[Title 20 CFR 404.1575]
[Code of Federal Regulations (annual edition) - April 1, 1996 Edition]
[Title 20 - EMPLOYEES' BENEFITS]
[Chapter III - SOCIAL SECURITY ADMINISTRATION]
[Part 404 - FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )]
[Subpart P - Determining Disability and Blindness]
[Sec. 404.1575 - Evaluation guides if you are self-employed.]
[From the U.S. Government Publishing Office]




  20
  EMPLOYEES' BENEFITS
  2
  1996-04-01
  1996-04-01
  false
  
  404.1575
  Sec. 404.1575
  
    EMPLOYEES' BENEFITS
    SOCIAL SECURITY ADMINISTRATION
    FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
    Determining Disability and Blindness
  


Sec. 404.1575  Evaluation guides if you are self-employed.

    (a) If you are a self-employed person. We will consider your 
activities and their value to your business to decide whether you have 
engaged in substantial gainful activity if you are self-employed. We 
will not consider your income alone since the amount of income you 
actually receive may depend upon a number of different factors like 
capital investment, profit sharing agreements, etc. We will generally 
consider work that you are forced to stop after a short time because of 
your impairment as an unsuccessful work attempt and your income from 
that work will not show that you are able to do substantial gainful 
activity. We will evaluate your work activity on the value to the 
business of your services regardless of whether you receive an immediate 
income for your services. We consider that you have engaged in 
substantial gainful activity if--
    (1) Your work activity, in terms of factors such as hours, skills, 
energy output, efficiency, duties, and responsibilities, is comparable 
to that of unimpaired individuals in your community who are in the same 
or similar businesses as their means of livelihood;
    (2) Your work activity, although not comparable to that of 
unimpaired individuals, is clearly worth the amount

[[Page 349]]

shown in Sec. 404.1574(b)(2) when considered in terms of its value to 
the business, or when compared to the salary that an owner would pay to 
an employee to do the work you are doing; or
    (3) You render services that are significant to the operation of the 
business and receive a substantial income from the business.
    (b) What we mean by significant services. (1) If you are not a farm 
landlord and you operate a business entirely by yourself, any services 
that you render are significant to the business. If your business 
involves the services of more than one person, we will consider you to 
be rendering significant services if you contribute more than half the 
total time required for the management of the business, or you render 
management services for more than 45 hours a month regardless of the 
total management time required by the business.
    (2) If you are a farm landlord, that is, you rent farm land to 
another, we will consider you to be rendering significant services if 
you materially particpate in the production or the management of the 
production of the things raised on the rented farm. (See Sec. 404.1082 
of this chapter for an explanation of material participation.) If you 
were given social security earnings credits because you materially 
participated in the activities of the farm and you continue these same 
activities, we will consider you to be rendering significant services.
    (c) What we mean by substantial income. After your normal business 
expenses are deducted from your gross income to determine net income, we 
will deduct the reasonable value of any unpaid help, any soil bank 
payments that were included as farm income, and impairment-related work 
expenses described in Sec. 404.1576 that have not been deducted in 
determining your net earnings from self-employment. We will consider the 
resulting amount of income from the business to be substantial if--
    (1) It averages more than the amounts described in 
Sec. 404.1574(b)(2); or
    (2) It averages less than the amounts described in 
Sec. 404.1574(b)(2) but the livelihood which you get from the business 
is either comparable to what it was before you became severely impaired 
or is comparable to that of unimpaired self-employed persons in your 
community who are in the same or similar business as their means of 
livelihood.

[46 FR 4870, Jan. 19, 1981, as amended at 48 FR 21936, May 16, 1983; 49 
FR 22272, May 29, 1984]