The first step the Social Security Administration (SSA) will take in evaluating your disability benefits application is examining whether you are engaging in substantial gainful activity (SGA). If you are engaging in SGA, you are not disabled. As the term implies, the activity must be both substantial and gainful, which means the SSA looks at both how demanding the activity is and how much you earned from it.

The Substantial Requirement

The SSA considers work activity substantial if it requires performing tasks independently and taking on duties that are demanding. If you are unable to perform simple tasks without needing more help than other people, your work may not be substantial. Similarly, if your work makes few demands on you and is of little use to the business, your work may not be substantial.

The Gainful Requirement

When you work for someone else, the primary method for determining whether your work activity is gainful is based on your monthly income. As of 2012, you can earn up to $1,010 a month without engaging in substantial gainful activity. The minimum income level is adjusted each year.

If you are self-employed or have some control over the amount and timing of your wages, your activity may be gainful even if you are earning less than the monthly minimum threshold or even if you are earning nothing at all. The SSA evaluates gainful by considering whether you are engaging in work that is customarily performed for profit. It is irrelevant to the SSA whether you actually earn any income performing the work-related activity. For example, if you own and operate a small business that does not make a profit, the SSA may still view you as engaging in gainful activity.

The SSA will consider both legal and illegal work activity. So, if you work “under the table” and do not pay taxes on that income, SSA will still consider it.

You can deduct impairment-related work expenses from your income to determine whether it is over the monthly minimum. An impairment-related work expense may include a special van to take you to work, or special equipment at work necessary for you to complete the tasks of the position. Some expenses you wouldn’t expect to be deductable are included (such as expenses for treatment for the disabling impairment that you have to pay regardless of whether
or not you work) and some expenses that you might expect to qualify are excluded (such as expenses for health insurance).

Watch for my next blog post on Step 2 of the Sequential Evaluation Process.