Substantial Gainful Activity limits set by the Social Security Administration can deny you Benefits
The Social Security Administration has a long gauntlet of financial and medical criteria you must meet in order to be approved for benefits. One of the most frustrating criteria, and one that leads to many disqualifications, is that of substantial gainful activity or SGA.
The Internal Revenue Service defines substantial gainful activity as “the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit”. The idea behind the substantial gainful activity criteria is to weed out those who are not disabled and are able to work.
The Social Security Administration has decided that anyone capable of earning over a set dollar limit is “able to engage in competitive employment in the national economy”. For 2019, that limit is $1,220 for non-blind applicants and $2,040 for blind applicants. Every year, the SGA is compared to the Cost-of-Living Adjustments or COLA to see if an increase to the limit is needed. Checking the applicant’s income against the SGA limit is one of the first steps of the determination process. If the applicant makes above the limit, they will be ineligible regardless of medical condition.
The purpose of this limit is not to prevent those with high incomes from collecting benefits.
There is no income limit on benefits so long as that income comes from sources other than work. Investments, interests, and capital gains are all exempt from the substantial gainful activity calculation. For Social Security Disability Insurance, there is no limit on income. However, if you are applying for Supplemental Security Income, there is a strict and low limit on countable income.
Code of Federal Regulations § 404.1574 (2) states that only the amount earned is counted.
If someone with a disability is paid a subsidy, any amount over the value of their productivity is not exempt from the substantial gainful activity calculation. Applicants who worked under special conditions- for example, if they were given extra breaks and assistance from other employees- can make the claim that their income was not in line with their actual ability to produce.
For self-employed individuals, determining income can be ambiguous.
The Social Security Administration has three tests to determine if self-employment qualifies as work activity:
- You provide significant service to your business and have monthly earnings over the SGA limit. There are many business owners who take a laid-back approach to management and simply reap the profits of their business. This allows them to continue to do that, but prevents them from actively engaging in the actual work.
- Your work is comparable to non-disabled people in the same field. The SSA will compare your business to similar businesses to determine the normal level of activity for that type of business.
- You produce at a higher level than the SGA limit in terms of value. If you would have to pay an employee more than the SGA limit to do the work you are doing for the business, it will be determined you are not disabled.
Regardless of your medical condition, if the Social Security Administration determines that you are engaged in substantial gainful activity, then you will be denied benefits. If you have been denied due to the SGA limit, talk to our attorneys at Bemis, Roach and Reed today for a free consultation. We may be able to help find a solution for you so you can collect benefits.
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