If You're a Gig Worker, Here's How You Can Still Get Disability Protection
Company benefits are great to have, but if you're a contractor, chances are you're out of luck. And if you get injured or are too sick to work, you could quickly find yourself in hot water. However, those self-employment taxes you’re paying come with a federal benefit ready to act as your safety net.


The modern gig economy, dependent on contract workers, offers flexible jobs to millions of people, but only so long as these people are able to show up. No work, no pay, no benefits.
More traditional part-time workers can face a similar situation. As the economy booms, demand for seasonal workers is on the rise. Retailer Kohl’s announced it will increase holiday hiring to 90,000 people this year, and Target will hire 120,000 people this year — up from 100,000 in 2017. Most of these workers also will not be eligible for company benefits.
Most part-time employees do have one advantage over freelancers: access to workers’ compensation benefits, as long as they receive a wage and have taxes deducted from their paychecks. On the other hand, companies generally are not required to provide workers’ compensation coverage to independent contractors. If these workers get injured on the job, they may have few supports. Some very small companies are excluded from this requirement as well. One way to verify your options is to check with your state, as requirements vary. Here is a resource from the National Federation of Independent Business. Yet the Social Security Administration (SSA) estimates one in four 20-year-olds will be disabled before reaching age 67.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
At the national level and across some states, there has been some discussion of – though not much movement toward — a system of “portable benefits” that would follow individuals across their variety of gig employments. This would provide a much-needed safety net for surviving a job interruption. According to the Federal Reserve Board’s 2015 survey regarding household economics, 53% of adults don't have a rainy day fund that could cover them for even three months of living expenses. Almost half reported not having enough cash to cover a $400 emergency expense.
Your Disability Safety Net: SSDI
Until such a system gets implemented, it’s good to know that there is already a program in place designed to help today’s part-timers and gig workers: the Social Security Disability Insurance (SSDI) program. SSDI is an income replacement insurance for former workers with disabilities, provided through the Social Security Administration. To be clear, this “insurance” is not something you have to sign up for or buy. If you pay FICA or self-employment taxes, you are already paying into it and are on your way to being covered. Workers who earn at least $1,360 (in 2019) per quarter get credit toward their disability insurance. Typically, to be covered you must have paid FICA payroll or self-employment taxes for five out of the last 10 years.
SSDI benefits are portable — available if you meet eligibility requirements, no matter how many different companies you were employed by.
When someone experiences a severe disability that prevents them from working for 12 months or more, SSDI also unlocks other important benefits, such as Medicare prior to age 65, dependent benefits and return to work support. SSDI continues until the individual is able to return to work on a regular basis or until retirement age, when old age benefits kick in. It has the added advantage of protecting future retirement benefit income.
Applying for SSDI Benefits
Although more than 2 million people apply for SSDI benefits each year, doing so is ultimately a personal decision. The experience is different for everyone. Work history, education, age and mental or physical conditions can all impact the SSDI process and your outcome.
To be eligible for benefits, you have to meet the work history requirements and be able to prove that your condition prevents you from working. Provided you meet the SSA’s requirements, SSDI is an extremely valuable resource to keep in mind if you experience a disability without private long-term disability insurance or workers’ compensation protection.
Crime Never Pays, But Honesty Does
SSDI is a huge advantage of a more standardized gig economy. Drivers for companies like Uber and Lyft work “on the books,” meaning they must file taxes each year as self-employed workers, which includes payroll taxes. Besides breaking the law, individuals who work side jobs for cash without reporting to the IRS will not be eligible for Social Security programs like SSDI.
Those FICA deductions can be a hefty amount of each paycheck, but they’re especially important for gig, part-time, contract and seasonal workers who have limited options for protecting themselves and their families if they can’t work because of a disability.
No matter which — or how many — companies you work for, SSDI can be there to catch you when things take a turn for the worse.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Mike Stein, assistant vice president of operations strategy and planning, has 25 years experience helping people with disabilities through his work with Allsup. He oversees the claims operations for both Social Security Disability Insurance representation and the Veterans Disability Appeal Service for veterans. During this time, he has become an authority on the SSDI application process, as well as Social Security Administration programs.
-
Stocks Edge Higher With Nvidia, Fed in Focus: Stock Market Today
The AI bellwether reports earnings after today's close, while Wall Street is keeping a cautious eye on President Trump's attacks against the Fed.
-
New Trump Tax Bill: Five Changes Homeowners Need to Know Now
Tax Changes Trump’s new tax legislation is reshaping how tax breaks for homeowners work.
-
I'm a Financial Planning Pro: Do Your Family a Final Favor and Write Them a Love Letter
Specify your preferences in this personal document that shares your wishes on how you want to be remembered and celebrated. Your family will thank you for easing an emotional time.
-
The Future of Financial Advice Is Human: Gen Z Trusts Advisers, But AI Skills Matter
Graduates entering the workforce trust human advisers more than AI tools with their financial planning. But AI can still enhance the client/adviser relationship.
-
I'm a Wealth Adviser: If You're a DIY Investor, Don't Make These Five Mistakes
Even though you may feel confident because of easy access to investing information, you may be making mistakes that could compromise your long-term performance. Here's what you should know.
-
Building a Business That Lasts: The Critical Steps to Avoid Blunders
'Another Way' author David Whorton offers advice on how to build an 'evergreen' business that endures by avoiding common pitfalls that can lead to failure.
-
I'm a Financial Pro: Why You Shouldn't Put All Your Eggs in the Company Stock Basket
Limit exposure to your employer's stock, sell it periodically and maintain portfolio diversification to protect your wealth from unexpected events.
-
How Will the One Big Beautiful Bill Shape Your Legacy?
The One Big Beautiful Bill Act removes uncertainty over tax brackets and estate tax. Families should take time to review estate plans to take full advantage.
-
Should You Claim Social Security Early or Late? A Financial Adviser Weighs In
There isn't a wrong age to start claiming Social Security, but there are factors that everyone should consider to avoid leaving money on the table.
-
Three Things Financially Confident People Do, From a Pro Who Knows
If you have any worries about your retirement future, take back control with these three tips.