insurance (SSDI) provides supplemental income to people who are unable to find work because of a disability. Supplemental Security Income (SSI) pays benefits to disabled people with limited income. If you become disabled, you can apply to the Social Security Administration (SSA) for these benefits.

To qualify for disability benefits, you need to have enough work credits. For SSDI benefits, you already must have a history of working and paying Social Security payroll taxes. Younger workers can qualify for disability with fewer credits.

You have to have a qualifying medical condition to get Social Security disability benefits. You also can’t be able to engage in any substantial gainful activity (SGA) because of a physical or mental condition. You need to present medical evidence to support your claim that you:

• Can’t do the work that you did before because of your condition
• Can’t adjust to other work because of your condition
• Have a disability that has or will keep you out of work for at least one year

Self-Employment and Disability Benefits

People with disabilities are often at an economic disadvantage. According to the National Disability Institute, more than 25% of people with disabilities are living in poverty. Disability benefits help, but they’re often not enough to cover basic living expenses. Self-employment could help many people with disabilities become more self-reliant. However, starting a business could mean losing benefits.

There are income caps for people on SSDI benefits. But that shouldn’t keep you from starting your own business.

The income amount for substantial gainful activity changes every year. In 2025, it means you can’t earn more than $1,620 per month or $2,700 per month for the blind. The SSA will use a few tests to determine whether your self-employment income qualifies as earned income, including:

• Significant services and substantial income test
• Compatibility test
• Worth of work test
• Countable income test

The Significant Services and Substantial Income Test

The SSA uses this test first. If you are a one-person business, your services are necessarily significant. If you have more than one employee or co-owner, your services will be significant if you contribute more than half of the total time to managing the business or if you manage the business for more than 45 hours per month.

Income from your job is substantial if it exceeds the minimum income allowed by the SSA. If you make more than the minimum, you may lose your disability benefits. Your income may also be substantial if the work you do is like the work you did before going on disability. This includes any work as a self-employed or small business owner in a similar business.

Determining whether the income qualifies as earned income or unearned income is important. Unearned income generally doesn’t count toward income limits. This includes Social Security benefits, state disability payments, unemployment benefits, and interest income.

The Comparability Test and Worth of Work Test

Social Security can then perform the comparability and worth of work tests. The comparability test compares your business to people in the community who make their livelihood from the same or similar business. The test will look at hours, skills, energy output, efficiency, duties, and responsibilities.

The worth of work test evaluates the work’s value. If the value exceeds the minimum income limit or is worth more than the limit compared to another employee, your work is a substantial gainful activity.

The Countable Income Test

The SSA may use the countable income test after you receive benefits for 24 months. If your monthly countable income averages more than the allowable amount for the months you worked, the SSA may determine that you engaged in substantial gainful activity.

The Trial Work Period (TWP) and Extended Period of Eligibility (EPE)

Most likely, you won’t immediately lose your benefits if you start a business. You’ll have a trial work period to test your ability to work while still qualifying as disabled. A trial work period lasts at least nine months during a rolling 60-month period. Any month where your earnings exceed the limit ($1,160 per month in 2025) counts as a month of services for the trial work period.

The Extended Period of Eligibility (EPE) begins the month after the trial period ends. You can still receive benefits during the first 36 months of the EPE. But your earnings must fall below the substantial gainful activity level.

Can You Earn More Through Entrepreneurship Than SSDI?

If you can earn a better income by acting as your own boss, you may want to take the risk of losing your SSDI benefits. You can still receive Social Security monthly payments as retirement benefits when you reach retirement age.

The U.S. Department of Labor (DOL) and Office of Disability Employment Policy (ODEP) have resources for self-employment and business ownership as a disabled person. According to the Bureau of Labor Statistics (BLS), over 8% of people with disabilities are self-employed. The rate of self-employment for people with disabilities is higher than for non-disabled people.

Employment Support for Entrepreneurs on SSDI

The Ticket to Work Program is an opportunity for people on SSDI. It supports career development for people ages 18 through 64 who receive disability income. This includes support for starting your own business. Work incentives also allow you to deduct business expenses from countable income.

The Plan to Achieve Self-Support (PASS) can help you get the items and services you need to start a business. This can help you set aside money to pay for these qualifying expenses—without the funds affecting your disability benefits. Find an experienced lawyer who can help make sure you properly calculate your income so you don’t lose access to your benefits. If you want to pursue a start-up while on disability benefits, talk to a Social Security disability lawyer.