Brian Forsythe, Benefits Specialist, Resource Partnership
Clients occasionally call me with questions about working from home and how their benefits would be affected. My answer depends upon the type of work one plans to do. If you are an employee who is telecommuting the same rules apply as if you were performing your work at your employer’s location. If you’re running a home-based business, however, Social Security considers your income differently.
Let’s first look at working from home but not self-employed. If you are telecommuting but remain an employee of the company you are working for then you will be subject to the standard working rules. If you receive SSI, the first $85 that you earn each month will not be counted and then your SSI will be reduced $1 for every $2 you earn until your work income eliminates your SSI cash benefit. You will keep your MassHealth medical insurance because Social Security Regulation 1619(b) ensures that beneficiaries will not lose medical coverage if they become ineligible for SSI through work alone. You will need to report your monthly work income to Social Security to avoid potential overpayments.
If you receive SSDI, you would be subject to the 9 month Trial Work Period, whereby any month your gross income exceeds $670, will count as a Trial Work month. During Trial Work you can earn as much as you like without fear of losing your SSDI check. After completion of the Trial Work Period, you will then be subject to Substantial Gainful Activity (SGA) calculation. Once you complete your Trial Work Period, your SSDI check will be stopped if your gross work income reaches the SGA amount, which for 2008 is $940. If you need to get your benefits back due to loss or reduction in work income, you can still use the 36 month Extended Period of Eligibility and the 5 year Expedited Reinstatement Period. Again, it is your responsibility to notify Social Security of your work income to avoid possible overpayments.
Let’s now turn to home-based self-employment – in this case Social Security’s rules for self-employment apply. Social Security will not count your gross income, but will instead count your net income. You will be able to subtract your business expenses from your income before it is counted by Social Security. Also there is a special rule for Trial Work if you are self-employed. A month will be considered a Trial Work month at $670 of net income or 80 hours per month working in your business. Any business deduction that is allowed by the IRS will be accepted by Social Security. Additionally, Social Security will allow you to deduct your self-employment taxes from your income. Social Security also allows you to deduct for unpaid help if a relative or friend helps you run your business and that individual is not being paid.
Social Security can also help you start your own business or purchase the equipment you might need to telecommute through a Plan for Achieving Self Support (PASS Plan). This powerful tool can get you started on your quest for successful home-based employment. For more information on PASS Plans and other Social Security work incentives, contact Resource Partnership at (508) 647-1722.
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Resource Partnership
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