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Substantial Gainful Activity (SGA)

What Income Counts As Earnings For Purposes Of Substantial Gainful Activity?

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  • Includes:
    • Income directly related to your work.
    • Gross income before payroll deductions.
    • Sick and vacation pay earned during the subject period, even if you didn't use it during the time period.
    • Cafeteria Plans: If you participate in a cafeteria plan at work (see Cafeteria Plans), any income set aside pre-tax, or used to purchase pre-tax benefits should be added to the gross income.
    • Bonus and incentive payments: When evaluating bonus/incentive payments, Social Security only considers those payments that represent your own productivity. Social Security will determine if the bonus/incentive payment represents a specific period of time. If it does, Social Security will distribute the earnings over the period of time it was earned. If the amount does not represent a specific period of work activity, or a specific time period is not determinable, Social Security will distribute the payment(s) monthly over the time period you worked for the employer, up to but not exceeding a year.
    • Royalty and Similar Payments: If you receive royalties or similar payments for activities performed in the past, the key for Social Security is to look at when the income was earned. For example: Mr. A was a painter all his life and his art work was sold at various art shows and galleries. Mr. A filed for disability benefits when the arthritis in his hands made it impossible for him to hold a paint brush and therefore unable to paint. He continues to receive royalties for his art work but since the payments represent work activity performed in the past, the income is considered earned for SGA purposes when the work activity occurred.

  • Does not include:
    • Income from dividends, savings accounts etc.
    • Your assets.
    • Your spouse's income or assets.

Income can be reduced to determine "countable" income by deducting Impairment Related Work Expenses and Subsidized Earnings. For more information, See IRWE and Subsidized Earnings.

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