The average annual earnings in 2023 for a labor worker in Memphis TN and the surrounding mid south region of Arkansas, Louisiana, and Mississippi is $32,258 with $24,000 – $28,000 on the lower end. People who are having a hard time holding down their job due to a disability, will be faced with having to understand where their working wages fall compared to SGA, if they want to apply for Social Security Disability.
Mr. Heermans, of Heermans Social Security Disability Law Firm says, “We use the acronym (SGA) frequently, so it is important that we understand what it means and properly define it”. In simple terms, (SGA) substantial gainful activity is employment or other income that exceeds $1,470 per month for most recipients. The ceiling climbs to $2,460 per month for blind recipients. These ceilings, which change pretty much every year, are currently effective as of May 16, 2023. However, as outlined below, there’s nothing “simple” about SGA. The SGA amount can vary fairly widely from year to year.
The SGA issue is more than a matter of not working. In fact, a prolonged period of unemployment could hurt your application, because that affects a person’s work credits. At the Heermans Social Security Disability Law Firm, we recommend that you contact our disability lawyers while you are still working and before your disability completely puts you out of the workforce.
Our attorneys routinely deal with these kinds of complex issues. So, when you reach out to us for a FREE Disability Evaluation, you get a disability review by an experienced partner who understands the Social Security Disability application process to obtain financial support benefits.
Volunteer or Unpaid Work and SGA
Tennessee is known as the Volunteer State, with the tradition going back to the war of 1812. Many people work but don’t get regular paychecks. A quarter of Americans volunteer their time, energy, and/or talents to a nonprofit or other group. Unpaid volunteer work sometimes counts toward the SGA threshold. And, unless the recipient is blind, there’s not much room to work with changing the SSA rules.
Abraham Lincoln once said that if you call a dog’s tail a leg, it still has four legs. Changing the name doesn’t change what it is. Likewise, calling a “worker” a “volunteer” doesn’t make that person a volunteer. Some examples include:
- Unpaid Interns: Back in the day, interns sat in on meetings and learned how to be doctors, lawyers, accountants, and so on. Today, many of these interns send faxes and do other “grunt work” that entry level employees normally perform.
- Extensive Volunteering: Most people volunteer two or three + hours a week. That amount of work doesn’t affect the SGA equation. Some people volunteer ten or twenty hours a week. According to the SSA, if you do that much volunteer work, you’re capable of doing paid work.
- Family Business: As far as SSA bureaucrats are concerned, volunteering at a family business is like an unpaid internship. One might argue that volunteering at a family business is more like doing chores, which as outlined below, isn’t work.
On a related note, some people work not for cash but for physical or mental health benefits. Such activity still counts toward the SGA threshold, even though no money changes hands.
Basically, in these cases, the Social Security (DDS) Disability Determination Services officer translates hours volunteered into potential money earned. Household chores, attending school, going to the doctor or therapist, and other such everyday activities are exempt from the hours-to-money calculation leap.
We should point out that a DDS officer could consider such activity in another context. For example, if Tim’s household chores include painting the barn, Tim’s bad back might not be as bad as he claims it is. Painting, therefore, could be a red flag to a DDS officer that Tim just prefers not to work at a job.
Speaking of exemptions, federal law exempts any volunteer work done under the 1973 Domestic Volunteer Service Act. These types of programs include the Retired Senior Volunteer Program, Foster Grandparent Program, and Service Corps of Retired Executives.
Exclusions and Deductions
Generally, the first $50 of earnings per month is exempt. That amount usually covers odd jobs, like babysitting and dog walking. Money the recipient places directly into a plan for achieving self-support (PASS) savings account is also exempt, regardless of the amount. This is very important for disabled young adults who are looking toward future independence and freedom, as their life experience and maturity help them grow out of their disability and into more “ability”.
Impairment-Related Work Expenses (IRWEs) are also deductible. These expenses include specialized work transportation, personal care aids, non-disabled assistants (e.g., Mary must hire a driver), and the cost of training needed to learn how to use a page-turner or other impairment-related specialized equipment needed for your work. Some special rules apply in some cases.
If your employer pays you more than the actual value of your labor because of your disability, the extra amount is a subsidy. For example, sheltered workshops that employ mentally disabled individuals often subsidize their pay. Generally, only the regular pay, and not the additional subsidy, counts toward the SGA ceiling. This is a real blessing for those whose disability requires them to have more money in order to pay for additional disability-related living expenses.
This area is probably the “biggie”. Currently, almost 75 million Americans freelance. Some have side hustles or side gigs, and others are full-time self-employed workers. Frequently, income doesn’t match effort. Some full time self-employed people dance for nickels, while others have very easy and very lucrative side income. When it comes to self-employment, there is no straightforward way to say that “this activity” will equal “that income”.
We should stop here and discuss the difference between active and passive income. Some business owners count the money while other people do the work. Other people make money, for example, off of real estate or other investments. The rule here is simple. SGA only includes employment income. Passive income isn’t SGA income. So, if you have a large stock portfolio that is doing well, it is still not going to be considered income.
Back to self-employment. Generally, if the applicant has been self-employed for less than two years, DDS officers use one of several tests to measure self-employment income against the SGA threshold.
The comparability test usually applies if the self-employed applicant isn’t very busy or isn’t making much money. For example, if Ben is a self-unemployed web designer, the SSA looks at nearby web designers and examines how much they earn, how many hours they work, and so on.
If you think that test is subjective, we’re just getting started. The second test, the worth of work test, is even more subjective. Presumably, people who write historical fiction novels contribute more to society than people who write off-color or adult theme novels. So, it could happen that traditions and social bias might come into play here.
Regardless of comparability or worth, if you provide significant services and earn substantial income from it, you are engaging in SGA. SP’s (sole proprietors) almost always perform significant services. Things get fuzzy if the applicant has partners. Generally, income is substantial if it exceeds $1,470 per month, less the aforementioned deductions.
Slightly different rules apply if the applicant has been self-employed for more than two years. Typically, only the dollar figure matters. The amount of work done is irrelevant. If countable monthly income exceeds $1,470, benefits will cease unless the applicant didn’t provide significant services. So, now we have the question, what are significant services? This can lead into another question; what does it mean to get paid for doing nothing? You can see how things are starting to go into a gray area here.
This is all the more reason to contact a Heermans attorney to represent you when you apply for social security disability. Our lawyers have spent years in law school learning about the laws that pertain to the application and receipt of disability benefits. We will help you understand the application process, so that you can stay out of the gray area of questions and confusion.
Generally, DDS evaluators can use any test they decide is appropriate for the applicant and their work/earning history. Having a Heermans lawyer by your side means that you will be prepared for whatever SGA test is used. For more information about the financial side of a SSD application, contact the disability lawyers in Memphis at The Heermans Social Security Disability Law Firm. Call or text 24/7 at (901) 244-0057. More value added FREE information can be found in our online article library.
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