The SSA & The Self Employed Claimant

Tuesday, June 12th, 2007

When it comes to disability, the default position of the Social Security Administration (the “SSA”) is that applicants are not disabled. Thus, the SSA draws every presumption and inference in favor of denying an application for Social Security Disability (“SSD”) benefits. One such presumption concerns applicants who were self-employed.

When an applicant who was self employed applies for SSD, the SSA presumes that the applicant is still working off the books. This presumption frequently gets extended to ridiculous lengths. I had a client who after receiving SSD told the SSA that he was resuming work for his wife’s company. Instead of rewarding the claimant for his honesty, the SSA demanded an overpayment on the grounds that he must have been working off the books for years.

Despite the fact that the SSA never has any evidence that a formerly self-employed SSD applicant is working off the books, the SSA asserts that it will deny benefits unless the claimant proves otherwise. The claimant can submit an affidavit that he or she is not working, which is the same evidence that must be accepted at a hearing. However then the SSA has rejected such affidavits at the initial application stage, and requested tax records. However, when I have produced the tax records revealing no income, or advised the SSA that the claimant did not file because there was no income, the SSA still refused to approve benefits for lack of evidence.

The problem is that the SSA is requiring the claimant to prove a negative; that is, something that does not exist. You can prove you are working by your testimony or that of co-workers. Employment and tax records can also establish gainful activity. Because there is no direct proof that one is not working, what can one do when the SSA rejects indirect proof?

I recently succeeded in getting SSD benefits approved for a formerly self-employed hardware store owner at the initial application stage. I refused to provide the tax records of the applicant’s spouse on numerous grounds. However, I supplied letters from the hardware store suppliers stating that the applicant no longer worked at the store. Those letters must have sufficed because the SSA, which had told me benefits would be denied if I refused to turn over the tax records, approved the application. The letters were very short, and required little effort on the part of the suppliers, or the claimant in securing them.

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