Cracking the Code: Unraveling Substantial Gainful Activity in Social Security Disability Claims

Substantial Gainful Activity (SGA) Demystified:

1. Role in the Sequential Evaluation Process:

The SSA follows a five-step sequential evaluation process to determine an individual’s eligibility for Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). SGA is a key component of this process:

• Step 1: The SSA assesses whether the claimant is engaged in substantial gainful activity. If the answer is yes, the claim is typically denied, as the individual is considered not disabled.
• Step 2: If not engaged in SGA, the SSA evaluates the severity of the claimant’s impairments.
• Steps 3-5: The evaluation process considers Social Security’s Listings of Impairments, the claimant’s ability to perform past work or adjust to other work.

2. Substantial Gainful Activity Threshold:

• SGA involves significant physical or mental activities, or a combination of both, that result in substantial earnings.
• The SSA sets a monthly earnings threshold to define gainful employment, and this threshold is subject to annual adjustments (COLAs).
• For 2023, the SGA threshold is $1,470 per month for non-blind individuals and $2,460 for blind individuals. For 2024, please see our recent blog post.

Impairment Related Work Expenses (IRWEs):

1. Reducing Countable Income:

Understanding Impairment Related Work Expenses (IRWEs) is crucial for claimants looking to lower their countable income and meet the SGA threshold. IRWEs are expenses related to a disability that allow individuals to work, and they can be deducted from the total income during the SGA evaluation:

• Examples of IRWEs: This may include expenses related to assistive technology, transportation, specialized equipment, and medical services necessary for employment.
• Deductible Amount: By subtracting IRWEs from total earnings, individuals can potentially bring their countable income below the SGA threshold, increasing their chances of qualifying for disability benefits.

Distinction between Employees and Self-Employed Individuals:

While SGA applies to both employees and self-employed individuals, this blog post focuses on its implications for employees. The key distinction lies in how earnings are evaluated:

1. Employees:

• Earnings from employment are directly compared to the SGA threshold.
• The focus is on the nature and amount of work performed, considering both physical and mental exertion.
• If monthly earnings surpass the SGA threshold, the SSA may deem the individual not disabled.
• Special consideration is given to individuals participating in a Trial Work Period, allowing them to test their ability to work without immediately losing disability benefits. But there are exceptions to this.

2. Self-Employed Individuals:

• Self-employed individuals face additional complexities, as the SSA considers their net income, not just gross earnings.
• The evaluation involves assessing the individual’s role, responsibilities, and level of involvement in the business.
• Determining SGA for self-employed individuals may involve a more nuanced analysis of the business operations and financial records.

Navigating the SGA Landscape:

1. Seek Professional Guidance:

• Given the intricate nature of SGA and its role in disability claims, consulting with a Social Security disability attorney is highly advisable.
• Attorneys specializing in disability law can provide tailored advice, helping individuals understand the specific implications of SGA on their case.

2. Keep Detailed Records:

• Maintain thorough records of income, work-related expenses, and any other factors that may impact the SGA evaluation.
• Detailed documentation can serve as crucial evidence in demonstrating eligibility for disability benefits.

In Conclusion:

Substantial Gainful Activity is a critical aspect of Social Security disability claims, serving as a gatekeeper in the evaluation process. Understanding its role, staying informed about annual adjustments to the SGA threshold, and leveraging strategies like IRWEs are essential for individuals seeking disability benefits.

Navigating the complexities of disability claims can be challenging, but armed with knowledge and professional guidance, individuals can enhance their chances of a successful outcome. Whether you’re just beginning the claims process or facing a reassessment, empowering yourself with information about SGA is a proactive step towards securing the financial support you need during times of disability.