Under Social Security's rules, individuals capable of performing "Substantial Gainful Activity" (SGA) are not eligible for disability benefits. Substantial Gainful Activity means engaging in significant and productive physical or mental work activities. What constitutes SGA can be difficult to determine, especially in cases of self-employment or when a person's employment is subsidized by the employer. But the general rule is that people earning over the monthly SGA threshold set by the Social Security Administration (SSA) will not be considered disabled.
For 2021, the SGA limit is $1,310 per month for non-blind individuals and $2,190 for those who are statutorily blind. With few exceptions, those earning more than the monthly SGA limit will automatically be considered not disabled.
SSA defines "disability" as the inability to engage in SGA due to medical impairments lasting at least one year or expected to end in death. Therefore, if a person is performing SGA as she is applying for benefits, SSA will usually deny the disability application without even considering any medical evidence. If one's monthly earnings do not rise to the level of SGA, as is frequently the case with part-time jobs, the disability applicant will usually proceed past the first step of SSA's five-step sequential evaluation process for determining disability.
However, in determining whether you are disabled, the Administrative Law Judge at your hearing can consider any work you are performing even if it less than SGA.
There are a number of situations in which earning SGA will not prevent a person from receiving disability benefits.
Sometimes an individual will receive more pay than his or her services are truly worth, a situation Social Security calls "subsidized employment." Often this will happen in "sheltered workshops" or where the employer is a friend or family member who is trying to help the employee. Sometimes those placed in jobs through a vocational rehabilitation agency will also receive special considerations, from extra rest breaks to relaxed productivity standards. In these sorts of situations, Social Security will attempt to determine the actual value of the services rendered rather than taking a person's earnings at face-value. Thus, those who earn under the SGA threshold in subsidized employment situations can still be found to be disabled.
An unsuccessful work attempt (UWA) occurs when a person earns SGA for six months or less and quits (or starts to earn under SGA level) due to medical reasons or the removal of special accommodations. Note that a UWA can only begin after an extended break from any previous employment. Different rules apply to a UWA that lasts less than three months and those lasting less than six months.
If SSA determines that a UWA has occurred, this can lead to Social Security establishing an earlier onset date of disability and more back benefits for the disability recipient.
Those already approved for Social Security Disability Insurance (SSDI) are entitled to one Trial Work Period (TWP). During this time they may work over the SGA level for up to nine months over a sixty-month rolling period, while still receiving monthly disability checks. Trial Work Periods are meant as an incentive for SSDI recipients to see whether they are capable of returning to the labor force. (Monthly earnings need not amount to SGA to count against as one of the nine trial work months.
Also, those who have received SSI benefits for at least a month can start to earn over the SGA level without losing benefits, though they need to be able to show that they are still disabled despite being able to do SGA.
All wages and work-related pre-tax income is counted for SGA purposes, but other sources of income, like investments, interest, and gifts, do not count. Often those with disabilities will have impairment-related work expenses (IRWE) that allow them to work, such as expenses for residential modifications, disability-related transportation, or wheelchairs. These costs are subtracted from a person's earnings when determining SGA, but only if that particular person has paid for these expenses.
Even illegal activity like drug-dealing or prostitution is considered SGA.
Determining whether a self-employed person is engaging in SGA presents considerable difficulties for Social Security. Frequently the net profits of a business bear little relationship to the amount of work actually being performed. To remedy this problem, Social Security considers the nature and scope of your work; how your work activities compare to those of people in similar businesses; and how much you would have to pay someone else to do your work. SSA also subtracts "unincurred business expenses" from your net earnings to determine SGA. SSA will consider something an unincurred business expense where friends and family volunteer to help the business or when equipment is donated to the business. For more information, see our article on disability benefits for the self-employed.
Updated January 6, 2021