Social Security Administration
Increase in SGA Level
The Social Security Administration today announced several new
rules that took effect January 1, 2001, that will allow more persons
with disabilities to test their ability to work without fear of
losing their cash benefits and important health care coverage. These
new rules are part of a package of proposed regulations announced
by President Clinton as part of the 10th anniversary
of the Americans with Disabilities Act in July. Final regulations
were published in the Federal Register on December 29, 2000.
"These new regulations will encourage individuals with disabilities
to test their ability to work," said Kenneth S. Apfel, Commissioner
of Social Security.
The first new rule increases the amount of earnings that are considered
to be gainful employment. Beginning January 1, a Social Security
Disability beneficiary can earn $740 a month and remain eligible
for benefits. The Social Security Administration uses the term "substantial
gainful activity" (SGA) to determine if work is substantial enough
to make a person ineligible for benefits. Under the new rule, the
current monthly SGA earnings limit of $700, which became effective
July 1999, will be automatically adjusted annually based on increases
in the national average wage index. This amount applies to people
with disabilities other than blindness.
"This new rule is good news for Social Security Disability beneficiaries,"
commented Commissioner Apfel. "Disability beneficiaries will now
be able to count on having an SGA level that accurately reflects
annual increases in the national average wage."
The second new rule affects the trial work period (TWP). Currently,
the TWP allows disability beneficiaries to test their ability to
work for at least nine months. During the TWP, Social Security beneficiaries
may earn any amount and receive full Social Security Disability
benefits. Currently, earnings of $200 in a month count as a trial
work month. The rule increases that amount to $530 per month and
links annual changes to increases in the national average wage index.
After completion of nine trial work months, the SGA level is used
to determine whether earnings are substantial or not. If earnings
fall below the SGA level, full benefits generally continue. If earnings
are higher than the SGA level, cash benefits are normally suspended
while medical benefits continue.
The third and final rule in the package allows for more income
to be excluded when a student who receives Supplemental Security
Income (SSI) returns to work. Under current SSI law, when a student
under the age of 22 works, up to $400 of earned income (wages or
self-employment) per month is not counted when determining eligibility.
The maximum yearly exclusion is $1,620. The new rule increases the
monthly excluded amount to $1,290 and the maximum yearly amount
to $5,200. This yearly exclusion roughly corresponds to what a student
may realistically earn in part-time or summer employment. In addition,
both amounts will be automatically annually adjusted based on increases
in the cost-of-living index.
SSA pays cash benefits to people whom, due to the onset of a disability
that is expected to last more than a year or result in death, are
unable to earn a substantial wage. SSA administers two disability
programs: Social Security Disability Insurance and Supplemental
Social Security Disability Insurance pays monthly benefits to people
who have earned enough Social Security credits. Credits are earned
by working and paying Social Security taxes. Benefit payments are
financed by the Social Security Disability Insurance Trust Fund.
This program pays an average monthly benefit of $786 to 5 million
workers with disabilities. In addition, some 1.6 million members
of their families receive monthly benefits.
SSI, a cash assistance program where eligibility is based on financial
need, provides monthly payments to people who have low income and
few assets. Although this program is run by the Social Security
Administration, the payments are financed by the general revenue
funds, not from Social Security taxes. Nationwide, there are 6.6
million people receiving SSI benefits, including 900,000 disabled
The increase in the SGA level affects both Social Security Disability
Insurance benefits and SSI benefits. The term SGA is part of the
statutory definition of disability that requires an individual to
be unable to engage in substantial work for initial and ongoing
eligibility under the Social Security Disability Insurance program
and initial eligibility under the SSI program.
The trial work period is relevant only to the Social Security Disability
Insurance program, while the student earned income exclusion is
relevant only to the SSI program.
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SSA Press Office 4-H-9
West High Rise 6401 Security Blvd. Baltimore, MD 21235
410-965-8904 FAX 410-966-9973