Applying for SSDI or SSI benefits is a complex and time-consuming process. You are bound to have questions about how that process works and what the requirements are for a successful application. Substantial Gainful Activity (SGA) is a term you’ll hear a lot and, for those who are self-employed, it is handled differently than for those are working a regular job.
What is Substantial Gainful Activity?
SGA is the term the Social Security Administration (SSA) uses to refer to the threshold amount of work an applicant does before they are disqualified from receiving benefits. When an applicant does enough work in a given period of time, the work is considered SGA. When their work falls short of the threshold, it is not SGA and they may receive benefits. SGA is frequently expressed in a dollar amount per month, but this is not the only way it is defined.
The three tests
For applicants who are self-employed, determining SGA is not as straight-forward as looking at paystubs from an employer and seeing if the amounts of the checks exceed the allowable dollar amount. Instead, the SSA uses what’s the called the three tests for the initial determination of eligibility.
The first test is whether the applicant’s work is significant to the operation of the business and if they earn substantial income from it. If the answer is ‘yes’, the work can be considered SGA. The second test is whether the applicant’s work is comparable to that of a non-disabled person’s work, who would be doing similar activities for another business. If the answer is ‘yes’, the work can be considered SGA. For the third test, if the applicant’s work is not comparable to a non-disabled person’s work, it can still be SGA if it is clearly worth more than threshold dollar amount set by the SSA for SGA.
Determining whether an applicant’s self-employment will qualify as SGA is not easy. There’s a lot of nuance to it, requiring the assistance of someone who is knowledgeable and experienced dealing with disability applications and the SSA.