The Social Security Administration administers two types of federally funded disability programs under the Social Security Act: Disability Insurance (Title 2) and Supplemental Security Income (Title 16). The Title 2 program is limited to workers who have paid into the Social Security system by way of the Federal Insurance Contributions Act tax and who have earned enough “credits” to be insured for a disability claim. The Title 16 program is available to any disabled worker with limited income and resources. The income and resource limits are set by the Social Security Act, but generally, for Title 16 (SSI) eligibility, an unmarried individual person cannot have more than $2,000 in “countable” resources and no more than $1,767.00 per month in earned income for individuals (2022 values).
Some disabled workers may be dual eligible by way of both having earned enough Social Security “credits” under the Title 2 program and having limited income and resources under the Title 16 program. Nevertheless, the disability evaluation process is the same under both programs. Social Security uses a “five-step sequential evaluation process” at all levels of the agency adjudication and appeals proceedings to determine whether an applicant is “disabled” under the Social Security disability programs. Applicants for disability can be found disabled, or approved, at Step 3 or Step 5 of the sequential evaluation process as described below, but can be denied disability at Step 1, 2, 4, and 5 of the sequential evaluation process.
At Step 1 of the sequential evaluation process, Social Security must first make a determination of whether the applicant is engaged in “Substantial Gainful Activity” (SGA) or has been engaged in SGA since the applicant’s alleged onset date of disability. If they are, then the federal regulations direct a finding of “not disabled” for that period of time they are engaged in SGA, regardless of the applicant’s medical condition, diagnosis, or prognosis.
What constitutes SGA depends on whether the applicant is self-employed, or is employed by someone else, as in the case of a person who receives a W-2 from their employer at the end of the year. The SGA rules for self-employed individuals are complex as there are three different “tests” the agency uses for determining whether a self-employed individual is engaged in SGA, with one test in particular looking not at actual earnings, but at the amount of time the individual expended at the job. For W-2 employees, Social Security has published the SGA amount for each year of potential earnings from 1975 to the present year, and the amount increases annually according to changes in the national average wage index. For 2022, earnings of at least $1,350 per month are considered “SGA” for non-blind individuals. For example, if an applicant applied in 2022 for Social Security disability, but had monthly earnings of $1,350 or more, then the federal regulations direct a finding of “not disabled”.
To make this Step 1 determination, Social Security refers to its own internal reports that it generates from IRS tax records it receives on a quarterly basis, including “new hire” reports, as well as the admissions of the Applicant. All applicants for disability are required to report their work history for the 15 years prior to the onset of their disability in their application and at multiple stages throughout the adjudication process. They are also asked upon initial application, to swear, under penalty of perjury, whether they have reviewed their earnings record with Social Security and whether it is accurate. Because the source of the Social Security Administration’s earnings record for every worker are the IRS tax records, any payments that a worker does not report to the IRS will also not be contained in Social Security’s earnings records. This is especially the case with “under the table” payments to workers and employees; workers who fail to file tax returns; or workers who falsify their earnings on their tax records to minimize their tax liability. Unfortunately, a direct consequence of this behavior is reduced Social Security benefits as the benefit amount is directly tied to a worker’s tax payment history, or worse, ineligibility for the disability program due to a lack of earned “credits”.
At Step 2 of the sequential evaluation process, Social Security must determine whether the applicant has a “medically determinable impairment” that is “severe”. This is defined as a physical or mental condition that causes more than a minimal limitation on the individual’s ability to function and that has lasted, or is expected to last more than 12 months. To make this determination, Social Security obtains the medical records of the applicant and compares the medical evidence in those records to the allegations made by the applicant concerning their disability.
Upon application, the actual determination at Step 2 is made by physicians employed by the agency and Social Security will make a determination that an applicant has a medically determinable impairment based only upon medical reports received from “acceptable medical sources”. Those acceptable medical sources include licensed physicians, licensed psychologists, licensed optometrists, licensed podiatrists, licensed advanced practice registered nurses, and licensed physician’s assistants. In sum, a medical expert makes the Step 2 determination based on the reports of other medical experts. At the hearing level of the appeals process (discussed in detail below), the Administrative Law Judge often adopts these findings by the agency physicians at the application level, or obtains the opinion of a disinterested medical expert testifying at the hearing. If the applicant is determined to have at least one severe medically determinable impairment, the disability evaluation proceeds to Step 3 of the process. Otherwise, the applicant is denied at Step 2 if there is no medical evidence from an acceptable medical source of a “severe medically determinable impairment”.
At Step 3 of the sequential evaluation process, Social Security determines whether the applicant’s severe medically determinable impairment(s) “meets or equals” one of their “listing of impairments” for adults. These listings, and their severity level criteria, for purposes of establishing a “disabling” severe medically determinable impairment, are published in the federal regulations and change from time to time. For example, the listing of impairments for a musculoskeletal condition such as spine and joint conditions, underwent significant changes in 2021, making it increasingly more difficult for an applicant to “meet” a listing for a back or joint impairment if they had no medically documented need for a wheelchair or handheld assistive device such as a cane or walker.
The determination of whether an applicant meets or equals a listing is again made by a physician employed by the agency at the application level, or a medical expert testifying at a hearing. If the medical expert determines that the individual’s impairment does not meet or equal a listing, then the agency must next determine the applicant’s “residual functional capacity” (RFC). Informally, the agency refers to this as “Step 3 ½” as it is a necessary precursor to the vocational disability determinations made at Step 4 and 5 of the sequential evaluation process.
The RFC is an assessment of the applicant’s maximum capacity for the various physical and mental demands of any job given the individual’s underlying medical condition or “severe medically determinable impairment”. For example, an RFC is generally expressed as the maximum amount of time, in an 8-hour work day, that the individual can do certain physical activities such as sit, stand, walk, push, pull, climb, reach in all directions, etc., and/or whether they can respond to the normal social pressures and demands of employers, co-workers, and customers, and/or whether they have the skills for certain types of jobs (unskilled verses semi-skilled vs skilled jobs). These assessments are generally also made by medical experts but can also be made by certain adjudicators such as Administrative Law Judges.
However, the adjudicator or ALJ’s RFC assessment must be based on evidence in the medical record from acceptable medical sources. The applicant’s own subjective complaints or testimony concerning the severity of their condition and symptoms are insufficient for an RFC finding. In fact, although a claimant for disability is permitted to freely testify at a hearing about their perceptions of the severity of their own condition and their symptoms, the ALJ is not required to take these statements at face value, and is required, by law, to assess the claimant’s credibility as to the statements they make. This credibility assessment is made by comparing the claimant’s statements to the objective medical evidence contained in the record.
At Step 4 of the sequential evaluation process, the agency determines the applicant’s “Past Relevant Work” (PRW) and whether, given their RFC, the applicant can perform this work as they performed it, or as that job is normally performed in the national economy. The agency uses vocational experts (VEs) to make this determination. At the application level, vocational experts are employed by the agency to review the applicant’s work history and assess the type of job they worked and the physical and mental demands of that job using the Dictionary of Occupational Titles (an ancient publication by the U.S. Department of Labor Employment and Training Administration) as well as their own education and experience. Vocational experts are required to have a master’s level education and most have extensive past experience with social welfare programs aimed at rehabilitating and placing disabled workers in the job market.
At the hearing, ALJs use disinterested vocational experts to testify and assess the applicant’s work history based on a review of the evidence in the record and listening to the testimony of the applicant about how they performed their job, how long they worked at their job, how much they earned, and their educational level. The vocational expert also opines on whether, based on a hypothetical RFC posited by the ALJ and the expert’s assessment of any PRW, the applicant can perform the demands of their PRW. If the VE testifies or opines that the applicant can perform PRW, then the regulations direct a finding of “not disabled”.
For example, if the applicant has an RFC for unskilled, “light” duty work (standing and walking maximum 6 hours out of an 8-hour day and sitting at least 2 hours), but has PRW of unskilled sedentary work (sit/stand no more than 2 hours and sitting at least 6 hours of an 8-hour work day), then they are not disabled because the RFC does not preclude, or prevent them from returning to their PRW. If, however, the opposite was true—RFC of sedentary and light PRW—then the analysis would proceed to the final, fifth step of the sequential evaluation process because such an RFC would preclude PRW.
At Step 5 of the sequential evaluation process, and after the applicant has been found unable to perform their PRW, the agency must still determine whether the applicant can perform any other jobs in the national economy given their age, education, PRW, and RFC. At this step, the decision can be very fact dependent, especially depending upon the age of the applicant as the agency uses “grid rules” for efficiency in administrative decisionmaking. These “grid rules” become mostly relevant when a disability applicant reaches the age of 50 because the adjudicator can plug in facts like the person’s age, education, PRW, RFC, and transferability of any job skills, and the grid rules produce a decision of “disabled” or “not disabled”. For example, a person who reaches step 5 and is age 50, has a high school education, has no transferable skills to other work, has PRW that is unskilled, and has an RFC of “sedentary” work will be found “disabled” under Rule 202.12.
For individuals under 50, the determination of disability often requires the testimony of a vocational expert. In such cases, the vocational expert opines on whether there are any other jobs in the national economy in significant numbers that the applicant could work given their RFC. And this opinion is not based on actual jobs available in the job market, but instead on estimates provided by the DOT for every job category. In sum, the decisions made at this step of the process are based on multiple opinions of other experts who have analyzed the evidence in the record.
Additionally, it is at this step where the agency specifies the onset date of the person’s disability, if there is a finding of disability. For example, an applicant may allege a specific disability onset date, but the agency can find that based on the medical evidence, a decision of disability is not merited until a later date, and thereby set a later disability onset date, resulting in less past due benefits. Alternatively, the agency can also determine disability for a “closed period”. A closed period decision usually includes a favorable decision for one part of the applicant’s alleged disability period, and an unfavorable decision for the remainder of the alleged disability period. This can be the case where the agency determines either (1) the applicant was engaged in SGA at some point during the alleged disability period, rendering them ineligible for disability during that period of time, or (2) where the agency finds the individual was disabled for part of the alleged disability period, but the medical evidence showed an improvement such that the person was no longer considered disabled as of a certain date during the alleged disability period.
