For Social Security purposes, a disability is any mental or physical impairment that has either:
- prevented substantial gainful work activity for twelve months
- is expected to prevent substantial work activity for twelve months, or
- is expected to result in death.
Understanding that the ability to perform "substantial gainful activity" is an integral part of the disability determination process is fundamental to understanding why Social Security has an earnings cutoff amount. The Social Security Administration (SSA) puts a dollar amount on what substantial gainful work activity (SGA) means. If you work and earn over this amount, you won't be eligible for benefits. Hence, the earnings cutoff amount is the SGA amount.
Generally, the SGA monthly amount increases each year. In 2011, the amount is $1,000 per month.
Some argue that the monthly SGA earnings limit is an arbitrary amount with no real basis, and to some extent that is true. Some feel that the entire concept of SGA is unfair and complicated, and that can be argued as well. For instance, someone making minimum wage can work 32 hours per week and have their earnings come under the SGA amount, while someone who makes significantly more (say $42 per hour) can work only five hours per week without becoming ineligible for benefits.
In actuality, the SSA can look at things that affect the perceived "worth" of an individual's work that might influence whether or not an individual is determined to be engaging in SGA-level work activity, even if they are earning over the monthly earnings limit. For example, Social Security claims representatives must investigate whether an individual is performing work activity that is actually worth what they are being paid. They must consider the fact that some employers will subsidize disabled employees' work by paying them their full wage even though the employees are not performing up to the value of that wage because of their disability. Similarly, some employers allow disabled employees to have special considerations to work that cost the employer money, which should be deducted from their wage in considering the true value of their work. In fact, the cost of any impairment-related work expenses must be deducted from a person's earnings to come up with their monthly work amount.
The SSA may also consider the fact that although the individual is being paid the full amount, their employer may not consider their work to be worth their pay. If an employer considers their employees work to be worth half of the actual pay, then Social Security may just count half the amount of earnings toward their SGA determination.
Although some will argue it that the concept of SGA is too complex (myself included), clearly an individual who is applying for disability should not be able to work at a level that is the same as an individual who is not disabled.
And if there was no SGA amount, how could Social Security determine if an individual's impairments prevent them from working like other average individuals?
