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Alexandra Baig, CFP®

Equal pay for equal work: Employer Subsidies


“Substantial Gainful Activity” or “SGA” is a significant threshold for anyone with a disability, who wants to qualify for government benefits. If you are able to work and earn more than $1,180 per month in gross wages (2018), then you ARE performing SGA and you are NOT to be considered by Social Security to have a disability and you will not qualify for benefits. SGA is a pretty low threshold; and in most states, it represents 40 hours at a minimum wage job. It is difficult to live on, especially if your disability causes you extra out-of-pocket expense. However, Social Security wants people with disabilities to work as much as they can and has developed caveats to the SGA rule to incentivize them.

As a person with a disability, you might want to work as much as you can, but you may also need special support to do it. Perhaps you have a job coach who sticks by you at work and helps you break down tasks and learn new processes. Perhaps your disability makes it harder for you to work for extended periods of time under certain conditions—standing up, sitting down, being in noisy settings, being under fluorescent lights or being with certain smells or products. Your employer thus makes a reasonable accommodation for you to take more frequent breaks than your co-workers without a disability. Perhaps because of your disability, you work somewhat slower than your co-workers, but the employer allows this as a reasonable accommodation and pays you the same amount as those who work faster. In each of these cases, Social Security considers your employer to be providing a subsidy. Social Security only considers as countable income the wages that your employer pays you that directly represent the value of the products or services you produce.

For example, if you manufacture 20% fewer widgets per day than your co-workers because you work slower or because you need more frequent breaks or because your para-transit means you arrive at work later and leave earlier, then 20% of your wages should not be counted when determining if you are generating SGA. This would mean that you could earn up to $1,474 in gross wages per month and still be eligible for benefits. If you have a job coach, the Social Security Administration will need to determine how much of your productivity is attributable to your own efforts and how much to the job coach.

As with most things Social Security, though, there is a bit of a devil in the details. Social Security needs to evaluate your specific situation to determine whether or not your employer is truly subsidizing you. Social Security attempts to determine the value of this subsidy by talking to you, to your employer, to your co-workers, to the job coach (if applicable) and even to other widget-producing companies or someone familiar with the industry standards for widgets. While there is no way to control the outcome of the agency’s investigation, you can aid the investigation by talking to your employer or your support provider about your special conditions and the need for the employer or support provider to place a monetary value on them. Whenever possible, have the employer or support provider put the value in writing on the company letterhead signed by someone with appropriate authority.

And if you’d rather not be making widgets at all, take heart! You can use the extra money you’re allowed to earn under the subsidy to upgrade your job skills and move on.


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