September 7, 2023


Liz Yoder, CFP®

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What is Substantial Gainful Activity?

Substantial Gainful Activity was a term defined by the Social Security Administration to define competitive work enough to justify not awarding cash benefits.

“A person who is earning more than a certain monthly amount (net of impairment-related work expenses) is ordinarily considered to be engaging in SGA.” 

Social Security will be counting the full paycheck before any deductions are made, not just the check that is given to the employee for deposit. 

In 2023, the standard amount of earnings that are considered substantial is $1470 a month. When an employed individual with a disability has an hourly income, they must stay under the SGA limit each month to be eligible for sustained benefits. 

Often we think in terms of annual amounts. $1470 a month is the same as an annual income of $17,640. However, the Social Security Administration will be looking at earned income each month. Many people are paid in 26 pay periods, get paid weekly, or have jobs that are seasonal. Each month needs to be below the SGA amount.  An equal paycheck on 26 pay periods (when there is no Impairment related work expense) for 2023 is $678.46 An equal paycheck on 52 pay periods is $339.33. 

Not everyone has equal paychecks and will need to monitor the hours that they agree to work if they are planning to continue receiving their Social Security payments.

Substantial Gainful Activity is used to approve both SSI and SSDI payments. When someone goes over the SGA amount for a short period of time, benefits may stop for a period of time. The Social Security Administration may even request payments back when the work history indicates the employee is “no longer disabled.”

Usually, this back and forth with Social Security is enough to either maintain SGA or to give up the fight altogether. However, SGA should be taken very seriously if a person with a childhood disability intends to benefit from their parent’s Social Security work history with the Disabled Adult Child (DAC) benefit. The DAC benefit could be tens of thousands of dollars annually over and above what the individual could earn and receive in their own SSDI payments alone. To be eligible for the DAC, a worker with a childhood disability (before 22) needs to have never entered into SGA for a sustained period of time – beyond 6 months. 

Many people with childhood disabilities do not get the opportunity to work beyond SGA, but many do. When trying to figure out what the best path for a young person is, we recommend a full review of who the young person is, what their energy level is when working beyond 20 hours a week (based on most states’ minimum wage standards), and what their future work prospects may be when their current opportunity changes. We talk with individuals and families on the pathway to important safety nets, which include SSDI, the Disabled Adult Child Benefit, and Medicare, in addition to other Medicaid supports.

It is not our view that people who can work should be on Social Security or other disability benefits forever, but we want them to know they will be successful before turning their back on a safety net that may not be an option to them in the future. Planning is important for everyone. Contact us if you want to put together a plan for your greater financial independence.

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