Social Security Facts



by Susan Rockwood Gashel for

National Association of Blind Merchants

a division of

The National Federation of the Blind

This guidance document has three purposes:  First, to summarize the law with respect to Social Security disability insurance (SSDI), second, to provide assistance to State Licensing Agencies (SLAs) under the Randolph-Sheppard Act (R-S Act), so as to assist them in meeting their legal obligations, and, third, to assist licensees to obtain the documentation needed by the Social Security Administration (SSA) to process their claims.

 Purpose of and Qualifications for SSDI

SSDI is a federal program that pays insurance benefits to blind or disabled individuals who have paid into Social Security long enough to become insured and whose earnings (after allowed deductions) do not exceed Social Security’s substantial gainful activity (SGA) guidelines. This article presumes that a licensee is blind under the SSA definition, and that he or she has worked long enough and paid Social Security taxes so as to qualify for SSDI – the term SSA uses for this is fully insured.

SSA keeps a record of each individual’s annual earnings used to determine if the individual has worked long enough to be fully insured.  The term “quarters of coverage” is used to determine if an individual has worked long enough to qualify for SSDI, and the amount of earnings needed to receive a quarter of coverage changes each year.  The applicable amount in 2014 is $1,200.  Only four quarters of coverage can be earned each year.

Under special rules that apply only to the blind, a blind person who has earned a minimum of six quarters of coverage before reaching age 28 is fully insured.  If this has not happened, the minimum number of quarters needed to be fully insured increases by one for each year beginning at age 28, but once the minimum is reached, fully insured status is secured forever, and no more quarters of coverage are needed.  The amount of benefits payable is based on past earnings.  SSDI is an insurance program intended to replace (at least some) income lost due to disability.  One caveat – there is a “recently insured” requirement for disabled individuals who are not blind.  This does not apply to the blind, who need only to be fully insured.

Substantial Gainful Activity

Even if an individual is fully insured and blind, he or she cannot receive SSDI cash benefits if engaged in SGA.  To determine SGA for people who are self employed, such as licensed blind vendors, it is necessary to evaluate the economic value of the self employed individual’s services.  See Social Security Ruling 83-34.  SSR 83-34, coupled with a more recent ruling specific to blind vendors–SSR 12-1p  These rulings make it clear that, to determine if a self-employed individual’s income falls below the SGA guideline,  the following are deducted from net income (gross income less normal business expenses):

  • Income received from vending machines not serviced, operated, or maintained by a blind vendor.  This includes income shared with a blind vendor by the SLA pursuant to 34 C.F.R. 395.8 or commissions from vending machines that the blind vendor has serviced by a third party.  (This income must be reported to the SSA but is excluded from earnings under the SGA guideline since it is not a measure of a blind vendor’s productivity.)
  • The reasonable value of unpaid help furnished by a spouse, children, or others.
  • The amount paid by the individual for impairment-related work expenses (if not already deducted from gross income as a business expense).
  • The reasonable value of un-incurred business expenses paid for the self-employed person by another individual or agency.  These un-incurred business expenses are expenses usually paid by self-employed individuals.

SSR 83-34 explains that deduction of un-incurred business expenses is “consistent with the principle that only income attributable to an individual’s own productive work activity should be considered in determining SGA.”  It also explains that unpaid help “makes it possible for a disabled person to have a higher income than he or she would ordinarily have by virtue of his or her own work activity alone.”

SSR 12-1p explains: “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 to be SGA.”  SSR-12-p makes it clear that vending machine income from vending machines not operated by the blind licensee is not counted in determining SGA:

Income received from vending machines not serviced, operated, or maintained by a blind vendor is not a measure of a blind vendor’s productivity.  …  We will not consider this income when we determine whether the self-employment work activity is SGA.

Thus, there are four categories of deductions from net income used to determine SGA:  (1) income received from vending machines that are not serviced or maintained by the blind vendor, (2) reasonable value of unpaid help, (3) documented cost of impairment related work expenses paid by a blind vendor if not deducted as a business expense, and (4) reasonable value of un-incurred business expenses paid on the vendor’s behalf by another person or agency.  In 2014, if the blind individual earns less than $1800 per month after amounts deducted to determine SGA, then the individual is not considered to be engaged in SGA and is eligible for disability insurance payments.  A caveat:  in 2014, the amount is $1800 per month.  It changes yearly, and is available at,

The State Licensing Agency’s Role in Providing the Documentation

Of the four categories, the two that concern the state licensing agencies are (1) un-incurred business expenses paid for the self-employed person by another individual or agency; and (2) vending machine income where the vendor does not service, operate, or maintain the machines.

Un-incurred business expenses paid for the self-employed person by another individual or agency

The SSA requires the following information concerning the payment of business expenses by someone other than the blind licensee:

  • the name of the individual or agency who paid the expenses
  • the relationship of that person or agency to the blind licensee
  • the reason why the expenses were paid
  • a full account of the expenses paid
  • the kind and amount of expenses
  • the period during which they were paid

Attached is a form to be prepared on SLA letterhead, directed to the blind licensee and to the Social Security Administration, which sets forth the expenses.   The SLA will have the following information in its records:

  • Square footage of vending facility
  • Management services.  This is usually calculated by dividing the amount reported on the RSA-15 for management services by the number reported for vendor person years.
  • Equipment replacement and repair.  Repair costs may be calculated by reference to the SLA’s records of equipment repair by location.  The value of equipment may be calculated by taking the total value of equipment assigned to the licensee and amortizing it over a five year period.  Say the total value of equipment is $100,000, if multiplied by .20, the annual cost would be $20,000.

Vending machine income where the vendor does not service, operate, or maintain the machines

  •  Vending machine income.  This amount is collected for reporting on the RSA-15, but only the amount actually paid to a blind vendor must be reported as related to that vendor’s claim.  This includes commissions the blind vendor receives from vending machines on full-service (serviced by a third party whereby commissions are paid directly to the blind vendor).

The Vendor’s Role in Collecting the Documentation

  •  Rent (this is part of un-incurred business expenses paid for the licensee by another individual or agency):  if the SLA does not provide you with a letter reflecting the value of rent, the vendor needs to obtain a letter from the host agency indicating the number of square feet of the vending facility and the market price per square foot.  If the host agency does not provide the information, then the vendor can approach a commercial real estate agent and get a letter documenting price per square footage for a building in that locality.  The SLA will have the square footage of the vending facility – it is usually listed in a permit.
  • Unpaid help furnished by a spouse, children, or others.  If the vendor has a spouse, family member or significant other that provides services, consider what the actual duties of that individual are, and consider the market rate for those duties.  It may very well be that the individual is providing unpaid help.  If so, have the individual write a letter explaining his or her duties, the number of hours per month the individual works, and the number of hours the individual is paid for.  In many cases, individuals are paid a set amount, say $500 per week, and if the vendor had to hire someone on the open market, that person would earn $600 per week.  Thus, there is $400 per month of un-incurred business expense to list so as to verify that the vendor’s income is below SGA for purposes of eligibility to Social Security disability benefits.  Another form of documentation can be obtained from the US Dept. of Labor’s Bureau of Labor Statistics site.  Remember that the individual that works for the licensee is probably paid as a cashier.  Yet the individual may perform bookkeeping duties, driver duties, etc.  So, for example, the mean hourly wage for a counter attendant in Colorado is $8.76.  Yet a bookkeeper earns $16.70, and a driver earns $14.87 an hour.  So if the vendor pays $12.50 an hour (or $500 per week), and the worker spends half his or her time cashiering, and the other half doing bookkeeping and driving, then $2.50 per hour or $100 per week can be reported as reasonable value of unpaid help.  Attached is a form to help calculate the unpaid help amount.
  • Impairment-related work expenses.  The vendor should keep track of purchases such as JAWS, amounts paid to individuals for reading and responding to print material, and any blindness-related technology you purchase.  Make sure that is not taken as a business expense.

What Steps to Take to Avoid Receiving an Overpayment Letter from the SSA

The Department of the Treasury notifies the SSA of earnings.  The likely result where a vendor does not report earnings as well as the allowable deductions from earnings, that the vendor will receive a letter indicating an overpayment.  These letters often say that the vendor owes tens of thousands of dollars.  This can be avoided by completion of the Work Activity Report – Self Employment, Form SSA-820-BK.  The vendor needs to document net earnings, self-employment tax returns, whether anyone besides the vendor had management responsibilities for the business (and if so the hours per month each individual spent on management duties, and the duties each performed), and whether any person or organization provided any free help, items or services related to the business.  Next, the form provides for documentation of items or services related to the vendor’s physical or mental condition (i.e., money spent for technology, readers, etc.).  Remember not to list these if taken as a deductible business expense from gross income.

What to Do When Upon Receipt of an Overpayment Letter from SSA

The first thing to do is to file a request for reconsideration, Form SSA-561-US, within 60 days of receipt of the letter.  The reason may be phrased as:  “I am and remain statutorily blind; deductions from net income made under the SGA guidelines will establish that I have not been overpaid.”  To continue receiving benefits, also file another form, SSA-632-BK, the title of which is Request for Waiver of Overpayment Recovery or Change in Repayment Rate.  In section 2, check A “The overpayment was not my fault and I cannot afford to pay the money back and/or it is unfair for some other reasons.”  In No. 5, the form asks “Why did you think you were due the overpaid money and why do you think you were not at fault in causing the overpayment or accepting the money?”  A suggested answer is “I am due the money that is alleged to be overpaid, but in fact is not an overpayment.”  The form requires an accounting of all assets of the individual and other members of the household.

Assuming that the request for reconsideration is a denial of the claim, the next step is to  file for a hearing before an administrative law judge.  The correct form is available at

Before the hearing it is imperative to have documentation of all amounts claimed as deductions in each of the four categories allowed and used to determine SGA.  In the event that there are deductions from income that have not been fully documented, it may be necessary to ask the assigned administrative law judge to issue subpoenas to obtain the information.  These must be requested well in advance of the hearing.

This guidance document sets forth an overview of the process.  Thanks to James Gashel and Terry Smith for their assistance in the preparation of the document.  


Social Security Facts


by James Gashel

The Social Security Disability Insurance (SSDI) program pays monthly cash benefits to people under age sixty-five who have worked a sufficient amount of time in Social Security-covered employment or self-employment, provided they are blind or disabled under the law. Licensed vendors in the Randolph-Sheppard program are presumably blind under the Social Security Act since the definition of blindness used in both laws (Randolph-Sheppard and Social Security) is identical. However, that does not mean that every blind vendor automatically qualifies for an SSDI check.

This article is written to respond to the many questions which continue to arise from vendors or persons assisting them in determining their potential eligibility for SSDI checks. In many respects the circumstances under which vendors operate and receive their income are unique and have unique implications that must be understood to deal effectively with Social Security issues. Social Security personnel can apply the requirements of the law correctly only if we are able to give them the facts they need to evaluate income and earnings. This is particularly important for vendors and their advocates. However, many of the facts and concepts presented here apply to all blind persons in dealing with Social Security. Nevertheless, we will highlight the particular considerations that apply in the case of vendors.

Being Fully Insured

For the blind there are three principal eligibility factors which are necessary to entitle an individual to receive SSDI benefits: blindness, being “fully insured,” and having stopped doing “substantial work.” For those who are not blind, there is a fourth requirement, being “recently insured.” You need to have worked the required time under Social Security-covered employment or self-employment. The amount of past work required of any blind person is a matter of individual determination, depending on when the person became age twenty-one and the year in which blindness began, or  (if blind before or while working) the year in which the person stopped doing substantial work. For blind people who became age twenty-one in 1950 or later, quarters of coverage are calculated as follows: one quarter is needed for each year elapsing after the year age twenty-one was attained, up to and including the year before the person became blind or stopped doing substantial work, whichever occurred later. For blind people who became age twenty-one before 1950, the years that are counted to have enough quarters of coverage begin with 1951 up to the year before blindness or the loss of substantial work occurred, whichever came later. It is not required that quarters of coverage be earned in any particular year. It is only that the number of quarters (regardless of when earned) needs to total the number of years required for each individual. Younger people who became blind or stopped doing substantial work in their twenties, for example, can qualify with as few as six quarters, but no less. Older people will need substantially more quarters.

Any blind person who has enough quarters of coverage as described here is called “fully insured.” The Social Security Administration will tell you how many quarters of coverage you have. During 1991 a quarter of coverage is credited for earnings of $540.00 received during a calendar quarter. Four quarters are credited with earnings of $2,160.00 for the calendar year 1991, regardless of when the money is earned during the year. The amount needed to earn quarters of coverage increases annually beginning in January of each new year.

Being Recently Insured

Being blind and being fully insured are the first two important eligibility conditions for SSDI checks. Disabled people who are not blind must also meet a third condition, which is called “recently insured.” They must have worked enough to earn quarters of coverage in at least twenty out of the most recent forty quarters. This means that a substantial number of their quarters of coverage must have been earned during at least five out of the most recent ten years. Social Security personnel sometimes erroneously apply this recent work requirement to blind people. But remember, the blind need only be “fully insured,” not “recently insured.”

Substantial Work

What does it mean when we say that a blind person has stopped doing “substantial work?” In addition to blindness and being fully insured, not doing substantial work is the third principle condition of eligibility for SSDI if you are blind. Generally, any blind person whose “countable income” is less than $810.00 per month in 1991 is not doing substantial work. The amount of time spent at work and the amount of actual labor or management work done does not count. Only income is evaluated in the case of blind people applying for SSDI benefits. Eight hundred ten dollars is the monthly amount allowed for “countable income” during 1991. Beginning January of each new year, the amount of “countable income” used to measure “substantial gainful activity” for blind persons increases by law.

Countable Income

All income is not necessarily “countable income.” Your real income before taxes may be much higher than the amount considered to be “countable.” Deductions to reach “countable income” may bring the income below the monthly amount allowed. If someone helps out in a vending business but is not paid, the reasonable value of the unpaid help should be deducted from the vendor’s income to reach “countable income.” The unpaid help is a bonus that must be subtracted to find the vendor’s “countable income.” The vending machine income that some vendors receive from machines that they do not operate or service should also be subtracted to reach “countable income.” This money does not reflect the level of the vendor’s work activity. The vending machine income is entirely excluded because it is a subsidy. But that is not true of income from vending machines that the blind vendor services. It must be counted.

“Unincurred business expenses” are another form of subsidy that must be excluded from real income to reach “countable income.” Although space for the vending facility is provided without charge in most instances, the value of the space is an “unincurred business expense.” Without the contribution of the space, the vendor would have to pay the cost; so the free space artificially inflates the vendor’s income. Its value should then be subtracted from the vendor’s real (before taxes) income. The building management should be able to provide an estimate of the charge per square foot if the space had to be rented. Free utilities are also an “unincurred business expense.” Their value can be determined. It is the amount of the utility costs (even though the vendor does not pay them) that should be subtracted from the vendor’s income.

“Impairment-related work expenses” should also be considered and subtracted from the vendor’s income. Paid help for clerical assistance, reading, driving, and other services of a work- and impairment-related nature can be deducted to determine “countable income.” Buying devices that are blindness-related and used in part (or entirely) for work is another for of impairment-related work expense. Monthly installment payments on accounts for equipment purchases can be subtracted to reach “countable income.” So can care of a dog guide or the purchase of some medications. Special transportation services, such as taxi fares when public transit is not available or cannot be used, are also deductible. Impairment-related work expenses can actually be any costs resulting from blindness and necessary (at least in part) for work.

In sum, real (before taxes) income is not necessarily “countable income,” especially in the case of blind vendors. The Social Security Administration is only interested in identifying “countable income” and will exclude other income that is not an accurate measurement of work. The exclusions include any subsidies, the reasonable value of unpaid help, unincurred business expenses, and impairment-related work expenses. Once these standard deductions have been made, “countable income” that is below the amount allowed will not be called substantial gainful work. If “countable income” is above the monthly amount allowed after all of the deductions have been made, substantial gainful work has been achieved, and eligibility for SSDI checks will stop after a trial work period is over. The trial work period will normally be over if there have been earnings of $200.00 in any month for nine months, not necessarily consecutive months.

Social Security Disability Insurance is insurance, not welfare. You have to earn entitlement by working and paying in during enough calendar quarters. Once you meet the eligibility conditions, benefits can then be paid. Being poor is not one of the conditions. Rich people also qualify for Social Security. The question of whether one agrees or disagrees is not really relevant. The law is the law. While the Social Security Act is not everything that it might be, the work incentives we have won give blind people the opportunity to get a foothold and begin to support themselves without abrupt termination of their Social Security benefits. Whatever one may think of the law, it is certainly better for the blind than it used to be. And the blind are not now lumped with other groups of the disabled, something which resulted from NFB efforts. Most disabled people who are not blind can only earn $490.00 per month before their SSDI checks are terminated. Moreover, they have a much harder time than the blind in establishing initial eligibility for benefits.

In numbers there is strength, but numbers alone are not enough. Knowledge and concerted action are also required. The National Federation of the Blind is a force to be reckoned with. It grows stronger every day. What would life for the blind of this nation be like if the National Federation of the Blind did not exist, and never had existed?