The First Step in Social Security’s 5-Step Disability Analysis – Substantial Gainful Activity (SGA)

Step 1: Engaging in a Substantial Gainful Activity (SGA)

A.k.a.: Are you working?
Even you have a clearly disabling condition, if you are able to work at a substantial gainful activity level (SGA), you are not disabled.
Example, you may be limited to crutches or a wheelchair, but you force yourself to work a full time, competitive, job. Under Social Security regulations, you are not considered disabled. Because you are able to work, you do not qualify for Social Security disability benefits.

There are exceptions to this:
– If you are working full time, but your medical expense, which let you work, are so high that your pre-tax income is still below SGA threshold, then your Impairment Related Work Expenses (IRWEs) make your work not SGA.

– If you are working at an SGA level, but the work is not competitive: you either got a job through a friend or family member and you not held to the same standards as another worker in the same position, or if you are being paid a “subsidy” — the value of your work is $200 a week, but you are being paid $700 a week.

The SSA defines substantial gainful activity as 1) work that involves significant and productive duties and 2) work which pays more than the current monthly income limit set by the SSA. Substantial gainful activity includes part-time work and work that pays less than your regular employment or which has less responsibility. Work that is not paid is not considered “gainful” employment, but if it is substantial, the SSA may well find that you are able to work and thus not eligible for Social Security Disability benefits.

In 2014 the earnings limit is $1,070 ($1,800 for blind persons). The dollar amount that measures substantial gainful activity tends to change from year to year, usually increasing slightly, $1,040 in 2013 and $1.010 in 2012. However, the earnings limit for substantial gainful activity in 2010 was the same as 2011 ($1,000). The limit in 2009 was $980, etc. (see: http://www.socialsecurity.gov/oact/cola/sga.html)

Social Security will consider when wages are earned, not simply the total annual amount. For example, if you are a teacher and are paid for 9 month’s work over a period of 12 months, Social Security will take your yearly pay and divide it by nine to come up with the figure you actually earned for a month’s work.

Income counted with respect to the earnings limit includes income from the work you do, whether it takes the form of wages from a company, self-employment earnings, or in-kind payments such as room and board that are provided in addition to or instead of cash. The SSA includes only net wages or earnings, so items such as expense reimbursement are not counted. Found in the gray area are items such as bonuses and incentive payments, since they are not necessarily related to work performance. Compensation is discussed in POMS RS 02505.240, but if you are in doubt, it is a good idea to ask your local Social Security attorney representative.

We will discuss Step-2 – Severe Medically Determinable Impairments (MDI) in a future post.

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