When you first begin working for yourself while you're receiving Social Security disability benefits, Social Security gives you the chance to try to start your business without losing your benefits. You have a total of nine months to try starting a business or freelancing, during what's called a "trial work period" (TWP). During the TWP, you won't lose benefits regardless of your earnings, as long as you report your work to the Social Security and you are still disabled.
Your trial work period starts when you begin to work for yourself and perform a "significant" amount of services. Social Security will find that your services are significant if you earn more than $940 (gross) per month or you work more than 80 hours in a month for your own business.
Your trial work period will last a total of nine months during a five-year period. The months do not have to be consecutive. Again, a month counts toward the nine-month TWP whenever you work over 80 hours in a month or earn more than $940 (in 2021) in a month.
During those nine months, you can make over the SGA amount ($1,310 in 2021) without having it affect your SSDI benefits. At the end of those nine months, if you are still working and Social Security decides that you are performing SGA, the agency will terminate your benefits.
Your Extended Period of Eligibility (EPE) begins the month after your TWP ends. If you don't have nine months that count as trial work, you aren't entitled to an EPE.
The Extended Period of Eligibility has two parts. The first 36 months of the EPE is called the "re-entitlement" period, where your small business or freelance activity might cause you to lose benefits for some months but not others.
If you run a small business or do freelance work during your re-entitlement period, your eligibility to receive a monthly SSDI check will be determined on a month-to-month basis. You will get benefits for any month that your work activity is not at the SGA level. During these 36 months, to determine whether your work activity is considered SGA, Social Security will apply the "countable income test," as discussed in "Can I Start a Small Business and Still Receive Social Security Disability Benefits?"
If your business activity is considered SGA in any month during the re-entitlement period, your benefits will be "ceased." You are entitled to a three-month grace period though, so you will still get benefits for that month plus the next two months. If your work activity falls below the SGA level again, your benefits will re-start without a new application. After a benefits cessation during the re-entitlement period, Social Security will evaluate your work under the "three tests" to decide if your benefits can restart.
After your 36-month re-entitlement period has ended, your benefits will stop if your self-employment rises to the SGA level again. You will have to apply for disability benefits again if you stop working for yourself because of your disability. However, if you become unable to continue your freelance or small business activity within five years of your benefits being stopped, you may be entitled to "expedited reinstatement" of your benefits.
For more information on the amount of self-employment work you can do, see our article on working for yourself while collecting Social Security disability benefits. For more information on the trial work period or EPE, see our article on starting to work while on SSDI.
Updated May 14, 2021