TN 13 (09-16)

DI 10505.005 Determining and Verifying Gross Earnings from Employment

A. Determining gross earnings

When determining whether a claimant or beneficiary works at substantial gainful activity (SGA) levels, consider:

  • when he or she worked; and

  • how much he or she earned for the work activity for the period you are evaluating (after considering all applicable work incentives).

When developing monthly gross earnings, be alert to claimants or beneficiaries who:

  • may be in a position to defer or suppress the amount of reported earnings (e.g., family employment, corporate officer); or

  • received earnings, but may not have actually worked for them (e.g., sick leave, military casualty, annual leave payments, disability payments); or

  • may be eligible for work incentive deductions. For policies on how to determine countable earnings when IRWEs, special conditions, or subsidies may apply, refer to DI 10505.010.

NOTE: It is not necessary to pursue further development of work incentive information if the evidence shows that the difference between gross and countable earnings would not change the ultimate SGA determination.

NOTE: Multiply pay per hour by hours worked per week. Multiply the weekly pay by 13/3 (4.333) to determine a monthly pay.

B. Documenting work activity

Document work activity using the form SSA-821-BK (Work Activity Report - Employee) per DI 10505.035, to obtain the following information:

  • name of employer and type of work;

  • dates of employment;

  • hours worked;

  • rate of pay and when he or she earned payments; and

  • work incentive information (e.g., subsidies, IRWEs).

Review the information provided on the work activity report to verify work activity following instructions in DI 10505.005C for post entitlement determinations and DI 10505.005D for initial claims.

NOTE: There may be circumstances where you do not have to complete a work activity report (e.g., “clearly not SGA”). See DI 10505.003.

C. Verifying earnings for post entitlement determinations

1. Policy for paid earnings versus earned earnings

The Bipartisan Budget Act of 2015 simplifies post entitlement SGA determinations by allowing us to presume earnings were earned in the month they were paid. However, prior to applying this paid versus earned assumption, you will evaluate any readily available earnings verification sources and determine when earnings were earned. If you have no other readily available evidence to determine when earnings were earned, you will use other sources of earnings verification even if the earnings source only documents when earnings are paid. This new policy will apply to all post entitlement determinations made after September 23, 2016, including trial work period and reopening determinations.

2. Hierarchical list of earnings verification sources

Use these sources of earnings verification in the following order. If at any time you believe the earnings evidence is not accurate, proceed down the priority list to find a more suitable and accurate record of earnings.

NOTE: When processing work CDR reopenings, adjudicators must revise/update earnings verification codes of “SSA Records” and “State Records” in eWork to reflect the current verification source. These codes are no longer an option in eWork.

a. Third-party payroll provider documents earnings when earned

If the employer participates with The Work Number, Verify Advantage or any other SSA-approved wage verification company, and you have a signed/attested SSA-821 verify earnings by accessing the provider wages. Generally, you can determine when earnings are earned based on pay period start and end date. Enter monthly earnings into Earnings Detail Screen of eWork and code earning verification as Electronic Wage Verification (EWV). If you are unable to determine when earnings were earned or the employer does not use a third-party payroll provider, proceed to next source of earnings.

NOTE: The SSA-8240 and the response captured in Wage and Employment Authorization (WEIA) are not approved authorizations for EWV.

b. Paystubs

If the beneficiary can provide paystubs/earnings data within 15 days for field offices or 35 days for payment centers, use paystub data. You may use the Pay Distribution Calculator to convert weekly or bi-weekly earnings from paystubs into monthly totals. Record monthly earnings on eWork’s Earnings Details screen, and code them as verified by Paystubs. If additional evidence of earnings is needed, proceed to next source of earnings.

c. Shared process screen and Paystubs feature in eWork

Check the shared process menu for earnings information from providers for beneficiaries participating in The Ticket to Work program. Also, check the paystub feature of eWork, which stores Title II paystubs and SSI monthly wage SSIMWV paystub information. If evidence information is sufficient to determine when wages were earned, document that information first. If unable to determine when earned, then assume that wages were earned in the month they were paid. Code the earnings verification as indicated in shared process. For example if paystubs, as paystubs.

d. Third-party payroll provider documents when paid

If the third party payroll provider can only verify when the earnings were paid, apply paid vs earned assumption. You will assume earnings were earned in the month of payment. You will place a comment in the remarks section of eWork “payroll data when paid.” If the employer does not use a third-party payroll provider, precede to next source of earnings.

e. SSI verified wages

Check the verified earnings on the SSR and assume that earnings were earned in the month they were paid. Code the earnings verification as SSI wages.

f. National Directory of New Hires (NDNH)

Query the NDNH for quarterly earnings information. Divide quarterly earnings amount by the number of months worked in the quarter as indicated on the SSA-821 to determine monthly amount. If the SSA-821 does not provide information on the period worked, or the beneficiary does not return the SSA-821, divide the quarterly amount by 3. Enter monthly earnings into earnings summary screen of eWork and Code earnings verification as NDNH.

g. IRS earnings on the SEQY/DEQY

Check SEQY/DEQY and divide amount over the number of months worked in the year, as indicated on the SSA-821. If the SSA-821 does not provide information regarding on the period worked, or the beneficiary did not return the SSA-821, divide the annual earnings on the SEQY by 12 and code earnings verification as SEQY.

h. SSA-L725

If none of the earnings sources above are available, or you are unable to determine if earnings are SGA, send an SSA-L725 request to the employer. The SSA-L725 is a last resort. Exhaust all of the above earnings sources before sending this form. If evidence of earnings is received, code earnings verification as SSA-L725.

D. Verifying earnings for Initial Claims

1. Policy for determining earned wages

Adjudicators will verify when wages are earned to determine the appropriate onset date. If the beneficiary alleges work after onset and the allegation does not result in a technical denial or a clearly not SGA determination (DI 10501.025) compare the beneficiary’s statement and verifications of earnings obtained to determine whether the work information appears to be complete. Use the verification sources listed in DI 10505.005D2 to determine monthly countable earnings. Resolve significant discrepancies that arise between the claimant’s statement and verification obtained. A significant discrepancy is one that:

  • Cannot be accounted for and resolved as a difference between paid versus earned (or another posting reason); and

  • Could result in a change in the determination of onset (see DI 11010.050).

2. Hierarchical list of earnings verification sources for initial claims

a. Third-party payroll provider documents earnings when earned

If the employer participates with The Work Number, Verify Advantage or any other SSA-approved wage verification company, and you have a signed/attested SSA-821 verify earnings by accessing the provider wages. Generally, you can determine when earnings are earned based on pay period start and end date. If you are unable to determine when earnings were earned or the employer does not use a third-party payroll provider, proceed to next source of earnings.

b. Paystubs

If the beneficiary can provide paystubs/earnings data within 15 days for field offices or 35 days for payment centers, use paystub data. You may use Pay Distribution Calculator to convert weekly or bi-weekly earnings from paystubs into monthly totals. If additional evidence of earnings is needed proceed to next source of earnings.

c. Shared process screen and Paystubs feature in eWork

Check the shared process menu for earnings information from providers for beneficiaries participating in The Ticket to Work program. Also, check the paystub feature of eWork, which stores Title II paystubs and SSI monthly wage SSIMWV paystub information. If evidence information is sufficient to determine when wages were earned, document that information first.

d. SSA-L725

Send an SSA-L725 request to the employer to determine when earnings were earned. Tickle the case for 15 days for field office and 35 days for PC processing. No follow-ups are required.

e. Third-party payroll provider documents when paid

If the third party payroll provider can only verify when the earnings were paid, use the SSA-821 information to determine when the work activity occurred and spread earnings over the period worked. If the employer does not use a third-party payroll provider, precede to next source of earnings.

f. SSI verified wages

Check the verified earnings on the SSR, compare earnings data with 821 information to determine when wages were earned, and post accordingly.

g. National Directory of New Hires (NDNH)

Use the NDNH only as a lead when investigating earnings for SSDI beneficiaries in initial claims. If you are unable to determine the monthly earnings based on NDNH information and the information on the SSA-821, you must still develop evidence of earnings when earned to determine onset.

h. IRS earnings on the SEQY/DEQY

Use the SEQY/DEQY data only as a lead when investigating earnings for SSDI beneficiaries in initial claims. If you are unable to determine the monthly earnings based on SEQY/DEQY information and the information on the SSA-821, you must still develop evidence of earnings when earned to determine onset.