SSDI Step 1: Are You Working?

How the 5-Step Process Works

As the name implies, the 5-step process is essentially a set of 5 questions that Social Security asks in order to determine if you are disabled. Each question basically has a yes or no answer. Depending on the answer, you may be found to be disabled or not disabled, or you might have to move on to the next question.

Unfortunately, the answers to these questions do not come just from you (the claimant). Social Security gathers evidence from many different places – everything from tax records to hospital reports – to move along the 5-step process. Your opinion as to these issues is not always the most important thing. Sound a bit daunting? It is.

Are You Working?

Let’s start with the first question SSA will want to know: Are you working? The basic idea is that being disabled means being unable to work. This makes sense, doesn’t it? We cannot expect the government to pay us at the same time our boss pays us.

But, like most things with Social Security, it is not that simple. You can actually do some work and still be eligible for benefits. At the same time, some things that you might not consider to be “work” could in fact cost you your case if you do them. It is extremely important to know what is what is this area.

Instead of using the word “work” like the rest of us, Social Security calls it “substantial gainful activity,” or SGA for short. This may seem like a long and unnecessary way of talking about a basic thing, but it is actually pretty helpful. Let’s look at each word separately, because Social Security has special definitions for each term.

Substantial

“Substantial” means something that is more than just a little bit. Think of eating. If you have a substantial dinner, it will fill you up almost completely. The same thing applies here. Substantial is SGA refers to the amount of effort that you put into a particular job. If it requires “significant” use of your mind and body, then it is “substantial.”

Of course this is kind of a vague definition because they don’t ever tell us what “significant” really means. But that’s not a problem for a good lawyer or advocate. Over the years, we have come to understand that “substantial” basically includes anything that makes you get out of bed in the morning. Social Security wants to make sure that as much work as possible gets put into this category.

Gainful

Now that we understand “substantial,” our next goal is to look at “gainful.” This is a funny word that we don’t hear people using too often in everyday conversation. It means “for pay or profit.” For Social Security purposes, in 2021 work activity is considered “gainful” if it earns you at least $1,310 per month. However – and this is a big “however” – even if you are earning less than that amount per month, Social Security can still say you are working (and therefore not disabled). So even if you are doing volunteer work, or earning just a few hundred buck a month, SSA might still deem this “gainful” activity. How can this be? Well, if Social Security feels that you could work more, but you are intentionally cutting back on your hours or deliberately being underpaid in order to get under the current $1,310 minimum, they might say that you are actually working. So they might look around your community to see how much your type of work normally pays. If you are being underpaid, SSA might say that you are participating in substantial gainful activity. The idea here is that the SGA amount is set on an assumption that people are working to their maximum capacity. Social Security does not want to pay out benefits to someone who is trying to have it both ways.

On the other hand, the current $1,310 figure can be misleading in the other direction as well. For example, Social Security has a formula for deducting expenses that you need in order to work. This can work in your favor. For example, if you pay for attendant care – someone to help you with basic functions – while at work, this cost can be taken out of your monthly earnings. OR if you need special

equipment to perform your job, this can be taken into account as well. So these things could bring you under the SGA cutoff amount.

Are you self employed? If so, your work will likely be considered SGA as well. There is a whole set of rules that applies to self-employment, but the basic idea is that your efforts are compared to a worker in a traditional work situation. If your time and money earned match up to the SGA standards for a typical employee, then you will be seen as doing SGA as well.

Activity

“Activity” is the easiest part of SGA. It is just another term for “something you do.” It is really the “substantial” and “gainful” parts of the definition that matter. But it must be active. Investing in stocks and getting a dividend is not “active.” It’s passive. But being your own day trader – well, that’s a lot closer to work. You’re just self-employed.

So, putting all of Step 1 together, what we get is this: If you are performing work that earns over about $1,310 per month, you are not disabled. And even if you are doing work that earns under $1,310 per month, Social Security could still say you are working. Either way, you do not get to move on to Step 2 of the 5-Step process. The only sure-fire way to pass Step 1 is to be doing no kind of work at all – no part-time work, no under-the-table work, no volunteer work, nothing. That doesn’t mean you couldn’t get way with a little work and still pass Step 1, but you’d be taking your chances.

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