Social Security: Substantial Gainful Activity
for the Blind
Umar Moulta-Ali
Analyst in Disability Policy
January 6, 2012
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Social Security: Substantial Gainful Activity for the Blind
Summary
In the Social Security disability program, the level of earnings that constitute “substantial gainful
activity” (SGA), and therefore disqualifies a person from receiving benefits, is set by regulation at
$1,010 a month for 2012. However, the law provides a different SGA level for the blind at $1,690
a month for 2012, which is adjusted annually to reflect growth in average wages. This report
discusses the reasons for these differing amounts and proposals to change them.
This report will be updated as events warrant.
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Social Security: Substantial Gainful Activity for the Blind
nder the Social Security Act, disabled individuals qualify for benefits only if they are
determined to be unable to engage in “substantial gainful activity” (SGA). Under Section
U 223(d) of the Social Security Act, the Commissioner of Social Security is given the
authority to promulgate regulations prescribing the criteria for determining when earnings
demonstrate an individual’s ability to engage in SGA. Since July 1999, the SGA amount is
adjusted annually to reflect the growth in average wages. In 2012, this amount is $1,010 a month.
However, the same section of the law specifies that a different definition of SGA applies to
individuals disabled by blindness. These individuals are considered to be engaging in SGA if their
earnings exceed $1,690 a month, adjusted annually to reflect growth in average wages.
This different treatment for the blind began with enactment of P.L. 95-216 in 1977. During
consideration of H.R. 9346, the Social Security Amendments of 1977, the Senate adopted by a
voice vote an amendment by Senator Bayh that provided disability benefits for blind individuals
regardless of their ability to work or the amount of money they actually earned. The amendment
was identical to S. 753, a bill introduced by Senator Humphrey earlier in the year. Speaking in
support of this amendment on the Senate floor, Senator Bayh stated:
Social security disability insurance was designed to partially replace income loss due to a
disability. Congress has previously recognized blindness as a distinct and unique condition.
Certain economic consequences predictably follow the disability of blindness. It is
comparable with the social security insurance concept to protect the blind from these adverse
affects. If persons with a high earning capacity can return to work at all after becoming blind,
they do so, almost without exception, at a much lower salary, and continue to suffer an
adverse impact on their earning power. Moreover, working in a society adapted to vision
entails extra costs for supportive services and special devices.1
The House-passed version of H.R. 9346 contained no similar provision. In conference, it was
agreed that the House would recede with an amendment that struck the provisions of the Senate
amendment but provided that the amount of earnings under the test of SGA that would terminate
a blind individual’s benefits would be increased to the monthly exempt amount for persons at or
above the full retirement age (FRA) under the Social Security earnings test. The conferees stated
that they were aware that this established a different test of SGA for blind persons than is applied
administratively for persons with other disabilities. They went on to say that they did not intend
that the new SGA level established for the blind should be applied to other types of disabilities.
When the provision became effective in 1978, the SGA for non-blind recipients was $260 a
month; for the blind it became $334 a month, a difference of about 28%.
In subsequent years, the different SGA amounts occasionally became subject to debate. In 1988,
the Social Security Advisory Council found that the preferential treatment for the blind was
inappropriate and recommended that for new applicants the SGA level be lowered to that for all
other disabled recipients. The council also recommended that the SGA level for blind persons
already on the rolls be frozen at the then-current level ($700 a month). In 1992, the United States
District Court for the District of Wyoming found that the higher SGA amount for the blind was
unconstitutional because it violated the guarantee of equal protection under the law. The United
States Court of Appeals for the 10th Circuit overturned the district court’s ruling, saying that there
was a rational basis for Congress to place preferences for blind persons in the law. The Supreme
Court refused to review the appeals court’s decision.
1 123 Cong. Rec. S18786 (daily ed. November 4, 1977) (statement of Sen. Bayh).
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Social Security: Substantial Gainful Activity for the Blind
In 1996, the General Accounting Office (GAO, now known as the Government Accountability
Office) was asked to examine whether the legislative rationale for an earnings limit for the blind
that was higher than for individuals who have other disabilities was warranted. It concluded that
the legislative rationale was based on the assumption that adverse employment experiences,
including high job-related costs and unemployment, were greater for the blind than for persons
who have other disabilities. However, GAO found that such experiences do not appear to be
unique to the blind compared to other disabled recipients. GAO repeated this conclusion in a
hearing on the topic held by the Social Security Subcommittee of the House Committee on Ways
and Means on March 23, 2000.
Also in 1996, when Congress enacted legislation (P.L. 104-121) to substantially increase the
earnings test limit for those who have attained retirement age over a period of five years, reaching
$30,000 in 2002, it removed the linkage between the SGA level of the blind and the exempt
amount for individuals who have attained the full retirement age. Instead their SGA level
continued as before (i.e., adjusted annually to reflect growth in average wages). SGA for the blind
was $1,500 a month in 2007. If the link had not been broken, then the SGA limit for the blind in
2007 would have been $2,870 a month.
During deliberation of P.L. 104-121, advocates of the blind sought to have the link maintained.
During the mark-up of the bill in the Ways and Means Subcommittee on Social Security, an
amendment was offered to do so. The projected cost of $1.8 billion over seven years led to the
proposal being rejected.
On April 7, 2000, President Clinton signed H.R. 5, the Senior Citizens’ Freedom to Work Act,
which eliminated the Social Security earnings test for recipients who have reached the full
retirement age, effective in 2000. The new law (P.L. 106-182) continues the severance between
the earnings test and the SGA level of the blind enacted in P.L. 104-121. The Social Security
Administration estimates that if the SGA amount for the blind were totally eliminated, as would
happen if the linkage were restored, the long-range cost to the program would be 0.03% of
taxable payroll. If the linkage of the blind SGA to the earnings test applicable to those above the
full retirement age were restored, and the non-blind SGA level were brought up to that of the
blind, the long-range cost to the program would be 0.45% of taxable payroll (equivalent to an
increase of about 23% in the long-range actuarial deficit).
Proponents of liberalizing the SGA limit for the blind maintain that the reasons given in 1977 to
provide a different limit for the blind are just as valid today. Blindness is still a distinct and
special condition, and they believe that the blind still merit being singled out for compensatory
help. They point out that Congress has recognized the special nature of blindness by writing into
law different disability criteria for the blind in regard to (1) insured status, (2) continued
eligibility for benefits beyond age 54 regardless of the level of work activity,2 and (3) the use of
functional capacity as part of the test of meeting the definition of disability. They say that what
Congress established then was that the “retirement test” (as the earnings test is sometimes called)
for older workers should be applied to the blind, and therefore that they should be treated just like
retired older workers whenever Congress makes changes to the retirement test. They say that if
any change is made to lessen or eliminate the difference in SGA amounts, it should be to raise the
SGA limits of the non-blind.
2 Cash benefits are suspended, however.
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Social Security: Substantial Gainful Activity for the Blind
Opponents of liberalizing the SGA limit for the blind maintain that the blind already receive
enough preferential treatment and that to expand it further would be inequitable. Many of them
think that even current law is too generous, because they see no logical reason that a particular
group of disabled individuals should receive advantages over another. In their view, there are
many other impairments that could just as easily be viewed as needing special compensatory
relief (e.g., quadriplegia and cancer). They dispute that the blind suffer higher rates of
unemployment or work-related expenses. They point out that the very definition of disability is
that a person is unable to perform substantial work, and that the purpose of the SGA limit is to
determine if, regardless of a person’s medical condition, he or she demonstrates by work that he
or she is not in fact disabled. From their perspective if the SGA for the blind were further
liberalized, especially to the point where it would approach or exceed the average wage of all
workers, the concept of disability would become meaningless, and vitiate the basic concept of the
disability program as a whole.
Acknowledgments
This report revises a report originally written by Scott Szymendera. All questions should be addressed to
the current author.
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