One of the criteria used to determine whether a disabled individual is eligible for Social Security Disability benefits is whether or not the person can perform “substantial gainful activity.” If the Social Security Administration determines that you can engage in substantial gainful activity, you will not be eligible for disability benefits. To meet the definition of disability, you must not only meet the SSA’s physical tests for the severity of your disability, but must also be unable to engage in any other kind of “substantial gainful” work.
The SSA defines substantial gainful activity as 1) work that involves significant and productive duties and 2) work which pays more than the current monthly income limit set by the SSA. Substantial gainful activity includes part-time work and work that pays less than your regular employment or which has less responsibility. Work that is not paid is not considered “gainful” employment, but if it is substantial, the SSA may well find that you are able to work and thus not eligible for Social Security Disability benefits.
In 2017 the earnings limit is $1,170 ($1,950 for blind persons). The dollar amount that measures substantial gainful activity tends to change from year to year, usually increasing slightly to affect cost of living increases. Social Security Disability payments made under SSDI will consider when wages are earned, not simply the total annual amount. For example, if you are a teacher and are paid for 9 month’s work over a period of 12 months, Social Security will take your yearly pay and divide it by nine to come up with the figure you actually earned for a month’s work.
Income counted with respect to the earnings limit includes income from the work you do, whether it takes the form of wages from a company, self-employment earnings, or in-kind payments such as room and board that are provided in addition to or instead of cash. The SSA includes only net wages or earnings, so items such as expense reimbursement are not counted. Found in the gray area are items such as bonuses and incentive payments, since they are not necessarily related to work performance. Compensation is discussed in POMS RS 02505.240, but if you are in doubt, it is a good idea to ask your local Social Security office to make a determination.
What counts as income for Social Security Disability Insurance (SSDI) is not necessarily the same as what counts as income for Supplemental Security Income (SSI). However, both programs exclude work-related expenses that are associated with your disabling condition. For example, if you have mobility issues that require the use of a wheelchair, the cost of the wheelchair is excluded from your income, and if you are unable to drive because of your disability and must travel to work, you can deduct the cost of your cab fares.
Social Security uses your gross pay when determining whether your are eligible for disability benefits, and does not allow you to exclude state and tax withholdings, insurance premiums, FICA taxes, pension payments, union dues, or other standard payroll deductions, since they are paid with income you have earned. If you are self-employed, Social Security counts your net income (gross income minus your business expenses), basically using the same income amount that you would report to the IRS.
Once all the allowable expenses are deducted from your earnings, the figure that remains is called “countable income.” Countable income is the figure used to determine whether or not you engage in substantial gainful employment and are eligible to receive Social Security Disability benefits.