What Is SGA? Understanding Substantial Gainful Activity 2023By Kenton Koszdin on March 31, 2023 | In Disability Insurance
Substantial gainful activity (SGA) is a standard used by the Social Security Administration (SSA) to determine whether a person should be legally classified as disabled. If the SSA determines that a person can engage in SGA, they are not disabled.
SGA is determined by comparing an individual’s monthly income with a pre-determined SGA threshold. If that person’s income exceeds the SGA threshold, the SSA will not consider that person disabled. Each year, the SSA adjusts the monthly SGA threshold limits to keep pace with inflation.
If you are interested in receiving disability benefits and need help understanding SGA thresholds, contact an experienced Los Angeles Social Security lawyer for help.
SSA’s Definition of Substantial Gainful Activity
What does substantial gainful activity mean? Substantial and gainful activity considers your monthly earnings and compares them to a threshold that changes yearly. For instance, SSDI SGA 2023 is higher than it was in 2022.
However, keep in mind that you can be making zero income and still be considered engaged in SGA.
Substantial activity is any activity that requires that you engage in significant physical or mental activity. Additionally, your work may be considered substantial even if it is part-time or pays less than you earned when you were not disabled.
Gainful activity is any activity that you would get paid for. However, keep in mind that the SSA may consider your activity to be gainful even if you are not paid if it is an activity that people are normally paid for.
2023 SGA Thresholds
As mentioned, the Social Security Administration uses the substantial gainful activity test to determine whether a person qualifies for disability benefits. What is the SGA? It varies year by year.
In 2023, the SGA SSA threshold has been set at $1,470 for disabled individuals who are not legally blind. For a person that is legally blind, the SGA threshold is $2,460 per month.
Translated, this means that if someone wants to receive disability benefits and is not blind, they cannot make more than $1,470 in monthly income. And if a person is legally blind, that person may not collect disability benefits if they are making more than $2,460 per month.
Keep in mind that there are exceptions to the SGA limit that will be discussed later in this article.
What Is a Cost-of-Living Adjustment (COLA)?
The Social Security Administration provides cost-of-living adjustments to recipients of SSDI and SSI benefits to help them with continually rising inflation. Each year, the adjustment percentage varies. In 2022, recipients received a 5.9% COLA increase, whereas, in 2023, the COLA was 8.7%. This 8.7% translates to an average monthly payment of $914 for SSI recipients and $1,483 for individuals who receive SSDI benefit payments.
The COLAs, which also affect SGA Social Security, are automatic and typically begin shortly before the end of the year. For example, the 2023 COLA became effective in December 2022.
SSDI and SSI Requirements
Social Security disability benefits and Supplemental Security Income are two programs offered by the Social Security Administration for workers and individuals who are considered disabled. Each has strict eligibility requirements, although SSI disability benefits are often easier to qualify for than SSDI benefits.
SSDI is a form of disability insurance that workers and their employers pay into. If a worker becomes disabled, they can take advantage of SSDI benefits if:
- They have worked for enough time to gain sufficient work credits for their age
- They are considered medically disabled
- They are not working or are not working enough to cover their basic necessities
SSI is supplemental income for disabled individuals and the blind who do not have enough work credits to qualify for SSDI. Additionally, individuals seeking SSI must be considered low resource by the SSA and must make below the substantial gainful activity (SGA) threshold, which is $2,460 per month for blind people and $1,470 for non-blind individuals. These SGA threshold amounts also apply to individuals seeking SSDI benefits.
In most cases, it is not possible to receive SSDI and SSI benefits concurrently. However, if a person is approved for a low SSDI monthly payment, the SSA may qualify them for SSI as well to help them supplement their income. For help determining the appropriate program for your situation, contact a Social Security Disability Attorney for a free consultation.
What Is a Trial Work Period?
If you are disabled and are receiving benefits, you can seek to head back to work for a trial work period without the threat of losing your benefits. Even if you surpass the SSA substantial gainful activity threshold, you can still continue receiving benefits for a period of nine months over an overall 60-month period.
The program is an incentive to get disabled workers back into the workforce. But keep in mind that the trial period is only for recipients of SSDI benefits and not SSI.
Substantial Gainful Activity Exceptions
Exceptions exist to the rule of substantial gainful activity (SGA) that allow individuals to earn more income per month than the SGA threshold and still receive disability benefits.
For individuals who work and apply for Supplemental Security Income (SSI), the SSA will exclude some of their income when determining whether that person is disabled.
Excluded income for SSI recipients who work includes:
- The first $20 of income that is unearned
- The first $65 of income that is earned plus half of the rest of the income over $65
- The first $30 of irregularly received income per quarter
- Money that an individual saves under the PASS program for achieving self-support
Impairment-Related Work Expenses (IRWE)
Impairment-related work expenses are a cost that an individual incurs for special equipment or services they need to engage in employment. The SSA may deduct the money you have outlaid for IRWEs from your earnings when determining the answer to the question “what is substantial gainful activity?”.
Some examples of IRWEs the SSA might deduct include:
- Expenses related to specialized transportation to and from work.
- Costs associated with paying someone to help your activities necessary to get prepared for work in the morning.
- Expenses related to hiring non-impaired individuals to help with work that you cannot complete due to a disability.
- Costs associated with training and education to learn how to use or operate specialized work tools and equipment related to your impairment.
Keep in mind that the SSA will not deduct certain IRWE expenses, including those for which you have been reimbursed through a particular program, such as a vocational program. Additionally, the SSA will also not deduct payments for services executed on behalf of someone else, such as childcare services.
If an employer offers a disabled employee a special work opportunity that does not exist for that employer’s other employees, it falls under subsidized employment, and the SSA may not count the income earned by that employee toward the SGA threshold.
Known as sheltered work or special environment, this type of work situation might involve an employer offering a disabled employee flexible work hours for the purpose of accommodating their disability.
What Does Not Qualify as SGA?
The Social Security Administration has categorically stated that certain activities you engage in do not qualify as substantial gainful activity, such as:
- Self-care activities
- Chores around the house
- Various types of therapy, including physical, mental, and occupational therapy
- Attending school
- Participating in social activities
Although the SSA does not consider these activities as SGAs, it is essential to note that the agency can use your participation in these activities in its efforts to determine whether you are disabled.
For example, if you attend school and are part of the university basketball team, the SSA may not deem you to be engaged in SGA disability. However, the fact that you are part of the basketball team could lead them to disqualify you for benefits on the grounds that you do not have a qualifying medical condition.
SGA and Volunteer Work
If you engage in certain types of volunteer activities, the SSA may consider you to have surpassed the Social Security SGA SSDI limit, even if you are not being paid for your work. For example, if you volunteer for more than a few hours per week or would make over the SGA threshold if you were paid for your time, the SSA will likely consider you to be over the SGA limit.
Self-Employment Work and SGA
If you are self-employed, the SSA will look beyond your income to determine whether you are engaged in SGA. Social Security SGA calculations will take into account:
- The type and scope of your work;
- How your work compares to the work of others in the business; and
- How much others in your situation earn
Because of the complexities of self-employed work and SGA determinations, it is wise for individuals in this situation to consult with a disability lawyer.
Passive Income and SGA
Passive income, which includes income from investments like stocks, bonds, and retirement income, does not affect the SSA’s calculation of SGA for disability. However, your eligibility for SSI may be affected by the amount of passive income you have. SSI calculations take an individual’s assets into account when assessing their eligibility. Hence, too much passive income may disqualify you from receiving SSI disability benefits.
Hiring Reliable Disability Attorneys in Los Angeles, CA
The more information applicants for disability benefits possess about how the Social Security Administration (SSA) considers and evaluates their type of disability, the more they will be prepared for the sometimes long and arduous road to benefit eligibility. The Kenton Koszdin Law Office provides experienced representation in all types of disability cases, including Social Security disability and workers’ compensation. And we answer any questions you might have, including “What is considered substantial gainful activity?”. If you have any questions or concerns about any kind of disability cases, including Social Security disability and workers’ compensation, call the Kenton Koszdin Law Office today! We offer free in-house consultations! Call 818-273-6857 or visit us online to book a free session. We look forward to hearing from you.