To prevail on a Social Security Disability claim, the claimant must prove an inability to engage in substantial gainful activity, which the Administration generally defines as “work activity that involves doing significant physical or mental activities… [and] is the kind of work usually done for pay or profit.” At times, a claimant may be receiving passive income which does not involve significant physical or mental activities. For example, pension payments, annuities, interest or dividends from investments or savings are not earnings for Social Security purposes, though they are income for tax purposes.
However, the analysis can be more complicated for passive income from owning a business or rental property. Merely owning a business interest should not count as substantial gainful activity if the claimant does not actually perform the productive work or spends less than half the time necessary to earn that income. By the same token, renting rooms, property, or specific equipment should not be counted as substantial gainful activity – unless the individual’s primary business is renting properties for profit as a landlord who regularly manages and maintains the property.
To analyze whether passive income is substantial gainful activity, the Administration will apply three tests. First, if the individual receives substantial income from the business and renders services that are significant to the operation of the business, then he or she is engaging in substantial gainful activity. Second, if the work activity is comparable to unimpaired individuals in the community engaged in the same or similar business in terms of hours, duties, skills and responsibilities, then he or she is engaging in substantial gainful activity. Third, if the work activity is clearly worth the threshold for substantial gainful activity when considered in terms of value to the business or comparable salary, then he or she is engaging in substantial gainful activity.
While passing these tests does not automatically warrant a finding of disability, it is a necessary the first step in the disability evaluation process.
 SSR 83-21
 The threshold for substantial gainful activity for non-blind individuals in 2023 is $1470 per month.