How Do I Know if I am Doing Substantial Gainful Activity?

The Social Security Administra¬tion uses the “Sequential Evaluation Process” to determine your eligibility for benefits. The first step in the Sequential Evaluation Process evaluates whether you are performing work at the “substantial gainful activity” level, which essentially asks whether your work involves “significant physical or mental activities.”

Work might not be considered substantial if you are unable to do “ordinary or simple tasks satisfactorily without more supervision or assistance than is usually given other people doing similar work,” or if you are doing work that involves “minimal duties that make little or no demands” and that are of almost no use to your employer or the operation of a self-employed business.

The SSA defines gainful activity as “the kind of work usually done for pay or profit, whether or not a profit is realized.” This is a broad definition, as virtually any task normally performed by employees of a business would qualify. If you are an employee, the SSA will probably determine whether your work is gainful by looking at your earnings. If you are self-employed, the SSA will most likely look instead at your normal work activity and what value it has to your business. Working at a loss does not mean your work is not gainful (many self-employed people work at a loss from time to time), and SSA does not want to let claimants qualify at this step just because they are able to control the timing and amount of their income to appear that they are not actually working (such as when claimants are working for relatives).

For 2013, the SSA has determined any income over $1,040 per month, $1,740 if blind, is substantial gainful activity. The SSA looks at gross, pre-tax, income each month. When calculating whether your income is high enough to count as substantial gainful activity-level, the SSA allows the deduction of earnings for “impairment-related work expenses,” which are payments you make for medical treatment, including medications related to your disabling impairment. It may also include costs for transportation, attendant care services, or residential modification. However, the work expense rules are somewhat unintuitive, and some expenses that you might assume are covered are not (such as health insurance premiums).

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