Contract workers enjoy flexibility. However, if they can’t work because of an illness or an injury, they don’t get paid. Employees usually have long-term disability insurance in their benefits package. However, what about the gig worker?
Not having company-sponsored health or disability insurance benefits is a downside of being a gig worker, explains Kiplinger in the article “If You're a Gig Worker, Here's How You Can Still Get Disability Protection.”
Most part-time employees have one advantage over freelancers. That’s workers’ compensation benefits, provided that they earn a wage and have taxes deducted from their paychecks. On the other hand, employers typically aren’t required to provide workers’ compensation coverage to independent contractors. If these workers get injured on the job, they are out of luck, and certain small companies are also exempt from this requirement.
However, there is help. The Social Security Disability Insurance (SSDI) program is your disability safety net. It’s designed to help today’s part-timers and gig workers. SSDI is an income replacement insurance for former workers with disabilities, provided through the Social Security Administration.
This “insurance” isn’t something you have to sign up for or buy—if you pay FICA or self-employment taxes, you’re 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. These benefits are portable and available, if you meet eligibility requirements, regardless of the number of places you’ve worked.
When someone experiences a severe disability that prevents them from working for 12 months or more, SSDI also allows access to other important benefits, like 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 start. It has the added advantage of protecting future retirement benefit income.
SSDI is a resource if you experience a disability without private long-term disability insurance or workers’ compensation protection. To be eligible, you have to meet certain work history requirements and be able to prove that your condition prevents you from working.
It’s good to know that our nation provides a safety net to those who are not able to work. No matter how many gig jobs you are juggling, as long as you are filing taxes and paying into the system, you have this protection.
Reference: Kiplinger (December 11, 2018) “If You're a Gig Worker, Here's How You Can Still Get Disability Protection”