Sequential Evaluation
Process
SGA, severe impairment, listing of impairments, residual functional capacity, significant numbers.
by Thomas E. Bush
Excerpted from Social Security Disability Practice
Under the five-step sequential disability evaluation
process described in 20 C.F.R. §404.1520 the following must be proved by
a claimant in order to be found disabled:
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The claimant is not engaging in “substantial gainful activity” (SGA); and
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The claimant has a “severe” impairment; and
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The impairment meets or “equals” one of the impairments described in the social security regulations known as the “Listing of Impairments”; or
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4. Considering the claimant’s “residual functional capacity” (RFC), that is, what the claimant can still do even with his or her impairments, the claimant is unable to do “past relevant work” (PRW); and
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5. Other work within the claimant’s RFC, considering age, education and work experience, does not exist in the national economy in significant numbers.
Watch out for the terms identified by quotation
marks above and the initials that go with some of them. They have
precise meanings in the regulations and rulings that are not necessarily
the meanings one would expect. It will be necessary for you to learn
these terms if you want to make sense out of social security
regulations.
§113
Step 1: Substantial Gainful Activity
Because it is a sequential process,
if the proof fails at any step other than step 3, the process is
terminated and the claimant is found not disabled. Thus, if a
claimant is working, that is, performing “substantial gainful activity”
(SGA), no matter how impaired that claimant is, the claimant cannot be
found disabled. This is the reason that our hypothetical bookkeeper in
§100 is not disabled.
This work, however, must be both
“substantial” and “gainful.” “Substantial work activity . . .
involves doing significant physical or mental activities.” 20 C.F.R.
§404.1572(a). Work may not be substantial when a claimant is unable “to
do ordinary or simple tasks satisfactorily without more supervision or
assistance than is usually given other people doing similar work” or
when a claimant is doing work “that involves minimal duties that make
little or no demands” on the claimant and that are of “little or no use”
to the employer or to the operation of a self-employed business. 20
C.F.R. §404.1573(b). But even sheltered work may be substantial. 20
C.F.R. §404.1573(c).
As a rule, whether work is “gainful” is determined
by looking at the claimant’s earnings. But, because SSA did not want to
let self-employed claimants slip past this step if they happened to be
working at a loss (as so many unimpaired self-employed people do from
time to time), SSA defined gainful activity broadly: “Work activity is
gainful if it is the kind of work usually done for pay or profit,
whether or not a profit is realized.” 20 C.F.R. §404.1572(b). See
also, 20 C.F.R. §404.1575 and SSR 83-34, which provide evaluation
guides for the self-employed.
Beginning with the year 2001, the amount of
earnings that qualifies as “gainful activity” is adjusted for growth in
national wages. 20 C.F.R. §404.1574(b)(2)(ii). You can find the amount
for the current year on the Internet at www.ssa.gov/cola/. Because the
regulations contain SGA dollar amounts only for years through 2000 (and
only a formula for years after that), Appendix 11 of this book provides
the SGA amounts (and several other amounts that are based on annual
cost-of-living increases) for years beginning with the year 2000.
Historical SGA amounts can also be found at POMS DI 10501.015.
The SGA level, which was $500 per month from 1990
until July 1999 when it was raised to $700, is becoming considerably
more generous than it used to be because of cost-of-living increases.
For the year 2007, average earnings of more than $900 per month, after
appropriate deductions for impairment–related work expenses and medical
expenses (see 20 C.F.R. §1576, SSR 84-26 and §274 of this book),
show that work was substantial gainful activity. From January 1, 1990
through June 30, 1999, average earnings of more than $500 per month
showed that a claimant was engaged in substantial gainful activity.
During all of the 1980s, average earnings of more than $300 per month
demonstrated that work was substantial gainful activity. 20 C.F.R.
§404.1574(b)(2). See also SSRs 83-33 and 83-35.
Work is evaluated “without regard to legality.” 20
C.F.R. §404.1572, 42 U.S.C. §§423(d)(4)(B) and 1382c(a)(3)(E). Thus,
illegal activity may be substantial gainful activity. See also,
SSR 94-1c, which adopted Dotson v. Shalala, 1 F.3d 571 (7th Cir.
1993), as a social security ruling.
§114
Step 2: The Severity Step
At step two of the sequential evaluation process, it is
necessary to determine if a claimant’s impairments are “severe,” a
misleading word that encouraged erroneous decisions and spawned much
litigation in the past. This step, which incorporates two different
concepts, was intended to weed out frivolous cases involving either 1)
no medically determinable impairments or 2) slight medically
determinable impairments that impose only minor limitations on ability
to work. Virtually any reduction in residual functional capacity (what
the claimant can still do even with his or her impairments) satisfies
the requirement that there be a severe medically determinable
impairment. See 20 C.F.R. §404.1520(c), §404.1521, SSR 85-28 and SSR
96-3p. As such, medically determinable impairments are divided into two
categories:
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slight impairments that are referred to in SSA’s peculiar lingo as “nonsevere” impairments and
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all other impairments that are, therefore, “severe.”
As a practical matter, when you
prove a reduction of the claimant’s residual functional capacity at step
4, you have effectively proven that the claimant has a severe medically
determinable impairment. No separate proof is required to show a
significant limitation of ability to do “basic work activities.” See
20 C.F.R. §404.1521. SSA is supposed to consider the combined effect of
all impairments, including multiple non-severe impairments, in
determining if a claimant’s overall condition meets the requirement of
being “severe.” 20 C.F.R. §404.1523. Note that even subjective symptoms,
as long as they arise from a medically determinable impairment, must be
considered in assessing whether an impairment, or group of impairments,
reduces a claimant’s ability to do basic work activity. SSR 96-3p. If an
adjudicator is “unable to determine clearly” the effect of an impairment
on a claimant’s ability to do basic work activities, the adjudicator is
directed by SSR 96-3p to proceed with the next steps of the sequential
evaluation process. Thus, close cases are to be decided in favor
of finding an impairment to be severe.
On the other hand, “[n]o symptom or combination of
symptoms can be the basis for a finding of disability, no matter how
genuine the individual’s complaints may appear to be, unless there are
medical signs and laboratory findings demonstrating the existence of a
medically determinable physical or mental impairment.” SSR 96-4p. When
there is no “medically determinable impairment,” an individual may be
found not disabled at step 2 of the sequential evaluation process.
Nevertheless, as a rule, if a doctor has enough information to make a
legitimate diagnosis, a claimant has a medically determinable
impairment. When there is a controversy over which diagnosis is correct,
if medical signs or laboratory findings show any abnormality, the
claimant has a medically determinable impairment even if the doctors do
not agree on which diagnosis is best.
Step 2 denials are usually hogwash. Do not be
intimidated by a step 2 denial if your own eyes tell you that the
claimant is significantly impaired and you believe the claimant. Indeed,
you should not be intimidated by step 2 denials even after a hearing in
a non-frivolous case. Even though the U.S. Supreme Court upheld the
facial validity of the step 2 regulation in Bowen v. Yuckert, 482
U.S. 137 (1987), federal courts have not treated SSA kindly in step 2
cases. Federal courts usually send step 2 cases back to SSA for
completion of the sequential evaluation process. Indeed, after the
Supreme Court upheld the facial validity of step 2 in Bowen v.
Yuckert, supra, it remanded the case to the Ninth Circuit which, in
turn, remanded Yuckert v. Bowen, 841 F.2d 303 (9th Cir. 1988),
refusing to affirm a step 2 denial in that case.
§115
Duration Requirement
Unless an impairment is expected to result in death, it
must have lasted or be expected to last for a continuous period of 12
months. 20 C.F.R. §404.1505(a). See also, 20 C.F.R. §404.1522(b).
The regulation implies that the impairment must be
continuously “severe.” This interpretation is a concern for those
impairments that wax and wane or have short periods of remission but
have active periods sufficient to preclude engaging in substantial
gainful activity on a sustained basis. The regulation, properly
interpreted, does not require a denial of disability benefits for
failure to meet the duration requirement under such circumstances.
Cf. Moore v. Sullivan, 895 F.2d 1065, 1069 (5th Cir. 1990).
The regulation specifically prohibits tacking
together unrelated severe impairments to meet the duration requirement.
20 C.F.R. §404.1522(a). This is the reason that our hypothetical packer
in §100, is not disabled. This regulation appears to be the unintended
consequence of the wording of the definition of disability. 42 U.S.C.
§423(d)(2)(A). It is hard to find a public policy reason for this harsh
result.
Denials based on the duration requirement usually
occur in those cases where, at the time of the decision, the duration
requirement is not met and the impairment is the sort that is likely to
improve within 12 months. For those impairments that may or may not
improve before the duration requirement is met, sometimes a state agency
decision-maker will delay a case just to see if the claimant continues
to be disabled. Because of the slow progress of the administrative
process, the 12 months usually have passed by the time a claimant
actually attends a hearing, thus permitting an accurate retrospective
evaluation.
Once the twelve-month duration requirement is met,
you may ask for a finding of a closed period of disability in the
situation where a claimant’s condition has improved to the degree that
he or she is able to return to work.
§116 Step 3:
Listing of Impairments
In order to be found disabled at step 3 of the
sequential evaluation process, a claimant’s medical signs, findings, and
symptoms must meet or “medically equal” one of the set of medical signs,
findings and symptoms found in the Listing of Impairments. The Listing
of Impairments is a set of medical criteria for disability found at
Appendix 1 of the social security disability regulations, officially
cited as 20 C.F.R. Part 404, Subpart P, Appendix 1.
If a claimant can be found disabled at step 3,
there is no inquiry into ability to do past work or other work. This is
the reason that our hypothetical lawyer in §100 is disabled despite the
fact that he retains the ability to practice law. His impairment meets
§1.05B of the Listings, which deals with amputation of one or both feet.
Although you should look at the issue in every
case, you will want to take an especially hard look at the Listings when
your client can still perform past relevant work. If your client’s
impairment meets or equals one of the impairments in the Listings, the
ability to perform past work is irrelevant.
It is possible to argue that your client’s
impairments are medically equivalent to an impairment in the Listing of
Impairments. 20 C.F.R. §404.1526(a). This comes up in four situations:
(1) your client does not have one of the essential findings stated in
the Listings for your client’s particular impairment but your client has
other findings; (2) your client has all the essential findings but one
or more of the findings is not quite severe enough and your client has
other findings; (3) your client’s impairment is not described in the
Listings but it may be as severe as an analogous impairment that appears
in the Listings; or (4) your client has a combination of impairments,
none of which meet the Listings but the cumulative total of your
client’s impairments could still equal the Listings. 20 C.F.R.
§404.1526(b). It is possible to compare medical findings, symptoms and
limitations in functioning to see if one claimant, whose impairment does
not appear in the Listings, is as disabled as another claimant whose
impairment meets a particular Listing. See §336. However, before
an ALJ or the Appeals Council can find that a claimant’s impairment
medically equals a Listed Impairment, the decision maker must receive
the opinion of a medical expert hired by SSA. See SSR 96-6p.
In regular social security disability and SSI
cases involving adults, if a claimant cannot be found disabled at step
3, the inquiry proceeds to step 4. For a discussion of widow(er)’s
disability under pre-1991 standards and disabled children’s eligibility
for SSI, see §§142 and 145.
§117
Step 4: Past Relevant Work
In the usual case, attention will
focus on steps 4 and 5 of the sequential evaluation process. You must
prove that your client is incapable of doing any work that he or she has
performed in the last 15 years (or in the 15 years before the claimant’s
disability insured status requirement was last met, if that date is
earlier – see §131, on insured status), if that work was done at the
“substantial gainful activity” level and lasted long enough for your
client to learn how to do it. Thus, you have to identify the claimant’s
easiest job and then figure out why the claimant cannot still do that
kind of work. If the claimant had an easy job in the past 15 years that
he or she can still do, the claimant will be found not disabled like our
hypothetical truck driver in §100, unless you can put together an
argument that the impairments meet or medically equal one of the
impairments in the Listing of Impairments.
SSA takes the position that if
a claimant retains the capacity to do a job as it is ordinarily done,
the claimant is not disabled even though the claimant’s actual past job
required greater exertion and the claimant is unable to do that
particular job. The “job as it is ordinarily done” rule will not be
applied to a claimant’s benefit, however. If a claimant’s own past work
was easier than the way the job is ordinarily done, SSA will examine the
actual job requirements as the claimant performed them in determining
whether the claimant can return to past relevant work. See Social
Security Ruling 82-61. This rule applies even if the past job was done
only part-time, as long as it was substantial gainful activity. SSR
96-8p, footnote 2.
For more about past relevant
work, see §347.
§118
Step 5: Other Work
Once you have proven that the
claimant cannot perform past relevant work, you move on to the most
complicated step: proving inability to do other work that exists in
significant numbers in the national economy, considering a claimant’s
remaining work capacity, age, education and work experience. SSA has
provided an important tool for determining whether a claimant is or is
not disabled because of medical-impairments and vocational factors: the
Medical-Vocational Guidelines, discussed in detail beginning at §120.
The Medical-Vocational Guidelines, popularly known as the “grids,”
provide that the older a claimant is, the easier it is to be found
disabled. Thus, our hypothetical housewife in §100, is found disabled
despite the remaining physical capacity to do most jobs in the economy
(sedentary, light and medium work) because of the adversity of age (55),
education (less than a high school graduate), and work experience (none
in the past 15 years). See Rule 203.10 of the Medical-Vocational
Guidelines. Indeed, this rule may still be applied if “the work activity
performed within this 15-year period does not (on the basis of job
content, recency, or duration) enhance present work capability.” SSR
82-63.
§119
Summary and Exceptions
As you can see, determining
disability involves a multi-step reasoning process. The one-step “he
can’t work” sort of argument won’t get you very far. Common sense can be
applied only where there isn’t a regulation or Social Security Ruling to
the contrary.
The sequential evaluation
process provides two main routes for a finding of disability. One route
involves a purely medical determination that the claimant’s impairment
meets or medically equals an impairment described in the Listing of
Impairments. The other route to a disability finding involves assessing
a combination of medical and vocational factors that culminates at step
5 of the sequential evaluation process and, to one degree or another,
uses the Medical-Vocational Guidelines.
In addition, there are three
other ways to be found disabled without completing the standard
five-step sequential evaluation process. If a claimant fits one of three
special vocational profiles, the claimant is found disabled without
proceeding to step five and without consulting the Medical-Vocational
Guidelines. Indeed, for one of the three profiles, it is not even
necessary to assess residual functional capacity. A claimant who fits
this profile is found disabled by simply showing that he or she has a
severe impairment. This profile, which is described at 20 C.F.R.
§404.1562(b), provides that a claimant is disabled who:
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Has a severe, medically determinable impairment;
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Is age 55 or older;
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Has an 11th grade education or less; and
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Has no past relevant work experience.
Another profile, known as
the “worn-out worker,” describes a claimant who has no more than a sixth
grade education and 35 years of doing arduous unskilled labor. For this
claimant to be found disabled, it must be shown only that the claimant
is unable to do the arduous unskilled labor done in the past. 20 C.F.R.
§§404.1520(g)(2) and 404.1562(a). See also SSR 82-63 and
Walston v. Sullivan, 956 F.2d 768 (8th Cir. 1992). In effect, the
worn-out worker is found disabled at step four with proof that he or she
is incapable of performing past relevant work. An article by ALJ Peter
J. Lemoine, “The Worn-Out Worker Rule Revisited,” 49 West’s Social
Security Reporting Service 883, presents a well-reasoned analysis that
demonstrates that the worn-out worker rule may be more useful than it
may appear at first glance.
A claimant may have more formal
education than sixth grade and still be considered to have marginal
education if he or she functions at the marginal educational level. Even
light work “if it demands a great deal of stamina or activity such as
repetitive bending and lifting at a very fast pace” (SSR 82-63), may
qualify as arduous. The 35 years of qualified work activity need not be
continuous and may be interspersed with work activity that does not
satisfy the “arduous unskilled labor” requirement. Not all prior work
need be unskilled if work at higher skill level is isolated, brief or
remote or if skills are not transferable. ALJ Lemoine points out that as
long as there are 35 years of qualified employment that the claimant can
no longer perform, the existence of an arduous unskilled job in the past
which the claimant retains the capacity to perform will not make the
worn-out worker rule inapplicable.
The third profile does
not appear in 20 C.F.R. §404.1562. Instead, it appears only in the POMS
(along with the other two adverse profiles discussed above), but it is
consistent with the principles stated in SSRs 82-63 and 85-15. POMS DI
25010.001B.3 provides:
A finding of ‘disabled’ will be made for persons
who:
are not working at SGA level, and
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have a lifetime commitment (30 years or more) to a field of work that is unskilled, or is skilled or semi-skilled but with no transferable skills, and
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can no longer perform this past work because of a severe impairment(s), and
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are closely approaching retirement age (age 60 or older), and
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have no more than a limited education.
(See
DI 25001.001 for the definitions of “limited education” and DI 24505.000
for a discussion of severe impairment.)
NOTE: To satisfy the requirement for this
profile, the 30 years of lifetime commitment work does not have to be at
one job or for one employer but rather work in one field of a very
similar nature. If the person has a history of working 30 years or more
in one field of work, the use of this profile will not be
precluded by the fact that the person also has work experience in other
fields, so long as that work experience in other fields is not past
relevant work which the person is still able to perform.
The regulations provide six
possibilities for a finding of not disabled: a claimant might:
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Be working at the SGA level;
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Not have a medically determinable impairment;
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Have an impairment that does not significantly limit the physical or mental ability to do basic work activities;
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Fail to meet the duration requirement;
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Be capable of past relevant work;
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Be capable of other work.
And, as we shall see, there are other
requirements, which have nothing to do with whether a claimant is
disabled—SSA calls these “non-disability requirements,” that may be used
by SSA to deny benefits. See §§130 et seq.
Thomas E. Bush has devoted his practice to social security disability issues since 1977. He was elected to NOSSCR’s Board of Directors in 1988, and was President of NOSSCR for the 1997-98 term. He is the author of Social Security Disability Practice, from which this article is excerpted.
