The Substantial Gainful Activity Test

Red_question_markIn order to receive Social Security disability benefits, you must be unable to engage in substantial gainful activity. If you are performing substantial gainful activity, you will be deemed ineligible for social security benefits, no matter what health problems you have.

The Social Security Administration will analyze your level of work activity and monthly work income to determine whether you meet the substantial gainful activity test. This issue must be resolved before any consideration is made to the severity of your medical problems.

What is Substantial Activity?

Work activity is “substantial” if it involves significant physical activity, mental activity, or both. Full-time or part-time work can be substantial activity, as long as the income from the work is over a certain amount per month.

What is Gainful Activity?

If you are earning more than a certain amount of income per month, then you are engaged in substantial gainful activity. In 2014, you must earn less than $1070 pre-tax per month in order to qualify for social security disability benefits. If you earn over this monthly limit, and there is no 12 month period in which you did not earn that amount; then you are performing substantial gainful activity, and are disqualified from receiving social security benefits. The gainful activity amounts for previous years can be found on the Social Security Administration at www.ssa.gov/OACT/cola/sga.html.

As noted, normally you must have a 12-consecutive month period of time wherein you have not performed SGA. There is an exception for people who try to return to work, and within three months have to stop work because of their health. This situation may be determined to be an “unsuccessful work attempt”, in which case those three months could still be counted toward the 12-consecutive month period.

When evaluating your monthly income, the Social Security Administration only considers the amount of income you receive from working. This amount does not include money from non-work related sources, such as gifts, interest, or investments.

What if I am self-employed?

If you own your own business, the Social Security Administration may look at other factors to determine whether you meet the substantial gainful activity test. For example, you are performing substantial gainful activity if you perform a similar amount of work as an unimpaired individual in your community who works in the same occupation. Also, if the work you perform adds a value to the business that is more than $1070 per month, your work is substantial gainful activity and you will be deemed ineligible for Social Security benefits. The rules allow a self-employed person to deduct normal business income and other impairment related work expenses to determine whether the $1070 monthly level is exceeded.