Self-Employment Non-Service Months- for Earnings Limits

Some Background:
Bob from NY previously asked about his recently widowed daughter who works less than 45 hours in self-employment. He said per week, but wrote back to say she actually is working less than 45 hours per month. This makes a big difference because the general rule is that a self-employed person who puts in less than 45 hours per month is able to use that month as a "non-service" month for the earnings test. If so, then the beneficiary can receive a benefit for such a month despite the annual earnings.

Bob also wrote back to ask what procedure to follow to get the benefits, so here it goes.

The first thing to understand is that SSA considers any claim by a self-employed person to be questionable because a business owner can control the reporting of income. The other thing is that the actual dollar amount earned is not a conclusive factor in deciding if someone is renedering substantial services. The reader would do well to read a couple of sections of my Social Security Benefits Handbook: Section 412 and Section 809. These sections provide more detail about how SSA handles these self-employment claims.

So Bob, your daughter must be prepared for some probing and detailed questions about her business and what she is doing, and what she is not doing. She should also know that SSA will verify her statements by contacting vendors, customers and may even come by the business to do a little spying! Yes, that's exactly right.

Your daughter must visit the SS office and put in an earnings report. If she hasn't filed an application for Mother's benefits she should do so. Because she is self-employed she must make a visit in person to the SSA office.

Note that non-service months are available only in the first year of entitlement.

SSA's Programs Operations Manual System (the POMS) discusses the rules for determining whether self-employment services are sunstantial. Here is the link: https://secure.ssa.gov/apps10/poms.nsf/lnx/0302505065