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Calculating SSI Benefits for the Self-Employed

calculating ssi benefits self employedWhen you calculate your earnings regarding self-employment, the Social Security Administration (SSA) counts Net Earnings from Self Employment (NESE), which is your gross receipts minus your business expenses x .9235; therefore a portion of your net earnings count in determining your income from self-employment.

The SSA will work with you to project your average earnings from self-employment over the calendar year. Based on these projections, your monthly SSI check will be adjusted based on what you and SSA project will be your annual NESE.

Will Average Earnings from Self Employment Affect My SSI?

The reason it’s important to estimate what you expect your NESE annual earnings will be because SSA will adjust your SSI check – retroactively – during the entire calendar year. Inaccurate projects may incur an overpayment or underpayment when calculating SSI benefits.

A countable income formula will be used by SSA in order to determine your SSI monthly payment: The General Income Exclusion of $20 per month (if not already applied to unearned income); and the Earned Income Exclusion of $65 per month is applied. Finally, the remainder of your earnings is divided by two. When figuring your SSI payment amount, SSA counts less than half of your earnings.

Important Information for SSI Recipients

Property Essential to Self-Support (PESSS) excludes some resources that are essential to your means of self support when your eligibility for SSI is determined. Property that is used in your trade or business isn’t counted by SSA. In order to use this exclusion, inform SSA of these types of resources.

Student Earned Income Exclusion is a special exclusion for individuals under age 22 who are attending school regularly and earning income. The amount of exclusion allowed is $1700 per month or a maximum of $6840 in 2012.

Impairment-Related Work Expenses (IRWE) is a work incentive, in limited circumstances, that may help you during self-employment if you have reasonable expenses for items and services that are related to your disability, that are necessary for you to work, that you pay out of pocket during the months you’re working and not reimbursed by another source. For example, modifications to your home if you’re self-employed at home that you’re unable to deduct as a business expense.

Blind Work Expense (BWE) is an expense if your primary disability on record with SSA is blindness. SSA will not count any earned income that you use to meet expenses that are needed to earn that income in deciding your SSI eligibility and payment amount – including taxes that you pay for your business. To learn about the allowable deductions, you can contact a benefits counselor or SSA.

A Plan for Achieving Self Support (PASS) allows you to set aside income and/or resources for a specified time for a work goal. A PASS can help you to establish or maintain SSI eligibility and can increase your SSI payment. SSA doesn’t count the income and/or resources you set aside under a PASS when your SSI eligibility and payment amount are determined. A PASS should be submitted on form SSA-545 and must be approved by SSA. A PASS with a self-employment work goal should include a business plan. To learn more about a PASS, you can contact a Community Work Incentives Coordinator, a Benefits Information Network Liaison or SSA to learn more about a PASS.

For more information about ssi eligibility and social security disability law, visit the website of Sadaka Associates at



Principal & Founder
This article was written by Mark Sadaka, a seasoned trial lawyer in nationally significant cases. He fearlessly champions clients impacted by fatal or severe injuries caused by others or corporations. Renowned for his expertise in complex litigation, he's featured in books, sought after by media for interviews, and a highly sought speaker. Notably, he exclusively represents individuals facing life-changing injuries or substantial financial losses.

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