Average Earnings and Substantial Gainful Activity in Social Security Disability - Melvin
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Average Earnings and Substantial Gainful Activity in Social Security Disability

by Melvin Cook

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Substantial gainful activity is a term of art used in social security disability claims to determine if a person meets a threshold requirement for disability benefits. If a person is engaged in substantial gainful activity (“SGA”), then they will not be found disabled, no matter how severe their medical impairments may be.

Substantial gainful activity is often looked at in terms of the amount a person makes on a monthly basis. So, for example, in 2019, this monthly amount is $1,220 for a non-blind individual (different rules apply for statutory blind individuals). A person making more than this amount may not be found disabled, regardless of the severity of their impairments.

SGA must often be averaged over the period of time the person worked. See Social Security Ruling (SSR) 83-35. This would typically be the case when a person’s earnings vary somewhat from month to month.

But there is the issue of determining the appropriate period of time over which to average the individual’s earnings. SGA often changes on an annual basis (for example, the SGA amount in 2018 was $1,180 per month for a non-blind individual. Presumably, this is to account for inflation.

So, if there is no change in the SGA amount and no significant change in work patterns or earnings during the work period, then the earnings are averaged over the entire work period.

As a practical matter, this means that work that is substantially continuous with no significant change in work patterns or earnings during the year, will be averaged each year or for the period of time the person worked each year.

For example, suppose a person works a seasonal job for four months each year. The person’s work pattern and earnings do not change significantly although the earnings may vary somewhat from month to month. Because the SGA amount changes each year, the earnings will be average each year to determine whether or not the person has engaged in substantial gainful activity.

So, suppose a person has the following earnings:

Mr. Jones January 2018 $1,200
February 2018 $1,143
March 2018 $1,198
April 2018 $1,181

January 2019 $1,199
February 2019 $1,187
March 2019 $1,219
April 2019 $1,217

Total Earnings: $9,544.

The temptation might be to average these earnings over the eight months in which they were earned. This would lead to an average monthly earnings amount of $1,193 per month.
However, this would be incorrect. This is because the SGA amount changed from $1,180 in 2018 to $1,220 in 2019. The correct way would be to average each year’s earnings on its own account.

Although the hypothetical individual had lower earnings in 2018 than in 2019, his average earnings for that year were $1,180.50, which exceeded the SGA amount for that year.
In 2019, the person’s average earnings were $1,205.50 per month. This was higher than his earnings in 2018, but below the $1,220 SGA amount for 2019.

See Social Security Ruling (SSR) 83-35.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.

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When it comes the family law and social security disability, each client and case is different. It is also important to select an attorney with the experience, skills and professionalism required to address your legal issues. To learn more, contact the Salt Lake City law offices of Melvin A. Cook and schedule an initial consultation to discuss your case.

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