Are you self-employed in CA? Thinking about starting a family or wondering what would happen if you had surgery and couldn’t work? How would your lifestyle be affected if your Mom or Dad fell ill and you had to care for them? For most self-employed people, no work…no pay…no way to pay bills, YIKES! Therefore, if you want to protect your lifestyle, you must have short and long term disability help replace your paycheck. We insure our car and homes, yet most don’t think of insuring our paychecks.
Be prepared in advance!
CA is one of the few states that offer a State Disability program. Most people know if you receive a W2, you pay into SDI on your paycheck. But most people don’t realize that it’s available to self-employed people too! Disability Insurance Elective Coverage (DIEC) program may be eligible for Disability Insurance (DI) AND Paid Family Leave (PFL) benefits. All you need to do is apply and pay quarterly premiums to EDD. Here’s a snapshot:
- DIEC is protection against loss of income due to injury, pregnancy, or illness…whether or not it is work-related.
- Up to 39 weeks of benefits for your own disability.
- Automatic coverage in PFL, which provides up to six weeks of benefits in a 12-month period to care for a seriously ill child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner, or to bond with a new child.
- The weekly benefit amounts are the same for DI and PFL claims. For calendar year 2018, the DIEC minimum weekly benefit amount is $50 and the maximum weekly benefit amount is $1,216, depending on what you report on your taxes.
- Must be able to provide an IRS Schedule SE.
One of our clients is a self-employed attorney. She wanted to start a family therefore we advised her to begin paying into DIEC the year before she delivered. She reported her entire annual salary in the last quarter of the year. Since your benefits are based on the ‘highest quarter’ of the last 12 months, her weekly benefits were higher than if she would have spread out her income throughout the year.
For more information about DIEC, visit www.Go2HIR.com and click on the Resources tab for DIEC application and more info!