In determining whether or not a claimant is medically eligible for benefits, the SSA starts with the following deceptively simple question: Are you engaged in Substantial Gainful Activity (SGA)?
The Appeals Council has explained what the Social Security Administration means by Substantial Gainful Activity:
"Substantial gainful activity" means the performance of significant physical or mental activities in work for pay or profit, or in work of a type generally performed for pay or profit. "Significant activities" implies not only that the activities are useful in the accomplishment of a job or the operation of a business, but also that they are the kind normally done for pay or profit. Work may be substantial even if it is performed on a part-time basis, or even if the individual does less, is paid less, or has less responsibility than in previous work. Work activity is gainful if it is the kind or work usually done for pay, whether in-cash or in-kind, or for profit, whether or not a profit is realized. Activities involving self-care, household tasks, nonremunerative training, hobbies, therapy, school attendance, clubs, social programs, etc., are not generally considered to be SGA.
See Social Security Ruling 82-53. (http://www.socialsecurity.gov/OP_Home/rulings/di/01/SSR82-53-di-01.html).
Though the Agency at times has used complicated methods for determining whether a claimant’s earnings were substantial, it currently applies a simple earnings test to determine whether work activity is SGA. For 2012, SGA is set at $1,010 a month. For 2013, the rate goes up to $1,040 a month.
Notably, the rates above apply for receipt of benefits under every possible medical condition except one: blindness. Individuals who meet the Listings of Impairments for blindness are allowed to earn substantially more. For the blind in 2012, SGA was $1,690. In 2013 the SGA level for the blind is set at $1,740.
If your earnings are in excess of $1,040 a month, you fail Step 1 of the Sequential Evaluation Process, and your claim does not go any further. A real example of this rule:
I was approached by a 55 year old claimant who had recently received a denial from Tennessee’s DDDs in Nashville. He was a florist with a small chain of stores. A year before he had been diagnosed with cancer. He had been undergoing multiple types of treatment including chemotherapy and radiation therapy. By the time that he had come to see me, the cancer had spread (metastasized) to his lungs and liver. His oncologist was preparing him for the fact that his condition was terminal. Yet, amazingly throughout this year, he had continued to go into his shops a couple of times each week. He also continued to oversee the business’s finances from home. Though his businesses were struggling without him there, he still managed to take home over $2,000 a month.
Applying the Sequential Evaluation Process, the harsh result was that his level of earnings was over the SGA rate allowed. It did not matter that this work was done on a part-time basis. It also did not matter that his condition was terminal. Because he was earning over SGA he could not be found to be disabled.
In contrast to other parts of the Sequential Evaluation Process, this rule is generally straight forward. That said, there are limited ways around this SGA test. Some of the exceptions that may apply occur: a) where work is actually an unsuccessful work attempt; b) where the work was subsidized or sheltered work activity; and c) where individuals are engaged in certain job training programs. Additionally, some of my more complicated cases have been with small business owners who still retain ownership yet are no longer actively running the business.
As an attorney specializing in Social Security claims, this is one of the areas where I have provided value to my clients. The workers at the local Social Security office are often too busy or too disinterested to inquire into whether or not a claimant might meet one of these exceptions.