Is the employee's work comparable to that of unimpaired individuals in the community engaged in the same or similar occupations as their means of livelihood? The individual's work is considered SGA if analysis of the time, energy, skills and responsibility involved in its performance shows that the work is essentially the same in quality and quantity as that done by unimpaired individuals engaged in the same or similar occupations as their means of livelihood. For obvious reasons, the performance of the same work under the same circumstances as that done by unimpaired individuals as their means of livelihood must be considered SGA regardless of the amount of earnings the impaired person receives for such work.

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  The amount of corroborative development required will depend upon the extent to which information already in the file discloses limitations in duties, hours, responsibilities, etc. In some cases it will be clear to the field office (FO) that the individual's work is not comparable to that of unimpaired individuals in the community doing the same or similar work as their means of livelihood. Generally, a statement to this effect will be sufficient evidence that the individual's work is not SGA under the test of comparability.

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  Where there is doubt, it will be necessary to contact the employer, the U.S. Employment Service, or other informed sources in the community for information as to the time, energy, duties, and responsibilities of unimpaired workers doing the same or similar work. The precise manner in which such development is carried out will vary with individual cases and requires the exercise of judgment, together with background knowledge of local conditions. Therefore the payment service centers (PSC) will transfer these cases to the FO for the determination.

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  Regardless of whether a conclusion is clear from the evidence already in file or whether further development is required, the file must reflect thorough consideration of this question.

Is the employee's work clearly worth more than the amount shown in the Earnings Guidelines? If the individual's work is not comparable to that of unimpaired individuals according to the test of comparability, it will still be considered SGA if, according to the prevailing pay scales in their community, it is clearly worth more than the SGA amount shown in the Earnings Guidelines.

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  The amount of corroborative development required will depend upon the amount of information already in file and the FO's knowledge of local conditions. In some cases it will be clear to the FO based upon knowledge of local pay scales, that the individual's work is not worth more than the SGA amount shown in the Earnings Guidelines (e.g., the individual is being paid the same amount as others who do the same or similar work). Generally, a statement to this effect will be sufficient evidence that the individual's work is not SGA under the test of worth DI 10505.020C.3.

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  Where there is doubt, it will be necessary to contact the employer, the U.S. Employment Service, or other informed sources in the community for information as to the worth of the individual's work. The precise manner in which such development is carried out will vary with individual cases and requires the exercise of judgment, together with background knowledge of local conditions.

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  Regardless of whether a conclusion is clear from the evidence already in file or whether further development is required, the file must reflect thorough consideration of this question.

1. a. 

   Under the tests of comparability and worth of work, development may not be required if there is a reasonable explanation as to why an employee's earnings are not substantial.

   A reasonable explanation as to why an employee’s earnings are not substantial might be the inability to perform the full responsibilities of the job, such as working at a slower rate or working fewer hours (part-time) than unimpaired persons. When the file adequately explains why an employee's earnings are not substantial, and there are no indications that the comparability or worth of work tests could be met (i.e., the work is obviously not the same in quality and quantity as that done by unimpaired people as their means of livelihood, and the work is obviously not worth more than the amount shown in the SGA Earnings Guidelines), development under the comparability and worth of work tests is not required. The file must clearly reflect why development under these 2 tests was not undertaken.

2. b. 

   The fact that there are unimpaired persons who work for the same low earnings as the impaired person would not be persuasive that the individual is engaged in SGA. For the impaired individual's work to be SGA, the evidence would have to show that unimpaired individuals make their livelihood doing the same or similar work for the same low earnings, or that the impaired individual's work is clearly worth more than the applicable amount shown in the Earnings Guidelines.

3. c. 

   After development has been completed, if there is any reasonable doubt as to whether an individual engaged in SGA under the tests of comparability or worth of work, the adjudicator should generally conclude that the individual did not engage in SGA.

Ann works part-time in their parent's flower shop. They work 15 hours a week and earns $8.00 an hour, the amount usually paid for this type of work in their community. Their monthly earnings total $519.60. In this example, Ann’s low earnings can readily be explained by the fact that they work only 15 hours a week. There is no evidence to suggest that their work could be the same in quality and quantity as that done by unimpaired people as their means of livelihood; and, since all workers in their community earn $8.00 an hour working at a flower shop, there is nothing to suggest that their work should be valued any higher. Therefore, this work can be found to be not SGA without any further development under the comparability and worth of work tests. The file should include a statement from the adjudicator that reflects why development under the 2 tests was not undertaken.

Bill has been receiving title II disability benefits since November 2004. In January of 2007, Bill reports they have been working full-time as a desk clerk in a local motel that is owned by their family since December of 2004. Bill is paid $500 a month. Bill completed their TWP in August of 2005 and the adjudicator needs to determine if SGA level work activity was performed after August of 2005. Bill's low earnings are not adequately explained because Bill's earnings do not appear to be consistent with the full-time work they are doing, development under the comparability and worth of work tests may be required. Since Bill has not received cash benefits for 24 months in September of 2005, the adjudicator can apply the comparability and worth of work tests to determine if SGA has been performed.

When an individual does not have substantial earnings because they are not performing the full responsibilities of the job, such as working at a slower rate or working fewer hours (part-time) than unimpaired persons, do not conclude in a work-issue-only determination that the individual could increase a limited work effort to a level of SGA. Such a decision concerns the capability to engage in SGA and requires consideration of medical and vocational factors. The SGA determination should be based only on work activity actually performed.

For work determinations made on or after 12/18/06, work activity engaged in by a title II disability beneficiary after they have received title II disability benefits for 24 months, may not be used as evidence that the individual’s disability has ceased. Specifically, do not consider the activities engaged in by the beneficiary in work performed after the 24-month requirement is met to determine that the work shows the beneficiary is able to perform SGA. Instead, compare the countable earnings from the work with the earnings guidelines in DI 10501.015 to determine if the beneficiary is engaging in SGA for disability cessation purposes.

Determine countable earnings in the usual manner (see DI 10505.010). Then apply the guides in DI 10505.020A. or in DI 10505.020B. to determine whether the beneficiary has engaged in SGA for purposes of deciding if disability has ceased. Do not consider the tests of comparability or worth of work if countable earnings are equal to or less than the SGA threshold amount (see DI 10505.020B.).

NOTE: If countable earnings are over the SGA threshold amount, and there is information indicating that not all of the beneficiary’s earnings are directly related to the individual’s own productivity (i.e., the earnings are subsidized or the work is performed under special conditions), consider the work activities performed by the beneficiary in deciding the reasonable value of the services performed to determine countable earnings before applying the SGA earnings guidelines.

The Exemption of Work Activity provision does not apply when:

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  determining initial eligibility for disability benefits;

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  determining whether work activity performed by a title II disability beneficiary before they have received title II disability benefits for at least 24 months is SGA;

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  determining whether work performed in or after the EPE/reentitlement period is SGA after an SGA cessation has been determined; and

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  determining SGA during the initial reinstatement period (IRP) for expedited reinstatement (EXR) cases.

A title II disability beneficiary will qualify for the Exemption of Work Activity provision if:

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  The beneficiary has received title II disability cash benefits for at least 24 months during the current period of entitlement, and the work being evaluated was performed after the 24^th month of receipt of benefits; and

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  The beneficiary’s disability has not ceased due to SGA in the extended period of eligibility (EPE).

NOTE: If the reason the beneficiary did not receive a benefit was because the full payment was withheld to recover an overpayment, to pay attorney fees, or for a garnishment order, consider the benefit received for the purpose of the exemption of work activity.

For the purposes of the exemption of work activity provision, a beneficiary will be considered to have received title II disability cash benefits for 24 months beginning with the first day of the first month following the 24^th month for which they received title II disability benefits that they were due. The 24 months do not have to be consecutive. For EXR cases, the 24-month requirement will have been met when the individual completes the 24-month initial reinstatement period (IRP).

Any months for which the beneficiary was entitled to title II disability benefits but did not actually receive a title II disability cash benefit will not be counted for the 24-month requirement. For example prisoner suspense, Medicare Qualified Government Employee (MQGE), an individual in full workers compensation offset, a childhood disability benefit (CDB) technically entitled to a disability maximum (DMAX), and a supplemental security income (SSI) only recipient. However, if the reason the beneficiary did not receive a benefit was because the full payment was withheld to recover an overpayment, to pay attorney fees, or for a garnishment order, consider the benefit received for the purpose of the exemption of work activity provision.

Mary has been entitled to title II disability cash benefits since November 2004 (5-month waiting period- June through October 2004). In January of 2007, Mary reports that they have been working since December of 2004. The adjudicator determines that the TWP months are as follows: December 2004, January 2005 through August 2005. Starting in September of 2005, the work activity needs to be evaluated under SGA rules.

In September of 2005, Mary had not been entitled and received 24 months of cash benefits and therefore the comparability and worth of work tests can be applied when making the SGA determination. In this example the comparability and worth of work tests were applied but it was determined that Mary was not working at the SGA level through the current month-January 2007. If Mary reports any subsequent work activity for months after January of 2007, the adjudicator will not apply the comparability and worth of work tests, because the adjudicator has determined that Mary has been entitled and received 24-months of benefits and the exemption of work activity provision will apply starting in November of 2006 and continuing.

EXAMPLE 2:

In January of 2007, Henry came into the office to inform the adjudicator that they started their own business in January of 2007 and to file an appeal on their SGA cessation claiming that their IRWE was not calculated correctly. They want to know how their new business will be evaluated because they will not be making any money in the beginning. At first glance, Henry’s Master Beneficiary Record (MBR) would indicate the exemption of work activity would not apply because an SGA cessation is on the record. However, Henry is filing an appeal on that decision. If the SGA decision is re-opened and determined not to be SGA, the exemption of work activity provision may apply. In this example, the adjudicator re-opens the decision and determines that Henry has not performed SGA work activity. Henry had been entitled and received title II cash disability benefits since November of 2004. The exemption of work activity provision would apply starting in December 2006 and the recent work activity being reported in January of 2007 would not be evaluated under the comparability and worth of work tests.