Substantial Gainful Activity (SGA)

For people who are employees

 If your earnings are between $700 and $1,000 a month in 2010, Social Security may review your case, considering the time, energy, skill, and responsibility involved in the work you're doing, to determine whether it is comparable to that of non-disabled people in your area. If the work is deemed to be comparable, Social Security may consider you as having performed "substantial" work in that month, despite the fact the earnings aren't over $1,000 a month. However, as a practical matter, this rarely occurs except in the case of people who are self-employed.  

For people who are self-employed

Social Security examines the time and effort expended working in addition to the amount of earnings. For instance, if earnings in 2010 do not exceed $1,000 per month ($1,640 per month if you are blind), a self-employed person may still be considered to have performed "substantial work" if you spent more than 80 hours per month working.

As Social Security puts it:

"If you are self-employed and your disability is not blindness, the way we evaluate your work activity for SGA purposes will depend on whether the work activity being evaluated occurs before or after you have received SSDI benefits for 24 months and the purpose of the evaluation. We will apply either the Three Tests or the Countable Income Test to determine if your work activity is SGA, depending on when you work.

The Three Tests:
We apply the three tests to evaluate your work activity when you initially apply for SSDI and prior to your receiving SSDI benefits for 24 months. We will also use the three tests to evaluate your work activity during the re-entitlement period to determine if benefits can be reinstated in the extended period of eligibility after we have already determined your disability has ended due to SGA work activity. Your self-employment work activity is SGA if:

• You render significant services to the business, and you had over the SGA level ($1000 in 2010) average monthly income; or
• Your work is comparable to the work of persons without disability in your community engaged in the same or similar businesses; or
• Your average monthly work is worth the SGA level earnings in terms of its effects on the business or when compared to what you would have to pay an employee to do the work.

The Countable Income Test:
We will apply the countable income test if you have been entitled to and received SSDI benefits for at least 24 months. We will only use the countable income test to determine whether you have engaged in SGA and if your disability has ended as a result of that SGA.

We will compare your countable earnings to the SGA earnings guidelines. If your monthly countable earnings average more than $1000 (in 2010), we will determine that you have engaged in SGA unless there is evidence you are not rendering significant services in the month. If your monthly countable earnings average less than $1000, we will not consider you to have engaged in SGA.

If you are self-employed and your disability is blindness, we decide SGA based on whether you have received a substantial income from the business and rendered significant services to the business. We make this determination using your countable earnings. We also use your countable earnings to determine whether you have engaged in SGA and whether payments can be reinstated during the Extended Period of Eligibility .

If you are self-employed, your disability is blindness, and you are age 55 or older, special rules apply. If your earnings demonstrate SGA but your work requires a lower level of skill and ability than the work you did before age 55, or when you became blind, whichever is later, we will suspend, not terminate, your benefits. Your eligibility for SSDI benefits continues indefinitely, and we pay your benefits for any months earnings fall below SGA."

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