How Does The Social Security Administration Define a Disability?

For a person to be receiving either Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), there must first be a determination of disability by the Social Security Administration (SSA).  The beneficiary of a self-settled special needs trust must be disabled. A third party special needs trust could be established with the anticipation that the beneficiary may become disabled in the future.  On occasion a Self-Settled Special Needs Trust is established in anticipate of a determination of disability by SSA.

• • Adult Definition. The definition of disability for Special Needs Trusts is the same definition contained in the Social Security Act for determining eligibility for SSI or SSDI. The Act provides:

[A]n individual shall be considered to be disabled for purposes of this subchapter if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. The impairment must be so severe that the claimant is unable to do his or her previous work or any other “substantial gainful activity” which exists in the national economy.

Substantial gainful activity (SGA) is the ability to earn $1,690 per month in the workplace effective January 2026 if disabled or $2,830 per month if blind.  This is indexed for inflation. In the future, SGA will be determined by the ratio of the national average wage index for the previous two years, comparing that amount to the current SGA level and taking the greater of the two.

• • Minor Definition. A minor having a medically determinable physical or mental impairment, or a combination of impairments, that causes marked and severe functional limitations and that is expected to result in death or last for at least 12 months.
  • Over Age 65. It is possible for a person over age 65 to be determined to be disabled. Generally, if a person is receiving Social Security retirement income, this replaces income from SSDI or SSI.  The Social Security full retirement age (FRA) is determined by the individual’s birth year, gradually increasing to 67 for those born in 1960 or later.  Benefits can be claimed as early as age 62.  This will result in a permanent reduction in monthly payments.  Payments can be delayed until age 70, which increases the monthly amount.   It is also possible that U.S. citizens who have little work history may be entitled to SSI, because the Social Security retirement benefit is less than the SSI payment.