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Increase In Substantial Gainful Activity Level Near Approval

NAMI Comments On SGA Proposed Increase

Chris Marshall
For Immediate Release
23 Mar 99

In an effort to bolster work incentives reform in Congress, Vice President Al Gore announced at a press conference on February 12 of this year, a proposed rule change to increase the Substantial Gainful Activity (SGA) level from $500 a month to $700 a month for non-blind disabled beneficiaries of Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). The Vice President, joined by Ken Apfel ,Commissioner of the Social Security Administration, and Alexis Herman, Secretary of Labor, stated that "by proposing an increase in allowable monthly earnings, we are enabling Americans with disabilities to make the most of their abilities."

According to the Social Security Administration, current work activity is the foremost determinant of an applicant’s disability. If an individual is unable to earn at a certain level or higher (currently $500 a month for non-blind disabled), which is referred to as engaging in substantial gainful activity, then the individual is deemed disabled and is likely to be eligible for financial assistance and health care coverage. The SGA level also serves as a measure for ongoing entitlement to SSDI benefits and those who exceed this amount are no longer considered disabled and lose their disability benefits and health insurance. Fear of inadvertently exceeding SGA has kept many disabled beneficiaries, including people with severe mental illnesses, from attempting to enter the workforce.

The SGA amount for recipients who are determined to be non-blind disabled has been increased only once since 1980, from $300 a month to $500 a month in 1990. Originally, SGA had been adjusted annually based on the national average wage index or "indexed." This ended in 1980. The SGA amount for the blind disabled, $1,110 per month, was established by statute and is indexed. Although NAMI strongly supports the current proposed SGA increase for the non-blind disabled beneficiaries, including people with severe mental illnesses, this SGA level should be indexed to wage growth.

The Social Security Administration’s proposed increase to SGA level is a administrative change that does not require legislation from Congress. During a recent comment period there was almost no opposition and the increase is expected to take effect June 1, 1999.

Below is a letter from NAMI executive director Laurie Flynn to Commissioner Ken Apfel stating NAMI’s comments on the proposed SGA increase.


March 18, 1999

Kenneth S. Apfel
Social Security Administration
P.O. Box 1585
Baltimore, MD 21235

Dear Commissioner Apfel:

On behalf of the 208,000 members and 1,200 affiliates of the National Alliance for the Mentally Ill (NAMI), I would like submit the following comments in response to the Social Security Administration’s recently published Notice of Proposed Rulemaking increasing the Substantial Gainful Activity (SGA) amount from $500 a month to $700 a month for people with disabilities on the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) rolls.

NAMI is the nation’s leading grassroots organization dedicated solely to improving the lives of persons with severe mental illnesses such as schizophrenia, bipolar disorder (manic-depressive illness), major depression, obsessive-compulsive disorder, and anxiety disorders. NAMI’s efforts focus on support to persons with these serious brain disorders and to their families; advocacy for ending discrimination in federal income support and health insurance programs and education to eliminate the pervasive stigma surrounding severe mental illness. NAMI also endorses efforts to promote employment opportunities and greater independence through increased access to rehabilitation and job training programs and extended health care coverage to workers who need treatment in order enter and stay in the workforce.

NAMI strongly supports Social Security’s proposed rule change to increase the SGA amount for people with disabilities, including people with severe mental illnesses, who are on the SSI and SSDI rolls. NAMI believes that this increase, from $500 to $700 a month, is the minimum needed in order to begin allowing beneficiaries to lift themselves from below poverty and to provide assistance and encouragement to expand the often gradual process of returning to work. However, NAMI also believes that this proposal can be made even better by indexing SGA to wage growth and moving it to a level toward equivalence with the level for blind SSI and SSDI beneficiaries.

SGA’s Impact on Work

Individuals with disabilities, including people with severe mental illnesses, want to work, but are often discouraged by many barriers existing in the current public system. A recent Harris survey showed that 72% of unemployed people with disabilities, including people with severe mental illnesses, have a strong desire to have a job. Yet 69% of this group say that their need for medical treatment is a major impediment to seeking employment. Employment is an essential part of recovery for people with severe mental illnesses and recent advances in treatment services and medications have increased the capacity of people with severe mental illnesses to join the mainstream and live independently. NAMI has heard the frustration from countless members who would like to begin the road to recovery by gaining employment but cannot risk losing their health benefits by exceeding the SGA.

Employment assistance is critical for people with severe mental illnesses to regain independence, dignity and purpose. People with severe mental illnesses are the fastest growing population within both the SSI and SSDI programs. More importantly, SSA data reveal that people with mental illnesses are joining the disability rolls at an earlier age. Given how difficult it is to get off the rolls through employment – less than 1% successfully do so – it becomes imperative to enact reforms that end the severe penalties for those who are willing to take the tremendous risks inherent in entering the workforce. Increasing the SGA level will certainly have a positive impact on individuals who would like to work but cannot afford to lose their eligibility for health care services.

The Current SGA Level is Outdated

Although NAMI strongly supports the increase of SGA to $700 a month and acknowledges the intent of SSA to create an environment where more beneficiaries with disabilities can "enter the workforce and lead more productive self-sufficient lives," this figure does not completely reflect an adjustment based on the national average wage index since the inception of SGA in 1979. SGA was designed as an indicator to signal whether a beneficiary is capable of earning significant wages and provides an incentive to enter the workforce. NAMI believes that a more equitable approach would be to increase SGA and index it to wage growth since the establishment of SGA. This would increase SGA to nearly $880 a month, and would more accurately demonstrate an individual’s ability to earn SGA.

Indexing SGA to Wage Growth

Since the establishment of SGA twenty years ago, it has been increased only once, in 1990. As wages have increased over that same period, people with severe mental illnesses and other disabilities receiving SSA benefits have been forced to reduce the amount of hours they work in order to keep from exceeding SGA. Thus, SGA has become a very unreliable indicator of a beneficiary’s ability to work. As you know, Social Security has stated that the past increase in SGA has resulted in substantial cost in creases to both the SSI and SSDI programs. Likewise, this proposed increase is projected to increase the overall cost of Social Security’s disability programs.

However, indexing SGA to wage growth, as is currently done for the SGA amount for the blind, would result in costs going gradually over time. Such a move would allow SGA to be a more reliable indicator of an individual’s ability to earn wages and work. It would also more effectively incentivize work for all people with disabilities, including people with severe mental illnesses. This would mean that the federal government would not be hit by substantial periodic cost increases that are needed to correct an antiquated and unreliable SGA. Finally, such a move would also avoid placing an unfair burden on beneficiaries who are eager to attempt to work.

Equivalence to the SGA Level for Blind Beneficiaries

NAMI believes that SSI and SSDI beneficiaries with severe mental illnesses and other disabilities should have an SGA level equivalent to the level established for the blind, around $1,100 per month. Such an adjusted level should also be adjusted annually for the cost of living, as is done for blind beneficiaries. This figure currently allows a blind disabled beneficiary to earn minimum wage (or a little more) and work a 40 hour week, without a substantial loss of cash benefits.

Currently, persons with disabilities (excluding blind beneficiaries), can work barely more than 30 hours a week at minimum wage before exceeding SGA and thus risk losing all, or part of their cash benefits. It is likely that increasing SGA for non-blind beneficiaries to that for the blind disabled would create an additional fiscal burden for Social Security’s programs. However, this change would create greater equity and fairness in both the SSI and SSDI programs and would more effectively incentivize work for many beneficiaries.


On behalf of NAMI consumer and family membership, I would like to thank Social Security for taking this important and long overdue step toward greater fairness in the SSI and SSDI programs. NAMI is hopeful that this measure will allow more beneficiaries with severe mental illnesses to reach their potential through employment. We are also optimistic that some consumers may actually use this increased flexibility to attempt to enter the workforce for the first time. Thank you for the opportunity to comment on this important change in Social Security’s disability programs.


Laurie M. Flynn
Executive Director