Step 1: Substantial Gainful Activity

In order to be considered substantial gainful activity by the SSA, work must be both “substantial” and “gainful.” “Substantial work activity . . . involves doing significant physical or mental activities.” Work may not be substantial when:

• One is unable “to do ordinary or simple tasks satisfactorily without more supervision or assistance than is usually given other people doing similar work.”
• One is performing work “that involves minimal duties that make little or no demands” on you and that are of “little or no use” to your employer or to a self-employed business.

The SSA has a broad definition of gainful activity: “Work activity is gainful if it is the kind of work usually done for pay or profit, whether or not a profit is realized.” Nevertheless, when you are employed by someone else, the question of whether work is “gainful” is usually determined solely by your earnings.

If you are self-employed, the SSA will examine your work activity and its value to the business, even if you are not making a profit. The SSA is careful to prevent employed claimants from evading this step, especially if they can control the timing or amount of their income (e.g., when they work for relatives).

Even illegal activity may be substantial gainful activity, as work is evaluated “without regard to legality.”

Whether you are self-employed or not, the SSA allows a deduction from earnings for “impairment-related work expenses,” which are usually expenses for medical treatment for the disabling impairment, but which may also include payments for transportation costs, vehicle modification, and residential modification. However, before you make a deduction you must review the work expense rules because some expenses that you might expect to be covered are excluded (such as health insurance).

To determine if work is substantial gainful activity, the SSA also averages income using a formula that accounts for the type of work, the length of time worked, and whether the SGA level changed during the time that the claimant worked.

The SGA level, which was increased from $300 per month in the 1980s to $700 per month in July 1999, has become more substantial due to cost-of-living increases that have been applied beginning with the year 2001. For example, for the year 2010, average earnings of more than $1,000 per month indicate that work constituted substantial gainful activity.

You can find the SGA amount for the current year on the Internet at www.ssa.gov/cola/. For more questions about disability law, contact Social Security disability lawyer Garry W. Miracle.