Substantial Gainful Activity: The Up-To-Date Complete 2023 Guide

The Social Security Administration (SSA) has a long list of criteria used to determine your eligibility to receive supplemental security income SSI and social security disability insurance SSDI. The most important criterion is that you suffer from a disability that prevents you from working for at least 12 months. To measure the amount of work you can perform, the SSA uses a “substantial gainful activity” (SGA) level which is adjusted each year. If they determine you can work at the SGA level, they will deny your claim. Here we offer an up-to-date SGA guide to help you understand what the SSA considers too much work, the limits, and the factors that impact your social security disability claim.

What does substantial gainful activity mean?

The term Substantial gainful activity or SGA can be defined as follows:

• Substantial work is performing significant physical or mental activities
• Gainful activity is any activity that allows you to perform duties that allow you to earn pay

For example, if your disability claims you cannot sit for long periods of time, yet you do volunteer work at the local food bank where you sit for hours sorting canned goods, this indicates to the SSA that you can perform tasks to earn wages.

What does the SSA consider substantial gainful activity?

The SSA considers work “substantial” when it includes significant physical and/or mental activities, whether they are performed on a full or part-time basis. “Gainful” work activity includes any work performed for pay or profit, generally performed for pay or profit, or intended for profit even if pay isn’t received. For example, suppose you can perform tasks to volunteer at the local pet shelter, such as lifting animals or taking dogs for long walks.

Although you don’t get paid, the SSA still views this as substantial gainful activity, which means your disability is not severe enough to keep you from working. However, the SSA never considers volunteer work for programs covered under the Domestic Volunteer Service Act of 1973 SGA. So, it is very important to understand the exemptions and the type of activities the SSA will and won’t include in your SGA.

What is not considered SGA by the social security administration?

Some common exceptions that would not be considered SGA include:

• Tasks for self care
• General household chores
• Activities related to physical, occupational, or mental therapy
• Attending school
• Some social activities

However, the SSA can be quite strict and will look at these types of activities as a whole to help measure your level of abilities outside of the workplace.

What is the substantial gainful activity limit for 2023?

The SSA adjusts SGA levels to reflect the changing cost of living. In 2023, the SGA amount is defined as earning $1,470 or more a month from working or $2,460 if you are blind. The SGA amount for non-blind disabled individuals is based on the SGA amount for the year 2000 multiplied by the ratio of the national average wage index for 2022 to that of 1998, or if larger such SGA amount for 2023 ($1,470). If the amount is not a multiple of $10, the amount is rounded to the nearest multiple of $10.

What are substantial gainful activity (SGA) exceptions?

There are some SSA SGA exemptions, including:

Impairment-related work expenses

Impairment-Related Work Expenses (IRWE) are costs you incur related to your disability and necessary for you to work. The SSA deducts IRWEs from your countable income that meets the following criteria:

• They allow you to work
• They are needed as a result of physical or mental impairment;
• You have covered the costs and will not be reimbursed by another source and
• The cost is “reasonable,” representing the standard charge in your community

Income averaging

The SSA uses Income Averaging for self-employed SSDI beneficiaries or in jobs with fluctuating monthly earnings. Average earnings are used when determining SGA since the SSA doesn’t have a regular month-to-month comparison. They add the countable earnings and then divide that amount by the number of months worked during the review period to determine if your earnings fall below the SGA threshold. This is more likely to see your SGA threshold work in your favor, presenting a more realistic look at your average income.

Special accommodations

Special accommodations might include extended breaks or special rest periods during work hours. They are used to calculate the true value of work activity to demonstrate compensation is not commensurate with work performed to help reduce SGA.

What is the Trial Work Period?

The Trial Work Period (TWP) allows you to confirm your limitations while still receiving your full monthly disability benefits. The period is nine months, which does not have to be consecutive but must fall within a 60-month period. The purpose of the trial work period is to encourage you to return to work by giving you time to test your abilities without penalization. As a result, you are more likely to feel confident you can work and opt to continue working instead of collecting full or partial benefits.

How is a month calculated?

A month is calculated every time you earn over $1,050 per month (in 2023). If you are self-employed, it is calculated based on working over 80 hours in a month. Anything earned before taxes is applied to the $1,050 TWP threshold. However, you can deduct impairment-related work expenses, which in this case also include animal-related costs and job coaching.

How Does SSA Track Trial Work Earnings?

You must inform SSA of your earnings by the 10th of each month with a certified letter and a copy of your pay stubs.

What About Continuing Disability Reviews?

A CDR or Continuing Disability Review is conducted randomly by the SSA to review your medical impairment(s) to ensure you are still eligible to receive benefits. During your trial work period, CDRs will not likely raise a red flag with Social Security.

Can I Work While Applying for Benefits?

No. Because your claim is based on your inability to perform substantial gainful activity, the work performed during the SSDI application process works against you. Even part-time work performed in a very different capacity from your full-time job demonstrates you can work. This sends a message to the SSA that your medical condition is not serious.

A disability claims examiner’s job is to consider your current mental and physical state’s impact on your ability to work. In their eyes, even working 15 to 20 hours a week or the ability to earn over the SGA amount means you are unlikely to meet the criteria required to receive SSDI. In fact, if your case is under appeal, working will also negatively impact a disability judge’s decision. To avoid any confusion during the application or appeal process, it is best to either avoid working or seek the advice of a disability advocate who can provide assistance.

What is the Extended Period of Eligibility?

When your nine months are up, you enter a 36-month Extended Period of Eligibility (EPE). During this time, you can continue to receive your full monthly benefits if you are disabled and earn below the SGA threshold. During the EPE any earnings above the threshold lead to the loss of your entire benefits for the month, and the SSA will consider your disability “ceased.” At this point, the SSA pays you in full for that month with a two-month grace period before they terminate your benefits. However, if your earnings fall below SGA levels within the 36 months, despite the termination, you can contact Social Security to request they restart your payments.

How is passive vs earned income factored into gainful activity?

The SSA looks at your overall income to determine your eligibility. Since passive income is not earned by work activity, your earnings are not included when determining your ability to work. Because of this, most types of passive income are not included when the SSA is determining your eligibility.

What is passive income?

Passive income is money you receive through investments. The following are examples of income the SSA considers passive:

• Rental income or cash flow from real estate property
• Business activities or trade earnings not requiring your participation
• Royalty payments not derived during an ordinary course of business or trade
• Some limited partnerships where you don’t participate in business activities
• Dividends
• Interest

Passive income does not impact the amount of disability benefits you receive from Social Security. However, to reduce the risk of the impact your passive income has on your claim, your investments must be self-managed. Otherwise, the SSA could consider any work required on your part as SGA. This includes things such as property maintenance tasks for rent-generating properties.

What is Unearned Income?

The SSA also looks at other forms of unearned income when determining if you qualify for benefits, including:

• Workers’ compensation
• Retirement benefits and Pensions
• Veterans’ benefits
• Unemployment
• Contributions from family members or friends towards your household expenses
• Inheritance or life insurance payments
• Child Support and alimony
• Income from investments
• Union benefits

Because the SSA could include some forms of unearned income, you might consider speaking to a disability advocate to understand the types of income and SGA that impact your eligibility for SSDI.

Should I Consult with a Disability Advocate?

If you are applying for SSDI benefits, the disability advocates at Princeton Disability can ensure you follow the proper process for approval and don’t perform work that increases your SGA.

The sooner you consult with a disability advocate, the sooner your application will be complete, and the higher chance there is for approval. Two-thirds of disability claims are denied when filed without assistance from a disability advocate. As well, benefits of up to $3,345 per month are available to qualified applicants. Now is the time to choose an advocate.

Click here to set up your free consultation today.