No. 00-1937 

In the Supreme Court of the United States 

LARRY G. MASSANARI, ACTING COMMISSIONER 
OF SOCIAL SECURITY, PETITIONER 

v. 

CLEVELAND B. WALTON 

ON PETITION FOR A WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE FOURTH CIRCUIT 

PETITION FOR A WRIT OF CERTIORARI 

THEODORE B. OLSON 

Solicitor General 

Counsel of Record 

STUART E. SCHIFFER 

Acting Assistant Attorney 

General 

EDWIN S. KNEEDLER 

Deputy Solicitor General 

JEFFREY A. LAMKEN 

Assistant to the Solicitor 

General 

JOHN C. HOYLE 
MARK S. DAVIES 

Attorneys 

Department of Justice 
Washington, D.C. 20530-0001 
(202) 514-2217 

QUESTIONS PRESENTED 

Title II and Title XVI of the Social Security Act 
define disability as the “inability to engage in any 
substantial gainful activity by reason of any * * * 
impairment which can be expected to result in death or 
which has lasted or can be expected to last for * * * 
not less than 12 months.” 42 U.S.C. 423(d)(1)(A); 42 
U.S.C. 1382c(a)(3)(A) (1994 & Supp. IV 1998). Under 
Title II, once a claimant is entitled to disability insur- 
ance benefits, the claimant may engage in substantial 
gainful activity during a “trial work period” of up to 
nine (not necessarily consecutive) months without being 
disqualified from receiving benefits. 42 U.S.C. 422(c). 
The questions presented are: 

1. Whether a claimant is entitled to disability bene- 
fits under Titles II and XVI of the Social Security Act if 
he has a physical or mental impairment that has lasted 
or can be expected to last at least 12 months, but his 
inability to engage in substantial gainful activity by 
reason of that impairment has not lasted or cannot be 
expected to last 12 months. 

2. Whether a claimant under Title II may be under a 
disability and entitled to a “trial work period” if, at the 
time his disability insurance benefits claim is adju- 
dicated, his impairment no longer prevents him from 
performing substantial gainful activity. 

(I) 

TABLE OF CONTENTS 

Page 

Opinions below ............................................................................... 
1 

Jurisdiction ...................................................................................... 1 

Statutory provisions involved ..................................................... 
2 

Statement ........................................................................................ 2 

Reasons for granting the petition ............................................... 
15 

Conclusion ....................................................................................... 27 

Appendix A ..................................................................................... 
1a 

Appendix B ..................................................................................... 
15a 

Appendix C ..................................................................................... 
27a 

Appendix D ..................................................................................... 
28a 

Appendix E ..................................................................................... 
30a 

Appendix F ..................................................................................... 
36a 

Appendix G ..................................................................................... 
39a 

Appendix H ..................................................................................... 
47a 

Appendix I ...................................................................................... 
50a 

Appendix J ...................................................................................... 
52a 

Appendix K ..................................................................................... 
62a 

Appendix L ..................................................................................... 
63a 

TABLE OF AUTHORITIES 

Cases: 

Alexander v. Richardson, 451 F.2d 1185 (10th Cir. 

1971), cert. denied, 407 U.S. 911 (1972) ......... 

15, 16, 17, 18, 20 

Bowen v. Yuckert, 482 U.S. 137 (1987) ........................... 

3, 5, 6 

Chevron U.S.A. Inc. v. Natural Res. Defense 

Council, Inc., 467 U.S. 837 (1984) ..................................... 

12, 22 

Cieutat v. Bowen, 824 F.2d 348 (5th Cir. 1987) ................ 

23 

Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795 

(1999) ........................................................................................ 4 

Leftwich v. Gardner, 377 F.2d 287 (4th Cir. 1967) ........... 3 

(III) 

IV 

Cases—Continued: Page 

McDonald v. Bowen, 818 F.2d 559 (7th Cir. 1986) ........... 

26 

Newton v. Chater, 92 F.3d 688 (8th Cir. 1996) .................. 

26 

Salamalekis v. Commissioner of Soc. Sec., 221 F.3d 

828 (6th Cir. 2000) .................................................................. 

26 

Titus v. Sullivan, 4 F.3d 590 (8th Cir. 1993) ..................... 

15, 17 

Walker v. Secretary of Health & Human Servs., 

943 F.2d 1257 (10th Cir. 1991) ............................................. 

26 

Statutes and regulations: 

Employment Opportunities for Disabled Americans 

Act, Pub. L. No. 99-643, 100 Stat. 3574 .............................. 

5 

Social Security Act, 42 U.S.C. 301 et seq. ............................. 

2 

Tit. II, 42 U.S.C. 401 et seq. .............................................. 

passim 

42 U.S.C. 422 ........................................................................ 

24 

42 U.S.C. 422(c) .............................................. 

4, 22, 23, 24, 63a 

42 U.S.C. 422(c)(2) .............................................................. 

4, 63a 

42 U.S.C. 422(c)(3) .................................................... 

4, 8, 9, 63a 

42 U.S.C. 422(c)(4)(A) ........................................................ 

4, 64a 

42 U.S.C. 422(c)(4)(B) ......................................................... 

4, 64a 

42 U.S.C. 423(a) ................................................................. 

13, 64a 

42 U.S.C. 423(c)(2) (1958) .................................................. 

2 

42 U.S.C. 423(c)(2) ............................................................ 

13, 69a 

42 U.S.C. 423(c)(2)(A) ...................................................... 

19, 69a 

42 U.S.C. 423(d) ................................................................... 

22 

42 U.S.C. 423(d)(1)(A) ..................................... 

3, 7, 12, 20, 70a 

42 U.S.C. 423(d)(2) ............................................................ 

21, 70a 

42 U.S.C. 423(d)(2)(A) ................................................ 

3, 20, 70a 

42 U.S.C. 423(d)(4)(A) .............................................. 

4, 5, 10, 71a 

42 U.S.C. 423(f)(1) ............................................................. 

19, 75a 

Tit. XVI, 42 U.S.C. 1381 et seq. ....................................... 

passim 

42 U.S.C. 1382c .................................................................... 

5, 87a 

42 U.S.C. 1382c(a)(3)(A) (1994 & Supp. IV 1998) ... 

5, 22, 87a 

42 U.S.C. 1382c(a)(3)(B) .................................................... 

5, 87a 

Social Security Amendments of 1956, Pub. L. No. 880, 

Tit. I, § 103, 70 Stat. 815 .................................................... 2 

V 

Statutes and regulations—Continued: 
Page 

Social Security Amendments of 1965, Pub. L. No. 

89-97, Tit. III, § 303(a)(1), 79 Stat. 366 .............................. 

2, 3 

Social Security Amendments of 1972, Pub. L. No. 

92-603, Tit. III, § 301, 86 Stat. 1465 ................................. 

5 

20 C.F.R. (1986): 

Pt. 404 ...................................................................................... 

2, 94a 

Section 404.1520 (1986) ..................................................... 

6 

Section 404.1520(b) ............................................................ 

7, 98a 

Section 404.1520(f) ............................................................ 

7, 99a 

Section 404.1571 ................................................................. 

7 

Section 404.1574(b)(2) ....................................................... 

10 

Section 404.1592(d)(1) (2001), 65 Fed. Reg. 42,787 

(2000) .............................................................................. 

8, 9 

Section 404.1592(d)(2) (2001), 65 Fed. Reg. 42,787 

(2000) .............................................................................. 24 

Section 404.1592(d)(2)(iii) (2001), 65 Fed. Reg. 42,787 

(2000) .............................................................................. 9 

Section 404.1594 ................................................................. 

20 

Pt. 416 (1986): 

Section 416.920 ................................................................... 

6 

Miscellaneous: 

60 Fed. Reg. 12,168 ................................................................... 

6, 15 

65 Fed. Reg. 42,774 (2000) ........................................ 
6, 8, 9, 24, 25 

H.R. Rep. No. 544, 90th Cong., 1st Sess. (1967) .................. 
4 

S. Rep. No. 404, 89th Cong., 1st Sess. (1965) ........ 
2, 3, 8, 21, 25 

S. Rep. No. 744, 90th Cong., 1st Sess. (1967) ....................... 
4 

S.S.R. 73-7 (Cum. Ed. 1971-1975) ........................................... 
6 

S.S.R. 82-52 (Cum. Ed. 1981-1985) .................................. 6, 10, 24 

In the Supreme Court of the United States 

LARRY G. MASSANARI, ACTING COMMISSIONER 
OF SOCIAL SECURITY, PETITIONER 

v. 

CLEVELAND B. WALTON 

ON PETITION FOR A WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE FOURTH CIRCUIT 

PETITION FOR A WRIT OF CERTIORARI 

The Solicitor General, on behalf of the Acting Com- 
missioner of Social Security, respectfully petitions for a 
writ of certiorari to review the judgment of the United 
States Court of Appeals for the Fourth Circuit in this 
case. 

OPINIONS BELOW 

The opinion of the court of appeals (App., infra, 1a- 
14a) is reported at 235 F.3d 184. The opinion and judg- 
ment of the district court (App., infra, 15a-26a, 27a) are 
unreported. 

JURISDICTION 

The judgment of the court of appeals was entered on 
December 18, 2000. A petition for rehearing was 
denied on February 27, 2001 (App., infra, 62a). On May 
21, 2001, the Chief Justice extended the time within 
which to file a petition for a writ of certiorari to and 

(1) 

2 

including June 27, 2001. The jurisdiction of this Court is 
invoked under 28 U.S.C. 1254(1). 

STATUTORY PROVISIONS INVOLVED 

Relevant provisions of the Social Security Act, 42 
U.S.C. 301 et seq., and the relevant regulations, 20 
C.F.R. Pts. 404 and 416, are set forth in the appendix to 
the petition, App., infra, 63a-104a. 

STATEMENT 

This case concerns the meaning of a fundamental 
term—“disability”—under the disability insurance pro- 
gram established by Title II of the Social Security Act 
(Act) and the Supplemental Security Income program 
established by Title XVI of that Act. 

1. a. Title II of the Social Security Act, 42 U.S.C. 
401 et seq., which was first enacted in 1935, provides 
old-age, survivor, and disability benefits for insured 
individuals. Congress added the disability insurance 
benefits provisions to Title II in 1956. Social Security 
Amendments of 1956, Pub. L. No. 880, Tit. I, § 103, 70 
Stat. 815. As originally enacted, the disability insur- 
ance program provided for the payment of monthly 
benefits to anyone who was unable to “engage in any 
substantial gainful activity by reason of ” an “impair- 
ment which can be expected to result in death or to be 
of long-continued and indefinite duration.” 42 U.S.C. 
423(c)(2) (1958); S. Rep. No. 404, 89th Cong., 1st Sess. 
98-99 (1965). 

The requirement that the disability be of “long- 
continued and indefinite duration” proved difficult to 
administer and, in 1965, Congress amended the Act to 
make the duration requirement more certain. See 
Social Security Amendments of 1965, Pub. L. No. 89-97, 
Tit. III, § 303(a)(1), 79 Stat. 366. In the previous 
decade, a disability that lasted 12 months was found in 

3 

the “great majority” of cases to be of “long-continued 
and indefinite duration” within the meaning of the Act 
and thus sufficient to entitle the claimant to benefits. S. 
Rep. No. 404, supra, at 99. A 12-month disability re- 
quirement, Congress concluded, would generally pre- 
vent the program, which was directed at long-term 
disabilities, from being required to pay “disability bene- 
fits in cases of short-term, temporary disability.” Id. at 

98. Accordingly, the Social Security Amendments of 
1965 replaced the “long-continued and indefinite dura- 
tion” requirement with a 12-month disability require- 
ment. 79 Stat. 366. Title II of the Social Security Act 
thus now provides: 

The term “disability” means—inability to engage in 
any substantial gainful activity by reason of any 
medically determinable physical or mental impair- 
ment which can be expected to result in death or 
which has lasted or can be expected to last for a 
continuous period of not less than 12 months. 

42 U.S.C. 423(d)(1)(A). 

Title II further provides that an individual “shall be 
determined to be under a disability only if his physical 
or mental impairment or impairments are of such sever- 
ity that he is not only unable to do his previous work 
but cannot, considering his age, education, and work 
experience, engage in any other kind of substantial 
gainful work which exists in the national economy.” 42 
U.S.C. 423(d)(2)(A) (emphasis added); see Bowen v. 
Yuckert, 482 U.S. 137, 147-148 (1987). That section was 
added by the Social Security Amendments of 1967 in 
response to a decision of the Fourth Circuit, Leftwich v. 
Gardner, 377 F.2d 287 (1967), which had held that a 
claimant was under a disability despite his performance 
of work at a level that, according to the Secretary of 

4 

Health, Education and Welfare, demonstrated the 
claimant’s ability to engage in substantial gainful 
activity. See H.R. Rep. No. 544, 90th Cong., 1st Sess. 
29, 31 (1967); S. Rep. No. 744, 90th Cong., 1st Sess. 46- 
50, 263-264 (1967). The 1967 amendments also added a 
provision directing that the Commissioner “shall by 
regulations prescribe the criteria for determining when 
services performed or earnings derived from services 
demonstrate an individual’s ability to engage in sub- 
stantial gainful activity,” and providing as a general 
rule that “an individual whose services or earnings 
meet such criteria shall * * * be found not to be 
disabled.” 42 U.S.C. 423(d)(4)(A); see note 1, infra. 

To encourage individuals to return to work, the Title 
II disability insurance benefit program also provides 
for a “trial work period” during which individuals may 
engage in what would otherwise be considered “sub- 
stantial gainful activity” without losing disability 
benefits. 42 U.S.C. 422(c). The “period of trial work” 
begins “with the month in which [the claimant] becomes 
entitled to disability insurance benefits,” 42 U.S.C. 
422(c)(3), and ends after the individual has performed 
services for nine months (which need not be con- 
secutive), or the month in which the disability actually 
ceases, if that is earlier, 42 U.S.C. 422(c)(4)(A) and (B). 
“[A]ny services rendered by an individual during a 
period of trial work” are “deemed not to have been 
rendered by such individual in determining whether his 
disability has ceased in a month during such period.” 42 
U.S.C. 422(c)(2). Thus, under the trial work provisions, 
once an individual is entitled to benefits under the 
disability insurance program, he may work for up to 
nine months without losing benefits. See Cleveland v. 
Policy Mgmt. Sys. Corp., 526 U.S. 795, 805 (1999). 

5 

b. Congress enacted Title XVI of the Social Security 
Act, 42 U.S.C. 1381 et seq., in 1972 to provide Supple- 
mental Security Income (SSI) to financially needy per- 
sons who are aged, blind, or disabled. See Pub. L. No. 
92-603, Tit. III, § 301, 86 Stat. 1465. Unlike Title II, 
which is an insurance program, the SSI program 
established by Title XVI is a welfare program that 
looks to financial need. Bowen v. Yuckert, 482 U.S. at 
140. Both programs, however, use the same definition 
of disability. The SSI program thus provides that a 
claimant is “disabled” for purposes of Title XVI if he is 
“unable to engage in any substantial gainful activity by 
reason of any medically determinable physical or 
mental impairment which can be expected to result in 
death or which has lasted or can be expected to last for 
a continuous period of not less than twelve months,” 42 
U.S.C. 1382c(a)(3)(A) (1994 & Supp. IV 1998), and 
further provides that an individual “shall be determined 
to be under a disability only if ” the impairment is “of 
such severity that” the individual cannot engage in any 
“substantial gainful work which exists in the national 
economy,” 42 U.S.C. 1382c(a)(3)(B). Unlike Title II’s 
disability insurance program, however, Title XVI’s SSI 
program does not provide for a trial work period. See 
Employment Opportunities for Disabled Americans 
Act, Pub. L. No. 99-643, 100 Stat. 3574 (amending 42 
U.S.C. 1382c to eliminate trial work period).1 

c. For approximately three decades, the Commis- 
sioner of Social Security has interpreted the Social 

1 Beginning July 1, 1987, under Section 1619 of the Social 
Security Act, 42 U.S.C. 1382h, a disabled SSI recipient who has 
earnings ordinarily considered to represent substantial gainful 
activity can still receive SSI payments so long as his income does 
not make him financially ineligible to receive SSI. 

6 

Security Act as precluding an award of disability 
benefits unless the claimant’s inability to perform 
substantial gainful activity has lasted or can be 
expected to last for 12 consecutive months. See, e.g. 
Social Security Ruling (S.S.R.) 73-7 (Cum. Ed. 1971- 
1975); S.S.R. 82-52, at 328 (Cum. Ed. 1981-1985) (“In 
considering duration, it is the inability to engage in 
[substantial gainful activity] that must last the required 
12-month period.”). The Commissioner’s five-step 
sequential evaluation process for adjudicating disability 
claims, established by regulation and considered by this 
Court on a number of occasions (see, e.g., Cleveland v. 
Policy Mgmt. Sys. Corp., 526 U.S. at 804; Bowen v. 
Yuckert, 482 U.S. at 140-142), has long incorporated at 
the first step the requirement that the inability to 
engage in substantial gainful activity last for at least 12 
months. See Bowen v. Yuckert, 482 U.S. at 140 (citing 
20 C.F.R. 404.1520, 416.920 (1986)); S.S.R. 82-52, at 331 
(“The denial determination or decision for insufficient 
duration should not be understood as independent of 
the sequential evaluation process.”). The Commis- 
sioner’s new final rules governing the determination of 
substantial gainful activity and the trial work period 
under Title II, issued last year, also incorporate that 12- 
month disability requirement. See Determining Dis- 
ability and Blindness; Substantial Gainful Activity 
Guides, 65 Fed. Reg. 42,774 (2000) (final rules); see also 
Determining Disability and Blindness; Substantial 
Gainful Activity Guides, 60 Fed. Reg. 12,168 (1995) 
(notice of proposed rulemaking). 

Thus, under the Commissioner’s longstanding con- 
struction of the Act, it is not enough that an individual’s 
underlying medical impairment has already lasted or 
can be expected to last for at least 12 months. 65 Fed. 
Reg. at 42,774, 42,780. Instead, the disability—the 

7 

inability to engage in substantial gainful activity by 
reason of the claimed impairment—must have lasted or 
be expected to last for at least 12 months. Conse- 
quently, a claimant who is able to work within one year 
of the onset of his inability to work is generally not 
considered disabled. As the Commissioner recently 
explained, it has been his “longstanding interpretation” 
of the Act that “the duration requirement to establish 
disability will not be met and a disability claim will be 
denied based on evidence that, within 12 months after 
the onset of an impairment which prevented substantial 
gainful activity and before [the agency] ha[s] issued any 
notice of determination or decision finding disability, 
the impairment no longer prevents substantial gainful 
activity.” Ibid. See also 20 C.F.R. 404.1520(b) (“If you 
are working and the work you are doing is substantially 
gainful activity, we will find that you are not disabled 
regardless of your medical condition or your age, 
education, and work experience.”); 20 C.F.R. 404.1520(f) 
(“Your impairment(s) must prevent you from doing 
any other work.”); 20 C.F.R. 404.1571 (“If you are able 
to engage in substantial gainful activity, we will find 
that you are not disabled.”). 

Disability determinations can also be made based on 
the expected duration of the disability. In particular, if 
the disability determination is made before the expira- 
tion of 12 months after the onset of the alleged inability 
to engage in substantial gainful activity, the claimant 
may be determined to be disabled if the inability to 
engage in substantial gainful activity is by reason of an 
impairment that “can be expected to last” 12 months. 
42 U.S.C. 423(d)(1)(A). Thus, it is not necessary for the 
Commissioner to wait 12 months from the onset of the 
alleged disability to adjudicate a disability claim. 
Instead, so long as the inability to work “can be 

8 

expected” to last 12 months, the claimant may be 
determined to be disabled. See 65 Fed. Reg. at 42,774 
(“We believe that Congress provided that disability can 
be found based on an impairment which ‘can be ex- 
pected to last’ 12 months simply to provide a means for 
us to adjudicate disability claims without having to wait 
12 months from onset.”); S. Rep. No. 404, supra, at 99 
(“[W]here disability has existed for 12 calendar months 
or more, no prognosis would be required. Where a 
worker has been under a disability which has lasted for 
less than 12 months, the bill would require only a 
prediction that the worker’s disability will continue for 
a total of at least 12 calendar months after onset of the 
disability.”).2 

The Commissioner has also issued regulations 
governing entitlement to a trial work period for pur- 
poses of the disability insurance program under Title 

II. Under the Social Security Act and the Commis- 
sioner’s regulations, an individual is not entitled to a 
trial work period unless the individual is “entitled to 
disability insurance benefits.” 42 U.S.C. 422(c)(3) (trial 
work period begins when individual “becomes entitled 
to disability insurance benefits”); 65 Fed. Reg. at 42,787 
(to be codified at 20 C.F.R. 404.1592(d)(1)(2001)) (“You 
are generally entitled to a trial work period if you are 
entitled to disability insurance benefits.”). As ex- 
plained above, the Commissioner has determined that 
entitlement to disability benefits is contingent on the 

2 Because that disability determination turns on a prediction 
that is sometimes wrong—i.e., a claimant who the Commissioner 
expected would not be able to return to work within 12 months in 
fact may return to work during that period—there is a narrow 
class of individuals who are entitled to and receive disability 
benefits even though they were able to work within 12 months of 
the onset of their disability. 

9 

claimant being unable to engage in substantial gainful 
activity, or being expected to be unable to engage in 
such activity, for at least 12 months. Accordingly, an 
individual who has been unable to work for a full 12- 
month period is “entitled” to benefits and thus to a trial 
work period; similarly, an individual who is determined 
by the Commissioner to be expected to be unable to 
work for such a period is “entitled” to benefits and a 
trial work period. Ibid. But if the Commissioner does 
not find that the individual is expected to be unable to 
engage in substantial gainful activity for at least 12 
months by reason of the impairment, and if the in- 
dividual in fact returns to work within 12 months, the 
individual is not entitled to benefits and is not entitled 
to a trial work period. See 65 Fed. Reg. at 42,774 
(“Because the person cannot become entitled to dis- 
ability benefits in this situation, there can be no trial 
work period.”). Accordingly, as the Commissioner’s 
regulations explain, a claimant is not entitled to a trial 
work period if he “perform[s] work demonstrating the 
ability to engage in substantial gainful activity within 
12 months of the onset of the impairment(s) that pre- 
vented [the claimant] from performing substantial 
gainful activity and before the date of any notice of 
determination or decision finding that [the claimant is] 
disabled.” 65 Fed. Reg. at 42,787 (to be codified at 20 
C.F.R. 404.1592(d)(2)(iii) (2001)). 

2. On October 31, 1994, respondent Cleveland B. 
Walton was terminated as an in-school suspension 
teacher. After several work attempts, he was diag- 
nosed in March 1995 as suffering from schizophrenia. 
In May of that year, respondent began working part- 
time as a cashier at a grocery store. By October 1995, 
he earned more than $500 a month, raising a presump- 
tion of substantial gainful activity under the regulations 

10 

issued by the Commissioner pursuant to 42 U.S.C. 
423(d)(4) (A). See 20 C.F.R. 404.1574(b)(2).3 Respon- 
dent began to work full time at the grocery store in 
December 1995, and he worked there successfully for 
two years before being suspended for selling alcohol to 
a minor. App., infra, 53a-54a; A.R. 440, 444. 

In March 1995, respondent applied for disability 
insurance benefits under Title II and SSI benefits 
under Title XVI, citing his schizophrenia and related 
depression. In 1996, the Administrative Law Judge 
(ALJ) determined that respondent had not engaged in 
substantial gainful activity and otherwise satisfied the 
definition of disability for the period, which exceeded 12 
months, between October 1994, when respondent was 
discharged by the school district, and December 1995, 
when respondent began to work full time at the grocery 
store. App., infra, 52a-61a. The Appeals Council of the 
Social Security Administration remanded the case to 
determine whether respondent had engaged in sub- 
stantial gainful activity within one year of the alleged 
onset of his disability. Under S.S.R. 82-52, the Appeals 
Council noted, such activity before the lapse of the 12- 
month period following onset requires a denial of 
benefits. Id. at 47a-49a. On remand, the ALJ denied 
respondent’s claim for benefits. Id. at 39a-46a. Like 
the Appeals Council, the ALJ noted that, under the 
Commissioner’s construction of the Social Security Act 
set forth in S.S.R. 82-52, a claim must be denied when 
an individual returns to work within 12 months of the 

3 As discussed above, p. 4, supra, Section 423(d)(4)(A) directs 
the Commissioner to issue regulations for determining when 
services performed or earnings derived from services demonstrate 
an individual’s ability to engage in substantial gainful activity and 
thereby render him not disabled. 

11 

impairment’s onset. See id. at 41a (The “duration 
requirement provides that [the claimant] must be 
prevented from performing substantial gainful activity 
for a 12-month period even if his impairment lasted or 
was expected to last for 12 months.”). Reviewing the 
evidence and applying the regulatory criteria for 
determining whether work performed or earnings de- 
rived from such work demonstrate an ability to engage 
in substantial gainful activity, the ALJ concluded that 
respondent had engaged in substantial gainful employ- 
ment as of October 1995, within one year of the onset of 
his impairment. App., infra, 41a-44a; see p. 4, supra. 
Accordingly, the ALJ held that respondent was not dis- 
abled and was not entitled to benefits. App., infra, 45a. 

The ALJ also determined that respondent was not 
entitled to a trial work period. App., infra, 44a. Re- 
spondent “returned to substantial gainful activity 
beginning in October 1995,” the ALJ explained, and 
thus could “not be found to be under a ‘disability’ be- 
cause he was not prevented from working for any con- 
tinuous period of 12 months.” Ibid. Because re- 
spondent “is not under a ‘disability,’ ” the ALJ further 
explained, “he is not entitled to a cash benefit or to a 
trial work period under the Regulations.” Ibid. 

3. Respondent sought review in district court. The 
magistrate judge recommended granting summary 
judgment in favor of the Commissioner, App., infra, 
30a-35a, and the district court accepted that recom- 
mendation, id. at 15a-26a. 

The magistrate and district court both concluded that 
a claimant’s disability (i.e., his inability to engage in 
substantial gainful activity) and not just his impairment 
must last at least 12 months. In this case, they ob- 
served, respondent had engaged in substantial gainful 
activity within 12 months of the date of onset. Accord- 

12 

ingly, the magistrate and district court held that re- 
spondent’s claim failed at the first step of the sequential 
evaluation process, because respondent could not be 
found unable to engage in substantial gainful activity 
for the requisite 12-month period. See App., infra, 23a- 
24a, 33a-34a. 

The magistrate and district court also rejected re- 
spondent’s request for a trial work period. Because 
respondent was not entitled to disability benefits, they 
held, respondent was not entitled to a trial work period. 
App., infra, 17a n.2, 34a. 

4. The court of appeals reversed. App., infra, 1a-14a. 
The court of appeals sustained the ALJ’s conclusion 
that respondent engaged in substantial work activity in 
October 1995, less than 12 months after the onset of his 
alleged inability to work, id. at 2a n.1, 5a, but it rejected 
the Commissioner’s interpretation of the Act’s defini- 
tion of disability, under which such activity rendered 
respondent ineligible for benefits, id. at 6a-10a. 
Applying the two-step test of Chevron U.S.A. Inc. v. 
Natural Resources Defense Council, Inc., 467 U.S. 837 
(1984), the court rejected the Commissioner’s inter- 
pretation under step one as contrary to the “clear and 
unambiguous” language of the statute. App., infra, 6a. 
The statute’s text, in the court’s view, plainly requires 
only that the impairment giving rise to the disability 
last, or be expected to last, more than a year; the 
inability to work itself, the court held, need not last that 
long. Id. at 7a. The court first observed that 42 U.S.C. 
423(d)(1)(A) defines disability as the “inability to 
engage in any substantial gainful activity by reason of 
any medically determinable physical or mental im- 
pairment which can be expected to result in death or 
which has lasted or can be expected to last for a 
continuous period of not less than 12 months.” App., 

13 

infra, 7a. The court then found it dispositive that the 
phrase “which has lasted or can be expected to last for a 
continuous period of not less than 12 months” modifies 
“impairment,” not “inability to engage in substantial 
gainful activity.” Id. at 7a-8a. See also id. at 11a. 
Accordingly, the court concluded that “a claimant 
whose impairment was ‘expected to result in death,’ or 
which ‘lasted’ or ‘was expected to last’ for a continuous 
period of not less than twelve months may be disabled, 
even if the inability to engage in substantial gainful 
activity does not cause death or actually persist for 
twelve months.” Id. at 8a. 

Having invalidated the Commissioner’s construction 
of the statute, the court of appeals then concluded that 
respondent is entitled to disability insurance benefits. 
In this case, the court explained, respondent’s impair- 
ment was expected to last (and did last) more than 12 
months. Moreover, at the expiration of the five-month 
waiting period after the onset of respondent’s disability 
(i.e., by April 1995), respondent had not returned to 
work.4 Accordingly, the court concluded that respon- 
dent had met the statutory requirements for entitle- 
ment to an award of disability insurance benefits under 
Title II. App., infra, 9a. The court did not separately 
address respondent’s claim for SSI benefits under Title 
XVI of the Social Security Act, which has no statutory 
waiting period. 

The court of appeals also held that respondent was 
entitled to a trial work period. App., infra, 9a-10a. Re- 
spondent’s entitlement to a trial work period, the court 

4 Under 42 U.S.C. 423(a) and (c)(2), there is no entitlement to 
receive benefits until after the expiration of the earliest period of 
five consecutive months “throughout which” the individual is 
“under a disability.” 

14 

stated, is “conclusively settled” in his favor by the 
court’s earlier conclusion that respondent was entitled 
to disability benefits as of April 1995, when the five- 
month waiting period expired. Id. at 9a. The court 
noted that the period of trial work begins once the 
claimant becomes entitled to disability benefits. 
Having found that respondent was entitled to benefits 
beginning in April 1995, the court further concluded 
that respondent qualified for a nine-month trial work 
period as of that date. Ibid. Because the “trial work 
period precludes consideration of the October 1995 
[work],” the court stated, respondent “meets even the 
Commissioner’s extra-statutory requirements for a 
finding of disability”—i.e., that the inability to work, 
like the underlying impairment, must have lasted or be 
expected to last at least 12 months—since no work 
“during the period of twelve months from his disability 
onset date, October 31, 1994, could have been con- 
sidered.” Id. at 10a. 

The court also rejected the Commissioner’s construc- 
tion of the Social Security Act as unreasonable under 
the second step of Chevron. App., infra, 10a-13a. In so 
doing, however, the court mostly repeated its textual 
analysis of the Act. Id. at 10a-11a. In addition, the 
court rejected as unreasonable the Commissioner’s 
position that the trial work period cannot begin until 
after either (a) benefits are granted or (b) the individual 
is unable to work for 12 consecutive months. The Com- 
missioner, the court noted, had interpreted the phrase 
“can be expected to last” in the definition of disability 
as having been included “so that [the agency could] 
‘adjudicate disability claims without having to wait 12 
months from the alleged onset of disability, rather than 
to permit claims to be allowed in the face of evidence 
that the claimant’s impairment did not prevent sub- 

15 

stantial gainful activity for 12 continuous months.’ ” Id. 
at 12a (quoting 60 Fed. Reg. at 12,168). The court re- 
jected that interpretation because the Act does not 
explicitly mention adjudication as a prerequisite to a 
finding of disability; because no other part of the Act 
“differentiates between claims adjudicated within 
twelve months, and claims adjudicated after twelve 
months”; and because “under the Commissioner’s inter- 
pretation, a finding of disability, or entitlement to 
benefits or a trial work period, would be determined, in 
part, by when the Commissioner adjudicated a claim.” 
Id. at 13a-14a. 

REASONS FOR GRANTING THE PETITION 

The court of appeals in this case set aside the 
Commissioner’s longstanding—indeed, decades-old— 
construction of a fundamental provision of the Social 
Security Act, holding that claimants are entitled to 
disability insurance benefits under Title II and Supple- 
mental Security Income (SSI) benefits under Title XVI 
of that Act even though they are able to work within a 
year of the onset of their disabilities, so long as the 
underlying impairment has lasted or can be expected to 
last more than 12 months. That decision is in direct 
conflict with the decision of the Tenth Circuit in 
Alexander v. Richardson, 451 F.2d 1185 (1971), cert. 
denied, 407 U.S. 911 (1972), and the decision of the 
Eighth Circuit in Titus v. Sullivan, 4 F.3d 590, 594-595 
(1993). If allowed to stand, it would impose an esti- 
mated $9.8 billion in additional costs on the Social 
Security disability programs over the next 10 years in 
the Fourth Circuit alone, and would impose more than 
$80 billion in additional costs over that same period if 
applied nationwide. Finally, the court of appeals’ 
decision fundamentally misconstrues the Social 

16 

Security Act, converting programs that were intended 
to address long-term disabilities into short-term dis- 
ability programs that Congress specifically declined to 
enact. 

1. The court of appeals’ decision in this case squarely 
conflicts with those of two other circuits. Invalidating 
the Commissioner’s longstanding construction and 
application of the Social Security Act, the court of 
appeals held that the Act does not require—and in fact 
unambiguously forecloses the Commissioner from 
interpreting it to require—that a claimant’s disability 
(i.e., the inability to work on account of an impairment) 
last or be expected to last at least 12 months. Instead, 
the court held, a claimant is entitled to benefits under 
both the disability insurance program established by 
Title II and the SSI program established by Title XVI 
where the claimant’s inability to engage in substantial 
gainful activity has not lasted and is not expected to 
last 12 months, so long as the impairment that allegedly 
gave rise to that inability lasts or is expected to last at 
least 12 months. App., infra, 11a. 

Two other courts of appeals, however, have reached 
the opposite conclusion. In Alexander v. Richardson, 
supra, for example, the Tenth Circuit affirmed the 
denial of benefits because “this disability extended for a 
period of less than twelve months, although there was 
an impairment which lasted for more than one year.” 
451 F.2d at 1186. The court explained: 

To recover disability benefits under the Act an 
applicant must be unable to engage in any sub- 
stantial gainful activity. Disability is established by 
showing a medically determinable mental or physi- 
cal impairment which prevents [the applicant from] 
engaging in any gainful activity. Inability to engage 

17 

in any gainful activity and the impairment which 
causes it cannot be separated. The two components 
of disability must exist at the same time. 

Ibid. The court further concluded that the history of 
the 1965 amendments to the Social Security Act, which 
introduced the 12-month duration requirement, showed 
that Congress intended to require that the disability— 

i.e., the inability to work on account of the impairment 
—and not merely the impairment itself last at least 12 
months. Congress, the court explained, expressly de- 
clared that it sought to require that insured workers be 
or be expected to be “totally disabled,” i.e., unable to 
work, for the entire 12-month period. See id. at 1187. 
The Eighth Circuit followed Alexander in Titus, 4 F.3d 
at 594 (“We agree with the district court that the inter- 
pretation of ‘duration of impairment’ was settled in 
Alexander v . Richardson, 451 F.2d 1185 (10th Cir. 
1971).”). 

2. The court of appeals’ decision, moreover, has 
profound programmatic and fiscal implications for the 
Social Security programs. The question of how long a 
claimant’s disability must last or be expected to last in 
order for the claimant to be entitled to benefits is one of 
the most fundamental issues in the administration of 
the Title II and Title XVI disability programs, in which 
approximately two million claims are filed annually. As 
noted above, it is the longstanding position of the Com- 
missioner that benefits are not awarded where the 
claimant was capable of returning to work within 12 
months after the onset of the inability to engage in 
substantial gainful activity, and millions of claims have 
been denied on that basis since the 12-month duration 
requirement was enacted in 1965. The court of appeals’ 
decision thus represents a dramatic departure from the 

18 

way the disability programs long have been adminis- 
tered. 

The fiscal impact of that departure, moreover, is 
potentially enormous. Obviously, many claimants who 
are capable of working will have impairments that will 
last for longer than a year. See, e.g., Alexander, 451 
F.2d at 1186 (“For example, an applicant may have an 
injury from which he has lost one of his hands. The 
result is a physical impairment for the remainder of his 
life, but if he is able to engage in any gainful activities 
within a year from his injury he is not entitled to 
benefits.”). We have been informed by the Social 
Security Administration that its Office of the Chief 
Actuary estimates that, in the Fourth Circuit alone, the 
increase in disability insurance benefits and SSI 
payments that would result from complying with the 
decision would cost the Social Security programs ap- 
proximately $9.8 billion over the next ten years (2002- 
2011); if the decision were applied nationwide, the 
estimated additional costs would be $80 billion.5 

The court of appeals’ decision, if allowed to stand, 
would also have a substantial impact on the agency’s 
ability to administer the program effectively. Because 
the decision relaxes the standards of eligibility for dis- 
ability insurance benefits under Title II and for SSI 
benefits under Title XVI, it may dramatically increase 
the number of applications the agency must process; 

5 These estimates may in fact prove somewhat conservative. 
For example, the estimates are based on the number of denials on 
duration grounds under current experience; they do not attempt to 
account for the increase in applications for benefits that would be 
caused by the court of appeals’ decision. Because the decision 
below relaxes the requirements to qualify for benefits, a sub- 
stantial increase in the number of applications appears likely if the 
decision is not reversed. 

19 

the agency already must process several million appli- 
cations under those programs each year. The impact 
may be particularly profound in the context of Title 
XVI’s SSI program. As discussed above, the disability 
insurance program of Title II imposes a five-month 
waiting period; thus, even if the applicant’s disability is 
expected to last at least 12 months from the outset, the 
applicant is not eligible for benefits until the disability 
has lasted at least five months. 42 U.S.C. 423(c)(2)(A). 
Unlike Title II, however, Title XVI does not impose a 
waiting period.6 Thus, under the court of appeals’ 
decision, SSI benefits must be paid if an impairment 
causes an inability to work of any duration. It is 
unlikely that Congress intended such a result, or to 
impose the resulting burdens on the agency. 

The extent to which the court of appeals’ decision 
undermines the fundamental premises of the Act is 
underscored by its effect on the application of other 
provisions of the Act. For example, under 42 U.S.C. 
423(f)(1), the Commissioner may terminate benefits 
where “the individual is now able to engage in sub- 
stantial gainful activity” if “there has been any medical 
improvement in the individual’s impairment.” Because 
the court of appeals’ decision permits individuals to 
obtain benefits even if their impairments no longer 
prevent them from engaging in substantial gainful 
activity, it would make terminations under Section 
423(f)(1) problematic. Where the individual already 
can work notwithstanding the impairment—where 
maximum medical improvement has already been 

6 To the extent the court of appeals intended to suggest 
otherwise, see App., infra, 9a n.7, it was mistaken. The statutory 
provisions cited in that footnote apply only under Title II of the 
Act; they do not apply under Title XVI. 

20 

achieved—at the time the award is made, it may prove 
difficult if not impossible to show further “medical 
improvement” that could be a basis for termination. 
The agency therefore could be required to continue 
paying benefits indefinitely to individuals who can work 
notwithstanding their impairments because it cannot 
show “medical improvement” between the date of the 
award and the date of the proposed termination. See 20 
C.F.R. 404.1594. 

3. The court of appeals’ decision rests on an 
erroneous interpretation of the Act and a misappli- 
cation of Chevron deference principles. The court 
emphasized that the definition of disability requires 
that the impairment last 12 months. App., infra, 7a-8a. 
The court, however, ignored two critical features of the 
statutory framework. First, the definition of disability 
requires not only an underlying medical impairment 
that has already lasted or can be expected to last in the 
future for at least 12 months, but also an inability to 
engage in substantial gainful activity “by reason of ” 
that impairment. 42 U.S.C. 423(d)(1)(A). The inability 
to work and the impairment giving rise to that inability 
are thus directly linked. Where, as here, the claimant 
returns to work within 12 months, he does not meet the 
definition of disability, because he does not have, for the 
duration of the 12-month qualifying period, an inability 
to work “by reason of ” the underlying impairment. 
Alexander, 451 F.2d at 1186 (“[i]nability to engage in 
any gainful activity and the impairment which causes it 
cannot be separated”). Second, the court ignored 
Section 423(d)(2)(A), which was added to the definition 
of disability in 1967 and provides that an individual is 
disabled “only if ” the impairment is “of such severity” 
that it precludes substantial gainful activity. Where 
the individual is able to engage in substantial gainful 

21 

activity, the impairment is not sufficiently severe and 
the individual cannot be considered disabled. In this 
case, the court of appeals effectively read out of the Act 
Section 423(d)(2)’s command that the claimant be 
considered disabled “only if ” he is unable to work. 

Furthermore, the legislative history of the 1965 
amendments to the Social Security Act demonstrates 
that Congress intended to require that the disability 
(and not merely the impairment) last 12 months. When 
Congress first imposed the 12-month duration require- 
ment in 1965, it rejected a shorter six-month period 
proposed in the House of Representatives’ version of 
the bill. Explaining that decision, the Senate Finance 
Committee noted that the “the House provision could 
result in the payment of disability benefits in cases of 
short-term, temporary disability.” S. Rep. No. 404, 
89th Cong., 1st Sess. 98 (1965). “Under the House 
provision,” the committee explained, “benefits could be 
paid for several months in cases of temporary disability 
resulting from accidents or illnesses requiring a limited 
period of immobility.” Ibid. To avoid awarding benefits 
in cases of only temporary disability, the Senate com- 
mittee believed it “necessary to require that a worker 
be under a disability for a somewhat longer period than 
6 months in order to qualify for disability benefits.” 
Ibid. (emphasis added). By eliminating the require- 
ment that the inability to engage in substantial gainful 
activity must last 12 months, the court of appeals’ 
decision creates precisely the short-term disability 
benefits program Congress sought to avoid. And that 
result conflicts with Congress’s intent, evident through- 
out the legislative history, that the disability last 12 
months. See id. at 98 (bill modified “to provide for the 
payment of disability benefits for an insured worker 
who has been or can be expected to be totally disabled 

22 

throughout a continuous period of 12 calendar 
months”).7 

At the very least, in light of the text, structure and 
legislative history of the Act, the Commissioner’s long- 
standing interpretation of the definition of disability is 
reasonable and therefore entitled to deference. See 
Chevron U.S.A. Inc. v. Natural Res. Defense Council, 
Inc., 467 U.S. 837, 842-843 (1984). As a matter of 
grammar, the court of appeals was correct in concluding 
that Section 423(d) expressly requires the impairment 
to last at least 12 months, as does Section 
1382c(a)(3)(A), which governs the SSI program. But 
the court of appeals was incorrect to assert that the Act 
thereby unambiguously precludes the Commissioner 
from requiring that the disability—the inability to 
engage in substantial gainful activity by reason of the 
impairment—last 12 months as well. The Act nowhere 
expressly declares that there is no minimum duration 
requirement for the disability itself, and requiring the 
disability to be co-extensive with the underlying 
impairment for the qualifying 12-month period is the 
most sensible construction of the Act. Titles II and 
XVI of the Act are designed to provide disability 
benefits to those who cannot engage in substantial 
gainful activity, not to provide impairment benefits to 

7 It is no answer to note that disability insurance benefits are 
not paid until after a five-month waiting period. As the legislative 
history discussed in the text makes clear, Congress considered 
even a six-month disability to be too short or temporary in nature 
to warrant the payment of benefits under Title II. Moreover, 
there is no waiting period for SSI benefits, which means that an 
SSI claimant apparently would be entitled to receive benefits 
under the court of appeals’ decision for a disability of any duration, 
so long as the underlying impairment lasts or is expected to last 12 
months or more. 

23 

those who can. By contrast, the court of appeals offered 
no plausible reason why Congress would have insisted 
that the underlying impairment last for 12 months but 
at the same time insisted that the claimant’s inability to 
work have no minimum duration. 

4. The court of appeals’ invalidation of the Commis- 
sioner’s regulations governing the availability of trial 
work periods under 42 U.S.C. 422(c) also warrants this 
Court’s review. Indeed, the court’s ruling that respon- 
dent was entitled to a trial work period appears to 
stand or fall with its resolution of the question of 
whether respondent was entitled to disability benefits 
notwithstanding his return to substantial gainful activ- 
ity within 12 months of the onset of his inability to 
work. The court of appeals concluded that respondent’s 
claim to a trial work period was “conclusively settled” 
in his favor by the court’s earlier conclusion that he was 
entitled to disability benefits. App., infra, 9a.8 
The court of appeals, moreover, gave the Commis- 
sioner’s construction of the Act inappropriately short 
shrift. The Commissioner has consistently construed 

8 The court of appeals does not appear to have construed the 
trial work period provision independently of its interpretation of 
the duration requirement. To the extent the court of appeals’ 
decision could be read as holding that respondent was entitled to a 
trial work period notwithstanding the 12-month duration require- 
ment because his inability to work was, at some point after onset, 
“expected to last” 12 months—even though he had resumed 
substantial gainful activity before the expiration of that 12-month 
period—such a holding would not affect the need for plenary 
review. That holding would itself conflict with the decision by the 
Fifth Circuit in Cieutat v. Bowen, 824 F.2d 348, 358-359 (1987). As 
that court correctly held, the trial work provision precludes the 
Commissioner “only from considering work done after disability 
commences and only for purposes of determining whether the 
disability has ceased.” Ibid. 

24 

Section 422 as making a trial work period available only 
where the impairment has precluded substantial gainful 
activity for 12 continuous months, or where there has 
been a determination that it can be expected to do so. 
See S.S.R. 82-52 (Cum. Ed. 1981-1985); 65 Fed. Reg. 
42,787 (2000) (to be codified at 20 C.F.R. 404.1592(d)(2) 
(2001)) (“You are not entitled to a trial work period” if 
“you perform work demonstrating the ability to engage 
in substantial gainful activity within 12 months of the 
onset of the impairment(s) that prevented you from 
performing substantial gainful activity and before the 
date of any notice of determination or decision finding 
that you are disabled.”). The Commissioner explained: 

Because section [422(c)] provides that a trial work 
period shall begin with the month in which a person 
becomes entitled to title II disability benefits, a 
claimant who does not become entitled to disability 
benefits cannot receive a trial work period. Under 
our interpretation of the duration requirement, a 
person cannot be found to be under a disability if he 
or she performs work demonstrating the ability to 
perform substantial gainful activity within 12 
months after onset and before we have issued any 
notice of determination or decision finding disability. 

* * * On the other hand, if a claimant returns to 
work before we have made a determination or de- 
cision finding disability, but more than 12 months 
from onset, the duration requirement may be 
satisfied * * *, the claimant may become entitled to 
benefits, and the work may be protected by the trial 
work period even though the work began prior to a 
finding of disability. 

65 Fed. Reg. at 42,774. 

25 

The court of appeals expressed concern that the 
Commissioner’s construction of the Act has the po- 
tential to yield different results based on when the 
disability determination is made. App., infra, 13a 
(“under the Commissioner’s interpretation, a finding of 
disability, or entitlement to benefits or a trial work 
period, would be determined, in part, by when the 
Commissioner adjudicated a claim”). The court rea- 
soned that, if the disability determination is made with- 
in 12 months of onset, and at that point the disability 
was “expected to last” 12 months, an individual could be 
entitled to a trial work period even though he or she 
later returns to work before 12 months lapse. If the 
disability determination were made after the claimant 
has already returned to work, however, the individual 
would be found not disabled. Ibid. 

The court of appeals’ reasoning is unsupported. As 
the Commissioner explained, Congress permitted the 
agency to find a disability “based on an impairment 
which ‘can be expected to last’ 12 months”—rather than 
limiting the agency to finding disability where the 
impairment had already lasted 12 months—in order “to 
provide a means for [the agency] to adjudicate dis- 
ability claims without having to wait 12 months from 
onset, rather than to permit claims to be allowed in the 
face of specific evidence that the claimant’s impairment 
did not, in fact, prevent him or her from engaging in 
substantial gainful activity for 12 continuous months.” 
65 Fed. Reg. at 42,774. The court of appeals nowhere 
offered an alternative explanation for the “expected to 
last” language in the definition of disability. Moreover, 
although the Commissioner’s construction might cause 
disability determinations to depend, in a few cases, on 
when the determination is made, Congress was aware 
of that possibility and specifically chose to permit it. 

26 

S. Rep. No. 404, supra, at 99 (“[W]here disability has 
existed for 12 calendar months or more, no prognosis 
would be required. Where a worker has been under a 
disability which has lasted for less than 12 months, the 
bill would require only a prediction that the worker’s 
disability will continue for a total of at least 12 calendar 
months after onset of the disability.”).9 The Commis- 
sioner’s interpretation, which is consistent with 
Congress’s intent as well as the text of the Act, is at the 
very least reasonable and therefore should be sus- 
tained. 

10 

9 The court of appeals’ other reasons for rejecting the Com- 
missioner’s interpretation of the expectancy provision also lack 
merit. First, the court rejected that interpretation because the Act 
does not explicitly mention adjudication as a prerequisite to a 
finding of disability. App., infra, 13a. But the Act does permit a 
finding of disability when the inability to perform substantial 
gainful activity “can be expected” to last 12 months. The Com- 
missioner reasonably concluded that the relevant expectation is 
that found by the adjudicator at the time of the disability deter- 
mination. Second, the court observed that no other part of the Act 
“differentiates between claims adjudicated within twelve months, 
and claims adjudicated after twelve months.” Ibid. But no other 
part of the Act contains similar statutory language. 

10 In this particular error, the Fourth Circuit has considerable 
company. The Sixth, Seventh, Eighth, and Tenth Circuits have all 
misapplied the trial work provisions. See App., infra, 13a n.10. 
Under those cases, joined by the Fourth Circuit here, a claimant is 
entitled to a trial work period if at some point the claimant’s 
inability to work can be expected to last 12 months even if, at the 
time the claim is adjudicated, 12 months have passed and the 
claimant has returned to work during that period. See Sala- 
malekis v. Commissioner of Soc. Sec., 221 F.3d 828, 834 (6th Cir. 
2000); Walker v. Secretary of Health and Human Servs., 943 F.2d 
1257, 1260 (10th Cir. 1991); McDonald v. Bowen, 818 F.2d 559, 564 
(7th Cir. 1986); Newton v. Chater, 92 F.3d 688, 694 (8th Cir. 1996). 
As explained above, the 12-month duration requirement applies to 

27 

CONCLUSION 

The petition for a writ of certiorari should be 
granted. 

Respectfully submitted. 

THEODORE B. OLSON 

Solicitor General 

STUART E. SCHIFFER 

Acting Assistant Attorney 

General 

EDWIN S. KNEEDLER 

Deputy Solicitor General 

JEFFREY A. LAMKEN 

Assistant to the Solicitor 

General 

JOHN C. HOYLE 
MARK S. DAVIES 

Attorneys 

JUNE 2001 

the disability—both the impairment and the resulting inability to 
work. Accordingly, review of the first question presented will 
cause the Court to decide whether the trial work provisions apply 
to a claimant who returns to work less than 12 months after the 
onset of his disability. 

APPENDIX A 

UNITED STATES COURT OF APPEALS 
FOR THE FOURTH CIRCUIT 

No. 00-1016 

CLEVELAND B. WALTON, PLAINTIFF-APPELLANT 

v. 

KENNETH S. APFEL, COMMISSIONER OF 

SOCIAL SECURITY, DEFENDANT-APPELLEE 

Argued: Oct. 30, 2000 
Decided: Dec. 18, 2000 

Before: NIEMEYER and LUTTIG, Circuit Judges, and 
WILLIAMS, United States District Judge for the Dis- 
trict of Maryland, sitting by designation. 

Affirmed in part, reversed in part, and remanded by 
published opinion. Judge LUTTIG wrote the opinion, in 
which Judge NIEMEYER and Judge WILLIAMS joined. 

OPINION 

LUTTIG, Circuit Judge: 

Cleveland B. Walton appeals the district court’s 
grant of summary judgment affirming the decision by 
the Commissioner of the Social Security Administration 

(1a) 

2a 

that Walton was not entitled to disability insurance 
benefits and supplemental security income under the 
Social Security Act. The Commissioner’s denial of 
benefits, and the district court’s affirmance of that 
decision, were pursuant to a regulatory interpretation 
of the Social Security Act by the Social Security 
Administration, which interpretation provides that a 
return to work prior to the lapse of a 12 month period 
after onset of disability and prior to the adjudication of 
disability precludes a finding that a claimant is disabled 
and does not allow the award of a trial work period. 
We hold that the agency interpretation upon which 
the district court and the Commissioner relied 
clearly contravenes the relevant, and unambiguous, 
provisions of the Social Security Act. See 42 U.S.C. 
§§ 423(d)(1)(A); 422(c)(3). Accordingly, we reverse the 
judgment of the district court granting summary 
judgment to the Commissioner and denying summary 
judgment to Walton, except with regard to the district 
court’s conclusion that Walton began “substantial 
gainful activity” (“SGA”)1 in October 1995, when his 
earnings exceeded $500, which latter holding we affirm. 

1 Substantial gainful activity is “work activity that is both sub- 
stantial and gainful,” and that involves “doing significant physical 
or mental activities.” 20 C.F.R. §§ 404.1572, 416.972. According to 
the statutory guidelines, earnings between $300 and $500 per 
month may be deemed SGA, while earnings in excess of $500 per 
month create a rebuttable presumption of SGA. 20 C.F.R. 
§§ 404.1574(b)(2)(vii), 416.974(b)(2)(vii); see also Payne v. Sullivan, 
946 F.2d 1081, 1083 (4th Cir. 1991). Moreover, the Commissioner 
considered the nature of appellant’s work and his ability to do that 
work, in addition to his earnings. In this case, the regulations 
defining substantial gainful activity are reasonable, 42 U.S.C. 
§ 405(a), the decision that appellant’s October 1995 earnings were 

3a 

I. 

Cleveland B. Walton (“Walton”), a college graduate 
in his mid-thirties with a history of psychological 
problems, was diagnosed with schizophrenia after a six- 
day period of hospitalization in March 1995. He applied 
for disability insurance benefits (“DIB”) and supple- 
mental security income (“SSI”) under the Social Secu- 
rity Act (“Act”) on April 12, 1995, based on his claimed 
mental impairment—schizophrenic disorder with asso- 
ciated depression. His application was denied initially 
and upon reconsideration. 

After an evidentiary hearing on July 10, 1996, an 
Administrative Law Judge (“ALJ”) concluded that 
Walton was disabled by his mental impairment; at the 
request of the ALJ, Dr. Elliott J. Spanier, a board- 
certified psychiatrist, reviewed appellant’s medical 
records and opined that Walton suffered from schizo- 
phrenic disorder with psychotic features, that the 
impairment met the criteria of a listed impairment,2 
and that the impairment had lasted 12 months. 

Prior to his hearing before the ALJ, Walton advised 
the ALJ that he had worked at Food Lion from May 
1995 until December 10, 1995, for five or six hours a 
day, and that he had begun working full-time at the 
same job on December 10, 1995. Based on this infor- 

SGA was supported by substantial evidence, and we affirm this 
part of the district court’s judgment. 

2 A listed impairment is an impairment “considered severe 
enough to prevent a person from doing any gainful activity.” 20 
C.F.R. § 404.1525(a). 

4a 

mation, the ALJ denied Walton a trial work period3 
because Walton had demonstrated the capacity for 
sustained work since May 1995, and because his 
disability ceased when he began working full time. 

Instead, the ALJ held that Walton was entitled to 
benefits pursuant to a period of disability that com- 
menced on the amended onset date of his impairment, 
October 31, 1994—the date his employment as an in- 
school suspension teacher was terminated—and ended 
on December 10, 1995—the date Walton started to 
work full-time at Food Lion. 

Subsequently, the Social Security Administration 
(SSA) determined that Walton may have begun SGA 
within twelve months of his onset date. Based on 
agency policy, Walton was not disabled, and was not 
entitled to benefits, if he had returned to work that 
constituted SGA within twelve months of his disability 
onset date and prior to adjudication of his claim, even if 
his impairment had lasted or was expected to last for a 
continuous period of not less than 12 months. Con- 
sequently, the case was remanded to the ALJ to assess 
when Walton began SGA. 

Substantial evidence that Walton remained mentally 
impaired was presented at the second hearing. How- 
ever, the ALJ did not reach the issue of impairment 
because he concluded that Walton returned to SGA in 
October 1995, when his earnings from his part-time 
work as a grocery store cashier and stocker exceeded 

3 A trial work period permits qualified claimants to test their 
ability to work for up to nine months and still be considered dis- 
abled. See 42 U.S.C. § 422(c); 20 C.F.R. § 404.1592. 

5a 

$500.4 And, because Walton was not unable to engage 
in SGA for a continuous period of at least twelve 
months from his disability onset date, the ALJ deter- 
mined that he was not disabled and not entitled to a 
trial work period, and therefore denied him benefits. 

Walton sought review of the ALJ’s decision, which 
stands as the final decision of the Commissioner of the 
Social Security Administration (“Commissioner”). The 
district court adopted the proposed memorandum 
opinion of the magistrate judge and granted summary 
judgment to the Commissioner, holding that the 
Commissioner’s decision that Walton engaged in SGA 
in October 1995 and was not disabled and entitled to 
benefits, was supported by substantial evidence, and 
that Walton was not entitled to a trial work period 
absent a finding of disability and entitlement to 
benefits. This appeal followed. 

II. 

Walton does not deny that he worked in October 
1995. Rather, he claims, inter alia, that his work in 
October 1995 did not constitute SGA5 and that, even if 
the work did constitute SGA, the district court improp- 
erly relied upon it because that SGA was part of a trial 
work period and, as such, could not be used as evidence 

4 Under the Act’s sequential evaluation process, the disability 
inquiry will end at the first step, and the claimant will be found not 
disabled, irrespective of impairment, if he has engaged in SGA. 
20 C.F.R. §§ 404.1520(b), 416.920(b). As discussed infra at [10a], 
SGA during a trial work period is ignored, and will not end the 
evaluation process. 42 U.S.C. § 422(c)(2). 

5 We affirm that portion of the district court’s opinion. See 
supra n. 1. 

6a 

that he was not disabled. The Commissioner does not 
dispute that Walton suffered from a mental impair- 
ment, nor does he dispute that the impairment lasted 
for a continuous period of at least 12 months. Instead, 
the Commissioner asserts that the district court 
properly upheld the denial of benefits because, 
pursuant to the Act and agency policy, Walton was not 
under a disability when he engaged in SGA during 
October 1995, prior to the lapse of twelve months from 
his disability onset date and prior to adjudication of his 
claim. Further, the Commissioner claims that because 
Walton was not disabled, he was not entitled to a trial 
work period. 

The Commissioner insists that his position is based 
on the plain language of the statute and that, even if the 
language of the Act were susceptible to another inter- 
pretation, deference is owed to the agency’s interpre- 
tation of the Act. Appellee’s Br. at 24. This interpre- 
tation is expressed in Social Security Ruling (SSR) 
82-52 and Notice of Proposed Rule-making, 60 Fed. 
Reg. 12166 (March 6, 1995) (“NPRM”).6 

While we recognize Chevron deference where such 
deference is due, see generally Chevron U.S.A., Inc. v. 
Natural Resources Defense Council, Inc., 467 U.S. 837, 
104 S. Ct. 2778, 81 L.Ed.2d 694 (1984), we nonetheless 
reject the Commissioner’s judgment in this case. In the 
first place, agency interpretation of the Act is not 
appropriate because the language of the statute is clear 
and unambiguous. Moreover, even if interpretation 
were required, the Commissioner’s interpretation 

6 This proposed regulation (which reflects the position of SSR 
82-52) became effective on August 10, 2000, and does not apply 
retroactively to Walton’s case. 

7a 

—which assumes either a duration period or adjudi- 
cation requirement and does violence to the grammati- 
cal structure of the statute—conflicts with the very 
statute it purports to elucidate. We are bound to reject 
such constructions. Id. at 843 & n. 9, 104 S. Ct. 2778. 

Consequently, the district court’s holding that 
Walton was not under a disability when he engaged in 
SGA prior to the lapse of twelve months from his onset 
date and prior to adjudication of his claim, and its 
holding that Walton was not entitled to a trial work 
period, are reversed. 

A. 

Beyond question, the statutory language speaks 
clearly to the issue of whether an individual can be 
under a “disability,” even though he engaged in SGA 
prior to the expiration of a twelve-month period from 
his disability onset date and prior to the adjudication of 
his disability and an award of benefits. The statutory 
language is unambiguous, requires no agency interpre- 
tation, and leaves no doubt that neither a duration 
requirement for the inability to engage in substantial 
gainful activity nor a requirement that the benefits 
have been “awarded” or adjudicated, exists. Rather, 
the relevant provision, 42 U.S.C. § 423(d)(1)(A), defines 
“disability” simply as the inability to engage in any 
substantial gainful activity by reason of any medically 
determinable physical or mental impairment which can 
be expected to result in death or which has lasted or 
can be expected to last for a continuous period of not 
less than 12 months. 

In addition to the facial clarity of the language, the 
grammatical structure and logic of the statute further 

8a 

compel the conclusion that the clause, “which can be 
expected to result in death or which has lasted or can 
be expected to last for a continuous period of not less 
than 12 months,” refers to the impairment, not to the 
inability to engage in SGA; the clause manifestly does 
not modify “substantial gainful activity.” 

In the first place, based solely on grammar and sen- 
tence structure, the clause modifies the prepositional 
phrase “by reason of any medically determinable physi- 
cal or mental impairment.” Additionally, a single 
referent for the entire adjectival phrase must exist. 
Thus, as a matter of pure logic, it is clear that the 
duration clause must modify impairment, and only 
impairment, because to hold otherwise would lead to 
the absurd construction dictated by the Commissioner’s 
interpretation, that “[d]isability is the inability to 
engage in substantial gainful activity . . . which can be 
expected to result in death or which has lasted or can 
be expected to last for a continuous period of not less 
than 12 months.” Obviously it is the impairment, and 
not the SGA, that Congress believed could lead to 
death, and it is thus the impairment, and not the SGA, 
which is subject to the “not less than twelve months” 
requirement. We decline to construe it otherwise. 

Accordingly, we hold that a claimant whose impair- 
ment was “expected to result in death,” or which 
“lasted” or “was expected to last” for a continuous 
period of not less than twelve months may be disabled, 
even if the inability to engage in substantial gainful 
activity does not cause death or actually persist for 
twelve months. 42 U.S.C. § 423(d)(1)(A). Moreover, 
such individual becomes entitled to disability insurance 
benefits, if under a disability, for each month after the 

9a 

five-month waiting period imposed by section 423(c)(2)7 
if the individual (1) is insured for disability benefits; 
(2) is below retirement age; and (3) has filed an 
application for benefits. 42 U.S.C. § 423(a). 

In this case, the ALJ found in the first hearing that 
Walton was disabled and had an impairment that had 
lasted for twelve months from the disability onset date 
in October 1994. It is further undisputed that Walton 
did not engage in a successful work attempt until May 
1995, two months after the five-month waiting period, 
and did not engage in SGA until October 1995, well 
after the five-month waiting period had elapsed. Con- 
sequently, Walton met the statutory prerequisites for 
entitlement to disability insurance benefits. 

Walton’s claim that he was entitled to a trial work 
period is likewise affirmed by the statutory language. 
For, whether Walton is entitled to a trial work period, 
in light of his return to part-time work in May 1995 and 
SGA in October 1995, is conclusively settled by the 
determination that Walton was disabled and entitled to 
disability benefits after the five-month waiting period, 

i.e., beginning in April 1995. 

Contrary to the Commissioner’s position, the statute 
allows a trial work period to begin prior to twelve 
months from the disability onset date, and before bene- 
fits are granted. Unambiguously, the statute provides 
that a “period of trial work . . . shall begin with the 

7 There is no entitlement to receive benefits until after this 
waiting period, which refers to the earliest period of five consecu- 
tive calendar months “throughout which the individual with 
respect to such application is filed has been under a disability.” 
42 U.S.C. § 422(c)(2); see also 42 U.S.C. § 423(a). 

10a 

month in which [the claimant] becomes entitled to dis- 
ability insurance benefits.” 42 U.S.C. § 422(c)(3) (emp- 
hasis added). And, as discussed supra, Walton met the 
requirements of 42 U.S.C. § 423(a) and was entitled to 
disability insurance benefits as of April 1995. 

Under the statute, “any services rendered by an 
individual during a period of trial work will be deemed 
not to have been rendered by such individual in 
determining whether his disability has ceased in a 
month during such period.” 42 U.S.C. § 422(c)(2).8 
Thus, given that Walton’s trial work period precludes 
consideration of the October 1995 SGA, Walton meets 
even the Commissioner’s extra-statutory requirements 
for a finding of disability, because no SGA during the 
period of twelve months from his disability onset date, 
October 31, 1994, could have been considered. 

Consequently, in light of our holdings that Walton 
was under a “disability,” “entitled to disability bene- 
fits,” and “entitled to a trial work period,” we must also 
hold that the district court’s consideration of the 
October 1995 SGA as evidence that Walton had en- 
gaged in SGA prior to the expiration of twelve months 
from his disability onset date was in contravention of 
the Act. 

B. 

Even if the statute we interpret herein were ambigu- 
ous, and thus susceptible to interpretation, we would 
nonetheless reject as unreasonable the Commissioner’s 

8 Once the trial work period is over, the agency can consider 
the work done during the work period in determining whether the 
disability has ended after the work period. 20 C.F.R. § 404.1592(a). 

11a 

contrary interpretation, which rests on the premise 
that it is the “inability to engage in any substantial 
gainful activity” which must “last” or “be expected to 
last for a continuous period of not less than 12 months.” 
And, it is based on this supposition that the Commis- 
sioner concludes that the definition of disability—and a 
prerequisite for entitlement to a trial work period— 
includes the requirement that either the impairment 
must have prevented SGA for a period of no less than 
twelve months or the claim must have been adjudicated 
and benefits awarded. See 60 Fed. Reg. 12166, 12168; 
SSR 82-52. It is clear, however, that the Commis- 
sioner’s position is directly belied by the language, 
structure, and grammar of 42 U.S.C. § 423(d)(1)(A). 

For, to obtain the outcome the Commissioner desires, 
one is required in the first instance to separate a single 
adjectival clause in section 423(d)(1)(A)— “which can be 
expected to result in death or has lasted or is expected 
to last in excess of twelve months”—so that “which can 
be expected to result in death” modifies only “impair- 
ment,” while “which has lasted or can be expected to 
last” modifies both impairment and “inability to engage 
in substantial gainful activity.” There is no mode of 
statutory construction which allows such. As discussed 
supra at [8a], parts of a single adjectival phrase cannot 
modify different antecedents. The only logical referent 
for both constituents parts of the clause is “impair- 
ment.” 

We further conclude that the agency’s interpretation 
is contrary to the clear statutory language in other 
respects. For example, while the Commissioner accepts 
“an award of benefits” as an alternate requirement to 
being unable to engage in SGA for a period of twelve 

12a 

months, “an award of benefits” is nowhere to be found 
in the statutes that define “disability” and outline the 
parameters of “trial work period.” Additionally, though 
the Commissioner seeks to make the trial work period, 
as well as a finding of disability, contingent upon either 
the duration of SGA or adjudication,9 see 60 Fed. Reg. 
12166, 12168; SSR 82-52, the “shall begin” language in 
42 U.S.C. § 422(c)(3) is conditioned only on being “eligi- 
ble to receive benefits,” as determined under section 
423(a)(1). The conflict between the statute and the 
agency interpretation is both apparent and significant. 

The Commissioner seeks to reconcile this apparent 
tension by reference to the use of different verb tenses 
within 42 U.S.C. § 423(d)(1)(A). We are told that the 
Congress included the “expected to last” language in 
section 423(d)(1)(A) so that the SSA can “adjudicate 
disability claims without having to wait 12 months from 
the alleged onset of disability, rather than to permit 
claims to be allowed in the face of evidence that the 
claimant’s impairment did not prevent substantial gain- 
ful activity for 12 continuous months.” 60 Fed. Reg. 
12166, 12168. In support of this position, appellee 
points to the fact that in its “definition of ‘disability,’ 
Congress used two different verb tenses to provide for 
the fact that the Agency would decide claims at two 
different times relative to the onset of a claimant’s 
disability.” Appellee’s Br. at 14. 

9 The Commissioner’s “interpretation” mandates that a trial 
work period may “not be awarded when a claimant performs work 
demonstrating the ability to engage in substantial gainful activity 
within 12 months after the alleged onset of disability and prior to 
an award of benefits.” J.A. 97. 

13a 

If for no other reason, juxtaposition of this “verb 
tense” analysis with the timing of agency adjudication 
exposes its weakness, and makes the argument unper- 
suasive as a statutory matter. As an initial matter 
—and significantly—neither section 423(a)(1) nor sec- 
tion 423(d)(1)(A) even mentions adjudication as a 
prerequisite to “disability” or “entitlement to disability 
benefits.” Second, no part of the Act of which we are 
aware differentiates between claims adjudicated within 
twelve months, and claims adjudicated after twelve 
months, a distinction upon which the Commissioner’s 
verb tense analysis rests. Lastly, under the Commis- 
sioner’s interpretation, a finding of disability, or entitle- 
ment to benefits or a trial work period, would be deter- 
mined, in part, by when the Commissioner adjudicated 
a claim; we decline to make findings and entitlements of 
such nature turn upon the vagaries of agency efficiency. 

In sum, the Commissioner’s position, grounded in 
SSR 82-52 and the NPRM, is both in actual conflict with 
the statutory language and unreasonable, and our duty 
is therefore clear—we must reject the agency interpre- 
tation and apply the statute as enacted. 

10 

10 We join no fewer than four other circuit courts of appeal in 
the assessment that the agency’s position contradicts the plain lan- 
guage of the governing statute. See Salamalekis v. Commissioner 
of Social Security, 221 F.3d 828, 832 (6th Cir. 2000) (agency 
position and SSR 82-52 an invalid interpretation of the Act); 
Newton v. Chater, 92 F.3d 688, 693-94 (8th Cir. 1996) (trial work 
period starts in the month that disability entitlement begins, i.e., 
after five-month waiting period; agency ruling is inconsistent with 
the statutory provisions); Walker v. Secretary of Health and 
Human Services, 943 F.2d 1257, 1259-60 (10th Cir. 1991) (same); 
McDonald v. Bowen, 818 F.2d 559, 564 (7th Cir. 1987) (same). 

14a 

For the above reasons, those portions of the judg- 
ment of the district court affirming the Commissioner’s 
conclusions that Walton is not disabled based on his 
return to SGA within twelve months of his onset date 
and is not entitled to a trial work period are reversed. 
However, that portion of the district court’s judgment 
affirming the Commissioner’s conclusion that appel- 
lant’s work in October 1995 was SGA is affirmed. The 
case is remanded for further proceedings consistent 
with this opinion. 

AFFIRMED IN PART, REVERSED 
IN PART, AND REMANDED 

15a 

APPENDIX B 

UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF VIRGINIA 
Richmond Division 

Civil Action No. 3:98CV339 

CLEVELAND B. WALTON, PLAINTIFF 

v. 

KENNETH S. APFEL, COMMISSIONER OF SOCIAL 
SECURITY, DEFENDANT 

[Filed: Oct. 20, 1999] 

MEMORANDUM OPINION 

Cleveland B. Walton appeals the final decision of the 
Commissioner of the Social Security Administration 
(“Commissioner”) denying Walton’s claim for disability 
insurance benefits (“DIB”) and supplemental security 
income benefits (“SSI”). For the reasons which follow, 
the Commissioner’s decision at issue is supported by 
substantial evidence, the Proposed Memorandum Opi- 
nion of the Magistrate Judge denying Walton’s motion 
for summary judgment and granting the Commis- 
sioner’s motion for summary judgment is approved. 

PROCEDURAL BACKGROUND AND STATEMENT 
OF FACTS 

Walton was first hospitalized for depression with 
psychotic features in October 1990. Upon his release 

16a 

five days later, Walton was treated with medication as 
an outpatient until he re-entered the hospital in May 
1994, for depression. He was released ten days later 
and continued to receive medication and treatment as 
an outpatient until March 1995 when he was diagnosed 
with schizophrenia and hospitalized for approximately 
six days. Once again, Walton’s condition stabilized and 
he was released and treated with medication as an out- 
patient. The record shows that Walton’s mental health 
continued in that posture until April 12, 1995, when he 
filed his claims for SSI and DIB with the Social Secu- 
rity Administration.1 

From 1992 through October 1994, Walton worked as 
an in-school suspension teacher which entailed super- 
vision of students who were suspended from attending 
regular classes. After that employment was termi- 
nated, Walton worked for several different employers. 
These jobs, which the administrative law judge. 
(“ALJ”) found were unsuccessful work attempts and 
therefore were not considered in determining whether 
Walton was able to perform substantial gainful activity, 
included: a salesman for a clothing store; a stocker at a 
department store; an unidentified position with the 
Post Office; an unidentified position with a survey ser- 
vice; and a stocker at a grocery store. 

In May 1995, approximately three months after hav- 
ing been diagnosed with schizophrenia, Walton began 
working part-time at a grocery store as a cashier and 
stocker. By October 1995, Walton was earning more 
than $500 per month. On December 10, 1995, Walton 

1 Walton’s mother filed a protective application for disability 
insurance benefits and supplemental security income on his behalf 
on March 14, 1995. 

17a 

became a full-time employee and his hourly rate 
increased from $5.50 per hour to $6.50 per hour. 

On April 12, 1995, Walton filed an application for DIB 
and SSI, alleging that he had been disabled since 
February 20, 1995, due to psychiatric impairments, i.e., 
a schizophrenic disorder with associated depression. 
The Commission determined that Walton’s condition 
was not severe enough to prevent him from working 
because it was well controlled with medication. Thus, 
Walton’s application was denied initially and upon 
reconsideration. An ALJ conducted a de novo review 
based on an evidentiary hearing on July 10, 1996, at 
which Walton was represented by counsel. At the hear- 
ing, Walton amended the date of the onset of condition 
from February 20, 1995 to October 31, 1994. Walton’s 
mother, Joyce Walton, and vocational expert, Dr. 
Andrew V. Beale, also testified at the hearing. 

On August 30, 1996, the ALJ issued a decision con- 
cluding that Walton was entitled to a period of disa- 
bility commencing October 31, 1994, the alleged onset 
date of Walton’s disability due to psychiatric impair- 
ments, and ending December 10, 1995, when Walton 
started to work full-time at the convenience store. The 
ALJ held that Walton was entitled to receive DIB and 
SSI benefits from October 31, 1994 until February 29, 
1996, two months after the month in which his disability 
ceased, but that he was not entitled to a trial work 
period.2 On December 11, 1996, the Commissioner’s 

2 Walton’s attorney argued that a trial work period was war- 
ranted in this case. A trial work period would allow Walton to 
have worked an additional nine months while receiving benefits. 
Thus, a trial work period is an opportunity for an applicant to “test 
his ability to work and still be considered disabled.” 20 C.F.R. 

18a 

Appeals Council vacated and remanded the ALJ’s deci- 
sion based on additional evidence which showed that 
Walton had engaged in substantial gainful activity prior 
to the lapse of the twelve months after the onset date of 
his disability on October 31, 1994. 

On August 15, 1997, after a second hearing, the ALJ 
held that, beginning in October 1995, when his earnings 
consistently were in excess of $500 per month, Walton’s 
work activity as a grocery store cashier and stocker 
constituted substantial gainful activity. For that, rea- 
son, the ALJ determined that Walton was not entitled 
to a period of disability or DIB under sections 216(i) and 
223 of the Social Security Act, and was not eligible for 
SSI under sections 1602 and 1614(a)(3)(A) of the Social 
Security Act. 

DISCUSSION 

A. Standard of Review 

The task of judicial review is to determine whether 
there is substantial evidence to support the final deci- 
sion of the Commissioner that Walton is not entitled to 

§ 404.1592(a). A trial work period begins with the month in which 
a claimant becomes entitled to DIB and ends with the close of the 
ninth month in which the claimant has performed services (“any 
activity, even though it is not substantial gainful activity, which is 
done by a person in employment or self-employment for pay or 
profit, or is the kind normally done for pay or profit.” 20 C.F.R. 
404.1592(b)) or with the close of the month in which new evidence, 
other than evidence relating to work done during the trial work 
period, shows that the claimant is not disabled. See 20 C.F.R. 
§ 404.1592(e)(1), (2). The ALJ found that, a trial work period was 
not warranted because Walton had demonstrated the capacity for 
sustained work since May 1995. Further, if Walton is not entitled 
to DIB or SSI, he is not entitled to a trial work period. 

19a 

DIB or SSI benefits. See 42 U.S.C. § 405(g). Sub- 
stantial evidence is defined as “relevant evidence a 
reasonable mind might accept as adequate to support a 
conclusion. It consists of more than a mere scintilla of 
evidence but may be somewhat less than a pre- 
ponderance.” Laws v. Celebrezze, 368 F.2d 640, 642 (4th 
Cir. 1966). Consequently, a reviewing court should not 
substitute its judgment for that of the Commissioner. 
See id.; see also Hays v. Sullivan, 907 F.2d 1453, 1456 
(4th Cir. 1990). “[T]he language of § 205(g) precludes a 
de novo judicial proceeding and requires that the court 
uphold the Secretary’s decision even should the court 
disagree with such decision as long as it is supported by 
‘substantial evidence.’ ” 

Blalock v. Richardson, 483 
F.2d 773, 775 (4th Cir. 1972). Thus, it is the duty of the 
court to determine whether there was substantial 
evidence to justify the Commissioner’s decision. 

B. Analysis 

To qualify for DIB or SSI under the Social Security 
Act, a claimant must be disabled and must meet the 
earnings requirement as defined by the Act. “Dis- 
ability” is defined as the “inability to engage in any sub- 
stantial gainful activity by reason of any medically de- 
terminable physical or mental impairment which can be 
expected to result in death or which has lasted or can 
be expected to last for a continuous period of not 
less than 12 months.” 42 U.S.C. §§ 416(i)(1)(A), 
423(d)(1)(A), 1382c(a)(3)(A); see e.g., Stewart v. Apfel, 
182 F.3d 909 (4th Cir. 1999); Pass v. Chater, 65 F.3d 
1200 (4th Cir. 1995); Mullins v. Chater, 53 F.3d 328 (4th 
Cir. 1995); Rosa v. Callahan, 168 F.3d 72 (2d Cir. 1999). 

20a 

In addition, a claimant will be found to be under a 
disability: 

only if his physical or mental impairment or im- 
pairments are of such severity that he is not only 
unable to do his previous work but cannot, consider- 
ing his age, education, and work experience, engage 
in any other kind of substantial gainful work which 
exists in the national economy, regardless of 
whether such work exists in the immediate area in 
which he lives, or whether a specific job vacancy 
exists for him, or whether he would be hired if he 
applied for work. 

42 U.S.C. §§ 423(d)(2)(A), 1382c(a)(3)(B); see e.g., Pass 

v. Chater, 65 F.3d 1200 (4th Cir. 1995); English v. 
Shalala, 10 F.3d 1080 (9th Cir. 1993); Bush v. Shalala, 
94 F.3d 40, 45 n.3 (2d Cir. 1996). 

1. Substantial Gainful Activity 

According to the Act, a claimant will be considered 
disabled “if he is unable to engage in any substantial 
gainful activity by reason of any medically determin- 
able physical or mental impairment which can be 
expected to result in death or which has lasted or can 
be expected to last for a continuous period of not less 
than twelve months.” 42 U.S.C. § 1382(c)(a)(3)(A). 
Substantial gainful activity is “work activity that is 
both substantial and gainful.” 20 C.F.R. §§ 404.1572, 
426.972. Substantial work activity “involves doing 
significant physical or mental activities.” 20 C.F.R. 
§§ 404.1572(a), 916.972(a). Work may be substantial 
even if it is part time. See id. Gainful work activity is 
work that is done for pay or profit. 20 C.F.R. 
§§ 404.1572(b), 416.972(b). The ALJ concluded that, 
beginning in October 1995, Walton’s work as a cashier 

21a 

and stocker at the grocery store was both substantial 
and gainful. The date claimed as the onset of disability 
was October 31, 1994, less than twelve months before 
he performed substantial gainful activity. For that 
reason, the ALJ held that Walton did not satisfy the 
durational requirement of 20 C.F.R. §§ 404.1505, 
416.905. 

The Commissioner has promulgated a five-step 
process to determine whether a claimant is disabled. 
See 20 C.F.R. §§ 404.1520, 416.920. Under the regula- 
tions, the ALJ must consider whether the claimant 
(1) is working and the work he is doing is substantial 
gainful activity; (2) has a severe impairment; (3) has an 
impairment that meets or equals the requirements of a 
listed impairment; (4) has an impairment that prevents 
him from doing past relevant work; and (5) whether his 
impairment prevents him from performing other work. 
See 20 C.F.R. §§ 404.1520, 416.920; see also, Hunter v. 
Sullivan, 993 F.2d 31 (4th Cir. 1992) (discussing five 
step process). The claimant bears the burden of pro- 
duction and proof in the first four steps of the inquiry. 
See Hunter v. Sullivan, 993 F.2d 31, 35 (4th Cir. 1992). 
If the claimant discharges that obligation, the burden 
then shifts to the Secretary to show, in the fifth step, 
that other jobs exist in the national economy that the 
claimant can perform reconsidering his age, education, 
and work experience. See id. 

If, at any point in the analysis, the ALJ finds that the 
claimant has not satisfied any step of the process, 
review does not proceed to the next step. See 20 C.F.R. 
§§ 404.1520, 416.920; see also Hunter, 993 F.2d at 35. 
Thus, if the ALJ determines that the claimant is work- 
ing and the work he is doing is substantial gainful 

22a 

activity, the Commissioner will find that he is not 
disabled without regard to his medical condition, 
age, education or work experience. See 20 C.F.R. 
§§ 404.1520(b), 416.920(b), see also Pass v. Chater, 65 
F.3d 1200 (4th Cir. 1995). 

Applying these principles, Walton was found to be 
engaged in substantial gainful activity and, therefore, 
he was not disabled within the meaning of the Act. 
Thus, the analysis ended at that step of the process and 
his claim was denied. There was substantial evidence in 
the record upon which the ALJ could reach that deci- 
sion. Thus, even though Walton’s condition met the re- 
quirements of a listed impairment (step three) the anal- 
ysis never reached that stage. 

Walton attacks the ALJ’s findings and insists that he 
was not engaged in substantial gainful activity before 
the lapse of the twelve month duration requirement. 
Walton argues that the ALJ allegedly failed to properly 
average Walton’s earnings and deduct impairment- 
related work expenses. For the reasons set forth be- 
low, Walton’s arguments lack merit. 

a. Walton’s Earnings Create a Rebuttable 
Presumption of Substantial Gainful Activity. 

According to the statutory guidelines, earnings in 
excess of $500 per month, for work done between 
January 1990 and June 1999, create a rebuttable pre- 
sumption of substantial gainful activity. See 20 C.F.R. 
§§ 404.1574 (b)(2)(vii), 416.974(b)(2) (vii); see also Payne 

v. Sullivan, 946 F.2d 1081, 1083 (4th Cir. 1991); Garnett 

v. Sullivan, 905 F.2d 778, 780 n.1 (4th Cir. 1990); Jones 

v. Shalala, 21 F.3d 191, 192 (7th Cir. 1994). Beginning 
in October 1995, Walton’s earnings were consistently in 
excess of $500 per month. Hence, the ALJ correctly 

23a 

held that there was a rebuttable presumption that 
Walton was engaging in substantial gainful activity 
within twelve months of his alleged onset date. 

Walton’s argument that his out-of-pocket expenses 
for high blood pressure medication should be deducted 
from his total earnings to reduce his average monthly 
earnings is flawed. Although impairment-related work 
expenses may be deducted from earnings when 
deciding if the claimant has performed substantial 
gainful activity, only certain expenses qualify for the 
deduction. See 20 C.F.R. §§ 404.1576(c), 416.976(c). 
Examples of deductible drugs and medical services are 
anti-convulsant drugs to control epilepsy, anti-depress- 
ant medication for mental disorders, and radiation 
treatment or chemotherapy for cancer patients. The 
ALJ correctly held that blood pressure medication did 
not qualify as a deductible drug under the regulations 
because to be deductible, the drugs or services must be 
directly related to the claimant’s impairment. See 20 
C.F.R. §§ 404.1576(c)(5)(iii), 416.976(c)(5)(iii). The 
medication taken by Walton for his mental disorder was 
provided to him by a mental health agency and did not, 
therefore, represent an out-of-pocket expense. Thus, 
Walton’s earnings should not have been reduced by any 
impairment-related expenses. 

b. Walton Failed to Rebut the Presumption of 
Substantial Gainful Activity. 

Walton sought to rebut the presumption of sub- 
stantial gainful activity by arguing that, when his earn- 
ings are averaged over the entire period of time that he 
worked, his average earnings fall below $500 per month 
until December 1995. Thus, Walton argues that the 

24a 

period in which he engaged in substantial gainful acti- 
vity began in December 1995. 

The ALJ relied on Social Security Ruling 83-35 in 
rejecting Walton’s argument. Social Security Ruling 
83-35 provides that “[w]hen there is significant change 
in work patterns or earnings during the period of work 
requiring evaluation, earnings are not averaged over 
the entire period of work involved. . . . the earnings 

must be averaged over each separate period of work 
involved to determine if either effort was SGA.” SSR 
83-35. The ALJ found that there was a “significant 
change in the claimant’s ability to function and in his 
earnings (since he consistently earned in excess of $500 
a month for months after October 1995, as compared to 
earnings averaging only $350 from June to September 
1995).” Tr. at 15. Thus, the ALJ averaged earnings 
after October 1995 and found that Walton consistently 
earned in excess of $500 beginning in October 1995. 

Walton also argues that, even if he did engage in 
substantial gainful activity within twelve months of the 
onset of his disability, he is nevertheless entitled to 
DIB because his impairment was expected to last more 
than twelve months. The ALJ pointed out that “the 
duration requirement provides that [the claimant] must 
be prevented from performing substantial gainful acti- 
vity for a 12-month period even if his impairment lasted 
or was expected to last for 12 months.” Tr. at 13. See 
20 C.F.R. §§ 404.1520(b), 416.920(b) (“If you are work- 
ing and the work you are doing is substantial gainful 
activity, we will find that you are not disabled regard- 
less of your medical condition . . .”). 

25a 

c. Even if Walton’s Earnings Averaged Slightly 
Less Than $500 per Month, He Was Still 
Engaged in Substantial Gainful Activity. 

The regulations provide “that the amount of a clai- 
mant’s earnings may show that he engaged in sub- 
stantial gainful activity. See 20 C.F.R. §§ 404.1574, 
416.974 (emphasis added). However, the regulations 
also provide that “the fact that [a claimant’s] earnings 
are not substantial will not necessarily show that [he] is 
not able to do substantial gainful activity.” 20 C.F.R. 
§§ 404.1574(a), 416.974(a). 

If a claimant’s monthly income averages between 
$300 and $500 per month, the Commissioner will con- 
sider other factors to determine whether his work 
constitutes substantial gainful activity. See 20 C.F.R. 
§§ 404.1574(b)(6), 416.974 (b)(6); Payne v. Sullivan, 946 
F.2d 1081, 1083 (4th Cir. 1991). For example, if 
Walton’s work was comparable to that of unimpaired 
people in the community who have the same or similar 
occupations, that can serve as additional evidence that 
his work constituted substantial gainful activity. See 20 
C.F.R. §§ 404.1574(b)(6)(i), 416.974(b)(6)(i). 

In this case, even if Walton’s monthly income 
averaged slightly less than $500 per month, other fac- 
tors suggest that his work constituted substantial 
gainful activity. As the Magistrate Judge pointed out, 
“[t]here was no evidence that plaintiff was being subsi- 
dized or that he was provided any special considera- 
tions to continue his employment. In fact, Walton 
denied any such special consideration. There is no 
evidence that Walton was working in a sheltered or 
special environment or that he was not actually earning 
his pay.” Mag. Proposed Mem. Op. at 4. Thus, there is 

26a 

additional evidence that Walton’s work constituted 
substantial gainful activity.3 

CONCLUSION 

The Commissioner’s decision that Walton was not 
entitled to DIB or SSI was supported by substantial 
evidence. Therefore, Walton’s objections to the Pro- 
posed Memorandum Opinion are overruled. The Pro- 
posed Memorandum Opinion is affirmed and, as approv- 
ed herein, shall constitute the final decision of this 
Court. 

The Clerk is directed to send a copy of this Memoran- 
dum opinion to all counsel of record. 

It is so ORDERED. 

/s/ ROBERT E. PAYNE 

United States District Judge 

Richmond, Virginia 
Date: October 26, 1999 

3 Walton also argues that the ALJ erred by giving deference to 
the Commissioner’s explanation of its policy despite the fact that 
the Commissioner relied on a non-final Social Security Ruling set 
forth in a Notice of Proposed Rulemaking. Given the resolution of 
the other arguments, it is unnecessary to address that one. 

27a 

APPENDIX C 

UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF VIRGINIA 
Richmond Division 

Civil Action No. 3:98CV339 

CLEVELAND B. WALTON, PLAINTIFF 

v. 

KENNETH S. APFEL, COMMISSIONER OF SOCIAL 
SECURITY, DEFENDANT 

ORDER 

For the reasons set forth in the accompanying memo- 
randum Opinion, it is hereby ORDERED that the 
Proposed Memorandum Opinion is affirmed and, as 
approved, shall constitute the final decision of this 
Court. 

The Clerk is directed to send a copy of this Order to 
all counsel of record. 

It is so ORDERED. 

/s/ ROBERT E. PAYNE 

United States District Judge 

Richmond, Virginia 
Date: October 26, 1999 

28a 

APPENDIX D 

UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF VIRGINIA 
Richmond Division 

Civil Action No. 3:98CV339 

CLEVELAND B. WALTON, PLAINTIFF 

v. 

KENNETH S. APFEL, COMMISSIONER OF SOCIAL 
SECURITY, DEFENDANT 

[Filed: Apr. 14, 1999] 

ORDER 

Pursuant to Title 28 U.S.C. 636(b)(1)(c), it is 

ORDERED that the attached proposed memorandum 
opinion be, and the same hereby is, FILED. All parties 
are advised that they may file objections to the pro- 
posed memorandum opinion within twelve (12) days of 
the date hereof. Failure to object in writing setting 
forth with specificity the objection, may result in the 
Court’s adopting the proposed memorandum and the 
entry of an order in accordance therewith. 

Let the Clerk send a copy of this order, and a copy of 
the attached memorandum, to counsel for the plaintiff 

29a 

and counsel for the defendant. 

/s/ ILLEGIBLE 

UNITED STATES MAGISTRATE 

JUDGE 

Date: April 14, 1999 

30a 

APPENDIX E 

UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF VIRGINIA 
Richmond Division 

Civil Action No. 3:98CV339 

CLEVELAND B. WALTON, PLAINTIFF 

v. 

KENNETH S. APFEL, COMMISSIONER OF SOCIAL 
SECURITY, DEFENDANT 

[Filed: Apr. 14, 1999] 

PROPOSED MEMORANDUM OPINION 

Cleveland B. Walton, the plaintiff, brings this action 
for review of the final decision of the Commissioner of 
Social Security denying his claim for disability insu- 
rance benefits and supplemental security income under 
the Social Security Act. Jurisdiction is appropriate 
pursuant to 42 U.S.C. 405(g). 

The plaintiff testified at an initial hearing before an 
administrative law judge (ALJ) on July 10, 1996, that 
he was 32 years old and had a BS degree in music edu- 
cation. He worked from November, 1992 to October, 
1994 as a teacher. In November, 1994, he was em- 
ployed in sales at a retail clothing store and in Decem- 
ber, 1994, he worked in a grocery store. In May, 1995, 

31a 

plaintiff worked parttime in the grocery store and 
became a full time employee on December 10, 1995. He 
said he became disabled in October, 1994, due to a 
psychiatric impairment. Joyce Walton, plaintiff’s 
mother, testified that Walton had his first psychiatric in 
1990 and was hospitalized in March, 1995. She said that 
his breakdowns occur when he forgets to take his 
prescribed medications. She did not believe that he 
could continue working without some support. 

On August 30, 1996, the ALJ found that Walton had 
not worked from October 31, 1994 through December 
10, 1995; that he had severe paranoid schizophrenia 
with depression and anxiety; that his impairment met 
listing 12.03A, B and C; that he was disabled since 
October 31, 1994; and that his disability terminated on 
December 10, 1995, when he returned to full-time work. 

The Appeals Council found that Walton’s work 
record since October 31, 1994, showed that he engaged 
in substantial gainful activity and remanded this matter 
to the ALJ to evaluate his work record since October 
31, 1994. 

On remand, a hearing was conducted by the ALJ on 
June 3, 1997, and plaintiff testified that he went back to 
work for Food Lion in June, 1995 and earned $354.00 a 
month through December, 1995, when he began earning 
$1,140.00 a month. He was suspended in March, 1996. 
Plaintiffs mother, Joyce Walton, testified that she has 
to remind him to take his medicine and she did not 
believe he would take them if he lived alone. She said 
her son was fired at Food Lion due to his failure to pay 
for food he had eaten. 

32a 

On August 15, 1997, the ALJ found that Walton’s 
monthly earnings averaged in excess of $500.00 in 
October, 1995 and since he has not been unable to en- 
gage in substantial activity for a continuous period of at 
least twelve months, he is not disabled. 

The Appeals Council denied plaintiff ’s request for a 
review on April 3, 1998, and plaintiff appeals that final 
decision. 

The medical evidence of record begins with a hospital 
record where plaintiff was hospitalized for major 
depression in October, 1990. 

Plaintiff underwent a psychological evaluation in 
May, 1994, which resulted in a diagnosis of Major 
Depression with psychotic features. 

On January 3, 1996, Dr. William A. Shepard com- 
pleted a Medical Assessment of plaintiff ’s ability to 
perform work-related activities. He reported that 
“with medication management [Walton] carries out 
reasonable conversation and duties at a minimal scale”. 
He concluded that Walton’s lack of touch with reality 
even though maintained on medications still leaves him 
with defects that are possibly permanent. 

On June 30, 1996, Dr. Elliott J. Spanier, a psychiatrist 
and medical advisor, opined that Walton’s impairments 
met listing 12.03, that they have lasted or would be 
expected to last for a continuous period of not less than 
12 months, and that his thought disorders, halluci- 
nations, and paranoid thinking made it unlikely that he 
could engage in sustained work activity. 

33a 

The issue is whether the final decision of the Com- 
missioner is supported by substantial evidence. Bla- 
lock v. Richardson, 483 F.2d 773 (4th Cir. 1976). 

The scope of judicial review in disability cases is 
narrow, and is limited to a determination of whether 
the final decision of the Commissioner is supported by 
substantial evidence in the record as a whole. Richard- 
son v. Prates, 402 U.S. 389, 91 S. Ct. 1420 (1971). The 
Commissioner’s factual findings are conclusive if they 
are supported by substantial evidence. “Substantial 
evidence” has been defined as being more than a mere 
scintilla, but something less than a preponderance. 
Laws v. Celebrezze, 368 F.2d 640 (4th Cir. 1966). 

20 CFR 404.1571 provides, in part, “if you are able to 
engage in substantial gainful activity, we will find that 
you are not disabled.” Section 404.1574(2)(vii) provides 
“We will consider that your earnings from your work 
activities as an employee show that you have engaged 
in substantial gainful activity if your earnings averaged 
more than $500 a month in calendar years after 1989”. 
The Regulations define “Disability” as the inability to 
do any substantial gainful activity by reason of any 
medically determinable physical or mental impairment 
which can be expected to result in death or which has 
lasted or can be expected to last for a continuous period 
of not less than 12 months. 

This case is unusual in that the medical evidence 
indicates that the plaintiff meets the requirements of a 
listed impairment during the period in question and 
would otherwise be found to be “disabled” except for 
the fact that the evidence shows that during this period 
of time the plaintiff was actually engaged in SGA. 
There was no evidence that plaintiff was being subsi- 

34a 

dized or that he was provided special considerations to 
continue in his employment. In fact, plaintiff denied 
any such special consideration. There is no evidence 
that Walton was working in a sheltered or special 
environment or that he was not actually earning his 
pay. The ALJ correctly made an evaluation pursuant 
to Section 404.1520(a) and (b), which provides “If you 
are working and the work you are doing is substantial 
gainful activity, we will find that you are not disabled 
regardless of your medical condition or your age, educa- 
tion, and work experience.” 

Plaintiff argues that the ALJ erred in not finding him 
disabled based on the fact that his impairment was 
“expected” to last for a continuous period of not less 
than 12 months. The ALJ, in reviewing plaintiff ’s work 
record during the relevant period, did not have to 
consider prospectively the expectations of the duration 
of his impairment because the ALJ had the benefit of 
knowing the actual amounts plaintiff did earn during 
the period. The ALJ averaged Walton’s actual earnings 
and found that in October, 1995, he earned $523.77, in 
November, 1995, $640.26, and $1,140.33 in December, 
1995. His earnings were consistently in excess of $500 
per month beginning in October, 1995. Plaintiff ’s em- 
ployment during the relevant period did not fulfill the 
requirements of being classified as “trial work periods” 
as defined in Section 404.1592. 

The Commissioner’s decision is supported by sub- 
stantial evidence and was based upon a correct applica- 
tion of the law. It should, therefore, be affirmed. 

Plaintiff ’s motion for summary judgment will be 
denied and defendant’s motion for summary judgment 
will be granted. 

35a 

An appropriate order shall issue. 

/s/ ILLEGIBLE 

UNITED STATES MAGISTRATE 

JUDGE 

Date: April 14, 1999 

36a 

APPENDIX F 

[seal omitted] 

SOCIAL SECURITY ADMINISTRATION 

Refer to: TAHB9 
Office of Hearings and Appeals 

[Social Security 

5107 Leesburg Pike 

Number omitted] 

Falls Church, VA 22041-3255 

ACTION OF APPEALS COUNCIL ON REQUEST 

FOR REVIEW 

Mr. Cleveland B. Walton 
5 Shoal Ct. 
Portsmouth, VA 23703 

Dear Mr. Walton: 

The Appeals Council has considered the request for 
review of the Administrative Law Judge’s decision 
issued on August 15, 1997. 

Social Security Administration regulations provide that 
the Appeals Council will grant a request for review 
where: (1) there appears to be an abuse of discretion by 
the Administrative Law Judge; (2) there is an error of 
law; (3) the Administrative Law Judge’s action, find- 
ings, or conclusions are not supported by substantial 
evidence; or (4) there is a broad policy or procedural 
issue which may affect the general public interest. The 
regulations also provide that where new and material 
evidence is submitted with the request for review, the 
court record will be evaluated and review will be 
granted where the Appeals Council finds that the Ad- 
ministrative Law Judge’s actions, findings, or conclu- 
sion is contrary to the weight of the evidence currently 
of record (20 CFR 404.970 and 416.1470). 

37a 

The Appeals Council has concluded that there is no 
basis under the above regulations for granting your 
request for review. Accordingly, your request is denied 
and the Administrative Law Judge’s decision stands as 
the final decision of the Commissioner of Social Security 
in your case. In reaching this conclusion, the Appeals 
Council has considered the applicable statutes, regu- 
lations, and rulings in effect as of the date of this action. 

The Appeals Council has also considered the conten- 
tions raised in the material identified on the attached 
Order of Appeals Council, but concluded that these con- 
tentions do not provide a basis for changing the Ad- 
ministrative Law Judge’s decision. 

If you desire a court review of the Administrative Law 
Judge’s decision, you may commence a civil action by 
filing a complaint in the United States District Court 
for the judicial district in which you reside within sixty 
(60) days from the date of the receipt of this letter. It 
will be presumed that this letter is received within five 
(5) days after the date shown above unless a reasonable 
showing to the contrary is made. The complaint should 
name the Commissioner of Social Security as the defen- 
dant and should include the Social Security number(s) 
shown at the top of this notice. The right to court 
review is provided for in sections 205(g) and 1631(c)(3) 
of the Social Security Act, as amended (42 U.S.C. 405(g) 
and 1383(c)(3)). 

If you cannot file your complaint within 60 days, you 
may ask the Appeals Council to extend the time in 
which you may begin a civil action. However, the 
Council will only extend the time if you provide a good 
reason for not meeting the deadline. Your reason(s) 
must be set forth clearly in your request. 

38a 

If a civil action is commenced, the Commissioner must 
be served by sending a copy of the summons and 
complaint by registered or certified mail to the General 
Counsel, Social Security Administration, Room 611, 
Altmeyer Building, 6401 Security Boulevard, Balti- 
more, MD 21235. (See rules 4(c) and (i) of the Federal 
Rules of Civil Procedure). In addition, you must serve 
the United States Attorney for the district in which you 
file your complaint and the Attorney General of the 
United States, as provided in the Federal Rules of Civil 
Procedure. 

Sincerely yours, 

original signed by 
David O. Phillips 
Administrative Appeals Judge 

cc: 
Kathryn L. Prior 

39a 

APPENDIX G 

SOCIAL SECURITY ADMINISTRATION 
Office of Hearings and Appeals 

DECISION 

IN THE CASE OF 
CLAIM FOR 

Period of Disability, 

Cleveland B. Walton 

Disability Insurance Benefits, and 
Supplemental Security Income 

(Claimant) 
_____________ [omitted] 
(Wage Earner) 
(Social Security Number) 

PROCEDURAL HISTORY 

The claimant filed concurrent applications for a period 
of disability, disability insurance benefits, and supple- 
mental security income on April 12, 1995, with a 
protective filing on March 14, 1995. After two admin- 
istrative denials, the claimant requested a hearing on 
October 12, 1995. A hearing was held on July 10, 1996, 
and on August 30, 1996 the undersigned Administrative 
Law Judge issued a decision finding that the claimant 
was entitled to a closed period of disability from Octo- 
ber 31, 1994 to December 10, 1995 when, according to 
his testimony at the hearing, he returned to substantial 
gainful activity. 

The Administration subsequently determined that the 
claimant’s earnings beginning in October 1995 exceeded 
$500 per month (indicating an ability to engage in sub- 
stantial gainful activity under sections 404.1574 and 

40a 

416.974 of Regulation Nos. 4 and 16), and on March 12, 
1997 the Appeals Council remanded the case to the un- 
dersigned to determine whether the claimant is, in fact, 
entitled to a cash benefit. 

At both the original hearing and the supplemental 
hearing held in Richmond, Virginia, on June 3, 1997, the 
claimant was represented by Kathryn L. Pryor, Attor- 
ney at Law. 

ISSUES 

The general issues are whether the claimant is entitled 
to a period of disability and disability insurance benefits 
under sections 216(i) and 223, respectively, of the Social 
Security Act, as amended; and whether he is disabled 
under section 1614(a)(3)(A) of the Act. 

EVALUATION OF THE EVIDENCE 

Sections 404.1505 and 416.905 of the Regulations pro- 
vide the basic definition of disability—the inability to 
do any substantial gainful activity by reason of any me- 
dically determinable physical or mental impairment 
which can be expected to result in death or which has 
lasted, or can be expected to for a continuance period of 
not less than 12 months. Thus, the claimant must prove 
that he has a medically determinable impairment which 
prevents him from performing substantial gainful acti- 
vity. 

Social Security Ruling 82-52 provides that when an 
individual returns to work demonstrating the ability to 
engage in substantial gainful activity before approval of 
the award and prior to the lapse of the 12-month period 
after onset, the claim must be denied. While the under- 
signed concluded in the decision of August 30, 1996 that 

41a 

Mr. Walton had an impairment meeting the require- 
ments of section 12.03 of Appendix 1 to Subpart P of 
Regulations No. 4, the duration requirement provides 
that he must be prevented from performing substantial 
gainful activity for a 12-month period even if his impair- 
ment lasted or was expected to last for 12 months. The 
undersigned must determine whether the claimant en- 
gaged in substantial gainful activity as defined in the 
Regulations prior to October 31, 1995, 12 months after 
the alleged onset of disability. 

At the initial hearing, the claimant testified that he had 
begun working as a general laborer and cashier at a 
grocery in May 1995. He testified that he worked on a 
part-time basis between May and December 10, 1995, 
five to six hours a day, three days a week, earning $5.50 
an hour. Beginning December 10, 1995, he began work- 
ing 40 hours a week on a full-time basis, earning $6.50 
an hour. 

When the Social Security District office began process- 
ing the claim for payment of supplemental security 
income, it obtained pay stubs from the claimant and 
earnings information directly from the personnel 
department of the grocery store for which the claimant 
worked. The records showed that the claimant actually 
earned $354.39 in June 1995, $519.43 in July 1995, 
$335.67 in August 1995, $392.94 in September 1995, 
$523.77 in October 1995, $640.26 in November 1995, and 
$1,140.33 in December 1995 (Exhibit 40). The Admin- 
istration maintains that the claimant returned to sub- 
stantial gainful activity in October 1995, when his earn- 
ings consistently were in excess of $500 a month. 

Counsel argues that the above-described earnings 
should be averaged over the entire period of time that 

42a 

the claimant worked, which would equal $461.07 a 
month from June through November 1995 and, with 
actual December 1995 earnings, would increase to an 
average of $566.68 a month (Exhibit 53). 

Sections 404.1574 and 416.974 of the Regulations pro- 
vide several guidelines to determine whether an indivi- 
dual is engaging in substantial gainful activity. Sec- 
tions 404.1574(b) and 416.974(b) provide that the crite- 
ria in paragraph (a) of those sections, and sections 
404.1576 and 416.976 be considered before looking at 
actual earnings. 

Sections 404.1574(a) and 416.974(a) provide that earn- 
ings amounts may not necessarily show that an indi- 
vidual has the ability or inability to engage in sub- 
stantial gainful activity. Only the amounts earned (and 
no subsidized earnings) will be considered, and work in 
a sheltered or special environment could be viewed 
differently than similar work in the civilian work force. 
The evidence in the case at hand does not show that the 
claimant’s earnings were subsidized, or that he worked 
in a sheltered or special environment. 

Sections 404.1576 and 416.976 provide that impairment 
related work expenses may be deducted from earnings 
to reduce the monthly wage amount. Included in those 
sections is payment for certain prescribed drugs and 
medical services. Counsel has maintained that the 
claimant’s out-of-pocket expenses for high blood pres- 
sure medication should be deducted from his total 
earnings in October 1995. She indicated that his earn- 
ings of $523.77 should be offset by a payment of $24.38 
for high blood pressure medicine made on October 17, 
1995 (Exhibit 44). Sections 404.1576(c)(5) and 
416.976(c)(5) provide that if an individual uses drugs or 

43a 

medical services to control an impairment, the pay- 
ments for them may be deducted. Examples of 
deductible drugs and medical services listed are anti- 
convulsant drugs to control epilepsy and anti-depres- 
sant medication for mental disorders. While the 
claimant in this case has a mental disorder and has 
taken medication for it, that medication was provided 
for the claimant by a mental health agency and did not 
represent an out-of-pocket expense. While the claimant 
apparently requires blood pressure medication, the 
undersigned finds that that medication would not be 
considered a deductible drug as intended by the 
Regulations. 

Sections 404.1574 (b) and 416.974 (b) provide monetary 
guidelines for earnings that will ordinarily show that an 
individual has engaged in substantial gainful activity. 
For calendar years after 1989, there is a rebuttable pre- 
sumption that earnings averaging more than $500 a 
month will ordinarily show that an individual is 
engaging in substantial gainful activity. As previously 
noted, the claimant earned $523.77 in October 1995, 
$640.26 in November 1995, and $2,140.33 in December 
1995 (Exhibit 40). Although counsel argues that the 
entire period (from when the claimant returned to work 
in May 1995 until he began consistently earning in 
excess of $500 a month) should be considered when 
averaging earnings, SSR 83-35 provides that when 
there is a significant change in work patterns or earn- 
ings during the period of work requiring evaluation, 
earnings are not averaged over the entire period of 
work involved. It is noted that the claimant testified 
that he worked on a part-time basis until he was able to 
return to full-time work despite his impairment. There 
was a significant change in the claimant’s ability to 

44a 

function and in his earnings (since he consistently 
earned in excess of $500 a month for months after 
October 1995 as compared to earnings averaging only 
$350 from June to September 1995). The undersigned 
will average earnings after October 1995, and the 
record clearly demonstrates that the claimant 
consistently earned in excess of $500 beginning in 
October 1995. 

There was evidence submitted by a former employer 
indicating that the claimant’s performance was not 
ranked among the top as compared to other employees. 
As a matter of fact, the claimant ranked last in per- 
formance in March 1996 (Exhibit 51). While it is admir- 
able that the claimant has continued to work despite his 
psychiatric impairment, the undersigned is bound by 
the law and regulations which indicate that the 
claimant returned to substantial gainful activity 
beginning October 1995. 

Counsel argued that the claimant should be entitled to a 
trial work period beginning May 1995, when he re- 
turned to part-time work. Sections 404.1592(e) and 
416.992(e) provide specifically that a trial work period 
will begin with the month in which an individual 
becomes entitled to a cash benefit. In this case, since 
the undersigned must find that the claimant returned 
to substantial gainful activity beginning in October 
1995, he can not be found to be under a “disability” 
because he was not prevented from working for any 
continuous period of 12 months. Since he is not under a 
“disability,” he is not entitled to a cash benefit or to a 
trial work period under the Regulations. The under- 
signed therefore concludes that the claimant is not 
entitled to a period of disability, disability insurance 

45a 

benefits, or supplemental security income based on the 
applications filed protectively on March 14, 1995. 

As previously indicated, the undersigned admires the 
claimant for his attempts to continue to work despite a 
Listing-level impairment, and if he should be prevented 
from engaging in substantial gainful for a period of 12 
months or longer in the future, he is encouraged to file 
new applications for benefits. 

FINDINGS 

After careful consideration of the entire record, the 
Administrative Law Judge makes the following finding: 

1. The claimant met the earnings requirements 
of the Social Security Act on October 31, 1994, 
the date that he alleges he became disabled, 
and continues to meet them through Decem- 
ber 31, 2000. 

2. The claimant began working with earnings 
averaging in excess of $500 a month in Octo- 
ber 1995. 

3. The claimant’s work activity involved signi- 
ficant activities for pay, and constitutes sub- 
stantial gainful activity within the meaning of 
the Regulations. 

4. The claimant has not been unable to engage in 
substantial gainful activity for any continuous 
period of at least 12 months. 

5. The claimant was not under a “disability” as 
defined in the Social Security Act at any time 
through the date of this decision. 

46a 

DECISION 

It is the decision of the Administrative Law Judge that, 
based on the applications filed protectively on March 
14, 1995, the claimant is not entitled to a period of dis- 
ability or disability insurance benefits under sections 
216(i) and 223, respectively, of the Social Security Act, 
and is not eligible for supplemental security income un- 
der sections 1602 and 1614(a)(3)(A) of the Act. 

/s/ DAVID S. ANTROBUS 

DAVID S. ANTROBUS 
Administrative Law Judge 
Main Street Centre, Rm 1720 
600 East Main Street 
Richmond, VA 23219-2406 

AUG 15, 1997 
Date 

47a 

APPENDIX H 

SOCIAL SECURITY ADMINISTRATION 

OFFICE OF HEARINGS AND APPEALS 

ORDER OF APPEALS COUNCIL 

REMANDING CASE TO ADMINISTRATIVE LAW JUDGE 

In the case of 
Claim for 

Period of Disability 

Cleveland B. Walton 
Disability Insurance Benefits 
(Claimant) 

_____________ [omitted] 

(Wage Earner)(Leave 

(Social Security Number) 

blank if same as above) 

Notice of own motion review was previously sent on 
December 11, 1996, advising of the Appeals Council’s 
intention to review the Administrative Law Judge’s de- 
cision issued on August 30, 1996, pursuant to 20 CFR 
404.969, because there was an error of law and the ac- 
tion, findings or conclusions were not supported by sub- 
stantial evidence (20 CFR 404.970). In that notice the 
Council also advised of its intention to remand this case 
for further proceedings and offered an opportunity for 
comment on that proposed action. Comments were re- 
ceived and were considered. 

Under the authority of 20 CFR 404.977, the Appeals 
Council vacates the hearing decision and remands this 
case to an Administrative Law Judge for resolution of 
the following issue: 

• The Administrative Law Judge found that the 
claimant was disabled beginning October 31, 

48a 

1994 and that his disability benefits ceased on 
December 19, 1995, when he returned to full- 
time employment; however, the additional evi- 
dence suggests that the claimant returned to 
work demonstrating ability to engage in sub- 
stantial gainful activity which occurred before 
the approval of the award and prior to the lapse 
of the 12-month period after onset. If this is so, 
in accordance with Social Security Ruling 82-52, 
the claimant’s claim must be denied. A further 
evaluation of the claimant’s work activity since 
October 31, 1994 is warranted. 

Upon remand, the Administrative Law Judge will: 

• Further consider the issues in this case, includ- 
ing the information regarding the claimant’s 
work activity and evaluate his work activity 
since the established onset date of October 31, 
1994. 

In compliance with the above, the Administrative Law 
Judge will offer the claimant an opportunity for a hear- 
ing, take any further action needed to complete the 
administrative record and issue a new decision. 

Section 8001 of Public Law 100-647 requires payment of 
interim benefits in cases where an Administrative Law 
Judge issues a favorable disability decision and no final 
decision is issued within 110 days after the date of the 
Administrative Law Judge’s decision. Because the Ap- 
peals Council has exercised its own motion review au- 
thority in this case, interim benefits may be payable if a 
final decision is not issued within 110 days after the 
date of the Administrative Law Judge’s decision. 
Those interim benefits will continue until a final deci- 

49a 

sion is issued. Another Social Security Administration 
office will notify the claimant at the appropriate time as 
to the amount and the effective date of any interim 
payments. 

APPEALS COUNCIL 

/s/ DAVID O. PHILLIPS 

DAVID O. PHILLIPS 
Administrative Appeals Judge 

/s/ RICHARD F. WHITE 

RICHARD F. WHITE 
Administrative Appeals Judge 

Date: MAR. 4, 1997 

50a 

APPENDIX I 

[seal omitted] 

SOCIAL SECURITY ADMINISTRATION 

Refer to: TAHB9 
Office of Hearings and Appeals 

[Social Security 

5107 Leesburg Pike 

Number omitted] 

Falls Church, VA 22041-3255 

Mr. Cleveland B. Walton 
13606 Lucky Debonaire Ln. 
Midlothian, VA 23112 

NOTICE OF ORDER OF APPEALS COUNCIL 
REMANDING CASE TO ADMINISTRATIVE 

LAW JUDGE 

What This Order Means 

We have sent your case back to an Administrative 
Law Judge. In the enclosed order, we explain why 
we did this and what actions the Administrative Law 
Judge will take on your claim. 

In addition to what we directed the Administrative 
Law Judge to do, the Administrative Law Judge may 
also take any other action necessary to complete 
your claim. 

The Next Action on Your Claim 

An Administrative Law Judge will contact you to tell 
you what you need to do. 

51a 

If you have any questions you may contact your local 
hearing office. 

This notice and enclosed order of 
remand mailed MAR. 4, 1997 

cc: 
Kathryn L. Pryor, Esq. 
RCALJ, Philadelphia 

Kathryn L. Pryor, Esq. 
P.O. Box 12206 
Richmond, VA 23241 

52a 

APPENDIX J 

SOCIAL SECURITY ADMINISTRATION 
Office of Hearings and Appeals 

DECISION 

IN THE CASE OF 
CLAIM FOR 

Period of Disability, 
Disability Insurance Benefits, and 

Cleveland B. Walton 
Supplemental Security Income 
(Claimant) 

_____________ [omitted] 
(Wage Earner) 
(Social Security Number) 

PROCEDURAL HISTORY 

Cleveland B. Walton filed applications for disability 
insurance benefits and supplementary security income 
on March 14, 1995. They were denied initially on May 
18, 1995, and upon reconsideration on August 16, 1995. 
He filed a timely request for hearing on October 12, 
1995, and this case is now properly before this Adminis- 
trative Law Judge for a decision pursuant to sections 
404.930 and 416.1430 of Regulations Nos. 4 and 16. Mr. 
Walton meets the special earnings requirements for 
disability insured status under the Social Security Act 
through December 31, 1999. 

At a hearing before this Administrative Law Judge on 
July 10, 1996 in Richmond, Virginia, Mr. Walton was 
represented by Attorney Kathryn L. Pryor. Also pres- 
ent and testifying were the claimant’s mother, Joyce 
Walton, and vocational expert Dr. Andrew V. Beale. 

53a 

Mr. Walton initially alleged disability commencing 
February 29, 1995, but at his hearing he amended that 
onset date to October 31, 1994, the date on which he 
was fired from a job as a substitute teacher (Exhibit 

34). 

ISSUES 

The general issues are whether the claimant is entitled 
to a period of disability and disability insurance benefits 
under sections 216(i) and 223, respectively, of the Social 
Security Act, as amended; and whether he is disabled 
under section 1614(a)(3)(A) of the Act. The Social 
Security Act defines “disability” as the inability to 
engage in any substantial gainful activity due to 
physical or mental impairments which can be expected 
to either result in death or last for a period of not less 
than 12 months. 

EVALUATION OF THE EVIDENCE 

The claimant alleges disability since his amended onset 
date of October 31, 1994 due to psychiatric impair- 
ments, i.e., a schizophrenic disorder with associated de- 
pression. Subsequent to the alleged onset date, he 
worked briefly in November of 1994 as a suit salesman 
and processor in department and clothing stores, and in 
December of 1994 as a grocery store stocker. He also 
work briefly in February of 1994 as a night stocker for a 
grocery store (Exhibit 14). These episodes of employ- 
ment reportedly ended due to his psychiatric impair- 
ments and as such, it is concluded by this Adminis- 
trative Law Judge that they constituted unsuccessful 
work attempts. 

It was further determined at the claimant’s hearing 
that since May of 1995, he [h]as been employed at a gro- 
cery store as a general worker and cashier. He ini- 

54a 

tially was employed on a part time basis between May 
and December 10, 1995, working five to six hours a day, 
three days a week, earning $5.50 per hour. Beginning 
December 10, 1995, he began working 40 hours per 
week on a full-time basis, earning $6.50 per hour. 
Earnings prior to December 10, 1995 averaged $396 per 
month. Since these earnings averaged less than $500 
per month, he was not engaged in substantial gainful 
activity. However, beginning December 10, 1995 when 
he began working full time, his earnings have averaged 
$1,040 per month, clearly reflecting substantial gainful 
activity. Other than being placed on a night shift, he 
advised he received no special considerations in this 
job. The undersigned therefore concludes, based upon 
all above-described information, that the claimant was 
not engaged in substantial gainful activity from October 
31, 1994 to December 10, 1995, but was engaged in 
substantial gainful activity subsequent to that date. 

The claimant remarked that he works on the night shift 
for this grocery store because he did not “scan” fast 
enough as a checker or scanner. He indicated for the 
record that [ ] since being hospitalized for paranoid 
schizophrenia, he has had difficulty focusing on job 
duties. He undergoes outpatient psychiatric care and 
takes the medications Haldol, Cogentin, Ativan, and 
Calan. 

He relies upon his mother to give him these medi- 
cations. He is able to prepare simple meals for himself, 
care for his personal needs, and perform simple house- 
hold chores. He requires assistance with handling his 
finances. He has few social activities or interactions 
other than attending church where he plays music. He 
has limited interaction with people other than family 

55a 

members. He reported medication side effects of an 
occasional dry mouth, weight gain, and arm tremor 
(Exhibits 15 and 16). The claimant’s mother, Joyce 
Walton, generally corroborated these statements. She 
noted that he has required hospitalizations for his 
psychiatric impairments and that since his last [ ] 
hospitalization she brought him home to live with her in 
Richmond. She noted that she must remind him to take 
his medication and she wakes him up to go to work. 
She was not sure he could live independently since he 
depends so much on her presently. These remarks 
were consistent with her statements in Exhibit 17. 

The undersigned evaluated this testimony pursuant to 
[ ] 20 CFR sections 404.1529, 416.929, 404.1569a and 
416.969a (SSR 96-7p), and found it to be fully credible 
and consistent with written statements for the record 
describing the claimant’s impairment and restrictions. 

Medical records in this case document the claimant’s 
history of psychiatric treatment dating from 1990, when 
he was hospitalized in October of that year for major 
depression with psychotic features characterized by 
hallucinations, agitation, and difficulty eating and sleep- 
ing (Exhibit 18). He reportedly was treated on an 
outpatient basis and taking Haldol but experienced a 
deterioration warranting hospitalization on May 22, 
1994. At that time he had become anxious and de- 
pressed about losing his job. He then became suspi- 
cious and paranoid and for several days was mute most 
of the time. He exhibited difficulty thinking and 
remembering, and his cognitive style was marked by 
obsessive-ness and rumination. Major depression with 
melancholia and psychotic features was again diagnosed 
(Exhibits 19 and 20). Further deterioration of his 

56a 

condition occurred in March of 1995, at which time he 
was experiencing visual hallucinations, anxiety and 
agitation (Exhibit 21). Paranoid schizophrenia was 
diagnosed and he was hospitalized from March 5 to 
March 11, 1995. During this admission he exhibited 
evidence of catatonic schizophrenia. His condition 
gradually stabilized with prescribed medications. He 
was discharged to be followed on an outpatient basis 
(Exhibits 22 and 23). 

The record confirms that Mr. Walton is under the 
outpatient psychiatric care with Dr. R. Neil Johnston. 
His records note ongoing prescription of medications, 
but that the claimant is generally isolated with activi- 
ties confined to his home. He exhibits a flattened affect. 
It was noted that he had been dismissed from eight jobs 
in a year due to a decline in his productivity level, 
concentration problems, and difficulty following instruc- 
tions (Exhibits 24-27). Dr. William A. Shepard, another 
treating psychiatrist, obeserved [sic] that even with 
medication management, the claimant carries out 
reasonable conversation and duties on only a minimal 
scale. His isolation and paranoia have decreased his 
cognitive abilities and social boundaries. He opined 
that the claimant lacked the ability to understand, 
remember and carry out complex job instructions and 
that he had only a fair ability to handle simpler 
instructions (Exhibit 28). 

The medical evidence in this case was transmitted to 
board-certified psychiatrist and medical expert Dr. 
Elliot J. Spanier with the request that he review the 
evidence and respond to interrogatories posed by this 
Administrative Law Judge (Exhibit 31). Dr. Speanier 
[sic] advised in Exhibit 33 that the claimant clearly had 

57a 

a schizophrenic disorder meeting the requirements of 
section 12.03 of Appendix 1 of Subpart P of Regulation 
No. 4. He noted that the record revealed objective 
signs of schizophrenia meeting the “A” criteria of that 
section: delusions and hallucinations, catatonic beha- 
vior, incoherence, loosening of associations and illogical 
thinking with a flattened affect, and emotional with- 
drawal and isolation. In addition, he observed that the 
claimant had significant functional limitations (the “B” 
criteria of section 12.03). Specifically, the record 
demonstrates a moderate restriction of activities [o]f 
daily living given his reliance upon his mother to assist 
with a good deal of the household structure, marked 
difficulty mai[n]taining social functioning given his 
isolation and withdrawal, constant deficiencies of 
concentration, and continual episodes of deterioration in 
a work setting demonstrated by his multiple job losses. 
The undersigned further reviewed the record and noted 
that the claimant has a condition meeting section 12.03 
in that he has a medically documented history of one or 
more episodes of acute symptoms and signs of paranoid 
schizophrenia although they are currently attenuated 
by medication or psychosocial support. He has demon- 
strated repeated episodes of deterioration in work set- 
tings causing him to withdraw from the situation or to 
experience an excerbation of his symptoms, and has a 
documented history of the inability to function outside 
of a highly supportive living situation, which is re- 
flected in his current situation in which he lives with his 
mother. 

Since the record in this case clearly establishes an 
impairment meeting the requirements of section 

12.03A, B, and C, the undersigned concludes that Mr. 
Walton was “disabled” commencing October 31, 1994. 

58a 

However, as noted previously herein, he returned to 
full time employment on December 10, 1995 and has 
engaged in substantial gainful activity demonstrated by 
earnings averaging $1,040 per month. While counsel for 
the claimant argued that the award of a trial work 
period is warranted in this case, (i.e., an opportunity to 
work an additional nine months and receive benefits 
during those months), the undersigned does not concur. 
Mr. Walton has demonstrated a capacity for sustained 
work since at least May of 1995 in view of his part time 
work activity. Even though that was not substantial 
gainful activity in terms of his earnings, that continuous 
employment since May of 1995 through the present 
date persuades the undersigned that an additional trial 
period is unnecessary. The claimant has clearly estab- 
lished an ability to return to full time employment 
despite his psychiatric impairment. 

Accordingly, Mr. Walton is entitled [ ] to [a] period of 
disability commencing October 31, 1994, and to disabil- 
ity insurance benefits and supplementary security 
income pursuant to the applications filed protectively 
on March 14, 1995. It is further concluded that since his 
disability ceased on December 10, 1995 due to his re- 
turn to substantial gainful activity, his entitlement to 
benefits ended February 29, 1996, the second month 
after the month in which his disability ceased. 

59a 

FINDINGS 

After careful consideration of the entire record, the 
Administrative Law Judge makes the following find- 
ings: 

1. The claimant met the disability insured status 
requirements of the Act on October 31, 1994, the 
date the claimant stated he became unable to 
work, and continues to meet them through 
December 31, 1999. 

2. The claimant was not engaged in substantial 
gainful activity from October 31, 1994 until his 
return to full time employment on December 10, 
1995, earning an average of $1,040 per month 
since that date. 

3. The medical evidence establishes that the claim- 
ant has severe paranoid schizophrenia with 
underlying depression and anxiety. 

4. The severity of the claimant’s impairment meets 
the requirements of section 12.03A, B, and C, 
Appendix 1, Subpart P, Regulations No. 4 and 
has precluded him from working for at least 12 
continuous months. 

5. The claimant was under a “disability,” as def ined 
in the Social Security Act, beginning October 31, 
1994 (20 CPR 404.1520(d) and 416.920(d)). 

6. Beginning December 10, 1995, the claimant re- 
turned to work as a general worker and cashier 
for a grocery store, working 40 hours per week, 
earning an average of $6.50 per hour or $1,040 
per month. 

60a 

7. The claimant’s work activity involves significant 
physical or mental activities for pay or profit and 
constitutes substantial gainful activity within the 
meaning of the regulations (20 CFR 44.532 and 
416.972). 

8. In view of his return to substantial gainful activ- 
ity, the claimant’s disability ceased on December 
10, 1995. 

9. In view of the claimant’s part-time and full-time 
work since May of 1995, the further award of a 
trial work period is not warranted. 

DECISION 

It is the decision of the Administrative Law judge that, 
based on the application filed on March 14, 1995, the 
claimant is entitled to a period of disability commencing 
on October 31, 1994 and to disability insurance benefits 
under sections 216(i) and 223, respectively, of the Social 
Security Act. 

It is the further decision of the Administrative Law 
Judge that, based on the application filed on March 14, 
1995, the claimant has been disabled since October 31, 
1994 under 1614(a)(3)(A) of the Social Security Act. 

It is the further decision of the Administrative Law 
Judge that based on the finding that disability ceased 
on December 10, 1995, entitlement to a period of dis- 
ability and disability insurance benefits, and eligibility 
for supplemental security income, ended effective 
February 29, 1996, the end of the second calendar 
month after the month in which the disability ceased. 

61a 

The component of the Social Security Administration 
responsible for authorizing supplemental security in- 
come payments will advise the claimant regarding the 
nondisability requirements for these payments, and if 
eligible, the amount and the month(s) for which pay- 
ment will be made. 

/s/ DAVID S. ANTROBUS 

DAVID S. ANTROBUS 
Administrative Law Judge 
Main Street Centre, Rm 1720 
600 East Main Street 
Richmond, VA 23219-2406 

AUG. 30, 1996 
Date 

62a 

APPENDIX K 

UNITED STATES COURT OF APPEALS 
FOR THE FOURTH CIRCUIT 

CLEVELAND B. WALTON, PLAINTIFF-APPELLANT 

v. 

KENNETH S. APFEL, COMMISSIONER OF SOCIAL 
SECURITY, DEFENDANT-APPELLEE 

FILED: February 27, 2001 

On Petition for Rehearing and Rehearing En Banc 

The appellee’s petition for rehearing and rehearing en 
banc was submitted to this Court. As no member of 
this Court or the panel requested a poll on the petition 
for rehearing en banc, and 

As the panel considered the petition for rehearing and 
is of the opinion that it should be denied, 

IT IS ORDERED that the petition for rehearing and 
rehearing en banc is denied. 

For the Court, 

/s/ PATRICIA S. CONNOR 

CLERK 

63a 

APPENDIX L 

1. 42 U.S.C. 422(c) states as follows: 

(c) “Period of trial work” defined 

(1) The term “period of trial work”, with respect to 
an individual entitled to benefits under section 423, 
402(d), 402(e), or 402(f ) of this title, means a period of 
months beginning and ending as provided in para- 
graphs (3) and (4). 

(2) For purposes of sections 416(i) and 423 of this 
title, any services rendered by an individual during a 
period of trial work shall be deemed not to have been 
rendered by such individual in determining whether his 
disability has ceased in a month during such period. 
For purposes of this subsection the term “services” 
means activity (whether legal or illegal) which is 
performed for remuneration or gain or is determined by 
the Commissioner of Social Security to be of a type 
normally performed for remuneration or gain. 

(3) A period of trial work for any individual shall 
begin with the month in which he becomes entitled to 
disability insurance benefits, or, in the case of an 
individual entitled to benefits under section 402(d) of 
this title who has attained the age of eighteen, with the 
month in which he becomes entitled to such benefits or 
the month in which he attains the age of eighteen, 
whichever is later, or, in the case of an individual enti- 
tled to widow’s or widower’s insurance benefits under 
section 402(e) or (f) of this title who became entitled to 
such benefits prior to attaining age 60, with the month 
in which such individual becomes so entitled. Notwith- 
standing the preceding sentence, no period of trial work 

64a 

may begin for any individual prior to the beginning of 
the month following September 1960; and no such 
period may begin for an individual in a period of 
disability of such individual in which he had a previous 
period of trial work. 

(4) A period of trial work for any individual shall 
end with the close of whichever of the following months 
is the earlier: 

(A) the ninth month, in any period of 60 
consecutive months, in which the individual renders 
services (whether or not such nine months are 
consecutive); or 

(B) the month in which his disability (as defined 
in section 423(d) of this title) ceases (as determined 
after application of paragraph (2) of this subsection). 

2. 42 U.S.C. 423 states as follows: 

§ 423. 

Disability insurance benefit payments 

(a) Disability insurance benefits 

(1) Every individual who— 

(A) is insured for disability insurance benefits (as 
determined under subsection (c)(1) of this section), 

(B) has not attained retirement age (as defined in 
section 416(l) of this title), 

(C) has filed application for disability insurance 
benefits, and 

65a 

(D) is under a disability (as defined in subsection 
(d) of this section) 

shall be entitled to a disability insurance benefit (i) for 
each month beginning with the first month after his 
waiting period (as defined in subsection (c)(2) of this 
section) in which he becomes so entitled to such 
insurance benefits, or (ii) for each month beginning with 
the first month during all of which he is under a 
disability and in which he becomes so entitled to such 
insurance benefits, but only if he was entitled to 
disability insurance benefits which terminated, or had a 
period of disability (as defined in section 416(i) of this 
title) which ceased, within the 60-month period pre- 
ceding the first month in which he is under such 
disability, and ending with the month preceding which- 
ever of the following months is the earliest: the month 
in which he dies, the month in which he attains 
retirement age (as defined in section 416(l) of this title), 
or, subject to subsection (e) of this section, the termina- 
tion month. For purposes of the preceding sentence, 
the termination month for any individual shall be the 
third month following the month in which his disability 
ceases; except that, in the case of an individual who has 
a period of trial work which ends as determined by 
application of section 422(c)(4)(A) of this title, the 
termination month shall be the earlier of (I) the third 
month following the earliest month after the end of 
such period of trial work with respect to which such 
individual is determined to no longer be suffering from 
a disabling physical or mental impairment, or (II) the 
third month following the earliest month in which such 
individual engages or is determined able to engage in 
substantial gainful activity, but in no event earlier than 
the first month occurring after the 36 months following 

66a 

such period of trial work in which he engages or is 
determined able to engage in substantial gainful 
activity. No payment under this paragraph may be 
made to an individual who would not meet the defini- 
tion of disability in subsection (d) of this section except 
for paragraph (1)(B) thereof for any month in which he 
engages in substantial gainful activity, and no payment 
may be made for such month under subsection (b), (c), 
or (d) of section 402 of this title to any person on the 
basis of the wages and self-employment income of such 
individual. In the case of a deceased individual, the 
requirement of subparagraph (C) may be satisfied by an 
application for benefits filed with respect to such 
individual within 3 months after the month in which he 
died. 

(2) Except as provided in section 402(q) of this title 
and section 415(b)(2)(A)(ii) of this title, such individual’s 
disability insurance benefit for any month shall be equal 
to his primary insurance amount for such month 
determined under section 415 of this title as though he 
had attained age 62 in— 

(A) the first month of his waiting period, or 

(B) in any case in which clause (ii) of paragraph 
(1) of this subsection is applicable, the first month for 
which he becomes entitled to such disability 
insurance benefits, 

and as though he had become entitled to old-age 
insurance benefits in the month in which the application 
for disability insurance benefits was filed and he was 
entitled to an old-age insurance benefit for each month 
for which (pursuant to subsection (b) of this section) he 
was entitled to a disability insurance benefit. For the 

67a 

purposes of the preceding sentence, in the case of an 
individual who attained age 62 in or before the first 
month referred to in subparagraph (A) or (B) of such 
sentence, as the case may be, the elapsed years 
referred to in section 415(b)(3) of this title shall not 
include the year in which he attained age 62, or any 
year thereafter. 

(b) Filing application 

An application for disability insurance benefits filed 
before the first month in which the applicant satisfies 
the requirements for such benefits (as prescribed in 
subsection (a)(1) of this section) shall be deemed a valid 
application (and shall be deemed to have been filed in 
such first month) only if the applicant satisfies the 
requirements for such benefits before the Commis- 
sioner of Social Security makes a final decision on the 
application and no request under section 405(b) of this 
title for notice and opportunity for a hearing thereon is 
made, or if such a request is made, before a decision 
based upon the evidence adduced at the hearing is 
made (regardless of whether such decision becomes the 
final decision of the Commissioner of Social Security). 
An individual who would have been entitled to a 
disability insurance benefit for any month had he filed 
application therefor before the end of such month shall 
be entitled to such benefit for such month if such 
application is filed before the end of the 12th month 
immediately succeeding such month. 

(c) Definitions; insured status; waiting period 

For purposes of this section— 

68a 

(1) An individual shall be insured for disability 
insurance benefits in any month if— 

(A) he would have been a fully insured individual 
(as defined in section 414 of this title) had he attained 
age 62 and filed application for benefits under section 
402(a) of this title on the first day of such month, and 

(B)(i) he had not less than 20 quarters of coverage 
during the 40-quarter period which ends with the 
quarter in which such month occurred, or 

(ii) if such month ends before the quarter in which 
he attains (or would attain) age 31, not less than one- 
half (and not less than 6) of the quarters during the 
period ending with the quarter in which such month 
occurred and beginning after he attained the age of 
21 were quarters of coverage, or (if the number of 
quarters in such period is less than 12) not less than 6 
of the quarters in the 12-quarter period ending with 
such quarter were quarters of coverage, or 

(iii) in the case of an individual (not otherwise 
insured under clause (i)) who, by reason of section 
416(i)(3)(B)(ii) of this title, had a prior period of 
disability that began during a period before the 
quarter in which he or she attained age 31, not less 
than one-half of the quarters beginning after such 
individual attained age 21 and ending with the 
quarter in which such month occurs are quarters of 
coverage, or (if the number of quarters in such period 
is less than 12) not less than 6 of the quarters in the 
12-quarter period ending with such quarter are 
quarters of coverage; 

69a 

except that the provisions of subparagraph (B) of this 
paragraph shall not apply in the case of an individual 
who is blind (within the meaning of “blindness” as 
defined in section 416(i)(1) of this title). 

For purposes 
of subparagraph (B) of this paragraph, when the 
number of quarters in any period is an odd number, 
such number shall be reduced by one, and a quarter 
shall not be counted as part of any period if any part of 
such quarter was included in a period of disability 
unless such quarter was a quarter of coverage. 

(2) The term “waiting period” means, in the case of 
any application for disability insurance benefits, the 
earliest period of five consecutive calendar months— 

(A) throughout which the individual with respect 
to whom such application is filed has been under a 
disability, and 

(B)(i) which begins not earlier than with the first 
day of the seventeenth month before the month in 
which such application is filed if such individual is 
insured for disability insurance benefits in such 
seventeenth month, or (ii) if he is not so insured in 
such month, which begins not earlier than with the 
first day of the first month after such seventeenth 
month in which he is so insured. 

Notwithstanding the preceding provisions of this 
paragraph, no waiting period may begin for any individ- 
ual before January 1, 1957. 

(d) “Disability” defined 

(1) The term “disability” means— 

70a 

(A) inability to engage in any substantial gainful 
activity by reason of any medically determinable 
physical or mental impairment which can be ex- 
pected to result in death or which has lasted or can 
be expected to last for a continuous period of not less 
than 12 months; or 

(B) in the case of an individual who has attained 
the age of 55 and is blind (within the meaning of 
“blindness” as defined in section 416(i)(1) of this 
title), inability by reason of such blindness to engage 
in substantial gainful activity requiring skills or 
abilities comparable to those of any gainful activity in 
which he has previously engaged with some 
regularity and over a substantial period of time. 

(2) For purposes of paragraph (1)(A)— 

(A) An individual shall be determined to be 
under a disability only if his physical or mental 
impairment or impairments are of such severity that 
he is not only unable to do his previous work but 
cannot, considering his age, education, and work 
experience, engage in any other kind of substantial 
gainful work which exists in the national economy, 
regardless of whether such work exists in the 
immediate area in which he lives, or whether a 
specific job vacancy exists for him, or whether he 
would be hired if he applied for work. For purposes 
of the preceding sentence (with respect to any 
individual), “work which exists in the national 
economy” means work which exists in significant 
numbers either in the region where such individual 
lives or in several regions of the country. 

71a 

(B) In determining whether an individual’s 
physical or mental impairment or impairments are of 
a sufficient medical severity that such impairment or 
impairments could be the basis of eligibility under 
this section, the Commissioner of Social Security 
shall consider the combined effect of all of the 
individual’s impairments without regard to whether 
any such impairment, if considered separately, would 
be of such severity. If the Commissioner of Social 
Security does find a medically severe combination of 
impairments, the combined impact of the impair- 
ments shall be considered throughout the disability 
determination process. 

(C) An individual shall not be considered to be 
disabled for purposes of this subchapter if alcoholism 
or drug addiction would (but for this subparagraph) 
be a contributing factor material to the Commis- 
sioner’s determination that the individual is disabled. 

(3) For purposes of this subsection, a “physical or 
mental impairment” is an impairment that results from 
anatomical, physiological, or psychological abnormali- 
ties which are demonstrable by medically acceptable 
clinical and laboratory diagnostic techniques. 

(4)(A) The Commissioner of Social Security shall by 
regulations prescribe the criteria for determining when 
services performed or earnings derived from services 
demonstrate an individual’s ability to engage in 
substantial gainful activity. No individual who is blind 
shall be regarded as having demonstrated an ability to 
engage in substantial gainful activity on the basis of 
earnings that do not exceed an amount equal to the 
exempt amount which would be applicable under 
section 403(f )(8) of this title, to individuals described in 

72a 

subparagraph (D) thereof, if section 102 of the Senior 
Citizens’ Right to Work Act of 1996 had not been en- 
acted. Notwithstanding the provisions of paragraph 
(2), an individual whose services or earnings meet such 
criteria shall, except for purposes of section 422(c) of 
this title, be found not to be disabled. In determining 
whether an individual is able to engage in substantial 
gainful activity by reason of his earnings, where his 
disability is sufficiently severe to result in a functional 
limitation requiring assistance in order for him to work, 
there shall be excluded from such earnings an amount 
equal to the cost (to such individual) of any attendant 
care services, medical devices, equipment, prostheses, 
and similar items and services (not including routine 
drugs or routine medical services unless such drugs or 
services are necessary for the control of the disabling 
condition) which are necessary (as determined by the 
Commissioner of Social Security in regulations) for that 
purpose, whether or not such assistance is also needed 
to enable him to carry out his normal daily functions; 
except that the amounts to be excluded shall be subject 
to such reasonable limits as the Commissioner of Social 
Security may prescribe. 

(B) In determining under subparagraph (A) when 
services performed or earnings derived from services 
demonstrate an individual’s ability to engage in sub- 
stantial gainful activity, the Commissioner of Social 
Security shall apply the criteria described in sub- 
paragraph (A) with respect to services performed by 
any individual without regard to the legality of such 
services. 

(5)(A) An individual shall not be considered to be 
under a disability unless he furnishes such medical and 

73a 

other evidence of the existence thereof as the Com- 
missioner of Social Security may require. An indivi- 
dual’s statement as to pain or other symptoms shall not 
alone be conclusive evidence of disability as defined in 
this section; there must be medical signs and findings, 
established by medically acceptable clinical or labora- 
tory diagnostic techniques, which show the existence of 
a medical impairment that results from anatomical, 
physiological, or psychological abnormalities which 
could reasonably be expected to produce the pain or 
other symptoms alleged and which, when considered 
with all evidence required to be furnished under this 
paragraph (including statements of the individual or his 
physician as to the intensity and persistence of such 
pain or other symptoms which may reasonably be 
accepted as consistent with the medical signs and 
findings), would lead to a conclusion that the individual 
is under a disability. Objective medical evidence of 
pain or other symptoms established by medically 
acceptable clinical or laboratory techniques (for 
example, deteriorating nerve or muscle tissue) must be 
considered in reaching a conclusion as to whether the 
individual is under a disability. Any non-Federal 
hospital, clinic, laboratory, or other provider of medical 
services, or physician not in the employ of the Federal 
Government, which supplies medical evidence required 
and requested by the Commissioner of Social Security 
under this paragraph shall be entitled to payment from 
the Commissioner of Social Security for the reasonable 
cost of providing such evidence. 

(B) In making any determination with respect to 
whether an individual is under a disability or continues 
to be under a disability, the Commissioner of Social 
Security shall consider all evidence available in such 

74a 

individual’s case record, and shall develop a complete 
medical history of at least the preceding twelve months 
for any case in which a determination is made that the 
individual is not under a disability. In making any 
determination the Commissioner of Social Security 
shall make every reasonable effort to obtain from the 
individual’s treating physician (or other treating health 
care provider) all medical evidence, including diagnostic 
tests, necessary in order to properly make such deter- 
mination, prior to evaluating medical evidence obtained 
from any other source on a consultative basis. 

(6)(A) Notwithstanding any other provision of this 
subchapter, any physical or mental impairment which 
arises in connection with the commission by an 
individual (after October 19, 1980) of an offense which 
constitutes a felony under applicable law and for which 
such individual is subsequently convicted, or which is 
aggravated in connection with such an offense (but only 
to the extent so aggravated), shall not be considered in 
determining whether an individual is under a disability. 

(B) Notwithstanding any other provision of this 
subchapter, any physical or mental impairment which 
arises in connection with an individual’s confinement in 
a jail, prison, or other penal institution or correctional 
facility pursuant to such individual’s conviction of an 
offense (committed after October 19, 1980) constituting 
a felony under applicable law, or which is aggravated in 
connection with such a confinement (but only to the 
extent so aggravated), shall not be considered in deter- 
mining whether such individual is under a disability for 
purposes of benefits payable for any month during 
which such individual is so confined. 

(e) Engaging in substantial gainful activity 

75a 

(1) No benefit shall be payable under subsection 
(d)(1)(B)(ii), (d)(6)(A)(ii), (d)(6)(B), (e)(1)(B)(ii), or 
(f)(1)(B)(ii) of section 402 of this title or under sub- 
section (a)(1) of this section to an individual for any 
month, after the third month, in which he engages in 
substantial gainful activity during the 36-month period 
following the end of his trial work period determined by 
application of section 422(c)(4)(A) of this title. 

(2) No benefit shall be payable under section 402 of 
this title on the basis of the wages and self-employment 
income of an individual entitled to a benefit under 
subsection (a)(1) of this section for any month for which 
the benefit of such individual under subsection (a)(1) of 
this section is not payable under paragraph (1). 

(f ) 
Standard of review for termination of disability 

benefits 

A recipient of benefits under this subchapter or sub- 
chapter XVIII of this chapter based on the disability of 
any individual may be determined not to be entitled to 
such benefits on the basis of a finding that the physical 
or mental impairment on the basis of which such 
benefits are provided has ceased, does not exist, or is 
not disabling only if such finding is supported by— 

(1) substantial evidence which demonstrates that— 

(A) there has been any medical improvement in 
the individual’s impairment or combination of 
impairments (other than medical improvement which 
is not related to the individual’s ability to work), and 

(B) the individual is now able to engage in 
substantial gainful activity; or 

76a 

(2) substantial evidence which— 

(A) consists of new medical evidence and a new 
assessment of the individual’s residual functional 
capacity, and demonstrates that— 

(i) although the individual has not improved 
medically, he or she is nonetheless a beneficiary of 
advances in medical or vocational therapy or 
technology (related to the individual’s ability to 
work), and 

(ii) the individual is now able to engage in 
substantial gainful activity, or 

(B) demonstrates that— 

(i) although the individual has not improved 
medically, he or she has undergone vocational 
therapy (related to the individual’s ability to 
work), and 

(ii) the individual is now able to engage in 
substantial gainful activity; or 

(3) substantial evidence which demonstrates that, as 
determined on the basis of new or improved diagnostic 
techniques or evaluations, the individual’s impairment 
or combination of impairments is not as disabling as it 
was considered to be at the time of the most recent 
prior decision that he or she was under a disability or 
continued to be under a disability, and that therefore 
the individual is able to engage in substantial gainful 
activity; or 

(4) substantial evidence (which may be evidence on 
the record at the time any prior determination of the 

77a 

entitlement to benefits based on disability was made, or 
newly obtained evidence which relates to that deter- 
mination) which demonstrates that a prior deter- 
mination was in error. 

Nothing in this subsection shall be construed to require 
a determination that a recipient of benefits under this 
subchapter or subchapter XVIII of this chapter based 
on an individual’s disability is entitled to such benefits if 
the prior determination was fraudulently obtained or if 
the individual is engaged in substantial gainful activity, 
cannot be located, or fails, without good cause, to 
cooperate in a review of the entitlement to such 
benefits or to follow prescribed treatment which would 
be expected to restore his or her ability to engage in 
substantial gainful activity. In making for purposes of 
the preceding sentence any determination relating to 
fraudulent behavior by any individual or failure by any 
individual without good cause to cooperate or to take 
any required action, the Commissioner of Social 
Security shall specifically take into account any 
physical, mental, educational, or linguistic limitation 
such individual may have (including any lack of facility 
with the English language). Any determination under 
this section shall be made on the basis of all the 
evidence available in the individual’s case file, including 
new evidence concerning the individual’s prior or 
current condition which is presented by the individual 
or secured by the Commissioner of Social Security. 
Any determination made under this section shall be 
made on the basis of the weight of the evidence and on 
a neutral basis with regard to the individual’s condition, 
without any initial inference as to the presence or 
absence of disability being drawn from the fact that the 
individual has previously been determined to be 

78a 

disabled. For purposes of this subsection, a benefit 
under this subchapter is based on an individual’s 
disability if it is a disability insurance benefit, a child’s, 
widow’s, or widower’s insurance benefit based on 
disability, or a mother’s or father’s insurance benefit 
based on the disability of the mother’s or father’s child 
who has attained age 16. 

(g) Continued payment of disability benefits during 
appeal 

(1) In any case where— 

(A) an individual is a recipient of disability 
insurance benefits, or of child’s, widow’s, or 
widower’s insurance benefits based on disability, 

(B) the physical or mental impairment on the 
basis of which such benefits are payable is found to 
have ceased, not to have existed, or to no longer be 
disabling, and as a consequence such individual is 
determined not to be entitled to such benefits, and 

(C) a timely request for a hearing under section 
421(d) of this title, or for an administrative review 
prior to such hearing, is pending with respect to the 
determination that he is not so entitled, 

such individual may elect (in such manner and form and 
within such time as the Commissioner of Social Security 
shall by regulations prescribe) to have the payment of 
such benefits, the payment of any other benefits under 
this subchapter based on such individual’s wages and 
self-employment income, the payment of mother’s or 
father’s insurance benefits to such individual’s mother 
or father based on the disability of such individual as a 

79a 

child who has attained age 16, and the payment of 
benefits under subchapter XVIII of this chapter based 
on such individual’s disability, continued for an addi- 
tional period beginning with the first month beginning 
after January 12, 1983, for which (under such deter- 
mination) such benefits are no longer otherwise 
payable, and ending with the earlier of (i) the month 
preceding the month in which a decision is made after 
such a hearing, or (ii) the month preceding the month in 
which no such request for a hearing or an admini- 
strative review is pending. 

(2)(A) If an individual elects to have the payment of 
his benefits continued for an additional period under 
paragraph (1), and the final decision of the Commis- 
sioner of Social Security affirms the determination that 
he is not entitled to such benefits, any benefits paid 
under this subchapter pursuant to such election (for 
months in such additional period) shall be considered 
overpayments for all purposes of this subchapter, 
except as otherwise provided in subparagraph (B). 

(B) If the Commissioner of Social Security deter- 
mines that the individual’s appeal of his termination of 
benefits was made in good faith, all of the benefits paid 
pursuant to such individual’s election under paragraph 
(1) shall be subject to waiver consideration under the 
provisions of section 404 of this title. In making for 
purposes of this subparagraph any determination of 
whether any individual’s appeal is made in good faith, 
the Commissioner of Social Security shall specifically 
take into account any physical, mental, educational, or 
linguistic limitation such individual may have (including 
any lack of facility with the English language). 

80a 

(h) Interim benefits in cases of delayed final 
decisions 

(1) In any case in which an administrative law judge 
has determined after a hearing as provided under 
section 405(b) of this title that an individual is entitled 
to disability insurance benefits or child’s, widow’s, or 
widower’s insurance benefits based on disability and 
the Commissioner of Social Security has not issued the 
Commissioner’s final decision in such case within 110 
days after the date of the administrative law judge’s 
determination, such benefits shall be currently paid for 
the months during the period beginning with the month 
preceding the month in which such 110-day period 
expires and ending with the month preceding the 
month in which such final decision is issued. 

(2) For purposes of paragraph (1), in determining 
whether the 110-day period referred to in paragraph (1) 
has elapsed, any period of time for which the action or 
inaction of such individual or such individual’s repre- 
sentative without good cause results in the delay in the 
issuance of the Commissioner’s final decision shall not 
be taken into account to the extent that such period of 
time exceeds 20 calendar days. 

(3) Any benefits currently paid under this sub- 
chapter pursuant to this subsection (for the months 
described in paragraph (1)) shall not be considered 
overpayments for any purpose of this subchapter 
(unless payment of such benefits was fraudulently 
obtained), and such benefits shall not be treated as 
past-due benefits for purposes of section 406(b)(1) of 
this title. 

81a 

(i) Reinstatement of entitlement[*] 

(1)(A) Entitlement to benefits described in sub- 
paragraph (B)(i)(I) shall be reinstated in any case 
where the Commissioner determines that an individual 
described in subparagraph (B) has filed a request for 
reinstatement meeting the requirements of paragraph 
(2)(A) during the period prescribed in subparagraph 
(C). Reinstatement of such entitlement shall be in 
accordance with the terms of this subsection. 

(B) An individual is described in this subparagraph 
if 

(i) prior to the month in which the individual 
files a request for reinstatement— 

(I) the individual was entitled to benefits 
under this section or section 402 of this title on 
the basis of disability pursuant to an application 
filed therefor; and 

(II) such entitlement terminated due to the 
performance of substantial gainful activity; 

(ii) the individual is under a disability and the 
physical or mental impairment that is the basis for 
the finding of disability is the same as (or related to) 
the physical or mental impairment that was the basis 
for the finding of disability that gave rise to the 
entitlement described in clause (i); and 

[*] This subsection was added December 17, 1999, by Pub. L. No. 
106-170, Title I, § 112(a), (c), 113 Stat. 1881, 1886, and became 
effective on January 1, 2001. 

82a 

(iii) the individual’s disability renders the 
individual unable to perform substantial gainful 
activity. 

(C)(i) Except as provided in clause (ii), the period 
prescribed in this subparagraph with respect to an 
individual is 60 consecutive months beginning with the 
month following the most recent month for which the 
individual was entitled to a benefit described in sub- 
paragraph (B)(i)(I) prior to the entitlement termination 
described in subparagraph (B)(i)(II). 

(ii) In the case of an individual who fails to file a 
reinstatement request within the period prescribed 
in clause (i), the Commissioner may extend the 
period if the Commissioner determines that the 
individual had good cause for the failure to so file. 

(2)(A)(i) A request for reinstatement shall be filed in 
such form, and containing such information, as the 
Commissioner may prescribe. 

(ii) A request for reinstatement shall include 
express declarations by the individual that the 
individual meets the requirements specified in 
clauses (ii) and (iii) of paragraph (1)(B). 

(B) A request for reinstatement filed in accordance 
with subparagraph (A) may constitute an application 
for benefits in the case of any individual who the 
Commissioner determines is not entitled to reinstated 
benefits under this subsection. 

(3) In determining whether an individual meets the 
requirements of paragraph (1)(B)(ii), the provisions of 
subsection (f ) shall apply. 

83a 

(4)(A)(i) Subject to clause (ii), entitlement to benefits 
reinstated under this subsection shall commence with 
the benefit payable for the month in which a request for 
reinstatement is filed. 

(ii) An individual whose entitlement to a benefit 
for any month would have been reinstated under this 
subsection had the individual filed a request for 
reinstatement before the end of such month shall be 
entitled to such benefit for such month if such 
request for reinstatement is filed before the end of 
the twelfth month immediately succeeding such 
month. 

(B)(i) Subject to clauses (ii) and (iii), the amount of 
the benefit payable for any month pursuant to the 
reinstatement of entitlement under this subsection shall 
be determined in accordance with the provisions of this 
title. 

(ii) For purposes of computing the primary 
insurance amount of an individual whose entitlement 
to benefits under this section is reinstated under this 
subsection, the date of onset of the individual’s 
disability shall be the date of onset used in 
determining the individual’s most recent period of 
disability arising in connection with such benefits 
payable on the basis of an application. 

(iii) Benefits under this section or section 202 
payable for any month pursuant to a request for 
reinstatement filed in accordance with paragraph (2) 
shall be reduced by the amount of any provisional 
benefit paid to such individual for such month under 
paragraph (7). 

84a 

(C) No benefit shall be payable pursuant to an 
entitlement reinstated under this subsection to an 
individual for any month in which the individual 
engages in substantial gainful activity. 

(D) The entitlement of any individual that is 
reinstated under this subsection shall end with the 
benefits payable for the month preceding whichever of 
the following months is the earliest: 

(i) The month in which the individual dies. 

(ii) The month in which the individual attains 
retirement age. 

(iii) The third month following the month in 
which the individual’s disability ceases. 

(5) Whenever an individual’s entitlement to benefits 
under this section is reinstated under this subsection, 
entitlement to benefits payable on the basis of such 
individual’s wages and self-employment income may be 
reinstated with respect to any person previously en- 
titled to such benefits on the basis of an application if 
the Commissioner determines that such person satisfies 
all the requirements for entitlement to such benefits 
except requirements related to the filing of an 
application. The provisions of paragraph (4) shall apply 
to the reinstated entitlement of any such person to the 
same extent that they apply to the reinstated 
entitlement of such individual. 

(6) An individual to whom benefits are payable 
under this section or section 402 of this title pursuant to 
a reinstatement of entitlement under this subsection for 
24 months (whether or not consecutive) shall, with 

85a 

respect to benefits so payable after such twenty-fourth 
month, be deemed for purposes of paragraph (1)(B)(i)(I) 
and the determination, if appropriate, of the termina- 
tion month in accordance with subsection (a)(1) of this 
section, or subsection (d)(1), (e)(1), or (f )(1) of section 
402 of this title, to be entitled to such benefits on the 
basis of an application filed therefor. 

(7)(A) An individual described in paragraph (1)(B) 
who files a request for reinstatement in accordance 
with the provisions of paragraph (2)(A) shall be entitled 
to provisional benefits payable in accordance with this 
paragraph, unless the Commissioner determines that 
the individual does not meet the requirements of 
paragraph (1)(B)(i) or that the individual’s declaration 
under paragraph (2)(A)(ii) is false. Any such deter- 
mination by the Commissioner shall be final and not 
subject to review under subsection (b) or (g) of section 
405 of this title. 

(B) The amount of a provisional benefit for a month 
shall equal the amount of the last monthly benefit 
payable to the individual under this title on the basis of 
an application increased by an amount equal to the 
amount, if any, by which such last monthly benefit 
would have been increased as a result of the operation 
of section 415(i) of this title. 

(C)(i) Provisional benefits shall begin with the month in 
which a request for reinstatement is filed in accordance 
with paragraph (2)(A). 

(ii) Provisional benefits shall end with the 
earliest of 

86a 

(I) the month in which the Commissioner 
makes a determination regarding the individual’s 
entitlement to reinstated benefits; 

(II) the fifth month following the month 
described in clause (i); 

(III) the month in which the individual per- 
forms substantial gainful activity; or 

(IV) the month in which the Commissioner 
determines that the individual does not meet the 
requirements of paragraph (1)(B)(i) or that the 
individual’s declaration made in accordance with 
paragraph (2)(A)(ii) is false. 

(D) In any case in which the Commissioner deter- 
mines that an individual is not entitled to reinstated 
benefits, any provisional benefits paid to the individual 
under this paragraph shall not be subject to recovery as 
an overpayment unless the Commissioner determines 
that the individual knew or should have known that the 
individual did not meet the requirements of paragraph 
(1)(B). 

(j) Limitation on payments to prisoners 

For provisions relating to limitation on payments to 
prisoners, see section 402(x) of this title. 

87a 

3. 42 U.S.C. 1381a states as follows: 

§ 1381a. 

Basic entitlement to benefits 

Every aged, blind, or disabled individual who is 
determined under part A of this subchapter to be 
eligible on the basis of his income and resources shall, in 
accordance with and subject to the provisions of this 
subchapter, be paid benefits by the Commissioner of 
Social Security. 

4. 42 U.S.C. 1382c(a)(3) states as follows: 

§ 1382c. Definitions 

* * * * * 

(a)(3)(A) Except as provided in subparagraph (C), an 
individual shall be considered to be disabled for 
purposes of this subchapter if he is unable to engage in 
any substantial gainful activity by reason of any 
medically determinable physical or mental impairment 
which can be expected to result in death or which has 
lasted or can be expected to last for a continuous period 
of not less than twelve months. 

(B) For purposes of subparagraph (A), an individual 
shall be determined to be under a disability only if his 
physical or mental impairment or impairments are of 
such severity that he is not only unable to do his 
previous work but cannot, considering his age, educa- 
tion, and work experience, engage in any other kind of 
substantial gainful work which exists in the national 
economy, regardless of whether such work exists in the 
immediate area in which he lives, or whether a specific 

88a 

job vacancy exists for him, or whether he would be 
hired if he applied for work. For purposes of the 
preceding sentence (with respect to any individual), 
“work which exists in the national economy” means 
work which exists in significant numbers either in the 
region where such individual lives or in several regions 
of the country. 

(C)(i) An individual under the age of 18 shall be 
considered disabled for the purposes of this subchapter 
if that individual has a medically determinable physical 
or mental impairment, which results in marked and 
severe functional limitations, and which can be 
expected to result in death or which has lasted or can 
be expected to last for a continuous period of not less 
than 12 months. 

(ii) Notwithstanding clause (i), no individual under 
the age of 18 who engages in substantial gainful activity 
(determined in accordance with regulations prescribed 
pursuant to subparagraph (E)) may be considered to be 
disabled. 

(D) For purposes of this paragraph, a physical or 
mental impairment is an impairment that results from 
anatomical, physiological, or psychological abnormali- 
ties which are demonstrable by medically acceptable 
clinical and laboratory diagnostic techniques. 

(E) The Commissioner of Social Security shall by 
regulations prescribe the criteria for determining when 
services performed or earnings derived from services 
demonstrate an individual’s ability to engage in 
substantial gainful activity. In determining whether an 
individual is able to engage in substantial gainful 
activity by reason of his earnings, where his disability is 

89a 

sufficiently severe to result in a functional limitation 
requiring assistance in order for him to work, there 
shall be excluded from such earnings an amount equal 
to the cost (to such individual) of any attendant care 
services, medical devices, equipment, prostheses, and 
similar items and services (not including routine drugs 
or routine medical services unless such drugs or 
services are necessary for the control of the disabling 
condition) which are necessary (as determined by the 
Commissioner of Social Security in regulations) for that 
purpose, whether or not such assistance is also needed 
to enable him to carry out his normal daily functions; 
except that the amounts to be excluded shall be subject 
to such reasonable limits as the Commissioner of Social 
Security may prescribe. Notwithstanding the provi- 
sions of subparagraph (B), an individual whose services 
or earnings meet such criteria shall be found not to be 
disabled. The Commissioner of Social Security shall 
make determinations under this subchapter with 
respect to substantial gainful activity, without regard 
to the legality of the activity. 

(F) Notwithstanding the provisions of subpara- 
graphs (A) through (E), an individual shall also be 
considered to be disabled for purposes of this 
subchapter if he is permanently and totally disabled as 
defined under a State plan approved under subchapter 
XIV or XVI of this chapter as in effect for October 1972 
and received aid under such plan (on the basis of 
disability) for December 1973 (and for at least one 
month prior to July 1973), so long as he is continuously 
disabled as so defined. 

(G) In determining whether an individual’s physical 
or mental impairment or impairments are of a sufficient 

90a 

medical severity that such impairment or impairments 
could be the basis of eligibility under this section, the 
Commissioner of Social Security shall consider the 
combined effect of all of the individual’s impairments 
without regard to whether any such impairment, if 
considered separately, would be of such severity. If the 
Commissioner of Social Security does find a medically 
severe combination of impairments, the combined 
impact of the impairments shall be considered through- 
out the disability determination process. 

(H)(i) In making determinations with respect to 
disability under this subchapter, the provisions of 
sections 421(h), 421(k), and 423(d)(5) of this title shall 
apply in the same manner as they apply to deter- 
minations of disability under subchapter II of this 
chapter. 

(ii)(I) Not less frequently than once every 3 years, 
the Commissioner shall review in accordance with 
paragraph (4) the continued eligibility for benefits 
under this subchapter of each individual who has not 
attained 18 years of age and is eligible for such benefits 
by reason of an impairment (or combination of 
impairments) which is likely to improve (or, at the 
option of the Commissioner, which is unlikely to 
improve). 

(II) A representative payee of a recipient whose 
case is reviewed under this clause shall present, at the 
time of review, evidence demonstrating that the 
recipient is, and has been, receiving treatment, to the 
extent considered medically necessary and available, of 
the condition which was the basis for providing benefits 
under this subchapter. 

91a 

(III) If the representative payee refuses to 
comply without good cause with the requirements of 
subclause (II), the Commissioner of Social Security 
shall, if the Commissioner determines it is in the best 
interest of the individual, promptly suspend payment of 
benefits to the representative payee, and provide for 
payment of benefits to an alternative representative 
payee of the individual or, if the interest of the 
individual under this subchapter would be served 
thereby, to the individual. 

(IV) Subclause (II) shall not apply to the 
representative payee of any individual with respect to 
whom the Commissioner determines such application 
would be inappropriate or unnecessary. In making such 
determination, the Commissioner shall take into 
consideration the nature of the individual’s impairment 
(or combination of impairments). Section 1383(c) of this 
title shall not apply to a finding by the Commissioner 
that the requirements of subclause (II) should not apply 
to an individual’s representative payee. 

(iii) If an individual is eligible for benefits under 
this subchapter by reason of disability for the month 
preceding the month in which the individual attains the 
age of 18 years, the Commissioner shall redetermine 
such eligibility— 

(I) by applying the criteria used in 
determining initial eligibility for individuals who are 
age 18 or older; and 

(II) either during the 1-year period beginning 
on the individual’s 18th birthday or, in lieu of a 
continuing disability review, whenever the 

92a 

Commissioner determines that an individual’s case is 
subject to a redetermination under this clause. 

With respect to any redetermination under this clause, 
paragraph (4) shall not apply. 

(iv)(I) Except as provided in subclause (VI), not 
later than 12 months after the birth of an individual, the 
Commissioner shall review in accordance with para- 
graph (4) the continuing eligibility for benefits under 
this subchapter by reason of disability of such 
individual whose low birth weight is a contributing 
factor material to the Commissioner’s determination 
that the individual is disabled. 

(II) A review under subclause (I) shall be 
considered a substitute for a review otherwise required 
under any other provision of this subparagraph during 
that 12-month period. 

(III) A representative payee of a recipient whose 
case is reviewed under this clause shall present, at the 
time of review, evidence demonstrating that the 
recipient is, and has been, receiving treatment, to the 
extent considered medically necessary and available, of 
the condition which was the basis for providing benefits 
under this subchapter. 

(IV) If the representative payee refuses to comply 
without good cause with the requirements of subclause 
(III), the Commissioner of Social Security shall, if the 
Commissioner determines it is in the best interest of 
the individual, promptly suspend payment of benefits to 
the representative payee, and provide for payment of 
benefits to an alternative representative payee of the 

93a 

individual or, if the interest of the individual under this 
subchapter would be served thereby, to the individual. 

(V) Subclause (III) shall not apply to the repre- 
sentative payee of any individual with respect to whom 
the Commissioner determines such application would 
be inappropriate or unnecessary. In making such 
determination, the Commissioner shall take into consi- 
deration the nature of the individual’s impairment (or 
combination of impairments). Section 1383(c) of this 
title shall not apply to a finding by the Commissioner 
that the requirements of subclause (III) should not 
apply to an individual’s representative payee. 

(VI) Subclause (I) shall not apply in the case of an 
individual described in that subclause who, at the time 
of the individual’s initial disability determination, the 
Commissioner determines has an impairment that is 
not expected to improve within 12 months after the 
birth of that individual, and who the Commissioner 
schedules for a continuing disability review at a date 
that is after the individual attains 1 year of age. 

(I) In making any determination under this sub- 
chapter with respect to the disability of an individual 
who has not attained the age of 18 years and to whom 
section 421(h) of this title does not apply, the Com- 
missioner of Social Security shall make reasonable 
efforts to ensure that a qualified pediatrician or other 
individual who specializes in a field of medicine appro- 
priate to the disability of the individual (as determined 
by the Commissioner of Social Security) evaluates the 
case of such individual. 

(J) Notwithstanding subparagraph (A), an individ- 
ual shall not be considered to be disabled for purposes 

94a 

of this subchapter if alcoholism or drug addiction would 
(but for this subparagraph) be a contributing factor 
material to the Commissioner’s determination that the 
individual is disabled. 

5. 20 C.F.R. 404.315(a) states as follows: 

§ 404.315 
Who is entitled to disability benefits. 

(a) General. You are entitled to disability benefits 
while disabled before age 65 if— 

(1) You have enough social security earnings to be 
insured for disability, as described in § 404.130; 

(2) You apply; 

(3) You have a disability, as defined in § 404.1505, or 
you are not disabled, but you had a disability that ended 
within the 12-month period before the month you 
applied; and 

(4) You have been disabled for 5 full consecutive 
months. This 5-month waiting period begins with a 
month in which you were both insured for disability and 
disabled. Your waiting period can begin no earlier than 
the 17th month before the month you apply—no matter 
how long you were disabled before then. No waiting 
period is required if you were previously entitled to 
disability benefits or to a period of disability under 
§ 404.320 any time within 5 years of the month you 
again became disabled. 

95a 

6. 20 C.F.R. 404.321 (2001) (see 65 Fed. Reg. 42,782 
(2000)) states as follows: 

§ 404.321 
When a period of disability begins and ends. 

(a) When a period of disability begins. Your period 
of disability begins on the day your disability begins if 
you are insured for disability on that day. If you are 
not insured for disability on that day, your period of 
disability will begin on the first day of the first calendar 
quarter after your disability began in which you 
become insured for disability. Your period of disability 
may not begin after you become 65 years old. 

(b) When disability ended before December 1, 1980. 
Your period of disability ends on the last day of the 
month before the month in which you become 65 years 
old or, if earlier, the last day of the second month 
following the month in which your disability ended. 

(c) When disability ends after November 1980. 
Your period of disability ends with the close of 
whichever of the following is the earliest— 

(1) The month before the month in which you 
become 65 years old; 

(2) The month immediately preceding your termi- 
nation month (§ 404.325); or 

(3) If you perform substantial gainful activity 
during the reentitlement period described in 
§ 404.1592a, the last month for which you received 
benefits. 

96a 

(d) When drug addiction or alcoholism is a con- 
tributing factor material to the determination of 
disability. (1) Your entitlement to receive disability 
benefit payments ends the month following the month 
in which, regardless of the number of entitlement 
periods you may have had based on disability where 
drug addiction or alcoholism is a contributing factor 
material to the determination of disability (as described 
in § 404.1535)— 

(i) You have received a total of 36 months of 
disability benefits. Not included in these 36 months are 
months in which treatment for your drug addiction or 
alcoholism is not available, months before March 1995, 
and months for which your benefits were suspended for 
any reason; or 

(ii) Your benefits have been suspended for 12 
consecutive months because of your failure to comply 
with treatment requirements. 

(2) For purposes other than payment of your 
disability benefits, your period of disability continues 
until the termination month as explained in § 404.325. 

7. 20 C.F.R. 404.1505 states as follows: 

§ 404.1505 
Basic definition of disability. 

(a) The law defines disability as the inability to do 
any substantial gainful activity by reason of any 
medically determinable physical or mental impairment 
which can be expected to result in death or which has 
lasted or can be expected to last for a continuous period 
of not less than 12 months. To meet this definition, you 

97a 

must have a severe impairment, which makes you 
unable to do your previous work or any other sub- 
stantial gainful activity which exists in the national 
economy. To determine whether you are able to do 
any other work, we consider your residual functional 
capacity and your age, education, and work experience. 
We will use this definition of disability if you are 
applying for a period of disability, or disability insur- 
ance benefits as a disabled worker, or child’s insurance 
benefits based on disability before age 22 or, with 
respect to disability benefits payable for months after 
December 1990, as a widow, widower, or surviving 
divorced spouse. 

(b) There are different rules for determining dis- 
ability for individuals who are statutorily blind. We 
discuss these in §§ 404.1581 through 404.1587. There 
are also different rules for determining disability for 
widows, widowers, and surviving divorced spouses for 
monthly benefits for months prior to January 1991. We 
discuss these rules in §§ 404.1577, 404.1578, and 
404.1579. 

8. 20 C.F.R. 404.1509 states as follows: 

§ 404.1509 
How long the impairment must last. 

Unless your impairment is expected to result in 
death, it must have lasted or must be expected to last 
for a continuous period of at least 12 months. We call 
this the duration requirement. 

98a 

9. 20 C.F.R. 404.1520 states as follows: 

§ 404.1520 
Evaluation of disability in general. 

(a) Steps in evaluating disability. We consider all 
evidence in your case record when we make a deter- 
mination or decision whether you are disabled. When 
you file a claim for a period of disability and/or dis- 
ability insurance benefits or for child’s benefits based 
on disability, we use the following evaluation process. 
If you are doing substantial gainful activity, we will 
determine that you are not disabled. If you are not 
doing substantial gainful activity, we will first consider 
the effect of your physical or mental impairment; if you 
have more than one impairment, we will also consider 
the combined effect of your impairments. Your im- 
pairment(s) must be severe and meet the duration 
requirement before we can find you to be disabled. We 
follow a set order to determine whether you are dis- 
abled. We review any current work activity, the 
severity of your impairment(s), your residual functional 
capacity, your past work, and your age, education, and 
work experience. If we can find that you are disabled 
or not disabled at any point in the review, we do not 
review your claim further. Once you have been found 
entitled to disability benefits, we follow a somewhat 
different order of evaluation to determine whether your 
entitlement continues, as explained in § 404.1594(f)(6). 

(b) If you are working. If you are working and the 
work you are doing is substantial gainful activity, we 
will find that you are not disabled regardless of your 
medical condition or your age, education, and work 
experience. 

(c) You must have a severe impairment. If you do 
not have any impairment or combination of impair- 

99a 

ments which significantly limits your physical or mental 
ability to do basic work activities, we will find that you 
do not have a severe impairment and are, therefore, not 
disabled. We will not consider your age, education, and 
work experience. However, it is possible for you to 
have a period of disability for a time in the past even 
though you do not now have a severe impairment. 

(d) When your impairment(s) meets or equals a 
listed impairment in appendix 1. If you have an 
impairment(s) which meets the duration requirement 
and is listed in appendix 1 or is equal to a listed impair- 
ment(s), we will find you disabled without considering 
your age, education, and work experience. 

(e) Your impairment(s) must prevent you from 
doing past relevant work. If we cannot make a decision 
based on your current work activity or on medical facts 
alone, and you have a severe impairment(s), we then 
review your residual functional capacity and the 
physical and mental demands of the work you have 
done in the past. If you can still do this kind of work, 
we will find that you are not disabled. 

(f ) Your impairment(s) must prevent you from 
doing any other work. (1) If you cannot do any work 
you have done in the past because you have a severe 
impairment(s), we will consider your residual functional 
capacity and your age, education, and past work 
experience to see if you can do other work. If you 
cannot, we will find you disabled. 

(2) If you have only a marginal education, and long 
work experience (i.e., 35 years or more) where you only 
did arduous unskilled physical labor, and you can no 

100a 

longer do this kind of work, we use a different rule (see 
§ 404.1562). 

10. 20 C.F.R. 404.1572 states as follows: 

§ 404.1572 
What we mean by substantial gainful 

activity. 

Substantial gainful activity is work activity that is 
both substantial and gainful: 

(a) Substantial work activity. Substantial work 
activity is work activity that involves doing significant 
physical or mental activities. Your work may be 
substantial even if it is done on a part-time basis or if 
you do less, get paid less, or have less responsibility 
than when you worked before. 

(b) Gainful work activity. Gainful work activity is 
work activity that you do for pay or profit. Work 
activity is gainful if it is the kind of work usually done 
for pay or profit, whether or not a profit is realized. 

(c) Some other activities. Generally, we do not 
consider activities like taking care of yourself, 
household tasks, hobbies, therapy, school attendance, 
club activities, or social programs to be substantial 
gainful activity. 

101a 

11. 20 C.F.R. 404.1592 (2001) (see 65 Fed. Reg. 42,787 
(2001)) states as follows: 

§ 404.1592 
The trial work period. 

(a) Definition of the trial work period. The trial 
work period is a period during which you may test your 
ability to work and still be considered disabled. It 
begins and ends as described in paragraph (e) of this 
section. During this period, you may perform services 
(see paragraph (b) of this section) in as many as 9 
months, but these months do not have to be 
consecutive. We will not consider those services as 
showing that your disability has ended until you have 
performed services in at least 9 months. However, 
after the trial work period has ended we will consider 
the work you did during the trial work period in 
determining whether your disability ended at any time 
after the trial work period. 

* * * * * 

(e) When the trial work period begins and ends. The 
trial work period begins with the month in which you 
become entitled to disability insurance benefits, to 
child’s benefits based on disability or to widow’s, 
widower’s, or surviving divorced spouse’s benefits 
based on disability. 

It cannot begin before the month 
in which you file your application for benefits, and for 
widows, widowers, and surviving divorced spouses, it 
cannot begin before December 1, 1980. It ends with the 
close of whichever of the following calendar months is 
the earliest: 

(1) The 9th month (whether or not the months have 
been consecutive) in which you have performed 
services if that 9th month is prior to January 1992; 

102a 

(2) The 9th month (whether or not the months have 
been consecutive and whether or not the previous 8 
months of services were prior to January 1992) in which 
you have performed services within a period of 60 
consecutive months if that 9th month is after December 
1991; or 

(3) The month in which new evidence, other than 
evidence relating to any work you did during the trial 
work period, shows that you are not disabled, even 
though you have not worked a full 9 months. We may 
find that your disability has ended at any time during 
the trial work period if the medical or other evidence 
shows that you are no longer disabled. See § 404.1594 
for information on how we decide whether your 
disability continues or ends. 

12. 20 C.F.R. 416.260 states as follows: 

§ 416.260 General. 

The regulations in §§ 416.260 through 416.269 
describe the rules for determining eligibility for special 
SSI cash benefits and for special SSI eligibility status 
for an individual who works despite a disabling im- 
pairment. Under these rules an individual who works 
despite a disabling impairment may qualify for special 
SSI cash benefits and in most cases for Medicaid bene- 
fits when his or her gross earned income exceeds the 
applicable dollar amount which ordinarily represents 
SGA described in § 416.974(b)(2). The calculation of 
this gross earned income amount, however, is not to be 
considered an actual SGA determination. Also, for 
purposes of determining eligibility or continuing eligi- 
bility for Medicaid benefits, a blind or disabled in- 

103a 

dividual (no longer eligible for regular SSI benefits or 
for special SSI cash benefits) who, except for earnings, 
would otherwise be eligible for SSI cash benefits may 
be eligible for a special SSI eligibility status under 
which he or she is considered to be a blind or disabled 
individual receiving SSI benefits. We explain the rules 
for eligibility for special SSI cash benefits in §§ 416.261 
and 416.262. We explain the rules for the special SSI 
eligibility status in §§ 416.264 through 416.269. 

13. 20 C.F.R. 416.261 states as follows: 

§ 416.261 
What are special SSI cash benefits and 

when are they payable. 

Special SSI cash benefits are benefits that we may 
pay you in lieu of regular SSI benefits because your 
gross earned income in a month of initial eligibility for 
regular SSI benefits exceeds the amount ordinarily 
considered to represent SGA under § 416.974(b)(2). 
You must meet the eligibility requirements in § 416.262 
in order to receive special SSI cash benefits. Special 
SSI cash benefits are not payable for any month in 
which your countable income exceeds the limits estab- 
lished for the SSI program (see subpart K of this part). 
If you are eligible for special SSI cash benefits, we 
consider you to be a disabled individual receiving SSI 
benefits for purposes of eligibility for Medicaid. We 
compute the amount of special SSI cash benefits accord- 
ing to the rules in subpart D of this part. If your State 
makes supplementary payments which we administer 
under a Federal-State agreement, and if your State 
elects to supplement the special SSI cash benefits, the 
rules in subpart T of this part will apply to these 
payments. 

104a 

14. 20 C.F.R. 416.262 states as follows: 

§ 416.262 
Eligibility requirements for special SSI 

cash benefits. 

You are eligible for special SSI cash benefits if you 
meet the following requirements— 

(a) You were eligible to receive a regular SSI 
benefit or a federally administered State supplemen- 
tary payment (see § 416.2001) in a month before the 
month for which we are determining your eligibility for 
special SSI cash benefits as long as that month was not 
in a prior period of eligibility which has terminated 
according to §§ 416.1331 through 416.1335; 

(b) In the month for which we are making the deter- 
mination, your gross earned income exceeds the 
amount ordinarily considered to represent SGA under 
§ 416.974(b)(2); 

(c) You continue to have a disabling impairment; 

(d) If your disability is based on a determination 
that drug addiction or alcoholism is a contributing 
factor material to the determination of disability as 
described in § 416.935, you have not yet received SSI 
cash benefits, special SSI cash benefits, or special SSI 
eligibility status for a total of 36 months, or Social 
Security benefit payments when treatment was avail- 
able for a total of 36 months; and 

(e) You meet all the nondisability requirements for 
eligibility for SSI benefits (see § 416.202). 

We will follow the rules in this subpart in determining 
your eligibility for special SSI cash benefits.