What is Substantial Gainful Activity?Posted August 3, 2018 by Premier Disability Services, LLC®
Step 1 of the Social Security Administration’s 5-Step Sequential Evaluation Process asks whether you (the claimant) are engaging in “substantial gainful activity,” or SGA. If the answer is yes, then you will be ineligible for benefits regardless of the nature or severity of your medical impairments.
SGA is generally defined as work activity that is both “substantial” and “gainful.” Substantial work activity is work activity that involves doing significant physical or mental activities. Your work may be substantial even if it is done on a part-time basis or if you do less, get paid less, or have less responsibility than when you worked before. Gainful work activity is work activity that you do for pay or profit. Work activity is gainful if it is the kind of work usually done for pay or profit, whether or not a profit is realized. Generally, the Administration does not consider activities like taking care of yourself, household tasks, hobbies, therapy, school attendance, club activities, or social programs to be substantial gainful activity. See 20 CFR § 404.1572.
In 2018, SGA is defined as earning $1,180 or more per month for non-blind individuals, and $1,970 for blind individuals; however, SGA is more than just a number. For instance, volunteer work, criminal activity, and running a small business can all be considered substantial gainful activity even if you are not making any money. If you are self-employed (performing contract work, odd jobs, freelancing, or running a small business), the Administration will assess whether your work is SGA using one of three tests. Which test the Administration uses depends on when your business was started and why the SSA is reviewing your work activity. See 20 CFR §§ 404.1574 (if you are an employee) and 20 CFR § 404.1575 (if you are self-employed).
Conversely, if your employer pays you more than the actual value of your labor, the Administration will consider the amount over the actual value to be a subsidy. For example, a sheltered workshop where people with mental disabilities work usually subsidizes workers’ pay. The Administration will not include the subsidy amount when determining whether your work is SGA. Additionally, the Administration will consider whether your work activity was an “unsuccessful work attempt.” Generally, if you worked for a period of six months or less and had to stop or reduce the amount of work you did due to your impairments, the work done will not be considered SGA. In other words, any earnings from an unsuccessful work attempt will not be counted for purposes of making an SGA decision. See 20 CFR § 404.1574(c).
Remember that SGA relates only to money you earn from working. Passive income, such income from investments or retirement funds are not considered SGA. However, passive income may affect eligibility for the Supplemental Security Income (SSI) program.
Monthly SGA dollar amounts since 1975: https://www.ssa.gov/oact/cola/sga.html
By: Thomas Klint of Premier Disability Services, LLC®