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Social Security Forms SSA-821 (Work Activity Report) and 820 (Self-Employed Work Activity Report): Part 1 of 2

Upon the filing of an initial application for Social Security disability benefits, an applicant may see that their local Social Security Field Office where they filed their claim is sending for completion an SSA-821 (Work Activity Report) and SSA-820 (Self-Employed Work Activity Report), if in fact the claimant has been undertaking self-employed work. Understanding the purpose of these forms and taking the steps necessary to properly complete the form can help ensure that an appropriate decision is made in one's case.

In order to prove entitlement to Social Security disability benefits, a disability claimant needs to show that they have remained or they are likely to remain totally disabled from all forms of gainful employment for a year or longer. It is important to understand, however, that being out of work altogether is not the standard one needs to meet to establish one is “disabled” under Social Security’s rules. Step one of the Social Security sequential evaluation process requires that the Social Security Administration (SSA) initially determine whether the claimant is continuing to undertake substantial gainful activity (SGA): a period of disability for purposes of potentially collecting a Social Security disability check cannot begin until such time as the claimant is not longer earning SGA level wages. Under Social Security’s rules, “substantial activity” is defined as work for which one would ordinarily be compensated, and not simply any manner of activity. “Gainful activity” is defined as earned income which, for 2016, amounts to earnings of $1130.00 per month or more. Assuming one is working but the activities do not amount to what is deemed by the local Social Security office as "substantial" or the earnings do not amount to gainful levels (i.e., $1130.00 in a particular month), then a period of disability can be deemed to have begun.

If one is continuing to work, but not full time hours or with what appear to be activities that are less than significant, the Social Security field office may deem it appropriate to send the Work Activity Report forms to a claimant so as to spell out the work performed and the hours and pay received so as to see if they are continuing to undertake what is deemed to be "substantial" and "gainful" work activity. It is important to understand as well that the Social Security Administration (SSA) is looking at earned income: therefore, the form distinguishes other forms of income such as vacation pay, holiday pay, sick pay, disability pay, etc. Moreover, in determining income, SSA does take into account the costs one incurs as a result of their physical and/or mental conditions, whether it be the costs of medicines, co-pays for treatment, medical devices or special equipment, etc., and thus will reduce what constitutes "earned income" by the amount of such recognized costs.

The Self Employed Work Activity Report is meant to allow self-employed individuals to parse out their gross income and expenses on a monthly basis so as to then report to SSA the amount of any “net” earnings one may be receiving on an ongoing basis. Moreover, for each month, SSA is interested in seeing whether the individual is undertaking at least 45 hours per month as part of determining whether their involvement in the business remains “substantial.” Many times we see self-employed individuals receiving significant ongoing income for performing very little to any work: in essence the money is being earned much in the way a disability or sick pay policy may pay someone valued by the company, but not necessarily for the work performed. Thus, in such circumstances, while the net pay may be significant enough to meet the $1130.00 per month standard, the actual duties and/or hours work may not cause SSA to determine that the pay is either “earned income” or for that matter that the duties constitute “substantial activity. “