SSDI and LLC ownership

[staxx]

Hello,

My mom has been on SSDI for about 15 years after she got hit by 2 drunk drivers in 2 weeks.

I've been running a business as a sole prop (which has been wrong to do since I've been getting help with running my business). My mom had helped me get started with marketing (most of my customers are her friends), and she is bi-lingual and talks to some for me.

I'm trying to reorganize my business properly as an LLC, and wanted to list her as an owner (and employee). She would only be working <20hr/month and wouldn't even be paid more than $400/mo, basically just making phone calls and driving around. She is concerned about how this would affect her SSDI though. Looking through the SSA website, I see stuff about a trial work period when being paid >$720/mo and continuing to receive benefits for 3 years if making less than $1010/mo. Nothing about being allowed to work when making under those amounts though.

Basically my question is if she were to continue helping me, would it affect her SSDI?

 

[OHRoadwarrior]

It could. They are free to reassess her condition at any time.

 

[TheGeekess]

Hello,

My mom has been on SSDI for about 15 years after she got hit by 2 drunk drivers in 2 weeks.

I've been running a business as a sole prop (which has been wrong to do since I've been getting help with running my business). My mom had helped me get started with marketing (most of my customers are her friends), and she is bi-lingual and talks to some for me.

I'm trying to reorganize my business properly as an LLC, and wanted to list her as an owner (and employee). She would only be working <20hr/month and wouldn't even be paid more than $400/mo, basically just making phone calls and driving around. She is concerned about how this would affect her SSDI though. Looking through the SSA website, I see stuff about a trial work period when being paid >$720/mo and continuing to receive benefits for 3 years if making less than $1010/mo. Nothing about being allowed to work when making under those amounts though.

Basically my question is if she were to continue helping me, would it affect her SSDI?

Two things can cause us to decide that you are no longer disabled and to stop your benefits.

Your disability benefits will stop if you work at a level we consider "substantial."

In 2012, average earnings of $1,010 or more per month ($1,690 or more per month if you are blind) are usually considered substantial.

Your disability benefits also will stop if we decide that your medical condition has improved to the point that you are no longer disabled.

You are responsible for promptly reporting any improvement in your condition, if you return to work, and certain other events as long as you are receiving disability benefits. The booklet we send you when your application is approved explains what you need to report to us.

http://www.ssa.gov/dibplan/dwork2.htm

If you work while receiving disability payments

You should tell us if you take a job or become self-employed, no matter how little you earn. Please let us know how many hours you expect to work and when your work starts or stops. If you still are disabled, you will be eligible for a trial work period, and you can continue receiving benefits for up to nine months. Also, tell us if you have any special work expenses because of your disability (such as specialized equipment, a wheelchair or even prescription drugs) or if there is any change in the amount of those expenses.

http://www.ssa.gov/pubs/10153.html#a0=3&part2=

 

[tranquility]

Hate to be a taxpayer and everything, but if a person can work, why should that not decrease disability income? I mean, really. I understand and accept the give a man a fish, but, if they can fish, why am I giving it?

Sure, society gains from people working. It just seems a person who attenuates the work based on how much free stuff they're getting needs to think about the moral and not just the legal argument. I know disabled people. They are wonderful and terrific and I am proud to be able to help them live. But, they are not working. They are not because they can't. Can not. Or, if they can, can't to a level to support themselves.

Why must everyone plan to game the system? Not *paying* more in taxes according to the rules seems a bit different from not *getting* more in benefits according to the rules.

Sorry for not helping and just bloviating, but, this seems a question that won't be asked if it continues to be asked. (If that makes any sense.) At some point, things that cannot continue, won't.

 

[staxx]

Hey tranqulity, I understand the concern. Seeing the large number of people on this forum that are purely trying to game the system (poor excuse to be on disability, working just under the threshold), it angers me too. Hell, it angers me that I have an extended family member that games his veteran benefits (he was perfectly fine until he realized what he can claim for faking PTSD), and there's nothing anyone can really do about it.

At the same time there's a fundamental difference between them and my mom. She got hit by those drunk drivers when I was a kid, I remember having to help her with everything growing up and has a legitimate physical inability to be going out and getting a job.

Basically what i'm asking is if I can pay her for what basically amounts to her socializing with her friends without worrying about her losing her benefits. If it's a portion that okay, but if she were losing the full amount to be getting less money, that's a concern.

Thank you to TheGeekness for answer you gave, I wasn't able to find that exact info.

 

[Onderzoek]

One way people 'game' the system is to hire their immigrant elderly relatives and pay them enough money to earn 4 quarters of coverage a year for 10 years in order to get them a Social Security retirement check and Medicare for the rest of their lives. Your mother is already entitled to benefits but additional Social Security taxable earnings could result in a recomp and maybe increase her benefits. So paying her a wage for socializing is your own method of gaming the Social Security system. SSA employees also may suspect that you are deliberately paying her less than what her work is worth as a wages. If she is a co-owner of the business, that makes her self-employed and then she has to keep track of the business decisions she makes and the number of hours she spends working and someone would have to determine what it would cost for the business to hire someone else to do the work she is doing to determine the true value.

Lots of unintended consequences are possible.

 

[OHRoadwarrior]

You are trying to justify the same way everyone else does. I have been hit by 7 negligent drivers over the years. Have lived severely disabled for over 2 decades. Have been off on sick leave AGAIN for over 3 months and it doesn't look like I am going back. If you want to help mom, give her a gift, which will not affect her SSDI. Establishing she can work in a carrier/transporter capacity can muck up the line distinguishing whether she is still disabled. Fish or cut bait. She either can or she can't.

Hey tranqulity, I understand the concern. Seeing the large number of people on this forum that are purely trying to game the system (poor excuse to be on disability, working just under the threshold), it angers me too. Hell, it angers me that I have an extended family member that games his veteran benefits (he was perfectly fine until he realized what he can claim for faking PTSD), and there's nothing anyone can really do about it.

At the same time there's a fundamental difference between them and my mom. She got hit by those drunk drivers when I was a kid, I remember having to help her with everything growing up and has a legitimate physical inability to be going out and getting a job.

Basically what i'm asking is if I can pay her for what basically amounts to her socializing with her friends without worrying about her losing her benefits. If it's a portion that okay, but if she were losing the full amount to be getting less money, that's a concern.

Thank you to TheGeekness for answer you gave, I wasn't able to find that exact info.