How Does the SSA Define “Substantial Gainful Activity”?

Mark Bennett [Freeimages.com Content License (http://www.freeimages.com/license)], via Freeimages.comThe Social Security Disability Insurance (SSDI) program provides benefits to qualifying individuals who are unable to work due to an injury, illness, or other condition.  Congress has further defined the term “disability” under the Social Security disability program (for purposes of claiming entitlement to Title II Social Security disability insurance (SSDI) benefits or Title XVI Supplemental Security Income (SSI) benefits as meaning an inability to “engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for for a continuous period of not less than 12 months.”  42 U.S.C. § 423 (d)(1)(A)

The Social Security Administration (SSA) the Social Security Administration (SSA) is not looking to see if  It is not any manner of work that one can perform, but rather what is defined as the ability to undertake Substantial Gainful Activity (SGA).   The first step in the sequential evaluation process is to determine whether one is undertaking Substantial Gainful Activity: if so, a claimant is deemed “not disabled” under Social Security’s rules.  Generally, if one is earning in 2015 $1090.00 per month on a regular and ongoing basis they will be deemed “not disabled” from the outset of their application. 

 

Substantial Gainful Activity, Defined

The basic definition of Substantial Gainful Activity (SGA) in SSA’s regulations appears, at first glance, is that it “is work activity that is both substantial and gainful.” It goes on to elaborate on the two adjectives. “Substantial” refers to work that requires “significant physical or mental activities,” and “gainful” refers to “the kind of work usually done for pay or profit,” although work may still be considered gainful even if the individual is not making a profit.

SSA generally does not consider one’s self-care, household chores, therapy and other medical care, school work, or hobbies as work activity, although such activities may be considered when determining one’s ability to undertake SGA level work.

Disability as Inability to Work

When determining whether a claimant is “disabled” under their rules, SSA will look to see not only whether an individual is undertaking SGA but whether they remain capable of doing so.  While an individual may be earning less than gainful wages at the time of an application, this does not mean that an individual who is earning only $800.00 per month will not be deemed capable of earning much more than that: SSA may deem the individual as working less hours than they are capable, or may determine that they remain capable of undertaking less taxing work for more hours and better pay such that they could be earning gainful wages.

The SSA considers multiple factors regarding a claimant’s current work when making an SGA assessment.  SSA, in making this determination, will look to see if your job duties “requires use of your experience, skills, supervision and responsibilities” or “contribute substantially to the operation of the business.”  Assuming either of these statements is true, SSA is likely to find that you remain capable of SGA.  SSA likewise considers one’s job duties and how well they are performing these duties.  Assuming you require additional assistance at work, or your job duties are considered to be minimal in the sense that they require little demand of you, then this will factor into SSA’s determination as to whether you are capable of SGA.  SSA likewise will look to see whether there are special conditions associated with your employment given the nature of your disability, such as reduced or irregular hours to accommodate your disability, you receive special assistance from others to perform your duties, or you are permitted to work at a lower rate of productivity (to name a few).  According to its regulations, the SSA only considers earnings that are “directly related to [a claimant’s] productivity.” It is therefore supposed to disregard earnings that “exceed the reasonable value of the work” performed. A claimant who works in a sheltered workshop or other special environment will receive consideration by SSA as to the reasonable value of the services they perform rather than a simple consideration of the earnings they bring home.

SSA takes a very detailed analysis into the work undertaken by self-employed individuals and, while time spent at work is a consideration, SSA will not base a decision as to whether a self-employed individual is undertaking SGA level work activity based simply on that factor (in fact, a self-employed or an otherwise employed individual can be found capable of undertaking or of actually undertaking SGA level work  when considering only part-time work).  SSA has promulgated Social Security Ruling 83-34 in order to provide guidance as to how a self-employed individual’s work and earnings should be analyzed.  As the ruling makes clear in its preface, a self-employed individual’s earnings can be based on a number of factors, including “such things as market conditions, capital investments, the services of other people, and agreements on distribution of profits.”  Thus, evidence of earnings in and of itself does not tell the entire story.  As is likewise pointed out in the Ruling, one could receive a large income based on capital investments to the company, and thus such an income does not truly reflect their ability to undertake work activities on behalf of the company so as to characterize them as substantial.   Social Security Ruling 83-34 was set up to address these various concerns, and the “need to consider the economic value of the individual’s services, regardless of whether an immediate income results from such services.”  The Ruling establishes a 3 part test to allow for a proper valuation of a self-employed individual’s contributions so as to determine whether their activities should be considered substantial and gainful: 1) did he or she render “services that are significant to the operation of the business” and did he or she receive “a substantial income from the business”, 2) is “[t]he individual’s work activity, in terms of all relevant factors such as hours, skills, energy output, efficiency, duties, and responsibilities…comparable to that of unimpaired individuals in the same community engaged in the same or similar businesses as their means of livelihood and 3) is “[t]he individual’s work activity, although not comparable to that of unimpaired individuals as indicated above, is, nevertheless, clearly worth more than the amount shown for the particular calendar year in the SGA Earnings Guidelines when considered in terms of its value to the business, or when compared to the salary an owner would pay to an employee for such duties in that business setting. ”  Assuming an answer is yes to any one of the 3 questions proposed, then the self-employed individual’s work activity will be considered performed at an SGA level.

Income Restrictions

For both self-employed claimants as well as employed claimants, based on the factors and corresponding analysis set forth above, it is important to note that a claimant may be found capable of SGA or deemed to actually undertake SGA level work based on part-time work alone, or, to the contrary, may be found incapable of SGA based on a full-time job.  In terms of whether an individual is actually undertaking SGA level activity requires a determination of an individual’s  monthly earned income and a number of other factors.  If the income itself exceeds a certain threshold, SSA tends to view this as an indication of the ability to perform SGA, although it is not always the sole deciding factor (as reflected by the discussion above).   In 2015, the monthly earned income threshold for a non-blind claimant is $1,090. By comparison, a person working a full-time job (40 hours per week) at the federal minimum wage of $7.25 per hour would make an average of $1,257 per month.  Thus, working less than 40 hours per week does not mean that one is earning necessarily less than gainful wages.  The SGA threshold for a blind claimant is $1,820 per month, which equals the average monthly income provided by a $10.50-per-hour full-time job.

For an analysis as to whether your ongoing work or ability to work is likely to be deemed at an SGA level, and as to how you should proceed with your SSDI claim, you should contact the Law Offices of Russell J. Goldsmith today at 1-800-773-8622.

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Medicare and SSDI for Claimants in Maine and Other States, Social Security Disability Lawyer Blog, August 25, 2015

Common Reasons for Denial of SSDI Benefits in Massachusetts and Nationwide, Social Security Disability Lawyer Blog, August 24, 2015

Failing to Follow Your Doctor’s Prescribed Therapy When Making an SSDI Claim in Massachusetts and Around the Country, Social Security Disability Lawyer Blog, August 21, 2015