Substantial Gainful Activity (SGA) Reviews: Using the Unsuccessful Work Attempt Policy to Avoid an SGA Determination
Description: This article explains how Social Security Disability Insurance (SSDI) beneficiaries can utilize the Social Security Administration's (SSA) Unsuccessful Work Attempt (UWA) policy to negate findings of Substantial Gainful Activity (SGA). It outlines the specific criteria required to classify a short-term work effort as a UWA and provides guidance for benefits counselors assisting beneficiaries with the reporting process.
Introduction
We’ve all seen this movie before – and we lived it. A Social Security Disability Insurance (SSDI) beneficiary tells you the Social Security Administration (SSA) is reviewing her recent work history, following her ninth trial work month and several months of work after that, to determine if she performed substantial gainful activity (SGA) and faces a “cessation” of benefits. She tells you she loved that most recent work experience, but it did not work out because of increased stress associated with more responsibilities and more hours of work. Based on the advice of her mental health counselor, she recently moved to a less stressful position with the same employer, reduced her hours, and saw her monthly earnings significantly reduced to a level that is now clearly below the SGA level. “How do I fill out the 12-page questionnaire I got from SSA concerning this most recent job experience?” she asks.
You wonder if this work effort could be classified as an Unsuccessful Work Attempt (UWA). What factors are relevant to the UWA determination? How should the beneficiary report this work experience and its impact on her disability symptoms on form SSA-821-BK (Work Activity Report – Employee)? What else do you need to know about the work history for this most recent job and are there employment and/or medical records the beneficiary needs to gather? And what role is it reasonable for you to play, as her benefits counselor?
This article will focus on how SSA’s UWA policy can be used to establish that a work effort, that otherwise appears to be SGA, can be classified as a UWA to avoid an SGA determination. In the pages below, we will:
Summarize the SGA rule and its potential impact at the initial application stage and, following the nine-month Trial Work Period, to determine whether a “benefit cessation month” has occurred.
Explain the UWA policy and when it can be used to negate an apparent finding of SGA-level earnings if the work was either stopped or countable earnings reduced below the SGA level because of the beneficiary’s disability.
And provide examples of when a work effort can be classified as a UWA and when it cannot be classified as a UWA.
Since very few of our readers provide services to persons applying for Social Security or SSI disability benefits or appealing denials of benefits, our primary focus will be on the UWA’s application to beneficiaries. And since the SGA rules do not apply to SSI beneficiaries, we will focus on SSDI beneficiaries.
We are writing this as a companion piece to our most recent article, Substantial Gainful Activity (SGA) Reviews: Using Income Averaging to Avoid an SGA Determination, Deeper Dive #6 (Feb. 2023). Like the policies on income averaging described in our last article, the focus of the UWA policy is to ensure that a work effort does not lead to a benefit denial or cessation unless there is truly evidence of sustained earnings at the SGA level.
The SGA Earnings Test and When it Applies to a Work Effort
The Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs define disability for adults as the inability to perform SGA due to one or more medical conditions.1 SSA has long used an SGA monthly earnings test as a presumed showing that the applicant or beneficiary has demonstrated the ability to perform SGA and is not or is no longer disabled.2 For 2023, the monthly SGA figure is $2,460 for persons who are statutorily blind and $1,470 for all other disabilities. When “countable monthly earnings” exceed the SGA amount for the year being reviewed, SSA will ordinarily deny a Social Security disability application or an SSI application for an adult age 18 or older. The SGA test does not apply to SSI applications for persons who are statutorily blind.
The SGA earnings test does not apply to SSI beneficiaries, as SSI payments will be gradually reduced as earnings increase (even when they increase above the SGA level). The SGA test, however, will apply to SSDI beneficiaries, including those receiving Childhood Disability Benefits (CDB) (also known as Disabled Adult Child or DAC benefits), and Widow’s or Widower’s disability benefits3 at key points as they pursue work goals:
It will apply during the 36-month Extended Period of Eligibility (EPE), first to determine when a “benefit cessation month” has occurred and, after a three-month grace period, to determine if a later month within the EPE will be an SSDI payment or nonpayment month.
It will apply after the EPE to determine whether SSDI payments will be terminated due to SGA-level earnings.4
For those terminated after the EPE, the SGA earnings test will be used to determine whether the person qualifies for Expedited Reinstatement (EXR) because they are no longer working or are earning at less than the SGA level.
After an EXR application is approved, the SGA earnings test will be used during the EXR’s 24-month Initial Reinstatement Period to determine, month-by-month, whether the beneficiary will be entitled to a monthly payment.5
How is the Unsuccessful Work Attempt Defined?
The policies governing UWAs appear in Social Security’s Program Operations Manual System (POMS) at POMS DI 11010.145 and POMS DI 24005.001. When the months involved in a work effort are found to be a UWA, countable wages for those months cannot be used to find that the work amounted to SGA.
SSA defines a UWA in POMS DI 11010.145 A and DI 24005.001 A:
“A UWA is an effort to do work in employment or self-employment that discontinues or reduces to the non-Substantial Gainful Activity (SGA) level after a short time (no more than 6 months) because of the impairment or the removal of special conditions related to the impairment that are essential to the further performance of work. Work performed during a UWA does not prevent a finding of disability.”
In POMS DI 24005.001 B, SSA advises decisionmakers, when determining SGA, “you may disregard work if the claimant or beneficiary:
discontinued or reduced work to the non-SGA level after a short time because of the impairment; or
discontinued or reduced work to the non-SGA level . . . because of the removal of special conditions related to the impairment that were essential to his or her performance of work.”
When Does the UWA Policy Apply or Not Apply?
The UWA policy is only relevant at either the initial application stage or during the Extended Period of Eligibility to determine if a “benefit cessation month” has occurred based on SGA-level earnings. UWA policy will never apply if average countable earnings are below the SGA level for the earnings period being reviewed.
UWA policy applies to both SSDI and SSI at the initial application stage. At this point, it will be the State’s Disability Determination Services (DDS) that makes a UWA determination when it reviews the applicant’s recent work history. The DDS will determine whether countable earnings were at the SGA level, leading either to an application denial or possibly an approval with a later onset date, or whether the work effort reviewed is a UWA thereby negating an SGA finding. The SSA Field Office will typically gather information related to an SGA determination and may recommend that the DDS find the work efforts were or were not a UWA. However, the DDS has the final responsibility to determine if a UWA occurred at this stage. POMS DI 24005.001.
UWA policy applies during the Extended Period of Eligibility (EPE) when SSA does a work-related continuing disability review to determine if a “benefit cessation month” has occurred. The EPE starts the month immediately after the nine-month Trial Work Period (TWP) is completed and runs for 36 consecutive months, regardless of whether the beneficiary works in a month or not. The first time the SSDI beneficiary has countable earnings above the SGA level during the EPE, this qualifies as a benefit cessation month. The cessation month could occur as early as the first month of the EPE, or at any later month of the EPE. The beneficiary will be eligible for SSDI payments for the cessation month and the next two months (the Grace Period). Thereafter, for the remainder of the EPE, eligibility for SSDI will be determined month-by-month with benefits paid only if countable earnings are at or below the SGA level. If no cessation month occurs during the EPE, but does occur after the EPE has ended, the beneficiary receives a Grace Period6, but if they perform SGA after the Grace Period, their SSDI will terminate. SSA’s Field Office is generally responsible for SGA-related determinations, including UWA determinations, during the EPE and post-EPE period. However, if the SGA and UWA determinations are made in the context of a broader medical Continuing Disability Review, then the DDS will be responsible for the SGA and UWA determinations. POMS DI 11010.145 B.3.
The UWA policy will not apply to the following:
It will not apply during the nine-month Trial Work Period, as the use of a TWP month is determined month-by-month based only on whether gross earnings exceeded the TWP services level for the year in question ($1,050 for 2023) or whether the work met alternative TWP criteria for the self-employed ($1,050 per month or 80 hours devoted to the business in a month in 2023).
It will not apply during the EPE, after a benefit cessation month has occurred, as month-by-month eligibility for an SSDI payment is then based solely on whether countable earnings are at or below the SGA level.
After an application for Expedited Reinstatement (EXR) has been approved, the UWA policy will not apply during the 24-month Initial Reinstatement Period (IRP). During the IRP, SSDI will be paid only for those months when countable earnings are at or below the SGA level. Once SSDI benefits have been paid for any 24 months following EXR approval, the IRP has been completed and the beneficiary is now fully eligible for the whole range of work incentives including a second TWP and a second EPE (with the UWA available when SSA determines whether a benefit cessation month occurred during this new EPE or post-EPE as discussed above).
A UWA Applies Only to Work Efforts of Six Month or Less
Consider these two examples:
Work performed between November 5, 2022 and May 4, 2023 is a work effort of “six months or less” and can be reviewed as a possible UWA.
SGA-level work lasting more than six months “cannot be a UWA regardless of why it ended or [was] reduced to the non-SGA level.” Thus, work at the SGA level between November 5, 2022 and May 30, 2023 is a work effort of more than six months and is not a candidate for a possible UWA.
Based on examples that appear at POMS DI 11010.145 E.1 & 2. SSA has no discretion to treat a work effort as a UWA if it lasts even a few days beyond the six-month period.
SGA-level work during the Trial Work Period can, in some cases, be relevant to the “six months or less” criteria. Although UWA policy does not apply to the TWP, SSA is required to evaluate the entire period of work against the UWA criteria, even if some of those months fall within the TWP. POMS DI 11010.145 B.4. Consider this example:
Rafaela’s TWP ended in July 2022. She began work at the SGA level during May 2022, the seventh month of her TWP. This SGA-level work effort goes on for seven months and ends in the fourth month of her EPE, November 2022. Since the full period of the work effort exceeds six months, including three TWP and four EPE months, it cannot be considered a possible UWA.
There Must be a “Significant Break” in the Continuity of the Work Effort that Precedes the Beginning of the Work Effort being Considered as a UWA.
As spelled out in POMS DI 11010.145 C, the significant break would occur it the person:
“Discontinued or reduced work activity to the non-SGA level because of the impairment or the removal of special conditions related to the impairment that are essential to the further performance of the work; or
Discontinued or reduced work activity to the non-SGA level prior to the onset date of the impairment for reasons unrelated to the impairment (such as retirement or layoff); or
Never previously engaged in work activity.”
SSA considers work discontinued if: the person was out of work at least 30 consecutive days; or was forced to change to another type of work or employer because of their disability. We note that the language in the first bullet is nearly identical to the UWA definition language in POMS DI 11010.145 A and POMS DI 24005.001 A, quoted above. In fact, it is not unusual for a first job to end as a UWA, followed by a second job that ends as a UWA as the beneficiary attempts to find success at a job they can perform despite an ongoing severe disability.
Oscar’s Case. Oscar receives SSDI based on a severe arthritic condition that limits his mobility and the amounts he can lift. It also causes frequent pain that limits the work he can do and how long he can sustain that work. Starting on January 15, 2022 and ending on June 29, 2022, he works at a warehouse unloading goods from delivery trucks. His first supervisor, knowing about Oscar’s limitations, structures his work to avoid the time he spends walking about the warehouse and to avoid lifting the heaviest items. In May and June, a new supervisor tells Oscar he will have to take on the same duties as the other warehouse employees. Those new duties put a great strain on his knees and back and, after consulting with his doctor, he quits this job at the end of June.
Then, in October 2022 Oscar is rehired by the same employer to a warehouse job where the primary duties will involve the logging in of deliveries to the warehouse and separately logging items sent out to their local stores. This new job puts less demands on his knees and back but does involve regular walking throughout the workday as trucks arrive at or depart from the warehouse. It also involves periodic lifting as necessary to identify products arriving at or departing from the warehouse. Between October 1, 2022 and February 28, 2023, Oscar earns SGA-level countable wages. Despite the decreased exertional demands on his knees and back compared to his previous job, Oscar struggles again with pain in his knees and back. On March 1, 2023, on the advice of his doctor, Oscar reduces his work hours to lessen the strain on his body and at that point his countable earnings are reduced to a non-SGA level.
The end of the first job in late June 2022 will satisfy the “significant break” criteria outlined above:
It met the discontinued criteria, as he was out of work at least 30 days; and
It was discontinued because of his impairment and because of the removal of special conditions related to his impairment, i.e., his new supervisor required him to do the more strenuous work which led to his inability to sustain this work. See POMS DI 11010.145 F.
The first job will also be a candidate for review as a possible UWA.
Policy for An Event that Must Follow a UWA
SSA describes this requirement as follows:
“After the first significant break in a claimant’s or beneficiary’s continuous work activity, regard the following period of work as continuous until the impairment or the removal of special conditions related to the impairment essential to the further performance of work, causes the work to discontinue, or reduce to the non-SGA level. Each continuous period, separated by significant breaks, may be a UWA as the beneficiary or claimant met the duration and conditions of work criteria.” POMS DI 11010.145 D (emphasis added).
Going back to Oscar’s case, he will meet these requirements. After his significant break in July 2022, the October 2022 through February 2023 period can be considered a “continuous period of work” which ended in February as the work was reduced to the non-SGA level on March 1, 2023 because of his impairment. Based on the highlighted language, above, Oscar could be eligible for multiple UWAs over time so long as each new work effort satisfies the continuous period and significant break criteria.
What Role Can a Benefits Counselor Play to Assist a Beneficiary in Reporting Their Work Efforts to Support a UWA Determination? Completing Form SSA-821-BK to Document a UWA
SSA will send the 12-page SSA-821-BK form to beneficiaries when it plans to review a period of work activity following the end of the nine-month Trial Work Period. The purpose is to document monthly earnings and any factors that might reduce countable earnings through paid time off, impairment related work expenses, or subsidies/special conditions. Questions on the form will also be relevant to whether one or more UWAs took place during the review period. While SSA policy and good practice suggest this form will be sent to a beneficiary within a few months of the TWP ending, so that a prompt decision can be made about whether a benefit cessation month occurred, the reality is often quite different. Often, this form does not go out until two years or more after the TWP ends. The most important role a benefits counselor can play at this stage is to assist the beneficiary to properly and accurately complete Form SSA-821-BK.
Use Other Policies First to Reduce Countable Earnings – Including Paid Time Off, Impairment Related Work Expenses, Subsidies/Special Conditions, and Income Averaging – as a UWA Determination is Not Needed if Countable Earnings are Below the SGA Level.
Keep in mind that the UWA analysis is relevant only if the applicant or beneficiary has countable earnings above the SGA level. Thus, before you consider whether a UWA took place always consider first the strategies mentioned above to bring countable wages below the SGA level. We have previously published Deeper Dive articles that focused on the use of Paid Time Off (PTO), Substantial Gainful Activity Determinations: Using Paid Time Off as Exclusions When Determining Countable Earnings, Deeper Dive #5 (November 2022) and Income Averaging, Substantial Gainful Activity (SGA) Reviews Using Income Averaging to Avoid an SGA Determination, Deeper Dive #6 (February 2023).7
Document Support for a UWA on Form SSA-821-BK Even If You Believe that Some Combination of PTO, IRWEs, and Subsidies/Special Conditions Reduces Countable Earnings Below the SGA Level.
Even if the beneficiary or their benefit counselor/other support person believes there is a strong argument to reduce countable earnings below the SGA level, the decision maker may not agree. Therefore, if the evidence appears to support a UWA finding, plan to document that as well.
The best place to document support for a UWA is at section 6A on page 7 of SSA-821-BK. The lead-in language states: “For any job you told us about in Question 3, did you make any of the changes below since the DATE shown in the identification section (Check all that apply)” (emphasis in original). Section 6A then lists four categories of special conditions, with an opportunity to check a Yes box for one or more of them:
Stopped working
Reduced my work hours
Reduced my earnings
Changes to a lighter or easier type of work
After entering the employer’s name and dates in the second and third columns, the final column asks the beneficiary to check one or more of three boxes related to “Reasons for Changes in Work Activity.” Those three options are, for each of the four categories:
my physical and/or mental condition(s);
special conditions that allowed me to work were removed; and
other reasons (please explain in 6B).” (Section 6B provides a half page to “provide any additional information about your work changes.”)
Additional “Remarks” sections on pages 8 and 9 provide additional space to elaborate on the issues. Also, where needed, we always urge beneficiaries (and those working with them) to provide SSA with additional typewritten pages to further document these issues (always referring to additional Remarks in the document and additional separate pages in section 6B). It is best practice to include the beneficiary’s name and Social Security Number (SSN) on any additional typewritten pages as they become separated.
How would Oscar, in the example above, complete sections 6A and 6B to document his two possible UWAs?
For the first work effort that ended in late June 2022, Oscar would list the employer’s name and dates of the work effort along the top line and:
Oscar would check the box for “stopped working” and check two boxes in the far right column as reasons for changes in work activity: “My physical and/or mental conditions” and “Special Conditions that allowed me to work were removed.”
Then in the extra space provided in 6B, Oscar would explain in detail what led to his quitting the first job, including the recommendation of his doctor.
For the second work effort, that started October 1, 2022, Oscar would list the employer and the dates of the work effort as ending February 28, 2023, in each of two places:
In the second row, checking the box for “reduced my work hours” and checking the box in the right column for “My physical and/or mental conditions.”
In the third row, checking the box for “reduced my earnings” and checking the box in the right column for “My physical and/or mental conditions.”
Then in the extra space provided in 6B, he can detail the specifics of why he needed to make these moves to enable him to continue working, including the recommendation of his doctor.
If Oscar’s doctor is willing to do so, it would be helpful to get a signed and dated letter from the doctor, preferably on letterhead, explaining that it was their recommendation that Oscar quit the first job and reduce work hours with the second job. The doctor’s letter should be referenced, in the Remarks section as an attachment.
A Comment on Completing Form SSA-820-BK for Persons Who Are Self-Employed
Section 7 of this eight-page form, at page 5, is very similar to section 6A on form SSA-821-BK, discussed above. It provides boxes to check for “stopped working,” “reduced my work hours,” “changed to lighter or easier work,” and “other changes.” Unlike the other form there is no separate space for an employer and the right column just provides a space for an explanation.
After providing space in sections 8 and 9 to document any unpaid help and impairment related work expenses, there is space on pages 6 and 7 to share any additional remarks that did not fit in other parts of the form. Here again, we would urge the beneficiary and anyone helping them to use this space to elaborate on why the various changes were made. Include the beneficiary’s name and SSN on any additional sheets submitted.
Conclusion
For many of the beneficiaries served by our readers, the movement from dependence on benefits to financial independence through work frequently involves one or multiple work efforts. Often, the beneficiary goes through periods where work efforts start and stop, rather than remaining the same for months on end. For SSDI beneficiaries (the focus of this article), the principles of Unsuccessful Work Attempts provide just one tool in the benefits counselor’s toolkit to help beneficiaries avoid an SGA-based loss of SSDI payments until the beneficiary is in a better position to move forward without that source of income.
Of course, any individual benefits counseling case involves the need for multiple tools and strategies as you seek to help the beneficiary toward their goal – the maximum amount of financial independence possible. Knowing that, we continue to provide our readers with additional tools to help support the goals of the beneficiaries in your caseloads. As always, we continue to look for issues where a more in-depth analysis than is presently available (i.e., a “deeper dive”) would best serve our readers. For that reason, we have now devoted the last two Deeper Dive articles to the issues of Income Averaging and Unsuccessful Work Attempts. We hope these two Deeper Dive articles will help you better advise beneficiaries in these potentially precarious situations.
As always, please let us know of your successes or challenges as you seek to use the information in these articles in your day-to-day work.
Dated: May 2, 2023
Authors: James R. Sheldon, JD (Board Member), Disability Consultant and Edwin J. Lopez-Soto, JD (NABWIS member), Extension Faculty, Cornell’s Yan Tan Institute (YTI)
Footnotes:
1 42 US Code 423(d). For information on how disability is determined, see Disability, SSA Pub. No. 05-10029 (August 2022).
2 An SGA-based determination that a person is either not disabled or no longer considered disabled is a decision based solely on countable earnings. SSA decision makers do not consider the applicant/beneficiary’s medical condition when making this decision.
3 SSDI is used in this article to refer to beneficiaries whose benefits are based on their own earnings record, based on the earnings records of a parent or person with a parent-like status (CDB), and those based on the earnings record of a spouse (Widow’s/Widower’s).
4 For more information on the Extended Period of Eligibility, see POMS DI 13010.210 and following.
5 For more information on Expedited Reinstatement, see POMS DI 13050.001 and following.
6 When a cessation month determination is made during this post-EPE period, the UWA policy will apply and could negate a finding that the beneficiary performed SGA-level work.
7 PTO is best documented in sections 1 through 4 of form SSA-821-B; subsidies and special conditions are best documented in section 5; and impairment related work expenses are best documented in section 7.
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