I received a decision today from Administrative Law Judge (“ALJ”) Seymour Rayner that approved Social Security Disability (“SSD”) benefits for the owner of a home improvement business. ALJ Rayner readily accepted that the claimant was disabled from his past work as a carpenter due to various cardiovascular related impairments. However, ALJ Rayner required a supplemental hearing to determine whether the claimant’s income as business owner precluded the receipt of SSD benefits.
Experience has shown that there is a presumption that self employed SSD claimants are working off the books. In this particular case, the disability examiner explicitly told the claimant that he would never receive SSD benefits because the examiner believed the claimant was still working.
Passive income does not prevent a claimant from receiving SSD benefits. For example, workers compensation or private disability benefits are not an automatic bar to receiving SSD benefits. Accessing an individual retirement account or tapping funds from other non-work sources such as investment income, rental property, annuities or earned interest, will not prevent entitlement to SSD benefits.
I provided ALJ Rayner with the claimant’s business records. There was no documentary evidence that the claimant was performing work or services of any kind. The claimant was simply taking periodic payments from the business as profits. In other words, the money that the claimant was getting from his business was passive income, and was no different than profits from selling stocks or bonds.
There are many ways to establish that income received is not the type that would preclude receiving SSD benefits. Simply because a Social Security representative says you cannot get SSD because you have income is not necessarily true.