SSR 12-1p: Title II: Determining whether work performed in self-employment by persons who are blind is substantial gainful activity and treatment of income resulting from the Randolph-Sheppard Act and similar programs

Effective Date: September 21, 2012 Publication Date: September 21, 2012 Federal Register Vol. 77, No. 184, page 58604

POLICY INTERPRETATION RULING

Purpose: This Social Security Ruling (SSR) explains our

policy for evaluating whether work performed by self-employed

persons who are blind is substantial gainful

activity (SGA) under the disability program in title II of

the Social Security Act (Act). [1] In addition, this ruling clarifies that we do not count income resulting from the

Randolph-Sheppard Act and similar programs as earnings when

we determine whether blind persons are engaging in SGA.

Citations (Authority): Sections 216(i) and 223(d) of the Act, as amended; (42 U.S.C. 416(i) and 423(d)); 20 CFR 404.1572 , 404.1573 , 404.1575 , and 404.1584 ;

section 7 of the Randolph-Sheppard Act, as amended (20 U.S.C. 107d-3);

34 CFR 395.8 and 395.32.

Introduction: Under the disability provisions of the law,

a title II disability beneficiary who performs SGA after

the trial work period is not eligible for disability

payments except during the first month he or she performs

SGA, and the two succeeding months, whether or not he or

she performs SGA in those months. We define SGA in the

regulations as work that involves doing significant

physical or mental activities and is the kind of work

usually done for pay or profit. Work activity may be

substantial even if the person does it on a part-time

basis, or does less, is paid less, or has less

responsibility than in previous work. Work activity by a

self-employed person is gainful if it is the kind of work

usually done for profit, whether or not the person realizes

a profit. We generally do not consider activities such as

self-care, household tasks, hobbies, therapy, school

attendance, club activities, or social programs to be SGA. See 20 CFR 404.1572 .

aid less, or has less

responsibility than in previous work. Work activity by a

self-employed person is gainful if it is the kind of work

usually done for profit, whether or not the person realizes

a profit. We generally do not consider activities such as

self-care, household tasks, hobbies, therapy, school

attendance, club activities, or social programs to be SGA. See 20 CFR 404.1572 .

Policy Interpretation: For work activity performed by

blind self-employed persons, we evaluate self-employment

work activity based on whether the blind person has

received a substantial income from the business and

rendered significant services to the

business. [2]

Substantial Income

To determine whether a blind person has received

substantial income from the business, we determine the

blind person's countable income in the same manner as we

determine the countable income of non-blind persons. We use

the Internal Revenue Service rules to determine gross

income, deductions, and net income from self-employment.

We then deduct the reasonable value of any significant

amount of unpaid help furnished by the person's spouse,

children, or others, impairment-related work expenses (if

they were not already deducted from gross income as a

business expense), unincurred business expenses, and any

soil bank payments (if such payments were included as

income by a farmer). The income remaining after we make

all applicable deductions represents the actual value of

work performed and is the amount we use to determine

whether the person has engaged in SGA. We refer to this

amount as the blind person's countable income. See 20 CFR 404.1575(c) and 404.1584(d) .

We then compare his or her countable income from the

business with the dollar amounts in our published SGA

earnings guidelines for persons who are

blind. [3] We generally adjust the SGA guidelines annually based on

increases in the national average wage index.

son has engaged in SGA. We refer to this

amount as the blind person's countable income. See 20 CFR 404.1575(c) and 404.1584(d) .

We then compare his or her countable income from the

business with the dollar amounts in our published SGA

earnings guidelines for persons who are

blind. [3] We generally adjust the SGA guidelines annually based on

increases in the national average wage index.

- If the average monthly countable income of a

self-employed blind person exceeds our SGA earnings guidelines

for the applicable year, we will consider the person's

work activity to be SGA, unless he or she has not

rendered significant services to the business.

- If the average monthly countable income of the blind

person is equal to or less than the SGA earnings

guidelines for the applicable year, we will not consider

his or her work activity to be SGA.

If the average monthly countable income of a

self-employed blind person exceeds our SGA earnings guidelines

for the applicable year, we will consider the person's

work activity to be SGA, unless he or she has not

rendered significant services to the business.

If the average monthly countable income of the blind

person is equal to or less than the SGA earnings

guidelines for the applicable year, we will not consider

his or her work activity to be SGA.

Significant Services

If the countable income of a self-employed blind

person exceeds our SGA guidelines for blind persons, we

will consider whether he or she (if not a farm

landlord [4] )

has rendered significant services to determine whether the

work activity is SGA. If the blind person operates a

business alone, we consider any services rendered to be

significant to the business. However, if the business

involves the services of more than one person, we evaluate

the actual services rendered by the blind person to

determine whether they are significant

landlord [4] )

has rendered significant services to determine whether the

work activity is SGA. If the blind person operates a

business alone, we consider any services rendered to be

significant to the business. However, if the business

involves the services of more than one person, we evaluate

the actual services rendered by the blind person to

determine whether they are significant. We will consider

services significant if the blind person provides more than

half the total time needed to manage the business, or more

than 45 hours a month regardless of the total management

time the business required.

Vending Machine Income Received by Blind Vendors under the

Randolph-Sheppard Act and Similar Programs

The Randolph-Sheppard Act established a program for persons who are blind to

operate vending facilities as a business on Federal

property. [5] The income the blind vendor receives from the operation of the business is

self-employment income. In addition, under the

Randolph-Sheppard Act program, a blind vendor who operates a vending

facility on Federal property may also receive income from vending machines that

are located on the same property, even though the blind vendor does not service,

operate, or maintain the vending

machines. [6]

Various states have established similar programs for

persons who are blind to operate vending facilities as a

business on state and local government property. Like the

Randolph-Sheppard Act program, many of these State programs

provide the blind vendor with income from vending machines

that are located on the same property but are operated

independently of the blind vendor's vending facility

business.

e established similar programs for

persons who are blind to operate vending facilities as a

business on state and local government property. Like the

Randolph-Sheppard Act program, many of these State programs

provide the blind vendor with income from vending machines

that are located on the same property but are operated

independently of the blind vendor's vending facility

business.

The income that blind self-employed vendors receive

under the Randolph-Sheppard Act (and similar State

programs) from vending machines that are located on the

same property, but are not serviced, operated, or

maintained by the blind vendor, is not a measure of a blind

vendor's own productivity. It does not represent the

actual value of any part of the blind vendor's work

activity. Since the income a blind vendor receives under

this provision of the Randolph-Sheppard Act (or similar

State programs) is independent of his or her own vending

business, and cannot be attributed to the blind vendor's

own work activity, we will not consider this income when we

determine whether the self-employment work activity is SGA.

We will deduct this income from the blind vendor's net

income before we apply the SGA earnings guidelines.

Cross-References: SSR 83-34 Titles II and XVI: Determining Whether Work Is Substantial Gainful Activity —

Self-Employed Persons; Program Operations Manual System sections

DI 10501.015, DI 10515.005, and DI 10515.010.

[1] A person is blind if his or her visual impairment meets

the definition of “blindness” in section 216(i)(1) of the Act. See 20 CFR 404.1581 .

[2] We apply this test to evaluate work activity performed by

blind self-employed persons in 1978 or later. We use a

different test to evaluate work activity performed by blind

self-employed individuals prior to 1978. See SSR 83-34 ,

“Titles II and XVI: Determining Whether Work Is Substantial

Gainful Activity—Self-Employed Persons.”

in section 216(i)(1) of the Act. See 20 CFR 404.1581 .

[2] We apply this test to evaluate work activity performed by

blind self-employed persons in 1978 or later. We use a

different test to evaluate work activity performed by blind

self-employed individuals prior to 1978. See SSR 83-34 ,

“Titles II and XVI: Determining Whether Work Is Substantial

Gainful Activity—Self-Employed Persons.”

[3] Evaluation of a self-employed person's work activity for

SGA purposes is concerned only with income that represents

the person's own productivity. Therefore, before applying

the earnings guidelines it is necessary to ascertain what

portion of the individual's income represents the actual

value of the work he or she performed. See SSR 83-34 . For

1978 and later, the law establishes SGA earnings guidelines

for blind persons that are higher than the SGA earnings

guidelines for non-blind persons. Section 335 of Public

Law 95-216, 91 Stat. 1509, 1547.

[4] If a blind person is a farm landlord (i.e., you rent farm

land to another) who materially participates in the

production or the management of the production of the

things raised on the rented farm, we will consider those

services as significant. See 20 CFR 404.1082 , 404.1575(b)(2) .

[5] Randolph-Sheppard Act, as amended (20 U.S.C. 107 et seq.);

34 CFR part 395.

[6] Section 7 of the Randolph-Sheppard Act, as amended (20

U.S.C. 107d-3); 34 CFR 395.8 and 395.32.