Worth of Work Test

Massachusetts Attorneys Advising Self-Employed Social Security Claimants

Social Security Disability Insurance (SSDI) is traditionally only available to individuals who are either entirely unable to work, or able to work in only a very limited capacity. In order to ensure that benefits are reserved for these few, the Social Security Administration has implemented income threshold tests that set a limit on how much a disabled individual can earn in wages before he or she no longer qualifies as disabled. This is known as the substantial gainful activity threshold. For individuals who own their own business or are self-employed, substantial gainful activity (“SGA”) does not always neatly apply, since wages may not be the true measure of the work they do. At Kantrovitz & Associates, P.C., our Social Security lawyers work with self-employed individuals throughout Massachusetts to compare their level of work-related activity and the threshold for SSDI benefits.

Substantial Gainful Activity

For individuals who are employed in traditional work positions, the SSA requires that those who receive disability benefits can make only $1,090 in wages a month before they no longer qualify for assistance. This is the substantial gainful activity threshold. While the SSA has many options and plans in place to assist people who are attempting to return to work, or many bounce back and forth between periods of employment and unemployment, the general rule is that someone who is able to make more than $1,090 a month should not be categorized as disabled.

For self-employed individuals, this threshold is much more difficult to measure, for they may not receive wages or may receive reduced wages that are not commensurate with the actual level of work or activity that the individual is putting into the job. For this reason, the SSA has created an alternative set of tests to measure substantial gainful activity for the self-employed. These three tests include the significant services and substantial income test, the comparability test, and the worth of work test. The worth of work test is discussed here.

Worth of Work Test

The worth of work test is typically applied in circumstances when an SSDI applicant or recipient is clearly engaged in meaningful work for himself or others, but is not receiving wages that reflect that level of work. This may be because a business is just getting started, or a new skill is being learned. In this circumstance, the SSA measures the value of what the self-employed individual does for his or her business as opposed to the wages or profit that she or he receives from it. If the worth of the work provided is equivalent to more than $1,090 a month, or if it would cost more than $1,090 a month to hire someone else to perform similar services, this is considered substantial gainful activity.

Discuss Your Government Benefits Applicant with a Massachusetts Lawyer

Determining substantial gainful activity for the purpose of qualifying for disability benefits may be complicated. Many self-employed individuals may not have the time or the resources to engage in a comprehensive evaluation of the work that they do or the services they provide, and how such work might be measured under one of the SSA’s three tests. At Kantrovitz & Associates, P.C., our government benefits attorneys can advise Massachusetts residents on the SSDI eligibility process and provide insightful advice on how to manage SGA restrictions. From our Boston offices, we serve individuals from Rhode Island to New Hampshire, including in Providence and the Merrimack River area. Contact us for more information at (800) 367-0871 or online.