[Federal Register: November 17, 2006 (Volume 71, Number 222)]
[Rules and Regulations]
[Page 66840-66860]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17no06-9]
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SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404 and 416
[Docket No. SSA-2006-0101]
RIN 0960-AE93
Exemption of Work Activity as a Basis for a Continuing Disability
Review
AGENCY: Social Security Administration (SSA).
ACTION: Final rules.
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SUMMARY: We are publishing these final rules to amend our regulations
to carry out section 221(m) of the Social Security Act (the Act).
Section 221(m) affects our rules for when we will conduct a continuing
disability review if you work and receive benefits under title II of
the Act based on disability. (We interpret this section to include you
if you receive both title II disability benefits and title XVI
(Supplemental Security Income (SSI)) payments based on disability.) It
also affects our rules on how we evaluate work activity when we decide
if you have engaged in substantial gainful activity for purposes of
determining whether your disability has ended. In addition, section
221(m) of the Act affects certain other standards we use when we
determine whether your disability continues or ends. We are also
amending our regulations concerning how we determine whether your
disability continues or ends. These
[[Page 66841]]
revisions will codify our existing operating instructions for how we
consider certain work at the last two steps of our continuing
disability review process. We are also revising our disability
regulations to incorporate some rules which are contained in another
part of our regulations and which apply if you are using a ticket under
the Ticket to Work and Self-Sufficiency program (the Ticket to Work
program). In addition, we are amending our regulations to eliminate the
secondary substantial gainful activity amount that we currently use to
evaluate work you did as an employee before January 2001.
DATES: These rules are effective December 18, 2006.
FOR FURTHER INFORMATION CONTACT: Kristine Erwin-Tribbitt, Policy
Analyst, Office of Program Development and Research, Social Security
Administration, 6401 Security Boulevard, Baltimore, Maryland 21235-
6401. Call (410) 965-3353 or TTY (410) 966-5609 for information about
these final rules. For information on eligibility or filing for
benefits, call our national toll-free number 1-(800) 772-1213 or TTY 1-
(800) 325-0778. You may also contact Social Security Online at http://www.socialsecurity.gov/
.
SUPPLEMENTARY INFORMATION:
Electronic Version Access
The electronic file of this document is available on the date of
publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html
.
What is the purpose of these final rules?
We are revising our disability regulations to carry out section
221(m) of the Act. The changes will apply to you if you are a working
beneficiary who is entitled to Social Security disability benefits
under title II of the Act and you have received such benefits for at
least 24 months. If you are a person who meets these requirements, we
are revising our rules on when we will start a continuing disability
review (specifically, a medical continuing disability review or a
``medical review'') to decide whether you are still disabled. In
addition, we are amending our rules to provide that, under the medical
improvement review standard sequential evaluation process, we will not
consider the activities you perform in your work if they support a
finding that you are no longer disabled. We are revising our
regulations to provide that we will not use the activities you perform
in work to support a finding that you are no longer disabled when
deciding if the work you do shows that you are able to perform
substantial gainful activity. Specifically we will not compare your
work activity to that of unimpaired persons in your community who are
doing the same or similar work as their means of livelihood. Also, if
your earnings are less than the substantial gainful activity limit, we
will not make a determination that your work is worth more than the
substantial gainful activity amount.
We are also making certain changes to our regulations that may
apply to you even if you are not affected by section 221(m) of the Act.
We are clarifying how we consider work activity at the last two steps
of the medical improvement review standard sequential evaluation
process when we determine if you are still disabled. The rules will
codify the interpretations of our standards for determining whether
disability continues under title II and title XVI that we have been
using in operating instructions for some time. These rules also provide
that these interpretations apply when we determine whether you are
entitled to expedited reinstatement of benefits under section 223(i) of
the Act or eligible for expedited reinstatement of benefits under
section 1631(p) of the Act. The changes affect you if you are entitled
to Social Security benefits based on disability under title II or you
are an adult who is eligible for SSI payments based on disability under
title XVI and you work during your current period of entitlement or
eligibility based on disability. Also, the rules affect you if you
request reinstatement of benefits.
We are also incorporating into our disability regulations some
rules which are contained in another part of our regulations and which
apply to you if you are using a ticket under the Ticket to Work
program. In addition, we are revising our rules for evaluating work
activity you performed as an employee prior to January 2001 to
eliminate the use of the secondary substantial gainful activity amount.
We are also making some minor clarifications and corrections of other
rules.
Ticket to Work and Work Incentives Advisory Panel
During the preparation of these rules, we consulted with the Ticket
to Work and Work Incentives Advisory Panel.
What do we mean by ``final rules'' and ``existing rules''?
For clarity, we use the term ``final rules'' in this preamble to
refer to the changes we are making to our regulations in this
publication. We also use the term ``new'' or ``amended'' rules to refer
to these changes. We use the term ``existing rules'' to refer to the
rules that will be changed by these final rules.
When will we start to use these final rules?
We will start to use these final rules on their effective date. We
will continue to use our existing rules until the effective date of
these final rules.
As is our usual practice when we make changes to our regulations,
we will apply these final rules in determinations or decisions that we
make on or after the effective date of these final rules. When these
final rules become effective, we will apply them to cases that are
pending in our administrative review process, including cases on remand
from a Federal court.
What are continuing disability reviews and when do we start them under
existing rules?
After we find that you are disabled, we are required by the Act and
our regulations to periodically reevaluate whether you continue to meet
the disability requirements of the Act. (See sections 221(i),
1631(d)(1) and 1633 of the Act, and Sec. Sec. 404.1589 and 416.989 of
our regulations.) We call this evaluation a continuing disability
review. There are two main types of continuing disability review: (1)
Work continuing disability reviews (sometimes referred to as a ``work
reviews'') in which we mainly examine your earnings, and (2) medical
continuing disability reviews (sometimes referred to as ``medical
reviews'') in which we examine your medical improvement and ability to
function. In Sec. Sec. 404.1590 and 416.990 of our regulations, we
explain that, if you are entitled to or eligible for disability
benefits, you must undergo regularly scheduled continuing disability
reviews. We also explain that in some circumstances, we may start a
continuing disability review before the time of your regularly
scheduled continuing disability review.
In Sec. Sec. 404.1590(b) and 416.990(b) of our regulations, we
list circumstances in which we will start a continuing disability
review. In most cases, we start a continuing disability review because,
under the Act and our regulations, we must evaluate your impairment(s)
from time to time to determine if you are still entitled to Social
Security disability benefits or eligible for SSI payments based on
disability or blindness. If you are entitled to or eligible for such
benefits, you are subject to regularly scheduled continuing disability
reviews at intervals ranging from 6 months to 7 years depending on
whether, and the
[[Page 66842]]
degree to which, we expect your impairment(s) to improve.
We may also start a continuing disability review because you
returned to work, and at other times when we receive information that
raises questions about whether you are still under a disability, such
as when you complete vocational rehabilitation services. For more
information about how we decide the frequency of continuing disability
reviews and when we may start a continuing disability review at other
than scheduled times, see Sec. Sec. 404.1590 and 416.990 of our
existing regulations.
Under existing rules, how do we determine whether your disability
continues or ends?
When we do a continuing disability review to determine whether your
disability continues or ends, we use the rules in Sec. 404.1594 if you
are a Social Security disability beneficiary and the rules in Sec.
416.994 if you are an adult who is eligible for SSI payments based on
disability. In general, these rules provide that we must determine if
there has been any medical improvement in your impairment(s) and, if
so, whether this medical improvement is related to your ability to
work. The rules in these sections also provide some exceptions to this
medical improvement review standard.
In Sec. 404.1594(f), we provide an eight-step sequential
evaluation process that we use when we determine whether you are still
disabled under title II of the Act. We generally follow the steps in
order. However, we may also find that your disability has ended because
of one of several exceptions to the medical improvement review standard
described in Sec. Sec. 404.1594(d) and (e). (Since the exceptions are
in the statute and are not affected by section 221(m) or the provisions
of these final rules, we do not summarize them below.) The eight steps
are as follows:
1. Are you engaging in substantial gainful activity? If you are
(and any applicable trial work period has been completed), we will find
that your disability ended.
2. If you are not, do you have an impairment or combination of
impairments that meets or equals the severity of an impairment in our
Listing of Impairments? If you do, we will generally find that your
disability continues.
3. If you do not, has there been medical improvement? If there has
been medical improvement as shown by a decrease in the medical severity
of your impairment(s), we go on to step 4. If there is no medical
improvement in your impairment(s), we skip to step 5.
4. If there has been medical improvement, we must determine whether
it is related to your ability to do work. If medical improvement is not
related to your ability to do work, we go on to step 5. If medical
improvement is related to your ability to do work, we skip to step 6.
5. If we found at step 3 that there has been no medical
improvement, or if we found at step 4 that the medical improvement is
not related to your ability to work, we consider whether one of the
exceptions to medical improvement applies in your case. If none of the
exceptions to medical improvement applies, we find that your disability
continues. However, if one of the exceptions applies, we will find
either that your disability has ended or that we need to go on to step
6, depending on the exception that applies in your case.
6. If medical improvement is related to your ability to do work, or
if any one of certain exceptions to medical improvement applies, we
will determine whether all of your current impairments in combination
are ``severe'' (see Sec. 404.1521 of our regulations). If you do not
have a ``severe'' impairment(s), we will find that your disability has
ended.
7. If your impairment(s) is ``severe,'' we will assess your
residual functional capacity based on all your current impairments and
consider whether you can still do work you have done in the past. If
you can do such work, we will find that your disability has ended.
8. If you are not able to do work you have done in the past, we
will consider one final step. Given the residual functional capacity
assessment and considering your age, education, and past work
experience, can you do other work? If you can, disability will be found
to have ended. If you cannot, disability will be found to continue.
We also use this medical improvement review standard to review your
continuing eligibility if you are an adult who receives SSI payments
based on disability. The sequential evaluation process is in Sec.
416.994(b)(5) of our regulations, but it has only seven steps instead
of eight. The seven steps are the same as the second through eighth
steps of Sec. 404.1594(f). We do not have a step for you if you are
engaging in substantial gainful activity because of an SSI work
incentive provision in section 1619 of the Act.
What is substantial gainful activity?
The term ``substantial gainful activity'' means work activity that
involves significant physical or mental activities and that is done for
pay or profit. Work activity is gainful if it is the kind of work
usually performed for pay or profit, whether or not a profit is
realized.
Under existing rules, how do we evaluate your work as an employee to
determine if you are engaging in substantial gainful activity?
If you work as an employee, we generally use earnings guidelines to
evaluate your work activity to decide whether the work you do is
substantial gainful activity. If your average monthly earnings are more
than the primary substantial gainful activity amount (i.e., $860 per
month for non-blind individuals in 2006), we ordinarily consider that
you have engaged in substantial gainful activity. If your average
monthly earnings from your work activity are equal to or less than the
primary substantial gainful activity amount for the year(s) in which
you work, the way we evaluate your work activity under our existing
rules generally depends on whether the work occurred in or after
January 2001 or before January 2001.
For work occurring between January 1, 1990 and January 1, 2001, if
your average monthly earnings from your work activity were less than
$300, we generally consider that your earnings show that you have not
engaged in substantial gainful activity. With certain exceptions, we
generally do not consider other information beyond your earnings. We
refer to this $300 earnings guideline as the secondary substantial
gainful activity amount to distinguish it from the primary substantial
gainful activity amount. If your earnings were between the primary
($700 per month for work occurring between July 1, 1999 and January 1,
2001) and secondary substantial gainful activity levels, our rules
provide that such earnings are neither high nor low enough to show
whether you have engaged in substantial gainful activity. In these
circumstances, we use separate criteria to evaluate your work as an
employee to determine if you engaged in substantial gainful activity.
If you worked in a sheltered workshop or comparable facility before
January 1, 2001, earnings not greater than the primary substantial
gainful activity amount ordinarily establish that the work was not
substantial gainful activity.
Beginning with January 2001, if your average monthly earnings are
equal to or less than the primary substantial gainful activity amount,
we generally consider that your earnings show that you have not engaged
in substantial gainful activity. Except in certain circumstances, we
generally do not
[[Page 66843]]
consider other information in addition to your earnings.
Example: You worked from July 2000 through June 2001, with earnings
of $600 per month. We use different criteria for evaluating your work
activity from January 2001 through June 2001 and from July 2000 through
December 2000 to determine if you engaged in substantial gainful
activity. For work activity from January 2001 through June 2001, your
average monthly earnings are less than the primary substantial gainful
activity amount ($740 per month for work occurring between January 1,
2001 and January 1, 2002). We will generally consider that your
earnings show that you have not engaged in substantial gainful
activity. For work activity from July 2000 through December 2000, your
earnings are between the primary ($700 per month for work occurring
between July 1, 1999 and January 1, 2001) and secondary ($300 per month
for work occurring between January 1, 1990 and January 1, 2001)
substantial gainful activity levels. We consider that your earnings are
neither high nor low enough to show whether you have engaged in
substantial gainful activity. We will use separate criteria, such as
the work you did, the hours you worked, and the amount of assistance
you received, to evaluate your work to determine if you engaged in
substantial gainful activity.
Under existing rules, are earnings guidelines the only factor used to
determine if your work as an employee is substantial gainful activity?
As we have indicated above, in some instances, earnings guidelines
are not the only factor we used to determine if the work you are
performing is substantial gainful activity. In some cases we will
consider other information if there is evidence which shows that you
may have engaged in substantial gainful activity. In these instances,
we evaluate your work activity under the criteria described below to
determine if you have engaged in substantial gainful activity. We may
determine that you have engaged in substantial gainful activity if your
work activity satisfies either of the following set of criteria:
Your work is comparable to that of unimpaired people in
your community who are doing the same or similar occupations as their
means of livelihood, taking into account the time, energy, skill, and
responsibility involved in the work; or
Your work, although significantly less than that done by
unimpaired people, is clearly worth more than the substantial gainful
activity amount, according to pay scales in your community.
Under existing rules, what factors are used to determine if your work
as a self-employed person is substantial gainful activity?
We consider your activities and their value to your business to
decide whether you have engaged in substantial gainful activity. To
determine whether you have engaged in substantial gainful activity, we
apply three tests. If you have not engaged in substantial gainful
activity under test one, then we will consider tests two and three. The
tests are as follows:
(1) Test One: You have engaged in substantial gainful activity if
you render services that are significant to the operation of the
business and receive a substantial income from the business. (See Sec.
404.1575(b) and (c) for an explanation of what we mean by significant
services and substantial income for purposes of this test.)
(2) Test Two: You have engaged in substantial gainful activity if
your work activity, in terms of factors such as hours, skills, energy
output, efficiency, duties, and responsibilities, is comparable to that
of unimpaired individuals in your community who are in the same or
similar businesses as their means of livelihood.
(3) Test Three: You have engaged in substantial gainful activity if
your work activity, although not comparable to that of unimpaired
individuals, is clearly worth more than the substantial gainful
activity amount when considered in terms of its value to the business,
or when compared to the salary that an owner would pay to an employee
to do the work you are doing.
Under existing rules, when will your performance of substantial gainful
activity affect whether you continue to be disabled?
If you are entitled to Social Security benefits based on disability
and you are working, the work you do may show that you are able to do
substantial gainful activity and are, therefore, no longer disabled. If
you are engaging in substantial gainful activity, before we determine
whether you are no longer disabled because of your work activity, we
will consider whether you are entitled to a trial work period under
Sec. 404.1592. We will find that your disability has ceased in the
month in which you demonstrated your ability to engage in substantial
gainful activity following completion of any applicable trial work
period. See Sec. 404.1594(d)(5) and (f)(1) of our regulations. Our
determination that your disability has ceased because you demonstrated
the ability to engage in substantial gainful activity is not a
determination of whether you continue to have a disabling impairment
(see Sec. 404.1511) for purposes of eligibility for a reentitlement
period (see Sec. 404.1592a) following completion of a trial work
period. If you work during your reentitlement period and we determine
that your disability has ceased because your work is substantial
gainful activity, we will stop your benefits. If you later stop
engaging in substantial gainful activity and you are still within your
reentitlement period, we will start paying your benefits again. In
determining whether you do substantial gainful activity in a month for
purposes of stopping or starting benefits during the reentitlement
period, we will consider your work in, or earnings for, that month (see
Sec. 404.1592a(a)(2)(i)).
If you are receiving SSI benefits based on disability, your
performance of substantial gainful activity does not affect your
disability status for purposes of eligibility for SSI benefits. This is
because of an SSI work incentive provision in section 1619 of the Act.
What does section 221(m) of the Act provide?
Above, we described what typically happens during a continuing
disability review. However, section 221(m) of the Act provides for
special exceptions for specified individuals under specific
circumstances.
Section 221(m) contains two paragraphs. Paragraph (1) provides
that, if you are entitled to disability insurance benefits under
section 223 of the Act or to other monthly insurance benefits based on
disability under section 202 of the Act,\1\ and you have received such
benefits for at least 24 months:
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\1\ The other monthly insurance benefits based on disability
under section 202 of the Act are:
Child's insurance benefits based on disability under
section 202(d);
Widow's insurance benefits based on disblity under
section 202(c); and
Widower's insurance benefits based on disability under
section 202(f).
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We may not schedule a continuing disability review for you
solely as a result of your work activity (section 221(m)(1)(A));
We may not use your work activity as evidence that you are
no longer disabled (section 221(m)(1)(B)); and
If you stop working, we may not presume that you are
unable to work just because you stopped working (section 221(m)(1)(C)).
[[Page 66844]]
Paragraph (2) explains that, if you are an individual described in
paragraph (1):
You are still subject to regularly scheduled continuing
disability reviews that are not triggered by work (section
221(m)(2)(A)); and
We may still terminate your benefits if you have earnings
that exceed the level of earnings that represent substantial gainful
activity (section 221(m)(2)(B)).
What revisions are we making, and why?
As a result of section 221(m) of the Act, we are revising several
of our rules in subparts J and P of part 404 and subparts I and N of
part 416 of our regulations:
To explain that we will not start a continuing disability
review based solely on your work activity if you are covered by section
221(m) of the Act;
To explain how we consider activities from work in
continuing disability reviews if you are covered by section 221(m); and
To explain how we evaluate your work when we decide
whether you have engaged in substantial gainful activity for purposes
of determining whether your disability has ceased, if you are covered
by section 221(m).
In addition, we are also revising several of our rules in subparts
J and P of part 404 and subparts I and N of part 416 of our
regulations:
To incorporate rules about not starting a continuing
disability review that are contained in another part of our regulations
and apply to you if you are using a ticket under the Ticket to Work
program;
To clarify how we determine continuing disability at the
last two steps of the medical improvement review standard sequential
evaluation process;
To explain that our action to start or to discontinue a
continuing disability review is not an initial determination; and
To eliminate the use of the secondary substantial gainful
activity amount for evaluating work done by an employee before January
2001.
Although section 221(m) applies only if you receive disability
benefits under title II of the Act, we are making changes to our title
XVI regulations that will apply to you if:
You are entitled to Social Security disability benefits
under title II of the Act;
You are subject to the provisions of section 221(m)
because you have received the Social Security disability benefits for
at least 24 months; and
You are also eligible for SSI benefits based on disability
or blindness under title XVI of the Act.
If you meet these criteria, we will use the same rules for starting
continuing disability reviews under title XVI as we will use under
title II. Also, when we do conduct a continuing disability review, we
will use the same rules on how we consider the activities from your
work in a continuing disability review under title XVI as we will use
in a continuing disability review under title II. If we did not make
these changes to the title XVI regulations, we would have rules under
which we could start a continuing disability review based solely on
your work activity to determine whether your disability continues or
ends under title XVI even though we could not start a continuing
disability review on that basis to determine whether your disability
continues or ends under title II. Also, when we do conduct continuing
disability reviews for both title II and title XVI purposes, we would
have different rules on how we consider the activities from your work
for title II and title XVI purposes. As a result, we could determine
that your disability continues under title II but that your disability
has ended under title XVI. For these reasons, we are making the
aforementioned changes to the title XVI regulations that will apply to
you if you are a recipient of SSI benefits based on disability or
blindness and also are a Social Security disability beneficiary who is
covered by section 221(m) of the Act. We concluded that this is a
reasonable interpretation of the statute and the most logical,
equitable, and administratively efficient way to implement section
221(m) if you receive both types of benefits.
We do not interpret section 221(m) of the Act to apply to you if
you are a recipient of SSI benefits only. Section 221(m) provides that,
for you to be covered by that section, you must be entitled to and have
received Social Security disability benefits under title II. Therefore,
these final rules do not extend the provisions of section 221(m) to you
if you receive only SSI disability or blindness payments.
We are also revising our disability regulations to include rules
that are already in subpart C of part 411 of our regulations and that
apply to you if you are in the Ticket to Work program and using your
ticket. These rules provide that we will not start a continuing
disability review for you during the period in which you are using a
ticket. However, they also explain that we can still do a review to
determine if your disability has ended under title II because you have
demonstrated your ability to engage in substantial gainful activity, as
defined in Sec. Sec. 404.1571-404.1576 of our regulations.
We are also clarifying in these final rules that if you are
entitled to Social Security disability benefits under title II or
eligible for SSI disability payments under title XVI, we will not
consider the work that you are doing or have done during your current
period of entitlement or eligibility based on disability to be past
relevant work or past work experience at the last two steps of the
applicable medical improvement review standard sequential evaluation
process. We are also amending our rules to provide a comparable rule if
you are requesting expedited reinstatement of benefits under section
223(i) or 1631(p) of the Act. The rule will apply at the last two steps
to work you do during or after your previous period of entitlement or
eligibility which terminated and which is the basis for your request
for expedited reinstatement.
The following is an explanation of the specific changes we are
making and our reasons for making these changes.
Sections 404.903 and 416.1403 Administrative Actions That Are Not
Initial Determinations
We are adding a new paragraph (x) to Sec. 404.903 and a new
paragraph (a)(22) to Sec. 416.1403 to explain that the action of
starting or discontinuing a continuing disability review is not an
initial determination. As explained in existing Sec. Sec. 404.903 and
416.1403(a), administrative actions that are not initial determinations
may be reviewed by us, but they are not subject to the administrative
review process provided by subpart J of part 404 or subpart N of part
416 of our regulations, and they are not subject to judicial review. If
we start a continuing disability review based solely on your work
activity, we will provide an opportunity for you to request that we
review that action if you believe that you are protected by the section
221(m)(1)(A) provision and that the medical review should not have been
started. We will inform you of this opportunity when we send you a
letter telling you that we are starting a medical continuing disability
review. If we review the action and conclude that the initiation of the
continuing disability review was in error because section 221(m)(1)(A)
of the Act applies, we will discontinue processing the continuing
disability review. In addition, as we explain later in this preamble,
if we process the continuing disability review to completion and make a
medical cessation determination, we are amending our
[[Page 66845]]
rules in Sec. Sec. 404.1590 and 416.990 to provide a procedure under
which we will vacate the medical cessation determination if, within a
prescribed time period, we receive evidence from you that establishes
that the start of your continuing disability review was in error
because of section 221(m)(1)(A) of the Act.
Sections 404.1574 and 416.974 Evaluation Guides if You Are an Employee
We are revising Sec. Sec. 404.1574(b) and 416.974(b) to remove the
rules relating to the use of the secondary substantial gainful activity
amount for evaluating work activity you performed as an employee prior
to January 2001. This change will eliminate the difference that exists
between the way we evaluate work you performed as an employee before
January 2001 and the way we evaluate work you performed as an employee
in months beginning with January 2001 in cases in which your average
monthly earnings from your work are equal to or less than the
applicable primary substantial gainful activity amount.
On December 29, 2000, we published final rules in the Federal
Register (65 FR 82905) to discontinue the use of a secondary
substantial gainful activity amount effective for work activity in
months beginning with January 2001. We made this change because, as we
explained in the preamble to those final rules, ``our experience
suggests that the secondary substantial gainful activity amount has not
been as useful a tool as we would have liked'' (65 FR 82906). We
indicated that our experience suggests that few applicants and
beneficiaries would be affected by the change because few employees
have been found to have performed substantial gainful activity on the
basis of the secondary rules except in those circumstances that would
otherwise warrant development of other information beyond earnings. We
also explained that ``[d]iscontinuing these complex secondary
guidelines will help simplify our rules and facilitate public
understanding of the Social Security disability program as well as
improve our work efficiency'' (65 FR 82906). For these same reasons,
and to provide consistent rules for considering earnings from your work
as an employee, without regard to whether the work was performed before
January 2001 or in or after January 2001, we are discontinuing the use
of the secondary guidelines altogether.
Under this change, if your average monthly earnings from work you
performed as an employee before January 2001 are equal to or less than
the applicable primary substantial gainful activity amount, we will
consider your earnings in the same way we consider earnings from work
performed by an employee in or after January 2001 that do not average
more than the applicable primary substantial gainful activity amount.
That is, we will generally consider that your earnings from your work
will show that you have not engaged in substantial gainful activity
without considering other information beyond your earnings. We will
perform additional development beyond looking at earnings only when
circumstances indicate that you may have been engaging in substantial
gainful activity or might have been in a position to control when
earnings are paid to you or the amount of wages paid to you (for
example, if you work for a small corporation run by a relative).
Using the facts from the ``Example'' set out earlier, the following
illustrates how we will evaluate your work activity under these final
rules, which eliminate the use of the secondary substantial gainful
activity guidelines altogether. As in the ``Example'' above, you worked
from July 2000 through June 2001, with earnings of $600 per month. For
the entire period you worked, your average monthly earnings are less
than the applicable primary substantial gainful activity amounts ($740
per month for work occurring between January 1, 2001 and January 1,
2002 and $700 per month for work occurring between July 1, 1999 and
January 1, 2001). Therefore, we will generally consider that your
earnings show that you have not engaged in substantial gainful
activity.
To make this change, we are eliminating the rules in existing
Sec. Sec. 404.1574(b) and 416.974(b) relating to the use of the
secondary substantial gainful activity amount and the distinction
between work performed before January 2001 and work performed in or
after January 2001. We are replacing existing paragraphs (b)(3) through
(b)(6) of Sec. Sec. 404.1574 and 416.974 with a new paragraph (b)(3),
Earnings that will ordinarily show that you have not engaged in
substantial gainful activity. In new paragraph (b)(3), we are
consolidating our existing rules that apply in cases in which average
monthly earnings from work performed by an employee (including work
performed in a sheltered workshop or comparable facility) in or after
January 2001 are equal to or less than the applicable primary
substantial gainful activity amount, and are extending the scope of
these rules to cover work performed before January 2001 as well as work
performed in or after January 2001.
In a new paragraph (b)(3)(i), General, we state the general rule.
We explain that if your average monthly earnings are equal to or less
than the amount(s) determined under paragraph (b)(2) of Sec. 404.1574
or Sec. 416.974 for the year(s) in which you work, we will generally
consider that the earnings from your work activity as an employee
(including earnings from work in a sheltered workshop or comparable
facility) will show that you have not engaged in substantial gainful
activity. We explain that we will generally not consider other
information in addition to your earnings except in the circumstances
described in new paragraph (b)(3)(ii) of Sec. Sec. 404.1574 and
416.974.
In new paragraph (b)(3)(ii), When we will consider other
information in addition to your earnings, we describe those
circumstances in which we will ordinarily consider other information
beyond your earnings. We explain that we will generally consider other
information in addition to your earnings if there is evidence
indicating that you may be engaging in substantial gainful activity or
that you are in a position to control when earnings are paid to you or
the amount of wages paid to you (for example, if you are working for a
small corporation owned by a relative).
We also include provisions in new paragraph (b)(3)(ii) that provide
examples of other information we may consider. These latter provisions
incorporate the provisions of existing paragraph (b)(6)(iii) of
Sec. Sec. 404.1574 and 416.974. In new paragraphs (b)(3)(ii)(A) and
(B), we explain that other information we may consider includes, for
example, whether (A) Your work is comparable to that of unimpaired
people in your community who are doing the same or similar occupations
as their means of livelihood, taking into account the time, energy,
skill, and responsibility involved in the work; and (B) your work,
although significantly less than that done by unimpaired people, is
clearly worth the amounts shown in paragraph (b)(2) of Sec. 404.1574
or Sec. 416.974, according to pay scales in your community.
The provisions of new Sec. Sec. 404.1574(b)(3)(i) and (ii) and
416.974(b)(3)(i) and (ii) are based on the rules that are stated in the
first sentence of existing paragraph (b)(3), the last sentence of
existing paragraph (b)(4), existing paragraph (b)(5), and existing
paragraphs (b)(6)(ii) and (iii) of Sec. Sec. 404.1574 and 416.974.
In new Sec. 404.1574(b)(3)(iii), we explain that, even if the
circumstances described in new Sec. 404.1574(b)(3)(ii) are
[[Page 66846]]
present, we will not consider other information in addition to your
earnings in evaluating the work you are doing or have done if: (A) At
the time you do the work, you are entitled to Social Security
disability benefits and you have received such benefits for at least 24
months; and (B) we are evaluating that work to consider whether you
have engaged in substantial gainful activity or demonstrated the
ability to engage in substantial gainful activity for the purpose of
determining whether your disability has ceased because of your work
activity. We include cross-references to the sections of our
regulations that concern making substantial gainful activity
determinations for purposes of determining whether your disability has
ceased.
Since new paragraphs (b)(3)(ii)(A) and (B) require us to consider
your work activities, we decided that we could no longer use
(b)(3)(ii)(A) and (B)--based on section 221(m)(1)(B) of the Act--to
decide that the work you do after you have received Social Security
disability benefits for at least 24 months shows that you are able to
engage in substantial gainful activity and are, therefore, no longer
disabled. Therefore, in Sec. 404.1574(b)(3), we have included a
paragraph (b)(3)(iii), Special rule for considering earnings alone when
evaluating the work you do after you have received social security
disability benefits for at least 24 months, which provides an exception
to the rule in Sec. 404.1574(b)(3)(ii), discussed above. The exception
will apply when we are evaluating the work that you perform while you
are entitled to Social Security disability benefits and after you have
received such benefits for at least 24 months and will apply to you
only if you are covered by section 221(m) of the Act. The exception
would apply only if we are evaluating that work to decide whether the
work shows that you are able to engage in substantial gainful activity
for the purpose of determining whether your disability has ceased
because of your work activity. In this case, even if the circumstances
described in new Sec. 404.1574(b)(3)(ii) are present, we will not
consider other information in addition to your earnings. Instead, we
will apply the general rule described in new Sec. 404.1574(b)(3)(i).
That is, in the case described above, if your average monthly earnings
from that work are equal to or less than the amount(s) determined under
Sec. 404.1574(b)(2) for the year(s) in which that work occurs, we will
find that your earnings from that work will show that you have not
engaged in substantial gainful activity.
If you are entitled to Social Security disability benefits and you
perform work as an employee after you have received such benefits for
at least 24 months, section 221(m)(1)(B) of the Act provides that we
may not consider information about the activities you perform in that
work (such as the information described in new Sec.
404.1574(b)(3)(ii)(A) and (B)) to determine that the work shows that
you are able to engage in substantial gainful activity and are,
therefore, no longer disabled, i.e., that your disability has ceased.
We may still consider your earnings from that work under the earnings
guidelines to decide whether your earnings show that you have engaged
in substantial gainful activity for the purpose of determining whether
your disability has ceased. Also, we may still consider other
information in addition to your earnings in the circumstances described
in new Sec. 404.1574(b)(3)(ii) to decide whether that work is
substantial gainful activity for purposes other than the purpose of
determining whether your disability has ceased. Therefore, after we
have determined that your disability has ceased during the
reentitlement period because you performed substantial gainful
activity, we will continue to make substantial gainful activity
determinations to decide whether benefits should be started or stopped
for a subsequent month(s) during the reentitlement period and to decide
when your entitlement to benefits terminates (see Sec. 404.1592a(a)(2)
and (3)). We may use the tests in Sec. 404.1574(b)(3)(ii) that involve
looking at your work activities in making these substantial gainful
activity determinations because these determinations do not involve
deciding that you are no longer disabled.
Also, in new Sec. 404.1574(b)(3), we include a paragraph
(b)(3)(iv), When we consider you to have received social security
disability benefits for at least 24 months. The provisions of paragraph
(b)(3)(iv) apply for purposes of new paragraph (b)(3)(iii) of Sec.
404.1574. In new Sec. 404.1574(b)(3)(iv), we provide a definition of
Social Security disability benefits and explain when we will consider
you to have received such benefits for at least 24 months.
In response to public comments we received on the proposed rules,
we have modified the criteria relating to the 24-month requirement in
these final rules. We have modified the criteria in Sec.
404.1574(b)(3)(iv) of the final rules to provide that, if you are
otherwise due a social security disability benefit for a month, but we
withhold your benefit for that month to recover an overpayment, we will
count that month toward the 24-month requirement. We provide that, in
this situation, we will consider you to have constructively received a
social security disability benefit for the month for purposes of the
24-month requirement. We are making similar changes in final Sec. Sec.
404.1575(e)(2), 404.1590(i)(2)(i), and 416.990(i)(2)(i), which are
described later in this preamble.
In final Sec. 404.1574(b)(3)(iv), we explain that we consider you
to have received social security disability benefits for at least 24
months beginning with the first day of the first month following the
24th month for which you actually received Social Security disability
benefits that you were due or constructively received such benefits. We
state that the 24 months do not have to be consecutive. We explain that
we do not count months for which you were entitled to benefits but for
which you did not actually or constructively receive benefit payments.
In addition, we explain that if you also receive SSI payments, months
for which you received only SSI payments will not count for the 24-
month requirement.
We are including new paragraphs (b)(3)(iii) and (iv) only in our
revision of Sec. 404.1574(b). We are not including similar provisions
in our revision of Sec. 416.974(b) because the performance of
substantial gainful activity is not a basis for determining that
disability has ceased under the SSI program.
As we explain above, new paragraph (b)(3) of Sec. Sec. 404.1574
and 416.974 will replace existing paragraphs (b)(3) through (b)(6) of
these sections. As a consequence, we have made certain conforming
changes to existing paragraphs (b)(1) and (2) of Sec. Sec. 404.1574
and 416.974. We are amending existing paragraph (b)(1) of Sec. Sec.
404.1574 and 416.974 to remove references to paragraphs (b)(4), (5),
and (6). We are revising the parenthetical phrase in the introductory
text of existing paragraph (b)(2) of Sec. Sec. 404.1574 and 416.974 to
read, ``(including earnings from work in a sheltered workshop or a
comparable facility especially set up for severely impaired persons),''
to incorporate the description of sheltered work contained in existing
paragraph (b)(4) of these sections.
Section 404.1575 Evaluation Guides if You Are Self-Employed
If you are covered by section 221(m) of the Act and you are self-
employed, we are revising our rules in existing Sec. 404.1575 to
explain how we will evaluate your work activity when
[[Page 66847]]
deciding whether you have engaged in substantial gainful activity
following the completion of a trial work period for purposes of
determining if your disability has ceased. (We are not amending our
rules in Sec. 416.975 because your performance of substantial gainful
activity does not affect your disability status for purposes of your
continuing eligibility for SSI payments.) As we explained earlier, if
you are self-employed, we consider three tests to determine if you have
engaged in substantial gainful activity. Since the three tests require
us to consider your activities at work and their value to your
business, we decided that we could not use these tests to decide that
the work you do after you have received Social Security disability
benefits for at least 24 months shows that you are able to engage in
substantial gainful activity and are, therefore, no longer disabled.
Based on section 221(m)(1)(B) of the Act, we concluded that we needed
to provide a different test for considering whether that work is
substantial gainful activity for purposes of determining whether your
disability has ceased. Therefore, we will use a new evaluation test for
that purpose. We refer to this new test as the countable income test.
To explain this new evaluation test and when we will apply it, we
are revising existing paragraphs (a) and (c) of Sec. 404.1575 and
adding a new paragraph (e). We are retaining all of the provisions of
existing paragraph (a). However, we are restructuring the paragraph. We
made the first two sentences of existing paragraph (a) the introductory
text of paragraph (a) of final Sec. 404.1575. (We revised the first
sentence of the paragraph to include a reference to new paragraph (e).)
We included the remaining provisions of existing paragraph (a) in a new
paragraph (a)(2), General rules for evaluating your work activity if
you are self-employed. Because of this change, we redesignated existing
paragraphs (a)(1), (2), and (3) of Sec. 404.1575 as paragraphs
(a)(2)(i), (ii), and (iii), respectively, of final Sec. 404.1575.
Following the first two sentences (the introductory text) of
paragraph (a) of final Sec. 404.1575, we added a new paragraph (a)(1),
How we evaluate the work you do after you have become entitled to
disability benefits. In new Sec. 404.1575(a)(1), we explain which
rules we will use to evaluate your work activity if you are self-
employed and you perform the work activity while you are entitled to
Social Security disability benefits. (We explain that Social Security
disability benefits means disability insurance benefits for a disabled
worker, child's insurance benefits based on disability, or widow's or
widower's insurance benefits based on disability.) We explain that the
way we will evaluate your work activity will depend on whether the work
occurs before or after you have received Social Security disability
benefits for at least 24 months and on the purpose of the evaluation.
We explain in new Sec. 404.1575(a)(1) that we will use the guides in
new paragraph (e), which provide for the use of the countable income
test, to evaluate the work activity you do after you have received such
benefits for at least 24 months to determine whether you have engaged
in substantial gainful activity for the purpose of determining whether
your disability has ceased. In all other cases in which we evaluate
your work activity as a self-employed person to make a substantial
gainful activity determination, we will apply the guides in Sec.
404.1575(a)(2) of these final rules. Section 404.1575(a)(2) of the
final rules sets out the three tests we currently use to evaluate the
work of a self-employed person.
We explain in new Sec. 404.1575(a)(1) that we will use the three
tests described in Sec. 404.1575(a)(2) to evaluate the work activity
you do before you have received Social Security disability benefits for
24 months to determine if you have engaged in substantial gainful
activity, regardless of the purpose of the evaluation. We also explain
that, after we have determined that your disability has ceased during
the reentitlement period because you performed substantial gainful
activity, we will use the three tests to determine whether you are
doing substantial gainful activity in subsequent months in or after
your reentitlement period, whether your work activity occurs before or
after you have received Social Security disability benefits for at
least 24 months. After we have determined that your disability has
ceased due to the performance of substantial gainful activity during
the reentitlement period, we make substantial gainful activity
determinations to decide whether benefits should be started or stopped
for a subsequent month(s) during the reentitlement period and to decide
when your entitlement to benefits terminates (see Sec. 404.1592a(a)(2)
and (3)). We may use the three tests that involve looking at work
activity in making these substantial gainful activity determinations
because these determinations do not involve deciding that you are no
longer disabled.
We are revising existing Sec. 404.1575(c). In amended Sec.
404.1575(c)(1), Determining countable income, we explain what
deductions are applied to your net income to decide the amount of your
income we use to determine if you have done substantial gainful
activity. We explain that we refer to this amount as your countable
income. In amended Sec. 404.1575(c)(2), we explain when we consider
your countable income to be substantial.
In new Sec. 404.1575(e), Special rules for evaluating the work you
do after you have received social security disability benefits for at
least 24 months, we explain the countable income test and when it
applies. We explain that we will apply this test to evaluate the work
you are doing or have done if, at the time you perform the work, you
are entitled to Social Security disability benefits and you have
received such benefits for at least 24 months. We explain that we will
apply the test only when we are evaluating that work to consider
whether you have engaged in substantial gainful activity or
demonstrated the ability to engage in substantial gainful activity for
the purpose of determining whether your disability has ceased because
of your work activity. We explain that, under the countable income
test, we will not consider the services you perform in that work to
determine that the work you are doing shows that you are able to engage
in substantial gainful activity and are, therefore, no longer disabled.
However, we may consider the services you perform to determine that you
are not doing substantial gainful activity.
In new paragraph (e)(2), The 24-month requirement, we explain that
we consider you to have received Social Security disability benefits
for at least 24 months beginning with the first day of the first month
following the 24th month for which you actually received Social
Security disability benefits that you were due or constructively
received such benefits. We explain that we will consider you to have
constructively received a benefit for a month for purposes of the 24-
month requirement if you were otherwise due a social security
disability benefit for that month and your monthly benefit was withheld
to recover an overpayment.
We explain the new evaluation test in new paragraph (e)(3), The
countable income test. Under the countable income test, we will compare
your countable income to the substantial gainful activity earnings
guidelines in Sec. 404.1574(b)(2) to determine if you have engaged in
substantial gainful activity. We will consider that you have engaged in
substantial gainful activity if your monthly countable income averages
more than the amounts in Sec. 404.1574(b)(2) unless the evidence shows
that you did not render
[[Page 66848]]
significant services in the month(s). If your average monthly countable
income is equal to or less than the amounts in Sec. 404.1574(b)(2), or
if the evidence shows that you did not render significant services, we
will consider that your work as a self-employed person shows that you
have not engaged in substantial gainful activity.
Sections 404.1590 and 416.990 When and How Often We Will Conduct a
Continuing Disability Review
We added two new paragraphs to existing Sec. Sec. 404.1590 and
416.990 to explain when we will and will not start continuing
disability reviews if you are in the Ticket to Work program and your
ticket is in use (new paragraph (h)), and if you are covered by the
provisions of section 221(m) of the Act (new paragraph (i)).
In new Sec. Sec. 404.1590(h) and 416.990(h), If you are
participating in the Ticket to Work program, we restate our rules
already set out in Sec. Sec. 411.160 and 411.165 that we will not
start a continuing disability review for you during the period in which
you are using a ticket under the Ticket to Work program. This amendment
to existing Sec. Sec. 404.1590 and 416.990 is not a change in policy,
but incorporates rules already set out in Sec. Sec. 411.160 and
411.165. In addition, we provide in new Sec. 404.1590(h) that this
provision does not apply to the reviews we do under title II using the
rules in Sec. Sec. 404.1571-404.1576 to determine whether the work you
have done shows that you are able to do substantial gainful activity
(see Sec. 411.160(b)). (As we have already noted, your performance of
substantial gainful activity does not affect your SSI eligibility
because of the work incentive provisions of section 1619 of the Act.)
In new Sec. Sec. 404.1590(i) and 416.990(i), If you are working
and have received social security disability benefits for at least 24
months, we provide rules for you if you are covered by section 221(m)
of the Act. In new paragraph (i)(1), General, we explain that we will
not start a continuing disability review based solely on your work
activity if you are currently entitled to benefits based on disability
under title II of the Act and you have received such benefits for at
least 24 months. We also list the types of title II disability benefits
that qualify.
Although section 221(m)(1)(A) says that a continuing disability
review may not be ``scheduled'' based solely on your work activity, we
use the word ``start'' in this provision and the remainder of new
paragraph (i) of Sec. Sec. 404.1590 and 416.990 to avoid any confusion
about what we will do, and to use consistent language throughout these
sections of our rules. Existing provisions in Sec. Sec. 404.1590 and
416.990 use both words. We use the word ``start'' in the opening
sentence of existing Sec. Sec. 404.1590(b) and 416.990(b) to explain
when we will do a continuing disability review. We then use the word
``scheduled'' in existing paragraphs (b)(1), (b)(2) and (b)(10) to
explain when we will start a continuing disability review that we have
scheduled in advance; that is, based on a diary for ``medical
improvement expected,'' ``medical improvement possible,'' or ``medical
improvement not expected,'' or on a ``vocational reexamination diary.''
In existing paragraph (b)(11) of Sec. 416.990, we specify a timeframe
within which we must review the cases of certain children (i.e., by the
first birthday of the child) unless certain conditions are met. In
existing paragraph (b)(11)(ii) of Sec. 416.990, which discusses one of
the conditions, we use the word ``schedule'' to describe a situation in
which we set a time in advance for conducting a continuing disability
review. The remaining provisions in existing paragraphs (b)(3)-(b)(9)
of Sec. Sec. 404.1590 and 416.990 describe situations in which we do
not schedule continuing disability reviews in advance but may start
them sooner than the regularly scheduled reviews.
In new Sec. Sec. 404.1590(i)(2) and 416.990(i)(2), The 24-month
requirement, we provide rules for determining whether the 24-month
requirement in new Sec. Sec. 404.1590(i)(1) and 416.990(i)(1) is met.
In new paragraph (i)(2)(i), we explain that months for which you have
actually received Social Security disability benefits under title II
that you were due, or for which you have constructively received such
benefits, will be counted for the 24-month requirement. The 24 months
do not have to be consecutive. We explain that we will consider you to
have constructively received a benefit for a month for purposes of the
24-month requirement if you were otherwise due a social security
disability benefit for that month and your monthly benefit was withheld
to recover an overpayment. We also explain that we do not count months
for which you were technically ``entitled'' but did not actually or
constructively receive benefit payments. In addition, we clarify that
months for which you received only SSI payments and months for which
you received continued benefits pending the appeal of a medical
cessation determination, do not count toward the 24-month requirement.
In new Sec. Sec. 404.1590(i)(2)(ii) and 416.990(i)(2)(ii), we
explain that you will not meet the 24-month requirement for purposes of
new Sec. 404.1590(i)(1) or Sec. 416.990(i)(1) if you have not
received Social Security disability benefits for at least 24 months as
of the date on which we start a continuing disability review. We
explain that the date on which we start a continuing disability review
is the date on the notice we send you that tells you that we are
beginning the review.
In new Sec. Sec. 404.1590(i)(3) and 416.990(i)(3), When we may
start a continuing disability review even if you have received social
security disability benefits for at least 24 months, we include a
reminder that, even if you meet the requirements of new paragraph
(i)(1) of Sec. 404.1590 or Sec. 416.990, we may still start a
continuing disability review if we have another reason to do so; that
is, when the fact that you are working is not the sole reason for the
continuing disability review. We include two examples, including a
reminder that we must still schedule you for regularly scheduled
continuing disability reviews, as provided under section 221(m)(2)(A)
of the Act.
In Sec. 404.1590, we include a new paragraph (i)(4), Reviews to
determine whether the work you have done shows that you are able to do
substantial gainful activity, to clarify that the exemption from
continuing disability reviews in new paragraph (i)(1) of that section
does not apply to certain reviews we conduct under title II of the Act.
We explain that paragraph (i)(1) does not apply to the reviews we
conduct using the rules in Sec. Sec. 404.1571-404.1576 to determine
whether the work you have done shows that you are able to do
substantial gainful activity and are, therefore, no longer disabled. In
other words, if section 221(m) of the Act applies to you, we may not be
able to start a medical continuing disability review, but we can still
start a work continuing disability review to determine if you are doing
substantial gainful activity. We do not conduct similar reviews under
title XVI because of the work incentive provisions in section 1619 of
the Act. Therefore, we do not include a similar provision in the
amendments to Sec. 416.990.
As we explain earlier in this preamble, if we start a continuing
disability review based on your work activity, we will provide an
opportunity for you to request that we review that action if you
believe that you are protected by section 221(m)(1)(A) of the Act and
that the action of starting the continuing disability review was in
error. If we review the action and conclude that the initiation of the
medical continuing disability review
[[Page 66849]]
was in error, we will discontinue the processing of the continuing
disability review. If the continuing disability review proceeds to
completion and we make a medical cessation determination, we provide a
procedure in new Sec. Sec. 404.1590(i)(5) and 416.990(i)(4) under
which we will vacate the medical cessation determination if the action
of starting the continuing disability review is shown to have been in
error because you were protected by section 221(m)(1)(A). You must
provide evidence to us that establishes that you met the requirements
of new Sec. 404.1590(i)(1) or Sec. 416.990(i)(1) as of the date of
the start of your continuing disability review and that the start of
the review was erroneous. In addition, we must receive the evidence
within 12 months of the date of the notice of the initial determination
of medical cessation.
We also amended existing paragraph (a) of Sec. Sec. 404.1590 and
416.990 to include references to new paragraphs (h) and (i) of these
sections.
Section 404.1592a The Reentitlement Period
We amended existing paragraph (a) of Sec. 404.1592a to explain
when the special rules in amended Sec. Sec. 404.1574(b)(3)(iii) and
404.1575(e) may apply, and when they will not apply, in making
substantial gainful activity determinations. We also revised existing
paragraph (a)(3) of Sec. 404.1592a to separate the provisions into two
lower level paragraphs. We designated the second, third, and fourth
sentences of existing paragraph (a)(3) as new paragraph (a)(3)(i). We
designated the fifth, sixth, and seventh sentences of existing
paragraph (a)(3) as new paragraph (a)(3)(ii).
We amended existing paragraph (a)(1) of Sec. 404.1592a to include
a reference to the special rules for evaluating the work you do after
you have received Social Security disability benefits for at least 24
months. We are including this reference in the list of examples of the
relevant rules we will apply when deciding whether the work you do
following completion of a trial work period is substantial gainful
activity for purposes of determining whether your disability has
ceased. We are also making a similar change in newly designated
paragraph (a)(3)(ii).
We revised the last sentence of existing paragraph (a)(2)(i), and
added in newly designated paragraph (a)(3)(i), of this section to
clarify that, if we have decided that your disability ceased because
you performed substantial gainful activity, we will not apply the
special rules in amended Sec. Sec. 404.1574(b)(3)(iii) and 404.1575(e)
in making substantial gainful activity determinations for purposes of
determining whether benefits should be paid for any subsequent months
of the reentitlement period or whether your entitlement to benefits has
terminated. The special rules in amended Sec. Sec. 404.1574(b)(3)(iii)
and 404.1575(e) do not apply in making these substantial gainful
activity determinations because these determinations do not involve
deciding whether your disability has ceased.
Section 404.1594 How We Will Determine Whether Your Disability
Continues or Ends
Section 416.994 How We Will Determine Whether Your Disability Continues
or Ends, Disabled Adults
We are adding new Sec. 404.1594(i), If you work during your
current period of entitlement based on disability or during certain
other periods, and new Sec. 416.994(b)(8), If you work during your
current period of eligibility based on disability or during certain
other periods, to:
Incorporate a longstanding instruction that interprets our
regulations on how we consider your work at the last two steps of the
medical improvement review standard sequential evaluation process when
determining whether your disability continues or ends;
Provide a comparable rule on how we consider your work at
the last two steps of the process when determining whether you are
entitled to expedited reinstatement of benefits under section 221(i) or
eligible for expedited reinstatement of benefits under section 1631(p)
of the Act;
Explain how we will consider the activities you do in your
work when determining whether your disability continues or ends if you
are covered by section 221(m) of the Act; and
Explain how we will consider the activities you do in your
work when determining whether your disability continues or ends if you
are not covered by section 221(m) of the Act.
In new Sec. Sec. 404.1594(i)(1) and 416.994(b)(8)(i), we clarify
our rules about the last two steps of the medical improvement review
standard sequential evaluation process for determining whether
disability continues or ends to reflect an interpretation contained in
an operating instruction we have been using for a number of years. The
provisions clarify that we will not consider work you are doing now, or
work that you did, during your current period of entitlement based on
disability under title II (new Sec. 404.1594(i)(1)), or during your
current period of eligibility based on disability under title XVI (new
Sec. 416.994(b)(8)(i)), to be past relevant work for purposes of the
second to last step of the sequential evaluation processes described in
Sec. Sec. 404.1594(f) and 416.994(b)(5). The provisions also explain
that we will not consider such work to be ``past work experience'' when
we decide whether you can do other work at the last step of those
processes. In these provisions of the final rules, we also provide that
we will not consider certain work to be past relevant work or past work
experience for purposes of the last two steps of the medical
improvement review standard sequential evaluation process when we
decide whether you qualify for expedited reinstatement of benefits
under section 223(i) or 1631(p) of the Act. For purposes of deciding
whether you qualify for expedited reinstatement of benefits, the rules
would apply to work you are doing or have done during or after your
previous period of entitlement or eligibility which terminated and
which is the basis for your request for expedited reinstatement.
In new Sec. Sec. 404.1594(i)(2) and 416.994(b)(8)(ii), we provide
rules for you if you are covered by section 221(m) of the Act. Section
221(m)(1)(B) of the Act explains that if you are covered by this
section, ``no work activity engaged in by the individual may be used as
evidence that the individual is no longer disabled.'' Based on this
statutory language, we provide in these final rules that we will not
consider the activities you do in your work if they support a finding
that you are no longer disabled. We may still find that you are no
longer disabled, but only if that finding is based on other evidence.
We also provide that we may consider the activities you do in your
work if they provide evidence that you are still disabled or if they do
not conflict with a finding that you are still disabled. Your
functioning on the job may help us to establish that you are still
disabled. We concluded that we are required to include this provision
because the language of section 221(m)(1)(B) speaks only about the use
of work activity as evidence that an individual is ``no longer
disabled.''
We also include in new Sec. Sec. 404.1594(i)(2) and
416.994(b)(8)(ii) a statement that we will not presume that you are
still disabled if you stop working. This would incorporate the
statutory requirement of section 221(m)(1)(C) into our regulations.
[[Page 66850]]
In new Sec. Sec. 404.1594(i)(3) and 416.994(b)(8)(iii), we explain
how we consider activities from work in all other continuing disability
reviews, that is, if you receive disability benefits under title II but
are not covered by section 221(m) or if you are eligible only for SSI
benefits. The rules would only incorporate into our regulations an
interpretation we already use. Even though we may not consider the work
that you do during your current period of entitlement or eligibility
based on disability to be past relevant work or past work experience,
we do consider the physical and mental activities you do in your work
when we need to assess your functioning (for example, when we assess
your residual functional capacity) in deciding whether your disability
continues or ends. We consider the activities regardless of whether
they support a finding that your disability continues or support a
finding that your disability has ended. (It is only when you are
covered by section 221(m) that we would not consider the activities if
they support a finding that your disability has ended, as explained in
Sec. Sec. 404.1594(i)(2) and 416.994(b)(8)(ii), discussed above.) In
new Sec. Sec. 404.1594(i)(3) and 416.994(b)(8)(iii), therefore, we are
only codifying in our regulations our current practice when you are not
covered by section 221(m).
We concluded that we are required to do this in these cases,
because of the general requirements of the Act and our regulations that
we consider all of the relevant evidence in your case record whenever
we make a determination about your disability. Section 221(m) provides
an explicit exception to this rule, but only for people who are covered
by that section.
We are aware that the provisions in final Sec. Sec. 404.1594(i)(2)
and 416.994(b)(8)(ii) may create a more complex process because we may,
in some cases, be required to disregard information about your work
that would otherwise be evidence about your physical and mental
abilities. We may also be required to undertake additional development
to obtain alternative evidence about your abilities, or to clarify
evidence (such as medical opinion evidence) that may have been based on
information about your activities at work. However, we concluded that
there is no other permissible interpretation of the language of section
221(m)(1)(B).
We are also adding cross-references in several places in existing
Sec. Sec. 404.1594 and 416.994 as a reminder to consider the
provisions in new Sec. Sec. 404.1594(i) and 416.994(b)(8) whenever
appropriate.
Other Changes
We are making a few minor editorial corrections and revisions to
existing provisions. These changes are not substantive and we do not
intend to change the meaning of existing rules in any way by them. For
example, we provide paragraph designations for some of the clauses
within Sec. Sec. 404.1590(b) and 416.990(b) to make them easier to
refer to. We are also deleting the reference to completion of a trial
work period from existing Sec. 416.990(b)(4). There are no trial work
periods under title XVI because of other work incentive provisions in
the Act. When we last revised our regulations to remove references to
the trial work period from the SSI regulations, we inadvertently
overlooked this provision. See 65 FR 42772, 42775 (July 11, 2000). In
addition, we are replacing the word ``decide'' with the word
``determine'' in the heading of Sec. 416.994 to conform to the
language used in the headings of Sec. Sec. 404.1594 and 416.994a.
Public Comments on the Notice of Proposed Rulemaking (NPRM)
When we published the NPRM in the Federal Register on October 11,
2005 (70 FR 58999), we provided interested parties 60 days to submit
comments. We received comments from 13 commenters, including national,
State and community based agencies and private organizations serving
people with disabilities, beneficiaries, and other individuals. We
carefully considered the comments we received on the proposed rules in
publishing these final regulations. The comments we received and our
responses to the comments are set forth below. Although we condensed,
summarized, or paraphrased the comments, we believe that we have
expressed the views accurately and have responded to all of the
significant issues raised.
In addition, a few of the comments were about subjects that were
outside the scope of this rulemaking. We have not summarized and
responded to these comments below.
Comments and Responses
Comment: One commenter wanted us to clarify how the evaluation of
subsidies and special conditions will be performed if work activity
cannot be evaluated when making a substantial gainful activity
determination for the purpose of determining whether disability has
ceased.
Response: Generally, in evaluating the work activity of an employee
for purposes of determining whether the work is substantial gainful
activity, our primary consideration will be the earnings the individual
derives from the work activity. When we evaluate earnings under the
earnings guidelines for determining substantial gainful activity, we
use the actual amount of earnings paid to the individual (subject to
the deduction of impairment-related work expenses) unless we have
information indicating that not all of the earnings are directly
related to the individual's productivity (i.e., the earnings are
subsidized or the work is performed under special conditions). When the
amount of earnings paid to an individual exceed the reasonable value of
the work he or she performs, we consider only that part of the
individual's pay which he or she actually earns. See Sec.
404.1574(a)(2) of our regulations.
When we have evidence indicating that an individual with a serious
medical impairment may not be earning all that he or she is paid, we
will continue to evaluate the work activity performed by the individual
to determine whether, and to what extent, the individual's earnings
exceed the reasonable value of the services performed by the
individual. We will evaluate the work activity to determine the
reasonable value of the actual services the individual performs in
order to determine the amount of earnings we will use when applying the
earnings guidelines. If we did not do this before applying the earnings
guidelines, we could find that an individual with a serious medical
impairment has demonstrated the ability to engage in substantial
gainful activity and, therefore, is no longer disabled, on the basis of
earnings that are in excess of the reasonable value of the actual
services he or she performs. Therefore, we will continue to evaluate
the work activity of an individual in these instances for the purpose
of determining the amount of earnings we will use when applying the
earnings guidelines, even if the individual is covered by section
221(m) of the Act. We believe this is a reasonable interpretation of
sections 221(m)(1)(B) and (2)(B) of the Act.
The changes which we proposed to make to Sec. 404.1574(b), and
which we are adopting in these final rules, do not affect this aspect
of our existing rules in Sec. 404.1574(a)(2) for evaluating whether
the work performed by an employee is substantial gainful activity.
Therefore, we do not believe that there is a need to make changes to
clarify this aspect of our existing rules.
Comment: One commenter was concerned that individuals who are
participating in the Ticket to Work
[[Page 66851]]
program do not understand that the continuing disability review
protection for individuals who are using a ticket does not apply to the
reviews we conduct using the rules in Sec. Sec. 404.1571 through
404.1576.
Response: When we refer to the reviews we conduct using the rules
in Sec. Sec. 404.1571 through 404.1576, we are discussing the
substantial gainful activity determinations we make under Sec. Sec.
404.1592a(a)(1) and 404.1594(d)(5) and (f)(1) (see also Sec.
404.1592a(a)(3)(ii) of these final rules). The latter sections require
us to evaluate the work activity of a title II disability beneficiary
to determine whether the work shows that the individual is able to
engage in substantial gainful activity and, therefore, is no longer
disabled. Our public information materials have clearly explained that
even though a title II disability beneficiary is using a ticket under
the Ticket to Work program, we will still evaluate his or her work
activity to determine whether the work is substantial gainful activity.
We explain in these materials that if the work shows that the
individual is able to do substantial gainful activity, we will
determine that the individual is no longer disabled (after applying any
applicable trial work period). Also, Sec. 411.160(b) of our
regulations for the Ticket to Work program clearly explains that even
though an individual who is using a ticket is protected from a medical
continuing disability review, the individual will still be subject to a
review to determine whether his or her disability has ended under Sec.
404.1594(d)(5) because he or she has demonstrated the ability to engage
in substantial gainful activity.
Comment: A number of commenters recommended that we allow the start
of a continuing disability review to be an initial determination with
appeal rights and/or eliminate the prescribed 12-month period within
which an individual must submit evidence to show that the start of a
continuing disability review was in error because it was precluded
under section 221(m)(1)(A) of the Act.
Response: We did not adopt the recommendations. Because the action
of starting or discontinuing a continuing disability review is not an
adjudication of whether the individual's disability continues or ends,
we do not consider that action to be an initial determination that is
subject to the administrative review process under subpart J of part
404 or subpart N of part 416 of our regulations or to judicial review.
We recognize that beneficiaries may not always know whether they
qualify for the protection against the start of a continuing disability
review based solely on work activity as provided under section
221(m)(1)(A) of the Act. Therefore, we have developed a screening tool
to identify beneficiaries covered by section 221(m) to help prevent the
starting of a continuing disability review based solely on their work
activity. We recognize that the screening tool may not capture every
case and that it is possible that we may start a continuing disability
review solely as a result of a beneficiary's work activity even though
the beneficiary may be protected by the section 221(m)(1)(A) provision.
Should this happen, we will provide an opportunity for the beneficiary
to request that we review the action of starting the continuing
disability review. As we explain earlier in this preamble, we will
inform the individual of this opportunity in the notice we send the
individual which tells him or her that we are starting a medical
continuing disability review. If we review the action and conclude that
the initiation of the continuing disability review was in error because
section 221(m)(1)(A) applies, we will discontinue processing the
continuing disability review. In the event the continuing disability
review is processed to completion and results in a medical cessation
determination, we explain in Sec. Sec. 404.1590(i)(5) and
416.990(i)(4) of these final rules that we will provide the beneficiary
12 months within which to submit evidence to show that the action of
starting the medical continuing disability review was in error because
the beneficiary was protected by section 221(m)(1)(A) of the Act. If we
receive evidence within the prescribed time period that establishes
that the start of the continuing disability review was in error because
of section 221(m)(1)(A), we will vacate the medical cessation
determination and reinstate the individual. This procedure will be
available in addition to any appeal requests on the medical cessation
determination. We believe that the 12-month period is adequate time to
submit evidence that the medical continuing disability review should
not have been started, considering the beneficiary will only have 60
days to appeal the medical cessation determination. Also, we believe
that the situation in which a beneficiary may need to use this
procedure will be rare with the use of the screening tool and the
availability of the aforementioned protest procedure that will be
explained in the notice that we send to the beneficiary telling the
beneficiary that we are starting a continuing disability review.
Comment: Several of the commenters suggested that we make changes
to the criteria relating to the requirement that a title II disability
beneficiary must have received social security disability benefits for
at least 24 months to receive the protections under section 221(m) of
the Act. Specifically, the commenters requested that we allow months
for which a beneficiary does not receive payment of social security
disability benefits due to overpayment recovery or because of worker's
compensation offset, as well as months for which a beneficiary receives
only SSI payments, to be counted for the 24-month requirement.
Response: We agree with the commenters that our rules should allow
months for which a beneficiary is otherwise due a social security
disability benefit to count for the 24-month requirement if the monthly
benefit is withheld to satisfy the beneficiary's obligation to
reimburse us for an overpayment. Because the monthly benefit which is
otherwise due the beneficiary is applied to reduce the beneficiary's
overpayment debt, we believe that a beneficiary in this situation may
be treated as having received a social security disability benefit for
purposes of applying the 24-month requirement. This will allow a social
security disability beneficiary whose monthly benefit is withheld to
recover an overpayment to receive the same consideration for purposes
of the 24-month requirement as a beneficiary who repays an overpayment
by refunding the overpayment amount to us or whose monthly benefit is
subject to partial withholding to recover an overpayment. We have
modified Sec. Sec. 404.1574(b)(3)(iv), 404.1575(e)(2),
404.1590(i)(2)(i), and 416.990(i)(2)(i) of the final rules to provide
that, if a beneficiary is otherwise due a social security disability
benefit for a month and the monthly benefit is withheld to recover an
overpayment, we will consider the beneficiary to have constructively
received a benefit for that month for purposes of the 24-month
requirement. We also have made changes to these sections of the final
rules to provide that months for which a beneficiary has actually
received social security disability benefits that he or she was due, or
for which the beneficiary has constructively received such benefits (as
described above), will be counted for the 24-month requirement.
We cannot adopt the suggestion to allow months for which a
beneficiary does not receive a benefit payment because of worker's
compensation offset to count for the 24-month requirement.
[[Page 66852]]
Because the Act requires a reduction in title II benefits on account of
receipt of worker's compensation or similar payments, we cannot regard
a beneficiary as having received a benefit for purposes of the 24-month
requirement if the application of the worker's compensation offset
results in no monthly benefit being due the beneficiary. This is not
like the situation where the monthly benefit which is otherwise due a
beneficiary is withheld to reduce the beneficiary's overpayment debt
and where the beneficiary would have actually received a benefit
payment had he or she refunded the overpayment amount to us. In
addition, we cannot adopt the suggestion that months for which the
individual receives only SSI payments be counted for the 24-month
requirement. The statute specifically requires receipt of title II
disability benefits for at least 24 months. Therefore, if an individual
is both entitled to title II disability benefits and eligible for SSI
payments based on disability or blindness, we cannot count the months
for which the individual received only SSI payments for the purpose of
determining whether the 24-month requirement is met.
Comment: A few commenters requested that we reconsider our stance
on the interpretation of section 221(m)(1)(c). The commenters were
concerned that our interpretation creates a barrier or disincentive for
a beneficiary to attempt working.
Response: We did not make any changes in the final rules as a
result of the commenters' recommendation. We believe that the language
of section 221(m)(1)(C) of the Act is clear and not susceptible of
another interpretation. Moreover, we do not believe that this
interpretation will create a disincentive for beneficiaries to return
to work.
Section 221(m)(1)(c) of the Act states that ``no cessation of work
activity by the individual may give rise to a presumption that the
individual is unable to engage in work.'' In other words, we will not
presume that a beneficiary is still disabled simply because he or she
stops working. When an individual has a medical continuing disability
review, we apply the medical improvement review standard to determine
whether the individual's disability continues or ends. Section
221(m)(1)(c) clarifies that, when determining whether disability
continues or ends under the medical improvement review standard, we may
not presume that the individual continues to be disabled just because
he or she stopped working. The facts associated with why the individual
stopped work will still be evaluated under the medical improvement
review standard if they support a determination that the individual is
still disabled.
Comment: Several commenters believe the rules associated with the
medical improvement review standard are complex and need to be
simplified for beneficiaries to understand, especially with the
addition of the new rules associated with section 221(m)(1)(B).
Response: We wrote the new rules in Sec. Sec. 404.1594(i) and
416.994(b)(8) relating to the medical improvement review standard in
plain language to make the rules as easy to read and understand as
possible. With the addition of these new rules, we will revise our
public information materials to make sure beneficiaries understand that
activities they perform in work cannot be used to show they are no
longer disabled if they meet the requirements of section 221(m)(1).
Additionally, when we make a determination that an individual is no
longer disabled, we are required to explain the determination in
writing and in plain language. The notice of determination will also
have to explain what evidence was used and, in an appropriate case,
clarify that work activity was not used because the beneficiary was
protected by section 221(m)(1)(B) of the Act.
Comment: A few commenters suggested that we clarify that if a
medical cessation is overturned on appeal, the months for which social
security disability benefits were continued pending the appeal will
count, thereafter, toward the 24-month requirement.
Response: If we conduct a continuing disability review and
determine that the disability of a social security disability
beneficiary has medically ceased, the individual may request benefit
continuation while the medical cessation is being appealed. Because the
individual is being paid under a special provision, we clarify in
Sec. Sec. 404.1590(i)(2)(i) and 416.990(i)(2)(i) of these final rules
that the months for which an individual is receiving benefit
continuation pending reconsideration and/or a hearing before an
administrative law judge on a medical cessation determination will not
count toward the 24-month requirement for section 221(m)(1) purposes.
If the medical cessation is overturned on appeal and our final decision
is that the individual's disability continues, we reinstate the
individual's entitlement to social security disability benefits for the
months in the period during which the medical cessation was being
appealed. Thereafter, these months would be months for which the
individual was entitled to social security disability benefits for
purposes of any future continuing disability reviews. We provide in
final Sec. Sec. 404.1590(i) and 416.990(i) that months for which the
individual was entitled to social security disability benefits and
received such benefits that he or she was due will count for the 24-
month requirement. We believe these provisions of the final rules
adequately address the situation that was of concern to the commenters.
Because the final rules cover the situation, we do not believe further
clarification is necessary.
Changes From the Proposed Rules
In these final rules, we are making certain changes from the
proposed rules. We are making these changes to provide consistency in
wording in parallel provisions of the part 404 and part 416 rules, to
clarify certain provisions contained in the proposed rules, and to
correct certain inappropriate cross-references contained in the
proposed rules.
In Sec. 404.1574(b)(3)(ii) of the final rules, we are revising the
first sentence of this section of the NPRM to parallel the language
used in Sec. 416.974(b)(3)(ii). In Sec. 404.1574(b)(3)(ii) of the
NPRM, we had stated, in part, that we would generally consider other
information in addition to earnings if there was evidence indicating
that the individual is in a position to defer or suppress earnings.
However, our intent was to include in this section the same language we
used in proposed Sec. 416.974(b)(3)(ii). The latter section explained
that we will generally consider other information in addition to
earnings if there is evidence indicating that the individual may be
engaging in substantial gainful activity or that the individual is in a
position to control when earnings are paid or the amount of wages paid.
In the final rules, we include this language in both Sec. Sec.
404.1574(b)(3)(ii) and 416.974(b)(3)(ii).
In Sec. Sec. 404.1590(i)(2)(i) and 416.990(i)(2)(i) of the final
rules, we are switching the order of the last two sentences contained
in these sections of the proposed rules. We are also revising what was
the last sentence of these sections of the proposed rules (and is now
the next-to-last sentence of these sections of the final rules) to
clarify that months for which an individual has social security
disability benefits continued under Sec. 404.1597a pending
reconsideration and/or a hearing before an administrative law judge on
a medical cessation determination will not count toward the 24-month
requirement. In making this revision in
[[Page 66853]]
final Sec. 416.990(i)(2)(i), we changed the cross-reference to Sec.
416.996 (relating to SSI benefit continuation pending appeal of a
medical cessation) that was contained in proposed Sec.
416.990(i)(2)(i). In final Sec. 416.990(i)(2)(i), we substituted a
reference to Sec. 404.1597a, which is the appropriate section of our
regulations that concerns an individual's election of continuation of
social security disability benefits pending an appeal of a medical
cessation determination.
In Sec. Sec. 404.1594(i) and 416.994(b)(8) of these final rules,
we have revised certain cross-references that were contained in these
sections of the proposed rules. For example, in final Sec.
416.994(b)(8)(iii), we have substituted a reference to ``paragraph
(b)(5) of this section'' for the reference to ``paragraph (f) of this
section'' that was contained in proposed Sec. 416.994(b)(8)(iii). The
evaluation steps for the medical improvement review standard for SSI
adult disability cases are contained in paragraph (b)(5) of Sec.
416.994.
Also, in these final rules, we have made a few, minor,
nonsubstantive changes in punctuation and wording from the proposed
rules to improve the clarity of these final regulations.
Regulatory Procedures
Executive Order 12866
We have consulted with the Office of Management and Budget (OMB)
and determined that these final rules meet the criteria for a
significant regulatory action under Executive Order 12866, as amended
by Executive Order 13258. Thus, they were subject to OMB review.
Regulatory Flexibility Act
We certify that these final regulations will not have a significant
economic impact on a substantial number of small entities because they
affect only individuals. Thus, a regulatory flexibility analysis as
provided in the Regulatory Flexibility Act, as amended, is not
required.
Paperwork Reduction Act
These final regulations impose no reporting or recordkeeping
requirements that require OMB clearance.
(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social
Security--Disability Insurance; 96.002, Social Security--Retirement
Insurance; 96.004, Social Security--Survivors Insurance; 96.006,
Supplemental Security Income)
List of Subjects
20 CFR Part 404
Administrative practice and procedure, Blind, Disability benefits,
Old-Age, Survivors and Disability Insurance, Reporting and
recordkeeping requirements, Social Security, Vocational rehabilitation.
20 CFR Part 416
Administrative practice and procedure, Aged, Blind, Disability
benefits, Public assistance programs, Reporting and recordkeeping
requirements, Supplemental Security Income (SSI), Vocational
rehabilitation.
Dated: August 3, 2006.
Jo Anne B. Barnhart,
Commissioner of Social Security.
0
For the reasons set out in the preamble, we are amending subparts J and
P of part 404 and subparts I and N of part 416 of chapter III of title
20 of the Code of Federal Regulations as set forth below.
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950-)
Subpart J--Determinations, Administrative Review Process, and
Reopening of Determinations and Decisions [Amended]
0
1. The authority citation for subpart J continues to read as follows:
Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j),
221, 223(i), 225, and 702(a)(5) of the Social Security Act (42
U.S.C. 401(j), 404(f), 405(a), (b), (d)-(h), and (j), 421, 423(i),
425, and 902(a)(5)); sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42
U.S.C. 405 note); secs. 5, 6(c)-(e), and 15, Pub. L. 98-460, 98
Stat. 1802 (42 U.S.C. 421 note).
0
2. Section 404.903 is amended by removing the word ``and'' at the end
of paragraph (x), replacing the period at the end of paragraph (y) with
``;'', and adding a new paragraph (z) to read as follows:
Sec. 404.903 Administrative actions that are not initial
determinations.
* * * * *
(z) Starting or discontinuing a continuing disability review; and
Subpart P--Determining Disability and Blindness [Amended]
0
3. The authority citation for subpart P is revised to read as follows:
Authority: Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a),
(i), and (m), 222(c), 223, 225, and 702(a)(5) of the Social Security
Act (42 U.S.C. 402, 405(a), (b), and (d)-(h), 416(i), 421(a), (i),
and (m), 422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-
193, 110 Stat. 2105, 2189.
0
4. Section 404.1574 is amended by revising paragraph (b) to read as
follows:
Sec. 404.1574 Evaluation guides if you are an employee.
* * * * *
(b) Earnings guidelines. (1) General. If you are an employee, we
first consider the criteria in paragraph (a) of this section and Sec.
404.1576, and then the guides in paragraphs (b)(2) and (3) of this
section. When we review your earnings to determine if you have been
performing substantial gainful activity, we will subtract the value of
any subsidized earnings (see paragraph (a)(2) of this section) and the
reasonable cost of any impairment-related work expenses from your gross
earnings (see Sec. 404.1576). The resulting amount is the amount we
use to determine if you have done substantial gainful activity. We will
generally average your earnings for comparison with the earnings
guidelines in paragraphs (b)(2) and (3) of this section. See Sec.
404.1574a for our rules on averaging earnings.
(2) Earnings that will ordinarily show that you have engaged in
substantial gainful activity. We will consider that your earnings from
your work activity as an employee (including earnings from work in a
sheltered workshop or a comparable facility especially set up for
severely impaired persons) show that you engaged in substantial gainful
activity if:
(i) Before January 1, 2001, they averaged more than the amount(s)
in Table 1 of this section for the time(s) in which you worked.
(ii) Beginning January 1, 2001, and each year thereafter, they
average more than the larger of:
(A) The amount for the previous year, or
(B) An amount adjusted for national wage growth, calculated by
multiplying $700 by the ratio of the national average wage index for
the year 2 calendar years before the year for which the amount is being
calculated to the national average wage index for the year 1998. We
will then round the resulting amount to the next higher multiple of $10
where such amount is a multiple of $5 but not of $10 and to the nearest
multiple of $10 in any other case.
Table 1
------------------------------------------------------------------------
Your monthly
earnings
For months: averaged more
than:
------------------------------------------------------------------------
In calendar years before 1976........................... $200
In calendar year 1976................................... 230
In calendar year 1977................................... 240
In calendar year 1978................................... 260
In calendar year 1979................................... 280
In calendar years 1980-1989............................. 300
[[Page 66854]]
January 1990-June 1999.................................. 500
July 1999-December 2000................................. 700
------------------------------------------------------------------------
(3) Earnings that will ordinarily show that you have not engaged in
substantial gainful activity.
(i) General. If your average monthly earnings are equal to or less
than the amount(s) determined under paragraph (b)(2) of this section
for the year(s) in which you work, we will generally consider that the
earnings from your work as an employee (including earnings from work in
a sheltered workshop or comparable facility) will show that you have
not engaged in substantial gainful activity. We will generally not
consider other information in addition to your earnings except in the
circumstances described in paragraph (b)(3)(ii) of this section.
(ii) When we will consider other information in addition to your
earnings. We will generally consider other information in addition to
your earnings if there is evidence indicating that you may be engaging
in substantial gainful activity or that you are in a position to
control when earnings are paid to you or the amount of wages paid to
you (for example, if you are working for a small corporation owned by a
relative). (See paragraph (b)(3)(iii) of this section for when we do
not apply this rule.) Examples of other information we may consider
include, whether--
(A) Your work is comparable to that of unimpaired people in your
community who are doing the same or similar occupations as their means
of livelihood, taking into account the time, energy, skill, and
responsibility involved in the work; and
(B) Your work, although significantly less than that done by
unimpaired people, is clearly worth the amounts shown in paragraph
(b)(2) of this section, according to pay scales in your community.
(iii) Special rule for considering earnings alone when evaluating
the work you do after you have received social security disability
benefits for at least 24 months. Notwithstanding paragraph (b)(3)(ii)
of this section, we will not consider other information in addition to
your earnings to evaluate the work you are doing or have done if--
(A) At the time you do the work, you are entitled to social
security disability benefits and you have received such benefits for at
least 24 months (see paragraph (b)(3)(iv) of this section); and
(B) We are evaluating that work to consider whether you have
engaged in substantial gainful activity or demonstrated the ability to
engage in substantial gainful activity for the purpose of determining
whether your disability has ceased because of your work activity (see
Sec. Sec. 404.1592a(a)(1) and (3)(ii) and 404.1594(d)(5) and (f)(1)).
(iv) When we consider you to have received social security
disability benefits for at least 24 months. For purposes of paragraph
(b)(3)(iii) of this section, social security disability benefits means
disability insurance benefits for a disabled worker, child's insurance
benefits based on disability, or widow's or widower's insurance
benefits based on disability. We consider you to have received such
benefits for at least 24 months beginning with the first day of the
first month following the 24th month for which you actually received
social security disability benefits that you were due or constructively
received such benefits. The 24 months do not have to be consecutive. We
will consider you to have constructively received a benefit for a month
for purposes of the 24-month requirement if you were otherwise due a
social security disability benefit for that month and your monthly
benefit was withheld to recover an overpayment. Any months for which
you were entitled to benefits but for which you did not actually or
constructively receive a benefit payment will not be counted for the
24-month requirement. If you also receive supplemental security income
payments based on disability or blindness under title XVI of the Social
Security Act, months for which you received only supplemental security
income payments will not be counted for the 24-month requirement.
* * * * *
0
5. Section 404.1575 is amended by revising paragraphs (a) and (c) and
adding new paragraph (e) to read as follows:
Sec. 404.1575 Evaluation guides if you are self-employed.
(a) If you are a self-employed person. If you are working or have
worked as a self-employed person, we will use the provisions in
paragraphs (a) through (e) of this section that are relevant to your
work activity. We will use these provisions whenever they are
appropriate, whether in connection with your application for disability
benefits (when we make an initial determination on your application and
throughout any appeals you may request), after you have become entitled
to a period of disability or to disability benefits, or both.
(1) How we evaluate the work you do after you have become entitled
to disability benefits. If you are entitled to social security
disability benefits and you work as a self-employed person, the way we
will evaluate your work activity will depend on whether the work
activity occurs before or after you have received such benefits for at
least 24 months and on the purpose of the evaluation. For purposes of
paragraphs (a) and (e) of this section, social security disability
benefits means disability insurance benefits for a disabled worker,
child's insurance benefits based on disability, or widow's or widower's
insurance benefits based on disability. We will use the rules in
paragraph (e)(2) of this section to determine if you have received such
benefits for at least 24 months.
(i) We will use the guides in paragraph (a)(2) of this section to
evaluate any work activity you do before you have received social
security disability benefits for at least 24 months to determine
whether you have engaged in substantial gainful activity, regardless of
the purpose of the evaluation.
(ii) We will use the guides in paragraph (e) of this section to
evaluate any work activity you do after you have received social
security disability benefits for at least 24 months to determine
whether you have engaged in substantial gainful activity for the
purpose of determining whether your disability has ceased because of
your work activity.
(iii) If we have determined under Sec. 404.1592a(a)(1) that your
disability ceased in a month during the reentitlement period because
you performed substantial gainful activity, and we need to decide under
Sec. 404.1592a(a)(2)(i) or (a)(3)(i) whether you are doing substantial
gainful activity in a subsequent month in or after your reentitlement
period, we will use the guides in paragraph (a)(2) of this section
(subject to the limitations described in Sec. 404.1592a(a)(2)(i) and
(a)(3)(i)) to determine whether your work activity in that month is
substantial gainful activity. We will use the guides in paragraph
(a)(2) of this section for these purposes, regardless of whether your
work activity in that month occurs before or after you have received
social security disability benefits for at least 24 months.
(2) General rules for evaluating your work activity if you are
self-employed. We will consider your activities and their value to your
business to decide whether you have engaged in
[[Page 66855]]
substantial gainful activity if you are self-employed. We will not
consider your income alone because the amount of income you actually
receive may depend on a number of different factors, such as capital
investment and profit-sharing agreements. We will generally consider
work that you were forced to stop or reduce to below substantial
gainful activity after 6 months or less because of your impairment as
an unsuccessful work attempt. See paragraph (d) of this section. We
will evaluate your work activity based on the value of your services to
the business regardless of whether you receive an immediate income for
your services. We determine whether you have engaged in substantial
gainful activity by applying three tests. If you have not engaged in
substantial gainful activity under test one, then we will consider
tests two and three. The tests are as follows:
(i) Test one: You have engaged in substantial gainful activity if
you render services that are significant to the operation of the
business and receive a substantial income from the business. Paragraphs
(b) and (c) of this section explain what we mean by significant
services and substantial income for purposes of this test.
(ii) Test Two: You have engaged in substantial gainful activity if
your work activity, in terms of factors such as hours, skills, energy
output, efficiency, duties, and responsibilities, is comparable to that
of unimpaired individuals in your community who are in the same or
similar businesses as their means of livelihood.
(iii) Test Three: You have engaged in substantial gainful activity
if your work activity, although not comparable to that of unimpaired
individuals, is clearly worth the amount shown in Sec. 404.1574(b)(2)
when considered in terms of its value to the business, or when compared
to the salary that an owner would pay to an employee to do the work you
are doing.
* * * * *
(c) What we mean by substantial income. (1) Determining countable
income. We deduct your normal business expenses from your gross income
to determine net income. Once we determine your net income, we deduct
the reasonable value of any significant amount of unpaid help furnished
by your spouse, children, or others. Miscellaneous duties that
ordinarily would not have commercial value would not be considered
significant. We deduct impairment-related work expenses that have not
already been deducted in determining your net income. Impairment-
related work expenses are explained in Sec. 404.1576. We deduct
unincurred business expenses paid for you by another individual or
agency. An unincurred business expense occurs when a sponsoring agency
or another person incurs responsibility for the payment of certain
business expenses, e.g., rent, utilities, or purchases and repair of
equipment, or provides you with equipment, stock, or other material for
the operation of your business. We deduct soil bank payments if they
were included as farm income. That part of your income remaining after
we have made all applicable deductions represents the actual value of
work performed. The resulting amount is the amount we use to determine
if you have done substantial gainful activity. For purposes of this
section, we refer to this amount as your countable income. We will
generally average your countable income for comparison with the
earnings guidelines in Sec. 404.1574(b)(2). See Sec. 404.1574a for
our rules on averaging of earnings.
(2) When countable income is considered substantial. We will
consider your countable income to be substantial if--
(i) It averages more than the amounts described in Sec.
404.1574(b)(2); or
(ii) It averages less than the amounts described in Sec.
404.1574(b)(2) but it is either comparable to what it was before you
became seriously impaired if we had not considered your earnings or is
comparable to that of unimpaired self-employed persons in your
community who are in the same or a similar business as their means of
livelihood.
* * * * *
(e) Special rules for evaluating the work you do after you have
received social security disability benefits for at least 24 months.
(1) General. We will apply the provisions of this paragraph to evaluate
the work you are doing or have done if, at the time you do the work,
you are entitled to social security disability benefits and you have
received such benefits for at least 24 months. We will apply the
provisions of this paragraph only when we are evaluating that work to
consider whether you have engaged in substantial gainful activity or
demonstrated the ability to engage in substantial gainful activity for
the purpose of determining whether your disability has ceased because
of your work activity (see Sec. Sec. 404.1592a(a)(1) and (3)(ii) and
404.1594(d)(5) and (f)(1)). We will use the countable income test
described in paragraph (e)(3) of this section to determine whether the
work you do after you have received such benefits for at least 24
months is substantial gainful activity or demonstrates the ability to
do substantial gainful activity. We will not consider the services you
perform in that work to determine that the work you are doing shows
that you are able to engage in substantial gainful activity and are,
therefore, no longer disabled. However, we may consider the services
you perform to determine that you are not doing substantial gainful
activity. We will generally consider work that you were forced to stop
or reduce below substantial gainful activity after 6 months or less
because of your impairment as an unsuccessful work attempt. See
paragraph (d) of this section.
(2) The 24-month requirement. For purposes of paragraphs (a)(1) and
(e) of this section, we consider you to have received social security
disability benefits for at least 24 months beginning with the first day
of the first month following the 24th month for which you actually
received social security disability benefits that you were due or
constructively received such benefits. The 24 months do not have to be
consecutive. We will consider you to have constructively received a
benefit for a month for purposes of the 24-month requirement if you
were otherwise due a social security disability benefit for that month
and your monthly benefit was withheld to recover an overpayment. Any
months for which you were entitled to benefits but for which you did
not actually or constructively receive a benefit payment will not be
counted for the 24-month requirement. If you also receive supplemental
security income payments based on disability or blindness under title
XVI of the Social Security Act, months for which you received only
supplemental security income payments will not be counted for the 24-
month requirement.
(3) Countable income test. We will compare your countable income to
the earnings guidelines in Sec. 404.1574(b)(2) to determine if you
have engaged in substantial gainful activity. See paragraph (c)(1) of
this section for an explanation of countable income. We will consider
that you have engaged in substantial gainful activity if your monthly
countable income averages more than the amounts described in Sec.
404.1574(b)(2) for the month(s) in which you work, unless the evidence
shows that you did not render significant services in the month(s). See
paragraph (b) of this section for what we mean by significant services.
If your average monthly countable income is equal to or less than the
amounts in
[[Page 66856]]
Sec. 404.1574(b)(2) for the month(s) in which you work, or if the
evidence shows that you did not render significant services in the
month(s), we will consider that your work as a self-employed person
shows that you have not engaged in substantial gainful activity.
0
6. Section 404.1590 is amended by adding three new sentences to the end
of paragraph (a), revising paragraph (b) introductory text and
paragraphs (b)(6), (b)(7)(i), and (b)(8), and adding new paragraphs (h)
and (i) to read as follows:
Sec. 404.1590 When and how often we will conduct a continuing
disability review.
(a) General. * * * In paragraphs (b) through (g) of this section,
we explain when and how often we conduct continuing disability reviews
for most individuals. In paragraph (h) of this section, we explain
special rules for some individuals who are participating in the Ticket
to Work program. In paragraph (i) of this section, we explain special
rules for some individuals who work.
(b) When we will conduct a continuing disability review. Except as
provided in paragraphs (h) and (i) of this section, we will start a
continuing disability review if--
* * * * *
(6) You tell us that--
(i) You have recovered from your disability; or
(ii) You have returned to work;
(7) * * *
(i) The services have been completed; or
* * * * *
(8) Someone in a position to know of your physical or mental
condition tells us any of the following, and it appears that the report
could be substantially correct:
(i) You are not disabled; or
(ii) You are not following prescribed treatment; or
(iii) You have returned to work; or
(iv) You are failing to follow the provisions of the Social
Security Act or these regulations;
* * * * *
(h) If you are participating in the Ticket to Work program. If you
are participating in the Ticket to Work program, we will not start a
continuing disability review during the period in which you are using a
ticket. However, this provision does not apply to reviews we conduct
using the rules in Sec. Sec. 404.1571-404.1576 to determine whether
the work you have done shows that you are able to do substantial
gainful activity and are, therefore, no longer disabled. See subpart C
of part 411 of this chapter.
(i) If you are working and have received social security disability
benefits for at least 24 months.
(1) General. Notwithstanding the provisions in paragraphs (b)(4),
(b)(5), (b)(6)(ii), (b)(7)(ii), and (b)(8)(iii) of this section, we
will not start a continuing disability review based solely on your work
activity if--
(i) You are currently entitled to disability insurance benefits as
a disabled worker, child's insurance benefits based on disability, or
widow's or widower's insurance benefits based on disability; and
(ii) You have received such benefits for at least 24 months (see
paragraph (i)(2) of this section).
(2) The 24-month requirement.
(i) The months for which you have actually received disability
insurance benefits as a disabled worker, child's insurance benefits
based on disability, or widow's or widower's insurance benefits based
on disability that you were due, or for which you have constructively
received such benefits, will count for the 24-month requirement under
paragraph (i)(1)(ii) of this section, regardless of whether the months
were consecutive. We will consider you to have constructively received
a benefit for a month for purposes of the 24-month requirement if you
were otherwise due a social security disability benefit for that month
and your monthly benefit was withheld to recover an overpayment. Any
month for which you were entitled to benefits but for which you did not
actually or constructively receive a benefit payment will not be
counted for the 24-month requirement. Months for which your social
security disability benefits are continued under Sec. 404.1597a
pending reconsideration and/or a hearing before an administrative law
judge on a medical cessation determination will not be counted for the
24-month requirement. If you also receive supplemental security income
payments based on disability or blindness under title XVI of the Social
Security Act, months for which you received only supplemental security
income payments will not be counted for the 24-month requirement.
(ii) In determining whether paragraph (i)(1) of this section
applies, we consider whether you have received disability insurance
benefits as a disabled worker, child's insurance benefits based on
disability, or widow's or widower's insurance benefits based on
disability for at least 24 months as of the date on which we start a
continuing disability review. For purposes of this provision, the date
on which we start a continuing disability review is the date on the
notice we send you that tells you that we are beginning to review your
disability case.
(3) When we may start a continuing disability review even if you
have received social security disability benefits for at least 24
months. Even if you meet the requirements of paragraph (i)(1) of this
section, we may still start a continuing disability review for a
reason(s) other than your work activity. We may start a continuing
disability review if we have scheduled you for a periodic review of
your continuing disability, we need a current medical or other report
to see if your disability continues, we receive evidence which raises a
question as to whether your disability continues, or you fail to follow
the provisions of the Social Security Act or these regulations. For
example, we will start a continuing disability review when you have
been scheduled for a medical improvement expected diary review, and we
may start a continuing disability review if you failed to report your
work to us.
(4) Reviews to determine whether the work you have done shows that
you are able to do substantial gainful activity. Paragraph (i)(1) of
this section does not apply to reviews we conduct using the rules in
Sec. Sec. 404.1571-404.1576 to determine whether the work you have
done shows that you are able to do substantial gainful activity and
are, therefore, no longer disabled.
(5) Erroneous start of the continuing disability review. If we
start a continuing disability review based solely on your work activity
that results in a medical cessation determination, we will vacate the
medical cessation determination if--
(i) You provide us evidence that establishes that you met the
requirements of paragraph (i)(1) of this section as of the date of the
start of your continuing disability review and that the start of the
review was erroneous; and
(ii) We receive the evidence within 12 months of the date of the
notice of the initial determination of medical cessation.
0
7. Section 404.1592a is amended by revising the second sentence of
paragraph (a)(1), the sixth sentence of paragraph (a)(2)(i), and
paragraph (a)(3) to read as follows:
Sec. 404.1592a The reentitlement period.
(a) * * *
(1) * * * When we decide whether this work is substantial gainful
activity, we will apply all of the relevant provisions of Sec. Sec.
404.1571-404.1576 including, but not limited to, the provisions for
averaging earnings,
[[Page 66857]]
unsuccessful work attempts, and deducting impairment-related work
expenses, as well as the special rules for evaluating the work you do
after you have received disability benefits for at least 24 months. * *
*
(2)(i) * * * Once we have determined that your disability has
ceased during the reentitlement period because of the performance of
substantial gainful activity as explained in paragraph (a)(1) of this
section, we will not apply the provisions of Sec. Sec. 404.1574(c) and
404.1575(d) regarding unsuccessful work attempts, the provisions of
Sec. 404.1574a regarding averaging of earnings, or the special rules
in Sec. Sec. 404.1574(b)(3)(iii) and 404.1575(e) for evaluating the
work you do after you have received disability benefits for at least 24
months, to determine whether benefits should be paid for any particular
month in the reentitlement period that occurs after the month your
disability ceased.
* * * * *
(3) The way we will consider your work activity after your
reentitlement period ends (see paragraph (b)(2) of this section) will
depend on whether you worked during the reentitlement period and if you
did substantial gainful activity.
(i) If you worked during the reentitlement period and we decided
that your disability ceased during the reentitlement period because of
your work under paragraph (a)(1) of this section, we will find that
your entitlement to disability benefits terminates in the first month
in which you engaged in substantial gainful activity after the end of
the reentitlement period (see Sec. 404.325). (See Sec. 404.321 for
when entitlement to a period of disability ends.) When we make this
determination, we will consider only your work in, or earnings for,
that month; we will not apply the provisions of Sec. Sec. 404.1574(c)
and 404.1575(d) regarding unsuccessful work attempts, the provisions of
Sec. 404.1574a regarding averaging of earnings, or the special rules
in Sec. Sec. 404.1574(b)(3)(iii) and 404.1575(e) for evaluating the
work you do after you have received disability benefits for at least 24
months.
(ii) If we did not find that your disability ceased because of work
activity during the reentitlement period, we will apply all of the
relevant provisions of Sec. Sec. 404.1571-404.1576 including, but not
limited to, the provisions for averaging earnings, unsuccessful work
attempts, and deducting impairment-related work expenses, as well as
the special rules for evaluating the work you do after you have
received disability benefits for at least 24 months, to determine
whether your disability ceased because you performed substantial
gainful activity after the reentitlement period. If we find that your
disability ceased because you performed substantial gainful activity in
a month after your reentitlement period ended, you will be paid
benefits for the month in which your disability ceased and the two
succeeding months. After those three months, your entitlement to a
period of disability or to disability benefits terminates (see
Sec. Sec. 404.321 and 404.325).
* * * * *
0
8. Section 404.1594 is amended by adding a new sentence to the end of
paragraph (b) introductory text, adding a sentence to paragraph (c)
introductory text immediately following the first sentence, revising
the third sentence of paragraph (f) introductory text and adding a new
fourth sentence, and adding a new paragraph (i) to read as follows:
Sec. 404.1594 How we will determine whether your disability continues
or ends.
* * * * *
(b) Terms and definitions. * * * In addition, see paragraph (i) of
this section if you work during your current period of entitlement
based on disability or during certain other periods.
* * * * *
(c) Determining medical improvement and its relationship to your
abilities to do work. * * * (In addition, see paragraph (i) of this
section if you work during your current period of entitlement based on
disability or during certain other periods.) * * *
* * * * *
(f) Evaluation steps. * * * The steps are as follows. (See
paragraph (i) of this section if you work during your current period of
entitlement based on disability or during certain other periods.)
* * * * *
(i) If you work during your current period of entitlement based on
disability or during certain other periods. (1) We will not consider
the work you are doing or have done during your current period of
entitlement based on disability (or, when determining whether you are
entitled to expedited reinstatement of benefits under section 223(i) of
the Act, the work you are doing or have done during or after the
previously terminated period of entitlement referred to in section
223(i)(1)(B) of the Act) to be past relevant work under paragraph
(f)(7) of this section or past work experience under paragraph (f)(8)
of this section. In addition, if you are currently entitled to
disability benefits under title II of the Social Security Act, we may
or may not consider the physical and mental activities that you perform
in the work you are doing or have done during your current period of
entitlement based on disability, as explained in paragraphs (i)(2) and
(3) of this section.
(2) If you are currently entitled to disability insurance benefits
as a disabled worker, child's insurance benefits based on disability,
or widow's or widower's insurance benefits based on disability under
title II of the Social Security Act, and at the time we are making a
determination on your case you have received such benefits for at least
24 months, we will not consider the activities you perform in the work
you are doing or have done during your current period of entitlement
based on disability if they support a finding that your disability has
ended. (We will use the rules in Sec. 404.1590(i)(2) to determine
whether the 24-month requirement is met.) However, we will consider the
activities you do in that work if they support a finding that your
disability continues or they do not conflict with a finding that your
disability continues. We will not presume that you are still disabled
if you stop working.
(3) If you are not a person described in paragraph (i)(2) of this
section, we will consider the activities you perform in your work at
any of the evaluation steps in paragraph (f) of this section at which
we need to assess your ability to function.
PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND
DISABLED
Subpart I--Determining Disability and Blindness [Amended]
0
9. The authority citation for subpart I of part 416 is revised to read
as follows:
Authority: Secs. 221(m), 702(a)(5), 1611, 1614, 1619, 1631(a),
(c), (d)(1), and (p), and 1633 of the Social Security Act (42 U.S.C.
421(m), 902(a)(5), 1382, 1382c, 1382h, 1383(a), (c), (d)(1), and
(p), and 1383(b); secs. 4(c) and 5, 6(c)-(e), 14(a), and 15, Pub. L.
98-460, 98 Stat. 1794, 1801, 1802, and 1808 (42 U.S.C. 421 note, 423
note, 1382h note).
0
10. Section 416.974 is amended by revising paragraph (b) to read as
follows:
Sec. 416.974 Evaluation guides if you are an employee.
* * * * *
(b) Earnings guidelines. (1) General. If you are an employee, we
first consider the criteria in paragraph (a) of this section and Sec.
416.976, and then the guides in paragraphs (b)(2) and (3) of
[[Page 66858]]
this section. When we review your earnings to determine if you have
been performing substantial gainful activity, we will subtract the
value of any subsidized earnings (see paragraph (a)(2) of this section)
and the reasonable cost of any impairment-related work expenses from
your gross earnings (see Sec. 416.976). The resulting amount is the
amount we use to determine if you have done substantial gainful
activity. We will generally average your earnings for comparison with
the earnings guidelines in paragraphs (b)(2) and (3) of this section.
See Sec. 416.974a for our rules on averaging earnings.
(2) Earnings that will ordinarily show that you have engaged in
substantial gainful activity. We will consider that your earnings from
your work activity as an employee (including earnings from work in a
sheltered workshop or a comparable facility especially set up for
severely impaired persons) show that you have engaged in substantial
gainful activity if:
(i) Before January 1, 2001, they averaged more than the amount(s)
in Table 1 of this section for the time(s) in which you worked.
(ii) Beginning January 1, 2001, and each year thereafter, they
average more than the larger of:
(A) The amount for the previous year, or
(B) An amount adjusted for national wage growth, calculated by
multiplying $700 by the ratio of the national average wage index for
the year 2 calendar years before the year for which the amount is being
calculated to the national average wage index for the year 1998. We
will then round the resulting amount to the next higher multiple of $10
where such amount is a multiple of $5 but not of $10 and to the nearest
multiple of $10 in any other case.
Table 1
------------------------------------------------------------------------
Your monthly
earnings
For months: averaged more
than:
------------------------------------------------------------------------
In calendar years before 1976........................... $200
In calendar year 1976................................... 230
In calendar year 1977................................... 240
In calendar year 1978................................... 260
In calendar year 1979................................... 280
In calendar years 1980-1989............................. 300
January 1990-June 1999.................................. 500
July 1999-December 2000................................. 700
------------------------------------------------------------------------
(3) Earnings that will ordinarily show that you have not engaged in
substantial gainful activity.
(i) General. If your average monthly earnings are equal to or less
than the amount(s) determined under paragraph (b)(2) of this section
for the year(s) in which you work, we will generally consider that the
earnings from your work as an employee (including earnings from work in
a sheltered workshop or comparable facility) will show that you have
not engaged in substantial gainful activity. We will generally not
consider other information in addition to your earnings except in the
circumstances described in paragraph (b)(3)(ii) of this section.
(ii) When we will consider other information in addition to your
earnings. Unless you meet the criteria set forth in section 416.990 (h)
and (i), we will generally consider other information in addition to
your earnings if there is evidence indicating that you may be engaging
in substantial gainful activity or that you are in a position to
control when earnings are paid to you or the amount of wages paid to
you (for example, if you are working for a small corporation owned by a
relative). Examples of other information we may consider include,
whether--
(A) Your work is comparable to that of unimpaired people in your
community who are doing the same or similar occupations as their means
of livelihood, taking into account the time, energy, skill, and
responsibility involved in the work; and
(B) Your work, although significantly less than that done by
unimpaired people, is clearly worth the amounts shown in paragraph
(b)(2) of this section, according to pay scales in your community.
* * * * *
0
11. Section 416.990 is amended by adding three new sentences to the end
of paragraph (a), revising paragraph (b) introductory text and
paragraphs (b)(4), (b)(6), and (b)(8), and adding new paragraphs (h)
and (i) to read as follows:
Sec. 416.990 When and how often we will conduct a continuing
disability review.
(a) General. * * * In paragraphs (b) through (g) of this section,
we explain when and how often we conduct continuing disability reviews
for most individuals. In paragraph (h) of this section, we explain
special rules for some individuals who are participating in the Ticket
to Work program. In paragraph (i) of this section, we explain special
rules for some individuals who work and have received social security
benefits as well as supplemental security income payments.
(b) When we will conduct a continuing disability review. Except as
provided in paragraphs (h) and (i) of this section, we will start a
continuing disability review if--
* * * * *
(4) You return to work;
* * * * *
(6) You tell us that--
(i) You have recovered from your disability; or
(ii) You have returned to work;
* * * * *
(8) Someone in a position to know of your physical or mental
condition tells us any of the following, and it appears that the report
could be substantially correct:
(i) You are not disabled or blind; or
(ii) You are not following prescribed treatment; or
(iii) You have returned to work; or
(iv) You are failing to follow the provisions of the Social
Security Act or these regulations;
* * * * *
(h) If you are participating in the Ticket to Work program. If you
are participating in the Ticket to Work program, we will not start a
continuing disability review during the period in which you are using a
ticket. See subpart C of part 411 of this chapter.
(i) If you are working and have received social security disability
benefits for at least 24 months.
(1) General. Notwithstanding the provisions in paragraphs (b)(4),
(b)(5), (b)(6)(ii), (b)(7)(ii), and (b)(8)(iii) of this section, we
will not start a continuing disability review based solely on your work
activity if--
(i) You are currently entitled to disability insurance benefits as
a disabled worker, child's insurance benefits based on disability, or
widow's or widower's insurance benefits based on disability under title
II of the Social Security Act (see subpart D of part 404 of this
chapter); and
(ii) You have received such benefits for at least 24 months (see
paragraph (i)(2) of this section).
(2) The 24-month requirement. (i) The months for which you have
actually received disability insurance benefits as a disabled worker,
child's insurance benefits based on disability, or widow's or widower's
insurance benefits based on disability that you were due under title II
of the Social Security Act, or for which you have constructively
received such benefits, will count for the 24-month requirement under
paragraph (i)(1)(ii) of this section, regardless of whether the months
were consecutive. We will consider you to have constructively received
a benefit for a month for purposes of the 24-month requirement if you
were otherwise due a social security disability benefit for
[[Page 66859]]
that month and your monthly benefit was withheld to recover an
overpayment. Any month for which you were entitled to social security
disability benefits but for which you did not actually or
constructively receive a benefit payment will not be counted for the
24-month requirement. Months for which your social security disability
benefits are continued under Sec. 404.1597a pending reconsideration
and/or a hearing before an administrative law judge on a medical
cessation determination will not be counted for the 24-month
requirement. Months for which you received only supplemental security
income payments will not be counted for the 24-month requirement.
(ii) In determining whether paragraph (i)(1) of this section
applies, we consider whether you have received disability insurance
benefits as a disabled worker, child's insurance benefits based on
disability, or widow's or widower's insurance benefits based on
disability under title II of the Social Security Act for at least 24
months as of the date on which we start a continuing disability review.
For purposes of this provision, the date on which we start a continuing
disability review is the date on the notice we send you that tells you
that we are beginning to review your disability case.
(3) When we may start a continuing disability review even if you
have received social security disability benefits for at least 24
months. Even if you meet the requirements of paragraph (i)(1) of this
section, we may still start a continuing disability review for a
reason(s) other than your work activity. We may start a continuing
disability review if we have scheduled you for a periodic review of
your continuing disability, we need a current medical or other report
to see if your disability continues, we receive evidence which raises a
question as to whether your disability or blindness continues, or you
fail to follow the provisions of the Social Security Act or these
regulations. For example, we will start a continuing disability review
when you have been scheduled for a medical improvement expected diary
review, and we may start a continuing disability review if you failed
to report your work to us.
(4) Erroneous start of the continuing disability review. If we
start a continuing disability review based solely on your work activity
that results in a medical cessation determination, we will vacate the
medical cessation determination if--
(i) You provide us evidence that establishes that you met the
requirements of paragraph (i)(1) of this section as of the date of the
start of your continuing disability review and that the start of the
review was erroneous; and
(ii) We receive the evidence within 12 months of the date of the
notice of the initial determination of medical cessation.
0
12. Section 416.994 is amended by revising the section heading, adding
a new sentence to the end of paragraph (b)(1) introductory text, adding
a sentence to paragraph (b)(2) introductory text immediately following
the first sentence, revising the third sentence of paragraph (b)(5)
introductory text and adding a new sentence to the end of the
paragraph, and adding a new paragraph (b)(8) to read as follows:
Sec. 416.994 How we will determine whether your disability continues
or ends, disabled adults.
* * * * *
(b) Disabled persons age 18 or over (adults). * * *
(1) Terms and definitions. * * * In addition, see paragraph (b)(8)
of this section if you work during your current period of eligibility
based on disability or during certain other periods.
* * * * *
(2) Determining medical improvement and its relationship to your
abilities to do work.
* * * (In addition, see paragraph (b)(8) of this section if you
work during your current period of eligibility based on disability or
during certain other periods.) * * *
* * * * *
(5) Evaluation steps. * * * The steps are as follows. (See
paragraph (b)(8) of this section if you work during your current period
of eligibility based on disability or during certain other periods.)
* * * * *
(8) If you work during your current period of eligibility based on
disability or during certain other periods.
(i) We will not consider the work you are doing or have done during
your current period of eligibility based on disability (or, when
determining whether you are eligible for expedited reinstatement of
benefits under section 1631(p) of the Act, the work you are doing or
have done during or after the previously terminated period of
eligibility referred to in section 1631(p)(1)(B) of the Act) to be past
relevant work under paragraph (b)(5)(vi) of this section or past work
experience under paragraph (b)(5)(vii) of this section. In addition, if
you are currently entitled to disability benefits under title II of the
Social Security Act, we may or may not consider the physical and mental
activities that you perform in the work you are doing or have done
during your current period of entitlement based on disability, as
explained in paragraphs (b)(8)(ii) and (iii) of this section.
(ii) If you are currently entitled to disability insurance benefits
as a disabled worker, child's insurance benefits based on disability,
or widow's or widower's insurance benefits based on disability under
title II of the Social Security Act, and at the time we are making a
determination on your case you have received such benefits for at least
24 months, we will not consider the activities you perform in the work
you are doing or have done during your current period of entitlement
based on disability if they support a finding that your disability has
ended. (We will use the rules in Sec. 416.990(i)(2) to determine
whether the 24-month requirement is met.) However, we will consider the
activities you do in that work if they support a finding that your
disability continues or they do not conflict with a finding that your
disability continues. We will not presume that you are still disabled
if you stop working.
(iii) If you are not a person described in paragraph (b)(8)(ii) of
this section, we will consider the activities you perform in your work
at any of the evaluation steps in paragraph (b)(5) of this section at
which we need to assess your ability to function. However, we will not
consider the work you are doing or have done during your current period
of eligibility based on disability (or, when determining whether you
are eligible for expedited reinstatement of benefits under section
1631(p) of the Act, the work you are doing or have done during or after
the previously terminated period of eligibility referred to in section
1631(p)(1)(B) of the Act) to be past relevant work under paragraph
(b)(5)(vi) of this section or past work experience under paragraph
(b)(5)(vii) of this section.
* * * * *
Subpart N--Determinations, Administrative Review Process, and
Reopening of Determinations and Decisions [Amended]
0
13. The authority citation for subpart N continues to read as follows:
Authority: Secs. 702(a)(5), 1631, and 1633 of the Social
Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b).
0
14. Section 416.1403 is amended by removing the word ``and'' at the end
of paragraph (a)(22), replacing the period at the end of paragraph
(a)(23) with ``;
[[Page 66860]]
and'', and adding new paragraph (a)(24) to read as follows:
Sec. 416.1403 Administrative actions that are not initial
determinations.
(a) * * *
(24) Starting or discontinuing a continuing disability review; and
* * * * *
[FR Doc. E6-19255 Filed 11-16-06; 8:45 am]
BILLING CODE 4191-02-P