State Policies

Alabama State Policies & Resources


Alabama Department of Rehabilitation Services (ADRS)

Self-Employment Policy Summary:

ADRS defines self-employment as working for oneself in a business selling goods or services for profit. Self-employment is considered based on circumstances related to the consumer’s interests, strengths, past experiences, and abilities in self-employment. The income derived from self-employment is expected to be the primary income source for the individual and should be sufficient to meet ongoing living expenses. In Alabama, self-employment will not fund or assist consumers with cash, salary, purchases of real estate, hobbies, or construction of buildings. Some best practices for consumers exiting a controlled environment (e.g., prison, drug rehabilitation facility) and wanting to start a self-employment business, is to help the consumer with obtaining paid employment through an established business doing similar type work. Working for an established business can assist the VR consumer with their transition out of the controlled environment and lead to the later opportunity of establishing their own self-employment business.   
ADRS divides self-employment into three categories:   

1. Supported Self-Employment 
Supported self-employment allows an individual classified as most significantly disabled to own a business. ADRS anticipates that the consumer will need supports in many areas including business plan development, acquisition of business supplies/equipment, accommodations, business implementation, long term supports for business maintenance, etc.  Supported Employment services, from a supported employment provider, may be utilized during the self-employment process; however, natural supports or consumer financed supports, need to be identified in the supported employment plan for long-term business maintenance (i.e., bookkeeping, transportation, bank deposits, ordering etc.).  Natural supports such as friends, family, co-workers need to be identified.  The costs for such supports (if applicable) must be factored into planning for supported self-employment.  
2. Traditional Self-Employment 
Traditional Self-employment ventures offer a broad array of financial opportunities for ADRS consumers. The decision to commit VR funds in support of traditional self-employment must be based on a variety of factors, including, but not limited to, the following: evaluation of the consumer’s completed questionnaires; the consumer’s demonstration of having significant knowledge and skills required for their venture; the viability of the business plan, labor market information; total start-up costs; the ability to make sound business decisions; and the potential for obtaining supporting resources. 
3. Maintaining Existing Self-Employment 
Maintaining Existing Self-Employment is designed for individuals who are already successfully self-employed and who may experience a disabling condition that has the potential to jeopardize their business. This category of self-employment services can be used to assist when
disability-related issues interfere with the success of maintaining an existing business but cannot be used to provide expansion or enhancement of existing business. The VR counselor determines disability-related accommodations that may be needed with the assistance of other VR staff such as Business Relations Consultants and Rehabilitation Engineers. VR support can be used to acquire disability-related supplies or equipment.   
Prior to submitting a proposed business plan, consumers should: receive and review a “Myths and Realities of Entrepreneurship” article; complete and submit the “Preliminary Assessment” Questionnaires; along with the “Begin Developing Your Business Plan” worksheet. ADRS requires written business plans that include the following sections: Executive Summary; General Company Description, Products and Services, Marketing Plan, Operational Plan, Management and Organizational Structure, Personal Financial Statement, Startup Expenses and Capitalization, and the Financial Plan.  
The Individualized Plan for Employment (IPE) is completed after the final approval of the business plan. The IPE must clearly state the length of time for any services provided, e.g., up to 6 months of rent, 3 months of initial inventory, 2 months of business-related supplies, etc. because ADRS will not be responsible for long term financial support.  
ADRS funding limits are organized according to three financial tiers. In tier 1, VR will fund 100% of the first $7,000 of startup costs. Tier 1 may be approved at the local VR supervisor level. Tier 2 covers the startup costs from $7,000 – 15,000 at which VR will provide 50% of approved costs. Tier 3 covers start up costs over $15,000 at which VR will provide 25% of approved startup costs. Tier 2 and Tier 3 business plans are to include the Self Employment Rehabilitation Specialist for funding approval.  
For a self-employment case to be considered successfully closed, the consumer must meet the core indicator plus one of the additional indicators. The core indicator is that the consumer has sustained the business for at least ninety (90) days, the consumer’s adjusted gross income is comparable to the adjusted gross income of people without disabilities in similar occupations, and income is being reinvested in the business to support ongoing business expenses. Additional indicators are SSDI/ SSI benefits terminated, a consumer has experienced a decrease in public benefits (i.e., SSI, TANF, Medicaid, food stamps, housing subsidy, etc., equity in the business has increased. The consumer will submit business statements to the counselor which reflect earnings have been reinvested into the business, and consumer and counselor agree that monthly gross earnings are satisfactory for closure.

Policy Link: 




The following downloadable PDF contains statewide self-employment resources and links for people with disabilities.

Alabama State-Specific Self-Employment Resources (PDF)

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