Disability Determination

When you apply for Supplemental Security Income (SSI), the Social Security Administration (SSA) looks at everything you send with your application and uses a five-step process to figure out whether you meet their criteria for disability.

If Social Security says you have a disability, you may qualify for SSI if your resources and income are below SSI’s limits.

Note: This article is about the rules for adults ages 18 – 64. Seniors over age 64 may qualify for benefits without having a disability. You can learn more about the rules for children under 18 in DB101’s Benefits for Young People article.

Step 1: Are You Working at a Level of Substantial Gainful Activity?

If you are working and your monthly earnings before taxes are deducted are higher than the Substantial Gainful Activity (SGA) level, you don't have a disability according to Social Security and do not qualify for SSI benefits. In 2024, SGA is $1,550.

If you are not working or if your earnings are less than the SGA level, Social Security moves on to the next step to decide if you have a disability.

SGA and Self-Employment

If you’re self-employed, Social Security looks at more than just your income, because the amount of money you actually get from your business depends on a lot of things. Instead, they use three tests.

If SSA decides that you are not doing Substantial Gainful Activity (SGA) using all three tests, you may qualify for SSI.

Note: If you are self-employed and either blind or over age 55, there are special SGA rules. For details, contact Ability Connection Colorado (ACCO), a Work Incentives Planning and Assistance (WIPA) program.

Self-Employed Test 1: Significant Services and Substantial Income

If you do a lot of work that is important for your business and you get a lot of income from the business, Social Security probably says that you can support yourself (are doing SGA) and you do not qualify for SSI.

Social Security considers the services you perform significant if:

• You operate a business (other than a farm) all by yourself, or
• You and at least one other person run the business and you either do more than half of the management time or manage for at least 45 hours per month. For example, if it takes 60 hours a month to manage your business and you manage it for 35 of those hours, your services are significant.

Social Security considers your income substantial if:

• Your net countable income is greater than $1,550 per month. To figure out your net countable income, Social Security usually takes your net profit and reduces it a bit (7.65%), to take into account that self-employed people pay higher Social Security taxes. Then they deduct the value of unpaid help, Impairment Related Work Expenses (IRWEs), and unincurred business expenses from your net income.

If Test 1 does not show you are doing Substantial Gainful Activity, Social Security moves on to Test 2.

Self -Employed Test 2: Comparing Work Activity

Social Security looks at your work, including things like hours worked, skills needed, responsibilities, and effort involved. If the work you do is about the same as the work done by people without disabilities who are in similar businesses in your community, Social Security decides that you can work enough to support yourself (are doing SGA) and you don't qualify for SSI.

If Test 2 does not show you are doing Substantial Gainful Activity, Social Security moves on to Test 3.

Self-Employed Test 3: Worth of Work Activity

Social Security looks at your monthly work. If they think your work is worth more than $1,550 per month for your business, or if you would have had to pay someone else at least $1,550 per month to do that work, Social Security says you are doing Substantial Gainful Activity.

If Test 3 does not show that you are doing Substantial Gainful Activity, Social Security moves on to the next step of the disability determination process and you may qualify for SSI.

Step 2: Is Your Medical Condition Severe?

For Social Security to say you have a disability, your medical condition must be expected to:

• Significantly limit your ability to perform basic work activities for at least 12 consecutive months, or
• Result in death.

If it does not, you aren't considered to have a disability and do not qualify for SSI benefits.

If your disability meets this standard, Social Security moves on to the next step to decide if you have a disability.

Step 3: Is Your Medical Condition on Social Security’s List of Impairments?

Social Security’s List of Impairments includes many mental and physical disorders. If your condition is on the list, Social Security says that you have a disability and skips steps 4 and 5.

If your condition is not on the list, Social Security decides if your condition is as severe as a condition that is on the list. If it is, Social Security says that you have a disability and skips steps 4 and 5.

If your condition is not as severe, Social Security moves on to steps 4 and 5 to decide if you have a disability.

Step 4: Can You Do the Same Work You Did Before?

If your condition doesn’t stop you from doing the work you did before, Social Security says you do not have a disability and do not qualify for SSI benefits.

If your medical condition does stop you from doing the same work you did before, Social Security moves on to the fifth step to decide if you have a disability.

Step 5: Can You Do Any Other Type of Work?

If you can’t do the work you used to do, Social Security looks at your age, education, skills and condition to see if there is other work you could do.

If your condition doesn’t stop you from doing other work and earning at the SGA level, you aren't considered to have a disability and do not qualify for SSI benefits.

If your medical condition does stop you from doing other work and earning at the SGA level, Social Security says that you have a disability, as long as you have met the other four criteria.

If you have a disability, low resources, and low income, you may qualify for SSI benefits.