[Title 20 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2017 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

          Title 20

Employees' Benefits


________________________

Parts 400 to 499

                         Revised as of April 1, 2017

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2017
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 20:
          Chapter III--Social Security Administration                3
  Finding Aids:
      Table of CFR Titles and Chapters........................    1339
      Alphabetical List of Agencies Appearing in the CFR......    1359
      Chapter III Index.......................................    1369
      List of CFR Sections Affected...........................    1379

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                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 20 CFR 401.5 refers 
                       to title 20, part 401, 
                       section 5.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 2017), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

PAST PROVISIONS OF THE CODE

    Provisions of the Code that are no longer in force and effect as of 
the revision date stated on the cover of each volume are not carried. 
Code users may find the text of provisions in effect on any given date 
in the past by using the appropriate List of CFR Sections Affected 
(LSA). For the convenience of the reader, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume. For changes to 
the Code prior to the LSA listings at the end of the volume, consult 
previous annual editions of the LSA. For changes to the Code prior to 
2001, consult the List of CFR Sections Affected compilations, published 
for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed as 
an approved incorporation by reference, please contact the agency that 
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contacting the agency, you find the material is not available, please 
notify the Director of the Federal Register, National Archives and 
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or call 202-741-6010.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Authorities 
and Rules. A list of CFR titles, chapters, subchapters, and parts and an 
alphabetical list of agencies publishing in the CFR are also included in 
this volume.

[[Page vii]]

    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, 8601 Adelphi Road, College Park, MD 
20740-6001 or e-mail [email protected].

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ELECTRONIC SERVICES

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CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers of the Presidents of the United 
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    The Office of the Federal Register also offers a free service on the 
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site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.archives.gov/federal-
register.
    The e-CFR is a regularly updated, unofficial editorial compilation 
of CFR material and Federal Register amendments, produced by the Office 
of the Federal Register and the Government Publishing Office. It is 
available at www.ecfr.gov.

    Oliver A. Potts,
    Director,
    Office of the Federal Register.
    April 1, 2017.

                                
                                      
                            

  

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                               THIS TITLE

    Title 20--Employees' Benefits is composed of four volumes. The first 
volume, containing parts 1-399, includes current regulations issued by 
the Office of Workers' Compensation Programs, Department of Labor and 
the Railroad Retirement Board. The second volume, containing parts 400-
499, includes all current regulations issued by the Social Security 
Administration. The third volume, containing parts 500 to 656, includes 
current regulations issued by the Employees' Compensation Appeals Board, 
and the Employment and Training Administration. The fourth volume, 
containing part 657 to End, includes the current regulations issued by 
the Office of Workers' Compensation Programs, the Benefits Review Board, 
the Office of the Assistant Secretary for Veterans' Employment and 
Training Service (all of the Department of Labor) and the Joint Board 
for the Enrollment of Actuaries. The contents of these volumes represent 
all current regulations codified under this title of the CFR as of April 
1, 2017.

    An index to chapter III appears in the second volume.

    For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of John 
Hyrum Martinez, assisted by Stephen J. Frattini.

[[Page 1]]



                      TITLE 20--EMPLOYEES' BENEFITS




                  (This book contains parts 400 to 499)

  --------------------------------------------------------------------
                                                                    Part

chapter iii--Social Security Administration.................         401

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               CHAPTER III--SOCIAL SECURITY ADMINISTRATION




  --------------------------------------------------------------------
Part                                                                Page
400             [Reserved]

401             Privacy and disclosure of official records 
                    and information.........................           5
402             Availability of information and records to 
                    the public..............................          26
403             Testimony by employees and the production of 
                    records and information in legal 
                    proceedings.............................          43
404             Federal old-age, survivors and disability 
                    insurance (1950-    )...................          47
405             [Reserved]

408             Special benefits for certain World War II 
                    veterans................................         710
411             The Ticket to Work and Self-Sufficiency 
                    Program.................................         750
416             Supplemental security income for the aged, 
                    blind, and disabled.....................         793
418             Medicare subsidies..........................        1168
421             National Instant Criminal Background Check 
                    System (NCIS)...........................        1212
422             Organization and procedures.................        1216
423             Service of process..........................        1283
424-428         [Reserved]

429             Administrative claims under the Federal Tort 
                    Claims Act and related statutes.........        1284
430             Personnel...................................        1294
431             Protection of human subjects................        1294
432-437         [Reserved]

438             Restrictions on lobbying....................        1312
440-497         [Reserved]

498             Civil monetary penalties, assessments and 
                    recommended exclusions..................        1321
499             [Reserved]

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                           PART 400 [RESERVED]



PART 401_PRIVACY AND DISCLOSURE OF OFFICIAL RECORDS AND INFORMATION
--Table of Contents



                            Subpart A_General

Sec.
401.5  Purpose of the regulations.
401.10  Applicability.
401.15  Limitations on scope.
401.20  Scope.
401.25  Terms defined.

                        Subpart B_The Privacy Act

401.30  Privacy Act and other responsibilities.
401.35  Your right to request records.
401.40  How to get your own records.
401.45  Verifying your identity.
401.50  Granting notification of or access to a record.
401.55  Access to medical records.
401.60  Access to or notification of program records about more than one 
          individual.
401.65  How to correct your record.
401.70  Appeals of refusals to correct records or refusals to allow 
          access to records.
401.75  Rights of parents or legal guardians.
401.80  Accounting for disclosures.
401.85  Exempt systems.
401.90  Contractors.
401.95  Fees.

        Subpart C_Disclosure of Official Records and Information

401.100  Disclosure of records with the written consent of the subject 
          of the record.
401.105  Disclosure of personal information without the consent of the 
          subject of the record.
401.110  Disclosure of personal information in nonprogram records 
          without the consent of the subject of the record.
401.115  Disclosure of personal information in program records without 
          the consent of the subject of the record.
401.120  Disclosures required by law.
401.125  Disclosures prohibited by law.
401.130  Freedom of Information Act.
401.135  Other laws.
401.140  General principles.
401.145  Safeguards against unauthorized redisclosure or use.
401.150  Compatible purposes.
401.155  Law enforcement purposes.
401.160  Health or safety.
401.165  Statistical and research activities.
401.170  Congress.
401.175  Government Accountability Office.
401.180  Disclosure under court order or other legal process.
401.185  Other specific recipients.
401.190  Deceased persons.
401.195  Situations not specified in this part.
401.200  Blood donor locator service.

Appendix A to Part 401--Employee Standards of Conduct

    Authority: Secs. 205, 702(a)(5), 1106, and 1141 of the Social 
Security Act (42 U.S.C. 405, 902(a)(5), 1306, and 1320b-11); 5 U.S.C. 
552 and 552a; 8 U.S.C. 1360; 26 U.S.C. 6103; 30 U.S.C. 923.

    Source: 62 FR 4143, Jan. 29, 1997, unless otherwise noted.



                            Subpart A_General



Sec. 401.5  Purpose of the regulations.

    (a) General. The purpose of this part is to describe the Social 
Security Administration (SSA) policies and procedures for implementing 
the requirements of the Privacy Act of 1974, 5 U.S.C. 552a and section 
1106 of the Social Security Act concerning disclosure of information 
about individuals, both with and without their consent. This part also 
complies with other applicable statutes.
    (b) Privacy. This part implements the Privacy Act by establishing 
agency policies and procedures for the maintenance of records. This part 
also establishes agency policies and procedures under which you can ask 
us whether we maintain records about you or obtain access to your 
records. Additionally, this part establishes policies and procedures 
under which you may seek to have your record corrected or amended if you 
believe that your record is not accurate, timely, complete, or relevant.
    (c) Disclosure. This part also sets out the general guidelines which 
we follow in deciding whether to make disclosures. However, we must 
examine the facts of each case separately to decide if we should 
disclose the information or keep it confidential.



Sec. 401.10  Applicability.

    (a) SSA. All SSA employees and components are governed by this part. 
SSA employees governed by this part include all regular and special 
government employees of SSA; experts and consultants whose temporary 
(not in

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excess of 1 year) or intermittent services have been procured by SSA by 
contract pursuant to 5 U.S.C. 3109; volunteers where acceptance of their 
services are authorized by law; those individuals performing gratuitous 
services as permitted under conditions prescribed by the Office of 
Personnel Management; and, participants in work-study or training 
programs.
    (b) Other entities. This part also applies to advisory committees 
and councils within the meaning of the Federal Advisory Committee Act 
which provide advice to: Any official or component of SSA; or the 
President and for which SSA has been delegated responsibility for 
providing services.



Sec. 401.15  Limitations on scope.

    The regulations in this part do not--
    (a) Make available to an individual records which are not retrieved 
by that individual's name or other personal identifier.
    (b) Make available to the general public records which are retrieved 
by an individual's name or other personal identifier or make available 
to the general public records which would otherwise not be available to 
the general public under the Freedom of Information Act, 5 U.S.C. 552, 
and part 402 of this title.
    (c) Govern the maintenance or disclosure of, notification about or 
access to, records in the possession of SSA which are subject to the 
regulations of another agency, such as personnel records which are part 
of a system of records administered by the Office of Personnel 
Management.
    (d) Apply to grantees, including State and local governments or 
subdivisions thereof, administering federally funded programs.
    (e) Make available records compiled by SSA in reasonable 
anticipation of court litigation or formal administrative proceedings. 
The availability of such records to the general public or to any subject 
individual or party to such litigation or proceedings shall be governed 
by applicable constitutional principles, rules of discovery, and 
applicable regulations of the agency.



Sec. 401.20  Scope.

    (a) Access. Sections 401.30 through 401.95, which set out SSA's 
rules for implementing the Privacy Act, apply to records retrieved by an 
individual's name or personal identifier subject to the Privacy Act. The 
rules in Secs. 401.30 through 401.95 also apply to information developed 
by medical sources for the Social Security program and shall not be 
accessed except as permitted by this part.
    (b) Disclosure--(1) Program records. Regulations that apply to the 
disclosure of information about an individual contained in SSA's program 
records are set out in Secs. 401.100 through 401.200 of this part. These 
regulations also apply to the disclosure of other Federal program 
information which SSA maintains. That information includes:
    (i) Health insurance records which SSA maintains for the Health Care 
Financing Administration's (HCFA) programs under title XVIII of the 
Social Security Act. We will disclose these records to HCFA. HCFA may 
redisclose these records under the regulations applying to records in 
HCFA's custody;
    (ii) Black lung benefit records which SSA maintains for the 
administration of the Federal Coal Mine Health and Safety Act; (However, 
this information is not covered by section 1106 of the Social Security 
Act.) and
    (iii) Information retained by medical sources pertaining to a 
consultative examination performed for the Social Security program shall 
not be disclosed except as permitted by this part.
    (2) Nonprogram records. Section 401.110 sets out rules applicable to 
the disclosure of nonprogram records, e.g., SSA's administrative and 
personnel records.

[62 FR 4143, Jan. 29, 1997, as amended at 65 FR 16812, Mar. 30, 2000; 72 
FR 20939, Apr. 27, 2007]



Sec. 401.25  Terms defined.

    Access means making a record available to a subject individual.
    Act means the Social Security Act.
    Agency means the Social Security Administration.
    Commissioner means the Commissioner of Social Security.
    Disclosure means making a record about an individual available to or 
releasing it to another party.

[[Page 7]]

    FOIA means the Freedom of Information Act.
    Individual when used in connection with the Privacy Act or for 
disclosure of nonprogram records, means a living person who is a citizen 
of the United States or an alien lawfully admitted for permanent 
residence. It does not include persons such as sole proprietorships, 
partnerships, or corporations. A business firm which is identified by 
the name of one or more persons is not an individual. When used in 
connection with the rules governing program information, individual 
means a living natural person; this does not include corporations, 
partnerships, and unincorporated business or professional groups of two 
or more persons.
    Information means information about an individual, and includes, but 
is not limited to, vital statistics; race, sex, or other physical 
characteristics; earnings information; professional fees paid to an 
individual and other financial information; benefit data or other claims 
information; the social security number, employer identification number, 
or other individual identifier; address; phone number; medical 
information, including psychological or psychiatric information or lay 
information used in a medical determination; and information about 
marital and family relationships and other personal relationships.
    Maintain means to establish, collect, use, or disseminate when used 
in connection with the term record; and, to have control over or 
responsibility for a system of records when used in connection with the 
term system of records.
    Notification means communication to an individual whether he is a 
subject individual. (Subject individual is defined further on in this 
section.)
    Program information means personal information and records collected 
and compiled by SSA in order to discharge its responsibilities under 
titles I, II, IV part A, X, XI, XIV, XVI and XVIII of the Act and parts 
B and C of the Federal Coal Mine Health and Safety Act.
    Record means any item, collection, or grouping of information about 
an individual that is maintained by SSA including, but not limited to, 
information such as an individual's education, financial transactions, 
medical history, and criminal or employment history that contains the 
individual's name, or an identifying number, symbol, or any other means 
by which an individual can be identified. When used in this part, record 
means only a record which is in a system of records.
    Routine use means the disclosure of a record outside SSA, without 
the consent of the subject individual, for a purpose which is compatible 
with the purpose for which the record was collected. It includes 
disclosures required to be made by statutes other than the Freedom of 
Information Act, 5 U.S.C. 552. It does not include disclosures which the 
Privacy Act otherwise permits without the consent of the subject 
individual and without regard to whether they are compatible with the 
purpose for which the information is collected, such as disclosures to 
the Bureau of the Census, the General Accounting Office, or to Congress.
    Social Security Administration (SSA) means (1) that Federal agency 
which has administrative responsibilities under titles, I, II, X, XI, 
XIV, XVI, and XVIII of the Act; and (2) units of State governments which 
make determinations under agreements made under sections 221 and 1633 of 
the Act.
    Social Security program means any program or provision of law which 
SSA is responsible for administering, including the Freedom of 
Information Act and Privacy Act. This includes our responsibilities 
under parts B and C of the Federal Coal Mine Health and Safety Act.
    Statistical record means a record maintained for statistical 
research or reporting purposes only and not maintained to make 
determinations about a particular subject individual.
    Subject individual means the person to whom a record pertains.
    System of records means a group of records under our control from 
which information about an individual is retrieved by the name of the 
individual or by an identifying number, symbol, or other identifying 
particular. Single records or groups of records which are not retrieved 
by a personal identifier are not part of a system of records. Papers 
maintained by individual Agency employees which are prepared, 
maintained, or discarded at the discretion of the employee and which are 
not subject

[[Page 8]]

to the Federal Records Act, 44 U.S.C. 2901, are not part of a system of 
records; provided, that such personal papers are not used by the 
employee or the Agency to determine any rights, benefits, or privileges 
of individuals.
    We and our mean the Social Security Administration.



                        Subpart B_The Privacy Act



Sec. 401.30  Privacy Act and other responsibilities.

    (a) Policy. Our policy is to protect the privacy of individuals to 
the fullest extent possible while nonetheless permitting the exchange of 
records required to fulfill our administrative and program 
responsibilities, and responsibilities for disclosing records which the 
general public is entitled to have under the Freedom of Information Act, 
5 U.S.C. 552, and 20 CFR part 402.
    (b) Maintenance of records. We will maintain no record unless:
    (1) It is relevant and necessary to accomplish an SSA function which 
is required to be accomplished by statute or Executive Order;
    (2) We obtain the information in the record, as much as it is 
practicable, from the subject individual if we may use the record to 
determine an individual's rights, benefits or privileges under Federal 
programs;
    (3) We inform the individual providing the record to us of the 
authority for our asking him or her to provide the record (including 
whether providing the record is mandatory or voluntary, the principal 
purpose for maintaining the record, the routine uses for the record, and 
what effect his or her refusal to provide the record may have on him or 
her). Further, the individual agrees to provide the record, if the 
individual is not required by statute or Executive Order to do so.
    (c) First Amendment rights. We will keep no record which describes 
how an individual exercises rights guaranteed by the First Amendment 
unless we are expressly authorized:
    (1) By statute,
    (2) By the subject individual, or
    (3) Unless pertinent to and within the scope of an authorized law 
enforcement activity.
    (d) Privacy Officer. The Privacy Officer is an advisor to the Agency 
on all privacy policy and disclosure matters. The Privacy Officer 
coordinates the development and implementation of Agency privacy 
policies and related legal requirements to ensure Privacy Act 
compliance, and monitors the coordination, collection, maintenance, use 
and disclosure of personal information. The Privacy Officer also ensures 
the integration of privacy principles into information technology 
systems architecture and technical designs, and generally provides to 
Agency officials policy guidance and directives in carrying out the 
privacy and disclosure policy.
    (e) Senior Agency Official for Privacy. The Senior Agency Official 
for Privacy assumes overall responsibility and accountability for 
ensuring the agency's implementation of information privacy protections 
as well as agency compliance with federal laws, regulations, and 
policies relating to the privacy of information, such as the Privacy 
Act. The compliance efforts also include reviewing information privacy 
procedures to ensure that they are comprehensive and up-to-date and, 
where additional or revised procedures may be called for, working with 
the relevant agency offices in the consideration, adoption, and 
implementation of such procedures. The official also ensures that agency 
employees and contractors receive appropriate training and education 
programs regarding the information privacy laws, regulations, polices 
and procedures governing the agency's handling of personal information. 
In addition to the compliance role, the official has a central policy-
making role in the agency's development and evaluation of legislative, 
regulatory and other policy proposals which might implicate information 
privacy issues, including those relating to the collection, use, 
sharing, and disclosure of personal information.
    (f) Privacy Impact Assessment. In our comprehensive Privacy Impact 
Assessment (PIA) review process, we incorporate the tenets of privacy 
law, SSA privacy regulations, and privacy policy directly into the 
development of certain Information Technology projects. Our review 
examines the risks and

[[Page 9]]

ramifications of collecting, maintaining and disseminating information 
in identifiable form in an electronic information system and identifies 
and evaluates protections and alternate processes to reduce the risk of 
unauthorized disclosures. As we accomplish the PIA review, we ask 
systems personnel and program personnel to resolve questions on data 
needs and data protection prior to the development of the electronic 
system.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20939, Apr. 27, 2007]



Sec. 401.35  Your right to request records.

    The Privacy Act gives you the right to direct access to most records 
about yourself that are in our systems of records. Exceptions to this 
Privacy Act right include--
    (a) Special procedures for access to certain medical records (see 5 
U.S.C. 552a(f)(3) and Sec. 401.55);
    (b) Unavailability of certain criminal law enforcement records (see 
5 U.S.C. 552a(k), and Sec. 401.85); and
    (c) Unavailability of records compiled in reasonable anticipation of 
a court action or formal administrative proceeding.

    Note to Sec. 401.35: The Freedom of Information Act (see 20 CFR part 
402) allows you to request information from SSA whether or not it is in 
a system of records.



Sec. 401.40  How to get your own records.

    (a) Your right to notification and access. Subject to the provisions 
governing medical records in Sec. 401.55, you may ask for notification 
of or access to any record about yourself that is in an SSA system of 
records. If you are a minor, you may get information about yourself 
under the same rules as for an adult. Under the Privacy Act, if you are 
the parent or guardian of a minor, or the legal guardian of someone who 
has been declared legally incompetent, and you are acting on his or her 
behalf, you may ask for information about that individual. You may be 
accompanied by another individual of your choice when you request access 
to a record in person, provided that you affirmatively authorize the 
presence of such other individual during any discussion of a record to 
which you are requesting access.
    (b) Identifying the records. At the time of your request, you must 
specify which systems of records you wish to have searched and the 
records to which you wish to have access. You may also request copies of 
all or any such records. Also, we may ask you to provide sufficient 
particulars to enable us to distinguish between records on individuals 
with the same name. The necessary particulars are set forth in the 
notices of systems of records which are published in the Federal 
Register.
    (c) Requesting notification or access. To request notification of or 
access to a record, you may visit your local social security office or 
write to the manager of the SSA system of records. The name and address 
of the manager of the system is part of the notice of systems of 
records. Every local social security office keeps a copy of the Federal 
Register containing that notice. That office can also help you get 
access to your record. You do not need to use any special form to ask 
for a record about you in our files, but your request must give enough 
identifying information about the record you want to enable us to find 
your particular record. This identifying information should include the 
system of records in which the record is located and the name and social 
security number (or other identifier) under which the record is filed. 
We do not honor requests for all records, all information, or similar 
blanket requests. Before granting notification of or access to a record, 
we may, if you are making your request in person, require you to put 
your request in writing if you have not already done so.



Sec. 401.45  Verifying your identity.

    (a) When required. Unless you are making a request for notification 
of or access to a record in person, and you are personally known to the 
SSA representative, you must verify your identity in accordance with 
paragraph (b) of this section if:
    (1) You make a request for notification of a record and we determine 
that the mere notice of the existence of the record would be a clearly 
unwarranted invasion of privacy if disclosed to someone other than the 
subject individual; or,

[[Page 10]]

    (2) You make a request for access to a record which is not required 
to be disclosed to the general public under the Freedom of Information 
Act, 5 U.S.C. 552, and part 402 of this chapter.
    (b) Manner of verifying identity--(1) Request in person. If you make 
a request to us in person, you must provide at least one piece of 
tangible identification such as a driver's license, passport, alien or 
voter registration card, or union card to verify your identity. If you 
do not have identification papers to verify your identity, you must 
certify in writing that you are the individual who you claim to be and 
that you understand that the knowing and willful request for or 
acquisition of a record pertaining to an individual under false 
pretenses is a criminal offense.
    (2) Request by telephone. If you make a request by telephone, you 
must verify your identity by providing identifying particulars which 
parallel the record to which notification or access is being sought. If 
we determine that the particulars provided by telephone are 
insufficient, you will be required to submit your request in writing or 
in person. We will not accept telephone requests where an individual is 
requesting notification of or access to sensitive records such as 
medical records.
    (3) Electronic requests. If you make a request by computer or other 
electronic means, e.g., over the Internet, we require you to verify your 
identity by using identity confirmation procedures that are commensurate 
with the sensitivity of the information that you are requesting. If we 
cannot confirm your identity using our identity confirmation procedures, 
we will not process the electronic request. When you cannot verify your 
identity through our procedures, we will require you to submit your 
request in writing.
    (4) Electronic disclosures. When we collect or provide personally 
identifiable information over open networks such as the Internet, we use 
encryption in all of our automated online transaction systems to protect 
the confidentiality of the information. When we provide an online access 
option, such as a standard e-mail comment form on our Web site, and 
encryption is not being used, we alert you that personally identifiable 
information (such as your social security number) should not be included 
in your message.
    (5) Requests not made in person. Except as provided in paragraphs 
(b)(2) of this section, if you do not make a request in person, you must 
submit a written request to SSA to verify your identify or you must 
certify in your request that you are the individual you claim to be. You 
must also sign a statement that you understand that the knowing and 
willful request for or acquisition of a record pertaining to an 
individual under false pretenses is a criminal offense.
    (6) Requests on behalf of another. If you make a request on behalf 
of a minor or legal incompetent as authorized under Sec. 401.40, you 
must verify your relationship to the minor or legal incompetent, in 
addition to verifying your own identity, by providing a copy of the 
minor's birth certificate, a court order, or other competent evidence of 
guardianship to SSA; except that you are not required to verify your 
relationship to the minor or legal incompetent when you are not required 
to verify your own identity or when evidence of your relationship to the 
minor or legal incompetent has been previously given to SSA.
    (7) Medical records--additional verification. You need to further 
verify your identity if you are requesting notification of or access to 
sensitive records such as medical records. Any information for further 
verification must parallel the information in the record to which 
notification or access is being sought. Such further verification may 
include such particulars as the date or place of birth, names of 
parents, name of employer or the specific times the individual received 
medical treatment.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20939, Apr. 27, 2007]



Sec. 401.50  Granting notification of or access to a record.

    (a) General. Subject to the provisions governing medical records in 
Sec. 401.55 and the provisions governing exempt systems in Sec. 401.85, 
upon receipt of your request for notification of or access to

[[Page 11]]

a record and verification of your identity, we will review your request 
and grant notification or access to a record, if you are the subject of 
the record.
    (b) Our delay in responding. If we determine that we will have to 
delay responding to your request because of the number of requests we 
are processing, a breakdown of equipment, shortage of personnel, storage 
of records in other locations, etc., we will so inform you and tell you 
when notification or access will be granted.



Sec. 401.55  Access to medical records.

    (a) General. You have a right to access your medical records, 
including any psychological information that we maintain.
    (b) Medical records procedures--(1) Notification of or access to 
medical records. (i) You may request notification of or access to a 
medical record pertaining to you. Unless you are a parent or guardian 
requesting notification of or access to a minor's medical record, you 
must make a request for a medical record in accordance with this section 
and the procedures in Secs. 401.45 through 401.50 of this part.
    (ii) When you request medical information about yourself, you must 
also name a representative in writing. The representative may be a 
physician, other health professional, or other responsible individual 
who will be willing to review the record and inform you of its contents. 
Following the discussion, you are entitled to your records. The 
representative does not have the discretion to withhold any part of your 
record. If you do not designate a representative, we may decline to 
release the requested information. In some cases, it may be possible to 
release medical information directly to you rather than to your 
representative.
    (2) Utilization of the designated representative. You will be 
granted direct access to your medical record if we can determine that 
direct access is not likely to have an adverse effect on you. If we 
believe that we are not qualified to determine, or if we do determine, 
that direct access to you is likely to have an adverse effect, the 
record will be sent to the designated representative. We will inform you 
in writing that the record has been sent.
    (c) Medical records of minors--(1) Request by the minor. You may 
request access to your own medical records in accordance with paragraph 
(b) of this section.
    (2) Requests on a minor's behalf; notification of or access to 
medical records to an individual on a minor's behalf. (i) To protect the 
privacy of a minor, we will not give to a parent or guardian direct 
notification of or access to a minor's record, even though the parent or 
guardian who requests such notification or access is authorized to act 
on a minor's behalf as provided in Sec. 401.75 of this part.
    (ii) A parent or guardian must make all requests for notification of 
or access to a minor's medical record in accordance with this paragraph 
and the procedures in Secs. 401.45 through 401.50 of this part. A parent 
or guardian must at the time he or she makes a request designate a 
family physician or other health professional (other than a family 
member) to whom the record, if any, will be sent. If the parent or 
guardian will not designate a representative, we will decline to release 
the requested information.
    (iii) Where a medical record on the minor exists, we will in all 
cases send it to the physician or health professional designated by the 
parent or guardian. The representative will review the record, discuss 
its contents with the parent or legal guardian, then release the entire 
record to the parent or legal guardian. The representative does not have 
the discretion to withhold any part of the minor's record. We will 
respond in the following similar manner to the parent or guardian making 
the request: ``We have completed processing your request for 
notification of or access to _____'s (Name of minor) medical records. 
Please be informed that if any medical record was found pertaining to 
that individual, it has been sent to your designated physician or health 
professional.''
    (iv) In each case where we send a minor's medical record to a 
physician or health professional, we will make reasonable efforts to 
inform the minor that we have given the record to the representative.

[[Page 12]]

    (3) Requests on behalf of an incapacitated adult. If you are the 
legal guardian of an adult who has been declared legally incompetent, 
you may receive his or her records directly.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20939, Apr. 27, 2007]



Sec. 401.60  Access to or notification of program records about more
than one individual.

    When information about more than one individual is in one record 
filed under your social security number, you may receive the information 
about you and the fact of entitlement and the amount of benefits payable 
to other persons based on your record. You may receive information about 
yourself or others, which is filed under someone else's social security 
number, if that information affects your entitlement to social security 
benefits or the amount of those benefits.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20940, Apr. 27, 2007]



Sec. 401.65  How to correct your record.

    (a) How to request a correction. This section applies to all records 
kept by SSA (as described in Sec. 401.5) except for records of earnings. 
(20 CFR 422.125 describes how to request correction of your earnings 
record.) You may request that your record be corrected or amended if you 
believe that the record is not accurate, timely, complete, relevant, or 
necessary to the administration of a social security program. To amend 
or correct your record, you should write to the manager identified in 
the notice of systems of records which is published in the Federal 
Register (see Sec. 401.40(c) on how to locate this information). The 
staff at any social security office can help you prepare the request. 
You should submit any available evidence to support your request. Your 
request should indicate--
    (1) The system of records from which the record is retrieved;
    (2) The particular record which you want to correct or amend;
    (3) Whether you want to add, delete or substitute information in the 
record; and
    (4) Your reasons for believing that your record should be corrected 
or amended.
    (b) What we will not change. You cannot use the correction process 
to alter, delete, or amend information which is part of a determination 
of fact or which is evidence received in the record of a claim in the 
administrative appeal process. Disagreements with these determinations 
are to be resolved through the SSA appeal process. (See subparts I and J 
of part 404, and subpart N of part 416, of this chapter.) For example, 
you cannot use the correction process to alter or delete a document 
showing a birth date used in deciding your social security claim. 
However, you may submit a statement on why you think certain information 
should be altered, deleted, or amended, and we will make this statement 
part of your file.
    (c) Acknowledgment of correction request. We will acknowledge 
receipt of a correction request within 10 working days, unless we can 
review and process the request and give an initial determination of 
denial or compliance before that time.
    (d) Notice of error. If the record is wrong, we will correct it 
promptly. If wrong information was disclosed from the record, we will 
tell all those of whom we are aware received that information that it 
was wrong and will give them the correct information. This will not be 
necessary if the change is not due to an error, e.g., a change of name 
or address.
    (e) Record found to be correct. If the record is correct, we will 
inform you in writing of the reason why we refuse to amend your record 
and we will also inform you of your right to seek a review of the 
refusal and the name and address of the official to whom you should send 
your request for review.
    (f) Record of another government agency. If you request us to 
correct or amend a record governed by the regulation of another 
government agency, e.g., Office of Personnel Management, Federal Bureau 
of Investigation, we will forward your request to such government agency 
for processing and we will inform you in writing of the referral.

[[Page 13]]



Sec. 401.70  Appeals of refusals to correct records or refusals to
allow access to records.

    (a) General. This section describes how to appeal decisions made by 
SSA under the Privacy Act concerning your request for correction of or 
access to your records, those of your minor child, or those of a person 
for whom you are the legal guardian. We generally handle a denial of 
your request for information about another person under the provisions 
of the Freedom of Information Act (see part 402 of this chapter). To 
appeal a decision under this section, your request must be in writing.
    (b) Appeal of refusal to correct or amend records. If we deny your 
request to correct an SSA record, you may request a review of that 
decision. As discussed in Sec. 401.65(e), our letter denying your 
request will tell you to whom to write.
    (1) We will review your request within 30 working days from the date 
of the receipt. However, for a good reason and with the approval of the 
Executive Director for the Office of Public Disclosure, this time limit 
may be extended up to an additional 30 days. In that case, we will 
notify you about the delay, the reason for it and the date when the 
review is expected to be completed.
    (2) If, after review, we determine that the record should be 
corrected, we will do so. However, if we refuse to amend the record as 
you requested, we will inform you that--
    (i) Your request has been refused and the reason for refusing;
    (ii) The refusal is SSA's final decision; and
    (iii) You have a right to seek court review of SSA's final decision.
    (3) We will also inform you that you have a right to file a 
statement of disagreement with the decision. Your statement should 
include the reason you disagree. We will make your statement available 
to anyone to whom the record is subsequently disclosed, together with a 
statement of our reasons for refusing to amend the record. Also, we will 
provide a copy of your statement to individuals whom we are aware 
received the record previously.
    (c) Appeals after denial of access. If, under the Privacy Act, we 
deny your request for access to your own record, those of your minor 
child or those of a person to whom you are the legal guardian, we will 
advise you in writing of the reason for that denial, the name and title 
or position of the person responsible for the decision and your right to 
appeal that decision. You may appeal the denial decision to the 
Executive Director for the Office of Public Disclosure, 6401 Security 
Boulevard, Baltimore, MD 21235-6401, within 30 days after you receive 
notice denying all or part of your request, or, if later, within 30 days 
after you receive materials sent to you in partial compliance with your 
request.
    (d) Filing your appeal. If you file an appeal, the Executive 
Director or his or her designee will review your request and any 
supporting information submitted and then send you a notice explaining 
the decision on your appeal. The time limit for making our decision 
after we receive your appeal is 30 working days. The Executive Director 
or his or her designee may extend this time limit up to 30 additional 
working days if one of the circumstances in 20 CFR 402.140 is met. We 
will notify you in writing of any extension, the reason for the 
extension and the date by which we will decide your appeal. The notice 
of the decision on your appeal will explain your right to have the 
matter reviewed in a Federal district court if you disagree with all or 
part of our decision.

[72 FR 20940, Apr. 27, 2007]



Sec. 401.75  Rights of parents or legal guardians.

    For purposes of this part, a parent or guardian of any minor or the 
legal guardian of any individual who has been declared incompetent due 
to physical or mental incapacity or age by a court of competent 
jurisdiction is authorized to act on behalf of a minor or incompetent 
individual. Except as provided in Sec. 401.45, governing procedures for 
verifying an individual's identity, and Sec. 401.55(c) governing special 
procedures for notification of or access to a minor's medical records, 
if you are authorized to act on behalf of a minor or legal incompetent, 
you will be viewed

[[Page 14]]

as if you were the individual or subject individual.



Sec. 401.80  Accounting for disclosures.

    (a) We will maintain an accounting of all disclosures of a record 
for five years or for the life of the record, whichever is longer; 
except that, we will not make accounting for:
    (1) Disclosures under paragraphs (a) and (b) of Sec. 401.110; and,
    (2) Disclosures of your record made with your written consent.
    (b) The accounting will include:
    (1) The date, nature, and purpose of each disclosure; and
    (2) The name and address of the person or entity to whom the 
disclosure is made.
    (c) You may request access to an accounting of disclosures of your 
record. You must request access to an accounting in accordance with the 
procedures in Sec. 401.40. You will be granted access to an accounting 
of the disclosures of your record in accordance with the procedures of 
this part which govern access to the related record. We may, at our 
discretion, grant access to an accounting of a disclosure of a record 
made under paragraph (g) of Sec. 401.110.



Sec. 401.85  Exempt systems.

    (a) General policy. The Privacy Act permits certain types of 
specific systems of records to be exempt from some of its requirements. 
Our policy is to exercise authority to exempt systems of records only in 
compelling cases.
    (b) Specific systems of records exempted. (1) Those systems of 
records listed in paragraph (b)(2) of this section are exempt from the 
following provisions of the Act and this part:
    (i) 5 U.S.C. 552a(c)(3) and paragraph (c) of Sec. 401.80 of this 
part which require that you be granted access to an accounting of 
disclosures of your record.
    (ii) 5 U.S.C. 552a (d) (1) through (4) and (f) and Secs. 401.35 
through 401.75 relating to notification of or access to records and 
correction or amendment of records.
    (iii) 5 U.S.C. 552a(e)(4) (G) and (H) which require that we include 
information about SSA procedures for notification, access, and 
correction or amendment of records in the notice for the systems of 
records.
    (iv) 5 U.S.C. 552a(e)(3) and Sec. 401.30 which require that if we 
ask you to provide a record to us, we must inform you of the authority 
for our asking you to provide the record (including whether providing 
the record is mandatory or voluntary, the principal purposes for 
maintaining the record, the routine uses for the record, and what effect 
your refusal to provide the record may have on you), and if you are not 
required by statute or Executive Order to provide the record, that you 
agree to provide the record. This exemption applies only to an 
investigatory record compiled by SSA for criminal law enforcement 
purposes in a system of records exempt under subsection (j)(2) of the 
Privacy Act to the extent that these requirements would prejudice the 
conduct of the investigation.
    (2) The following systems of records are exempt from those 
provisions of the Privacy Act and this part listed in paragraph (b)(1) 
of this section:
    (i) Pursuant to subsection (j)(2) of the Privacy Act, the 
Investigatory Material Compiled for Law Enforcement Purposes System, 
SSA.
    (ii) Pursuant to subsection (k)(2) of the Privacy Act:
    (A) The General Criminal Investigation Files, SSA;
    (B) The Criminal Investigations File, SSA; and,
    (C) The Program Integrity Case Files, SSA.
    (D) Civil and Administrative Investigative Files of the Inspector 
General, SSA/OIG.
    (E) Complaint Files and Log. SSA/OGC.
    (iii) Pursuant to subsection (k)(5) of the Privacy Act:
    (A) The Investigatory Material Compiled for Security and Suitability 
Purposes System, SSA; and,
    (B) The Suitability for Employment Records, SSA.
    (iv) Pursuant to subsection (k)(6) of the Privacy Act, the Personnel 
Research and Merit Promotion Test Records, SSA/DCHR/OPE.
    (c) Notification of or access to records in exempt systems of 
records. (1) Where a system of records is exempt as provided in 
paragraph (b) of this section, you

[[Page 15]]

may nonetheless request notification of or access to a record in that 
system. You should make requests for notification of or access to a 
record in an exempt system of records in accordance with the procedures 
of Secs. 401.35 through 401.55.
    (2) We will grant you notification of or access to a record in an 
exempt system but only to the extent such notification or access would 
not reveal the identity of a source who furnished the record to us under 
an express promise, and prior to September 27, 1975, an implied promise, 
that his or her identity would be held in confidence, if:
    (i) The record is in a system of records which is exempt under 
subsection (k)(2) of the Privacy Act and you have been, as a result of 
the maintenance of the record, denied a right, privilege, or benefit to 
which you would otherwise be eligible; or,
    (ii) The record is in a system of records which is exempt under 
subsection (k)(5) of the Privacy Act.
    (3) If we do not grant you notification of or access to a record in 
a system of records exempt under subsections (k) (2) and (5) of the 
Privacy Act in accordance with this paragraph, we will inform you that 
the identity of a confidential source would be revealed if we granted 
you notification of or access to the record.
    (d) Discretionary actions by SSA. Unless disclosure of a record to 
the general public is otherwise prohibited by law, we may at our 
discretion grant notification of or access to a record in a system of 
records which is exempt under paragraph (b) of this section. 
Discretionary notification of or access to a record in accordance with 
this paragraph will not be a precedent for discretionary notification of 
or access to a similar or related record and will not obligate us to 
exercise discretion to grant notification of or access to any other 
record in a system of records which is exempt under paragraph (b) of 
this section.



Sec. 401.90  Contractors.

    (a) All contracts which require a contractor to maintain, or on 
behalf of SSA to maintain, a system of records to accomplish an SSA 
function must contain a provision requiring the contractor to comply 
with the Privacy Act and this part.
    (b) A contractor and any employee of such contractor will be 
considered employees of SSA only for the purposes of the criminal 
penalties of the Privacy Act, 5 U.S.C. 552a(i), and the employee 
standards of conduct (see appendix A of this part) where the contract 
contains a provision requiring the contractor to comply with the Privacy 
Act and this part.
    (c) This section does not apply to systems of records maintained by 
a contractor as a result of his management discretion, e.g., the 
contractor's personnel records.



Sec. 401.95  Fees.

    (a) Policy. Where applicable, we will charge fees for copying 
records in accordance with the schedule set forth in this section. We 
may only charge fees where you request that a copy be made of the record 
to which you are granted access. We will not charge a fee for searching 
a system of records, whether the search is manual, mechanical, or 
electronic. Where we must copy the record in order to provide access to 
the record (e.g., computer printout where no screen reading is 
available), we will provide the copy to you without cost. Where we make 
a medical record available to a representative designated by you or to a 
physician or health professional designated by a parent or guardian 
under Sec. 401.55 of this part, we will not charge a fee.
    (b) Fee schedule. Our Privacy Act fee schedule is as follows:
    (1) Copying of records susceptible to photocopying--$.10 per page.
    (2) Copying records not susceptible to photocopying (e.g., punch 
cards or magnetic tapes)--at actual cost to be determined on a case-by-
case basis.
    (3) We will not charge if the total amount of copying does not 
exceed $25.
    (c) Other fees. We also follow Secs. 402.155 through 402.165 of this 
chapter to determine the amount of fees, if any, we will charge for 
providing information under the FOIA and Privacy Act.

[[Page 16]]



        Subpart C_Disclosure of Official Records and Information



Sec. 401.100  Disclosure of records with the written consent of 
the subject of the record.

    (a) General. Except as permitted by the Privacy Act and the 
regulations in this part, or when required by the FOIA, we will not 
disclose your records without your written consent.
    (b) Disclosure with written consent. The written consent must 
clearly specify to whom the information may be disclosed, the 
information you want us to disclose (e.g., social security number, date 
and place of birth, monthly Social Security benefit amount, date of 
entitlement), and, where applicable, during which timeframe the 
information may be disclosed (e.g., during the school year, while the 
subject individual is out of the country, whenever the subject 
individual is receiving specific services).
    (c) Disclosure of the entire record. We will not disclose your 
entire record. For example, we will not honor a blanket consent for all 
information in a system of records or any other record consisting of a 
variety of data elements. We will disclose only the information you 
specify in the consent. We will verify your identity and where 
applicable (e.g., where you consent to disclosure of a record to a 
specific individual), the identity of the individual to whom the record 
is to be disclosed.
    (d) A parent or guardian of a minor is not authorized to give 
written consent to a disclosure of a minor's medical record. See 
Sec. 401.55(c)(2) for the procedures for disclosure of or access to 
medical records of minors.

[72 FR 20940, Apr. 27, 2007]



Sec. 401.105  Disclosure of personal information without the consent
of the subject of the record.

    (a) SSA maintains two categories of records which contain personal 
information:
    (1) Nonprogram records, primarily administrative and personnel 
records which contain information about SSA's activities as a government 
agency and employer, and
    (2) Program records which contain information about SSA's clients 
that it keeps to administer benefit programs under Federal law.
    (b) We apply different levels of confidentiality to disclosures of 
information in the categories in paragraphs (a) (1) and (2) of this 
section. For administrative and personnel records, the Privacy Act 
applies. To the extent that SSA has physical custody of personnel 
records maintained as part of the Office of Personnel Management's (OPM) 
Privacy Act government-wide systems of records, these records are 
subject to OPM's rules on access and disclosure at 5 CFR parts 293 and 
297. For program records, we apply somewhat more strict confidentiality 
standards than those found in the Privacy Act. The reason for this 
difference in treatment is that our program records include information 
about a much greater number of persons than our administrative records, 
the information we must collect for program purposes is often very 
sensitive, and claimants are required by statute and regulation to 
provide us with the information in order to establish entitlement for 
benefits.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20940, Apr. 27, 2007]



Sec. 401.110  Disclosure of personal information in nonprogram records
without the consent of the subject of the record.

    The disclosures listed in this section may be made from our 
nonprogram records, e.g., administrative and personnel records, without 
your consent. Such disclosures are those:
    (a) To officers and employees of SSA who have a need for the record 
in the performance of their duties. The SSA official who is responsible 
for the record may upon request of any officer or employee, or on his 
own initiative, determine what constitutes legitimate need.
    (b) Required to be disclosed under the Freedom of Information Act, 5 
U.S.C. 552, and 20 CFR part 402.
    (c) For a routine use as defined in Sec. 401.25 of this part. 
Routine uses will be listed in any notice of a system of records. SSA 
publishes notices of systems of records, including all pertinent routine 
uses, in the Federal Register.
    (d) To the Bureau of the Census for purposes of planning or carrying 
out a

[[Page 17]]

census or survey or related activity pursuant to the provisions of Title 
13 U.S.C.
    (e) To a recipient who has provided us with advance written 
assurance that the record will be used solely as a statistical research 
or reporting record; Provided, that, the record is transferred in a form 
that does not identify the subject individual.
    (f) To the National Archives of the United States as a record which 
has sufficient historical or other value to warrant its continued 
preservation by the United States Government, or for evaluation by the 
Administrator of General Services or his designee to determine whether 
the record has such value.
    (g) To another government agency or to an instrumentality of any 
governmental jurisdiction within or under the control of the United 
States for a civil or criminal law enforcement activity if the activity 
is authorized by law, and if the head of such government agency or 
instrumentality has submitted a written request to us, specifying the 
record desired and the law enforcement activity for which the record is 
sought.
    (h) To an individual pursuant to a showing of compelling 
circumstances affecting the health or safety of any individual if a 
notice of the disclosure is transmitted to the last known address of the 
subject individual.
    (i) To either House of Congress, or to the extent of matter within 
its jurisdiction, any committee or subcommittee thereof, any joint 
committee of Congress or subcommittee of any such joint committee.
    (j) To the Comptroller General, or any of his authorized 
representatives, in the course of the performance of duties of the 
Government Accountability Office.
    (k) Pursuant to the order of a court of competent jurisdiction.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20940, Apr. 27, 2007]



Sec. 401.115  Disclosure of personal information in program records
without the consent of the subject of the record.

    This section describes how various laws control the disclosure of 
personal information that we keep. We disclose information in the 
program records only when a legitimate need exists. For example, we 
disclose information to officers and employees of SSA who have a need 
for the record in the performance of their duties. We also must consider 
the laws identified below in the respective order when we disclose 
program information:
    (a) Some laws require us to disclose information (Sec. 401.120); 
some laws require us to withhold information (Sec. 401.125). These laws 
control whenever they apply.
    (b) If no law of this type applies in a given case, then we must 
look to FOIA principles. See Sec. 401.130.
    (c) When FOIA principles do not require disclosure, we may disclose 
information if both the Privacy Act and section 1106 of the Social 
Security Act permit the disclosure.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20940, Apr. 27, 2007]



Sec. 401.120  Disclosures required by law.

    We disclose information when a law specifically requires it. The 
Social Security Act requires us to disclose information for certain 
program purposes. These include disclosures to the SSA Office of 
Inspector General, the Federal Parent Locator Service, and to States 
pursuant to an arrangement regarding use of the Blood Donor Locator 
Service. Also, there are other laws which require that we furnish other 
agencies information which they need for their programs. These agencies 
include the Department of Veterans Affairs for its benefit programs, 
U.S. Citizenship and Immigration Services to carry out its duties 
regarding aliens, the Railroad Retirement Board for its benefit 
programs, and to Federal, State and local agencies administering 
Temporary Assistance for Needy Families, Medicaid, unemployment 
compensation, food stamps, and other programs.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20941, Apr. 27, 2007]

[[Page 18]]



Sec. 401.125  Disclosures prohibited by law.

    We do not disclose information when a law specifically prohibits it. 
The Internal Revenue Code generally prohibits us from disclosing tax 
return information which we receive to maintain individual earnings 
records. This includes, for example, amounts of wages and contributions 
from employers. Other laws restrict our disclosure of certain 
information about drug and alcohol abuse which we collect to determine 
eligibility for social security benefits.



Sec. 401.130  Freedom of Information Act.

    The FOIA requires us to disclose any information in our records upon 
request from the public, unless one of several exemptions in the FOIA 
applies. When the FOIA requires disclosure (see part 402 of this 
chapter), the Privacy Act permits it. The public does not include 
Federal agencies, courts, or the Congress, but does include State 
agencies, individuals, corporations, and most other parties. The FOIA 
does not apply to requests that are not from the public (e.g., from a 
Federal agency). However, we apply FOIA principles to requests from 
these other sources for disclosure of program information.



Sec. 401.135  Other laws.

    When the FOIA does not apply, we may not disclose any personal 
information unless both the Privacy Act and section 1106 of the Social 
Security Act permit the disclosure. Section 1106 of the Social Security 
Act requires that disclosures which may be made must be set out in 
statute or regulations; therefore, any disclosure permitted by this part 
is permitted by section 1106.



Sec. 401.140  General principles.

    When no law specifically requiring or prohibiting disclosure applies 
to a question of whether to disclose information, we follow FOIA 
principles to resolve that question. We do this to insure uniform 
treatment in all situations. The FOIA principle which most often applies 
to SSA disclosure questions is whether the disclosure would result in a 
``clearly unwarranted invasion of personal privacy.'' To decide whether 
a disclosure would be a clearly unwarranted invasion of personal privacy 
we consider--
    (a) The sensitivity of the information (e.g., whether individuals 
would suffer harm or embarrassment as a result of the disclosure);
    (b) The public interest in the disclosure;
    (c) The rights and expectations of individuals to have their 
personal information kept confidential;
    (d) The public's interest in maintaining general standards of 
confidentiality of personal information; and
    (e) The existence of safeguards against unauthorized redisclosure or 
use.



Sec. 401.145  Safeguards against unauthorized redisclosure or use.

    (a) The FOIA does not authorize us to impose any restrictions on how 
information is used after we disclose it under that law. In applying 
FOIA principles, we consider whether the information will be adequately 
safeguarded against improper use or redisclosure. We must consider all 
the ways in which the recipient might use the information and how likely 
the recipient is to redisclose the information to other parties. Thus, 
before we disclose personal information we may consider such factors 
as--
    (1) Whether only those individuals who have a need to know the 
information will obtain it;
    (2) Whether appropriate measures to safeguard the information to 
avoid unwarranted use or misuse will be taken; and
    (3) Whether we would be permitted to conduct on-site inspections to 
see whether the safeguards are being met.
    (b) We feel that there is a strong public interest in sharing 
information with other agencies with programs having the same or similar 
purposes, so we generally share information with those agencies. 
However, since there is usually little or no public interest in 
disclosing information for disputes between two private parties or for 
other private or commercial purposes, we generally do not share 
information for these purposes.

[[Page 19]]



Sec. 401.150  Compatible purposes.

    (a) General. The Privacy Act allows us to disclose information 
maintained in a system of records without your consent to any other 
party if such disclosure is pursuant to a routine use published in the 
system's notice of system of records. A ``Routine use'' must be 
compatible with the purpose for which SSA collected the information.
    (b) Notice of routine use disclosures. A list of permissible routine 
use disclosures is included in every system of records notice published 
in the Federal Register.
    (c) Determining compatibility--(1) Disclosure to carry out SSA 
programs. We disclose information for published routine uses necessary 
to carry out SSA's programs.
    (2) Disclosure to carry out programs similar to SSA programs. We may 
disclose information for the administration of other government 
programs. These disclosures are pursuant to published routine uses where 
the use is compatible with the purpose for which the information was 
collected. These programs generally meet the following conditions:
    (i) The program is clearly identifiable as a Federal, State, or 
local government program.
    (ii) The information requested concerns eligibility, benefit 
amounts, or other matters of benefit status in a Social Security program 
and is relevant to determining the same matters in the other program. 
For example, we disclose information to the Railroad Retirement Board 
for pension and unemployment compensation programs, to the Department of 
Veterans Affairs for its benefit programs, to worker's compensation 
programs, to State general assistance programs and to other income 
maintenance programs at all levels of government. We also disclose for 
health maintenance programs like Medicaid and Medicare.
    (iii) The information will be used for appropriate epidemiological 
or similar research purposes.

[72 FR 20941, Apr. 27, 2007]



Sec. 401.155  Law enforcement purposes.

    (a) General. The Privacy Act allows us to disclose information for 
law enforcement purposes under certain conditions. Much of the 
information in our files is especially sensitive or very personal. 
Furthermore, participation in social security programs is mandatory, so 
people cannot limit what information is given to us. Therefore, we 
generally disclose information for law enforcement purposes only in 
limited situations. The Privacy Act allows us to disclose information if 
the head of the law enforcement agency makes a written request giving 
enough information to show that the conditions in paragraphs (b) or (c) 
of this section are met, what information is needed, and why it is 
needed. Paragraphs (b) and (c) of this section discuss the disclosures 
we generally make for these purposes.
    (b) Serious crimes. SSA may disclose information for criminal law 
enforcement purposes where a violent crime such as murder or kidnapping 
has been committed and the individual about whom the information is 
being sought has been indicted or convicted of that crime.
    (c) Criminal activity involving the social security program or 
another program with the same purposes. We disclose information when 
necessary to investigate or prosecute fraud or other criminal activity 
involving the social security program. We may also disclose information 
for investigation or prosecution of criminal activity in other income-
maintenance or health-maintenance programs (e.g., other governmental 
pension programs, unemployment compensation, general assistance, 
Medicare or Medicaid) if the information concerns eligibility, benefit 
amounts, or other matters of benefit status in a social security program 
and is relevant to determining the same matters in the other program.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20941, Apr. 27, 2007]



Sec. 401.160  Health or safety.

    The Privacy Act allows us to disclose information in compelling 
circumstances where an individual's health or safety is affected. For 
example, if we learn that someone has been exposed to an excessive 
amount of radiation, we may notify that person and appropriate health 
officials. If we learn that someone has made a threat

[[Page 20]]

against someone else, we may notify that other person and law 
enforcement officials. When we make these disclosures, the Privacy Act 
requires us to send a notice of the disclosure to the last known address 
of the person whose record was disclosed.



Sec. 401.165  Statistical and research activities.

    (a) General. Statistical and research activities often do not 
require information in a format that identifies specific individuals. 
Therefore, whenever possible, we release information for statistical or 
research purposes only in the form of aggregates or individual data that 
cannot be associated with a particular individual. The Privacy Act 
allows us to release records if there are safeguards that the record 
will be used solely as a statistical or research record and the 
individual cannot be identified from any information in the record.
    (b) Safeguards for disclosure with identifiers. The Privacy Act also 
allows us to disclose data for statistical and research purposes in a 
form allowing individual identification, pursuant to published routine 
use, when the purpose is compatible with the purpose for which the 
record was collected. We will disclose personally identifiable 
information for statistical and research purposes if--
    (1) We determine that the requestor needs the information in an 
identifiable form for a statistical or research activity, will use the 
information only for that purpose, and will protect individuals from 
unreasonable and unwanted contacts;
    (2) The activity is designed to increase knowledge about present or 
alternative Social Security programs or other Federal or State income-
maintenance or health-maintenance programs; or is used for research that 
is of importance to the Social Security program or the Social Security 
beneficiaries; or an epidemiological research project that relates to 
the Social Security program or beneficiaries; and
    (3) The recipient will keep the information as a system of 
statistical records, will follow appropriate safeguards, and agrees to 
our on-site inspection of those safeguards so we can be sure the 
information is used or redisclosed only for statistical or research 
purposes. No redisclosure of the information may be made without SSA's 
approval.
    (c) Statistical record. A statistical record is a record in a system 
of records which is maintained only for statistical and research 
purposes, and which is not used to make any determination about an 
individual. We maintain and use statistical records only for statistical 
and research purposes. We may disclose a statistical record if the 
conditions in paragraph (b) of this section are met.
    (d) Compiling of records. Where a request for information for 
statistical and research purposes would require us to compile records, 
and doing that would be administratively burdensome to ongoing SSA 
operations, we may decline to furnish the information.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 20941, Apr. 27, 2007]



Sec. 401.170  Congress.

    (a) We disclose information to either House of Congress. We also 
disclose information to any committee or subcommittee of either House, 
or to any joint committee of Congress or subcommittee of that committee, 
if the information is on a matter within the committee's or 
subcommittee's jurisdiction.
    (b) We disclose to any member of Congress the information needed to 
respond to constituents' requests for information about themselves 
(including requests from parents of minors, or legal guardians). 
However, these disclosures are subject to the restrictions in 
Secs. 401.35 through 401.60.



Sec. 401.175  Government Accountability Office.

    We disclose information to the Government Accountability Office when 
that agency needs the information to carry out its duties.

[72 FR 20941, Apr. 27, 2007]



Sec. 401.180  Disclosure under court order or other legal process.

    (a) General. The Privacy Act permits us to disclose information when 
we are

[[Page 21]]

ordered to do so by a court of competent jurisdiction. When information 
is used in a court proceeding, it usually becomes part of the public 
record of the proceeding and its confidentiality often cannot be 
protected in that record. Much of the information that we collect and 
maintain in our records on individuals is especially sensitive. 
Therefore, we follow the rules in paragraph (d) of this section in 
deciding whether we may disclose information in response to an order 
from a court of competent jurisdiction. When we disclose pursuant to an 
order from a court of competent jurisdiction, and the order is a matter 
of public record, the Privacy Act requires us to send a notice of the 
disclosure to the last known address of the person whose record was 
disclosed.
    (b) Court. For purposes of this section, a court is an institution 
of the judicial branch of the U.S. Federal government consisting of one 
or more judges who seek to adjudicate disputes and administer justice. 
(See 404.2(c)(6) of this chapter). Entities not in the judicial branch 
of the Federal government are not courts for purposes of this section.
    (c) Court order. For purposes of this section, a court order is any 
legal process which satisfies all of the following conditions:
    (1) It is issued under the authority of a Federal court;
    (2) A judge or a magistrate judge of that court signs it;
    (3) It commands SSA to disclose information; and
    (4) The court is a court of competent jurisdiction.
    (d) Court of competent jurisdiction. It is the view of SSA that 
under the Privacy Act the Federal Government has not waived sovereign 
immunity, which precludes state court jurisdiction over a Federal agency 
or official. Therefore, SSA will not honor state court orders as a basis 
for disclosure. State court orders will be treated in accordance with 
the other provisions of this part.
    (e) Conditions for disclosure under a court order of competent 
jurisdiction. We disclose information in compliance with an order of a 
court of competent jurisdiction if--
    (1) another section of this part specifically allows such 
disclosure, or
    (2) SSA, the Commissioner of Social Security, or any officer or 
employee of SSA in his or her official capacity is properly a party in 
the proceeding, or
    (3) disclosure of the information is necessary to ensure that an 
individual who is accused of criminal activity receives due process of 
law in a criminal proceeding under the jurisdiction of the judicial 
branch of the Federal government.
    (f) In other circumstances. We may disclose information to a court 
of competent jurisdiction in circumstances other than those stated in 
paragraph (e) of this section. We will make our decision regarding 
disclosure by balancing the needs of a court while preserving the 
confidentiality of information. For example, we may disclose information 
under a court order that restricts the use and redisclosure of the 
information by the participants in the proceeding; we may offer the 
information for inspection by the court in camera and under seal; or we 
may arrange for the court to exclude information identifying individuals 
from that portion of the record of the proceedings that is available to 
the public. We will make these determinations in accordance with 
Sec. 401.140.
    (g) Other regulations on request for testimony, subpoenas and 
production of records in legal proceedings. See 20 CFR part 403 of this 
chapter for additional rules covering disclosure of information and 
records governed by this part and requested in connection with legal 
proceedings.

[72 FR 20941, Apr. 27, 2007]



Sec. 401.185  Other specific recipients.

    In addition to disclosures we make under the routine use provision, 
we also release information to--
    (a) The Bureau of the Census for purposes of planning or carrying 
out a census, survey, or related activity; and
    (b) The National Archives of the United States if the record has 
sufficient historical or other value to warrant its continued 
preservation by the United States Government. We also disclose a record 
to the Administrator of General Services for a determination of whether 
the record has such a value.

[[Page 22]]



Sec. 401.190  Deceased persons.

    We do not consider the disclosure of information about a deceased 
person to be a clearly unwarranted invasion of that person's privacy. 
However, in disclosing information about a deceased person, we follow 
the principles in Sec. 401.115 to insure that the privacy rights of a 
living person are not violated.



Sec. 401.195  Situations not specified in this part.

    If no other provision in this part specifically allows SSA to 
disclose information, the Commissioner or designee may disclose this 
information if not prohibited by Federal law. For example, the 
Commissioner or designee may disclose information necessary to respond 
to life threatening situations.



Sec. 401.200  Blood donor locator service.

    (a) General. We will enter into arrangements with State agencies 
under which we will furnish to them at their request the last known 
personal mailing addresses (residence or post office box) of blood 
donors whose blood donations show that they are or may be infected with 
the human immunodeficiency virus which causes acquired immune deficiency 
syndrome. The State agency or other authorized person, as defined in 
paragraph (b) of this section, will then inform the donors that they may 
need medical care and treatment. The safeguards that must be used by 
authorized persons as a condition to receiving address information from 
the Blood Donor Locator Service are in paragraph (g) of this section, 
and the requirements for a request for address information are in 
paragraph (d) of this section.
    (b) Definitions. State means the 50 States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the 
Commonwealth of Northern Marianas, and the Trust Territory of the 
Pacific Islands.
    Authorized person means--
    (1) Any agency of a State (or of a political subdivision of a State) 
which has duties or authority under State law relating to the public 
health or otherwise has the duty or authority under State law to 
regulate blood donations; and
    (2) Any entity engaged in the acceptance of blood donations which is 
licensed or registered by the Food and Drug Administration in connection 
with the acceptance of such blood donations, and which provides for--
    (i) The confidentiality of any address information received pursuant 
to the rules in this part and section 1141 of the Social Security Act 
and related blood donor records;
    (ii) Blood donor notification procedures for individuals with 
respect to whom such information is requested and a finding has been 
made that they are or may be infected with the human immunodeficiency 
virus; and
    (iii) Counseling services for such individuals who have been found 
to have such virus. New counseling programs are not required, and an 
entity may use existing counseling programs or referrals to provide 
these services.
    Related blood donor records means any record, list, or compilation 
established in connection with a request for address information which 
indicates, directly or indirectly, the identity of any individual with 
respect to whom a request for address information has been made pursuant 
to the rules in this part.
    (c) Use of social security number for identification. A State or an 
authorized person in the State may require a blood donor to furnish his 
or her social security number when donating blood. The number may then 
be used by an authorized person to identify and locate a donor whose 
blood donation indicates that he or she is or may be infected with the 
human immunodeficiency virus.
    (d) Request for address of blood donor. An authorized person who has 
been unable to locate a blood donor at the address he or she may have 
given at the time of the blood donation may request assistance from the 
State agency which has arranged with us to participate in the Blood 
Donor Locator Service. The request to the Blood Donor Locator Service 
must--
    (1) Be in writing;
    (2) Be from a participating State agency either on its own behalf as 
an authorized person or on behalf of another authorized person;

[[Page 23]]

    (3) Indicate that the authorized person meets the confidentiality 
safeguards of paragraph (g) of this section; and
    (4) Include the donor's name and social security number, the 
addresses at which the authorized person attempted without success to 
contact the donor, the date of the blood donation if available, a 
statement that the donor has tested positive for the human 
immunodeficiency virus according to the latest Food and Drug 
Administration standards or that the history of the subsequent use of 
the donated blood or blood products indicates that the donor has or may 
have the human immunodeficiency virus, and the name and address of the 
requesting blood donation facility.
    (e) SSA response to request for address. After receiving a request 
that meets the requirements of paragraph (d) of this section, we will 
search our records for the donor's latest personal mailing address. If 
we do not find a current address, we will request that the Internal 
Revenue Service search its tax records and furnish us any personal 
mailing address information from its files, as required under section 
6103(m)(6) of the Internal Revenue Code. After completing these 
searches, we will provide to the requesting State agency either the 
latest mailing address available for the donor or a response stating 
that we do not have this information. We will then destroy the records 
or delete all identifying donor information related to the request and 
maintain only the information that we will need to monitor the 
compliance of authorized persons with the confidentiality safeguards 
contained in paragraph (g) of this section.
    (f) SSA refusal to furnish address. If we determine that an 
authorized person has not met the requirements of paragraphs (d) and (g) 
of this section, we will not furnish address information to the State 
agency. In that case, we will notify the State agency of our 
determination, explain the reasons for our determination, and explain 
that the State agency may request administrative review of our 
determination. The Commissioner of Social Security or a delegate of the 
Commissioner will conduct this review. The review will be based on the 
information of record and there will not be an opportunity for an oral 
hearing. A request for administrative review, which may be submitted 
only by a State agency, must be in writing. The State agency must send 
its request for administrative review to the Commissioner of Social 
Security, 6401 Security Boulevard, Baltimore, MD 21235, within 60 days 
after receiving our notice refusing to give the donor's address. The 
request for review must include supporting information or evidence that 
the requirements of the rules in this part have been met. If we do not 
furnish address information because an authorized person failed to 
comply with the confidentiality safeguards of paragraph (g) of this 
section, the State agency will have an opportunity to submit evidence 
that the authorized person is now in compliance. If we then determine, 
based on our review of the request for administrative review and the 
supporting evidence, that the authorized person meets the requirements 
of the rules in this part, we will respond to the address request as 
provided in paragraph (e) of this section. If we determine on 
administrative review that the requirements have not been met, we will 
notify the State agency in writing of our decision. We will make our 
determination within 30 days after receiving the request for 
administrative review, unless we notify the State agency within this 30-
day time period that we will need additional time. Our determination on 
the request for administrative review will give the findings of fact, 
the reasons for the decision, and what actions the State agency should 
take to ensure that it or the blood donation facility is in compliance 
with the rules in this part.
    (g) Safeguards to ensure confidentiality of blood donor records. We 
will require assurance that authorized persons have established and 
continue to maintain adequate safeguards to protect the confidentiality 
of both address information received from the Blood Donor Locator 
Service and related blood donor records. The authorized person must, to 
the satisfaction of the Secretary--
    (1) Establish and maintain a system for standardizing records which 
includes the reasons for requesting the

[[Page 24]]

addresses of blood donors, dates of the requests, and any disclosures of 
address information;
    (2) Store blood donors' addresses received from the Blood Donor 
Locator Service and all related blood donor records in a secure area or 
place that is physically safe from access by persons other than those 
whose duties and responsibilities require access;
    (3) Restrict access to these records to authorized employees and 
officials who need them to perform their official duties related to 
notifying blood donors who are or may be infected with the human 
immunodeficiency virus that they may need medical care and treatment;
    (4) Advise all personnel who will have access to the records of the 
confidential nature of the information, the safeguards required to 
protect the information, and the civil and criminal sanctions for 
unauthorized use or disclosure of the information;
    (5) Destroy the address information received from the Blood Donor 
Locator Service, as well as any records established in connection with 
the request which indicate directly or indirectly the identity of the 
individual, after notifying or attempting to notify the donor at the 
address obtained from the Blood Donor Locator Service; and
    (6) Upon request, report to us the procedures established and 
utilized to ensure the confidentiality of address information and 
related blood donor records. We reserve the right to make onsite 
inspections to ensure that these procedures are adequate and are being 
followed and to request such information as we may need to ensure that 
the safeguards required in this section are being met.
    (h) Unauthorized disclosure. Any official or employee of the Federal 
Government, a State, or a blood donation facility who discloses blood 
donor information, except as provided for in this section or under a 
provision of law, will be subject to the same criminal penalty as 
provided in section 7213(a) of the Internal Revenue Code of 1986 for the 
unauthorized disclosure of tax information.



       Sec. Appendix A to Part 401--Employee Standards of Conduct

    (a) General. All SSA employees are required to be aware of their 
responsibilities under the Privacy Act of 1974, 5 U.S.C. 552a. 
Regulations implementing the Privacy Act are set forth in this part. 
Instruction on the requirements of the Act and regulation shall be 
provided to all new employees of SSA. In addition, supervisors shall be 
responsible for assuring that employees who are working with systems of 
records or who undertake new duties which require the use of systems of 
records are informed of their responsibilities. Supervisors shall also 
be responsible for assuring that all employees who work with such 
systems of records are periodically reminded of the requirements of the 
Privacy Act and are advised of any new provisions or interpretations of 
the Act.
    (b) Penalties. (1) All employees must guard against improper 
disclosure of records which are governed by the Privacy Act. Because of 
the serious consequences of improper invasions of personal privacy, 
employees may be subject to disciplinary action and criminal prosecution 
for knowing and willful violations of the Privacy Act and regulation. In 
addition, employees may also be subject to disciplinary action for 
unknowing or unwillful violations, where the employee had notice of the 
provisions of the Privacy Act and regulations and failed to inform 
himself or herself sufficiently or to conduct himself or herself in 
accordance with the requirements to avoid violations.
    (2) SSA may be subjected to civil liability for the following 
actions undertaken by its employees:
    (a) Making a determination under the Privacy Act and Secs. 401.65 
and 401.70 not to amend an individual's record in accordance with his or 
her request, or failing to make such review in conformity with those 
provisions;
    (b) Refusing to comply with an individual's request for notification 
of or access to a record pertaining to him or her;
    (c) Failing to maintain any record pertaining to any individual with 
such accuracy, relevance, timeliness, and completeness as is necessary 
to assure fairness in any determination relating to the qualifications, 
character, rights, or opportunities of, or benefits to the individual 
that may be made on the basis of such a record, and consequently makes a 
determination which is adverse to the individual; or
    (d) Failing to comply with any other provision of the Act or any 
rule promulgated thereunder, in such a way as to have an adverse effect 
on an individual.
    (3) An employee may be personally subject to criminal liability as 
set forth below and in 5 U.S.C. 552a (i):

[[Page 25]]

    (a) Willful disclosure. Any officer or employee of SSA, who by 
virtue of his employment or official position, has possession of, or 
access to, agency records which contain individually identifiable 
information the disclosure of which is prohibited by the Privacy Act or 
by rules or regulations established thereunder, and who, knowing that 
disclosure of the specific material is so prohibited, willfully 
discloses the material in any manner to any person or agency not 
entitled to receive it, shall be guilty of a misdemeanor and may be 
fined not more than $5,000.
    (b) Notice requirements. Any officer or employee of SSA who 
willfully maintains a system of records without meeting the notice 
requirements [of the Privacy Act] shall be guilty of a misdemeanor and 
may be fined not more than $5,000.
    (c) Rules governing employees not working with systems of records. 
Employees whose duties do not involve working with systems of records 
will not generally disclose to any one, without specific authorization 
from their supervisors, records pertaining to employees or other 
individuals which by reason of their official duties are available to 
them. Notwithstanding the above, the following records concerning 
Federal employees are a matter of public record and no further 
authorization is necessary for disclosure:
    (1) Name and title of individual.
    (2) Grade classification or equivalent and annual rate of salary.
    (3) Position description.
    In addition, employees shall disclose records which are listed in 
SSA's Freedom of Information Regulation as being available to the 
public. Requests for other records will be referred to the responsible 
SSA Freedom of Information Officer. This does not preclude employees 
from discussing matters which are known to them personally, and without 
resort to a record, to official investigators of Federal agencies for 
official purposes such as suitability checks, Equal Employment 
Opportunity investigations, adverse action proceedings, grievance 
proceedings, etc.
    (d) Rules governing employees whose duties require use or reference 
to systems of records. Employees whose official duties require that they 
refer to, maintain, service, or otherwise deal with systems of records 
(hereinafter referred to as ``Systems Employees'') are governed by the 
general provisions. In addition, extra precautions are required and 
systems employees are held to higher standards of conduct.
    (1) Systems Employees shall:
    (a) Be informed with respect to their responsibilities under the 
Privacy Act;
    (b) Be alert to possible misuses of the system and report to their 
supervisors any potential or actual use of the system which they believe 
is not in compliance with the Privacy Act and regulation;
    (c) Disclose records within SSA only to an employee who has a 
legitimate need to know the record in the course of his or her official 
duties;
    (d) Maintain records as accurately as practicable.
    (e) Consult with a supervisor prior to taking any action where they 
are in doubt whether such action is in conformance with the Act and 
regulation.
    (2) Systems employees shall not:
    (a) Disclose in any form records from a system of records except (1) 
with the consent or at the request of the subject individual; or (2) 
where its disclosure is permitted under Sec. 401.110.
    (b) Permit unauthorized individuals to be present in controlled 
areas. Any unauthorized individuals observed in controlled areas shall 
be reported to a supervisor or to the guard force.
    (c) Knowingly or willfully take action which might subject SSA to 
civil liability.
    (d) Make any arrangements for the design, development, or operation 
of any system of records without making reasonable effort to provide 
that the system can be maintained in accordance with the Act and 
regulation.
    (e) Contracting officers. In addition to any applicable provisions 
set forth above, those employees whose official duties involve entering 
into contracts on behalf of SSA shall also be governed by the following 
provisions:
    (1) Contracts for design, or development of systems and equipment. 
The contracting officer shall not enter into any contract for the design 
or development of a system of records, or for equipment to store, 
service or maintain a system of records unless the contracting officer 
has made reasonable effort to ensure that the product to be purchased is 
capable of being used without violation of the Privacy Act or the 
regulations in this part. He shall give special attention to provision 
of physical safeguards.
    (2) Contracts for the operation of systems of records. The 
Contracting Officer, in conjunction with other officials whom he feels 
appropriate, shall review all proposed contracts providing for the 
operation of systems of records prior to execution of the contracts to 
determine whether operation of the system of records is for the purpose 
of accomplishing a Department function. If it is determined that the 
operation of the system is to accomplish an SSA function, the 
contracting officer shall be responsible for including in the contract 
appropriate provisions to apply the provisions of the Privacy Act and 
regulation to the system, including prohibitions against improper 
release by the contractor, his employees, agents, or subcontractors.
    (3) Other service contracts. Contracting officers entering into 
general service contracts shall be responsible for determining the 
appropriateness of including provisions in the

[[Page 26]]

contract to prevent potential misuse (inadvertent or otherwise) by 
employees, agents, or subcontractors of the contractor.
    (f) Rules governing SSA officials responsible for managing systems 
of records. In addition to the requirements for Systems Employees, SSA 
officials responsible for managing systems of records as described in 
Sec. 401.40(c) (system managers) shall:
    (1) Respond to all requests for notification of or access, 
disclosure, or amendment of records in a timely fashion in accordance 
with the Privacy Act and regulation;
    (2) Make any amendment of records accurately and in a timely 
fashion;
    (3) Inform all persons whom the accounting records show have 
received copies of the record prior to the amendments of the correction; 
and
    (4) Associate any statement of disagreement with the disputed 
record, and
    (a) Transmit a copy of the statement to all persons whom the 
accounting records show have received a copy of the disputed record, and
    (b) Transmit that statement with any future disclosure.

[62 FR 4143, Jan. 29, 1997, as amended at 72 FR 69617, Dec. 10, 2007]



PART 402_AVAILABILITY OF INFORMATION AND RECORDS TO THE PUBLIC--
Table of Contents



Sec.
402.5  Scope and purpose.
402.10  Policy.
402.15  Relationship between the FOIA and the Privacy Act of 1974.
402.20  Requests not handled under the FOIA.
402.25  Referral of requests outside of SSA.
402.30  Definitions.
402.35  Publication.
402.40  Publications for sale.
402.45  Availability of records.
402.50  Availability of administrative staff manuals.
402.55  Materials available at district offices and branch offices.
402.60  Materials in field offices of the Office of Hearings and 
          Appeals.
402.65  Health care information.
402.70  Reasons for withholding some records.
402.75  Exemption one for withholding records: National defense and 
          foreign policy.
402.80  Exemption two for withholding records: Internal personnel rules 
          and practices.
402.85  Exemption three for withholding records: Records exempted by 
          other statutes.
402.90  Exemption four for withholding records: Trade secrets and 
          confidential commercial or financial information.
402.95  Exemption five for withholding records: Internal memoranda.
402.100  Exemption six: Clearly unwarranted invasion of personal 
          privacy.
402.105  Exemption seven for withholding records: Law enforcement.
402.110  Exemptions eight and nine for withholding records: Records on 
          financial institutions; records on wells.
402.125  Who may release a record.
402.130  How to request a record.
402.135  Where to send a request.
402.140  How a request for a record is processed.
402.145  Responding to your request.
402.150  Release of records.
402.155  Fees to be charged--categories of requests.
402.160  Fees to be charged--general provisions.
402.165  Fee schedule.
402.170  Fees for providing records and related services for program 
          purposes pursuant to section 1106 of the Social Security Act.
402.175  Fees for providing information and related services for non-
          program purposes.
402.180  Procedure on assessing and collecting fees for providing 
          records.
402.185  Waiver or reduction of fees in the public interest.
402.190  Officials who may deny a request for records under FOIA.
402.195  How a request is denied.
402.200  How to appeal a decision denying all or part of a request.
402.205  U.S. District Court action.

    Authority: Secs. 205, 702(a)(5), and 1106 of the Social Security 
Act; (42 U.S.C. 405, 902(a)(5), and 1306); 5 U.S.C. 552 and 552a; 8 
U.S.C. 1360; 18 U.S.C. 1905; 26 U.S.C. 6103; 30 U.S.C. 923b; 31 U.S.C. 
9701; E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp., p. 235.

    Source: 62 FR 4154, Jan. 29, 1997, unless otherwise noted.



Sec. 402.5  Scope and purpose.

    The rules in this part relate to the availability to the public, 
pursuant to the Freedom of Information Act (FOIA) 5 U.S.C. 552, of 
records of the Social Security Administration (SSA). They describe how 
to make a FOIA request; who can release records and who can decide not 
to release; how much time it should take to make a determination 
regarding release; what fees may be charged; what records are available 
for public inspection; why some records

[[Page 27]]

are not released; and your right to appeal and then go to court if we 
refuse to release records. The rules in this part do not revoke, modify, 
or supersede the regulations of SSA relating to disclosure of 
information in part 401 of this chapter.



Sec. 402.10  Policy.

    As a general policy, SSA follows a balanced approach in 
administering FOIA. We not only recognize the right of public access to 
information in the possession of SSA, but also protect the integrity of 
internal processes. In addition, we recognize the legitimate interests 
of organizations or persons who have submitted records to SSA or who 
would otherwise be affected by release of records. For example, we have 
no discretion to release certain records, such as trade secrets and 
confidential commercial information, prohibited from release by law. 
This policy calls for the fullest responsible disclosure consistent with 
those requirements of administrative necessity and confidentiality which 
are recognized in the FOIA.



Sec. 402.15  Relationship between the FOIA and the Privacy Act of 1974.

    (a) Coverage. The FOIA and the rules in this part apply to all SSA 
records. The Privacy Act, 5 U.S.C. 552a, applies to records that are 
about individuals, but only if the records are in a system of records. 
``Individuals'' and ``system of records'' are defined in the Privacy Act 
and in 20 CFR 401.25.
    (b) Requesting your own records. If you are an individual and 
request records, then to the extent you are requesting your own records 
in a system of records, we will handle your request under the Privacy 
Act. If there is any record that we need not release to you under those 
provisions, we will also consider your request under the FOIA and this 
rule, and we will release the record to you if the FOIA requires it.
    (c) Requesting another individual's record. Whether or not you are 
an individual, if you request records that are about an individual 
(other than yourself) and that are in a system of records, we will 
handle your request under the FOIA and the rules in this part. However, 
if our disclosure in response to your request would be permitted by the 
Privacy Act's disclosure provision, (5 U.S.C. 552a(b)), for reasons 
other than the requirements of the FOIA, and if we decide to make the 
disclosure, then we will not handle your request under the FOIA and the 
rules in this part. For example, when we make routine use disclosures 
pursuant to requests, we do not handle them under the FOIA and the rules 
in this part. (``Routine use'' is defined in the Privacy Act and in 20 
CFR 401.25.) If we handle your request under the FOIA and the rules in 
this part and the FOIA does not require releasing the record to you, 
then the Privacy Act may prohibit the release and remove our discretion 
to release.



Sec. 402.20  Requests not handled under the FOIA.

    (a) We will not handle your request under the FOIA and the 
regulations in this part to the extent it asks for records that are 
currently available, either from SSA or from another part of the Federal 
Government, under a separate statute that provides specific activity for 
charging fees for those records. For example, we will not handle your 
request under the FOIA and the regulations in this part to the extent it 
asks for detailed earnings statements under the Social Security program.
    (b) We will not handle your request under the FOIA and the 
regulations in this part if you are seeking a record that is distributed 
by SSA as part of its regular program activity, for example, public 
information leaflets distributed by SSA.



Sec. 402.25  Referral of requests outside of SSA.

    If you request records that were created by, or provided to us by, 
another Federal agency, and if that agency asserts control over the 
records, we may refer the records and your request to that agency. We 
may likewise refer requests for classified records to the agency that 
classified them. In these cases, the other agency will process and 
respond to your request, to the extent it concerns those records, under 
that agency's regulation, and you need not make a separate request to 
that

[[Page 28]]

agency. We will notify you when we refer your request to another agency.



Sec. 402.30  Definitions.

    As used in this part,
    Agency means any executive department, military department, 
government corporation, government controlled corporation, or other 
establishment in the executive branch of the Federal Government, or any 
independent regulatory agency. A private organization is not an agency 
even if it is performing work under contract with the Government or is 
receiving Federal financial assistance. Grantee and contractor records 
are not subject to the FOIA unless they are in the possession or under 
the control of SSA or its agents. Solely for the purpose of disclosure 
under the FOIA, we consider records of individual beneficiaries located 
in the State Disability Determination Services (DDS) to be agency 
records.
    Commercial use means, when referring to a request, that the request 
is from or on behalf of one who seeks information for a use or purpose 
that furthers the commercial, trade, or profit interests of the 
requester or of a person on whose behalf the request is made. Whether a 
request is for a commercial use depends on the purpose of the request 
and the use to which the records will be put. The identity of the 
requester (individual, non-profit corporation, for-profit corporation) 
and the nature of the records, while in some cases indicative of that 
purpose or use, are not necessarily determinative. When a request is 
from a representative of the news media, a purpose or use supporting the 
requester's news dissemination function is not a commercial use.
    Duplication means the process of making a copy of a record and 
sending it to the requester, to the extent necessary to respond to the 
request. Such copies include paper copy, microfilm, audio-visual 
materials, and magnetic tapes, cards, and discs.
    Educational institution means a preschool, elementary or secondary 
school, institution of undergraduate or graduate higher education, or 
institution of professional or vocational education, which operates a 
program of scholarly research.
    Freedom of Information Act or FOIA means 5 U.S.C. 552.
    Freedom of Information Officer means an SSA official who has been 
delegated the authority to authorize disclosure of or withhold records 
and assess, waive, or reduce fees in response to FOIA requests.
    Non-commercial scientific institution means an institution that is 
not operated substantially for purposes of furthering its own or someone 
else's business, trade, or profit interests, and that is operated for 
purposes of conducting scientific research whose results are not 
intended to promote any particular product or industry.
    Records means any information maintained by an agency, regardless of 
forms or characteristics, that is made or received in connection with 
official business. This includes handwritten, typed, or printed 
documents (such as memoranda, books, brochures, studies, writings, 
drafts, letters, transcripts, and minutes) and material in other forms, 
such as punchcards; magnetic tapes; cards; computer discs or other 
electronic formats; paper tapes; audio or video recordings; maps; 
photographs; slides; microfilm; and motion pictures. It does not include 
objects or articles such as exhibits, models, equipment, and duplication 
machines, audiovisual processing materials, or computer software. It 
does not include personal records of an employee, or books, magazines, 
pamphlets, or other reference material in formally organized and 
officially designated SSA libraries, where such materials are available 
under the rules of the particular library.
    Representative of the news media means a person actively gathering 
information for an entity organized and operated to publish or broadcast 
news to the public. News media entities include television and radio 
broadcasters, publishers of periodicals who distribute their products to 
the general public or who make their products available for purchase or 
subscription by the general public, and entities that may disseminate 
news through other media (e.g., electronic dissemination of text). We 
will treat freelance journalists as representatives of a news media 
entity if

[[Page 29]]

they can show a likelihood of publication through such an entity. A 
publication contract is such a basis, and the requester's past 
publication record may show such a basis.
    Request means asking for records, whether or not you refer 
specifically to the FOIA. Requests from Federal agencies and court 
orders for documents are not included within this definition.
    Review means, when used in connection with processing records for a 
commercial use request, examining the records to determine what 
portions, if any, may be withheld, and any other processing that is 
necessary to prepare the records for release. It includes only the 
examining and processing that are done the first time we analyze whether 
a specific exemption applies to a particular record or portion of a 
record. It does not include examination done in the appeal stage with 
respect to an exemption that was applied at the initial request stage. 
However, if we initially withhold a record under one exemption, and on 
appeal we determine that that exemption does not apply, then examining 
the record in the appeal stage for the purpose of determining whether a 
different exemption applies is included in review. It does not include 
the process of researching or resolving general legal or policy issues 
regarding exemptions.
    Search means looking for records or portions of records responsive 
to a request. It includes reading and interpreting a request, and also 
page-by-page and line-by-line examination to identify responsive 
portions of a document. However, it does not include line-by-line 
examination where merely duplicating the entire page would be a less 
expensive and quicker way to comply with the request.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998, 66 
FR 2809, Jan. 12, 2001]



Sec. 402.35  Publication.

    (a) Methods of publication. Materials we are required to publish 
pursuant to the provisions of 5 U.S.C. 552 (a)(1) and (a)(2), we publish 
in one of the following ways:
    (1) By publication in the Federal Register of Social Security 
Administration regulations, and by their subsequent inclusion in the 
Code of Federal Regulations;
    (2) By publication in the Federal Register of appropriate general 
notices;
    (3) By other forms of publication, when incorporated by reference in 
the Federal Register with the approval of the Director of the Federal 
Register; and
    (4) By publication in the ``Social Security Rulings'' of indexes of 
precedential social security orders and opinions issued in the 
adjudication of claims, statements of policy and interpretations which 
have been adopted but have not been published in the Federal Register. 
The ``Social Security Rulings'' may be purchased through the Government 
Printing Office (See Sec. 402.40).
    (b) Publication of rulings. Although not required pursuant to 5 
U.S.C. 552 (a)(1) and (a)(2), we publish the following rulings in the 
Federal Register as well as by other forms of publication:
    (1) We publish Social Security Rulings in the Federal Register under 
the authority of the Commissioner of Social Security. They are binding 
on all components of the Social Security Administration. These rulings 
represent precedent final opinions and orders and statements of policy 
and interpretations that we have adopted.
    (2) We publish Social Security Acquiescence Rulings in the Federal 
Register under the authority of the Commissioner of Social Security. 
They are binding on all components of the Social Security 
Administration, except with respect to claims subject to the 
relitigation procedures established in 20 CFR 404.985(c), 410.670c, and 
416.1485(c). For a description of Social Security Acquiescence Rulings, 
see 20 CFR 404.985(b), 410.670c(b), and 416.1485(b) of this title.
    (c) Availability for inspection. To the extent practicable and to 
further assist the public, we make available for inspection at the 
address specified in Sec. 402.135 those materials which are published in 
the Federal Register pursuant to 5 U.S.C. 552(a)(1).
    (d) Availability by telecommunications. To the extent practicable, 
we will make available by means of computer

[[Page 30]]

telecommunications the indices and other records that are available for 
inspection.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998; 65 
FR 16813, Mar. 30, 2000; 72 FR 36360, July 3, 2007]



Sec. 402.40  Publications for sale.

    The following publications containing information pertaining to the 
program, organization, functions, and procedures of the Social Security 
Administration may be purchased from the Superintendent of Documents, 
Government Printing Office, Washington, DC 20402:
    (a) Title 20, parts 400-499 of the Code of Federal Regulations.
    (b) Federal Register issues.
    (c) Compilation of the Social Security Laws.
    (d) Social Security Rulings.
    (e) Social Security Handbook. The information in the Handbook is not 
of precedent or interpretative force.
    (f) Social Security Bulletin.
    (g) Social Security Acquiescence Rulings.
    (h) SSA Publications on CD-ROM.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998]



Sec. 402.45  Availability of records.

    (a) What records are available. 5 U.S.C. 552, also known as the 
FOIA, permits any person to see, and get a copy of, any Federal agency's 
records unless the material is exempt from mandatory disclosure as 
described in Sec. 402.70 of this part.
    (b) FOIA. Under the FOIA, we are also required to make available to 
the public the instructional manuals issued to our employees, general 
statements of policy, and other materials which are used in processing 
claims and which are not published in the Federal Register, and an index 
of these manuals and materials.
    (c) Record citation as precedent. We will not use or cite any record 
described in paragraph (b) of this section as a precedent for an action 
against a person unless we have indexed the record and published it or 
made it available, or unless the person has timely notice of the record.
    (d) Electronic Reading Room. We will prepare an index of records 
which have become or are likely to become the subject of subsequent 
requests. The index, and, to the extent practicable, the records will be 
made available on the Internet or by other computer telecommunications 
means.
    (e) Federal employees. We will not disclose information when the 
information sought is lists of telephone numbers and/or duty stations of 
one or more Federal employees if the disclosure, as determined at the 
discretion of the official responsible for custody of the information, 
would place employee(s) at risk of injury or other harm. Also, we will 
not disclose the requested information if the information is protected 
from mandatory disclosure under an exemption of the Freedom of 
Information Act.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998; 72 
FR 69617, Dec. 10, 2007]



Sec. 402.50  Availability of administrative staff manuals.

    All administrative staff manuals of the Social Security 
Administration and instructions to staff personnel which contain 
policies, procedures, or interpretations that affect the public are 
available for inspection and copying. A complete listing of such 
materials is published in the Index of Administrative Staff Manuals and 
Instructions. These manuals are generally not printed in a sufficient 
quantity to permit sale or other general distribution to the public. 
Selected material is maintained at district offices and field offices 
and may be inspected there. See Secs. 402.55 and 402.60 for a listing of 
this material.



Sec. 402.55  Materials available at district offices and branch
offices.

    (a) Materials available for inspection. The following are available 
or will be made available for inspection at the district offices and 
branch offices:
    (1) Compilation of the Social Security Laws.
    (2) Social Security Administration regulations under the retirement, 
survivors, disability, and supplemental security income programs, i.e., 
20 CFR parts 401, 402, 404, 416, and 422; and the Social Security 
Administration's regulations under part B of title IV (Black

[[Page 31]]

Lung Benefits) of the Federal Coal Mine Health and Safety Act of 1969, 
20 CFR part 410.
    (3) Social Security Rulings.
    (4) Social Security Handbook.
    (5) Social Security Acquiescence Rulings.
    (b) Materials available for inspection and copying. The following 
materials are available or will be made available for inspection and 
copying at the district offices and branch offices (fees may be 
applicable per Secs. 402.155 through 402.185):
    (1) SSA Program Operations Manual System.
    (2) SSA Organization Manual.
    (3) Handbook for State Social Security Administrators.
    (4) Indexes to the materials listed in paragraph (a) of this section 
and in this paragraph (b) and an index to the Hearings, Appeals and 
Litigation Law (HALLEX) manual.
    (5) Index of Administrative Staff Manuals and Instructions.



Sec. 402.60  Materials in field offices of the Office of Hearings 
and Appeals.

    (a) Materials available for inspection. The following materials are 
available for inspection in the field offices of the Office of Hearings 
and Appeals:
    (1) Regulations of the Social Security Administration (see 
Sec. 402.55(a)(2)).
    (2) Title 5, United States Code.
    (3) Compilation of the Social Security Laws.
    (4) Social Security Rulings.
    (5) Social Security Handbook.
    (6) Social Security Acquiescence Rulings.
    (b) The Hearings, Appeals and Litigation Law (HALLEX) manual is 
available for inspection and copying in the field offices of the Office 
of Hearings and Appeals (fees may be applicable per Secs. 402.155 
through 402.185).



Sec. 402.65  Health care information.

    We have some information about health care programs under titles 
XVIII and XIX (Medicare and Medicaid) of the Social Security Act. We 
follow the rules in 42 CFR part 401 in determining whether to provide 
any portion of it to a requester.



Sec. 402.70  Reasons for withholding some records.

    Section 552(b) of the Freedom of Information Act contains nine 
exemptions to the mandatory disclosure of records. We describe these 
exemptions in Secs. 402.75 through 402.110 of this part and explain how 
we apply them to disclosure determinations. (In some cases more than one 
exemption may apply to the same document.) Information obtained by the 
agency from any individual or organization, furnished in reliance on a 
provision for confidentiality authorized by applicable statute or 
regulation, will not be disclosed, to the extent it can be withheld 
under one of these exemptions. This section does not itself authorize 
the giving of any pledge of confidentiality by any officer or employee 
of the agency.



Sec. 402.75  Exemption one for withholding records: National defense
and foreign policy.

    We are not required to release records that, as provided by FOIA, 
are ``(a) specifically authorized under criteria established by an 
Executive Order to be kept secret in the interest of national defense or 
foreign policy and (b) are in fact properly classified pursuant to such 
Executive Order.'' Executive Order No. 12958 (1995) (3 CFR, 1987 Comp., 
p. 235) provides for such classification. When the release of certain 
records may adversely affect U.S. relations with foreign countries, we 
usually consult with officials of those countries or officials of the 
Department of State. Also, we may on occasion have in our possession 
records classified by some other agency. We may refer your request for 
such records to the agency that classified them and notify you that we 
have done so.



Sec. 402.80  Exemption two for withholding records: Internal personnel
rules and practices.

    We are not required to release records that are ``related solely to 
the internal personnel rules and practices of an agency.'' Under this 
exemption, we may withhold routine internal agency practices and 
procedures. For example, we may withhold guard schedules and rules 
governing parking facilities or lunch periods. Also under

[[Page 32]]

this exemption, we may withhold internal records whose release would 
help some persons circumvent the law or agency regulations. For example, 
we ordinarily do not disclose manuals that instruct our investigators or 
auditors how to investigate possible violations of law, to the extent 
that this release would help some persons circumvent the law.



Sec. 402.85  Exemption three for withholding records: Records exempted
by other statutes.

    We are not required to release records if another statute 
specifically allows or requires us to withhold them. We may use another 
statute to justify withholding only if it absolutely prohibits 
disclosure or if it sets forth criteria to guide our decision on 
releasing or identifies particular types of material to be withheld. We 
often use this exemption to withhold information regarding a worker's 
earnings which is tax return information under section 6103 of the 
Internal Revenue Code.



Sec. 402.90  Exemption four for withholding records: Trade secrets
and confidential commercial or financial information.

    We will withhold trade secrets and commercial or financial 
information that is obtained from a person and is privileged or 
confidential.
    (a) Trade secrets. A trade secret is a secret, commercially valuable 
plan, formula, process, or device that is used for the making, 
preparing, compounding, or processing of trade commodities and that can 
be said to be the end product of either innovation or substantial 
effort. There must be a direct relationship between the trade secret and 
the productive process.
    (b) Commercial or financial information. We will not disclose 
records whose information is ``commercial or financial,'' is obtained 
from a person, and is ``privileged or confidential.''
    (1) Information is ``commercial or financial'' if it relates to 
businesses, commerce, trade, employment, profits, or finances (including 
personal finances). We interpret this category broadly.
    (2) Information is ``obtained from a person'' if SSA or another 
agency has obtained it from someone outside the Federal Government or 
from someone within the Government who has a commercial or financial 
interest in the information. ``Person'' includes an individual, 
partnership, corporation, association, State or foreign government, or 
other organization. Information is not ``obtained from a person'' if it 
is generated by SSA or another Federal agency. However, information is 
``obtained from a person'' if it is provided by someone, including but 
not limited to an agency employee, who retains a commercial or financial 
interest in the information.
    (3) Information is ``privileged'' if it would ordinarily be 
protected from disclosure in civil discovery by a recognized evidentiary 
privilege, such as the attorney-client privilege or the work product 
privilege. Information may be privileged for this purpose under a 
privilege belonging to a person outside the government, unless the 
providing of the information to the government rendered the information 
no longer protectable in civil discovery.
    (4) Information is ``confidential'' if it meets one of the following 
tests:
    (i) Disclosure may impair the government's ability to obtain 
necessary information in the future;
    (ii) Disclosure would substantially harm the competitive position of 
the person who submitted the information;
    (iii) Disclosure would impair other government interests, such as 
program effectiveness and compliance; or
    (iv) Disclosure would impair other private interests, such as an 
interest in controlling availability of intrinsically valuable records, 
which are sold in the market by their owner.
    (c) Analysis under tests in this section. The following questions 
may be relevant in analyzing whether a record meets one or more of the 
above tests:
    (1) Is the information of a type customarily held in strict 
confidence and not disclosed to the public by the person to whom it 
belongs?
    (2) What is the general custom or usage with respect to such 
information in the relevant occupation or business?
    (3) How many, and what types of, individuals have access to the 
information?

[[Page 33]]

    (4) What kind and degree of financial injury can be expected if the 
information is disclosed?
    (d) Designation of certain confidential information. A person who 
submits records to the government may designate part or all of the 
information in such records as exempt from disclosure under Exemption 4 
of the FOIA. The person may make this designation either at the time the 
records are submitted to the government or within a reasonable time 
thereafter. The designation must be in writing. Where a legend is 
required by a request for proposals or request for quotations, pursuant 
to 48 CFR 352.215-12, then that legend is necessary for this purpose. 
Any such designation will expire ten years after the records were 
submitted to the government.
    (e) Predisclosure notification. The procedures in this paragraph 
apply to records on which the submitter has designated information as 
provided in paragraph (d) of this section. They also apply to records 
that were submitted to the government where we have substantial reason 
to believe that information in the records could reasonably be 
considered exempt under Exemption 4. Certain exceptions to these 
procedures are stated in paragraph (f) of this section.
    (1) When we receive a request for such records, and we determine 
that we may be required to disclose them, we will make reasonable 
efforts to notify the submitter about these facts. The notice will 
include a copy of the request, and it will inform the submitter about 
the procedures and time limits for submission and consideration of 
objections to disclosure. If we must notify a large number of 
submitters, we may do this by posting or publishing a notice in a place 
where the submitters are reasonably likely to become aware of it.
    (2) The submitter has five working days from receipt of the notice 
to object to disclosure of any part of the records and to state all 
bases for its objections.
    (3) We will give consideration to all bases that have been timely 
stated by the submitter. If we decide to disclose the records, we will 
notify the submitter in writing. This notice will briefly explain why we 
did not sustain its objections. We will include with the notice a copy 
of the records about which the submitter objected, as we propose to 
disclose them. The notice will state that we intend to disclose the 
records five working days after the submitter receives the notice unless 
we are ordered by a United States District Court not to release them.
    (4) When a requester files suit under the FOIA to obtain records 
covered by this paragraph, we will promptly notify the submitter.
    (5) Whenever we send a notice to a submitter under paragraph (e)(1) 
of this section, we will notify the requester that we are giving the 
submitter a notice and an opportunity to object. Whenever we send a 
notice to a submitter under paragraph (e)(3) of this section, we will 
notify the requester of this fact.
    (f) Exceptions to predisclosure notification. The notice 
requirements in paragraph (e) of this section do not apply in the 
following situations:
    (1) We decided not to disclose the records;
    (2) The information has previously been published or made generally 
available;
    (3) Disclosure is required by a regulation, issued after notice and 
opportunity for public comment, that specifies narrow categories of 
records that are to be disclosed under the FOIA, but in this case a 
submitter may still designate records as described in paragraph (d) of 
this section, and in exceptional cases, we may, at our discretion, 
follow the notice procedures in paragraph (e) of this section; or
    (4) The designation appears to be obviously frivolous, but in this 
case we will still give the submitter the written notice required by 
paragraph (e)(3) of this section (although this notice need not explain 
our decision or include a copy of the records), and we will notify the 
requester as described in paragraph (e)(5) of this section.



Sec. 402.95  Exemption five for withholding records: Internal
memoranda.

    This exemption covers internal government communications and notes 
that fall within a generally recognized

[[Page 34]]

evidentiary privilege. Internal government communications include an 
agency's communications with an outside consultant or other outside 
person, with a court, or with Congress, when those communications are 
for a purpose similar to the purpose of privileged intra-agency 
communications. Some of the most-commonly applicable privileges are 
described in the following paragraphs:
    (a) Deliberative process privilege. This privilege protects 
predecisional deliberative communications. A communication is protected 
under this privilege if it was made before a final decision was reached 
on some question of policy and if it expressed recommendations or 
opinions on that question. The purpose of the privilege is to prevent 
injury to the quality of the agency decisionmaking process by 
encouraging open and frank internal policy discussions, by avoiding 
premature disclosure of policies not yet adopted, and by avoiding the 
public confusion that might result from disclosing reasons that were not 
in fact the ultimate grounds for an agency's decision. Purely factual 
material in a deliberative document is within this privilege only if it 
is inextricably intertwined with the deliberative portions so that it 
cannot reasonably be segregated, if it would reveal the nature of the 
deliberative portions, or if its disclosure would in some other way make 
possible an intrusion into the decisionmaking process. We will release 
purely factual material in a deliberative document unless that material 
is otherwise exempt. The privilege continues to protect predecisional 
documents even after a decision is made.
    (b) Attorney work product privilege. This privilege protects 
documents prepared by or for an agency, or by or for its representative 
(typically, our attorneys) in anticipation of litigation or for trial. 
It includes documents prepared for purposes of administrative 
adjudications as well as court litigation. It includes documents 
prepared by program offices as well as by attorneys. It includes factual 
material in such documents as well as material revealing opinions and 
tactics. Finally, the privilege continues to protect the documents even 
after the litigation is closed.
    (c) Attorney-client communication privilege. This privilege protects 
confidential communications between a lawyer and an employee or agent of 
the Government where there is an attorney-client relationship between 
them (typically, where the lawyer is acting as attorney for the agency 
and the employee is communicating on behalf of the agency) and where the 
employee has communicated information to the attorney in confidence in 
order to obtain legal advice or assistance.



Sec. 402.100  Exemption six: Clearly unwarranted invasion of personal
privacy.

    (a) Documents affected. We may withhold records about individuals if 
disclosure would constitute a clearly unwarranted invasion of their 
personal privacy.
    (b) Balancing test. In deciding whether to release records to you 
that contain personal or private information about someone else, we 
weigh the foreseeable harm of invading a person's privacy against the 
public interest in disclosure. In determining whether disclosure would 
be in the public interest, we will consider whether disclosure of the 
requested information would shed light on how a Government agency 
performs its statutory duties. However, in our evaluation of requests 
for records we attempt to guard against the release of information that 
might involve a violation of personal privacy because of a requester 
being able to ``read between the lines'' or piece together items that 
would constitute information that normally would be exempt from 
mandatory disclosure under Exemption Six.
    (c) Examples. Some of the information that we frequently withhold 
under Exemption Six is: Home addresses, ages, and minority group status 
of our employees or former employees; social security numbers; medical 
information about individuals who have filed a claim for disability 
benefits; names and addresses of individual beneficiaries of our 
programs, or benefits such individuals receive; earnings

[[Page 35]]

records, claim files, and other personal information SSA maintains.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35132, June 29, 1998]



Sec. 402.105  Exemption seven for withholding records: Law enforcement.

    We are not required to disclose information or records that the 
government has compiled for law enforcement purposes. The records may 
apply to actual or potential violations of either criminal or civil laws 
or regulations. We can withhold these records only to the extent that 
releasing them would cause harm in at least one of the following 
situations:
    (a) Enforcement proceedings. We may withhold information whose 
release could reasonably be expected to interfere with prospective or 
ongoing law enforcement proceedings. Investigations of fraud and 
mismanagement, employee misconduct, and civil rights violations may fall 
into this category. In certain cases--such as when a fraud investigation 
is likely--we may refuse to confirm or deny the existence of records 
that relate to the violations in order not to disclose that an 
investigation is in progress, or may be conducted.
    (b) Fair trial or impartial adjudication. We may withhold records 
whose release would deprive a person of a fair trial or an impartial 
adjudication because of prejudicial publicity.
    (c) Personal privacy. We are careful not to disclose information 
that could reasonably be expected to constitute an unwarranted invasion 
of personal privacy. When a name surfaces in an investigation, that 
person is likely to be vulnerable to innuendo, rumor, harassment, and 
retaliation.
    (d) Confidential sources and information. We may withhold records 
whose release could reasonably be expected to disclose the identity of a 
confidential source of information. A confidential source may be an 
individual; a State, local, or foreign government agency; or any private 
organization. The exemption applies whether the source provides 
information under an express promise of confidentiality or under 
circumstances from which such an assurance could be reasonably inferred. 
Also, where the record, or information in it, has been compiled by a law 
enforcement authority conducting a criminal investigation, or by an 
agency conducting a lawful national security investigation, the 
exemption also protects all information supplied by a confidential 
source. Also protected from mandatory disclosure is any information 
which, if disclosed, could reasonably be expected to jeopardize the 
system of confidentiality that assures a flow of information from 
sources to investigatory agencies.
    (e) Techniques and procedures. We may withhold records reflecting 
special techniques or procedures of investigation or prosecution, not 
otherwise generally known to the public. In some cases, it is not 
possible to describe even in general terms those techniques without 
disclosing the very material to be withheld. We may also withhold 
records whose release would disclose guidelines for law enforcement 
investigations or prosecutions if this disclosure could reasonably be 
expected to create a risk that someone could circumvent requirements of 
law or of regulation.
    (f) Life and physical safety. We may withhold records whose 
disclosure could reasonably be expected to endanger the life or physical 
safety of any individual. This protection extends to threats and 
harassment as well as to physical violence.

[62 FR 4154, Jan. 29, 1997. Redesignated at 63 FR 35132, June 29, 1998]



Sec. 402.110  Exemptions eight and nine for withholding records:
Records on financial institutions; records on wells.

    Exemption eight permits us to withhold records about regulation or 
supervision of financial institutions. Exemption nine permits the 
withholding of geological and geophysical information and data, 
including maps, concerning wells.



Sec. 402.125  Who may release a record.

    Except as otherwise provided by regulation, only the Deputy 
Executive Director for the Office of Public Disclosure, Office of the 
General Counsel, SSA, or her or his designee may determine whether to 
release any record in

[[Page 36]]

SSA's control and possession. This official is SSA's Freedom of 
Information Officer. Sections 402.40, 402.55, and 402.60 list some of 
the materials which we have determined may be released.

[62 FR 4154, Jan. 29, 1997, as amended at 68 FR 60295, Oct. 22, 2003]



Sec. 402.130  How to request a record.

    You may request a record in person or by mail or by electronic 
telecommunications. To the extent practicable, and in the future, we 
will attempt to provide access for requests by telephone, fax, Internet, 
and e-mail. Any request should reasonably describe the record you want. 
If you have detailed information which would assist us in identifying 
that record, please submit it with your request. We may charge fees for 
some requests (Secs. 402.145-402.175 explain our fees). You should 
identify the request as a Freedom of Information Act request and mark 
the outside of any envelope used to submit your request as a ``Freedom 
of Information Request.'' The staff at any Social Security office can 
help you prepare this request.

[63 FR 35132, June 29, 1998]



Sec. 402.135  Where to send a request.

    You may send your request for a record to: The Deputy Executive 
Director for the Office of Public Disclosure, Office of the General 
Counsel, Social Security Administration, 6401 Security Boulevard, 
Baltimore, Maryland 21235.

[62 FR 4154, Jan. 29, 1997, as amended at 68 FR 60295, Oct. 22, 2003]



Sec. 402.140  How a request for a record is processed.

    (a) In general, we will make a determination as to whether a 
requested record will be provided within 20 days (excepting Saturdays, 
Sundays, and legal public holidays) after receipt of a request by the 
appropriate official (see Sec. 402.135). This 20-day period may be 
extended in unusual circumstances by written notice to you, explaining 
why we need additional time, and the extension may be for up to 10 
additional working days when one or more of the following situations 
exist:
    (1) The office processing the request needs to locate and then 
obtain the record from another facility;
    (2) We need to locate, obtain, and appropriately examine a large 
number of records which are requested in a single request; or
    (3) The office processing the request needs to consult with another 
agency which has a substantial interest in the subject matter of the 
request. This consultation shall be conducted with all practicable 
speed.
    (b) If we cannot process your request within 10 additional days, we 
will notify you and provide you an opportunity to limit the scope of the 
request so that it may be processed within the additional 10 days, or we 
will provide you with an opportunity to arrange with us an alternative 
time frame for processing the request, or for processing a modified 
request.
    (c) Multi-tracking procedures. We will establish four tracks for 
handling requests and the track to which a request is assigned will 
depend on the nature of the request and the estimated processing time:
    (1) Track 1--Requests that can be answered with readily available 
records or information. These are the fastest to process.
    (2) Track 2--Requests where we need records or information from 
other offices throughout the Agency but we do not expect that the 
decision on disclosure will be as time consuming as for requests in 
Track 3.
    (3) Track 3--Requests which require a decision or input from another 
office or agency and a considerable amount of time will be needed for 
that, or the request is complicated or involves a large number of 
records. Usually, these cases will take the longest to process.
    (4) Track 4--Requests that will be expedited.
    (d) We will provide for expedited access for requesters who show a 
``compelling need'' for a speedy response. The EFOIA describes 
compelling need as when the failure to obtain the records on an 
expedited basis could reasonably be expected to pose ``an imminent 
threat to the life or physical safety of an individual,'' or when the 
request is from a person primarily engaged in disseminating information

[[Page 37]]

(such as a member of the news media), and there is an ``urgency to 
inform the public concerning actual or alleged Federal Government 
activity.'' We also will expedite processing of a request if the 
requester explains in detail to our satisfaction that a prompt response 
is needed because the requester may be denied a legal right, benefit, or 
remedy without the requested information, and that it cannot be obtained 
elsewhere in a reasonable amount of time. We will respond within 10 days 
to a request for expedited processing and, if we decide to grant 
expedited processing, we will then notify you of our decision whether or 
not to disclose the records requested as soon as practicable.

[63 FR 35133, June 29, 1998]



Sec. 402.145  Responding to your request.

    (a) Retrieving records. We are required to furnish copies of records 
only when they are in our possession or we can retrieve them from 
storage. We will make reasonable efforts to search for records manually 
or by automated means, including any information stored in an electronic 
form or format, except when such efforts would significantly interfere 
with the operation of our automated information system. If we have 
stored the records you want in the National Archives or another storage 
center, we will retrieve and review them for possible disclosure. 
However, the Federal Government destroys many old records, so sometimes 
it is impossible to fill requests. Various laws, regulations, and 
manuals give the time periods for keeping records before they may be 
destroyed. For example, there is information about retention of records 
in the Records Disposal Act of 1944, 44 U.S.C. 3301 through 3314; the 
Federal Property Management Regulations, 41 CFR 101-11.4; and the 
General Records Schedules of the National Archives and Records 
Administration.
    (b) Furnishing records. We will furnish copies only of records that 
we have or can retrieve. We are not required to create new records or to 
perform research for you. We may decide to conserve Government resources 
and at the same time supply the records you need by consolidating 
information from various records rather than copying them all. For 
instance, we could extract sections from various similar records instead 
of providing repetitious information. We generally will furnish only one 
copy of a record. We will make reasonable efforts to provide the records 
in the form or format you request if the record is readily reproducible 
in that form or format.
    (c) Deletions. When we publish or otherwise make available any 
record, we may delete information that is exempt from disclosure. For 
example, in an opinion or order, statement of policy, or other record 
which relates to a private party or parties, the name or names and other 
identifying details may be deleted. When technically feasible, we will 
indicate the extent of deletions on the portion of the record that is 
released or published at the place of the deletion unless including that 
indication would harm an interest protected by an exemption. If we deny 
a request, in whole or in part, we will make a reasonable effort to 
estimate the volume of any requested matter that is not disclosed, 
unless such an estimate would harm an interest protected by an 
exemption.
    (d) Creation of records. We are not required to create new records 
merely to satisfy a request. However, we will search manually or by 
automated means to locate information that is responsive to the request. 
If extensive computer programming is needed to respond to a request, we 
may decline to commit such resources, or if we agree to do so, we may 
charge you for the reasonable cost of doing so. We do not mean that we 
will never help you get information that does not already exist in our 
records. However, diverting staff and equipment from our other 
responsibilities may not always be possible.

[63 FR 35133, June 29, 1998]



Sec. 402.150  Release of records.

    (a) Records previously released. If we have released a record, or a 
part of a record, to others in the past, we will ordinarily release it 
to you also. However, we will not release it to you if a statute forbids 
this disclosure, and we will not necessarily release it to you if an 
exemption applies in your situation and it did not apply, or applied 
differently, in the previous situation(s) or

[[Page 38]]

if the previous release was unauthorized. See Sec. 402.45(d) regarding 
records in electronic reading rooms.
    (b) Poor copy. If we cannot make a legible copy of a record to be 
released, we do not attempt to reconstruct it. Instead, we furnish the 
best copy possible and note its poor quality in our reply.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35133, June 29, 1998]



Sec. 402.155  Fees to be charged--categories of requests.

    Paragraphs (a) through (c) of this section state, for each category 
of request, the type of fees that we will generally charge. However, for 
each of these categories, the fees may be limited, waived, or reduced 
for the reasons given below or for other reasons.
    (a) Commercial use request. If your request is for a commercial use, 
we will charge you the costs of search, review, and duplication.
    (b) Educational and scientific institutions and news media. If you 
are an educational institution or a non-commercial scientific 
institution, operated primarily for scholarly or scientific research, or 
a representative of the news media, and your request is not for a 
commercial use, we will charge you only for the duplication of 
documents. Also, we will not charge you the copying costs for the first 
100 pages of duplication.
    (c) Other requesters. If your request is not the kind described by 
paragraph (a) or (b) of this section, then we will charge you only for 
the search and the duplication. Also, we will not charge you for the 
first two hours of search time or for the copying costs of the first 100 
pages of duplication.



Sec. 402.160  Fees to be charged--general provisions.

    (a) We may charge search fees even if the records we find are exempt 
from disclosure, or even if we do not find any records at all.
    (b) If we are not charging you for the first two hours of search 
time, under paragraph (c) of Sec. 402.155, and those two hours are spent 
on a computer search, then the two free hours are the first two hours of 
the time needed to access the information in the computer.
    (c) If we are not charging you for the first 100 pages of 
duplication, under paragraph (b) or (c) of Sec. 402.155, then those 100 
pages are the first 100 pages of photocopies of standard size pages, or 
the first 100 pages of computer printout.
    (d) We will charge interest on unpaid bills beginning on the 31st 
day following the day the bill was sent.

[62 FR 4154, Jan. 29, 1997, as amended at 63 FR 35134, June 29, 1998]



Sec. 402.165  Fee schedule.

    The following is our fee schedule for providing records and related 
services under the FOIA:
    (a) Manual searching for or reviewing of records. When the search or 
review is performed by employees at grade GS-1 through GS-8, we will 
charge an hourly rate based on the salary of a GS-5, step 7, employee; 
when done by a GS-9 through GS-14, an hourly rate based on the salary of 
a GS-12, step 4, employee; and when done by a GS-15 or above, an hourly 
rate based on the salary of a GS-15, step 7, employee. In each case, we 
will compute the hourly rate by taking the current hourly rate for the 
specified grade and step, adding 16% of that rate to cover benefits, and 
rounding to the nearest whole dollar. As of January 5, 1997, these rates 
were $14, $28, and $50 respectively. These rates are adjusted as Federal 
salaries change. When a search involves employees at more than one of 
these levels, we will charge the rate appropriate for each.
    (b) Computer searching and printing. We will charge the actual cost 
of operating the computer plus charges for the time spent by the 
operator, at the rates given in paragraph (a) of this section.
    (c) Photocopying standard size pages. We will charge $0.10 per page. 
The Freedom of Information (FOI) Officer may charge lower fees for 
particular documents where--
    (1) The document has already been printed in large numbers;
    (2) The program office determines that using existing stock to 
answer this request, and any other anticipated FOI requests, will not 
interfere with program requirements; and

[[Page 39]]

    (3) The FOI Officer determines that the lower fee is adequate to 
recover the prorated share of the original printing costs.
    (d) Photocopying odd-size documents. For photocopying documents such 
as punchcards or blueprints, or reproducing other records such as tapes, 
we will charge the actual costs of operating the machine, plus the 
actual cost of the materials used, plus charges for the time spent by 
the operator, at the rates given in paragraph (a) of this section.
    (e) Certifying that records are true copies. This service is not 
required by the FOIA. If we agree to provide it, we will charge $10 per 
certification.
    (f) Sending records by express mail, certified mail, or other 
special methods. This service is not required by the FOIA. If we agree 
to provide it, we will charge our actual costs.
    (g) Other special services. For performing any other special service 
that you request and we agree to, we will charge the actual costs of 
operating any machinery, plus actual cost of any materials used, plus 
charges for the time of our employees, at the rates given in paragraph 
(a) of this section.
    (h) Billing exceeds cost of service. Generally we will not charge 
you a fee when the cost of the service is less than the cost of sending 
you a bill. However, where an individual, organization, or governmental 
unit makes multiple separate requests, we will total the costs incurred 
and periodically bill the requester for the services rendered.
    (i) Fee for copies of printed materials. When extra copies of 
printed material are available, the charge is generally 1 cent per page. 
If the material may be purchased from the Superintendent of Documents, 
the charge is that set by the Superintendent. The Superintendent's 
address is in Sec. 402.40.
    (j) When not applicable. This fee schedule does not apply to 
requests for records of Social Security number holders, wage earners, 
employers, and claimants when the requests are governed by section 1106 
of the Social Security Act and by Secs. Sections 402.170 and 402.175.



Sec. 402.170  Fees for providing records and related services for
program purposes pursuant to section 1106 of the Social Security Act.

    (a) Program purposes described. (1) We consider a request to be 
program related if the information must be disclosed under the Social 
Security Act. For example, section 205(c)(2)(A) of the Act (42 U.S.C. 
405(c)(2)(A)) requires that we provide certain information upon request 
to a worker, her or his legal representative, her or his survivor, or 
the legal representative of the worker's estate. That information is the 
amounts of the worker's wages and self-employment income and the periods 
during which they were paid or derived, as shown by our records.
    (2) We also consider a request to be program related if the 
requester indicates the needed information will be used for a purpose 
which is directly related to the administration of a program under the 
Social Security Act.
    (i) The major criteria we consider in deciding whether a proposed 
use is so related are:
    (A) Is the information needed to pursue some benefit under the Act?
    (B) Is the information needed solely to verify the accuracy of 
information obtained in connection with a program administered under the 
Act?
    (C) Is the information needed in connection with an activity which 
has been authorized under the Act?
    (D) Is the information needed by an employer to carry out her or his 
taxpaying responsibilities under the Federal Insurance Contributions Act 
or section 218 of the Act?
    (ii) We will consider on a case by case basis those requests which 
do not meet these criteria but are claimed to be program related.
    (b) When we charge. If we determine the request for information is 
program related, we may or may not charge for the information. For 
example, as stated in paragraph (a) of this section, we generally will 
not charge you for information needed to assure the accuracy of our 
records on which your present or future Social Security benefits depend. 
In addition, we generally will not charge for furnishing information 
under section 205(c)(2)(A) of the Act. However, if we do charge for a 
program

[[Page 40]]

related request (for example, if more detailed information or special 
services are requested) we will use the fee schedule in Sec. 402.165 if 
information is being disclosed under the FOIA and the fee schedule in 20 
CFR 401.95 if access to the information is being granted under the 
Privacy Act. (Exception: If the request is for purposes of administering 
employee benefits covered by the Employee Retirement Income Security Act 
of 1974 (ERISA), even if the request is covered by section 205(c)(2)(A) 
of the Act, we will charge under Sec. 402.175.)



Sec. 402.175  Fees for providing information and related services
for non-program purposes.

    (a) General. Section 1106(c) of the Social Security Act permits the 
Commissioner to require requesters of information to pay the full cost 
of supplying the information where the information is requested to 
comply with the ERISA, or ``* * * for any other purpose not directly 
related to the administration of the program or programs under * * *'' 
the Social Security Act. This may be done notwithstanding the fee 
provisions of the FOIA and the Privacy Act or any other provision of 
law. As used in this section--
    (1) Full cost includes the direct and indirect costs to SSA 
(including costs of duplication) of providing information and related 
services under section 1106(c) of the Act; and
    (2) Full cost of an employee's time includes fringe benefits and 
overhead costs such as rent and utilities.
    (b) Non-program related requests. We consider a request for 
information which does not meet or equal any of the criteria in 
Sec. 402.170 to be non-program related. (Whether a request for 
information about an individual is made by that individual or by someone 
else is not a factor.) In responding to these requests, or requests for 
ERISA purposes, we will charge the full cost of our services as 
described in paragraph (c) of this section.
    (c) Fee schedule. Our fee schedule for non-program related requests 
is:
    (1) Manual searching for records. Full cost of the employee's time.
    (2) Photocopying, or reproducing records such as magnetic tapes or 
punch cards. Full cost of the operator's time plus the full cost of the 
machine time and the materials used.
    (3) Use of electronic data processing equipment to obtain records. 
Our full cost for the service, including computer search time, computer 
runs and printouts, and the time of computer programmers and operators 
and other employees.
    (4) Certification or authentication of records. Full cost of 
certification or authentication.
    (5) Forwarding materials to destination. If you request special 
arrangements for forwarding the material, we will charge you the full 
cost of this service (e.g., you request express mail or a commercial 
delivery service). If no special forwarding arrangements are requested, 
we will charge you the full cost of the service, including the U.S. 
Postal Service cost.
    (6) Performing other special services. If we agree to provide any 
special services you request, we will charge you the full cost of the 
time of the employee who performs the service, plus the full cost of any 
machine time and materials that the employee uses.
    (7) Billing exceeds cost of service. Generally we will not charge 
you a fee when the cost of the service is less than the cost of sending 
you a bill. However, where an individual, organization, or governmental 
unit makes multiple separate requests, we will total the costs incurred 
and bill the requester for the services rendered.
    (d) Fee for copies of printed materials. When extra copies of 
printed material are available, the charge is generally 1 cent per page. 
If the material may be purchased from the Superintendent of Documents, 
the charge is that set by the Superintendent. The Superintendent's 
address is in Sec. 402.40.
    (e) Charging when requested record not found. We may charge you for 
search time, even though we fail to find the records. We may also charge 
you for search time if the records we locate are exempt from disclosure.



Sec. 402.180  Procedure on assessing and collecting fees for providing
records.

    (a) We will generally assume that when you send us a request, you 
agree

[[Page 41]]

to pay for the services needed to locate and send that record to you. 
You may specify in your request a limit on the amount you are willing to 
spend. If you do that or include with your request a payment that does 
not cover our fee, we will notify you if it appears that the fee will 
exceed that amount and ask whether you want us to continue to process 
your request. Also, before we start work on your request under 
Sec. 402.140, we will generally notify you of our exact or estimated 
charge for the information, unless it is clear that you have a 
reasonable idea of the cost.
    (b) If you have failed to pay previous bills in a timely fashion, or 
if our initial review of your request indicates that we will charge you 
fees exceeding $250, we will require you to pay your past due fees and/
or the estimated fees, or a deposit, before we start searching for the 
records you want. If so, we will let you know promptly upon receiving 
your request. In such cases, administrative time limits (i.e., ten 
working days from receipt of initial requests and 20 working days from 
receipt of appeals from initial denials, plus permissible extensions of 
these time limits) will begin only after we come to an agreement with 
you over payment of fees, or decide that fee waiver or reduction is 
appropriate.
    (c) We will normally require you to pay all fees before we furnish 
the records to you. We may, at our discretion, send you a bill along 
with or following the furnishing of the records. For example, we may do 
this if you have a history of prompt payment. We may also, at our 
discretion, aggregate the charges for certain time periods in order to 
avoid sending numerous small bills to frequent requesters, or to 
businesses or agents representing requesters. For example, we might send 
a bill to such a requester once a month. Fees should be paid in 
accordance with the instructions furnished by the person who responds to 
your requests.
    (d) Payment of fees will be made by check or money order payable to 
``Social Security Administration''.

[62 FR 4154, Jan. 29, 1997, as amended at 68 FR 60295, Oct. 22, 2003]



Sec. 402.185  Waiver or reduction of fees in the public interest.

    (a) Standard. We will waive or reduce the fees we would otherwise 
charge if disclosure of the information meets both tests which are 
explained in paragraphs (b) and (c) of this section:
    (1) It is in the public interest because it is likely to contribute 
significantly to public understanding of the operations or activities of 
the government; and
    (2) It is not primarily in the commercial interest of the requester.
    (b) Public interest. The disclosure passes the first test only if it 
furthers the specific public interest of being likely to contribute 
significantly to public understanding of government operations or 
activities, regardless of any other public interest it may further. In 
analyzing this question, we will consider the following factors:
    (1) How, if at all, do the records to be disclosed pertain to the 
operations or activities of the Federal Government?
    (2) Would disclosure of the records reveal any meaningful 
information about government operations or activities? Can one learn 
from these records anything about such operations that is not already 
public knowledge?
    (3) Will the disclosure advance the understanding of the general 
public as distinguished from a narrow segment of interested persons? 
Under this factor we may consider whether the requester is in a position 
to contribute to public understanding. For example, we may consider 
whether the requester has such knowledge or expertise as may be 
necessary to understand the information, and whether the requester's 
intended use of the information would be likely to disseminate the 
information among the public. An unsupported claim to be doing research 
for a book or article does not demonstrate that likelihood, while such a 
claim by a representative of the news media is better evidence.
    (4) Will the contribution to public understanding be a significant 
one? Will the public's understanding of the government's operations be 
substantially greater as a result of the disclosure?
    (c) Not primarily in the requester's commercial interest. If the 
disclosure passes

[[Page 42]]

the test of furthering the specific public interest described in 
paragraph (b) of this section, we will determine whether it also 
furthers the requester's commercial interest and, if so, whether this 
effect outweighs the advancement of that public interest. In applying 
this second test, we will consider the following factors:
    (1) Would the disclosure further a commercial interest of the 
requester, or of someone on whose behalf the requester is acting? 
``Commercial interests'' include interests relating to business, trade, 
and profit. Not only profit-making corporations have commercial 
interests--so do nonprofit corporations, individuals, unions, and other 
associations. The interest of a representative of the news media in 
using the information for news dissemination purposes will not be 
considered a commercial interest.
    (2) If disclosure would further a commercial interest of the 
requester, would that effect outweigh the advancement of the public 
interest defined in paragraph (b) of this section? Which effect is 
primary?
    (d) Deciding between waiver and reduction. If the disclosure passes 
both tests, we will normally waive fees. However, in some cases we may 
decide only to reduce the fees. For example, we may do this when 
disclosure of some but not all of the requested records passes the 
tests.
    (e) Procedure for requesting a waiver or reduction. You must make 
your request for a waiver or reduction at the same time you make your 
request for records. You should explain why you believe a waiver or 
reduction is proper under the analysis in paragraphs (a) through (d) of 
this section. Only FOI Officers may make the decision whether to waive, 
or reduce, the fees. If we do not completely grant your request for a 
waiver or reduction, the denial letter will designate a review official. 
You may appeal the denial to that official. In your appeal letter, you 
should discuss whatever reasons are given in our denial letter. The 
process prescribed in Sec. 402.190 of this part will also apply to these 
appeals.



Sec. 402.190  Officials who may deny a request for records under
FOIA.

    Only the Deputy Executive Director for the Office of Public 
Disclosure, Office of the General Counsel, SSA, or her or his designee 
is authorized to deny a written request to obtain, inspect, or copy any 
social security record.

[62 FR 4154, Jan. 29, 1997, as amended at 68 FR 60295, Oct. 22, 2003]



Sec. 402.195  How a request is denied.

    (a) Oral requests. If we cannot comply with your oral request 
because the Deputy Executive Director for the Office of Public 
Disclosure, Office of the General Counsel (or designee) has not 
previously made a determination to release the record you want, we will 
tell you that fact. If you still wish to pursue your request, you must 
put your request in writing.
    (b) Written requests. If you make a written request and the 
information or record you requested will not be released, we will send 
you an official denial in writing. We will explain why the request was 
denied (for example, the reasons why the requested document is subject 
to one or more clearly described exemptions), will include the name and 
title or position of the person who made the decision, and what your 
appeal rights are.
    (c) Unproductive searches. We make a diligent search for records to 
satisfy your request. Nevertheless, we may not be able always to find 
the records you want using the information you provided, or they may not 
exist. If we advise you that we have been unable to find the records 
despite a diligent search, this does not constitute a denial of your 
request.

[62 FR 4154, Jan. 29, 1997, as amended at 68 FR 60295, Oct. 22, 2003]



Sec. 402.200  How to appeal a decision denying all or part of a request.

    (a) How to appeal. If all or part of your written request was 
denied, you may request that the Commissioner of Social Security, 6401 
Security Boulevard, Baltimore, MD 21235 review that determination. Your 
request for review:
    (1) Must be in writing;

[[Page 43]]

    (2) Must be mailed within 30 days after you received notification 
that all or part of your request was denied or, if later, 30 days after 
you received materials in partial compliance with your request; and
    (3) May include additional information or evidence to support your 
request.
    (b) How the review is made. After reviewing the prior decision and 
after considering anything else you have submitted, the Commissioner or 
his or her designee will affirm or revise all or part of the prior 
decision. The Commissioner (or a designee) will affirm a denial only 
after consulting with the appropriate SSA official(s), including legal 
counsel. The decision must be made within 20 working days after your 
appeal is received. The Commissioner or a designee may extend this time 
limit up to 10 additional working days if one of the situations in 
Sec. 402.140(a) exists, provided that, if a prior extension was used to 
process this request, the sum of the extensions may not exceed 10 
working days. You will be notified in writing of any extension, the 
reason for the extension, and the date by which your appeal will be 
decided.
    (c) How you are notified of the Commissioner's decision. The 
Commissioner or a designee will send you a written notice of the 
decision explaining the basis of the decision (for example, the reasons 
why an exemption applies) which will include the name and title or 
position of the person who made the decision. The notice will tell you 
that if any part of your request remains unsatisfied, you have the right 
to seek court review.



Sec. 402.205  U.S. District Court action.

    If the Commissioner or a designee, upon review, affirms the denial 
of your request for records, in whole or in part, you may ask a U.S. 
District Court to review that denial. See 5 U.S.C. 552(a)(4)(B). If we 
fail to act on your request for a record or for review of a denial of 
such a request within the time limits in Sec. 402.140(a) or in 
Sec. 402.190(b), you may ask a U.S. District Court to treat this as if 
the Commissioner had denied your request.



PART 403_TESTIMONY BY EMPLOYEES AND THE PRODUCTION OF RECORDS AND
INFORMATION IN LEGAL PROCEEDINGS--Table of Contents



Sec.
403.100  When can an SSA employee testify or produce information or 
          records in legal proceedings?
403.105  What is the relationship between this part and 20 CFR parts 401 
          and 402?
403.110  What special definitions apply to this part?
403.115  When does this part apply?
403.120  How do you request testimony?
403.125  How will we handle requests for records, information, or 
          testimony involving SSA's Office of the Inspector General?
403.130  What factors may the Commissioner consider in determining 
          whether SSA will grant your application for testimony?
403.135  What happens to your application for testimony?
403.140  If the Commissioner authorizes testimony, what will be the 
          scope and form of that testimony?
403.145  What will SSA do if you have not satisfied the conditions in 
          this part or in 20 CFR part 401 or 402?
403.150  Is there a fee for our services?
403.155  Does SSA certify records?

    Authority: Secs. 702(a)(5) and 1106 of the Act, (42 U.S.C. 902(a)(5) 
and 1306); 5 U.S.C. 301; 31 U.S.C. 9701.

    Source: 66 FR 2809, Jan. 12, 2001, unless otherwise noted.



Sec. 403.100  When can an SSA employee testify or produce information 
or records in legal proceedings?

    An SSA employee can testify concerning any function of SSA or any 
information or record created or acquired by SSA as a result of the 
discharge of its official duties in any legal proceeding covered by this 
part only with the prior authorization of the Commissioner. An SSA 
employee can provide records or other information in a legal proceeding 
covered by this part only to the extent that doing so is consistent with 
20 CFR parts 401 and 402. A request for both testimony and records or 
other information is considered two separate requests--one for testimony 
and one for records or other information. SSA maintains a policy of 
strict impartiality with respect to private litigants and seeks to 
minimize the disruption of official duties.

[[Page 44]]



Sec. 403.105  What is the relationship between this part and
20 CFR parts 401 and 402?

    (a) General. Disclosure of SSA's records and information contained 
in those records is governed by the regulations at 20 CFR parts 401 and 
402. SSA employees will not disclose records or information in any legal 
proceeding covered by this part except as permitted by 20 CFR parts 401 
and 402.
    (b) Requests for information or records that do not include 
testimony. (1) If you do not request testimony, Secs. 403.120-403.140 do 
not apply.
    (2) If 20 CFR part 401 or 402 permits disclosure to you of any 
requested record or information, we will make every reasonable effort to 
provide the disclosable information or record to you on or before the 
date specified in your request.
    (3) If neither 20 CFR part 401 nor 402 permits disclosure of 
information or a record you request, we will notify you as provided in 
Sec. 403.145. We will also send you any notices required by part 401 or 
402.



Sec. 403.110  What special definitions apply to this part?

    The following definitions apply:
    (a) Application means a written request for testimony that conforms 
to the requirements of Sec. 403.120.
    (b)(1) Employee includes--
    (i) Any person employed in any capacity by SSA, currently or in the 
past;
    (ii) Any person appointed by, or subject to the supervision, 
jurisdiction, or control of SSA, the Commissioner of Social Security, or 
any other SSA official, currently or in the past; and
    (iii) Any person who is not described elsewhere in this definition 
but whose disclosure of information is subject to the regulations at 20 
CFR part 401, currently or in the past.
    (2) For purposes of this paragraph (b), a person subject to SSA's 
jurisdiction or control includes any person hired as a contractor by 
SSA, any person performing services for SSA under an agreement (such as 
an officer or employee of a State agency involved in determining 
disability for SSA), and any consultant (including medical or vocational 
experts or medical services or consultative examination providers), 
contractor, or subcontractor of such person. Such a person would also 
include any person who has served or is serving in any advisory 
capacity, formal or informal.
    (3) For purposes of this paragraph (b), a person employed by SSA in 
the past is considered an employee only when the matter about which the 
person would testify is one in which he or she was personally involved 
while at SSA; where the matter concerns official information that the 
employee acquired while working, such as sensitive or confidential 
agency information; where the person purports to speak for SSA; or where 
significant SSA resources would be required to prepare the person to 
testify. Such a person would not be considered an employee when the 
person will rely only on expertise or general knowledge he or she 
acquired while working at SSA.
    (c) Commissioner means the Commissioner of Social Security or his or 
her designee(s).
    (d) Legal proceeding includes any pretrial, trial, and post-trial 
stage of any existing or reasonably anticipated judicial or 
administrative action, hearing, investigation, or similar proceeding 
before a court, commission, board, agency, or other tribunal, authority 
or entity, foreign or domestic. Legal proceeding also includes any 
deposition or other pretrial proceeding, including a formal or informal 
request for testimony by an attorney or any other person.
    (e) Record has the same meaning as ``record'' in 20 CFR 402.30.
    (f) Request means any attempt to obtain the production, disclosure, 
or release of information, records, or the testimony of an SSA employee, 
including any order, subpoena, or other command issued in a legal 
proceeding as well as any informal or other attempt (by any method) by a 
party or a party's representative.
    (g) SSA means the Social Security Administration.
    (h) Testimony includes any sworn statement (oral or written), 
including (but not limited to)--

[[Page 45]]

    (1) Any statement provided through personal appearance; deposition; 
or recorded interview; or provided by telephone, television, or 
videotape;
    (2) Any response during discovery or other similar proceedings that 
would involve more than the mere physical production of records; and
    (3) Any declaration made under penalty of perjury or any affidavit.
    (i) We or our means the Social Security Administration.
    (j) You or your means an individual or entity that submits a request 
for records, information or testimony.



Sec. 403.115  When does this part apply?

    (a) Except as specified in paragraph (b) of this section, this part 
applies to any request in connection with any legal proceeding for SSA 
records or other information or for testimony from SSA or its employees. 
This part applies to requests for testimony related to SSA's functions 
or to any information or record created or acquired by SSA as a result 
of the discharge of its official duties.
    (b) This part does not apply to requests for testimony--
    (1) In an SSA administrative proceeding;
    (2) In a legal proceeding to which SSA is a party (``SSA'' here 
includes the Commissioner and any employee acting in his or her official 
capacity);
    (3) From the United States Department of Justice;
    (4) In a criminal proceeding in which the United States is a party;
    (5) In a legal proceeding initiated by state or local authorities 
arising from an investigation or audit initiated by, or conducted in 
cooperation with, SSA's Office of the Inspector General;
    (6) From either house of Congress;
    (7) In a law enforcement proceeding related to threats or acts 
against SSA, its employees, or its operations (``SSA'' here includes the 
Commissioner and any employee acting in his or her official capacity); 
or
    (8) Where Federal law or regulations expressly require a Federal 
employee to provide testimony.



Sec. 403.120  How do you request testimony?

    (a) You must submit a written application for testimony of an SSA 
employee. Your application must-
    (1) Describe in detail the nature and relevance of the testimony 
sought in the legal proceeding;
    (2) Include a detailed explanation as to why you need the testimony, 
why you cannot obtain the information you need from an alternative 
source, and why providing it to you would be in SSA's interest; and
    (3) Provide the date and time that you need the testimony and the 
place where SSA would present it.
    (b) You must submit a complete application to SSA at least 30 days 
in advance of the date that you need the testimony. If your application 
is submitted fewer than 30 days before that date, you must provide, in 
addition to the requirements set out above, a detailed explanation as to 
why--
    (1) You did not apply in a timely fashion; and
    (2) It is in SSA's interest to review the untimely application.
    (c) You must send your application for testimony to: Social Security 
Administration, Office of the General Counsel, Office of General Law, 
6401 Security Boulevard, Room 617 Altmeyer Building, Baltimore, 
Maryland, 21235-6401, Attn: Touhy Officer. (If you are requesting 
testimony of an employee of the Office of the Inspector General, send 
your application to the address in Sec. 403.125.)
    (d) The Commissioner has the sole discretion to waive any 
requirement in this section.
    (e) If your application does not include each of the items required 
by paragraph (a) of this section, we may return it to you for additional 
information. Unless the Commissioner waives one or more requirements, we 
will not process an incomplete or untimely application.

[66 FR 2809, Jan. 12, 2001; 66 FR 14316, Mar. 12, 2001, as amended at 73 
FR 26002, May 8, 2008; 74 FR 16327, Apr. 10, 2009; 79 FR 7577, Feb. 10, 
2014]

[[Page 46]]



Sec. 403.125  How will we handle requests for records, information,
or testimony involving SSA's Office of the Inspector General?

    A request for records or information of the Office of the Inspector 
General or the testimony of an employee of the Office of the Inspector 
General will be handled in accordance with the provisions of this part, 
except that the Inspector General or the Inspector General's designee 
will make those determinations that the Commissioner otherwise would 
make. Send your request for records or information pertaining to the 
Office of the Inspector General or your application for testimony of an 
employee of the Office of the Inspector General to: Office of the 
Inspector General, Social Security Administration, 300 Altmeyer 
Building, 6401 Security Blvd., Baltimore, MD 21235-6401.



Sec. 403.130  What factors may the Commissioner consider in determining
whether SSA will grant your application for testimony?

    In deciding whether to authorize the testimony of an SSA employee, 
the Commissioner will consider applicable law and factors relating to 
your need and the burden to SSA. The considerations include, but are not 
limited to, the following:
    (a) Risk of law violation or compromise of Government privilege. (1) 
Would providing the testimony violate a statute (such as 26 U.S.C. 6103 
or section 1106 of the Social Security Act, 42 U.S.C. 1306), Executive 
Order, or regulation (such as 20 CFR part 401)?
    (2) Would providing the testimony put confidential, sensitive, or 
privileged information at risk?
    (b) Burden on SSA. (1) Would granting the application unduly expend 
for private purposes the resources of the United States (including the 
time of SSA employees needed for official duties)?
    (2) Would the testimony be available in a less burdensome form or 
from another source?
    (3) Would the testimony be limited to the purpose of the request?
    (4) Did you previously request the same testimony in the same or a 
related proceeding?
    (c) Interests served by allowing testimony. (1) Would providing the 
testimony serve SSA's interest?
    (2) Would providing the testimony maintain SSA's policy of 
impartiality among private litigants?
    (3) Is another government agency involved in the proceeding?
    (4) Do you need the testimony to prevent fraud or similar 
misconduct?
    (5) Would providing the testimony be necessary to prevent a 
miscarriage of justice or to preserve the rights of an accused 
individual to due process in a criminal proceeding?



Sec. 403.135  What happens to your application for testimony?

    (a) If 20 CFR part 401 or 402 does not permit disclosure of 
information about which you seek testimony from an SSA employee, we will 
notify you under Sec. 403.145.
    (b) If 20 CFR part 401 or 402 permits disclosure of the information 
about which you seek testimony,
    (1) The Commissioner makes the final decision on your application;
    (2) All final decisions are in the sole discretion of the 
Commissioner; and
    (3) We will notify you of the final decision on your application.



Sec. 403.140  If the Commissioner authorizes testimony, what will
be the scope and form of that testimony?

    The employee's testimony must be limited to matters that were 
specifically approved. We will provide testimony in the form that is 
least burdensome to SSA unless you provide sufficient information in 
your application for SSA to justify a different form. For example, we 
will provide an affidavit or declaration rather than a deposition and a 
deposition rather than trial testimony.



Sec. 403.145  What will SSA do if you have not satisfied the
conditions in this part or in 20 CFR part 401 or 402?

    (a) We will provide the following information, as appropriate, to 
you or the court or other tribunal conducting the legal proceeding if 
your request states that a response is due on a particular date and the 
conditions prescribed in this part, or the conditions for disclosure in 
20 CFR part 401 or 402,

[[Page 47]]

are not satisfied or we anticipate that they will not be satisfied by 
that date:
    (1) A statement that compliance with the request is not authorized 
under 20 CFR part 401 or 402, or is prohibited without the 
Commissioner's approval;
    (2) The requirements for obtaining the approval of the Commissioner 
for testimony or for obtaining information, records, or testimony under 
20 CFR part 401 or 402; and
    (3) If the request complies with Sec. 403.120, the estimated time 
necessary for a decision. We will make every reasonable effort to 
provide this information in writing on or before the date specified in 
your request.
    (b) Generally, if a response to a request for information, records, 
or testimony is due before the conditions of this part or the conditions 
for disclosure in 20 CFR part 401 or 402 are met, no SSA employee will 
appear.
    (c) SSA will seek the advice and assistance of the Department of 
Justice when appropriate.



Sec. 403.150  Is there a fee for our services?

    (a) General. Unless the Commissioner grants a waiver, you must pay 
fees for our services in providing information, records, or testimony. 
You must pay the fees as prescribed by the Commissioner. In addition, 
the Commissioner may require that you pay the fees in advance as a 
condition of providing the information, records, or testimony. Make fees 
payable to the Social Security Administration by check or money order.
    (b) Records or information. Unless the Commissioner grants a waiver, 
you must pay the fees for production of records or information 
prescribed in 20 CFR Secs. 401.95 and 402.155 through 402.185, as 
appropriate.
    (c) Testimony. Unless the Commissioner grants a waiver, you must pay 
fees calculated to reimburse the United States Government for the full 
cost of providing the testimony. Those costs include, but are not 
limited to--
    (1) The salary or wages of the witness and related costs for the 
time necessary to prepare for and provide the testimony and any travel 
time, and
    (2) Other travel costs.
    (d) Waiver or reduction of fees. The Commissioner may waive or 
reduce fees for providing information, records, or testimony under this 
part. The rules in 20 CFR Sec. 402.185 apply in determining whether to 
waive fees for the production of records. In deciding whether to waive 
or reduce fees for testimony or for production of information that does 
not constitute a record, the Commissioner may consider other factors, 
including but not limited to--
    (1) The ability of the party responsible for the application to pay 
the full amount of the chargeable fees;
    (2) The public interest, as described in 20 CFR Sec. 402.185, 
affected by complying with the application;
    (3) The need for the testimony or information in order to prevent a 
miscarriage of justice;
    (4) The extent to which providing the testimony or information 
serves SSA's interest; and
    (5) The burden on SSA's resources required to provide the 
information or testimony.



Sec. 403.155  Does SSA certify records?

    We can certify the authenticity of copies of records we disclose 
pursuant to 20 CFR parts 401 and 402, and this part. We will provide 
this service only in response to your written request. If we certify, we 
will do so at the time of the disclosure and will not certify copies of 
records that have left our custody. A request for certified copies of 
records previously released is considered a new request for records. 
Fees for this certification are set forth in 20 CFR 402.165(e).



PART 404_FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950-)
--Table of Contents



       Subpart A_Introduction, General Provisions and Definitions

Sec.
404.1  Introduction.
404.2  General definitions and use of terms.
404.3  General provisions.

            Subpart B_Insured Status and Quarters of Coverage

                                 General

404.101  Introduction.

[[Page 48]]

404.102  Definitions.

                          Fully Insured Status

404.110  How we determine fully insured status.
404.111  When we consider a person fully insured based on World War II 
          active military or naval service.
404.112  When we consider certain employees of private nonprofit 
          organizations to be fully insured.
404.115  Table for determining the quarters of coverage you need to be 
          fully insured.

                        Currently Insured Status

404.120  How we determine currently insured status.

                        Disability Insured Status

404.130  How we determine disability insured status.
404.131  When you must have disability insured status.
404.132  How we determine fully insured status for a period of 
          disability or disability insurance benefits.
404.133  When we give you quarters of coverage based on military service 
          to establish a period of disability.

                          Quarters of Coverage

404.140  What is a quarter of coverage.
404.141  How we credit quarters of coverage for calendar years before 
          1978.
404.142  How we credit self-employment income to calendar quarters for 
          taxable years beginning before 1978.
404.143  How we credit quarters of coverage for calendar years after 
          1977.
404.144  How we credit self-employment income to calendar years for 
          taxable years beginning after 1977.
404.145  When you acquire a quarter of coverage.
404.146  When a calendar quarter cannot be a quarter of coverage.

Appendix to Subpart B of Part 404--Quarter of Coverage Amounts for 
          Calendar Years After 1978

              Subpart C_Computing Primary Insurance Amounts

                                 General

404.201  What is included in this subpart?
404.202  Other regulations related to this subpart.
404.203  Definitions.
404.204  Methods of computing primary insurance amounts--general.

 Average-Indexed-Monthly Earnings Method of Computing Primary Insurance 
                                 Amounts

404.210  Average-indexed-monthly-earnings method.
404.211  Computing your average indexed monthly earnings.
404.212  Computing your primary insurance amount from your average 
          indexed monthly earnings.
404.213  Computation where you are eligible for a pension based on your 
          noncovered employment.

   Average-Monthly-Wage Method of Computing Primary Insurance Amounts

404.220  Average-monthly-wage method.
404.221  Computing your average monthly wage.
404.222  Use of benefit table in finding your primary insurance amount 
          from your average monthly wage.

Guaranteed Alternative for People Reaching Age 62 After 1978 but Before 
                                  1984

404.230  Guaranteed alternative.
404.231  Steps in computing your primary insurance amount under the 
          guaranteed alternative--general.
404.232  Computing your average monthly wage under the guaranteed 
          alternative.
404.233  Adjustment of your guaranteed alternative when you become 
          entitled after age 62.

         Old-Start Method of Computing Primary Insurance Amounts

404.240  Old-start method--general.
404.241  1977 simplified old-start method.
404.242  Use of old-start primary insurance amount as guaranteed 
          alternative.
404.243  Computation where you are eligible for a pension based on 
          noncovered employment.

   Special Computation Rules for People Who Had a Period of Disability

404.250  Special computation rules for people who had a period of 
          disability.
404.251  Subsequent entitlement to benefits less than 12 months after 
          entitlement to disability benefits ended.
404.252  Subsequent entitlement to benefits 12 months or more after 
          entitlement to disability benefits ended.

                Special Minimum Primary Insurance Amounts

404.260  Special minimum primary insurance amounts.
404.261  Computing your special minimum primary insurance amount.

                        Cost-of-Living Increases

404.270  Cost-of-living increases.

[[Page 49]]

404.271  When automatic cost-of-living increases apply.
404.272  Indexes we use to measure the rise in the cost-of-living.
404.273  When are automatic cost-of-living increases effective?
404.274  What are the measuring periods we use to calculate cost-of-
          living increases?
404.275  How is an automatic cost-of-living increase calculated?
404.276  Publication of notice of increase.
404.277  When does the frozen minimum primary insurance amount increase 
          because of cost-of-living adjustments?
404.278  Additional cost-of-living increase.

                Recomputing Your Primary Insurance Amount

404.280  Recomputations.
404.281  Why your primary insurance amount may be recomputed.
404.282  Effective date of recomputations.
404.283  Recomputation under method other than that used to find your 
          primary insurance amount.
404.284  Recomputations for people who reach age 62, or become disabled, 
          or die before age 62 after 1978.
404.285  Recomputations performed automatically.
404.286  How to request an immediate recomputation.
404.287  Waiver of recomputation.
404.288  Recomputing when you are entitled to a monthly pension based on 
          noncovered employment.

               Recalculations of Primary Insurance Amounts

404.290  Recalculations.

Appendixes to Subpart C of Part 404--Note
Appendix I to Subpart C of Part 404--Average of the Total Wages for 
          Years After 1950
Appendix II to Subpart C of Part 404--Benefit Formulas Used With Average 
          Indexed Monthly Earnings
Appendix III to Subpart C of Part 404--Benefit Table
Appendix IV to Subpart C of Part 404--Earnings Needed for a Year of 
          Coverage After 1950
Appendix V to Subpart C of Part 404--Computing the Special Minimum 
          Primary Insurance Amount and Related Maximum Family Benefits
Appendix VI to Subpart C of Part 404--Percentage of Automatic Increases 
          in Primary Insurance Amounts Since 1978
Appendix VII to Subpart C of Part 404--``Old-Law'' Contribution and 
          Benefit Base

  Subpart D_Old-Age, Disability, Dependents' and Survivors' Insurance 
                     Benefits; Period of Disability

                                 General

404.301  Introduction.
404.302  Other regulations related to this subpart.
404.303  Definitions.
404.304  What are the general rules on benefit amounts?
404.305  When you may not be entitled to benefits.

                     Old-Age and Disability Benefits

404.310  When am I entitled to old-age benefits?
404.311  When does my entitlement to old-age benefits begin and end?
404.312  How is my old-age benefit amount calculated?
404.313  What are delayed retirement credits and how do they increase my 
          old-age benefit amount?
404.315  Who is entitled to disability benefits?
404.316  When entitlement to disability benefits begins and ends.
404.317  How is the amount of my disability benefit calculated?
404.320  Who is entitled to a period of disability.
404.321  When a period of disability begins and ends.
404.322  When you may apply for a period of disability after a delay due 
          to a physical or mental condition.
404.325  The termination month.

 Rules Relating to Continuation of Benefits After Your Impairment Is No 
                            Longer Disabling

404.327  When you are participating in an appropriate program of 
          vocational rehabilitation services, employment services, or 
          other support services.
404.328  When your completion of the program, or your continuation in 
          the program for a specified period of time, will increase the 
          likelihood that you will not have to return to the disability 
          benefit rolls.

                Benefits for Spouses and Divorced Spouses

404.330  Who is entitled to wife's or husband's benefits.
404.331  Who is entitled to wife's or husband's benefits as a divorced 
          spouse.
404.332  When wife's and husband's benefits begin and end.

[[Page 50]]

404.333  Wife's and husband's benefit amounts.
404.335  How do I become entitled to widow's or widower's benefits?
404.336  How do I become entitled to widow's or widower's benefits as a 
          surviving divorced spouse?
404.337  When does my entitlement to widow's and widower's benefits 
          start and end?
404.338  Widow's and widower's benefits amounts.
404.339  How do I become entitled to mother's or father's benefits as a 
          surviving spouse?
404.340  How do I become entitled to mother's or father's benefits as a 
          surviving divorced spouse?
404.341  When mother's and father's benefits begin and end.
404.342  Mother's and father's benefit amounts.
404.344  Your relationship by marriage to the insured.
404.345  Your relationship as wife, husband, widow, or widower under 
          State law.
404.346  Your relationship as wife, husband, widow, or widower based 
          upon a deemed valid marriage.
404.347  ``Living in the same household'' defined.
404.348  When is a child living with me in my care?
404.349  When is a child living apart from me in my care?

                            Child's Benefits

404.350  Who is entitled to child's benefits?
404.351  Who may be reentitled to child's benefits?
404.352  When does my entitlement to child's benefits begin and end?
404.353  Child's benefit amounts.
404.354  Your relationship to the insured.
404.355  Who is the insured's natural child?
404.356  Who is the insured's legally adopted child?
404.357  Who is the insured's stepchild?
404.358  Who is the insured's grandchild or stepgrandchild?
404.359  Who is the insured's equitably adopted child?
404.360  When a child is dependent upon the insured person.
404.361  When a natural child is dependent.
404.362  When a legally adopted child is dependent.
404.363  When is a stepchild dependent?
404.364  When is a grandchild or stepgrandchild dependent?
404.365  When an equitably adopted child is dependent.
404.366  ``Contributions for support,'' ``one-half support,'' and 
          ``living with'' the insured defined--determining first month 
          of entitlement.
404.367  When you are a ``full-time elementary or secondary school 
          student''.
404.368  When you are considered a full-time student during a period of 
          nonattendance.

                            Parent's Benefits

404.370  Who is entitled to parent's benefits?
404.371  When parent's benefits begin and end.
404.373  Parent's benefit amounts.
404.374  Parent's relationship to the insured.

                       Special Payments at Age 72

404.380  General.
404.381  Who is entitled to special age 72 payments?
404.382  When special age 72 payments begin and end.
404.383  Special age 72 payment amounts.
404.384  Reductions, suspensions, and nonpayments of special age 72 
          payments.

                         Lump-Sum Death Payment

404.390  General.
404.391  Who is entitled to the lump-sum death payment as a widow or 
          widower who was living in the same household?
404.392  Who is entitled to the lump-sum death payment when there is no 
          widow(er) who was living in the same household?

      Subpart E_Deductions; Reductions; and Nonpayments of Benefits

404.401  Deduction, reduction, and nonpayment of monthly benefits or 
          lump-sum death payments.
404.401a  When we do not pay benefits because of a disability 
          beneficiary's work activity.
404.402  Interrelationship of deductions, reductions, adjustments, and 
          nonpayment of benefits.
404.403  Reduction where total monthly benefits exceed maximum family 
          benefits payable.
404.404  How reduction for maximum affects insured individual and other 
          persons entitled on his earnings record.
404.405  Situations where total benefits can exceed maximum because of 
          ``savings clause.''
404.406  Reduction for maximum because of retroactive effect of 
          application for monthly benefits.
404.407  Reduction because of entitlement to other benefits.
404.408  Reduction of benefits based on disability on account of receipt 
          of certain other disability benefits provided under Federal, 
          State, or local laws or plans.
404.408a  Reduction where spouse is receiving a Government pension.

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404.408b  Reduction of retroactive monthly social security benefits 
          where supplemental security income (SSI) payments were 
          received for the same period.
404.409  What is full retirement age?
404.410  How does SSA reduce my benefits when my entitlement begins 
          before full retirement age?
404.411  How are benefits reduced for age when a person is entitled to 
          two or more benefits?
404.412  After my benefits are reduced for age when and how will 
          adjustments to that reduction be made?
404.413  After my benefits are reduced for age what happens if there is 
          an increase in my primary insurance amount?
404.415  Deductions because of excess earnings.
404.417  Deductions because of noncovered remunerative activity outside 
          the United States; 45 hour and 7-day work test.
404.418  ``Noncovered remunerative activity outside the United States,'' 
          defined.
404.420  Persons deemed entitled to benefits based on an individual's 
          earnings record.
404.421  How are deductions made when a beneficiary fails to have a 
          child in his or her care?
404.423  Manner of making deductions.
404.424  Total amount of deductions where more than one deduction event 
          occurs in a month.
404.425  Total amount of deductions where deduction events occur in more 
          than 1 month.
404.428  Earnings in a taxable year.
404.429  Earnings; defined.
404.430  Monthly and annual exempt amounts defined; excess earnings 
          defined.
404.434  Excess earnings; method of charging.
404.435  Excess earnings; months to which excess earnings can or cannot 
          be charged; grace year defined.
404.436  Excess earnings; months to which excess earnings cannot be 
          charged because individual is deemed not entitled to benefits.
404.437  Excess earnings; benefit rate subject to deductions because of 
          excess earnings.
404.439  Partial monthly benefits; excess earnings of the individual 
          charged against his benefits and the benefits of persons 
          entitled (or deemed entitled) to benefits on his earnings 
          record.
404.440  Partial monthly benefits; prorated share of partial payment 
          exceeds the benefit before deduction for excess earnings.
404.441  Partial monthly benefits; insured individual and another person 
          entitled (or deemed entitled) on the same earnings record both 
          have excess earnings.
404.446  Definition of ``substantial services'' and ``services''.
404.447  Evaluation of factors involved in substantial services test.
404.450  Required reports of work outside the United States or failure 
          to have care of a child.
404.451  Penalty deductions for failure to report within prescribed time 
          limit noncovered remunerative activity outside the United 
          States or not having care of a child.
404.452  Reports to Social Security Administration of earnings; wages; 
          net earnings from self-employment.
404.453  Penalty deductions for failure to report earnings timely.
404.454  Good cause for failure to make required reports.
404.455  Request by Social Security Administration for reports of 
          earnings and estimated earnings; effect of failure to comply 
          with request.
404.456  Current suspension of benefits because an individual works or 
          engages in self-employment.
404.457  Deductions where taxes neither deducted from wages of certain 
          maritime employees nor paid.
404.458  Limiting deductions where total family benefits payable would 
          not be affected or would be only partly affected.
404.459  Penalty for making false or misleading statements or 
          withholding information.
404.460  Nonpayment of monthly benefits to aliens outside the United 
          States.
404.461  Nonpayment of lump sum after death of alien outside United 
          States for more than 6 months.
404.462  Nonpayment of hospital and medical insurance benefits of alien 
          outside United States for more than 6 months.
404.463  Nonpayment of benefits of aliens outside the United States; 
          ``foreign social insurance system,'' and ``treaty obligation'' 
          exceptions defined.
404.464  How does deportation or removal from the United States affect 
          the receipt of benefits?
404.465  Conviction for subversive activities; effect on monthly 
          benefits and entitlement to hospital insurance benefits.
404.466  Conviction for subversive activities; effect on enrollment for 
          supplementary medical insurance benefits.
404.467  Nonpayment of benefits; individual entitled to disability 
          insurance benefits or childhood disability benefits based on 
          statutory blindness is engaging in substantial gainful 
          activity.
404.468  Nonpayment of benefits to prisoners.
404.469  Nonpayment of benefits where individual has not furnished or 
          applied for a Social Security number.
404.470  Nonpayment of disability benefits due to noncompliance with 
          rules regarding treatment for drug addiction or alcoholism.

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404.471  Nonpayment of disability benefits for trial work period service 
          months upon a conviction of fraudulently concealing work 
          activity.
404.480  Paying benefits in installments: Drug addiction or alcoholism.

Subpart F_Overpayments, Underpayments, Waiver of Adjustment or Recovery 
         of Overpayments, and Liability of a Certifying Officer

404.501  General applicability of section 204 of the Act.
404.502  Overpayments.
404.502a  Notice of right to waiver consideration.
404.503  Underpayments.
404.504  Relation to provisions for reductions and increases.
404.505  Relationship to provisions requiring deductions.
404.506  When waiver may be applied and how to process the request.
404.507  Fault.
404.508  Defeat the purpose of Title II.
404.509  Against equity and good conscience; defined.
404.510  When an individual is ``without fault'' in a deduction 
          overpayment.
404.510a  When an individual is ``without fault'' in an entitlement 
          overpayment.
404.511  When an individual is at ``fault'' in a deduction overpayment.
404.512  When adjustment or recovery of an overpayment will be waived.
404.513  Liability of a certifying officer.
404.515  Collection and compromise of claims for overpayment.
404.520  Referral of overpayments to the Department of the Treasury for 
          tax refund offset--General.
404.521  Notice to overpaid persons.
404.522  Review within SSA that an overpayment is past due and legally 
          enforceable.
404.523  Findings by SSA.
404.524  Review of our records related to the overpayment.
404.525  Suspension of offset.
404.526  Tax refund insufficient to cover amount of overpayment.
404.527  Additional methods for recovery of title II benefit 
          overpayments.
404.530  Are title VIII and title XVI benefits subject to adjustment to 
          recover title II overpayments?
404.535  How much will we withhold from your title VIII and title XVI 
          benefits to recover a title II overpayment?
404.540  Will you receive notice of our intention to apply cross-program 
          recovery?
404.545  When will we begin cross-program recovery from current monthly 
          benefits?

            Subpart G_Filing of Applications and Other Forms

                           General Provisions

404.601  Introduction.
404.602  Definitions.
404.603  You must file an application to receive benefits.

                              Applications

404.610  What makes an application a claim for benefits?
404.611  How do I file an application for Social Security benefits?
404.612  Who may sign an application.
404.613  Evidence of authority to sign an application for another.
404.614  When an application or other form is considered filed.
404.615  Claimant must be alive when an application is filed.
404.617  Pilot program for photographic identification of disability 
          benefit applicants in designated geographic areas.

                 Effective Filing Period of Application

404.620  Filing before the first month you meet the requirements for 
          benefits.
404.621  What happens if I file after the first month I meet the 
          requirements for benefits?
404.622  Limiting an application.
404.623  Am I required to file for all benefits if I am eligible for 
          old-age and husband's or wife's benefits?

                 Filing Date Based on Written Statement

404.630  Use of date of written statement as filing date.
404.631  Statements filed with the Railroad Retirement Board.
404.632  Statements filed with a hospital.

               Deemed Filing Date Based on Misinformation

404.633  Deemed filing date in a case of misinformation.

                        Withdrawal of Application

404.640  Withdrawal of an application.
404.641  Cancellation of a request to withdraw.

                           Subpart H_Evidence

                                 General

404.701  Introduction.
404.702  Definitions.
404.703  When evidence is needed.
404.704  Your responsibility for giving evidence.
404.705  Failure to give requested evidence.
404.706  Where to give evidence.
404.707  Original records or copies as evidence.

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404.708  How we decide what is enough evidence.
404.709  Preferred evidence and other evidence.

                  Evidence of Age, Marriage, and Death

404.715  When evidence of age is needed.
404.716  Type of evidence of age to be given.
404.720  Evidence of a person's death.
404.721  Evidence to presume a person is dead.
404.722  Rebuttal of a presumption of death.
404.723  When evidence of marriage is required.
404.725  Evidence of a valid ceremonial marriage.
404.726  Evidence of common-law marriage.
404.727  Evidence of a deemed valid marriage.
404.728  Evidence a marriage has ended.

               Evidence for Child's and Parent's Benefits

404.730  When evidence of a parent or child relationship is needed.
404.731  Evidence you are a natural parent or child.
404.732  Evidence you are a stepparent or stepchild.
404.733  Evidence you are the legally adopting parent or legally adopted 
          child.
404.734  Evidence you are an equitably adopted child.
404.735  Evidence you are the grandchild or stepgrandchild.
404.736  Evidence of a child's dependency.
404.745  Evidence of school attendance for child age 18 or older.
404.750  Evidence of a parent's support.

                       Other Evidence Requirements

404.760  Evidence of living in the same household with insured person.
404.762  What is acceptable evidence of having a child in my care?
404.770  Evidence of where the insured person had a permanent home.
404.780  Evidence of ``good cause'' for exceeding time limits on 
          accepting proof of support or application for a lump-sum death 
          payment.

                      Subpart I_Records of Earnings

                           General Provisions

404.801  Introduction.
404.802  Definitions.
404.803  Conclusiveness of the record of your earnings.

                     Obtaining Earnings Information

404.810  How to obtain a statement of earnings and a benefit estimate 
          statement.
404.811  The statement of earnings and benefit estimates you requested.
404.812  Statement of earnings and benefit estimates sent without 
          request.

                     Correcting the Earnings Record

404.820  Filing a request for correction of the record of your earnings.
404.821  Correction of the record of your earnings before the time limit 
          ends.
404.822  Correction of the record of your earnings after the time limit 
          ends.
404.823  Correction of the record of your earnings for work in the 
          employ of the United States.

         Notice of Removal or Reduction of an Entry of Earnings

404.830  Notice of removal or reduction of your wages.
404.831  Notice of removal or reduction of your self-employment income.

 Subpart J_Determinations, Administrative Review Process, and Reopening 
                     of Determinations and Decisions

          Introduction, Definitions, and Initial Determinations

404.900  Introduction.
404.901  Definitions.
404.902  Administrative actions that are initial determinations.
404.903  Administrative actions that are not initial determinations.
404.904  Notice of the initial determination.
404.905  Effect of an initial determination.
404.906  Testing modifications to the disability determination 
          procedures.

                             Reconsideration

404.907  Reconsideration--general.
404.908  Parties to a reconsideration.
404.909  How to request reconsideration.
404.911  Good cause for missing the deadline to request review.
404.913  Reconsideration procedures.
404.914  Disability hearing--general.
404.915  Disability hearing--disability hearing officers.
404.916  Disability hearing--procedures.
404.917  Disability hearing--disability hearing officer's reconsidered 
          determination.
404.918  Disability hearing--review of the disability hearing officer's 
          reconsidered determination before it is issued.
404.919  Notice of another person's request for reconsideration.
404.920  Reconsidered determination.
404.921  Effect of a reconsidered determination.
404.922  Notice of a reconsidered determination.

                        Expedited Appeals Process

404.923  Expedited appeals process--general.
404.924  When the expedited appeals process may be used.

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404.925  How to request expedited appeals process.
404.926  Agreement in expedited appeals process.
404.927  Effect of expedited appeals process agreement.
404.928  Expedited appeals process request that does not result in 
          agreement.

               Hearing Before an Administrative Law Judge

404.929  Hearing before an administrative law judge--general.
404.930  Availability of a hearing before an administrative law judge.
404.932  Parties to a hearing before an administrative law judge.
404.933  How to request a hearing before an administrative law judge.
404.935  Submitting written evidence to an administrative law judge.
404.936  Time and place for a hearing before an administrative law 
          judge.
404.937  Protecting the safety of the public and our employees in our 
          hearing process.
404.938  Notice of a hearing before an administrative law judge.
404.939  Objections to the issues.
404.940  Disqualification of the administrative law judge.
404.941  Prehearing case review.
404.942  Prehearing proceedings and decisions by attorney advisors.
404.943  Responsibilities of the adjudication officer.

               Administrative Law Judge Hearing Procedures

404.944  Administrative law judge hearing procedures--general.
404.946  Issues before an administrative law judge.
404.948  Deciding a case without an oral hearing before an 
          administrative law judge.
404.949  Presenting written statements and oral arguments.
404.950  Presenting evidence at a hearing before an administrative law 
          judge.
404.951  When a record of a hearing before an administrative law judge 
          is made.
404.952  Consolidated hearing before an administrative law judge.
404.953  The decision of an administrative law judge.
404.955  The effect of an administrative law judge's decision.
404.956  Removal of a hearing request from an administrative law judge 
          to the Appeals Council.
404.957  Dismissal of a request for a hearing before an administrative 
          law judge.
404.958  Notice of dismissal of a request for a hearing before an 
          administrative law judge.
404.959  Effect of dismissal of a request for a hearing before an 
          administrative law judge.
404.960  Vacating a dismissal of a request for a hearing before an 
          administrative law judge.
404.961  Prehearing and posthearing conferences.
404.965  [Reserved]

                         Appeals Council Review

404.966  Testing elimination of the request for Appeals Council review.
404.967  Appeals Council review--general.
404.968  How to request Appeals Council review.
404.969  Appeals Council initiates review.
404.970  Cases the Appeals Council will review.
404.971  Dismissal by Appeals Council.
404.972  Effect of dismissal of request for Appeals Council review.
404.973  Notice of Appeals Council review.
404.974  Obtaining evidence from Appeals Council.
404.975  Filing briefs with the Appeals Council.
404.976  Procedures before Appeals Council on review.
404.977  Case remanded by Appeals Council.
404.979  Decision of Appeals Council.
404.981  Effect of Appeals Council's decision or denial of review.
404.982  Extension of time to file action in Federal district court.

                           Court Remand Cases

404.983  Case remanded by a Federal court.
404.984  Appeals Council review of administrative law judge decision in 
          a case remanded by a Federal court.
404.985  Application of circuit court law.

           Reopening and Revising Determinations and Decisions

404.987  Reopening and revising determinations and decisions.
404.988  Conditions for reopening.
404.989  Good cause for reopening.
404.990  Finality of determinations and decisions on revision of an 
          earnings record.
404.991  Finality of determinations and decisions to suspend benefit 
          payments for entire taxable year because of earnings.
404.991a  Late completion of timely investigation.
404.992  Notice of revised determination or decision.
404.993  Effect of revised determination or decision.
404.994  Time and place to request a hearing on revised determination or 
          decision.
404.995  Finality of findings when later claim is filed on same earnings 
          record.
404.996  Increase in future benefits where time period for reopening 
          expires.

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                   Payment of Certain Travel Expenses

404.999a  Payment of certain travel expenses--general.
404.999b  Who may be reimbursed.
404.999c  What travel expenses are reimbursable.
404.999d  When and how to claim reimbursement.

Subpart K_Employment, Wages, Self-Employment, and Self-Employment Income

404.1001  Introduction.
404.1002  Definitions.

                               Employment

404.1003  Employment.
404.1004  What work is covered as employment?
404.1005  Who is an employee.
404.1006  Corporation officer.
404.1007  Common-law employee.
404.1008  Agent-driver or commission-driver, full-time life insurance 
          salesman, home worker, or traveling or city salesman.
404.1009  Who is an employer.
404.1010  Farm crew leader as employer.

                      Work Excluded From Employment

404.1012  Work excluded from employment.
404.1013  Included-excluded rule.
404.1014  Domestic service by a student for a local college club, 
          fraternity or sorority.
404.1015  Family services.
404.1016  Foreign agricultural workers.
404.1017  Sharefarmers.
404.1018  Work by civilians for the United States Government or its 
          instrumentalities--wages paid after 1983.
404.1018a  Work by civilians for the United States Government or its 
          instrumentalities--remuneration paid prior to 1984.
404.1018b  Medicare qualified government employment.
404.1019  Work as a member of a uniformed service of the United States.
404.1020  Work for States and their political subdivisions and 
          instrumentalities.
404.1021  Work for the District of Columbia.
404.1022  American Samoa, Guam, or the Commonwealth of the Northern 
          Mariana Islands.
404.1023  Ministers of churches and members of religious orders.
404.1024  Election of coverage by religious orders.
404.1025  Work for religious, charitable, educational, or certain other 
          organizations exempt from income tax.
404.1026  Work for a church or qualified church-controlled organization.
404.1027  Railroad work.
404.1028  Student working for a school, college, or university.
404.1029  Student nurses.
404.1030  Delivery and distribution or sale of newspapers, shopping 
          news, and magazines.
404.1031  Fishing.
404.1032  Work for a foreign government.
404.1033  Work for a wholly owned instrumentality of a foreign 
          government.
404.1034  Work for an international organization.
404.1035  Work for a communist organization.
404.1036  Certain nonresident aliens.
404.1037  Work on or in connection with a non-American vessel or 
          aircraft.
404.1038  Domestic employees under age 18.

       Exemption From Social Security by Reason of Religous Belief

404.1039  Employers (including partnerships) and employees who are both 
          members of certain religious groups opposed to insurance.

                                  Wages

404.1041  Wages.
404.1042  Wages when paid and received.
404.1043  Facilities or privileges--meals and lodging.
404.1044  Vacation pay.
404.1045  Employee expenses.
404.1046  Pay for work by certain members of religious orders.
404.1047  Annual wage limitation.
404.1048  Contribution and benefit base after 1992.
404.1049  Payments under an employer plan or system.
404.1050  Retirement payments.
404.1051  Payments on account of sickness or accident disability, or 
          related medical or hospitalization expenses.
404.1052  Payments from or to certain tax-exempt trusts or payments 
          under or into certain annuity plans.
404.1053  ``Qualified benefits'' under a cafeteria plan.
404.1054  Payments by an employer of employee's tax or employee's 
          contribution under State law.
404.1055  Payments for agricultural labor.
404.1056  Explanation of agricultural labor.
404.1057  Domestic service in the employer's home.
404.1058  Special situations.
404.1059  Deemed wages for certain individuals interned during World War 
          II.
404.1060  [Reserved]

                             Self-Employment

404.1065  Self-employment coverage.
404.1066  Trade or business in general.
404.1068  Employees who are considered self-employed.
404.1069  Real estate agents and direct sellers.
404.1070  Christian Science practitioners.

[[Page 56]]

404.1071  Ministers and members of religious orders.
404.1073  Public office.
404.1074  Farm crew leader who is self-employed.
404.1075  Members of certain religious groups opposed to insurance.
404.1077  Individuals under railroad retirement system.

                         Self-Employment Income

404.1080  Net earnings from self-employment.
404.1081  General rules for figuring net earnings from self-employment.
404.1082  Rentals from real estate; material participation.
404.1083  Dividends and interest.
404.1084  Gain or loss from disposition of property; capital assets; 
          timber, coal, and iron ore; involuntary conversion.
404.1085  Net operating loss deduction.
404.1086  Community income.
404.1087  Figuring partner's net earnings from self-employment for 
          taxable year which ends as a result of death.
404.1088  Retirement payment to retired partners.
404.1089  Figuring net earnings for residents and nonresidents of Puerto 
          Rico.
404.1090  Personal exemption deduction.
404.1091  Figuring net earnings for ministers and members of religious 
          orders.
404.1092  Figuring net earnings for U.S. citizens or residents living 
          outside the United States.
404.1093  Possession of the United States.
404.1094  Options available for figuring net earnings from self-
          employment.
404.1095  Agricultural trade or business.
404.1096  Self-employment income.

Subpart L [Reserved]

     Subpart M_Coverage of Employees of State and Local Governments

                                 General

404.1200  General.
404.1201  Scope of this subpart regarding coverage and wage reports and 
          adjustments.
404.1202  Definitions.
404.1203  Evidence--for wages paid prior to 1987.
404.1204  Designating officials to act on behalf of the State.

                 What Groups of Employees May Be Covered

404.1205  Absolute coverage groups.
404.1206  Retirement system coverage groups.
404.1207  Divided retirement system coverage groups.
404.1208  Ineligible employees.
404.1209  Mandatorily excluded services.
404.1210  Optionally excluded services.
404.1211  Interstate instrumentalities.
404.1212  Police officers and firefighters.

         How Coverage Under Agreements Is Obtained and Continues

404.1214  Agreement for coverage.
404.1215  Modification of agreement.
404.1216  Modification of agreement to correct an error.
404.1217  Continuation of coverage.
404.1218  Resumption of coverage.
404.1219  Dissolution of political subdivision.

                    How To Identify Covered Employees

404.1220  Identification numbers.

                  What Records of Coverage Must Be Kept

404.1225  Records--for wages paid prior to 1987.

            Review of Compliance by State With Its Agreement

404.1230  Onsite review program.
404.1231  Scope of review.
404.1232  Conduct of review.
404.1234  Reports of review's findings.

   How To Report Wages and Contributions--for Wages Paid Prior to 1987

404.1237  Wage reports and contribution returns--general--for wages paid 
          prior to 1987.
404.1239  Wage reports for employees performing services in more than 
          one coverage group--for wages paid prior to 1987.
404.1242  Back pay.
404.1243  Use of reporting forms--for wages paid prior to 1987.
404.1247  When to report wages--for wages paid prior to 1987.
404.1249  When and where to make deposits of contributions and to file 
          contribution returns and wage reports--for wages paid prior to 
          1987.
404.1251  Final reports--for wages paid prior to 1987.

 What Is a State's Liability for Contributions--for Wages Paid Prior to 
                                  1987

404.1255  State's liability for contributions--for wages paid prior to 
          1987.
404.1256  Limitation on State's liability for contributions for multiple 
          employment situations--for wages paid prior to 1987.

 Figuring the Amount of the State's Contributions--for Wages Paid Prior 
                                 to 1987

404.1260  Amount of contributions--for wages paid prior to 1987.
404.1262  Manner of payment of contributions by State--for wages paid 
          prior to 1987.

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404.1263  When fractional part of a cent may be disregarded--for wages 
          paid prior to 1987.

 If a State Fails To Make Timely Payments--for Wages Paid Prior to 1987

404.1265  Addition of interest to contributions--for wages paid prior to 
          1987.
404.1267  Failure to make timely payments--for wages paid prior to 1987.

  How Errors in Reports and Contributions Are Adjusted--for Wages Paid 
                              Prior to 1987

404.1270  Adjustments in general--for wages paid prior to 1987.
404.1271  Adjustment of overpayment of contributions--for wages paid 
          prior to 1987.
404.1272  Refund or recomputation of overpayments which are not 
          adjustable--for wages paid prior to 1987.
404.1275  Adjustment of employee contributions--for wages paid prior to 
          1987.
404.1276  Reports and payments erroneously made to Internal Revenue 
          Service-transfer of funds--for wages paid prior to 1987.

 How Overpayments of Contributions Are Credited or Refunded--for Wages 
                           Paid Prior to 1987

404.1280  Allowance of credits or refunds--for wages paid prior to 1987.
404.1281  Credits or refunds for periods of time during which no 
          liability exists--for wages paid prior to 1987.
404.1282  Time limitations on credits or refunds--for wages paid prior 
          to 1987.
404.1283  Exceptions to the time limitations on credits or refunds--for 
          wages paid prior to 1987.
404.1284  Offsetting underpayments against overpayments--for wages paid 
          prior to 1987.

 How Assessments for Underpayments of Contributions Are Made--for Wages 
                           Paid Prior to 1987

404.1285  Assessments of amounts due--for wages paid prior to 1987.
404.1286  Time limitations on assessments--for wages paid prior to 1987.
404.1287  Exceptions to the time limitations on assessments--for wages 
          paid prior to 1987.
404.1289  Payment after expiration of time limitation for assessment--
          for wages paid prior to 1987.

Secretary's Review of Decisions on Credits, Refunds, or Assessments--for 
                        Wages Paid Prior to 1987

404.1290  Review of decisions by the Secretary--for wages paid prior to 
          1987.
404.1291  Reconsideration--for wages paid prior to 1987.
404.1292  How to request review--for wages paid prior to 1987.
404.1293  Time for filing request for review--for wages paid prior to 
          1987.
404.1294  Notification to State after reconsideration--for wages paid 
          prior to 1987.
404.1295  Commissioner's review--for wages paid prior to 1987.
404.1296  Commissioner's notification to the State--for wages paid prior 
          to 1987.

  How a State May Seek Court Review of Secretary's Decision--for Wages 
                           Paid Prior to 1987

404.1297  Review by court--for wages paid prior to 1987.
404.1298  Time for filing civil action--for wages paid prior to 1987.
404.1299  Final judgments--for wages paid prior to 1987.

    Subpart N_Wage Credits for Veterans and Members of the Uniformed 
                                Services

                                 General

404.1301  Introduction.
404.1302  Definitions.

                          World War II Veterans

404.1310  Who is a World War II veteran.
404.1311  Ninety-day active service requirement for World War II 
          veterans.
404.1312  World War II service included.
404.1313  World War II service excluded.

                       Post-World War II Veterans

404.1320  Who is a post-World War II veteran.
404.1321  Ninety-day active service requirement for post-World War II 
          veterans.
404.1322  Post-World War II service included.
404.1323  Post-World War II service excluded.

                     Separation From Active Service

404.1325  Separation from active service under conditions other than 
          dishonorable.

                    Members of the Uniformed Services

404.1330  Who is a member of a uniformed service.

             Amounts of Wage Credits and Limits on Their Use

404.1340  Wage credits for World War II and post-World War II veterans.
404.1341  Wage credits for a member of a uniformed service.
404.1342  Limits on granting World War II and post-World War II wage 
          credits.
404.1343  When the limits on granting World War II and post-World War II 
          wage credits do not apply.

[[Page 58]]

             Deemed Insured Status for World War II Veterans

404.1350  Deemed insured status.
404.1351  When deemed insured status does not apply.
404.1352  Benefits and payments based on deemed insured status.

  Effect of Other Benefits on Payment of Social Security Benefits and 
                                Payments

404.1360  Veterans Administration pension or compensation payable.
404.1361  Federal benefit payable other than by Veterans Administration.
404.1362  Treatment of social security benefits or payments where 
          Veterans Administration pension or compensation payable.
404.1363  Treatment of social security benefits or payments where 
          Federal benefit payable other than by Veterans Administration.

    Evidence of Active Service and Membership in a Uniformed Service

404.1370  Evidence of active service and separation from active service.
404.1371  Evidence of membership in a uniformed service during the years 
          1957 through 1967.

    Subpart O_Interrelationship of Old-Age, Survivors and Disability 
         Insurance Program With the Railroad Retirement Program

404.1401  What is the interrelationship between the Railroad Retirement 
          Act and the Old-Age, Survivors and Disability Insurance 
          Program of the Social Security Act?
404.1402  When are railroad industry services by a non-vested worker 
          covered under Social Security?
404.1404  Effective date of coverage of railroad services under the act.
404.1405  If you have been considered a non-vested worker, what are the 
          situations when your railroad industry work will not be 
          covered under Social Security?
404.1406  Eligibility to railroad retirement benefits as a bar to 
          payment of social security benefits.
404.1407  When railroad retirement benefits do not bar payment of social 
          security benefits.
404.1408  Compensation to be treated as wages.
404.1409  Purposes of using compensation.
404.1410  Presumption on basis of certified compensation record.
404.1412  Compensation quarters of coverage.
404.1413  When will we certify payment to the Railroad Retirement Board 
          (RRB)?

             Subpart P_Determining Disability and Blindness

                                 General

404.1501  Scope of subpart.
404.1502  General definitions and terms for this subpart.

                             Determinations

404.1503  Who makes disability and blindness determinations.
404.1503a  Program integrity.
404.1503b  Evidence from excluded medical sources of evidence.
404.1504  Determinations by other government agencies and 
          nongovernmental entities.

                        Definition of Disability

404.1505  Basic definition of disability.
404.1506  When we will not consider your impairment.
404.1508  [Reserved]
404.1509  How long the impairment must last.
404.1510  Meaning of substantial gainful activity.
404.1511  Definition of disabling impairment.

                                Evidence

404.1512  Responsibility for evidence.
404.1513  Categories of evidence.
404.1513a  Evidence from our Federal or State agency medical or 
          psychological consultants.
404.1514  When we will purchase existing evidence.
404.1515  Where and how to submit evidence.
404.1516  If you fail to submit medical and other evidence.
404.1517  Consultative examination at our expense.
404.1518  If you do not appear at a consultative examination.

Standards To Be Used in Determining When a Consultative Examination Will 
        Be Obtained in Connection With Disability Determinations

404.1519  The consultative examination.
404.1519a  When we will purchase a consultative examination and how we 
          will use it.
404.1519b  When we will not purchase a consultative examination.

        Standards for the Type of Referral and for Report Content

404.1519f  Type of purchased examinations.
404.1519g  Who we will select to perform a consultative examination.
404.1519h  Your medical source.
404.1519i  Other sources for consultative examinations.

[[Page 59]]

404.1519j  Objections to the medical source designated to perform the 
          consultative examination.
404.1519k  Purchase of medical examinations, laboratory tests, and other 
          services.
404.1519m  Diagnostic tests or procedures.
404.1519n  Informing the medical source of examination scheduling, 
          report content, and signature requirements.
404.1519o  When a properly signed consultative examination report has 
          not been received.
404.1519p  Reviewing reports of consultative examinations.
404.1519q  Conflict of interest.

             Authorizing and Monitoring the Referral Process

404.1519s  Authorizing and monitoring the consultative examination.

           Procedures To Monitor the Consultative Examination

404.1519t  Consultative examination oversight.

                        Evaluation of Disability

404.1520  Evaluation of disability in general.
404.1520a  Evaluation of mental impairments.
404.1520b  How we consider evidence.
404.1520c  How we consider and articulate medical opinions and prior 
          administrative medical findings for claims filed on or after 
          March 27, 2017.
404.1521  Establishing that you have a medically determinable 
          impairment(s).
404.1522  What we mean by an impairment(s) that is not severe.
404.1523  Multiple impairments.

                         Medical Considerations

404.1525  Listing of Impairments in appendix 1.
404.1526  Medical equivalence.
404.1527  Evaluating opinion evidence for claims filed before March 27, 
          2017.
404.1528  [Reserved]
404.1529  How we evaluate symptoms, including pain.
404.1530  Need to follow prescribed treatment.
404.1535  How we will determine whether your drug addiction or 
          alcoholism is a contributing factor material to the 
          determination of disability.
404.1536  Treatment required for individuals whose drug addiction or 
          alcoholism is a contributing factor material to the 
          determination of disability.
404.1537  What we mean by appropriate treatment.
404.1538  What we mean by approved institutions or facilities.
404.1539  How we consider whether treatment is available.
404.1540  Evaluating compliance with the treatment requirements.
404.1541  Establishment and use of referral and monitoring agencies.

                      Residual Functional Capacity

404.1545  Your residual functional capacity.
404.1546  Responsibility for assessing your residual functional 
          capacity.

                        Vocational Considerations

404.1560  When we will consider your vocational background.
404.1562  Medical-vocational profiles showing an inability to make an 
          adjustment to other work.
404.1563  Your age as a vocational factor.
404.1564  Your education as a vocational factor.
404.1565  Your work experience as a vocational factor.
404.1566  Work which exists in the national economy.
404.1567  Physical exertion requirements.
404.1568  Skill requirements.
404.1569  Listing of Medical-Vocational Guidelines in appendix 2.
404.1569a  Exertional and nonexertional limitations.

                      Substantial Gainful Activity

404.1571  General.
404.1572  What we mean by substantial gainful activity.
404.1573  General information about work activity.
404.1574  Evaluation guides if you are an employee.
404.1574a  When and how we will average your earnings.
404.1575  Evaluation guides if you are self-employed.
404.1576  Impairment-related work expenses.

            Widows, Widowers, and Surviving Divorced Spouses

404.1577  Disability defined for widows, widowers, and surviving 
          divorced spouses for monthly benefits payable for months prior 
          to January 1991.
404.1578  How we determine disability for widows, widowers, and 
          surviving divorced spouses for monthly benefits payable for 
          months prior to January 1991.
404.1579  How we will determine whether your disability continues or 
          ends.

                                Blindness

404.1581  Meaning of blindness as defined in the law.
404.1582  A period of disability based on blindness.
404.1583  How we determine disability for blind persons who are age 55 
          or older.

[[Page 60]]

404.1584  Evaluation of work activity of blind people.
404.1585  Trial work period for persons age 55 or older who are blind.
404.1586  Why and when we will stop your cash benefits.
404.1587  Circumstances under which we may suspend and terminate your 
          benefits before we make a determination.

                    Continuing or Stopping Disability

404.1588  Your responsibility to tell us of events that may change your 
          disability status.
404.1589  We may conduct a review to find out whether you continue to be 
          disabled.
404.1590  When and how often we will conduct a continuing disability 
          review.
404.1591  If your medical recovery was expected and you returned to 
          work.
404.1592  The trial work period.
404.1592a  The reentitlement period.
404.1592b  What is expedited reinstatement?
404.1592c  Who is entitled to expedited reinstatement?
404.1592d  How do I request reinstatement?
404.1592e  How do we determine provisional benefits?
404.1592f  How do we determine reinstated benefits?
404.1593  Medical evidence in continuing disability review cases.
404.1594  How we will determine whether your disability continues or 
          ends.
404.1595  When we determine that you are not now disabled.
404.1596  Circumstances under which we may suspend and terminate your 
          benefits before we make a determination.
404.1597  After we make a determination that you are not now disabled.
404.1597a  Continued benefits pending appeal of a medical cessation 
          determination.
404.1598  If you become disabled by another impairment(s).
404.1599  Work incentive experiments and rehabilitation demonstration 
          projects in the disability program.

Appendix 1 to Subpart P of Part 404--Listing of Impairments
Appendix 2 to Subpart P of Part 404--Medical-Vocational Guidelines

                 Subpart Q_Determinations of Disability

                           General Provisions

404.1601  Purpose and scope.
404.1602  Definitions.
404.1603  Basic responsibilities for us and the State.

  Responsibilities for Performing the Disability Determination Function

404.1610  How a State notifies us that it wishes to perform the 
          disability determination function.
404.1611  How we notify a State whether it may perform the disability 
          determination function.
404.1613  Disability determinations the State makes.
404.1614  Responsibilities for obtaining evidence to make disability 
          determinations.
404.1615  Making disability determinations.
404.1616  Medical consultants and psychological consultants.
404.1617  Reasonable efforts to obtain review by a physician, 
          psychiatrist, and psychologist.
404.1618  Notifying claimants of the disability determination.

                     Quick Disability Determinations

404.1619  Quick disability determination process.

            Administrative Responsibilities and Requirements

404.1620  General administrative requirements.
404.1621  Personnel.
404.1622  Training.
404.1623  Facilities.
404.1624  Medical and other purchased services.
404.1625  Records and reports.
404.1626  Fiscal.
404.1627  Audits.
404.1628  Property.
404.1629  Participation in research and demonstration projects.
404.1630  Coordination with other agencies.
404.1631  Confidentiality of information and records.
404.1632  Other Federal laws and regulations.
404.1633  Policies and operating instructions.

                          Performance Standards

404.1640  General.
404.1641  Standards of performance.
404.1642  Processing time standards.
404.1643  Performance accuracy standard.
404.1644  How and when we determine whether the processing time 
          standards are met.
404.1645  How and when we determine whether the performance accuracy 
          standard is met.
404.1650  Action we will take if a State agency does not meet the 
          standards.

                   Performance Monitoring and Support

404.1660  How we will monitor.
404.1661  When we will provide performance support.
404.1662  What support we will provide.

                           Substantial Failure

404.1670  General.
404.1671  Good cause for not following the Act, our regulations, or 
          other written guidelines.
404.1675  Finding of substantial failure.

[[Page 61]]

                          Hearings and Appeals

404.1680  Notice of right to hearing on proposed finding of substantial 
          failure.
404.1681  Disputes on matters other than substantial failure.
404.1682  Who conducts the hearings.
404.1683  Hearings and appeals process.

             Assumption of Disability Determination Function

404.1690  Assumption when we make a finding of substantial failure.
404.1691  Assumption when State no longer wishes to perform the 
          disability determination function.
404.1692  Protection of State employees.
404.1693  Limitation on State expenditures after notice.
404.1694  Final accounting by the State.

                   Subpart R_Representation of Parties

404.1700  Introduction.
404.1703  Definitions.
404.1705  Who may be your representative.
404.1706  Notification of options for obtaining attorney representation.
404.1707  Appointing a representative.
404.1710  Authority of a representative.
404.1713  Mandatory use of electronic services.
404.1715  Notice or request to a representative.
404.1717  Direct payment of fees to eligible non-attorney 
          representatives.
404.1720  Fee for a representative's services.
404.1725  Request for approval of a fee.
404.1728  Proceedings before a State or Federal court.
404.1730  Payment of fees.
404.1735  [Reserved]
404.1740  Rules of conduct and standards of responsibility for 
          representatives.
404.1745  Violations of our requirements, rules, or standards.
404.1750  Notice of charges against a representative.
404.1755  Withdrawing charges against a representative.
404.1765  Hearing on charges.
404.1770  Decision by hearing officer.
404.1775  Requesting review of the hearing officer's decision.
404.1776  Assignment of request for review of the hearing officer's 
          decision.
404.1780  Appeals Council's review of hearing officer's decision.
404.1785  Evidence permitted on review.
404.1790  Appeals Council's decision.
404.1795  When the Appeals Council will dismiss a request for review.
404.1797  Reinstatement after suspension--period of suspension expired.
404.1799  Reinstatement after suspension or disqualification--period of 
          suspension not expired.

                      Subpart S_Payment Procedures

404.1800  Introduction.
404.1805  Paying benefits.
404.1807  Monthly payment day.
404.1810  Expediting benefit payments.
404.1815  Withholding certification or payments.
404.1820  Transfer or assignment of payments.
404.1821  Garnishment of payments after disbursement.
404.1825  Joint payments to a family.

                    Subpart T_Totalization Agreements

                           General Provisions

404.1901  Introduction.
404.1902  Definitions.
404.1903  Negotiating totalization agreements.
404.1904  Effective date of a totalization agreement.
404.1905  Termination of agreements.

                           Benefit Provisions

404.1908  Crediting foreign periods of coverage.
404.1910  Person qualifies under more than one totalization agreement.
404.1911  Effects of a totalization agreement on entitlement to hospital 
          insurance benefits.

                           Coverage Provisions

404.1913  Precluding dual coverage.
404.1914  Certificate of coverage.
404.1915  Payment of contributions.

                         Computation Provisions

404.1918  How benefits are computed.
404.1919  How benefits are recomputed.
404.1920  Supplementing the U.S. benefit if the total amount of the 
          combined benefits is less than the U.S. minimum benefit.
404.1921  Benefits of less than $1 due.

                            Other Provisions

404.1925  Applications.
404.1926  Evidence.
404.1927  Appeals.
404.1928  Effect of the alien non-payment provision.
404.1929  Overpayments.
404.1930  Disclosure of information.

                    Subpart U_Representative Payment

404.2001  Introduction.
404.2010  When payment will be made to a representative payee.
404.2011  What happens to your monthly benefits while we are finding a 
          suitable representative payee for you?

[[Page 62]]

404.2015  Information considered in determining whether to make 
          representative payments.
404.2020  Information considered in selecting a representative payee.
404.2021  What is our order of preference in selecting a representative 
          payee for you?
404.2022  Who may not serve as a representative payee?
404.2024  How do we investigate a representative payee applicant?
404.2025  What information must a representative payee report to us?
404.2030  How will we notify you when we decide you need a 
          representative payee?
404.2035  What are the responsibilities of your representative payee?
404.2040  Use of benefit payments.
404.2040a  Compensation for qualified organizations serving as 
          representative payees.
404.2041  Who is liable if your representative payee misuses your 
          benefits?
404.2045  Conservation and investment of benefit payments.
404.2050  When will we select a new representative payee for you?
404.2055  When representative payment will be stopped.
404.2060  Transfer of accumulated benefit payments.
404.2065  How does your representative payee account for the use of 
          benefits?

        Subpart V_Payments for Vocational Rehabilitation Services

                           General Provisions

404.2101  General.
404.2102  Purpose and scope.
404.2103  Definitions.
404.2104  Participation by State VR agencies or alternate participants.
404.2106  Basic qualifications for alternate participants.

                           Payment Provisions

404.2108  Requirements for payment.
404.2109  Responsibility for making payment decisions.
404.2110  What we mean by ``SGA'' and by ``a continuous period of 9 
          months''.
404.2111  Criteria for determining when VR services will be considered 
          to have contributed to a continuous period of 9 months.
404.2112  Payment for VR services in a case where an individual 
          continues to receive disability payments based on 
          participation in an approved VR program.
404.2114  Services for which payment may be made.
404.2115  When services must have been provided.
404.2116  When claims for payment for VR services must be made (filing 
          deadlines).
404.2117  What costs will be paid.

                        Administrative Provisions

404.2118  Applicability of these provisions to alternate participants.
404.2119  Method of payment.
404.2120  Audits.
404.2121  Validation reviews.
404.2122  Confidentiality of information and records.
404.2123  Other Federal laws and regulations.
404.2127  Resolution of disputes.



       Subpart A_Introduction, General Provisions and Definitions

    Authority: Secs. 203, 205(a), 216(j), and 702(a)(5) of the Social 
Security Act (42 U.S.C. 403, 405(a), 416(j), and 902(a)(5)) and 48 
U.S.C. 1801.



Sec. 404.1  Introduction.

    The regulations in this part 404 (Regulations No. 4 of the Social 
Security Administration) relate to the provisions of title II of the 
Social Security Act as amended on August 28, 1950, and as further 
amended thereafter. The regulations in this part are divided into 22 
subparts:
    (a) Subpart A contains provisions relating to general definitions 
and use of terms.
    (b) Subpart B relates to quarters of coverage and insured status 
requirements.
    (c) Subpart C relates to the computation and recomputation of the 
primary insurance amount.
    (d) Subpart D relates to the requirements for entitlement to monthly 
benefits and to the lump-sum death payment duration of entitlement and 
benefit rates.
    (e) Subpart E contains provisions relating to the reduction and 
increase of insurance benefits and to deductions from benefits and lump-
sum death payments.
    (f) Subpart F relates to overpayments, underpayments, waiver of 
adjustment or recovery of overpayments and liability of certifying 
officers.
    (g) Subpart G relates to filing of applications and other forms.
    (h) Subpart H relates to evidentiary requirements for establishing 
an initial and continuing right to monthly benefits and for establishing 
a right to lump-sum death payment. (Evidentiary requirements relating to 
disability are contained in subpart P.)

[[Page 63]]

    (i) Subpart I relates to maintenance and revision of records of 
wages and self-employment income.
    (j) Subpart J relates to initial determinations, the administrative 
review process, and reopening of determinations and decisions.
    (k) Subpart K relates to employment, wages, self-employment and 
self-employment income.
    (l) Subpart L is reserved.
    (m) Subpart M relates to coverage of employees of State and local 
Governments.
    (n) Subpart N relates to benefits in cases involving veterans.
    (o) Subpart O relates to the interrelationship of the old-age, 
survivors and disability insurance program with the railroad retirement 
program.
    (p) Subpart P relates to the determination of disability or 
blindness.
    (q) Subpart Q relates to standards, requirements and procedures for 
States making determinations of disability for the Commissioner. It also 
sets out the Commissioner's responsibilities in carrying out the 
disability determination function.
    (r) Subpart R relates to the provisions applicable to attorneys and 
other individuals who represent applicants in connection with claims for 
benefits.
    (s) Subpart S relates to the payment of benefits to individuals who 
are entitled to benefits.
    (t) Subpart T relates to the negotiation and administration of 
totalization agreements between the United States and foreign countries.
    (u) Subpart U relates to the selection of a representative payee to 
receive benefits on behalf of a beneficiary and to the duties and 
responsibilities of a representative payee.
    (v) Subpart V relates to payments to State vocational rehabilitative 
agencies (or alternate participants) for vocational rehabilitation 
services.

[26 FR 7054, Aug. 5, 1961; 26 FR 7760, Aug. 19, 1961, as amended at 27 
FR 4513, May 11, 1962; 28 FR 14492, Dec. 31, 1963; 51 FR 11718, Apr. 7, 
1986; 62 FR 38450, July 18, 1997]



Sec. 404.2  General definitions and use of terms.

    (a) Terms relating to the Act and regulations. (1) The Act means the 
Social Security Act, as amended (42 U.S.C. Chapter 7).
    (2) Section means a section of the regulations in part 404 of this 
chapter unless the context indicates otherwise.
    (b) Commissioner; Appeals Council; Administrative Law Judge defined. 
(1) Commissioner means the Commissioner of Social Security.
    (2) Appeals Council means the Appeals Council of the Office of 
Hearings and Appeals in the Social Security Administration or such 
member or members thereof as may be designated by the Chairman.
    (3) Administrative Law Judge means an Administrative Law Judge in 
the Office of Hearings and Appeals in the Social Security 
Administration.
    (c) Miscellaneous. (1) Certify, when used in connection with the 
duty imposed on the Commissioner by section 205(i) of the act, means 
that action taken by the Administration in the form of a written 
statement addressed to the Managing Trustee, setting forth the name and 
address of the person to whom payment of a benefit or lump sum, or any 
part thereof, is to be made, the amount to be paid, and the time at 
which payment should be made.
    (2) Benefit means an old-age insurance benefit, disability insurance 
benefit, wife's insurance benefit, husband's insurance benefit, child's 
insurance benefit, widow's insurance benefit, widower's insurance 
benefit, mother's insurance benefit, father's insurance benefit, 
parent's insurance benefit, or special payment at age 72 under title II 
of the Act. (Lump sums, which are death payments under title II of the 
Act, are excluded from the term benefit as defined in this part to 
permit greater clarity in the regulations.)
    (3) Lump sum means a lump-sum death payment under title II of the 
act or any person's share of such a payment.
    (4) Attainment of age. An individual attains a given age on the 
first moment of the day preceding the anniversary of his birth 
corresponding to such age.
    (5) State, unless otherwise indicated, includes:
    (i) The District of Columbia,
    (ii) The Virgin Islands,

[[Page 64]]

    (iii) The Commonwealth of Puerto Rico effective January 1, 1951,
    (iv) Guam and American Samoa, effective September 13, 1960, 
generally, and for purposes of sections 210(a) and 211 of the Act 
effective after 1960 with respect to service performed after 1960, and 
effective for taxable years beginning after 1960 with respect to 
crediting net earnings from self-employment and self-employment income,
    (v) The Territories of Alaska and Hawaii prior to January 3, 1959, 
and August 21, 1959, respectively, when those territories acquired 
statehood, and
    (vi) The Commonwealth of the Northern Mariana Islands (CNMI) 
effective January 1, 1987; Social Security coverage for affected 
temporary employees of the government of the CNMI is also effective on 
January 1, 1987, under section 210(a)(7)(E) of the Social Security Act. 
In addition, Social Security coverage for affected non-temporary 
employees of the government of the CNMI is effective on October 1, 2012, 
under section 210(a)(7)(C) of the Social Security Act.
    (6) United States, when used in a geographical sense, includes, 
unless otherwise indicated:
    (i) The States,
    (ii) The Territories of Alaska and Hawaii prior to January 3, 1959, 
and August 21, 1959, respectively, when they acquired statehood,
    (iii) The District of Columbia,
    (iv) The Virgin Islands,
    (v) The Commonwealth of Puerto Rico effective January 1, 1951, (vi) 
Guam and American Samoa, effective September 13, 1960, generally, and 
for purposes of sections 210(a) and 211 of the Act, effective after 1960 
with respect to service performed after 1960, and effective for taxable 
years beginning after 1960 with respect to crediting net earnings from 
self-employment and self-employment income, and
    (vii) The Commonwealth of the Northern Mariana Islands effective 
January 1, 1987.
    (7) Masculine gender includes the feminine, unless otherwise 
indicated.
    (8) The terms defined in sections 209, 210, and 211 of the act shall 
have the meanings therein assigned to them.

[26 FR 7055, Aug. 5, 1961; 26 FR 7760, Aug. 19, 1961, as amended at 28 
FR 1037, Feb. 2, 1963; 28 FR 14492, Dec. 31, 1963; 29 FR 15509, Nov. 19, 
1964; 41 FR 32886, Aug. 6, 1976; 51 FR 11718, Apr. 7, 1986; 61 FR 41330, 
Aug. 8, 1996; 62 FR 38450, July 18, 1997; 69 FR 51555, Aug. 20, 2004; 79 
FR 33684, June 12, 2014]



Sec. 404.3  General provisions.

    (a) Effect of cross references. The cross references in the 
regulations in this part 404 to other portions of the regulations, when 
the word see is used, are made only for convenience and shall be given 
no legal effect.
    (b) Periods of limitation ending on nonwork days. Pursuant to the 
provisions of section 216(j) of the act, effective September 13, 1960, 
where any provision of title II, or any provision of another law of the 
United States (other than the Internal Revenue Code of 1954) relating to 
or changing the effect of title II, or any regulation of the 
Commissioner issued under title II, provides for a period within which 
an act is required to be done which affects eligibility for or the 
amount of any benefit or payment under this title or is necessary to 
establish or protect any rights under this title, and such period ends 
on a Saturday, Sunday or Federal legal holiday or on any other day all 
or part of which is declared to be a nonwork day for Federal employees 
by statute or Executive Order, then such act shall be considered as done 
within such period if it is done on the first day thereafter which is 
not a Saturday, Sunday, or legal holiday or any other day all or part of 
which is declared to be a nonwork day for Federal employees either by 
statute or Executive Order. For purposes of this paragraph, the day on 
which a period ends shall include the final day of any extended period 
where such extension is authorized by law or by the Commissioner 
pursuant to law. Such extension of any period of limitation does not 
apply to periods during which benefits may be paid for months prior to 
the month an application for such benefits is filed pursuant to 
Sec. 404.621, or to periods during which an application for benefits

[[Page 65]]

may be accepted as such pursuant to Sec. 404.620.

[26 FR 7055, Aug. 5, 1961, as amended at 29 FR 15509, Nov. 19, 1964; 51 
FR 11718, Apr. 7, 1986; 61 FR 41330, Aug. 8, 1996; 62 FR 38450, July 18, 
1997]



            Subpart B_Insured Status and Quarters of Coverage

    Authority: Secs. 205(a), 212, 213, 214, 216, 217, 223, and 702(a)(5) 
of the Social Security Act (42 U.S.C. 405(a), 412, 413, 414, 416, 417, 
423, and 902(a)(5)).

    Source: 45 FR 25384, Apr. 15, 1980, unless otherwise noted.

                                 General



Sec. 404.101  Introduction.

    (a) Insured status. This subpart explains what we mean when we say 
that a person has insured status under the social security program. It 
also describes how a person may become fully insured, currently insured 
or insured for disability benefits. Your insured status is a basic 
factor in determining if you are entitled to old-age or disability 
insurance benefits or to a period of disability. It is also a basic 
factor in determining if dependents' or survivors' insurance benefits or 
a lump-sum death payment are payable based on your earnings record. If 
you are neither fully nor currently insured, no benefits are payable 
based on your earnings. (Subpart D of this part describes these benefits 
and the kind of insured status required for each.) In Secs. 404.110 
through 404.120 we tell how we determine if you are fully or currently 
insured. The rules for determining if you are insured for purposes of 
establishing a period of disability or becoming entitled to disability 
insurance benefits are in Secs. 404.130 through 404.133. Whether you 
have the required insured status depends on the number of quarters of 
coverage (QCs) you have acquired.
    (b) QCs. This subpart also sets out our rules on crediting you with 
QCs. QCs are used in determining insured status. In general, you are 
credited with QCs based on the wages you are paid and the self-
employment income you derive during certain periods. (See subpart K of 
this part for a definition of wages and self-employment income.) Our 
rules on how and when you acquire a QC are contained in Secs. 404.140 
through 404.146.



Sec. 404.102  Definitions.

    For the purpose of this subpart--
    Act means the Social Security Act, as amended.
    Age means how many years old you are. You reach a particular age on 
the day before your birthday. For example, if your sixty-second birthday 
is on July 1, 1979, you became age 62 on June 30, 1979.
    Quarter or calendar quarter means a period of three calendar months 
ending March 31, June 30, September 30, or December 31 of any year.
    We, our, or us means the Social Security Administration.
    You or your means the worker whose insured status is being 
considered.

                          Fully Insured Status



Sec. 404.110  How we determine fully insured status.

    (a) General. We describe how we determine the number of quarters of 
coverage (QCs) you need to be fully insured in paragraphs (b), (c), and 
(d) of this section. The table in Sec. 404.115 may be used to determine 
the number of QCs you need to be fully insured under paragraph (b) of 
this section. We consider certain World War II veterans to have died 
fully insured (see Sec. 404.111). We also consider certain employees of 
private nonprofit organizations to be fully insured if they meet special 
requirements (see Sec. 404.112).
    (b) How many QCs you need to be fully insured. (1) You need at least 
6 QCs but not more than 40 QCs to be fully insured. A person who died 
before 1951 with at least 6 QCs is fully insured.
    (2) You are fully insured for old-age insurance benefits if you have 
one QC (whenever acquired) for each calendar year elapsing after 1950 
or, if later, after the year in which you became age 21, and before the 
year you reach retirement age, that is, before--
    (i) The year you become age 62, if you are a woman;
    (ii) The year you become age 62, if you are a man who becomes age 62 
after 1974;

[[Page 66]]

    (iii) The year 1975, if you are a man who became age 62 in 1973 or 
1974; or
    (iv) The year you became age 65, if you are a man who became age 62 
before 1973.
    (3) A person who is otherwise eligible for survivor's benefits and 
who files an application will be entitled to benefits based on your 
earnings if you die fully insured. You will be fully insured if you had 
one QC (whenever acquired) for each calendar year elapsing after 1950 
or, if later, after the year you became age 21, and before the earlier 
of the following years:
    (i) The year you die; or
    (ii) The year you reach retirement age as shown in paragraph (b)(2) 
of this section.
    (c) How a period of disability affects the number of QCs you need. 
In determining the number of elapsed years under paragraph (b) of this 
section, we do not count as an elapsed year any year which is wholly or 
partly in a period of disability we established for you. For example, if 
we established a period of disability for you from December 5, 1975 
through January 31, 1977, the three years, 1975, 1976 and 1977, would 
not be counted as elapsed years.
    (d) How we credit QCs for fully insured status based on your total 
wages before 1951--(1) General. For purposes of paragraph (b) of this 
section, we may use the following rules in crediting QCs based on your 
wages before 1951 instead of the rule in Sec. 404.141(b)(1).
    (i) We may consider you to have one QC for each $400 of your total 
wages before 1951, as defined in paragraph (d)(2) of this section, if 
you have at least 7 elapsed years as determined under paragraph (b)(2) 
or (b)(3) of this section; and the number of QCs determined under this 
paragraph plus the number of QCs credited to you for periods after 1950 
make you fully insured.
    (ii) If you file an application in June 1992 or later and you are 
not entitled to a benefit under Sec. 404.380 or section 227 of the Act 
in the month the application is made, we may consider you to have at 
least one QC before 1951 if you have $400 or more total wages before 
1951, as defined in paragraph (d)(2) of this section, provided that the 
number of QCs credited to you under this paragraph plus the number of 
QCs credited to you for periods after 1950 make you fully insured.
    (2) What are total wages before 1951. For purposes of paragraph 
(d)(1) of this section, your total wages before 1951 include--
    (i) Remuneration credited to you before 1951 on the records of the 
Secretary;
    (ii) Wages considered paid to you before 1951 under section 217 of 
the Act (relating to benefits in case of veterans);
    (iii) Compensation under the Railroad Retirement Act of 1937 before 
1951 that can be credited to you under title II of the Social Security 
Act; and
    (iv) Wages considered paid to you before 1951 under section 231 of 
the Act (relating to benefits in case of certain persons interned in the 
United States during World War II).
    (e) When your fully insured status begins. You are fully insured as 
of the first day of the calendar quarter in which you acquire the last 
needed QC (see Sec. 404.145).

[45 FR 25384, Apr. 15, 1980, as amended at 50 FR 36573, Sept. 9, 1985; 
57 FR 23156, June 2, 1992]



Sec. 404.111  When we consider a person fully insured based on
World War II active military or naval service.

    We consider that a person, who was not otherwise fully insured, died 
fully insured if--
    (a) The person was in the active military or naval service of the 
United States during World War II;
    (b) The person died within three years after separation from service 
and before July 27, 1954; and
    (c) The conditions in Sec. 404.1350 that permit us to consider the 
person fully insured are met.
    (d) The provisions of this section do not apply to persons filing 
applications after May 31, 1992, unless a survivor is entitled to 
benefits under section 202 of the Act based on the primary insurance 
amount of the fully insured person for the month preceding the month in 
which the application is made.

[45 FR 25384, Apr. 15, 1980, as amended at 57 FR 23157, June 2, 1992]

[[Page 67]]



Sec. 404.112  When we consider certain employees of private nonprofit
organizations to be fully insured.

    If you are age 55 or over on January 1, 1984, and are on that date 
an employee of an organization described in Sec. 404.1025(a) which does 
not have in effect a waiver certificate under section 3121(k) of the 
Code on that date and whose employees are mandatorily covered as a 
result of section 102 of Pub. L. 98-21, we consider you to be fully 
insured if you meet the following requirements:

------------------------------------------------------------------------
                                                                 QC's
                                                               acquired
              Your age on January 1, 1984 is--                after Dec.
                                                               31, 1983
------------------------------------------------------------------------
60 or over.................................................            6
59 or over but less than age 60............................            8
58 or over but less than age 59............................           12
57 or over but less than age 58............................           16
55 or over but less than age 57............................           20
------------------------------------------------------------------------


[50 FR 36573, Sept. 9, 1985]



Sec. 404.115  Table for determining the quarters of coverage you need 
to be fully insured.

    (a) General. You may use the following table to determine the number 
of quarters of coverage (QCs) you need to be fully insured under 
Sec. 404.110. Paragraphs (b) and (c) of this section tell you how to use 
this table.

----------------------------------------------------------------------------------------------------------------
Worker who reaches retirement age as described in Sec. 404.110(b)(2)       Worker who dies before reaching
----------------------------------------------------------------------    retirement age as described in Sec.
                                                   Col. II \1\                       404.110(b)(2)
                                          ----------------------------------------------------------------------
                                                                                                    Col. V \4\--
          Col. I--Date of birth                                        Col. III \2\--                Age in year
                                                Men          Women     Year of death   Col. IV \3\    of death
 
----------------------------------------------------------------------------------------------------------------
Jan. 1, 1893 or earlier..................             6             6       \5\ 1957             6        \6\ 28
Jan. 2, 1893 to Jan. 1, 1894.............             7             6           1958             7            29
Jan. 2, 1894 to Jan. 1, 1895.............             8             6           1959             8            30
Jan. 2, 1895 to Jan. 1, 1896.............             9             6           1960             9            31
Jan. 2, 1896 to Jan. 1, 1897.............            10             7           1961            10            32
Jan. 2, 1897 to Jan. 1, 1898.............            11             8           1962            11            33
Jan. 2, 1898 to Jan. 1, 1899.............            12             9           1963            12            34
Jan. 2, 1899 to Jan. 1, 1900.............            13            10           1964            13            35
Jan. 2, 1900 to Jan. 1, 1901.............            14            11           1965            14            36
Jan. 2, 1901 to Jan. 1, 1902.............            15            12           1966            15            37
Jan. 2, 1902 to Jan. 1, 1903.............            16            13           1967            16            38
Jan. 2, 1903 to Jan. 1, 1904.............            17            14           1968            17            39
Jan. 2, 1904 to Jan. 1, 1905.............            18            15           1969            18            40
Jan. 2, 1905 to Jan. 1, 1906.............            19            16           1970            19            41
Jan. 2, 1906 to Jan. 1, 1907.............            20            17           1971            20            42
Jan. 2, 1907 to Jan. 1, 1908.............            21            18           1972            21            43
Jan. 2, 1908 to Jan. 1, 1909.............            22            19           1973            22            44
Jan. 2, 1909 to Jan. 1, 1910.............            23            20           1974            23            45
Jan. 2, 1910 to Jan. 1, 1911.............            24            21           1975            24            46
Jan. 2, 1911 to Jan. 1, 1912.............            24            22           1976            25            47
Jan. 2, 1912 to Jan. 1, 1913.............            24            23           1977            26            48
Jan. 2, 1913 to Jan. 1, 1914.............            24            24           1978            27            49
Jan. 2, 1914 to Jan. 1, 1915.............            25            25           1979            28            50
Jan. 2, 1915 to Jan. 1, 1916.............            26            26           1980            29            51
Jan. 2, 1916 to Jan. 1, 1917.............            27            27           1981            30            52
Jan. 2, 1917 to Jan. 1, 1918.............            28            28           1982            31            53
Jan. 2, 1918 to Jan. 1, 1919.............            29            29           1983            32            54
Jan. 2, 1919 to Jan. 1, 1920.............            30            30           1984            33            55
Jan. 2, 1920 to Jan. 1, 1921.............            31            31           1985            34            56
Jan. 2, 1921 to Jan. 1, 1922.............            32            32           1986            35            57
Jan. 2, 1922 to Jan. 1, 1923.............            33            33           1987            36            58
Jan. 2, 1923 to Jan. 1, 1924.............            34            34           1988            37            59
Jan. 2, 1924 to Jan. 1, 1925.............            35            35           1989            38            60
Jan. 2, 1925 to Jan. 1, 1926.............            36            36           1990            39            61
Jan. 2, 1926 to Jan. 1, 1927.............            37            37       \7\ 1991            40            62
Jan. 2, 1927 to Jan. 1, 1928.............            38            38  .............  ............  ............
Jan. 2, 1928 to Jan. 1, 1929.............            39            39  .............  ............  ............
Jan. 2, 1929 or later....................            40  ............  .............  ............
----------------------------------------------------------------------------------------------------------------
\1\ Number of QCs required for fully insured status; living worker or worker who dies after reaching retirement
  age.
\2\ Worker born before Jan. 2, 1930 who dies before reaching retirement age.
\3\ Number of QCs required for fully insured status.
\4\ Worker born Jan. 2, 1930 or later, who dies before reaching retirement age.
\5\ Or earlier.
\6\ Or younger.
\7\ Or later.


[[Page 68]]

    (b) Number of QCs you need. The QCs you need for fully insured 
status are in column II opposite your date of birth in column I. If a 
worker dies before reaching retirement age as described in 
Sec. 404.110(b)(2), the QCs needed for fully insured status are shown in 
column IV opposite--
    (1) The year of death in column III, if the worker was born before 
January 2, 1930; or
    (2) The age in the year of death in column V, if the worker was born 
after January 1, 1930.
    (c) How a period of disability affects the number of QCs you need. 
If you had a period of disability established for you, it affects the 
number of QCs you need to be fully insured (see Sec. 404.110(c)). For 
each year which is wholly or partly in a period of disability, subtract 
one QC from the number of QCs shown in the appropriate line and column 
of the table as explained in paragraph (b) of this section.

                        Currently Insured Status



Sec. 404.120  How we determine currently insured status.

    (a) What the period is for determining currently insured status. You 
are currently insured if you have at least 6 quarters of coverage (QCs) 
during the 13-quarter period ending with the quarter in which you--
    (1) Die;
    (2) Most recently became entitled to disability insurance benefits; 
or
    (3) Became entitled to old-age insurance benefits.
    (b) What quarters are not counted as part of the 13-quarter period. 
We do not count as part of the 13-quarter period any quarter all or part 
of which is included in a period of disability established for you, 
except that the first and last quarters of the period of disability may 
be counted if they are QCs (see Sec. 404.146(d)).

                        Disability Insured Status



Sec. 404.130  How we determine disability insured status.

    (a) General. We have four different rules for determining if you are 
insured for purposes of establishing a period of disability or becoming 
entitled to disability insurance benefits. To have disability insured 
status, you must meet one of these rules and you must be fully insured 
(see Sec. 404.132 which tells when the period ends for determining the 
number of quarters of coverage (QCs) you need to be fully insured).
    (b) Rule I--You must meet the 20/40 requirement. You are insured in 
a quarter for purposes of establishing a period of disability or 
becoming entitled to disability insurance benefits if in that quarter--
    (1) You are fully insured; and
    (2) You have at least 20 QCs in the 40-quarter period (see paragraph 
(f) of this section) ending with that quarter.
    (c) Rule II--You become disabled before age 31. You are insured in a 
quarter for purposes of establishing a period of disability or becoming 
entitled to disability insurance benefits if in that quarter--
    (1) You have not become (or would not become) age 31;
    (2) You are fully insured; and
    (3) You have QCs in at least one-half of the quarters during the 
period ending with that quarter and beginning with the quarter after the 
quarter you became age 21; however--
    (i) If the number of quarters during this period is an odd number, 
we reduce the number by one; and
    (ii) If the period has less than 12 quarters, you must have at least 
6 QCs in the 12-quarter period ending with that quarter.
    (d) Rule III--You had a period of disability before age 31. You are 
insured in a quarter for purposes of establishing a period of disability 
or becoming entitled to disability insurance benefits if in that 
quarter--
    (1) You are disabled again at age 31 or later after having had a 
prior period of disability established which began before age 31 and for 
which you were only insured under paragraph (c) of this section; and
    (2) You are fully insured and have QCs in at least one-half the 
calendar quarters in the period beginning with the quarter after the 
quarter you became age 21 and through the quarter in which the later 
period of disability begins, up to a maximum of 20 QCs out of 40 
calendar quarters; however--

[[Page 69]]

    (i) If the number of quarters during this period is an odd number, 
we reduce the number by one;
    (ii) If the period has less than 12 quarters, you must have at least 
6 QCs in the 12-quarter period ending with that quarter; and
    (iii) No monthly benefits may be paid or increased under Rule III 
before May 1983.
    (e) Rule IV--You are statutorily blind. You are insured in a quarter 
for purposes of establishing a period of disability or becoming entitled 
to disability insurance benefits if in that quarter--
    (1) You are disabled by blindness as defined in Sec. 404.1581; and
    (2) You are fully insured.
    (f) How we determine the 40-quarter or other period. In determining 
the 40-quarter period or other period in paragraph (b), (c), or (d) of 
this section, we do not count any quarter all or part of which is in a 
prior period of disability established for you, unless the quarter is 
the first or last quarter of this period and the quarter is a QC. 
However, we will count all the quarters in the prior period of 
disability established for you if by doing so you would be entitled to 
benefits or the amount of the benefit would be larger.

[49 FR 28547, July 13, 1984, as amended at 55 FR 7313, Mar. 1, 1990]



Sec. 404.131  When you must have disability insured status.

    (a) For a period of disability. To establish a period of disability, 
you must have disability insured status in the quarter in which you 
become disabled or in a later quarter in which you are disabled.
    (b) For disability insurance benefits. (1) To become entitled to 
disability insurance benefits, you must have disability insured status 
in the first full month that you are disabled as described in 
Sec. 404.1501(a), or if later--
    (i) The 17th month (if you have to serve a waiting period described 
in Sec. 404.315(d)) before the month in which you file an application 
for disability insurance benefits; or
    (ii) The 12th month (if you do not have to serve a waiting period) 
before the month in which you file an application for disability 
insurance benefits.
    (2) If you do not have disability insured status in a month 
specified in paragraph (b)(1) of this section, you will be insured for 
disability insurance benefits beginning with the first month after that 
month in which you do meet the insured status requirement and you also 
meet all other requirements for disability insurance benefits described 
in Sec. 404.315.



Sec. 404.132  How we determine fully insured status for a period 
of disability or disability insurance benefits.

    In determining if you are fully insured for purposes of paragraph 
(b), (c), (d), or (e) of Sec. 404.130 on disability insured status, we 
use the fully insured status requirements in Sec. 404.110, but apply the 
following rules in determining when the period of elapsed years ends:
    (a) If you are a woman, or a man born after January 1, 1913, the 
period of elapsed years in Sec. 404.110(b) used in determining the 
number of quarters of coverage (QCs) you need to be fully insured ends 
as of the earlier of--
    (1) The year you become age 62; or
    (2) The year in which--
    (i) Your period of disability begins;
    (ii) Your waiting period begins (see Sec. 404.315(d)); or
    (iii) You become entitled to disability insurance benefits (if you 
do not have to serve a waiting period).
    (b) If you are a man born before January 2, 1913, the period of 
elapsed years in Sec. 404.110(b) used in determining the number of QCs 
you need to be fully insured ends as of the earlier of--
    (1) The year 1975; or
    (2) The year specified in paragraph (a)(2) of this section.

[45 FR 25384, Apr. 15, 1980, as amended at 49 FR 28547, July 13, 1984]



Sec. 404.133  When we give you quarters of coverage based on military 
service to establish a period of disability.

    For purposes of establishing a period of disability only, we give 
you quarters of coverage (QCs) for your military service before 1957 
(see subpart N of this part). We do this even though we may not use that 
military service for other purposes of title II of the Act because a 
periodic benefit is payable from

[[Page 70]]

another Federal agency based in whole or in part on the same period of 
military service.

                          Quarters of Coverage



Sec. 404.140  What is a quarter of coverage.

    (a) General. A quarter of coverage (QC) is the basic unit of social 
security coverage used in determining a worker's insured status. We 
credit you with QCs based on your earnings covered under social 
security.
    (b) How we credit QCs based on earnings before 1978 (General). 
Before 1978, wages were generally reported on a quarterly basis and 
self-employment income was reported on an annual basis. For the most 
part, we credit QCs for calendar years before 1978 based on your 
quarterly earnings. For these years, as explained in Sec. 404.141, we 
generally credit you with a QC for each calendar quarter in which you 
were paid at least $50 in wages or were credited with at least $100 of 
self-employment income. Section 404.142 tells how self-employment income 
derived in a taxable year beginning before 1978 is credited to specific 
calendar quarters for purposes of Sec. 404.141.
    (c) How we credit QCs based on earnings after 1977 (General). After 
1977, both wages and self-employment income are generally reported on an 
annual basis. For calendar years after 1977, as explained in 
Sec. 404.143, we generally credit you with a QC for each part of your 
total covered earnings in a calendar year that equals the amount 
required for a QC in that year. Section 404.143 also tells how the 
amount required for a QC will be increased in the future as average 
wages increase. Section 404.144 tells how self-employment income derived 
in a taxable year beginning after 1977 is credited to specific calendar 
years for purposes of Sec. 404.143.
    (d) When a QC is acquired and when a calendar quarter is not a QC 
(general). Section 404.145 tells when a QC is acquired and Sec. 404.146 
tells when a calendar quarter cannot be a QC. These rules apply when we 
credit QCs under Sec. 404.141 or Sec. 404.143.



Sec. 404.141  How we credit quarters of coverage for calendar years
before 1978.

    (a) General. The rules in this section tell how we credit calendar 
quarters as quarters of coverage (QCs) for calendar years before 1978. 
We credit you with a QC for a calendar quarter based on the amount of 
wages you were paid and self-employment income you derived during 
certain periods. The rules in paragraphs (b), (c), and (d) of this 
section are subject to the limitations in Sec. 404.146, which tells when 
a calendar quarter cannot be a QC.
    (b) How we credit QCs based on wages paid in, or self-employment 
income credited to, a calendar quarter. We credit you with a QC for a 
calendar quarter in which--
    (1) You were paid wages of $50 or more (see paragraph (c) of this 
section for an exception relating to wages paid for agricultural labor); 
or
    (2) You were credited (under Sec. 404.142) with self-employment 
income of $100 or more.
    (c) How we credit QCs based on wages paid for agricultural labor in 
a calendar year after 1954. (1) We credit QCs based on wages for 
agricultural labor depending on the amount of wages paid during a 
calendar year for that work. If you were paid wages for agricultural 
labor in a calendar year after 1954 and before 1978, we credit you with 
QCs for calendar quarters in that year which are not otherwise QCs 
according to the following table.

------------------------------------------------------------------------
  If the wages paid to you in a
 calendar year for agricultural   We credit you with    And assign: \1\
           labor were
------------------------------------------------------------------------
$400 or more....................  4 QCs.............  All.
At least $300 but less than $400  3 QCs.............  Last 3.
At least $200 but less than $300  2 QCs.............  Last 2.
At least $100 but less than $200  1 QC..............  Last.
Less than $100..................  No QCs............
------------------------------------------------------------------------
\1\ One QC to each of the following calendar quarters in that year.

    (2) When we assign QCs to calendar quarters in a year as shown in 
the table in paragraph (c)(1) of this section, you might not meet (or 
might not meet as early in the year as otherwise possible)

[[Page 71]]

the requirements to be fully or currently insured, to be entitled to a 
computation or recomputation of your primary insurance amount, or to 
establish a period of disability. If this happens, we assign the QCs to 
different quarters in that year than those shown in the table if this 
assignment permits you to meet these requirements (or meet them earlier 
in the year). We can only reassign QCs for purposes of meeting these 
requirements.
    (d) How we credit QCs based on wages paid or self-employment income 
derived in a year. (1) If you were paid wages in a calendar year after 
1950 and before 1978 at least equal to the annual wage limitation in 
effect for that year as described in Secs. 404.1047 and 404.1096, we 
credit you with a QC for each quarter in that calendar year. If you were 
paid at least $3,000 wages in a calendar year before 1951, we credit you 
with a QC for each quarter in that calendar year.
    (2) If you derived self-employment income (or derived self-
employment income and also were paid wages) during a taxable year 
beginning after 1950 and before 1978 at least equal to the self-
employment income and wage limitation in effect for that year as 
described in Sec. 404.1068(b), we credit you with a QC for each calendar 
quarter wholly or partly in that taxable year.

[45 FR 25384, Apr. 15, 1980; 45 FR 41931, June 23, 1980, as amended at 
70 FR 14977, Mar. 24, 2005]



Sec. 404.142  How we credit self-employment income to calendar
quarters for taxable years beginning before 1978.

    In crediting quarters of coverage under Sec. 404.141(b)(2), we 
credit any self-employment income you derived during a taxable year that 
began before 1978 to calendar quarters as follows:
    (a) If your taxable year was a calendar year, we credit your self-
employment income equally to each quarter of that calendar year.
    (b) If your taxable year was not a calendar year (that is, it began 
on a date other than January 1, or was less than a calendar year), we 
credit your self-employment income equally--
    (1) To the calendar quarter in which your taxable year ended; and
    (2) To each of the next three or fewer preceding quarters that were 
wholly or partly in your taxable year.



Sec. 404.143  How we credit quarters of coverage for calendar years
after 1977.

    (a) Crediting quarters of coverage (QCs). For calendar years after 
1977, we credit you with a QC for each part of the total wages paid and 
self-employment income credited (under Sec. 404.144) to you in a 
calendar year that equals the amount required for a QC in that year. For 
example, if the total of your wages and self-employment income for a 
calendar year is more than twice, but less than 3 times, the amount 
required for a QC in that year, we credit you with only 2 QCs for the 
year. The rules for crediting QCs in this section are subject to the 
limitations in Sec. 404.146, which tells when a calendar quarter cannot 
be a QC. In addition, we cannot credit you with more than four QCs for 
any calendar year. The amount of wages and self-employment income that 
you must have for each QC is--
    (1) $250 for calendar year 1978; and
    (2) For each calendar year after 1978, an amount determined by the 
Commissioner for that year (on the basis of a formula in section 
213(d)(2) of the Act which reflects national increases in average 
wages). The amount determined by the Commissioner is published in the 
Federal Register on or before November 1 of the preceding year and 
included in the appendix to this subpart.
    (b) Assigning QCs. We assign a QC credited under paragraph (a) of 
this section to a specific calendar quarter in the calendar year only if 
the assignment is necessary to--
    (1) Give you fully or currently insured status;
    (2) Entitle you to a computation or recomputation of your primary 
insurance amount; or
    (3) Permit you to establish a period of disability.

[45 FR 25834, Apr. 15, 1980, as amended at 62 FR 38450, July 18, 1997]

[[Page 72]]



Sec. 404.144  How we credit self-employment income to calendar years
for taxable years beginning after 1977.

    In crediting quarters of coverage under Sec. 404.143(a), we credit 
self-employment income you derived during a taxable year that begins 
after 1977 to calendar years as follows:
    (a) If your taxable year is a calendar year or begins and ends 
within the same calendar year, we credit your self-employment income to 
that calendar year.
    (b) If your taxable year begins in one calendar year and ends in the 
following calendar year, we allocate proportionately your self-
employment income to the two calendar years on the basis of the number 
of months in each calendar year which are included completely within 
your taxable year. We consider the calendar month in which your taxable 
year ends as included completely within your taxable year.

    Example: For the taxable year beginning May 15, 1978, and ending May 
14, 1979, your self-employment income is $1200. We credit \7/12\ ($700) 
of your self-employment income to calendar year 1978 and \5/12\ ($500) 
of your self-employment income to calendar year 1979.



Sec. 404.145  When you acquire a quarter of coverage.

    If we credit you with a quarter of coverage (QC) for a calendar 
quarter under paragraph (b), (c), or (d) of Sec. 404.141 for calendar 
years before 1978 or assign it to a specific calendar quarter under 
paragraph (b) of Sec. 404.143 for calendar years after 1977, you acquire 
the QC as of the first day of the calendar quarter.



Sec. 404.146  When a calendar quarter cannot be a quarter of coverage.

    This section applies when we credit you with quarters of coverage 
(QCs) under Sec. 404.141 for calendar years before 1978 and under 
Sec. 404.143 for calendar years after 1977. We cannot credit you with a 
QC for--
    (a) A calendar quarter that has not begun;
    (b) A calendar quarter that begins after the quarter of your death;
    (c) A calendar quarter that has already been counted as a QC; or
    (d) A calendar quarter that is included in a period of disability 
established for you, unless--
    (1) The quarter is the first or the last quarter of this period; or
    (2) The period of disability is not taken into consideration (see 
Sec. 404.320(a)).



Sec. Appendix to Subpart B of Part 404--Quarter of Coverage Amounts for 
                        Calendar Years After 1978

    This appendix shows the amount determined by the Commissioner that 
is needed for a quarter of coverage for each year after 1978 as 
explained in Sec. 404.143. We publish the amount as a Notice in the 
Federal Register on or before November 1 of the preceding year. The 
amounts determined by the Commissioner are as follows:

------------------------------------------------------------------------
                                                                 Amount
                         Calendar year                           needed
------------------------------------------------------------------------
1979..........................................................      $260
1980..........................................................       290
1981..........................................................       310
1982..........................................................       340
1983..........................................................       370
1984..........................................................       390
1985..........................................................       410
1986..........................................................       440
1987..........................................................       460
1988..........................................................       470
1989..........................................................       500
1990..........................................................       520
1991..........................................................       540
1992..........................................................       570
------------------------------------------------------------------------


[45 FR 25384, Apr. 15, 1980, as amended at 52 FR 8247, Mar. 17, 1987; 57 
FR 44096, Sept. 24, 1992; 62 FR 38450, July 18, 1997]



              Subpart C_Computing Primary Insurance Amounts

    Authority: Secs. 202(a), 205(a), 215, and 702(a)(5) of the Social 
Security Act (42 U.S.C. 402(a), 405(a), 415, and 902(a)(5)).

    Source: 47 FR 30734, July 15, 1982, unless otherwise noted.

                                 General



Sec. 404.201  What is included in this subpart?

    In this subpart we describe how we compute your primary insurance 
amount (PIA), how and when we will recalculate or recompute your PIA to 
include credit for additional earnings, and how we automatically adjust 
your PIA to reflect changes in the cost of living.

[[Page 73]]

    (a) What is my primary insurance amount? Your primary insurance 
amount (PIA) is the basic figure we use to determine the monthly benefit 
amount payable to you and your family. For example, if you retire in the 
month you attain full retirement age (as defined in Sec. 404.409) or if 
you become disabled, you will be entitled to a monthly benefit equal to 
your PIA. If you retire prior to full retirement age your monthly 
benefit will be reduced as explained in Secs. 404.410-404.413. Benefits 
to other members of your family are a specified percentage of your PIA 
as explained in subpart D. Total benefits to your family are subject to 
a maximum as explained in Sec. 404.403.
    (b) How is this subpart organized? (1) In Secs. 404.201 through 
404.204, we explain some introductory matters.
    (2) In Secs. 404.210 through 404.213, we describe the average-
indexed-monthly-earnings method we use to compute the primary insurance 
amount (PIA) for workers who attain age 62 (or become disabled or die 
before age 62) after 1978.
    (3) In Secs. 404.220 through 404.222, we describe the average-
monthly-wage method we use to compute the PIA for workers who attain age 
62 (or become disabled or die before age 62) before 1979.
    (4) In Secs. 404.230 through 404.233, we describe the guaranteed 
alternative method we use to compute the PIA for people who attain age 
62 after 1978 but before 1984.
    (5) In Secs. 404.240 through 404.243, we describe the old-start 
method we use to compute the PIA for those who had all or substantially 
all of their social security covered earnings before 1951.
    (6) In Secs. 404.250 through 404.252, we describe special rules we 
use to compute the PIA for a worker who previously had a period of 
disability.
    (7) In Secs. 404.260 through 404.261, we describe how we compute the 
special minimum PIA for long-term, low-paid workers.
    (8) In Secs. 404.270 through 404.278, we describe how we 
automatically increase your PIA because of increases in the cost of 
living.
    (9) In Secs. 404.280 through 404.288, we describe how and when we 
will recompute your PIA to include additional earnings which were not 
used in the original computation.
    (10) In Sec. 404.290 we describe how and when we will recalculate 
your PIA.
    (11) Appendices I-VII contain material such as figures and formulas 
that we use to compute PIAs.

[68 FR 4701, Jan. 30, 2003]



Sec. 404.202  Other regulations related to this subpart.

    This subpart is related to several others. In subpart B of this 
part, we describe how you become insured for social security benefits as 
a result of your work in covered employment. In subpart D, we discuss 
the different kinds of social security benefits available--old-age and 
disability benefits for you and benefits for your dependents and 
survivors--the amount of the benefits, and the requirements you and your 
family must meet to qualify for them; your work status, your age, the 
size of your family, and other factors may affect the amount of the 
benefits for you and your family. Rules relating to deductions, 
reductions, and nonpayment of benefits we describe in subpart E. In 
subpart F of this part, we describe what we do when a recalculation or 
recomputation of your primary insurance amount (as described in this 
subpart) results in our finding that you and your family have been 
overpaid or underpaid. In subparts G and H of this part, we tell how to 
apply for benefits and what evidence is needed to establish entitlement 
to them. In subpart J of this part, we describe how benefits are paid. 
Then in subparts I, K, N, and O of this part, we discuss your earnings 
that are taxable and creditable for social security purposes (and how we 
keep records of them), and deemed military wage credits which may be 
used in finding your primary insurance amount.



Sec. 404.203  Definitions.

    (a) General definitions. As used in this subpart--
    Ad hoc increase in primary insurance amounts means an increase in 
primary insurance amounts enacted by the Congress and signed into law by 
the President.
    Entitled means that a person has applied for benefits and has proven 
his or

[[Page 74]]

her right to them for a given period of time.
    We, us, or our means the Social Security Administration.
    You or your means the insured worker who has applied for benefits or 
a deceased insured worker on whose social security earnings record 
someone else has applied.
    (b) Other definitions. To make it easier to find them, we have 
placed other definitions in the sections of this subpart in which they 
are used.

[47 FR 30734, July 15, 1982, as amended at 62 FR 38450, July 18, 1997]



Sec. 404.204  Methods of computing primary insurance amounts--general.

    (a) General. We compute most workers' primary insurance amounts 
under one of two major methods. There are, in addition, several special 
methods of computing primary insurance amounts which we apply to some 
workers. Your primary insurance amount is the highest of all those 
computed under the methods for which you are eligible.
    (b) Major methods. (1) If after 1978 you reach age 62, or become 
disabled or die before age 62, we compute your primary insurance amount 
under what we call the average-indexed-monthly-earnings method, which is 
described in Secs. 404.210 through 404.212. The earliest of the three 
dates determines the computation method we use.
    (2) If before 1979 you reached age 62, became disabled, or died, we 
compute your primary insurance amount under what we call the average-
monthly-wage method, described in Secs. 404.220 through 404.222.
    (c) Special methods. (1) Your primary insurance amount, computed 
under any of the special methods for which you are eligible as described 
in this paragraph, may be substituted for your primary insurance amount 
computed under either major method described in paragraph (b) of this 
section.
    (2) If you reach age 62 during the period 1979-1983, your primary 
insurance amount is guaranteed to be the highest of--
    (i) The primary insurance amount we compute for you under the 
average-indexed-monthly-earnings method;
    (ii) The primary insurance amount we compute for you under the 
average-monthly-wage method, as modified by the rules described in 
Secs. 404.230 through 404.233; or
    (iii) The primary insurance amount computed under what we call the 
old-start method; as described in Secs. 404.240 through 404.242.
    (3) If you had all or substantially all of your social security 
earnings before 1951, we will also compute your primary insurance amount 
under what we call the old-start method.
    (4) We compute your primary insurance amount under the rules in 
Secs. 404.250 through 404.252, if--
    (i) You were disabled and received social security disability 
insurance benefits sometime in your life;
    (ii) Your disability insurance benefits were terminated because of 
your recovery or because you engaged in substantial gainful activity; 
and
    (iii) You are, after 1978, re-entitled to disability insurance 
benefits, or entitled to old-age insurance benefits, or have died.
    (5) In some situations, we use what we call a special minimum 
computation, described in Secs. 404.260 through 404.261, to find your 
primary insurance amount. Computations under this method reflect long-
term, low-wage attachment to covered work.

 Average-Indexed-Monthly-Earnings Method of Computing Primary Insurance 
                                 Amounts



Sec. 404.210  Average-indexed-monthly-earnings method.

    (a) Who is eligible for this method. If after 1978, you reach age 
62, or become disabled or die before age 62, we will compute your 
primary insurance amount under the average-indexed-monthly-earnings 
method.
    (b) Steps in computing your primary insurance amount under the 
average-indexed-monthly-earnings method. We follow these three major 
steps in computing your primary insurance amount:
    (1) First, we find your average indexed monthly earnings, as 
described in Sec. 404.211;
    (2) Second, we find the benefit formula in effect for the year you 
reach age 62, or become disabled or die before age 62, as described in 
Sec. 404.212; and

[[Page 75]]

    (3) Then, we apply that benefit formula to your average indexed 
monthly earnings to find your primary insurance amount, as described in 
Sec. 404.212.
    (4) Next, we apply any automatic cost-of-living or ad hoc increases 
in primary insurance amounts that became effective in or after the year 
you reached age 62, unless you are receiving benefits based on the 
minimum primary insurance amount, in which case not all the increases 
may be applied, as described in Sec. 404.277.



Sec. 404.211  Computing your average indexed monthly earnings.

    (a) General. In this method, your social security earnings after 
1950 are indexed, as described in paragraph (d) of this section, then 
averaged over the period of time you can reasonably have been expected 
to have worked in employment or self-employment covered by social 
security. (Your earnings before 1951 are not used in finding your 
average indexed monthly earnings.)
    (b) Which earnings may be used in computing your average indexed 
monthly earnings--(1) Earnings. In computing your average indexed 
monthly earnings, we use wages, compensation, self-employment income, 
and deemed military wage credits (see Secs. 404.1340 through 404.1343) 
that are creditable to you for social security purposes for years after 
1950.
    (2) Computation base years. We use your earnings in your computation 
base years in finding your average indexed monthly earnings. All years 
after 1950 up to (but not including) the year you become entitled to 
old-age or disability insurance benefits, and through the year you die 
if you had not been entitled to old-age or disability benefits, are 
computation base years for you. The year you become entitled to benefits 
and following years may be used as computation base years in a 
recomputation if their use would result in a higher primary insurance 
amount. (See Secs. 404.280 through 404.287.) However, years after the 
year you die may not be used as computation base years even if you have 
earnings credited to you in those years. Computation base years do not 
include years wholly within a period of disability unless your primary 
insurance amount would be higher by using the disability years. In such 
situations, we count all the years during the period of disability, even 
if you had no earnings in some of them.
    (c) Average of the total wages. Before we compute your average 
indexed monthly earnings, we must first know the ``average of the total 
wages'' of all workers for each year from 1951 until the second year 
before you become eligible. The average of the total wages for years 
after 1950 are shown in appendix I. Corresponding figures for more 
recent years which have not yet been incorporated into this appendix are 
published in the Federal Register on or before November 1 of the 
succeeding year. ``Average of the total wages'' (or ``average wage'') 
means:
    (1) For the years 1951 through 1977, four times the amount of 
average taxable wages that were reported to the Social Security 
Administration for the first calendar quarter of each year for social 
security tax purposes. For years prior to 1973, these average wages were 
determined from a sampling of these reports.
    (2) For the years 1978 through 1990, all remuneration reported as 
wages on Form W-2 to the Internal Revenue Service for all employees for 
income tax purposes, divided by the number of wage earners. We adjusted 
those averages to make them comparable to the averages for 1951-1977. 
For years after 1977, the term includes remuneration for services not 
covered by social security and remuneration for covered employment in 
excess of that which is subject to FICA contributions.
    (3) For years after 1990, all remuneration reported as wages on Form 
W-2 to the Internal Revenue Service for all employees for income tax 
purposes, including remuneration described in paragraph (c)(2) of this 
section, plus contributions to certain deferred compensation plans 
described in section 209(k) of the Social Security Act (also reported on 
Form W-2), divided by the number of wage earners. If both distributions 
from and contributions to any such deferred compensation plan are 
reported on Form W-2, we will include only the contributions in the 
calculation of the average of the total wages. We will adjust those 
averages to

[[Page 76]]

make them comparable to the averages for 1951-1990.
    (d) Indexing your earnings. (1) The first step in indexing your 
social security earnings is to find the relationship (under paragraph 
(d)(2) of this section) between--
    (i) The average wage of all workers in your computation base years; 
and
    (ii) The average wage of all workers in your indexing year. As a 
general rule, your indexing year is the second year before the earliest 
of the year you reach age 62, or become disabled or die before age 62. 
However, your indexing year is determined under paragraph (d)(4) of this 
section if you die before age 62, your surviving spouse or surviving 
divorced spouse is first eligible for benefits after 1984, and the 
indexing year explained in paragraph (d)(4) results in a higher 
widow(er)'s benefit than results from determining the indexing year 
under the general rule.
    (2) To find the relationship, we divide the average wages for your 
indexing year, in turn, by the average wages for each year beginning 
with 1951 and ending with your indexing year. We use the quotients found 
in these divisions to index your earnings as described in paragraph 
(d)(3) of this section.
    (3) The second step in indexing your social security earnings is to 
multiply the actual year-by-year dollar amounts of your earnings (up to 
the maximum amounts creditable, as explained in Secs. 404.1047 and 
404.1096 of this part) by the quotients found in paragraph (d)(2) of 
this section for each of those years. We round the results to the nearer 
penny. (The quotient for your indexing year is 1.0; this means that your 
earnings in that year are used in their actual dollar amount; any 
earnings after your indexing year that may be used in computing your 
average indexed monthly earnings are also used in their actual dollar 
amount.)

    Example: Ms. A reaches age 62 in July 1979. Her year-by-year social 
security earnings since 1950 are as follows:

------------------------------------------------------------------------
                            Year                               Earnings
------------------------------------------------------------------------
1951.......................................................       $3,200
1952.......................................................        3,400
1953.......................................................        3,300
1954.......................................................        3,600
1955.......................................................        3,700
1956.......................................................        3,700
1957.......................................................        4,000
1958.......................................................        4,200
1959.......................................................        4,400
1960.......................................................        4,500
1961.......................................................        2,800
1962.......................................................        2,200
1963.......................................................            0
1964.......................................................            0
1965.......................................................        3,700
1966.......................................................        4,500
1967.......................................................        5,400
1968.......................................................        6,200
1969.......................................................        6,900
1970.......................................................        7,300
1971.......................................................        7,500
1972.......................................................        7,800
1973.......................................................        8,200
1974.......................................................        9,000
1975.......................................................        9,900
1976.......................................................       11,100
1977.......................................................        9,900
1978.......................................................       11,000
------------------------------------------------------------------------

    Step 1. The first step in indexing Ms. A's earnings is to find the 
relationship between the general wage level in Ms. A's indexing year 
(1977) and the general wage level in each of the years 1951-1976. We 
refer to appendix I for average wage figures, and perform the following 
computations:

------------------------------------------------------------------------
                                                    II.      III. Column
                                      I. 1977   Nationwide  I divided by
               Year                   general   average of    column II
                                    wage level   the total     equals
                                                   wages    relationship
------------------------------------------------------------------------
1951..............................   $9,779.44   $2,799.16    3.4937053
1952..............................    9,779.44    2,973.32    3.2890641
1953..............................    9,779.44    3,139.44    3.1150269
1954..............................    9,779.44    3,155.64    3.0990354
1955..............................    9,779.44    3,301.44    2.9621741
1956..............................    9,779.44    3,532.36    2.7685287
1957..............................    9,779.44    3,641.72    2.6853904
1958..............................    9,779.44    3,673.80    2.6619413
1959..............................    9,779.44    3,855.80    2.5362934
1960..............................    9,779.44    4,007.12    2.4405159
1961..............................    9,779.44    4,086.76    2.3929568
1962..............................    9,779.44    4,291.40    2.2788461
1963..............................    9,779.44    4,396.64    2.2242986
1964..............................    9,779.44    4,576.32    2.1369659
1965..............................    9,779.44    4,658.72    2.0991689
1966..............................    9,779.44    4,938.36    1.9803012
1967..............................    9,779.44    5,213.44    1.8758133
1968..............................    9,779.44    5,571.76    1.7551797
1969..............................    9,779.44    5,893.76    1.6592871
1970..............................    9,779.44    6,186.24    1.5808375
1971..............................    9,779.44    6,497.08    1.5052054
1972..............................    9,779.44    7,133.80    1.3708599
1973..............................    9,779.44    7,580.16    1.2901364
1974..............................    9,779.44    8,030.76    1.2177478
1975..............................    9,779.44    8,630.92    1.1330704
1976..............................    9,779.44    9,226.48    1.0599318
1977..............................    9,779.44    9,779.44    1.0000000
------------------------------------------------------------------------

    Step 2. After we have found these indexing quotients, we multiply 
Ms. A's actual year-by-year earnings by them to find her indexed 
earnings, as shown below:

[[Page 77]]



------------------------------------------------------------------------
                                                                 III.
                                                               Column I
                                                      II.     multiplied
                Year                   I. Actual   Indexing    by column
                                       earnings    quotient    II equals
                                                                indexed
                                                               earnings
------------------------------------------------------------------------
1951................................      $3,200   3.4937053  $11,179.86
1952................................       3,400   3.2890641   11,182.82
1953................................       3,300   3.1150269   10,279.59
1954................................       3,600   3.0990354   11,156.53
1955................................       3,700   2.9621741   10,960.04
1956................................       3,700   2.7685287   10,243.56
1957................................       4,000   2.6853904   10,741.56
1958................................       4,200   2.6619413   11,180.15
1959................................       4,400   2.5362934   11,159.69
1960................................       4,500   2.4405159   10,982.32
1961................................       2,800   2.3929568    6,700.28
1962................................       2,200   2.2788461    5,013.46
1963................................           0   2.2242986           0
1964................................           0   2.1369659           0
1965................................       3,700   2.0991689    7,766.92
1966................................       4,500   1.9803012    8,911.36
1967................................       5,400   1.8758133   10,129.39
1968................................       6,200   1.7551797   10,882.11
1969................................       6,900   1.6592871   11,449.08
1970................................       7,300   1.5808375   11,540.11
1971................................       7,500   1.5052054   11,289.04
1972................................       7,800   1.3708599   10,692.71
1973................................       8,200   1.2901364   10,579.12
1974................................       9,000   1.2177478   10,959.73
1975................................       9,900   1.1330704   11,217.40
1976................................      11,100   1.0599318   11,765.24
1977................................       9,900   1.0000000    9,900.00
1978................................      11,000           0   11,000.00
------------------------------------------------------------------------

    (4) We calculate your indexing year under this paragraph if you, the 
insured worker, die before reaching age 62, your surviving spouse or 
surviving divorced spouse is first eligible after 1984, and the indexing 
year calculated under this paragraph results in a higher widow(er)'s 
benefit than results from the indexing year calculated under the general 
rule explained in paragraph (d)(1)(ii). For purposes of this paragraph, 
the indexing year is never earlier than the second year before the year 
of your death. Except for this limitation, the indexing year is the 
earlier of--
    (i) The year in which you, the insured worker, attained age 60, or 
would have attained age 60 if you had lived, and
    (ii) The second year before the year in which the surviving spouse 
or the surviving divorced spouse becomes eligible for widow(er)'s 
benefits, i.e., has attained age 60, or is age 50-59 and disabled.
    (e) Number of years to be considered in finding your average indexed 
monthly earnings. To find the number of years to be used in computing 
your average indexed monthly earnings--
    (1) We count the years beginning with 1951, or (if later) the year 
you reach age 22, and ending with the earliest of the year before you 
reach age 62, become disabled, or die. Years wholly or partially within 
a period of disability (as defined in Sec. 404.1501(b) of subpart P of 
this part) are not counted unless your primary insurance amount would be 
higher. In that case, we count all the years during the period of 
disability, even though you had no earnings in some of those years. 
These are your elapsed years. From your elapsed years, we then subtract 
up to 5 years, the exact number depending on the kind of benefits to 
which you are entitled. You cannot, under this procedure, have fewer 
than 2 benefit computation years.
    (2) For computing old-age insurance benefits and survivors insurance 
benefits, we subtract 5 from the number of your elapsed years. See 
paragraphs (e) (3) and (4) of this section for the dropout as applied to 
disability benefits. This is the number of your benefit computation 
years; we use the same number of your computation base years (see 
paragraph (b)(2) of this section) in computing your average indexed 
monthly earnings. For benefit computation years, we use the years with 
the highest amounts of earnings after indexing. They may include 
earnings from years that were not indexed, and must include years of no 
earnings if you do not have sufficient years with earnings. You cannot 
have fewer than 2 benefit computation years.
    (3) Where the worker is first entitled to disability insurance 
benefits (DIB) after June 1980, there is an exception to the usual 5 
year dropout provision explained in paragraph (e)(2) of this section. 
(For entitlement before July 1980, we use the usual dropout.) We call 
this exception the disability dropout. We divide the elapsed years by 5 
and disregard any fraction. The result, which may not exceed 5, is the 
number of dropout years. We subtract that number from the number of 
elapsed years to get the number of benefit computation years, which may 
not be fewer than 2. After the worker dies, the disability dropout no 
longer applies and we use the basic 5 dropout years to compute benefits 
for survivors. We continue to apply the disability dropout when a person 
becomes entitled to old-

[[Page 78]]

age insurance benefits (OAIB), unless his or her entitlement to DIB 
ended at least 12 months before he or she became eligible for OAIB. For 
first DIB entitlement before July 1980, we use the rule in paragraph 
(e)(2) of this section.
    (4) For benefits payable after June 1981, the disability dropout 
might be increased by the child care dropout. If the number of 
disability dropout years is fewer than 3, we will drop out a benefit 
computation year for each benefit computation year that the worker meets 
the child care requirement and had no earnings, until the total of all 
dropout years is 3. The child care requirement for any year is that the 
worker must have been living with his or her child (or his or her 
spouse's child) substantially throughout any part of any calendar year 
that the child was alive and under age 3. In actual practice, no more 
than 2 child care years may be dropped, because of the combined effect 
of the number of elapsed years, 1-for-5 dropout years (if any), and the 
computation years required for the computation.

    Example: Ms. M., born August 4, 1953, became entitled to disability 
insurance benefits (DIB) beginning in July 1980 based on a disability 
which began January 15, 1980. In computing the DIB, we determined that 
the elapsed years are 1975 through 1979, the number of dropout years is 
1 (5 elapsed years divided by 5), and the number of computation years is 
4. Since Ms. M. had no earnings in 1975 and 1976, we drop out 1975 and 
use her earnings for the years 1977 through 1979.
    Ms. M. lived with her child, who was born in 1972, in all months of 
1973 and 1974 and did not have any earnings in those years. We, 
therefore, recompute Ms. M.'s DIB beginning with July 1981 to give her 
the advantage of the child care dropout. To do this, we reduce the 4 
computation years by 1 child care year to get 3 computation years. 
Because the child care dropout cannot be applied to computation years in 
which the worker had earnings, we can drop only one of Ms. M.'s 
computation years, i.e., 1976, in addition to the year 1975 which we 
dropped in the initial computation.

    (i) Living with means that you and the child ordinarily live in the 
same home and you exercise, or have the right to exercise, parental 
control. See Sec. 404.366(c) for a further explanation.
    (ii) Substantially throughout any part of any calendar year means 
that any period you were not living with the child during a calendar 
year did not exceed 3 months. If the child was either born or attained 
age 3 during the calendar year, the period of absence in the year cannot 
have exceeded the smaller period of 3 months, or one-half the time after 
the child's birth or before the child attained age 3.
    (iii) Earnings means wages for services rendered and net earnings 
from self-employment minus any net loss for a taxable year. See 
Sec. 404.429 for a further explanation.
    (f) Your average indexed monthly earnings. After we have indexed 
your earnings and found your benefit computation years, we compute your 
average indexed monthly earnings by--
    (1) Totalling your indexed earnings in your benefit computation 
years;
    (2) Dividing the total by the number of months in your benefit 
computation years; and
    (3) Rounding the quotient to the next lower whole dollar. if not 
already a multiple of $1.

    Example: From the example in paragraph (d) of this section, we see 
that Ms. A reaches age 62 in 1979. Her elapsed years are 1951-1978 (28 
years). We subtract 5 from her 28 elapsed years to find that we must use 
23 benefit computation years. This means that we will use her 23 highest 
computation base years to find her average indexed monthly earnings. We 
exclude the 5 years 1961-1965 and total her indexed earnings for the 
remaining years, i.e., the benefit computation years (including her 
unindexed earnings in 1977 and 1978) and get $249,381.41. We then divide 
that amount by the 276 months in her 23 benefit computation years and 
find her average indexed monthly earnings to be $903.56, which is 
rounded down to $903.

[47 FR 30734, July 15, 1982; 47 FR 35479, Aug. 13, 1982, as amended at 
48 FR 11695, Mar. 21, 1983; 51 FR 4482, Feb. 5, 1986; 57 FR 1381, Jan. 
14, 1992]



Sec. 404.212  Computing your primary insurance amount from your 
average indexed monthly earnings.

    (a) General. We compute your primary insurance amount under the 
average-indexed-monthly-earnings method by applying a benefit formula to 
your average indexed monthly earnings.
    (b) Benefit formula. (1) We use the applicable benefit formula in 
appendix II for the year you reach age 62, become disabled, or die 
whichever occurs first.

[[Page 79]]

If you die before age 62, and your surviving spouse or surviving 
divorced spouse is first eligible after 1984, we may compute the primary 
insurance amount, for the purpose of paying benefits to your widow(er), 
as if you had not died but reached age 62 in the second year after the 
indexing year that we computed under the provisions of 
Sec. 404.211(d)(4). We will not use this primary insurance amount for 
computing benefit amounts for your other survivors or for computing the 
maximum family benefits payable on your earnings record. Further, we 
will only use this primary insurance amount if it results in a higher 
widow(er)'s benefit than would result if we did not use this special 
computation.
    (2) The dollar amounts in the benefit formula are automatically 
increased each year for persons who attain age 62, or who become 
disabled or die before age 62 in that year, by the same percentage as 
the increase in the average of the total wages (see appendix I).
    (3) We will publish benefit formulas for years after 1979 in the 
Federal Register at the same time we publish the average of the total 
wage figures. We begin to use a new benefit formula as soon as it is 
applicable, even before we periodically update appendix II.
    (4) We may use a modified formula, as explained in Sec. 404.213, if 
you are entitled to a pension based on your employment which was not 
covered by Social Security.
    (c) Computing your primary insurance amount from the benefit 
formula. We compute your primary insurance amount by applying the 
benefit formula to your average indexed monthly earnings and adding the 
results for each step of the formula. For computations using the benefit 
formulas in effect for 1979 through 1982, we round the total amount to 
the next higher multiple of $0.10 if it is not a multiple of $0.10 and 
for computations using the benefit formulas effective for 1983 and later 
years, we round to the next lower multiple of $0.10. (See paragraph (e) 
of this section for a discussion of the minimum primary insurance 
amount.)
    (d) Adjustment of your primary insurance amount when entitlement to 
benefits occurs in a year after attainment of age 62, disability or 
death. If you (or your survivors) do not become entitled to benefits in 
the same year you reach age 62, become disabled, or die before age 62, 
we compute your primary insurance amount by--
    (1) Computing your average indexed monthly earnings as described in 
Sec. 404.211;
    (2) Applying to your average indexed monthly earnings the benefit 
formula for the year in which you reach age 62, or become disabled or 
die before age 62; and
    (3) Applying to the primary insurance amount all automatic cost-of-
living and ad hoc increases in primary insurance amounts that have gone 
into effect in or after the year you reached age 62, became disabled, or 
died before age 62. (See Sec. 404.277 for special rules on minimum 
benefits, and appendix VI for a table of percentage increases in primary 
insurance amounts since December 1978. Increases in primary insurance 
amounts are published in the Federal Register and we periodically update 
appendix VI.)
    (e) Minimum primary insurance amount. If you were eligible for 
benefits, or died without having been eligible, before 1982, your 
primary insurance amount computed under this method cannot be less than 
$122. This minimum benefit provision has been repealed effective with 
January 1982 for most workers and their families where the worker 
initially becomes eligible for benefits in that or a later month, or 
dies in January 1982 or a later month without having been eligible 
before January 1982. For members of a religious order who are required 
to take a vow of poverty, as explained in 20 CFR 404.1024, and which 
religious order elected Social Security coverage before December 29, 
1981, the repeal is effective with January 1992 based on first 
eligibility or death in that month or later.

[47 FR 30734, July 15, 1982, as amended at 48 FR 46142, Oct. 11, 1983; 
51 FR 4482, Feb. 5, 1986; 52 FR 47916, Dec. 17, 1987]



Sec. 404.213  Computation where you are eligible for a pension based
on your noncovered employment.

    (a) When applicable. Except as provided in paragraph (d) of this 
section, we will modify the formula prescribed

[[Page 80]]

in Sec. 404.212 and in appendix II of this subpart in the following 
situations:
    (1) You become eligible for old-age insurance benefits after 1985; 
or
    (2) You become eligible for disability insurance benefits after 
1985; and
    (3) For the same months after 1985 that you are entitled to old-age 
or disability benefits, you are also entitled to a monthly pension(s) 
for which you first became eligible after 1985 based in whole or part on 
your earnings in employment which was not covered under Social Security. 
We consider you to first become eligible for a monthly pension in the 
first month for which you met all requirements for the pension except 
that you were working or had not yet applied. In determining whether you 
are eligible for a pension before 1986, we consider all applicable 
service used by the pension-paying agency. (Noncovered employment 
includes employment outside the United States which is not covered under 
the United States Social Security system. Pensions from noncovered 
employment outside the United States include both pensions from social 
insurance systems that base benefits on earnings but not on residence or 
citizenship, and those from private employers. However, for benefits 
payable for months prior to January 1995, we will not modify the 
computation of a totalization benefit (see Secs. 404.1908 and 404.1918) 
as a result of your entitlement to another pension based on employment 
covered by a totalization agreement. Beginning January 1995, we will not 
modify the computation of a totalization benefit in any case (see 
Sec. 404.213(e)(8)).
    (b) Amount of your monthly pension that we use. For purposes of 
computing your primary insurance amount, we consider the amount of your 
monthly pension(s) (or the amount prorated on a monthly basis) which is 
attributable to your noncovered work after 1956 that you are entitled to 
for the first month in which you are concurrently entitled to Social 
Security benefits. For applications filed before December 1988, we will 
use the month of earliest concurrent eligibility. In determining the 
amount of your monthly pension we will use, we will consider the 
following:
    (1) If your pension is not paid on a monthly basis or is paid in a 
lump-sum, we will allocate it proportionately as if it were paid 
monthly. We will allocate this the same way we allocate lump-sum 
payments for a spouse or surviving spouse whose benefits are reduced 
because of entitlement to a Government pension. (See Sec. 404.408a.)
    (2) If your monthly pension is reduced to provide a survivor's 
benefit, we will use the unreduced amount.
    (3) If the monthly pension amount which we will use in computing 
your primary insurance amount is not a multiple of $0.10, we will round 
it to the next lower multiple of $0.10.
    (c) How we compute your primary insurance amount. When you become 
entitled to old-age or disability insurance benefits and to a monthly 
pension, we will compute your primary insurance amount under the 
average-indexed-monthly-earnings method (Sec. 404.212) as modified by 
paragraph (c) (1) and (2) of this section. Where applicable, we will 
also consider the 1977 simplified old-start method (Sec. 404.241) as 
modified by Sec. 404.243 and a special minimum primary insurance amount 
as explained in Secs. 404.260 and 404.261. We will use the highest 
result from these three methods as your primary insurance amount. We 
compute under the average-indexed-monthly-earnings method, and use the 
higher primary insurance amount resulting from the application of 
paragraphs (c) (1) and (2) of this section, as follows:
    (1) The formula in appendix II, except that instead of the first 
percentage figure (i.e., 90 percent), we use--
    (i) 80 percent if you initially become eligible for old-age or 
disability insurance benefits in 1986;
    (ii) 70 percent for initial eligibility in 1987;
    (iii) 60 percent for initial eligibility in 1988;
    (iv) 50 percent for initial eligibility in 1989;
    (v) 40 percent for initial eligibility in 1990 and later years, or
    (2) The formula in appendix II minus one-half the portion of your 
monthly pension which is due to noncovered work after 1956 and for which 
you were entitled in the first month you were

[[Page 81]]

entitled to both Social Security benefits and the monthly pension. If 
the monthly pension amount is not a multiple of $0.10, we will round to 
the next lower multiple of $0.10. To determine the portion of your 
pension which is due to noncovered work after 1956, we consider the 
total number of years of work used to compute your pension and the 
percentage of those years which are after 1956, and in which your 
employment was not covered. We take that percentage of your total 
pension as the amount which is due to your noncovered work after 1956.
    (d) Alternate computation. (1) If you have more than 20 but less 
than 30 years of coverage as defined in the column headed ``Alternate 
Computation Under Sec. 404.213(d)'' in appendix IV of this subpart, we 
will compute your primary insurance amount using the applicable 
percentage given below instead of the first percentage in appendix II of 
this subpart if the applicable percentage below is larger than the 
percentage specified in paragraph (c) of this section:
    (i) For benefits payable for months before January 1989--

------------------------------------------------------------------------
                       Years of coverage                         Percent
------------------------------------------------------------------------
29............................................................        80
28............................................................        70
27............................................................        60
26............................................................        50
------------------------------------------------------------------------

    (ii) For benefits payable for months after December 1988--

------------------------------------------------------------------------
                       Years of coverage                         Percent
------------------------------------------------------------------------
29............................................................        85
28............................................................        80
27............................................................        75
26............................................................        70
25............................................................        65
24............................................................        60
23............................................................        55
22............................................................        50
21............................................................        45
------------------------------------------------------------------------

    (2) If you later earn additional year(s) of coverage, we will 
recompute your primary insurance amount, effective with January of the 
following year.
    (e) Exceptions. The computations in paragraph (c) of this section do 
not apply in the following situations:
    (1) Payments made under the Railroad Retirement Act are not 
considered to be a pension from noncovered employment for the purposes 
of this section. See subpart O of this part for a discussion of railroad 
retirement benefits.
    (2) You were entitled before 1986 to disability insurance benefits 
in any of the 12 months before you reach age 62 or again become 
disabled. (See Sec. 404.251 for the appropriate computation.)
    (3) You were a Federal employee performing service on January 1, 
1984 to which Social Security coverage was extended on that date solely 
by reason of the amendments made by section 101 of the Social Security 
Amendments of 1983.
    (4) You were an employee of a nonprofit organization who was exempt 
from Social Security coverage on December 31, 1983 unless you were 
previously covered under a waiver certificate which was terminated prior 
to that date.
    (5) You have 30 years of coverage as defined in the column headed 
``Alternate Computation Under Sec. 404.213(d)'' in appendix IV of this 
subpart.
    (6) Your survivors are entitled to benefits on your record of 
earnings. (After your death, we will recompute the primary insurance 
amount to nullify the effect of any monthly pension, based in whole or 
in part on noncovered employment, to which you had been entitled.)
    (7) For benefits payable for months after December 1994, payments by 
the social security system of a foreign country which are based on a 
totalization agreement between the United States and that country are 
not considered to be a pension from noncovered employment for purposes 
of this section. See subpart T of this part for a discussion of 
totalization agreements.
    (8) For benefits payable for months after December 1994, the 
computations in paragraph (c) do not apply in the case of an individual 
whose entitlement to U.S. social security benefits results from a 
totalization agreement between the United States and a foreign country.
    (9) For benefits payable for months after December 1994, you are 
eligible after 1985 for monthly periodic benefits based wholly on 
service as a member of a uniformed service, including inactive duty 
training.

[[Page 82]]

    (f) Entitlement to a totalization benefit and a pension based on 
noncovered employment. If, before January 1995, you are entitled to a 
totalization benefit and to a pension based on noncovered employment 
that is not covered by a totalization agreement, we count your coverage 
from a foreign country with which the United States (U.S.) has a 
totalization agreement and your U.S. coverage to determine if you meet 
the requirements for the modified computation in paragraph (d) of this 
section or the exception in paragraph (e)(5) of this section.
    (1) Where the amount of your totalization benefit will be determined 
using a computation method that does not consider foreign earnings (see 
Sec. 404.1918), we will find your total years of coverage by adding 
your--
    (i) Years of coverage from the agreement country (quarters of 
coverage credited under Sec. 404.1908 divided by four) and
    (ii) Years of U.S. coverage as defined for the purpose of computing 
the special minimum primary insurance amount under Sec. 404.261.
    (2) Where the amount of your totalization benefit will be determined 
using a computation method that does consider foreign earnings, we will 
credit your foreign earnings to your U.S. earnings record and then find 
your total years of coverage using the method described in Sec. 404.261.

[52 FR 47916, Dec. 17, 1987, as amended at 55 FR 21382, May 24, 1990; 57 
FR 22429, May 28, 1992; 60 FR 17444, Apr. 6, 1995; 60 FR 56513, Nov. 9, 
1995]

   Average-Monthly-Wage Method of Computing Primary Insurance Amounts



Sec. 404.220  Average-monthly-wage method.

    (a) Who is eligible for this method. You must before 1979, reach age 
62, become disabled or die to be eligible for us to compute your primary 
insurance amount under the average-monthly-wage method. Also, as 
explained in Sec. 404.230, if you reach age 62 after 1978 but before 
1984, you are eligible to have your primary insurance amount computed 
under a modified average-monthly-wage method if it is to your advantage. 
Being eligible for either the average-monthly-wage method or the 
modified average-monthly-wage method does not preclude your eligibility 
under the old-start method described in Secs. 404.240 through 404.242.
    (b) Steps in computing your primary insurance amount under the 
average-monthly-wage method. We follow these three major steps in 
computing your primary insurance amount under the average-monthly-wage 
method:
    (1) First, we find your average monthly wage, as described in 
Sec. 404.221;
    (2) Second, we look at the benefit table in appendix III; and
    (3) Then we find your primary insurance amount in the benefit table, 
as described in Sec. 404.222.
    (4) Finally, we apply any automatic cost-of-living or ad hoc 
increases that became effective in or after the year you reached age 62, 
or became disabled, or died before age 62, as explained in Secs. 404.270 
through 404.277.



Sec. 404.221  Computing your average monthly wage.

    (a) General. Under the average-monthly-wage method, your social 
security earnings are averaged over the length of time you can 
reasonably have been expected to have worked under social security after 
1950 (or after you reached age 21, if later).
    (b) Which of your earnings may be used in computing your average 
monthly wage. (1) In computing your average monthly wage, we consider 
all the wages, compensation, self-employment income, and deemed military 
wage credits that are creditable to you for social security purposes. 
(The maximum amounts creditable are explained in Secs. 404.1047 and 
404.1096 of this part.)
    (2) We use your earnings in your computation base years in computing 
your average monthly wage. All years after 1950 up to (but not 
including) the year you become entitled to old-age or disability 
insurance benefits, or through the year you die if you had not been 
entitled to old-age or disability benefits, are computation base years 
for you. Years after the year you die may not be used as computation 
base years even if you have earnings credited to you in them. However, 
years beginning with the year you become entitled to

[[Page 83]]

benefits may be used for benefits beginning with the following year if 
using them would give you a higher primary insurance amount. Years 
wholly within a period of disability are not computation base years 
unless your primary insurance amount would be higher if they were. In 
such situations, we count all the years during the period of disability, 
even if you had no earnings in some of them.
    (c) Number of years to be considered in computing your average 
monthly wage. To find the number of years to be used in computing your 
average monthly wage--
    (1) We count the years beginning with 1951 or (if later) the year 
you reached age 22 and ending with the year before you reached age 62, 
or became disabled, or died before age 62. Any part of a year--or 
years--in which you were disabled, as defined in Sec. 404.1505, is not 
counted unless doing so would give you a higher average monthly wage. In 
that case, we count all the years during the period of disability, even 
if you had no earnings in some of those years. These are your elapsed 
years. (If you are a male and you reached age 62 before 1975, see 
paragraph (c)(2) of this section for the rules on finding your elapsed 
years.)
    (2) If you are a male and you reached age 62 in--
    (i) 1972 or earlier, we count the years beginning with 1951 and 
ending with the year before you reached age 65, or became disabled or 
died before age 65 to find your elapsed years;
    (ii) 1973, we count the years beginning with 1951 and ending with 
the year before you reached age 64, or became disabled or died before 
age 64 to find your elapsed years; or
    (iii) 1974, we count the years beginning with 1951 and ending with 
the year before you reached age 63, became disabled, or died before age 
63 to find your elapsed years.
    (3) Then we subtract 5 from the number of your elapsed years. This 
is the number of your benefit computation years; we use the same number 
of your computation base years in computing your average monthly wage. 
For benefit computation years, we use the years with the highest amounts 
of earnings, but they may include years of no earnings. You cannot have 
fewer than 2 benefit computation years.
    (d) Your average monthly wage. After we find your benefit 
computation years, we compute your average monthly wage by--
    (1) Totalling your creditable earnings in your benefit computation 
years;
    (2) Dividing the total by the number of months in your benefit 
computation years; and
    (3) Rounding the quotient to the next lower whole dollar if not 
already a multiple of $1.

    Example: Mr. B reaches age 62 and becomes entitled to old-age 
insurance benefits in August 1978. He had no social security earnings 
before 1951 and his year-by-year social security earnings after 1950 are 
as follows:

------------------------------------------------------------------------
                            Year                               Earnings
------------------------------------------------------------------------
1951.......................................................       $2,700
1952.......................................................        2,700
1953.......................................................        3,400
1954.......................................................        3,100
1955.......................................................        4,000
1956.......................................................        4,100
1957.......................................................        4,000
1958.......................................................        4,200
1959.......................................................        4,800
1960.......................................................        4,800
1961.......................................................        4,800
1962.......................................................        4,800
1963.......................................................        4,800
1964.......................................................        1,500
1965.......................................................          0
1966.......................................................          0
1967.......................................................          0
1968.......................................................        3,100
1969.......................................................        5,200
1970.......................................................        7,100
1971.......................................................        7,800
1972.......................................................        8,600
1973.......................................................        8,900
1974.......................................................        9,700
1975.......................................................       10,100
1976.......................................................       10,800
1977.......................................................       11,900
------------------------------------------------------------------------

    We first find Mr. B's elapsed years, which are the 27 years 1951-
1977. We subtract 5 from his 27 elapsed years to find that we must use 
22 benefit computation years in computing his average monthly wage. His 
computation base years are 1951-1977, which are the years after 1950 and 
prior to the year he became entitled. This means that we will use his 22 
computation base years with the highest earnings to compute his average 
monthly wage. Thus, we exclude the years 1964-1967 and 1951.
    We total his earnings in his benefit computation years and get 
$132,700. We then divide that amount by the 264 months in his 22 benefit 
computation years and find his average monthly wage to be $502.65, which 
is rounded down to $502.


[[Page 84]]


    (e) ``Deemed'' average monthly wage for certain deceased veterans of 
World War II. Certain deceased veterans of World War II are ``deemed'' 
to have an average monthly wage of $160 (see Secs. 404.1340 through 
404.1343 of this part) unless their actual average monthly wage, as 
found in the method described in paragraphs (a) through (d) of this 
section is higher.



Sec. 404.222  Use of benefit table in finding your primary insurance
amount from your average monthly wage.

    (a) General. We find your primary insurance amount under the 
average-monthly-wage method in the benefit table in appendix III.
    (b) Finding your primary insurance amount from benefit table. We 
find your average monthly wage in column III of the table. Your primary 
insurance amount appears on the same line in column IV (column II if you 
are entitled to benefits for any of the 12 months preceding the 
effective month in column IV). As explained in Sec. 404.212(e), there is 
a minimum primary insurance amount of $122 payable for persons who 
became eligible or died after 1978 and before January 1982. There is 
also an alternative minimum of $121.80 (before the application of cost-
of-living increases) for members of this group whose benefits were 
computed from the benefit table in effect in December 1978 on the basis 
of either the old-start computation method in Secs. 404.240 through 
404.242 or the guaranteed alternative computation method explained in 
Secs. 404.230 through 404.233. However, as can be seen from the extended 
table in appendix III, the lowest primary insurance amount under this 
method is now $1.70 for individuals for whom the minimum benefit has 
been repealed.

    Example: In the example in Sec. 404.221(d), we computed Mr. B's 
average monthly wage to be $502. We refer to the December 1978 benefit 
table in appendix III. Then we find his average monthly wage in column 
III of the table. Reading across, his primary insurance amount is on the 
same line in column IV and is $390.50. A 9.9 percent automatic cost-of-
living benefit increase was effective for June 1979, increasing Mr. B's 
primary insurance amount to $429.20, as explained in Secs. 404.270 
through 404.277. Then, we increase the $429.20 by the 14.3 percent June 
1980 cost-of-living benefit increase and get $490.60, and by the 11.2 
percent June 1981 increase to get $545.60.

[47 FR 30734, July 15, 1982, as amended at 48 FR 46142, Oct. 11, 1983]

Guaranteed Alternative for People Reaching Age 62 After 1978 but Before 
                                  1984



Sec. 404.230  Guaranteed alternative.

    (a) General. If you reach age 62 after 1978 but before 1984, we 
compute your primary insurance amount under a modified average-monthly-
wage method as a guaranteed alternative to your primary insurance amount 
computed under the average-indexed-monthly-earnings method. We also 
compute your primary insurance amount under the old-start method 
(Secs. 404.240 through 404.242) and under the special rules for a person 
who had a period of disability (Secs. 404.250 through 404.252), if you 
are eligible. In Secs. 404.231 through 404.233, we explain the average-
monthly-wage method as the alternative to the average-indexed-monthly-
earnings method.
    (b) Restrictions. (1) To qualify for this guaranteed-alternative 
computation, you must have some creditable earnings before 1979.
    (2) You or your survivors do not qualify for a guaranteed-
alternative computation if you were eligible (you attained age 62, 
became disabled, or died before age 62) for social security benefits 
based on your own earnings at any time before 1979 unless--
    (i) Those benefits were disability insurance benefits which were 
terminated because you recovered from your disability or you engaged in 
substantial gainful activity; and
    (ii) You spent at least 12 months without being eligible for 
disability benefits again.
    (3) This guaranteed alternative method applies only to old-age 
insurance benefits and to survivor benefits where the deceased worker 
reached the month of his or her 62nd birthday after 1978 but before 1984 
and died after reaching age 62.

[[Page 85]]



Sec. 404.231  Steps in computing your primary insurance amount under
the guaranteed alternative--general.

    If you reach age 62 after 1978 but before 1984, we follow three 
major steps in finding your guaranteed alternative:
    (a) First, we compute your average monthly wage, as described in 
Sec. 404.232;
    (b) Second, we find the primary insurance amount that corresponds to 
your average monthly wage in the benefit table in appendix III.
    (c) Then we apply any automatic cost-of-living or ad hoc increases 
in primary insurance amounts that have become effective in or after the 
year you reached age 62.



Sec. 404.232  Computing your average monthly wage under the guaranteed
alternative.

    (a) General. With the exception described in paragraph (b) of this 
section, we follow the rules in Sec. 404.221 to compute your average 
monthly wage.
    (b) Exception. We do not use any year after the year you reach age 
61 as a computation base year in computing your average monthly wage for 
purposes of the guaranteed alternative.



Sec. 404.233  Adjustment of your guaranteed alternative when you
become entitled after age 62.

    (a) If you do not become entitled to benefits at the time you reach 
age 62, we adjust the guaranteed alternative computed for you under 
Sec. 404.232 as described in paragraph (b) of this section.
    (b) To the primary insurance amount computed under the guaranteed 
alternative, we apply any automatic cost-of-living or ad hoc increases 
in primary insurance amounts that go into effect in the year you reach 
age 62 and in years up through the year you become entitled to benefits. 
(See appendix VI for a list of the percentage increases in primary 
insurance amounts since December 1978.)

    Example: Mr. C reaches age 62 in January 1981 and becomes entitled 
to old-age insurance benefits in April 1981. He had no social security 
earnings before 1951 and his year-by-year social security earnings after 
1950 are as follows:

------------------------------------------------------------------------
                            Year                               Earnings
------------------------------------------------------------------------
1951.......................................................       $3,600
1952.......................................................        3,600
1953.......................................................        3,600
1954.......................................................        3,600
1955.......................................................        4,200
1956.......................................................        4,200
1957.......................................................        4,200
1958.......................................................        4,200
1959.......................................................        4,800
1960.......................................................        4,800
1961.......................................................        4,800
1962.......................................................        4,800
1963.......................................................        4,800
1964.......................................................        4,800
1965.......................................................        4,800
1966.......................................................        6,600
1967.......................................................        6,600
1968.......................................................        7,800
1969.......................................................        7,800
1970.......................................................        7,800
1971.......................................................        7,800
1972.......................................................        9,000
1973.......................................................       10,800
1974.......................................................       13,200
1975.......................................................       14,100
1976.......................................................       15,300
1977.......................................................       16,500
1978.......................................................       17,700
1979.......................................................       22,900
1980.......................................................       25,900
1981.......................................................       29,700
------------------------------------------------------------------------

    Mr. C's elapsed years are the 30 years 1951 through 1980. We 
subtract 5 from his 30 elapsed years to find that we must use 25 benefit 
computation years in computing his average monthly wage. His computation 
base years are 1951 through 1980 which are years after 1950 up to the 
year he reached age 62. We will use his 25 computation base years with 
the highest earnings to compute his average monthly wage. Thus, we 
exclude the years 1951-1955. The year 1981 is not a base year for this 
computation.
    We total his earnings in his benefit computation years and get 
$236,000. We then divide by the 300 months in his 25 benefit computation 
years, and find his average monthly wage to be $786.66 which is rounded 
down to $786.
    The primary insurance amount in the benefit table in appendix III 
that corresponds to Mr. C's average monthly wage is $521.70. The 9.9 
percent and 14.3 percent cost of living increase for 1979 and 1980, 
respectively, are not applicable because Mr. C reached age 62 in 1981.
    The average indexed monthly earnings method described in 
Secs. 404.210 through 404.212 considers all of the earnings after 1950, 
including 1981 earnings which, in Mr. C's case cannot be used in the 
guaranteed alternative method. Mr. C's primary insurance amount under 
the average indexed earnings method is $548.40. Therefore, his benefit 
is based upon the $548.40 primary insurance amount. As in the guaranteed 
alternative method, Mr. C is not entitled to the cost of living 
increases for years before the year he reaches age 62.

[[Page 86]]

         Old-Start Method of Computing Primary Insurance Amounts



Sec. 404.240  Old-start method--general.

    If you had all or substantially all your social security earnings 
before 1951, your primary insurance amount computed under the ``1977 
simplified old-start'' method may be higher than any other primary 
insurance amount computed for you under any other method for which you 
are eligible. As explained in Sec. 404.242, if you reach age 62 after 
1978, your primary insurance amount computed under the old-start method 
is used, for purposes of the guaranteed alternative described in 
Sec. 404.230, if the old-start primary insurance amount is higher than 
the one found under the average-monthly-wage method. We may use a 
modified computation, as explained in Sec. 404.243, if you are entitled 
to a pension based on your employment which was not covered by Social 
Security.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47917, Dec. 17, 1987]



Sec. 404.241  1977 simplified old-start method.

    (a) Who is qualified. To qualify for the old-start computation, you 
must meet the conditions in paragraphs (a) (1), (2), or (3) of this 
section:
    (1) You must--
    (i) Have one ``quarter of coverage'' (see Secs. 404.101 and 404.110 
of this part) before 1951;
    (ii) Have attained age 21 after 1936 and before 1950, or attained 
age 22 after 1950 and earned fewer than 6 quarters of coverage after 
1950;
    (iii) Have not had a period of disability which began before 1951, 
unless it can be disregarded, as explained in Sec. 404.320 of this part; 
and,
    (iv) Have attained age 62, become disabled, or died, after 1977.
    (2)(i) You or your survivor becomes entitled to benefits for June 
1992 or later;
    (ii) You do not meet the conditions in paragraph (a)(1) of this 
section, and,
    (iii) No person is entitled to benefits on your earnings record in 
the month before the month you or your survivor becomes entitled to 
benefits.
    (3) A recomputation is first effective for June 1992 or later based 
on your earnings for 1992 or later.
    (b) Steps in old-start computation. (1) First, we allocate your 
earnings during the period 1937-1950 as described in paragraph (c) of 
this section.
    (2) Next, we compute your average monthly wage, as described in 
paragraph (d) of this section.
    (3) Next, we apply the old-start formula to your average monthly 
wage, as described in paragraph (e)(1) of this section.
    (4) Next, we apply certain increments to the amount computed in step 
(3), as described in paragraph (e)(2) of this section.
    (5) Next, we find your primary insurance amount in the benefit table 
in appendix III, as described in paragraph (f)(1) of this section.
    (6) Then, we apply automatic cost-of-living or ad hoc increases in 
primary insurance amounts to the primary insurance amount found in step 
(5), as described in paragraph (f)(2) of this section.
    (c) Finding your computation base years under the old-start method. 
(1) Instead of using your actual year-by-year earnings before 1951, we 
find your computation base years for 1937-1950 (and the amount of 
earnings for each of them) by allocating your total 1937-1950 earnings 
among the years before 1951 under the following procedure:
    (i) If you reached age 21 before 1950 and your total 1937-1950 
earnings are not more than $3,000 times the number of years after the 
year you reached age 20 and before 1951 (a maximum of 14 years), we 
allocate your earnings equally among those years, and those years are 
your computation base years before 1951.
    (ii) If you reached age 21 before 1950 and your total 1937-1950 
earnings are more than $3,000 times the number of years after the year 
you reached age 20 and before 1951, we allocate your earnings at the 
rate of $3,000 per year for each year after you reached age 20 and 
before 1951 up to a maximum of 14 years. We credit any remainder in 
reverse order to years before age 21 in $3,000 increments and any amount 
left

[[Page 87]]

over of less than $3,000 to the year before the earliest year to which 
we credited $3,000. No more than $42,000 may be credited in this way and 
to no more than 14 years. Those years are your computation base years 
before 1951.
    (iii) If you reached age 21 in 1950 or later and your total pre-1951 
earnings are $3,000 or less, we credit the total to the year you reached 
age 20 and that year is your pre-1951 computation base year.
    (iv) If you reached age 21 in 1950 or later and your total pre-1951 
earnings are more than $3,000, we credit $3,000 to the year you reached 
age 20 and credit the remainder to earlier years (or year) in blocks of 
$3,000 in reverse order. We credit any remainder of less than $3,000 to 
the year before the earliest year to which we had credited $3,000. No 
more than $42,000 may be credited in this way and to no more than 14 
years. Those years are your computation base years before 1951.
    (v) If you die before 1951, we allocate your 1937-1950 earnings 
under paragraphs (c)(1) (i) through (iv), except that in determining the 
number of years, we will use the year of death instead of 1951. If you 
die before you attain age 21, the number of years in the period is equal 
to 1.
    (vi) For purposes of paragraphs (c)(1) (i) through (v), if you had a 
period of disability which began before 1951, we will exclude the years 
wholly within a period of disability in determining the number of years.
    (2)(i) All years after 1950 up to (but not including) the year you 
become entitled to old-age insurance or disability insurance benefits 
(or through the year you die if you had not become entitled to old-age 
or disability benefits) are also computation base years for you.
    (ii) Years wholly within a period of disability are not computation 
base years unless your primary insurance amount would be higher if they 
were. In such situations, we count all the years during the period of 
disability, even if you had no earnings in some of them.

    Example: Ms. D reaches age 62 in June 1979. Her total 1937-1950 
social security earnings are $40,000 and she had social security 
earnings of $7,100 in 1976 and $6,300 in 1977. Since she reaches age 62 
after 1978, we first compute her primary insurance amount under the 
average-indexed-monthly-earnings method (Secs. 404.210 through 404.212). 
As of June 1981, it is $170.50, which is the minimum primary insurance 
amount applicable, because her average indexed monthly earnings of $50 
would yield only $56.50 under the benefit formula. Ms. D reached age 62 
after 1978 but before 1984 and her guaranteed alternative under the 
average-monthly-wage method as of June 1981 is $170.30, which is the 
minimum primary insurance amount based on average monthly wages of $48. 
(These amounts include the 9.9, the 14.3, and the 11.2 percent cost-of-
living increases effective June 1979, June 1980, and June 1981 
respectively.)
    Ms. D is also eligible for the old-start method. We first allocate 
$3,000 of her 1937-1950 earnings to each of her 13 computation base 
years starting with the year she reached age 21 (1938) and ending with 
1950. The remaining $1,000 is credited to the year she reached age 20. 
Ms. D, then, has 42 computation base years (14 before 1951 and 28 after 
1950).

    (d) Computing your average monthly wage under the old-start method. 
(1) First, we count your elapsed years, which are the years beginning 
with 1937 (or the year you reach 22, if later) and ending with the year 
before you reach age 62, or become disabled or die before age 62. (See 
Sec. 404.211(e)(1) for the rule on how we treat years wholly or 
partially within a period of disability.)
    (2) Next, we subtract 5 from the number of your elapsed years, and 
this is the number of computation years we must use. We then choose this 
number of your computation base years in which you had the highest 
earnings. These years are your benefit computation years. You must have 
at least 2 benefit computation years.
    (3) Then we compute your average monthly wage by dividing your total 
creditable earnings in your benefit computation years by the number of 
months in these years and rounding the quotient to the next lower dollar 
if not already a multiple of $1.
    (e) Old-start computation formula. We use the following formula to 
compute your primary insurance benefit, which we will convert to your 
primary insurance amount:
    (1) We take 40 percent of the first $50 of your average monthly 
wage, plus 10 percent of the next $200 of your average monthly wage up 
to a total average monthly wage of $250. (We do not use

[[Page 88]]

more than $250 of your average monthly wage.)
    (2) We increase the amount found in paragraph (e)(1) of this section 
by 1 percent for each $1,650 in your pre-1951 earnings, disregarding any 
remainder less than $1,650. We always increase the amount by at least 4 
of these 1 percent increments but may not increase it by more than 14 of 
them.
    (f) Finding your primary insurance amount under the old-start 
method. (1) In column I of the benefit table in appendix III we locate 
the amount (the primary insurance benefit) computed in paragraph (e) of 
this section and find the corresponding primary insurance amount on the 
same line in column IV of the table.
    (2) We increase that amount by any automatic cost-of-living or ad 
hoc increases in primary insurance amounts effective since the beginning 
of the year in which you reached age 62, or became disabled or died 
before age 62. (See Secs. 404.270 through 404.277.)

    Example: From the example in paragraph (c)(2) of this section, we 
see that Ms. D's elapsed years total 40 (number of years at ages 22 to 
61, both inclusive). Her benefit computation years, therefore, must 
total 35. Since she has only 16 years of actual earnings, we must 
include 19 years of zero earnings in this old-start computation to reach 
the required 35 benefit computation years.
    We next divide her total social security earnings ($53,400) by the 
420 months in her benefit computation years and find her average monthly 
wage to be $127.
    We apply the old-start computation formula to Ms. D's average 
monthly wage as follows: 40 percent of the first $50 of her average 
monthly wage ($20.00), plus 10 percent of the remaining $77 of her 
average monthly wage ($7.70), for a total of $27.70.
    We then apply 14 1-percent increments to that amount, increasing it 
by $3.88 to $31.58. We find $31.58 in column I of the December 1978 
benefit table in appendix III and find her primary insurance amount of 
$195.90 on the same line in column IV. We apply the 9.9 percent 
automatic cost-of-living increase effective for June 1979 to $195.90 and 
get an old-start primary insurance amount of $215.30 which we then 
increase to $246.10 to reflect the 14.3 percent cost-of-living increase 
effective for June 1980, and to $273.70 to reflect the June 1981 
increase. Since that primary insurance amount is higher than the $153.10 
primary insurance amount computed under the average-monthly-wage method 
and the $153.30 primary insurance amount computed under the average-
indexed-monthly-earnings method, we base Ms. D's benefits (and those of 
her family) on $215.30 (plus later cost-of-living increases), which is 
the highest primary insurance amount.

[47 FR 30734, July 15, 1982, as amended at 55 FR 21382, May 24, 1990; 57 
FR 23157, June 2, 1992]



Sec. 404.242  Use of old-start primary insurance amount as guaranteed 
alternative.

    If your primary insurance amount as computed under the old-start 
method is higher than your primary insurance amount computed under the 
average-monthly-wage method, your old-start primary insurance amount 
will serve as the guaranteed alternative to your primary insurance 
amount computed under the average-indexed-monthly-earnings method, as 
described in Sec. 404.230. However, earnings that you have in or after 
the year you reach age 62, or become disabled or die before age 62 are 
not used in an old-start computation in this situation.



Sec. 404.243  Computation where you are eligible for a pension based
on noncovered employment.

    The provisions of Sec. 404.213 are applicable to computations under 
the old-start method, except for paragraphs (c) (1) and (2) and (d) of 
that section. Your primary insurance amount will be whichever of the 
following two amounts is larger:
    (a) One-half the primary insurance amount computed according to 
Sec. 404.241 (before application of the cost of living amount); or
    (b) The primary insurance amount computed according to Sec. 404.241 
(before application of the cost of living amount), minus one-half the 
portion of your monthly pension which is due to noncovered work after 
1956 and for which you were eligible in the first month you became 
eligible for Social Security benefits. If the result is not a multiple 
of $0.10, we will round to the next lower multiple of $0.10. (See 
Sec. 404.213 (b)(3) if you are not eligible for a monthly pension in the 
first month you are entitled to Social Security benefits.) To determine 
the portion of your pension which is due to noncovered work after 1956, 
we consider the total number of years of work used

[[Page 89]]

to compute your pension and the percentage of those years which are 
after 1956 and in which your employment was not covered. We take that 
percentage of your total pension as the amount which is due to your 
noncovered work after 1956.

[52 FR 47918, Dec. 17, 1987]

   Special Computation Rules for People Who Had a Period of Disability



Sec. 404.250  Special computation rules for people who had a period
of disability.

    If you were disabled at some time in your life, received disability 
insurance benefits, and those benefits were terminated because you 
recovered from your disability or because you engaged in substantial 
gainful activity, special rules apply in computing your primary 
insurance amount when you become eligible after 1978 for old-age 
insurance benefits or if you become re-entitled to disability insurance 
benefits or die. (For purposes of Secs. 404.250 through 404.252, we use 
the term second entitlement to refer to this situation.) There are two 
sets of rules:
    (a) Second entitlement within 12 months. If 12 months or fewer pass 
between the last month for which you received a disability insurance 
benefit and your second entitlement, see the rules in Sec. 404.251; and
    (b) Second entitlement after more than 12 months. If more than 12 
months pass between the last month for which you received a disability 
insurance benefit and your second entitlement, see the rules in 
Sec. 404.252.



Sec. 404.251  Subsequent entitlement to benefits less than 12 months
after entitlement to disability benefits ended.

    (a) Disability before 1979; second entitlement after 1978. In this 
situation, we compute your second-entitlement primary insurance amount 
by selecting the highest of the following:
    (1) The primary insurance amount to which you were entitled when you 
last received a benefit, increased by any automatic cost-of-living or ad 
hoc increases in primary insurance amounts that took effect since then;
    (2) The primary insurance amount resulting from a recomputation of 
your primary insurance amount, if one is possible; or
    (3) The primary insurance amount computed for you as of the time of 
your second entitlement under any method for which you are qualified at 
that time, including the average-indexed-monthly-earnings method if the 
previous period of disability is disregarded.
    (b) Disability and second entitlement after 1978. In this situation, 
we compute your second-entitlement primary insurance amount by selecting 
the highest of the following:
    (1) The primary insurance amount to which you were entitled when you 
last received a benefit, increased by any automatic cost-of-living or ad 
hoc increases in primary insurance amount that took effect since then;
    (2) The primary insurance amount resulting from a recomputation of 
your primary insurance amount, if one is possible (this recomputation 
may be under the average-indexed-monthly-earnings method only); or
    (3) The primary insurance amount computed for you as of the time of 
your second entitlement under any method (including an old-start method) 
for which you are qualifed at that time.
    (c) Disability before 1986; second entitlement after 1985. When 
applying the rule in paragraph (b)(3) of this section, we must consider 
your receipt of a monthly pension based on noncovered employment. (See 
Sec. 404.213). However, we will disregard your monthly pension if you 
were previously entitled to disability benefits before 1986 and in any 
of the 12 months before your second entitlement.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47918, Dec. 17, 1987]



Sec. 404.252  Subsequent entitlement to benefits 12 months or more
after entitlement to disability benefits ended.

    In this situation, we compute your second-entitlement primary 
insurance amount by selecting the higher of the following:
    (a) New primary insurance amount. The primary insurance amount 
computed

[[Page 90]]

as of the time of your second entitlement under any of the computation 
methods for which you qualify at the time of your second entitlement; or
    (b) Previous primary insurance amount. The primary insurance amount 
to which you were entitled in the last month for which you were entitled 
to a disability insurance benefit.

                Special Minimum Primary Insurance Amounts



Sec. 404.260  Special minimum primary insurance amounts.

    Regardless of the method we use to compute your primary insurance 
amount, if the special minimum primary insurance amount described in 
Sec. 404.261 is higher, then your benefits (and those of your dependents 
or survivors) will be based on the special minimum primary insurance 
amount. Special minimum primary insurance amounts are not based on a 
worker's average earnings, as are primary insurance amounts computed 
under other methods. Rather, the special minimum primary insurance 
amount is designed to provide higher benefits to people who worked for 
long periods in low-paid jobs covered by social security.



Sec. 404.261  Computing your special minimum primary insurance amount.

    (a) Years of coverage. (1) The first step in computing your special 
minimum primary insurance amount is to find the number of your years of 
coverage, which is the sum of--
    (i) The quotient found by dividing your total creditable social 
security earnings during the period 1937-1950 by $900, disregarding any 
fractional remainder; plus
    (ii) The number of your computation base years after 1950 in which 
your social security earnings were at least the amounts shown in 
appendix IV. (Computation base years mean the same here as in other 
computation methods discussed in this subpart.)
    (2) You must have at least 11 years of coverage to qualify for a 
special minimum primary insurance amount computation. However, special 
minimum primary insurance amounts based on little more than 10 years of 
coverage are usually lower than the regular minimum benefit that was in 
effect before 1982 (see Secs. 404.212(e) and 404.222(b) of this part). 
In any situation where your primary insurance amount computed under 
another method is higher, we use that higher amount.
    (b) Computing your special minimum primary insurance amount. (1) 
First, we subtract 10 from your years of coverage and multiply the 
remainder (at least 1 and no more than 20) by $11.50;
    (2) Then we increase the amount found in paragraph (b)(1) of this 
section by any automatic cost-of-living or ad hoc increases that have 
become effective since December 1978 to find your special minimum 
primary insurance amount. See appendix V for the applicable table, which 
includes the 9.9 percent cost-of-living increase that became effective 
June 1979, the 14.3 percent increase that became effective June 1980, 
and the 11.2 percent increase that became effective June 1981.

    Example: Ms. F, who attained age 62 in January 1979, had $10,000 in 
total social security earnings before 1951 and her post-1950 earnings 
are as follows:

------------------------------------------------------------------------
                            Year                               Earnings
------------------------------------------------------------------------
1951.......................................................       $1,100
1952.......................................................          950
1953.......................................................            0
1954.......................................................        1,000
1955.......................................................        1,100
1956.......................................................        1,200
1957.......................................................            0
1958.......................................................        1,300
1959.......................................................            0
1960.......................................................        1,300
1961.......................................................            0
1962.......................................................        1,400
1963.......................................................        1,300
1964.......................................................            0
1965.......................................................          500
1966.......................................................          700
1967.......................................................          650
1968.......................................................          900
1969.......................................................        1,950
1970.......................................................        2,100
1971.......................................................        2,000
1972.......................................................        1,500
1973.......................................................        2,700
1974.......................................................        2,100
1975.......................................................        2,600
1976.......................................................        3,850
1977.......................................................        4,150
1978.......................................................            0
------------------------------------------------------------------------

    Her primary insurance amount under the average-indexed-monthly-
earnings method as of June 1981 is $240.40 (based on average indexed 
monthly earnings of $229). Her guaranteed-alternative primary insurance 
amount under the average-monthly-wage method as

[[Page 91]]

of June 1981 is $255.80 (based on average monthly wages of $131).
    However, Ms. F has enough earnings before 1951 to allow her 11 years 
of coverage before 1951 ($10,000  $900 = 11, plus a remainder, which we 
drop). She has sufficient earnings in 1951-52, 1954-56, 1958, 1960, 
1962-63, 1969-71, 1973, and 1976-77 to have a year of coverage for each 
of those years. She thus has 15 years of coverage after 1950 and a total 
of 26 years of coverage. We subtract 10 from her years of coverage, 
multiply the remainder (16) by $11.50 and get $184.00. We then apply the 
June 1979, June 1980, and June 1981 automatic cost-of-living increases 
(9.9 percent, 14.3 percent, and 11.2 percent, respectively) to that 
amount to find her special minimum primary insurance amount of $202.30 
effective June 1979, $231.30 effective June 1980, and $257.30 effective 
June 1981. (See appendices V and VI.) Since her special minimum primary 
insurance amount is higher than the primary insurance amounts computed 
for her under the other methods described in this subpart for which she 
is eligible, her benefits (and those of her family) are based on the 
special minimum primary insurance amount.

[47 FR 30734, July 15, 1982, as amended at 48 FR 46143, Oct. 11, 1983]

                        Cost-of-Living Increases



Sec. 404.270  Cost-of-living increases.

    Your primary insurance amount may be automatically increased each 
December so it keeps up with rises in the cost of living. These 
automatic increases also apply to other benefit amounts, as described in 
Sec. 404.271.

[47 FR 30734, July 15, 1982, as amended at 51 FR 12603, Apr. 14, 1986]



Sec. 404.271  When automatic cost-of-living increases apply.

    Besides increases in the primary insurance amounts of current 
beneficiaries, automatic cost-of-living increases also apply to--
    (a) The benefits of certain uninsured people age 72 and older (see 
Sec. 404.380);
    (b) The special minimum primary insurance amounts (described in 
Secs. 404.260 through 404.261) of current and future beneficiaries;
    (c) The primary insurance amounts of people who after 1978 become 
eligible for benefits or die before becoming eligible (beginning with 
December of the year they become eligible or die), although certain 
limitations are placed on the automatic adjustment of the frozen minimum 
primary insurance amount (as described in Sec. 404.277); and
    (d) The maximum family benefit amounts in column V of the benefit 
table in appendix III.

[47 FR 30734, July 15, 1982, as amended at 51 FR 12603, Apr. 14, 1986]



Sec. 404.272  Indexes we use to measure the rise in the cost-of-living.

    (a) The bases. To measure increases in the cost-of-living for annual 
automatic increase purposes, we use either:
    (1) The revised Consumer Price Index (CPI) for urban wage earners 
and clerical workers as published by the Department of Labor, or
    (2) The average wage index (AWI), which is the average of the annual 
total wages that we use to index (i.e., update) a worker's past earnings 
when we compute his or her primary insurance amount (Sec. 404.211(c)).
    (b) Effect of the OASDI fund ratio. Which of these indexes we use to 
measure increases in the cost-of-living depends on the Old-Age, 
Survivors, and Disability Insurance (OASDI) fund ratio.
    (c) OASDI fund ratio for years after 1984. For purposes of cost-of-
living increases, the OASDI fund ratio is the ratio of the combined 
assets in the Federal Old-Age and Survivors Insurance Trust Fund and the 
Federal Disability Insurance Trust Fund (see section 201 of the Social 
Security Act) on January 1 of a given year, to the estimated 
expenditures from the Funds in the same year. The January 1 balance 
consists of the assets (i.e., government bonds and cash) in the Federal 
Old-Age and Survivors Insurance Trust Fund and the Federal Disability 
Insurance Trust Fund, plus Federal Insurance Contributions Act (FICA) 
and Self-Employment Contributions Act (SECA) taxes transferred to these 
trust funds on January 1 of the given year, minus the outstanding 
amounts (principal and interest) owed to the Federal Hospital Insurance 
Trust Fund as a result of interfund loans. Estimated expenditures are 
amounts we expect to pay from the Old-Age and Survivors Insurance and 
the Disability Insurance Trust Funds during the year, including the net 
amount that we pay into the

[[Page 92]]

Railroad Retirement Account, but excluding principal repayments and 
interest payments to the Hospital Insurance Trust Fund and transfer 
payments between the Old-Age and Survivors Insurance and the Disability 
Insurance Trust Funds. The ratio as calculated under this rule is 
rounded to the nearest 0.1 percent.
    (d) Which index we use. We use the CPI if the OASDI fund ratio is 
15.0 percent or more for any year from 1984 through 1988, and if the 
ratio is 20.0 percent or more for any year after 1988. We use either the 
CPI or the AWI, depending on which has the lower percentage increase in 
the applicable measuring period (see Sec. 404.274), if the OASDI fund 
ratio is less than 15.0 percent for any year from 1984 through 1988, and 
if the ratio is less than 20.0 percent for any year after 1988. For 
example, if the OASDI fund ratio for a year is 17.0 percent, the cost-
of-living increase effective December of that year will be based on the 
CPI.

[51 FR 12603, Apr. 14, 1986]



Sec. 404.273  When are automatic cost-of-living increases effective?

    We make automatic cost-of-living increases if the applicable index, 
either the CPI or the AWI, rises over a specified measuring period (see 
the rules on measuring periods in Sec. 404.274). If the cost-of-living 
increase is to be based on an increase in the CPI, the increase is 
effective in December of the year in which the measuring period ends. If 
the increase is to be based on an increase in the AWI, the increase is 
effective in December of the year after the year in which the measuring 
period ends.

[69 FR 19925, Apr. 15, 2004]



Sec. 404.274  What are the measuring periods we use to calculate
cost-of-living increases?

    (a) General. Depending on the OASDI fund ratio, we measure the rise 
in one index or in both indexes during the applicable measuring period 
(described in paragraphs (b) and (c) of this section) to determine 
whether there will be an automatic cost-of-living increase and if so, 
its amount.
    (b) Measuring period based on the CPI--(1) When the period begins. 
The measuring period we use for finding the amount of the CPI increase 
begins with the later of--
    (i) Any calendar quarter in which an ad hoc benefit increase is 
effective; or
    (ii) The third calendar quarter of any year in which the last 
automatic increase became effective.
    (2) When the period ends. The measuring period ends with the third 
calendar quarter of the following year. If this measuring period ends in 
a year after the year in which an ad hoc increase was enacted or took 
effect, there can be no cost-of-living increase at that time. We will 
extend the measuring period to the third calendar quarter of the next 
year.
    (c) Measuring period based on the AWI--(1) When the period begins. 
The measuring period we use for finding the amount of the AWI increase 
begins with the later of--
    (i) The calendar year before the year in which an ad hoc benefit 
increase is effective; or
    (ii) The calendar year before the year in which the last automatic 
increase became effective.
    (2) When the period ends. The measuring period ends with the 
following year. If this measuring period ends in a year in which an ad 
hoc increase was enacted or took effect, there can be no cost-of-living 
increase at that time. We will extend the measuring period to the next 
calendar year.

[69 FR 19925, Apr. 15, 2004]



Sec. 404.275  How is an automatic cost-of-living increase calculated?

    (a) Increase based on the CPI. We compute the average of the CPI for 
the quarters that begin and end the measuring period by adding the three 
monthly CPI figures, dividing the total by three, and rounding the 
result to the same number of decimal places as the published CPI 
figures. If the number of decimal places in the published CPI values 
differs between those used for the beginning and ending quarters, we use 
the number for the ending quarter. If the average for the ending quarter 
is higher than the average for the

[[Page 93]]

beginning quarter, we divide the average for the ending quarter by the 
average of the beginning quarter to determine the percentage increase in 
the CPI over the measuring period.
    (b) Increase based on the AWI. If the AWI for the year that ends the 
measuring period is higher than the AWI for the year which begins the 
measuring period and all the other conditions for an AWI-based increase 
are met, we divide the higher AWI by the lower AWI to determine the 
percentage increase in the AWI.
    (c) Rounding rules. We round the increase from the applicable 
paragraph (a) or (b) of this section to the nearest 0.1 percent by 
rounding 0.05 percent and above to the next higher 0.1 percent and 
otherwise rounding to the next lower 0.1 percent. For example, if the 
applicable index is the CPI and the increase in the CPI is 3.15 percent, 
we round the increase to 3.2 percent. We then apply this percentage 
increase to the amounts described in Sec. 404.271 and round the 
resulting dollar amounts to the next lower multiple of $0.10 (if not 
already a multiple of $0.10).
    (d) Additional increase. See Sec. 404.278 for the additional 
increase that is possible.

[69 FR 19925, Apr. 15, 2004, as amended at 72 FR 2186, Jan. 18, 2007]



Sec. 404.276  Publication of notice of increase.

    When we determine that an automatic cost-of-living increase is due, 
we publish in the Federal Register within 45 days of the end of the 
measuring period used in finding the amount of the increase--
    (a) The fact that an increase is due;
    (b) The amount of the increase;
    (c) The increased special minimum primary insurance amounts; and
    (d) The range of increased maximum family benefits that corresponds 
to the range of increased special minimum primary insurance amounts.



Sec. 404.277  When does the frozen minimum primary insurance amount 
increase because of cost-of-living adjustments?

    (a) What is the frozen minimum primary insurance amount (PIA)? The 
frozen minimum is a minimum PIA for certain workers whose benefits are 
computed under the average-indexed-monthly-earnings method. Section 
404.210(a) with Sec. 404.212(e) explains when the frozen minimum 
applies.
    (b) When does the frozen minimum primary insurance amount (PIA) 
increase automatically? The frozen minimum PIA increases automatically 
in every year in which you or your dependents or survivors are entitled 
to benefits and a cost-of-living increase applies.
    (c) When are automatic increases effective for old-age or disability 
benefits based on a frozen minimum primary insurance amount (PIA)? 
Automatic cost-of-living increases apply to your frozen minimum PIA 
beginning with the earliest of:
    (1) December of the year you become entitled to benefits and receive 
at least a partial benefit;
    (2) December of the year you reach full retirement age (as defined 
in Sec. 404.409) if you are entitled to benefits in or before the month 
you attain full retirement age, regardless of whether you receive at 
least a partial benefit; or
    (3) December of the year you become entitled to benefits if that is 
after you attain full retirement age.
    (d) When are automatic increases effective for survivor benefits 
based on a frozen minimum primary insurance amount (PIA)? (1) Automatic 
cost-of-living increases apply to the frozen minimum PIA used to 
determine survivor benefits in December of any year in which your 
child(ren), your surviving spouse caring for your child(ren), or your 
parent(s), are entitled to survivor benefits for at least one month.
    (2) Automatic cost-of-living increases apply beginning with December 
of the earlier of:
    (i) The year in which your surviving spouse or surviving divorced 
spouse (as defined in Secs. 404.335 and 404.336) has attained full 
retirement age (as defined in Sec. 404.409) and receives at least a 
partial benefit, or
    (ii) The year in which your surviving spouse or surviving disabled 
spouse becomes entitled to benefits and receives at least a partial 
benefit.
    (3) Automatic cost-of-living increases are not applied to the frozen 
minimum PIA in any year in which no survivor of

[[Page 94]]

yours is entitled to benefits on your social security record.

[68 FR 4702, Jan. 30, 2003]



Sec. 404.278  Additional cost-of-living increase.

    (a) General. In addition to the cost-of-living increase explained in 
Sec. 404.275 for a given year, we will further increase the amounts in 
Sec. 404.271 if--
    (1) The OASDI fund ratio is more than 32.0 percent in the given year 
in which a cost-of-living increase is due; and
    (2) In any prior year, the cost-of-living increase was based on the 
AWI as the lower of the CPI and AWI.
    (b) Measuring period for the additional increase--(1) Beginning. To 
compute the additional increase, we begin with--
    (i) In the case of certain uninsured beneficiaries age 72 and older 
(see Sec. 404.380), the first calendar year in which a cost-of-living 
adjustment was based on the AWI rather than the CPI;
    (ii) For all other individuals and for maximum benefits payable to a 
family, the year in which the insured individual became eligible for 
old-age or disability benefits to which he or she is currently entitled, 
or died before becoming eligible.
    (2) Ending. The end of the measuring period is the year before the 
first year in which a cost-of-living increase is due based on the CPI 
and in which the OASDI fund ratio is more than 32.0 percent.
    (c) Compounded percentage benefit increase. To compute the 
additional cost-of-living increase, we must first compute the compounded 
percentage benefit increase (CPBI) for both the cost-of-living increases 
that were actually paid during the measuring period and for the 
increases that would have been paid if the CPI had been the basis for 
all the increases.
    (d) Computing the CPBI. The computation of the CPBI is as follows--
    (1) Obtain the sum of (i) 1.000 and (ii) the actual cost-of-living 
increase percentage (expressed as a decimal) for each year in the 
measuring period;
    (2) Multiply the resulting amount for the first year by that for the 
second year, then multiply that product by the amount for the third 
year, and continue until the last amount has been multiplied by the 
product of the preceding amounts;
    (3) Subtract 1 from the last product;
    (4) Multiply the remaining product by 100. The result is what we 
call the actual CPBI.
    (5) Substitute the cost-of-living increase percentage(s) that would 
have been used if the increase(s) had been based on the CPI (for some 
years, this will be the percentage that was used), and do the same 
computations as in paragraphs (d) (1) through (4) of this section. The 
result is what we call the assumed CPBI.
    (e) Computing the additional cost-of-living increase. To compute the 
precentage increase, we--
    (1) Subtract the actual CPBI from the assumed CPBI;
    (2) Add 100 to the actual CPBI;
    (3) Divide the answer from paragraph (e)(1) of this section by the 
answer from paragraph (e)(2) of this section, multiply the quotient by 
100, and round to the nearest 0.1. The result is the additional increase 
percentage, which we apply to the appropriate amount described in 
Sec. 404.271 after that amount has been increased under Sec. 404.275 for 
a given year. If that increased amount is not a multiple of $0.10, we 
will decrease it to the next lower multiple of $0.10.
    (f) Restrictions on paying an additional cost-of-living increase. We 
will pay the additional increase to the extent necessary to bring the 
benefits up to the level they would have been if they had been increased 
based on the CPI. However, we will pay the additional increase only to 
the extent payment will not cause the OASDI fund ratio to drop below 
32.0 percent for the year after the year in which the increase is 
effective.

[51 FR 12604, Apr. 21, 1986, as amended at 69 FR 19925, Apr. 15, 2004]

                Recomputing Your Primary Insurance Amount



Sec. 404.280  Recomputations.

    At times after you or your survivors become entitled to benefits, we 
will recompute your primary insurance amount. Usually we will recompute 
only if doing so will increase your primary insurance amount. However, 
we

[[Page 95]]

will also recompute your primary insurance amount if you first became 
eligible for old-age or disability insurance benefits after 1985, and 
later become entitled to a pension based on your noncovered employment, 
as explained in Sec. 404.213. There is no limit on the number of times 
your primary insurance amount may be recomputed, and we do most 
recomputations automatically. In the following sections, we explain:
    (a) Why a recomputation is made (Sec. 404.281),
    (b) When a recomputation takes effect (Sec. 404.282),
    (c) Methods of recomputing (Secs. 404.283 and 404.284),
    (d) Automatic recomputations (Sec. 404.285),
    (e) Requesting a recomputation (Sec. 404.286),
    (f) Waiving a recomputation (Sec. 404.287), and
    (g) Recomputing when you are entitled to a pension based on 
noncovered employment (Sec. 404.288).

[52 FR 47918, Dec. 17, 1987]



Sec. 404.281  Why your primary insurance amount may be recomputed.

    (a) Earnings not included in earlier computation or recomputation. 
The most common reason for recomputing your primary insurance amount is 
to include earnings of yours that were not used in the first computation 
or in an earlier recomputation, as described in paragraphs (c) through 
(e) of this section. These earnings will result in a revised average 
monthly wage or revised average indexed monthly earnings.
    (b) New computation method enacted. If a new method of computing or 
recomputing primary insurance amounts is enacted into law and you are 
eligible to have your primary insurance amount recomputed under the new 
method, we will recompute it under the new method if doing so would 
increase your primary insurance amount.
    (c) Earnings in the year you reach age 62 or become disabled. In the 
initial computation of your primary insurance amount, we do not use your 
earnings in the year you become entitled to old-age insurance benefits 
or become disabled. However, we can use those earnings (called lag 
earnings) in a recomputation of your primary insurance amount. We 
recompute and begin paying you the higher benefits in the year after the 
year you become entitled to old-age benefits or become disabled.
    (d) Earnings not reported to us in time to use them in the 
computation of your primary insurance amount. Because of the way reports 
of earnings are required to be submitted to us for years after 1977, the 
earnings you have in the year before you become entitled to old-age 
insurance benefits, or become disabled or in the year you die might not 
be reported to us in time to use them in computing your primary 
insurance amount. We recompute your primary insurance amount based on 
the new earnings information and begin paying you (or your survivors) 
the higher benefits based on the additional earnings, beginning with the 
month you became entitled or died.
    (e) Earnings after entitlement that are used in a recomputation. 
Earnings that you have after you become entitled to benefits will be 
used in a recomputation of your primary insurance amount.
    (f) Entitlement to a monthly pension. We will recompute your primary 
insurance amount if in a month after you became entitled to old-age or 
disability insurance benefits, you become entitled to a pension based on 
noncovered employment, as explained in Sec. 404.213. Further, we will 
recompute your primary insurance amount after your death to disregard a 
monthly pension based on noncovered employment which affected your 
primary insurance amount.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47918, Dec. 17, 1987]



Sec. 404.282  Effective date of recomputations.

    Most recomputations are effective beginning with January of the 
calendar year after the year in which the additional earnings used in 
the recomputation were paid. However, a recomputation to include 
earnings in the year of death (whether or not paid before death) is 
effective for the month of death. Additionally if you first became 
eligible for old-age or disability insurance benefits after 1985 and you 
later

[[Page 96]]

also become entitled to a monthly pension based on noncovered 
employment, we will recompute your primary insurance amount under the 
rules in Sec. 404.213; this recomputed Social Security benefit amount is 
effective for the first month you are entitled to the pension. Finally, 
if your primary insurance amount was affected by your entitlement to a 
pension, we will recompute the amount to disregard the pension, 
effective with the month of your death.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47918, Dec. 17, 1987]



Sec. 404.283  Recomputation under method other than that used to find 
your primary insurance amount.

    In some cases, we may recompute your primary insurance amount under 
a computation method different from the method used in the computation 
(or earlier recomputation) of your primary insurance amount, if you are 
eligible for a computation or recomputation under the different method.



Sec. 404.284  Recomputations for people who reach age 62, or become
disabled, or die before age 62 after 1978.

    (a) General. Years of your earnings after 1978 not used in the 
computation of your primary insurance amount (or in earlier 
recomputations) under the average-indexed-monthly-earnings method may be 
substituted for earlier years of your indexed earnings in a 
recomputation, but only under the average-indexed-monthly-earnings 
method. See Sec. 404.288 for the rules on recomputing when you are 
entitled to a monthly pension based on noncovered employment.
    (b) Substituting actual dollar amounts in earnings for earlier years 
of indexed earnings. When we recompute your primary insurance amount 
under the average-indexed-monthly earnings method, we use actual dollar 
amounts, i.e., no indexing, for earnings not included in the initial 
computation or earlier recomputation. These later earnings are 
substituted for earlier years of indexed or actual earnings that are 
lower.
    (c) Benefit formula used in recomputation. The formula that was used 
in the first computation of your primary insurance amount is also used 
in recomputations of your primary insurance amount.
    (d) Your recomputed primary insurance amount. We recompute your 
primary insurance amount by applying the benefit formula to your average 
indexed monthly earnings as revised to include additional earnings. See 
Sec. 404.281. We then increase the recomputed PIA by the amounts of any 
automatic cost-of-living or ad hoc increases in primary insurance 
amounts that have become effective since you reached age 62, or became 
disabled or died before age 62.
    (e) Minimum increase in primary insurance amounts. Your primary 
insurance amount may not be recomputed unless doing so would increase it 
by at least $1.

    Example 1. Ms. A, whose primary insurance amount we computed to be 
$432.40 in June 1979 in Secs. 404.210 through 404.212 (based on average 
indexed monthly earnings of $903), had earnings of $11,000 in 1979 which 
were not used in the initial computation of her primary insurance 
amount. We may recompute her primary insurance amount effective for 
January 1980. In this recomputation, her 1979 earnings may be 
substituted in their actual dollar amount for the lowest year of her 
indexed earnings that was used in the initial computation. In Ms. A's 
case, we substitute the $11,000 for her 1966 indexed earnings of 
$8,911.36. Her total indexed earnings are now $251,470.05 and her new 
average indexed monthly earnings are $911. We apply to Ms. A's new 
average indexed monthly earnings the same benefit formula we used in the 
initial computation. Doing so produces an amount of $396.00. An 
automatic cost-of-living increase of 9.9 percent was effective in June 
1979. We increase the $396.00 amount by 9.9 percent to find Ms. A's 
recomputed primary insurance amount of $435.30. Later we increased the 
primary insurance amount to $497.60 to reflect the 14.3 percent cost-of-
living increase beginning June 1980 and to $553.40 to reflect the 11.2 
percent cost-of-living increase beginning June 1981.
    Example 2. Mr. B, whose primary insurance amount we computed to be 
$429.20 (based on average monthly wages of $502) in June 1978 in 
Secs. 404.220 through 404.222, had earnings of $12,000 in 1978 which 
were not used in the initial computation of his primary insurance 
amount. We may recompute his primary insurance amount effective for 
January 1979. In this recomputation, his 1978 earnings are substituted 
for the lowest year of earnings used in the initial computation ($2,700 
in

[[Page 97]]

1952). Mr. B's total earnings are now $142,000 and his new average 
monthly wage is $537.
    We next find Mr. B's new average monthly wage in column III of the 
December 1978 benefit table in appendix III. Reading across, we find his 
recomputed primary insurance amount on the same line in column IV, which 
is $407.70. We then apply the 9.9 percent, the 14.3 percent and the 11.2 
percent automatic cost-of-living increases for June 1979, June 1980, and 
June 1981, respectively, to compute Mr. B's primary insurance amount of 
$569.60.

    (f) Guaranteed alternatives. We may recompute your primary insurance 
amount by any of the following methods for which you qualify, if doing 
so would result in a higher amount than the one computed under the 
average-indexed-monthly-earnings method. Earnings in or after the year 
you reach age 62 cannot be used.
    (1) If you reached age 62 after 1978 and before 1984, we may 
recompute to include earnings for years before the year you reached age 
62 by using the guaranteed alternative (Sec. 404.231). We will increase 
the result by any cost-of-living or ad hoc increases in the primary 
insurance amounts that have become effective in and after the year you 
reached age 62.
    (2) We will also recompute under the old-start guarantee 
(Sec. 404.242) and the prior-disability guarantee (Sec. 404.252) if you 
meet the requirements of either or both these methods.

[47 FR 30734, July 15, 1982, as amended at 52 FR 47918, Dec. 17, 1987]



Sec. 404.285  Recomputations performed automatically.

    Each year, we examine the earnings record of every retired, 
disabled, and deceased worker to see if the worker's primary insurance 
amount may be recomputed under any of the methods we have described. 
When a recomputation is called for, we perform it automatically and 
begin paying the higher benefits based on your recomputed primary 
insurance amount for the earliest possible month that the recomputation 
can be effective. You do not have to request this service, although you 
may request a recomputation at an earlier date than one would otherwise 
be performed (see Sec. 404.286). Doing so, however, does not allow your 
increased primary insurance amount to be effective any sooner than it 
would be under an automatic recomputation. You may also waive a 
recomputation if one would disadvantage you or your family (see 
Sec. 404.287).



Sec. 404.286  How to request an immediate recomputation.

    You may request that your primary insurance amount be recomputed 
sooner than it would be recomputed automatically. To do so, you must 
make the request in writing to us and provide acceptable evidence of 
your earnings not included in the first computation or earlier 
recomputation of your primary insurance amount. If doing so will 
increase your primary insurance amount, we will recompute it. However, 
we cannot begin paying higher benefits on the recomputed primary 
insurance amount any sooner than we could under an automatic 
recomputation, i.e., for January of the year following the year in which 
the earnings were paid or derived.



Sec. 404.287  Waiver of recomputation.

    If you or your family would be disadvantaged in some way by a 
recomputation of your primary insurance amount, or you and every member 
of your family do not want your primary insurance amount to be 
recomputed for any other reason, you may waive (that is, give up your 
right to) a recomputation, but you must do so in writing. That you waive 
one recomputation, however, does not mean that you also waive future 
recomputations for which you might be eligible.



Sec. 404.288  Recomputing when you are entitled to a monthly pension 
based on noncovered employment.

    (a) After entitlement to old-age or disability insurance benefits. 
If you first become eligible for old-age or disability insurance 
benefits after 1985 and you later become entitled to a monthly pension 
based on noncovered employment, we may recompute your primary insurance 
amount under the rules in Sec. 404.213. When recomputing, we will use 
the amount of the pension to which you are entitled or deemed entitled 
in the first month that you are concurrently eligible for both the 
pension and

[[Page 98]]

old-age or disability insurance benefits. We will disregard the rule in 
Sec. 404.284(e) that the recomputation must increase your primary 
insurance amount by at least $1.
    (b) Already entitled to benefits and to a pension based on 
noncovered employment. If we have already computed or recomputed your 
primary insurance amount to take into account your monthly pension, we 
may later recompute for one of the reasons explained in Sec. 404.281. We 
will recompute your primary insurance amount under the rules in 
Secs. 404.213 and 404.284. Any increase resulting from the recomputation 
under the rules of Sec. 404.284 will be added to the most recent primary 
insurance amount which we had computed to take into account your monthly 
pension.
    (c) After your death. If one or more survivors are entitled to 
benefits after your death, we will recompute the primary insurance 
amount as though it had never been affected by your entitlement to a 
monthly pension based in whole or in part on noncovered employment.

[52 FR 47918, Dec. 17, 1987]

               Recalculations of Primary Insurance Amounts



Sec. 404.290  Recalculations.

    (a) Your primary insurance amount may be ``recalculated'' in certain 
instances. When we recalculate your primary amount, we refigure it under 
the same method we used in the first computation by taking into 
account--
    (1) Earnings (including compensation for railroad service) 
incorrectly included or excluded in the first computation;
    (2) Special deemed earnings credits including credits for military 
service (see subpart N of this part) and for individuals interned during 
World War II (see subpart K of this part), not available at the time of 
the first computation;
    (3) Correction of clerical or mathematical errors; or
    (4) Other miscellaneous changes in status.
    (b) Unlike recomputations, which may only serve to increase your 
primary insurance amount, recalculations may serve to either increase or 
reduce it.



             Sec. Appendixes to Subpart C of Part 404--Note

    The following appendices contain data that are needed in computing 
primary insurance amounts. Appendix I contains average of the total 
wages figures, which we use to index a worker's earnings for purposes of 
computing his or her average indexed monthly earnings. Appendix II 
contains benefit formulas which we apply to a worker's average indexed 
monthly earnings to find his or her primary insurance amount. Appendix 
III contains the benefit table we use to find a worker's primary 
insurance amount from his or her average monthly wage. We use the 
figures in appendix IV to find your years of coverage for years after 
1950 for purposes of your special minimum primary insurance amount. 
Appendix V contains the table for computing the special minimum primary 
insurance amount. Appendix VI is a table of the percentage increases in 
primary insurance amounts since 1978. Appendix VII is a table of the 
old-law contribution and benefit base that would have been effective 
under the Social Security Act without enactment of the 1977 amendments.
    The figures in the appendices are by law automatically adjusted each 
year. We are required to announce the changes through timely publication 
in the Federal Register. The only exception to the requirement of 
publication in the Federal Register is the update of benefit amounts 
shown in appendix III. We update the benefit amounts for payment 
purposes but are not required by law to publish this extensive table in 
the Federal Register. We have not updated the table in appendix III, but 
the introductory paragraphs at appendix III explain how you can compute 
the current benefit amount.
    When we publish the figures in the Federal Register, we do not 
change every one of these figures. Instead, we provide new ones for each 
year that passes. We continue to use the old ones for various 
computation purposes, as the regulations show. Most of the new figures 
for these appendices are required by law to be published by November 1 
of each year. Notice of automatic cost-of-living increases in primary 
insurance amounts is required to be published within 45 days of the end 
of the applicable measuring period for the increase (see Secs. 404.274 
and 404.276). In effect, publication is required within 45 days of the 
end of the third calendar quarter of any year in which there is to be an 
automatic cost-of-living increase.
    We begin to use the new data in computing primary insurance amounts 
as soon as required by law, even before we periodically update these 
appendices. If the data you need to find your primary insurance amount 
have

[[Page 99]]

not yet been included in the appendices, you may find the figures in the 
Federal Register on or about November 1.

[52 FR 8247, Mar. 17, 1987]



Sec. Appendix I to Subpart C of Part 404--Average of the Total Wages for 
                            Years After 1950

    Explanation: We use these figures to index your social security 
earnings (as described in Sec. 404.211) for purposes of computing your 
average indexed monthly earnings.

------------------------------------------------------------------------
                                                              Average of
                       Calendar year                          the total
                                                                wages
------------------------------------------------------------------------
1951.......................................................    $2,799.16
1952.......................................................     2,973.32
1953.......................................................     3,139.44
1954.......................................................     3,155.64
1955.......................................................     3,301.44
1956.......................................................     3,532.36
1957.......................................................     3,641.72
1958.......................................................     3,673.80
1959.......................................................     3,855.80
1960.......................................................     4,007.12
1961.......................................................     4,086.76
1962.......................................................     4,291.40
1963.......................................................     4,396.64
1964.......................................................     4,576.32
1965.......................................................     4,658.72
1966.......................................................     4,938.36
1967.......................................................     5,213.44
1968.......................................................     5,571.76
1969.......................................................     5,893.76
1970.......................................................     6,186.24
1971.......................................................     6,497.08
1972.......................................................     7,133.80
1973.......................................................     7,580.16
1974.......................................................     8,030.76
1975.......................................................     8,630.92
1976.......................................................     9,226.48
1977.......................................................     9,779.44
1978.......................................................    10,556.03
1979.......................................................    11,479.46
1980.......................................................    12,513.46
1981.......................................................    13,773.10
1982.......................................................    14,531.34
1983.......................................................    15,239.24
1984.......................................................    16,135.07
1985.......................................................    16,822.51
1986.......................................................    17,321.82
1987.......................................................    18,426.51
1988.......................................................    19,334.04
1989.......................................................    20,099.55
1990.......................................................    21,027.98
------------------------------------------------------------------------


[47 FR 30734, July 15, 1982, as amended at 52 FR 8247, Mar. 17, 1987; 57 
FR 44096, Sept. 24, 1992]



 Sec. Appendix II to Subpart C of Part 404--Benefit Formulas Used With 
                    Average Indexed Monthly Earnings

    As explained in Sec. 404.212, we use one of the formulas below to 
compute your primary insurance amount from your average indexed monthly 
earnings (AIME). To select the appropriate formula, we find in the left-
hand column the year after 1978 in which you reach age 62, or become 
disabled, or die before age 62. The benefit formula to be used in 
computing your primary insurance amount is on the same line in the 
right-hand columns. For example, if you reach age 62 or become disabled 
or die before age 62 in 1979, then we compute 90 percent of the first 
$180 of AIME, 32 percent of the next $905 of AIME, and 15 percent of 
AIME over $1,085. After we figure your amount for each step in the 
formula, we add the amounts. If the total is not already a multiple of 
$0.10, we round the total as follows:
    (1) For computations using the benefit formulas in effect for 1979 
through 1982, we round the total upward to the nearest $0.10, and
    (2) For computations using the benefit formulas in effect for 1983 
and later, we round the total downward to the nearest $0.10.

                            Benefit Formulas
------------------------------------------------------------------------
                                              90     plus 32    plus 15
                                           percent   percent    percent
        Year you reach age 62 \1\           of the    of the    of AIME
                                           first--    next--     over--
------------------------------------------------------------------------
1979.....................................     $180       $905     $1,085
1980.....................................      194        977      1,171
1981.....................................      211      1,063      1,274
1982.....................................      230      1,158      1,388
1983.....................................      254      1,274      1,528
1984.....................................      267      1,345      1,612
1985.....................................      280      1,411      1,691
1986.....................................      297      1,493      1,790
1987.....................................      310      1,556      1,866
1988.....................................      319      1,603      1,922
1989.....................................      339      1,705      2,044
1990.....................................      356      1,789      2,145
1991.....................................      370      1,860      2,230
1992.....................................      387      1,946      2,333
------------------------------------------------------------------------
\1\ Or become disabled or die before age 62.


[57 FR 44096, Sept. 24, 1992; 57 FR 45878, Oct. 5, 1992]



        Sec. Appendix III to Subpart C of Part 404--Benefit Table

    This benefit table shows primary insurance amounts and maximum 
family benefits in effect in December 1978 based on cost-of-living 
increases which became effective for June 1978. (See Sec. 404.403 for 
information on maximum family benefits.) You will also be able to find 
primary insurance amounts for an individual whose entitlement began in 
the period June 1977 through May 1978.
    The benefit table in effect in December 1978 had a minimum primary 
insurance amount of $121.80. As explained in Sec. 404.222(b), certain 
workers eligible, or who died without having been eligible, before 1982 
had their benefit computed from this table. However, the minimum benefit 
provision was repealed for other workers by the 1981 amendments to the 
Act (the Omnibus Budget Reconciliation

[[Page 100]]

Act of 1981, Pub. L. 97-35 as modified by Pub. L. 97-123). As a result, 
this benefit table includes a downward extension from the former minimum 
of $121.80 to the lowest primary insurance amount now possible. The 
extension is calculated as follows. For each single dollar of average 
monthly wage in the benefit table, the primary insurance amount shown 
for December 1978 is $121.80 multiplied by the ratio of that average 
monthly wage to $76. The upper limit of each primary insurance benefit 
range in column I of the table is $16.20 multiplied by the ratio of the 
average monthly wage in column III of the table to $76. The maximum 
family benefit is 150 percent of the corresponding primary insurance 
amount.
    The repeal of the minimum benefit provision is effective with 
January 1982 for most workers and their families where the worker 
initially becomes eligible for benefits after 1981 or dies after 1981 
without having been eligible before January 1982. For members of a 
religious order who are required to take a vow of poverty, as explained 
in 20 CFR 404.1024, and which religious order elected Social Security 
coverage before December 29, 1981, the repeal is effective with January 
1992 based on first eligibility or death in that month or later.
    To use this table, you must first compute the primary insurance 
benefit (column I) or the average monthly wage (column III), then move 
across the same line to either column II or column IV as appropriate. To 
determine increases in primary insurance amounts since December 1978 you 
should see appendix VI. Appendix VI tells you, by year, the percentage 
of the increases. In applying each cost-of-living increase to primary 
insurance amounts, we round the increased primary insurance amount to 
the next lower multiple of $0.10 if not already a multiple of $0.10. 
(For cost-of-living increases which are effective before June 1982, we 
round to the next higher multiple of $0.10.)

     Extended December 1978 Table of Benefits Effective January 1982
                              [In dollars]
------------------------------------------------------------------------
     I. Primary                    III. Average               V. Maximum
 insurance benefit:              monthly wage: Or     IV.       family
 If an individual's      II.        his or her      Primary    benefits:
 primary insurance     Primary    average monthly  insurance    And the
    benefit (as       insurance      wage (as        amount     maximum
  determined under     amount    determined under  effective   amount of
 Sec. 404.241(e))    effective   Sec. 404.221)    January    benefits
        is--         June 1977:        is--          1982:    payable on
--------------------  Or his or ------------------  Then his   the basis
                         her                         or her    of his or
                       primary               But    primary    her wages
   At      But not    insurance     At       not   insurance   and self-
 least--     more    amount is--  least--   more     amount   employment
            than--                         than--     is--    income is--
 
------------------------------------------------------------------------
                                                1       1.70       2.60
               0.42                    2        2       3.30       5.00
   0.43         .63                    3        3       4.90       7.40
    .64         .85                    4        4       6.50       9.80
    .86        1.06                    5        5       8.10      12.20
   1.07        1.27                    6        6       9.70      14.60
   1.28        1.49                    7        7      11.30      17.00
   1.50        1.70                    8        8      12.90      19.40
   1.71        1.91                    9        9      14.50      21.80
   1.92        2.13                   10       10      16.10      24.20
   2.14        2.34                   11       11      17.70      26.60
   2.35        2.55                   12       12      19.30      29.00
   2.56        2.77                   13       13      20.90      31.40
   2.78        2.98                   14       14      22.50      33.80
   2.99        3.19                   15       15      24.10      36.20
   3.20        3.41                   16       16      25.70      38.60
   3.42        3.62                   17       17      27.30      41.00
   3.63        3.83                   18       18      28.90      43.40
   3.84        4.05                   19       19      30.50      45.80
   4.06        4.26                   20       20      32.10      48.20
   4.27        4.47                   21       21      33.70      50.60
   4.48        4.68                   22       22      35.30      53.00
   4.69        4.90                   23       23      36.90      55.40
   4.91        5.11                   24       24      38.50      57.80
   5.12        5.32                   25       25      40.10      60.20
   5.33        5.54                   26       26      41.70      62.60
   5.55        5.75                   27       27      43.30      65.00
   5.76        5.96                   28       28      44.90      67.40
   5.97        6.18                   29       29      46.50      69.80
   6.19        6.39                   30       30      48.10      72.20
   6.40        6.60                   31       31      49.70      74.60
   6.61        6.82                   32       32      51.30      77.00
   6.83        7.03                   33       33      52.90      79.40
   7.04        7.24                   34       34      54.50      81.80
   7.25        7.46                   35       35      56.10      84.20
   7.47        7.67                   36       36      57.70      86.60

[[Page 101]]

 
   7.68        7.88                   37       37      59.30      89.00
   7.89        8.10                   38       38      60.90      91.40
   8.11        8.31                   39       39      62.60      93.90
   8.32        8.52                   40       40      64.20      96.30
   8.53        8.73                   41       41      65.80      98.70
   8.74        8.95                   42       42      67.40     101.10
   8.96        9.16                   43       43      69.00     103.50
   9.17        9.37                   44       44      70.60     105.90
   9.38        9.59                   45       45      72.20     108.30
   9.60        9.80                   46       46      73.80     110.70
   9.81       10.01                   47       47      75.40     113.10
  10.02       10.23                   48       48      77.00     115.50
  10.24       10.44                   49       49      78.60     117.90
  10.45       10.65                   50       50      80.20     120.30
  10.66       10.87                   51       51      81.80     122.70
  10.88       11.08                   52       52      83.40     125.10
  11.09       11.29                   53       53      85.00     127.50
  11.30       11.51                   54       54      86.60     129.90
  11.52       11.72                   55       55      88.20     132.30
  11.73       11.93                   56       56      89.80     134.70
  11.94       12.15                   57       57      91.40     137.10
  12.16       12.36                   58       58      93.00     139.50
  12.37       12.57                   59       59      94.60     141.90
  12.58       12.78                   60       60      96.20     144.30
  12.79       13.00                   61       61      97.80     146.70
  13.01       13.21                   62       62      99.40     149.10
  13.22       13.42                   63       63     101.00     151.50
  13.43       13.64                   64       64     102.60     153.90
  13.65       13.85                   65       65     104.20     156.30
  13.86       14.06                   66       66     105.80     158.70
  14.07       14.28                   67       67     107.40     161.10
  14.29       14.49                   68       68     109.00     163.50
  14.50       14.70                   69       69     110.60     165.90
  14.71       14.92                   70       70     112.20     168.30
  14.93       15.13                   71       71     113.80     170.70
  15.14       15.34                   72       72     115.40     173.10
  15.35       15.56                   73       73     117.00     175.50
  15.57       15.77                   74       74     118.60     177.90
  15.78       15.98                   75       75     120.20     180.30
  15.99       16.20                   76       76     121.80     182.70
------------------------------------------------------------------------


              Table of Benefits in Effect in December 1978
                              [In dollars]
------------------------------------------------------------------------
     I. Primary                    III. Average               V. Maximum
 insurance benefit:              monthly wage: Or     IV.       family
 If an individual's      II.        his or her      Primary    benefits:
 primary insurance     Primary    average monthly  insurance    And the
    benefit (as       insurance      wage (as        amount     maximum
  determined under     amount    determined under  effective   amount of
 Sec. 404.241(e))    effective   Sec. 404.221)      June     benefits
        is--         June 1977:        is--          1978:    payable on
--------------------  Or his or ------------------  Then his   the basis
                         her                         or her    of his or
                       primary               But    primary    her wages
   At      But not    insurance     At       not   insurance   and self-
 least--     more    amount is--  least--   more     amount   employment
            than--                         than--     is--    income is--
 
------------------------------------------------------------------------
              16.20     114.30                 76     121.80     182.70
  16.21       16.84     116.10        77       78     123.70     185.60
  16.85       17.60     118.80        79       80     126.60     189.90
  17.61       18.40     121.00        81       81     128.90     193.50
  18.41       19.24     123.00        82       83     131.20     196.80
  19.25       20.00     125.80        84       85     134.00     201.00
  20.01       20.64     128.10        86       87     136.50     204.80
  20.65       21.28     130.10        88       89     138.60     207.90

[[Page 102]]

 
  21.29       21.88     132.70        90       90     141.40     212.10
  21.89       22.28     135.00        91       92     143.80     215.70
  22.29       22.68     137.20        93       94     146.20     219.20
  22.59       23.08     139.40        95       96     148.50     222.80
  23.09       23.44     142.00        97       97     151.30     227.00
  23.45       23.76     144.30        98       99     153.70     230.60
  23.77       24.20     147.10       100      101     156.70     235.10
  24.21       24.60     149.20       102      102     158.90     238.50
  24.61       25.00     151.70       103      104     161.60     242.40
  25.01       25.48     154.50       105      106     164.60     246.90
  25.49       25.92     157.00       107      107     167.30     251.00
  25.93       26.40     159.40       108      109     169.80     254.80
  26.41       26.94     161.90       110      113     172.50     258.80
  26.95       27.46     164.20       114      118     174.90     262.40
  27.47       28.00     166.70       119      122     177.60     266.50
  28.01       28.68     169.30       123      127     180.40     270.60
  28.69       29.25     171.80       128      132     183.00     274.60
  29.26       29.68     174.10       133      136     185.50     278.30
  29.69       30.36     176.50       137      141     188.00     282.10
  30.37       30.92     179.10       142      146     190.80     286.20
  30.93       31.36     181.70       147      150     193.60     290.40
  31.37       32.00     183.90       151      155     195.90     293.90
  32.01       32.60     186.50       156      160     198.70     298.10
  32.61       33.20     189.00       161      164     201.30     302.00
  33.21       33.88     191.40       165      169     203.90     305.90
  33.89       34.50     194.00       170      174     206.70     310.10
  34.51       35.00     196.30       175      178     209.10     313.70
  35.01       35.80     198.90       179      183     211.90     318.00
  35.81       36.40     201.30       184      188     214.40     321.70
  36.41       37.08     203.90       189      193     217.20     326.00
  37.09       37.60     206.40       194      197     219.90     329.90
  37.61       38.20     208.80       198      202     222.40     333.60
  38.21       39.12     211.50       203      207     225.30     338.00
  39.13       39.68     214.00       208      211     228.00     342.00
  39.69       40.33     216.00       212      216     230.10     345.20
  40.34       41.12     218.70       217      221     233.00     349.50
  41.13       41.76     221.20       222      225     235.60     353.40
  41.77       42.44     223.90       226      230     238.50     357.80
  42.45       43.20     226.30       231      235     241.10     361.70
  43.21       43.76     229.10       236      239     244.00     366.10
  43.77       44.44     231.20       240      244     246.30     371.10
  44.45       44.88     233.50       245      249     248.70     378.80
  44.89       45.60     236.40       250      253     251.80     384.90
                        238.70       254      258     254.30     392.50
                        240.80       259      263     256.50     400.00
                        243.70       264      267     259.60     206.00
                        246.10       268      272     262.10     413.70
                        248.70       273      277     264.90     421.20
                        251.00       278      281     267.40     427.20
                        253.50       282      286     270.00     434.90
                        256.20       287      291     272.90     442.60
                        258.30       292      295     275.10     448.50
                        261.10       296      300     278.10     456.10
                        263.50       301      305     280.70     463.80
                        265.80       306      309     283.10     469.80
                        268.50       310      314     286.00     477.40
                        270.70       315      319     288.30     485.10
                        273.20       320      323     291.00     491.10
                        275.80       324      328     293.80     498.70
                        278.10       329      333     296.20     506.20
                        281.00       334      337     299.30     512.50
                        283.00       338      342     301.40     519.90
                        285.60       343      347     304.20     527.50

[[Page 103]]

 
                        288.30       348      351     307.10     533.60
                        290.50       352      356     309.40     541.20
                        293.30       357      361     312.40     548.80
                        295.60       362      365     314.90     554.90
                        297.90       366      370     317.30     562.50
                        300.60       371      375     320.20     569.90
                        303.10       376      379     322.90     576.30
                        305.70       380      384     325.60     583.90
                        307.90       385      389     328.00     591.30
                        310.30       390      393     330.50     597.40
                        313.00       394      398     333.40     605.10
                        315.40       399      403     336.00     612.70
                        318.20       404      407     338.90     618.60
                        320.20       408      412     341.10     626.30
                        322.50       413      417     343.50     633.80
                        324.80       418      421     346.00     639.90
                        327.40       422      426     348.70     647.50
                        329.60       427      431     351.10     655.10
                        331.60       432      436     353.20     662.70
                        334.40       437      440     356.20     665.70
                        336.50       441      445     358.40     669.70
                        338.70       446      450     360.80     673.40
                        341.30       451      454     363.50     676.30
                        343.50       455      459     365.90     680.10
                        345.80       460      464     368.30     683.80
                        347.90       465      468     370.60     687.10
                        350.70       469      473     373.50     690.80
                        352.60       474      478     375.60     694.60
                        354.90       479      482     378.00     697.70
                        357.40       483      487     380.70     701.60
                        359.70       488      492     383.10     705.40
                        361.90       493      496     385.50     708.40
                        364.50       497      501     388.20     712.10
                        366.60       502      506     390.50     715.80
                        368.90       507      510     392.90     719.00
                        371.10       511      515     395.30     722.80
                        373.70       516      520     398.00     726.70
                        375.80       521      524     400.30     729.50
                        378.10       525      529     402.70     733.40
                        380.80       530      534     405.60     737.10
                        382.80       535      538     407.70     740.20
                        385.10       539      543     410.20     744.10
                        387.60       544      548     412.80     747.80
                        389.90       549      553     415.30     751.60
                        392.10       554      556     417.60     753.90
                        393.90       557      560     419.60     756.90
                        396.10       561      563     421.90     759.30
                        398.20       564      567     424.10     762.30
                        400.40       568      570     426.50     764.50
                        402.30       571      574     428.50     767.50
                        404.40       575      577     430.70     769.90
                        406.20       578      581     432.70     772.80
                        408.40       582      584     435.00     775.20
                        410.20       585      588     436.90     778.20
                        412.60       589      591     439.50     780.50
                        414.60       592      595     441.60     783.50
                        416.70       596      598     443.80     785.60
                        418.70       599      602     446.00     788.90
                        420.70       603      605     448.10     791.10
                        422.80       606      609     450.30     794.00
                        424.90       610      612     452.60     796.50
                        426.90       613      616     454.70     799.50
                        428.90       617      620     456.80     802.50

[[Page 104]]

 
                        431.00       621      623     459.10     804.80
                        433.00       624      627     461.20     807.90
                        435.10       628      630     463.40     810.70
                        437.10       631      634     465.60     814.70
                        439.20       635      637     467.80     818.50
                        441.40       638      641     470.10     822.40
                        443.20       642      644     472.10     826.10
                        445.40       645      648     474.40     830.10
                        447.40       649      652     476.50     833.70
                        448.60       653      656     477.80     836.10
                        449.90       657      660     479.20     838.40
                        451.50       661      665     480.90     841.50
                        453.10       666      670     482.60     844.50
                        454.80       671      675     484.40     847.40
                        456.40       676      680     486.10     850.50
                        458.00       681      685     487.80     853.50
                        459.80       686      690     489.70     856.40
                        461.20       691      695     491.20     859.60
                        462.80       696      700     492.90     862.60
                        464.50       701      705     494.70     865.60
                        466.10       706      710     496.40     868.60
                        467.70       711      715     498.20     871.50
                        469.40       716      720     500.00     874.60
                        471.00       721      725     501.70     877.60
                        472.60       726      730     503.40     880.70
                        474.20       731      735     505.10     883.80
                        475.90       736      740     506.90     886.70
                        477.40       741      745     508.50     889.90
                        478.90       746      750     510.10     892.70
                        480.40       751      755     511.70     896.40
                        481.80       756      760     513.20     897.80
                        483.20       761      765     514.70     900.40
                        484.50       766      770     516.00     903.00
                        485.80       771      775     517.40     905.40
                        487.20       776      780     518.90     907.90
                        488.60       781      785     520.40     910.40
                        489.80       786      790     521.70     912.90
                        491.10       791      795     523.10     915.40
                        492.50       796      800     524.60     918.00
                        494.00       801      805     526.20     920.50
                        495.30       806      810     527.50     923.00
                        496.70       811      815     529.00     925.60
                        498.00       816      820     530.40     928.00
                        499.40       821      825     531.90     930.60
                        500.70       826      830     533.30     933.10
                        502.00       831      835     534.70     935.70
                        503.30       836      840     536.10     938.10
                        504.70       841      845     537.60     940.80
                        506.00       846      850     538.90     943.00
                        507.50       851      855     540.50     945.70
                        508.80       856      860     541.90     948.10
                        510.20       861      865     543.40     950.70
                        511.50       866      870     544.80     953.20
                        512.90       871      875     546.30     955.70
                        514.10       876      880     547.60     958.20
                        515.50       881      885     549.10     960.80
                        516.80       886      890     550.40     963.20
                        518.20       891      895     551.90     966.00
                        519.60       896      900     553.40     968.30
                        521.00       901      905     554.90     970.90
                        522.30       906      910     556.30     973.50
                        523.70       911      915     557.80     976.00
                        525.10       916      920     559.30     978.30

[[Page 105]]

 
                        526.30       921      925     560.60     961.00
                        527.60       926      930     561.90     983.40
                        529.00       931      935     563.40     985.90
                        530.40       936      940     564.90     988.50
                        531.70       941      945     566.30     991.00
                        533.00       946      950     567.70     993.50
                        534.50       951      955     569.30     996.10
                        535.90       956      960     570.80     998.60
                        537.30       961      965     572.30   1,001.00
                        538.40       966      970     573.40   1,003.60
                        539.80       971      975     574.90   1,006.20
                        541.20       976      980     576.40   1,008.50
                        542.60       981      985     577.90   1,011.10
                        543.80       986      990     579.20   1,013.60
                        545.20       991      995     580.70   1,016.20
                        546.60       996    1,000     582.20   1,018.60
                        547.80     1,001    1,005     583.50   1,020.70
                        548.90     1,006    1,010     584.60   1,023.20
                        550.20     1,011    1,015     586.00   1,025.30
                        551.50     1,016    1,020     587.40   1,027.80
                        552.60     1,021    1,025     588.60   1,029.90
                        553.80     1,026    1,030     589.80   1,032.20
                        555.10     1,031    1,035     591.20   1,034.50
                        556.20     1,036    1,040     592.40   1,036.70
                        557.50     1,041    1,045     593.80   1,039.10
                        558.80     1,046    1,050     595.20   1,041.30
                        559.80     1,051    1,055     596.20   1,043.40
                        561.10     1,056    1,060     597.60   1,045.90
                        562.40     1,061    1,065     599.00   1,048.00
                        563.60     1,066    1,070     600.30   1,050.50
                        564.80     1,071    1,075     601.60   1,052.60
                        566.00     1,076    1,080     602.80   1,054.90
                        567.30     1,081    1,085     604.20   1,057.10
                        568.40     1,086    1,090     605.40   1,059.40
                        569.70     1,091    1,095     606.80   1,061.70
                        571.00     1,096    1,100     608.20   1,064.00
                        572.00     1,101    1,105     609.20   1,066.10
                        573.30     1,106    1,110     610.60   1.068.50
                        574.60     1,111    1,115     612.00   1,070.70
                        575.70     1,116    1,120     613.20   1,073.10
                        577.00     1,121    1,125     614.60   1,075.30
                        578.20     1,126    1,130     615.80   1,077.60
                        579.40     1,131    1,135     617.10   1,079.70
                        580.60     1,136    1,140     618.40   1,082.20
                        581.90     1,141    1,145     619.80   1,084.40
                        583.10     1,146    1,150     621.10   1,086.70
                        584.20     1,151    1,555     622.20   1,088.80
                        585.50     1,156    1,160     623.60   1,091.10
                        586.70     1,161    1,165     624.90   1,093.40
                        587.90     1,166    1,170     626.20   1,095.80
                        589.20     1,171    1,175     627.50   1,098.00
                        590.30     1,176    1,180     628.70   1,100.20
                        591.40     1,181    1,185     629.90   1,102.20
                        592.60     1,186    1,190     631.20   1,104.30
                        593.70     1,191    1,195     632.30   1,106.50
                        594.80     1,196    1,200     633.50   1,108.60
                        595.90     1,201    1,205     634.70   1,110.60
                        597.10     1,206    1,210     636.00   1,112.90
                        598.20     1,211    1,215     637.10   1,114.90
                        599.30     1,216    1,220     638.30   1,117.00
                        600.40     1,221    1,225     639.50   1,119.00
                        601.60     1,226    1,230     640.80   1,121.20
                        602.70     1,231    1,235     641.90   1,123.30

[[Page 106]]

 
                        603.80     1,236    1,240     643.10   1,125.40
                        605.00     1,241    1,245     644.40   1,127.50
                        606.10     1,246    1,250     645.50   1,129.60
                        607.20     1,251    1,255     646.70   1,131.60
                        608.30     1,256    1,260     647.90   1,133.80
                        609.50     1,261    1,265     649.20   1,135.90
                        610.60     1,266    1,270     650.30   1,138.00
                        611.70     1,271    1,275     651.50   1,140.00
                        612.80     1,276    1,280     652.70   1,142.20
                        613.80     1,281    1,285     653.70   1,144.10
                        614.80     1,286    1,290     654.90   1,146.10
                        616.00     1,291    1,295     656.10   1,148.00
                        617.00     1,296    1,300     657.20   1,150.00
                        618.10     1,301    1,305     658.30   1,152.00
                        619.10     1,306    1,310     659.40   1,154.00
                        620.20     1,311    1,315     660.60   1,155.90
                        621.30     1,316    1,320     661.70   1,157.90
                        622.30     1,321    1,325     662.80   1,159.80
                        623.40     1,326    1,330     664.00   1,161.90
                        624.40     1,331    1,335     665.00   1,163.80
                        625.50     1,336    1,340     666.20   1,165.80
                        626.60     1,341    1,345     667.40   1,167.70
                        627.60     1,346    1,350     668.40   1,169.70
                        628.70     1,351    1,355     669.60   1,171.70
                        629.70     1,356    1,360     670.70   1,173.70
                        630.80     1,361    1,365     671.90   1,175.60
                        631.80     1,366    1,370     672.90   1,177.70
                        632.90     1,371    1,375     674.10   1,179.60
                        633.90     1,376    1,380     675.20   1,181.60
                        634.90     1,381    1,385     676.20   1,183.40
                        635.90     1,386    1,390     677.30   1,185.30
                        636.90     1,391    1,395     678.30   1,187.10
                        637.90     1,396    1,400     679.40   1,189.00
                        638.90     1,401    1,405     680.50   1,190.80
                        639.90     1,406    1,410     681.50   1,192.70
                        640.90     1,411    1,415     682.60   1,194.60
                        641.90     1,416    1,420     683.70   1,196.50
                        642.90     1,421    1,425     685.70   1,198.30
                        643.90     1,426    1,430     684.80   1,200.20
                        644.90     1,431    1,435     686.90   1,202.00
                        645.90     1,436    1,440     687.90   1,203.90
                        646.90     1,441    1,445     689.00   1,205.70
                        647.90     1,446    1,450     690.10   1,207.70
                        648.90     1,451    1,455     691.10   1,209.50
                        649.90     1,456    1,460     692.20   1,211.40
                        650.90     1,461    1,465     693.30   1,213.20
                        651.90     1,466    1,470     694.30   1,215.10
                        652.90     1,471    1,475     695.40   1,216.90
------------------------------------------------------------------------


[47 FR 30734, July 15, 1982; 47 FR 35479, Aug. 16, 1982, as amended at 
48 FR 46143, Oct. 11, 1983; 48 FR 50076, Oct. 31, 1983]

[[Page 107]]



Sec. Appendix IV to Subpart C of Part 404--Earnings Needed for a Year of 
                           Coverage After 1950

Minimum Social Security Earnings to Qualify for a Year of Coverage After
                       1950 for Purposes of the--
------------------------------------------------------------------------
                                              Special        Benefit
                                              minimum      computations
                   Year                       primary      described in
                                             insurance       section
                                               amount     404.213(d) \2\
------------------------------------------------------------------------
1951-1954.................................         $900             $900
1955-1958.................................        1,050            1,050
1959-1965.................................        1,200            1,200
1966-1967.................................        1,650            1,650
1968-1971.................................        1,950            1,950
1972......................................        2,250            2,250
1973......................................        2,700            2,700
1974......................................        3,300            3,300
1975......................................        3,525            3,525
1976......................................        3,825            3,825
1977......................................        4,125            4,125
1978......................................        4,425            4,425
1979......................................        4,725            4,725
1980......................................        5,100            5,100
1981......................................        5,550            5,550
1982......................................        6,075            6,075
1983......................................        6,675            6,675
1984......................................        7,050            7,050
1985......................................        7,425            7,425
1986......................................        7,875            7,875
1987......................................        8,175            8,175
1988......................................        8,400            8,400
1989......................................        8,925            8,925
1990......................................        9,525            9,525
1991......................................        5,940            9,900
1992......................................        6,210           10,350
------------------------------------------------------------------------
\2\ Applies only to certain individuals with pensions from noncovered
  employment.

    Note: For 1951-78, the amounts shown are 25 percent of the 
contribution and benefit base (the contribution and benefit base is the 
same as the annual wage limitation as shown in Sec. 404.1047) in effect. 
For years after 1978, however, the amounts are 25 percent of what the 
contribution and benefit base would have been if the 1977 Social 
Security Amendments had not been enacted, except, for special minimum 
benefit purposes, the applicable percentage is 15 percent for years 
after 1990.

[57 FR 44096, Sept. 24, 1992]



Sec. Appendix V to Subpart C of Part 404--Computing the Special Minimum 
      Primary Insurance Amount and Related Maximum Family Benefits

    These tables are based on section 215(a)(1)(C)(i) of the Social 
Security Act, as amended. They include the percent cost-of-living 
increase shown in appendix VI for each effective date.

                                June 1979
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $12.70      $19.10
12..............................................       25.30       38.00
13..............................................       38.00       57.00
14..............................................       50.60       75.90
15..............................................       63.20       94.90
16..............................................       75.90      113.90
17..............................................       88.50      132.80
18..............................................      101.20      151.80
19..............................................      113.80      170.70
20..............................................      126.40      189.60
21..............................................      139.10      208.70
22..............................................      151.70      227.60
23..............................................      164.40      246.60
24..............................................      177.00      265.50
25..............................................      189.60      284.50
26..............................................      202.30      303.50
27..............................................      214.90      322.40
28..............................................      227.50      341.30
29..............................................      240.20      360.30
30..............................................      252.80      379.20
------------------------------------------------------------------------


                                June 1980
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $14.60      $21.90
12..............................................       29.00       43.50
13..............................................       43.50       65.30
14..............................................       57.90       86.90
15..............................................       72.30      108.50
16..............................................       86.80      130.20
17..............................................      101.20      151.80
18..............................................      115.70      173.60
19..............................................      130.10      195.20
20..............................................      144.50      216.80
21..............................................      159.00      238.60
22..............................................      173.40      260.20
23..............................................      188.00      282.00
24..............................................      202.40      303.60
25..............................................      216.80      325.20
26..............................................      231.30      347.00
27..............................................      245.70      368.60
28..............................................      260.10      390.20
29..............................................      274.60      411.90
30..............................................      289.00      433.50
------------------------------------------------------------------------


                                June 1981
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount     benefits
------------------------------------------------------------------------
11..............................................      $16.30      $24.50
12..............................................       32.30       48.50
13..............................................       48.40       72.70
14..............................................       64.40       96.70
15..............................................       80.40      120.70
16..............................................       96.60      144.90
17..............................................      112.60      168.90
18..............................................      128.70      193.10
19..............................................      144.70      217.10
20..............................................      160.70      241.10
21..............................................      176.90      265.40
22..............................................      192.90      289.40
23..............................................      209.10      313.70
24..............................................      225.10      337.70
25..............................................      241.10      361.70

[[Page 108]]

 
26..............................................      257.30      386.00
27..............................................      273.30      410.00
28..............................................      289.30      434.00
29..............................................      305.40      458.10
30..............................................      321.40      482.10
------------------------------------------------------------------------


                                June 1982
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $17.50      $26.30
12..............................................       34.60       52.00
13..............................................       51.90       78.00
14..............................................       69.10      103.80
15..............................................       86.30      129.60
16..............................................      103.70      155.60
17..............................................      120.90      181.30
18..............................................      138.20      207.30
19..............................................      155.40      233.10
20..............................................      172.50      258.90
21..............................................      189.90      285.00
22..............................................      207.10      310.80
23..............................................      224.50      336.90
24..............................................      241.70      362.60
25..............................................      258.90      388.40
26..............................................      276.30      414.50
27..............................................      293.50      440.30
28..............................................      310.70      466.10
29..............................................      327.90      491.90
30..............................................      345.10      517.70
------------------------------------------------------------------------


                              December 1983
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $18.10      $27.20
12..............................................       35.80       53.80
13..............................................       53.70       80.70
14..............................................       71.50      107.40
15..............................................       89.30      134.10
16..............................................      107.30      161.00
17..............................................      125.10      187.60
18..............................................      143.00      214.50
19..............................................      160.80      241.20
20..............................................      178.50      267.90
21..............................................      196.50      294.90
22..............................................      214.30      321.60
23..............................................      232.30      348.60
24..............................................      250.10      375.20
25..............................................      267.90      401.90
26..............................................      285.90      429.00
27..............................................      303.70      455.70
28..............................................      321.50      482.40
29..............................................      339.30      509.10
30..............................................      357.10      535.80
------------------------------------------------------------------------


                              December 1984
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $18.70      $28.10
12..............................................       37.00       55.60
13..............................................       55.50       83.50
14..............................................       74.00      111.10
15..............................................       92.40      138.70
16..............................................      111.00      166.60
17..............................................      129.40      194.10
18..............................................      148.00      222.00
19..............................................      166.40      249.60
20..............................................      184.70      277.20
21..............................................      203.30      305.20
22..............................................      221.80      332.80
23..............................................      240.40      360.80
24..............................................      258.80      388.30
25..............................................      277.20      415.90
26..............................................      295.90      444.00
27..............................................      314.30      471.60
28..............................................      332.70      499.20
29..............................................      351.10      526.90
30..............................................      369.50      554.50
------------------------------------------------------------------------


                              December 1985
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $19.20      $28.90
12..............................................       38.10       57.30
13..............................................       57.20       86.00
14..............................................       76.20      114.50
15..............................................       95.20      142.90
16..............................................      114.40      171.70
17..............................................      133.40      200.10
18..............................................      152.50      228.80
19..............................................      171.50      257.30
20..............................................      190.40      285.70
21..............................................      209.60      314.60
22..............................................      228.60      343.10
23..............................................      247.80      371.90
24..............................................      266.80      400.30
25..............................................      285.70      428.70
26..............................................      305.00      457.70
27..............................................      324.00      486.20
28..............................................      343.00      514.60
29..............................................      361.90      543.20
30..............................................      380.90      571.60
------------------------------------------------------------------------


                              December 1986
------------------------------------------------------------------------
                                                      II.        III.
                                                    Primary     Maximum
              I. Years of coverage                 insurance    family
                                                    amount      benefit
------------------------------------------------------------------------
11..............................................      $19.40      $29.20
12..............................................       38.50       58.00
13..............................................       57.90       87.10
14..............................................       77.10      115.90
15..............................................       96.40      144.70
16..............................................      115.80      173.90
17..............................................      135.10      202.70
18..............................................      154.40      231.70
19..............................................      173.70      260.60
20..............................................      192.80      289.40
21..............................................      212.30      318.60
22..............................................      231.50      347.50
23..............................................      251.00      376.70
24..............................................      270.20      405.50
25..............................................      289.40      434.20
26..............................................      308.90      463.60
27..............................................      328.20      492.50
28..............................................      347.40      521.20

[[Page 109]]

 
29..............................................      366.60      550.20
30..............................................      385.80      579.00
------------------------------------------------------------------------


                              December 1987
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $20.20       $30.40
12............................................        40.10        60.40
13............................................        60.30        90.70
14............................................        80.30       120.70
15............................................       100.40       150.70
16............................................       120.60       181.20
17............................................       140.70       211.20
18............................................       160.80       241.40
19............................................       180.90       271.50
20............................................       200.80       301.50
21............................................       221.20       331.90
22............................................       241.20       362.00
23............................................       261.50       392.50
24............................................       281.50       422.50
25............................................       301.50       452.40
26............................................       321.80       483.00
27............................................       341.90       513.10
28............................................       361.90       543.00
29............................................       381.90       573.30
30............................................       402.00       603.30
------------------------------------------------------------------------


                              December 1988
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $21.00       $31.60
12............................................        41.70        62.80
13............................................        62.70        94.30
14............................................        83.50       125.50
15............................................       104.40       156.70
16............................................       125.40       188.40
17............................................       146.30       219.60
18............................................       167.20       251.00
19............................................       188.10       282.30
20............................................       208.80       313.50
21............................................       230.00       345.10
22............................................       250.80       376.40
23............................................       271.90       408.20
24............................................       292.70       439.40
25............................................       313.50       470.40
26............................................       334.60       502.30
27............................................       355.50       533.60
28............................................       376.30       564.70
29............................................       397.10       596.20
30............................................       418.00       627.40
------------------------------------------------------------------------


                              December 1989
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $21.90       $33.00
12............................................        43.60        65.70
13............................................        65.60        98.70
14............................................        87.40       131.30
15............................................       109.30       164.00
16............................................       131.20       197.20
17............................................       153.10       229.90
18............................................       175.00       262.70
19............................................       196.90       295.50
20............................................       218.60       328.20
21............................................       240.80       361.30
22............................................       262.50       394.00
23............................................       284.60       427.30
24............................................       306.40       460.00
25............................................       328.20       492.50
26............................................       350.30       525.90
27............................................       372.20       558.60
28............................................       393.90       591.20
29............................................       415.70       624.20
30............................................       437.60       656.80
------------------------------------------------------------------------


                              December 1990
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $23.00       $34.70
12............................................        45.90        69.20
13............................................        69.10       104.00
14............................................        92.10       138.30
15............................................       115.20       172.80
16............................................       138.20       207.80
17............................................       161.30       242.30
18............................................       184.40       276.80
19............................................       207.50       311.40
20............................................       230.40       345.90
21............................................       253.80       380.80
22............................................       276.60       415.20
23............................................       299.90       450.30
24............................................       322.90       484.80
25............................................       345.90       519.00
26............................................       369.20       554.20
27............................................       392.20       588.70
28............................................       415.10       623.10
29............................................       438.10       657.90
30............................................       461.20       692.20
------------------------------------------------------------------------


                              December 1991
------------------------------------------------------------------------
                                                                 III.
                                                II. Primary    Maximum
             I. Years of coverage                insurance      family
                                                   amount      benefit
------------------------------------------------------------------------
11............................................       $23.80       $35.90
12............................................        47.50        71.70
13............................................        71.60       107.80
14............................................        95.50       143.40
15............................................       119.40       179.10
16............................................       143.30       215.40
17............................................       167.20       251.20
18............................................       191.20       287.00
19............................................       215.10       322.90
20............................................       238.90       358.60
21............................................       263.10       394.80
22............................................       286.80       430.50
23............................................       310.90       466.90
24............................................       334.80       502.70
25............................................       358.60       538.20
26............................................       382.80       574.70
27............................................       406.70       610.40
28............................................       430.40       646.10
29............................................       454.30       682.20

[[Page 110]]

 
30............................................       478.20       717.80
------------------------------------------------------------------------
Note: The amounts shown in the above table for years of coverage less
  than 19 are not payable for June 1981 through December 1981 because
  the corresponding values shown in column II are less than the $135.70
  minimum primary insurance amount payable for that period. For months
  after December 1981, a special minimum primary insurance amount of
  $128.70 will be payable.


[47 FR 30734, July 15, 1982, as amended at 52 FR 8248, Mar. 17, 1987; 57 
FR 44097, Sept. 24, 1992; 57 FR 45878, Oct. 5, 1992]



   Sec. Appendix VI to Subpart C of Part 404--Percentage of Automatic 
            Increases in Primary Insurance Amounts Since 1978

------------------------------------------------------------------------
                                                              Percentage
                       Effective date                          increase
------------------------------------------------------------------------
06/79......................................................          9.9
06/80......................................................         14.3
06/81......................................................         11.2
06/82......................................................          7.4
12/83......................................................          3.5
12/84......................................................          3.5
12/85......................................................          3.1
12/86......................................................          1.3
12/87......................................................          4.2
12/88......................................................          4.0
12/89......................................................          4.7
12/90......................................................          5.4
12/91......................................................          3.7
------------------------------------------------------------------------


[57 FR 44097, Sept. 24, 1992]



Sec. Appendix VII to Subpart C of Part 404--``Old-Law'' Contribution and 
                              Benefit Base

    Explanation: We use these figures to determine the earnings needed 
for a year of coverage for years after 1978 (see Sec. 404.261 and 
appendix IV). This is the contribution and benefit base that would have 
been effective under the Social Security Act without the enactment of 
the 1977 amendments.

------------------------------------------------------------------------
                            Year                                Amount
------------------------------------------------------------------------
1979.......................................................      $18,900
1980.......................................................       20,400
1981.......................................................       22,200
1982.......................................................       24,300
1983.......................................................       26,700
1984.......................................................       28,200
1985.......................................................       29,700
1986.......................................................       31,500
1987.......................................................       32,700
1988.......................................................       33,600
1989.......................................................       35,700
1990.......................................................       38,100
1991.......................................................       39,600
1992.......................................................       41,400
------------------------------------------------------------------------


[52 FR 8248, Mar. 17, 1987, as amended at 57 FR 44097, Sept. 24, 1992; 
57 FR 45878, Oct. 5, 1992]



  Subpart D_Old-Age, Disability, Dependents' and Survivors' Insurance 
                     Benefits; Period of Disability

    Authority: Secs. 202, 203(a) and (b), 205(a), 216, 223, 225, 228(a)-
(e), and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 403(a) and 
(b), 405(a), 416, 423, 425, 428(a)-(e), and 902(a)(5)).

    Source: 44 FR 34481, June 15, 1979, unless otherwise noted.

                                 General



Sec. 404.301  Introduction.

    This subpart sets out what requirements you must meet to qualify for 
social security benefits, how your benefit amounts are figured, when 
your right to benefits begins and ends, and how family relationships are 
determined. These benefits are provided by title II of the Social 
Security Act. They include--
    (a) For workers, old-age and disability benefits and benefit 
protection during periods of disability;
    (b) For a worker's dependents, benefits for a worker's wife, 
divorced wife, husband, divorced husband, and child;
    (c) For a worker's survivors, benefits for a worker's widow, 
widower, divorced wife, child, and parent, and a lump-sum death payment; 
and
    (d) For uninsured persons age 72 or older, special payments.



Sec. 404.302  Other regulations related to this subpart.

    This subpart is related to several others. Subpart H sets out what 
evidence you need to prove you qualify for benefits. Subpart P describes 
what is needed to prove you are disabled. Subpart E describes when your 
benefits may be reduced or stopped for a time. Subpart G describes the 
need for and the effect of an application for benefits. Part 410 
describes when you may qualify for black lung benefits. Part 416 
describes when you may qualify for supplemental security income. Also 42 
CFR part 405 describes when you may

[[Page 111]]

qualify for hospital and medical insurance if you are aged, disabled, or 
have chronic kidney disease.



Sec. 404.303  Definitions.

    As used in this subpart:
    Apply means to sign a form or statement that the Social Security 
Administration accepts as an application for benefits under the rules 
set out in subpart G.
    Eligible means that a person would meet all the requirements for 
entitlement to benefits for a period of time but has not yet applied.
    Entitled means that a person has applied and has proven his or her 
right to benefits for a period of time.
    Insured person or the insured means someone who has enough earnings 
under social security to permit payment of benefits on his or her 
earnings record. The requirements for becoming insured are described in 
subpart B.
    Permanent home means the true and fixed home (legal domicile) of a 
person. It is the place to which a person intends to return whenever he 
or she is absent.
    Primary insurance amount means an amount that is determined from the 
average monthly earnings creditable to the insured person. This term and 
the manner in which it is computed are explained in subpart C.
    We or Us means the Social Security Administration.
    You means the person who has applied for benefits or the person for 
whom someone else has applied.



Sec. 404.304  What are the general rules on benefit amounts?

    This subpart describes how we determine the highest monthly benefit 
amount you ordinarily could qualify for under each type of benefit. 
However, the highest monthly benefit amount you could qualify for may 
not be the amount you will be paid. In a particular month, your benefit 
amount may be reduced or not paid at all. Under some circumstances, your 
benefit amount may be increased. The most common reasons for a change in 
your benefit amount are listed below.
    (a) Age. Sections 404.410 through 404.413 explain how your old-age, 
wife's or husband's, or widow's or widower's benefits may be reduced if 
you choose to receive them before you attain full retirement age (as 
defined in Sec. 404.409).
    (b) Earnings. Sections 404.415 through 404.418 explain how 
deductions will be made from your benefits if your earnings or the 
insured person's earnings go over certain limits.
    (c) Overpayments and underpayments. Your benefits may be increased 
or decreased to make up for any previous overpayment or underpayment 
made on the insured person's record. For more information about this, 
see subpart F of this part.
    (d) Family maximum. Sections 404.403 through 404.406 explain that 
there is a maximum amount payable on each insured person's earnings 
record. If you are entitled to benefits as the insured's dependent or 
survivor, your benefits may be reduced to keep total benefits payable to 
the insured's family within these limits.
    (e) Government pension offset. If you are entitled to wife's, 
husband's, widow's, widower's, mother's or father's benefits and receive 
a Government pension for work that was not covered under social 
security, your monthly benefits may be reduced because of that pension. 
Special age 72 payments may also be reduced because of a Government 
pension. For more information about this, see Sec. 404.408a which covers 
reductions for Government pensions and Sec. 404.384(c) which covers 
special age 72 payments.
    (f) Rounding. After all other deductions or reductions, we reduce 
any monthly benefit that is not a multiple of $1 to the next lower 
multiple of $1.

[68 FR 4702, Jan. 30, 2003]



Sec. 404.305  When you may not be entitled to benefits.

    In addition to the situations described in Sec. 404.304 when you may 
not receive a benefit payment, there are special circumstances when you 
may not be entitled to benefits. These circumstances are--
    (a) Waiver of benefits. If you have waived benefits and been granted 
a tax exemption on religious grounds as described in Secs. 404.1039 and 
404.1075, no one may become entitled to any benefits or payments on your 
earnings record and

[[Page 112]]

you may not be entitled to benefits on anyone else's earnings record; 
and
    (b) Person's death caused by an intentional act. You may not become 
entitled to or continue to receive any survivor's benefits or payments 
on the earnings record of any person, or receive any underpayment due a 
person, if you were convicted of a felony or an act in the nature of a 
felony of intentionally causing that person's death. If you were subject 
to the juvenile justice system, you may not become entitled to or 
continue to receive survivor's benefits or payments on the earnings 
record of any person, or receive any underpayment due a person, if you 
were found by a court of competent jurisdiction to have intentionally 
caused that person's death by committing an act which, if committed by 
an adult, would have been considered a felony or an act in the nature of 
a felony.

[44 FR 34481, June 15, 1979, as amended at 47 FR 42098, Sept. 24, 1982; 
52 FR 19136, May 21, 1987, 52 FR 21410, June 5, 1987; 58 FR 64888, Dec. 
10, 1993]

                     Old-Age and Disability Benefits



Sec. 404.310  When am I entitled to old-age benefits?

    We will find you entitled to old-age benefits if you meet the 
following three conditions:
    (a) You are at least 62 years old;
    (b) You have enough social security earnings to be fully insured as 
defined in Secs. 404.110 through 404.115; and
    (c) You apply; or you are entitled to disability benefits up to the 
month you attain full retirement age (as defined in Sec. 404.409). When 
you attain full retirement age, your disability benefits automatically 
become old-age benefits.

[68 FR 4702, Jan. 30, 2003]



Sec. 404.311  When does my entitlement to old-age benefits begin
and end?

    (a) We will find you entitled to old-age benefits beginning with:
    (1) If you have attained full retirement age (as defined in 
Sec. 404.409), the first month covered by your application in which you 
meet all requirements for entitlement; or
    (2) If you have attained age 62, but have not attained full 
retirement age (as defined in Sec. 404.409), the first month covered by 
your application throughout which you meet all requirements for 
entitlement.
    (b) We will find your entitlement to old-age benefits ends with the 
month before the month you die.

[68 FR 4702, Jan. 30, 2003]



Sec. 404.312  How is my old-age benefit amount calculated?

    (a) If your old-age benefits begin in the month you attain full 
retirement age (as defined in Sec. 404.409), your monthly benefit is 
equal to the primary insurance amount (as explained in subpart C of this 
part).
    (b) If your old-age benefits begin after the month you attain full 
retirement age, your monthly benefit is your primary insurance amount 
plus an increase for retiring after full retirement age. See 
Sec. 404.313 for a description of these increases.
    (c) If your old-age benefits begin before the month you attain full 
retirement age, your monthly benefit amount is the primary insurance 
amount minus a reduction for each month you are entitled before you 
attain full retirement age. These reductions are described in 
Secs. 404.410 through 404.413.

[68 FR 4702, Jan. 30, 2003]



Sec. 404.313  What are delayed retirement credits and how do they
increase my old-age benefit amount?

    (a) What are delayed retirement credits and how do I earn them? 
Delayed retirement credits (DRCs) are credits we use to increase the 
amount of your old-age benefit amount. You may earn a credit for each 
month during the period beginning with the month you attain full 
retirement age (as defined in Sec. 404.409) and ending with the month 
you attain age 70 (72 before 1984). You earn a credit for each month for 
which you are fully insured and eligible but do not receive an old-age 
benefit either because you do not apply for benefits or because you 
elect to voluntarily suspend your benefits to earn DRCs. Even if you 
were entitled to old-age benefits before full retirement age you may 
still earn DRCs for months during the period from full retirement age to 
age 70, if you voluntarily elect to suspend

[[Page 113]]

those benefits. If we have determined that you are entitled to benefits, 
you may voluntarily suspend benefits for any month beginning with the 
month after the month in which you voluntarily request that we suspend 
your benefits. If you apply for benefits, and we have not made a 
determination that you are entitled to benefits, you may voluntarily 
have your benefits suspended for any month for which you have not 
received a payment.
    (b) How is the amount of the increase because of delayed retirement 
credits computed?--(1) Computation of the increase amount. The amount of 
the increase depends on your date of birth and the number of credits you 
earn. We total the number of credits (which need not be consecutive) and 
multiply that number by the applicable percentage from paragraph (b)(2) 
of this section. We then multiply the result by your benefit amount and 
round the answer to the next lower multiple of 10 cents (if the answer 
is not already a multiple of 10 cents). We add the result to your 
benefit amount. If a supplementary medical insurance premium is involved 
it is then deducted. The result is rounded to the next lower multiple of 
$1 (if the answer is not already a multiple of $1).
    (2) Credit percentages. The applicable credit amount for each month 
of delayed retirement can be found in the table below.

------------------------------------------------------------------------
                                   The credit for each month you delay
   If your date of birth is:                 retirement is:
------------------------------------------------------------------------
Before 1/2/1917...............  \1/12\ of 1%
1/2/1917--1/1/1925............  \1/4\ of 1%
1/2/1925--1/1/1927............  \7/24\ of 1%
1/2/1927--1/1/1929............  \1/3\ of 1%
1/2/1929--1/1/1931............  \3/8\ of 1%
1/2/1931--1/1/1933............  \5/12\ of 1%
1/2/1933--1/1/1935............  \11/24\ of 1%
1/2/1935--1/1/1937............  \1/2\ of 1%
1/2/1937--1/1/1939............  \13/24\ of 1%
1/2/1939--1/1/1941............  \7/12\ of 1%
1/2/1941--1/1/1943............  \5/8\ of 1%
After 1/1/1943................  \2/3\ of 1%
------------------------------------------------------------------------

    Example: Alan was qualified for old-age benefits when he reached age 
65 on January 15, 1998. He decided not to apply for old-age benefits 
immediately because he was still working. When he became age 66 in 
January 1999, he stopped working and applied for benefits beginning with 
that month. Based on his earnings, his primary insurance amount was 
$782.60. However, because he did not receive benefits immediately upon 
attainment of full retirement age (65), he is due an increase based on 
his delayed retirement credits. He earned 12 credits, one for each month 
from January 1998 through December 1998. Based on his date of birth of 
1/15/1933 he is entitled to a credit of \11/24\ of one percent for each 
month of delayed retirement. 12 credits multiplied by \11/24\ of one 
percent equals a credit of 5.5 percent. 5.5% of the primary insurance 
amount of $782.60 is $43.04 which is rounded to $43.00, the next lower 
multiple of 10 cents. $43.00 is added to the primary insurance amount, 
$782.60. The result, $825.60 is the monthly benefit amount. If a 
supplementary medical insurance premium is involved it is then deducted. 
The result is rounded to the next lower multiple of $1 (if the answer is 
not already a multiple of $1).

    (c) When is the increase because of delayed retirement credits 
effective?--(1) Credits earned after entitlement and before the year of 
attainment of age 70. If you are entitled to benefits, we examine our 
records after the end of each calendar year to determine whether you 
have earned delayed retirement credits during the previous year for 
months when you were at or over full retirement age and you were fully 
insured and eligible for benefits but did not receive them. Any increase 
in your benefit amount is effective beginning with January of the year 
after the year the credits were earned.
    (2) Credits earned after entitlement in the year of attainment of 
age 70. If you are entitled to benefits in the month you attain age 70, 
we examine our records to determine if you earned any additional delayed 
retirement credits during the calendar year in which you attained age 
70. Any increase in your benefit amount is effective beginning with the 
month you attained age 70.
    (3) Credits earned prior to entitlement. If you are full retirement 
age or older and eligible for old-age benefits but do not apply for 
benefits, your delayed retirement credits for months from the month of 
attainment of full retirement age through the end of the year prior to 
the year of filing will be included in the computation of your initial 
benefit amount. Credits earned in the year you attain age 70 will be 
added in the month you attain age 70.

[[Page 114]]

    (d) How do delayed retirement credits affect the special minimum 
primary insurance amount? We do not add delayed retirement credits to 
your old-age benefit if your benefit is based on the special minimum 
primary insurance amount described in Sec. 404.260. We add the delayed 
retirement credits only to your old-age benefit based on your regular 
primary insurance amount, i.e. as computed under one of the other 
provisions of subpart C of this part. If your benefit based on the 
regular primary insurance amount plus your delayed retirement credits is 
higher than the benefit based on your special minimum primary insurance 
amount, we will pay the higher amount to you. However, if the special 
minimum primary insurance amount is higher than the regular primary 
insurance amount without the delayed retirement credits, we will use the 
special minimum primary insurance amount to determine the family maximum 
and the benefits of others entitled on your earnings record.
    (e) What is the effect of my delayed retirement credits on the 
benefit amount of others entitled on my earnings record?--(1) Surviving 
spouse or surviving divorced spouse. If you earn delayed retirement 
credits during your lifetime, we will compute benefits for your 
surviving spouse or surviving divorced spouse based on your regular 
primary insurance amount plus the amount of those delayed retirement 
credits. All delayed retirement credits, including any earned during the 
year of death, can be used in computing the benefit amount for your 
surviving spouse or surviving divorced spouse beginning with the month 
of your death. We compute delayed retirement credits up to but not 
including the month of death.
    (2) Other family member. We do not use your delayed retirement 
credits to increase the benefits of other family members entitled on 
your earnings record.
    (3) Family maximum. We add delayed retirement credits to your 
benefit after we compute the family maximum. However, we add delayed 
retirement credits to your surviving spouse's or surviving divorced 
spouse's benefit before we reduce for the family maximum.

[68 FR 4703, Jan. 30, 2003, as amended at 75 FR 76259, Dec. 8, 2010]



Sec. 404.315  Who is entitled to disability benefits?

    (a) General. You are entitled to disability benefits while disabled 
before attaining full retirement age as defined in Sec. 404.409 if--
    (1) You have enough social security earnings to be insured for 
disability, as described in Sec. 404.130;
    (2) You apply;
    (3) You have a disability, as defined in Sec. 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 Sec. 404.320 any time within 5 years of the month you again became 
disabled.
    (b) Prohibition against reentitlement to disability benefits if drug 
addiction or alcoholism is a contributing factor material to the 
determination of disability. You cannot be entitled to a period of 
disability payments if drug addiction or alcoholism is a contributing 
factor material to the determination of disability and your earlier 
entitlement to disability benefits on the same basis terminated after 
you received benefits for 36 months during which treatment was 
available.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21930, May 16, 1983; 51 
FR 10616, Mar. 28, 1986; 51 FR 16166, May 1, 1986; 53 FR 43681, Oct. 28, 
1988; 57 FR 30119, July 8, 1992; 60 FR 8145, Feb. 10, 1995; 68 FR 4704, 
Jan. 30, 2003]



Sec. 404.316  When entitlement to disability benefits begins and ends.

    (a) You are entitled to disability benefits beginning with the first 
month covered by your application in which you meet all the other 
requirements

[[Page 115]]

for entitlement. If a waiting period is required, your benefits cannot 
begin earlier than the first month following that period.
    (b) Your entitlement to disability benefits ends with the earliest 
of these months:
    (1) The month before the month of your death;
    (2) The month before the month you attain full retirement age as 
defined in Sec. 404.409 (at full retirement age your disability benefits 
will be automatically changed to old-age benefits);
    (3) The second month after the month in which your disability ends 
as provided in Sec. 404.1594(b)(1), unless continued subject to 
paragraph (c); or (4) subject to the provisions of paragraph (d) of this 
section, the month before your termination month (Sec. 404.325).
    (c)(1) Your benefits, and those of your dependents, may be continued 
after your impairment is no longer disabling if--
    (i) You are participating in an appropriate program of vocational 
rehabilitation services, employment services, or other support services, 
as described in Sec. 404.327(a) and (b);
    (ii) You began participating in the program before the date your 
disability ended; and
    (iii) We have determined under Sec. 404.328 that your completion of 
the program, or your continuation in the program for a specified period 
of time, will increase the likelihood that you will not have to return 
to the disability benefit rolls.
    (2) We generally will stop your benefits with the earliest of these 
months--
    (i) The month in which you complete the program; or
    (ii) The month in which you stop participating in the program for 
any reason (see Sec. 404.327(b) for what we mean by ``participating'' in 
the program); or
    (iii) The month in which we determine under Sec. 404.328 that your 
continuing participation in the program will no longer increase the 
likelihood that you will not have to return to the disability benefit 
rolls.
    Exception to paragraph (c): In no case will we stop your benefits 
with a month earlier than the second month after the month your 
disability ends, provided that you meet all other requirements for 
entitlement to and payment of benefits through such month.
    (d) If, after November 1980, you have a disabling impairment 
(Sec. 404.1511), you will be paid benefits for all months in which you 
do not do substantial gainful activity during the reentitlement period 
(Sec. 404.1592a) following the end of your trial work period 
(Sec. 404.1592). If you are unable to do substantial gainful activity in 
the first month following the reentitlement period, we will pay you 
benefits until you are able to do substantial gainful activity. 
(Earnings during your trial work period do not affect the payment of 
your benefit.) You will also be paid benefits for the first month after 
the trial work period in which you do substantial gainful activity and 
the two succeeding months, whether or not you do substantial gainful 
activity during those succeeding months. After those three months, you 
cannot be paid benefits for any months in which you do substantial 
gainful activity.
    (e) If drug addiction or alcoholism is a contributing factor 
material to the determination of disability as described in 
Sec. 404.1535, you may receive disability benefits on that basis for no 
more than 36 months regardless of the number of entitlement periods you 
may have. 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 benefit payments were suspended 
for any reason. Benefits to your dependents may continue after the 36 
months of benefits if, but for the operation of this paragraph, you 
would otherwise be entitled to benefits based on disability. The 36-
month limit is no longer effective for benefits for months beginning 
after September 2004.
    (f) If drug addiction or alcoholism is a contributing factor 
material to the determination of disability as described in 
Sec. 404.1535 and your disability benefits are suspended for 12 
consecutive months because of your failure to comply with treatment 
requirements, your disability benefits will be terminated effective the 
first month after such 12-month period. Benefits to your dependents may 
continue after the 12-month period if, but for the operation

[[Page 116]]

of this paragraph, you would otherwise be entitled to benefits based on 
disability.

[44 FR 34481, June 15, 1979, as amended at 47 FR 31542, July 21, 1982; 
47 FR 52693, Nov. 23, 1982; 49 FR 22270, May 29, 1984; 51 FR 17617, May 
14, 1986; 60 FR 8145, Feb. 10, 1995; 68 FR 4704, Jan. 30, 2003; 70 FR 
36505, June 24, 2005]



Sec. 404.317  How is the amount of my disability benefit calculated?

    Your monthly benefit is equal to the primary insurance amount (PIA). 
This amount is computed under the rules in subpart C of this part as if 
it was an old-age benefit, and as if you were 62 years of age at the 
beginning of the 5-month waiting period mentioned in Sec. 404.315(a). If 
the 5-month waiting period is not required because of your previous 
entitlement, your PIA is figured as if you were 62 years old when you 
become entitled to benefits this time. Your monthly benefit amount may 
be reduced if you receive workers' compensation or public disability 
payments before you attain full retirement age (as defined in 
Sec. 404.409) (see Sec. 404.408). Your benefits may also be reduced if 
you were entitled to other retirement-age benefits before you attained 
full retirement age (as defined in Sec. 404.409).

[68 FR 4704, Jan. 30, 2003, as amended at 81 FR 10033, Apr. 4, 2016]



Sec. 404.320  Who is entitled to a period of disability.

    (a) General. A period of disability is a continuous period of time 
during which you are disabled. If you become disabled, you may apply to 
have our records show how long your disability lasts. You may do this 
even if you do not qualify for disability benefits. If we establish a 
period of disability for you, the months in that period of time will not 
be counted in figuring your average earnings. If benefits payable on 
your earnings record would be denied or reduced because of a period of 
disability, the period of disability will not be taken into 
consideration.
    (b) Who is entitled. You are entitled to a period of disability if 
you meet all the following conditions:
    (1) You have or had a disability as defined in Sec. 404.1505.
    (2) You are insured for disability, as defined in Sec. 404.130 in 
the calendar quarter in which you became disabled, or in a later 
calendar quarter in which you were disabled.
    (3) You file an application while disabled, or no later than 12 
months after the month in which your period of disability ended. If you 
were unable to apply within the 12-month period after your period of 
disability ended because of a physical or mental condition as described 
in Sec. 404.322, you may apply not more than 36 months after the month 
your disability ended.
    (4) At least 5 consecutive months go by from the month in which your 
period of disability begins and before the month in which it would end.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21930, May 16, 1983; 51 
FR 10616, Mar. 28, 1986]



Sec. 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 have 
attained full retirement age as defined in Sec. 404.409.
    (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 attain full retirement 
age as defined in Sec. 404.409.
    (2) The month immediately preceding your termination month 
(Sec. 404.325); or
    (3) If you perform substantial gainful activity during the 
reentitlement period described in Sec. 404.1592a, the last month for 
which you received benefits.

[[Page 117]]

    (d) When drug addiction or alcoholism is a contributing 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 Sec. 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 Sec. 404.325.

[49 FR 22271, May 29, 1984, as amended at 60 FR 8145, Feb. 10, 1995; 65 
FR 42782, July 11, 2000; 68 FR 4704, Jan. 30, 2003]



Sec. 404.322  When you may apply for a period of disability after
a delay due to a physical or mental condition.

    If because of a physical or mental condition you did not apply for a 
period of disability within 12 months after your period of disability 
ended, you may apply not more than 36 months after the month in which 
your disability ended. Your failure to apply within the 12-month time 
period will be considered due to a physical or mental condition if 
during this time--
    (a) Your physical condition limited your activities to such an 
extent that you could not complete and sign an application; or
    (b) You were mentally incompetent.



Sec. 404.325  The termination month.

    If you do not have a disabling impairment, your termination month is 
the third month following the month in which your impairment is not 
disabling even if it occurs during the trial work period or the 
reentitlement period. If you continue to have a disabling impairment and 
complete 9 months of trial work, your termination month will be the 
third month following the earliest month you perform substantial gainful 
activity or are determined able to perform substantial gainful activity; 
however, in no event will the termination month under these 
circumstances be earlier than the first month after the end of the 
reentitlement period described in Sec. 404.1592a.

    Example 1: You complete your trial work period in December 1999. You 
then work at the substantial gainful activity level and continue to do 
so throughout the 36 months following completion of your trial work 
period and thereafter. Your termination month will be January 2003, 
which is the first month in which you performed substantial gainful 
activity after the end of your 36-month reentitlement period. This is 
because, for individuals who have disabling impairments (see 
Sec. 404.1511) and who work, the termination month cannot occur before 
the first month after the end of the 36-month reentitlement period.
    Example 2: You complete your trial work period in December 1999, but 
you do not do work showing your ability to do substantial gainful 
activity during your trial work period or throughout your 36-month 
reentitlement period. In April 2003, 4 months after your reentitlement 
period ends, you become employed at work that we determine is 
substantial gainful activity, considering all of our rules in 
Secs. 404.1574 and 404.1574a. Your termination month will be July 2003; 
that is, the third month after the earliest month you performed 
substantial gainful activity.

[65 FR 42782, July 11, 2000]

 Rules Relating to Continuation of Benefits After Your Impairment Is No 
                            Longer Disabling

    Source: 70 FR 36505, June 24, 2005, unless otherwise noted.



Sec. 404.327  When you are participating in an appropriate program
of vocational rehabilitation services, employment services, or other
support services.

    (a) What is an appropriate program of vocational rehabilitation 
services, employment services, or other support services? An appropriate 
program of vocational rehabilitation services, employment services, or 
other support services means--
    (1) A program that is carried out under an individual work plan with 
an

[[Page 118]]

employment network under the Ticket to Work and Self-Sufficiency Program 
under part 411 of this chapter;
    (2) A program that is carried out under an individualized plan for 
employment with--
    (i) A State vocational rehabilitation agency (i.e., a State agency 
administering or supervising the administration of a State plan approved 
under title I of the Rehabilitation Act of 1973, as amended (29 U.S.C. 
720-751) under 34 CFR part 361; or
    (ii) An organization administering a Vocational Rehabilitation 
Services Project for American Indians with Disabilities authorized under 
section 121 of part C of title I of the Rehabilitation Act of 1973, as 
amended (29 U.S.C. 741);
    (3) A program of vocational rehabilitation services, employment 
services, or other support services that is carried out under a similar, 
individualized written employment plan with--
    (i) An agency of the Federal Government (for example, the Department 
of Veterans Affairs);
    (ii) A one-stop delivery system or specialized one-stop center 
described in section 134(c) of the Workforce Investment Act of 1998 (29 
U.S.C. 2864(c)); or
    (iii) Another provider of services approved by us; providers we may 
approve include, but are not limited to--
    (A) A public or private organization with expertise in the delivery 
or coordination of vocational rehabilitation services, employment 
services, or other support services; or
    (B) A public, private or parochial school that provides or 
coordinates a program of vocational rehabilitation services, employment 
services, or other support services carried out under an individualized 
program or plan;
    (4) An individualized education program developed under policies and 
procedures approved by the Secretary of Education for assistance to 
States for the education of individuals with disabilities under the 
Individuals with Disabilities Education Act, as amended (20 U.S.C. 1400 
et seq.); you must be age 18 through age 21 for this provision to apply.
    (b) When are you participating in the program? (1) You are 
participating in a program described in paragraph (a)(1), (a)(2), or 
(a)(3) of this section when you are taking part in the activities and 
services outlined in your individual work plan, your individualized plan 
for employment, or your similar individualized written employment plan, 
as appropriate.
    (2) If you are a student age 18 through 21 receiving services under 
an individualized education program described in paragraph (a)(4) of 
this section, you are participating in your program when you are taking 
part in the activities and services outlined in your program or plan.
    (3) You are participating in your program under paragraph (b)(1) or 
(2) of this section during temporary interruptions in your program. For 
an interruption to be considered temporary, you must resume taking part 
in the activities and services outlined in your plan or program, as 
appropriate, no more than three months after the month the interruption 
occurred.



Sec. 404.328  When your completion of the program, or your continuation
in the program for a specified period of time, will increase the 
likelihood that you will not have to return to the disability benefit 
rolls.

    (a) We will determine that your completion of the program, or your 
continuation in the program for a specified period of time, will 
increase the likelihood that you will not have to return to the 
disability benefit rolls if your completion of or your continuation in 
the program will provide you with--
    (1) Work experience (see Sec. 404.1565) so that you would more 
likely be able to do past relevant work (see Sec. 404.1560(b)), despite 
a possible future reduction in your residual functional capacity (see 
Sec. 404.1545); or
    (2) Education (see Sec. 404.1564) and/or skilled or semi-skilled 
work experience (see Sec. 404.1568) so that you would more likely be 
able to adjust to other work that exists in the national economy (see 
Sec. 404.1560(c)), despite a possible future reduction in your residual 
functional capacity (see Sec. 404.1545).
    (b) If you are a student age 18 through age 21 participating in an 
individualized education program described in Sec. 404.327(a)(4), we 
will find that your completion of or continuation in the program will 
increase the likelihood

[[Page 119]]

that you will not have to return to the disability benefit rolls.
    (c) If you are receiving transition services after having completed 
an individualized education program as described in paragraph (b) of 
this section, we will determine that the transition services will 
increase the likelihood that you will not have to return to the 
disability benefit rolls if they meet the requirements in 
Sec. 404.328(a).

                Benefits for Spouses and Divorced Spouses



Sec. 404.330  Who is entitled to wife's or husband's benefits.

    You are entitled to benefits as the wife or husband of an insured 
person who is entitled to old-age or disability benefits if--
    (a) You are the insured's wife or husband based upon a relationship 
described in Secs. 404.345 through 404.346 and one of the following 
conditions is met:
    (1) Your relationship to the insured as a wife or husband has lasted 
at least 1 year. (You will be considered to meet the 1-year duration 
requirement throughout the month in which the first anniversary of the 
marriage occurs.)
    (2) You and the insured are the natural parents of a child; or
    (3) In the month before you married the insured you were entitled 
to, or if you had applied and been old enough you could have been 
entitled to, any of these benefits or payments: Wife's, husband's, 
widow's, widower's, or parent's benefits; disabled child's benefits; or 
annuity payments under the Railroad Retirement Act for widows, widowers, 
parents, or children 18 years old or older;
    (b) You apply;
    (c) You are age 62 or older throughout a month and you meet all 
other conditions of entitlement, or you are the insured's wife or 
husband and have in your care (as defined in Secs. 404.348 through 
404.349), throughout a month in which all other conditions of 
entitlement are met, a child who is entitled to child's benefits on the 
insured's earnings record and the child is either under age 16 or 
disabled; and
    (d) You are not entitled to an old-age or disability benefit based 
upon a primary insurance amount that is equal to or larger than the full 
wife's or husband's benefit.

[44 FR 34481, June 15, 1979; 44 FR 56691, Oct. 2, 1979, as amended at 45 
FR 68932, Oct. 17, 1980; 48 FR 21926, May 16, 1983]



Sec. 404.331  Who is entitled to wife's or husband's benefits as
a divorced spouse.

    You are entitled to wife's or husband's benefits as the divorced 
wife or divorced husband of an insured person who is entitled to old-age 
or disability benefits if you meet the requirements of paragraphs (a) 
through (e). You are entitled to these benefits even though the insured 
person is not yet entitled to benefits, if the insured person is at 
least age 62 and if you meet the requirements of paragraphs (a) through 
(f). The requirements are that--
    (a) You are the insured's divorced wife or divorced husband and--
    (1) You were validly married to the insured under State law as 
described in Sec. 404.345 or you were deemed to be validly married as 
described in Sec. 404.346; and
    (2) You were married to the insured for at least 10 years 
immediately before your divorce became final;
    (b) You apply;
    (c) You are not married. (For purposes of meeting this requirement, 
you will be considered not to be married throughout the month in which 
the divorce occurred);
    (d) You are age 62 or older throughout a month in which all other 
conditions of entitlement are met; and
    (e) You are not entitled to an old-age or disability benefit based 
upon a primary insurance amount that is equal to or larger than the full 
wife's or husband's benefit.
    (f) You have been divorced from the insured person for at least 2 
years.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21926, May 16, 1983; 51 
FR 11911, Apr. 8, 1986; 58 FR 64891, Dec. 10, 1993]



Sec. 404.332  When wife's and husband's benefits begin and end.

    (a) You are entitled to wife's or husband's benefits beginning with 
the first month covered by your application in which you meet all the 
other requirements for entitlement under Sec. 404.330 or

[[Page 120]]

Sec. 404.331. However, if you are entitled as a divorced spouse before 
the insured person becomes entitled, your benefits cannot begin before 
January 1985 based on an application filed no earlier than that month.
    (b) Your entitlement to benefits ends with the month before the 
month in which one of the following events first occurs:
    (1) You become entitled to an old-age or disability benefit based 
upon a primary insurance amount that is equal to or larger than the full 
wife's or husband's benefit.
    (2) You are the wife or husband and are divorced from the insured 
person unless you meet the requirements for benefits as a divorced wife 
or divorced husband as described in Sec. 404.331.
    (3) You are the divorced wife or divorced husband and you marry 
someone, other than the insured who is entitled to old-age benefits, 
unless that other person is someone entitled to benefits as a wife, 
husband, widow, widower, father, mother, parent or disabled child. Your 
benefits will end if you remarry the insured who is not yet entitled to 
old-age benefits.
    (4) If you are under age 62, there is no longer a child of the 
insured who is under age 16 or disabled and entitled to child's benefits 
on the insured's earnings record. (See paragraph (c) of this section if 
you were entitled to wife's or husband's benefits for August 1981 on the 
basis of having a child in care.) (If you no longer have in your care a 
child who is under age 16 or disabled and entitled to child's benefits 
on the insured's earnings record, your benefits may be subject to 
deductions as provided in Sec. 404.421.)
    (5) The insured person dies or is no longer entitled to old age or 
disability benefits. Exception: Your benefits will continue if the 
insured person was entitled to disability benefits based on a finding 
that drug addiction or alcoholism was a contributing factor material to 
the determination of his or her disability (as described in 
Sec. 404.1535), the insured person's benefits ended after 36 months of 
benefits (see Sec. 404.316(e)) or 12 consecutive months of suspension 
for noncompliance with treatment (see Sec. 404.316(f)), and but for the 
operation of these provisions, the insured person would remain entitled 
to benefits based on disability.
    (6) If your benefits are based upon a deemed valid marriage and you 
have not divorced the insured, you marry someone other than the insured.
    (7) You die.
    (8) You became entitled as the divorced wife or the divorced husband 
before the insured person became entitled, but he or she is no longer 
insured.
    (c) If you were entitled to wife's or husband's benefits for August 
1981 on the basis of having a child in care, your entitlement will 
continue until September 1983, until the child reaches 18 (unless 
disabled) or is otherwise no longer entitled to child's benefits, or 
until one of the events described in paragraph (b) (1), (2), (3), (5), 
(6) or (7) of this section occurs, whichever is earliest.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21926, May 16, 1983; 49 
FR 24115, June 12, 1984; 51 FR 11911, Apr. 8, 1986; 58 FR 64891, Dec. 
10, 1993; 60 FR 8145, Feb. 10, 1995; 64 FR 14608, Mar. 26, 1999]



Sec. 404.333  Wife's and husband's benefit amounts.

    Your wife's or husband's monthly benefit is equal to one-half the 
insured person's primary insurance amount. If you are entitled as a 
divorced wife or as a divorced husband before the insured person becomes 
entitled, we will compute the primary insurance amount as if he or she 
became entitled to old-age benefits in the first month you are entitled 
as a divorced wife or as a divorced husband. The amount of your monthly 
benefit may change as explained in Sec. 404.304.

[51 FR 11912, Apr. 8, 1986]



Sec. 404.335  How do I become entitled to widow's or widower's benefits?

    We will find you entitled to benefits as the widow or widower of a 
person who died fully insured if you meet the requirements in paragraphs 
(a) through (e) of this section:
    (a) You are the insured's widow or widower based upon a relationship 
described in Secs. 404.345 through 404.346, and you meet one of the 
conditions in paragraphs (a)(1) through (4) of this section:
    (1) Your relationship to the insured as a wife or husband lasted for 
at least

[[Page 121]]

9 months immediately before the insured died.
    (2) Your relationship to the insured as a wife or husband did not 
last 9 months before the insured died, but you meet one of the 
conditions in paragraphs (a)(2)(i) through (iv) of this section.
    (i) At the time of your marriage the insured was reasonably expected 
to live for 9 months, and the death of the insured was accidental. The 
death is accidental if it was caused by an event that the insured did 
not expect, if it was the result of bodily injuries received from 
violent and external causes, and if, as a direct result of these 
injuries, death occurred not later than 3 months after the day on which 
the bodily injuries were received. An intentional and voluntary suicide 
will not be considered an accidental death.
    (ii) At the time of your marriage the insured was reasonably 
expected to live for 9 months, and the death of the insured occurred in 
the line of duty while he or she was serving on active duty as a member 
of the uniformed services as defined in Sec. 404.1019.
    (iii) At the time of your marriage the insured was reasonably 
expected to live for 9 months, and you had been previously married to 
the insured for at least 9 months.
    (iv) The insured had been married prior to his or her marriage to 
you and the prior spouse was institutionalized during the marriage to 
the insured due to mental incompetence or similar incapacity. During the 
period of the prior spouse's institutionalization, the insured, as 
determined based on evidence satisfactory to the Agency, would have 
divorced the prior spouse and married you, but the insured did not do so 
because the divorce would have been unlawful, by reason of the 
institutionalization, under the laws of the State in which the insured 
was domiciled at the time. Additionally, the prior spouse must have 
remained institutionalized up to the time of his or her death and the 
insured must have married you within 60 days after the prior spouse's 
death.
    (3) You and the insured were the natural parents of a child; or you 
were married to the insured when either of you adopted the other's child 
or when both of you adopted a child who was then under 18 years old.
    (4) In the month before you married the insured, you were entitled 
to or, if you had applied and had been old enough, could have been 
entitled to any of these benefits or payments: widow's, widower's, 
father's (based on the record of a fully insured individual), mother's 
(based on the record of a fully insured individual), wife's, husband's, 
parent's, or disabled child's benefits; or annuity payments under the 
Railroad Retirement Act for widows, widowers, parents, or children age 
18 or older.
    (b) You apply, except that you need not apply again if you meet one 
of the conditions in paragraphs (b)(1) through (4) of this section:
    (1) You are entitled to wife's or husband's benefits for the month 
before the month in which the insured dies and you have attained full 
retirement age (as defined in Sec. 404.409) or you are not entitled to 
either old-age or disability benefits.
    (2) You are entitled to mother's or father's benefits for the month 
before the month in which you attained full retirement age (as defined 
in Sec. 404.409).
    (3) You are entitled to wife's or husband's benefits and to either 
old-age or disability benefits in the month before the month of the 
insured's death, you are under full retirement age (as defined in 
Sec. 404.409) in the month of death, and you have filed a Certificate of 
Election in which you elect to receive reduced widow's or widower's 
benefits.
    (4) You applied in 1990 for widow's or widower's benefits based on 
disability and you meet both of the conditions in paragraphs (b)(4)(i) 
and (ii) of this section:
    (i) You were entitled to disability insurance benefits for December 
1990, or eligible for supplemental security income or federally 
administered State supplementary payments, as specified in subparts B 
and T of part 416 of this chapter, respectively, for January 1991.
    (ii) You were found not disabled for any month based on the 
definition of disability in Secs. 404.1577 and 404.1578, as in effect 
prior to January 1991, but would have been entitled if the standard in 
Sec. 404.1505(a) had applied. (This exception to the requirement for 
filing an

[[Page 122]]

application is effective only with respect to benefits payable for 
months after December 1990.)
    (c) You are at least 60 years old; or you are at least 50 years old 
and have a disability as defined in Sec. 404.1505 and you meet all of 
the conditions in paragraphs (c)(1) through (4) of this section:
    (1) Your disability started not later than 7 years after the insured 
died or 7 years after you were last entitled to mother's or father's 
benefits or to widow's or widower's benefits based upon a disability, 
whichever occurred last.
    (2) Your disability continued during a waiting period of 5 full 
consecutive months, unless months beginning with the first month of 
eligibility for supplemental security income or federally administered 
State supplementary payments are counted, as explained in the Exception 
in paragraph (c)(3) of this section. The waiting period may begin no 
earlier than the 17th month before you applied; the fifth month before 
the insured died; or if you were previously entitled to mother's, 
father's, widow's, or widower's benefits, the 5th month before your 
entitlement to benefits ended. If you were previously entitled to 
widow's or widower's benefits based upon a disability, no waiting period 
is required.
    (3) Exception: For monthly benefits payable for months after 
December 1990, if you were or have been eligible for supplemental 
security income or federally administered State supplementary payments, 
as specified in subparts B and T of part 416 of this chapter, 
respectively, your disability need not have continued through a 
separate, full 5-month waiting period before you may begin receiving 
benefits. We will include as months of the 5-month waiting period the 
months in a period beginning with the first month you received 
supplemental security income or a federally administered State 
supplementary payment and continuing through all succeeding months, 
regardless of whether the months in the period coincide with the months 
in which your waiting period would have occurred, or whether you 
continued to be eligible for supplemental security income or a federally 
administered State supplementary payment after the period began, or 
whether you met the nondisability requirements for entitlement to 
widow's or widower's benefits. However, we will not pay you benefits 
under this provision for any month prior to January 1991.
    (4) You have not previously received 36 months of payments based on 
disability when drug addiction or alcoholism was a contributing factor 
material to the determination of disability (as described in 
Sec. 404.1535), regardless of the number of entitlement periods you may 
have had, or your current application for widow's or widower's benefits 
is not based on a disability where drug addiction or alcoholism is a 
contributing factor material to the determination of disability.
    (d) You are not entitled to an old-age benefit that is equal to or 
larger than the insured person's primary insurance amount.
    (e) You are unmarried, unless for benefits for months after 1983 you 
meet one of the conditions in paragraphs (e)(1) through (3) of this 
section:
    (1) You remarried after you became 60 years old.
    (2) You are now age 60 or older and you meet both of the conditions 
in paragraphs (e)(2)(i) and (ii) of this section:
    (i) You remarried after attaining age 50 but before attaining age 
60.
    (ii) At the time of the remarriage, you were entitled to widow's or 
widower's benefits as a disabled widow or widower.
    (3) You are now at least age 50, but not yet age 60 and you meet 
both of the conditions in paragraphs (e)(3)(i) and (ii) of this section:
    (i) You remarried after attaining age 50.
    (ii) You met the disability requirements in paragraph (c) of this 
section at the time of your remarriage (i.e., your disability began 
within the specified time and before your remarriage).

[68 FR 4704, Jan. 30, 2003, as amended at 70 FR 61365, Oct. 24, 2005]



Sec. 404.336  How do I become entitled to widow's or widower's 
benefits as a surviving divorced spouse?

    We will find you entitled to widow's or widower's benefits as the 
surviving divorced wife or the surviving divorced

[[Page 123]]

husband of a person who died fully insured if you meet the requirements 
in paragraphs (a) through (e) of this section:
    (a) You are the insured's surviving divorced wife or surviving 
divorced husband and you meet both of the conditions in paragraphs 
(a)(1) and (2) of this section:
    (1) You were validly married to the insured under State law as 
described in Sec. 404.345 or are deemed to have been validly married as 
described in Sec. 404.346.
    (2) You were married to the insured for at least 10 years 
immediately before your divorce became final.
    (b) You apply, except that you need not apply again if you meet one 
of the conditions in paragraphs (b)(1) through (4) of this section:
    (1) You are entitled to wife's or husband's benefits for the month 
before the month in which the insured dies and you have attained full 
retirement age (as defined in Sec. 404.409) or you are not entitled to 
old-age or disability benefits.
    (2) You are entitled to mother's or father's benefits for the month 
before the month in which you attain full retirement age (as defined in 
Sec. 404.409).
    (3) You are entitled to wife's or husband's benefits and to either 
old-age or disability benefits in the month before the month of the 
insured's death, you have not attained full retirement age (as defined 
in Sec. 404.409) in the month of death, and you have filed a Certificate 
of Election in which you elect to receive reduced widow's or widower's 
benefits.
    (4) You applied in 1990 for widow's or widower's benefits based on 
disability, and you meet the requirements in both paragraphs (b)(4)(i) 
and (ii) of this section:
    (i) You were entitled to disability insurance benefits for December 
1990 or eligible for supplemental security income or federally 
administered State supplementary payments, as specified in subparts B 
and T of part 416 of this chapter, respectively, for January 1991.
    (ii) You were found not disabled for any month based on the 
definition of disability in Secs. 404.1577 and 404.1578, as in effect 
prior to January 1991, but would have been entitled if the standard in 
Sec. 404.1505(a) had applied. (This exception to the requirement for 
filing an application is effective only with respect to benefits payable 
for months after December 1990.)
    (c) You are at least 60 years old; or you are at least 50 years old 
and have a disability as defined in Sec. 404.1505 and you meet all of 
the conditions in paragraphs (c)(1) through (4) of this section:
    (1) Your disability started not later than 7 years after the insured 
died or 7 years after you were last entitled to mother's or father's 
benefits or to widow's or widower's benefits based upon a disability, 
whichever occurred last.
    (2) Your disability continued during a waiting period of 5 full 
consecutive months, unless months beginning with the first month of 
eligibility for supplemental security income or federally administered 
State supplementary payments are counted, as explained in the Exception 
in paragraph (c)(3) of this section. This waiting period may begin no 
earlier than the 17th month before you applied; the fifth month before 
the insured died; or if you were previously entitled to mother's, 
father's, widow's, or widower's benefits, the 5th month before your 
previous entitlement to benefits ended. If you were previously entitled 
to widow's or widower's benefits based upon a disability, no waiting 
period is required.
    (3) Exception: For monthly benefits payable for months after 
December 1990, if you were or have been eligible for supplemental 
security income or federally administered State supplementary payments, 
as specified in subparts B and T of part 416 of this chapter, 
respectively, your disability does not have to have continued through a 
separate, full 5-month waiting period before you may begin receiving 
benefits. We will include as months of the 5-month waiting period the 
months in a period beginning with the first month you received 
supplemental security income or a federally administered State 
supplementary payment and continuing through all succeeding months, 
regardless of whether the months in the period coincide with the months 
in which your waiting period would have occurred, or whether you 
continued to be eligible for supplemental security income or a federally 
administered State supplementary payment after

[[Page 124]]

the period began, or whether you met the nondisability requirements for 
entitlement to widow's or widower's benefits. However, we will not pay 
you benefits under this provision for any month prior to January 1991.
    (4) You have not previously received 36 months of payments based on 
disability when drug addiction or alcoholism was a contributing factor 
material to the determination of disability (as described in 
Sec. 404.1535), regardless of the number of entitlement periods you may 
have had, or your current application for widow's or widower's benefits 
is not based on a disability where drug addiction or alcoholism is a 
contributing factor material to the determination of disability.
    (d) You are not entitled to an old-age benefit that is equal to or 
larger than the insured person's primary insurance amount.
    (e) You are unmarried, unless for benefits for months after 1983 you 
meet one of the conditions in paragraphs (e)(1) through (3) of this 
section:
    (1) You remarried after you became 60 years old.
    (2) You are now age 60 or older and you meet both of the conditions 
in paragraphs (e)(2)(i) and (ii) of this section:
    (i) You remarried after attaining age 50 but before attaining age 
60.
    (ii) At the time of the remarriage, you were entitled to widow's or 
widower's benefits as a disabled widow or widower.
    (3) You are now at least age 50 but not yet age 60 and you meet both 
of the conditions in paragraphs (e)(3)(i) and (ii) of this section:
    (i) You remarried after attaining age 50.
    (ii) You met the disability requirements in paragraph (c) of this 
section at the time of your remarriage (i.e., your disability began 
within the specified time and before your remarriage).

[68 FR 4705, Jan. 30, 2003, as amended at 71 FR 24814, Apr. 27, 2006]



Sec. 404.337  When does my entitlement to widow's and widower's 
benefits start and end?

    (a) We will find you entitled to widow's or widower's benefits under 
Sec. 404.335 or Sec. 404.336 beginning with the first month covered by 
your application in which you meet all other requirements for 
entitlement.
    (b) We will end your entitlement to widow's or widower's benefits at 
the earliest of the following times:
    (1) The month before the month in which you become entitled to an 
old-age benefit that is equal to or larger than the insured's primary 
insurance amount.
    (2) The second month after the month your disability ends or, where 
disability ends on or after December 1, 1980, the month before your 
termination month (Sec. 404.325). However your payments are subject to 
the provisions of paragraphs (c) and (d) of this section.

    Note: You may remain eligible for payment of benefits if you 
attained full retirement age (as defined in Sec. 404.409) before your 
termination month and you meet the other requirements for widow's or 
widower's benefits.

    (3) If drug addiction or alcoholism is a contributing factor 
material to the determination of disability as described in 
Sec. 404.1535, the month after the 12th consecutive month of suspension 
for noncompliance with treatment or after 36 months of benefits on that 
basis when treatment is available regardless of the number of 
entitlement periods you may have had, unless you are otherwise disabled 
without regard to drug addiction or alcoholism.
    (4) The month before the month in which you die.
    (c)(1) Your benefits may be continued after your impairment is no 
longer disabling if--
    (i) You are participating in an appropriate program of vocational 
rehabilitation services, employment services, or other support services, 
as described in Sec. 404.327(a) and (b);
    (ii) You began participating in the program before the date your 
disability ended; and
    (iii) We have determined under Sec. 404.328 that your completion of 
the program, or your continuation in the program for a specified period 
of time, will increase the likelihood that you will not have to return 
to the disability benefit rolls.
    (2) We generally will stop your benefits with the earliest of these 
months--

[[Page 125]]

    (i) The month in which you complete the program; or
    (ii) The month in which you stop participating in the program for 
any reason (see Sec. 404.327(b) for what we mean by ``participating'' in 
the program); or
    (iii) The month in which we determine under Sec. 404.328 that your 
continuing participation in the program will no longer increase the 
likelihood that you will not have to return to the disability benefit 
rolls.
    Exception to paragraph (c): In no case will we stop your benefits 
with a month earlier than the second month after the month your 
disability ends, provided that you meet all other requirements for 
entitlement to and payment of benefits through such month.
    (d) If, after November 1980, you have a disabling impairment 
(Sec. 404.1511), we will pay you benefits for all months in which you do 
not do substantial gainful activity during the reentitlement period 
(Sec. 404.1592a) following the end of your trial work period 
(Sec. 404.1592). If you are unable to do substantial gainful activity in 
the first month following the reentitlement period, we will pay you 
benefits until you are able to do substantial gainful activity. 
(Earnings during your trial work period do not affect the payment of 
your benefits.) We will also pay you benefits for the first month after 
the trial work period in which you do substantial gainful activity and 
the two succeeding months, whether or not you do substantial gainful 
activity during those succeeding months. After those three months, we 
cannot pay you benefits for any months in which you do substantial 
gainful activity.

[68 FR 4706, Jan. 30, 2003, as amended at 70 FR 36506, June 24, 2005]



Sec. 404.338  Widow's and widower's benefits amounts.

    (a) Your monthly benefit is equal to the insured person's primary 
insurance amount. If the insured person dies before reaching age 62 and 
you are first eligible after 1984, we may compute a special primary 
insurance amount to determine the amount of the monthly benefit (see 
Sec. 404.212(b)).
    (b) We may increase your monthly benefit amount if the insured 
person delays filing for benefits or requests voluntary suspension of 
benefits, and thereby earns delayed retirement credit (see 
Sec. 404.313), and/or works before the year 2000 after reaching full 
retirement age (as defined in Sec. 404.409(a)). The amount of your 
monthly benefit may change as explained in Sec. 404.304.
    (c) Your monthly benefit will be reduced if the insured person 
chooses to receive old-age benefits before reaching full retirement age. 
If so, your benefit will be reduced to the amount the insured person 
would be receiving if alive, or 82\1/2\ percent of his or her primary 
insurance amount, whichever is larger.

[70 FR 28811, May 19, 2005]



Sec. 404.339  How do I become entitled to mother's or father's
benefits as a surviving spouse?

    You may be entitled as the widow or widower to mother's or father's 
benefits on the earnings record of someone who was fully or currently 
insured when he or she died. You are entitled to these benefits if--
    (a) You are the widow or widower of the insured and meet the 
conditions described in Sec. 404.335(a);
    (b) You apply for these benefits; or you were entitled to wife's 
benefits for the month before the insured died;
    (c) You are unmarried;
    (d) You are not entitled to widow's or widower's benefits, or to an 
old-age benefit that is equal to or larger than the full mother's or 
father's benefit; and
    (e) You have in your care the insured's child who is entitled to 
child's benefits and he or she is under 16 years old or is disabled. 
Sections 404.348 and 404.349 describe when a child is in your care.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983; 73 
FR 40967, July 17, 2008]



Sec. 404.340  How do I become entitled to mother's or father's
benefits as a surviving divorced spouse?

    You may be entitled to mother's or father's benefits as the 
surviving divorced wife or the surviving divorced husband on the 
earnings record of someone who was fully or currently insured when she 
or he died. You are entitled to these benefits if--

[[Page 126]]

    (a) You were validly married to the insured under State law as 
described in Sec. 404.345 or you were deemed to be validly married as 
described in Sec. 404.346 but the marriage ended in a final divorce 
and--
    (1) You are the mother or father of the insured's child; or
    (2) You were married to the insured when either of you adopted the 
other's child or when both of you adopted a child and the child was then 
under 18 years old;
    (b) You apply for these benefits; or you were entitled to wife's or 
husband's benefits for the month before the insured died;
    (c) You are unmarried;
    (d) You are not entitled to widow's or widower's benefits, or to an 
old-age benefit that is equal to or larger than the full mother's or 
father's benefit; and
    (e) You have in your care the insured's child who is under age 16 or 
disabled, is your natural or adopted child, and is entitled to child's 
benefits on the insured person's record. Sections 404.348 and 404.349 
describe when a child is in your care.

[44 FR 34481, June 15, 1979, as amended at 45 FR 68932, Oct. 17, 1980; 
48 FR 21927, May 16, 1983; 58 FR 64891, Dec. 10, 1993; 73 FR 40967, July 
17, 2008]



Sec. 404.341  When mother's and father's benefits begin and end.

    (a) You are entitled to mother's or father's benefits beginning with 
the first month covered by your application in which you meet all the 
other requirements for entitlement.
    (b) Your entitlement to benefits ends with the month before the 
month in which one of the following events first occurs:
    (1) You become entitled to a widow's or widower's benefit or to an 
old-age benefit that is equal to or larger than the full mother's or 
father's benefit.
    (2) There is no longer a child of the insured who is under age 16 or 
disabled and entitled to a child's benefit on the insured's earnings 
record. (See paragraph (c) of this section if you were entitled to 
mother's or father's benefits for August 1981.) (If you no longer have 
in your care a child who is under age 16 or disabled and entitled to 
child's benefits on the insured's earnings record, your benefits may be 
subject to deductions as provided in Sec. 404.421.)
    (3) You remarry. Your benefits will not end, however, if you marry 
someone entitled to old-age, disability, wife's, husband's, widow's, 
widower's, father's, mother's, parent's or disabled child's benefits.
    (4) You die.
    (c) If you were entitled to spouse's benefits on the basis of having 
a child in care, or to mother's or father's benefits for August 1981, 
your entitlement will continue until September 1983, until the child 
reaches 18 (unless disabled) or is otherwise no longer entitled to 
child's benefits, or until one of the events described in paragraph (b) 
(1), (3), or (4) of this section occurs, whichever is earliest.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983; 49 
FR 24115, June 12, 1984; 58 FR 64891, Dec. 10, 1993; 64 FR 14608, Mar. 
26, 1999]



Sec. 404.342  Mother's and father's benefit amounts.

    Your mother's or father's monthly benefit is equal to 75 percent of 
the insured person's primary insurance amount. The amount of your 
monthly benefit may change as explained in Sec. 404.304.



Sec. 404.344  Your relationship by marriage to the insured.

    You may be eligible for benefits if you are related to the insured 
person as a wife, husband, widow, or widower. To decide your 
relationship to the insured, we look first to State laws. The State laws 
that we use are discussed in Sec. 404.345. If your relationship cannot 
be established under State law, you may still be eligible for benefits 
if your relationship as the insured's wife, husband, widow, or widower 
is based upon a deemed valid marriage as described in Sec. 404.346.



Sec. 404.345  Your relationship as wife, husband, widow, or widower
under State law.

    To decide your relationship as the insured's wife or husband, we 
look to the laws of the State where the insured had a permanent home 
when you applied

[[Page 127]]

for wife's or husband's benefits. To decide your relationship as the 
insured's widow or widower, we look to the laws of the State where the 
insured had a permanent home when he or she died. If the insured's 
permanent home is not or was not in one of the 50 States, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, or American 
Samoa, we look to the laws of the District of Columbia. For a definition 
of permanent home, see Sec. 404.303. If you and the insured were validly 
married under State law at the time you apply for wife's or husband's 
benefits or at the time the insured died if you apply for widow's, 
widower's, mother's, or father's benefits, the relationship requirement 
will be met. The relationship requirement will also be met if under 
State law you would be able to inherit a wife's, husband's, widow's, or 
widower's share of the insured's personal property if he or she were to 
die without leaving a will.



Sec. 404.346  Your relationship as wife, husband, widow, or widower
based upon a deemed valid marriage.

    (a) General. If your relationship as the insured's wife, husband, 
widow, or widower cannot be established under State law as explained in 
Sec. 404.345, you may be eligible for benefits based upon a deemed valid 
marriage. You will be deemed to be the wife, husband, widow, or widower 
of the insured if, in good faith, you went through a marriage ceremony 
with the insured that would have resulted in a valid marriage except for 
a legal impediment. A legal impediment includes only an impediment which 
results because a previous marriage had not ended at the time of the 
ceremony or because there was a defect in the procedure followed in 
connection with the intended marriage. For example, a defect in the 
procedure may be found where a marriage was performed through a 
religious ceremony in a country that requires a civil ceremony for a 
valid marriage. Good faith means that at the time of the ceremony you 
did not know that a legal impediment existed, or if you did know, you 
thought that it would not prevent a valid marriage.
    (b) Entitlement based upon a deemed valid marriage. To be entitled 
to benefits as a wife, husband, widow or widower as the result of a 
deemed valid marriage, you and the insured must have been living in the 
same household (see Sec. 404.347) at the time the insured died or, if 
the insured is living, at the time you apply for benefits. However, a 
marriage that had been deemed valid, shall continue to be deemed valid 
if the insured individual and the person entitled to benefits as the 
wife or husband of the insured individual are no longer living in the 
same household at the time of death of the insured individual.

[44 FR 34481, June 15, 1979, as amended at 45 FR 65540, Oct. 3, 1980; 48 
FR 21927, May 16, 1983; 58 FR 64892, Dec. 10, 1993]



Sec. 404.347  ``Living in the same household'' defined.

    Living in the same household means that you and the insured 
customarily lived together as husband and wife in the same residence. 
You may be considered to be living in the same household although one of 
you is temporarily absent from the residence. An absence will be 
considered temporary if:
    (a) It was due to service in the U.S. Armed Forces;
    (b) It was 6 months or less and neither you nor the insured were 
outside of the United States during this time and the absence was due to 
business, employment, or confinement in a hospital, nursing home, other 
medical institution, or a penal institution;
    (c) It was for an extended separation, regardless of the duration, 
due to the confinement of either you or the insured in a hospital, 
nursing home, or other medical institution, if the evidence indicates 
that you were separated solely for medical reasons and you otherwise 
would have resided together; or
    (d) It was based on other circumstances, and it is shown that you 
and the insured reasonably could have expected to live together in the 
near future.

[61 FR 41330, Aug. 8, 1996]



Sec. 404.348  When is a child living with me in my care?

    A child who has been living with you for at least 30 days is in your 
care unless--

[[Page 128]]

    (a) The child is in active military service;
    (b) The child is 16 years old or older and not disabled;
    (c) The child is 16 years old or older with a mental disability, but 
you do not actively supervise his or her activities and you do not make 
important decisions about his or her needs, either alone or with help 
from your spouse; or
    (d) The child is 16 years old or older with a physical disability, 
but it is not necessary for you to perform personal services for him or 
her. Personal services are services such as dressing, feeding, and 
managing money that the child cannot do alone because of a disability.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983; 73 
FR 40967, July 17, 2008]



Sec. 404.349  When is a child living apart from me in my care?

    (a) In your care. A child living apart from you is in your care if--
    (1) The child lived apart from you for not more than 6 months, or 
the child's current absence from you is not expected to last over 6 
months;
    (2) The child is under 16 years old, you supervise his or her 
activities and make important decisions about his or her needs, and one 
of the following circumstances exist:
    (i) The child is living apart because of school but spends at least 
30 days vacation with you each year unless some event makes having the 
vacation unreasonable; and if you and the child's other parent are 
separated, the school looks to you for decisions about the child's 
welfare;
    (ii) The child is living apart because of your employment but you 
make regular and substantial contributions to his or her support; see 
Sec. 404.366(a) for a definition of contributions for support;
    (iii) The child is living apart because of a physical disability 
that the child has or that you have; or
    (3) The child is 16 years old or older, is mentally disabled, and 
you supervise his or her activities, make important decisions about his 
or her needs, and help in his or her upbringing and development.
    (b) Not in your care. A child living apart from you is not in your 
care if--
    (1) The child is in active military service;
    (2) The child is living with his or her other parent;
    (3) The child is removed from your custody and control by a court 
order;
    (4) The child is 16 years old or older, is mentally competent, and 
either has been living apart from you for 6 months or more or begins 
living apart from you and is expected to be away for more than 6 months;
    (5) You gave your right to have custody and control of the child to 
someone else; or
    (6) You are mentally disabled.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983]

                            Child's Benefits



Sec. 404.350  Who is entitled to child's benefits?

    (a) General. You are entitled to child's benefits on the earnings 
record of an insured person who is entitled to old-age or disability 
benefits or who has died if--
    (1) You are the insured person's child, based upon a relationship 
described in Secs. 404.355 through 404.359;
    (2) You are dependent on the insured, as defined in Secs. 404.360 
through 404.365;
    (3) You apply;
    (4) You are unmarried; and
    (5) You are under age 18; you are 18 years old or older and have a 
disability that began before you became 22 years old; or you are 18 
years or older and qualify for benefits as a full-time student as 
described in Sec. 404.367.
    (b) Entitlement preclusion for certain disabled children. If you are 
a disabled child as referred to in paragraph (a)(5) of this section, and 
your disability was based on a finding that drug addiction or alcoholism 
was a contributing factor material to the determination of disability 
(as described in Sec. 404.1535) and your benefits ended after your 
receipt of 36 months of benefits, you will not be entitled to benefits 
based on disability for any month following such 36 months regardless of 
the number of entitlement periods you have had if, in such following 
months, drug addiction or alcoholism is a contributing factor

[[Page 129]]

material to the later determination of disability (as described in 
Sec. 404.1535).

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983; 60 
FR 8146, Feb. 10, 1995; 61 FR 38363, July 24, 1996]



Sec. 404.351  Who may be reentitled to child's benefits?

    If your entitlement to child's benefits has ended, you may be 
reentitled on the same earnings record if you have not married and if 
you apply for reentitlement. Your reentitlement may begin with--
    (a) The first month in which you qualify as a full-time student. 
(See Sec. 404.367.)
    (b) The first month in which you are disabled, if your disability 
began before you became 22 years old.
    (c) The first month you are under a disability that began before the 
end of the 84th month following the month in which your benefits had 
ended because an earlier disability had ended; or
    (d) With respect to benefits payable for months beginning October 
2004, you can be reentitled to childhood disability benefits at anytime 
if your prior entitlement terminated because you ceased to be under a 
disability due to the performance of substantial gainful activity and 
you meet the other requirements for reentitlement. The 84-month time 
limit in paragraph (c) in this section continues to apply if your 
previous entitlement to childhood disability benefits terminated because 
of medical improvement.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21927, May 16, 1983; 61 
FR 38363, July 24, 1996; 71 FR 66865, Nov. 17, 2006]



Sec. 404.352  When does my entitlement to child's benefits begin and end?

    (a) We will find your entitlement to child's benefits begins at the 
following times:
    (1) If the insured is deceased, with the first month covered by your 
application in which you meet all other requirements for entitlement.
    (2) If the insured is living and your first month of entitlement is 
September 1981 or later, with the first month covered by your 
application throughout which you meet all other requirements for 
entitlement.
    (3) If the insured is living and your first month of entitlement is 
before September 1981, with the first month covered by your application 
in which you meet all other requirements for entitlement.
    (b) We will find your entitlement to child's benefits ends at the 
earliest of the following times:
    (1) With the month before the month in which you become 18 years 
old, if you are not disabled or a full-time student.
    (2) With the second month following the month in which your 
disability ends, if you become 18 years old and you are disabled. If 
your disability ends on or after December 1, 1980, your entitlement to 
child's benefits continues, subject to the provisions of paragraphs (c) 
and (d) of this section, until the month before your termination month 
(Sec. 404.325).
    (3) With the last month you are a full-time student or, if earlier, 
with the month before the month you become age 19, if you become 18 
years old and you qualify as a full-time student who is not disabled. If 
you become age 19 in a month in which you have not completed the 
requirements for, or received, a diploma or equivalent certificate from 
an elementary or secondary school and you are required to enroll for 
each quarter or semester, we will find your entitlement ended with the 
month in which the quarter or semester in which you are enrolled ends. 
If the school you are attending does not have a quarter or semester 
system which requires reenrollment, we will find your entitlement to 
benefits ended with the month you complete the course or, if earlier, 
the first day of the third month following the month in which you become 
19 years old.
    (4) With the month before the month you marry. We will not find your 
benefits ended, however, if you are age 18 or older, disabled, and you 
marry a person entitled to child's benefits based on disability or 
person entitled to old-age, divorced wife's, divorced husband's, 
widow's, widower's, mother's, father's, parent's, or disability 
benefits.
    (5) With the month before the month the insured's entitlement to 
old-age or disability benefits ends for a reason other than death or the 
attainment of

[[Page 130]]

full retirement age (as defined in Sec. 404.409). Exception: We will 
continue your benefits if the insured person was entitled to disability 
benefits based on a finding that drug addiction or alcoholism was a 
contributing factor material to the determination of his or her 
disability (as described in Sec. 404.1535), the insured person's 
benefits ended after 36 months of payment (see Sec. 404.316(e)) or 12 
consecutive months of suspension for noncompliance with treatment (see 
Sec. 404.316(f)), and the insured person remains disabled.
    (6) With the month before the month you die.
    (7) With the month in which the divorce between your parent 
(including an adoptive parent) and the insured stepparent becomes final 
if you are entitled to benefits as a stepchild and the marriage between 
your parent (including an adoptive parent) and the insured stepparent 
ends in divorce.
    (c) If you are entitled to benefits as a disabled child age 18 or 
over and your disability is based on a finding that drug addiction or 
alcoholism was a contributing factor material to the determination of 
disability (as described in Sec. 404.1535), we will find your 
entitlement to benefits ended under the following conditions:
    (1) If your benefits have been suspended for a period of 12 
consecutive months for failure to comply with treatment, with the month 
following the 12 months unless you are otherwise disabled without regard 
to drug addiction or alcoholism (see Sec. 404.470(c)).
    (2) If you have received 36 months of benefits on that basis when 
treatment is available, regardless of the number of entitlement periods 
you may have had, with the month following such 36-month payment period 
unless you are otherwise disabled without regard to drug addiction or 
alcoholism.
    (d)(1) Your benefits may be continued after your impairment is no 
longer disabling if--
    (i) You are participating in an appropriate program of vocational 
rehabilitation services, employment services, or other support services, 
as described in Sec. 404.327(a) and (b);
    (ii) You began participating in the program before the date your 
disability ended; and
    (iii) We have determined under Sec. 404.328 that your completion of 
the program, or your continuation in the program for a specified period 
of time, will increase the likelihood that you will not have to return 
to the disability benefit rolls.
    (2) We generally will stop your benefits with the earliest of these 
months--
    (i) The month in which you complete the program; or
    (ii) The month in which you stop participating in the program for 
any reason (see Sec. 404.327(b) for what we mean by ``participating'' in 
the program); or
    (iii) The month in which we determine under Sec. 404.328 that your 
continuing participation in the program will no longer increase the 
likelihood that you will not have to return to the disability benefit 
rolls.
    Exception to paragraph (d): In no case will we stop your benefits 
with a month earlier than the second month after the month your 
disability ends, provided that you meet all other requirements for 
entitlement to and payment of benefits through such month.
    (e) If, after November 1980, you have a disabling impairment 
(Sec. 404.1511), we will pay you benefits for all months in which you do 
not do substantial gainful activity during the reentitlement period 
(Sec. 404.1592a) following the end of your trial work period 
(Sec. 404.1592). If you are unable to do substantial gainful activity in 
the first month following the reentitlement period, we will pay you 
benefits until you are able to do substantial gainful activity. 
(Earnings during your trial work period do not affect the payment of 
your benefits during that period.) We will also pay you benefits for the 
first month after the trial work period in which you do substantial 
gainful activity and the two succeeding months, whether or not you do 
substantial gainful activity during those succeeding months. After those 
three months, we cannot pay you benefits for any months in which you do 
substantial gainful activity.

[68 FR 4707, Jan. 30, 2003, as amended at 70 FR 36506, June 24, 2005; 75 
FR 52621, Aug. 27, 2010]

[[Page 131]]



Sec. 404.353  Child's benefit amounts.

    (a) General. Your child's monthly benefit is equal to one-half of 
the insured person's primary insurance amount if he or she is alive and 
three-fourths of the primary insurance amount if he or she has died. The 
amount of your monthly benefit may change as explained in Sec. 404.304.
    (b) Entitlement to more than one benefit. If you are entitled to a 
child's benefit on more than one person's earnings record, you will 
ordinarily receive only the benefit payable on the record with the 
highest primary insurance amount. If your benefit before any reduction 
would be larger on an earnings record with a lower primary insurance 
amount and no other person entitled to benefits on any earnings record 
would receive a smaller benefit as a result of your receiving benefits 
on the record with the lower primary insurance amount, you will receive 
benefits on that record. See Sec. 404.407(d) for a further explanation. 
If you are entitled to a child's benefit and to other dependent's or 
survivor's benefits, you can receive only the highest of the benefits.

[44 FR 34481, June 15, 1979; 44 FR 56691, Oct. 2, 1979, as amended at 48 
FR 21928, May 16, 1983; 51 FR 12606, Apr. 14, 1986; 61 FR 38363, July 
24, 1996]



Sec. 404.354  Your relationship to the insured.

    You may be related to the insured person in one of several ways and 
be entitled to benefits as his or her child, i.e., as a natural child, 
legally adopted child, stepchild, grandchild, stepgrandchild, or 
equitably adopted child. For details on how we determine your 
relationship to the insured person, see Secs. 404.355 through 404.359.

[63 FR 57593, Oct. 28, 1998]



Sec. 404.355  Who is the insured's natural child?

    (a) Eligibility as a natural child. You may be eligible for benefits 
as the insured's natural child if any of the following conditions is 
met:
    (1) You could inherit the insured's personal property as his or her 
natural child under State inheritance laws, as described in paragraph 
(b) of this section.
    (2) You are the insured's natural child and the insured and your 
mother or father went through a ceremony which would have resulted in a 
valid marriage between them except for a ``legal impediment'' as 
described in Sec. 404.346(a).
    (3) You are the insured's natural child and your mother or father 
has not married the insured, but the insured has either acknowledged in 
writing that you are his or her child, been decreed by a court to be 
your father or mother, or been ordered by a court to contribute to your 
support because you are his or her child. If the insured is deceased, 
the acknowledgment, court decree, or court order must have been made or 
issued before his or her death. To determine whether the conditions of 
entitlement are met throughout the first month as stated in 
Sec. 404.352(a), the written acknowledgment, court decree, or court 
order will be considered to have occurred on the first day of the month 
in which it actually occurred.
    (4) Your mother or father has not married the insured but you have 
evidence other than the evidence described in paragraph (a)(3) of this 
section to show that the insured is your natural father or mother. 
Additionally, you must have evidence to show that the insured was either 
living with you or contributing to your support at the time you applied 
for benefits. If the insured is not alive at the time of your 
application, you must have evidence to show that the insured was either 
living with you or contributing to your support when he or she died. See 
Sec. 404.366 for an explanation of the terms ``living with'' and 
``contributions for support.''
    (b) Use of State Laws--(1) General. To decide whether you have 
inheritance rights as the natural child of the insured, we use the law 
on inheritance rights that the State courts would use to decide whether 
you could inherit a child's share of the insured's personal property if 
the insured were to die without leaving a will. If the insured is 
living, we look to the laws of the State where the insured has his or 
her permanent home when you apply for benefits. If the insured is 
deceased, we look to the laws of the State where the insured had his or 
her permanent home when

[[Page 132]]

he or she died. If the insured's permanent home is not or was not in one 
of the 50 States, the Commonwealth of Puerto Rico, the Virgin Islands, 
Guam, American Samoa, or the Northern Mariana Islands, we will look to 
the laws of the District of Columbia. For a definition of permanent 
home, see Sec. 404.303. For a further discussion of the State laws we 
use to determine whether you qualify as the insured's natural child, see 
paragraphs (b)(3) and (b)(4) of this section. If these laws would permit 
you to inherit the insured's personal property as his or her child, we 
will consider you the child of the insured.
    (2) Standards. We will not apply any State inheritance law 
requirement that an action to establish paternity must be taken within a 
specified period of time measured from the worker's death or the child's 
birth, or that an action to establish paternity must have been started 
or completed before the worker's death. If applicable State inheritance 
law requires a court determination of paternity, we will not require 
that you obtain such a determination but will decide your paternity by 
using the standard of proof that the State court would use as the basis 
for a determination of paternity.
    (3) Insured is living. If the insured is living, we apply the law of 
the State where the insured has his or her permanent home when you file 
your application for benefits. We apply the version of State law in 
effect when we make our final decision on your application for benefits. 
If you do not qualify as a child of the insured under that version of 
State law, we look at all versions of State law that were in effect from 
the first month for which you could be entitled to benefits up until the 
time of our final decision and apply the version of State law that is 
most beneficial to you.
    (4) Insured is deceased. If the insured is deceased, we apply the 
law of the State where the insured had his or her permanent home when he 
or she died. We apply the version of State law in effect when we make 
our final decision on your application for benefits. If you do not 
qualify as a child of the insured under that version of State law, we 
will apply the version of State law that was in effect at the time the 
insured died, or any version of State law in effect from the first month 
for which you could be entitled to benefits up until our final decision 
on your application. We will apply whichever version is most beneficial 
to you. We use the following rules to determine the law in effect as of 
the date of death:
    (i) If a State inheritance law enacted after the insured's death 
indicates that the law would be retroactive to the time of death, we 
will apply that law; or
    (ii) If the inheritance law in effect at the time of the insured's 
death was later declared unconstitutional, we will apply the State law 
which superseded the unconstitutional law.

[63 FR 57593, Oct. 28, 1998]



Sec. 404.356  Who is the insured's legally adopted child?

    You may be eligible for benefits as the insured's child if you were 
legally adopted by the insured. If you were legally adopted after the 
insured's death by his or her surviving spouse you may also be 
considered the insured's legally adopted child. We apply the adoption 
laws of the State or foreign country where the adoption took place, not 
the State inheritance laws described in Sec. 404.355, to determine 
whether you are the insured's legally adopted child.

[44 FR 34481, June 15, 1979, as amended at 63 FR 57594, Oct. 28, 1998]



Sec. 404.357  Who is the insured's stepchild?

    You may be eligible for benefits as the insured's stepchild if, 
after your birth, your natural or adopting parent married the insured. 
You also may be eligible as a stepchild if you were conceived prior to 
the marriage of your natural parent to the insured but were born after 
the marriage and the insured is not your natural parent. The marriage 
between the insured and your parent must be a valid marriage under State 
law or a marriage which would be valid except for a legal impediment 
described in Sec. 404.346(a). If the insured is alive when you apply, 
you must have been his or her stepchild for at least 1 year immediately 
preceding the day you apply. For purposes of determining whether the 
conditions of entitlement

[[Page 133]]

are met throughout the first month as stated in Sec. 404.352(a)(2)(i), 
you will be considered to meet the one year duration requirement 
throughout the month in which the anniversary of the marriage occurs. If 
the insured is not alive when you apply, you must have been his or her 
stepchild for at least 9 months immediately preceding the day the 
insured died. This 9-month requirement will not have to be met if the 
marriage between the insured and your parent lasted less than 9 months 
under one of the conditions described in Sec. 404.335(a)(2)(i)-(iii).

[48 FR 21928, May 16, 1983, as amended at 64 FR 14608, Mar. 26, 1999; 70 
FR 61365, Oct. 24, 2005]



Sec. 404.358  Who is the insured's grandchild or stepgrandchild?

    (a) Grandchild and stepgrandchild defined. You may be eligible for 
benefits as the insured's grandchild or stepgrandchild if you are the 
natural child, adopted child, or stepchild of a person who is the 
insured's child as defined in Secs. 404.355 through 404.357, or 
Sec. 404.359. Additionally, for you to be eligible as a grandchild or 
stepgrandchild, your natural or adoptive parents must have been either 
deceased or under a disability, as defined in Sec. 404.1501(a), at the 
time your grandparent or stepgrandparent became entitled to old-age or 
disability benefits or died; or if your grandparent or stepgrandparent 
had a period of disability that continued until he or she became 
entitled to benefits or died, at the time the period of disability 
began. If your parent is deceased, for purposes of determining whether 
the conditions of entitlement are met throughout the first month as 
stated in Sec. 404.352(a)(2)(i), your parent will be considered to be 
deceased as of the first day of the month of death.
    (b) Legally adopted grandchild or stepgrandchild. If you are the 
insured's grandchild or stepgrandchild and you are legally adopted by 
the insured or by the insured's surviving spouse after his or her death, 
you are considered an adopted child and the dependency requirements of 
Sec. 404.362 must be met.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21928, May 16, 1983]



Sec. 404.359  Who is the insured's equitably adopted child?

    You may be eligible for benefits as an equitably adopted child if 
the insured had agreed to adopt you as his or her child but the adoption 
did not occur. The agreement to adopt you must be one that would be 
recognized under State law so that you would be able to inherit a 
child's share of the insured's personal property if he or she were to 
die without leaving a will. The agreement must be in whatever form, and 
you must meet whatever requirements for performance under the agreement, 
that State law directs. If you apply for child's benefits after the 
insured's death, the law of the State where the insured had his or her 
permanent home at the time of his or her death will be followed. If you 
apply for child's benefits during the insured's life, the law of the 
State where the insured has his or her permanent home at the time or 
your application will be followed.



Sec. 404.360  When a child is dependent upon the insured person.

    One of the requirements for entitlement to child's benefits is that 
you be dependent upon the insured. The evidence you need to prove your 
dependency is determined by how you are related to the insured. To prove 
your dependency you may be asked to show that at a specific time you 
lived with the insured, that you received contributions for your support 
from the insured, or that the insured provided at least one-half of your 
support. These dependency requirements, and the time at which they must 
be met, are explained in Secs. 404.361 through 404.365. The terms living 
with, contributions for support, and one-half support are defined in 
Sec. 404.366.



Sec. 404.361  When a natural child is dependent.

    (a) Dependency of natural child. If you are the insured's natural 
child, as defined in Sec. 404.355, you are considered dependent upon him 
or her, except as stated in paragraph (b) of this section.
    (b) Dependency of natural child legally adopted by someone other 
than the insured. (1) Except as indicated in paragraph (b)(2) of this 
section, if you are legally adopted by someone other than

[[Page 134]]

the insured (your natural parent) during the insured's lifetime, you are 
considered dependent upon the insured only if the insured was either 
living with you or contributing to your support at one of the following 
times:
    (i) When you applied;
    (ii) When the insured died; or
    (iii) If the insured had a period of disability that lasted until he 
or she became entitled to disability or old-age benefits or died, at the 
beginning of the period of disability or at the time he or she became 
entitled to disability or old-age benefits.
    (2) You are considered dependent upon the insured (your natural 
parent) if:
    (i) You were adopted by someone other than the insured after you 
applied for child's benefits; or
    (ii) The insured had a period of disability that lasted until he or 
she became entitled to old-age or disability benefits or died, and you 
are adopted by someone other than the insured after the beginning of 
that period of disability.

[64 FR 14608, Mar. 26, 1999]



Sec. 404.362  When a legally adopted child is dependent.

    (a) General. If you were legally adopted by the insured before he or 
she became entitled to old-age or disability benefits, you are 
considered dependent upon him or her. If you were legally adopted by the 
insured after he or she became entitled to old-age or disability 
benefits and you apply for child's benefits during the life of the 
insured, you must meet the dependency requirements stated in paragraph 
(b) of this section. If you were legally adopted by the insured after he 
or she became entitled to old-age or disability benefits and you apply 
for child's benefits after the death of the insured, you are considered 
dependent upon him or her. If you were adopted after the insured's death 
by his or her surviving spouse, you may be considered dependent upon the 
insured only under the conditions described in paragraph (c) of this 
section.
    (b) Adoption by the insured after he or she became entitled to 
benefits--(1) General. If you are legally adopted by the insured after 
he or she became entitled to benefits and you are not the insured's 
natural child or stepchild, you are considered dependent on the insured 
during his or her lifetime only if--
    (i) You had not attained age 18 when adoption proceedings were 
started, and your adoption was issued by a court of competent 
jurisdiction within the United States; or
    (ii) You had attained age 18 before adoption proceedings were 
started; your adoption was issued by a court of competent jurisdiction 
within the United States; and you were living with or receiving at least 
one-half of your support from the insured for the year immediately 
preceding the month in which your adoption was issued.
    (2) Natural child and stepchild. If you were legally adopted by the 
insured after he or she became entitled to benefits and you are the 
insured's natural child or stepchild, you are considered dependent upon 
the insured.
    (c) Adoption by the insured's surviving spouse--(1) General. If you 
are legally adopted by the insured's surviving spouse after the 
insured's death, you are considered dependent upon the insured as of the 
date of his or her death if--
    (i) You were either living with or receiving at least one-half of 
your support from the insured at the time of his or her death; and,
    (ii) The insured had started adoption proceedings before he or she 
died; or if the insured had not started the adoption proceedings before 
he or she died, his or her surviving spouse began and completed the 
adoption within 2 years of the insured's death.
    (2) Grandchild or stepgrandchild adopted by the insured's surviving 
spouse. If you are the grandchild or stepgrandchild of the insured and 
any time after the death of the insured you are legally adopted by the 
insured's surviving spouse, you are considered the dependent child of 
the insured as of the date of his or her death if--
    (i) Your adoption took place in the United States;
    (ii) At the time of the insured's death, your natural, adopting or 
stepparent was not living in the insured's household and making regular 
contributions toward your support; and

[[Page 135]]

    (iii) You meet the dependency requirements stated in Sec. 404.364.

[44 FR 34481, June 15, 1979; 44 FR 56691, Oct. 2, 1979, as amended at 56 
FR 24000, May 28, 1991; 57 FR 3938, Feb. 3, 1992]



Sec. 404.363  When is a stepchild dependent?

    If you are the insured's stepchild, as defined in Sec. 404.357, we 
consider you dependent on him or her if you were receiving at least one-
half of your support from him or her at one of these times--
    (a) When you applied;
    (b) When the insured died; or
    (c) If the insured had a period of disability that lasted until his 
or her death or entitlement to disability or old-age benefits, at the 
beginning of the period of disability or at the time the insured became 
entitled to benefits.

[44 FR 34481, June 15, 1979, as amended at 75 FR 52621, Aug. 27, 2010]



Sec. 404.364  When is a grandchild or stepgrandchild dependent?

    If you are the insured's grandchild or stepgrandchild, as defined in 
Sec. 404.358(a), you are considered dependent upon the insured if--
    (a) You began living with the insured before you became 18 years 
old; and
    (b) You were living with the insured in the United States and 
receiving at least one-half of your support from him or her for the year 
before he or she became entitled to old-age or disability benefits or 
died; or if the insured had a period of disability that lasted until he 
or she became entitled to benefits or died, for the year immediately 
before the month in which the period of disability began. If you were 
born during the 1-year period, the insured must have lived with you and 
provided at least one-half of your support for substantially all of the 
period that begins on the date of your birth. Paragraph (c) of this 
section explains when the substantially all requirement is met.
    (c) The ``substantially all'' requirement will be met if, at one of 
the times described in paragraph (b) of this section, the insured was 
living with you and providing at least one-half of your support, and any 
period during which he or she was not living with you and providing one-
half of your support did not exceed the lesser of 3 months or one-half 
of the period beginning with the month of your birth.

[44 FR 34481, June 15, 1979, as amended at 73 FR 40967, July 17, 2008]



Sec. 404.365  When an equitably adopted child is dependent.

    If you are the insured's equitably adopted child, as defined in 
Sec. 404.359, you are considered dependent upon him or her if you were 
either living with or receiving contributions for your support from the 
insured at the time of his or her death. If your equitable adoption is 
found to have occurred after the insured became entitled to old-age or 
disability benefits, your dependency cannot be established during the 
insured's life. If your equitable adoption is found to have occurred 
before the insured became entitled to old-age or disability benefits, 
you are considered dependent upon him or her if you were either living 
with or receiving contributions for your support from the insured at one 
of these times--
    (a) When you applied; or
    (b) If the insured had a period of disability that lasted until he 
or she became entitled to old-age or disability benefits, at the 
beginning of the period of disability or at the time the insured became 
entitled to benefits.



Sec. 404.366  ``Contributions for support,'' ``one-half support,'' and
``living with'' the insured defined--determining first month of
entitlement.

    To be eligible for child's or parent's benefits, and in certain 
Government pension offset cases, you must be dependent upon the insured 
person at a particular time or be assumed dependent upon him or her. 
What it means to be a dependent child is explained in Secs. 404.360 
through 404.365; what it means to be a dependent parent is explained in 
Sec. 404.370(f); and the Government pension offset is explained in 
Sec. 404.408a. Your dependency upon the insured person may be based upon 
whether at a specified time you were receiving contributions for your 
support or one-half of your support from the insured person, or whether 
you were living with him or her. These terms are defined in paragraphs 
(a) through (c) of this section.

[[Page 136]]

    (a) Contributions for support. The insured makes a contribution for 
your support if the following conditions are met:
    (1) The insured gives some of his or her own cash or goods to help 
support you. Support includes food, shelter, routine medical care, and 
other ordinary and customary items needed for your maintenance. The 
value of any goods the insured contributes is the same as the cost of 
the goods when he or she gave them for your support. If the insured 
provides services for you that would otherwise have to be paid for, the 
cash value of his or her services may be considered a contribution for 
your support. An example of this would be work the insured does to 
repair your home. The insured person is making a contribution for your 
support if you receive an allotment, allowance, or benefit based upon 
his or her military pay, veterans' pension or compensation, or social 
security earnings.
    (2) Contributions must be made regularly and must be large enough to 
meet an important part of your ordinary living costs. Ordinary living 
costs are the costs for your food, shelter, routine medical care, and 
similar necessities. If the insured person only provides gifts or 
donations once in a while for special purposes, they will not be 
considered contributions for your support. Although the insured's 
contributions must be made on a regular basis, temporary interruptions 
caused by circumstances beyond the insured person's control, such as 
illness or unemployment, will be disregarded unless during this 
interruption someone else takes over responsibility for supporting you 
on a permanent basis.
    (b) One-half support. The insured person provides one-half of your 
support if he or she makes regular contributions for your ordinary 
living costs; the amount of these contributions equals or exceeds one-
half of your ordinary living costs; and any income (from sources other 
than the insured person) you have available for support purposes is one-
half or less of your ordinary living costs. We will consider any income 
which is available to you for your support whether or not that income is 
actually used for your ordinary living costs. Ordinary living costs are 
the costs for your food, shelter, routine medical care, and similar 
necessities. A contribution may be in cash, goods, or services. The 
insured is not providing at least one-half of your support unless he or 
she has done so for a reasonable period of time. Ordinarily we consider 
a reasonable period to be the 12-month period immediately preceding the 
time when the one-half support requirement must be met under the rules 
in Secs. 404.362(c)(1) and 404.363 (for child's benefits), in 
Sec. 404.370(f) (for parent's benefits) and in Sec. 404.408a(c) (for 
benefits where the Government pension offset may be applied). A shorter 
period will be considered reasonable under the following circumstances:
    (1) At some point within the 12-month period, the insured either 
begins or stops providing at least one-half of your support on a 
permanent basis and this is a change in the way you had been supported 
up to then. In these circumstances, the time from the change up to the 
end of the 12-month period will be considered a reasonable period, 
unless paragraph (b)(2) of this section applies. The change in your 
source of support must be permanent and not temporary. Changes caused by 
seasonal employment or customary visits to the insured's home are 
considered temporary.
    (2) The insured provided one-half or more of your support for at 
least 3 months of the 12-month period, but was forced to stop or reduce 
contributions because of circumstances beyond his or her control, such 
as illness or unemployment, and no one else took over the responsibility 
for providing at least one-half of your support on a permanent basis. 
Any support you received from a public assistance program is not 
considered as a taking over of responsibility for your support by 
someone else. Under these circumstances, a reasonable period is that 
part of the 12-month period before the insured was forced to reduce or 
stop providing at least one-half of your support.
    (c) ``Living with'' the insured. You are living with the insured if 
you ordinarily live in the same home with the insured and he or she is 
exercising, or has the right to exercise, parental control and authority 
over your activities. You are living with the insured during

[[Page 137]]

temporary separations if you and the insured expect to live together in 
the same place after the separation. Temporary separations may include 
the insured's absence because of active military service or imprisonment 
if he or she still exercises parental control and authority. However, 
you are not considered to be living with the insured if you are in 
active military service or in prison. If living with is used to 
establish dependency for your eligibility to child's benefits and the 
date your application is filed is used for establishing the point for 
determining dependency, you must have been living with the insured 
throughout the month your application is filed in order to be entitled 
to benefits for that month.
    (d) Determining first month of entitlement. In evaluating whether 
dependency is established under paragraph (a), (b), or (c) of this 
section, for purposes of determining whether the conditions of 
entitlement are met throughout the first month as stated in 
Sec. 404.352(a)(2)(i), we will not use the temporary separation or 
temporary interruption rules.

[44 FR 34481, June 15, 1979, as amended at 45 FR 65540, Oct. 3, 1980; 48 
FR 21928, May 16, 1983; 52 FR 26955, July 17, 1987; 64 FR 14608, Mar. 
26, 1999]



Sec. 404.367  When you are a ``full-time elementary or secondary 
school student''.

    You may be eligible for child's benefits if you are a full-time 
elementary or secondary school student. For the purposes of determining 
whether the conditions of entitlement are met throughout the first month 
as stated in Sec. 404.352(a)(2)(i), if you are entitled as a student on 
the basis of attendance at an elementary or secondary school, you will 
be considered to be in full-time attendance for a month during any part 
of which you are in full-time attendance. You are a full-time elementary 
or secondary school student if you meet all the following conditions:
    (a) You attend a school which provides elementary or secondary 
education as determined under the law of the State or other jurisdiction 
in which it is located. Participation in the following programs also 
meets the requirements of this paragraph:
    (1) You are instructed in elementary or secondary education at home 
in accordance with a home school law of the State or other jurisdiction 
in which you reside; or
    (2) You are in an independent study elementary or secondary 
education program in accordance with the law of the State or other 
jurisdiction in which you reside which is administered by the local 
school or school district/jurisdiction.
    (b) You are in full-time attendance in a day or evening 
noncorrespondence course of at least 13 weeks duration and you are 
carrying a subject load which is considered full-time for day students 
under the institution's standards and practices. If you are in a home 
schooling program as described in paragraph (a)(1) of this section, you 
must be carrying a subject load which is considered full-time for day 
students under standards and practices set by the State or other 
jurisdiction in which you reside;
    (c) To be considered in full-time attendance, your scheduled 
attendance must be at the rate of at least 20 hours per week unless one 
of the exceptions in paragraphs (c) (1) and (2) of this section applies. 
If you are in an independent study program as described in paragraph 
(a)(2) of this section, your number of hours spent in school attendance 
are determined by combining the number of hours of attendance at a 
school facility with the agreed upon number of hours spent in 
independent study. You may still be considered in full-time attendance 
if your scheduled rate of attendance is below 20 hours per week if we 
find that:
    (1) The school attended does not schedule at least 20 hours per week 
and going to that particular school is your only reasonable alternative; 
or
    (2) Your medical condition prevents you from having scheduled 
attendance of at least 20 hours per week. To prove that your medical 
condition prevents you from scheduling 20 hours per week, we may request 
that you provide appropriate medical evidence or a statement from the 
school.
    (d) You are not being paid while attending the school by an employer 
who has requested or required that you attend the school;

[[Page 138]]

    (e) You are in grade 12 or below; and
    (f) You are not subject to the provisions in Sec. 404.468 for 
nonpayment of benefits to certain prisoners and certain other inmates of 
publicly funded institutions.

[48 FR 21928, May 16, 1983, as amended at 48 FR 55452, Dec. 13, 1983; 56 
FR 35999, July 30, 1991; 61 FR 38363, July 24, 1996]



Sec. 404.368  When you are considered a full-time student during 
a period of nonattendance.

    If you are a full-time student, your eligibility may continue during 
a period of nonattendance (including part-time attendance) if all the 
following conditions are met:
    (a) The period of nonattendance is 4 consecutive months or less;
    (b) You show us that you intend to resume your studies as a full-
time student at the end of the period or at the end of the period you 
are a full-time student; and
    (c) The period of nonattendance is not due to your expulsion or 
suspension from the school.

[48 FR 21929, May 16, 1983]

                            Parent's Benefits



Sec. 404.370  Who is entitled to parent's benefits?

    You may be entitled to parent's benefits on the earnings record of 
someone who has died and was fully insured. You are entitled to these 
benefits if all the following conditions are met:
    (a) You are related to the insured person as his or her parent in 
one of the ways described in Sec. 404.374.
    (b) You are at least 62 years old.
    (c) You have not married since the insured person died.
    (d) You apply.
    (e) You are not entitled to an old-age benefit equal to or larger 
than the parent's benefit amount.
    (f) You were receiving at least one-half of your support from the 
insured at the time he or she died, or at the beginning of any period of 
disability he or she had that continued up to death. See Sec. 404.366(b) 
for a definition of one-half support. If you were receiving one-half of 
your support from the insured at the time of the insured's death, you 
must give us proof of this support within 2 years of the insured's 
death. If you were receiving one-half of your support from the insured 
at the time his or her period of disability began, you must give us 
proof of this support within 2 years of the month in which the insured 
filed his or her application for the period of disability. You must file 
the evidence of support even though you may not be eligible for parent's 
benefits until a later time. There are two exceptions to the 2-year 
filing requirement:
    (1) If there is a good cause for failure to provide proof of support 
within the 2-year period, we will consider the proof you give us as 
though it were provided within the 2-year period. Good cause does not 
exist if you were informed of the need to provide the proof within the 
2-year period and you neglected to do so or did not intend to do so. 
Good cause will be found to exist if you did not provide the proof 
within the time limit due to--
    (i) Circumstances beyond your control, such as extended illness, 
mental or physical incapacity, or a language barrier;
    (ii) Incorrect or incomplete information we furnished you;
    (iii) Your efforts to get proof of the support without realizing 
that you could submit the proof after you gave us some other evidence of 
that support; or
    (iv) Unusual or unavoidable circumstances that show you could not 
reasonably be expected to know of the 2-year time limit.
    (2) The Soldiers' and Sailors' Civil Relief Act of 1940 provides for 
extending the filing time.



Sec. 404.371  When parent's benefits begin and end.

    (a) You are entitled to parent's benefits beginning with the first 
month covered by your application in which you meet all the other 
requirements for entitlement.
    (b) Your entitlement to benefits ends with the month before the 
month in which one of the following events first occurs:
    (1) You become entitled to an old-age benefit equal to or larger 
than the parent's benefit.

[[Page 139]]

    (2) You marry, unless your marriage is to someone entitled to 
wife's, husband's, widow's, widower's, mother's, father's, parent's or 
disabled child's benefits. If you marry a person entitled to these 
benefits, the marriage does not affect your benefits.
    (3) You die.

[44 FR 34481, June 15, 1979, as amended at 49 FR 24116, June 12, 1984]



Sec. 404.373  Parent's benefit amounts.

    Your parent's monthly benefit before any reduction that may be made 
as explained in Sec. 404.304, is figured in one of the following ways:
    (a) One parent entitled. Your parent's monthly benefit is equal to 
82\1/2\ percent of the insured person's primary insurance amount if you 
are the only parent entitled to benefits on his or her earnings record.
    (b) More than one parent entitled. Your parent's monthly benefit is 
equal to 75 percent of the insured person's primary insurance amount if 
there is another parent entitled to benefits on his or her earnings 
record.



Sec. 404.374  Parent's relationship to the insured.

    You may be eligible for benefits as the insured person's parent if--
    (a) You are the mother or father of the insured and would be 
considered his or her parent under the laws of the State where the 
insured had a permanent home when he or she died;
    (b) You are the adoptive parent of the insured and legally adopted 
him or her before the insured person became 16 years old; or
    (c) You are the stepparent of the insured and you married the 
insured's parent or adoptive parent before the insured became 16 years 
old. The marriage must be valid under the laws of the State where the 
insured had his or her permanent home when he or she died. See 
Sec. 404.303 for a definition of permanent home.

                       Special Payments at Age 72



Sec. 404.380  General.

    Some older persons had little or no chance to become fully insured 
for regular social security benefits during their working years. For 
those who became 72 years old several years ago but are not fully 
insured, a special payment may be payable as described in the following 
sections.



Sec. 404.381  Who is entitled to special age 72 payments?

    You are entitled to a special age 72 payment if--
    (a) You have attained the age of 72; and
    (1) You attained such age before 1968; or
    (2) You attained such age after 1967--or, for applications filed 
after November 5, 1990, you attained age 72 after 1967 and before 1972--
and have at least 3 quarters of coverage for each calendar year elapsing 
after 1966 and before the year in which you attained age 72 (see subpart 
B for a description of quarters of coverage);
    (b) You reside in one of the 50 States, the District of Columbia, or 
the Northern Mariana Islands;
    (c) You apply; and
    (d) You are a U.S. citizen or a citizen of the Northern Mariana 
Islands; or you are an alien who was legally admitted for permanent 
residence in the United States and who has resided here continuously for 
5 years. Residence in the United States includes residence in the 
Northern Mariana Islands, Guam, American Samoa, Puerto Rico, and the 
Virgin Islands.

[44 FR 34481, June 15, 1979, as amended at 57 FR 21598, May 21, 1992]



Sec. 404.382  When special age 72 payments begin and end.

    (a) Your entitlement to the special age 72 payment begins with the 
first month covered by your application in which you meet all the other 
requirements for entitlement.
    (b) Your entitlement to this payment ends with the month before the 
month of your death.



Sec. 404.383  Special age 72 payment amounts.

    (a) Payment from May 1983 on. If you are entitled to special age 72 
payments from May 1983 on, you will receive a monthly payment of 
$125.60. If your spouse is also entitled to special age 72 payments, he 
or she will also receive $125.60. This amount, first payable for

[[Page 140]]

June 1982, will be increased when cost-of-living adjustments of Social 
Security benefits occur. This special payment may be reduced, suspended 
or not paid at all as explained in Sec. 404.384.
    (b) Payment prior to May 1983. If a husband or a single individual 
is entitled to special age 72 payments for months prior to May 1983, the 
amount payable was $125.60 for the months since June 1982. The wife 
received an amount approximiately one-half the husband's amount (i.e., 
$63.00 for months in the period June 1982-April 1983).

[49 FR 24116, June 12, 1984]



Sec. 404.384  Reductions, suspensions, and nonpayments of special
age 72 payments.

    (a) General. Special age 72 payments may not be paid for any month 
you receive public assistance payments. The payment may be reduced if 
you or your spouse are eligible for a government pension. In some 
instances, the special payment may not be paid while you are outside the 
United States. The rules on when special payments may be suspended, 
reduced, or not paid are provided in paragraphs (b) through (e) of this 
section.
    (b) Suspension of special age 72 payments when you receive certain 
assistance payments. You cannot receive the special payment if 
supplemental security income or aid to families with dependent children 
(AFDC) payments are payable to you, or if your needs are considered in 
setting the amounts of these assistance payments made to someone else. 
However, if these assistance payments are stopped, you may receive the 
special payment beginning with the last month for which the assistance 
payments were paid.
    (c) Reduction of special age 72 payments when you or your spouse are 
eligible for a government pension. Special payments are reduced for any 
regular government pension (or lump-sum payment given instead of a 
pension) that you or your spouse are eligible for at retirement. A 
government pension is any annuity, pension, or retirement pay from the 
Federal Government, a State government or political subdivision, or any 
organization wholly owned by the Federal or State government. Also 
included as a government pension is any social security benefit. The 
term government pension does not include workmen's compensation payments 
or Veterans Administration payments for a service-connected disability 
or death.
    (d) Amount of reduction because of a government pension. If you are 
eligible for a government pension, the amount of the pension will be 
subtracted from your special age 72 payment. If your spouse is eligible 
for a government pension but is not entitled to the special payment, 
your special payment is reduced (after any reduction due to your own 
government pension) by the difference between the pension amount and the 
full special payment amount. If both you and your spouse are entitled to 
the special payment, each spouse's payment is first reduced by the 
amount of his or her own government pension (if any). Then, the wife's 
special payment is reduced by the amount that the husband's government 
pension exceeds the full special payment. The husband's special payment 
is also reduced by the amount that the wife's government pension exceeds 
the full special payment.
    (e) Nonpayment of special age 72 payments when you are not residing 
in the United States. No special payment is due you for any month you 
are not a resident of one of the 50 States, the District of Columbia, or 
the Northern Mariana Islands. Also, payment to you may not be permitted 
under the rules in Sec. 404.463 if you are an alien living outside the 
United States.

[44 FR 34481, June 15, 1979, as amended at 49 FR 24116, June 12, 1984]

                         Lump-Sum Death Payment



Sec. 404.390  General.

    If a person is fully or currently insured when he or she dies, a 
lump-sum death payment of $255 may be paid to the widow or widower of 
the deceased if he or she was living in the same household with the 
deceased at the time of his or her death. If the insured is not survived 
by a widow(er) who meets this

[[Page 141]]

requirement, all or part of the $255 payment may be made to someone else 
as described in Sec. 404.392.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21929, May 16, 1983; 61 
FR 41330, Aug. 8, 1996]



Sec. 404.391  Who is entitled to the lump-sum death payment as a widow
or widower who was living in the same household?

    You are entitled to the lump-sum death payment as a widow or widower 
who was living in the same household if--
    (a) You are the widow or widower of the deceased insured individual 
based upon a relationship described in Sec. 404.345 or Sec. 404.346;
    (b) You apply for this payment within two years after the date of 
the insured's death. You need not apply again if, in the month prior to 
the death of the insured, you were entitled to wife's or husband's 
benefits on his or her earnings record; and
    (c) You were living in the same household with the insured at the 
time of his or her death. The term living in the same household is 
defined in Sec. 404.347.

[44 FR 34481, June 15, 1979, as amended at 48 FR 21929, May 16, 1983]



Sec. 404.392  Who is entitled to the lump-sum death payment when there
is no widow(er) who was living in the same household?

    (a) General. If the insured individual is not survived by a 
widow(er) who meets the requirements of Sec. 404.391, the lump-sum death 
payment shall be paid as follows:
    (1) To a person who is entitled (or would have been entitled had a 
timely application been filed) to widow's or widower's benefits (as 
described in Sec. 404.335) or mother's or father's benefits (as 
described in Sec. 404.339) on the work record of the deceased worker for 
the month of that worker's death; or
    (2) If no person described in (1) survives, in equal shares to each 
person who is entitled (or would have been entitled had a timely 
application been filed) to child's benefits (as described in 
Sec. 404.350) on the work record of the deceased worker for the month of 
that worker's death.
    (b) Application requirement. A person who meets the requirements of 
paragraph (a)(1) of this section need not apply to receive the lump-sum 
death payment if, for the month prior to the death of the insured, that 
person was entitled to wife's or husband's benefits on the insured's 
earnings record. Otherwise, an application must be filed within 2 years 
of the insured's death.

[48 FR 21929, May 16, 1983; 61 FR 41330, Aug. 8, 1996]



      Subpart E_Deductions; Reductions; and Nonpayments of Benefits

    Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c), 216(l), 
222(c), 223(e), 224, 225, 702(a)(5), and 1129A of the Social Security 
Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a) and (c), 416(l), 422(c), 
423(e), 424a, 425, 902(a)(5), and 1320a-8a); 48 U.S.C. 1801.

    Source: 32 FR 19159, Dec. 20, 1967, unless otherwise noted.



Sec. 404.401  Deduction, reduction, and nonpayment of monthly benefits
or lump-sum death payments.

    Under certain conditions, the amount of a monthly insurance benefit 
(see Secs. 404.380 through 404.384 of this part for provisions 
concerning special payments at age 72) or the lump-sum death payment as 
calculated under the pertinent provisions of sections 202 and 203 of the 
Act (including reduction for age under section 202(q) of a monthly 
benefit) must be increased or decreased to determine the amount to be 
actually paid to a beneficiary. Increases in the amount of a monthly 
benefit or lump-sum death payment are based upon recomputation and 
recalculations of the primary insurance amount (see subpart C of this 
part). A decrease in the amount of a monthly benefit or lump-sum death 
payment is required in the following instances:
    (a) Reductions. A reduction of a person's monthly benefit is 
required where:
    (1) The total amount of the monthly benefits payable on an earnings 
record exceeds the maximum that may be paid (see Sec. 404.403);
    (2) An application for monthly benefits is effective for a month 
during a retroactive period, and the maximum

[[Page 142]]

has already been paid for that month or would be exceeded if such 
benefit were paid for that month (see Sec. 404.406);
    (3) An individual is entitled to old-age or disability insurance 
benefits in addition to any other monthly benefit (see Sec. 404.407);
    (4) An individual under full retirement age (see Sec. 404.409) is 
concurrently entitled to disability insurance benefits and to certain 
public disability benefits (see Sec. 404.408);
    (5) An individual is entitled in a month to a widow's or widower's 
insurance benefit that is reduced under section 202 (e)(4) or (f)(5) of 
the Act and to any other monthly insurance benefit other than an old-age 
insurance benefit (see Sec. 404.407(b)); or
    (6) An individual is entitled in a month to old-age, disability, 
wife's, husband's, widow's, or widower's insurance benefit and reduction 
is required under section 202(q) of the Act (see Sec. 404.410).
    (b) Deductions. A deduction from a monthly benefit or a lump-sum 
death payment may be required because of:
    (1) An individual's earnings or work (see Secs. 404.415 and 
404.417);
    (2) Failure of certain beneficiaries receiving wife's or mother's 
insurance benefits to have a child in her care (see Sec. 404.421);
    (3) The earnings or work of an old-age insurance beneficiary where a 
wife, husband, or child is also entitled to benefits (see Secs. 404.415 
and 404.417);
    (4) Failure to report within the prescribed period either certain 
work outside the United States or not having the care of a child (see 
Sec. 404.451);
    (5) Failure to report within the prescribed period earnings from 
work in employment or self-employment (see Sec. 404.453); or
    (6) Certain taxes which were neither deducted from the wages of 
maritime employees nor paid to the Federal Government (see 
Sec. 404.457).
    (c) Adjustments. We may adjust your benefits to correct errors in 
payments under title II of the Act. We may also adjust your benefits if 
you received more than the correct amount due under titles VIII or XVI 
of the Act. For the title II rules on adjustment to your benefits, see 
subpart F of this part. For the rules on adjusting your benefits to 
recover title VIII overpayments, see Sec. 408.930 of this chapter. For 
the rules on adjusting your benefits to recover title XVI overpayments, 
see Sec. 416.572 of this chapter.
    (d) Nonpayments. Nonpayment of monthly benefits may be required 
because:
    (1) The individual is an alien who has been outside the United 
States for more than 6 months (see Sec. 404.460);
    (2) The individual on whose earnings record entitlement is based has 
been deported (see Sec. 404.464);
    (3) The individual is engaged in substantial gainful activity while 
entitled to disability insurance benefits based on ``statutory 
blindness'' (see Sec. 404.467); or
    (4) The individual has not provided satisfactory proof that he or 
she has a Social Security number or has not properly applied for a 
Social Security number (see Sec. 404.469).
    (e) Recalculation. A reduction by recalculation of a benefit amount 
may be prescribed because an individual has been convicted of certain 
offenses (see Sec. 404.465) or because the primary insurance amount is 
recalculated (see subpart C of this part).
    (f) Suspensions. Suspension of monthly benefits may be required 
pursuant to section 203(h)(3) of the Act (the Social Security 
Administration has information indicating that work deductions may 
reasonably be expected for the year), or pursuant to section 225 of the 
Act (the Social Security Administration has information indicating a 
beneficiary is no longer disabled).

[40 FR 30813, July 23, 1975, as amended at 48 FR 37016, Aug. 16, 1983; 
56 FR 41789, Aug. 23, 1991; 65 FR 16813, Mar. 30, 2000; 66 FR 38906, 
July 26, 2001; 68 FR 40122, July 7, 2003; 69 FR 25955, May 10, 2004; 81 
FR 19033, Apr. 4, 2016]



Sec. 404.401a  When we do not pay benefits because of a disability
beneficiary's work activity.

    If you are receiving benefits because you are disabled or blind as 
defined in title II of the Social Security Act, we will stop your 
monthly benefits even

[[Page 143]]

though you have a disabling impairment (Sec. 404.1511), if you engage in 
substantial gainful activity during the reentitlement period 
(Sec. 404.1592a) following completion of the trial work period 
(Sec. 404.1592). You will, however, be paid benefits for the first month 
after the trial work period in which you do substantial gainful activity 
and the two succeeding months, whether or not you do substantial gainful 
activity in those two months. If anyone else is receiving monthly 
benefits based on your earnings record, that individual will not be paid 
benefits for any month for which you cannot be paid benefits during the 
reentitlement period. Except as provided in Sec. 404.471, earnings from 
work activity during a trial work period will not stop your benefits.

[49 FR 22271, May 29, 1984, as amended at 58 FR 64883, Dec. 10, 1993; 71 
FR 66865, Nov. 17, 2006]



Sec. 404.402  Interrelationship of deductions, reductions,
adjustments, and nonpayment of benefits.

    (a) Deductions, reductions, adjustment. Deductions because of 
earnings or work (see Secs. 404.415 and 404.417); failure to have a 
child ``in his or her care'' (see Sec. 404.421); as a penalty for 
failure to timely report noncovered work outside the United States, 
failure to report that he or she no longer has a child ``in his or her 
care,'' or failure to timely report earnings (see Secs. 404.451 and 
404.453); because of unpaid maritime taxes (see Sec. 404.457); or 
nonpayments because of drug addiction and alcoholism to individuals 
other than an insured individual who are entitled to benefits on the 
insured individual's earnings record are made:
    (1) Before making any reductions because of the maximum (see 
Sec. 404.403),
    (2) Before applying the benefit rounding provisions (see 
Sec. 404.304(f)), and,
    (3) Except for deductions imposed as a penalty (see Secs. 404.451 
and 404.453), before making any adjustment necessary because an error 
has been made in the payment of benefits (see subpart F). However, for 
purposes of charging excess earnings for taxable years beginning after 
December 1960 or ending after June 1961, see paragraph (b) of this 
section and Sec. 404.437 for reductions that apply before such charging.
    (b) Reductions, nonpayments. (1) Reduction because of the maximum 
(see Sec. 404.403) is made:
    (i) Before reduction because of simultaneous entitlement to old-age 
or disability insurance benefits and to other benefits (see 
Sec. 404.407);
    (ii) Before reduction in benefits for age (see Secs. 404.410 through 
404.413);
    (iii) Before adjustment necessary because an error has been made in 
the payment of benefits (see subpart F of this part);
    (iv) Before reduction because of entitlement to certain public 
disability benefits provided under Federal, State, or local laws or 
plans (see Sec. 404.408);
    (v) Before nonpayment of an individual's benefits because he is an 
alien living outside the United States for 6 months (see Sec. 404.460), 
or because of deportation (see Sec. 404.464);
    (vi) Before the redetermination of the amount of benefit payable to 
an individual who has been convicted of certain offenses (see 
Sec. 404.465); and
    (vii) Before suspension of benefits due to earnings (see 
Sec. 404.456), for benefits payable or paid for months after December 
1995 to a non-working auxiliary or survivor who resides in a different 
household than the working auxiliary or survivor whose benefits are 
suspended.
    (2) Reduction of benefits because of entitlement to certain public 
disability benefits (see Sec. 404.408) is made before deduction under 
section 203 of the Act relating to work (see Secs. 404.415, 404.417, 
404.451, and 404.453) and failure to have care of a child (see 
Secs. 404.421 and 404.451).
    (3) Reduction of the benefit of a spouse who is receiving a 
Government pension (see Sec. 404.408(a)) is made after the withholding 
of payments as listed in paragraph (d)(1) of this section and after 
reduction because of receipt of certain public disability benefits 
(paragraph (b)(2) of this section).
    (c) Alien outside the United States; deportation nonpayment--
deduction. If an individual is subject to nonpayment of a benefit for a 
month under Sec. 404.460 or Sec. 404.464, no deduction is made from his 
benefit for that month under Sec. 404.415, Sec. 404.417, or 
Sec. 404.421, and no deduction is made because of that individual's work 
from the benefit of any person entitled

[[Page 144]]

or deemed entitled to benefits under Sec. 404.420, on his earnings 
record, for that month.
    (d) Order of priority--deductions and other withholding provisions. 
Deductions and other withholding provisions are applied in accordance 
with the following order of priority:
    (1) Current nonpayments under Secs. 404.460, 404.464, 404.465, 
404.467, and 404.469;
    (2) Current reductions under Sec. 404.408;
    (3) Current reductions under Sec. 404.408a;
    (4) Current deductions under Secs. 404.417 and 404.421;
    (5) Current withholding of benefits under Sec. 404.456;
    (6) Unpaid maritime tax deductions (Sec. 404.457);
    (7) Withholdings to recover overpayments (see subpart F of this 
part);
    (8) Penalty deductions under Secs. 404.451 and 404.453.

[40 FR 30813, July 23, 1975, as amended at 44 FR 29047, May 18, 1979; 48 
FR 37016, Aug. 16, 1983; 48 FR 46148, Oct. 11, 1983; 56 FR 41789, Aug. 
23, 1991; 60 FR 8146, Feb. 10, 1995; 68 FR 15659, Apr. 1, 2003; 68 FR 
40122, July 7, 2003]



Sec. 404.403  Reduction where total monthly benefits exceed maximum 
family benefits payable.

    (a) General. (1) The Social Security Act limits the amount of 
monthly benefits that can be paid for any month based on the earnings of 
an insured individual. If the total benefits to which all persons are 
entitled on one earnings record exceed a maximum amount prescribed by 
law, then those benefits must be reduced so that they do not exceed that 
maximum.
    (2) The method of determining the total benefits payable (the family 
maximum) depends on when the insured individual died or became eligible, 
whichever is earlier. For purposes of this section, the year in which 
the insured individual becomes eligible refers generally to the year in 
which the individual attains age 62 or becomes disabled. However, where 
eligibility or death is in 1979 or later, the year of death, attainment 
of age 62, or beginning of current disability does not control if the 
insured individual was entitled to a disability benefit within the 12 
month period preceding current eligibility or death. Instead the year in 
which the individual became eligible for the former disability insurance 
benefit is the year of eligibility.
    (3) The benefits of an individual entitled as a divorced spouse or 
surviving divorced spouse will not be reduced pursuant to this section. 
The benefits of all other individuals entitled on the same record will 
be determined under this section as if no such divorced spouse or 
surviving divorced spouse were entitled to benefits.
    (4) In any case where more than one individual is entitled to 
benefits as the spouse or surviving spouse of a worker for the same 
month, and at least one of those individuals is entitled based on a 
marriage not valid under State law (see Secs. 404.345 and 404.346), the 
benefits of the individual whose entitlement is based on a valid 
marriage under State law will not be reduced pursuant to this section. 
The benefits of all other individuals entitled on the same record 
(unless excluded by paragraph (a)(3) of this section) will be determined 
under this section as if such validly married individual were not 
entitled to benefits.
    (5) When a person entitled on a worker's earnings record is also 
entitled to benefits on another earnings record, we consider only the 
amount of benefits actually due or payable on the worker's record to the 
dually-entitled person when determining how much to reduce total monthly 
benefits payable on the worker's earnings record because of the maximum. 
We do not include, in total benefits payable, any amount not paid 
because of that person's entitlement on another earnings record (see 
Sec. 404.407). The effect of this provision is to permit payment of up 
to the full maximum benefits to other beneficiaries who are not subject 
to a deduction or reduction. (See Sec. 404.402 for other situations 
where we apply deductions or reductions before reducing total benefits 
for the maximum.)

    Example 1: A wage earner, his wife and child are entitled to 
benefits. The wage earner's primary insurance amount is $600.00. His 
maximum is $900.00. Due to the maximum limit, the monthly benefits for 
the wife and child must be reduced to $150.00 each. Their original 
benefit rates are $300.00 each.

Maximum--$900.00

[[Page 145]]

Subtract primary insurance amount--$600.00
Amount available for wife and child--$300.00
Divide by 2--$150.00 each for wife and child

    The wife is also entitled to benefits on her own record of $120.00 
monthly. This reduces her wife's benefit to $30.00. The following table 
illustrates this calculation.

Wife's benefit, reduced for maximum--$150.00
Subtract reduction due to dual entitlement--$120.00
Wife's benefit--$30.00

    In computing the total benefits payable on the record, we disregard 
the $120.00 we cannot pay the wife. This allows us to increase the 
amount payable to the child to $270.00. The table below shows the steps 
in our calculation.

Amount available under maximum--$300.00
Subtract amount due wife after reduction due to entitlement to her own 
benefit--$30.00
Child's benefit--$270.00
    Example 2: A wage earner, his wife and 2 children are entitled to 
benefits. The wage earner's primary insurance amount is $1,250.00. His 
maximum is $2,180.00. Due to the maximum limit, the monthly benefits for 
the wife and children must be reduced to $310.00 each. Their original 
rates (50 percent of the worker's benefit) are $625.00 each. The 
following shows the calculation.

Maximum--$2,180.00
Subtract primary insurance amount--$1,250.00
Amount available for wife and children--$930.00
Divide by 3--$310 each for wife and children

    The children are also entitled to benefits on their own records. 
Child one is entitled to $390.00 monthly and child two is entitled to 
$280.00 monthly. This causes a reduction in the benefit to child one to 
0.00 and the benefit to child two to $30.00. Again, the following 
illustrates the calculation.

Benefit payable to child 1 reduced for maximum--$310.00
Subtract reduction due to dual entitlement--$390.00
Benefit payable to child 1--$0.00
Benefit payable to child 2, reduced for maximum--$310.00
Subtract reduction for dual entitlement--$280.00
Benefit payable to child 2--$30.00

    In computing the total benefits payable on the record, we consider 
only the benefits actually paid to the children, or $30. This allows 
payment of an additional amount to the wife, increasing her benefit to 
$625.00. This is how the calculation works.
Amount available under maximum for wife and children--$930.00
Subtract amount due children after reduction due to entitlement to their 
own benefits--$30.00
Amount available for wife--$900.00
Amount payable to wife (original benefit)--$625.00
    Example 3: A wage earner, his wife and 4 children are entitled to 
benefits. The wage earner's primary insurance amount is $1,250.00. His 
maximum is $2,180.00. Due to the maximum limit, the monthly benefits for 
the wife and children must be reduced to $186.00 each. Their original 
rates are $625.00 each. This is how the calculation works.

Maximum--$2,180.00
Subtract primary insurance amount--$1,250.00
Amount available for wife and children--$930.00
Divide by 5--$186.00 each for wife and four children

    Two children are also entitled to benefits on their own records. 
Child one is entitled to $390.00 monthly and child two is entitled to 
$280.00 monthly. This causes a reduction in the benefit to child one to 
$0.00 and the benefit to child two to $0.00. This calculation is as 
follows.

Benefit to child 1, reduced for maximum--$186.00
Subtract reduction due to dual entitlement--$390.00
Benefit payable to child 1--$0.00

Benefit to child 2, reduced for maximum--$186.00
Subtract reduction for dual entitlement--$280.00
Benefit payable to child two--$0.00

    In computing the total benefits payable on the record, we disregard 
the $372.00 we cannot pay the children. This allows payment of an 
additional amount to the wife, and the two remaining children as 
follows:

Amount available under maximum for wife and children--$930.00
Subtract amount due child one and child two after reduction due to 
entitlement to their own benefits--$0.00
Amount available for wife and the other two children--$930.00
Amount payable to the wife and each of the remaining two children--
$310.00

    (b) Eligibility or death before 1979. Where more than one individual 
is entitled to monthly benefits for the same month on the same earnings 
record, a reduction in the total benefits payable for that month may be 
required (except in cases involving a saving clause--see Sec. 404.405) 
if the maximum family benefit is exceeded. The maximum is exceeded if 
the total of the monthly benefits exceeds the amount appearing in column 
V of the applicable table in section 215(a) of the Act on the line on

[[Page 146]]

which appears in column IV the primary insurance amount of the insured 
individual whose earnings record is the basis for the benefits payable. 
Where the maximum is exceeded, the total benefits for each month after 
1964 are reduced to the amount appearing in column V. However, when any 
of the persons entitled to benefits on the insured individual's earnings 
would, except for the limitation described in Sec. 404.353(b), be 
entitled to child's insurance benefits on the basis of the earnings 
record of one or more other insured individuals, the total benefits 
payable may not be reduced to less than the smaller of--
    (1) The sum of the maximum amounts of benefits payable on the basis 
of the earnings records of all such insured individuals, or
    (2) The last figure in column V of the applicable table in (or 
deemed to be in) section 215(a) of the Act. The applicable table refers 
to the table which is effective for the month the benefit is payable.
    (c) Eligible for old-age insurance benefits or dies in 1979. If an 
insured individual becomes eligible for old-age insurance benefits or 
dies in 1979, the monthly maximum is as follows--
    (1) 150 percent of the first $230 of the individual's primary 
insurance amount, plus
    (2) 272 percent of the primary insurance amount over $230 but not 
over $332, plus
    (3) 134 percent of the primary insurance amount over $332 but not 
over $433, plus
    (4) 175 percent of the primary insurance amount over $433.


If the total of this computation is not a multiple of $0.10, it will be 
rounded to the next lower multiple of $0.10.
    (d) Eligible for old-age insurance benefits or dies after 1979. (1) 
If an insured individual becomes eligible for old-age insurance benefits 
or dies after 1979, the monthly maximum is computed as in paragraph (c) 
of this section. However, the dollar amounts shown there will be updated 
each year as average earnings rise. This updating is done by first 
dividing the average of the total wages (see Sec. 404.203(m)) for the 
second year before the individual dies or becomes eligible, by the 
average of the total wages for 1977. The result of that computation is 
then multiplied by each dollar amount in the formula in paragraph (c) of 
this section. Each updated dollar amount will be rounded to the nearer 
dollar; if the amount is an exact multiple of $0.50 (but not of $1), it 
will be rounded to the next higher $1.
    (2) Before November 2 of each calendar year after 1978, the 
Commissioner will publish in the Federal Register the formula and 
updated dollar amounts to be used for determining the monthly maximum 
for the following year.
    (d-1) Entitled to disability insurance benefits after June 1980. If 
you first become eligible for old-age or disability insurance benefits 
after 1978 and first entitled to disability insurance benefits after 
June 1980, we compute the monthly family maximum under a formula which 
is different from that in paragraphs (c) and (d) of this section. The 
computation under the new formula is as follows:
    (1) We take 85 percent of your average indexed monthly earnings and 
compare that figure with your primary insurance amount (see Sec. 404.212 
of this part). We work with the larger of these two amounts.
    (2) We take 150 percent of your primary insurance amount.
    (3) We compare the results of paragraphs (d-1) (1) and (2) of this 
section. The smaller amount is the monthly family maximum. As a result 
of this rule, the entitled spouse and children of some workers will not 
be paid any benefits because the family maximum does not exceed the 
primary insurance amount.
    (e) Person entitled on more than one record during years after 1978 
and before 1984. (1) If any of the persons entitled to monthly benefits 
on the earnings record of an insured individual would, except for the 
limitation described in Sec. 404.353(b), be entitled to child's 
insurance benefits on the earnings record of one or more other insured 
individuals, the total benefits payable may not be reduced to less than 
the smaller of--(i) the sum of the maximum amounts of benefits payable 
on the earnings records of all the insured individuals, or (ii) 1.75 
times the highest primary insurance amount possible for that

[[Page 147]]

month based on the average indexed monthly earnings equal to one-twelfth 
of the contribution and benefit base determined for that year.
    (2) If benefits are payable on the earnings of more than one 
individual and the primary insurance amount of one of the insured 
individuals was computed under the provisions in effect before 1979 and 
the primary insurance amount of the others was computed under the 
provisions in effect after 1978, the maximum monthly benefits cannot be 
more than the amount computed under paragraph (e)(1) of this section.
    (f) Person entitled on more than one record for years after 1983. 
(1) If any person for whom paragraphs (c) and (d) would apply is 
entitled to monthly benefits on the earnings record of an insured 
individual would, except for the limitation described in 
Sec. 404.353(b), be entitled to child's insurance benefits on the 
earnings record of one or more other insured individuals, the total 
benefits payable to all persons on the earnings record of any of those 
insured individuals may not be reduced to less than the smaller of:
    (i) The sum of the maximum amounts of benefits payable on the 
earnings records of all the insured individuals, or
    (ii) 1.75 times the highest primary insurance amount possible for 
January 1983, or if later, January of the year that the person becomes 
entitled or reentitled on more than one record.

This highest primary insurance amount possible for that year will be 
based on the average indexed monthly earnings equal to one-twelfth of 
the contribution and benefit base determined for that year. Thereafter, 
the total monthly benefits payable to persons on the earnings record of 
those insured individuals will then be increased only when monthly 
benefits are increased because of cost-of-living adjustments (see 
Sec. 404.270ff).
    (2) If benefits are payable on the earnings of more than one 
individual and the primary insurance amount of one of the insured 
individuals was computed under the provisions in effect before 1979 and 
the primary insurance amount of the other was computed under the 
provisions in effect after 1978, the maximum monthly benefits cannot be 
more than the amount computed under paragraph (f)(1) of this section.
    (g) Person previously entitled to disability insurance benefits. If 
an insured individual who was previously entitled to disability 
insurance benefits becomes entitled to a ``second entitlement'' as 
defined in Sec. 404.250, or dies, after 1995, and the insured 
individual's primary insurance amount is determined under 
Secs. 404.251(a)(1), 404.251(b)(1), or 404.252(b), the monthly maximum 
during the second entitlement is determined under the following rules:
    (1) If the primary insurance amount is determined under 
Secs. 404.251(a)(1) or 404.251(b)(1), the monthly maximum equals the 
maximum in the last month of the insured individual's earlier 
entitlement to disability benefits, increased by any cost-of-living or 
ad hoc increases since then.
    (2) If the primary insurance amount is determined under 
Sec. 404.252(b), the monthly maximum equals the maximum in the last 
month of the insured individual's earlier entitlement to disability 
benefits.
    (3) Notwithstanding paragraphs (g)(1) and (g)(2) of this section, if 
the second entitlement is due to the insured individual's retirement or 
death, and the monthly maximum in the last month of the insured 
individual's earlier entitlement to disability benefits was computed 
under paragraph (d-1) of this section, the monthly maximum is equal to 
the maximum that would have been determined for the last month of such 
earlier entitlement if computed without regard for paragraph (d-1) of 
this section.

[45 FR 1611, Jan. 8, 1980, as amended at 46 FR 25601, May 8, 1981; 48 FR 
46148, Oct. 11, 1983; 51 FR 12606, Apr. 14, 1986; 58 FR 64892, Dec. 10, 
1993; 62 FR 38450, July 18, 1997; 64 FR 17101, Apr. 8, 1999; 64 FR 
57775, Oct. 27, 1999; 65 FR 16813, Mar. 30, 2000]



Sec. 404.404  How reduction for maximum affects insured individual 
and other persons entitled on his earnings record.

    If a reduction of monthly benefits is required under the provisions 
of Sec. 404.403, the monthly benefit amount of each of the persons 
entitled to a

[[Page 148]]

monthly benefits on the same earnings record (with the exception of the 
individual entitled to old-age or disability insurance benefits) is 
proportionately reduced so that the total benefits that can be paid in 1 
month (including an amount equal to the primary insurance amount of the 
old-age or disability insurance beneficiary, when applicable) does not 
exceed the maximum family benefit (except as provided in Sec. 404.405 
where various savings clause provisions are described).



Sec. 404.405  Situations where total benefits can exceed maximum
because of ``savings clause.''

    The following provisions are savings clauses and describe exceptions 
to the rules concerning the maximum amount payable on an individual's 
earnings record in a month as described in Sec. 404.403. The effect of a 
savings clause is to avoid lowering benefit amounts or to guarantee 
minimum increases to certain persons entitled on the earnings record of 
the insured individual when a statutory change has been made that would 
otherwise disadvantage them. The reduction described in Sec. 404.403 
does not apply in the following instances:
    (a)-(m) [Reserved]
    (n) Months after August 1972. The reduction described in 
Sec. 404.403(a) shall not apply to benefits for months after August 1972 
where two or more persons were entitled to benefits for August 1972 
based upon the filing of an application in August 1972 or earlier and 
the total of such benefits was subject to reduction for the maximum 
under Sec. 404.403 (or would have been subject to such reduction except 
for this paragraph) for January 1971. In such a case, maximum family 
benefits on the insured individual's earnings record for any month after 
August 1972 may not be less than the larger of:
    (1) The maximum family benefits for such month determined under the 
applicable table in section 215(a) of the Act (the applicable table in 
section 215(a) is that table which is effective for the month the 
benefit is payable or in the case of a lump-sum payment, the month the 
individual died); or
    (2) The total obtained by multiplying each benefit for August 1972 
after reduction for the maximum but before deduction or reduction for 
age, by 120 percent and raising each such increased amount, if it is not 
a multiple of 10 cents, to the next higher multiple of 10 cents.
    (o) Months after December 1972. The reduction described in 
Sec. 404.403 shall not apply to benefits for months after December 1972 
in the following cases:
    (1) In the case of a redetermination of widow's or widower's 
benefits, the reduction described in Sec. 404.403 shall not apply if:
    (i) Two or more persons were entitled to benefits for December 1972 
on the earnings records of a deceased individual and at least one such 
person is entitled to benefits as the deceased individual's widow or 
widower for December 1972 and for January 1973; and
    (ii) The total of benefits to which all persons are entitled for 
January 1973 is reduced (or would be reduced if deductions were not 
applicable) for the maximum under Sec. 404.403.

In such case, the benefit of each person referred to in paragraph 
(o)(1)(i) of this section for months after December 1972 shall be no 
less than the amount it would have been if the widow's or widower's 
benefit had not been redetermined under the Social Security Amendments 
of 1972.
    (2) In the case of entitlement to child's benefits based upon 
disability which began between ages 18 and 22 the reduction described in 
Sec. 404.403 shall not apply if:
    (i) One or more persons were entitled to benefits on the insured 
individual's earnings record for December 1972 based upon an application 
filed in that month or earlier; and
    (ii) One or more persons not included in paragraph (o)(2)(i) of this 
section are entitled to child's benefits on that earnings record for 
January 1973 based upon disability which began in the period from ages 
18 to 22; and
    (iii) The total benefits to which all persons are entitled on that 
record for January 1973 is reduced (or would be reduced if deductions 
were not applicable) for the maximum under Sec. 404.403.

In such case, the benefit of each person referred to in paragraph 
(o)(2)(i) of this section for months after December 1972 shall be no 
less than the amount it

[[Page 149]]

would have been if the person entitled to child's benefits based upon 
disability in the period from ages 18 to 22 were not so entitled.
    (3) In the case of entitlement of certain surviving divorced 
mothers, the reduction described in Sec. 404.403 shall not apply if:
    (i) One or more persons were entitled to benefits on the insured 
individual's earnings record for December 1972 based upon an application 
filed in December 1972 or earlier; and
    (ii) One or more persons not included in paragraph (o)(3)(i) of this 
section are entitled to benefits on that earnings record as a surviving 
divorced mother for a month after December 1972; and
    (iii) The total of benefits to which all persons are entitled on 
that record for any month after December 1972 is reduced (or would be 
reduced if deductions were not applicable) for the maximum under 
Sec. 404.403.

In such case, the benefit of each such person referred to in paragraph 
(o)(3)(i) of this section for months after December 1972 in which any 
person referred to in paragraph (o)(3)(ii) of this section is entitled 
shall be no less than it would have been if the person(s) referred to in 
paragraph (o)(3)(ii) of this section had not become entitled to 
benefits.
    (p) Months after December 1973. The reduction described in 
Sec. 404.403 shall not apply to benefits for months after December 1973 
where two or more persons were entitled to monthly benefits for January 
1971 or earlier based upon applications filed in January 1971 or 
earlier, and the total of such benefits was subject to reduction for the 
maximum under Sec. 404.403 for January 1971 or earlier. In such a case, 
maximum family benefits payable on the insured individual's earnings 
record for any month after January 1971 may not be less than the larger 
of:
    (1) The maximum family benefit for such month shown in the 
applicable table in section 215(a) of the Act (the applicable table in 
section 215(a) of the Act is that table which is effective for the month 
the benefit is payable or in the case of a lump-sum payment, the month 
the individual died); or
    (2) The largest amount which has been determined payable for any 
month for persons entitled to benefits on the insured individual's 
earnings records; or
    (3) In the case of persons entitled to benefits on the insured 
individual's earnings record for the month immediately preceding the 
month of a general benefit or cost-of-living increase after September 
1972, an amount equal to the sum of the benefit amount for each person 
(excluding any part of an old-age insurance benefit increased because of 
delayed retirement under the provisions of Sec. 404.305(a) for the month 
immediately before the month of increase in the primary insurance amount 
(after reduction for the family maximum but before deductions or 
reductions for age) multiplied by the percentage of increase. Any such 
increased amount, if it is not a multiple of $0.10, will be raised to 
the next higher multiple of $0.10 for months before June 1982 and 
reduced to the next lower multiple of $0.10 for months after May 1982.
    (q) Months after May 1978. The family maximum for months after May 
1978 is figured for all beneficiaries just as it would have been if none 
of them had gotten a benefit increase because of the retirement credit 
if:
    (1) One or more persons were entitled (without the reduction 
required by Sec. 404.406) to monthly benefits for May 1978 on the wages 
and self-employment income of a deceased wage earner;
    (2) The benefit for June 1978 of at least one of those persons is 
increased by reason of a delayed retirement credit (see 
Sec. 404.330(b)(4) or Sec. 404.333(b)(4)); and
    (3) The total amount of monthly benefits to which all those persons 
are entitled is reduced because of the maximum or would be so reduced 
except for certain restrictions (see Sec. 404.403 and Sec. 404.402(a)).

[32 FR 19159, Dec. 20, 1967, as amended at 40 FR 30814, July 23, 1975; 
43 FR 8132, Feb. 28, 1978; 43 FR 29277, July 7, 1978; 48 FR 46148, Oct. 
11, 1983]



Sec. 404.406  Reduction for maximum because of retroactive effect 
of application for monthly benefits.

    Under the provisions described in Sec. 404.403, beginning with the 
month in which a person files an application and becomes entitled to 
benefits on an insured individual's earnings record, the

[[Page 150]]

benefit rate of other persons entitled on the same earnings record 
(aside from the individual on whose earnings record entitlement is 
based) are adjusted downward, if necessary, so that the maximum benefits 
payable on one earnings record will not be exceeded. An application may 
also be effective (retroactively) for benefits for months before the 
month of filing (see Sec. 404.603). For any month before the month of 
filing, however, benefits that have been previously certified by the 
Administration for payment to other persons (on the same earnings 
record) are not changed. Rather, the benefit payment of the person 
filing the application in the later month is reduced for each month of 
the retroactive period to the extent that may be necessary, so that no 
earlier payment to some other person is made erroneous. This means that 
for each month of the retroactive period the amount payable to the 
person filing the later application is the difference, if any, between 
(a) the total amount of benefits actually certified for payment to other 
persons for that month, and (b) the maximum amount of benefits payable 
for that month to all persons, including the person filing later.

[32 FR 19159, Dec. 20, 1967, as amended at 64 FR 14608, Mar. 26, 1999]



Sec. 404.407  Reduction because of entitlement to other benefits.

    (a) Entitlement to old-age or disability insurance benefit and other 
monthly benefit. If an individual is entitled to an old-age insurance 
benefit or disability insurance benefit for any month after August 1958 
and to any other monthly benefit payable under the provisions of title 
II of the Act (see subpart D of this part) for the same month, such 
other benefit for the month, after any reduction under section 202(q) of 
the Act because of entitlement to such benefit for months before 
retirement age and any reduction under section 203(a) of the Act, is 
reduced (but not below zero) by an amount equal to such old-age 
insurance benefit (after reduction under section 202(q) of the Act) or 
such disability insurance benefit, as the case may be.
    (b) Entitlement to widow's or widower's benefit and other monthly 
benefit. If an individual is entitled for any month after August 1965 to 
a widow's or widower's insurance benefit under the provisions of section 
202 (e)(4) or (f)(5) of the Act and to any other monthly benefit payable 
under the provisions of title II of the Act (see subpart D) for the same 
month, except an old-age insurance benefit, such other insurance benefit 
for that month, after any reduction under paragraph (a) of this section, 
any reduction for age under section 202(q) of the Act, and any reduction 
under the provisions described in section 203(a) of the Act, shall be 
reduced, but not below zero, by an amount equal to such widow's or 
widower's insurance benefit after any reduction or reductions under 
paragraph (a) of this section or section 203(a) of the Act.
    (c) Entitlement to old-age insurance benefit and disability 
insurance benefit. Any individual who is entitled for any month after 
August 1965 to both an old-age insurance benefit and a disability 
insurance benefit shall be entitled to only the larger of such benefits 
for such month, except that where the individual so elects, he or she 
shall instead be entitled to only the smaller of such benefits for such 
month. Only a person defined in Sec. 404.612 (a), (c), or (d) may make 
the above described election.
    (d) Child's insurance benefits. A child may, for any month, be 
simultaneously entitled to a child's insurance benefit on more than one 
individual's earnings if all the conditions for entitlement described in 
Sec. 404.350 are met with respect to each claim. Where a child is 
simultaneously entitled to child's insurance benefits on more than one 
earnings record, the general rule is that the child will be paid an 
amount which is based on the record having the highest primary insurance 
amount. However, the child will be paid a higher amount which is based 
on the earnings record having a lower primary insurance amount if no 
other beneficiary entitled on any record would receive a lower benefit 
because the child is paid on the record with the lower primary insurance 
amount. (See Sec. 404.353(b).)
    (e) Entitlement to more than one benefit where not all benefits are 
child's insurance benefits and no benefit is an old-age

[[Page 151]]

or disability insurance benefit. If an individual (other than an 
individual to whom section 202 (e)(4) or (f)(5) of the Act applies) is 
entitled for any month to more than one monthly benefit payable under 
the provisions of this subpart, none of which is an old-age or 
disability insurance benefit and all of which are not child's insurance 
benefits, only the greater of the monthly benefits to which he would 
(but for the provisions of this paragraph) otherwise be entitled is 
payable for such month. For months after August 1965, an individual who 
is entitled for any month to more than one widow's or widower's 
insurance benefit to which section 202 (e)(4) or (f)(5) of the Act 
applies is entitled to only one such benefit for such month, such 
benefit to be the largest of such benefits.

[32 FR 19159, Dec. 20, 1967, as amended at 51 FR 12606, Apr. 14, 1986; 
54 FR 5603, Feb. 6, 1989]



Sec. 404.408  Reduction of benefits based on disability on account of 
receipt of certain other disability benefits provided under Federal,
State, or local laws or plans.

    (a) When reduction required. Under section 224 of the Act, a 
disability insurance benefit to which an individual is entitled under 
section 223 of the Act for a month (and any monthly benefit for the same 
month payable to others under section 202 on the basis of the same 
earnings record) is reduced (except as provided in paragraph (b) of this 
section) by an amount determined under paragraph (c) of this section if:
    (1) The individual first became entitled to disability insurance 
benefits after 1965 but before September 1981 based on a period of 
disability that began after June 1, 1965, and before March 1981, and
    (i) The individual entitled to the disability insurance benefit is 
also entitled to periodic benefits under a workers' compensation law or 
plan of the United States or a State for that month for a total or 
partial disability (whether or not permanent), and
    (ii) The Commissioner has, in a month before that month, received a 
notice of the entitlement, and
    (iii) The individual has not attained age 62, or
    (2) The individual first became entitled to disability insurance 
benefits after August 1981 based on a disability that began after 
February 1981, and
    (i) The individual entitled to the disability insurance benefit is 
also, for that month, concurrently entitled to a periodic benefit 
(including workers' compensation or any other payments based on a work 
relationship) on account of a total or partial disability (whether or 
not permanent) under a law or plan of the United States, a State, a 
political subdivision, or an instrumentality of two or more of these 
entities, and
    (ii) The individual has not attained full retirement age as defined 
in Sec. 404.409.
    (b) When reduction not made. (1) The reduction of a benefit 
otherwise required by paragraph (a)(1) of this section is not made if 
the workers' compensation law or plan under which the periodic benefit 
is payable provides for the reduction of such periodic benefit when 
anyone is entitled to a benefit under title II of the Act on the basis 
of the earnings record of an individual entitled to a disability 
insurance benefit under section 223 of the Act.
    (2) The reduction of a benefit otherwise required by paragraph 
(a)(2) of this section is not to be made if:
    (i) The law or plan under which the periodic public disability 
benefit is payable provides for the reduction of that benefit when 
anyone is entitled to a benefit under title II of the Act on the basis 
of the earnings record of an individual entitled to a disability 
insurance benefit under section 223 of the Act and that law or plan so 
provided on February 18, 1981. (The reduction required by paragraph 
(a)(2) of this section will not be affected by public disability 
reduction provisions not actually in effect on this date or by changes 
made after February 18, 1981, to provisions that were in effect on this 
date providing for the reduction of benefits previously not subject to a 
reduction); or
    (ii) The benefit is a Veterans Administration benefit, a public 
disability benefit (except workers' compensation) payable to a public 
employee based on employment covered under Social Security, a public 
benefit based on need,

[[Page 152]]

or a wholly private pension or private insurance benefit.
    (c) Amount of reduction--(1) General. The total of benefits payable 
for a month under sections 223 and 202 of the Act to which paragraph (a) 
of this section applies is reduced monthly (but not below zero) by the 
amount by which the sum of the monthly disability insurance benefits 
payable on the disabled individual's earnings record and the other 
public disability benefits payable for that month exceeds the higher of:
    (i) Eighty percent of his average current earnings, as defined in 
paragraph (c)(3) of this section, or
    (ii) The total of such individual's disability insurance benefit for 
such month and all other benefits payable for such month based on such 
individual's earnings record, prior to reduction under this section.
    (2) Limitation on reduction. In no case may the total of monthly 
benefits payable for a month to the disabled worker and to the persons 
entitled to benefits for such month on his earnings record be less than:
    (i) The total of the benefits payable (after reduction under 
paragraph (a) of this section) to such beneficiaries for the first month 
for which reduction under this section is made, and
    (ii) Any increase in such benefits which is made effective for 
months after the first month for which reduction under this section is 
made.
    (3) Average current earnings defined. (i) Beginning January 1, 1979, 
for purposes of this section, an individual's average current earnings 
is the largest of either paragraph (c)(3)(i) (a), (b) or (c) of this 
section (after reducing the amount to the next lower multiple of $1 when 
the amount is not a multiple of $1):
    (A) The average monthly wage (determined under section 215(b) of the 
Act as in effect prior to January 1979) used for purposes of computing 
the individual's disability insurance benefit under section 223 of the 
Act;
    (B) One-sixtieth of the total of the individual's wages and earnings 
from self-employment, without the limitations under sections 209(a) and 
211(b)(1) of the Act (see paragraph (c)(3)(ii) of this section), for the 
5 consecutive calendar years after 1950 for which the wages and earnings 
from self-employment were highest; or
    (C) One-twelfth of the total of the individual's wages and earnings 
from self-employment, without the limitations under sections 209(a) and 
211(b)(1) of the Act (see paragraph (c)(3)(ii) of this section), for the 
calendar year in which the individual had the highest wages and earnings 
from self-employment during the period consisting of the calendar year 
in which the individual became disabled and the 5 years immediately 
preceding that year. Any amount so computed which is not a multiple of 
$1 is reduced to the next lower multiple of $1.
    (ii) Method of determining calendar year earnings in excess of the 
limitations under sections 209(a) and 211(b)(1) of the Act. For the 
purposes of paragraph (c)(3)(i) of this section, the extent by which the 
wages or earnings from self-employment of an individual exceed the 
maximum amount of earnings creditable under sections 209(a) and 
211(b)(1) of the Act in any calendar year after 1950 and before 1978 
will ordinarily be estimated on the basis of the earnings information 
available in the records of Administration. (See subpart I of this 
part.) If an individual provides satisfactory evidence of his actual 
earnings in any year, the extent, if any, by which his earnings exceed 
the limitations under sections 209(a) and 211(b)(1) of the Act shall be 
determined by the use of such evidence instead of by the use of 
estimates.
    (4) Reentitlement to disability insurance benefits. If an 
individual's entitlement to disability insurance benefits terminates and 
such individual again becomes entitled to disability insurance benefits, 
the amount of the reduction is again computed based on the figures 
specified in this paragraph (c) applicable to the subsequent 
entitlement.
    (5) Computing disability insurance benefits. When reduction is 
required, the total monthly Social Security disability insurance 
benefits payable after reduction can be more easily computed by 
subtracting the monthly amount of the other public disability benefit 
from the higher of paragraph (c)(1) (i) or (ii). This is the method 
employed in the examples used in this section.

[[Page 153]]

    (d) Items not counted for reduction. Amounts paid or incurred, or to 
be incurred, by the individual for medical, legal, or related expenses 
in connection with the claim for public disability payments (see 
Sec. 404.408 (a) and (b)) or the injury or occupational disease on which 
the public disability award or settlement agreement is based, are 
excluded in computing the reduction under paragraph (a) of this section 
to the extent they are consonant with the applicable Federal, State, or 
local law or plan and reflect either the actual amount of expenses 
already incurred or a reasonable estimate, given the circumstances in 
the individual's case, of future expenses. Any expenses not established 
by evidence required by the Administration or not reflecting a 
reasonable estimate of the individual's actual future expenses will not 
be excluded. These medical, legal, or related expenses may be evidenced 
by the public disability award, compromise agreement, a court order, or 
by other evidence as the Administration may require. This other evidence 
may consist of:
    (1) A detailed statement by the individual's attorney, physician, or 
the employer's insurance carrier; or
    (2) Bills, receipts, or canceled checks; or
    (3) Other clear and convincing evidence indicating the amount of 
expenses; or
    (4) Any combination of the foregoing evidence from which the amount 
of expenses may be determinable.
    (e) Certification by individual concerning eligibility for public 
disability benefits. Where it appears that an individual may be eligible 
for a public disability benefit which would give rise to a reduction 
under paragraph (a) of this section, the individual may be required, as 
a condition of certification for payment of any benefit under section 
223 of the Act to any individual for any month, and of any benefit under 
section 202 of the Act for any month based on such individual's earnings 
record, to furnish evidence as requested by the Administration and to 
certify as to:
    (1) Whether he or she has filed or intends to file any claim for a 
public disability benefit, and
    (2) If he or she has so filed, whether there has been a decision on 
the claim. The Commissioner may rely, in the absence of evidence to the 
contrary, upon a certification that he or she has not filed and does not 
intend to file such a claim, or that he or she has filed and no decision 
has been made, in certifying any benefit for payment pursuant to section 
205(i) of the Act.
    (f) Verification of eligibility or entitlement to a public 
disability benefit under paragraph (a). Section 224 of the Act requires 
the head of any Federal agency to furnish the Commissioner information 
from the Federal agency's records which is needed to determine the 
reduction amount, if any, or verify other information to carry out the 
provisions of this section. The Commissioner is authorized to enter into 
agreements with States, political subdivisions, and other organizations 
that administer a law or plan of public disability benefits in order to 
obtain information that may be required to carry out the provisions of 
this section.
    (g) Public disability benefit payable on other than a monthly basis. 
Where public disability benefits are paid periodically but not monthly, 
or in a lump sum as a commutation of or a substitute for periodic 
benefits, such as a compromise and release settlement, the reduction 
under this section is made at the time or times and in the amounts that 
the Administration determines will approximate as nearly as practicable 
the reduction required under paragraph (a) of this section.
    (h) Priorities. (1) For an explanation of when a reduction is made 
under this section where other reductions, deductions, etc., are 
involved, see Sec. 404.402.
    (2) Whenever a reduction in the total of benefits for any month 
based on an individual's earnings record is made under paragraph (a) of 
this section, each benefit, except the disability insurance benefit, is 
first proportionately decreased. Any excess reduction over the sum of 
all the benefits, other than the disability insurance benefit, is then 
applied to the disability insurance benefit.

    Example 1: Effective September 1981, Harold is entitled to a monthly 
disability primary insurance amount of $507.90 and a monthly public 
disability benefit of $410.00 from the

[[Page 154]]

State. Eighty percent of Harold's average current earnings is $800.00. 
Because this amount ($800.00) is higher than Harold's disability 
insurance benefit ($507.90), we subtract Harold's monthly public 
disability benefit ($410.00) from eighty percent of his average current 
earnings ($800.00). This leaves Harold a reduced monthly disability 
benefit of $390.00.
    Example 2: In September 1981, Tom is entitled to a monthly 
disability primary insurance amount of $559.30. His wife and two 
children are also entitled to monthly benefits of $93.20 each. The total 
family benefit is $838.90. Tom is also receiving a monthly workers' 
compensation benefit of $500.00 from the State. Eighty percent of Tom's 
average current earnings is $820.10. Because the total family benefit 
($838.90) is higher than 80 percent of the average current earnings 
($820.10), we subtract the monthly workers' compensation benefit 
($500.00) from the total family benefit ($838.90), leaving $338.90 
payable. This means the monthly benefits to Tom's wife and children are 
reduced to zero, and Tom's monthly disability benefit is reduced to 
$338.90.

    (i) Effect of changes in family composition. The addition or 
subtraction in the number of beneficiaries in a family may cause the 
family benefit to become, or cease to be, the applicable limit for 
reduction purposes under this section. When the family composition 
changes, the amount of the reduction is recalculated as though the new 
number of beneficiaries were entitled for the first month the reduction 
was imposed. If the applicable limit both before and after the change is 
80 percent of the average current earnings and the limitation on maximum 
family benefits is in effect both before and after the change, the 
amount payable remains the same and is simply redistributed among the 
beneficiaries entitled on the same earnings record.

    Example 1: Frank is receiving $500.00 a month under the provisions 
of a State workers' compensation law. He had a prior period of 
disability which terminated in June 1978. In September 1981, Frank 
applies for a second period of disability and is awarded monthly 
disability insurance benefits with a primary insurance amount of 
$370.20. His child, Doug, qualifies for benefits of $135.10 a month on 
Frank's earnings record. The total family benefits is $505.30 monthly.
    Frank's average monthly wage (as used to compute the primary 
insurance amount) is $400.00; eighty percent of his average current 
earnings (computed by using the 5 consecutive years in which his 
earnings were highest) is $428.80 (80% of $536.00); eighty percent of 
Frank's average current earnings (computed by using the 1 calendar year 
in which his earnings were highest) is $509.60 (80% of $637.00). The 
highest value for 80 percent of average current earnings is therefore 
$509.60 (80%). Since this is higher than the total family benefit 
($505.30), the $509.60 is the applicable limit in determining the amount 
of the reduction (or offset). The amount payable after the reduction 
is--

80% of Frank's average current earnings......................    $509.60
Frank's monthly workers' compensation benefit................    ^500.00
                                                              ----------
  Monthly benefit payable to Frank...........................       9.60
 

    No monthly benefits are payable to Doug because the reduction is 
applied to Doug's benefit first. In December 1981, another child, Mike, 
becomes entitled on Frank's earnings record. The monthly benefit to each 
child before reduction is now $109.10, the amount payable when there are 
two beneficiaries in addition to the wage earner. Thus, the total family 
benefit becomes $588.40. Because this is now higher than $509.60 (80% of 
Frank's average current earnings), $588.40 becomes the applicable limit 
in determining the amount of reduction. The amount payable after the 
increase in the total family benefit is--

The new total family benefit.................................    $588.40
Frank's monthly workers' compensation rate...................    ^500.00
                                                              ----------
  Monthly benefit payable to Frank...........................      88.40
 


No monthly benefits are payable to either child because the reduction 
(or offset) is applied to the family benefits first.
    Example 2: Jack became entitled to disability insurance benefits in 
December 1973 (12/73), with a primary insurance amount (PIA) of $220.40. 
He was also receiving a workers' compensation benefit. An offset was 
imposed against the disability insurance benefit. By June 1977 (6/77), 
Jack's PIA had increased to $298.00 because of several statutory benefit 
increases. In December 1977 (12/77), his wife, Helen, attained age 65 
and filed for unreduced wife's benefits. (She was not entitled to a 
benefit on her own earnings record.) This benefit was terminated in May 
1978 (5/78), at her death. Helen's benefit was computed back to 12/73 as 
though she were entitled in the first month that offset was imposed 
against Jack. Since there were no other beneficiaries entitled and 
Helen's entire monthly benefit amount is subject to offset, the benefit 
payable to her for 12/77 through April 1978 (4/78), would be $38.80. 
This gives Helen the protected statutory benefit increases since 12/73. 
The table below shows how Helen's benefit was computed beginning with 
the first month offset was imposed.

[[Page 155]]



------------------------------------------------------------------------
                                                     Helen's
                                          Jack's     benefit    Helen's
Month of entitlement/statutory increase     PIA     prior to   statutory
                                                     offset     increase
------------------------------------------------------------------------
December 1973..........................   $220.40     $110.20  .........
March 1974.............................    236.00      118.00      $7.80
June 1974..............................    244.80      122.40     + 4.40
June 1975..............................    264.40      132.20     + 9.80
June 1976..............................    281.40      140.70     + 8.50
June 1977..............................    298.00      149.00     + 8.30
                                        --------------------------------
December 1977 through April 1978 \1\...  ........  ..........      38.80
------------------------------------------------------------------------
\1\ Monthly benefit payable to Helen.


    (j) Effect of social security disability insurance benefit 
increases. Any increase in benefits due to a recomputation or a 
statutory increase in benefit rates is not subject to the reduction for 
public disability benefits under paragraph (a) and does not change the 
amount to be deducted from the family benefit. The increase is simply 
added to what amount, if any, is payable. If a new beneficiary becomes 
entitled to monthly benefits on the same earnings record after the 
increase, the amount of the reduction is redistributed among the new 
beneficiaries entitled under section 202 of the Act and deducted from 
their current benefit rate.

    Example: In March 1981, Chuck became entitled to disability 
insurance benefits with a primary insurance amount of $362.40 a month. 
He has a wife and two children who are each entitled to a monthly 
benefit of $60.40. Chuck is receiving monthly disability compensation 
from a worker's compensation plan of $410.00. Eighty percent of his 
average current earnings is $800.00. Because this is higher than the 
total family benefit ($543.60), $800.00 is the applicable limit in 
computing the amount of reduction. The amount of monthly benefits 
payable after the reduction is--

Applicable limit.............................................    $800.00
Chuck's monthly disability compensation......................    ^410.00
                                                              ----------
Total amount payable to Chuck and the family after reduction.    $390.00
Amount payable to Chuck......................................    ^362.40
                                                              ----------
Total amount payable to the family...........................     $27.60
$9.20 payable to each family member equals...................     $27.60
                                                              ----------
                                                                   3
 

    In June 1981, the disability benefit rates were raised to reflect an 
increase in the cost-of-living. Chuck is now entitled to $403.00 a month 
and each family member is entitled to $67.20 a month (an increase of 
$6.80 to each family member). The monthly amounts payable after the 
cost-of-living increase are now $403.00 to Chuck and $16.00 to each 
family member ($9.20 plus the $6.80 increase).
    In September 1981, another child becomes entitled to benefits based 
on Chuck's earnings record. The monthly amount payable to the family 
(excluding Chuck) must now be divided by 4:

$6.90 payable to each family member equals...................     $27.60
                                                              ----------
                                                                   4
 

    The June 1981 cost-of-living increase is added to determine the 
amount payable. Chuck continues to receive $403.00 monthly. Each family 
member receives a cost-of-living increase of $5.10. Thus, the amount 
payable to each is $12.00 in September 1981 ($6.90 plus the $5.10 
increase). (See Example 2 under (i).)

    (k) Effect of changes in the amount of the public disability 
benefit. Any change in the amount of the public disability benefit 
received will result in a recalculation of the reduction under paragraph 
(a) and, potentially, an adjustment in the amount of such reduction. If 
the reduction is made under paragraph (a)(1) of this section, any 
increased reduction will be imposed effective with the month after the 
month the Commissioner received notice of the increase in the public 
disability benefit (it should be noted that only workers' compensation 
can cause this reduction). Adjustments due to a decrease in the amount 
of the public disability benefit will be effective with the actual date 
the decreased amount was effective. If the reduction is made under 
paragraph (a)(2) of this section, any increase or decrease in the 
reduction will be imposed effective with the actual date of entitlement 
to the new amount of the public disability benefit.

    Example: In September 1981, based on a disability which began March 
12, 1981, Theresa became entitled to Social Security disability 
insurance benefits with a primary insurance amount of $445.70 a month. 
She had previously been entitled to Social Security disability insurance 
benefits from March 1967 through July 1969. She is receiving a temporary 
total workers' compensation payment of $227.50 a month. Eighty percent 
of her average current earnings is $610.50. The amount of monthly 
disability insurance benefit payable after reduction is--

80 percent of Theresa's average current earnings.............    $610.50
Theresa's monthly workers' compensation payment..............    ^227.50
                                                              ----------
  Total amount payable to Theresa after reduction............     383.00
 


[[Page 156]]

    On November 15, 1981, the Commissioner was notified that Theresa's 
workers' compensation rate was increased to $303.30 a month effective 
October 1, 1981. This increase reflected a cost-of-living adjustment 
granted to all workers' compensation recipients in her State. The 
reduction to her monthly disability insurance benefit is recomputed to 
take this increase into account--

80 percent of Theresa's average current earnings.............    $610.50
Theresa's monthly workers' compensation payment beginning        ^303.30
 October 1, 1981.............................................
                                                              ----------
  Total new amount payable to Theresa beginning October 1981     $307.20
   after recalculation of the reduction......................
 

    Effective January, 1, 1982, Theresa's workers' compensation payment 
is decreased to $280.10 a month when she begins to receive a permanent 
partial payment. The reduction to her monthly disability insurance 
benefit is again recalculated to reflect her decreased workers' 
compensation amount--

80 percent of Theresa's average current earnings.............    $610.50
Theresa's monthly workers' compensation payment beginning        ^280.10
 January 1, 1982.............................................
                                                              ----------
  Total new amount payable to Theresa beginning January 1982     $330.40
   after recalculation of the reduction......................
 

    If, in the above example, Theresa had become entitled to disability 
insurance benefits in August 1981, the increased reduction to her 
benefit, due to the October 1, 1981 increase in her workers' 
compensation payment, would have been imposed beginning with December 
1981, the month after the month she notified the Social Security 
Administration of the increase. The later decrease in her workers' 
compensation payment would still affect her disability insurance benefit 
beginning with January 1982.

    (l) Redetermination of benefits--(1) General. In the second calendar 
year after the year in which reduction under this section in the total 
of an individual's benefits under section 223 of the Act and any 
benefits under section 202 of the Act based on his or her wages and 
self-employment income is first required (in a continuous period of 
months), and in each third year thereafter, the amount of those benefits 
which are still subject to reduction under this section are 
redetermined, provided this redetermination does not result in any 
decrease in the total amount of benefits payable under title II of the 
Act on the basis of the workers' wages and self-employment income. The 
redetermined benefit is effective with the January following the year in 
which the redetermination is made.
    (2) Average current earnings. In making the redetermination required 
by paragraph (l)(1) of this section, the individual's average current 
earnings (as defined in paragraph (c)(3) of this section) is deemed to 
be the product of his average current earnings as initially determined 
under paragraph (c)(3) of this section and:
    (i) The ratio of the average of the total wages (as defined in 
Sec. 404.1049) of all persons for whom wages were reported to the 
Secretary of the Treasury or his delegate for the calendar year before 
the year in which the redetermination is made, to the average of the 
total wages of all person reported to the Secretary of the Treasury or 
his delegate for calendar year 1977 or, if later, the calendar year 
before the year in which the reduction was first computed (but not 
counting any reduction made in benefits for a previous period of 
disability); and
    (ii) In any case in which the reduction was first computed before 
1978, the ratio of the average of the taxable wages reported to the 
Commissioner of Social Security for the first calendar quarter of 1977 
to the average of the taxable wages reported to the Commissioner of 
Social Security for the first calendar quarter of the calendar year 
before the year in which the reduction was first computed (but not 
counting any reduction made in benefits for a previous period of 
disability). Any amount determined under the preceding two sentences 
which is not a multiple of $1 is reduced to the next lower multiple of 
$1.
    (3) Effect of redetermination. Where the applicable limit on total 
benefits previously used was 80 percent of the average current earnings, 
a redetermination under this paragraph may cause an increase in the 
amount of benefits payable. Also, where the limit previously used was 
the total family benefit, the redetermination may cause the average 
current earnings to exceed the total family benefit and thus become the 
new applicable limit. If for some other reason (such as a statutory 
increase or recomputation) the benefit has already been increased to a 
level

[[Page 157]]

which equals or exceeds the benefit resulting from a redetermination 
under this paragraph, no additional increase is made. A redetermination 
is designed to bring benefits into line with current wage levels when no 
other change in payments has done so.

    Example: In October 1978, Alice became entitled to disability 
insurance benefits with a primary insurance amount of $505.10. Her two 
children were also entitled to monthly benefits of $189.40 each. Alice 
was also entitled to monthly disability compensation benefits of $667.30 
from the State. Eighty percent of Alice's average current earnings is 
$1340.80, and that amount is the applicable limit. The amount of monthly 
benefits payable after the reduction is--

Applicable limit...........................................    $1,340.80
Alice's State disability compensation benefit..............      ^667.30
                                                            ------------
Total benefits payable to Alice and both children after          $673.50
 reduction.................................................
Alice's disability insurance benefit.......................      ^505.10
Payable to the children....................................      $168.40
$84.20 payable to each child after reduction equals........      $168.40
                                                            ------------
                                                                  2
 

    In June 1979 and June 1980, cost-of-living increases in Social 
Security benefits raise Alice's benefit by $50.10 (to $555.20) and 
$79.40 (to $634.60) respectively. The children's benefits (before 
reduction) are each raised by $18.80 (to $208.20) and $29.80 (to 
$238.00). These increases in Social Security benefits are not subject to 
the reduction (i.e., offset).
    In 1980, Alice's average current earnings are redetermined as 
required by law. The offset is recalculated, and if the amount payable 
to the family is higher than the current amount payable to the family, 
that higher amount becomes payable the following January (i.e., January 
1981). The current amount payable to the family after the reduction is 
recalculated--

Alice's 1978 benefit after reduction.........................    $505.10
Alice's cost-of-living increase in June 1979.................    + 50.10
Alice's cost-of-living increase in June 1980.................    + 79.40
One child's 1978 benefit after reduction.....................    + 84.20
That child's cost-of-living increase in June 1979............    + 18.70
That child's cost-of-living increase in June 1980............    + 29.70
The other child's 1978 benefit after reduction...............    + 84.20
The other child's cost-of-living increase in June 1979.......    + 18.70
The other child's cost-of-living increase in June 1980.......    + 29.70
                                                              ----------
Total amount payable to the family after reduction in January     899.80
 1981........................................................
 

    The amount payable to the family after reduction is then 
recalculated using the redetermined average current earnings--

Average current earnings before redetermination............    $1,676.00
Redetermination ratio effective for January 1981...........     x  1.174
                                                            ------------
Redetermined average current earnings......................    $1,967.00
                                                                  x  80%
                                                            ------------
80% of the redetermined average current earnings...........    $1,573.60
Alice's State disability compensation benefit..............      ^667.30
                                                            ------------
Total benefits payable to the family after offset..........      $906.30
 

    We then compare the total amount currently being paid to the family 
($899.80) to the total amount payable after the redetermination 
($906.30). In this example, the redetermination yields a higher amount 
and, therefore, becomes payable the following January (i.e., January 
1981). Additional computations are required to determine the amount that 
will be paid to each family member--

Total benefits payable to the family using the redetermined      $906.30
 average current earnings....................................
Total cost-of-living increases to both children..............     ^96.80
                                                              ----------
Balance payable..............................................     809.50
Alice's current benefit amount before reduction..............    ^634.60
                                                              ----------
Payable to the children......................................     174.90
Total cost-of-living increases to both children..............    + 96.80
                                                              ----------
Total payable to children after reduction....................     271.70
$135.90 (rounded from $135.85) payable to each child equals..    $271.70
                                                              ----------
                                                                   2
 


[32 FR 19159, Dec. 20, 1967; 33 FR 3060, Feb. 16, 1968, as amended at 37 
FR 3425, Feb. 16, 1972; 48 FR 37017, Aug. 16, 1983; 48 FR 38814, Aug. 
26, 1983; 62 FR 38450, July 18, 1997; 81 FR 19033, Apr. 4, 2016]



Sec. 404.408a  Reduction where spouse is receiving a Government pension.

    (a) General--(1) Terms used in this section. (i) Government pension 
means any monthly periodic benefit (or equivalent) you receive that is 
based on your Federal, State, or local government employment.
    (ii) Noncovered employment means Federal, State, or local government 
employment that Social Security did not cover and for which you did not 
pay Social Security taxes. For the purposes of this section, we consider 
your Federal, State, or local government employment to be noncovered 
employment if you pay only Medicare taxes.

[[Page 158]]

    (iii) Spouse's benefits are Social Security benefits you receive as 
a wife, husband, widow(er), mother, father, divorced spouse, or 
surviving divorced spouse.
    (2) When reduction is required. We will reduce your spouse's benefit 
for each month that you receive a government pension based on noncovered 
employment, unless one of the exceptions in paragraph (b) of this 
section applies. When we consider whether you receive a government 
pension based on noncovered employment, we consider the entire month to 
be a month covered by Social Security if you worked for a Federal, 
State, or local government employer in a position covered by Social 
Security for at least 1 day in that month and there was no noncovered 
employment that month under the same pension plan.
    (b) Exceptions. The reduction does not apply:
    (1) If you are receiving a Government pension based on employment 
for an interstate instrumentality.
    (2) If you received or are eligible to receive a Government pension 
for one or more months in the period December 1977 through November 1982 
and you meet the requirements for Social Security benefits that were 
applied in January 1977, even though you don't claim benefits, and you 
don't actually meet the requirements for receiving benefits until a 
later month. The January 1977 requirements are, for a man, a one-half 
support test (see paragraph (c) of this section), and, for a woman 
claiming benefits as a divorced spouse, marriage for at least 20 years 
to the insured worker. You are considered eligible for a Government 
pension for any month in which you meet all the requirements for payment 
except that you are working or have not applied.
    (3) If you were receiving or were eligible (as defined in paragraph 
(b)(2) of this section) to receive a Government pension for one or more 
months before July 1983, and you meet the dependency test of one-half 
support that was applied to claimants for husband's and widower's 
benefits in 1977, even though you don't claim benefits, and you don't 
actually meet the requirements for receiving benefits until a later 
month. If you meet the exception in this paragraph but you do not meet 
the exception in paragraph (b)(2), December 1982 is the earliest month 
for which the reduction will not affect your benefits.
    (4) If you would have been eligible for a pension in a given month 
except for a requirement which delayed eligibility for such pension 
until the month following the month in which all other requirements were 
met, we will consider you to be eligible in that given month for the 
purpose of meeting one of the exceptions in paragraphs (b) (2) and (3) 
of this section. If you meet an exception solely because of this 
provision, your benefits will be unreduced for months after November 
1984 only.
    (5) If, with respect to monthly benefits payable for months after 
December 1994, you are receiving a Government pension based wholly upon 
service as a member of a uniformed service, regardless of whether on 
active or inactive duty and whether covered by social security. However, 
if the earnings on the last day of employment as a military reservist 
were not covered, January 1995 is the earliest month for which the 
reduction will not affect your benefits.
    (6) If you are receiving a government pension and the last 60 months 
of your government employment were covered by both Social Security and 
the pension plan that provides your government pension.
    (i) If the last day of your government employment was after June 30, 
2004 and on or before March 2, 2009, we will apply a transitional rule 
to reduce the last 60-month requirement under the following conditions:
    (A) You worked 60 months in Federal, State, or local government 
employment covered by Social Security before March 2, 2004, and you 
worked at least 1 month of covered government employment after March 2, 
2004, or
    (B) You worked fewer than 60 months in government employment covered 
by Social Security on or before March 2, 2004 and you worked the 
remaining number of months needed to total 60 months after March 2, 
2004. The months that you worked before or after March 2, 2004 do not 
have to be consecutive.
    (ii) We will always reduce your monthly spouse's benefit if you 
receive a government pension based on noncovered employment and you 
later go

[[Page 159]]

back to work for a Federal, State, or local government, unless:
    (A) Your final 60 months of Federal, State, or local government 
employment were covered by Social Security; and
    (B) Both your earlier and later Federal, State, or local government 
employment were under the same pension plan.
    (7) If you are a former Federal employee and you receive a 
government pension based on work that included at least 60 months in 
employment covered by Social Security in the period beginning January 1, 
1988 and ending with the first month you became entitled to spouse's 
benefits, whether or not the 60 months are consecutive), and:
    (i) You worked in the Civil Service Retirement System (CSRS), but 
switched after 1987 to either the Federal Employees Retirement System 
(FERS) or the Foreign Service Pension System; or
    (ii) You worked in the legislative branch and left CSRS after 1987 
or received a lump sum payment from CSRS or another retirement system 
after 1987.
    (8) You were a State or local government employee, or a Federal 
employee who worked in the CSRS but switched to the FERS before 1988, 
your last day of service was in covered employment, and
    (i) You filed for spouse's benefits before April 1, 2004 and became 
entitled to benefits based on that filing, or
    (ii) Your last day of service was before July 1, 2004,
    (c) The one-half support test. For a man to meet the January 1977 
requirement as provided in the exception in paragraph (b)(2) and for a 
man or a woman to meet the exception in paragraph (b)(3) of this 
section, he or she must meet a one-half support test. One-half support 
is defined in Sec. 404.366 of this part. One-half support must be met at 
one of the following times:
    (1) If the insured person had a period of disability which did not 
end before he or she became entitled to old-age or disability insurance 
benefits, or died, you must have been receiving at least one-half 
support from the insured either--
    (i) At the beginning of his or her period of disability;
    (ii) At the time he or she became entitled to old-age or disability 
insurance benefits; or
    (iii) If deceased, at the time of his or her death.
    (2) If the insured did not have a period of disability at the time 
of his or her entitlement or death, you must have been receiving at 
least one-half support from the insured either--
    (i) At the time he or she became entitled to old-age insurance 
benefits; or
    (ii) If deceased, at the time of his or her death.
    (d) Amount and priority of reduction--(1) Post-June 1983 government 
pensions. (i) If you became eligible for a government pension after June 
1983, and you do not meet one of the exceptions in paragraph (b) of this 
section, we will reduce (to zero, if necessary) your monthly Social 
Security spouse's benefits by two-thirds of the amount of your 
government pension.
    (ii) If you earned part of your pension based on employment other 
than Federal, State, or local government employment, we will only use 
the part of your pension earned in government employment to compute the 
GPO.
    (iii) If the reduction is not a multiple of 10 cents, we will round 
it to the next higher multiple of 10 cents.
    (2) Pre-July 1983 government pensions. (i) If you became eligible 
for a government pension before July 1983, and do not meet one of the 
exceptions in paragraph (b) of this section, we will reduce (to zero, if 
necessary) your monthly Social Security spouse's benefits as follows:
    (A) By the full amount of your pension for months before December 
1984; and
    (B) By two-thirds the amount of your monthly pension for months 
after November 1984.
    (ii) If the reduction is not a multiple of 10 cents, we will round 
it to the next higher multiple of 10 cents.
    (3) Reductions for age and simultaneous entitlement. We will reduce 
your spouse's benefit, if necessary, for age and for simultaneous 
entitlement to other Social Security benefits before we reduce it 
because you are receiving a government pension. In addition, this

[[Page 160]]

reduction follows the order of priority stated in Sec. 404.402(b).
    (4) Reduction not a multiple of $1.00. If the monthly benefit 
payable to you after the required reduction(s) is not a multiple of 
$1.00, we will reduce it to the next lower multiple of $1.00 as required 
by Sec. 404.304(f).
    (5) Lump sum payments. If the government pension is not paid monthly 
or is paid in a lump sum, we will allocate the pension on a basis 
equivalent to a monthly benefit and then reduce the monthly Social 
Security benefit accordingly.
    (i) We will generally obtain information about the number of years 
covered by a lump-sum payment from the pension plan.
    (ii) If one of the alternatives to a lump-sum payment is a life 
annuity, and we can determine the amount of the monthly annuity, we will 
base the reduction on that monthly amount.
    (iii) If the period or the equivalent monthly pension benefit is not 
clear, we may determine the reduction period and the equivalent monthly 
benefit on an individual basis.
    (e) When effective. This reduction was put into the Social Security 
Act by the Social Security Amendments of 1977. It only applies to 
applications for benefits filed in or after December 1977 and only to 
benefits for December 1977 and later.

[49 FR 41245, Oct. 22, 1984; 50 FR 20902, May 21, 1985, as amended at 51 
FR 23052, June 25, 1986; 60 FR 56513, Nov. 9, 1995; 80 FR 34050, June 
15, 2015]



Sec. 404.408b  Reduction of retroactive monthly social security 
benefits where supplemental security income (SSI) payments were
received for the same period.

    (a) When reduction is required. We will reduce your retroactive 
social security benefits if--
    (1) You are entitled to monthly social security benefits for a month 
or months before the first month in which those benefits are paid; and
    (2) SSI payments (including federally administered State 
supplementary payments) which were made to you for the same month or 
months would have been reduced or not made if your social security 
benefits had been paid when regularly due instead of retroactively.
    (b) Amount of reduction. Your retroactive monthly social security 
benefits will be reduced by the amount of the SSI payments (including 
federally administered State supplementary payments) that would not have 
been paid to you, if you had received your monthly social security 
benefits when they were regularly due instead of retroactively.
    (c) Benefits subject to reduction. The reduction described in this 
section applies only to monthly social security benefits. Social 
security benefits which we pay to you for any month after you have begun 
receiving recurring monthly social security benefits, and for which you 
did not have to file a new application, are not subject to reduction. 
The lump-sum death payment, which is not a monthly benefit, is not 
subject to reduction.
    (d) Refiguring the amount of the reduction. We will refigure the 
amount of the reduction if there are subsequent changes affecting your 
claim which relate to the reduction period described in paragraph (a) of 
this section. Refiguring is generally required where there is a change 
in your month of entitlement or the amount of your social security 
benefits or SSI payments (including federally administered State 
supplementary payments) for the reduction period.
    (e) Reimbursement of reduced retroactive monthly social security 
benefits. The amount of the reduction will be--
    (1) First used to reimburse the States for the amount of any 
federally administered State supplementary payments that would not have 
been made to you if the monthly social security benefits had been paid 
when regularly due instead of retroactively; and
    (2) The remainder, if any, shall be covered into the general fund of 
the U.S. Treasury for the amount of SSI benefits that would not have 
been paid to you if the monthly social security benefits had been paid 
to you when regularly due instead of retroactively.

[47 FR 4988, Feb. 3, 1982]



Sec. 404.409  What is full retirement age?

    Full retirement age is the age at which you may receive unreduced 
old-

[[Page 161]]

age, wife's, husband's, widow's, or widower's benefits. Full retirement 
age has been 65 but is being gradually raised to age 67 beginning with 
people born after January 1, 1938. See Sec. 404.102 regarding 
determination of age.
    (a) What is my full retirement age for old-age benefits or wife's or 
husband's benefits? You may receive unreduced old-age, wife's, or 
husband's benefits beginning with the month you attain the age shown.

------------------------------------------------------------------------
          If your birth date is:               Full retirement age is:
------------------------------------------------------------------------
Before 1/2/1938...........................  65 years.
1/2/1938--1/1/1939........................  65 years and 2 months.
1/2/1939--1/1/1940........................  65 years and 4 months.
1/2/1940--1/1/1941........................  65 years and 6 months.
1/2/1941--1/1/1942........................  65 years and 8 months.
1/2/1942--1/1/1943........................  65 years and 10 months.
1/2/1943--1/1/1955........................  66 years.
1/2/1955--1/1/1956........................  66 years and 2 months.
1/2/1956--1/1/1957........................  66 years and 4 months.
1/2/1957--1/1/1958........................  66 years and 6 months.
1/2/1958--1/1/1959........................  66 years and 8 months.
1/2/1959--1/1/1960........................  66 years and 10 months.
1/2/1960 and later........................  67 years.
------------------------------------------------------------------------

    (b) What is my full retirement age for widow's or widower's 
benefits? You may receive unreduced widow's or widower's benefits 
beginning with the month you attain the age shown.

------------------------------------------------------------------------
          If your birth date is:               Full retirement age is:
------------------------------------------------------------------------
Before 1/2/1912...........................  62 years.
1/2/1912--1/1/1940........................  65 years.
1/2/1940--1/1/1941........................  65 years and 2 months.
1/2/1941--1/1/1942........................  65 years and 4 months.
1/2/1942--1/1/1943........................  65 years and 6 months.
1/2/1943--1/1/1944........................  65 years and 8 months.
1/2/1944--1/1/1945........................  65 years and 10 months.
1/2/1945--1/1/1957........................  66 years.
1/2/1957--1/1/1958........................  66 years and 2 months.
1/2/1958--1/1/1959........................  66 years and 4 months.
1/2/1959--1/1/1960........................  66 years and 6 months.
1/2/1960--1/1/1961........................  66 years and 8 months.
1/2/1961--1/1/1962........................  66 years and 10 months.
1/2/1962 and later........................  67 years.
------------------------------------------------------------------------

    (c) Can I still retire before full retirement age? You may still 
elect early retirement. You may receive old-age, wife's or husband's 
benefits at age 62. You may receive widow's or widower's benefits at age 
60. Those benefits will be reduced as explained in Sec. 404.410.

[68 FR 4707, Jan. 30, 2003]



Sec. 404.410  How does SSA reduce my benefits when my entitlement
begins before full retirement age?

    Generally your old-age, wife's, husband's, widow's, or widower's 
benefits are reduced if entitlement begins before the month you attain 
full retirement age (as defined in Sec. 404.409). However, your benefits 
as a wife or husband are not reduced for any month in which you have in 
your care a child of the worker on whose earnings record you are 
entitled. The child must be entitled to child's benefits. Your benefits 
as a widow or widower are not reduced below the benefit amount you would 
receive as a mother or father for any month in which you have in your 
care a child of the worker on whose record you are entitled. The child 
must be entitled to child's benefits. Subject to Secs. 404.411 through 
404.413, reductions in benefits are made in the amounts described.
    (a) How does SSA reduce my old-age benefits? The reduction in your 
primary insurance amount is based on the number of months of entitlement 
prior to the month you attain full retirement age. The reduction is \5/
9\ of 1 percent for each of the first 36 months and \5/12\ of 1 percent 
for each month in excess of 36.

    Example: Alex's full retirement age for unreduced benefits is 65 
years and 8 months. She elects to begin receiving benefits at age 62. 
Her primary insurance amount of $980.50 must be reduced because of her 
entitlement to benefits 44 months prior to full retirement age. The 
reduction is 36 months at \5/9\ of 1 percent and 8 months at \5/12\ of 1 
percent.


980.50  x  36  x  \5/9\  x  .01 = $196.10
980.50  x  8  x  \5/12\  x  .01 = $ 32.68

The two added together equal a total reduction of $228.78. This amount 
is rounded to $228.80 (the next higher multiple of 10 cents) and 
deducted from the primary insurance amount. The resulting $751.70 is the 
monthly benefit payable.

    (b) How does SSA reduce my wife's or husband's benefits? Your wife's 
or husband's benefits before any reduction (see Secs. 404.304 and 
404.333) are reduced first (if necessary) for the family maximum under 
Sec. 404.403. They are then reduced based on the number of months of 
entitlement prior to the month you attain full retirement age. This does 
not include any month in which you have a child of the worker on whose 
earnings record you are entitled in your care. The child must be 
entitled to child benefits. The reduction is \25/36\ of 1 percent for 
each of the first 36 months and \5/12\ of 1 percent for each month in 
excess of 36.


[[Page 162]]


    Example: Sam is entitled to old-age benefits. His spouse Ashley 
elects to begin receiving wife's benefits at age 63. Her full retirement 
age for unreduced benefits is 65 and 4 months. Her benefit will be 
reduced for 28 months of entitlement prior to full retirement age. If 
her unreduced benefit is $412.40 the reduction will be $412.40  x  28 
x  \25/36\  x  .01. The resulting $80.18 is rounded to $80.20 (the next 
higher multiple of 10 cents) and subtracted from $412.40 to determine 
the monthly benefit amount of $332.20.

    (c) How does SSA reduce my widow's or widower's benefits? Your 
entitlement to widow's or widower's benefits may begin at age 60 based 
on age or at age 50 based on disability. Refer to Sec. 404.335 for more 
information on the requirements for entitlement. Both types are reduced 
if entitlement begins prior to attainment of full retirement age (as 
defined in Sec. 404.409).
    (1) Widow's or widower's benefits based on age. Your widow's or 
widower's unreduced benefit amount (the worker's primary insurance 
amount after any reduction for the family maximum under Sec. 404.403), 
is reduced or further reduced based on the number of months of 
entitlement prior to the month you attain full retirement age. This does 
not include any month in which you have in your care a child of the 
worker on whose earnings record you are entitled. The child must be 
entitled to child's benefits. The number of months of entitlement prior 
to full retirement age is multiplied by .285 and then divided by the 
number of months in the period beginning with the month of attainment of 
age 60 and ending with the month immediately before the month of 
attainment of full retirement age.

    Example: Ms. Bogle is entitled to an unreduced widow benefit of 
$785.70 beginning at age 64. Her full retirement age for unreduced old-
age benefits is 65 years and 4 months. She will receive benefits for 16 
months prior to attainment of full retirement age. The number of months 
in the period from age 60 through full retirement age of 65 and 4 months 
is 64. The reduction in her benefit is $785.70  x  16  x  .285 divided 
by 64 or $55.98. $55.98 is rounded to the next higher multiple of 10 
cents ($56.00) and subtracted from $785.70. The result is a monthly 
benefit of $729.70.

    (2) Widow's or widower's benefits based on disability. (i) For 
months after December 1983, your widow's or widower's benefits are not 
reduced for months of entitlement prior to age 60. You are deemed to be 
age 60 in your month of entitlement to disabled widow's or widower's 
benefits and your benefits are reduced only under paragraph (c)(1) of 
this section.
    (ii) For months from January 1973 through December 1983, benefits as 
a disabled widow or widower were reduced under paragraph (c)(1) of this 
section. The benefits were then subject to an additional reduction of 
\43/240\ of one percent for each month of entitlement prior to age 60 
based on disability.
    (3) Widow's or widower's benefits prior to 1973. For months prior to 
January 1973 benefits as a widow or widower were reduced only for months 
of entitlement prior to age 62. The reduction was \5/9\ of one percent 
for each month of entitlement from the month of attainment of age 60 
through the month prior to the month of attainment of age 62. There was 
an additional reduction of \43/198\ of one percent for each month of 
entitlement prior to age 60 based on disability.
    (d) If my benefits are reduced under this section does SSA ever 
change the reduction? The reduction computed under paragraphs (a), (b) 
or (c) of this section may later be adjusted to eliminate reduction for 
certain months of entitlement prior to full retirement age as provided 
in Sec. 404.412. For special provisions on reducing benefits for months 
prior to full retirement age involving entitlement to two or more 
benefits, see Sec. 404.411.
    (e) Are my widow's or widower's benefits affected if the deceased 
worker was entitled to old-age benefits? If the deceased individual was 
entitled to old-age benefits, see Sec. 404.338 for special rules that 
may affect your reduced widow's or widower's benefits.

[68 FR 4708, Jan. 30, 2003]



Sec. 404.411  How are benefits reduced for age when a person is
entitled to two or more benefits?

    (a) What is the general rule? Except as specifically provided in 
this section, benefits of an individual entitled to more than one 
benefit will be reduced for months of entitlement before full retirement 
age (as defined in Sec. 404.409) according to the provisions of 
Sec. 404.410. Such age reductions are made before

[[Page 163]]

any reduction under the provisions of Sec. 404.407.
    (b) How is my disability benefit reduced after entitlement to an 
old-age benefit or widow's or widower's benefit? A person's disability 
benefit is reduced following entitlement to an old-age or widow's or 
widower's benefit (or following the month in which all conditions for 
entitlement to the widow's or widower's benefit are met except that the 
individual is entitled to an old-age benefit which equals or exceeds the 
primary insurance amount on which the widow's or widower's benefit is 
based) in accordance with the following provisions:
    (1) Individuals born January 2, 1928, or later whose disability 
began January 1, 1990, or later. When an individual is entitled to a 
disability benefit for a month after the month in which she or he 
becomes entitled to an old-age benefit which is reduced for age under 
Sec. 404.410, the disability benefit is reduced by the amount by which 
the old-age benefit would be reduced under Sec. 404.410 if she or he 
attained full retirement age in the first month of the most recent 
period of entitlement to the disability benefit.
    (2) Individuals born January 2, 1928, or later whose disability 
began before January 1, 1990, and, all individuals born before January 
2, 1928, regardless of when their disability began--(i) First entitled 
to disability in or after the month of attainment of age 62. When an 
individual is first entitled to a disability benefit in or after the 
month in which she or he attains age 62 and for which she or he is first 
entitled to a widow's or widower's benefit (or would be so entitled 
except for entitlement to an equal or higher old-age benefit) before 
full retirement age, the disability benefit is reduced by the larger of:
    (A) The amount the disability benefit would have been reduced under 
paragraph (b)(1) of this section; or
    (B) The amount equal to the sum of the amount the widow's or 
widower's benefit would have been reduced under the provisions of 
Sec. 404.410 if full retirement age for unreduced benefits were age 62 
plus the amount by which the disability benefit would have been reduced 
under paragraph (b)(1) of this section if the benefit were equal to the 
excess of such benefit over the amount of the widow's or widower's 
benefit (without consideration of this paragraph).
    (ii) First entitled to disability before age 62. When a person is 
first entitled to a disability benefit for a month before the month in 
which she or he attains age 62 and she or he is also entitled to a 
widow's or widower's benefit (or would be so entitled except for 
entitlement to an equal or higher old-age benefit), the disability 
benefit is reduced as if the widow or widower attained full retirement 
age in the first month of her or his most recent period of entitlement 
to the disability benefits.
    (c) How is my old-age benefit reduced after entitlement to a widow's 
or widower's benefit?--(1) Individual born after January 1, 1928. The 
old-age benefit is reduced in accordance with Sec. 404.410(a). There is 
no further reduction.
    (2) Individual born before January 2, 1928. The old-age benefit is 
reduced if, in the first month of entitlement, she or he is also 
entitled to a widow's or widower's benefit to which she or he was first 
entitled for a month before attainment of full retirement age or if, 
before attainment of full retirement age, she or he met all conditions 
for entitlement to widow's or widower's benefits in or before the first 
month for which she or he was entitled to old-age benefits except that 
the old-age benefit equals or exceeds the primary insurance amount on 
which the widow's or widower's benefit would be based. Under these 
circumstances, the old-age benefit is reduced by the larger of the 
following:
    (i) The amount by which the old-age benefit would be reduced under 
the regular age reduction provisions of Sec. 404.410; or
    (ii) An amount equal to the sum of:
    (A) The amount by which the widow's or widower's benefit would be 
reduced under Sec. 404.410 for months prior to age 62; and
    (B) The amount by which the old-age benefit would be reduced under 
Sec. 404.410 if it were equal to the excess of the individual's primary 
insurance amount over the widow's or widower's benefit before any 
reduction for age (but after any reduction for the family maximum under 
Sec. 404.403).

[[Page 164]]

    (d) How is my wife's or husband's benefit reduced when I am entitled 
to a reduced old-age benefit in the same month? When a person is first 
entitled to a wife's or husband's benefit in or after the month of 
attainment of age 62, that benefit is reduced if, in the first month of 
entitlement, she or he is also entitled to an old-age benefit (but is 
not entitled to a disability benefit) to which she or he was first 
entitled before attainment of full retirement age. Under these 
circumstances, the wife's or husband's benefit is reduced by the sum of:
    (1) The amount by which the old-age benefit would be reduced under 
the provisions of Sec. 404.410; and
    (2) The amount by which the spouse benefit would be reduced under 
the provisions of Sec. 404.410 if it were equal to the excess of such 
benefit (before any reduction for age but after reduction for the family 
maximum under Sec. 404.403) over the individual's own primary insurance 
amount.
    (e) How is my wife's or husband's or widow's or widower's benefit 
reduced when I am entitled to a reduced disability benefit in the same 
month? When a person is first entitled to a spouse or widow's or 
widower's benefit in or after the month of attainment of age 62 (or in 
the case of widow's or widower's benefits, age 50) that benefit is 
reduced if, in the first month of entitlement to that benefit, he or she 
is also entitled to a reduced disability benefit. Under these 
circumstances, the wife's or husband's or widow's or widower's benefit 
is reduced by the sum of:
    (1) The amount (if any) by which the disability benefit is reduced 
under paragraph (b)(1) of this section, and
    (2) The amount by which the wife's or husband's or widow's or 
widower's benefit would be reduced under Sec. 404.410 if it were equal 
to the excess of such benefit (before any reduction for age but after 
reduction for the family maximum under Sec. 404.403) over the disability 
benefit (before any reduction under paragraph (b) of this section).

[68 FR 4709, Jan. 30, 2003]



Sec. 404.412  After my benefits are reduced for age when and how
will adjustments to that reduction be made?

    (a) When may adjustment be necessary? The following months are not 
counted for purposes of reducing benefits in accordance with 
Sec. 404.410;
    (1) Months subject to deduction under Sec. 404.415 or Sec. 404.417;
    (2) In the case of a wife's or husband's benefit, any month in which 
she or he had a child of the insured individual in her or his care and 
for which the child was entitled to child's benefits;
    (3) In the case of a wife's or husband's benefit, any month for 
which entitlement to such benefits is precluded because the insured 
person's disability ceased (and, as a result, the insured individual's 
entitlement to disability benefits ended);
    (4) In the case of a widow's or widower's benefit, any month in 
which she or he had in her or his care a child of the deceased insured 
individual and for which the child was entitled to child's benefits;
    (5) In the case of a widow's or widower's benefit, any month before 
attainment of full retirement age for which she or he was not entitled 
to such benefits;
    (6) In the case of an old-age benefit, any month for which the 
individual was entitled to disability benefits.
    (b) When is the adjustment made? We make automatic adjustments in 
benefits to exclude the months of entitlement described in paragraphs 
(a)(1) through (6) of this section from consideration when determining 
the amount by which such benefits are reduced. Each year we examine 
beneficiary records to identify when an individual has attained full 
retirement age and one or more months described in paragraphs (a)(1) 
through (6) of this section occurred prior to such age during the period 
of entitlement to benefits reduced for age. Increases in benefit amounts 
based upon this adjustment are effective with the month of attainment of 
full retirement age. In the case of widow's or widower's benefits, this

[[Page 165]]

adjustment is made in the month of attainment of age 62 as well as the 
month of attainment of full retirement age.

[68 FR 4710, Jan. 30, 2003, as amended at 68 FR 40122, July 7, 2003]



Sec. 404.413  After my benefits are reduced for age what happens
if there is an increase in my primary insurance amount?

    (a) What is the general rule on reduction of increases? After an 
individual's benefits are reduced for age under Secs. 404.410 through 
404.411, the primary insurance amount on which such benefits are based 
may subsequently be increased because of a recomputation, a general 
benefit increase pursuant to an amendment of the Act, or increases based 
upon a rise in the cost-of-living under section 215(i) of the Social 
Security Act. When the primary insurance amount increases the monthly 
benefit amount also increases.
    (b) How are subsequent increases in the primary insurance amount 
reduced after 1977? After 1977, when an individual's benefits have been 
reduced for age and the benefit is increased due to an increase in the 
primary insurance amount, the amount of the increase to which the 
individual is entitled is proportionately reduced as provided in 
paragraph (c) of this section. The method of reduction is determined by 
whether entitlement to reduced benefits began before 1978 or after 1977. 
When an individual is entitled to more than one benefit which is reduced 
for age, the rules for reducing the benefit increases apply to each 
reduced benefit.
    (c) How is the reduction computed for increases after 1977?--(1) 
Entitlement to reduced benefits after 1977. If an individual becomes 
entitled after 1977 to a benefit reduced for age, and the primary 
insurance amount on which the reduced benefit is based is increased, the 
amount of the increase payable to the individual is reduced by the same 
percentage as we use to reduce the benefit in the month of initial 
entitlement. Where the reduced benefit of an individual has been 
adjusted at full retirement age (age 62 and full retirement age for 
widows or widowers), any increase to which the individual becomes 
entitled thereafter is reduced by the adjusted percentage.
    (2) Entitlement to reduced benefits before 1978. For an individual, 
who became entitled to a benefit reduced for age before 1978, whose 
benefit may be increased as a result of an increase in the primary 
insurance amount after 1977, we increase the amount of the benefit by 
the same percentage as the increase in the primary insurance amount.
    (d) How was the reduction computed for increases prior to 1978? When 
the individual's primary insurance amount increased, the amount of the 
increase was reduced separately under Secs. 404.410 and 404.411. The 
separate reduction was based on the number of months from the effective 
date of the increase through the month of attainment of age 65. This 
reduced increase amount was then added to the reduced benefit that was 
in effect in the month before the effective date of the increase. The 
result was the new monthly benefit amount.

[68 FR 4710, Jan. 30, 2003]



Sec. 404.415  Deductions because of excess earnings.

    (a) Deductions because of insured individual's earnings. Under the 
annual earnings test, we will reduce your monthly benefits (except 
disability insurance benefits based on the beneficiary's disability) by 
the amount of your excess earnings (as described in Sec. 404.434), for 
each month in a taxable year (calendar year or fiscal year) in which you 
are under full retirement age (as defined in Sec. 404.409(a)).
    (b) Deductions from husband's, wife's, and child's benefits because 
of excess earnings of the insured individual. We will reduce husband's, 
wife's, and child's insurance benefits payable (or deemed payable--see 
Sec. 404.420) on the insured individual's earnings record because of the 
excess earnings of the insured individual. However, beginning with 
January 1985, we will not reduce the benefits payable to a divorced wife 
or a divorced husband who has been divorced from the insured individual 
for at least 2 years.
    (c) Deductions because of excess earnings of beneficiary other than 
the insured. If benefits are payable to you (or

[[Page 166]]

deemed payable--see Sec. 404.420) on the earnings record of an insured 
individual and you have excess earnings (as described in Sec. 404.430) 
charged to a month, we will reduce only your benefits for that month 
under the annual earnings test. Child's insurance benefits payable by 
reason of being disabled will be evaluated using Substantial Gainful 
Activity guidelines (as described in Sec. 404.1574 or Sec. 404.1575). 
This deduction equals the amount of the excess earnings. (See 
Sec. 404.434 for charging of excess earnings where both the insured 
individual and you, a beneficiary, have excess earnings.)

[70 FR 28811, May 19, 2005]



Sec. 404.417  Deductions because of noncovered remunerative activity
outside the United States; 45 hour and 7-day work test.

    (a) Deductions because of individual's activity--(1) Prior to May 
1983. For months prior to May 1983, a 7-day work test applies in a month 
before benefit deductions are made for noncovered remunerative activity 
outside the United States. A deduction is made from any monthly benefit 
(except disability insurance benefits, child's insurance benefits based 
on the child's disability, or widow's or widower's insurance benefits 
based on the widow's or widower's disability) payable to an individual 
for each month in a taxable year beginning after December 1954 in which 
the beneficiary, while under age 72 (age 70 after December 1982), 
engages in noncovered remunerative activity (see Sec. 404.418) outside 
the United States on 7 or more different calendar days. The deduction is 
for an amount equal to the benefit payable to the individual for that 
month.
    (2) From May 1983 on. Effective May 1983, a 45-hour work test 
applies before a benefit deduction is made for the non-covered 
remunerative activity performed outside the United States in a month by 
the type of beneficiary described in paragraph (a)(1) of this section.
    (b) Deductions from benefits because of the earnings or work of an 
insured individual--(1) Prior to September 1984. Where the insured 
individual entitled to old-age benefits works on 7 or more days in a 
month prior to September 1984 while under age 72 (age 70 after December 
1982), a deduction is made for that month from any:
    (i) Wife's, husband's, or child's insurance benefit payable on the 
insured individual's earnings record; and
    (ii) Mother's, father's, or child's insurance benefit based on 
child's disability, which under Sec. 404.420 is deemed payable on the 
insured individual's earnings record because of the beneficiary's 
marriage to the insured individual.
    (2) From September 1984 on. Effective September 1984, a benefit 
deduction is made for a month from the benefits described in paragraph 
(b)(1) of this section only if the insured individual, while under age 
70, has worked in excess of 45 hours in that month.
    (3) Amount of deduction. The amount of the deduction required by 
this paragraph (b) is equal to the wife's, husband's or child's benefit.
    (4) From January 1985 on. Effective January 1985, no deduction will 
be made from the benefits payable to a divorced wife or a divorced 
husband who has been divorced from the insured individual for at least 2 
years.

[49 FR 24117, June 12, 1984, as amended at 51 FR 11912, Apr. 21, 1986; 
52 FR 26145, July 13, 1987]



Sec. 404.418  ``Noncovered remunerative activity outside the 
United States,'' defined.

    An individual is engaged in noncovered remunerative activity outside 
the United States for purposes of deductions described in Sec. 404.417 
if:
    (a) He performs services outside the United States as an employee 
and the services do not constitute employment as defined in subpart K of 
this part and, for taxable years ending after 1955, the services are not 
performed in the active military or naval service of the United States; 
or
    (b) He carries on a trade or business outside the United States 
(other than the performance of services as an employee) the net income 
or loss of which is not includable in computing his net earnings from 
self-employment (as defined in Sec. 404.1050) for a taxable year and 
would not be excluded from net earnings from self-employment (see 
Sec. 404.1052) if the trade or business were

[[Page 167]]

carried on in the United States. When used in the preceding sentence 
with respect to a trade or business, the term United States does not 
include the Commonwealth of Puerto Rico, the Virgin Islands and, with 
respect to taxable years beginning after 1960, Guam or American Samoa, 
in the case of an alien who is not a resident of the United States 
(including the Commonwealth of Puerto Rico, the Virgin Islands and, with 
respect to taxable years beginning after 1960, Guam and American Samoa), 
and the term trade or business shall have the same meaning as when used 
in section 162 of the Internal Revenue Code of 1954.



Sec. 404.420  Persons deemed entitled to benefits based on an
individual's earnings record.

    For purposes of imposing deductions under the annual earnings test 
(see Sec. 404.415) and the foreign work test (see Sec. 404.417), a 
person who is married to an old-age insurance beneficiary and who is 
entitled to a mother's or father's insurance benefit or a child's 
insurance benefit based on the child's disability (and all these 
benefits are based on the earnings record of some third person) is 
deemed entitled to such benefit based on the earnings record of the old-
age insurance beneficiary to whom he or she is married. This section is 
effective for months in any taxable year of the old-age insurance 
beneficiary that begins after August 1958.

[49 FR 24117, June 12, 1984]



Sec. 404.421  How are deductions made when a beneficiary fails to have
a child in his or her care?

    Deductions for failure to have a child in care (as defined in 
subpart D of this part) are made as follows:
    (a) Wife's or husband's benefit. A deduction is made from the wife's 
or husband's benefits to which he or she is entitled for any month if he 
or she is under full retirement age and does not have in his or her care 
a child of the insured entitled to child's benefits. However, a 
deduction is not made for any month in which he or she is age 62 or 
over, but under full retirement age, and there is in effect a 
certificate of election for him or her to receive actuarially reduced 
wife's or husband's benefits for such month (see subpart D of this 
part).
    (b) Mother's or father's benefits--(1) Widow or widower. A deduction 
is made from the mother's or father's benefits to which he or she is 
entitled as the widow or widower (see subpart D of this part) of the 
deceased individual upon whose earnings such benefit is based, for any 
month in which he or she does not have in his or her care a child who is 
entitled to child's benefits based on the earnings of the deceased 
insured individual.
    (2) Surviving divorced mother or father. A deduction is made from 
the mother's or father's benefits to which he or she is entitled as the 
surviving divorced mother or father (see subpart D of this part) of the 
deceased individual upon whose earnings record such benefit is based, 
for any month in which she or he does not have in care a child of the 
deceased individual who is her or his son, daughter, or legally adopted 
child and who is entitled to child's benefits based on the earnings of 
the deceased insured individual.
    (c) Amount to be deducted. The amount deducted from the benefits, as 
described in paragraphs (a) and (b) of this section, is equal to the 
amount of the benefits which is otherwise payable for the month in which 
she or he does not have a child in his or her care.
    (d) When a child is considered not entitled to benefits. For 
purposes of paragraphs (a) and (b) of this section, a person is 
considered not entitled to child's benefits for any month in which she 
or he is age 18 or over and is entitled to child's benefits because she 
or he is a full-time student at an educational institution. This 
paragraph applies to benefits for months after December 1964.

[68 FR 4710, Jan. 30, 2003, as amended at 68 FR 40122, July 7, 2003]



Sec. 404.423  Manner of making deductions.

    Deductions provided for in Secs. 404.415, 404.417, and 404.421 (as 
modified in Sec. 404.458) are made by withholding benefits (in whole or 
in part, depending upon the amount to be withheld) for each month in 
which an event causing a deduction occurred. If the amount to be 
deducted is not withheld from the

[[Page 168]]

benefits payable in the month in which the event causing the deduction 
occurred, such amount constitutes a deduction overpayment and is subject 
to adjustment or recovery in accordance with the provisions of subpart F 
of this part.

[32 FR 19159, Dec. 20, 1967, as amended at 68 FR 40122, July 7, 2003]



Sec. 404.424  Total amount of deductions where more than one deduction
event occurs in a month.

    If more than one of the deduction events specified in Secs. 404.415, 
404.417, and 404.421 occurred in any 1 month, each of which would 
occasion a deduction equal to the benefit for such month, only an amount 
equal to such benefit is deducted.



Sec. 404.425  Total amount of deductions where deduction events occur
in more than 1 month.

    If a deduction event described in Secs. 404.415, 404.417, and 
404.421 occurs in more than 1 month, the total amount deducted from an 
individual's benefits is equal to the sum of the deductions for all 
months in which any such event occurred.

[68 FR 40122, July 7, 2003]



Sec. 404.428  Earnings in a taxable year.

    (a) When we apply the annual earnings test to your earnings as a 
beneficiary under this subpart (see Sec. 404.415), we count all of your 
earnings (as defined in Sec. 404.429) for all months of your taxable 
year even though you may not be entitled to benefits during all months 
of that year. (See Sec. 404.430 for the rule that applies to the 
earnings of a beneficiary who attains full retirement age (as described 
in Sec. 404.409(a))).
    (b) Your taxable year is presumed to be a calendar year until you 
show to our satisfaction that you have a different taxable year. If you 
are self-employed, your taxable year is a calendar year unless you have 
a different taxable year for the purposes of subtitle A of the Internal 
Revenue Code of 1986. In either case, the number of months in a taxable 
year is not affected by:
    (1) The date a claim for Social Security benefits is filed;
    (2) Attainment of any particular age;
    (3) Marriage or the termination of marriage; or
    (4) Adoption.
    (c) The month of death is counted as a month of the deceased 
beneficiary's taxable year in determining whether the beneficiary had 
excess earnings for the year under Sec. 404.430. For beneficiaries who 
die after November 10, 1988, we use twelve as the number of months to 
determine whether the beneficiary had excess earnings for the year under 
Sec. 404.430.
    (d) Wages, as defined in Sec. 404.429(c), are charged as earnings 
for the months and year in which you rendered the services. Net earnings 
or net losses from self-employment count as earnings or losses in the 
year for which such earnings or losses are reportable for Federal income 
tax purposes.

[70 FR 28811, May 19, 2005]



Sec. 404.429  Earnings; defined.

    (a) General. The term ``earnings'' as used in this subpart (other 
than as a part of the phrase ``net earnings from self-employment'') 
includes the sum of your wages for services rendered in a taxable year, 
plus your net earnings from self-employment for the taxable year, minus 
any net loss from self-employment for the same taxable year.
    (b) Net earnings or net loss from self-employment. Your net earnings 
or net loss from self-employment are determined under the provisions in 
subpart K of this part, except that:
    (1) In this section, the following occupations are included in the 
definition of ``trade or business'' (although they may be excluded in 
subpart K):
    (i) The performance of the functions of a public office;
    (ii) The performance of a service of a duly ordained, commissioned, 
or licensed minister of a church in the exercise of his or her ministry 
or by a member of a religious order in the exercise of duties required 
by the order;
    (iii) The performance of service by an individual in the exercise of 
his or her profession as a Christian Science practitioner;
    (iv) The performance by an individual in the exercise of his or her 
profession as a doctor of medicine, lawyer, dentist, osteopath, 
veterinarian, chiropractor, naturopath, or optometrist.

[[Page 169]]

    (2) For the sole purpose of the earnings test under this subpart:
    (i) If you reach full retirement age, as defined in Sec. 404.409(a), 
on or before the last day of your taxable year, you will have excluded 
from your gross earnings from self-employment, your royalties 
attributable to a copyright or patent obtained before the taxable year 
in which you reach full retirement age; and
    (ii) If you are entitled to insurance benefits under title II of the 
Act, other than disability insurance benefits or child's insurance 
benefits payable by reason of being disabled, we will exclude from gross 
earnings any self-employment income you received in a year after your 
initial year of entitlement that is not attributable to services you 
performed after the first month you became entitled to benefits. In this 
section, services means any significant work activity you performed in 
the operation or management of a trade, profession, or business which 
can be related to the income received. If a part of the income you 
receive in a year is not related to any significant services you 
performed after the month of initial entitlement, only that part of your 
income may be excluded from gross earnings for deduction purposes. We 
count the balance of the income for deduction purposes. Your royalties 
or other self-employment income is presumed countable for purposes of 
the earnings test until it is shown to our satisfaction that such income 
may be excluded under this section.
    (3) We do not count as significant services:
    (i) Actions you take after the initial month of entitlement to sell 
a crop or product if it was completely produced in or before the month 
of entitlement. This rule does not apply to income you receive from a 
trade or business of buying and selling products produced or made by 
others; for example, a grain broker.
    (ii) Your activities to protect an investment in a currently 
operating business or activities that are too irregular, occasional, or 
minor to be considered as having a bearing on the income you receive, 
such as--
    (A) Hiring an agent, manager, or other employee to operate the 
business;
    (B) Signing contracts where your signature is required, so long as 
the major contract negotiations were handled by others in running the 
business for you;
    (C) Looking over the company's financial records to assess the 
effectiveness of those agents, managers, or employees in running the 
business for you;
    (D) Personally contacting an old and valued customer solely for the 
purpose of maintaining good will when such contact has a minimal effect 
on the ongoing operation of the trade or business; or
    (E) Occasionally filling in for an agent, manager, or other employee 
or partner in an emergency.
    (4) In figuring your net earnings or net loss from self-employment, 
we count all net income or net loss even though:
    (i) You did not perform personal services in carrying on the trade 
or business;
    (ii) The net profit was less than $400;
    (iii) The net profit was in excess of the maximum amount creditable 
to your earnings record; or
    (iv) The net profit was not reportable for social security tax 
purposes.
    (5) Your net earnings from self-employment is the excess of gross 
income over the allowable business deductions (allowed under the 
Internal Revenue Code). Net loss from self-employment is the excess of 
business deductions (that are allowed under the Internal Revenue Code) 
over gross income. You cannot deduct, from wages or net earnings from 
self-employment, expenses in connection with the production of income 
excluded from gross income under paragraph (b)(2)(ii) of this section.
    (c) Wages. Wages include the gross amount of your wages rather than 
the net amount paid after deductions by your employer for items such as 
taxes and insurance. Wages are defined in subpart K of this part, except 
that we also include the following types of wages that are excluded in 
subpart K:
    (1) Remuneration in excess of the amounts in the annual wage 
limitation table in Sec. 404.1047;

[[Page 170]]

    (2) Wages of less than the amount stipulated in section 
Sec. 404.1057 that you receive in a calendar year for domestic service 
in the private home of your employer, or service not in the course of 
your employer's trade or business;
    (3) Payments for agricultural labor excluded under Sec. 404.1055;
    (4) Remuneration, cash and non-cash, for service as a home worker 
even though the cash remuneration you received is less than the amount 
stipulated in Sec. 404.1058(a) in a calendar year;
    (5) Services performed outside the United States in the Armed Forces 
of the United States.
    (d) Presumptions concerning wages. For purposes of this section, 
when reports received by us show that you received wages (as defined in 
paragraph (c) of this section) during a taxable year, it is presumed 
that they were paid to you for services rendered in that year unless you 
present evidence to our satisfaction that the wages were paid for 
services you rendered in another taxable year. If a report of wages 
shows your wages for a calendar year, your taxable year is presumed to 
be a calendar year for purposes of this section unless you present 
evidence to our satisfaction that your taxable year is not a calendar 
year.

[70 FR 28812, May 19, 2005]



Sec. 404.430  Monthly and annual exempt amounts defined; 
excess earnings defined.

    (a) Monthly and annual exempt amounts. (1) The earnings test monthly 
and annual exempt amounts are the amounts of wages and self-employment 
income which you, as a Social Security beneficiary, may earn in any 
month or year without part or all of your monthly benefit being deducted 
because of excess earnings. The monthly exempt amount, (which is \1/12\ 
of the annual exempt amount), applies only in a beneficiary's grace year 
or years. (See Sec. 404.435(a) and (b)). The annual exempt amount 
applies to the earnings of each non-grace taxable year prior to the year 
of full retirement age, as defined in Sec. 404.409(a). A larger 
``annual'' exempt amount applies to the total earnings of the months in 
the taxable year that precedes the month in which you attain full 
retirement age. The full annual exempt amount applies to the earnings of 
these pre-full retirement age months, even though they are earned in 
less than a year. For beneficiaries using a fiscal year as a taxable 
year, the exempt amounts applicable at the end of the fiscal year apply.
    (2) We determine the monthly exempt amounts for each year by a 
method that depends on the type of exempt amount. In each case, the 
exempt amount so determined must be greater than or equal to the 
corresponding exempt amount in effect for months in the taxable year in 
which the exempt amount determination is being made.
    (i) To calculate the lower exempt amount (the one applicable before 
the calendar year of attaining full retirement age) for any year after 
1994, we multiply $670 (the lower exempt amount for 1994) by the ratio 
of the national average wage index for the second prior year to that 
index for 1992. If the amount so calculated is not a multiple of $10, we 
round it to the nearest multiple of $10 (i.e., if the amount ends in $5 
or more, we round up, otherwise we round down). The annual exempt amount 
is then 12 times the rounded monthly exempt amount.
    (ii) The higher exempt amount (the one applicable in months of the 
year of attaining full retirement age (as defined in section 404.409(a)) 
that precede such attainment) was set by legislation (Public Law 104-
121) for years 1996-2002. To calculate the higher exempt amount for any 
year after 2002, we multiply $2,500 (the higher exempt amount for 2002) 
by the ratio of the national average wage index for the second prior 
year to that index for 2000. We round the result as described in 
paragraph (a)(2)(i) of this section for the lower exempt amount.
    (iii) The following are the annual and monthly exempt amounts for 
taxable years 2000 through 2005.

[[Page 171]]



----------------------------------------------------------------------------------------------------------------
                                                  For years through taxable year   Months of taxable year prior
                                                    preceding year of reaching    to month of full of retirement
                                                        full retirement age                     age
                                                 ---------------------------------------------------------------
                      Year                          Reduction: $1 for every $2      Reduction: $1 for every $3
                                                      over the exempt amount          over the exempt amount
                                                 ---------------------------------------------------------------
                                                      Annual          Monthly         Annual          Monthly
----------------------------------------------------------------------------------------------------------------
2000............................................         $10,080            $840         $17,000          $1,417
2001............................................          10,680             890          25,000           2,084
2002............................................          11,280             940          30,000           2,500
2003............................................          11,520             960          30,720           2,560
2004............................................          11,640             970          31,080           2,590
2005............................................          12,000           1,000          31,800           2,650
----------------------------------------------------------------------------------------------------------------

    (b) Method of determining excess earnings for years after December 
1999. If you have not yet reached your year of full retirement age, your 
excess earnings for a taxable year are 50 percent of your earnings (as 
described in Sec. 404.429) that are above the exempt amount. After 
December 31, 1999, in the taxable year in which you will reach full 
retirement age (as defined in Sec. 404.409(a)), the annual (and monthly, 
if applicable) earnings limit applies to the earnings of the months 
prior to the month in which you reach full retirement age. Excess 
earnings are 33\1/3\ percent of the earnings above the annual exempt 
amount. Your earnings after reaching the month of full retirement age 
are not subject to the earnings test.

[70 FR 28813, May 19, 2005]



Sec. 404.434  Excess earnings; method of charging.

    (a) Months charged. If you have not yet reached your year of full 
retirement age, and if your estimated earnings for a year result in 
estimated excess earnings (as described in Sec. 404.430), we will charge 
these excess earnings to your full benefit each month from the beginning 
of the year, until all of the estimated excess earnings have been 
charged. Excess earnings, however, are not charged to any month 
described in Secs. 404.435 and 404.436.
    (b) Amount of excess earnings charged--(1) Insured individual's 
excess earnings. For each $1 of your excess earnings we will decrease by 
$1 the benefits to which you and all others are entitled (or deemed 
entitled--see Sec. 404.420) on your earnings record. (See Sec. 404.439 
where the excess earnings for a month are less than the total benefits 
payable for that month.) (See 404.415(b) for the effect on divorced 
wife's and divorced husband's benefits.)
    (2) Excess earnings of beneficiary other than insured individual. We 
will charge a beneficiary, other than the insured, $1 for each $1 of the 
beneficiary's excess earnings (see Sec. 404.437). These excess earnings, 
however, are charged only against that beneficiary's own benefits.
    (3) You, the insured individual, and a person entitled (or deemed 
entitled) on your earnings record both have excess earnings. If both you 
and a person entitled (or deemed entitled) on your earnings record have 
excess earnings (as described in Sec. 404.430), your excess earnings are 
charged first against the total family benefits payable (or deemed 
payable) on your earnings record, as described in paragraph (b)(1) of 
this section. Next, the excess earnings of a person entitled on your 
earnings record are charged against his or her own benefits remaining 
after part of your excess earnings have been charged against his/her 
benefits (because of the reduction in the total family benefits 
payable). See Sec. 404.441 for an example of this process and the manner 
in which partial monthly benefits are apportioned.
    (c) Earnings test applicability. Public Law 106-182 eliminated the 
Social Security earnings test, beginning with the month in which a 
person attains full retirement age (as defined in Sec. 404.409(a)), for 
taxable years after 1999. In the year that you reach full retirement 
age, the annual earnings test amount is applied to the earnings amounts 
of the months that precede your month of full retirement age. (See 
Sec. 404.430). The reduction rate for these months is $1 of benefits for 
every $3 you earned above the earnings limit in

[[Page 172]]

these months. The earnings threshold amount will be increased in 
conjunction with increases in average wages.

[70 FR 28813, May 19, 2005]



Sec. 404.435  Excess earnings; months to which excess earnings can
or cannot be charged; grace year defined.

    (a) Monthly benefits payable. We will not reduce your benefits on 
account of excess earnings for any month in which you, the beneficiary--
    (1) Were not entitled to a monthly benefit;
    (2) Were considered not entitled to benefits (due to non-covered 
work outside the United States or no child in care, as described in 
Sec. 404.436);
    (3) Were at full retirement age (as described in Sec. 404.409(a));
    (4) Were entitled to payment of a disability insurance benefit as 
defined in Sec. 404.315; (see Secs. 404.1592 and 404.1592a(b) which 
describes the work test if you are entitled to disability benefits);
    (5) Are age 18 or over and entitled to a child's insurance benefit 
based on disability;
    (6) Are entitled to a widow's or widower's insurance benefit based 
on disability; or
    (7) Had a non-service month in your grace year (see paragraph (b) of 
this section). A non-service month is any month in which you, while 
entitled to retirement or survivors benefits:
    (i) Do not work in self-employment (see paragraphs (c) and (d) of 
this section);
    (ii) Do not perform services for wages greater than the monthly 
exempt amount set for that month (see paragraph (e) of this section and 
Sec. 404.430); and
    (iii) Do not work in non-covered remunerative activity on 7 or more 
days in a month while outside the United States. A non-service month 
occurs even if there are no excess earnings in the year.
    (b) Grace year defined. (1) A beneficiary's initial grace year is 
the first taxable year in which the beneficiary has a non-service month 
(see paragraph (a)(7) of this section) in or after the month in which 
the beneficiary is entitled to a retirement, auxiliary, or survivor's 
benefit.
    (2) A beneficiary may have another grace year each time his or her 
entitlement to one type of benefit ends and, after a break in 
entitlement of at least one month, the beneficiary becomes entitled to a 
different type of retirement or survivors benefit. The new grace year 
would then be the taxable year in which the first non-service month 
occurs after the break in entitlement.
    (3) For purposes of determining whether a given year is a 
beneficiary's grace year, we will not count as a non-service month, a 
month that occurred while the beneficiary was entitled to disability 
benefits under section 223 of the Social Security Act or as a disabled 
widow, widower, or child under section 202.
    (4) A beneficiary entitled to child's benefits, to spouse's benefits 
before age 62 (entitled only by reason of having a child in his or her 
care), or to mother's or father's benefits is entitled to a termination 
grace year in any year the beneficiary's entitlement to these types of 
benefits terminates. This provision does not apply if the termination is 
because of death or if the beneficiary is entitled to a Social Security 
benefit for the month following the month in which the entitlement 
ended. The beneficiary is entitled to a termination grace year in 
addition to any other grace year(s) available to him or her.

    Example 1: Don, age 62, will retire from his regular job in April of 
next year. Although he will have earned $15,000 for January-April of 
that year and plans to work part time, he will not earn over the monthly 
exempt amount after April. Don's taxable year is the calendar year. 
Since next year will be the first year in which he has a non-service 
month while entitled to benefits, it will be his grace year and he will 
be entitled to the monthly earnings test for that year only. He will 
receive benefits for all months in which he does not earn over the 
monthly exempt amount (May-December) even though his earnings have 
substantially exceeded the annual exempt amount. However, in the years 
that follow, up to the year of full retirement age, only the annual 
earnings test will be applied if he has earnings that exceed the annual 
exempt amount, regardless of his monthly earnings amounts.
    Example 2: Marion was entitled to mother's insurance benefits from 
1998 because she had a child in her care. Because she had a non-

[[Page 173]]

service month in 1998, 1998 was her initial grace year. Marion's child 
turned 16 in May 2000, and the child's benefits terminated in April 
2000. Marion's entitlement to mother's benefits also terminated in April 
2000. Since Marion's entitlement did not terminate by reason of her 
death and she was not entitled to another type of Social Security 
benefit in the month after her entitlement to a mother's benefit ended, 
she is entitled to a termination grace year for 2000, the year in which 
her entitlement to mother's insurance benefits terminated. She applied 
for and became entitled to widow's insurance benefits effective February 
2001. Because there was a break in entitlement to benefits of at least 
one month before entitlement to another type of benefit, 2001 will be a 
subsequent grace year if Marion has a non-service month in 2001.

    (c) You worked in self-employment. You are considered to have worked 
in self-employment in any month in which you performed substantial 
services (see Sec. 404.446) in the operation of a trade or business (or 
in a combination of trades and businesses if there are more than one), 
as an owner or partner even though you had no earnings or net earnings 
resulting from your services during the month.
    (d) Presumption regarding work in self-employment. You are presumed 
to have worked in self-employment in each month of your taxable year 
until you show to our satisfaction that in a particular month you did 
not perform substantial services (see Sec. 404.446(c)) in any trades and 
businesses from which you derived your annual net income or loss (see 
Sec. 404.429).
    (e) Presumption regarding services for wages. You are presumed to 
have performed services in any month for wages (as defined in 
Sec. 404.429) of more than the applicable monthly exempt amount in each 
month of the year, until you show to our satisfaction that you did not 
perform services for wages in that month that exceeded the monthly 
exempt amount.

[70 FR 28814, May 19, 2005]



Sec. 404.436  Excess earnings; months to which excess earnings cannot
be charged because individual is deemed not entitled to benefits.

    Under the annual earnings test, excess earnings (as described in 
Sec. 404.430) are not charged to any month in which an individual is 
deemed not entitled to a benefit. A beneficiary (i.e., the insured 
individual or any person entitled or deemed entitled on the individual's 
earnings record) is deemed not entitled to a benefit for a month if he 
is subject to a deduction for that month because of:
    (a) Engaging in noncovered remunerative activity outside the United 
States (as described in Secs. 404.417 and 404.418); or
    (b) Failure to have a child in his or her care (as described in 
Sec. 404.421).

[32 FR 19159, Dec. 20, 1967, as amended at 38 FR 9429, Apr. 16, 1973; 38 
FR 17716, July 3, 1973; 43 FR 8133, Feb. 28, 1978; 68 FR 40123, July 7, 
2003]



Sec. 404.437  Excess earnings; benefit rate subject to deductions
because of excess earnings.

    We will further reduce your benefits (other than a disability 
insurance benefit) because of your excess earnings (see Sec. 404.430), 
after your benefits may have been reduced because of the following:
    (a) The family maximum (see Secs. 404.403 and 404.404), which 
applies to entitled beneficiaries remaining after exclusion of 
beneficiaries deemed not entitled under Sec. 404.436 (due to a deduction 
for engaging in non-covered remunerative activity outside the United 
States or failure to have a child in one's care);
    (b) Your entitlement to benefits (see Sec. 404.410) for months 
before you reach full retirement age (see Sec. 404.409(a)) (this applies 
only to old-age, wife's, widow's, widower's or husband's benefits);
    (c) Your receipt of benefits on your own earnings record, which 
reduces (see Sec. 404.407) your entitlement (or deemed entitlement; see 
Sec. 404.420) to benefits on another individual's earnings record; and
    (d) Your entitlement to benefits payable (or deemed payable) to you 
based on the earnings record of an individual entitled to a disability 
insurance benefit because of that individual's entitlement to workers' 
compensation (see Sec. 404.408).

[70 FR 28814, May 19, 2005]

[[Page 174]]



Sec. 404.439  Partial monthly benefits; excess earnings of the 
individual charged against his benefits and the benefits of persons
entitled (or deemed entitled) to benefits on his earnings record.

    Deductions are made against the total family benefits where the 
excess earnings (as described in Sec. 404.430) of an individual entitled 
to old-age insurance benefits are charged to a month and require 
deductions in an amount less than the total family benefits payable on 
his earnings record for that month (including the amount of a mother's 
or child's insurance benefit payable to a spouse who is deemed entitled 
on the individual's earnings record--see Sec. 404.420). The difference 
between the total benefits payable and the deductions made under the 
annual earnings test for such month is paid (if otherwise payable under 
title II of the Act) to each person in the proportion that the benefit 
to which each is entitled (before the application of the reductions 
described in Sec. 404.403 for the family maximum, Sec. 404.407 for 
entitlement to more than one type of benefit, and section 202(q) of the 
Act for entitlement to benefits before retirement age) and before the 
application of Sec. 404.304(f) to round to the next lower dollar bears 
to the total of the benefits to which all of them are entitled, except 
that the total amount payable to any such person may not exceed the 
benefits which would have been payable to that person if none of the 
insured individual's excess earnings had been charged to that month.

    Example: A is entitled to an old-age insurance benefit of $165 and 
his wife is entitled to $82.50 before rounding, making a total of 
$247.50. After A's excess earnings have been charged to the appropriate 
months, there remains a partial benefit of $200 payable for October, 
which is apportioned as follows:

------------------------------------------------------------------------
                                                    Fraction
                                      Original         of     Benefit\1\
                                       benefit      original
------------------------------------------------------------------------
A................................         $165           2/3        $133
Wife.............................           82.50        1/3          66
                                  --------------------------------------
  Total..........................          247.50  .........         199
------------------------------------------------------------------------
\1\ After deductions for excess earnings and after rounding per Sec.
  404.304(f).


[38 FR 9429, Apr. 16, 1973, as amended at 38 FR 17717, July 3, 1973; 43 
FR 8133, Feb. 28, 1978; 48 FR 46149, Oct. 11, 1983]



Sec. 404.440  Partial monthly benefits; pro-rated share of partial
payment exceeds the benefit before deduction for excess earnings.

    Where, under the apportionment described in Sec. 404.439, a person's 
prorated share of the partial benefit exceeds the benefit rate to which 
he was entitled before excess earnings of the insured individual were 
charged, such person's share of the partial benefit is reduced to the 
amount he would have been paid had there been no deduction for excess 
earnings (see example). The remainder of the partial benefit is then 
paid to other persons eligible to receive benefits in the proportion 
that the benefit of each such other person bears to the total of the 
benefits to which all such other persons are entitled (before reduction 
for the family maximum). Thus, if only two beneficiaries are involved, 
payment is made to one as if no deduction had been imposed; and the 
balance of the partial benefit is paid to the other. If three or more 
beneficiaries are involved, however, reapportionment of the excess of 
the beneficiary's share of the partial benefit over the amount he would 
have been paid without the deduction is made in proportion to his 
original entitlement rate (before reduction for the family maximum). If 
the excess amount involved at any point totals less than $1, it is not 
reapportioned; instead, each beneficiary is paid on the basis of the 
last calculation.

    Example: Family maximum is $150. Insured individual's excess 
earnings charged to the month are $25. The remaining $125 is prorated as 
partial payment.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Benefit after
                                                                                             deductions for     Benefit reduced for     Benefit payable
                                                              Original     Fraction of      excess earnings     maximum but without        after both
                                                              benefit     original total       but before      deductions for excess     deductions and
                                                                             benefit         reduction for            earnings          reductions (and
                                                                                             family maximum                                 rounded)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Insured Individual.........................................       $100              \2/5\                 50                   100.00                 75

[[Page 175]]

 
Wife.......................................................         50              \1/5\                 25                    16.60                 16
Child......................................................         50              \1/5\                 25                    16.60                 16
Child......................................................         50              \1/5\                 25                    16.60                 16
--------------------------------------------------------------------------------------------------------------------------------------------------------


[32 FR 19159, Dec. 20, 1967, as amended at 48 FR 46149, Oct. 11, 1983]



Sec. 404.441  Partial monthly benefits; insured individual and another
person entitled (or deemed entitled) on the same earnings record both
have excess   earnings.

    Where both the insured individual and another person entitled (or 
deemed entitled) on the same earnings record have excess earnings (as 
described in Sec. 404.430), their excess earnings are charged, and their 
partial monthly benefit is apportioned, as follows:

    Example: M and his wife are initially entitled to combined total 
benefits of $264 per month based on M's old-age insurance benefit of 
$176. For the taxable year in question, M's excess earnings were $1,599 
and his wife's excess earnings were $265. Both were under age 65. M had 
wages of more than $340 in all months of the year except February, while 
his wife had wages of more than $340 in all months of the year. After 
M's excess earnings have been charged to the appropriate months (all 
months through July except February), there remains a partial benefit 
payment for August of $249, which is allocated to M and his wife in the 
ratio that the original benefit of each bears to the sum of their 
original benefits: $166 and $83. His wife's excess earnings are charged 
against her full benefit for February ($88), her partial benefit for 
August ($83), her full benefit for September, and from $6 of her October 
benefit, leaving an $82 benefit payable to her for that month.

[48 FR 46149, Oct. 11, 1983]



Sec. 404.446  Definition of ``substantial services'' and ``services.''

    (a) General. In general, the substantial services test will be 
applicable only in a grace year (including a termination grace year) as 
defined in Sec. 404.435(c)(1). It is a test of whether, in view of all 
the services rendered by the individual and the surrounding 
circumstances, the individual reasonably can be considered retired in 
the month in question. In determining whether an individual has or has 
not performed substantial services in any month, the following factors 
are considered:
    (1) The amount of time the individual devoted to all trades and 
businesses;
    (2) The nature of the services rendered by the individual;
    (3) The extent and nature of the activity performed by the 
individual before he allegedly retired as compared with that performed 
thereafter;
    (4) The presence or absence of an adequately qualified paid manager, 
partner, or family member who manages the business;
    (5) The type of business establishment involved;
    (6) The amount of capital invested in the trade or business; and
    (7) The seasonal nature of the trade or business.
    (b) Individual engaged in more than one trade or business. When an 
individual, in any month, performs services in more than one trade or 
business, his services in all trades or businesses are considered 
together in determining whether he performed substantial services in 
self-employment in such month.
    (c) Evidentiary requirements. An individual who alleges that he did 
not render substantial services in any month, or months, shall submit 
detailed information about the operation of the trades or businesses, 
including the individual's activities in connection therewith. When 
requested to do so by the Administration, the individual shall also 
submit such additional statements, information, and other evidence as 
the Administration may consider necessary for a proper determination of 
whether the individual rendered substantial services in self-employment. 
Failure of the individual to submit the requested statements, 
information, and other evidence is a sufficient basis for a 
determination that

[[Page 176]]

the individual rendered substantial services in self-employment during 
the period in question.

[32 FR 19159, Dec. 20, 1967, as amended at 47 FR 46691, Oct. 20, 1982]



Sec. 404.447  Evaluation of factors involved in substantial services
test.

    In determining whether an individual's services are substantial, 
consideration is given to the following factors:
    (a) Amount of time devoted to trades or businesses. Consideration is 
first given to the amount of time the self-employed individual devotes 
to all trades or businesses, the net income or loss of which is 
includable in computing his earnings as defined in Sec. 404.429. For the 
purposes of this paragraph, the time devoted to a trade or business 
includes all the time spent by the individual in any activity, whether 
physical or mental, at the place of business or elsewhere in furtherance 
of such trade or business. This includes the time spent in advising and 
planning the operation of the business, making business contacts, 
attending meetings, and preparing and maintaining the facilities and 
records of the business. All time spent at the place of business which 
cannot reasonably be considered unrelated to business activities is 
considered time devoted to the trade or business. In considering the 
weight to be given to the time devoted to trades or businesses the 
following rules are applied:
    (1) Forty-five hours or less in a month devoted to trade or 
business. Where the individual establishes that the time devoted to his 
trades and businesses during a calendar month was not more than 45 
hours, the individual's services in that month are not considered 
substantial unless other factors (see paragraphs (b), (c), and (d) of 
this section) make such a finding unreasonable. For example, an 
individual who worked only 15 hours in a month might nevertheless be 
found to have rendered substantial services if he was managing a sizable 
business or engaging in a highly skilled occupation. However, the 
services of less than 15 hours rendered in all trades and businesses 
during a calendar month are not substantial.
    (2) More than 45 hours in a month devoted to trades and businesses. 
Where an individual devotes more than 45 hours to all trades and 
businesses during a calendar month, it will be found that the 
individual's services are substantial unless it is established that the 
individual could reasonably be considered retired in the month and, 
therefore, that such services were not, in fact, substantial.
    (b) Nature of services rendered. Consideration is also given to the 
nature of the services rendered by the individual in any case where a 
finding that the individual was retired would be unreasonable if based 
on time alone (see paragraph (a) of this section). The more highly 
skilled and valuable his services in self-employment are, the more 
likely the individual rendering such services could not reasonably be 
considered retired. The performance of services regularly also tends to 
show that the individual has not retired. Services are considered in 
relation to the technical and management needs of the business in which 
they are rendered. Thus, skilled services of a managerial or technical 
nature may be so important to the conduct of a sizable business that 
such services would be substantial even though the time required to 
render the services is considerably less than 45 hours.
    (c) Comparison of services rendered before and after retirement. 
Where consideration of the amount of time devoted to a trade or business 
(see paragraph (a) of this section) and the nature of services rendered 
(see paragraph (b) of this section) is not sufficient to establish 
whether an individual's services were substantial, consideration is 
given to the extent and nature of the services rendered by the 
individual before his retirement, as compared with the services 
performed during the period in question. A significant reduction in the 
amount or importance of services rendered in the business tends to show 
that the individual is retired; absence of such reduction tends to show 
that the individual is not retired.
    (d) Setting in which services performed. Where consideration of the 
factors described in paragraphs (a), (b), and (c) of this section is not 
sufficient to establish that an individual's services in

[[Page 177]]

self-employment were or were not substantial, all other factors are 
considered. The presence or absence of a capable manager, the kind and 
size of the business, the amount of capital invested and whether the 
business is seasonal, as well as any other pertinent factors, are 
considered in determining whether the individual's services are such 
that he can reasonably be considered retired.



Sec. 404.450  Required reports of work outside the United States 
or failure to have care of a child.

    (a) Beneficiary engaged in noncovered remunerative activity; report 
by beneficiary. Any individual entitled to a benefit which is subject to 
a deduction in that month because of noncovered remunerative activity 
outside the United States (see Sec. 404.417) shall report the occurrence 
of such an event to the Social Security Administration before the 
receipt and acceptance of a benefit for the second month following the 
month in which such event occurred.
    (b) Beneficiary receiving wife's, husband's, mother's or father's 
insurance benefits does not have care of a child; report by beneficiary. 
Any person receiving wife's, husband's, mother's, or father's insurance 
benefits which are subject to a deduction (as described in Sec. 404.421) 
because he or she did not have a child in his or her care shall report 
the occurrence of such an event to the Social Security Administration 
before the receipt and acceptance of a benefit for the second month 
following the month in which the deduction event occurred.
    (c) Report required by person receiving benefits on behalf of 
another. Where a person is receiving benefits on behalf of a beneficiary 
(see subpart U of this part) it is his duty to make the report to the 
Administration required by paragraph (a) or (b) of this section, on 
behalf of the beneficiary.
    (d) Report; content and form. A report required under the provisions 
of this section shall be filed with the Social Security Administration. 
(See Sec. 404.614 of this part for procedures concerning place of filing 
and date of receipt of such a report.) The report should be made on a 
form prescribed by the Administration and in accordance with 
instructions, printed thereon or attached thereto, as prescribed by the 
Administration. Prescribed forms may be obtained at any office of the 
Administration. If the prescribed form is not used, the report should be 
properly identified (e.g., show the name and social security claim 
number of the beneficiary about whom the report is made), describe the 
events being reported, tell when the events occurred, furnish any other 
pertinent data (e.g., who has care of the children), and be properly 
authenticated (e.g., bear the signature and address of the beneficiary 
making the report or the person reporting on his behalf). The report 
should contain all the information needed for a proper determination of 
whether a deduction applies and, if it does, the period for which such 
deductions should be made.

[32 FR 19159, Dec. 20, 1967, as amended at 49 FR 24117, June 12, 1984; 
51 FR 10616, Mar. 28, 1986; 65 FR 16813, Mar. 30, 2000]



Sec. 404.451  Penalty deductions for failure to report within
prescribed time limit noncovered remunerative activity outside the
United States or not having care of a child.

    (a) Penalty for failure to report. If an individual (or the person 
receiving benefits on his behalf) fails to comply with the reporting 
obligations of Sec. 404.450 within the time specified in Sec. 404.450 
and it is found that good cause for such failure does not exist (see 
Sec. 404.454), a penalty deduction is made from the individual's 
benefits in addition to the deduction described in Sec. 404.417 
(relating to noncovered remunerative activity outside the United States) 
or Sec. 404.421 (relating to failure to have care of a child).
    (b) Determining amount of penalty deduction. The amount of the 
penalty deduction for failure to report noncovered remunerative activity 
outside the United States or not having care of a child within the 
prescribed time is determined as follows:
    (1) First failure to make timely report. The penalty deduction for 
the first failure to make a timely report is an amount equal to the 
individual's benefit or benefits for the first month for which the 
deduction event was not reported timely.

[[Page 178]]

    (2) Second failure to make timely report. The penalty deduction for 
the second failure to make a timely report is an amount equal to twice 
the amount of the individual's benefit or benefits for the first month 
for which the deduction event in the second failure period was not 
reported timely.
    (3) Subsequent failures to make timely reports. The penalty 
deduction for the third or subsequent failure to file a timely report is 
an amount equal to three times the amount of the individual's benefit or 
benefits for the first month for which the deduction event in the third 
failure period was not reported timely.
    (c) Determining whether a failure to file a timely report is first, 
second, third, or subsequent failure--(1) Failure period. A failure 
period runs from the date of one delinquent report (but initially 
starting with the date of entitlement to monthly benefits) to the date 
of the next succeeding delinquent report, excluding the date of the 
earlier report and including the date of the later report. The failure 
period includes each month for which succeeding delinquent report, 
excluding a report becomes overdue during a failure period, but it does 
not include any month for which a report is not yet overdue on the 
ending date of such period. If good cause (see Sec. 404.454) is found 
for the entire period, the period is not regarded as a failure period.
    (2) First failure. When no penalty deduction under paragraph (b) of 
this section has previously been imposed against the beneficiary for 
failure to report noncovered remunerative activity outside the United 
States or for failure to report not having care of a child, the earliest 
month in the first failure period for which a report is delinquent and 
for which good cause (see Sec. 404.454) for failure to make the required 
report is not found is considered to be the first failure.
    (3) Second failure. After one penalty deduction under paragraph (b) 
of this section has been imposed against the beneficiary, the first 
month for which a report is delinquent in the second failure period is 
considered to be the second failure.
    (4) Third and subsequent failures. After a second penalty deduction 
under paragraph (b) of this section has been imposed against the 
beneficiary, the first month for which a report is delinquent in the 
third failure period is considered to be the third failure. Subsequent 
failures will be determined in the same manner.

    Example: M became entitled in January 1966 to mother's benefits; 
these benefits are not payable for any month in which the mother does 
not have a child in her care. M accepted benefits for each month from 
January 1966 through June 1967. In July 1967 she reported that she had 
not had a child in her care in January 1967. As she was not eligible for 
a benefit for any month in which she did not have a child in her care, 
M's July 1967 benefit was withheld to recover the overpayment she had 
received for January 1967, and the next payment she received was for 
August 1967. No penalty was imposed for her failure to make a timely 
report of the deduction event that occurred in January 1967 because it 
was determined that good cause existed.
    In March 1968 M reported that she had not had a child in her care in 
September or October 1967; however, she had accepted benefit payments 
for each month from August 1967 through February 1968. Her benefits for 
March and April 1968 were withheld to recover the overpayment for 
September and October 1967. Also, it was determined that good cause was 
not present for M's failure to make a timely report of the deduction 
event that had occurred in September 1967. A penalty equal to her 
benefit for September 1967 was deducted from M's May 1968 payment since 
this was her first failure to report not having a child in her care. 
Payments to her then were continued.
    On November 4, 1968, it was learned that M had not had a child in 
her care in November 1967 or in June, July, or August 1968 although she 
had accepted benefits for June through October 1968. Consequently, M's 
benefits for November 1968 through February 1969 were withheld to 
recover the 4 months' overpayment she received for months in which she 
did not have a child in her care. In addition, it was determined that 
good cause was not present for M's failure to report the deduction 
events, and a penalty was imposed equal to twice the amount of M's 
benefit for the month of June 1968. This was M's second failure to 
report not having a child in her care. No further penalty applied for 
November 1967 because that month was included in M's first-failure 
period.

    (5) Penalty deductions imposed under Sec. 404.453 not considered. A 
failure to make a timely report of earnings as required by Sec. 404.452 
for which a penalty deduction is imposed under Sec. 404.453 is

[[Page 179]]

not counted as a failure to report in determining the first or 
subsequent failure to report noncovered remunerative activity outside 
the United States or not having care of a child.
    (d) Limitation on amount of penalty deduction. Notwithstanding the 
provisions described in paragraph (b) of this section, the amount of the 
penalty deduction imposed for failure to make a timely report of 
noncovered remunerative activity outside the United States or for 
failure to report not having care of a child may not exceed the number 
of months in that failure period for which the individual received and 
accepted a benefit and for which a deduction is imposed by reason of his 
noncovered remunerative activity outside the United States or failure to 
have care of a child. (See Sec. 404.458 for other limitations on the 
amount of the penalty deduction.)

[38 FR 3596, Feb. 8, 1973, as amended at 38 FR 9430, Apr. 16, 1973]



Sec. 404.452  Reports to Social Security Administration of earnings;
wages; net earnings from self-employment.

    (a) Reporting requirements and conditions under which a report of 
earnings, that is, wages and/or net earnings from self-employment, is 
required. (1) If you have not reached full retirement age (see 
Sec. 404.409(a)) and you are entitled to a monthly benefit, other than 
only a disability insurance benefit, you are required to report to us 
the total amount of your earnings (as defined in Sec. 404.429) for each 
taxable year. This report will enable SSA to pay you accurate benefits 
and avoid both overpayments and underpayments.
    (2) If your wages and/or net earnings from self-employment in any 
month(s) of the year are below the allowable amount (see Secs. 404.446 
and 404.447), your report should include this information in order to 
establish your grace year (see Sec. 404.435) and possible eligibility 
for benefits for those months.
    (3) Your report to us for a taxable year should be filed on or 
before the 15th day of the fourth month following the close of the 
taxable year; for example, April 15 when the beneficiary's taxable year 
is a calendar year. An income tax return or form W-2, filed timely with 
the Internal Revenue Service, may serve as the report required to be 
filed under the provisions of this section, where the income tax return 
or form W-2 shows the same wages and/or net earnings from self-
employment that must be reported to us. Although we may accept W-2 
information and special payment information from employers, you still 
have primary responsibility for making sure that the earnings we use for 
deduction purposes are correct. If there is a valid reason for a delay, 
we may grant you an extension of up to 4 months to file this report.
    (4) You are not required to report to us if:
    (i) You reached full retirement age before the first month of your 
entitlement to benefits; or
    (ii) Your benefit payments were suspended under the provisions 
described in Sec. 404.456 for all months of a taxable year before the 
year of full retirement age, or for all months prior to your full 
retirement age in the full retirement age year, unless you are entitled 
to benefits as an auxiliary or survivor and your benefits are reduced 
for any month in the taxable year because of earnings and there is 
another person entitled to auxiliary or survivor's benefits on the same 
record, but living in a different household.
    (b) Report required by person receiving benefits on behalf of 
another. When you receive benefits as a representative payee on behalf 
of a beneficiary (see subpart U of this part), it is your duty to report 
any earnings of the beneficiary to us.
    (c) Information required. If you are the beneficiary, your report 
should show your name, address, Social Security number, the taxable year 
for which the report is made, and the total amount of your wages and/or 
net earnings from self employment during the taxable year. If you are a 
representative payee, your report should show the name, address, and 
Social Security number of the beneficiary, the taxable year for which 
the report is made, and the total earnings of the beneficiary, as well 
as your name, address, and Social Security number.
    (d) Requirement to furnish requested information. You, the 
beneficiary (or the person reporting on his/her behalf) are

[[Page 180]]

required to furnish any other information about earnings and services 
that we request for the purpose of determining the correct amount of 
benefits payable for a taxable year (see Sec. 404.455).
    (e) Extension of time for filing report--(1) Request for extension 
to file report. Your request for an extension of time, or the request of 
your authorized agent, must be in writing and must be filed at a Social 
Security Administration office before your report is due. Your request 
must include the date, your name, the Social Security number of the 
beneficiary, the name and Social Security number of the person filing 
the request if other than the beneficiary, the year for which your 
report is due, the amount of additional time requested, the reason why 
you require this extension (see Sec. 404.454), and your signature.
    (2) Evidence that extension of time has been granted. If you do not 
receive written approval of an extension of time for making your report 
of earnings, it will be presumed that no extension of time was granted. 
In such case, if you do not file on time, you will need to establish 
that you had good cause (Sec. 404.454) for filing your report after the 
normal due date.

[70 FR 28815, May 19, 2005]



Sec. 404.453  Penalty deductions for failure to report earnings timely.

    (a) Penalty for failure to report earnings; general. Penalty 
deductions are imposed against an individual's benefits, in addition to 
the deductions required because of his excess earnings (see 
Sec. 404.415), if:
    (1) He fails to make a timely report of his earnings as specified in 
Sec. 404.452 for a taxable year beginning after 1954;
    (2) It is found that good cause for failure to report earnings 
timely (see Sec. 404.454) does not exist;
    (3) A deduction is imposed because of his earnings (see 
Sec. 404.415) for that year; and
    (4) He received and accepted any payment of benefits for that year.
    (b) Determining amount of penalty deduction. The amount of the 
penalty deduction for failure to report earnings for a taxable year 
within the prescribed time is determined as follows:
    (1) First failure to file timely report. The penalty deduction for 
the first failure to file a timely report is an amount equal to the 
individual's benefit or benefits for the last month for which he was 
entitled to such benefit or benefits during the taxable year, except 
that with respect to any deductions imposed on or after January 2, 1968, 
if the amount of the deduction imposed for the taxable year is less than 
the benefit or benefits for the last month of the taxable year for which 
he was entitled to a benefit under section 202 of the Act, the penalty 
deduction is an amount equal to the amount of the deduction imposed but 
not less than $10.
    (2) Second failure to file timely report. The penalty deduction for 
the second failure to file a timely report is an amount equal to twice 
the amount of the individual's benefit or benefits for the last month 
for which he was entitled to such benefit or benefits during such 
taxable year.
    (3) Subsequent failures to file timely reports. The penalty 
deduction for the third or subsequent failure to file a timely report is 
an amount equal to three times the amount of the individual's benefit or 
benefits for the last month for which he was entitled to such benefit or 
benefits during such taxable year.
    (c) Determining whether a failure to file a timely report is first, 
second, or subsequent failure--(1) No prior failure. Where no penalty 
deduction under this section has previously been imposed against the 
beneficiary for failure to make a timely report of his earnings, all 
taxable years (and this may include 2 or more years) for which a report 
of earnings is overdue as of the date the first delinquent report is 
made are included in the first failure. The latest of such years for 
which good cause for failure to make the required report (see 
Sec. 404.454) is not found is considered the first failure to file a 
timely report.

    Example: X became entitled to benefits in 1964 and had reportable 
earnings for 1964, 1965, and 1966. He did not make his annual reports 
for those years until July 1967. At that time it was found that 1966 was 
the only year for which he has good cause for not making a timely report 
of his earnings. Since all taxable years for which a report is overdue 
as of the date of the first delinquent report are included in the first 
failure period, it was

[[Page 181]]

found that his first failure to make a timely report was for 1965. The 
penalty is equal to his December 1965 benefit rate. If good cause had 
also been found for both 1965 and 1964, then X would have no prior 
failure within the meaning of this subsection.

    (2) Second and subsequent failures. After one penalty deduction 
under paragraph (b) of this section has been imposed against an 
individual, each taxable year for which a timely report of earnings is 
not made (and the count commences with reports of earnings which become 
delinquent after the date the first delinquent report described in 
paragraph (c)(1) of this section was made), and for which good cause for 
failure to make the required report is not found, is considered 
separately in determining whether the failure is the second or 
subsequent failure to report timely.

    Example: Y incurred a penalty deduction for not making his 1963 
annual report until July 1964. In August 1966 it was found that he had 
not made a timely report of either his 1964 or 1965 earnings, and good 
cause was not present with respect to either year. The penalty for 1964 
is equal to twice his benefit rate for December 1964. The penalty for 
1965 is equal to three times his benefit rate for December 1965.

    (3) Penalty deduction imposed under Sec. 404.451 not considered. A 
failure to make a report as required by Sec. 404.450, for which a 
penalty deduction is imposed under Sec. 404.451, is not counted as a 
failure to report in determining, under this section, whether a failure 
to report earnings or wages is the first or subsequent failure to 
report.
    (d) Limitation on amount of penalty deduction. Notwithstanding the 
provisions described in paragraph (b) of this section, the amount of the 
penalty deduction imposed for failure to file a timely report of 
earnings for a taxable year may not exceed the number of months in that 
year for which the individual received and accepted a benefit and for 
which deductions are imposed by reason of his earnings for such year. 
(See Sec. 404.458 for other limitations on the amount of the penalty 
deduction.)

[32 FR 19159, Dec. 20, 1967, as amended at 38 FR 3597, Feb. 8, 1973; 38 
FR 9431, Apr. 16, 1973]



Sec. 404.454  Good cause for failure to make required reports.

    (a) General. The failure of an individual to make a timely report 
under the provisions described in Secs. 404.450 and 404.452 will not 
result in a penalty deduction if the individual establishes to the 
satisfaction of the Administration that his failure to file a timely 
report was due to good cause. Before making any penalty determination as 
described in Secs. 404.451 and 404.453, the individual shall be advised 
of the penalty and good cause provisions and afforded an opportunity to 
establish good cause for failure to report timely. The failure of the 
individual to submit evidence to establish good cause within a specified 
time may be considered a sufficient basis for a finding that good cause 
does not exist (see Sec. 404.705). In determining whether good cause for 
failure to report timely has been established by the individual, 
consideration is given to whether the failure to report within the 
proper time limit was the result of untoward circumstances, misleading 
action of the Social Security Administration, confusion as to the 
requirements of the Act resulting from amendments to the Act or other 
legislation, or any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
the individual may have. For example, good cause may be found where 
failure to file a timely report was caused by:
    (1) Serious illness of the individual, or death or serious illness 
in his immediate family;
    (2) Inability of the individual to obtain, within the time required 
to file the report, earnings information from his employer because of 
death or serious illness of the employer or one in the employer's 
immediate family; or unavoidable absence of his employer; or destruction 
by fire or other damage of the employer's business records;
    (3) Destruction by fire, or other damage, of the individual's 
business records;
    (4) Transmittal of the required report within the time required to 
file the report, in good faith to another Government agency even though 
the report does not reach the Administration

[[Page 182]]

until after the period for reporting has expired;
    (5) Unawareness of the statutory provision that an annual report of 
earnings is required for the taxable year in which the individual 
attained age 72 provided his earnings for such year exceeded the 
applicable amount, e.g., $1,680 for a 12-month taxable year ending after 
December 1967;
    (6) Failure on the part of the Administration to furnish forms in 
sufficient time for an individual to complete and file the report on or 
before the date it was due, provided the individual made a timely 
request to the Administration for the forms;
    (7) Belief that an extension of time for filing income tax returns 
granted by the Internal Revenue Service was also applicable to the 
annual report to be made to the Social Security Administration;
    (8) Reliance upon a written report to the Social Security 
Administration made by, or on behalf of, the beneficiary before the 
close of the taxable year, if such report contained sufficient 
information about the beneficiary's earnings or work, to require 
suspension of his benefits (see Sec. 404.456) and the report was not 
subsequently refuted or rescinded; or
    (9) Failure of the individual to understand reporting 
responsibilities due to his or her physical, mental, educational, or 
linguistic limitation(s).
    (b) Notice of determination. In every case in which it is determined 
that a penalty deduction should be imposed, the individual shall be 
advised of the penalty determination and of his reconsideration rights. 
If it is found that good cause for failure to file a timely report does 
not exist, the notice will include an explanation of the basis for this 
finding; the notice will also explain the right to partial adjustment of 
the overpayment, in accordance with the provisions of Sec. 404.502(c).
    (c) Good cause for subsequent failure. Where circumstances are 
similar and an individual fails on more than one occasion to make a 
timely report, good cause normally will not be found for the second or 
subsequent violation.

[38 FR 3597, Feb. 8, 1973, as amended at 43 FR 8133, Feb. 28, 1978; 59 
FR 1634, Jan. 12, 1994]



Sec. 404.455  Request by Social Security Administration for reports
of earnings and estimated earnings; effect of failure to comply with
request.

    (a) Request by Social Security Administration for report during 
taxable year; effect of failure to comply. The Social Security 
Administration may, during the course of a taxable year, request a 
beneficiary to estimate his or her earnings (as defined in Sec. 404.429) 
for the current taxable year and for the next taxable year, and to 
furnish any other information about his or her earnings that the Social 
Security Administration may specify. If a beneficiary fails to comply 
with a request for an estimate of earnings for a taxable year, the 
beneficiary's failure, in itself, constitutes justification under 
section 203(h) of the Act for a determination that it may reasonably be 
expected that the beneficiary will have deductions imposed under the 
provisions described in Sec. 404.415, due to his or her earnings for 
that taxable year. Furthermore, the failure of the beneficiary to comply 
with a request for an estimate of earnings for a taxable year will, in 
itself, constitute justification for the Social Security Administration 
to use the preceding taxable year's estimate of earnings (or, if 
available, reported earnings) to suspend payment of benefits for the 
current or next taxable year.
    (b) Request by Social Security Administration for report after close 
of taxable year; failure to comply. After the close of his or her 
taxable year, the Social Security Administration may request a 
beneficiary to furnish a report of his or her earnings for the closed 
taxable year and to furnish any other information about his or her 
earnings for that year that the Social Security Administration may 
specify. If he or she fails to comply with this request, this failure 
shall, in itself, constitute justification under section 203(h) of the 
Act for a determination that the beneficiary's benefits are subject to 
deductions as described in Sec. 404.415 for each month in the taxable 
year (or only for the months thereof specified by the Social Security 
Administration).

[56 FR 11373, Mar. 18, 1991]

[[Page 183]]



Sec. 404.456  Current suspension of benefits because an individual
works or engages in self-employment.

    (a) Circumstances under which benefit payments may be suspended. If, 
on the basis of information obtained by or submitted to the 
Administration, it is determined that an individual entitled to monthly 
benefits for any taxable year may reasonably be expected to have 
deductions imposed against his benefits (as described in Sec. 404.415) 
by reason of his earnings for such year, the Administration may, before 
the close of the taxable year, suspend all or part, as the 
Administration may specify, of the benefits payable to the individual 
and to all other persons entitled (or deemed entitled--see Sec. 404.420) 
to benefits on the basis of the individual's earnings record.
    (b) Duration of suspension. The suspension described in paragraph 
(a) of this section shall remain in effect with respect to the benefits 
for each month until the Administration has determined whether or not 
any deduction under Sec. 404.415 applies for such month.
    (c) When suspension of benefits becomes final. For taxable years 
beginning after August 1958, if benefit payments were suspended (as 
described in paragraph (a) of this section) for all months of 
entitlement in an individual's taxable year, no benefit payment for any 
month in that year may be made after the expiration of the period of 3 
years, 3 months, and 15 days following the close of the individual's 
taxable year unless, within that period, the individual, or any person 
entitled to benefits based on his earnings record, files with the 
Administration information showing that a benefit for a month is payable 
to the individual. Subject to the limitations of this paragraph, a 
determination about deductions may be reopened under the circumstances 
described in Sec. 404.907.

[32 FR 19159, Dec. 20, 1967, as amended at 65 FR 16813, Mar. 30, 2000]



Sec. 404.457  Deductions where taxes neither deducted from wages 
of certain maritime employees nor paid.

    (a) When deduction is required. A deduction is required where:
    (1) An individual performed services after September 1941 and before 
the termination of Title I of the First War Powers Act, 1941, on or in 
connection with any vessel as an officer or crew member; and
    (2) The services were performed in the employ of the United States 
and employment was through the War Shipping Administration or, for 
services performed before February 11, 1942, through the United States 
Maritime Commission; and
    (3) The services, under the provisions of Sec. 404.1041 of this 
part, constituted employment for the purposes of title II of the Social 
Security Act; and
    (4) The taxes imposed (by section 1400 of the Internal Revenue Code 
of 1939, as amended) with respect to such services were neither deducted 
from the individual's wages nor paid by the employer.
    (b) Amount of deduction. The deduction required by paragraph (a) of 
this section is an amount equal to 1 percent of the wages with respect 
to which the taxes described in paragraph (a)(4) of this section were 
neither deducted nor paid by the employer.
    (c) How deduction is made. The deduction required by paragraph (a) 
of this section is made by withholding an amount as determined under 
paragraph (b) of this section from any monthly benefit or lump-sum death 
payment based on the earnings record of the individual who performed the 
services described in paragraph (a) of this section.

[32 FR 19159, Dec. 20, 1967, as amended at 65 FR 16813, Mar. 30, 2000]



Sec. 404.458  Limiting deductions where total family benefits payable
would not be affected or would be only partly affected.

    Notwithstanding the provisions described in Secs. 404.415, 404.417, 
404.421, 404.451, and 404.453 about the amount of the deduction to be 
imposed for a month, no such deduction is imposed for a month when the 
benefits payable for that month to all persons entitled to benefits on 
the same earnings record and living in the same household remain equal 
to the maximum benefits payable to them on that earnings record. Where 
making such deductions and increasing the benefits to others in the 
household (for the month in which the deduction event occurred) would

[[Page 184]]

give members of the household less than the maximum (as determined under 
Sec. 404.404) payable to them, the amount of deduction imposed is 
reduced to the difference between the maximum amount of benefits payable 
to them and the total amount which would have been paid if the benefits 
of members of the household not subject to deductions were increased for 
that month. The individual subject to the deduction for such month may 
be paid the difference between the deduction so reduced and his benefit 
as adjusted under Sec. 404.403 (without application of Sec. 404.402(a)). 
All other persons in the household are paid, for such month, their 
benefits as adjusted under Sec. 404.403 without application of 
Sec. 404.402(a).

[47 FR 43673, Oct. 4, 1982, as amended at 68 FR 15659, Apr. 1, 2003; 68 
FR 40123, July 7, 2003]



Sec. 404.459  Penalty for making false or misleading statements 
or withholding information.

    (a) Why would SSA penalize me? You will be subject to a penalty if:
    (1) You make, or cause to be made, a statement or representation of 
a material fact, for use in determining any initial or continuing right 
to, or the amount of, monthly insurance benefits under title II or 
benefits or payments under title XVI, that you know or should know is 
false or misleading; or
    (2) You make a statement or representation of a material fact for 
use as described in paragraph (a)(1) of this section with knowing 
disregard for the truth; or
    (3) You omit from a statement or representation made for use as 
described in paragraph (a)(1) of this section, or otherwise withhold 
disclosure (for example, fail to come forward to notify us) of, a fact 
which you know or should know is material to the determination of any 
initial or continuing right to, or the amount of, monthly insurance 
benefits under title II or benefits or payments under title XVI, if you 
know, or should know, that the statement or representation with such 
omission is false or misleading or that the withholding of such 
disclosure is misleading.
    (b) What is the penalty? The penalty is nonpayment of benefits under 
title II that we would otherwise pay you and ineligibility for cash 
benefits under title XVI (including State supplementary payments made by 
SSA according to Sec. 416.2005).
    (c) How long will the penalty last? The penalty will last--
    (1) Six consecutive months the first time we penalize you;
    (2) Twelve consecutive months the second time we penalize you; and
    (3) Twenty-four consecutive months the third or subsequent time we 
penalize you.
    (d) Will this penalty affect any of my other government benefits? If 
we penalize you, the penalty will apply only to your eligibility for 
benefits under titles II and XVI (including State supplementary payments 
made by us according to Sec. 416.2005). The penalty will not affect--
    (1) Your eligibility for benefits that you would otherwise be 
eligible for under titles XVIII and XIX but for the imposition of the 
penalty; and
    (2) The eligibility or amount of benefits payable under titles II or 
XVI to another person. For example, another person (such as your spouse 
or child) may be entitled to benefits under title II based on your 
earnings record. Benefits would still be payable to that person to the 
extent that you would be receiving such benefits but for the imposition 
of the penalty. As another example, if you are receiving title II 
benefits that are limited under the family maximum provision 
(Sec. 404.403) and we stop your benefits because we impose a penalty on 
you, we will not increase the benefits of other family members who are 
limited by the family maximum provision simply because you are not 
receiving benefits because of the penalty.
    (e) How will SSA make its decision to penalize me? In order to 
impose a penalty on you, we must find that you knowingly (knew or should 
have known or acted with knowing disregard for the truth) made a false 
or misleading statement or omitted or failed to report a material fact 
if you knew, or should have known, that the omission or failure to 
disclose was misleading. We will base our decision to penalize you on 
the evidence and the reasonable inferences that can be drawn from that

[[Page 185]]

evidence, not on speculation or suspicion. Our decision to penalize you 
will be documented with the basis and rationale for that decision. In 
determining whether you knowingly made a false or misleading statement 
or omitted or failed to report a material fact so as to justify 
imposition of the penalty, we will consider all evidence in the record, 
including any physical, mental, educational, or linguistic limitations 
(including any lack of facility with the English language) which you may 
have had at the time. In determining whether you acted knowingly, we 
will also consider the significance of the false or misleading statement 
or omission or failure to disclose in terms of its likely impact on your 
benefits.
    (f) What should I do if I disagree with SSA's initial determination 
to penalize me? If you disagree with our initial determination to impose 
a penalty, you have the right to request reconsideration of the penalty 
decision as explained in Sec. 404.907. We will give you a chance to 
present your case, including the opportunity for a face-to-face 
conference. If you request reconsideration of our initial determination 
to penalize you, you have the choice of a case review, informal 
conference, or formal conference, as described in Sec. 416.1413(a) 
through (c). If you disagree with our reconsidered determination you 
have the right to follow the normal administrative and judicial review 
process by requesting a hearing before an administrative law judge, 
Appeals Council review and Federal court review, as explained in 
Sec. 404.900.
    (g) When will the penalty period begin and end? Subject to the 
additional limitations noted in paragraphs (g)(1) and (g)(2) of this 
section, the penalty period will begin the first day of the month for 
which you would otherwise receive payment of benefits under title II or 
title XVI were it not for imposition of the penalty. Once a sanction 
begins, it will run continuously even if payments are intermittent. If 
more than one penalty has been imposed, but they have not yet run, the 
penalties will not run concurrently.
    (1) If you do not request reconsideration of our initial 
determination to penalize you, the penalty period will begin no earlier 
than the first day of the second month following the month in which the 
time limit for requesting reconsideration ends. The penalty period will 
end on the last day of the final month of the penalty period. For 
example, if the time period for requesting reconsideration ends on 
January 10, a 6-month period of nonpayment begins on March 1 if you 
would otherwise be eligible to receive benefits for that month, and ends 
on August 31.
    (2) If you request reconsideration of our initial determination to 
penalize you and the reconsidered determination does not change our 
original decision to penalize you, the penalty period will begin no 
earlier than the first day of the second month following the month we 
notify you of our reconsidered determination. The penalty period will 
end on the last day of the final month of the penalty period. For 
example, if we notify you of our reconsidered determination on August 
31, 2001, and you are not otherwise eligible for payment of benefits at 
that time, but would again be eligible to receive payment of benefits on 
October 1, 2003, a 6-month period of nonpayment would begin on October 
1, 2003 and end on March 31, 2004.

[65 FR 42285, July 10, 2000, as amended at 71 FR 61407, Oct. 18, 2006]



Sec. 404.460  Nonpayment of monthly benefits to aliens outside the
United States.

    (a) Nonpayment of monthly benefits to aliens outside the United 
States more than 6 months. Except as described in paragraph (b) and 
subject to the limitations in paragraph (c) of this section after 
December 1956 no monthly benefit may be paid to any individual who is 
not a citizen or national of the United States, for any month after the 
sixth consecutive calendar month during all of which he is outside the 
United States, and before the first calendar month for all of which he 
is in the United States after such absence. (See Sec. 404.380 regarding 
special payments at age 72.)
    (1) For nonpayment of benefits under this section, it is necessary 
that the beneficiary be an alien, and while an alien, be outside the 
United States for more than six full consecutive calendar months. In 
determining whether, at

[[Page 186]]

the time of a beneficiary's initial entitlement to benefits, he or she 
has been outside the United States for a period exceeding six full 
consecutive calendar months, not more than the six calendar months 
immediately preceding the month of initial entitlement may be 
considered. For the purposes of this section, outside the United States 
means outside the territorial boundaries of the 50 States, the District 
of Columbia, Puerto Rico, the Virgin Islands of the United States, Guam, 
American Samoa, and the Commonwealth of the Northern Mariana Islands.
    (2) Effective with 6-month periods beginning after January 2, 1968, 
after an alien has been outside the United States for any period of 30 
consecutive days, he is deemed to be outside the United States 
continuously until he has returned to the United States and remained in 
the United States for a period of 30 consecutive days.
    (3) Payments which have been discontinued pursuant to the provisions 
of this section will not be resumed until the alien beneficiary has been 
in the United States for a full calendar month. A full calendar month 
includes 24 hours of each day of the calendar month.
    (4) Nonpayment of benefits to an individual under this section does 
not cause nonpayment of benefits to other persons receiving benefits 
based on the individual's earnings record.

    Example: R, an alien, leaves the United States on August 15, 1967, 
and returns on February 1, 1968. He leaves again on February 15, 1968, 
and does not return until May 15, 1968, when he spends 1 day in the 
United States. He has been receiving monthly benefits since July 1967.
    R's first 6-month period of absence begins September 1, 1967. Since 
this period begins before January 2, 1968, his visit (Feb. 1, 1968, to 
Feb. 15, 1968) to the United States for less than 30 consecutive days is 
sufficient to break this 6-month period.
    R's second 6-month period of absence begins March 1, 1968. Since 
this period begins after January 2, 1968, and he was outside the United 
States for 30 consecutive days, he must return and spend 30 consecutive 
days in the United States prior to September 1, 1968, to prevent 
nonpayment of benefits beginning September 1968. If R fails to return to 
the United States for 30 consecutive days prior to September 1, 1968, 
payments will be discontinued and will not be resumed until R spends at 
least 1 full calendar month in the United States.

    (b) When nonpayment provisions do not apply. The provisions 
described in paragraph (a) of this section do not apply, subject to the 
limitations in paragraph (c) of this section, to a benefit for any month 
if:
    (1) The individual was, or upon application would have been, 
entitled to a monthly benefit for December 1956, based upon the same 
earnings record; or
    (2)(i) The individual upon whose earnings the benefit is based, 
before that month, has resided in the United States for a period or 
periods aggregating 10 years or more or has earned not less than 40 
quarters of coverage;
    (ii) Except that, effective with July 1968, Sec. 404.460(b)(2)(i) 
does not apply if:
    (A) The beneficiary is a citizen of a country with a social 
insurance or pension system meeting the conditions described in 
paragraphs (b)(7)(i), (ii), and (iii) of this section but does not meet 
the condition described in paragraph (b)(7)(iv) of this section; or
    (B) The beneficiary is a citizen of a country with no social 
insurance or pension system of general application and at any time 
within 5 years before January 1968 (or the first month after December 
1967 in which benefits are subject to suspension pursuant to paragraph 
(a) of this section) such beneficiary was residing in a country to which 
payments were withheld by the Treasury Department pursuant to Vol. II, 
31 U.S.C. 3329. See Sec. 404.460(c).
    (iii) For purposes of this subparagraph a period of residence begins 
with the day the insured individual arrives in the United States with 
the intention of establishing at least a temporary home here; it 
continues so long as he maintains an attachment to an abode in the 
United States, accompanied by actual physical presence in the United 
States for a significant part of the period; and ends with the day of 
departure from the United States with the intention to reside elsewhere; 
or
    (3) The individual is outside the United States while in the active 
military or naval service of the United States; or

[[Page 187]]

    (4) The individual on whose earnings the benefit is based died 
before that month and:
    (i) Death occurred while the individual was on active duty or 
inactive duty training as a member of a uniformed service, or
    (ii) Death occurred after the individual was discharged or released 
from a period of active duty or inactive duty training as a member of a 
uniformed service, and the Administrator of Veterans' Affairs 
determines, and certifies to the Commissioner, that the discharge or 
release was under conditions other than dishonorable and that death was 
as a result of a disease or injury incurred or aggravated in line of 
duty while on active duty or inactive duty training; or
    (5) The individual on whose earnings record the benefit is based 
worked in service covered by the Railroad Retirement Act, and such work 
is treated as employment covered by the Social Security Act under the 
provisions described in subpart O of this part; or
    (6) The nonpayment of monthly benefits under the provisions 
described in paragraph (a) of this section would be contrary to a treaty 
obligation of the United States in effect on August 1, 1956 (see 
Sec. 404.463(b)); or
    (7) The individual is a citizen of a foreign country that the 
Commissioner determines has in effect a social insurance or pension 
system (see Sec. 404.463) which meets all of the following conditions:
    (i) Such system pays periodic benefits or the actuarial equivalent 
thereof; and
    (ii) The system is of general application; and
    (iii) Benefits are paid in this system on account of old age, 
retirement, or death; and
    (iv) Individuals who are citizens of the United States but not 
citizens of the foreign country and who qualify for such benefits are 
permitted to receive benefits without restriction or qualification, at 
their full rate, or the actuarial equivalent thereof, while outside of 
the foreign country and without regard to the duration of their absence 
therefrom.
    (c) Nonpayment of monthly benefits to aliens residing in certain 
countries--(1) Benefits for months after June 1968. Notwithstanding the 
provisions of paragraphs (a) and (b) of this section, we cannot pay 
monthly benefits for any month after June 1968 to anyone not a citizen 
or national of the United States for any month while residing in a 
country to which payments are being withheld by the Treasury Department 
pursuant to Vol. II, 31 U.S.C. 3329.
    (2) Benefits for months before July 1968. If a person who is not a 
United States citizen or national is entitled to receive benefits under 
title II of the Social Security Act, and was residing in a country where 
the Treasury Department withheld benefits on June 30, 1968 pursuant to 
Vol. II, 31 U.S.C. 3329, benefits cannot be paid. However, if the 
Treasury Department subsequently removes that restriction, a person who 
is not a United States citizen or national may be able to be paid 
benefits to which they were entitled for months prior to July 1968. 
Benefits cannot be paid,--
    (i) To any person other than such individual, or, if such individual 
dies before such benefits can be paid, to any person other than an 
individual who was entitled for the month in which the deceased 
individual died (with the application of section 202(j)(1) of the Social 
Security Act) to a monthly benefit under title II of such Act on the 
basis of the same wages and self-employment income as such deceased 
individual; or
    (ii) In excess of an amount equal to the amount of the last 12 
months' benefits that would have been payable to such individual.
    (3) List of countries under Treasury Department alien payment 
restriction. The Treasury Department is currently withholding payments 
to persons residing in the following countries pursuant to Vol. II, 31 
U.S.C. 3329. We will publish future additions to or deletions from the 
list of countries in the Federal Register: Cuba, North Korea.
    (d) Nonpayment of monthly benefits to certain aliens entitled to 
benefits on a worker's earnings record. An individual who after December 
31, 1984 becomes eligible for benefits on the earnings record of a 
worker for the first time, is an alien, has been outside the United 
States for more than 6 consecutive

[[Page 188]]

months, and is qualified to receive a monthly benefit by reason of the 
provisions of paragraphs (b)(2), (b)(3), (b)(5), or (b)(7) of this 
section, must also meet a U.S. residence requirement described in this 
section to receive benefits:
    (1) An alien entitled to benefits as a child of a living or deceased 
worker--
    (i) Must have resided in the U.S. for 5 or more years as the child 
of the parent on whose earnings record entitlement is based; or
    (ii) The parent on whose earnings record the child is entitled and 
the other parent, if any, must each have either resided in the United 
States for 5 or more years or died while residing in the U.S.
    (2) An alien who meets the requirements for child's benefits based 
on paragraph (d)(1) of this section above, whose status as a child is 
based on an adoptive relationship with the living or deceased worker, 
must also--
    (i) Have been adopted within the United States by the worker on 
whose earnings record the child's entitlement is based; and
    (ii) Have lived in the United States with, and received one-half 
support from, the worker for a period, beginning prior to the child's 
attainment of age 18, of
    (A) At least one year immediately before the month in which the 
worker became eligible for old-age benefits or disability benefits or 
died (whichever occurred first), or
    (B) If the worker had a period of disability which continued until 
the worker's entitlement to old-age or disability benefits or death, at 
least one year immediately before the month in which that period of 
disability began.
    (3) An alien entitled to benefits as a spouse, surviving spouse, 
divorced spouse, surviving divorced spouse, or surviving divorced mother 
or father must have resided in the United States for 5 or more years 
while in a spousal relationship with the person on whose earnings record 
the entitlement is based. The spousal relationship over the required 
period can be that of wife, husband, widow, widower, divorced wife, 
divorced husband, surviving divorced wife, surviving divorced husband, 
surviving divorced mother, surviving divorced father, or a combination 
of two or more of these categories.
    (4) An alien who is entitled to parent's benefits must have resided 
in the United States for 5 or more years as a parent of the person on 
whose earnings record the entitlement is based.
    (5) Individuals eligible for benefits before January 1, 1985 
(including those eligible for one category of benefits on a particular 
worker's earnings record after December 31, 1984, but also eligible for 
a different category of benefits on the same worker's earnings record 
before January 1, 1985), will not have to meet the residency 
requirement.
    (6) Definitions applicable to paragraph (d) of this section are as 
follows:
    Eligible for benefits means that an individual satisfies the 
criteria described in subpart D of this part for benefits at a 
particular time except that the person need not have applied for those 
benefits at that time.
    Other parent for purposes of paragraph (d)(1)(ii) of this section 
means any other living parent who is of the opposite sex of the worker 
and who is the adoptive parent by whom the child was adopted before the 
child attained age 16 and who is or was the spouse of the person on 
whose earnings record the child is entitled; or the natural mother or 
natural father of the child; or the step-parent of the child by a 
marriage, contracted before the child attained age 16, to the natural or 
adopting parent on whose earnings record the child is entitled. (Note: 
Based on this definition, a child may have more than one living other 
parent. However, the child's benefit will be payable for a month if in 
that month he or she has one other parent who had resided in the U.S. 
for at least 5 years.)
    Resided in the United States for satisfying the residency 
requirement means presence in the United States with the intention of 
establishing at least a temporary home. A period of residence begins 
upon arrival in the United States with that intention and continues so 
long as an attachment to an abode in the United States is maintained, 
accompanied by actual physical presence in the United States for a 
significant part of the period, and ending the day of departure from the 
United States with the intention to reside

[[Page 189]]

elsewhere. The period need not have been continuous and the requirement 
is satisfied if the periods of U.S. residence added together give a 
total of 5 full years.
    (7) The provisions described in paragraph (d) of this section shall 
not apply if the beneficiary is a citizen or resident of a country with 
which the United States has a totalization agreement in force, except to 
the extent provided by that agreement.

[32 FR 19159, Dec. 20, 1967, as amended at 34 FR 13366, Aug. 19, 1969; 
52 FR 8249, Mar. 17, 1987; 52 FR 26145, July 13, 1987; 60 FR 17445, Apr. 
6, 1995; 62 FR 38450, July 18, 1997; 69 FR 51555, Aug. 20, 2004; 74 FR 
48856, Sept. 25, 2009]



Sec. 404.461  Nonpayment of lump sum after death of alien outside 
United States for more than 6 months.

    Where an individual dies outside the United States after January 
1957 and no monthly benefit was or could have been paid to him for the 
month preceding the month in which he died because of the provisions 
described in Sec. 404.460, no lump-sum death payment may be made upon 
the basis of the individual's earnings record.



Sec. 404.462  Nonpayment of hospital and medical insurance benefits
of alien outside United States for more than 6 months.

    No payments may be made under part A (hospital insurance benefits) 
of title XVIII for items or services furnished to an individual in any 
month for which the prohibition described in Sec. 404.460 against 
payment of benefits to an individual outside the United States for more 
than six full consecutive calendar months is applicable (or would be if 
he were entitled to any such benefits). Also, no payments may be made 
under part B (supplementary medical insurance benefits) of title XVIII 
for expenses incurred by an individual during any month the individual 
is not paid a monthly benefit by reason of the provisions described in 
Sec. 404.460 or for which no monthly benefit would be paid if he were 
otherwise entitled thereto.



Sec. 404.463  Nonpayment of benefits of aliens outside the 
United States; ``foreign social insurance system,'' and ``treaty
obligation'' exceptions defined.

    (a) Foreign social insurance system exception. The following 
criteria are used to evaluate the social insurance or pension system of 
a foreign country to determine whether the exception described in 
Sec. 404.460(b) to the alien nonpayment provisions applies:
    (1) Social insurance or pension system. A social insurance system 
means a governmental plan which pays benefits as an earned right, on the 
basis either of contributions or work in employment covered under the 
plan, without regard to the financial need of the beneficiary. However, 
a plan of this type may still be regarded as a social insurance system 
though it may provide, in a subordinate fashion, for a supplemental 
payment based on need. A pension system means a governmental plan which 
pays benefits based on residence or age, or a private employer's plan 
for which the government has set up uniform standards for coverage, 
contributions, eligibility, and benefit amounts provided that, in both 
of these types of plans, the financial need of the beneficiary is not a 
consideration.
    (2) In effect. The social insurance or pension system of the foreign 
country must be in effect. This means that the foreign social insurance 
or pension system is in full operation with regard to taxes (or 
contributions) and benefits, or is in operation with regard to taxes (or 
contributions), and provision is made for payments to begin immediately 
upon the expiration of the period provided in the law for acquiring 
earliest eligibility. It is not in effect if the law leaves the 
beginning of operation to executive or other administrative action; nor 
is it in effect if the law has been temporarily suspended.
    (3) General application. The term of general application means that 
the social insurance or pension system (or combination of systems) 
covers a substantial portion of the paid labor force in industry and 
commerce, taking into consideration the industrial classification and 
size of the paid labor force and the population of the country, as well

[[Page 190]]

as occupational, size of employer, and geographical limitations on 
coverage.
    (4) Periodic benefit or actuarial equivalent. The term periodic 
benefit means a benefit payable at stated regular intervals of time such 
as weekly, biweekly, or monthly. Actuarial equivalent of a periodic 
benefit means the commutation of the value of the periodic benefit into 
a lump-sum payment, taking life expectancy and interest into account.
    (5) Benefits payable on account of old age, retirement, or death. 
The requirement that benefits be payable on account of old age, 
retirement, or death, is satisfied if the foreign social insurance plan 
or system includes provision for payment of benefits to aged or retired 
persons and to dependents and survivors of covered workers. The 
requirement is also met where the system pays benefits based only on old 
age or retirement. The requirement is not met where the only benefits 
payable are workmen's compensation payments, cash sickness payments, 
unemployment compensation payments, or maternity insurance benefits.
    (6) System under which U.S. citizens who qualify may receive payment 
while outside the foreign country. The foreign social insurance or 
pension system must permit payments to qualified U.S. citizens while 
outside such foreign country, regardless of the duration of their 
absence therefrom and must make the payments without restriction or 
qualification to these U.S. citizens at full rate, or at the full 
actuarial value. The foreign system is considered to pay benefits at the 
full rate if the U.S. citizen receives the full benefit rate in effect 
for qualified beneficiaries at the time of his award, whether he is then 
inside or outside the paying country; and he continues to receive the 
same benefit amount so long as he remains outside that country, even 
though he may not receive any increases going into effect after his 
award provided that in those other countries in which such increases are 
denied to beneficiaries, they are denied to all beneficiaries including 
nationals of the paying country.
    (7) List of countries which meet the social insurance or pension 
system exception in section 202(t)(2) of the act. The following 
countries have been found to have in effect a social insurance or 
pension system which meets the requirements of section 202(t)(2) of the 
Act. Unless otherwise specified, each country meets such requirements 
effective January 1957. The effect of these findings is that 
beneficiaries who are citizens of such countries and not citizens of the 
United States may be paid benefits regardless of the duration of their 
absence from the United States unless for months beginning after June 
1968 they are residing in a country to which payments to individuals are 
being withheld by the Treasury Department pursuant to the first section 
of the Act of October 9, 1940 (31 U.S.C. 123). Further additions to or 
deletions from the list of countries will be published in the Federal 
Register.

Antigua and Barbuda (effective November 1981)
Argentina (effective July 1968)
Austria (except from January 1958 through June 1961)
Bahamas, Commonwealth of the (effective October 1974)
Barbados (effective July 1968)
Belgium (effective July 1968)
Belize (effective September 1981)
Bolivia
Brazil
Burkina Faso, Republic of (formerly Upper Volta)
Canada (effective January 1966)
Chile
Colombia (effective January 1967)
Costa Rica (effective May 1962)
Cyprus (effective October 1964)
Czechoslovakia (effective July 1968)
Denmark (effective April 1964)
Dominica (effective November 1978)
Dominican Republic (effective November 1984)
Ecuador
El Salvador (effective January 1969)
Finland (effective May 1968)
France (effective June 1968)
Gabon (effective June 1964)
Grenada (effective April 1983)
Guatemala (effective October 1978)
Guyana (effective September 1969)
Iceland (effective December 1980)
Ivory Coast
Jamaica (effective July 1968)
Liechtenstein (effective July 1968)
Luxembourg
Malta (effective September 1964)
Mexico (effective March 1968)
Monaco
Netherlands (effective July 1968)
Nicaragua (effective May 1986)
Norway (effective June 1968)
Panama

[[Page 191]]

Peru (effective February 1969)
Philippines (effective June 1960)
Poland (effective March 1957)
Portugal (effective May 1968)
San Marino (effective January 1965)
Spain (effective May 1966)
St. Christopher and Nevis (effective September 1983)
St. Lucia (effective August 1984)
Sweden (effective July 1966)
Switzerland (effective July 1968)
Trinidad and Tobago (effective July 1975)
Trust Territory of the Pacific Islands (Micronesia) (effective July 
1976)
Turkey
United Kingdom
Western Samoa (effective August 1972)
Yugoslavia
Zaire (effective July 1961) (formerly Congo (Kinshasa))

    (b) The ``treaty obligation'' exception. It is determined that the 
Treaties of Friendship, Commerce, and Navigation now in force between 
the United States and the Federal Republic of Germany, Greece, the 
Republic of Ireland, Israel, Italy, and Japan, respectively, create 
treaty obligations precluding the application of Sec. 404.460(a) to 
citizens of such countries; and that the Treaty of Friendship, Commerce, 
and Navigation now in force between the United States and the Kingdom of 
the Netherlands creates treaty obligations precluding the application of 
Sec. 404.460(a) to citizens of that country with respect to monthly 
survivors benefits only. There is no treaty obligation that would 
preclude the application of Sec. 404.460(a) to citizens of any country 
other than those listed above.

[32 FR 19159, Dec. 20, 1967, as amended at 43 FR 2628, Jan. 18, 1978; 52 
FR 8249, Mar. 17, 1987]



Sec. 404.464  How does deportation or removal from the United States
affect the receipt of benefits?

    (a) Old-age or disability insurance benefits. (1) You cannot receive 
an old-age or disability benefit for any month that occurs after the 
month we receive notice from the Secretary of Homeland Security or the 
Attorney General of the United States that you were:
    (i) Deported under the provisions of section 241(a) of the 
Immigration and Nationality Act (INA) that were in effect before April 
1, 1997, unless your deportation was under:
    (A) Paragraph (1)(C) of that section; or
    (B) Paragraph (1)(E) of that section and we received notice of your 
deportation under this paragraph before March 3, 2004;
    (ii) Removed as deportable under the provisions of section 237(a) of 
the INA as in effect beginning April 1, 1997, unless your removal was 
under:
    (A) Paragraph (1)(C) of that section; or
    (B) Paragraph (1)(E) of that section and we received notice of your 
removal under this paragraph before March 3, 2004; or
    (iii) Removed as inadmissible under the provisions of section 
212(a)(6)(A) of the INA as in effect beginning April 1, 1997.
    (2) Benefits that cannot be paid to you because of your deportation 
or removal under paragraph (a)(1) of this section may again be payable 
for any month subsequent to your deportation or removal that you are 
lawfully admitted to the United States for permanent residence. You are 
considered lawfully admitted for permanent residence as of the month you 
enter the United States with permission to reside here permanently.
    (b) Dependents or survivors benefits. If an insured person on whose 
record you are entitled cannot be paid (or could not have been paid 
while still alive) an old-age or disability benefit for a month(s) 
because of his or her deportation or removal under paragraph (a)(1) of 
this section, you cannot be paid a dependent or survivor benefit on the 
insured person's record for that month(s) unless:
    (1) You are a U.S citizen; or
    (2) You were present in the United States for the entire month. 
(This means you were not absent from the United States for any period 
during the month, no matter how short.)
    (c) Lump sum death payment. A lump sum death payment cannot be paid 
on the record of a person who died:
    (1) In or after the month we receive from the Secretary of Homeland 
Security or the Attorney General of the United States notice of his or 
her deportation or removal under the provisions of the INA specified in 
paragraph

[[Page 192]]

(a)(1) of this section (excluding the exceptions under paragraphs 
(a)(1)(i)(A) and (B) and (ii)(A) and (B) of this section); and
    (2) Before the month in which the deceased person was thereafter 
lawfully admitted to the United States for permanent residence.

[70 FR 16411, Mar. 31, 2005]



Sec. 404.465  Conviction for subversive activities; effect on monthly
benefits and entitlement to hospital insurance benefits.

    (a) Effect of conviction. Where an individual is convicted of any 
offense (committed after August 1, 1956) under chapter 37 (relating to 
espionage and censorship), chapter 105 (relating to sabotage), or 
chapter 115 (relating to treason, sedition, and subversive activities) 
of title 18 U.S.C., or under section 4, 112, or 113 of the Internal 
Security Act of 1950, as amended, the court, in addition to all other 
penalties provided by law, may order that, in determining whether any 
monthly benefit is payable to the individual for the month in which he 
is convicted or for any month thereafter, and in determining whether the 
individual is entitled to hospital insurance benefits under part A of 
title XVIII for any such month, and in determining the amount of the 
benefit for that month, the following are not to be taken into account:
    (1) Any wages paid to such individual, or to any other individual, 
in the calendar quarter in which such conviction occurred or in any 
prior calendar quarter, and
    (2) Any net earnings from self-employment derived by the individual, 
or any other individual, during the taxable year in which the conviction 
occurred or during any prior taxable year.
    (b) Recalculation of benefit. When notified by the Attorney General 
that the additional penalty as described in paragraph (a) of this 
section has been imposed against any individual entitled to benefits 
under section 202 or section 223 of the Act (see subpart D), the 
Administration, for the purposes of determining the individual's 
entitlement to such benefits as of the month in which convicted and the 
amount of the benefit, will exclude the applicable wages and net 
earnings in accordance with the order of the court.
    (c) Effect of pardon. In the event that an individual, with respect 
to whom the additional penalty as described in paragraph (a) of this 
section has been imposed, is granted a pardon of the offense by the 
President of the United States, such penalty is not applied in 
determining such individual's entitlement to benefits, and the amount of 
such benefit, for any month beginning after the date on which the pardon 
is granted.



Sec. 404.466  Conviction for subversive activities; effect on
enrollment for supplementary medical insurance benefits.

    An individual may not enroll under part B (supplementary medical 
insurance benefits) of title XVIII if he has been convicted of any 
offense described in Sec. 404.465.



Sec. 404.467  Nonpayment of benefits; individual entitled to disability
insurance benefits or childhood disability benefits based on statutory
blindness is engaging in substantial gainful activity.

    (a) Disability insurance benefits. An individual who has attained 
age 55 and who meets the definition of disability for disability 
insurance benefits purposes based on statutory blindness, as defined in 
Sec. 404.1581, may be entitled to disability insurance benefits for 
months in which he is engaged in certain types of substantial gainful 
activity. No payment, however, may be made to the individual or to 
beneficiaries entitled to benefits on his earnings record for any month 
in which such individual engages in any type of substantial gainful 
activity.
    (b) Childhood disability benefits. An individual who has attained 
age 55 and who meets the definition of disability prescribed in 
Sec. 404.1583 for childhood disability benefits on the basis of 
statutory blindness may be entitled to childhood disability benefits for 
months in which he engages in certain types of substantial gainful 
activity. However, no payment may be made to such individual for any 
month after

[[Page 193]]

December 1972 in which such individual engages in substantial gainful 
activity.

[39 FR 43715, Dec. 18, 1974, as amended at 51 FR 10616, Mar. 28, 1986]



Sec. 404.468  Nonpayment of benefits to prisoners.

    (a) General. No monthly benefits will be paid to any individual for 
any month any part of which the individual is confined in a jail, 
prison, or other penal institution or correctional facility for 
conviction of a felony. This rule applies to disability benefits 
(Sec. 404.315) and child's benefits based on disability (Sec. 404.350) 
effective with benefits payable for months beginning on or after October 
1, 1980. For all other monthly benefits, this rule is effective with 
benefits payable for months beginning on or after May 1, 1983. However, 
it applies only to the prisoner; benefit payments to any other person 
who is entitled on the basis of the prisoner's wages and self-employment 
income are payable as though the prisoner were receiving benefits.
    (b) Felonious offenses. An offense will be considered a felony if--
    (1) It is a felony under applicable law: or
    (2) In a jurisdiction which does not classify any crime as a felony, 
it is an offense punishable by death or imprisonment for a term 
exceeding one year.
    (c) Confinement. In general, a jail, prison, or other penal 
institution or correctional facility is a facility which is under the 
control and jurisdiction of the agency in charge of the penal system or 
in which convicted criminals can be incarcerated. Confinement in such a 
facility continues as long as the individual is under a sentence of 
confinement and has not been released due to parole or pardon. An 
individual is considered confined even though he or she is temporarily 
or intermittently outside of that facility (e.g., on work release, 
attending school, or hospitalized).
    (d) Vocational rehabilitation exception. The nonpayment provision of 
paragraph (a) of this section does not apply if a prisoner who is 
entitled to benefits on the basis of disability is actively and 
satisfactorily participating in a rehabilitation program which has been 
specifically approved for the individual by court of law. In addition, 
the Commissioner must determine that the program is expected to result 
in the individual being able to do substantial gainful activity upon 
release and within a reasonable time. No benefits will be paid to the 
prisoner for any month prior to the approval of the program.

[49 FR 48182, Dec. 11, 1984, as amended at 62 FR 38450, July 18, 1997]



Sec. 404.469  Nonpayment of benefits where individual has not
furnished or applied for a Social Security number.

    No monthly benefits will be paid to an entitled individual unless he 
or she either furnishes to the Social Security Administration (SSA) 
satisfactory proof of his or her Social Security number, or, if the 
individual has not been assigned a number, he or she makes a proper 
application for a number (see Sec. 422.103). An individual submits 
satisfactory proof of his or her Social Security number by furnishing to 
SSA the number and sufficient additional information that can be used to 
determine whether that Social Security number or another number has been 
assigned to the individual. Sufficient additional information may 
include the entitled individual's date and place of birth, mother's 
maiden name, and father's name. If the individual does not know his or 
her Social Security number, SSA will use this additional information to 
determine the Social Security number, if any, that it assigned to the 
individual. This rule applies to individuals who become entitled to 
benefits beginning on or after June 1, 1989.

[56 FR 41789, Aug. 23, 1991]



Sec. 404.470  Nonpayment of disability benefits due to noncompliance
with rules regarding treatment for drug addiction or alcoholism.

    (a) Suspension of monthly benefits. (1) For an individual entitled 
to benefits based on a disability (Sec. 404.1505) and for whom drug 
addiction or alcoholism is a contributing factor material to the 
determination of disability (as described in Sec. 404.1535), monthly 
benefits will be suspended beginning with the first month after we 
notify the individual in

[[Page 194]]

writing that he or she has been determined not to be in compliance with 
the treatment requirements for such individuals (Sec. 404.1536).
    (2) This rule applies to all individuals entitled to disability 
benefits (Sec. 404.315), widow(er)'s benefits (Sec. 404.335), and 
child's benefits based on a disability (Sec. 404.350) effective with 
benefits paid in months beginning on or after March 1, 1995.
    (3) Benefit payments to any other person who is entitled on the 
basis of a disabled wage earner's entitlement to disability benefits are 
payable as though the disabled wage earner were receiving benefits.
    (b) Resumption of monthly benefits. The payment of benefits may be 
resumed only after an individual demonstrates and maintains compliance 
with appropriate treatment requirements for:
    (1) 2 consecutive months for the first determination of 
noncompliance;
    (2) 3 consecutive months for the second determination of 
noncompliance; and
    (3) 6 consecutive months for the third and all subsequent 
determinations of noncompliance.
    (c) Termination of benefits. (1) A suspension of benefit payments 
due to noncompliance with the treatment requirements for 12 consecutive 
months will result in termination of benefits effective with the first 
month following the 12th month of suspension of benefits.
    (2) Benefit payments to any other person who is entitled on the 
basis of a disabled wage earner's entitlement to disability benefits are 
payable as though the disabled wage earner were receiving benefits.

[60 FR 8146, Feb. 10, 1995]



Sec. 404.471  Nonpayment of disability benefits for trial work period
service months upon a conviction of fraudulently concealing work 
activity.

    (a) Nonpayment of benefits during the trial work period. Beginning 
with work activity performed in March 2004 and thereafter, if you are 
convicted by a Federal court of fraudulently concealing your work 
activity and the concealment of the work activity occurred while you 
were in a trial work period, monthly disability benefits under title II 
of the Social Security Act are not payable for months in which you 
performed services during that trial work period prior to the conviction 
(see Sec. 404.1592 for a definition of a trial work period and 
services). Benefits already received for months of work activity in the 
trial work period prior to the conviction and in the same period of 
disability during which the fraudulently concealed work activity 
occurred, will be considered an overpayment on the record.
    (b) Concealment of work activity. You can be found to be 
fraudulently concealing work activity if--
    (1) You provide false information to us concerning the amount of 
earnings you received or are receiving for a particular period;
    (2) You received or are receiving disability benefits while engaging 
in work activity under another identity (this would include working 
under another social security number or a forged social security 
number); or
    (3) You take other actions to conceal work activity with the intent 
of fraudulently obtaining benefits in excess of amounts that are due.

[71 FR 66866, Nov. 17, 2006]



Sec. 404.480  Paying benefits in installments: Drug addiction
or alcoholism.

    (a) General. For disabled beneficiaries who receive benefit payments 
through a representative payee because drug addiction or alcoholism is a 
contributing factor material to the determination of disability (as 
described in Sec. 404.1535), certain amounts due the beneficiary for a 
past period will be paid in installments. The amounts subject to payment 
in installments include:
    (1) Benefits due but unpaid which accrued prior to the month payment 
was effectuated;
    (2) Benefits due but unpaid which accrued during a period of 
suspension for which the beneficiary was subsequently determined to have 
been eligible; and
    (3) Any adjustment to benefits which results in an accrual of unpaid 
benefits.
    (b) Installment formula. Except as provided in paragraph (c) of this 
section,

[[Page 195]]

the amount of the installment payment in any month is limited so that 
the sum of (1) the amount due for a past period (and payable under 
paragraph (a) of this section) paid in such month and (2) the amount of 
any benefit due for the preceding month under such entitlement which is 
payable in such month, does not exceed two times the amount of the 
beneficiary's benefit payment for the preceding month. In counting the 
amount of the beneficiary's benefit payment for the previous month, no 
reductions or deductions under this title are taken into account.
    (c) Exception to installment limitation. An exception to the 
installment payment limitation in paragraph (b) of this section can be 
granted for the first month in which a beneficiary accrues benefit 
amounts subject to payment in installments if the beneficiary has unpaid 
housing expenses which result in a high risk of homelessness for the 
beneficiary. In that case, the benefit payment may be increased by the 
amount of the unpaid housing expenses so long as that increase does not 
exceed the amount of benefits which accrued during the most recent 
period of nonpayment. We consider a person to be at risk of homelessness 
if continued nonpayment of the outstanding housing expenses is likely to 
result in the person losing his or her place to live or if past 
nonpayment of housing expenses has resulted in the person having no 
appropriate personal place to live. In determining whether this 
exception applies, we will ask for evidence of outstanding housing 
expenses that shows that the person is likely to lose or has already 
lost his or her place to live. For purposes of this section, 
homelessness is the state of not being under the control of any public 
institution and having no appropriate personal place to live. Housing 
expenses include charges for all items required to maintain shelter (for 
example, mortgage payments, rent, heating fuel, and electricity).
    (d) Payment through a representative payee. If the beneficiary does 
not have a representative payee, payment of amounts subject to 
installments cannot be made until a representative payee is selected.
    (e) Underpaid beneficiary no longer entitled. In the case of a 
beneficiary who is no longer currently entitled to monthly payments, but 
to whom amounts defined in paragraph (a) of this section are still 
owing, we will treat such beneficiary's monthly benefit for the last 
month of entitlement as the beneficiary's benefit for the preceding 
month and continue to make installment payments of such benefits through 
a representative payee.
    (f) Beneficiary currently not receiving Social Security benefits 
because of suspension for noncompliance with treatment. If a beneficiary 
is currently not receiving benefits because his or her benefits have 
been suspended for noncompliance with treatment (as defined in 
Sec. 404.1536), the payment of amounts under paragraph (a) of this 
section will stop until the beneficiary has demonstrated compliance with 
treatment as described in Sec. 404.470 and will again commence with the 
first month the beneficiary begins to receive benefit payments.
    (g) Underpaid beneficiary deceased. Upon the death of a beneficiary, 
any remaining unpaid amounts as defined in paragraph (a) of this section 
will be treated as underpayments in accordance with Sec. 404.503(b).

[60 FR 8146, Feb. 10, 1995]



Subpart F_Overpayments, Underpayments, Waiver of Adjustment or Recovery 
         of Overpayments, and Liability of a Certifying Officer

    Authority: Secs. 204, 205(a), 702(a)(5), and 1147 of the Social 
Security Act (42 U.S.C. 404, 405(a), 902(a)(5), and 1320b-17); 31 U.S.C. 
3711; 31 U.S.C. 3716; 31 U.S.C. 3720A.



Sec. 404.501  General applicability of section 204 of the Act.

    (a) In general. Section 204 of the Act provides for adjustment as 
set forth in Secs. 404.502 and 404.503, in cases where an individual has 
received more or less than the correct payment due under title II of the 
Act. As used in this subpart, the term overpayment includes a payment in 
excess of the amount due

[[Page 196]]

under title II of the Act, a payment resulting from the failure to 
impose deductions or to suspend or reduce benefits under sections 203, 
222(b), 224, and 228(c), and (d), and (e) of the Act (see subpart E of 
this part), a payment pursuant to section 205(n) of the Act in an amount 
in excess of the amount to which the individual is entitled under 
section 202 or 223 of the Act, a payment resulting from the failure to 
terminate benefits, and a payment where no amount is payable under title 
II of the Act. The term underpayment as used in this subpart refers only 
to monthly insurance benefits and includes nonpayment where some amount 
of such benefits was payable. An underpayment may be in the form of an 
accrued unpaid benefit amount for which no check has been drawn or in 
the form of an unnegotiated check payable to a deceased individual. The 
provisions for adjustment also apply in cases where through error:
    (1) A reduction required under section 202(j)(1), 202(k)(3), 203(a), 
or 205(n) of the Act is not made, or
    (2) An increase or decrease required under section 202(d)(2), or 215 
(f) or (g) of the Act is not made, or
    (3) A deduction required under section 203(b) (as may be modified by 
the provisions of section 203(h)), 203(c), 203(d), 203(i), 222(b), or 
223(a)(1)(D) of the Act or section 907 of the Social Security Amendments 
of 1939 is not made, or
    (4) A suspension required under section 202(n) or 202(t) of the Act 
is not made, or
    (5) A reduction under section 202(q) of the Act is not made, or
    (6) A reduction, increase, deduction, or suspension is made which is 
either more or less than required, or
    (7) A payment in excess of the amount due under title XVIII of the 
Act was made to or on behalf of an individual (see 42 CFR 405.350 
through 405.351) entitled to benefits under title II of the Act, or
    (8) A payment of past due benefits is made to an individual and such 
payment had not been reduced by the amount of attorney's fees payable 
directly to an attorney under section 206 of the Act (see Sec. 404.977).
    (9) A reduction under Sec. 404.408b is made which is either more or 
less than required.
    (b) Payments made on the basis of an erroneous report of death. Any 
monthly benefit or lump sum paid under title II of the Act on the basis 
of an erroneous report by the Department of Defense of the death of an 
individual in the line of duty while such individual was a member of the 
uniformed services (as defined in section 210(m) of the Act) on active 
duty (as defined in section 210(l) of the Act) is deemed a correct 
payment for any month prior to the month such Department notifies the 
Administration that such individual is alive.
    (c) Payments made by direct deposit to a financial institution. When 
a payment in excess of the amount due under title II of the Act is made 
by direct deposit to a financial institution to or on behalf of an 
individual who has died, and the financial institution credits the 
payment to a joint account of the deceased individual and another person 
who was entitled to a monthly benefit on the basis of the same earnings 
record as the deceased individual for the month before the month in 
which the deceased individual died, the amount of the payment in excess 
of the correct amount will be an overpayment to the other person.

[34 FR 14887, Sept. 27, 1969, as amended at 44 FR 34942, June 18, 1979; 
47 FR 4988, Feb. 3, 1982; 48 FR 46149, Oct. 11, 1983; 55 FR 7313, Mar. 
1, 1990]



Sec. 404.502  Overpayments.

    Upon determination that an overpayment has been made, adjustments 
will be made against monthly benefits and lump sums as follows:
    (a) Individual overpaid is living. (1) If the individual to whom an 
overpayment was made is at the time of a determination of such 
overpayment entitled to a monthly benefit or a lump sum under title II 
of the Act, or at any time thereafter becomes so entitled, no benefit 
for any month and no lump sum is payable to such individual, except as 
provided in paragraphs (c) and (d) of this section, until an amount 
equal to the amount of the overpayment has been withheld or refunded. 
Such adjustments will be made against any monthly benefit or lump sum 
under

[[Page 197]]

title II of the Act to which such individual is entitled whether payable 
on the basis of such individual's earnings or the earnings of another 
individual.
    (2) If any other individual is entitled to benefits for any month on 
the basis of the same earnings as the overpaid individual, except as 
adjustment is to be effected pursuant to paragraphs (c) and (d) of this 
section by withholding a part of the monthly benefit of either the 
overpaid individual or any other individual entitled to benefits on the 
basis of the same earnings, no benefit for any month will be paid on 
such earnings to such other individual until an amount equal to the 
amount of the overpayment has been withheld or refunded.
    (3) If a representative payee receives a payment on behalf of a 
beneficiary after that beneficiary dies, the representative payee or his 
estate is solely liable for repaying the overpayment. If the 
representative payee is entitled to a monthly benefit or a lump sum 
under title II of the Act at the time we determine that an overpayment 
exists or at any time thereafter, except as provided in paragraphs (c) 
and (d) of this section, we will not pay the monthly benefits or the 
lump sum to the representative payee until the amount of the overpayment 
has been repaid. We will make such adjustments against any monthly 
benefit or lump sum under title II of the Act to which the 
representative payee is entitled whether payable on the basis of such 
representative payee's earnings or the earnings of another individual.
    (b) Individual overpaid dies before adjustment. If an overpaid 
individual dies before adjustment is completed under the provisions of 
paragraph (a) of this section, no lump sum and no subsequent monthly 
benefit will be paid on the basis of earnings which were the basis of 
the overpayment to such deceased individual until full recovery of the 
overpayment has been effected, except as provided in paragraphs (c) and 
(d) of this section or under Sec. 404.515. Such recovery may be effected 
through:
    (1) Payment by the estate of the deceased overpaid individual,
    (2) Withholding of amounts due the estate of such individual under 
title II of the Act,
    (3) Withholding a lump sum or monthly benefits due any other 
individual on the basis of the same earnings which were the basis of the 
overpayment to the deceased overpaid individual, or
    (4) Any combination of the amount above.
    (5) The methods in paragraphs (b)(1) and (b)(2) of this section for 
overpayments owed by a representative payee for payments made after the 
beneficiary's death. We will not recover such overpayments from any 
person other than the individual who was representative payee or his 
estate, but we may recover these overpayments from such other person 
under Sec. 404.503(b).
    (c) Adjustment by withholding part of a monthly benefit. (1) Where 
it is determined that withholding the full amount each month would 
defeat the purpose of title II, i.e., deprive the person of income 
required for ordinary and necessary living expenses (see Sec. 404.508), 
adjustment under paragraphs (a) and (b) of this section may be effected 
by withholding an amount of not less than $10 of the monthly benefit 
payable to an individual.
    (2) Adjustment as provided by this paragraph will not be available 
if the overpayment was caused by the individual's intentional false 
statement or representation, or willful concealment of, or deliberate 
failure to furnish, material information. In such cases, recovery of the 
overpayment will be accomplished as provided in paragraph (a) of this 
section.
    (d) Individual overpaid enrolled under supplementary insurance plan. 
Notwithstanding the provisions of paragraphs (a), (b), and (c) of this 
section, if the individual liable for the overpayment is an enrollee 
under part B of title XVIII of the Act and the overpayment was not 
caused by such individual's intentional false statement or 
representation, or willful concealment of, or deliberate failure to 
furnish, material information, an amount of such individual's monthly 
benefit which is equal to

[[Page 198]]

his obligation for supplementary medical insurance premiums will be 
applied toward payment of such premiums, and the balance of the monthly 
benefit will be applied toward recovery of the overpayment. Further 
adjustment with respect to such balance may be made if the enrollee so 
requests and meets the conditions of paragraph (c) of this section.

[35 FR 5943, Apr. 10, 1970, as amended at 44 FR 20653, Apr. 6, 1979; 73 
FR 65542, Nov. 4, 2008]



Sec. 404.502a  Notice of right to waiver consideration.

    Whenever an initial determination is made that more than the correct 
amount of payment has been made, and we seek adjustment or recovery of 
the overpayment, the individual from whom we are seeking adjustment or 
recovery is immediately notified. The notice includes:
    (a) The overpayment amount and how and when it occurred;
    (b) A request for full, immediate refund, unless the overpayment can 
be withheld from the next month's benefit;
    (c) The proposed adjustment of benefits if refund is not received 
within 30 days after the date of the notice and adjustment of benefits 
is available;
    (d) An explanation of the availability of a different rate of 
withholding when full withholding is proposed, installment payments when 
refund is requested and adjustment is not currently available, and/or 
cross-program recovery when refund is requested and the individual is 
receiving another type of payment from SSA (language about cross-program 
recovery is not included in notices sent to individuals in jurisdictions 
where this recovery option is not available);
    (e) An explanation of the right to request waiver of adjustment or 
recovery and the automatic scheduling of a file review and pre-
recoupment hearing (commonly referred to as a personal conference) if a 
request for waiver cannot be approved after initial paper review;
    (f) An explanation of the right to request reconsideration of the 
fact and/or amount of the overpayment determination;
    (g) Instructions about the availability of forms for requesting 
reconsideration and waiver;
    (h) An explanation that if the individual does not request waiver or 
reconsideration within 30 days of the date of the overpayment notice, 
adjustment or recovery of the overpayment will begin;
    (i) A statement that an SSA office will help the individual complete 
and submit forms for appeal or waiver requests; and
    (j) A statement that the individual receiving the notice should 
notify SSA promptly if reconsideration, waiver, a lesser rate of 
withholding, repayment by installments or cross-program adjustment is 
wanted.

[61 FR 56131, Oct. 31, 1996]



Sec. 404.503  Underpayments.

    Underpayments will be adjusted as follows:
    (a) Individual underpaid is living. If an individual to whom an 
underpayment is due is living, the amount of such underpayment will be 
paid to such individual either in a single payment (if he is not 
entitled to a monthly benefit or a lump-sum death payment) or by 
increasing one or more monthly benefits or a lump-sum death payment to 
which such individual is or becomes entitled. However, if we determine 
that the individual to whom an underpayment is due also received an 
overpayment as defined in Sec. 404.501(a) for a different period, we 
will apply any underpayment due the individual to reduce that 
overpayment, unless we have waived recovery of the overpayment under the 
provisions of Secs. 404.506 through 404.512.
    (b) Individual dies before adjustment of underpayment. If an 
individual who has been underpaid dies before receiving payment or 
negotiating a check or checks representing such payment, we first apply 
any amounts due the deceased individual against any overpayments as 
defined in Sec. 404.501(a) owed by the deceased individual, unless we 
have waived recovery of such overpayment under the provisions of 
Secs. 404.506 through 404.512. We then will distribute any remaining 
underpayment to the living person (or persons) in the highest order of 
priority as follows:

[[Page 199]]

    (1) The deceased individual's surviving spouse as defined in section 
216(c), (g), or (h) of the Act who was either:
    (i) Living in the same household (as defined in Sec. 404.347) with 
the deceased individual at the time of such individual's death, or
    (ii) Entitled to a monthly benefit on the basis of the same earnings 
record as was the deceased individual for the month in which such 
individual died.
    (2) The child or children of the deceased individual (as defined in 
section 216 (e) or (h) of the Act) entitled to a monthly benefit on the 
basis of the same earnings record as was the deceased individual for the 
month in which such individual died (if more than one such child, in 
equal shares to each such child).
    (3) The parent or parents of the deceased individual, entitled to a 
monthly benefit on the basis of the same earnings record as was the 
deceased individual for the month in which such individual died (if more 
than one such parent, in equal shares to each such parent). For this 
purpose, the definition of ``parent'' in Sec. 404.374 includes the 
parent(s) of any deceased individual who was entitled to benefits under 
title II of the Act.
    (4) The surviving spouse of the deceased individual (as defined in 
section 216(c), (g), or (h) of the Act) who does not qualify under 
paragraph (b)(1) of this section.
    (5) The child or children of the deceased individual (as defined in 
section 216 (e) or (h) of the Act) who do not qualify under paragraph 
(b)(2) of this section (if more than one such child, in equal shares to 
each such child).
    (6) The parent or parents of the deceased individual, who do not 
qualify under paragraph (b)(3) of this section (if more than one such 
parent, in equal shares to each such parent). For this purpose, the 
definition of ``parent'' in Sec. 404.374 includes the parent(s) of any 
deceased individual who was entitled to benefits under title II of the 
Act.
    (7) The legal representative of the estate of the deceased 
individual as defined in paragraph (d) of this section.
    (c) In the event that a person who is otherwise qualified to receive 
an underpayment under the provisions of paragraph (b) of this section, 
dies before receiving payment or before negotiating the check or checks 
representing such payment, his share of the underpayment will be divided 
among the remaining living person(s) in the same order of priority. In 
the event that there is (are) no other such person(s), the underpayment 
will be paid to the living person(s) in the next lower order of priority 
under paragraph (b) of this section.
    (d) Definition of legal representative. The term legal 
representative, for the purpose of qualifying to receive an 
underpayment, generally means the administrator or executor of the 
estate of the deceased individual. However, it may also include an 
individual, institution or organization acting on behalf of an 
unadministered estate, provided that such person can give the 
Administration good acquittance (as defined in paragraph (e) of this 
section). The following persons may qualify as legal representative for 
the purposes of this subpart, provided they can give the Administration 
good acquittance:
    (1) A person who qualifies under a State's small estate statute,
    (2) A person resident in a foreign country who, under the laws and 
customs of that country, has the right to receive assets of the estate,
    (3) A public administrator, or
    (4) A person who has the authority, under applicable law, to collect 
the assets of the estate of the deceased individual.
    (e) Definition of ``good acquittance.'' A person is considered to 
give the Administration good acquittance when payment to that person 
will release the Administration from further liability for such payment.

[34 FR 14487, Sept. 27, 1969, as amended at 35 FR 14129, Sept. 5, 1970; 
55 FR 7313, Mar. 1, 1990; 60 FR 17445, Apr. 6, 1995; 73 FR 65543, Nov. 
4, 2008]



Sec. 404.504  Relation to provisions for reductions and increases.

    The amount of an overpayment or underpayment is the difference 
between the amount paid to the beneficiary and the amount of the payment 
to which the beneficiary was actually entitled. Such payment, for 
example,

[[Page 200]]

would be equal to the difference between the amount of a benefit in fact 
paid to the beneficiary and the amount of such benefit as reduced under 
section 202(j)(1), 202(k)(3), 203(a), or 224(a), or as increased under 
section 202(d)(2), 202(m), or 215 (f) and (g). In effecting an 
adjustment with respect to an overpayment, no amount can be considered 
as having been withheld from a particular benefit which is in excess of 
the amount of such benefit as so decreased.

[34 FR 14888, Sept. 27, 1969]



Sec. 404.505  Relationship to provisions requiring deductions.

    Adjustments required by any of the provisions in this subpart F are 
made in addition to, but after, any deductions required by section 
202(t), 203(b), 203(c), 203(d), and 222(b) of the Act, or section 907 of 
the Social Security Act Amendments of 1939, and before any deductions 
required by section 203(g) or 203(h)(2) of the Act.

[34 FR 14888, Sept. 27, 1969]



Sec. 404.506  When waiver may be applied and how to process the request.

    (a) Section 204(b) of the Act provides that there shall be no 
adjustment or recovery in any case where an overpayment under title II 
has been made to an individual who is without fault if adjustment or 
recovery would either defeat the purpose of title II of the Act, or be 
against equity and good conscience.
    (b) If an individual requests waiver of adjustment or recovery of a 
title II overpayment within 30 days after receiving a notice of 
overpayment that contains the information in Sec. 404.502a, no 
adjustment or recovery action will be taken until after the initial 
waiver determination is made. If the individual requests waiver more 
than 30 days after receiving the notice of overpayment, SSA will stop 
any adjustment or recovery actions until after the initial waiver 
determination is made.
    (c) When waiver is requested, the individual gives SSA information 
to support his/her contention that he/she is without fault in causing 
the overpayment (see Sec. 404.507) and that adjustment or recovery would 
either defeat the purpose of title II of the Act (see Sec. 404.508) or 
be against equity and good conscience (see Sec. 404.509). That 
information, along with supporting documentation, is reviewed to 
determine if waiver can be approved. If waiver cannot be approved after 
this review, the individual is notified in writing and given the dates, 
times and place of the file review and personal conference; the 
procedure for reviewing the claims file prior to the personal 
conference; the procedure for seeking a change in the scheduled dates, 
times, and/or place; and all other information necessary to fully inform 
the individual about the personal conference. The file review is always 
scheduled at least 5 days before the personal conference. We will offer 
to the individual the option of conducting the personal conference face-
to-face at a place we designate, by telephone, or by video 
teleconference. The notice will advise the individual of the date and 
time of the personal conference.
    (d) At the file review, the individual and the individual's 
representative have the right to review the claims file and applicable 
law and regulations with the decisionmaker or another SSA representative 
who is prepared to answer questions. We will provide copies of material 
related to the overpayment and/or waiver from the claims file or 
pertinent sections of the law or regulations that are requested by the 
individual or the individual's representative.
    (e) At the personal conference, the individual is given the 
opportunity to:
    (1) Appear personally, testify, cross-examine any witnesses, and 
make arguments;
    (2) Be represented by an attorney or other representative (see 
Sec. 404.1700), although the individual must be present at the 
conference; and
    (3) Submit documents for consideration by the decisionmaker.
    (f) At the personal conference, the decisionmaker:
    (1) Tells the individual that the decisionmaker was not previously 
involved in the issue under review, that the waiver decision is solely 
the decisionmaker's, and that the waiver decision

[[Page 201]]

is based only on the evidence or information presented or reviewed at 
the conference;
    (2) Ascertains the role and identity of everyone present;
    (3) Indicates whether or not the individual reviewed the claims 
file;
    (4) Explains the provisions of law and regulations applicable to the 
issue;
    (5) Briefly summarizes the evidence already in file which will be 
considered;
    (6) Ascertains from the individual whether the information presented 
is correct and whether he/she fully understands it;
    (7) Allows the individual and the individual's representative, if 
any, to present the individual's case;
    (8) Secures updated financial information and verification, if 
necessary;
    (9) Allows each witness to present information and allows the 
individual and the individual's representative to question each witness;
    (10) Ascertains whether there is any further evidence to be 
presented;
    (11) Reminds the individual of any evidence promised by the 
individual which has not been presented;
    (12) Lets the individual and the individual's representative, if 
any, present any proposed summary or closing statement;
    (13) Explains that a decision will be made and the individual will 
be notified in writing; and
    (14) Explains repayment options and further appeal rights in the 
event the decision is adverse to the individual.
    (g) SSA issues a written decision to the individual (and his/her 
representative, if any) specifying the findings of fact and conclusions 
in support of the decision to approve or deny waiver and advising of the 
individual's right to appeal the decision. If waiver is denied, 
adjustment or recovery of the overpayment begins even if the individual 
appeals.
    (h) If it appears that the waiver cannot be approved, and the 
individual declines a personal conference or fails to appear for a 
second scheduled personal conference, a decision regarding the waiver 
will be made based on the written evidence of record. Reconsideration is 
then the next step in the appeals process (but see Sec. 404.930(a)(7)).

[61 FR 56131, Oct. 31, 1996, as amended at 73 FR 1973, Jan. 11, 2008]



Sec. 404.507  Fault.

    Fault as used in without fault (see Sec. 404.506 and 42 CFR 405.355) 
applies only to the individual. Although the Administration may have 
been at fault in making the overpayment, that fact does not relieve the 
overpaid individual or any other individual from whom the Administration 
seeks to recover the overpayment from liability for repayment if such 
individual is not without fault. In determining whether an individual is 
at fault, the Social Security Administration will consider all pertinent 
circumstances, including the individual's age and intelligence, and any 
physical, mental, educational, or linguistic limitations (including any 
lack of facility with the English language) the individual has. What 
constitutes fault (except for deduction overpayments--see Sec. 404.510) 
on the part of the overpaid individual or on the part of any other 
individual from whom the Administration seeks to recover the overpayment 
depends upon whether the facts show that the incorrect payment to the 
individual or to a provider of services or other person, or an incorrect 
payment made under section 1814(e) of the Act, resulted from:
    (a) An incorrect statement made by the individual which he knew or 
should have known to be incorrect; or
    (b) Failure to furnish information which he knew or should have 
known to be material; or
    (c) With respect to the overpaid individual only, acceptance of a 
payment which he either knew or could have been expected to know was 
incorrect.

[34 FR 14888, Sept. 27, 1969; 34 FR 15646, Oct. 9, 1969, as amended at 
44 FR 34942, June 18, 1979; 59 FR 1634, Jan. 12, 1994]



Sec. 404.508  Defeat the purpose of Title II.

    (a) General. Defeat the purpose of title II, for purposes of this 
subpart, means defeat the purpose of benefits under this title, i.e., to 
deprive a person of income required for ordinary and necessary living 
expenses. This depends upon whether the person has an income

[[Page 202]]

or financial resources sufficient for more than ordinary and necessary 
needs, or is dependent upon all of his current benefits for such needs. 
An individual's ordinary and necessary expenses include:
    (1) Fixed living expenses, such as food and clothing, rent, mortgage 
payments, utilities, maintenance, insurance (e.g., life, accident, and 
health insurance including premiums for supplementary medical insurance 
benefits under title XVIII), taxes, installment payments, etc.;
    (2) Medical, hospitalization, and other similar expenses;
    (3) Expenses for the support of others for whom the individual is 
legally responsible; and
    (4) Other miscellaneous expenses which may reasonably be considered 
as part of the individual's standard of living.
    (b) When adjustment or recovery will defeat the purpose of title II. 
Adjustment or recovery will defeat the purposes of title II in (but is 
not limited to) situations where the person from whom recovery is sought 
needs substantially all of his current income (including social security 
monthly benefits) to meet current ordinary and necessary living 
expenses.

[32 FR 18026, Dec. 16, 1967, as amended at 34 FR 14888, Sept. 27, 1969]



Sec. 404.509  Against equity and good conscience; defined.

    (a) Recovery of an overpayment is against equity and good conscience 
(under title II and title XVIII) if an individual--
    (1) Changed his or her position for the worse (Example 1) or 
relinquished a valuable right (Example 2) because of reliance upon a 
notice that a payment would be made or because of the overpayment 
itself; or
    (2) Was living in a separate household from the overpaid person at 
the time of the overpayment and did not receive the overpayment 
(Examples 3 and 4).
    (b) The individual's financial circumstances are not material to a 
finding of against equity and good conscience.

    Example 1. A widow, having been awarded benefits for herself and 
daughter, entered her daughter in private school because the monthly 
benefits made this possible. After the widow and her daughter received 
payments for almost a year, the deceased worker was found to be not 
insured and all payments to the widow and child were incorrect. The 
widow has no other funds with which to pay the daughter's private school 
expenses. Having entered the daughter in private school and thus 
incurred a financial obligation toward which the benefits had been 
applied, she was in a worse position financially than if she and her 
daughter had never been entitled to benefits. In this situation, the 
recovery of the payments would be against equity and good conscience.
    Example 2. After being awarded old-age insurance benefits, an 
individual resigned from employment on the assumption he would receive 
regular monthly benefit payments. It was discovered 3 years later that 
(due to a Social Security Administration error) his award was erroneous 
because he did not have the required insured status. Due to his age, the 
individual was unable to get his job back and could not get any other 
employment. In this situation, recovery of the overpayments would be 
against equity and good conscience because the individual gave up a 
valuable right.
    Example 3. M divorced K and married L. M died a few years later. 
When K files for benefits as a surviving divorced wife, she learns that 
L had been overpaid $3,200 on M's earnings record. Because K and L are 
both entitled to benefits on M's record of earnings and we could not 
recover the overpayment from L, we sought recovery from K. K was living 
in a separate household from L at the time of the overpayment and did 
not receive the overpayment. K requests waiver of recovery of the $3,200 
overpayment from benefits due her as a surviving divorced wife of M. In 
this situation, it would be against equity and good conscience to 
recover the overpayment from K.
    Example 4. G filed for and was awarded benefits. His daughter, T, 
also filed for student benefits on G's earnings record. Since T was an 
independent, full-time student living in another State, she filed for 
benefits on her own behalf. Later, after T received 12 monthly benefits, 
the school reported that T had been a full-time student only 2 months 
and had withdrawn from school. Since T was overpaid 10 monthly benefits, 
she was requested to return the overpayment to SSA. T did not return the 
overpayment and further attempts to collect the overpayment were 
unsuccessful. G was asked to repay the overpayment because he was 
receiving benefits on the same earnings record. G requested waiver. To 
support his waiver request G established that he was not at fault in 
causing the overpayment because he did not know that T was receiving 
benefits. Since G is

[[Page 203]]

without fault and, in addition, meets the requirements of not living in 
the same household at the time of the overpayment and did not receive 
the overpayment, it would be against equity and good conscience to 
recover the overpayment from G.

[53 FR 25483, July 7, 1988]



Sec. 404.510  When an individual is ``without fault'' in a deduction
overpayment.

    In determining whether an individual is ``without fault'' with 
respect to a deduction overpayment, the Social Security Administration 
will consider all pertinent circumstances, including the individual's 
age and intelligence, and any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) the individual has. Except as provided in Sec. 404.511 or 
elsewhere in this subpart F, situations in which an individual will be 
considered to be ``without fault'' with respect to a deduction 
overpayment include, but are not limited to, those that are described in 
this section. An individual will be considered ``without fault'' in 
accepting a payment which is incorrect because he/she failed to report 
an event specified in sections 203 (b) and (c) of the Act, or an event 
specified in section 203(d) of the Act as in effect for monthly benefits 
for months after December 1960, or because a deduction is required under 
section 203 (b), (c), (d), or section 222(b) of the Act, or payments 
were not withheld as required by section 202(t) or section 228 of the 
Act, if it is shown that such failure to report or acceptance of the 
overpayment was due to one of the following circumstances:
    (a) Reasonable belief that only his net cash earnings (take-home 
pay) are included in determining the annual earnings limitation or the 
monthly earnings limitation under section 203(f) of the Act.
    (b) Reliance upon erroneous information from an official source 
within the Social Security Administration (or other governmental agency 
which the individual had reasonable cause to believe was connected with 
the administration of benefits under title II of the Act) with respect 
to the interpretation of a pertinent provision of the Social Security 
Act or regulations pertaining thereto. For example, this circumstance 
could occur where the individual is misinformed by such source as to the 
interpretation of a provision in the Act or regulations relating to 
deductions, or relating to the effect of residence of an alien outside 
the United States for more than 6 months.
    (c) The beneficiary's death caused the earnings limit applicable to 
his earnings for purposes of deduction and the charging of excess 
earnings to be reduced below $1,680 for a taxable year ending after 
1967.
    (d) [Reserved]
    (e) Reasonable belief that in determining, for deduction purposes, 
his earnings from employment and/or net earnings from self-employment in 
the taxable year in which he became entitled to benefits, earnings in 
such year prior to such entitlement would be excluded. However, this 
provision does not apply if his earnings in the taxable year, beginning 
with the first month of entitlement, exceeded the earnings limitation 
amount for such year.
    (f) Unawareness that his earnings were in excess of the earnings 
limitation applicable to the imposition of deductions and the charging 
of excess earnings or that he should have reported such excess where 
these earnings were greater than anticipated because of:
    (1) Retroactive increases in pay, including back-pay awards;
    (2) Work at a higher pay rate than realized;
    (3) Failure of the employer of an individual unable to keep accurate 
records to restrict the amount of earnings or the number of hours worked 
in accordance with a previous agreement with such individual;
    (4) The occurrence of five Saturdays (or other work days, e.g., five 
Mondays) in a month and the earnings for the services on the fifth 
Saturday or other work day caused the deductions.
    (g) The continued issuance of benefit checks to him after he sent 
notice to the Administration of the event which caused or should have 
caused the deductions provided that such continued issuance of checks 
led him to believe in good faith that he was entitled to checks 
subsequently received.
    (h) Lack of knowledge that bonuses, vacation pay, or similar 
payments,

[[Page 204]]

constitute earnings for purposes of the annual earnings limitation.
    (i) [Reserved]
    (j) Reasonable belief that earnings in excess of the earnings 
limitation amount for the taxable year would subject him to deductions 
only for months beginning with the first month in which his earnings 
exceeded the earnings limitation amount. However, this provision is 
applicable only if he reported timely to the Administration during the 
taxable year when his earnings reached the applicable limitation amount 
for such year.
    (k) Lack of knowledge by a wife, husband, or child entitled to 
wife's, husband's, or child's insurance benefits, as the case may be, 
that the individual entitled to old-age insurance benefits on the same 
earnings record has incurred or would incur deductions because of a 
violation of the annual earnings or 7-day foreign work test, whichever 
is applicable, provided the wife, husband, or child is not living with 
such old-age insurance beneficiary and did not know and had no reason to 
know that such beneficiary's earnings activity or the income derived 
therefrom has caused or would cause such deductions.
    (l) Reasonable belief, with respect to earnings activity for months 
after December 1982, that net earnings from self-employment after 
attainment of age 70 (age 72 for months after December 1972 and before 
January 1983) in the taxable year in which such age was attained would 
not cause deductions (see Sec. 404.430(a)) with respect to benefits 
payable for months in that taxable year prior to the attainment of such 
age.
    (m) Reasonable belief by an individual entitled to child's, wife's, 
husband's, widow's, widower's, mother's, or parent's insurance benefits 
that earnings from employment and/or net earnings from self-employment 
after the termination of entitlement (other than termination by reason 
of entitlement to an old-age insurance benefit) in the taxable year in 
which the termination event occurred would not cause deductions with 
respect to benefits payable for months in that taxable year prior to the 
month in which the termination event occurred.
    (n) Failure to understand the deduction provisions of the Act or the 
occurrence of unusual or unavoidable circumstances the nature of which 
clearly shows that the individual was unaware of a violation of such 
deduction provisions.

[27 FR 1162, Feb. 8, 1962, as amended at 28 FR 14492, Dec. 31, 1963; 34 
FR 14888, Sept. 27, 1969; 36 FR 23361, Dec. 9, 1971; 43 FR 31318, July 
21, 1978; 44 FR 20653, Apr. 6, 1979; 59 FR 1634, Jan. 12, 1994; 60 FR 
17445, Apr. 6, 1995]



Sec. 404.510a  When an individual is ``without fault'' in an
entitlement overpayment.

    A benefit payment under title II or title XVIII of the Act to or on 
behalf of an individual who fails to meet one or more requirements for 
entitlement to such payment or a benefit payment exceeding the amount to 
which he is entitled, constitutes an entitlement overpayment. Where an 
individual or other person on behalf of an individual accepts such 
overpayment because of reliance on erroneous information from an 
official source within the Social Security Administration (or other 
governmental agency which the individual had reasonable cause to believe 
was connected with the administration of benefits under title II or 
title XVIII of the Act) with respect to the interpretation of a 
pertinent provision of the Social Security Act or regulations pertaining 
thereto, or where an individual or other person on behalf of an 
individual is overpaid as a result of the adjustment upward (under the 
family maximum provision in section 203 of the Act) of the benefits of 
such individual at the time of the proper termination of one or more 
beneficiaries on the same social security record and the subsequent 
reduction of the benefits of such individual caused by the reentitlement 
of the terminated beneficiary(ies) pursuant to a change in a provision 
of the law, such individual, in accepting such overpayment, will be 
deemed to be without fault. For purposes of this section governmental 
agency includes intermediaries and carriers under contract pursuant to 
sections 1816 and 1842 of the Act.

[39 FR 43716, Dec. 18, 1974]

[[Page 205]]



Sec. 404.511  When an individual is at ``fault'' in a deduction
overpayment.

    (a) Degree of care. An individual will not be without fault if the 
Administration has evidence in its possession which shows either a lack 
of good faith or failure to exercise a high degree of care in 
determining whether circumstances which may cause deductions from his 
benefits should be brought to the attention of the Administration by an 
immediate report or by return of a benefit check. The high degree of 
care expected of an individual may vary with the complexity of the 
circumstances giving rise to the overpayment and the capacity of the 
particular payee to realize that he is being overpaid. Accordingly, 
variances in the personal circumstances and situations of individual 
payees are to be considered in determining whether the necessary degree 
of care has been exercised by an individual to warrant a finding that he 
was without fault in accepting a deduction overpayment.
    (b) Subsequent deduction overpayments. The Social Security 
Administration generally will not find an individual to be without fault 
where, after having been exonerated for a ``deduction overpayment'' and 
after having been advised of the correct interpretation of the deduction 
provision, the individual incurs another ``deduction overpayment'' under 
the same circumstances as the first overpayment. However, in determining 
whether the individual is without fault, the Social Security 
Administration will consider all of the pertinent circumstances 
surrounding the prior and subsequent ``deduction overpayments,'' 
including any physical, mental, educational, or linguistic limitations 
(including any lack of facility with the English language) which the 
individual may have.

[16 FR 13054, Dec. 28, 1951, as amended at 59 FR 1634, Jan. 12, 1994]



Sec. 404.512  When adjustment or recovery of an overpayment will be 
waived.

    (a) Adjustment or recovery deemed ``against equity and good 
conscience.'' In the situations described in Secs. 404.510(a), (b), and 
(c), and 404.510a, adjustment or recovery will be waived since it will 
be deemed such adjustment or recovery is against equity and good 
conscience. Adjustment or recovery will also be deemed against equity 
and good conscience in the situation described in Sec. 404.510(e), but 
only as to a month in which the individual's earnings from wages do not 
exceed the total monthly benefits affected for that month.
    (b) Adjustment or recovery considered to defeat the purpose of title 
II or be against equity and good conscience under certain circumstances. 
In the situation described in Sec. 404.510(e) (except in the case of an 
individual whose monthly earnings from wages in employment do not exceed 
the total monthly benefits affected for a particular month), and in the 
situations described in Sec. 404.510 (f) through (n), adjustment or 
recovery shall be waived only where the evidence establishes that 
adjustment or recovery would work a financial hardship (see 
Sec. 404.508) or would otherwise be inequitable (see Sec. 404.509).

[27 FR 1163, Feb. 8, 1962, as amended at 35 FR 6321, Apr. 18, 1970; 36 
FR 23361, Dec. 9, 1971]



Sec. 404.513  Liability of a certifying officer.

    No certifying or disbursing officer shall be held liable for any 
amount certified or paid by him to any individual.
    (a) Where adjustment or recovery of such amount is waived under 
section 204(b) of the Act; or
    (b) Where adjustment under section 204(a) of the Act is not 
completed prior to the death of all individuals against whose benefits 
or lump sums deductions are authorized; or
    (c) Where a claim for recovery of an overpayment is compromised or 
collection or adjustment action is suspended or terminated pursuant to 
the Federal Claims Collection Act of 1966 (31 U.S.C. 951-953) (see 
Sec. 404.515).

[34 FR 14889, Sept. 27, 1969]



Sec. 404.515  Collection and compromise of claims for overpayment.

    (a) General effect of the Debt Collection Improvement Act of 1996. 
Claims by the Administration against an individual for recovery of 
overpayments under title II or title XVIII (not including title XVIII 
overpayments for which refund is requested from providers, physicians, 
or other suppliers of services) of the Act, not exceeding the sum of

[[Page 206]]

$100,000 or any higher amount authorized by the Attorney General, 
exclusive of interest, may be compromised, or collection suspended or 
terminated where such individual or his estate does not have the present 
or prospective ability to pay the full amount of the claim within a 
reasonable time (see paragraph (c) of this section) or the cost of 
collection is likely to exceed the amount of recovery (see paragraph (d) 
of this section) except as provided under paragraph (b) of this section.
    (b) When there will be no compromise, suspension or termination of 
collection of a claim for overpayment--(1) Overpaid individual alive. In 
any case where the overpaid individual is alive, a claim for overpayment 
will not be compromised, nor will there be suspension or termination of 
collection of the claim by the Administration if there is an indication 
of fraud, the filing of a false claim, or misrepresentation on the part 
of such individual or on the part of any other party having an interest 
in the claim.
    (2) Overpaid individual deceased. In any case where the overpaid 
individual is deceased (i) a claim for overpayment in excess of $5,000 
will not be compromised, nor will there be suspension or termination of 
collection of the claim by the Administration if there is an indication 
of fraud; the filing of a false claim, or misrepresentation on the part 
of such deceased individual, and (ii) a claim for overpayment regardless 
of the amount will not be compromised, nor will there be suspension or 
termination of collection of the claim by the Administration if there is 
an indication that any person other than the deceased overpaid 
individual had a part in the fraudulent action which resulted in the 
overpayment.
    (c) Inability to pay claim for recovery of overpayment. In 
determining whether the overpaid individual is unable to pay a claim for 
recovery of an overpayment under title II or title XVIII of the Act, the 
Administration will consider such individual's age, health, present and 
potential income (including inheritance prospects), assets (e.g., real 
property, savings account), possible concealment or improper transfer of 
assets, and assets or income of such individual which may be available 
in enforced collection proceedings. The Administration will also 
consider exemptions available to such individual under the pertinent 
State or Federal law in such proceedings. In the event the overpaid 
individual is deceased, the Administration will consider the available 
assets of the estate, taking into account any liens or superior claims 
against the estate.
    (d) Cost of collection or litigative probabilities. Where the 
probable costs of recovering an overpayment under title II or title 
XVIII of the Act would not justify enforced collection proceedings for 
the full amount of the claim or there is doubt concerning the 
Administration's ability to establish its claim as well as the time 
which it will take to effect such collection, a compromise or settlement 
for less than the full amount will be considered.
    (e) Amount of compromise. The amount to be accepted in compromise of 
a claim for overpayment under title II or title XVIII of the Act shall 
bear a reasonable relationship to the amount which can be recovered by 
enforced collection proceedings giving due consideration to the 
exemptions available to the overpaid individual under State or Federal 
law and the time which such collection will take.
    (f) Payment. Payment of the amount which the Administration has 
agreed to accept as a compromise in full settlement of a claim for 
recovery of an overpayment under title II or title XVIII of the Act must 
be made within the time and in the manner set by the Administration. A 
claim for such recovery of the overpayment shall not be considered 
compromised or settled until the full payment of the compromised amount 
has been made within the time and manner set by the Administration. 
Failure of the overpaid individual or his estate to make such payment as 
provided shall result in reinstatement of the full amount of the 
overpayment less any amounts paid prior to such default.

[34 FR 14889, Sept. 27, 1969; 34 FR 15413, Oct. 3, 1969, as amended at 
79 FR 33684, June 12, 2014]

[[Page 207]]



Sec. 404.520  Referral of overpayments to the Department of the
Treasury for tax refund offset--General.

    (a) The standards we will apply and the procedures we will follow 
before requesting the Department of the Treasury to offset income tax 
refunds due taxpayers who have an outstanding overpayment are set forth 
in Secs. 404.520 through 404.526. These standards and procedures are 
authorized by 31 U.S.C. 3720A and are implemented through Department of 
the Treasury regulations at 31 CFR 285.2.
    (b) We will use the Department of the Treasury tax refund offset 
procedure to collect overpayments that are certain in amount, past due 
and legally enforceable, and eligible for tax refund offset under 
regulations issued by the Department of the Treasury. We will use these 
procedures to collect overpayments only from persons who are not 
currently entitled to monthly Social Security benefits under title II of 
the Act. We will refer overpayments to the Department of the Treasury 
for offset against Federal tax refunds regardless of the length of time 
the debts have been outstanding.

[62 FR 64277, Dec. 5, 1997, as amended at 76 FR 65108, Oct. 20, 2011]



Sec. 404.521  Notice to overpaid persons.

    Before we request the collection of an overpayment by reduction of 
Federal and State income tax refunds, we will send a written notice of 
intent to the overpaid person. In our notice of intent to collect an 
overpayment through tax refund offset, we will state:
    (a) The amount of the overpayment; and
    (b) That we will collect the overpayment by requesting that the 
Department of the Treasury reduce any amounts payable to the overpaid 
person as refunds of Federal and State income taxes by an amount equal 
to the amount of the overpayment unless, within 60 calendar days from 
the date of our notice, the overpaid person:
    (1) Repays the overpayment in full; or
    (2) Provides evidence to us at the address given in our notice that 
the overpayment is not past due or legally enforceable; or
    (3) Asks us to waive collection of the overpayment under section 
204(b) of the Act.
    (c) The conditions under which we will waive recovery of an 
overpayment under section 204(b) of the Act;
    (d) That we will review any evidence presented that the overpayment 
is not past due or not legally enforceable;
    (e) That the overpaid person has the right to inspect and copy our 
records related to the overpayment as determined by us and will be 
informed as to where and when the inspection and copying can be done 
after we receive notice from the overpaid person that inspection and 
copying are requested.

[56 FR 52468, Oct. 21, 1991, as amended at 62 FR 64278, Dec. 5, 1997; 76 
FR 65108, Oct. 20, 2011]



Sec. 404.522  Review within SSA that an overpayment is past due and
legally enforceable.

    (a) Notification by overpaid individual. An overpaid individual who 
receives a notice as described in Sec. 404.521 has the right to present 
evidence that all or part of the overpayment is not past due or not 
legally enforceable. To exercise this right, the individual must notify 
us and present evidence regarding the overpayment within 60 calendar 
days from the date of our notice.
    (b) Submission of evidence. The overpaid individual may submit 
evidence showing that all or part of the debt is not past due or not 
legally enforceable as provided in paragraph (a) of this section. 
Failure to submit the notification and evidence within 60 calendar days 
will result in referral of the overpayment to the Department of the 
Treasury, unless the overpaid individual, within this 60-day time 
period, has asked us to waive collection of the overpayment under 
section 204(b) of the Act and we have not yet determined whether we can 
grant the waiver request. If the overpaid individual asks us to waive 
collection of the overpayment, we may ask that evidence to support the 
request be submitted to us.
    (c) Review of the evidence. After a timely submission of evidence by 
the overpaid individual, we will consider all available evidence related 
to the overpayment. If the overpaid individual has not requested a 
waiver we

[[Page 208]]

will make findings based on a review of the written record, unless we 
determine that the question of indebtedness cannot be resolved by a 
review of the documentary evidence. If the overpaid individual has asked 
us to make a waiver determination and our records do not show that after 
an oral hearing we had previously determined that he was at ``fault'' in 
accepting the overpayment, we will not deny the waiver request without 
first scheduling an oral hearing.

[56 FR 52469, Oct. 21, 1991, as amended at 62 FR 64278, Dec. 5, 1997]



Sec. 404.523  Findings by SSA.

    (a) Following the hearing or a review of the record, we will issue 
written findings which include supporting rationale for the findings. 
Issuance of these findings concerning whether the overpayment or part of 
the overpayment is past due and legally enforceable is the final Agency 
action with respect to the past-due status and enforceability of the 
overpayment. If we make a determination that a waiver request cannot be 
granted, we will issue a written notice of this determination in 
accordance with the regulations in subpart J of this part. Our referral 
of the overpayment to the Department of the Treasury will not be 
suspended under Sec. 404.525 pending any further administrative review 
of the waiver request that the individual may seek.
    (b) Copies of the findings described in paragraph (a) of this 
section will be distributed to the overpaid individual and the overpaid 
individual's attorney or other representative, if any.
    (c) If the findings referred to in paragraph (a) of this section 
affirm that all or part of the overpayment is past due and legally 
enforceable and, if waiver is requested, we determine that the request 
cannot be granted, we will refer the overpayment to the Department of 
the Treasury. No referral will be made to the Department of the Treasury 
if, based on our review of the overpayment, we reverse our prior finding 
that the overpayment is past due and legally enforceable or, upon 
consideration of a waiver request, we determine that waiver of our 
collection of the overpayment is appropriate.

[56 FR 52469, Oct. 21, 1991, as amended at 62 FR 64278, Dec. 5, 1997]



Sec. 404.524  Review of our records related to the overpayment.

    (a) Notification by the overpaid individual. An overpaid individual 
who intends to inspect or copy our records related to the overpayment as 
determined by us must notify us stating his or her intention to inspect 
or copy.
    (b) Our response. In response to a notification by the overpaid 
individual as described in paragraph (a) of this section, we will notify 
the overpaid individual of the location and time when the overpaid 
individual may inspect or copy our records related to the overpayment. 
We may also, at our discretion, mail copies of the overpayment-related 
records to the overpaid individual.

[56 FR 52469, Oct. 21, 1991]



Sec. 404.525  Suspension of offset.

    If, within 60 days of the date of the notice described in 
Sec. 404.521, the overpaid individual notifies us that he or she is 
exercising a right described in Sec. 404.522(a) and submits evidence 
pursuant to Sec. 404.522(b) or requests a waiver under Sec. 404.506, we 
will suspend any notice to the Department of the Treasury until we have 
issued written findings that affirm that an overpayment is past due and 
legally enforceable and, if applicable, make a determination that a 
waiver request cannot be granted.

[56 FR 52469, Oct. 21, 1991, as amended at 62 FR 64278, Dec. 5, 1997]



Sec. 404.526  Tax refund insufficient to cover amount of overpayment.

    If a tax refund for a given taxable year is insufficient to recover 
an overpayment completely, the case will remain with the Department of 
the Treasury for offset, assuming that all criteria for offset continue 
to be met.

[62 FR 64278, Dec. 5, 1997]



Sec. 404.527  Additional methods for recovery of title II benefit
overpayments.

    (a) General. In addition to the methods specified in Secs. 404.502 
and 404.520, an

[[Page 209]]

overpayment under title II of the Act is also subject to recovery under 
the rules in subparts D and E of part 422 of this chapter. Subpart D of 
part 422 of this chapter applies only under the following conditions:
    (1) The overpayment occurred after the individual has attained age 
18;
    (2) The overpaid individual is no longer entitled to benefits under 
title II of the Act; and
    (3) Pursuant to paragraph (b) of this section, we have determined 
that the overpayment is otherwise unrecoverable under section 204 of the 
Act.
    (b) When an overpayment is considered to be otherwise unrecoverable. 
An overpayment under title II of the Act is considered to be otherwise 
unrecoverable under section 204 of the Act if all of the following 
conditions are met:
    (1) Our billing system sequence has been completed (i.e., we have 
sent the individual an initial notice of the overpayment, a reminder 
notice, and a past-due notice) or collection activity has been suspended 
or terminated in accordance with the Federal Claims Collection Standards 
in 31 CFR 903.2 or 903.3.
    (2) We have not entered into an installment payment arrangement with 
the overpaid individual or, if we have entered into such an arrangement, 
the overpaid individual has failed to make any payment for two 
consecutive months.
    (3) The overpaid individual has not requested waiver pursuant to 
Sec. 404.506 or Sec. 404.522 or, after a review conducted pursuant to 
those sections, we have determined that we will not waive collection of 
the overpayment.
    (4) The overpaid individual has not requested reconsideration of the 
initial overpayment determination pursuant to Secs. 404.907 and 404.909 
or, after a review conducted pursuant to Sec. 404.913, we have affirmed, 
in whole or in part, the initial overpayment determination.
    (5) The overpayment cannot be recovered pursuant to Sec. 404.502 by 
adjustment of benefits payable to any individual other than the overpaid 
individual. For purposes of this paragraph, an overpayment will be 
deemed to be unrecoverable from any individual who was living in a 
separate household from the overpaid person at the time of the 
overpayment and did not receive the overpayment.

[62 FR 64278, Dec. 5, 1997, as amended at 68 FR 74183, Dec. 23, 2003]



Sec. 404.530  Are title VIII and title XVI benefits subject to 
adjustment to recover title II overpayments?

    (a) Definitions--(1) Cross-program recovery. Cross-program recovery 
is the process that we will use to collect title II overpayments from 
benefits payable to you under title VIII and title XVI of the Act.
    (2) Benefits payable. For purposes of this section, benefits payable 
means the amount of title VIII or title XVI benefits you actually would 
receive. For title VIII benefits, it includes your monthly benefit and 
any past-due benefits after any reduction by the amount of income for 
the month as described in Secs. 408.505 through 408.515 of this chapter. 
For title XVI benefits, it includes your monthly benefit and any past-
due benefits as described in Sec. 416.420 of this chapter.
    (b) When may we collect title II overpayments using cross-program 
recovery? We may use cross-program recovery to collect a title II 
overpayment you owe when benefits are payable to you under title VIII, 
title XVI, or both.

[70 FR 15, Jan. 3, 2005]



Sec. 404.535  How much will we withhold from your title VIII 
and title XVI benefits to recover a title II overpayment?

    (a) If past-due benefits are payable to you, we will withhold the 
lesser of the entire overpayment balance or the entire amount of past-
due benefits.
    (b)(1) We will collect the overpayment from current monthly benefits 
due in a month under title VIII and title XVI by withholding the lesser 
of the amount of the entire overpayment balance or:
    (i) 10 percent of the monthly title VIII benefits payable for that 
month and
    (ii) in the case of title XVI benefits, an amount no greater than 
the lesser of the benefit payable for that month or an amount equal to 
10 percent of your income for that month (including such monthly benefit 
but excluding payments under title II when recovery

[[Page 210]]

is also made from title II benefits and excluding income excluded 
pursuant to Secs. 416.1112 and 416.1124 of this chapter).
    (2) Paragraph (b)(1) of this section does not apply if:
    (i) You request and we approve a different rate of withholding, or
    (ii) You or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment.
    (c) In determining whether to grant your request that we withhold 
less than the amount described in paragraph (b)(1) of this section, we 
will use the criteria applied under Sec. 404.508 to similar requests 
about withholding from title II benefits.
    (d) If you or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment, we will collect 
the overpayment by withholding the lesser of the overpayment balance or 
the entire amount of title VIII and title XVI benefits payable to you. 
We will not collect at a lesser rate. (See Sec. 416.571 of this chapter 
for what we mean by concealment of material information.)

[70 FR 15, Jan. 3, 2005]



Sec. 404.540  Will you receive notice of our intention to apply 
cross-program recovery?

    Before we collect an overpayment from you using cross-program 
recovery, we will send you a written notice that tells you the following 
information:
    (a) We have determined that you owe a specific overpayment balance 
that can be collected by cross-program recovery;
    (b) We will withhold a specific amount from the title VIII or title 
XVI benefits (see Sec. 404.535);
    (c) You may ask us to review this determination that you still owe 
this overpayment balance;
    (d) You may request that we withhold a different amount from your 
current monthly benefits (the notice will not include this information 
if Sec. 404.535(d) applies); and
    (e) You may ask us to waive collection of this overpayment balance.

[70 FR 15, Jan. 3, 2005]



Sec. 404.545  When will we begin cross-program recovery from current
monthly benefits?

    (a) We will begin collecting the overpayment balance from your title 
VIII or title XVI current monthly benefits or payments by cross-program 
recovery no sooner than 30 calendar days after the date of the notice 
described in Sec. 404.540. If within that 30-day period you pay us the 
full overpayment balance stated in the notice, we will not begin cross-
program recovery.
    (b) If within that 30-day period you ask us to review our 
determination that you still owe us this overpayment balance, we will 
not begin cross-program recovery from your current monthly benefits 
before we review the matter and notify you of our decision in writing.
    (c) If within that 30-day period you ask us to withhold a different 
amount than the amount stated in the notice, we will not begin cross-
program recovery from your current monthly benefits until we determine 
the amount we will withhold. This paragraph does not apply when 
Sec. 404.535(d) applies.
    (d) If within that 30-day period you ask us to waive recovery of the 
overpayment balance, we will not begin cross-program recovery from your 
current monthly benefits before we review the matter and notify you of 
our decision in writing. See Secs. 404.506 through 404.512.

[70 FR 15, Jan. 3, 2005]



            Subpart G_Filing of Applications and Other Forms

    Authority: Secs. 202 (i), (j), (o), (p), and (r), 205(a), 216(i)(2), 
223(b), 228(a), and 702(a)(5) of the Social Security Act (42 U.S.C. 402 
(i), (j), (o), (p), and (r), 405(a), 416(i)(2), 423(b), 428(a), and 
902(a)(5)).

    Source: 44 FR 37209, June 26, 1979, unless otherwise noted.

                           General Provisions



Sec. 404.601  Introduction.

    This subpart contains the Social Security Administration's rules for 
filing a claim for old-age, disability, dependents', and survivors' 
insurance benefits as described in subpart D of part 404. It

[[Page 211]]

tells what an application is, who may sign it, where and when it must be 
signed and filed, the period of time it is in effect and how it may be 
withdrawn. This subpart also explains when a written statement, request, 
or notice will be considered filed. Since the application form and 
procedures for filing a claim under this subpart are the same as those 
used to establish entitlement to Medicare benefits under 42 CFR part 
405, persons who wish to become entitled to Medicare benefits should 
refer to the provisions of this subpart. Requirements concerning 
applications for the black lung benefits program are contained in part 
410. Requirements concerning applications for the supplemental security 
income program are contained in part 416. Part 422 contains the 
requirements for applying for a social security number.



Sec. 404.602  Definitions.

    For the purpose of this subpart--
    Applicant means the person who files an application for benefits for 
himself or herself or for someone else. A person who files for himself 
or herself is both the applicant and the claimant.
    Application refers only to an application on a form described in 
Sec. 404.611.
    Benefits means any old-age, disability, dependents', and survivors' 
insurance benefits described in subpart D, including a period of 
disability.
    Claimant means the person who files an application for benefits for 
himself or herself or the person for whom an application is filed.
    We, us, or our means the Social Security Administration (SSA).
    You or your means, as appropriate, the person who applies for 
benefits, the person for whom an application is filed, or the person who 
may consider applying for benefits.



Sec. 404.603  You must file an application to receive benefits.

    In addition to meeting other requirements, you must file an 
application to become entitled to benefits. If you believe you may be 
entitled to benefits, you should file an application. Filing an 
application will--
    (a) Permit a formal decision to be made on your entitlement to 
benefits;
    (b) Protect your entitlement to any benefits that may be payable for 
as many as 6 months or 12 months (depending on the type of benefit, as 
explained in Sec. 404.621) before the application was filed; and
    (c) Give you the right to appeal if you are dissatisfied with the 
decision.

[44 FR 37209, June 26, 1979, as amended at 46 FR 47444, Sept. 28, 1981]

                              Applications



Sec. 404.610  What makes an application a claim for benefits?

    We will consider your application a claim for benefits if it 
generally meets all of the following conditions:
    (a) You must file on a prescribed form, as stated in Sec. 404.611. 
See Sec. 422.505(a) of this chapter for the types of prescribed 
applications you can file.
    (b) You must complete and file the application with us as stated in 
Secs. 404.611 and 404.614.
    (c) You, or someone described in Sec. 404.612 who may sign an 
application for you, must sign the application.
    (d) You must be alive at the time you file (unless one of the 
limited exceptions in Sec. 404.615 applies).

[69 FR 498, Jan. 6, 2004]



Sec. 404.611  How do I file an application for Social Security
benefits?

    (a) General rule. You must apply for benefits on an application that 
we prescribe. See Sec. 422.505(a) of this chapter for the types of 
applications we will accept. See Sec. 404.614 for places where you can 
file your application for benefits.
    (b) What if I file a claim with the Railroad Retirement Board (RRB)? 
If you file an application with the RRB on one of its forms for an 
annuity under section 2 of the Railroad Retirement Act, as amended, we 
will consider this an application for title II Social Security benefits, 
which you may be entitled to, unless you tell us otherwise.
    (c) What if I file a claim with the Department of Veterans Affairs 
(DVA)? If you file an application with the DVA on one of its forms for 
survivors' dependency and indemnity compensation (see section 3005 of 
title 38 U.S.C.), we

[[Page 212]]

will consider this an application for Social Security survivors' 
benefits, except for the lump sum death payment.

[69 FR 498, Jan. 6, 2004]



Sec. 404.612  Who may sign an application.

    We will determine who may sign an application according to the 
following rules:
    (a) A claimant who is 18 years old or over, mentally competent, and 
physically able to do so, must sign his or her own application. If the 
claim is for child's benefits for a person who is not yet 22 years old, 
the application may be signed by a parent or a person standing in place 
of the parent.
    (b) A claimant who is between 16 and 18 years old may sign his or 
her own application if he or she is mentally competent, has no court 
appointed representative, and is not in the care of any person.
    (c) If the claimant is under age 18, or mentally incompetent, or 
physically unable to sign, the application may be signed by a court 
appointed representative or a person who is responsible for the care of 
the claimant, including a relative. If the claimant is in the care of an 
institution, the manager or principal officer of the institution may 
sign the application.
    (d) If a person who could receive disability benefits or who could 
have a period of disability established dies before filing, an 
application for disability benefits or for a period of disability may be 
signed by a person who would be qualified to receive any benefits due 
the deceased.
    (e) If a written statement showing an intent to claim benefits is 
filed with us, but the person for whom the benefits are claimed dies 
before an application is filed, an application may be filed as explained 
in Sec. 404.630(d).
    (f) If a person who could receive benefits on the basis of a 
``deemed'' filing date of an application under Sec. 404.633 (b)(1)(i) or 
(b)(2)(i) dies before an application for the benefits is filed, the 
application may be signed by a person who would be qualified to receive 
any benefits due the deceased person as explained in Sec. 404.633 
(b)(1)(ii) and (b)(2)(ii).
    (g) If it is necessary to protect a claimant from losing benefits 
and there is good cause for the claimant not signing the application, we 
may accept an application signed by some one other than a person 
described in this section.

    Example: Mr. Smith comes to a social security office a few days 
before the end of a month to file an application for old-age benefits 
for his neighbor, Mr. Jones. Mr. Jones, a 63 year old widower, just 
suffered a heart attack and is in the hospital. He asked Mr. Smith to 
file the application for him. We will accept an application signed by 
Mr. Smith since it would not be possible to have Mr. Jones sign and file 
the application until the next calendar month and a loss of one month's 
benefits would result.

[44 FR 37209, June 26, 1979, as amended at 59 FR 44923, Aug. 31, 1994; 
61 FR 41330, Aug. 8, 1996]



Sec. 404.613  Evidence of authority to sign an application for
another.

    (a) A person who signs an application for someone else will be 
required to provide evidence of his or her authority to sign the 
application for the person claiming benefits under the following rules:
    (1) If the person who signs is a court appointed representative, he 
or she must submit a certificate issued by the court showing authority 
to act for the claimant.
    (2) If the person who signs is not a court appointed representative, 
he or she must submit a statement describing his or her relationship to 
the claimant. The statement must also describe the extent to which the 
person is responsible for the care of the claimant. This latter 
information will not be requested if the application is signed by a 
parent for a child with whom he or she is living.
    (3) If the person who signs is the manager or principal officer of 
an institution which is responsible for the care of the claimant, he or 
she must submit a statement indicating the person's position of 
responsibility at the institution.
    (b) We may, at any time, require additional evidence to establish 
the authority of a person to sign an application for someone else.

[[Page 213]]



Sec. 404.614  When an application or other form is considered filed.

    (a) General rule. Except as otherwise provided in paragraph (b) of 
this section and in Secs. 404.630 through 404.633 which relate to the 
filing date of an application, an application for benefits, or a written 
statement, request, or notice is filed on the day it is received by an 
SSA employee at one of our offices or by an SSA employee who is 
authorized to receive it at a place other than one of our offices.
    (b) Other places and dates of filing. We will also accept as the 
date of filing--
    (1) The date an application for benefits, or a written statement, 
request or notice is received by any office of the U.S. Foreign Service 
or by the Veterans Administration Regional Office in the Philippines;
    (2) The date an application for benefits or a written statement, 
request or notice is mailed to us by the U.S. mail, if using the date we 
receive it would result in the loss or lessening of rights. The date 
shown by a U.S. postmark will be used as the date of mailing. If the 
postmark is unreadable, or there is no postmark, we will consider other 
evidence of when you mailed it to us; or
    (3) The date an application for benefits is filed with the Railroad 
Retirement Board or the Veterans Administration. See Sec. 404.611 (b) 
and (c) for an explanation of when an application for benefits filed 
with the Railroad Retirement Board or the Veterans Administration is 
considered an application for social security benefits.

[44 FR 37209, June 26, 1979, as amended at 59 FR 44923, Aug. 31, 1994]



Sec. 404.615  Claimant must be alive when an application is filed.

    A claimant must be alive at the time an application is filed. There 
are the following exceptions to this general rule:
    (a) If a disabled person dies before filing an application for 
disability benefits or a period of disability, a person who would be 
qualified to receive any benefits due the deceased may file an 
application. The application must be filed within 3 months after the 
month in which the disabled person died.
    (b) If a written statement showing an intent to claim benefits is 
filed with us, but the person for whom the benefits are claimed dies 
before an application is filed, an application may be filed as explained 
in Sec. 404.630(d).
    (c) If a person who could receive benefits on the basis of a 
``deemed'' filing date of an application under Sec. 404.633 (b)(1)(i) or 
(b)(2)(i) dies before an application for the benefits is filed, the 
application may be signed by a person who would be qualified to receive 
any benefits due the deceased person as explained in Sec. 404.633 
(b)(1)(ii) and (b)(2)(ii).

[44 FR 37209, June 26, 1979, as amended at 59 FR 44923, Aug. 31, 1994; 
61 FR 41330, Aug. 8, 1996]



Sec. 404.617  Pilot program for photographic identification of 
disability benefit applicants in designated geographic areas.

    (a) To be eligible for Social Security disability insurance benefits 
in the designated pilot geographic areas during the time period of the 
pilot, you or a person acting on your behalf must give SSA permission to 
take your photograph and make this photograph a part of the claims 
folder. You must give us this permission when you apply for benefits 
and/or when we ask for it at a later time. Failure to cooperate will 
result in denial of benefits. We will permit an exception to the 
photograph requirement when an individual has a sincere religious 
objection. This pilot will be in effect for a six-month period after 
these final rules become effective.
    (b) Designated pilot geographic areas means:
    (1) All SSA field offices in the State of South Carolina.
    (2) The Augusta, Georgia SSA field office.
    (3) All SSA field offices in the State of Kansas.
    (4) Selected SSA field offices located in New York City.

[68 FR 23194, May 1, 2003]

[[Page 214]]

                 Effective Filing Period of Application



Sec. 404.620  Filing before the first month you meet the requirements
for benefits.

    (a) General rule. If you file an application for benefits (except 
special age 72 payments) before the first month you meet all the other 
requirements for entitlement, the application will remain in effect 
until we make a final determination on your application unless there is 
an administrative law judge hearing decision on your application. If 
there is an administrative law judge hearing decision, your application 
will remain in effect until the administrative law judge hearing 
decision is issued.
    (1) If you meet all the requirements for entitlement while your 
application is in effect, we may pay you benefits from the first month 
that you meet all the requirements.
    (2) If you first meet all the requirements for entitlement after the 
period for which your application was in effect, you must file a new 
application for benefits. In this case, we may pay you benefits only 
from the first month that you meet all the requirements based on the new 
application.
    (b) Filing for special age 72 payments. The requirements for 
entitlement to special age 72 payments must be met no later than 3 
months after the month an application is filed.

[44 FR 37209, June 26, 1979, as amended at 52 FR 4003, Feb. 9, 1987]



Sec. 404.621  What happens if I file after the first month I meet 
the requirements for benefits?

    (a) Filing for disability benefits and for old-age, survivors', or 
dependents' benefits. (1) If you file an application for disability 
benefits, widow's or widower's benefits based on disability, or wife's, 
husband's, or child's benefits based on the earnings record of a person 
entitled to disability benefits, after the first month you could have 
been entitled to them, you may receive benefits for up to 12 months 
immediately before the month in which your application is filed. Your 
benefits may begin with the first month in this 12-month period in which 
you meet all the requirements for entitlement. Your entitlement, 
however, to wife's or husband's benefits under this rule is limited by 
paragraph (a)(3) of this section.
    (2) If you file an application for old-age benefits, widow's or 
widower's benefits not based on disability, wife's, husband's, or 
child's benefits based on the earnings record of a person not entitled 
to disability benefits, or mother's, father's, or parent's benefits, 
after the first month you could have been entitled to them, you may 
receive benefits for up to 6 months immediately before the month in 
which your application is filed. Your benefits may begin with the first 
month in this 6-month period in which you meet all the requirements for 
entitlement. Your entitlement, however, to old-age, wife's, husband's, 
widow's, or widower's benefits under this rule is limited by paragraph 
(a)(3) of this section.
    (3) If the effect of the payment of benefits for a month before the 
month you file would be to reduce your benefits because of your age, you 
cannot be entitled to old-age, wife's, husband's, widow's, or widower's 
benefits for any month before the month in which your application is 
filed, unless you meet one of the conditions in paragraph (a)(4) of this 
section. (An explanation of the reduction that occurs because of age if 
you are entitled to these benefits for a month before you reach full 
retirement age, as defined in Sec. 404.409, is in Sec. 404.410.) An 
example follows that assumes you do not meet any of the conditions in 
paragraph (a)(4) of this section.

    Example: You will attain full retirement age in March 2003. If you 
apply for old-age benefits in March, you cannot be entitled to benefits 
in the 6-month period before March because the payment of benefits for 
any of these months would result in your benefits being reduced for age. 
If you do not file your application until June 2003, you may be entitled 
to benefits for the month of March, April and May because the payment of 
benefits for these months would not result in your benefits being 
reduced for age. You will not, however, receive benefits for the 3 
months before March.

    (4) The limitation in paragraph (a)(3) of this section on your 
entitlement to old-age, wife's, husband's, widow's, or widower's 
benefits for months before

[[Page 215]]

you file an application does not apply if:
    (i) You are a widow, widower, surviving divorced wife, or surviving 
divorced husband who is disabled and could be entitled to retroactive 
benefits for any month before age 60. If you could not be entitled 
before age 60, the limitation will prevent payment of benefits to you 
for past months, but it will not affect the month you become entitled to 
hospital insurance benefits.
    (ii) You are a widow, widower, or surviving divorced spouse of the 
insured person who died in the month before you applied and you were at 
least age 60 in the month of death of the insured person on whose 
earnings record you are claiming benefits. In this case, you can be 
entitled beginning with the month the insured person died if you choose 
and if you file your application on or after July 1, 1983.
    (b) Filing for lump-sum death payment. An application for a lump-sum 
death payment must be filed within 2 years after the death of the person 
on whose earnings record the claim is filed. There are two exceptions to 
the 2-year filing requirement:
    (1) If there is a good cause for failure to file within the 2-year 
period, we will consider your application as though it were filed within 
the 2-year period. Good cause does not exist if you were informed of the 
need to file an application within the 2-year period and you neglected 
to do so or did not desire to make a claim. Good cause will be found to 
exist if you did not file within the time limit due to--
    (i) Circumstances beyond your control, such as extended illness, 
mental or physical incapacity, or a language barrier;
    (ii) Incorrect or incomplete information we furnished you;
    (iii) Your efforts to get evidence to support your claim without 
realizing that you could submit the evidence after filing an 
application; or
    (iv) Unusual or unavoidable circumstances which show that you could 
not reasonably be expected to know of the time limit.
    (2) The Soldiers' and Sailors' Civil Relief Act of 1940 provides for 
extending the filing time.
    (c) Filing for special age 72 payments. An application for special 
age 72 payments is not effective as a claim for benefits for any month 
before you actually file.
    (d) Filing for a period of disability. You must file an application 
for a period of disability while you are disabled or no later than 12 
months after the month in which your period of disability ended. If you 
were unable to apply within the 12-month time period because of a 
physical or mental condition, you may apply not more than 36 months 
after your disability ended. The general rule we use to decide whether 
your failure to file was due to a physical or mental condition is stated 
in Sec. 404.322.
    (e) Filing after death of person eligible for disability benefits or 
period of disability. If you file for disability benefits or a period of 
disability for another person who died before filing an application and 
you would qualify under Sec. 404.503(b) to receive any benefits due the 
deceased, you must file an application no later than the end of the 
third month following the month in which the disabled person died.

[68 FR 4711, Jan. 30, 2003]



Sec. 404.622  Limiting an application.

    Your application may entitle you to benefits for up to 6 months or 
12 months (depending on the type of benefit, as explained in 
Sec. 404.621) before the month in which it is filed. You may limit the 
number of months of your entitlement in the 6-month or 12-month period. 
You may state this choice any time before a decision is made on your 
claim by indicating, in writing, the month you want your benefits to 
begin. You may change the first month of entitlement in this 6-month or 
12-month period after a decision has been made on your claim under the 
following conditions:
    (a) You file the request in writing.
    (b) If you are filing for the claimant, he or she is alive when the 
request is filed.
    (c) If any other person who is entitled to benefits would lose some 
or all of those benefits because of the change, that person, or the 
person who filed for him or her, consents in writing.

[[Page 216]]

    (d) Any benefit payments that would become improper as a result of 
the change in entitlement month are repaid, or we are satisfied that 
they will be repaid.

[44 FR 37209, June 26, 1979, as amended at 46 FR 47445, Sept. 28, 1981]



Sec. 404.623  Am I required to file for all benefits if I am eligible
for old-age and husband's or wife's benefits?

    (a) Presumed filing for husband's or wife's benefits. If you file an 
application for old-age benefits, you are presumed to have filed an 
application for husband's or wife's benefits in the first month of your 
entitlement to old-age benefits, if--
    (1) Your old-age benefits are reduced for age because you choose to 
receive them before you reach full retirement age (as defined in 
Sec. 404.409); and
    (2) You are eligible for either a husband's or a wife's benefit for 
the first month of your entitlement to old-age benefits.
    (b) Presumed filing for old-age benefits. If you file an application 
for a husband's or a wife's benefit, you are presumed to have filed an 
application for old-age benefits in the first month of your entitlement 
to husband's or wife's benefits if--
    (1) Your husband's or wife's benefits are reduced for age because 
you choose to receive them before you reach full retirement age (as 
defined in Sec. 404.409); and
    (2) You are eligible for old-age benefits for the first month of 
your entitlement to husband's or wife's benefits.
    (c) Exception. Paragraph (b) of this section does not apply if you 
are also entitled to disability benefits in the first month of your 
entitlement to husband's or wife's benefits. In this event, you are 
presumed to have filed for old-age benefits only if your disability 
benefits end before you reach full retirement age (as defined in 
Sec. 404.409).

[68 FR 4712, Jan. 30, 2003]

                 Filing Date Based on Written Statement



Sec. 404.630  Use of date of written statement as filing date.

    If a written statement, such as a letter, indicating your intent to 
claim benefits either for yourself or for another person is filed with 
us under the rules stated in Sec. 404.614, we will use the filing date 
of the written statement as the filing date of the application, if all 
of the following requirements are met:
    (a) The statement indicates an intent to claim benefits.
    (b) The statement is signed by the claimant, the claimant's spouse, 
or a person described in Sec. 404.612. If the claimant, the claimant's 
spouse, or a person described in Sec. 404.612 telephones us and advises 
us of his or her intent to file a claim but cannot file an application 
before the end of the month, we will prepare and sign a written 
statement if it is necessary to prevent the loss of benefits. If the 
claimant, the claimant's spouse, or a person described in Sec. 404.612 
contacts us through the Internet by completing and transmitting the 
Personal Identification Information data on the Internet Social Security 
Benefit Application to us, we will use the date of the transmission as 
the filing date if it is necessary to prevent the loss of benefits.
    (c) The claimant files an application with us on an application form 
as described in Sec. 404.611, or one is filed for the claimant by a 
person described in Sec. 404.612, within 6 months after the date of a 
notice we will send advising of the need to file an application. We will 
send the notice to the claimant. However, if it is clear from the 
information we receive that the claimant is a minor or is mentally 
incompetent, we will send the notice to the person who submitted the 
written statement.
    (d) The claimant is alive when the application is filed; or if the 
claimant has died after the written statement was filed, an application 
is filed--
    (1) By or for a person who would be eligible to receive benefits on 
the deceased's earnings record;
    (2) By a person acting for the deceased's estate; or
    (3) If the statement was filed with a hospital under Sec. 404.632, 
by the hospital if--
    (i) No person described in paragraph (d) (1) or (2) of this section 
can be located; or
    (ii) A person described in paragraphs (d) (1) or (2) of this section 
is located

[[Page 217]]

but refuses or fails to file the application unless the refusal or 
failure to file is because it would be harmful to the deceased person or 
the deceased's estate.

[44 FR 37209, June 26, 1979, as amended at 71 FR 24814, Apr. 27, 2006]



Sec. 404.631  Statements filed with the Railroad Retirement Board.

    A written statement filed with the Railroad Retirement Board will be 
considered a written statement filed with us under the rules in 
Sec. 404.630 if--
    (a) The statement indicates an intent to claim any payments under 
the Railroad Retirement Act;
    (b) It bears the signature of the person filing the statement;
    (c) No application is filed with the Railroad Retirement Board on 
one of its forms. If an application has been filed, we will use the date 
of filing of that application as determined by the Railroad Retirement 
Board (see Sec. 404.614(b)(3)); and
    (d) The statement is sent to us by the Railroad Retirement Board.



Sec. 404.632  Statements filed with a hospital.

    A statement (generally a hospital admission form) filed with a 
hospital may serve as a written statement under Sec. 404.630 if the 
requirements of this section are met. The statement will be considered 
filed with us as of the date it was filed with the hospital and will 
serve to protect entitlement to benefits. A statement filed with a 
hospital by you or some other person for you requesting or indicating an 
intent to claim benefits will be considered a written statement filed 
with us and Sec. 404.630 will apply to it if--
    (a) You are a patient in the hospital;
    (b) The hospital provides services covered by hospital insurance 
under the Medicare program;
    (c) An application has not already been filed; and
    (d) The statement is sent to us.

               Deemed Filing Date Based on Misinformation



Sec. 404.633  Deemed filing date in a case of misinformation.

    (a) General. You may have considered applying for monthly benefits 
for yourself or for another person, and you may have contacted us in 
writing, by telephone or in person to inquire about filing an 
application for these benefits. It is possible that in responding to 
your inquiry, we may have given you misinformation about your 
eligibility for such benefits, or the eligibility of the person on whose 
behalf you were considering applying for benefits, which caused you not 
to file an application at that time. If this happened, and later an 
application for such benefits is filed with us, we may establish an 
earlier filing date under this section.

    Example 1: Mrs. Smith, a widow of an insured individual, contacts a 
Social Security office when she reaches age 60 to inquire about applying 
for widow's insurance benefits. She is told by an SSA employee that she 
must be age 62 to be eligible for these benefits. This information, 
which was incorrect, causes Mrs. Smith not to file an application for 
benefits. When Mrs. Smith reaches age 62, she again contacts a Social 
Security office to ask about filing for widow's insurance benefits and 
learns that she could have received the benefits at age 60. She files an 
application for these benefits, provides the information required under 
paragraph (f) of this section to show that an SSA employee provided 
misinformation, and requests a deemed filing date based on the 
misinformation which she received from an SSA employee when she was age 
60.
    Example 2: Ms. Hill, a 22-year-old, is forced to stop work because 
of illness. When she contacts a Social Security office to inquire about 
applying for disability insurance benefits, she is told by an SSA 
employee that she must have 20 quarters of coverage out of the last 40 
calendar quarters to be insured for disability insurance benefits. The 
employee fails to consider the special rules for insured status for 
persons who become disabled before age 31 and, consequently, tells Ms. 
Hill that she is not insured because she only has 16 quarters of 
coverage. The misinformation causes Ms. Hill not to file an application 
for disability insurance benefits. Because of her illness, she is unable 
to return to work. A year later, Ms. Hill reads an article that 
indicates that there are special rules for insured status for young 
workers who become disabled. She again contacts a Social Security office 
to inquire about benefits based on

[[Page 218]]

disability and learns that she was misinformed earlier about her insured 
status. She files an application for disability insurance benefits, 
provides the information required under paragraph (f) of this section to 
show that an SSA employee provided misinformation, and requests a deemed 
filing date based on the misinformation provided to her earlier.

    (b) Deemed filing date of an application based on misinformation. 
Subject to the requirements and conditions in paragraphs (c) through (g) 
of this section, we may establish a deemed filing date of an application 
for monthly benefits under the following provisions.
    (1)(i) If we determine that you failed to apply for monthly benefits 
for yourself because we gave you misinformation about your eligibility 
for such benefits, we will deem an application for such benefits to have 
been filed with us on the later of--
    (A) The date on which the misinformation was provided to you; or
    (B) The date on which you met all of the requirements for 
entitlement to such benefits, other than the requirement of filing an 
application.
    (ii) Before we may establish a deemed filing date of an application 
for benefits for you under paragraph (b)(1)(i) of this section, you or a 
person described in Sec. 404.612 must file an application for such 
benefits. If you die before an application for the benefits is filed 
with us, we will consider establishing a deemed filing date of an 
application for such benefits only if an application for the benefits is 
filed with us by a person who would be qualified to receive any benefits 
due you.
    (2)(i) If you had authority under Sec. 404.612 to sign an 
application for benefits for another person, and we determine that you 
failed to apply for monthly benefits for that person because we gave you 
misinformation about that person's eligibility for such benefits, we 
will deem an application for such benefits to have been filed with us on 
the later of--
    (A) The date on which the misinformation was provided to you; or
    (B) The date on which the person met all of the requirements for 
entitlement to such benefits, other than the requirement of filing an 
application.
    (ii) Before we may establish a deemed filing date of an application 
for benefits for the person under paragraph (b)(2)(i) of this section, 
you, such person, or another person described in Sec. 404.612 must file 
an application for such benefits. If the person referred to in paragraph 
(b)(2)(i) of this section dies before an application for the benefits is 
filed with us, we will consider establishing a deemed filing date of an 
application for such benefits only if an application for the benefits is 
filed with us by a person who would be qualified to receive any benefits 
due the deceased person.
    (c) Requirements concerning the misinformation. We apply the 
following requirements for purposes of paragraph (b) of this section.
    (1) The misinformation must have been provided to you by one of our 
employees while he or she was acting in his or her official capacity as 
our employee. For purposes of this section, an employee includes an 
officer of SSA.
    (2) Misinformation is information which we consider to be incorrect, 
misleading, or incomplete in view of the facts which you gave to the 
employee, or of which the employee was aware or should have been aware, 
regarding your particular circumstances, or the particular circumstances 
of the person referred to in paragraph (b)(2)(i) of this section. In 
addition, for us to find that the information you received was 
incomplete, the employee must have failed to provide you with the 
appropriate, additional information which he or she would be required to 
provide in carrying out his or her official duties.
    (3) The misinformation may have been provided to you orally or in 
writing.
    (4) The misinformation must have been provided to you in response to 
a specific request by you to us for information about your eligibility 
for benefits or the eligibility for benefits of the person referred to 
in paragraph (b)(2)(i) of this section for which you were considering 
filing an application.
    (d) Evidence that misinformation was provided. We will consider the 
following evidence in making a determination under paragraph (b) of this 
section.
    (1) Preferred evidence. Preferred evidence is written evidence which 
relates directly to your inquiry about your eligibility for benefits or 
the eligibility of

[[Page 219]]

another person and which shows that we gave you misinformation which 
caused you not to file an application. Preferred evidence includes, but 
is not limited to, the following--
    (i) A notice, letter or other document which was issued by us and 
addressed to you; or
    (ii) Our record of your telephone call, letter or in-person contact.
    (2) Other evidence. In the absence of preferred evidence, we will 
consider other evidence, including your statements about the alleged 
misinformation, to determine whether we gave you misinformation which 
caused you not to file an application. We will not find that we gave you 
misinformation, however, based solely on your statements. Other evidence 
which you provide or which we obtain must support your statements. 
Evidence which we will consider includes, but is not limited to, the 
following--
    (i) Your statements about the alleged misinformation, including 
statements about--
    (A) The date and time of the alleged contact(s);
    (B) How the contact was made, e.g., by telephone or in person;
    (C) The reason(s) the contact was made;
    (D) Who gave the misinformation; and
    (E) The questions you asked and the facts you gave us, and the 
questions we asked and the information we gave you, at the time of the 
contact;
    (ii) Statements from others who were present when you were given the 
alleged misinformation, e.g., a neighbor who accompanied you to our 
office;
    (iii) If you can identify the employee or the employee can recall 
your inquiry about benefits--
    (A) Statements from the employee concerning the alleged contact, 
including statements about the questions you asked, the facts you gave, 
the questions the employee asked, and the information provided to you at 
the time of the alleged contact; and
    (B) Our assessment of the likelihood that the employee provided the 
alleged misinformation;
    (iv) An evaluation of the credibility and the validity of your 
allegations in conjunction with other relevant information; and
    (v) Any other information regarding your alleged contact.
    (e) Information which does not constitute satisfactory proof that 
misinformation was given. Certain kinds of information will not be 
considered satisfactory proof that we gave you misinformation which 
caused you not to file an application. Examples of such information 
include--
    (1) General informational pamphlets that we issue to provide basic 
program information;
    (2) The Personal Earnings and Benefit Estimate Statement that is 
based on an individual's reported and projected earnings and is an 
estimate which can be requested at any time;
    (3) General information which we review or prepare but which is 
disseminated by the media, e.g., radio, television, magazines, and 
newspapers; and
    (4) Information provided by other governmental agencies, e.g., the 
Department of Veterans Affairs, the Department of Defense, State 
unemployment agencies, and State and local governments.
    (f) Claim for benefits based on misinformation. You may make a claim 
for benefits based on misinformation at any time. Your claim must 
contain information that will enable us to determine if we did provide 
misinformation to you about your eligibility for benefits, or the 
eligibility of a person on whose behalf you were considering applying 
for benefits, which caused you not to file an application for the 
benefits. Specifically, your claim must be in writing and it must 
explain what information was provided; how, when and where it was 
provided and by whom; and why the information caused you not to file an 
application. If you give us this information, we will make a 
determination on such a claim for benefits if all of the following 
conditions are also met.
    (1) An application for the benefits described in paragraph (b)(1)(i) 
or (b)(2)(i) of this section is filed with us by someone described in 
paragraph (b)(1)(ii) or (b)(2)(ii) of this section, as appropriate. The 
application must be filed after the alleged misinformation was provided. 
This application may be--

[[Page 220]]

    (i) An application on which we have made a previous final 
determination or decision awarding the benefits, but only if the 
claimant continues to be entitled to benefits based on that application;
    (ii) An application on which we have made a previous final 
determination or decision denying the benefits, but only if such 
determination or decision is reopened under Sec. 404.988; or
    (iii) A new application on which we have not made a final 
determination or decision.
    (2) The establishment of a deemed filing date of an application for 
benefits based on misinformation could result in the claimant becoming 
entitled to benefits or to additional benefits.
    (3) We have not made a previous final determination or decision to 
which you were a party on a claim for benefits based on alleged 
misinformation involving the same facts and issues. This provision does 
not apply, however, if the final determination or decision may be 
reopened under Sec. 404.988.
    (g) Effective date. This section applies only to misinformation 
which we provided after December 1982. In addition, this section is 
effective only for benefits payable for months after December 1982.

[59 FR 44924, Aug. 31, 1994]

                        Withdrawal of Application



Sec. 404.640  Withdrawal of an application.

    (a) Request for withdrawal filed before a determination is made. An 
application may be withdrawn before we make a determination on it if--
    (1) A written request for withdrawal is filed at a place described 
in Sec. 404.614 by the claimant or a person who may sign an application 
for the claimant under Sec. 404.612; and
    (2) The claimant is alive at the time the request is filed.
    (b) Request for withdrawal filed after a determination is made. An 
application may be withdrawn after we make a determination on it if--
    (1) The conditions in paragraph (a) of this section are met;
    (2) Any other person whose entitlement would be rendered erroneous 
because of the withdrawal consents in writing to it. Written consent for 
the person may be given by someone who could sign an application for him 
or her under Sec. 404.612; and
    (3) All benefits already paid based on the application being 
withdrawn are repaid or we are satisfied that they will be repaid.
    (4) Old age benefits. An old age benefit application may be 
withdrawn if, in addition to the requirements of this section--
    (i) The request for withdrawal is filed within 12 months of the 
first month of entitlement; and
    (ii) The claimant has not previously withdrawn an application for 
old age benefits.
    (c) Request for withdrawal filed after the claimant's death. An 
application may be withdrawn after the claimant's death, regardless of 
whether we have made a determination on it, if--
    (1) The claimant's application was for old-age benefits that would 
be reduced because of his or her age;
    (2) The claimant died before we certified his or her benefit 
entitlement to the Treasury Department for payment;
    (3) A written request for withdrawal is filed at a place described 
in Sec. 404.614 by or for the person eligible for widow's or widower's 
benefits based on the claimant's earnings; and
    (4) The conditions in paragraphs (b) (2) and (3) of this section are 
met.
    (d) Effect of withdrawal. If we approve a request to withdraw an 
application, the application will be considered as though it was never 
filed. If we disapprove a request for withdrawal, the application is 
treated as though the request was never filed.

[44 FR 37209, June 26, 1979, as amended at 48 FR 21931, May 16, 1983; 51 
FR 37720, Oct. 24, 1986; 75 FR 76259, Dec. 8, 2010]



Sec. 404.641  Cancellation of a request to withdraw.

    A request to withdraw an application may be cancelled and the 
application reinstated if--
    (a) A written request for cancellation is filed at a place described 
in Sec. 404.614 by the claimant or someone who may sign an application 
for the claimant under Sec. 404.612;
    (b) The claimant is alive at the time the request for cancellation 
is filed; and

[[Page 221]]

    (c) For a cancellation request received after we have approved the 
withdrawal, the request is filed no later than 60 days after the date of 
the notice of approval.



                           Subpart H_Evidence

    Authority: Secs. 205(a) and 702(a)(5) of the Social Security Act (42 
U.S.C. 405(a) and 902(a)(5)).

    Source: 43 FR 24795, June 7, 1978, unless otherwise noted.

                                 General



Sec. 404.701  Introduction.

    This subpart contains the Social Security Administration's basic 
rules about what evidence is needed when a person claims old-age, 
disability, dependents' and survivors' insurance benefits as described 
in subpart D. In addition, there are special evidence requirements for 
disability benefits. These are contained in subpart P. Evidence of a 
person's earnings under social security is described in subpart I. 
Evidence needed to obtain a social security number card is described in 
part 422. Evidence requirements for the supplemental security income 
program are contained in part 416.



Sec. 404.702  Definitions.

    As used in this subpart:
    Apply means to sign a form or statement that the Social Security 
Administration accepts as an application for benefits under the rules 
set out in subpart G.
    Benefits means any old-age, disability, dependents' and survivors' 
insurance benefits described in subpart D, including a period of 
disability.
    Convincing evidence means one or more pieces of evidence that prove 
you meet a requirement for eligibility. See Sec. 404.708 for the guides 
we use in deciding whether evidence is convincing.
    Eligible means that a person would meet all the requirements for 
entitlement to benefits for a period of time but has not yet applied.
    Entitled means that a person has applied and has proven his or her 
right to benefits for a period of time.
    Evidence means any record, document, or signed statement that helps 
to show whether you are eligible for benefits or whether you are still 
entitled to benefits.
    Insured person means someone who has enough earnings under social 
security to permit the payment of benefits on his or her earnings 
record. He or she is fully insured, transitionally insured, currently 
insured, or insured for disability as defined in subpart B.
    We or Us refers to the Social Security Administration.
    You refers to the person who has applied for benefits, or the person 
for whom someone else has applied.



Sec. 404.703  When evidence is needed.

    When you apply for benefits, we will ask for evidence that you are 
eligible for them. After you become entitled to benefits, we may ask for 
evidence showing whether you continue to be entitled to benefits; or 
evidence showing whether your benefit payments should be reduced or 
stopped. See Sec. 404.401 for a list showing when benefit payments must 
be reduced or stopped.



Sec. 404.704  Your responsibility for giving evidence.

    When evidence is needed to prove your eligibility or your right to 
continue to receive benefit payments, you will be responsible for 
obtaining and giving the evidence to us. We will be glad to advise you 
what is needed and how to get it and we will consider any evidence you 
give us. If your evidence is a foreign-language record or document, we 
can have it translated for you. Evidence given to us will be kept 
confidential and not disclosed to anyone but you except under the rules 
set out in part 401. You should also be aware that Section 208 of the 
Social Security Act provides criminal penalties for misrepresenting the 
facts or for making false statements to obtain social security benefits 
for yourself or someone else.



Sec. 404.705  Failure to give requested evidence.

    Generally, you will be asked to give us by a certain date specific 
kinds of evidence or information to prove you are eligible for benefits. 
If we do not receive the evidence or information by that date, we may 
decide you are not

[[Page 222]]

eligible for benefits. If you are already receiving benefits, you may be 
asked to give us by a certain date information needed to decide whether 
you continue to be entitled to benefits or whether your benefits should 
be stopped or reduced. If you do not give us the requested information 
by the date given, we may decide that you are no longer entitled to 
benefits or that your benefits should be stopped or reduced. You should 
let us know if you are unable to give us the requested evidence within 
the specified time and explain why there will be a delay. If this delay 
is due to illness, failure to receive timely evidence you have asked for 
from another source, or a similar circumstance, you will be given 
additional time to give us the evidence.



Sec. 404.706  Where to give evidence.

    Evidence should be given to the people at a Social Security 
Administration office. In the Philippines evidence should be given to 
the people at the Veterans Administration Regional Office. Elsewhere 
outside the United States, evidence should be given to the people at a 
United States Foreign Service Office.



Sec. 404.707  Original records or copies as evidence.

    (a) General. To prove your eligibility or continuing entitlement to 
benefits, you may be asked to show us an original document or record. 
These original records or documents will be returned to you after we 
have photocopied them. We will also accept copies of original records 
that are properly certified and some uncertified birth notifications. 
These types of records are described below in this section.
    (b) Certified copies of original records. You may give us copies of 
original records or extracts from records if they are certified as true 
and exact copies by--
    (1) The official custodian of the record;
    (2) A Social Security Administration employee authorized to certify 
copies;
    (3) A Veterans Administration employee if the evidence was given to 
that agency to obtain veteran's benefits;
    (4) A U.S. Consular Officer or employee of the Department of State 
authorized to certify evidence received outside the United States; or
    (5) An employee of a State Agency or State Welfare Office authorized 
to certify copies of original records in the agency's or office's files.
    (c) Uncertified copies of original records. You may give us an 
uncertified photocopy of a birth registration notification as evidence 
where it is the practice of the local birth registrar to issue them in 
this way.



Sec. 404.708  How we decide what is enough evidence.

    When you give us evidence, we examine it to see if it is convincing 
evidence. If it is, no other evidence is needed. In deciding if evidence 
is convincing, we consider whether--
    (a) Information contained in the evidence was given by a person in a 
position to know the facts;
    (b) There was any reason to give false information when the evidence 
was created;
    (c) Information contained in the evidence was given under oath, or 
with witnesses present, or with the knowledge there was a penalty for 
giving false information;
    (d) The evidence was created at the time the event took place or 
shortly thereafter;
    (e) The evidence has been altered or has any erasures on it; and
    (f) Information contained in the evidence agrees with other 
available evidence, including our records.



Sec. 404.709  Preferred evidence and other evidence.

    If you give us the type of evidence we have shown as preferred in 
the following sections of this subpart, we will generally find it is 
convincing evidence. This means that unless we have information in our 
records that raises a doubt about the evidence, other evidence of the 
same fact will not be needed. If preferred evidence is not available, we 
will consider any other evidence you give us. If this other evidence is 
several different records or documents which all show the same 
information, we may decide it is convincing evidence even though it is 
not preferred evidence. If the other evidence is not convincing by 
itself, we will ask

[[Page 223]]

for additional evidence. If this additional evidence shows the same 
information, all the evidence considered together may be convincing. 
When we have convincing evidence of the facts that must be proven or it 
is clear that the evidence provided does not prove the necessary facts, 
we will make a formal decision about your benefit rights.

                  Evidence of Age, Marriage, and Death



Sec. 404.715  When evidence of age is needed.

    (a) If you apply for benefits, we will ask for evidence of age which 
shows your date of birth unless you are applying for--
    (1) A lump-sum death payment;
    (2) A wife's benefit and you have the insured person's child in your 
care;
    (3) A mother's or father's benefit; or
    (4) A disability benefit (or for a period of disability) and neither 
your eligibility nor benefit amount depends upon your age.
    (b) If you apply for wife's benefits while under age 62 or if you 
apply for a mother's or father's benefit, you will be asked for evidence 
of the date of birth of the insured person's children in your care.
    (c) If you apply for benefits on the earnings record of a deceased 
person, you may be asked for evidence of his or her age if this is 
needed to decide whether he or she was insured at the time of death or 
what benefit amount is payable to you.



Sec. 404.716  Type of evidence of age to be given.

    (a) Preferred evidence. The best evidence of your age, if you can 
obtain it, is either: a birth certificate or hospital birth record 
recorded before age 5; or a religious record which shows your date of 
birth and was recorded before age 5.
    (b) Other evidence of age. If you cannot obtain the preferred 
evidence of your age, you will be asked for other convincing evidence 
that shows your date of birth or age at a certain time such as: an 
original family bible or family record; school records; census records; 
a statement signed by the physician or midwife who was present at your 
birth; insurance policies; a marriage record; a passport; an employment 
record; a delayed birth certificate, your child's birth certificate; or 
an immigration or naturalization record.



Sec. 404.720  Evidence of a person's death.

    (a) When evidence of death is required. If you apply for benefits on 
the record of a deceased person, we will ask for evidence of the date 
and place of his or her death. We may also ask for evidence of another 
person's death if this is needed to prove you are eligible for benefits.
    (b) Preferred evidence of death. The best evidence of a person's 
death is--
    (1) A certified copy or extract from the public record of death, 
coroner's report of death, or verdict of a coroner's jury; or a 
certificate by the custodian of the public record of death;
    (2) A statement of the funeral director, attending physician, intern 
of the institution where death occurred;
    (3) A certified copy of, or extract from an official report or 
finding of death made by an agency or department of the United States; 
or
    (4) If death occurred outside the United States, an official report 
of death by a United States Consul or other employee of the State 
Department; or a copy of the public record of death in the foreign 
country.
    (c) Other evidence of death. If you cannot obtain the preferred 
evidence of a person's death, you will be asked to explain why and to 
give us other convincing evidence such as: the signed statements of two 
or more people with personal knowledge of the death, giving the place, 
date, and cause of death.



Sec. 404.721  Evidence to presume a person is dead.

    If you cannot prove the person is dead but evidence of death is 
needed, we will presume he or she died at a certain time if you give us 
the following evidence:
    (a) A certified copy of, or extract from, an official report or 
finding by an agency or department of the United States that a missing 
person is presumed to be dead as set out in Federal law (5 U.S.C. 5565). 
Unless we have other evidence showing an actual date of death, we will 
use the date he or she

[[Page 224]]

was reported missing as the date of death.
    (b) Signed statements by those in a position to know and other 
records which show that the person has been absent from his or her 
residence and has not been heard from for at least 7 years. If the 
presumption of death is not rebutted pursuant to Sec. 404.722, we will 
use as the person's date of death either the date he or she left home, 
the date ending the 7 year period, or some other date depending upon 
what the evidence shows is the most likely date of death.
    (c) If you are applying for benefits as the insured person's 
grandchild or stepgrandchild but the evidence does not identify a 
parent, we will presume the parent died in the first month in which the 
insured person became entitled to benefits.

[43 FR 24795, June 7, 1978, as amended at 60 FR 19164, Apr. 17, 1995]



Sec. 404.722  Rebuttal of a presumption of death.

    A presumption of death made based on Sec. 404.721(b) can be rebutted 
by evidence that establishes that the person is still alive or explains 
the individual's absence in a manner consistent with continued life 
rather than death.

    Example 1: Evidence in a claim for surviving child's benefits showed 
that the worker had wages posted to his earnings record in the year 
following the disappearance. It was established that the wages belonged 
to the worker and were for work done after his ``disappearance.'' In 
this situation, the presumption of death is rebutted by evidence (wages 
belonging to the worker) that the person is still alive after the 
disappearance.
    Example 2: Evidence shows that the worker left the family home 
shortly after a woman, whom he had been seeing, also disappeared, and 
that the worker phoned his wife several days after the disappearance to 
state he intended to begin a new life in California. In this situation 
the presumption of death is rebutted because the evidence explains the 
worker's absence in a manner consistent with continued life.

[60 FR 19165, Apr. 17, 1995]



Sec. 404.723  When evidence of marriage is required.

    If you apply for benefits as the insured person's husband or wife, 
widow or widower, divorced wife or divorced husband, we will ask for 
evidence of the marriage and where and when it took place. We may also 
ask for this evidence if you apply for child's benefits or for the lump-
sum death payment as the widow or widower. If you are a widow, widower, 
or divorced wife who remarried after your marriage to the insured person 
ended, we may also ask for evidence of the remarriage. You may be asked 
for evidence of someone else's marriage if this is necessary to prove 
your marriage to the insured person was valid. In deciding whether the 
marriage to the insured person is valid or not, we will follow the law 
of the State where the insured person had his or her permanent home when 
you applied or, if earlier, when he or she died--see Sec. 404.770. What 
evidence we will ask for depends upon whether the insured person's 
marriage was a ceremonial marriage, a common-law marriage, or a marriage 
we will deem to be valid.

[43 FR 24795, June 7, 1978, as amended at 44 FR 34493, June 15, 1979]



Sec. 404.725  Evidence of a valid ceremonial marriage.

    (a) General. A valid ceremonial marriage is one that follows 
procedures set by law in the State or foreign country where it takes 
place. These procedures cover who may perform the marriage ceremony, 
what licenses or witnesses are needed, and similar rules. A ceremonial 
marriage can be one that follows certain tribal Indian custom, Chinese 
custom, or similar traditional procedures. We will ask for the evidence 
described in this section.
    (b) Preferred evidence. Preferred evidence of a ceremonial marriage 
is--
    (1) If you are applying for wife's or husband's benefits, signed 
statements from you and the insured about when and where the marriage 
took place. If you are applying for the lump-sum death payment as the 
widow or widower, your signed statement about when and where the 
marriage took place; or
    (2) If you are applying for any other benefits or there is evidence 
causing some doubt about whether there was a ceremonial marriage: a copy 
of the public record of marriage or a certified statement as to the 
marriage; a copy of

[[Page 225]]

the religious record of marriage or a certified statement as to what the 
record shows; or the original marriage certificate.
    (c) Other evidence of a ceremonial marriage. If preferred evidence 
of a ceremonial marriage cannot be obtained, we will ask you to explain 
why and to give us a signed statement of the clergyman or official who 
held the marriage ceremony, or other convincing evidence of the 
marriage.



Sec. 404.726  Evidence of common-law marriage.

    (a) General. A common-law marriage is one considered valid under 
certain State laws even though there was no formal ceremony. It is a 
marriage between two persons free to marry, who consider themselves 
married, live together as man and wife, and, in some States, meet 
certain other requirements. We will ask for the evidence described in 
this section.
    (b) Preferred evidence. Preferred evidence of a common-law marriage 
is--
    (1) If both the husband and wife are alive, their signed statements 
and those of two blood relatives;
    (2) If either the husband or wife is dead, the signed statements of 
the one who is alive and those of two blood relatives of the deceased 
person; or
    (3) If both the husband and wife are dead, the signed statements of 
one blood relative of each;
    Note: All signed statements should show why the signer believes 
there was a marriage between the two persons. If a written statement 
cannot be gotten from a blood relative, one from another person can be 
used instead.
    (c) Other evidence of common-law marriage. If you cannot get 
preferred evidence of a common-law marriage, we will ask you to explain 
why and to give us other convincing evidence of the marriage. We may not 
ask you for statements from a blood relative or other person if we 
believe other evidence presented to us proves the common-law marriage.



Sec. 404.727  Evidence of a deemed valid marriage.

    (a) General. A deemed valid marriage is a ceremonial marriage we 
consider valid even though the correct procedures set by State law were 
not strictly followed or a former marriage had not yet ended. We will 
ask for the evidence described in this section.
    (b) Preferred evidence. Preferred evidence of a deemed valid 
marriage is--
    (1) Evidence of the ceremonial marriage as described in 
Sec. 404.725(b)(2);
    (2) If the insured person is alive, his or her signed statement that 
the other party to the marriage went through the ceremony in good faith 
and his or her reasons for believing the marriage was valid or believing 
the other party thought it was valid;
    (3) The other party's signed statement that he or she went through 
the marriage ceremony in good faith and his or her reasons for believing 
it was valid;
    (4) If needed to remove a reasonable doubt, the signed statements of 
others who might have information about what the other party knew about 
any previous marriage or other facts showing whether he or she went 
through the marriage in good faith; and
    (5) Evidence the parties to the marriage were living in the same 
household when you applied for benefits or, if earlier, when the insured 
person died (see Sec. 404.760).
    (c) Other evidence of a deemed valid marriage. If you cannot obtain 
preferred evidence of a deemed valid marriage, we will ask you to 
explain why and to give us other convincing evidence of the marriage.



Sec. 404.728  Evidence a marriage has ended.

    (a) When evidence is needed that a marriage has ended. If you apply 
for benefits as the insured person's divorced wife or divorced husband, 
you will be asked for evidence of your divorce. If you are the insured 
person's widow or divorced wife who had remarried but that husband died, 
we will ask you for evidence of his death. We may ask for evidence that 
a previous marriage you or the insured person had was ended before you 
married each other if this is needed to show the latter marriage was 
valid. If you apply for benefits as an unmarried person and you had a 
marriage which was annulled, we will ask for evidence of the annulment. 
We will ask for the evidence described in this section.

[[Page 226]]

    (b) Preferred evidence. Preferred evidence a marriage has ended is--
    (1) A certified copy of the decree of divorce or annulment; or
    (2) Evidence the person you married has died (see Sec. 404.720).
    (c) Other evidence a marriage has ended. If you cannot obtain 
preferred evidence the marriage has ended, we will ask you to explain 
why and to give us other convincing evidence the marriage has ended.

[43 FR 24795, June 7, 1978, as amended at 44 FR 34493, June 15, 1979]

               Evidence for Child's and Parent's Benefits



Sec. 404.730  When evidence of a parent or child relationship 
is needed.

    If you apply for parent's or child's benefits, we will ask for 
evidence showing your relationship to the insured person. What evidence 
we will ask for depends on whether you are the insured person's natural 
parent or child; or whether you are the stepparent, stepchild, 
grandchild, stepgrandchild, adopting parent or adopted child.



Sec. 404.731  Evidence you are a natural parent or child.

    If you are the natural parent of the insured person, we will ask for 
a copy of his or her public or religious birth record made before age 5. 
If you are the natural child of the insured person, we will ask for a 
copy of your public or religious birth record made before age 5. In 
either case, if this record shows the same last name for the insured and 
the parent or child, we will accept it as convincing evidence of the 
relationship. However, if other evidence raises some doubt about this 
record or if the record cannot be gotten, we will ask for other evidence 
of the relationship. We may also ask for evidence of marriage of the 
insured person or of his or her parent if this is needed to remove any 
reasonable doubt about the relationship. To show you are the child of 
the insured person, you may be asked for evidence you would be able to 
inherit his or her personal property under State law where he or she had 
a permanent home (see Sec. 404.770). In addition, we may ask for the 
insured persons signed statement that you are his or her natural child, 
or for a copy of any court order showing the insured has been declared 
to be your natural parent or any court order requiring the insured to 
contribute to you support because you are his or her son or daughter.



Sec. 404.732  Evidence you are a stepparent or stepchild.

    If you are the stepparent or stepchild of the insured person, we 
will ask for the evidence described in Sec. 404.731 or Sec. 404.733 that 
which shows your natural or adoptive relationship to the insured 
person's husband, wife, widow, or widower. We will also ask for evidence 
of the husband's, wife's, widow's, or widower's marriage to the insured 
person--see Sec. 404.725.



Sec. 404.733  Evidence you are the legally adopting parent or legally
adopted child.

    If you are the adopting parent or adopted child, we will ask for the 
following evidence:
    (a) A copy of the birth certificate made following the adoption; or 
if this cannot be gotten, other evidence of the adoption; and, if 
needed, evidence of the date of adoption;
    (b) If the widow or widower adopted the child after the insured 
person died, the evidence described in paragraph (a) of this section; 
your written statement whether the insured person was living in the same 
household with the child when he or she died (see Sec. 404.760); what 
support the child was getting from any other person or organization; and 
if the widow or widower had a deemed valid marriage with the insured 
person, evidence of that marriage--see Sec. 404.727;
    (c) If you are the insured's stepchild, grandchild, or 
stepgrandchild as well as his or her adopted child, we may also ask you 
for evidence to show how you were related to the insured before the 
adoption.



Sec. 404.734  Evidence you are an equitably adopted child.

    In many States, the law will treat someone as a child of another if 
he or she agreed to adopt the child, the natural parents or the person 
caring for the child were parties to the agreement, he or she and the 
child then

[[Page 227]]

lived together as parent and child, and certain other requirements are 
met. If you are a child who had this kind or relationship to the insured 
person (or to the insured persons's wife, widow, or husband), we will 
ask for evidence of the agreement if it is in writing. If it is not in 
writing or cannot be gotten, other evidence may be accepted. Also, the 
following evidence will be asked for: Written statements of your natural 
parents and the adopting parents and other evidence of the child's 
relationship to the adopting parents.



Sec. 404.735  Evidence you are the grandchild or stepgrandchild.

    If you are the grandchild or stepgrandchild of the insured person, 
we will ask you for the kind of evidence described in Secs. 404.731 
through 404.733 that shows your relationship to your parent and your 
parent's relationship to the insured.



Sec. 404.736  Evidence of a child's dependency.

    (a) When evidence of a child's dependency is needed. If you apply 
for child's benefit's we may ask for evidence you were the insured 
person's dependent at a specific time--usually the time you applied or 
the time the insured died or became disabled. What evidence we ask for 
depends upon how you are related to the insured person.
    (b) Natural or adopted child. If you are the insured person's 
natural or adopted child, we may ask for the following evidence:
    (1) A signed statement by someone who knows the facts that confirms 
this relationship and which shows whether you were legally adopted by 
someone other than the insured. If you were adopted by someone else 
while the insured person was alive, but the adoption was annulled, we 
may ask for a certified copy of the annulment decree or other convincing 
evidence of the annulment.
    (2) A signed statement by someone in a position to know showing when 
and where you lived with the insured and when and why you may have lived 
apart; and showing what contributions the insured made to your support 
and when and how they were made.
    (c) Stepchild. If you are the insured person's stepchild, we will 
ask for the following evidence:
    (1) A signed statement by someone in a position to know--showing 
when and where you lived with the insured and when and why you may have 
lived apart.
    (2) A signed statement by someone in a position to know showing you 
received at least one-half of your support from the insured for the one-
year period ending at one of the times mentioned in paragraph (a) of 
this section; and the income end support you had in this period from any 
other source.
    (d) Grandchild or Stepgrandchild. If you are the insured person's 
grandchild or stepgrandchild, we will ask for evidence described in 
paragraph (c) of this section showing that you were living together with 
the insured and receiving one-half of your support from him or her for 
the year before the insured became entitled to benefits or to a period 
of disability, or died. We will also ask for evidence of your parent's 
death or disability.



Sec. 404.745  Evidence of school attendance for child age 18 or older.

    If you apply for child's benefits as a student age 18 or over, we 
may ask for evidence you are attending school. We may also ask for 
evidence from the school you attend showing your status at the school. 
We will ask for the following evidence:
    (a) Your signed statement that you are attending school full-time 
and are not being paid by an employer to attend school.
    (b) If you apply before the school year has started and the school 
is not a high school, a letter of acceptance from the school, receipted 
bill, or other evidence showing you have enrolled or been accepted at 
that school.



Sec. 404.750  Evidence of a parent's support.

    If you apply for parent's benefits, we will ask you for evidence to 
show that you received at least one-half of your support from the 
insured person in the one-year period before he or she died or became 
disabled. We may also ask others who know the facts for a signed

[[Page 228]]

statement about your sources of support. We will ask you for the 
following evidence:
    (a) The parent's signed statement showing his or her income, any 
other sources of support, and the amount from each source over the one-
year period.
    (b) If the statement described in paragraph (a) of this section 
cannot be obtained, other convincing evidence that the parent received 
one-half of his or her support from the insured person.

                       Other Evidence Requirements



Sec. 404.760  Evidence of living in the same household with insured 
person.

    If you apply for the lump-sum death payment as the insured person's 
widow or widower, or for wife's, husband's, widow's, or widower's 
benefits based upon a deemed valid marriage as described in 
Sec. 404.727, we will ask for evidence you and the insured were living 
together in the same household when he or she died; or if the insured is 
alive, when you applied for benefits. We will ask for the following as 
evidence of this:
    (a) If the insured person is living, his or her signed statement and 
yours showing whether you were living together when you applied for 
benefits.
    (b) If the insured person is dead, your signed statement showing 
whether you were living together when he or she died.
    (c) If you and the insured person were temporarily living apart, a 
signed statement explaining where each was living, how long the 
separation lasted, and why you were separated. If needed to remove any 
reasonable doubts about this, we may ask for the signed statements of 
others in a position to know, or for other convincing evidence you and 
the insured were living together in the same household.



Sec. 404.762  What is acceptable evidence of having a child in my 
care?

    What evidence we will ask for depends upon whether the child is 
living with you or with someone else. You will be asked to give the 
following evidence:
    (a) If the child is living with you, your signed statement showing 
that the child is living with you.
    (b) If the child is living with someone else--
    (1) Your signed statement showing with whom he or she is living and 
why he or she is living with someone else. We will also ask when he or 
she last lived with you and how long this separation will last, and what 
care and contributions you provide for the child;
    (2) The signed statement of the one with whom the child is living 
showing what care you provide and the sources and amounts of support 
received for the child. If the child is in an institution, an official 
there should sign the statement. These statements are preferred 
evidence. If there is a court order or written agreement showing who has 
custody of the child, you may be asked to give us a copy; and
    (3) If you cannot get the preferred evidence described in paragraph 
(b)(2) of this section, we will ask for other convincing evidence that 
the child is in your care.

[43 FR 24795, June 7, 1978, as amended at 73 FR 40967, July 17, 2008]



Sec. 404.770  Evidence of where the insured person had a permanent home.

    (a) When evidence of the insured's permanent home is needed. We may 
ask for evidence of where the insured person's permanent home was at the 
time you applied or, if earlier, the time he or she died if--
    (1) You apply for benefits as the insured's wife, husband, widow, 
widower, parent or child; and
    (2) Your relationship to the insured depends upon the State law that 
would be followed in the place where the insured had his or her 
permanent home when you applied for benefits or when he or she died.
    (b) What evidence is needed. We will ask for the following evidence 
of the insured person's permanent home:
    (1) Your signed statement showing where the insured considered his 
permanent home to be.
    (2) If the statement in paragraph (b)(1) of this section or other 
evidence we have raises a reasonable doubt about where the insured's 
permanent

[[Page 229]]

home was, evidence of where he or she paid personal, property, or income 
taxes, or voted; or other convincing evidence of where his or her 
permanent home was.



Sec. 404.780  Evidence of ``good cause'' for exceeding time limits on
accepting proof of support or application for a lump-sum death payment.

    (a) When evidence of good cause is needed. We may ask for evidence 
that you had good cause (as defined in Sec. 404.370(f)) for not giving 
us sooner proof of the support you received from the insured as his or 
her parent. We may also ask for evidence that you had good cause (as 
defined in Sec. 404.621(b)) for not applying sooner for the lump-sum 
death payment. You may be asked for evidence of good cause for these 
delays if--
    (1) You are the insured person's parent giving us proof of support 
more than 2 years after he or she died, or became disabled; or
    (2) You are applying for the lump-sum death payment more than 2 
years after the insured died.
    (b) What evidence of good cause is needed. We will ask for the 
following evidence of good cause:
    (1) Your signed statement explaining why you did not give us the 
proof of support or the application for lump-sum death payment within 
the specified 2 year period.
    (2) If the statement in paragraph (b)(1) of the section or other 
evidence raises a reasonable doubt whether there was good cause, other 
convincing evidence of this.

[43 FR 24795, June 7, 1978, as amended at 44 FR 34493, June 15, 1979]



                      Subpart I_Records of Earnings

    Authority: Secs. 205(a), (c)(1), (c)(2)(A), (c)(4), (c)(5), (c)(6), 
and (p), 702(a)(5), and 1143 of the Social Security Act (42 U.S.C. 
405(a), (c)(1), (c)(2)(A), (c)(4), (c)(5), (c)(6), and (p), 902(a)(5), 
and 1320b-13).

    Source: 44 FR 38454, July 2, 1979, unless otherwise noted.

                           General Provisions



Sec. 404.801  Introduction.

    The Social Security Administration (SSA) keeps a record of the 
earnings of all persons who work in employment or self-employment 
covered under social security. We use these earnings records to 
determine entitlement to and the amount of benefits that may be payable 
based on a person's earnings under the retirement, survivors', 
disability and health insurance program. This subpart tells what is 
evidence of earnings, how you can find out what the record of your 
earnings shows, and how and under what circumstances the record of your 
earnings may be changed to correct errors.



Sec. 404.802  Definitions.

    For the purpose of this subpart--
    Earnings means wages and self-employment income earned by a person 
based on work covered by social security. (See subpart K for the rules 
about what constitutes wages and self-employment income for benefit 
purposes.)
    Period means a taxable year when referring to self-employment 
income. When referring to wages it means a calendar quarter if the wages 
were reported or should have been reported quarterly by your employer or 
a calendar year if the wages were reported or should have been reported 
annually by your employer.
    Record of earnings, earnings record, or record means SSA's records 
of the amounts of wages paid to you and the amounts of self-employment 
income you received, the periods in which the wages were paid and the 
self-employment income was received, and the quarters of coverage which 
you earned based on these earnings.
    Survivor means your spouse, divorced wife, child, or parent, who 
survives you. Survivor also includes your surviving divorced wife who 
may be entitled to benefits as a surviving divorced mother.
    Tax return means, as appropriate, a tax return of wages or a tax 
return of self-employment income (including information returns and 
other written

[[Page 230]]

statements filed with the Commissioner of Internal Revenue under chapter 
2 or 21 of the Internal Revenue Code of 1954, as amended).
    Time limit means a period of time 3 years, 3 months, and 15 days 
after any year in which you received earnings. The period may be 
extended by the Soldiers and Sailors Relief Act of 1940 because of your 
military service or the military service of certain relatives who 
survive you (50 U.S.C. App. 501 and following sections). Where the time 
limit ends on a Federal nonwork day, we will extend it to the next 
Federal work day.
    Wage report means a statement filed by a State under section 218 of 
the Social Security Act or related regulations. This statement includes 
wage amounts for which a State is billed and wage amounts for which 
credits or refunds are made to a State according to an agreement under 
section 218 of the Act.
    We, us, or our means the Social Security Administration (SSA).
    Year means a calendar year when referring to wages and a taxable 
year when referring to self-employment income.
    You or your means any person for whom we maintain a record of 
earnings.



Sec. 404.803  Conclusiveness of the record of your earnings.

    (a) Generally. For social security purposes, SSA records are 
evidence of the amounts of your earnings and the periods in which they 
were received.
    (b) Before time limit ends. Before the time limit ends for a year, 
SSA records are evidence, but not conclusive evidence, of the amounts 
and periods of your earnings in that year.
    (c) After time limit ends. After the time limit ends for a year--
    (1) If SSA records show an entry of self-employment income or wages 
for an employer for a period in that year, our records are conclusive 
evidence of your self-employment income in that year or the wages paid 
to you by that employer and the periods in which they were received 
unless one of the exceptions in Sec. 404.822 applies;
    (2) If SSA records show no entry of wages for an employer for a 
period in that year, our records are conclusive evidence that no wages 
were paid to you by that employer in that period unless one of the 
exceptions in Sec. 404.822 applies; and
    (3) If SSA records show no entry of self-employment income for that 
year, our records are conclusive evidence that you did not receive self-
employment income in that year unless the exception in 
Sec. 404.822(b)(2) (i) or (iii) applies.

                     Obtaining Earnings Information



Sec. 404.810  How to obtain a statement of earnings and a benefit
estimate statement.

    (a) Right to a statement of earnings and a benefit estimate. You or 
your legal representative or, after your death, your survivor or the 
legal representative of your estate may obtain a statement of your 
earnings as shown on our records at the time of the request. If you have 
a social security number and have wages or net earnings from self-
employment, you may also request and receive an earnings statement that 
will include an estimate of the monthly old-age, disability, 
dependents', and survivors' insurance benefits potentially payable on 
your earnings record, together with a description of the benefits 
payable under the medicare program. You may request these statements by 
writing, calling, or visiting a social security office.
    (b) Contents of request. When you request a statement of your 
earnings, we will ask you to complete a prescribed form, giving us your 
name, social security number, date of birth, and sex. You, your 
authorized representative or, after your death, your survivor or the 
legal representative of your estate will be asked to sign and date the 
form. If you are requesting an estimate of the monthly benefits 
potentially payable on your earnings record, we will also ask you to 
give us the amount of your earnings for the last year, an estimate of 
your earnings for the current year, an estimate of your earnings for 
future years before your planned retirement, and the age at which you 
plan to retire, so that we can give you a more realistic estimate of the 
benefits that may be payable on your record. A request for a statement 
of earnings and a

[[Page 231]]

benefit estimate not made on the prescribed form will be accepted if the 
request is in writing, is signed and dated by the appropriate individual 
noted above, and contains all the information that is requested on the 
prescribed form.

[57 FR 54918, Nov. 23, 1992]



Sec. 404.811  The statement of earnings and benefit estimates you
requested.

    (a) General. After receiving a request for a statement of earnings 
and the information we need to comply with the request, we will provide 
you or your authorized representative a statement of the earnings we 
have credited to your record at the time of your request. With the 
statement of earnings, we will include estimates of the benefits 
potentially payable on your record, unless you do not have the required 
credits (quarters of coverage) for any kind of benefit(s). (However, see 
paragraph (b)(3) of this section regarding the possibility of our 
estimating up to eight additional credits on your record.) If we do not 
provide a statement of earnings and an estimate of all the benefits 
potentially payable, or any other information you requested, we will 
explain why.
    (b) Contents of statement of earnings and benefit estimates. The 
statement of your earnings and benefit estimates will contain the 
following information:
    (1) Your social security taxed earnings as shown by our records as 
of the date of your request;
    (2) An estimate of the social security and medicare hospital 
insurance taxes paid on your earnings (although we do not maintain such 
tax information);
    (3) The number of credits, i.e., quarters of coverage, not exceeding 
40, you have for both social security and medicare hospital insurance 
purposes, and the number you need to be eligible for social security and 
also for medicare hospital insurance coverage. If you do not already 
have the required credits (quarters of coverage) to be eligible to 
receive social security benefits and medicare hospital insurance 
coverage, we may include up to eight additional estimated credits (four 
per year) based on the earnings you told us you had for last year and 
this year that we have not yet entered on your record;
    (4) A statement as to whether you meet the credits (quarters of 
coverage) requirements, as described in subpart B of this part, for each 
type of social security benefit when we prepare the benefit estimates, 
and also whether you are eligible for medicare hospital insurance 
coverage;
    (5) Estimates of the monthly retirement (old-age), disability, 
dependents' and survivors' insurance benefits potentially payable on 
your record if you meet the credits (quarters of coverage) requirements. 
The benefit estimates we send you will be based partly on your stated 
earnings for last year (if not yet on your record), your estimate of 
your earnings for the current year and for future years before you plan 
to retire, and on the age at which you plan to retire. The estimate will 
include the retirement (old-age) insurance benefits you could receive at 
age 62 (or your current age if you are already over age 62), at full 
retirement age (currently age 65 to 67, depending on your year of birth) 
or at your current age if you are already over full retirement age, and 
at age 70;
    (6) A description of the coverage under the medicare program;
    (7) A reminder of your right to request a correction of your 
earnings record; and
    (8) A remark that an annually updated statement is available on 
request.

[61 FR 18076, Apr. 24, 1996]



Sec. 404.812  Statement of earnings and benefit estimates sent without
request.

    (a) Who will be sent a statement. Unless one of the conditions in 
paragraph (b) of this section applies to you, we will send you, without 
request, a statement of earnings and benefit estimates if:
    (1) You have a social security account number;
    (2) You have wages or net earnings from self-employment on your 
social security record;
    (3) You have attained age 25 or older, as explained in paragraph 
(c)(3) of this section; and

[[Page 232]]

    (4) We can determine your current mailing address.
    (b) Who will not be sent a statement. We will not send you an 
unrequested statement if any of the following conditions apply:
    (1) You do not meet one or more of the conditions of paragraph (a) 
of this section;
    (2) Our records contain a notation of your death;
    (3) You are entitled to benefits under title II of the Act;
    (4) We have already sent you a statement, based on your request, in 
the fiscal year we selected you to receive an unrequested statement;
    (5) We cannot obtain your address (see paragraph (c)(2) of this 
section); or
    (6) We are correcting your social security earnings record when we 
select you to receive a statement of earnings and benefit estimates.
    (c) The selection and mailing process. Subject to the provisions of 
paragraphs (a) and (b) of this section, we will use the following 
process for sending statements without requests:
    (1) Selection. We will use our records of assigned social security 
account numbers to identify individuals to whom we will send statements.
    (2) Addresses. If you are living in one of the 50 States or the 
District of Columbia, our current procedure is to get your address from 
individual taxpayer files of the Internal Revenue Service, as authorized 
by section 6103(m)(7) of the Internal Revenue Code (26 U.S.C. 
6103(m)(7)). If you live in Puerto Rico, the Virgin Islands, or Guam, we 
will get your address from the taxpayer records of the place in which 
you live.
    (3) Age. If you have attained age 60 on or before September 30, 
1995, we will send you a statement by that date. If you attain age 60 on 
or after October 1, 1995 but no later than September 30, 1999, we will 
send you a statement in the fiscal year in which you attain age 60, or 
in an earlier year as resources allow. Also, we will inform you that an 
annually updated statement is available on request. Beginning October 1, 
1999, we will send you a statement each year in which you are age 25 or 
older.
    (4) Ineligible. If we do not send you a statement because one or 
more conditions in paragraph (b) of this section apply when you are 
selected, we will send a statement in the first appropriate fiscal year 
thereafter in which you do qualify.
    (5) Undeliverable. If the statement we send you is returned by the 
Post Office as undeliverable, we will not remail it.
    (d) Contents of statement of earnings and benefit estimates. To 
prepare your statement and estimate your benefits, we will use the 
earnings in our records. If there are earnings recorded for you in 
either of the two years before the year in which you are selected to get 
a statement, we will use the later of these earnings as your earnings 
for the current year and future years when we estimate your benefits. In 
addition, if you do not already have the required credits (quarters of 
coverage) to be eligible to receive benefits, we will use that last 
recorded earnings amount to estimate up to eight additional credits 
(four per year) for last year and the current year if they are not yet 
entered on your record. If there are no earnings entered on your record 
in either of the two years preceding the year of selection, we will not 
estimate current and future earnings or additional credits for you. Your 
earnings and benefit estimates statement will contain the following 
information:
    (1) Your social security taxed earnings as shown by our records as 
of the date we select you to receive a statement;
    (2) An estimate of the social security and medicare hospital 
insurance taxes paid on your earnings (although we do not maintain such 
tax information);
    (3) The number of credits, i.e., quarters of coverage, not exceeding 
40 (as described in paragraph (d) of this section), that you have for 
both social security and medicare hospital insurance purposes, and the 
number you need to be eligible for social security benefits and also for 
medicare hospital insurance coverage;
    (4) A statement as to whether you meet the credit (quarters of 
coverage) requirements, as described in subpart B of this part, for each 
type of social security benefit when we prepare the benefit estimates, 
and also whether you are eligible for medicare hospital insurance 
coverage;

[[Page 233]]

    (5) Estimates of the monthly retirement (old-age), disability, 
dependents' and survivors' insurance benefits potentially payable on 
your record if you meet the credits (quarters of coverage) requirements. 
If you are age 50 or older, the estimates will include the retirement 
(old-age) insurance benefits you could receive at age 62 (or your 
current age if you are already over age 62), at full retirement age 
(currently age 65 to 67, depending on your year of birth) or at your 
current age if you are already over full retirement age, and at age 70. 
If you are under age 50, instead of estimates, we may provide a general 
description of the benefits (including auxiliary benefits) that are 
available upon retirement;
    (6) A description of the coverage provided under the medicare 
program;
    (7) A reminder of your right to request a correction of your 
earnings record; and
    (8) A remark that an annually updated statement is available on 
request.

[61 FR 18077, Apr. 24, 1996]

                     Correcting the Earnings Record



Sec. 404.820  Filing a request for correction of the record of your
earnings.

    (a) When to file a request for correction. You or your survivor must 
file a request for correction of the record of your earnings within the 
time limit for the year being questioned unless one of the exceptions in 
Sec. 404.822 applies.
    (b) Contents of a request. (1) A request for correction of an 
earnings record must be in writing and must state that the record is 
incorrect.
    (2) A request must be signed by you or your survivor or by a person 
who may sign an application for benefits for you or for your survivor as 
described in Sec. 404.612.
    (3) A request should state the period being questioned.
    (4) A request should describe, or have attached to it, any available 
evidence which shows that the record of earnings is incorrect.
    (c) Where to file a request. A request may be filed with an SSA 
employee at one of our offices or with an SSA employee who is authorized 
to receive a request at a place other than one of our offices. A request 
may be filed with the Veterans Administration Regional Office in the 
Philippines or with any U.S. Foreign Service Office.
    (d) When a request is considered filed. A request is considered 
filed on the day it is received by any of our offices, by an authorized 
SSA employee, by the Veterans Administration Regional Office in the 
Philippines, or by any U.S. Foreign Service Office. If using the date we 
receive a mailed request disadvantages the requester, we will use the 
date the request was mailed to us as shown by a U.S. postmark. If the 
postmark is unreadable or there is no postmark, we will consider other 
evidence of the date when the request was mailed.
    (e) Withdrawal of a request for correction. A request for correction 
of SSA records of your earnings may be withdrawn as described in 
Sec. 404.640.
    (f) Cancellation of a request to withdraw. A request to withdraw a 
request for correction of SSA records of your earnings may be cancelled 
as described in Sec. 404.641.
    (g) Determinations on requests. When we receive a request described 
in this section, we will make a determination to grant or deny the 
request. If we deny the request, this determination may be appealed 
under the provisions of subpart J of this part.



Sec. 404.821  Correction of the record of your earnings before the
time limit ends.

    Before the time limit ends for any year, we will correct the record 
of your earnings for that year for any reason if satisfactory evidence 
shows SSA records are incorrect. We may correct the record as the result 
of a request filed under Sec. 404.820 or we may correct it on our own.



Sec. 404.822  Correction of the record of your earnings after the
time limit ends.

    (a) Generally. After the time limit for any year ends, we may 
correct the record of your earnings for that year if satisfactory 
evidence shows SSA records are incorrect and any of the circumstances in 
paragraphs (b) through (e) of this section applies.

[[Page 234]]

    (b) Correcting SSA records to agree with tax returns. We will 
correct SSA records to agree with a tax return of wages or self-
employment income to the extent that the amount of earnings shown in the 
return is correct.
    (1) Tax returns of wages. We may correct the earnings record to 
agree with a tax return of wages or with a wage report of a State.
    (2) Tax returns of self-employment income--(i) Return filed before 
the time limit ended. We may correct the earnings record to agree with a 
tax return of self-employment income filed before the end of the time 
limit.
    (ii) Return filed after time limit ended. We may remove or reduce, 
but not increase, the amount of self-employment income entered on the 
earnings record to agree with a tax return of self-employment income 
filed after the time limit ends.
    (iii) Self-employment income entered in place of erroneously entered 
wages. We may enter self-employment income for any year up to an amount 
erroneously entered in SSA records as wages but which was later removed 
from the records. However, we may enter self-employment income under 
this paragraph only if--
    (A) An amended tax return is filed before the time limit ends for 
the year in which the erroneously entered wages were removed; or
    (B) Net earnings from self-employment, which are not already entered 
in the record of your earnings, were included in a tax return filed 
before the end of the time limit for the year in which the erroneously 
entered wages were removed.
    (c) Written request for correction or application for benefits filed 
before the time limit ends--(1) Written request for correction. We may 
correct an earnings record if you or your survivor files a request for 
correction before the time limit for that year ends. The request must 
state that the earnings record for that year is incorrect. However, we 
may not correct the record under this paragraph after our determination 
on the request becomes final.
    (2) Application for benefits. We may correct an earnings record if 
an application is filed for monthly benefits or for a lump-sum death 
payment before the time limit for that year ends. However, we may not 
correct the record under this paragraph after our determination on the 
application becomes final.
    (3) See subpart J for the rules on the finality of determinations.
    (d) Transfer of wages to or from the Railroad Retirement Board--(1) 
Wages erroneously reported. We may transfer to or from the records of 
the Railroad Retirement Board earnings which were erroneously reported 
to us or to the Railroad Retirement Board.
    (2) Earnings certified by Railroad Retirement Board. We may enter 
earnings for railroad work under subpart O if the earnings are certified 
by the Railroad Retirement Board.
    (e) Other circumstances permitting correction--(1) Investigation 
started before time limit ends. We may correct an earnings record if the 
correction is made as the result of an investigation started before, but 
completed after the time limit ends. An investigation is started when we 
take an affirmative step leading to a decision on a question about the 
earnings record, for example, an investigation is started when one SSA 
unit asks another unit to obtain additional information or evidence. We 
will remove or reduce earnings on the record under this paragraph only 
if we carried out the investigation as promptly as circumstances 
permitted.
    (2) Error apparent on face of records. We may correct an earnings 
record to correct errors, such as mechanical or clerical errors, which 
can be identified and corrected without going beyond any of the 
pertinent SSA records.
    (3) Fraud. We may change any entry which was entered on the earnings 
record as the result of fraud.
    (4) Entries for wrong person or period. We may correct errors in SSA 
records resulting from earnings being entered for the wrong person or 
period.
    (5) Less than correct wages on SSA records. We may enter wages paid 
to you by an employer for a period if no part of those wages or less 
than the correct amount of those wages is entered on SSA records.
    (6) Wage payments under a statute. We may enter and allocate wages 
awarded to you for a period as the result of a determination or 
agreement approved by

[[Page 235]]

a court or administrative agency that enforces Federal or State statutes 
protecting your right to employment or wages.

[44 FR 38454, July 2, 1979, as amended at 57 FR 21600, May 21, 1992]



Sec. 404.823  Correction of the record of your earnings for work in
the employ of the United States.

    We may correct the record of your earnings to remove, reduce, or 
enter earnings for work in the employ of the United States only if--
    (a) Correction is permitted under Sec. 404.821 or Sec. 404.822; and
    (b) Any necessary determinations concerning the amount of 
remuneration paid for your work and the periods for which such 
remuneration was paid have been made as shown by--
    (1) A tax return filed under section 3122 of the Internal Revenue 
Code (26 U.S.C. 3122); or
    (2) A certification by the head of the Federal agency or 
instrumentality of which you have been an employee or his or her agent. 
A Federal instrumentality for these purposes includes a nonappropriated 
fund activity of the armed forces or Coast Guard.

[44 FR 38454, July 2, 1979, as amended at 55 FR 24891, June 19, 1990]

         Notice of Removal or Reduction of an Entry of Earnings



Sec. 404.830  Notice of removal or reduction of your wages.

    If we remove or reduce an amount of wages entered on the record of 
your earnings, we will notify you of this correction if we previously 
notified you of the amount of your wages for the period involved. We 
will notify your survivor if we previously notified you or your survivor 
of the amount of your earnings for the period involved.



Sec. 404.831  Notice of removal or reduction of your self-employment 
income.

    If we remove or reduce an amount of self-employment income entered 
on the record of your earnings, we will notify you of this correction. 
We will notify your survivor if we previously notified you or your 
survivor of the amount of your earnings for the period involved.



 Subpart J_Determinations, Administrative Review Process, and Reopening 
                     of Determinations and Decisions

    Authority: Secs. 201(j), 204(f), 205(a)-(b), (d)-(h), and (j), 221, 
223(i), 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 
404(f), 405(a)-(b), (d)-(h), and (j), 421, 423(i), 425, and 902(a)(5)); 
sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); secs. 5, 
6(c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 421 note); 
sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note).

          Introduction, Definitions, and Initial Determinations



Sec. 404.900  Introduction.

    (a) Explanation of the administrative review process. This subpart 
explains the procedures we follow in determining your rights under title 
II of the Social Security Act. The regulations describe the process of 
administrative review and explain your right to judicial review after 
you have taken all the necessary administrative steps. These procedures 
apply also to persons claiming certain benefits under title XVIII of the 
Act (Medicare); see 42 CFR 405.904(a)(1). The administrative review 
process consists of several steps, which usually must be requested 
within certain time periods and in the following order:
    (1) Initial determination. This is a determination we make about 
your entitlement or your continuing entitlement to benefits or about any 
other matter, as discussed in Sec. 404.902, that gives you a right to 
further review.
    (2) Reconsideration. If you are dissatisfied with an initial 
determination, you may ask us to reconsider it.
    (3) Hearing before an administrative law judge. If you are 
dissatisfied with the reconsideration determination, you may request a 
hearing before an administrative law judge.
    (4) Appeals Council review. If you are dissatisfied with the 
decision of the administrative law judge, you may request that the 
Appeals Council review the decision.

[[Page 236]]

    (5) Federal court review. When you have completed the steps of the 
administrative review process listed in paragraphs (a)(1) through (a)(4) 
of this section, we will have made our final decision. If you are 
dissatisfied with our final decision, you may request judicial review by 
filing an action in a Federal district court.
    (6) Expedited appeals process. At some time after your initial 
determination has been reviewed, if you have no dispute with our 
findings of fact and our application and interpretation of the 
controlling laws, but you believe that a part of the law is 
unconstitutional, you may use the expedited appeals process. This 
process permits you to go directly to a Federal district court so that 
the constitutional issue may be resolved.
    (b) Nature of the administrative review process. In making a 
determination or decision in your case, we conduct the administrative 
review process in an informal, non-adversarial manner. Subject to 
certain timeframes at the hearing level (see Sec. 404.935) and the 
limitations on Appeals Council consideration of additional evidence (see 
Sec. 404.970), we will consider at each step of the review process any 
information you present as well as all the information in our records. 
If you are dissatisfied with our decision in the review process, but do 
not take the next step within the stated time period, you will lose your 
right to further administrative review and your right to judicial 
review, unless you can show us that there was good cause for your 
failure to make a timely request for review.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 300, Jan. 3, 1986; 51 FR 
8808, Mar. 14, 1986; 52 FR 4004, Feb. 9, 1987; 78 FR 57259, Sept. 18, 
2013; 80 FR 14835, Mar. 20, 2015; 81 FR 90992, Dec. 16, 2016]



Sec. 404.901  Definitions.

    As used in this subpart:
    Date you receive notice means 5 days after the date on the notice, 
unless you show us that you did not receive it within the 5-day period.
    Decision means the decision made by an administrative law judge or 
the Appeals Council.
    Determination means the initial determination or the reconsidered 
determination.
    Preponderance of the evidence means such relevant evidence that as a 
whole shows that the existence of the fact to be proven is more likely 
than not.
    Remand means to return a case for further review.
    Substantial evidence means such relevant evidence as a reasonable 
mind might accept as adequate to support a conclusion.
    Vacate means to set aside a previous action.
    Waive means to give up a right knowingly and voluntarily.
    We, us, or our refers to the Social Security Administration.
    You or your refers to any person claiming a right under the old age, 
disability, dependents' or survivors' benefits program.

[45 FR 52081, Aug. 5, 1980, as amended at 73 FR 76943, Dec. 18, 2008]



Sec. 404.902  Administrative actions that are initial determinations.

    Initial determinations are the determinations we make that are 
subject to administrative and judicial review. We will base our initial 
determination on the preponderance of the evidence. We will state the 
important facts and give the reasons for our conclusions in the initial 
determination. In the old age, survivors' and disability insurance 
programs, initial determinations include, but are not limited to, 
determinations about--
    (a) Your entitlement or your continuing entitlement to benefits;
    (b) Your reentitlement to benefits;
    (c) The amount of your benefit;
    (d) A recomputation of your benefit;
    (e) A reduction in your disability benefits because you also receive 
benefits under a workmen's compensation law;
    (f) A deduction from your benefits on account of work;
    (g) [Reserved]
    (h) Termination of your benefits;
    (i) Penalty deductions imposed because you failed to report certain 
events;
    (j) Any overpayment or underpayment of your benefits;
    (k) Whether an overpayment of benefits must be repaid to us;
    (l) How an underpayment of benefits due a deceased person will be 
paid;

[[Page 237]]

    (m) The establishment or termination of a period of disability;
    (n) A revision of your earnings record;
    (o) Whether the payment of your benefits will be made, on your 
behalf, to a representative payee;
    (p) Your drug addiction or alcoholism;
    (q) Who will act as your payee if we determine that representative 
payment will be made;
    (r) An offset of your benefits under Sec. 404.408b because you 
previously received supplemental security income payments for the same 
period;
    (s) Whether your completion of, or continuation for a specified 
period of time in, an appropriate program of vocational rehabilitation 
services, employment services, or other support services will increase 
the likelihood that you will not have to return to the disability 
benefit rolls, and thus, whether your benefits may be continued even 
though you are not disabled;
    (t) Nonpayment of your benefits under Sec. 404.468 because of your 
confinement in a jail, prison, or other penal institution or 
correctional facility for conviction of a felony;
    (u) Whether or not you have a disabling impairment(s) as defined in 
Sec. 404.1511;
    (v) Nonpayment of your benefits under Sec. 404.469 because you have 
not furnished us satisfactory proof of your Social Security number, or, 
if a Social Security number has not been assigned to you, you have not 
filed a proper application for one;
    (w) A claim for benefits under Sec. 404.633 based on alleged 
misinformation; and
    (x) Whether we were negligent in investigating or monitoring or 
failing to investigate or monitor your representative payee, which 
resulted in the misuse of benefits by your representative payee.

[45 FR 52081, Aug. 5, 1980, as amended at 47 FR 4988, Feb. 3, 1982; 47 
FR 31543, July 21, 1982; 49 FR 22272, May 29, 1984; 50 FR 20902, May 21, 
1985; 56 FR 41790, Aug. 23, 1991; 59 FR 44925, Aug. 31, 1994; 60 FR 
8147, Feb. 10, 1995; 68 FR 40123, July 7, 2003; 69 FR 60232, Oct. 7, 
2004; 70 FR 36507, June 24, 2005; 73 FR 76943, Dec. 18, 2008]



Sec. 404.903  Administrative actions that are not initial
determinations.

    Administrative actions that are not initial determinations may be 
reviewed by us, but they are not subject to the administrative review 
process provided by this subpart, and they are not subject to judicial 
review. These actions include, but are not limited to, an action--
    (a) Suspending benefits pending an investigation and determination 
of any factual issue relating to a deduction on account of work;
    (b) Suspending benefits pending an investigation to determine if 
your disability has ceased;
    (c) Denying a request to be made a representative payee;
    (d) Certifying two or more family members for joint payment of 
benefits;
    (e) Withholding less than the full amount of your monthly benefit to 
recover an overpayment;
    (f) Determining the fee that may be charged or received by a person 
who has represented you in connection with a proceeding before us;
    (g) Refusing to recognize, disqualifying, or suspending a person 
from acting as your representative in a proceeding before us (see 
Secs. 404.1705 and 404.1745);
    (h) Compromising, suspending or terminating collection of an 
overpayment under the Federal Claims Collection Act;
    (i) Extending or not extending the time to file a report of 
earnings;
    (j) Denying your request to extend the time period for requesting 
review of a determination or a decision;
    (k) Denying your request to use the expedited appeals process;
    (l) Denying your request to reopen a determination or a decision;
    (m) Withholding temporarily benefits based on a wage earner's 
estimate of earnings to avoid creating an overpayment;
    (n) Determining whether (and the amount of) travel expenses incurred 
are reimbursable in connection with proceedings before us;
    (o) Denying your request to readjudicate your claim and apply an 
Acquiescence Ruling;

[[Page 238]]

    (p) Findings on whether we can collect an overpayment by using the 
Federal income tax refund offset procedure (see Sec. 404.523);
    (q) Determining whether an organization may collect a fee from you 
for expenses it incurred in serving as your representative payee (see 
Sec. 404.2040a);
    (r) Declining under Sec. 404.633(f) to make a determination on a 
claim for benefits based on alleged misinformation because one or more 
of the conditions specified in Sec. 404.633(f) are not met;
    (s) The assignment of a monthly payment day (see Sec. 404.1807);
    (t) Determining whether we will refer information about your 
overpayment to a consumer reporting agency (see Secs. 404.527 and 
422.305 of this chapter);
    (u) Determining whether we will refer your overpayment to the 
Department of the Treasury for collection by offset against Federal 
payments due you (see Secs. 404.527 and 422.310 of this chapter);
    (v) Determining whether we will order your employer to withhold from 
your disposable pay to collect an overpayment you received under title 
II of the Social Security Act (see part 422, subpart E, of this 
chapter);
    (w) Determining whether provisional benefits are payable, the amount 
of the provisional benefits, and when provisional benefits terminate 
(see Sec. 404.1592e);
    (x) Determining whether to select your claim for the quick 
disability determination process under Sec. 404.1619;
    (y) The removal of your claim from the quick disability 
determination process under Sec. 404.1619;
    (z) Starting or discontinuing a continuing disability review;
    (aa) Issuing a receipt in response to your report of a change in 
your work activity; and
    (bb) Determining whether a non-attorney representative is eligible 
to receive direct fee payment as described in Sec. 404.1717 of this 
part.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 8808, Mar. 14, 1986; 55 
FR 1018, Jan. 11, 1990; 56 FR 52469, Oct. 21, 1991; 57 FR 23057, June 1, 
1992; 59 FR 44925, Aug. 31, 1994; 62 FR 6120, Feb. 11, 1997; 62 FR 
64278, Dec. 5, 1997; 68 FR 74183, Dec. 23, 2003; 70 FR 57142, Sept. 30, 
2005; 71 FR 16443, Mar. 31, 2006; 71 FR 66853, 66866, Nov. 17, 2006; 72 
FR 51177, Sept. 6, 2007; 76 FR 45192, July 28, 2011; 76 FR 80245, Dec. 
23, 2011; 80 FR 400, Jan. 6, 2015]



Sec. 404.904  Notice of the initial determination.

    We will mail a written notice of our initial determination to you at 
your last known address. The written notice will explain in simple and 
clear language what we have determined and the reasons for and the 
effect of our determination. If our determination involves a 
determination of disability that is in whole or in part unfavorable to 
you, our written notice also will contain in understandable language a 
statement of the case setting forth the evidence on which our 
determination is based. The notice also will inform you of your right to 
reconsideration. We will not mail a notice if the beneficiary's 
entitlement to benefits has ended because of his or her death.

[72 FR 51177, Sept. 6, 2007]



Sec. 404.905  Effect of an initial determination.

    An initial determination is binding unless you request a 
reconsideration within the stated time period, or we revise the initial 
determination.

[51 FR 300, Jan. 3, 1986]



Sec. 404.906  Testing modifications to the disability determination
procedures.

    (a) Applicability and scope. Notwithstanding any other provision in 
this part or part 422 of this chapter, we are establishing the 
procedures set out in this section to test modifications to our 
disability determination process. These modifications will enable us to 
test, either individually or in one or more combinations, the effect of: 
having disability claim managers assume primary responsibility for 
processing an application for disability benefits; providing persons who 
have applied for

[[Page 239]]

benefits based on disability with the opportunity for an interview with 
a decisionmaker when the decisionmaker finds that the evidence in the 
file is insufficient to make a fully favorable determination or requires 
an initial determination denying the claim; having a single 
decisionmaker make the initial determination with assistance from 
medical consultants, where appropriate; and eliminating the 
reconsideration step in the administrative review process and having a 
claimant who is dissatisfied with the initial determination request a 
hearing before an administrative law judge. The model procedures we test 
will be designed to provide us with information regarding the effect of 
these procedural modifications and enable us to decide whether and to 
what degree the disability determination process would be improved if 
they were implemented on a national level.
    (b) Procedures for cases included in the tests. Prior to commencing 
each test or group of tests in selected site(s), we will publish a 
notice in the Federal Register. The notice will describe which model or 
combinations of models we intend to test, where the specific test 
site(s) will be, and the duration of the test(s). The individuals who 
participate in the test(s) will be randomly assigned to a test group in 
each site where the tests are conducted. Paragraphs (b) (1) through (4) 
of this section lists descriptions of each model.
    (1) In the disability claim manager model, when you file an 
application for benefits based on disability, a disability claim manager 
will assume primary responsibility for the processing of your claim. The 
disability claim manager will be the focal point for your contacts with 
us during the claims intake process and until an initial determination 
on your claim is made. The disability claim manager will explain the 
disability programs to you, including the definition of disability and 
how we determine whether you meet all the requirements for benefits 
based on disability. The disability claim manager will explain what you 
will be asked to do throughout the claims process and how you can obtain 
information or assistance through him or her. The disability claim 
manager will also provide you with information regarding your right to 
representation, and he or she will provide you with appropriate referral 
sources for representation. The disability claim manager may be either a 
State agency employee or a Federal employee. In some instances, the 
disability claim manager may be assisted by other individuals.
    (2) In the single decisionmaker model, the decisionmaker will make 
the disability determination and may also determine whether the other 
conditions for entitlement to benefits based on disability are met. The 
decisionmaker will make the disability determination after any 
appropriate consultation with a medical or psychological consultant. The 
medical or psychological consultant will not be required to sign the 
disability determination forms we use to have the State agency certify 
the determination of disability to us (see Sec. 404.1615). However, 
before an initial determination is made in any case where there is 
evidence which indicates the existence of a mental impairment, the 
decisionmaker will make every reasonable effort to ensure that a 
qualified psychiatrist or psychologist has completed the medical portion 
of the case review and any applicable residual functional capacity 
assessment pursuant to our existing procedures (see Sec. 404.1617). In 
some instances the decisionmaker may be the disability claim manager 
described in paragraph (b)(1) of this section. When the decisionmaker is 
a State agency employee, a team of individuals that includes a Federal 
employee will determine whether the other conditions for entitlement to 
benefits are met.
    (3) In the predecision interview model, if the decisionmaker(s) 
finds that the evidence in your file is insufficient to make a fully 
favorable determination or requires an initial determination denying 
your claim, a predecision notice will be mailed to you. The notice will 
tell you that, before the decisionmaker(s) makes an initial 
determination about whether you are disabled, you may request a 
predecision interview with the decisionmaker(s). The notice will also 
tell you that you may submit additional evidence. You must request a

[[Page 240]]

predecision interview within 10 days after the date you receive the 
predecision notice. You must also submit any additional evidence within 
10 days after you receive the predecision notice. If you request a 
predecision interview, the decisionmaker(s) will conduct the predecision 
interview in person, by videoconference, or by telephone as the 
decisionmaker(s) determines is appropriate under the circumstances. If 
you make a late request for a predecision interview, or submit 
additional evidence late, but show in writing that you had good cause 
under the standards in Sec. 404.911 for missing the deadline, the 
decisionmaker(s) will extend the deadline. If you do not request the 
predecision interview, or if you do not appear for a scheduled 
predecision interview and do not submit additional evidence, or if you 
do not respond to our attempts to communicate with you, the 
decisionmaker(s) will make an initial determination based upon the 
evidence in your file. If you identify additional evidence during the 
predecision interview, which was previously not available, the 
decisionmaker(s) will advise you to submit the evidence. If you are 
unable to do so, the decisionmaker(s) may assist you in obtaining it. 
The decisionmaker(s) also will advise you of the specific timeframes you 
have for submitting any additional evidence identified during the 
predecision interview. If you have no treating source(s) (see 
Sec. 404.1502), or your treating source(s) is unable or unwilling to 
provide the necessary evidence, or there is a conflict in the evidence 
that cannot be resolved through evidence from your treating source(s), 
the decisionmaker(s) may arrange a consultative examination or resolve 
conflicts according to existing procedures (see Sec. 404.1519a). If you 
attend the predecision interview, or do not attend the predecision 
interview but you submit additional evidence, the decisionmaker(s) will 
make an initial determination based on the evidence in your file, 
including the additional evidence you submit or the evidence obtained as 
a result of the predecision notice or interview, or both.
    (4) In the reconsideration elimination model, we will modify the 
disability determination process by eliminating the reconsideration step 
of the administrative review process. If you receive an initial 
determination on your claim for benefits based on disability, and you 
are dissatisfied with the determination, we will notify you that you may 
request a hearing before an administrative law judge.

[60 FR 20026, Apr. 24, 1995, as amended at 73 FR 2415, Jan. 15, 2008; 76 
FR 24806, May 3, 2011; 82 FR 5863, Jan. 18, 2017]

                             Reconsideration



Sec. 404.907  Reconsideration--general.

    If you are dissatisfied with the initial determination, 
reconsideration is the first step in the administrative review process 
that we provide, except that we provide the opportunity for a hearing 
before an administrative law judge as the first step for those 
situations described in Secs. 404.930 (a)(6) and (a)(7), where you 
appeal an initial determination denying your request for waiver of 
adjustment or recovery of an overpayment (see Sec. 404.506). If you are 
dissatisfied with our reconsidered determination, you may request a 
hearing before an administrative law judge.

[61 FR 56132, Oct. 31, 1996]



Sec. 404.908  Parties to a reconsideration.

    (a) Who may request a reconsideration. If you are dissatisfied with 
the initial determination, you may request that we reconsider it. In 
addition, a person who shows in writing that his or her rights may be 
adversely affected by the initial determination may request a 
reconsideration.
    (b) Who are parties to a reconsideration. After a request for the 
reconsideration, you and any person who shows in writing that his or her 
rights are adversely affected by the initial determination will be 
parties to the reconsideration.



Sec. 404.909  How to request reconsideration.

    (a) We shall reconsider an initial determination if you or any other 
party to the reconsideration files a written request--

[[Page 241]]

    (1) Within 60 days after the date you receive notice of the initial 
determination (or within the extended time period if we extend the time 
as provided in paragraph (b) of this section);
    (2) At one of our offices, the Veterans Administration Regional 
Office in the Philippines, or an office of the Railroad Retirement Board 
if you have 10 or more years of service in the railroad industry.
    (b) Extension of time to request a reconsideration. If you want a 
reconsideration of the initial determination but do not request one in 
time, you may ask us for more time to request a reconsideration. Your 
request for an extension of time must be in writing and must give the 
reasons why the request for reconsideration was not filed within the 
stated time period. If you show us that you had good cause for missing 
the deadline, we will extend the time period. To determine whether good 
cause exists, we use the standards explained in Sec. 404.911.



Sec. 404.911  Good cause for missing the deadline to request review.

    (a) In determining whether you have shown that you had good cause 
for missing a deadline to request review we consider--
    (1) What circumstances kept you from making the request on time;
    (2) Whether our action misled you;
    (3) Whether you did not understand the requirements of the Act 
resulting from amendments to the Act, other legislation, or court 
decisions; and
    (4) Whether you had any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
which prevented you from filing a timely request or from understanding 
or knowing about the need to file a timely request for review.
    (b) Examples of circumstances where good cause may exist include, 
but are not limited to, the following situations:
    (1) You were seriously ill and were prevented from contacting us in 
person, in writing, or through a friend, relative, or other person.
    (2) There was a death or serious illness in your immediate family.
    (3) Important records were destroyed or damaged by fire or other 
accidental cause.
    (4) You were trying very hard to find necessary information to 
support your claim but did not find the information within the stated 
time periods.
    (5) You asked us for additional information explaining our action 
within the time limit, and within 60 days of receiving the explanation 
you requested reconsideration or a hearing, or within 30 days of 
receiving the explanation you requested Appeal Council review or filed a 
civil suit.
    (6) We gave you incorrect or incomplete information about when and 
how to request administrative review or to file a civil suit.
    (7) You did not receive notice of the determination or decision.
    (8) You sent the request to another Government agency in good faith 
within the time limit and the request did not reach us until after the 
time period had expired.
    (9) Unusual or unavoidable circumstances exist, including the 
circumstances described in paragraph (a)(4) of this section, which show 
that you could not have known of the need to file timely, or which 
prevented you from filing timely.

[45 FR 52081, Aug. 5, 1980, as amended at 59 FR 1634, Jan. 12, 1994]



Sec. 404.913  Reconsideration procedures.

    (a) Case review. With the exception of the type of case described in 
paragraph (b) of this section, the reconsideration process consists of a 
case review. Under a case review procedure, we will give you and the 
other parties to the reconsideration an opportunity to present 
additional evidence to us. The official who reviews your case will then 
make a reconsidered determination based on all of this evidence.
    (b) Disability hearing. If you have been receiving benefits based on 
disability and you request reconsideration of an initial or revised 
determination that, based on medical factors, you are not now disabled, 
we will give you and the other parties to the reconsideration an 
opportunity for a disability hearing. (See Secs. 404.914 through 
404.918.)

[51 FR 300, Jan. 3, 1986]

[[Page 242]]



Sec. 404.914  Disability hearing--general.

    (a) Availability. We will provide you with an opportunity for a 
disability hearing if:
    (1) You have been receiving benefits based on a medical impairment 
that renders you disabled;
    (2) We have made an initial or revised determination based on 
medical factors that you are not now disabled because your impairment:
    (i) Has ceased;
    (ii) Did not exist; or
    (iii) Is no longer disabling; and
    (3) You make a timely request for reconsideration of the initial or 
revised determination.
    (b) Scope. The disability hearing will address only the initial or 
revised determination, based on medical factors, that you are not now 
disabled. Any other issues which arise in connection with your request 
for reconsideration will be reviewed in accordance with the 
reconsideration procedures described in Sec. 404.913(a).
    (c) Time and place--(1) General. Either the State agency or the 
Associate Commissioner for Disability Determinations or his or her 
delegate, as appropriate, will set the time and place of your disability 
hearing. We will send you a notice of the time and place of your 
disability hearing at least 20 days before the date of the hearing. You 
may be expected to travel to your disability hearing. (See 
Secs. 404.999a-404.999d regarding reimbursement for travel expenses.)
    (2) Change of time or place. If you are unable to travel or have 
some other reason why you cannot attend your disability hearing at the 
scheduled time or place, you should request at the earliest possible 
date that the time or place of your hearing be changed. We will change 
the time or place if there is good cause for doing so under the 
standards in Sec. 404.936 (c) and (d).
    (d) Combined issues. If a disability hearing is available to you 
under paragraph (a) of this section, and you file a new application for 
benefits while your request for reconsideration is still pending, we may 
combine the issues on both claims for the purpose of the disability 
hearing and issue a combined initial/reconsidered determination which is 
binding with respect to the common issues on both claims.
    (e) Definition. For purposes of the provisions regarding disability 
hearings (Secs. 404.914 through 404.918) we, us or our means the Social 
Security Administration or the State agency.

[51 FR 300, Jan. 3, 1986, as amended at 51 FR 8808, Mar. 14, 1986; 71 FR 
10427, Mar. 1, 2006]



Sec. 404.915  Disability hearing--disability hearing officers.

    (a) General. Your disability hearing will be conducted by a 
disability hearing officer who was not involved in making the 
determination you are appealing. The disability hearing officer will be 
an experienced disability examiner, regardless of whether he or she is 
appointed by a State agency or by the Associate Commissioner for 
Disability Determinations or his or her delegate, as described in 
paragraphs (b) and (c) of this section.
    (b) State agency hearing officers--(1) Appointment of State agency 
hearing officers. If a State agency made the initial or revised 
determination that you are appealing, the disability hearing officer who 
conducts your disability hearing may be appointed by a State agency. If 
the disability hearing officer is appointed by a State agency, that 
individual will be employed by an adjudicatory unit of the State agency 
other than the adjudicatory unit which made the determination you are 
appealing.
    (2) State agency defined. For purposes of this subpart, State agency 
means the adjudicatory component in the State which issues disability 
determinations.
    (c) Federal hearing officers. The disability hearing officer who 
conducts your disability hearing will be appointed by the Associate 
Commissioner for Disability Determinations or his or her delegate if:
    (1) A component of our office other than a State agency made the 
determination you are appealing; or
    (2) The State agency does not appoint a disability hearing officer 
to conduct your disability hearing under paragraph (b) of this section.

[51 FR 301, Jan. 3, 1986, as amended at 71 FR 10428, Mar. 1, 2006]

[[Page 243]]



Sec. 404.916  Disability hearing--procedures.

    (a) General. The disability hearing will enable you to introduce 
evidence and present your views to a disability hearing officer if you 
are dissatisfied with an initial or revised initial determination, based 
on medical factors, that you are not now disabled as described in 
Sec. 404.914(a)(2).
    (b) Your procedural rights. We will advise you that you have the 
following procedural rights in connection with the disability hearing 
process:
    (1) You may request that we assist you in obtaining pertinent 
evidence for your disability hearing and, if necessary, that we issue a 
subpoena to compel the production of certain evidence or testimony. We 
will follow subpoena procedures similar to those described in 
Sec. 404.950(d) for the administrative law judge hearing process;
    (2) You may have a representative at the hearing appointed under 
subpart R of this part, or you may represent yourself;
    (3) You or your representative may review the evidence in your case 
file, either on the date of your hearing or at an earlier time at your 
request, and present additional evidence;
    (4) You may present witnesses and question any witnesses at the 
hearing;
    (5) You may waive your right to appear at the hearing. If you do not 
appear at the hearing, the disability hearing officer will prepare and 
issue a written reconsidered determination based on the information in 
your case file.
    (c) Case preparation. After you request reconsideration, your case 
file will be reviewed and prepared for the hearing. This review will be 
conducted in the component of our office (including a State agency) that 
made the initial or revised determination, by personnel who were not 
involved in making the initial or revised determination. Any new 
evidence you submit in connection with your request for reconsideration 
will be included in this review. If necessary, further development of 
the evidence, including arrangements for medical examinations, will be 
undertaken by this component. After the case file is prepared for the 
hearing, it will be forwarded by this component to the disability 
hearing officer for a hearing. If necessary, the case file may be sent 
back to this component at any time prior to the issuance of the 
reconsidered determination for additional development. Under paragraph 
(d) of this section, this component has the authority to issue a 
favorable reconsidered determination at any time in its development 
process.
    (d) Favorable reconsideration determination without a hearing. If 
all the evidence in your case file supports a finding that you are now 
disabled, either the component that prepares your case for hearing under 
paragraph (c) or the disability hearing officer will issue a written 
favorable reconsideration determination, even if a disability hearing 
has not yet been held.
    (e) Opportunity to submit additional evidence after the hearing. At 
your request, the disability hearing officer may allow up to 15 days 
after your disability hearing for receipt of evidence which is not 
available at the hearing, if:
    (1) The disability hearing officer determines that the evidence has 
a direct bearing on the outcome of the hearing; and
    (2) The evidence could not have been obtained before the hearing.
    (f) Opportunity to review and comment on evidence obtained or 
developed by us after the hearing. If, for any reason, additional 
evidence is obtained or developed by us after your disability hearing, 
and all evidence taken together can be used to support a reconsidered 
determination that is unfavorable to you with regard to the medical 
factors of eligibility, we will notify you, in writing, and give you an 
opportunity to review and comment on the additional evidence. You will 
be given 10 days from the date you receive our notice to submit your 
comments (in writing or, in appropriate cases, by telephone), unless 
there is good cause for granting you additional time, as illustrated by 
the examples in Sec. 404.911(b). Your comments will be considered before 
a reconsidered determination is issued. If you believe that it is 
necessary to have further opportunity for a hearing with respect to the 
additional evidence, a

[[Page 244]]

supplementary hearing may be scheduled at your request. Otherwise, we 
will ask for your written comments on the additional evidence, or, in 
appropriate cases, for your telephone comments.

[51 FR 301, Jan. 3, 1986]



Sec. 404.917  Disability hearing--disability hearing officer's
reconsidered determination.

    (a) General. The disability hearing officer who conducts your 
disability hearing will prepare and will also issue a written 
reconsidered determination, unless:
    (1) The disability hearing officer sends the case back for 
additional development by the component that prepared the case for the 
hearing, and that component issues a favorable determination, as 
permitted by Sec. 404.916(c);
    (2) It is determined that you are engaging in substantial gainful 
activity and that you are therefore not disabled; or
    (3) The reconsidered determination prepared by the disability 
hearing officer is reviewed under Sec. 404.918.
    (b) Content. The disability hearing officer's reconsidered 
determination will give the findings of fact and the reasons for the 
reconsidered determination. The disability hearing officer must base the 
reconsidered determination on the preponderance of the evidence offered 
at the disability hearing or otherwise included in your case file.
    (c) Notice. We will mail you and the other parties a notice of 
reconsidered determination in accordance with Sec. 404.922.
    (d) Effect. The disability hearing officer's reconsidered 
determination, or, if it is changed under Sec. 404.918, the reconsidered 
determination that is issued by the Associate Commissioner for 
Disability Determinations or his or her delegate, is binding in 
accordance with Sec. 404.921, subject to the exceptions specified in 
that section.

[51 FR 302, Jan. 3, 1986, as amended at 71 FR 10428, Mar. 1, 2006; 73 FR 
76943, Dec. 18, 2008]



Sec. 404.918  Disability hearing--review of the disability hearing
officer's reconsidered determination before it is issued.

    (a) General. The Associate Commissioner for Disability 
Determinations or his or her delegate may select a sample of disability 
hearing officers' reconsidered determinations, before they are issued, 
and review any such case to determine its correctness on any grounds he 
or she deems appropriate. The Associate Commissioner or his or her 
delegate shall review any case within the sample if:
    (1) There appears to be an abuse of discretion by the hearing 
officer;
    (2) There is an error of law; or
    (3) The action, findings or conclusions of the disability hearing 
officer are not supported by substantial evidence.

    Note to paragraph (a): If the review indicates that the reconsidered 
determination prepared by the disability hearing officer is correct, it 
will be dated and issued immediately upon completion of the review. If 
the reconsidered determination prepared by the disability hearing 
officer is found by the Associate Commissioner or his or her delegate to 
be deficient, it will be changed as described in paragraph (b) of this 
section.

    (b) Methods of correcting deficiencies in the disability hearing 
officer's reconsidered determination. If the reconsidered determination 
prepared by the disability hearing officer is found by the Associate 
Commissioner for Disability Determinations or his or her delegate to be 
deficient, the Associate Commissioner or his or her delegate will take 
appropriate action to assure that the deficiency is corrected before a 
reconsidered determination is issued. The action taken by the Associate 
Commissioner or his or her delegate will take one of two forms:
    (1) The Associate Commissioner or his or her delegate may return the 
case file either to the component responsible for preparing the case for 
hearing or to the disability hearing officer, for appropriate further 
action; or
    (2) The Associate Commissioner or his or her delegate may issue a 
written reconsidered determination which corrects the deficiency.
    (c) Further action on your case if it is sent back by the Associate 
Commissioner

[[Page 245]]

for Disability Determinations or his or her delegate either to the 
component that prepared your case for hearing or to the disability 
hearing officer. If the Associate Commissioner for Disability 
Determinations or his or her delegate sends your case back either to the 
component responsible for preparing the case for hearing or to the 
disability hearing officer for appropriate further action, as provided 
in paragraph (b)(1) of this section, any additional proceedings in your 
case will be governed by the disability hearing procedures described in 
Sec. 404.916(f) or if your case is returned to the disability hearing 
officer and an unfavorable determination is indicated, a supplementary 
hearing may be scheduled for you before a reconsidered determination is 
reached in your case.
    (d) Opportunity to comment before the Associate Commissioner for 
Disability Determinations or his or her delegate issues a reconsidered 
determination that is unfavorable to you. If the Associate Commissioner 
for Disability Determinations or his or her delegate proposes to issue a 
reconsidered determination as described in paragraph (b)(2) of this 
section, and that reconsidered determination is unfavorable to you, he 
or she will send you a copy of the proposed reconsidered determination 
with an explanation of the reasons for it, and will give you an 
opportunity to submit written comments before it is issued. At your 
request, you will also be given an opportunity to inspect the pertinent 
materials in your case file, including the reconsidered determination 
prepared by the disability hearing officer, before submitting your 
comments. You will be given 10 days from the date you receive the 
Associate Commissioner's notice of proposed action to submit your 
written comments, unless additional time is necessary to provide access 
to the pertinent file materials or there is good cause for providing 
more time, as illustrated by the examples in Sec. 404.911(b). The 
Associate Commissioner or his or her delegate will consider your 
comments before taking any further action on your case.

[71 FR 10428, Mar. 1, 2006]



Sec. 404.919  Notice of another person's request for reconsideration.

    If any other person files a request for reconsideration of the 
initial determination in your case, we shall notify you at your last 
known address before we reconsider the initial determination. We shall 
also give you an opportunity to present any evidence you think helpful 
to the reconsidered determination.

[45 FR 52081, Aug. 5, 1980. Redesignated at 51 FR 302, Jan. 3, 1986]



Sec. 404.920  Reconsidered determination.

    After you or another person requests a reconsideration, we will 
review the evidence we considered in making the initial determination 
and any other evidence we receive. We will make our determination based 
on the preponderance of the evidence.

[73 FR 76943, Dec. 18, 2008]



Sec. 404.921  Effect of a reconsidered determination.

    The reconsidered determination is binding unless--
    (a) You or any other party to the reconsideration requests a hearing 
before an administrative law judge within the stated time period and a 
decision is made;
    (b) The expedited appeals process is used; or
    (c) The reconsidered determination is revised.

[51 FR 302, Jan. 3, 1986]



Sec. 404.922  Notice of a reconsidered determination.

    We shall mail a written notice of the reconsidered determination to 
the parties at their last known address. We shall state the specific 
reasons for the determination and tell you and any other parties of the 
right to a hearing. If it is appropriate, we will also tell you and any 
other parties how to use the expedited appeals process.

[45 FR 52081, Aug. 5, 1980. Redesignated at 51 FR 302, Jan. 3, 1986]

[[Page 246]]

                        Expedited Appeals Process



Sec. 404.923  Expedited appeals process--general.

    By using the expedited appeals process you may go directly to a 
Federal district court without first completing the administrative 
review process that is generally required before the court will hear 
your case.



Sec. 404.924  When the expedited appeals process may be used.

    You may use the expedited appeals process if all of the following 
requirements are met:
    (a) We have made an initial and a reconsidered determination; an 
administrative law judge has made a hearing decision; or Appeals Council 
review has been requested, but a final decision has not been issued.
    (b) You are a party to the reconsidered determination or the hearing 
decision.
    (c) You have submitted a written request for the expedited appeals 
process.
    (d) You have claimed, and we agree, that the only factor preventing 
a favorable determination or decision is a provision in the law that you 
believe is unconstitutional.
    (e) If you are not the only party, all parties to the determination 
or decision agree to request the expedited appeals process.



Sec. 404.925  How to request expedited appeals process.

    (a) Time of filing request. You may request the expedited appeals 
process--
    (1) Within 60 days after the date you receive notice of the 
reconsidered determination (or within the extended time period if we 
extend the time as provided in paragraph (c) of this section);
    (2) At any time after you have filed a timely request for a hearing 
but before you receive notice of the administrative law judge's 
decision;
    (3) Within 60 days after the date you receive a notice of the 
administrative law judge's decision or dismissal (or within the extended 
time period if we extend the time as provided in paragraph (c) of this 
section); or
    (4) At any time after you have filed a timely request for Appeals 
Council review, but before you receive notice of the Appeals Council's 
action.
    (b) Place of filing request. You may file a written request for the 
expedited appeals process at one of our offices, the Veterans 
Administration Regional Office in the Philippines, or an office of the 
Railroad Retirement Board if you have 10 or more years of service in the 
railroad industry.
    (c) Extension of time to request expedited appeals process. If you 
want to use the expedited appeals process but do not request it within 
the stated time period, you may ask for more time to submit your 
request. Your request for an extension of time must be in writing and 
must give the reasons why the request for the expedited appeals process 
was not filed within the stated time period. If you show that you had 
good cause for missing the deadline, the time period will be extended. 
To determine whether good cause exists, we use the standards explained 
in Sec. 404.911.



Sec. 404.926  Agreement in expedited appeals process.

    If you meet all the requirements necessary for the use of the 
expedited appeals process, our authorized representative shall prepare 
an agreement. The agreement must be signed by you, by every other party 
to the determination or decision and by our authorized representative. 
The agreement must provide that--
    (a) The facts in your claim are not in dispute;
    (b) The sole issue in dispute is whether a provision of the Act that 
applies to your case is unconstitutional;
    (c) Except for your belief that a provision of the Act is 
unconstitutional, you agree with our interpretation of the law;
    (d) If the provision of the Act that you believe is unconstitutional 
were not applied to your case, your claim would be allowed; and
    (e) Our determination or the decision is final for the purpose of 
seeking judicial review.



Sec. 404.927  Effect of expedited appeals process agreement.

    After an expedited appeals process agreement is signed, you will not 
need to complete the remaining steps of the

[[Page 247]]

administrative review process. Instead, you may file an action in a 
Federal district court within 60 days after the date you receive notice 
(a signed copy of the agreement will be mailed to you and will 
constitute notice) that the agreement has been signed by our authorized 
representative.

[45 FR 52081, Aug. 5, 1980, as amended at 49 FR 46369, Nov. 26, 1984]



Sec. 404.928  Expedited appeals process request that does not result
in agreement.

    If you do not meet all of the requirements necessary to use the 
expedited appeals process, we shall tell you that your request to use 
this process is denied and that your request will be considered as a 
request for a hearing or Appeals Council review, whichever is 
appropriate.

               Hearing Before an Administrative Law Judge



Sec. 404.929  Hearing before an administrative law judge--general.

    If you are dissatisfied with one of the determinations or decisions 
listed in Sec. 404.930, you may request a hearing. The Deputy 
Commissioner for Disability Adjudication and Review, or his or her 
delegate, will appoint an administrative law judge to conduct the 
hearing. If circumstances warrant, the Deputy Commissioner, or his or 
her delegate, may assign your case to another administrative law judge. 
At the hearing, you may appear in person, by video teleconferencing, or, 
under certain extraordinary circumstances, by telephone. You may submit 
new evidence (subject to the provisions of Sec. 404.935), examine the 
evidence used in making the determination or decision under review, and 
present and question witnesses. The administrative law judge who 
conducts the hearing may ask you questions. He or she will issue a 
decision based on the preponderance of the evidence in the hearing 
record. If you waive your right to appear at the hearing, in person, by 
video teleconferencing, or by telephone, the administrative law judge 
will make a decision based on the preponderance of the evidence that is 
in the file and, subject to the provisions of Sec. 404.935, any new 
evidence that may have been submitted for consideration.

[79 FR 35931, June 25, 2014, as amended at 81 FR 80992, Dec. 16, 2016]



Sec. 404.930  Availability of a hearing before an administrative 
law judge.

    (a) You or another party may request a hearing before an 
administrative law judge if we have made--
    (1) A reconsidered determination;
    (2) A revised determination of an initial determination, unless the 
revised determination concerns the issue of whether, based on medical 
factors, you are disabled;
    (3) A reconsideration of a revised initial determination concerning 
the issue of whether, based on medical factors, you are disabled;
    (4) A revised reconsidered determination;
    (5) A revised decision based on evidence not included in the record 
on which the prior decision was based;
    (6) An initial determination denying waiver of adjustment or 
recovery of an overpayment based on a personal conference (see 
Sec. 404.506); or
    (7) An initial determination denying waiver of adjustment or 
recovery of an overpayment based on a review of the written evidence of 
record (see Sec. 404.506), and the determination was made concurrent 
with, or subsequent to, our reconsideration determination regarding the 
underlying overpayment but before an administrative law judge holds a 
hearing.
    (b) We will hold a hearing only if you or another party to the 
hearing file a written request for a hearing.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986; 61 FR 
56132, Oct. 31, 1996; 73 FR 2415, Jan. 15, 2008; 76 FR 24806, May 3, 
2011]



Sec. 404.932  Parties to a hearing before an administrative law judge.

    (a) Who may request a hearing. You may request a hearing if a 
hearing is available under Sec. 404.930. In addition, a person who shows 
in writing that his or her rights may be adversely affected by the 
decision may request a hearing.
    (b) Who are parties to a hearing. After a request for a hearing is 
made, you, the other parties to the initial, reconsidered, or revised 
determination, and

[[Page 248]]

any other person who shows in writing that his or her rights may be 
adversely affected by the hearing, are parties to the hearing. In 
addition, any other person may be made a party to the hearing if his or 
her rights may be adversely affected by the decision, and we notify the 
person to appear at the hearing or to present evidence supporting his or 
her interest.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986; 75 FR 
39160, July 8, 2010]



Sec. 404.933  How to request a hearing before an administrative 
law judge.

    (a) Written request. You may request a hearing by filing a written 
request. You should include in your request--
    (1) The name and social security number of the wage earner;
    (2) The reasons you disagree with the previous determination or 
decision;
    (3) A statement of additional evidence to be submitted and the date 
you will submit it; and
    (4) The name and address of any designated representative.
    (b) When and where to file. The request must be filed--
    (1) Within 60 days after the date you receive notice of the previous 
determination or decision (or within the extended time period if we 
extend the time as provided in paragraph (c) of this section);
    (2) At one of our offices, the Veterans Administration Regional 
Office in the Philippines, or an office of the Railroad Retirement Board 
for persons having 10 or more years of service in the railroad industry.
    (c) Extension of time to request a hearing. If you have a right to a 
hearing but do not request one in time, you may ask for more time to 
make your request. The request for an extension of time must be in 
writing and it must give the reasons why the request for a hearing was 
not filed within the stated time period. You may file your request for 
an extension of time at one of our offices. If you show that you had 
good cause for missing the deadline, the time period will be extended. 
To determine whether good cause exists, we use the standards explained 
in Sec. 404.911.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986]



Sec. 404.935  Submitting written evidence to an administrative 
law judge.

    (a) When you submit your request for hearing, you should also submit 
information or evidence as required by Sec. 404.1512 or any summary of 
the evidence to the administrative law judge. Each party must make every 
effort to ensure that the administrative law judge receives all of the 
evidence and must inform us about or submit any written evidence, as 
required in Sec. 404.1512, no later than 5 business days before the date 
of the scheduled hearing. If you do not comply with this requirement, 
the administrative law judge may decline to consider or obtain the 
evidence, unless the circumstances described in paragraph (b) of this 
section apply.
    (b) If you have evidence required under Sec. 404.1512 but you have 
missed the deadline described in paragraph (a) of this section, the 
administrative law judge will accept the evidence if he or she has not 
yet issued a decision and you did not inform us about or submit the 
evidence before the deadline because:
    (1) Our action misled you;
    (2) You had a physical, mental, educational, or linguistic 
limitation(s) that prevented you from informing us about or submitting 
the evidence earlier; or
    (3) Some other unusual, unexpected, or unavoidable circumstance 
beyond your control prevented you from informing us about or submitting 
the evidence earlier. Examples include, but are not limited to:
    (i) You were seriously ill, and your illness prevented you from 
contacting us in person, in writing, or through a friend, relative, or 
other person;
    (ii) There was a death or serious illness in your immediate family;
    (iii) Important records were destroyed or damaged by fire or other 
accidental cause; or
    (iv) You actively and diligently sought evidence from a source and 
the evidence was not received or was received less than 5 business days 
prior to the hearing.

[81 FR 90993, Dec. 16, 2016]

[[Page 249]]



Sec. 404.936  Time and place for a hearing before an administrative 
law judge.

    (a) General. We may set the time and place for any hearing. We may 
change the time and place, if it is necessary. After sending you 
reasonable notice of the proposed action, the administrative law judge 
may adjourn or postpone the hearing or reopen it to receive additional 
evidence any time before he or she notifies you of a hearing decision.
    (b) Where we hold hearings. We hold hearings in the 50 States, the 
District of Columbia, American Samoa, Guam, the Northern Mariana 
Islands, the Commonwealth of Puerto Rico, and the United States Virgin 
Islands. The ``place'' of the hearing is the hearing office or other 
site(s) at which you and any other parties to the hearing are located 
when you make your appearance(s) before the administrative law judge, 
whether in person, by video teleconferencing, or by telephone.
    (c) Determining how appearances will be made. In setting the time 
and place of the hearing, we will consider the following:
    (1) We will consult with the administrative law judge to determine 
the status of case preparation and to determine whether your appearance, 
or the appearance of any other party to the hearing, will be made in 
person, by video teleconferencing or, under extraordinary circumstances, 
by telephone. The administrative law judge will determine that your 
appearance, or the appearance of any other party to the hearing, be 
conducted by video teleconferencing if video teleconferencing equipment 
is available to conduct the appearance, use of video teleconferencing to 
conduct the appearance would be more efficient than conducting the 
appearance in person, and the administrative law judge determines that 
there is no circumstance in the particular case that prevents the use of 
video teleconferencing to conduct the appearance. The administrative law 
judge will direct you or another party to the hearing to appear by 
telephone when:
    (i) An appearance in person is not possible, such as if you are 
incarcerated, the facility will not allow a hearing to be held at the 
facility, and video teleconferencing is not available; or
    (ii) The administrative law judge determines, either on his or her 
own, or at your request or at the request of any other party to the 
hearing, that extraordinary circumstances prevent you or another party 
to the hearing from appearing at the hearing in person or by video 
teleconferencing.
    (2) The administrative law judge will determine whether any person 
other than you or any other party to the hearing, including a medical 
expert or a vocational expert, will appear at the hearing in person, by 
video teleconferencing, or by telephone. If you or any other party to 
the hearing objects to any other person appearing by video 
teleconferencing or by telephone, the administrative law judge will 
decide, either in writing or at the hearing, whether to have that person 
appear in person, by video teleconferencing, or by telephone. The 
administrative law judge will direct a person, other than you or any 
other party to the hearing if we are notified as provided in paragraph 
(e) of this section that you or any other party to the hearing objects 
to appearing by video teleconferencing, to appear by video 
teleconferencing or telephone when the administrative law judge 
determines:
    (i) Video teleconferencing or telephone equipment is available;
    (ii) Use of video teleconferencing or telephone equipment would be 
more efficient than conducting an examination of a witness in person, 
and;
    (iii) The ALJ determines there is no other reason why video 
teleconferencing or telephone should not be used.
    (d) Objecting to appearing by video teleconferencing. Prior to 
scheduling your hearing, we will notify you that we may schedule you to 
appear by video teleconferencing. If you object to appearing by video 
teleconferencing, you must notify us in writing within 30 days after the 
date you receive the notice. If you notify us within that time period 
and your residence does not change while your request for hearing is 
pending, we will set your hearing for a time and place at which you may 
make your appearance before the administrative law judge in person.
    (1) Notwithstanding any objections you may have to appearing by 
video teleconferencing, if you change your

[[Page 250]]

residence while your request for hearing is pending, we may determine 
how you will appear, including by video teleconferencing, as provided in 
paragraph (c)(1) of this section. For us to consider your change of 
residence when we schedule your hearing, you must submit evidence 
verifying your new residence.
    (2) If you notify us that you object to appearing by video 
teleconferencing more than 30 days after the date you receive our 
notice, we will extend the time period if you show you had good cause 
for missing the deadline. To determine whether good cause exists for 
extending the deadline, we use the standards explained in Sec. 404.911.
    (e) Objecting to the time or place of the hearing. If you object to 
the time or place of the hearing, you must:
    (1) Notify us in writing at the earliest possible opportunity, but 
not later than 5 days before the date set for the hearing or 30 days 
after receiving notice of the hearing, whichever is earlier (or within 
the extended time period if we extend the time as provided in paragraph 
(e)(3) of this section); and
    (2) State the reason(s) for your objection and state the time and 
place you want the hearing to be held. We will change the time or place 
of the hearing if the administrative law judge finds you have good 
cause, as determined under paragraph (f) of this section. Section 
404.938 provides procedures we will follow when you do not respond to a 
notice of hearing.
    (3) If you notify us that you object to the time or place of hearing 
less than 5 days before the date set for the hearing or, if earlier, 
more than 30 days after receiving notice of the hearing, we will extend 
the time period if you show you had good cause for missing the deadline. 
To determine whether good cause exists for extending the deadline, we 
use the standards explained in Sec. 404.911.
    (f) Good cause for changing the time or place. The administrative 
law judge will determine whether good cause exists for changing the time 
or place of your scheduled hearing. However, a finding that good cause 
exists to reschedule the time or place of your hearing will not change 
the assignment of the administrative law judge for your case, unless we 
determine reassignment will promote more efficient administration of the 
hearing process.
    (1) We will reschedule your hearing, if your reason is one of the 
following circumstances and is supported by the evidence:
    (i) A serious physical or mental condition or incapacitating injury 
makes it impossible for you or your representative to travel to the 
hearing, or a death in the family occurs; or
    (ii) Severe weather conditions make it impossible for you or your 
representative to travel to the hearing.
    (2) In determining whether good cause exists in circumstances other 
than those set out in paragraph (f)(1) of this section, the 
administrative law judge will consider your reason(s) for requesting the 
change, the facts supporting it, and the impact of the proposed change 
on the efficient administration of the hearing process. Factors 
affecting the impact of the change include, but are not limited to, the 
effect on the processing of other scheduled hearings, delays that might 
occur in rescheduling your hearing, and whether we previously granted 
you any changes in the time or place of your hearing. Examples of such 
other circumstances that you might give for requesting a change in the 
time or place of the hearing include, but are not limited to, the 
following:
    (i) You unsuccessfully attempted to obtain a representative and need 
additional time to secure representation;
    (ii) Your representative was appointed within 30 days of the 
scheduled hearing and needs additional time to prepare for the hearing;
    (iii) Your representative has a prior commitment to be in court or 
at another administrative hearing on the date scheduled for the hearing;
    (iv) A witness who will testify to facts material to your case would 
be unavailable to attend the scheduled hearing and the evidence cannot 
be otherwise obtained;
    (v) Transportation is not readily available for you to travel to the 
hearing; or
    (vi) You are unrepresented, and you are unable to respond to the 
notice of hearing because of any physical, mental, educational, or 
linguistic limitations (including any lack of facility

[[Page 251]]

with the English language) which you may have.
    (g) Good cause in other circumstances. In determining whether good 
cause exists in circumstances other than those set out in paragraph (e) 
of this section, the administrative law judge will consider your reason 
for requesting the change, the facts supporting it, and the impact of 
the proposed change on the efficient administration of the hearing 
process. Factors affecting the impact of the change include, but are not 
limited to, the effect on the processing of other scheduled hearings, 
delays which might occur in rescheduling your hearing, and whether any 
prior changes were granted to you. Examples of such other circumstances, 
which you might give for requesting a change in the time or place of the 
hearing, include, but are not limited to, the following:
    (1) You have attempted to obtain a representative but need 
additional time;
    (2) Your representative was appointed within 30 days of the 
scheduled hearing and needs additional time to prepare for the hearing;
    (3) Your representative has a prior commitment to be in court or at 
another administrative hearing on the date scheduled for the hearing;
    (4) A witness who will testify to facts material to your case would 
be unavailable to attend the scheduled hearing and the evidence cannot 
be otherwise obtained;
    (5) Transportation is not readily available for you to travel to the 
hearing;
    (6) You live closer to another hearing site; or
    (7) You are unrepresented, and you are unable to respond to the 
notice of hearing because of any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) which you may have.
    (h) Consultation procedures. Before we exercise the authority to set 
the time and place for an administrative law judge's hearings, we will 
consult with the appropriate hearing office chief administrative law 
judge to determine if there are any reasons why we should not set the 
time and place of the administrative law judge's hearings. If the 
hearing office chief administrative law judge does not state a reason 
that we believe justifies the limited number of hearings scheduled by 
the administrative law judge, we will then consult with the 
administrative law judge before deciding whether to begin to exercise 
our authority to set the time and place for the administrative law 
judge's hearings. If the hearing office chief administrative law judge 
states a reason that we believe justifies the limited number of hearings 
scheduled by the administrative law judge, we will not exercise our 
authority to set the time and place for the administrative law judge's 
hearings. We will work with the hearing office chief administrative law 
judge to identify those circumstances where we can assist the 
administrative law judge and address any impediment that may affect the 
scheduling of hearings.
    (i) Pilot program. The provisions of the first and second sentences 
of paragraph (a), the first sentence of paragraph (c)(1), and paragraph 
(g) of this section are a pilot program. These provisions will no longer 
be effective on August 11, 2017, unless we terminate them earlier or 
extend them beyond that date by notice of a final rule in the Federal 
Register.

[68 FR 5218, Feb. 3, 2003, as amended at 75 FR 39160, July 8, 2010; 78 
FR 29626, May 21, 2013; 78 FR 45452, July 29, 2013; 79 FR 41882, July 
18, 2014; 79 FR 35931, June 25, 2014; 80 FR 37971, July 2, 2015; 81 FR 
41214, June 24, 2016]



Sec. 404.937  Protecting the safety of the public and our employees 
in our hearing process.

    (a) Notwithstanding any other provision in this part or part 422 of 
this chapter, we are establishing the procedures set out in this section 
to ensure the safety of the public and our employees in our hearing 
process.
    (b)(1) At the request of any hearing office employee, the Hearing 
Office Chief Administrative Law Judge will determine, after consultation 
with the presiding administrative law judge, whether a claimant or other 
individual poses a reasonable threat to the safety of our employees or 
other participants in the hearing. The Hearing Office Chief 
Administrative Law Judge will

[[Page 252]]

find that a claimant or other individual poses a threat to the safety of 
our employees or other participants in the hearing when he or she 
determines that the individual has made a threat and there is a 
reasonable likelihood that the claimant or other individual could act on 
the threat or when evidence suggests that a claimant or other individual 
poses a threat. In making a finding under this paragraph, the Hearing 
Office Chief Administrative Law Judge will consider all relevant 
evidence, including any information we have in the claimant's record and 
any information we have regarding the claimant's or other individual's 
past conduct.
    (2) If the Hearing Office Chief Administrative Law Judge determines 
that the claimant or other individual poses a reasonable threat to the 
safety of our employees or other participants in the hearing, the 
Hearing Office Chief Administrative Law Judge will either:
    (i) Require the presence of a security guard at the hearing; or
    (ii) Require that the hearing be conducted by video teleconference 
or by telephone.
    (c) If we have banned a claimant from any of our facilities, we will 
provide the claimant with the opportunity for a hearing that will be 
conducted by telephone.
    (d) The actions of the Hearing Office Chief Administrative Law Judge 
taken under this section are final and not subject to further review.

[76 FR 13508, Mar. 14, 2011, as amended at 77 FR 10658, Feb. 23, 2012]



Sec. 404.938  Notice of a hearing before an administrative law judge.

    (a) Issuing the notice. After we set the time and place of the 
hearing, we will mail notice of the hearing to you at your last known 
address, or give the notice to you by personal service, unless you have 
indicated in writing that you do not wish to receive this notice. We 
will mail or serve the notice at least 75 days before the date of the 
hearing.
    (b) Notice information. The notice of hearing will tell you:
    (1) The specific issues to be decided in your case;
    (2) That you may designate a person to represent you during the 
proceedings;
    (3) How to request that we change the time or place of your hearing;
    (4) That your hearing may be dismissed if neither you nor the person 
you designate to act as your representative appears at your scheduled 
hearing without good reason under Sec. 404.957;
    (5) Whether your appearance or that of any other party or witness is 
scheduled to be made in person, by video teleconferencing, or by 
telephone. If we have scheduled you to appear at the hearing by video 
teleconferencing, the notice of hearing will tell you that the scheduled 
place for the hearing is a video teleconferencing site and explain what 
it means to appear at your hearing by video teleconferencing;
    (6) That you must make every effort to inform us about or submit all 
written evidence that is not already in the record no later than 5 
business days before the date of the scheduled hearing, unless you show 
that your circumstances meet the conditions described in 
Sec. 404.935(b); and
    (7) Any other information about the scheduling and conduct of your 
hearing.
    (c) Acknowledging the notice of hearing. The notice of hearing will 
ask you to return a form to let us know that you received the notice. If 
you or your representative do not acknowledge receipt of the notice of 
hearing, we will attempt to contact you for an explanation. If you tell 
us that you did not receive the notice of hearing, an amended notice 
will be sent to you by certified mail. See Sec. 404.936 for the 
procedures we will follow in deciding whether the time or place of your 
scheduled hearing will be changed if you do not respond to the notice of 
hearing.

[68 FR 5219, Feb. 3, 2003, as amended at 75 FR 39160, July 8, 2010; 78 
FR 29627, May 21, 2013; 79 FR 35932, June 25, 2014; 81 FR 90993, Dec. 
16, 2016]



Sec. 404.939  Objections to the issues.

    If you object to the issues to be decided at the hearing, you must 
notify the administrative law judge in writing at the earliest possible 
opportunity, but no later than 5 business days before

[[Page 253]]

the date set for the hearing, unless you show that your circumstances 
meet the conditions described in Sec. 404.935(b). You must state the 
reason(s) for your objection(s). The administrative law judge will make 
a decision on your objection(s) either at the hearing or in writing 
before the hearing.

[81 FR 90993, Dec. 16, 2016]



Sec. 404.940  Disqualification of the administrative law judge.

    An administrative law judge shall not conduct a hearing if he or she 
is prejudiced or partial with respect to any party or has any interest 
in the matter pending for decision. If you object to the administrative 
law judge who will conduct the hearing, you must notify the 
administrative law judge at your earliest opportunity. The 
administrative law judge shall consider your objections and shall decide 
whether to proceed with the hearing or withdraw. If he or she withdraws, 
the Associate Commissioner for Hearings and Appeals, or his or her 
delegate, will appoint another administrative law judge to conduct the 
hearing. If the administrative law judge does not withdraw, you may, 
after the hearing, present your objections to the Appeals Council as 
reasons why the hearing decision should be revised or a new hearing held 
before another administrative law judge.



Sec. 404.941  Prehearing case review.

    (a) General. After a hearing is requested but before it is held, we 
may, for the purposes of a prehearing case review, forward the case to 
the component of our office (including a State agency) that issued the 
determination being reviewed. That component will decide whether it 
should revise the determination based on the preponderance of the 
evidence. A revised determination may be fully or partially favorable to 
you. A prehearing case review will not delay the scheduling of a hearing 
unless you agree to continue the review and delay the hearing. If the 
prehearing case review is not completed before the date of the hearing, 
the case will be sent to the administrative law judge unless a favorable 
revised determination is in process or you and the other parties to the 
hearing agree in writing to delay the hearing until the review is 
completed.
    (b) When a prehearing case review may be conducted. We may conduct a 
prehearing case review if--
    (1) Additional evidence is submitted;
    (2) There is an indication that additional evidence is available;
    (3) There is a change in the law or regulation; or
    (4) There is an error in the file or some other indication that the 
prior determination may be revised.
    (c) Notice of a prehearing revised determination. If we revise the 
determination in a prehearing case review, we will mail a written notice 
of the revised determination to all parties at their last known 
addresses. We will state the basis for the revised determination and 
advise all parties of the effect of the revised determination on the 
request for a hearing.
    (d) Effect of a fully favorable revised determination. If the 
revised determination is fully favorable to you, we will tell you in the 
notice that an administrative law judge will dismiss the request for a 
hearing. We will also tell you that you or another party to the hearing 
may request that the administrative law judge vacate the dismissal and 
reinstate the request for a hearing if you or another party to the 
hearing disagrees with the revised determination for any reason. If you 
wish to make this request, you must do so in writing and send it to us 
within 60 days of the date you receive notice of the dismissal. If the 
request is timely, an administrative law judge will vacate the 
dismissal, reinstate the request for hearing, and offer you and all 
parties an opportunity for a hearing. The administrative law judge will 
extend the time limit if you show that you had good cause for missing 
the deadline. The administrative law judge will use the standards in 
Sec. 404.911 to determine whether you had good cause.
    (e) Effect of a partially favorable revised determination. If the 
revised determination is partially favorable to you, we will tell you in 
the notice what was not favorable. We will also tell you that an 
administrative law judge will hold the hearing you requested unless you 
and all other parties to the hearing agree in writing to dismiss the 
request

[[Page 254]]

for a hearing. An administrative law judge will dismiss the request for 
a hearing if we receive the written statement(s) agreeing to dismiss the 
request for a hearing before an administrative law judge mails a notice 
of his or her hearing decision.

[45 FR 52081, Aug. 5, 1980, as amended at 73 FR 76943, Dec. 18, 2008; 75 
FR 33168, June 11, 2010; 76 FR 65369, Oct. 21, 2011]



Sec. 404.942  Prehearing proceedings and decisions by attorney advisors.

    (a) General. After a hearing is requested but before it is held, an 
attorney advisor may conduct prehearing proceedings as set out in 
paragraph (c) of this section. If after the completion of these 
proceedings we can make a decision that is fully favorable to you and 
all other parties based on the preponderance of the evidence, an 
attorney advisor, instead of an administrative law judge, may issue the 
decision. The conduct of the prehearing proceedings by the attorney 
advisor will not delay the scheduling of a hearing. If the prehearing 
proceedings are not completed before the date of the hearing, the case 
will be sent to the administrative law judge unless a fully favorable 
decision is in process or you and all other parties to the hearing agree 
in writing to delay the hearing until the proceedings are completed.
    (b) When prehearing proceedings may be conducted by an attorney 
advisor. An attorney advisor may conduct prehearing proceedings if you 
have filed a claim for benefits based on disability and--
    (1) New and material evidence is submitted;
    (2) There is an indication that additional evidence is available;
    (3) There is a change in the law or regulations; or
    (4) There is an error in the file or some other indication that a 
fully favorable decision may be issued.
    (c) Nature of the prehearing proceedings that may be conducted by an 
attorney advisor. As part of the prehearing proceedings, the attorney 
advisor, in addition to reviewing the existing record, may--
    (1) Request additional evidence that may be relevant to the claim, 
including medical evidence; and
    (2) If necessary to clarify the record for the purpose of 
determining if a fully favorable decision is warranted, schedule a 
conference with the parties.
    (d) Notice of a decision by an attorney advisor. If an attorney 
advisor issues a fully favorable decision under this section, we will 
mail a written notice of the decision to all parties at their last known 
addresses. We will state the basis for the decision and advise all 
parties that they may request that an administrative law judge reinstate 
the request for a hearing if they disagree with the decision for any 
reason. Any party who wants to make this request must do so in writing 
and send it to us within 60 days of the date he or she receives notice 
of the decision. The administrative law judge will extend the time limit 
if the requestor shows good cause for missing the deadline. The 
administrative law judge will use the standards in Sec. 404.911 to 
determine whether there is good cause. If the request is timely, an 
administrative law judge will reinstate the request for a hearing and 
offer all parties an opportunity for a hearing.
    (e) Effect of an attorney advisor's decision. An attorney advisor's 
decision under this section is binding unless--
    (1) You or another party to the hearing submits a timely request 
that an administrative law judge reinstate the request for a hearing 
under paragraph (d) of this section;
    (2) The Appeals Council reviews the decision on its own motion 
pursuant to Sec. 404.969 as explained in paragraph (f)(3) of this 
section; or
    (3) The decision of the attorney advisor is revised under the 
procedures explained in Sec. 404.987.
    (f) Ancillary provisions. For the purposes of the procedures 
authorized by this section, the regulations of part 404 shall apply to--
    (1) Authorize an attorney advisor to exercise the functions 
performed by an administrative law judge under Secs. 404.1513a, 
404.1520a, 404.1526, and 404.1546.
    (2) Define the term ``decision'' to include a decision made by an 
attorney advisor, as well as the decisions identified in Sec. 404.901; 
and

[[Page 255]]

    (3) Make the decision of an attorney advisor under paragraph (d) of 
this section subject to review by the Appeals Council if the Appeals 
Council decides to review the decision of the attorney advisor anytime 
within 60 days after the date of the decision under Sec. 404.969.
    (g) Sunset provision. The provisions of this section will no longer 
be effective on August 4, 2017, unless we terminate them earlier or 
extend them beyond that date by notice of a final rule in the Federal 
Register.

[60 FR 34131, June 30, 1995, as amended at 63 FR 35516, June 30, 1998; 
64 FR 13678, Mar. 22, 1999; 64 FR 51893, Sept. 27, 1999; 72 FR 44765, 
Aug. 9, 2007; 73 FR 76944, Dec. 18, 2008; 74 FR 33328, July 13, 2009; 76 
FR 18384, Apr. 4, 2011; 76 FR 65370, Oct. 21, 2011; 78 FR 45460, July 
29, 2013; 80 FR 31991, June 5, 2015; 82 FR 5863, Jan. 18, 2017]



Sec. 404.943  Responsibilities of the adjudication officer.

    (a)(1) General. Under the procedures set out in this section we will 
test modifications to the procedures we follow when you file a request 
for a hearing before an administrative law judge in connection with a 
claim for benefits based on disability where the question of whether you 
are under a disability as defined in Sec. 404.1505 is at issue. These 
modifications will enable us to test the effect of having an 
adjudication officer be your primary point of contact after you file a 
hearing request and before you have a hearing with an administrative law 
judge. The tests may be conducted alone, or in combination with the 
tests of the modifications to the disability determination procedures 
which we conduct under Sec. 404.906. The adjudication officer, working 
with you and your representative, if any, will identify issues in 
dispute, develop evidence, conduct informal conferences, and conduct any 
other prehearing proceeding as may be necessary. The adjudication 
officer has the authority to make a decision fully favorable to you if 
the evidence so warrants. If the adjudication officer does not make a 
decision on your claim, your hearing request will be assigned to an 
administrative law judge for further proceedings.
    (2) Procedures for cases included in the tests. Prior to commencing 
tests of the adjudication officer position in selected site(s), we will 
publish a notice in the Federal Register. The notice will describe where 
the specific test site(s) will be and the duration of the test(s). We 
will also state whether the tests of the adjudication officer position 
in each site will be conducted alone, or in combination with the tests 
of the modifications to the disability determination procedures which we 
conduct under Sec. 404.906. The individuals who participate in the 
test(s) will be assigned randomly to a test group in each site where the 
tests are conducted.
    (b)(1) Prehearing procedures conducted by an Adjudication Officer. 
When you file a request for a hearing before an administrative law judge 
in connection with a claim for benefits based on disability where the 
question of whether you are under a disability as defined in 
Sec. 404.1505 is at issue, the adjudication officer will conduct an 
interview with you. The interview may take place in person, by 
telephone, or by videoconference, as the adjudication officer determines 
is appropriate under the circumstances of your case. If you file a 
request for an extension of time to request a hearing in accordance with 
Sec. 404.933(c), the adjudication officer may develop information on, 
and may decide where the adjudication officer issues a fully favorable 
decision to you that you had good cause for missing the deadline for 
requesting a hearing. To determine whether you had good cause for 
missing the deadline, the adjudication officer will use the standards 
contained in Sec. 404.911.
    (2) Representation. The adjudication officer will provide you with 
information regarding the hearing process, including your right to 
representation. As may be appropriate, the adjudication officer will 
provide you with referral sources for representation, and give you 
copies of necessary documents to facilitate the appointment of a 
representative. If you have a representative, the adjudication officer 
will conduct an informal conference with the representative, in person 
or by telephone, to identify the issues in dispute and prepare proposed 
written agreements for the approval of the administrative law judge 
regarding those issues which are not in dispute and

[[Page 256]]

those issues proposed for the hearing. If you decide to proceed without 
representation, the adjudication officer may hold an informal conference 
with you. If you obtain representation after the adjudication officer 
has concluded that your case is ready for a hearing, the administrative 
law judge will return your case to the adjudication officer who will 
conduct an informal conference with you and your representative.
    (3) Evidence. You, or your representative, may submit, or may be 
asked to obtain and submit, additional evidence to the adjudication 
officer. As the adjudication officer determines is appropriate under the 
circumstances of your case, the adjudication officer may refer the claim 
for further medical or vocational evidence.
    (4) Referral for a hearing. The adjudication officer will refer the 
claim to the administrative law judge for further proceedings when the 
development of evidence is complete, and you or your representative 
agree that a hearing is ready to be held. If you or your representative 
are unable to agree with the adjudication officer that the development 
of evidence is complete, the adjudication officer will note your 
disagreement and refer the claim to the administrative law judge for 
further proceedings. At this point, the administrative law judge 
conducts all further hearing proceedings, including scheduling and 
holding a hearing (Sec. 404.936), considering any additional evidence or 
arguments submitted (Secs. 404.935, 404.944, 404.949, 404.950), and 
issuing a decision or dismissal of your request for a hearing, as may be 
appropriate (Secs. 404.948, 404.953, 404.957). In addition, if the 
administrative law judge determines on or before the date of your 
hearing that the development of evidence is not complete, the 
administrative law judge may return the claim to the adjudication 
officer to complete the development of the evidence and for such other 
action as necessary.
    (c)(1) Fully favorable decisions issued by an adjudication officer. 
If, after a hearing is requested but before it is held, the adjudication 
officer decides that the evidence in your case warrants a decision which 
is fully favorable to you, the adjudication officer may issue such a 
decision. For purposes of the tests authorized under this section, the 
adjudication officer's decision shall be considered to be a decision as 
defined in Sec. 404.901. If the adjudication officer issues a decision 
under this section, it will be in writing and will give the findings of 
fact and the reasons for the decision. The adjudication officer will 
evaluate the issues relevant to determining whether or not you are 
disabled in accordance with the provisions of the Social Security Act, 
the rules in this part and part 422 of this chapter and applicable 
Social Security Rulings. For cases in which the adjudication officer 
issues a decision, he or she may determine your residual functional 
capacity in the same manner that an administrative law judge is 
authorized to do so in Sec. 404.1546. The adjudication officer may also 
evaluate the severity of your mental impairments in the same manner that 
an administrative law judge is authorized to do so under Sec. 404.1520a. 
The adjudication officer's decision will be based on the evidence which 
is included in the record and, subject to paragraph (c)(2) of this 
section, will complete the actions that will be taken on your request 
for hearing. A copy of the decision will be mailed to all parties at 
their last known address. We will tell you in the notice that the 
administrative law judge will not hold a hearing unless a party to the 
hearing requests that the hearing proceed. A request to proceed with the 
hearing must be made in writing within 30 days after the date the notice 
of the decision of the adjudication officer is mailed.
    (2) Effect of a decision by an adjudication officer. A decision by 
an adjudication officer which is fully favorable to you under this 
section, and notification thereof, completes the administrative action 
on your request for hearing and is binding on all parties to the hearing 
and not subject to further review, unless--
    (i) You or another party requests that the hearing continue, as 
provided in paragraph (c)(1) of this section;
    (ii) The Appeals Council decides to review the decision on its own 
motion under the authority provided in Sec. 404.969;

[[Page 257]]

    (iii) The decision is revised under the procedures explained in 
Secs. 404.987 through 404.989; or
    (iv) In a case remanded by a Federal court, the Appeals Council 
assumes jurisdiction under the procedures in Sec. 404.984.
    (3) Fee for a representative's services. The adjudication officer 
may authorize a fee for your representative's services if the 
adjudication officer makes a decision on your claim that is fully 
favorable to you, and you are represented. The actions of, and any fee 
authorization made by, the adjudication officer with respect to 
representation will be made in accordance with the provisions of subpart 
R of this part.
    (d) Who may be an adjudication officer. The adjudication officer 
described in this section may be an employee of the Social Security 
Administration or a State agency that makes disability determinations 
for us.

[60 FR 47475, Sept. 13, 1995, as amended at 75 FR 33168, June 11, 2010]

               Administrative Law Judge Hearing Procedures



Sec. 404.944  Administrative law judge hearing procedures--general.

    A hearing is open to the parties and to other persons the 
administrative law judge considers necessary and proper. At the hearing, 
the administrative law judge looks fully into the issues, questions you 
and the other witnesses, and, subject to the provisions of Sec. 404.935: 
Accepts as evidence any documents that are material to the issues; may 
stop the hearing temporarily and continue it at a later date if he or 
she finds that there is material evidence missing at the hearing; and 
may reopen the hearing at any time before he or she mails a notice of 
the decision in order to receive new and material evidence. The 
administrative law judge may decide when the evidence will be presented 
and when the issues will be discussed.

[81 FR 90993, Dec. 16, 2016



Sec. 404.946  Issues before an administrative law judge.

    (a) General. The issues before the administrative law judge include 
all the issues brought out in the initial, reconsidered or revised 
determination that were not decided entirely in your favor. However, if 
evidence presented before or during the hearing causes the 
administrative law judge to question a fully favorable determination, he 
or she will notify you and will consider it an issue at the hearing.
    (b) New issues--(1) General. The administrative law judge may 
consider a new issue at the hearing if he or she notifies you and all 
the parties about the new issue any time after receiving the hearing 
request and before mailing notice of the hearing decision. The 
administrative law judge or any party may raise a new issue; an issue 
may be raised even though it arose after the request for a hearing and 
even though it has not been considered in an initial or reconsidered 
determination. However, it may not be raised if it involves a claim that 
is within the jurisdiction of a State agency under a Federal-State 
agreement concerning the determination of disability.
    (2) Notice of a new issue. The administrative law judge shall notify 
you and any other party if he or she will consider any new issue. Notice 
of the time and place of the hearing on any new issues will be given in 
the manner described in Sec. 404.938, unless you have indicated in 
writing that you do not wish to receive the notice.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986]



Sec. 404.948  Deciding a case without an oral hearing before an 
administrative law judge.

    (a) Decision fully favorable. If the evidence in the hearing record 
supports a finding in favor of you and all the parties on every issue, 
the administrative law judge may issue a hearing decision based on a 
preponderance of the evidence without holding an oral hearing. The 
notice of the decision will state that you have the right to an oral 
hearing and to examine the evidence on which the administrative law 
judge based the decision.
    (b) Parties do not wish to appear. (1) The administrative law judge 
may decide a case on the record and not conduct an oral hearing if--
    (i) You and all the parties indicate in writing that you do not wish 
to appear

[[Page 258]]

before the administrative law judge at an oral hearing; or
    (ii) You live outside the United States, you do not inform us that 
you wish to appear, and there are no other parties who wish to appear.
    (2) When an oral hearing is not held, the administrative law judge 
shall make a record of the material evidence. The record will include 
the applications, written statements, certificates, reports, affidavits, 
and other documents that were used in making the determination under 
review and any additional evidence you or any other party to the hearing 
present in writing. The decision of the administrative law judge must be 
based on this record.
    (c) Case remanded for a revised determination. (1) The 
administrative law judge may remand a case to the appropriate component 
of our office for a revised determination if there is reason to believe 
that the revised determination would be fully favorable to you. This 
could happen if the administrative law judge receives new and material 
evidence or if there is a change in the law that permits the favorable 
determination.
    (2) Unless you request the remand, the administrative law judge 
shall notify you that your case has been remanded and tell you that if 
you object, you must notify him or her of your objections within 10 days 
of the date the case is remanded or we will assume that you agree to the 
remand. If you object to the remand, the administrative law judge will 
consider the objection and rule on it in writing.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986; 73 FR 
76944, Dec. 18, 2008; 75 FR 33168, June 11, 2010; 76 FR 65370, Oct. 21, 
2011]



Sec. 404.949  Presenting written statements and oral arguments.

    You or a person you designate to act as your representative may 
appear before the administrative law judge to state your case, present a 
written summary of your case, or enter written statements about the 
facts and law material to your case in the record. If presenting written 
statements prior to hearing, you must provide a copy of your written 
statements for each party no later than 5 business days before the date 
set for the hearing, unless you show that your circumstances meet the 
conditions described in Sec. 404.935(b).

[81 FR 90993, Dec. 16, 2016



Sec. 404.950  Presenting evidence at a hearing before an
administrative law judge.

    (a) The right to appear and present evidence. Any party to a hearing 
has a right to appear before the administrative law judge, either in 
person, or, when the conditions in Sec. 404.936(c)(1) exist, by video 
teleconferencing or telephone, to present evidence and to state his or 
her position. A party may also make his or her appearance by means of a 
designated representative, who may make the appearance in person, or, 
when the conditions in Sec. 404.936(c)(1) exist, by video 
teleconferencing or telephone.
    (b) Waiver of the right to appear. You may send the administrative 
law judge a waiver or a written statement indicating that you do not 
wish to appear at the hearing. You may withdraw this waiver any time 
before a notice of the hearing decision is mailed to you. Even if all of 
the parties waive their right to appear at a hearing, we may notify them 
of a time and a place for an oral hearing, if the administrative law 
judge believes that a personal appearance and testimony by you or any 
other party is necessary to decide the case.
    (c) Admissible evidence. Subject to the provisions of Sec. 404.935, 
the administrative law judge may receive any evidence at the hearing 
that he or she believes is material to the issues, even though the 
evidence would not be admissible in court under the rules of evidence 
used by the court.
    (d) Subpoenas. (1) When it is reasonably necessary for the full 
presentation of a case, an administrative law judge or a member of the 
Appeals Council may, on his or her own initiative or at the request of a 
party, issue subpoenas for the appearance and testimony of witnesses and 
for the production of books, records, correspondence, papers, or other 
documents that are material to an issue at the hearing.
    (2) Parties to a hearing who wish to subpoena documents or witnesses 
must

[[Page 259]]

file a written request for the issuance of a subpoena with the 
administrative law judge or at one of our offices at least 10 business 
days before the hearing date, unless you show that your circumstances 
meet the conditions described in Sec. 404.935(b). The written request 
must give the names of the witnesses or documents to be produced; 
describe the address or location of the witnesses or documents with 
sufficient detail to find them; state the important facts that the 
witness or document is expected to prove; and indicate why these facts 
could not be proven without issuing a subpoena.
    (3) We will pay the cost of issuing the subpoena.
    (4) We will pay subpoenaed witnesses the same fees and mileage they 
would receive if they had been subpoenaed by a Federal district court.
    (e) Witnesses at a hearing. Witnesses may appear at a hearing in 
person or, when the conditions in Sec. 404.936(c)(2) exist, by video 
teleconferencing or telephone. They will testify under oath or 
affirmation unless the administrative law judge finds an important 
reason to excuse them from taking an oath or affirmation. The 
administrative law judge may ask the witness any questions material to 
the issues and will allow the parties or their designated 
representatives to do so.
    (f) Collateral estoppel--issues previously decided. An issue at your 
hearing may be a fact that has already been decided in one of our 
previous determinations or decisions in a claim involving the same 
parties, but arising under a different title of the Act or under the 
Federal Coal Mine Health and Safety Act. If this happens, the 
administrative law judge will not consider the issue again, but will 
accept the factual finding made in the previous determination or 
decision unless there are reasons to believe that it was wrong.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986; 68 FR 
5219, Feb. 3, 2003; 75 FR 39160, July 8, 2010; 78 FR 29627, May 21, 
2013; 81 FR 90993, Dec. 16, 2016]



Sec. 404.951  Official record.

    (a) Hearing recording. All hearings will be recorded. The hearing 
recording will be prepared as a typed copy of the proceedings if--
    (1) The case is sent to the Appeals Council without a decision or 
with a recommended decision by the administrative law judge;
    (2) You seek judicial review of your case by filing an action in a 
Federal district court within the stated time period, unless we request 
the court to remand the case; or
    (3) An administrative law judge or the Appeals Council asks for a 
written record of the proceedings.
    (b) Contents of the official record. All evidence upon which the 
administrative law judge relies for the decision must be contained in 
the record, either directly or by appropriate reference. The official 
record will include the applications, written statements, certificates, 
reports, affidavits, medical records, and other documents that were used 
in making the decision under review and any additional evidence or 
written statements that the administrative law judge admits into the 
record under Secs. 404.929 and 404.935. All exhibits introduced as 
evidence must be marked for identification and incorporated into the 
record. The official record of your claim will contain all of the marked 
exhibits and a verbatim recording of all testimony offered at the 
hearing. It also will include any prior initial determinations or 
decisions on your claim.

[81 FR 90994, Dec. 16, 2016



Sec. 404.952  Consolidated hearing before an administrative law judge.

    (a) General. (1) A consolidated hearing may be held if--
    (i) You have requested a hearing to decide your benefit rights under 
title II of the Act and you have also requested a hearing to decide your 
rights under another law we administer; and
    (ii) One or more of the issues to be considered at the hearing you 
requested are the same issues that are involved in another claim you 
have pending before us.
    (2) If the administrative law judge decides to hold the hearing on 
both claims, he or she decides both claims, even if we have not yet made 
an initial or reconsidered determination on the other claim.

[[Page 260]]

    (b) Record, evidence, and decision. There will be a single record at 
a consolidated hearing. This means that the evidence introduced in one 
case becomes evidence in the other(s). The administrative law judge may 
make either a separate or consolidated decision.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986]



Sec. 404.953  The decision of an administrative law judge.

    (a) General. The administrative law judge shall issue a written 
decision that gives the findings of fact and the reasons for the 
decision. The administrative law judge must base the decision on the 
preponderance of the evidence offered at the hearing or otherwise 
included in the record. The administrative law judge shall mail a copy 
of the decision to all the parties at their last known address. The 
Appeals Council may also receive a copy of the decision.
    (b) Fully favorable oral decision entered into the record at the 
hearing. The administrative law judge may enter a fully favorable oral 
decision based on the preponderance of the evidence into the record of 
the hearing proceedings. If the administrative law judge enters a fully 
favorable oral decision into the record of the hearing proceedings, the 
administrative law judge may issue a written decision that incorporates 
the oral decision by reference. The administrative law judge may use 
this procedure only in those categories of cases that we identify in 
advance. The administrative law judge may only use this procedure in 
those cases where the administrative law judge determines that no 
changes are required in the findings of fact or the reasons for the 
decision as stated at the hearing. If a fully favorable decision is 
entered into the record at the hearing, the administrative law judge 
will also include in the record, as an exhibit entered into the record 
at the hearing, a document that sets forth the key data, findings of 
fact, and narrative rationale for the decision. If the decision 
incorporates by reference the findings and the reasons stated in an oral 
decision at the hearing, the parties shall also be provided, upon 
written request, a record of the oral decision.
    (c) Recommended decision. Although an administrative law judge will 
usually make a decision, the administrative law judge may send the case 
to the Appeals Council with a recommended decision based on a 
preponderance of the evidence when appropriate. The administrative law 
judge will mail a copy of the recommended decision to the parties at 
their last known addresses and send the recommended decision to the 
Appeals Council.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986; 54 FR 
37792, Sept. 13, 1989; 69 FR 61597, Oct. 20, 2004; 73 FR 76944, Dec. 18, 
2008; 75 FR 33168, June 11, 2010]



Sec. 404.955  The effect of an administrative law judge's decision.

    The decision of the administrative law judge is binding on all 
parties to the hearing unless--
    (a) You or another party request a review of the decision by the 
Appeals Council within the stated time period, and the Appeals Council 
reviews your case;
    (b) You or another party requests a review of the decision by the 
Appeals Council within the stated time period, the Appeals Council 
denies your request for review, and you seek judicial review of your 
case by filing an action in a Federal district court;
    (c) The decision is revised by an administrative law judge or the 
Appeals Council under the procedures explained in Sec. 404.987;
    (d) The expedited appeals process is used;
    (e) The decision is a recommended decision directed to the Appeals 
Council; or
    (f) In a case remanded by a Federal court, the Appeals Council 
assumes jurisdiction under the procedures in Sec. 404.984.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986; 54 FR 
37792, Sept. 13, 1989]

[[Page 261]]



Sec. 404.956  Removal of a hearing request from an administrative
law judge to the Appeals Council.

    If you have requested a hearing and the request is pending before an 
administrative law judge, the Appeals Council may assume responsibility 
for holding a hearing by requesting that the administrative law judge 
send the hearing request to it. If the Appeals Council holds a hearing, 
it shall conduct the hearing according to the rules for hearings before 
an administrative law judge. Notice shall be mailed to all parties at 
their last known address telling them that the Appeals Council has 
assumed responsibility for the case.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986]



Sec. 404.957  Dismissal of a request for a hearing before an 
administrative law judge.

    An administrative law judge may dismiss a request for a hearing 
under any of the following conditions:
    (a) At any time before notice of the hearing decision is mailed, you 
or the party or parties that requested the hearing ask to withdraw the 
request. This request may be submitted in writing to the administrative 
law judge or made orally at the hearing.
    (b)(1)(i) Neither you nor the person you designate to act as your 
representative appears at the time and place set for the hearing and you 
have been notified before the time set for the hearing that your request 
for hearing may be dismissed without further notice if you did not 
appear at the time and place of hearing, and good cause has not been 
found by the administrative law judge for your failure to appear; or
    (ii) Neither you nor the person you designate to act as your 
representative appears at the time and place set for the hearing and 
within 10 days after the administrative law judge mails you a notice 
asking why you did not appear, you do not give a good reason for the 
failure to appear.
    (2) In determining good cause or good reason under this paragraph, 
we will consider any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
which you may have.
    (c) The administrative law judge decides that there is cause to 
dismiss a hearing request entirely or to refuse to consider any one or 
more of the issues because--
    (1) The doctrine of res judicata applies in that we have made a 
previous determination or decision under this subpart about your rights 
on the same facts and on the same issue or issues, and this previous 
determination or decision has become final by either administrative or 
judicial action;
    (2) The person requesting a hearing has no right to it under 
Sec. 404.930;
    (3) You did not request a hearing within the stated time period and 
we have not extended the time for requesting a hearing under 
Sec. 404.933(c); or
    (4) You die, there are no other parties, and we have no information 
to show that another person may be adversely affected by the 
determination that was to be reviewed at the hearing. However, dismissal 
of the hearing request will be vacated if, within 60 days after the date 
of the dismissal, another person submits a written request for a hearing 
on the claim and shows that he or she may be adversely affected by the 
determination that was to be reviewed at the hearing.

[45 FR 52081, Aug. 5, 1980, as amended at 50 FR 21438, May 24, 1985; 51 
FR 303, Jan. 3, 1986; 59 FR 1634, Jan. 12, 1994]



Sec. 404.958  Notice of dismissal of a request for a hearing before 
an administrative law judge.

    We shall mail a written notice of the dismissal of the hearing 
request to all parties at their last known address. The notice will 
state that there is a right to request that the Appeals Council vacate 
the dismissal action.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986]



Sec. 404.959  Effect of dismissal of a request for a hearing before
an administrative law judge.

    The dismissal of a request for a hearing is binding, unless it is 
vacated by an administrative law judge or the Appeals Council.

[45 FR 52081, Aug. 5, 1980, as amended at 51 FR 303, Jan. 3, 1986]

[[Page 262]]



Sec. 404.960  Vacating a dismissal of a request for a hearing before
an administrative law judge.

    (a) Except as provided in paragraph (b) of this section, an 
administrative law judge or the Appeals Council may vacate a dismissal 
of a request for a hearing if you request that we vacate the dismissal. 
If you or another party wish to make this request, you must do so within 
60 days of the date you receive notice of the dismissal, and you must 
state why our dismissal of your request for a hearing was erroneous. The 
administrative law judge or Appeals Council will inform you in writing 
of the action taken on your request. The Appeals Council may also vacate 
a dismissal of a request for a hearing on its own motion. If the Appeals 
Council decides to vacate a dismissal on its own motion, it will do so 
within 60 days of the date we mail the notice of dismissal and will 
inform you in writing that it vacated the dismissal.
    (b) If you wish to proceed with a hearing after you received a fully 
favorable revised determination under the prehearing case review process 
in Sec. 404.941, you must follow the procedures in Sec. 404.941(d) to 
request that an administrative law judge vacate his or her order 
dismissing your request for a hearing.

[76 FR 65370, Oct. 21, 2011]



Sec. 404.961  Prehearing and posthearing conferences.

    The administrative law judge may decide on his or her own, or at the 
request of any party to the hearing, to hold a prehearing or posthearing 
conference to facilitate the hearing or the hearing decision. The 
administrative law judge shall tell the parties of the time, place and 
purpose of the conference at least seven days before the conference 
date, unless the parties have indicated in writing that they do not wish 
to receive a written notice of the conference. At the conference, the 
administrative law judge may consider matters in addition to those 
stated in the notice, if the parties consent in writing. A record of the 
conference will be made. The administrative law judge shall issue an 
order stating all agreements and actions resulting from the conference. 
If the parties do not object, the agreements and actions become part of 
the hearing record and are binding on all parties.



Sec. 404.965  [Reserved]

                         Appeals Council Review



Sec. 404.966  Testing elimination of the request for Appeals Council
review.

    (a) Applicability and scope. Notwithstanding any other provision in 
this part or part 422 of this chapter, we are establishing the 
procedures set out in this section to test elimination of the request 
for review by the Appeals Council. These procedures will apply in 
randomly selected cases in which we have tested a combination of model 
procedures for modifying the disability claim process as authorized 
under Secs. 404.906 and 404.943, and in which an administrative law 
judge has issued a decision (not including a recommended decision) that 
is less than fully favorable to you.
    (b) Effect of an administrative law judge's decision. In a case to 
which the procedures of this section apply, the decision of an 
administrative law judge will be binding on all the parties to the 
hearing unless--
    (1) You or another party file an action concerning the decision in 
Federal district court;
    (2) The Appeals Council decides to review the decision on its own 
motion under the authority provided in Sec. 404.969, and it issues a 
notice announcing its decision to review the case on its own motion no 
later than the day before the filing date of a civil action establishing 
the jurisdiction of a Federal district court; or
    (3) The decision is revised by the administrative law judge or the 
Appeals Council under the procedures explained in Sec. 404.987.
    (c) Notice of the decision of an administrative law judge. The 
notice of decision the administrative law judge issues in a case 
processed under this section will advise you and any other parties to 
the decision that you may file an action in a Federal district court 
within 60 days after the date you receive notice of the decision.
    (d) Extension of time to file action in Federal district court. Any 
party having

[[Page 263]]

a right to file a civil action under this section may request that the 
time for filing an action in Federal district court be extended. The 
request must be in writing and it must give the reasons why the action 
was not filed within the stated time period. The request must be filed 
with the Appeals Council. If you show that you had good cause for 
missing the deadline, the time period will be extended. To determine 
whether good cause exists, we will use the standards in Sec. 404.911.

[62 FR 49602, Sept. 23, 1997, as amended at 75 FR 33168, June 11, 2010]



Sec. 404.967  Appeals Council review--general.

    If you or any other party is dissatisfied with the hearing decision 
or with the dismissal of a hearing request, you may request that the 
Appeals Council review that action. The Appeals Council may deny or 
dismiss the request for review, or it may grant the request and either 
issue a decision or remand the case to an administrative law judge. The 
Appeals Council shall notify the parties at their last known address of 
the action it takes.



Sec. 404.968  How to request Appeals Council review.

    (a) Time and place to request Appeals Council review. You may 
request Appeals Council review by filing a written request. You should 
submit any evidence you wish to have considered by the Appeals Council 
with your request for review, and the Appeals Council will consider the 
evidence in accordance with Sec. 404.970. You may file your request--
    (1) Within 60 days after the date you receive notice of the hearing 
decision or dismissal (or within the extended time period if we extend 
the time as provided in paragraph (b) of this section);
    (2) At one of our offices, the Veterans Administration Regional 
Office in the Philippines, or an office of the Railroad Retirement Board 
if you have 10 or more years of service in the railroad industry.
    (b) Extension of time to request review. You or any party to a 
hearing decision may ask that the time for filing a request for the 
review be extended. The request for an extension of time must be in 
writing. It must be filed with the Appeals Council, and it must give the 
reasons why the request for review was not filed within the stated time 
period. If you show that you had good cause for missing the deadline, 
the time period will be extended. To determine whether good cause 
exists, we use the standards explained in Sec. 404.911.

[45 FR 52081, Aug. 5, 1980, as amended at 81 FR 90993, Dec. 16, 2016]



Sec. 404.969  Appeals Council initiates review.

    (a) General. Anytime within 60 days after the date of a decision or 
dismissal that is subject to review under this section, the Appeals 
Council may decide on its own motion to review the action that was taken 
in your case. We may refer your case to the Appeals Council for it to 
consider reviewing under this authority.
    (b) Identification of cases. We will identify a case for referral to 
the Appeals Council for possible review under its own-motion authority 
before we effectuate a decision in the case. We will identify cases for 
referral to the Appeals Council through random and selective sampling 
techniques, which we may use in association with examination of the 
cases identified by sampling. We will also identify cases for referral 
to the Appeals Council through the evaluation of cases we conduct in 
order to effectuate decisions.
    (1) Random and selective sampling and case examinations. We may use 
random and selective sampling to identify cases involving any type of 
action (i.e., fully or partially favorable decisions, unfavorable 
decisions, or dismissals) and any type of benefits (i.e., benefits based 
on disability and benefits not based on disability). We will use 
selective sampling to identify cases that exhibit problematic issues or 
fact patterns that increase the likelihood of error. Neither our random 
sampling procedures nor our selective sampling procedures will identify 
cases based on the identity of the decisionmaker or the identity of the 
office issuing the decision. We may examine cases that have been 
identified through random or

[[Page 264]]

selective sampling to refine the identification of cases that may meet 
the criteria for review by the Appeals Council.
    (2) Identification as a result of the effectuation process. We may 
refer a case requiring effectuation to the Appeals Council if, in the 
view of the effectuating component, the decision cannot be effectuated 
because it contains a clerical error affecting the outcome of the claim; 
the decision is clearly inconsistent with the Social Security Act, the 
regulations, or a published ruling; or the decision is unclear regarding 
a matter that affects the claim's outcome.
    (c) Referral of cases. We will make referrals that occur as the 
result of a case examination or the effectuation process in writing. The 
written referral based on the results of such a case examination or the 
effectuation process will state the referring component's reasons for 
believing that the Appeals Council should review the case on its own 
motion. Referrals that result from selective sampling without a case 
examination may be accompanied by a written statement identifying the 
issue(s) or fact pattern that caused the referral. Referrals that result 
from random sampling without a case examination will only identify the 
case as a random sample case.
    (d) Appeals Council's action. If the Appeals Council decides to 
review a decision or dismissal on its own motion, it will mail a notice 
of review to all the parties as provided in Sec. 404.973. The Appeals 
Council will include with that notice a copy of any written referral it 
has received under paragraph (c) of this section. The Appeals Council's 
decision to review a case is established by its issuance of the notice 
of review. If it is unable to decide within the applicable 60-day period 
whether to review a decision or dismissal, the Appeals Council may 
consider the case to determine if the decision or dismissal should be 
reopened pursuant to Secs. 404.987 and 404.988. If the Appeals Council 
decides to review a decision on its own motion or to reopen a decision 
as provided in Secs. 404.987 and 404.988, the notice of review or the 
notice of reopening issued by the Appeals Council will advise, where 
appropriate, that interim benefits will be payable if a final decision 
has not been issued within 110 days after the date of the decision that 
is reviewed or reopened, and that any interim benefits paid will not be 
considered overpayments unless the benefits are fraudulently obtained.

[63 FR 36570, July 7, 1998, as amended at 75 FR 33168, June 11, 2010]



Sec. 404.970  Cases the Appeals Council will review.

    (a) The Appeals Council will review a case if--
    (1) There appears to be an abuse of discretion by the administrative 
law judge;
    (2) There is an error of law;
    (3) The action, findings or conclusions of the administrative law 
judge are not supported by substantial evidence;
    (4) There is a broad policy or procedural issue that may affect the 
general public interest; or
    (5) Subject to paragraph (b) of this section, the Appeals Council 
receives additional evidence that is new, material, and relates to the 
period on or before the date of the hearing decision, and there is a 
reasonable probability that the additional evidence would change the 
outcome of the decision.
    (b) The Appeals Council will only consider additional evidence under 
paragraph (a)(5) of this section if you show good cause for not 
informing us about or submitting the evidence as described in 
Sec. 404.935 because:
    (1) Our action misled you;
    (2) You had a physical, mental, educational, or linguistic 
limitation(s) that prevented you from informing us about or submitting 
the evidence earlier; or
    (3) Some other unusual, unexpected, or unavoidable circumstance 
beyond your control prevented you from informing us about or submitting 
the evidence earlier. Examples include, but are not limited to:
    (i) You were seriously ill, and your illness prevented you from 
contacting us in person, in writing, or through a friend, relative, or 
other person;
    (ii) There was a death or serious illness in your immediate family;

[[Page 265]]

    (iii) Important records were destroyed or damaged by fire or other 
accidental cause;
    (iv) You actively and diligently sought evidence from a source and 
the evidence was not received or was received less than 5 business days 
prior to the hearing; or
    (v) You received a hearing level decision on the record and the 
Appeals Council reviewed your decision.
    (c) If you submit additional evidence that does not relate to the 
period on or before the date of the administrative law judge hearing 
decision as required in paragraph (a)(5) of this section, or the Appeals 
Council does not find you had good cause for missing the deadline to 
submit the evidence in Sec. 404.935, the Appeals Council will send you a 
notice that explains why it did not accept the additional evidence and 
advises you of your right to file a new application. The notice will 
also advise you that if you file a new application within 6 months after 
the date of the Appeals Council's notice, your request for review will 
constitute a written statement indicating an intent to claim benefits 
under Sec. 404.630. If you file a new application within 6 months of the 
Appeals Council's notice, we will use the date you requested Appeals 
Council review as the filing date for your new application.

[81 FR 90994, Dec. 16, 2016



Sec. 404.971  Dismissal by Appeals Council.

    The Appeals Council will dismiss your request for review if you did 
not file your request within the stated period of time and the time for 
filing has not been extended. The Appeals Council may also dismiss any 
proceedings before it if--
    (a) You and any other party to the proceedings files a written 
request for dismissal; or
    (b) You or any other party to the proceedings dies and the record 
clearly shows that dismissal will not adversely affect any other person 
who wishes to continue the action.



Sec. 404.972  Effect of dismissal of request for Appeals Council review.

    The dismissal of a request for Appeals Council review is binding and 
not subject to further review.



Sec. 404.973  Notice of Appeals Council review.

    When the Appeals Council decides to review a case, it shall mail a 
notice to all parties at their last known address stating the reasons 
for the review and the issues to be considered.



Sec. 404.974  Obtaining evidence from Appeals Council.

    You may request and receive copies or a statement of the documents 
or other written evidence upon which the hearing decision or dismissal 
was based and a copy or summary of the transcript of oral evidence. 
However, you will be asked to pay the costs of providing these copies 
unless there is a good reason why you should not pay.



Sec. 404.975  Filing briefs with the Appeals Council.

    Upon request, the Appeals Council shall give you and all other 
parties a reasonable opportunity to file briefs or other written 
statements about the facts and law relevant to the case. A copy of each 
brief or statement should be filed for each party.



Sec. 404.976  Procedures before the Appeals Council on review.

    (a) Limitation of issues. The Appeals Council may limit the issues 
it considers if it notifies you and the other parties of the issues it 
will review.
    (b) Oral argument. You may request to appear before the Appeals 
Council to present oral argument. The Appeals Council will grant your 
request if it decides that your case raises an important question of law 
or policy or that oral argument would help to reach a proper decision. 
If your request to appear is granted, the Appeals Council will tell you 
the time and place of the oral argument at least 10 business days before 
the scheduled date. The Appeals Council will determine whether your 
appearance, or the appearance of any

[[Page 266]]

other person relevant to the proceeding, will be in person, by video 
teleconferencing, or by telephone.

[81 FR 90994, Dec. 16, 2016]



Sec. 404.977  Case remanded by Appeals Council.

    (a) When the Appeals Council may remand a case. The Appeals Council 
may remand a case to an administrative law judge so that he or she may 
hold a hearing and issue a decision or a recommended decision. The 
Appeals Council may also remand a case in which additional evidence is 
needed or additional action by the administrative law judge is required.
    (b) Action by administrative law judge on remand. The administrative 
law judge shall take any action that is ordered by the Appeals Council 
and may take any additional action that is not inconsistent with the 
Appeals Council's remand order.
    (c) Notice when case is returned with a recommended decision. When 
the administrative law judge sends a case to the Appeals Council with a 
recommended decision, a notice is mailed to the parties at their last 
known address. The notice tells them that the case has been sent to the 
Appeals Council, explains the rules for filing briefs or other written 
statements with the Appeals Council, and includes a copy of the 
recommended decision.
    (d) Filing briefs with and obtaining evidence from the Appeals 
Council. (1) You may file briefs or other written statements about the 
facts and law relevant to your case with the Appeals Council within 20 
days of the date that the recommended decision is mailed to you. Any 
party may ask the Appeals Council for additional time to file briefs or 
statements. The Appeals Council will extend this period, as appropriate, 
if you show that you had good cause for missing the deadline.
    (2) All other rules for filing briefs with and obtaining evidence 
from the Appeals Council follow the procedures explained in this 
subpart.
    (e) Procedures before the Appeals Council. (1) The Appeals Council, 
after receiving a recommended decision, will conduct its proceedings and 
issue its decision according to the procedures explain in this subpart.
    (2) If the Appeals Council believes that more evidence is required, 
it may again remand the case to an administrative law judge for further 
inquiry into the issues, rehearing, receipt of evidence, and another 
decision or recommended decision. However, if the Appeals Council 
decides that it can get the additional evidence more quickly, it will 
take appropriate action.



Sec. 404.979  Decision of Appeals Council.

    After it has reviewed all the evidence in the administrative law 
judge hearing record and any additional evidence received, subject to 
the limitations on Appeals Council consideration of additional evidence 
in Sec. 404.970, the Appeals Council will make a decision or remand the 
case to an administrative law judge. The Appeals Council may affirm, 
modify or reverse the administrative law judge hearing decision or it 
may adopt, modify or reject a recommended decision. If the Appeals 
Council issues its own decision, it will base its decision on the 
preponderance of the evidence. A copy of the Appeals Council's decision 
will be mailed to the parties at their last known address.

[52 FR 4004, Feb. 9, 1987, as amended at 73 FR 76944, Dec. 18, 2008; 81 
FR 90994, Dec. 16, 2016]



Sec. 404.981  Effect of Appeals Council's decision or denial of review.

    The Appeals Council may deny a party's request for review or it may 
decide to review a case and make a decision. The Appeals Council's 
decision, or the decision of the administrative law judge if the request 
for review is denied, is binding unless you or another party file an 
action in Federal district court, or the decision is revised. You may 
file an action in a Federal district court within 60 days after the date 
you receive notice of the Appeals Council's action.



Sec. 404.982  Extension of time to file action in Federal district
court.

    Any party to the Appeals Council's decision or denial of review, or 
to an expedited appeals process agreement, may request that the time for 
filing an action in a Federal district court be extended. The request 
must be in writing and it must give the reasons why the action was not 
filed within the stated

[[Page 267]]

time period. The request must be filed with the Appeals Council, or if 
it concerns an expedited appeals process agreement, with one of our 
offices. If you show that you had good cause for missing the deadline, 
the time period will be extended. To determine whether good cause 
exists, we use the standards explained in Sec. 404.911.

                           Court Remand Cases



Sec. 404.983  Case remanded by a Federal court.

    When a Federal court remands a case to the Commissioner for further 
consideration, the Appeals Council, acting on behalf of the 
Commissioner, may make a decision, or it may remand the case to an 
administrative law judge with instructions to take action and issue a 
decision or return the case to the Appeals Council with a recommended 
decision. If the case is remanded by the Appeals Council, the procedures 
explained in Sec. 404.977 will be followed. Any issues relating to your 
claim may be considered by the administrative law judge whether or not 
they were raised in the administrative proceedings leading to the final 
decision in your case.

[54 FR 37792, Sept. 13, 1989, as amended at 62 FR 38450, July 18, 1997]



Sec. 404.984  Appeals Council review of administrative law judge 
decision in a case remanded by a Federal court.

    (a) General. In accordance with Sec. 404.983, when a case is 
remanded by a Federal court for further consideration, the decision of 
the administrative law judge will become the final decision of the 
Commissioner after remand on your case unless the Appeals Council 
assumes jurisdiction of the case. The Appeals Council may assume 
jurisdiction based on written exceptions to the decision of the 
administrative law judge which you file with the Appeals Council or 
based on its authority pursuant to paragraph (c) of this section. If the 
Appeals Council assumes jurisdiction of your case, any issues relating 
to your claim may be considered by the Appeals Council whether or not 
they were raised in the administrative proceedings leading to the final 
decision in your case or subsequently considered by the administrative 
law judge in the administrative proceedings following the court's remand 
order. The Appeals Council will either make a new, independent decision 
based on the preponderance of the evidence in the record that will be 
the final decision of the Commissioner after remand, or it will remand 
the case to an administrative law judge for further proceedings.
    (b) You file exceptions disagreeing with the decision of the 
administrative law judge. (1) If you disagree with the decision of the 
administrative law judge, in whole or in part, you may file exceptions 
to the decision with the Appeals Council. Exceptions may be filed by 
submitting a written statement to the Appeals Council setting forth your 
reasons for disagreeing with the decision of the administrative law 
judge. The exceptions must be filed within 30 days of the date you 
receive the decision of the administrative law judge or an extension of 
time in which to submit exceptions must be requested in writing within 
the 30-day period. A timely request for a 30-day extension will be 
granted by the Appeals Council. A request for an extension of more than 
30 days should include a statement of reasons as to why you need the 
additional time.
    (2) If written exceptions are timely filed, the Appeals Council will 
consider your reasons for disagreeing with the decision of the 
administrative law judge and all the issues presented by your case. If 
the Appeals Council concludes that there is no reason to change the 
decision of the administrative law judge, it will issue a notice to you 
addressing your exceptions and explaining why no change in the decision 
of the administrative law judge is warranted. In this instance, the 
decision of the administrative law judge is the final decision of the 
Commissioner after remand.
    (3) When you file written exceptions to the decision of the 
administrative law judge, the Appeals Council may assume jurisdiction at 
any time, even after the 60-day time period which applies when you do 
not file exceptions. If the Appeals Council assumes jurisdiction, it 
will make a new, independent decision based on the preponderance of

[[Page 268]]

the evidence in the entire record affirming, modifying, or reversing the 
decision of the administrative law judge, or it will remand the case to 
an administrative law judge for further proceedings, including a new 
decision. The new decision of the Appeals Council is the final decision 
of the Commissioner after remand.
    (c) Appeals Council assumes jurisdiction without exceptions being 
filed. Any time within 60 days after the date of the decision of the 
administrative law judge, the Appeals Council may decide to assume 
jurisdiction of your case even though no written exceptions have been 
filed. Notice of this action will be mailed to all parties at their last 
known address. You will be provided with the opportunity to file briefs 
or other written statements with the Appeals Council about the facts and 
law relevant to your case. After the Appeals Council receives the briefs 
or other written statements, or the time allowed (usually 30 days) for 
submitting them has expired, the Appeals Council will either issue a 
final decision of the Commissioner based on the preponderance of the 
evidence affirming, modifying, or reversing the decision of the 
administrative law judge, or remand the case to an administrative law 
judge for further proceedings, including a new decision.
    (d) Exceptions are not filed and the Appeals Council does not 
otherwise assume jurisdiction. If no exceptions are filed and the 
Appeals Council does not assume jurisdiction of your case, the decision 
of the administrative law judge becomes the final decision of the 
Commissioner after remand.

[54 FR 37792, Sept. 13, 1989; 54 FR 40779, Oct. 3, 1989; 62 FR 38450, 
July 18, 1997; 73 FR 76944, Dec. 18, 2008]



Sec. 404.985  Application of circuit court law.

    The procedures which follow apply to administrative determinations 
or decisions on claims involving the application of circuit court law.
    (a) General. We will apply a holding in a United States Court of 
Appeals decision that we determine conflicts with our interpretation of 
a provision of the Social Security Act or regulations unless the 
Government seeks further judicial review of that decision or we 
relitigate the issue presented in the decision in accordance with 
paragraphs (c) and (d) of this section. We will apply the holding to 
claims at all levels of the administrative review process within the 
applicable circuit unless the holding, by its nature, applies only at 
certain levels of adjudication.
    (b) Issuance of an Acquiescence Ruling. When we determine that a 
United States Court of Appeals holding conflicts with our interpretation 
of a provision of the Social Security Act or regulations and the 
Government does not seek further judicial review or is unsuccessful on 
further review, we will issue a Social Security Acquiescence Ruling. The 
Acquiescence Ruling will describe the administrative case and the court 
decision, identify the issue(s) involved, and explain how we will apply 
the holding, including, as necessary, how the holding relates to other 
decisions within the applicable circuit. These Acquiescence Rulings will 
generally be effective on the date of their publication in the Federal 
Register and will apply to all determinations and decisions made on or 
after that date unless an Acquiescence Ruling is rescinded as stated in 
paragraph (e) of this section. The process we will use when issuing an 
Acquiescence Ruling follows:
    (1) We will release an Acquiescence Ruling for publication in the 
Federal Register for any precedential circuit court decision that we 
determine contains a holding that conflicts with our interpretation of a 
provision of the Social Security Act or regulations no later than 120 
days from the receipt of the court's decision. This timeframe will not 
apply when we decide to seek further judicial review of the circuit 
court decision or when coordination with the Department of Justice and/
or other Federal agencies makes this timeframe no longer feasible.
    (2) If we make a determination or decision on your claim between the 
date of a circuit court decision and the date we publish an Acquiescence 
Ruling, you may request application of the published Acquiescence Ruling 
to the prior determination or decision. You must demonstrate that 
application of the Acquiescence Ruling could change

[[Page 269]]

the prior determination or decision in your case. You may demonstrate 
this by submitting a statement that cites the Acquiescence Ruling or the 
holding or portion of a circuit court decision which could change the 
prior determination or decision in your case. If you can so demonstrate, 
we will readjudicate the claim in accordance with the Acquiescence 
Ruling at the level at which it was last adjudicated. Any readjudication 
will be limited to consideration of the issue(s) covered by the 
Acquiescence Ruling and any new determination or decision on 
readjudication will be subject to administrative and judicial review in 
accordance with this subpart. Our denial of a request for readjudication 
will not be subject to further administrative or judicial review. If you 
file a request for readjudication within the 60-day appeal period and we 
deny that request, we shall extend the time to file an appeal on the 
merits of the claim to 60 days after the date that we deny the request 
for readjudication.
    (3) After we receive a precedential circuit court decision and 
determine that an Acquiescence Ruling may be required, we will begin to 
identify those claims that are pending before us within the circuit and 
that might be subject to readjudication if an Acquiescence Ruling is 
subsequently issued. When an Acquiescence Ruling is published, we will 
send a notice to those individuals whose cases we have identified which 
may be affected by the Acquiescence Ruling. The notice will provide 
information about the Acquiescence Ruling and the right to request 
readjudication under that Acquiescence Ruling, as described in paragraph 
(b)(2) of this section. It is not necessary for an individual to receive 
a notice in order to request application of an Acquiescence Ruling to 
his or her claim, as described in paragraph (b)(2) of this section.
    (c) Relitigation of court's holding after publication of an 
Acquiescence Ruling. After we have published an Acquiescence Ruling to 
reflect a holding of a United States Court of Appeals on an issue, we 
may decide under certain conditions to relitigate that issue within the 
same circuit. We may relitigate only when the conditions specified in 
paragraphs (c)(2) and (3) of this section are met, and, in general, one 
of the events specified in paragraph (c)(1) of this section occurs.
    (1) Activating events:
    (i) An action by both Houses of Congress indicates that a circuit 
court decision on which an Acquiescence Ruling was based was decided 
inconsistently with congressional intent, such as may be expressed in a 
joint resolution, an appropriations restriction, or enactment of 
legislation which affects a closely analogous body of law;
    (ii) A statement in a majority opinion of the same circuit indicates 
that the court might no longer follow its previous decision if a 
particular issue were presented again;
    (iii) Subsequent circuit court precedent in other circuits supports 
our interpretation of the Social Security Act or regulations on the 
issue(s) in question; or
    (iv) A subsequent Supreme Court decision presents a reasonable legal 
basis for questioning a circuit court holding upon which we base an 
Acquiescence Ruling.
    (2) The General Counsel of the Social Security Administration, after 
consulting with the Department of Justice, concurs that relitigation of 
an issue and application of our interpretation of the Social Security 
Act or regulations to selected claims in the administrative review 
process within the circuit would be appropriate.
    (3) We publish a notice in the Federal Register that we intend to 
relitigate an Acquiescence Ruling issue and that we will apply our 
interpretation of the Social Security Act or regulations within the 
circuit to claims in the administrative review process selected for 
relitigation. The notice will explain why we made this decision.
    (d) Notice of relitigation. When we decide to relitigate an issue, 
we will provide a notice explaining our action to all affected 
claimants. In adjudicating claims subject to relitigation, 
decisionmakers throughout the SSA administrative review process will 
apply our interpretation of the Social Security Act and regulations, but 
will also state in written determinations or decisions how the claims 
would have been decided under the circuit standard.

[[Page 270]]

Claims not subject to relitigation will continue to be decided under the 
Acquiescence Ruling in accordance with the circuit standard. So that 
affected claimants can be readily identified and any subsequent decision 
of the circuit court or the Supreme Court can be implemented quickly and 
efficiently, we will maintain a listing of all claimants who receive 
this notice and will provide them with the relief ordered by the court.
    (e) Rescission of an Acquiescence Ruling. We will rescind as 
obsolete an Acquiescence Ruling and apply our interpretation of the 
Social Security Act or regulations by publishing a notice in the Federal 
Register when any of the following events occurs:
    (1) The Supreme Court overrules or limits a circuit court holding 
that was the basis of an Acquiescence Ruling;
    (2) A circuit court overrules or limits itself on an issue that was 
the basis of an Acquiescence Ruling;
    (3) A Federal law is enacted that removes the basis for the holding 
in a decision of a circuit court that was the subject of an Acquiescence 
Ruling; or
    (4) We subsequently clarify, modify or revoke the regulation or 
ruling that was the subject of a circuit court holding that we 
determined conflicts with our interpretation of the Social Security Act 
or regulations, or we subsequently publish a new regulation(s) 
addressing an issue(s) not previously included in our regulations when 
that issue(s) was the subject of a circuit court holding that conflicted 
with our interpretation of the Social Security Act or regulations and 
that holding was not compelled by the statute or Constitution.

[63 FR 24932, May 6, 1998]

           Reopening and Revising Determinations and Decisions



Sec. 404.987  Reopening and revising determinations and decisions.

    (a) General. Generally, if you are dissatisfied with a determination 
or decision made in the administrative review process, but do not 
request further review within the stated time period, you lose your 
right to further review and that determination or decision becomes 
final. However, a determination or a decision made in your case which is 
otherwise final and binding may be reopened and revised by us.
    (b) Procedure for reopening and revision. We may reopen a final 
determination or decision on our own initiative, or you may ask that a 
final determination or a decision to which you were a party be reopened. 
In either instance, if we reopen the determination or decision, we may 
revise that determination or decision. The conditions under which we may 
reopen a previous determination or decision, either on our own 
initiative or at your request, are explained in Sec. 404.988.

[59 FR 8535, Feb. 23, 1994]



Sec. 404.988  Conditions for reopening.

    A determination, revised determination, decision, or revised 
decision may be reopened--
    (a) Within 12 months of the date of the notice of the initial 
determination, for any reason;
    (b) Within four years of the date of the notice of the initial 
determination if we find good cause, as defined in Sec. 404.989, to 
reopen the case; or
    (c) At any time if--
    (1) It was obtained by fraud or similar fault (see Sec. 416.1488(c) 
of this chapter for factors which we take into account in determining 
fraud or similar fault);
    (2) Another person files a claim on the same earnings record and 
allowance of the claim adversely affects your claim;
    (3) A person previously determined to be dead, and on whose earnings 
record your entitlement is based, is later found to be alive;
    (4) Your claim was denied because you did not prove that a person 
died, and the death is later established--
    (i) By a presumption of death under Sec. 404.721(b); or
    (ii) By location or identification of his or her body;
    (5) The Railroad Retirement Board has awarded duplicate benefits on 
the same earnings record;
    (6) It either--
    (i) Denies the person on whose earnings record your claim is based 
gratuitous wage credits for military or naval service because another 
Federal agency (other than the Veterans Administration) has erroneously 
certified that it

[[Page 271]]

has awarded benefits based on the service; or
    (ii) Credits the earnings record of the person on which your claim 
is based with gratuitous wage credits and another Federal agency (other 
than the Veterans Administration) certifies that it has awarded a 
benefit based on the period of service for which the wage credits were 
granted;
    (7) It finds that the claimant did not have insured status, but 
earnings were later credited to his or her earnings record to correct 
errors apparent on the face of the earnings record (section 205(c)(5)(C) 
of the Act), to enter items transferred by the Railroad Retirement 
Board, which were credited under the Railroad Retirement Act when they 
should have been credited to the claimant's Social Security earnings 
record (section 205(c)(5)(D) of the Act), or to correct errors made in 
the allocation of wages or self-employment income to individuals or 
periods (section 205(c)(5)(G) of the Act), which would have given him or 
her insured status at the time of the determination or decision if the 
earnings had been credited to his or her earnings record at that time, 
and the evidence of these earnings was in our possession or the 
possession of the Railroad Retirement Board at the time of the 
determination or decision;
    (8) It is fully or partially unfavorable to a party, but only to 
correct clerical error or an error that appears on the face of the 
evidence that was considered when the determination or decision was 
made;
    (9) It finds that you are entitled to monthly benefits or to a lump 
sum death payment based on the earnings of a deceased person, and it is 
later established that:
    (i) You were convicted of a felony or an act in the nature of a 
felony for intentionally causing that person's death; or
    (ii) If you were subject to the juvenile justice system, you were 
found by a court of competent jurisdiction to have intentionally caused 
that person's death by committing an act which, if committed by an 
adult, would have been considered a felony or an act in the nature of a 
felony;
    (10) It either--
    (i) Denies the person on whose earnings record your claim is based 
deemed wages for internment during World War II because of an erroneous 
finding that a benefit based upon the internment has been determined by 
an agency of the United States to be payable under another Federal law 
or under a system established by that agency; or
    (ii) Awards the person on whose earnings record your claim is based 
deemed wages for internment during World War II and a benefit based upon 
the internment is determined by an agency of the United States to be 
payable under another Federal law or under a system established by that 
agency; or
    (11) It is incorrect because--
    (i) You were convicted of a crime that affected your right to 
receive benefits or your entitlement to a period of disability; or
    (ii) Your conviction of a crime that affected your right to receive 
benefits or your entitlement to a period of disability is overturned.

[45 FR 52081, Aug. 5, 1980, as amended at 49 FR 46369, Nov. 26, 1984; 51 
FR 18313, May 19, 1986; 59 FR 1635, Jan. 12, 1994; 60 FR 19165, Apr. 17, 
1995; 75 FR 33168, June 11, 2010]



Sec. 404.989  Good cause for reopening.

    (a) We will find that there is good cause to reopen a determination 
or decision if--
    (1) New and material evidence is furnished;
    (2) A clerical error in the computation or recomputation of benefits 
was made; or
    (3) The evidence that was considered in making the determination or 
decision clearly shows on its face that an error was made.
    (b) We will not find good cause to reopen your case if the only 
reason for reopening is a change of legal interpretation or 
adminstrative ruling upon which the determination or decision was made.



Sec. 404.990  Finality of determinations and decisions on revision 
of an earnings record.

    A determination or a decision on a revision of an earnings record 
may be reopened only within the time period and under the conditions 
provided in section 205(c) (4) or (5) of the Act, or

[[Page 272]]

within 60 days after the date you receive notice of the determination or 
decision, whichever is later.



Sec. 404.991  Finality of determinations and decisions to suspend
benefit payments for entire taxable year because of earnings.

    A determination or decision to suspend benefit payments for an 
entire taxable year because of earnings may be reopened only within the 
time period and under the conditions provided in section 203(h)(1)(B) of 
the Act.



Sec. 404.991a  Late completion of timely investigation.

    We may revise a determination or decision after the applicable time 
period in Sec. 404.988(a) or Sec. 404.988(b) expires if we begin an 
investigation into whether to revise the determination or decision 
before the applicable time period expires. We may begin the 
investigation either based on a request by you or by an action on our 
part. The investigation is a process of gathering facts after a 
determination or decision has been reopened to determine if a revision 
of the determination or decision is applicable.
    (a) If we have diligently pursued the investigation to its 
conclusion, we may revise the determination or decision. The revision 
may be favorable or unfavorable to you. ``Diligently pursued'' means 
that in light of the facts and circumstances of a particular case, the 
necessary action was undertaken and carried out as promptly as the 
circumstances permitted. Diligent pursuit will be presumed to have been 
met if we conclude the investigation and if necessary, revise the 
determination or decision within 6 months from the date we began the 
investigation.
    (b) If we have not diligently pursued the investigation to its 
conclusion, we will revise the determination or decision if a revision 
is applicable and if it will be favorable to you. We will not revise the 
determination or decision if it will be unfavorable to you.

[49 FR 46369, Nov. 26, 1984; 49 FR 48036, Dec. 10, 1984]



Sec. 404.992  Notice of revised determination or decision.

    (a) When a determination or decision is revised, notice of the 
revision will be mailed to the parties at their last known address. The 
notice will state the basis for the revised determination or decision 
and the effect of the revision. The notice will also inform the parties 
of the right to further review.
    (b) If a reconsidered determination that you are disabled, based on 
medical factors, is reopened for the purpose of being revised, you will 
be notified, in writing, of the proposed revision and of your right to 
request that a disability hearing be held before a revised reconsidered 
determination is issued. If a revised reconsidered determination is 
issued, you may request a hearing before an administrative law judge.
    (c) If an administrative law judge or the Appeals Council proposes 
to revise a decision, and the revision would be based on evidence not 
included in the record on which the prior decision was based, you and 
any other parties to the decision will be notified, in writing, of the 
proposed action and of your right to request that a hearing be held 
before any further action is taken. If a revised decision is issued by 
an administrative law judge, you and any other party may request that it 
be reviewed by the Appeals Council, or the Appeals Council may review 
the decision on its own initiative.
    (d) If an administrative law judge or the Appeals Council proposes 
to revise a decision, and the revision would be based only on evidence 
included in the record on which the prior decision was based, you and 
any other parties to the decision will be notified, in writing, of the 
proposed action. If a revised decision is issued by an administrative 
law judge, you and any other party may request that it be reviewed by 
the Appeals Council, or the Appeals Council may review the decision on 
its own initiative.

[51 FR 303, Jan. 3, 1986]



Sec. 404.993  Effect of revised determination or decision.

    A revised determination or decision is binding unless--

[[Page 273]]

    (a) You or another party to the revised determination file a written 
request for reconsideration or a hearing before an administrative law 
judge, as appropriate;
    (b) You or another party to the revised decision file, as 
appropriate, a request for review by the Appeals Council or a hearing 
before an administrative law judge;
    (c) The Appeals Council reviews the revised decision; or
    (d) The revised determination or decision is further revised.

[51 FR 303, Jan. 3, 1986]



Sec. 404.994  Time and place to request a hearing on revised 
determination or decision.

    You or another party to a revised determination or decision may 
request, as approporiate, further review or a hearing on the revision by 
filing a request in writing at one of our offices within 60 days after 
the date you receive notice of the revision. Further review or a hearing 
will be held on the revision according to the rules of this subpart.



Sec. 404.995  Finality of findings when later claim is filed on same 
earnings record.

    If two claims for benefits are filed on the same earnings records, 
findings of fact made in a determination on the first claim may be 
revised in determining or deciding the second claim, even though the 
time limit for revising the findings made in the first claim has passed. 
However, a finding in connection with a claim that a person was fully or 
currently insured at the time of filing an application, at the time of 
death, or any other pertinent time, may be revised only under the 
conditions stated in Sec. 404.988.



Sec. 404.996  Increase in future benefits where time period for
reopening expires.

    If, after the time period for reopening under Sec. 404.988(b) has 
ended, new evidence is furnished showing a different date of birth or 
additional earnings for you (or for the person on whose earnings record 
your claim was based) which would otherwise increase the amount of your 
benefits, we will make the increase (subject to the limitations provided 
in section 205(c) (4) and (5) of the Act) but only for benefits payable 
after the time we received the new evidence. (If the new evidence we 
receive would lead to a decrease in your benefits, we will take no 
action if we cannot reopen under Sec. 404.988.)

[49 FR 46369, Nov. 26, 1984]

                   Payment of Certain Travel Expenses



Sec. 404.999a  Payment of certain travel expenses--general.

    When you file a claim for Social Security benefits, you may incur 
certain travel expenses in pursuing your claim. Sections 404.999b-
404.999d explain who may be reimbursed for travel expenses, the types of 
travel expenses that are reimbursable, and when and how to claim 
reimbursement. Generally, the agency that requests you to travel will be 
the agency that reimburses you. No later than when it notifies you of 
the examination or hearing described in Sec. 404.999b(a), that agency 
will give you information about the right to travel reimbursement, the 
right to advance payment and how to request it, the rules on means of 
travel and unusual travel costs, and the need to submit receipts.

[51 FR 8808, Mar. 14, 1986]



Sec. 404.999b  Who may be reimbursed.

    (a) The following individuals may be reimbursed for certain travel 
expenses--
    (1) You, when you attend medical examinations upon request in 
connection with disability determinations; these are medical 
examinations requested by the State agency or by us when additional 
medical evidence is necessary to make a disability determination (also 
referred to as consultative examinations, see Sec. 404.1517);
    (2) You, your representative (see Sec. 404.1705 (a) and (b)), and 
all unsubpoenaed witnesses we or the State agency determines to be 
reasonably necessary who attend disability hearings; and
    (3) You, your representative, and all unsubpoenaed witnesses we 
determine to be reasonably necessary who attend hearings on any claim 
for benefits before an administrative law judge.

[[Page 274]]

    (b) Sections 404.999a through 404.999d do not apply to subpoenaed 
witnesses. They are reimbursed under Secs. 404.950(d) and 404.916(b)(1).

[51 FR 8808, Mar. 14, 1986]



Sec. 404.999c  What travel expenses are reimbursable.

    Reimbursable travel expenses include the ordinary expenses of public 
or private transportation as well as unusual costs due to special 
circumstances.
    (a) Reimbursement for ordinary travel expenses is limited--
    (1) To the cost of travel by the most economical and expeditious 
means of transportation available and appropriate to the individual's 
condition of health as determined by the State agency or by us, 
considering the available means in the following order--
    (i) Common carrier (air, rail, or bus);
    (ii) Privately owned vehicles;
    (iii) Commercially rented vehicles and other special conveyances;
    (2) If air travel is necessary, to the coach fare for air travel 
between the specified travel points involved unless first-class air 
travel is authorized in advance by the State agency or by the Secretary 
in instances when--
    (i) Space is not available in less-than-first-class accommodations 
on any scheduled flights in time to accomplish the purpose of the 
travel;
    (ii) First-class accommodations are necessary because you, your 
representative, or reasonably necessary witness is so handicapped or 
otherwise impaired that other accommodations are not practical and the 
impairment is substantiated by competent medical authority;
    (iii) Less-than-first-class accommodations on foreign carriers do 
not provide adequate sanitation or health standards; or
    (iv) The use of first-class accommodations would result in an 
overall savings to the government based on economic considerations, such 
as the avoidance of additional subsistence costs that would be incurred 
while awaiting availability of less-than-first-class accommodations.
    (b) Unusual travel costs may be reimbursed but must be authorized in 
advance and in writing by us or the appropriate State official, as 
applicable, unless they are unexpected or unavoidable; we or the State 
agency must determine their reasonableness and necessity and must 
approve them before payment can be made. Unusual expenses that may be 
covered in connection with travel include, but are not limited to--
    (1) Ambulance services;
    (2) Attendant services;
    (3) Meals;
    (4) Lodging; and
    (5) Taxicabs.
    (c) If we reimburse you for travel, we apply the rules in 
Secs. 404.999b through 404.999d and the same rates and conditions of 
payment that govern travel expenses for Federal employees as authorized 
under 41 CFR chapter 301. If a State agency reimburses you, the 
reimbursement rates shall be determined by the rules in Secs. 404.999b 
through 404.999d and that agency's rules and regulations and may differ 
from one agency to another and also may differ from the Federal 
reimbursement rates.
    (1) When public transportation is used, reimbursement will be made 
for the actual costs incurred, subject to the restrictions in paragraph 
(a)(2) of this section on reimbursement for first-class air travel.
    (2) When travel is by a privately owned vehicle, reimbursement will 
be made at the current Federal or State mileage rate specified for that 
geographic location plus the actual costs of tolls and parking, if 
travel by a privately owned vehicle is determined appropriate under 
paragraph (a)(1) of this section. Otherwise, the amount of reimbursement 
for travel by privately owned vehicle cannot exceed the total cost of 
the most economical public transportation available for travel between 
the same two points. Total cost includes the cost for all the authorized 
travelers who travel in the same privately owned vehicle. Advance 
approval of travel by privately owned vehicle is not required (but could 
give you assurance of its approval).
    (3) Sometimes your health condition dictates a mode of 
transportation different from the most economical and expeditious. In 
order for your health to require a mode of transportation other than 
common carrier or passenger car,

[[Page 275]]

you must be so handicapped or otherwise impaired as to require special 
transportation arrangements and the conditions must be substantiated by 
competent medical authority.
    (d) For travel to a hearing--
    (1) Reimbursement is limited to travel within the U.S. For this 
purpose, the U.S. includes the U.S. as defined in Sec. 404.2(c)(6) and 
the Northern Mariana Islands.
    (2) We or the State agency will reimburse you, your representative, 
or an unsubpoenaed witness only if the distance from the person's 
residence or office (whichever he or she travels from) to the hearing 
site exceeds 75 miles.
    (3) For travel expenses incurred on or after April 1, 1991, the 
amount of reimbursement under this section for travel by your 
representative to attend a disability hearing or a hearing before an 
administrative law judge shall not exceed the maximum amount allowable 
under this section for travel to the hearing site from any point within 
the geographic area of the office having jurisdiction over the hearing.
    (i) The geographic area of the office having jurisdiction over the 
hearing means, as appropriate--
    (A) The designated geographic service area of the State agency 
adjudicatory unit having responsibility for providing the disability 
hearing;
    (B) If a Federal disability hearing officer holds the disability 
hearing, the geographic area of the State (which includes a State as 
defined in Sec. 404.2(c)(5) and also includes the Northern Mariana 
Islands) in which the claimant resides or, if the claimant is not a 
resident of a State, in which the hearing officer holds the disability 
hearing; or
    (C) The designated geographic service area of the Office of Hearings 
and Appeals hearing office having responsibility for providing the 
hearing before an administrative law judge.
    (ii) We or the State agency determine the maximum amount allowable 
for travel by a representative based on the distance to the hearing site 
from the farthest point within the appropriate geographic area. In 
determining the maximum amount allowable for travel between these two 
points, we or the State agency apply the rules in paragraphs (a) through 
(c) of this section and the limitations in paragraph (d) (1) and (4) of 
this section. If the distance between these two points does not exceed 
75 miles, we or the State agency will not reimburse any of your 
representative's travel expenses.
    (4) If a change in the location of the hearing is made at your 
request from the location we or the State agency selected to one farther 
from your residence or office, neither your additional travel expenses 
nor the additional travel expenses of your representative and witnesses 
will be reimbursed.

[51 FR 8808, Mar. 14, 1986, as amended at 59 FR 8532, Feb. 23, 1994]



Sec. 404.999d  When and how to claim reimbursement.

    (a)(1) Generally, you will be reimbursed for your expenses after 
your trip. However, travel advances may be authorized if you request 
prepayment and show that the requested advance is reasonable and 
necessary.
    (2) You must submit to us or the State agency, as appropriate, an 
itemized list of what you spent and supporting receipts to be 
reimbursed.
    (3) Arrangements for special means of transportation and related 
unusual costs may be made only if we or the State agency authorizes the 
costs in writing in advance of travel, unless the costs are unexpected 
or unavoidable. If they are unexpected or unavoidable we or the State 
agency must determine their reasonableness and necessity and must 
approve them before payment may be made.
    (4) If you receive prepayment, you must, within 20 days after your 
trip, provide to us or the State agency, as appropriate, an itemized 
list of your actual travel costs and submit supporting receipts. We or 
the State agency will require you to pay back any balance of the 
advanced amount that exceeds any approved travel expenses within 20 days 
after you are notified of the amount of that balance. (State agencies 
may have their own time limits in place of the 20-day periods in the 
preceding two sentences.)
    (b) You may claim reimbursable travel expenses incurred by your 
representative for which you have been billed by your representative, 
except that if your representative makes a

[[Page 276]]

claim for them to us or the State, he or she will be reimbursed 
directly.

(Approved by the Office of Management and Budget under control number 
0960-0434)

[51 FR 8809, Mar. 14, 1986, as amended at 51 FR 44983, Dec. 16, 1986]



Subpart K_Employment, Wages, Self-Employment, and Self-Employment Income

    Authority: Secs. 202(v), 205(a), 209, 210, 211, 229(a), 230, 231, 
and 702(a)(5) of the Social Security Act (42 U.S.C. 402(v), 405(a), 409, 
410, 411, 429(a), 430, 431, and 902(a)(5)) and 48 U.S.C.1801.

    Source: 45 FR 20075, Mar. 27, 1980, unless otherwise noted.



Sec. 404.1001  Introduction.

    (a)(1) In general, your social security benefits are based on your 
earnings that are on our records. (Subpart I of this part explains how 
we keep earnings records.) Basically, you receive credit only for 
earnings that are covered for social security purposes. The earnings are 
covered only if your work is covered. If you are an employee, your 
employer files a report of your covered earnings. If you are self-
employed, you file a report of your covered earnings. Some work is 
covered by social security and some work is not. Also, some earnings are 
covered by social security and some are not. It is important that you 
are aware of what kinds of work and earnings are covered so that you 
will know whether your earnings should be on our records.
    (2) If you are an employee, your covered work is called employment. 
This subpart explains our rules on the kinds of work that are covered as 
employment and the kinds that are not. We also explain who is an 
employee.
    (3) If your work is employment, your covered earnings are called 
wages. This subpart explains our rules on the kinds of earnings that are 
covered as wages and the kinds that are not.
    (4) If you work for yourself, you are self-employed. The subpart 
explains our rules on the kinds of self-employment that are covered and 
the kinds that are not.
    (5) If you are self-employed, your covered earnings are called self-
employment income which is based on your net earnings from self-
employment during a taxable year. This subpart explains our rules on the 
kinds of earnings that are covered as net earnings from self-employment 
and the kinds that are not. We also explain how to figure your net 
earnings from self-employment and determine your self-employment income 
which is the amount that goes on our records.
    (b) We include basically only the rules that apply to current work 
or that the law requires us to publish as regulations. We generally do 
not include rules that are seldom used or do not apply to current work 
because of changes in the law.
    (c) The Social Security Act and the Internal Revenue Code (Code) 
have similar provisions on coverage of your earnings because the one law 
specifies the earnings for which you will receive credit for benefit 
purposes and the other the earnings on which you must pay social 
security taxes. Because the Code (title 26 U.S.C.) has some provisions 
that are not in the Act but which may affect you, you may need to refer 
to the Code or the Internal Revenue Service regulations (title 26 of the 
Code of Federal Regulations) to get complete information about your 
social security coverage.
    (d) The rules are organized in the following manner:
    (1) Sections 404.1003 through 404.1010 include the rules on 
employment. We discuss what we mean by employment, what work is covered 
as employment for social security purposes, and describe the kinds of 
workers who are considered employees.
    (2) In Secs. 404.1012 through 404.1038 we discuss various types of 
work that are not covered as employment for social security purposes.
    (3) The rules on wages are found in Secs. 404.1041 through 404.1059. 
We describe what is meant by the term wages, discuss the various types 
of pay that count as wages, and state when the pay counts for Social 
Security purposes. We include explanations of agriculture labor, 
domestic services, service not in the course of the employer's business, 
and home worker services under wages because special standards apply to 
these services.

[[Page 277]]

    (4) Our rules on self-employment and self-employment income are 
found in Secs. 404.1065 through 404.1096. We discuss what we mean by 
self-employment, what we mean by a trade or business, what types of 
activities are considered self-employment, how to determine self-
employment income, and how net earnings from self-employment are 
figured.

[45 FR 20075, Mar. 27, 1980, as amended at 55 FR 7309, Mar. 1, 1990; 61 
FR 38365, July 24, 1996]



Sec. 404.1002  Definitions.

    (a) General definitions. As used in this subpart--
    The Act means the Social Security Act, as amended.
    The Code means the Internal Revenue Code of 1954, as amended.
    We, our, or us means the Social Security Administration.
    You or your means any person whose earnings from employment or self-
employment are included or excluded under social security.
    (b) Other definitions. For ease of reference, we have placed other 
definitions in the sections of this subpart in which they are used.

                               Employment



Sec. 404.1003  Employment.

    Employment means, generally, any service covered by social security 
performed by an employee for his or her employer. The rules on who is an 
employee and who is an employer are contained in Secs. 404.1005 through 
404.1010. Section 404.1004 states the general rule on the kinds of work 
covered as employment. Exceptions to the general rule are contained in 
Secs. 404.1012 through 404.1038 which explain the kinds of work excluded 
from employment. All of these rules apply to current work unless 
otherwise indicated.

[45 FR 20075, Mar. 27, 1980, as amended at 61 FR 38365, July 24, 1996]



Sec. 404.1004  What work is covered as employment?

    (a) General requirements of employment. Unless otherwise excluded 
from coverage under Secs. 404.1012 through 404.1038, the work you 
perform as an employee for your employer is covered as employment under 
social security if one of the following situations applies:
    (1) You perform the work within the United States (whether or not 
you or your employer are a citizen or resident of the United States).
    (2) You perform the work outside the United States and you are a 
citizen or resident of the United States working for--
    (i) An American employer; or
    (ii) A foreign affiliate of an American employer that has in effect 
an agreement covering your work under section 3121(l) of the Code.
    (3) You perform the work on or in connection with an American vessel 
or American aircraft and the conditions in paragraphs (a)(3) (i) and 
(ii) are met. Your citizenship or residence does not matter. The 
citizenship or residence of your employer matters only if it affects 
whether the vessel is an American vessel.
    (i) You enter into the contract of employment within the United 
States or the vessel or aircraft touches at a port or airport within the 
United States during the performance of your contract of employment on 
the vessel or aircraft.
    (ii) You are employed on and in connection with the vessel or 
aircraft when outside the United States.
    (4) Your work is designated as employment or recognized as 
equivalent to employment under a totalization agreement. (See 
Sec. 404.1913. An agreement may exempt work from coverage as well as 
extend coverage to work.)
    (5) Your work performed after December 31, 1994, is in the employ of 
an international organization pursuant to a transfer from a Federal 
agency under section 3582 of title 5 of the United States Code and both 
the following are met:
    (i) Immediately before the transfer, your work for the Federal 
agency was covered employment; and
    (ii) You would be entitled, upon separation from the international 
organization and proper application, to reemployment with the Federal 
agency under section 3582.
    (b) Explanation of terms used in this section--(1) American employer 
means--
    (i) The United States or any of its instrumentalities;

[[Page 278]]

    (ii) A State, a political subdivision of a State, or an 
instrumentality of any one or more States or political subdivisions of a 
State;
    (iii) An individual who is a resident of the United States;
    (iv) A partnership, if at least two-thirds of the partners are 
residents of the United States;
    (v) A trust, if all of the trustees are residents of the United 
States; or
    (vi) A corporation organized under the laws of the United States or 
of any State.
    (2) American aircraft means an aircraft registered under the laws of 
the United States.
    (3) American vessel means a vessel documented or numbered under the 
laws of the United States. It also includes a vessel neither documented 
nor numbered under the laws of the United States, nor documented under 
the laws of any foreign country, if its crew is employed solely by one 
or more citizens or residents of the United States, or corporations 
organized under the laws of the United States or of any State.
    (4) Citizen of the United States includes a citizen of the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa or 
the Commonwealth of the Northern Mariana Islands.
    (5) Foreign affiliate refers to a foreign affiliate as defined in 
section 3121(l)(6) of the Code.
    (6) On and in connection with refers to the performance of work on a 
vessel or aircraft which concerns the vessel or aircraft. Examples of 
this kind of work are the services performed on a vessel by employees as 
officers or crew members, or as employees of concessionaires, of the 
vessel.
    (7) On or in connection with refers to work performed on the vessel 
or aircraft and to work which concerns the vessel or aircraft but not 
actually performed on it. For example, shore services in connection with 
repairing, loading, unloading, or provisioning a vessel performed by 
employees as officers or crew members, or as employees of 
concessionaires, of the vessel are included, since this work concerns 
the vessel though not performed on it.
    (8) State refers to the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, 
and the Commonwealth of the Northern Mariana Islands.
    (9) United States when used in a geographical sense means the 50 
States, the District of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, American Samoa, and the Commonwealth of the 
Northern Mariana Islands.

[45 FR 20075, Mar. 27, 1980, as amended at 50 FR 36573, Sept. 9, 1985; 
55 FR 51687, Dec. 17, 1990; 61 FR 38365, July 24, 1996; 69 FR 51555, 
Aug. 20, 2004]



Sec. 404.1005  Who is an employee.

    You must be an employee for your work to be covered as employment 
for social security purposes. You are an employee if you are--
    (a) A corporation officer as described in Sec. 404.1006;
    (b) A common-law employee as described in Sec. 404.1007 (unless you 
are, after December 31, 1982, a qualified real estate agent or direct 
seller as described in Sec. 404.1069); or
    (c) An agent-driver or commission-driver, a full-time life insurance 
salesman, a home worker, or a traveling or city salesman as described in 
Sec. 404.1008.

[45 FR 20075, Mar. 27, 1980, as amended at 48 FR 40515, Sept. 8, 1983]



Sec. 404.1006  Corporation officer.

    If you are an officer of a corporation, you are an employee of the 
corporation if you are paid or you are entitled to be paid for holding 
office or performing services. However, if you are a director of a 
corporation, we consider you to be self-employed when you work as a 
director.



Sec. 404.1007  Common-law employee.

    (a) General. The common-law rules on employer-employee status are 
the basic test for determining whether you and the person or firm you 
work for have the relationship of employee and employer. Even though you 
are considered self-employed under the common-law rules, you may still 
be an employee for social security purposes under

[[Page 279]]

Sec. 404.1006 (relating to corporation officers) or Sec. 404.1008 
(relating to workers in four specific jobs). In general, you are a 
common-law employee if the person you work for may tell you what to do 
and how, when, and where to do it. The person or firm you work for does 
not have to give these orders, but needs only the right to do so. 
Whether or not you are a common-law employee is not always clear. 
Several aspects of your job arrangement are considered in determining 
whether you are an employee or are self-employed under the common-law 
rules.
    (b) Factors that show employee status. Some aspects of a job 
arrangement that may show you are an employee are as follows:
    (1) The person you work for may fire you.
    (2) The person you work for furnishes you with tools or equipment 
and a place to work.
    (3) You receive training from the person you work for or are 
required to follow that person's instructions.
    (4) You must do the work yourself.
    (5) You do not hire, supervise, or pay assistants (unless you are 
employed as a foreman, manager, or supervisor).
    (6) The person you work for sets your hours of work, requires you to 
work full-time, or restricts you from doing work for others.
    (7) The person you work for pays your business or traveling 
expenses.
    (8) You are paid by the hour, week or month.
    (c) Factors that show self-employed status. Some aspects of a job 
arrangement or business venture that may show you are self-employed are 
as follows:
    (1) You make a profit or suffer a loss.
    (2) You are hired to complete a certain job and if you quit before 
the job is completed you may be liable for damages.
    (3) You work for a number of persons or firms at the same time.
    (4) You advertise to the general public that you are available to 
perform services.
    (5) You pay your own expenses and have your own equipment and work 
place.
    (d) Questions about your status. If there is a question about 
whether you are working as an employee or are self-employed, we or the 
Internal Revenue Service will make a determination after examining all 
of the facts of your case.



Sec. 404.1008  Agent-driver or commission-driver, full-time life 
insurance salesman, home worker, or traveling or city salesman.

    (a) General. In addition to common-law employees and corporation 
officers, we consider workers in the four types of jobs described in 
paragraphs (b) through (e) of this section to be employees if their 
services are performed under the following conditions:
    (1) Under the work arrangement the worker is expected to do 
substantially all of the work personally.
    (2) The worker must not have a substantial investment in the 
facilities used to do the work. Facilities include such things as a 
place to work, storage space, equipment, machinery and office furniture. 
However, facilities do not include tools, equipment or clothing of the 
kind usually provided by employees nor transportation such as a car or 
truck.
    (3) The work must be performed as part of a continuing work 
relationship between the worker and the person for whom the work is 
done. The work performed must not be a single transaction. Part-time and 
regular seasonal work may be performed as part of a continuing work 
relationship.
    (b) Agent-driver or commission-driver. This is a driver hired by 
another person to distribute meat products, vegetable products, fruit 
products, bakery products, beverages (other than milk), or laundry or 
dry-cleaning services. We consider you an agent-driver or commission-
driver if you are paid a commission based on your sales or the 
difference between the price you charge your customers and the amount 
you pay for the goods or services. It makes no difference whether you 
drive your own truck or the company's truck or whether you solicit the 
customers you serve.
    (c) Full-time life insurance salesman. A full-time life insurance 
salesman's main activity is selling life insurance or annuity contracts, 
or both, mostly for one life insurance company. If you are a full-time 
life insurance salesman,

[[Page 280]]

you are probably provided office space, stenographic help, telephone, 
forms, rate books and advertising materials by the company or general 
agent, without cost to you.
    (d) Home worker. A home worker is a person who works away from the 
place of business of the person he or she works for, usually at home. If 
you are a home worker and you work according to the instructions of the 
person you work for, on material or goods furnished by that person, and 
are required to return the finished product to that person (or another 
person whom he or she designates), you are an employee.
    (e) Traveling or city salesman. The main activity of a traveling or 
city salesman is taking orders for merchandise for another person or 
firm. The salesman gets orders from wholesalers, retailers, contractors, 
or operators of hotels, restaurants or other firms whose main business 
is furnishing food or lodging or both. The salesman sells merchandise to 
others for resale or for use in their own business. We consider you a 
traveling or city salesman if most of your work is done for a single 
person or firm even though you have incidental sideline sales 
activities. However, you are not an employee under this paragraph as to 
those sideline sales. If you take orders for a number of persons or 
firms as a multiple line salesman, you are not a traveling or city 
salesman.



Sec. 404.1009  Who is an employer.

    A person is an employer if he or she employs at least one employee. 
Sometimes it is not clear who a worker's employer is, since the employer 
does not always pay the worker's wages. When there is a question about 
who the employer is, we use the common-law rules to identify the 
employer (see Sec. 404.1007).



Sec. 404.1010  Farm crew leader as employer.

    A farm crew leader furnishes workers to do agricultural labor for 
another person, usually a farm operator. If the crew leader pays the 
workers (the money can be the crew leader's or the farm operator's), the 
crew leader is deemed to be the employer of the workers and is self-
employed. However, the crew leader is not deemed the employer of the 
workers if there is a written agreement between the crew leader and the 
farm operator naming the crew leader as an employee. If the crew leader 
does not have this agreement and does not pay the workers, we use the 
common-law rules to determine the crew leader's status.

                      Work Excluded From Employment



Sec. 404.1012  Work excluded from employment.

    Certain kinds of work performed by an employee are excluded from 
employment. They are described in Secs. 404.1014 through 404.1038 and 
are exceptions to the general rule in Sec. 404.1004 on the kinds of work 
that are covered as employment. In general, if the work performed by an 
employee is excluded from employment, the work is not covered under 
social security. However, certain kinds of work performed by an 
employee, even though excluded from employment, are covered as self-
employment for social security purposes. In addition, if part of the 
work performed by an employee for the same employer is included as 
employment and part is excluded from employment, all the work may be 
included or all may be excluded as described in Sec. 404.1013.

[45 FR 20075, Mar. 27, 1980, as amended at 61 FR 38365, July 24, 1996]



Sec. 404.1013  Included-excluded rule.

    (a) If part of your work for an employer during a pay period is 
covered as employment and part excluded, all of your work during that 
period is considered covered if at least one-half of your time in the 
pay period is in covered work. If you spend most of your time in a pay 
period doing work that is excluded, all of your work in that period is 
excluded.
    (b) A pay period is the period for which your employer ordinarily 
pays you. It cannot be more than 31 consecutive days. If the actual 
period is not always the same, your usual pay period will be used for 
applying the included-excluded rule.
    (c) The included-excluded rule does not apply and your covered work 
will be counted if--

[[Page 281]]

    (1) Part of your work is covered by the Railroad Retirement Tax Act 
and part by the Social Security Act; or
    (2) You have no usual pay period of 31 consecutive days or less, or 
you have separate pay periods for covered and excluded work.



Sec. 404.1014  Domestic service by a student for a local college 
club, fraternity or sorority.

    (a) General. If you are a student and do work of a household nature 
in or about the club rooms or house of a local college club or local 
chapter of a college fraternity or sorority, and are enrolled and 
regularly attending classes at a school, college, or university, your 
work is not covered as employment.
    (b) Explanation of terms--(1) Work of a household nature means the 
type of work done by cooks, waiters, butlers, maids, janitors, 
laundresses, furnacemen, handymen, gardeners, housekeepers and 
housemothers.
    (2) A local college club or local chapter of a college fraternity or 
sorority does not include an alumni club or chapter. Also, if the club 
rooms or house are used mostly for supplying board or lodging to 
students or nonstudents as a business, the work done is not excluded by 
this section.



Sec. 404.1015  Family services.

    (a) General. If you work as an employee of a relative, the work is 
excluded from employment if--
    (1) You work while under age 18 in the employ of your parent;
    (2) You do nonbusiness work (see Sec. 404.1058(a)(3) for an 
explanation of nonbusiness work) or perform domestic service (as 
described in Sec. 404.1057(b)) as an employee of your parent while under 
age 21;
    (3) You do nonbusiness work as an employee of your son, daughter, or 
spouse; or
    (4) You perform domestic service in the private home of your son, 
daughter or spouse as an employee of that son, daughter or spouse 
unless--
    (i) The son or daughter has a child (either natural, adopted or 
stepchild) living in the home who is under age 18 or, if older, has a 
mental or physical condition that requires the personal care and 
supervision of an adult for at least four continuous weeks in the 
calendar quarter in which the work is done; and
    (ii) The son or daughter is a widower or widow, or is divorced and 
has not remarried, or has a spouse living in the home who, because of a 
physical or mental condition, is incapable of taking care of the child 
and the condition is present for at least four continuous weeks in the 
calendar quarter in which the work is done.
    (b) Family work for other than sole proprietor. Work for a 
corporation is not excluded under this section, and work for a 
partnership is not excluded unless the required family relationship 
exists between the employee and each of the partners.

[45 FR 20075, Mar. 27, 1980, as amended at 57 FR 59913, Dec. 17, 1992]



Sec. 404.1016  Foreign agricultural workers.

    Farm work done by foreign workers lawfully admitted to the United 
States on a temporary basis to do farm work is not covered as 
employment. The excluded work includes any services connected with farm 
operations.



Sec. 404.1017  Sharefarmers.

    (a) If you are a sharefarmer, your services are not covered as 
employment, but as self-employment.
    (b) You are a sharefarmer if you have an arrangement with the owner 
or tenant of the land and the arrangement provides for all of the 
following:
    (1) You will produce agricultural or horticultural commodities on 
the land.
    (2) The commodities you produce or the income from their sale will 
be divided between you and the person with whom you have the agreement.
    (3) The amount of your share depends on the amount of commodities 
you produce.
    (c) If under your agreement you are to receive a specific rate of 
pay, a fixed sum of money or a specific amount of the commodities not 
based on your production, you are not a sharefarmer for social security 
purposes.

[[Page 282]]



Sec. 404.1018  Work by civilians for the United States Government or
its instrumentalities--wages paid after 1983.

    (a) General. If you are a civilian employee of the United States 
Government or an instrumentality of the United States, your employer 
will determine the amount of remuneration paid for your work and the 
periods in or for which such remuneration was paid. We will determine 
whether your employment is covered under Social Security, the periods of 
such covered employment, and whether remuneration paid for your work 
constitutes wages for purposes of Social Security. To make these 
determinations we will consider the date of your appointment to Federal 
service, your previous Federal employing agencies and positions (if 
any), whether you were covered under Social Security or a Federal 
civilian retirement system, and whether you made a timely election to 
join a retirement system established by the Federal Employees' 
Retirement System Act of 1986 or the Foreign Service Pension System Act 
of 1986. Using this information and the following rules, we will 
determine that your service is covered unless--
    (1) The service would have been excluded if the rules in effect in 
January 1983 had remained in effect; and
    (i) You have been continuously performing such service since 
December 31, 1983; or
    (ii) You are receiving an annuity from the Civil Service Retirement 
and Disability Fund or benefits for service as an employee under another 
retirement system established by a law of the United States and in 
effect on December 31, 1983, for employees of the Federal Government 
other than a system for members of the uniformed services.
    (2) The service is under the provisions of 28 U.S.C. 294, relating 
to the assignment of retired Federal justices and judges to active duty.
    (b) Covered services--(1) Federal officials. Any service for which 
you received remuneration after 1983 is covered if performed--
    (i) As the President or the Vice President of the United States;
    (ii) In a position placed in the Executive Schedule under 5 U.S.C. 
5312 through 5317;
    (iii) As a noncareer appointee in the Senior Executive Service or a 
noncareer member of the Senior Foreign Service;
    (iv) In a position to which you are appointed by the President, or 
his designee, or the Vice President under 3 U.S.C. 105(a)(1), 106(a)(1), 
or 107(a)(1) or (b)(1) if the maximum rate of basic pay for such 
position is at or above the rate for level V of the Executive Schedule;
    (v) As the Chief Justice of the United States, an Associate Justice 
of the Supreme Court, a judge of a United States court of appeals, a 
judge of a United States district court, including the district court of 
a territory, a judge of the United States Claims Court, a judge of the 
United States Court of International Trade, a judge of the United States 
Tax Court, a United States magistrate, or a referee in bankruptcy or 
United States bankruptcy judge; or
    (vi) As a Member, Delegate, or Resident Commissioner of or to the 
Congress.
    (2) Legislative Branch Employees. Service you perform for the 
legislative branch of the Federal Government for which you are paid 
remuneration after 1983 is generally covered by Social Security if such 
service is not covered by the Civil Service Retirement System or by 
another retirement system established by a law of the United States and 
in effect on December 31, 1983, for employees of the Federal Government 
other than a system for members of the uniformed services.
    (3) Election to become subject to the Federal Employees' Retirement 
System or the Foreign Service Pension System. Your service is covered 
if:
    (i) You timely elect after June 30, 1987, under either the Federal 
Employees' Retirement System Act or the Central Intelligence Agency 
Retirement Act, to become subject to the Federal Employees Retirement 
System provided in 5 U.S.C. 8401 through 8479; or
    (ii) You timely elect after June 30, 1987, to become subject to the 
Foreign Service Pension System provided in 22 U.S.C. 4071 through 
4071(k).

[[Page 283]]

    (4) Subsequent Federal civilian service. If you perform Federal 
civilian service on or after November 10, 1988, which is described in 
paragraph (b)(1), (b)(2), or (b)(3) of this section you will continue to 
be covered for any subsequent Federal Civilian Service not excluded 
under paragraph (c) of this section.
    (c) Excluded Service. Notwithstanding Sec. 404.1018a and this 
section, your service is not covered if performed--
    (1) In a penal institution of the United States as an inmate 
thereof;
    (2) As an employee included under 5 U.S.C. 5351(2) relating to 
certain interns, student nurses, and other student employees of 
hospitals of the Federal Government, other than as a medical or dental 
intern or a medical or dental resident in training;
    (3) As an employee serving on a temporary basis in case of fire, 
storm, earthquake, flood, or other similar emergency; or
    (4) Under any other statutory provisions that would require 
exclusion for reasons other than being in the employ of the Federal 
Government or an instrumentality of such.
    (d) Work as a Peace Corps Volunteer. Work performed as a volunteer 
or volunteer leader within the meaning of the Peace Corps Act, 22 U.S.C. 
2501 through 2523, is covered as employment.
    (e) Work as Job Corps Enrollee. Work performed as an enrollee in the 
Job Corps is considered to be performed in the employ of the United 
States.
    (f) Work by Volunteer in Service to America. Work performed and 
training received as a Volunteer in Service to America is considered to 
be performed in the employ of the United States if the volunteer is 
enrolled for a period of service of at least 1 year. If the enrollment 
is for less than 1 year, we use the common-law rules in Sec. 404.1007 to 
determine the volunteer's status.
    (g) Work for international organizations. Work performed for an 
international organization by an employee who was transferred from a 
Federal agency is generally covered as employment if, immediately before 
the transfer, the employee's services for the Federal agency were 
covered. (See Sec. 404.1004(a)(5) and Sec. 404.1034(c).)
    (h) Meaning of ``continuously performing''--(1) Absence of less than 
366 days. You are considered to be continuously performing service 
described in paragraph (a)(1)(i) of this section if you return to the 
performance of such service after being separated from such service for 
a period of less than 366 consecutive days, regardless of whether the 
period began before, on, or after December 31, 1983.
    (2) Other absences. You are considered to be continuously performing 
service described in paragraph (a)(1)(i) of this section regardless of 
the length of separation or whether the period of separation began 
before, on, or after December 31, 1983, if you--
    (i) Return to the performance of such service after being detailed 
or transferred from such service to an international organization as 
described under 5 U.S.C. 3343 or under 5 U.S.C. 3581;
    (ii) Are reemployed or reinstated after being separated from such 
service for the purpose of accepting employment with the American 
Institute of Taiwan as provided under 22 U.S.C. 3310;
    (iii) Return to the performance of such service after performing 
service as a member of a uniformed service including service in the 
National Guard and temporary service in the Coast Guard Reserve and 
after exercising restoration or reemployment rights as provided under 38 
U.S.C. chapter 43; or
    (iv) Return to the performance of such service after employment by a 
tribal organization to which section 105(e)(2) of the Indian Self-
Determination Act applies.

[53 FR 38944, Oct. 4, 1988; 53 FR 44551, Nov. 3, 1988, as amended at 55 
FR 24891, June 19, 1990; 61 FR 38365, July 24, 1996; 79 FR 33684, June 
12, 2014]



Sec. 404.1018a  Work by civilians for the United States Government 
or its instrumentalities--remuneration paid prior to 1984.

    (a) General--remuneration paid prior to 1984. If you worked as a 
civilian employee of the United States Government or an instrumentality 
of the United States, your work was excluded

[[Page 284]]

from employment if that work was covered by a retirement system 
established by law. Your work for an instrumentality that was exempt 
from Social Security tax was also excluded. Certain other work for the 
United States or an instrumentality of the United States was 
specifically excluded and is described in this section.
    (b) Work covered by a retirement system--remuneration paid prior to 
1984. Work you did as an employee of the United States or an 
instrumentality of the United States was excluded from employment if the 
work was covered by a retirement system established by a law of the 
United States. If you had a choice as to whether your work was covered 
by the retirement system, the work was not covered by that system until 
you chose that coverage. In order for the exclusion to apply, the work 
you did, rather than the position you held, must have been covered by 
the retirement system.
    (c) Work that was specifically excluded--remuneration paid prior to 
1984. Work performed by an employee of the United States or an 
instrumentality of the United States was excluded if it was done--
    (1) As the President or Vice President of the United States;
    (2) As a Member of the United States Congress, a Delegate to 
Congress, or a Resident Commissioner;
    (3) In the legislative branch of the United States Government;
    (4) By a student nurse, student dietitian, student physical 
therapist or student occupational therapist who was assigned or attached 
to a Federal hospital, clinic, or medical or dental laboratory;
    (5) By a person designated as a student employee with the approval 
of the Office of Personnel Management who was assigned or attached 
primarily for training purposes to a Federal hospital, clinic, or 
medical or dental laboratory, other than a medical or dental intern or 
resident in training;
    (6) By an employee who served on a temporary basis in case of fire, 
storm, earthquake, flood, or other similar emergency;
    (7) By a person to whom the Civil Service Retirement Act did not 
apply because the person's services were subject to another retirement 
system established by a law of the United States or by the 
instrumentality of the United States for which the work was done, other 
than the retirement system established by the Tennessee Valley Authority 
under the plan approved by the Secretary of Health, Education, and 
Welfare on December 28, 1956; or
    (8) By an inmate of a penal institution of the United States, if the 
work was done in the penal institution.
    (d) Work for instrumentalities of the United States exempt from 
employer tax--remuneration paid prior to 1984. (1) Work performed by an 
employee of an instrumentality of the United States was excluded if--
    (i) The instrumentality was exempt from the employer tax imposed by 
section 3111 of the Code or by section 1410 of the Internal Revenue Code 
of 1939; and
    (ii) The exemption was authorized by another law specifically 
referring to these sections.
    (2) Work performed by an employee of an instrumentality of the 
United States was excluded if the instrumentality was not on December 
31, 1950, subject to the employer tax imposed by section 1410 of the 
Internal Revenue Code of 1939 and the work was covered by a retirement 
system established by the instrumentality, unless--
    (i) The work was for a corporation wholly owned by the United 
States;
    (ii) The work was for a Federal land bank association, a production 
credit association, a Federal Reserve Bank, a Federal Credit Union, a 
Federal land bank, a Federal intermediate credit bank, a bank for 
cooperatives, or a Federal Home Loan Bank;
    (iii) The work was for a State, county, or community committee under 
the Agriculture Marketing Service and the Commodity Stabilization 
Service, formerly the Production and Marketing Administration; or
    (iv) The work was by a civilian, who was not paid from funds 
appropriated by the Congress, in activities conducted by an 
instrumentality of the United States subject to the jurisdiction of the 
Secretary of Defense or Secretary of Transportation at installations 
intended for the comfort, pleasure, contentment, and mental and

[[Page 285]]

physical improvement of personnel of the Defense Department or the Coast 
Guard, such as--
    (A) Army and Air Force Exchange Service;
    (B) Army and Air Force Motion Picture Service;
    (C) Coast Guard Exchanges;
    (D) Navy Ship's Service Stores; and
    (E) Marine Corps Post Exchanges.
    (3) For purposes of paragraph (d)(2) of this section, if an employee 
has a choice as to whether his or her work was covered by a retirement 
system, the work was not covered by that system until he or she chose 
that coverage. The work done, rather than the position held, must have 
been covered by the retirement system.
    (e) Work as a Peace Corps Volunteer--remuneration paid prior to 
1984. Work performed as a volunteer or volunteer leader within the 
meaning of the Peace Corps Act, 22 U.S.C. 2501 through 2523, was covered 
as employment.
    (f) Work as Job Corps Enrollee--remuneration paid prior to 1984. 
Work performed as an enrollee in the Job Corps was considered to be 
performed in the employ of the United States.
    (g) Work by Volunteer in Service to America--remuneration paid prior 
to 1984. Work performed and training received as a Volunteer in Service 
to America was considered to be performed in the employ of the United 
States if the volunteer was enrolled for a period of service of at least 
one year. If the enrollment was for less than one year, we used the 
common-law rules in Sec. 404.1007 to determine the volunteer's status.

[53 FR 38945, Oct. 4, 1988]



Sec. 404.1018b  Medicare qualified government employment.

    (a) General. The work of a Federal, State, or local government 
employee not otherwise subject to Social Security coverage may 
constitute Medicare qualified government employment. Medicare qualified 
government employment means any service which in all ways meets the 
definition of ``employment'' for title II purposes of the Social 
Security Act, except for the fact that the service was performed by a 
Federal, State or local government employee. This employment is used 
solely in determining eligibility for protection under part A of title 
XVIII of the Social Security Act (Hospital Insurance) and for coverage 
under the Medicare program for end-stage renal disease.
    (b) Federal employment. If, beginning with remuneration paid after 
1982, your service as a Federal employee is not otherwise covered 
employment under the Social Security Act, it is Medicare qualified 
government employment unless excluded under Sec. 404.1018(c).
    (c) State and local government employment. If, beginning with 
service performed after March 31, 1986, your service as an employee of a 
State or political subdivision (as defined in Sec. 404.1202(b)), Guam, 
American Samoa, the District of Columbia, or the Northern Mariana 
Islands is excluded from covered employment solely because of section 
210(a)(7) of the Social Security Act which pertains to employees of 
State and local governments (note Secs. 404.1020 through 404.1022), it 
is Medicare qualified government employment except as provided in 
paragraphs (c) (1) and (2) of this section.
    (1) An individual's service shall not be treated as employment if 
performed--
    (i) By an individual employed by a State or political subdivision 
for the purpose of relieving that individual from unemployment;
    (ii) In a hospital, home, or other institution by a patient or 
inmate thereof as an employee of a State, political subdivision, or of 
the District of Columbia;
    (iii) By an individual, as an employee of a State, political 
subdivision or the District of Columbia serving on a temporary basis in 
case of fire, storm, snow, earthquake, flood, or other similar 
emergency;
    (iv) By an individual as an employee included under 5 U.S.C. 5351(2) 
(relating to certain interns, student nurses, and other student 
employees of hospitals of the District of Columbia government), other 
than as a medical or dental intern or a medical or dental resident in 
training; or
    (v) By an election official or election worker paid less than $100 
in a calendar year for such service prior to 1995, or less than $1,000 
for service performed in any calendar year after 1994 and before

[[Page 286]]

2000, or, for service performed in any calendar year after 1999, less 
than the $1,000 base amount, as adjusted pursuant to section 
218(c)(8)(B) of the Social Security Act to reflect changes in wages in 
the economy. We will publish this adjustment of the $1,000 base amount 
in the Federal Register on or before November 1 preceding the year for 
which the adjustment is made.
    (2) An individual's service performed for an employer shall not be 
treated as employment if--
    (i) The service would be excluded from coverage under section 
210(a)(7) of the Social Security Act which pertains to employees of 
State and local governments;
    (ii) The service is performed by an individual who--
    (A) Was performing substantial and regular service for remuneration 
for that employer before April 1, 1986;
    (B) Was a bona fide employee of that employer on March 31, 1986; and
    (C) Did not enter into the employment relationship with that 
employer for purposes of meeting the requirements of paragraphs 
(c)(2)(ii) (A) and (B) of this section; and
    (iii) After March 31, 1986, but prior to the service being 
performed, the employment relationship with that employer had not been 
terminated.

[57 FR 59913, Dec. 17, 1992, as amended at 61 FR 38366, July 24, 1996]



Sec. 404.1019  Work as a member of a uniformed service of the
United States.

    (a) Your work as a member of a uniformed service of the United 
States is covered under Social Security (unless creditable under the 
Railroad Retirement Act), if--
    (1) On or after January 1, 1957, the work is service on active duty 
or active duty for training but not including service performed while on 
leave without pay; or
    (2) On or after January 1, 1988, the work is service on inactive 
duty training.
    (b) You are a member of a uniformed service if--
    (1) You are appointed, enlisted, or inducted into (or a retired 
member of)--
    (i) One of the armed services (Army, Navy, Air Force, Marine Corps, 
or Coast Guard); or
    (ii) A component of one of the armed services, including any reserve 
component as defined in Veterans' Benefits, 38 U.S.C. 101 (except the 
Coast Guard Reserve as a temporary member);
    (2) You are a commissioned officer (including a retired commissioned 
officer) of the National Oceanic and Atmospheric Administration or the 
Regular or Reserve Corps of the Public Health Service;
    (3) You are a member of the Fleet Reserve or Fleet Marine Corps 
Reserve;
    (4) You are a cadet at the United States Military, Coast Guard, or 
Air Force Academy, or a midshipman at the United States Naval Academy;
    (5) You are a member of the Reserve Officers Training Corps, the 
Naval Reserve Officers Training Corps, or the Air Force Reserve Officers 
Training Corps, when ordered to annual training duty for 14 days or more 
including periods of authorized travel to and from that duty; or
    (6) You are selected for active military or naval training under the 
Military Selective Service Act or are provisionally accepted for active 
duty in the military or naval service and you are ordered or directed to 
a place for final acceptance or entry upon active duty and are on the 
way to or from, or at, that place.

[45 FR 20075, Mar. 27, 1980, as amended at 57 FR 59913, Dec. 17, 1992]



Sec. 404.1020  Work for States and their political subdivisions 
and instrumentalities.

    (a) General. If you work as an employee of a State, a political 
subdivision of a State, or any wholly owned instrumentality of one or 
more of these, your work is excluded from employment unless--
    (1) The work is covered under an agreement under section 218 of the 
Act (see subpart M of this part); or
    (2) The work is covered transportation service as defined in section 
210(k) of the Act (see paragraph (c) of this section).
    (3) You perform services after July 1, 1991, as an employee of a 
State (other than the District of Columbia, Guam, the Commonwealth of 
the Northern Mariana Islands, or American Samoa), a political 
subdivision of a State, or

[[Page 287]]

any wholly owned instrumentality of one or more of the foregoing and you 
are not a member of a retirement system of such State, political 
subdivision, or instrumentality. Retirement system has the meaning given 
that term in section 218(b)(4) of the Act, except as provided in 
regulations prescribed by the Secretary of the Treasury. This paragraph 
does not apply to services performed--
    (i) As an employee employed to relieve you from unemployment;
    (ii) In a hospital, home, or other institution where you are a 
patient or inmate thereof;
    (iii) As an employee serving on a temporary basis in case of fire, 
storm, snow, earthquake, flood, or other similar emergency;
    (iv) As an election official or election worker if the remuneration 
paid in a calendar year for such service prior to 1995 is less than 
$100, or less than $1000 for service performed in any calendar year 
after 1994 and before 2000, or, for service performed in any calendar 
year after 1999, less than the $1000 base amount, as adjusted pursuant 
to section 218(c)(8)(B) of the Social Security Act to reflect changes in 
wages in the economy. We will publish this adjustment of the $1000 base 
amount in the Federal Register on or before November 1 preceding the 
year for which the adjustment is made.
    (v) As an employee in a position compensated solely on a fee basis 
which is treated, pursuant to section 211(c)(2)(E) of the Act, as a 
trade or business for purposes of inclusion of the fees in net earnings 
from self-employment; or
    (4) The work is covered under Sec. 404.1021 or Sec. 404.1022.
    (b) Medicare qualified government employment. Notwithstanding the 
provisions of paragraph (a) of this section, your work may be covered as 
Medicare qualified government employment (see Sec. 404.1018b(c) of this 
subpart).
    (c) Covered transportation service--(1) Work for a public 
transportation system. If you work for a public transportation system of 
a State or political subdivision of a State, your work may be covered 
transportation service if all or part of the system was acquired from 
private ownership. You must work as an employee of the State or 
political subdivision in connection with its operation of a public 
transportation system for your work to be covered transportation 
service. This paragraph sets out additional conditions that must be met 
for your work to be covered transportation service. If you work for a 
public transportation system but your work is not covered transportation 
service, your work may be covered for social security purposes under an 
agreement under section 218 of the Act (see subpart M of this part).
    (2) Transportation system acquired in whole or in part after 1936 
and before 1951. All work after 1950 for a public transportation system 
is covered transportation service if--
    (i) Any part of the transportation system was acquired from private 
ownership after 1936 and before 1951; and
    (ii) No general retirement system covering substantially all work in 
connection with the operation of the transportation system and 
guaranteed by the State constitution was in effect on December 31, 1950.
    (3) Transportation system operated on December 31, 1950, no part of 
which was acquired after 1936 and before 1951. If no part of a 
transportation system operated by a State or political subdivision on 
December 31, 1950, was acquired from private ownership after 1936 and 
before 1951, work for that public transportation system is not covered 
transportation service unless performed under conditions described in 
paragraph (b)(4) of this section.
    (4) Addition after 1950 to existing transportation system. Work for 
a public transportation system part of which was acquired from private 
ownership after 1950 as an addition to an existing transportation system 
is covered transportation service beginning with the first day of the 
third calendar quarter following the calendar quarter in which the 
addition was acquired if--
    (i) The work is performed by an employee who--
    (A) Worked in employment in connection with the operation of the 
addition before the addition was acquired by the State or political 
subdivision; and
    (B) Became an employee of the State or political subdivision in 
connection

[[Page 288]]

with and at the time of its acquisition of the addition;
    (ii) On that first day, work performed by that employee is--
    (A) Not covered by a general retirement system; or
    (B) Covered by a general retirement system which contains special 
provisions that apply only to employees described in paragraph 
(c)(4)(i)(B) of this section;
    (iii) The existing transportation system was operated by the State 
or political subdivision on December 31, 1950; and
    (iv) Work for the existing transportation system was not covered 
transportation service because--
    (A) No part of the system was acquired from private ownership after 
1936 and before 1951; or
    (B) The general retirement system described in paragraph (c)(2)(ii) 
of this section was in effect on December 31, 1950.
    (5) Transportation system acquired after 1950. All work for a public 
transportation system is covered transportation service if--
    (i) The transportation system was not operated by the State or 
political subdivision before 1951;
    (ii) All or part of the transportation system was first acquired 
from private ownership after 1950; and
    (iii) At the time the State or political subdivision first acquired 
any part of its transportation system from private ownership, it did not 
have a general retirement system covering substantially all work 
performed in connection with the operation of the transportation system.
    (6) Definitions. (i) The term general retirement system means any 
pension, annuity, retirement, or similar fund or system established by a 
State or by a political subdivision of a State for employees of the 
State, the political subdivision, or both. The term does not include a 
fund or system which covers only work performed in positions connected 
with the operation of the public transportation system.
    (ii) A transportation system (or part of a system) is considered to 
have been acquired from private ownership by a State or political 
subdivision if--
    (A) Before the acquisition, work performed by employees in 
connection with the operation of the system (or an acquired part) 
constituted employment under the Act; and
    (B) Some of these employees became employees of the State or 
political subdivision in connection with and at the time of the 
acquisition.
    (iii) The term political subdivision includes an instrumentality of 
a State, of one or more political subdivisions of a State, or of a State 
and one or more of its political subdivisions.

[45 FR 20075, Mar. 27, 1980, as amended at 57 FR 59910, 59914, Dec. 17, 
1992; 61 FR 38366, July 24, 1996; 69 FR 51556, Aug. 20, 2004]



Sec. 404.1021  Work for the District of Columbia.

    If you work as an employee of the District of Columbia or a wholly 
owned instrumentality of the District of Columbia, your work is covered 
as employment unless--
    (a) Your work is covered by a retirement system established by a law 
of the United States; or
    (b) You are--
    (1) A patient or inmate of a hospital or penal institution and your 
work is for that hospital or institution;
    (2) A student employee (a student nurse, dietitian, or physical or 
occupational therapist, but not a medical or dental intern or resident 
in training) of a District of Columbia hospital, clinic, or medical or 
dental laboratory;
    (3) An employee serving temporarily in case of fire, storm, snow, 
earthquake, flood, or other similar emergency; or
    (4) A member of a board, committee, or council of the District of 
Columbia paid on a per diem, meeting, or other fee basis.
    (c) Medicare qualified government employment. If your work is not 
covered under Social Security, it may be covered as Medicare qualified 
government employment (see Sec. 404.1018b(c) of this subpart).

[45 FR 20075, Mar. 27, 1980, as amended at 57 FR 59914, Dec. 17, 1992]

[[Page 289]]



Sec. 404.1022  American Samoa, Guam, or the Commonwealth of the 
Northern Mariana Islands.

    (a) Work in American Samoa, Guam, or the Commonwealth of the 
Northern Mariana Islands. Work in American Samoa, Guam, or the 
Commonwealth of the Northern Mariana Islands for a private employer is 
covered as employment the same as in the 50 States. Work done by a 
resident of the Republic of the Philippines working in Guam on a 
temporary basis as a nonimmigrant alien admitted to Guam under section 
101(a)(15)(H)(ii) of the Immigration and Nationality Act is excluded 
from coverage regardless of the employer.
    (b) Work for American Samoa or a political subdivision or wholly 
owned instrumentality of American Samoa. Work as an officer or employee 
(including a member of the legislature) of the government of American 
Samoa, its political subdivisions, or any wholly owned instrumentality 
of any one or more of these, is covered as employment (unless the work 
is covered by a retirement system established by a law of the United 
States). The officer or employee is not considered as an employee of the 
United States, an agency of the United States, or an instrumentality of 
the United States, for purposes of title II of the Act. We consider any 
pay for this work to have been paid by the government of American Samoa, 
or the political subdivision or the wholly owned instrumentality of 
American Samoa.
    (c) Work for Guam, the Commonwealth of the Northern Mariana Islands 
(CNMI), or a political subdivision or wholly owned instrumentality of 
Guam or the CNMI. Work as an officer or employee (including a member of 
the legislature) of the government of the CNMI, its political 
subdivisions, or any wholly owned instrumentality of any one or more of 
these, is covered as employment beginning October 1, 2012. Work as an 
officer or employee (including a member of the legislature) of the 
government of Guam, its political subdivisions, or any wholly owned 
instrumentality of any one or more of these, is excluded from coverage 
as employment. However, the exclusion does not apply to employees 
classified as temporary or intermittent unless the work is--
    (1) Covered by a retirement system established by a law of Guam or 
the CNMI;
    (2) Done by an elected official;
    (3) Done by a member of the legislature; or
    (4) Done in a hospital or penal institution by a patient or inmate 
of the hospital or penal institution.
    (d) Medicare qualified government employment. If your work is not 
covered under Social Security, it may be covered as Medicare qualified 
government employment (see Sec. 404.1018b(c) of this subpart).

[45 FR 20075, Mar. 27, 1980, as amended at 57 FR 59914, Dec. 17, 1992; 
69 FR 51556, Aug. 20, 2004; 79 FR 33684, June 12, 2014]



Sec. 404.1023  Ministers of churches and members of religious orders.

    (a) General. If you are a duly ordained, commissioned, or licensed 
minister of a church, the work you do in the exercise of your ministry 
is excluded from employment. However, it is treated as self-employment 
for social security purposes. If you are a member of a religious order 
who has not taken a vow of poverty, the same rule applies to the work 
you do in the exercise of your duties required by that order. If you are 
a member of a religious order who has taken a vow of poverty, the work 
you do in the exercise of duties required by the order (the work may be 
done for the order or for another employer) is covered as employment 
only if the order or autonomous subdivision of the order to which you 
belong has filed an effective election of coverage. The election is made 
under section 3121(r) of the Code. For the rules on self-employment 
coverage of ministers and members of religious orders who have not taken 
vows of poverty, see Sec. 404.1071.
    (b) What is an ordained, commissioned, or licensed minister. The 
terms ordained, commissioned, or licensed describe the procedures 
followed by recognized churches or church denominations to vest 
ministerial status upon qualified individuals. If a church or church 
denomination has an ordination procedure, the commissioning or licensing 
of a person as a minister may not make him or her a commissioned or 
licensed minister for purposes of this subpart.

[[Page 290]]

Where there is an ordination procedure, the commissioning or licensing 
must be recognized as having the same effect as ordination and the 
person must be fully qualified to exercise all of the ecclesiastical 
duties of the church or church denomination.
    (c) When is work by a minister in the exercise of the ministry. (1) 
A minister is working in the exercise of the ministry when he or she 
is--
    (i) Ministering sacerdotal functions or conducting religious worship 
(other than as described in paragraph (d)(2) of this section); or
    (ii) Working in the control, conduct, and maintenance of a religious 
organization (including an integral agency of a religious organization) 
under the authority of a religious body constituting a church or church 
denomination.
    (2) The following rules are used to decide whether a minister's work 
is in the exercise of the ministry:
    (i) Whether the work is the conduct of religious worship or the 
ministration of sacerdotal functions depends on the tenets and practices 
of the religious body which is his or her church or church denomination.
    (ii) Work in the control, conduct, and maintenance relates to 
directing, managing, or promoting the activities of the religious 
organization. Any religious organization is considered to be under the 
authority of a religious body constituting a church or church 
denomination if it is organized and dedicated to carrying out the tenets 
and principles of a faith according to either the requirements or 
sanctions governing the creation of institutions of the faith.

The term religious organization has the same meaning and application as 
is given to the term for income tax purposes under the Code.
    (iii) If a minister is working in the conduct of religious worship 
or the ministration of sacerdotal functions, the work is in the exercise 
of the ministry whether or not it is performed for a religious 
organization. (See paragraph (d)(2) of this section for an exception to 
this rule.)

    Example: M, a duly ordained minister, is engaged to work as chaplain 
at a privately owned university. M spends his entire time working as 
chaplain. This includes the conduct of religious worship, offering 
spiritual counsel to the university students, and teaching a class in 
religion. M is working in the exercise of the ministry.

    (iv) If a minister is working for an organization which is operated 
as an integral agency of a religious organization under the authority of 
a religious body constituting a church or church denomination, all work 
by the minister in the conduct of religious worship, in the ministration 
of sacerdotal functions, or in the control, conduct, and maintenance of 
the organization is in the exercise of the ministry.

    Example: M, a duly ordained minister, is engaged by the N Religious 
Board as director of one of its departments. M performs no other 
service. The N Religious Board is an integral agency of O, a religious 
organization operating under the authority of a religious body 
constituting a church denomination. M is working in the exercise of the 
ministry.

    (v) If a minister, under an assignment or designation by a religious 
body constituting a church, works for an organization which is neither a 
religious organization nor operated as an integral agency of a religious 
organization, all service performed by him or her, even though the 
service may not involve the conduct of religious worship or the 
ministration of sacerdotal functions, is in the exercise of the 
ministry.

    Example: M, a duly ordained minister, is assigned by X, the 
religious body constituting M's church, to perform advisory service to Y 
company in connection with the publication of a book dealing with the 
history of M's church denomination. Y is neither a religious 
organization nor operated as an integral agency of a religious 
organization. M performs no other service for X or Y. M is working in 
the exercise of the ministry.

    (vi) If a minister is working for an organization which is neither a 
religious organization nor operated as an integral agency of a religious 
organization and the work is not performed under an assignment or 
designation by ecclesiastical superiors, then only the work done by the 
minister in the conduct of religious worship or the ministration of 
sacerdotal functions is in the exercise of the ministry. (See paragraph 
(d)(2) of this section for an exception to this rule.)


[[Page 291]]


    Example: M, a duly ordained minister, is engaged by N University to 
teach history and mathematics. M does no other work for N although from 
time to time M performs marriages and conducts funerals for relatives 
and friends. N University is neither a religious organization nor 
operated as an integral agency of a religious organization. M is not 
working for N under an assignment by his ecclesiastical superiors. The 
work performed by M for N University is not in the exercise of the 
ministry. However, service performed by M in performing marriages and 
conducting funerals is in the exercise of the ministry.

    (d) When is work by a minister not in the exercise of the ministry. 
(1) Work performed by a duly ordained, commissioned, or licensed 
minister of a church which is not in the exercise of the ministry is not 
excluded from employment.
    (2) Work performed by a duly ordained, commissioned, or licensed 
minister of a church as an employee of the United States, or a State, 
territory, or possession of the United States, or the District of 
Columbia, or a foreign government, or a political subdivision of any of 
these, is not in the exercise of the ministry, even though the work may 
involve the ministration of sacerdotal functions or the conduct of 
religious worship. For example, we consider service performed as a 
chaplain in the Armed Forces of the United States to be work performed 
by a commissioned officer and not by a minister in the exercise of the 
ministry. Also, service performed by an employee of a State as a 
chaplain in a State prison is considered to be performed by a civil 
servant of the State and not by a minister in the exercise of the 
ministry.
    (e) Work in the exercise of duties required by a religious order. 
Work performed by a member of a religious order in the exercise of 
duties required by the order includes all duties required of the member 
of the order. The nature or extent of the work is immaterial so long as 
it is service which the member is directed or required to perform by the 
member's ecclesiastical superiors.



Sec. 404.1024  Election of coverage by religious orders.

    A religious order whose members are required to take a vow of 
poverty, or any autonomous subdivision of that religious order, may 
elect to have social security coverage extended to the work performed by 
its members in the exercise of duties required by that order or 
subdivision. The rules on the election of coverage by these religious 
orders are described in 26 CFR 31.3121(r). The rules on determining the 
wages of members of religious orders for which an election of coverage 
has been made are described in Sec. 404.1046.



Sec. 404.1025  Work for religious, charitable, educational, or certain
other organizations exempt from income tax.

    (a) After 1983. Work done after 1983 by an employee in the employ of 
a religious, charitable, educational, or other organization described in 
section 501(c)(3) of the Code which is exempt from income tax under 
section 501(a) of the Code is covered as employment unless the work is 
for a church or church-controlled organization that has elected to have 
services performed by its employees excluded (see Sec. 404.1026). (See 
Sec. 404.1059(b) for special wage rule.)
    (b) Before 1984. Work described in paragraph (a) of this section 
which was done before 1984 is excluded from employment. However, the 
exclusion does not apply to work done during the period for which a form 
SS-15, Certificate Waiving Exemption From Taxes Under the Federal 
Insurance Contributions Act, was filed (or was deemed to have been 
filed) with the Internal Revenue Service.

[50 FR 36573, Sept. 9, 1985]



Sec. 404.1026  Work for a church or qualified church-controlled 
organization.

    (a) General. If you work for a church or qualified church-controlled 
organization, as described in this section, your employer may elect to 
have your services excluded from employment. You would then be 
considered to be self-employed and special conditions would apply to 
you. See Sec. 404.1068(f) for those special conditions. The employer's 
election of the exclusion must be made with the Internal Revenue Service 
in accordance with Internal Revenue Service procedures and must state 
that the church or church-controlled organization is opposed for 
religious

[[Page 292]]

reasons to the payment of Social Security employment taxes. The 
exclusion applies to current and future employees. If you work in an 
unrelated trade or business (within the meaning of section 513(a) of the 
Code) of the church or church-controlled organization, the exclusion 
does not apply to your services.
    (b) What is a church. For purposes of this section the term church 
means a church, a convention or association of churches, or an 
elementary or secondary school which is controlled, operated, or 
principally supported by a church or by a convention or association of 
churches.
    (c) What is a qualified church-controlled organization. For purposes 
of this section the term qualified church-controlled organization means 
any church-controlled organization exempt from income tax under section 
501(c)(3) of the Code but does not include an organization which:
    (1) Offers goods, services, or facilities for sale to the general 
public, other than on an incidental basis, or for other than a nominal 
charge which is substantially less than the cost of providing such 
goods, services, or facilities; and
    (2) Normally receives more than 25 percent of its support from 
either governmental sources or receipts from admissions, sales of 
merchandise, performance of services or furnishing of facilities other 
than in an unrelated trade or business, or both.

[50 FR 36573, Sept. 9, 1985, as amended at 55 FR 7309, Mar. 1, 1990]



Sec. 404.1027  Railroad work.

    We exclude from employment any work you do as an employee or 
employee representative as described in the Railroad Retirement Tax Act. 
However, railroad compensation can be counted for social security 
purposes under the conditions described in subpart O of this part.



Sec. 404.1028  Student working for a school, college, or university.

    (a) For purposes of this section, a school, college, or university 
has its usual accepted meaning. It does not, however, include any 
school, college, or university that is an instrumentality or integral 
part of a State or a political subdivision of a State for which work can 
only be covered by an agreement under section 218 of the Act. (See 
subpart M of this part.)
    (b) If you are a student, any work you do as an employee of a 
school, college or university is excluded from employment, if you are 
enrolled in and regularly attending classes at that school, college, or 
university. The exclusion also applies to work you do for a private 
nonprofit auxiliary organization of the school, college, or university 
if it is organized and operated exclusively for the benefit of, to 
perform functions of, or to carry out the purposes of the school, 
college, or university. The organization must be operated, supervised, 
or controlled by, or in connection with, the school, college, or 
university.
    (c) Whether you are a student for purposes of this section depends 
on your relationship with your employer. If your main purpose is 
pursuing a course of study rather than earning a livelihood, we consider 
you to be a student and your work is not considered employment.



Sec. 404.1029  Student nurses.

    If you are a student nurse, your work for a hospital or nurses 
training school is excluded from employment if you are enrolled and 
regularly attending classes in a nurses training school which is 
chartered or approved under State law.



Sec. 404.1030  Delivery and distribution or sale of newspapers,
shopping news, and magazines.

    (a) If you are under age 18. Work you do before you reach age 18 
delivering or distributing newspapers or shopping news is excluded from 
employment. This does not include delivery or distribution to some point 
for further delivery or distribution by someone else. If you make house-
to-house delivery or sale of newspapers or shopping news (including 
handbills and similar kinds of advertising material), your work is not 
covered while you are under age 18. Related work such as assembling 
newspapers is also excluded.
    (b) If you are any age. No matter how old you are, work you do in 
connection with and at the time of the sale of

[[Page 293]]

newspapers or magazines to consumers is excluded from employment if 
there is an arrangement under which--
    (1) You are to sell the newspapers or magazines at a fixed price; 
and
    (2) Your pay is the difference between the fixed selling price and 
the amount you are charged for the newspapers or magazines (whether or 
not you are guaranteed a minimum amount of compensation or receive 
credit for unsold newspapers or magazines).
    (c) If you are age 18 or older. If you have attained age 18, you are 
self-employed if you work under the arrangement described in paragraph 
(b) of this section. See Sec. 404.1068(b).



Sec. 404.1031  Fishing.

    (a) If you work on a boat engaged in catching fish or other forms of 
aquatic animal life, your work is not employment if you have an 
arrangement with the owner or operator of the boat which provides for 
all of the following:
    (1) You do not receive any cash pay (other than as provided in 
paragraph (a)(2) of this section).
    (2) You receive a share of the catch or a share of the proceeds from 
the sale of the catch.
    (3) The amount of your share depends on the size of the catch.
    (4) The operating crew of the boat (or each boat from which you 
receive a share if the fishing operation involves more than one boat) is 
normally made up of fewer than 10 individuals.
    (b) Work excluded from employment under this section is considered 
to be self-employment (Sec. 404.1068(e)).



Sec. 404.1032  Work for a foreign government.

    If you work as an employee of a foreign government in any capacity, 
your work is excluded from employment. If you are a citizen of the 
United States and work in the United States as an employee of a foreign 
government, you are considered to be self-employed (Sec. 404.1068(d)).



Sec. 404.1033  Work for a wholly owned instrumentality of a foreign
government.

    (a) If you work as an employee of an instrumentality of a foreign 
government, your work is excluded from employment if--
    (1) The instrumentality is wholly owned by the foreign government;
    (2) Your work is similar to work performed in foreign countries by 
employees of the United States Government or its instrumentalities; and
    (3) The Secretary of State certifies to the Secretary of the 
Treasury that the foreign government grants an equivalent exemption for 
services performed in the foreign country by employees of the United 
States Government or its instrumentalities.
    (b) Your work will not be excluded under this section if any of the 
conditions in paragraph (a) of this section are not met.
    (c) If you are a citizen of the United States and work in the United 
States as an employee of an instrumentality of a foreign government and 
the conditions in paragraph (a) of this section are met, you are 
considered to be self-employed (Sec. 404.1068(d)).



Sec. 404.1034  Work for an international organization.

    (a) If you work as an employee of an international organization 
entitled to enjoy privileges, exemptions, and immunities as an 
international organization under the International Organizations 
Immunities Act (59 Stat. 669), your work is excluded from employment 
except as described in paragraphs (b) and (c) of this section. The 
organization must meet the following conditions:
    (1) It must be a public international organization in which the 
United States participates under a treaty or authority of an act of 
Congress authorizing, or making an appropriation for, participation.
    (2) It must be designated by executive order to be entitled to enjoy 
the privileges, exemptions, and immunities provided in the International 
Organizations Immunities Act.
    (3) The designation must be in effect, and all conditions and 
limitations in the designation must be met.
    (b) Your work will not be excluded under this section if any of the 
conditions in paragraph (a) of this section are not met.

[[Page 294]]

    (c) Your work performed after December 31, 1994 will not be excluded 
under this section if you perform service in the employ of an 
international organization pursuant to a transfer from a Federal agency 
under section 3582 of title 5 of the United States Code and
    (1) Immediately before such transfer you performed service with a 
Federal agency which was covered as employment; and
    (2) You would be entitled, upon separation from the international 
organization and proper application, to reemployment with the Federal 
agency under section 3582.
    (d) If you are a citizen of the United States and work in the United 
States as an employee of an international organization that meets the 
conditions in paragraph (a) of this section and you are not subject to 
coverage based on paragraph (c) of this section, you are considered to 
be self-employed (Sec. 404.1068(d)).

[45 FR 20075, Mar. 27, 1980, as amended at 61 FR 38366, July 24, 1996]



Sec. 404.1035  Work for a communist organization.

    If you work as an employee of an organization which is registered, 
or which is required by a final order of the Subversive Activities 
Control Board to register under the Internal Security Act of 1950 as a 
communist action, communist-front, or communist-infiltrated 
organization, your work is excluded from employment. The exclusion is 
effective with the calendar year in which the organization is registered 
or the final order is in effect.



Sec. 404.1036  Certain nonresident aliens.

    (a) Foreign students. (1) Foreign students (nonimmigrant aliens) may 
be temporarily in the United States under subparagraph (F) of section 
101(a)(15) of the Immigration and Nationality Act to attend a school or 
other recognized place of study approved by the Attorney General. On-
campus work or work under permission granted by the Immigration and 
Naturalization Service which is done by these students is excluded from 
employment. Other work done by these foreign students is not excluded 
from employment under this section.
    (2) Foreign students (nonimmigrant aliens) may be temporarily in the 
United States under subparagraph (M) of section 101(a)(15) of the 
Immigration and Nationality Act to pursue a vocational or nonacademic 
technical education approved by the Attorney General. Work done by these 
students to carry out the purpose for which they were admitted is 
excluded from employment. Other work done by these foreign students is 
not excluded from employment under this section.
    (b) Exchange visitors. (1) Exchange visitors (nonimmigrant aliens) 
may be temporarily in the United States under subparagraph (J) of 
section 101(a)(15) of the Immigration and Nationality Act to participate 
in exchange visitor programs designated by the Director of the United 
States Information Agency. Work done by these exchange visitors to carry 
out the purpose for which they were admitted and for which permission 
has been granted by the sponsor, is excluded from employment. Other work 
done by these exchange visitors is not excluded from employment under 
this section.
    (2) Exchange visitors (nonimmigrant aliens) may be temporarily in 
the United States under subparagraph (Q) of section 101(a)(15) of the 
Immigration and Nationality Act to participate in an international 
cultural exchange program approved by the Attorney General. Effective 
October 1, 1994, work done by these exchange visitors to carry out the 
purpose for which they were admitted is excluded from employment. Other 
work done by these exchange visitors is not excluded from employment 
under this section.
    (c) Spouse and children. Work done by a foreign student's or 
exchange visitor's alien spouse or minor child who is also temporarily 
in the United States under subparagraph (F), (J), (M), or (Q) of section 
101(a)(15) of the Immigration and Nationality Act is not excluded from 
employment under this section unless that spouse or child and the work 
that is done meets the conditions of paragraph (a) or (b) of this 
section.

[61 FR 38366, July 24, 1996]

[[Page 295]]



Sec. 404.1037  Work on or in connection with a non-American vessel
or aircraft.

    If you work as an employee within the United States on or in 
connection with (as explained in Sec. 404.1004(b)(8)) a vessel or 
aircraft that is not an American vessel (as defined in 
Sec. 404.1004(b)(3)) or American aircraft (as defined in 
Sec. 404.1004(b)(2)), your work is excluded from employment if--
    (a) You are not a citizen of the United States or your employer is 
not an American employer (as defined in Sec. 404.1004(b)(1)); and
    (b) You are employed on and in connection with (as explained in 
Sec. 404.1004(b)(7)) the vessel or aircraft when outside the United 
States.



Sec. 404.1038  Domestic employees under age 18.

    Domestic services you perform in a private home of your employer are 
excluded from employment, regardless of the amount earned, in any year 
in which you are under age 18 if domestic service is not your principal 
occupation. The exclusion applies to the entire year if you are under 
age 18 in any part of the year. See Sec. 404.1057.

[61 FR 38366, July 24, 1996]

      Exemption From Social Security by Reason of Religious Belief



Sec. 404.1039  Employers (including partnerships) and employees who
are both members of certain religious groups opposed to insurance.

    (a) You and your employer (or, if the employer is a partnership, 
each of its partners) may file applications with the Internal Revenue 
Service for exemption from your respective shares of the Federal 
Insurance Contributions Act taxes on your wages paid by that employer if 
you and your employer (or, if the employer is a partnership, each of its 
partners)--
    (1) Are members of a recognized religious sect or division of the 
sect; and
    (2) Adhere to the tenets or teachings of the sect or division of the 
sect and for that reason are conscientiously opposed to receiving 
benefits from any private or public insurance that--
    (i) Makes payment in the event of death, disability, old-age, or 
retirement; or
    (ii) Makes payment for the cost of, or provides services for, 
medical care including the benefits of any insurance system established 
by the Act.
    (b) Both your application and your employer's application (or, if 
your employer is a partnership, each partner's application) must be 
filed with and approved by the Internal Revenue Service pursuant to 
section 3127 of the Internal Revenue Code. An application must contain 
or be accompanied by the applicant's waiver of all benefits and payments 
under title II and part A of title XVIII of the Act. See Sec. 404.305 
for the effect of the filing of the waiver and the granting of the 
exemption.
    (c) Regardless of whether the applicant meets all these conditions, 
the application will not be approved unless we find that--
    (1) The sect or division of the sect has established tenets or 
teachings which cause the applicant to be conscientiously opposed to the 
types of insurance benefits described in paragraph (a)(2) of this 
section; and
    (2) For a substantial period of time it has been the practice for 
members of the sect or division of the sect to make provision for their 
dependent members that is reasonable in view of their general level of 
living; and
    (3) The sect or division of the sect has been in existence 
continuously since December 31, 1950.
    (d) An application for exemption will be approved by the Internal 
Revenue Service only if no benefit or payment under title II or part A 
of title XVIII of the Act became payable (or, but for section 203 or 
section 222(b) of the Act, would have become payable) to the applicant 
at or before the time of the filing of the application for exemption.
    (e) The tax exemption ceases to be effective with respect to wages 
paid beginning with the calendar quarter in which either the employer 
(or if the employer is a partnership, any of its partners) or the 
employee involved does not meet the requirements of paragraph (a) of 
this section or the religious sect or division of the sect is

[[Page 296]]

found by us to no longer meet the requirements of paragraph (c) of this 
section. If the tax exemption ceases to be effective, the waiver of the 
right to receive Social Security and Medicare Part A benefits will also 
no longer be effective. Benefits may be payable based upon the wages of 
the individual, whose exempt status was terminated, for and after the 
calendar year following the calendar year in which the event occurred 
upon which the cessation of the exemption is based. Benefits may be 
payable based upon the self-employment income of the individual whose 
exempt status was terminated for and after the taxable year in which the 
event occurred upon which the cessation of the exemption is based.

[58 FR 64889, Dec. 10, 1993]

                                  Wages



Sec. 404.1041  Wages.

    (a) The term wages means remuneration paid to you as an employee for 
employment unless specifically excluded. Wages are counted in 
determining your entitlement to retirement, survivors', and disability 
insurance benefits.
    (b) If you are paid wages, it is not important what they are called. 
Salaries, fees, bonuses and commissions on sales or on insurance 
premiums are wages if they are remuneration paid for employment.
    (c) The way in which you are paid is unimportant. Wages may be paid 
on the basis of piecework or a percentage of the profits. Wages may be 
paid on an hourly, daily, weekly, monthly, or yearly basis. (See 
Sec. 404.1056 for special rules for agricultural labor.)
    (d) Your wages can be in any form. You can be paid in cash or 
something other than cash, for example, in goods or clothing. (See 
paragraphs (e) and (f) of this section for kinds of employment where 
cash payments alone are considered wages and Sec. 404.1043(b) concerning 
the value of meals and lodging as wages.) If your employer pays you cash 
for your meals and lodging on a regular basis as part of your 
employment, these payments may be considered wages. Payments other than 
cash may be counted as wages on the basis of the fair value of the items 
when paid.
    (e) In certain kinds of employment, cash payments alone count as 
wages. These types of employment are agricultural labor, domestic 
services, and services not in the course of the employer's trade or 
business.
    (f) To count as wages, payments for services performed by home 
workers who are employees as described in Sec. 404.1008(d) must be in 
cash and must amount to $100 or more in a calendar year. Once this cash 
pay test is met, all remuneration paid, whether in cash or kind, is also 
wages.

[45 FR 20075, Mar. 27, 1980, as amended at 55 FR 7309, Mar. 1, 1990]



Sec. 404.1042  Wages when paid and received.

    (a) In general. Wages are received by an employee at the time they 
are paid by the employer to the employee. Wages are paid by an employer 
at the time that they are actually or constructively paid unless they 
are deemed to be paid later (as described in paragraph (c)(3) of this 
section).
    (b) Constructive payment. Wages are constructively paid when they 
are credited to the account of, or set aside for, an employee so that 
they may be drawn upon by the employee at any time although not then 
actually received. To be a payment--
    (1) The wages must be credited to or set aside for the employee and 
must be made available without restriction so that they may be drawn 
upon at any time; or
    (2) The employer must intend to pay or to set aside or credit, and 
have the ability to pay wages when due to the employee, and failure of 
the employer to credit or set aside the wages is due to clerical error 
or mistake in the mechanics of payment, and because of the clerical 
error or mistake the wages are not actually available at that time.
    (c) Deemed payment. (1) The first $100 of cash paid, either actually 
or constructively, by an employer to an employee in a calendar year is 
considered paid at the time that the amount of the cash payment totals 
$100 for the year in the case of pay for--
    (i) Work not in the course of the employer's trade or business (non-
business work);

[[Page 297]]

    (ii) Work by certain home workers; and
    (iii) Work for an organization exempt from income tax under section 
501 of the Code.
    (2) We also apply this rule to domestic work in a private home of 
the employer, except see Sec. 404.1057(a)(1) for the applicable dollar 
amount.
    (3) Cash of less than $150 that an employer pays to an employee in a 
calendar year, either actually or constructively, for agricultural labor 
is considered paid at the earliest of--
    (i) The time in the calendar year that the employee's pay totals 
$150; or
    (ii) The 20th day of the calendar year on which the employee works 
for cash pay computed on a time basis.
    (4) If an employer pays cash to an employee for two or more of the 
kinds of work referred to in paragraph (c)(1) of this section, we apply 
the provisions of this paragraph to the pay for each kind of work.
    (d) Employee tax deductions. We consider employee tax deductions 
under section 3101 of the Code to be part of the employee's wages and 
consider them to be paid at the time of the deduction. We consider other 
deductions from wages to be wages paid at the time of the deduction. It 
is immaterial that the deductions are required or permitted by an act of 
Congress or the law of any State.
    (e) Tips. (1) Tips received by an employee in the course of 
employment, that are considered to be wages, are deemed to be paid at 
the time the employee reports the tips to the employer in a written 
statement as provided under section 6053(a) of the Code. Tips that are 
not reported are deemed to be paid to the employee at the time they are 
received by the employee.
    (2) We consider tips to be received in the course of employment 
whether they are received by the employee from the employer or from 
another person. Only tips employees receive and keep for themselves are 
considered to be the employees' pay. If employees split tips, each 
employee who receives part of the tip receives tips in the course of 
employment.
    (f) Payments under nonqualified deferred compensation plans. Amounts 
that an employee is entitled to receive under nonqualified deferred 
compensation plans (plans that do not qualify for special tax treatment 
under the Code) are creditable as wages for Social Security purposes at 
the later of the following times:
    (1) When the services are performed; or
    (2) When there is no longer a substantial risk of forfeiture (as 
defined in section 83 of the Code) of the employee's rights to the 
deferred compensation.

Any amounts taken into account as wages by this paragraph (and the 
income attributable thereto) will not thereafter be treated as wages for 
Social Security purposes.

[45 FR 20075, Mar. 27, 1980, as amended at 55 FR 7309, Mar. 1, 1990; 61 
FR 38366, July 24, 1996]



Sec. 404.1043  Facilities or privileges--meals and lodging.

    (a) Excluding the value of employer provided facilities or 
privileges from employee gross income prior to January 1, 1985. (1) 
Generally, the facilities or privileges that an employer furnished an 
employee prior to January 1, 1985 are not wages if the facilities or 
privileges--
    (i) Were of relatively small value; and
    (ii) Were offered or furnished by the employer merely as a means of 
promoting the health, good will, contentment, or efficiency of the 
employees.
    (2) The term facilities or privileges for the period prior to 
January 1, 1985 is intended to include such items as entertainment, 
medical services, and so-called courtesy discounts on purchases.
    (b) Meals and lodging. The value of the meals and lodging furnished 
to an employee by an employer for reasons of the employer's convenience 
is not wages if--
    (1) The meals are provided at the employer's place of business; and
    (2) The employee, in the case of lodging, is required to accept 
lodging on the employer's business premises as a condition of 
employment.

[52 FR 29662, Aug. 11, 1987]



Sec. 404.1044  Vacation pay.

    We consider your salary while on vacation, or a vacation allowance 
paid by your employer, to be wages.

[[Page 298]]



Sec. 404.1045  Employee expenses.

    Amounts that your employer pays you specifically--either as advances 
or reimbursements--for traveling or for other ordinary and necessary 
expenses incurred, or reasonably expected to be incurred, in your 
employer's business are not wages. The employer must identify these 
travel and other expenses either by making a separate payment or by 
specifically stating the separate amounts if both wages and expense 
allowances are combined in a single payment.



Sec. 404.1046  Pay for work by certain members of religious orders.

    (a) If you are a member of a religious order who has taken a vow of 
poverty (Sec. 404.1023), and the order has elected Social Security 
coverage under section 3121(r) of the Code, your wages are figured in a 
special way. Your wages, for Social Security purposes, are the fair 
market value of any board, lodging, clothing, and other items of value 
furnished to you by the order, or furnished to the order on your behalf 
by another organization or person under an agreement with the order. See 
paragraph (b) of this section if you perform services for a third party. 
The order must report at least $100 a month for each active member. If 
the fair market value of items furnished to all members of a religious 
order does not vary significantly, the order may consider all members to 
have a uniform wage.
    (b) If you perform services for a third party, the following rules 
apply:
    (1) If you perform services for another agency of the supervising 
church or an associated institution, any amounts paid based on such 
services, whether paid directly to you or to the order, do not count on 
wages. Only wages figured under (a) above, are counted.
    (2) If you perform services in a secular setting as an employee of a 
third party not affiliated or associated with the supervising church or 
an associated institution, any amounts paid based on such services, 
whether paid directly to you or to the order, count as wages paid to you 
by the third party. These wages are in addition to any wages counted 
under paragraph (a) of this section.

[55 FR 7309, Mar. 1, 1990; 55 FR 17530, Apr. 25, 1990]



Sec. 404.1047  Annual wage limitation.

    Payments made by an employer to you as an employee in a calendar 
year that are more than the annual wage limitation are not wages. The 
annual wage limitation is:

------------------------------------------------------------------------
                                                                 Wage
                       Calendar year                          limitation
------------------------------------------------------------------------
1951-54....................................................       $3,600
1955-58....................................................        4,200
1959-65....................................................        4,800
1966-67....................................................        6,600
1968-71....................................................        7,800
1972.......................................................        9,000
1973.......................................................       10,800
1974.......................................................       13,200
1975.......................................................       14,100
1976.......................................................       15,300
1977.......................................................       16,500
1978.......................................................       17,700
1979.......................................................       22,900
1980.......................................................       25,900
1981.......................................................       29,700
1982.......................................................       32,400
1983.......................................................       35,700
1984.......................................................       37,800
1985.......................................................       39,600
1986.......................................................       42,000
1987.......................................................       43,800
1988.......................................................       45,000
1989.......................................................       48,000
1990.......................................................       51,300
1991.......................................................       53,400
1992.......................................................       55,500
------------------------------------------------------------------------


[52 FR 8249, Mar. 17, 1987, as amended at 57 FR 44098, Sept. 24, 1992]



Sec. 404.1048  Contribution and benefit base after 1992.

    (a) General. The contribution and benefit base after 1992 is figured 
under the formula described in paragraph (b) of this section in any 
calendar year in which there is an automatic cost-of-living increase in 
old-age, survivors, and disability insurance benefits. For purposes of 
this section, the calendar year in which the contribution and benefit 
base is figured is called the determination year. The base figured in 
the determination year applies to wages paid after (and taxable years 
beginning after) the determination year.
    (b) Formula for figuring the contribution and benefit base. For 
wages paid after (and taxable years beginning

[[Page 299]]

after) the determination year, the contribution and benefit base is the 
larger of--
    (1) The contribution and benefit base in effect for the 
determination year; or
    (2) The amount determined by--
    (i) Multiplying the contribution and benefit base in effect for the 
determination year by the ratio of--
    (A) The average of the total wages (as described in paragraph (c) of 
this section) reported to the Secretary of the Treasury for the calendar 
year before the determination year to
    (B) The average of the total wages reported to the Secretary of the 
Treasury for the calendar year before the most recent calendar year in 
which an increase in the contribution and benefit base was enacted or a 
determination under this section resulting in an increase of the base 
was made; and
    (ii) Rounding the result of the multiplication, if not a multiple of 
$300, to--
    (A) The nearest multiple of $300; or
    (B) The next higher multiple of $300 if the result is a multiple of 
$150.
    (c) Average of the total wages. The average of the total wages means 
the amount equal to all remuneration reported as wages on Form W-2 to 
the Internal Revenue Service for all employees for income tax purposes 
plus contributions to certain deferred compensation plans described in 
section 209(k) of the Social Security Act (also reported on Form W-2), 
divided by the number of wage earners. If both distributions from and 
contributions to any such deferred compensation plan are reported on 
Form W-2, we will include only the contributions in the calculation of 
the average of the total wages. The reported remuneration and deferred 
compensation contributions include earnings from work not covered under 
social security and earnings from work covered under social security 
that are more than the annual wage limitation described in 
Sec. 404.1047.

[45 FR 20075, Mar. 27, 1980, as amended at 55 FR 7309, Mar. 1, 1990; 57 
FR 1382, Jan. 14, 1992]



Sec. 404.1049  Payments under an employer plan or system.

    (a) Payments to, or on behalf of, you or any of your dependents 
under your employer's plan or system are excluded from wages if made 
because of your or your dependents'--
    (1) Medical or hospitalization expenses connected with sickness or 
accident disability; or
    (2) Death, except that the exclusion does not apply to payments for 
group-term life insurance to the extent that the payments are includible 
in the gross income of the employee under the Internal Revenue Code of 
1986, effective with respect to group-term life insurance coverage in 
effect after 1987 for employees whose employment, for the employer (or 
successor of that employer) providing the insurance coverage, does not 
end prior to 1989. Such payments are wages, however, if they are for 
coverage for an employee who was separated from employment prior to 
January 1, 1989, if the payments are for any period for which the 
employee is reemployed by the employer (or successor of that employer) 
after the date of separation.
    (b) Payments to you or your dependents under your employer's plan at 
or after the termination of your employment relationship because of your 
death or retirement for disability are excluded from wages.
    (c) Payments made after 1983 to you or your dependents under your 
employer's plan at or after the termination of your employment 
relationship because of retirement after reaching an age specified in 
the plan or in a pension plan of the employer are not excluded from 
wages unless--
    (1) The payments are to or from a trust or annuity plan of your 
employer as described in Sec. 404.1052; or
    (2) An agreement to retire was in effect on March 24, 1983, between 
you and your employer and the payments made after 1983 under a 
nonqualified deferred compensation plan (see Sec. 404.1042(f)) are based 
on services performed for your employer before 1984.
    (d) The plan or system established by the employer must provide for 
the employees generally or for a class or classes of employees. The plan 
or system may also provide for these employees' dependents. Payments 
under a plan or system established only for your dependents are not 
excluded from wages. The plan or system established

[[Page 300]]

by the employer can provide for payments on account of one or more of 
the items in paragraphs (a) and (b) of this section.
    (e) For purposes of this section, your dependents include your 
husband or wife, children, and any other members of your immediate 
family.
    (f) It does not make any difference that the benefit payments are 
considered in arriving at the amount of your pay or are required by the 
employment agreement.

[45 FR 20075, Mar. 27, 1980, as amended at 50 FR 1832, Jan. 14, 1985; 55 
FR 7310, Mar. 1, 1990; 55 FR 17530, Apr. 25, 1990]



Sec. 404.1050  Retirement payments.

    Payments made after 1983 to you (including any amount paid by an 
employer for insurance or annuities) on account of your retirement for 
age are not excluded from wages unless--
    (a) The payments are to or from a trust or annuity plan of your 
employer as described in Sec. 404.1052; or
    (b) The payments satisfy the requirements described in 
Sec. 404.1049(c)(2).

[55 FR 7310, Mar. 1, 1990]



Sec. 404.1051  Payments on account of sickness or accident disability,
or related medical or hospitalization expenses.

    (a) We do not include as wages any payment that an employer makes to 
you, or on your behalf, on account of your sickness or accident 
disability, or related medical or hospitalization expenses, if the 
payment is made more than 6 consecutive calendar months following the 
last calendar month in which you worked for that employer. Payments made 
during the 6 consecutive months are included as wages.
    (b) The exclusion in paragraph (a) of this section also applies to 
any such payment made by a third party (such as an insurance company). 
However, if you contributed to your employer's sick pay plan, that 
portion of the third party payments attributable to your contribution is 
not wages.
    (c) Payments of medical or hospitalization expenses connected with 
sickness or accident disability are excluded from wages beginning with 
the first payment only if made under a plan or system of your employer 
as explained in Sec. 404.1049(a)(1).
    (d) Payments under a worker's compensation law are not wages.

[55 FR 7310, Mar. 1, 1990]



Sec. 404.1052  Payments from or to certain tax-exempt trusts or 
payments under or into certain annuity plans.

    (a) We do not include as wages any payment made--
    (1) Into a tax-exempt trust or annuity plan by your employer on 
behalf of you or your beneficiary; or
    (2) From a tax-exempt trust or under an annuity plan to, or on 
behalf of, you or your beneficiary.
    (b) The trust must be exempt from tax under sections 401 and 501(a) 
of the Code, and the annuity plan must be a plan described in section 
403(a) of the Code when payment is made.
    (c) The exclusion does not apply to payments to an employee of the 
trust for work done as an employee of the trust.

[55 FR 7310, Mar. 1, 1990]



Sec. 404.1053  ``Qualified benefits'' under a cafeteria plan.

    We do not include as wages any qualified benefits under a cafeteria 
plan as described in section 125 of the Code if such payment would not 
be treated as wages without regard to such plan and it is reasonable to 
believe that (if section 125 applied for purposes of this section) 
section 125 would not treat any wages as constructively received. This 
includes any qualified benefit made to you, or on your behalf, pursuant 
to a salary reduction agreement between you and your employer. The 
Internal Revenue Service decides whether any plan is a cafeteria plan 
under section 125 of the Code and whether any benefit under the plan is 
a qualified benefit.

[55 FR 7310, Mar. 1, 1990]



Sec. 404.1054  Payments by an employer of employee's tax or employee's 
contribution under State law.

    (a) We exclude as wages any payment by an employer (described in 
paragraph (b) of this section) that is not deducted from the employee's 
salary (or for which reimbursement is not made by the employee) of 
either--

[[Page 301]]

    (1) The tax imposed by section 3101 of the Code (employee's share of 
Social Security tax); or
    (2) Any payment required from an employee under a State unemployment 
compensation law.
    (b) The payments described in paragraph (a) of this section are not 
included as wages only if they are made by an employer on behalf of an 
employee employed in--
    (1) Domestic service in the private home of the employer; or
    (2) Agricultural labor.

[55 FR 7310, Mar. 1, 1990]



Sec. 404.1055  Payments for agricultural labor.

    (a) When cash payments are not wages. We do not include as wages 
your cash payments in a calendar year after 1987 from an employer for 
agricultural labor (see Sec. 404.1056) if your employer's total 
expenditures for agricultural labor are less than $2500 in that year and 
your employer paid you less than $150 cash remuneration in that year for 
your agricultural labor.
    (b) Exclusions for noncash payments and payments for seasonal 
agricultural labor. (1) Noncash payments for agricultural labor are not 
wages.
    (2) Your cash payments in a calendar year from an employer for 
agricultural labor are not wages, irrespective of your employer's total 
annual expenditures for agricultural labor, if you are a hand harvest 
laborer (i.e., seasonal agricultural labor), and--
    (i) Your employer paid you less than $150 in that year;
    (ii) You are paid on a piece rate basis in an operation which has 
been, and is customarily and generally recognized in the region of 
employment as paying on a piece rate basis;
    (iii) You commute daily from your permanent residence to the farm on 
which you are so employed; and,
    (iv) You were employed in agriculture less than 13 weeks during the 
previous calendar year.

    Example: In 1988, A (not a hand harvest laborer) performs 
agricultural labor for X for cash pay of $144 in the year. X's total 
agricultural labor expenditures for 1988 are $2,450. Neither the $150 
cash-pay test nor the $2,500 expenditures test is met. Therefore, X's 
payments to A are not wages.

    (c) When cash-pay is creditable as wages. (1) If you receive cash 
pay from an employer for services which are agricultural labor and for 
services which are not agricultural labor, we count only the amounts 
paid for agricultural labor in determining whether cash payments equal 
or exceed $150. If the amounts paid are less than $150, we count only 
those amounts paid for agricultural labor in determining if the $2500 
expenditure test is met.

    Example: Employer X operates a store and also operates a farm. 
Employee A, who regularly works in the store, works on X's farm when 
additional help is required for the farm activities. In calendar year 
1988, X pays A $140 cash for agricultural labor performed in that year, 
and $2,260 for work in connection with the operation of the store. 
Additionally, X's total expenditures for agricultural labor in 1988 were 
$2,010. Since the cash payments by X to A in the calendar year 1988 for 
agricultural labor are less than $150, and total agricultural labor 
expenditures were under $2,500, the $140 paid by X to A for agricultural 
labor is not wages. The $2,260 paid for work in the store is wages.

    (2) The amount of cash pay for agricultural labor that is creditable 
to an individual is based on cash paid in a calendar year rather than on 
amounts earned during a calendar year.
    (3) If you receive cash pay for agricultural labor in any one 
calendar year from more than one employer, we apply the $150 cash-pay 
test and $2,500 total expenditures test to each employer.
    (d) Application of the $150 cash-pay and 20-day tests prior to 1988. 
(1) For the time period prior to 1988, we apply either the $150 a year 
cash-pay test or the 20-day test. Cash payments are wages if you receive 
$150 or more from an employer for agricultural labor or under the 20-day 
test if you perform agricultural labor for which cash pay is computed on 
a time basis on 20 or more days during a calendar year. For purposes of 
the 20-day test, the amount of the cash pay is immaterial, and it is 
immaterial whether you also receive payments other than cash or payments 
that are not computed on a time basis. If cash paid to you for 
agricultural labor is computed on a time basis, the payments are not 
wages unless they

[[Page 302]]

are paid in a calendar year in which either the 20-day test or the $150 
cash-pay test is met.
    (2) [Reserved]

[57 FR 59914, Dec. 17, 1992, as amended at 61 FR 38367, July 24, 1996; 
70 FR 41955, July 21, 2005]



Sec. 404.1056  Explanation of agricultural labor.

    (a) What is agricultural labor. (1) If you work on a farm as an 
employee of any person, you are doing agricultural labor if your work 
has to do with--
    (i) Cultivating the soil;
    (ii) Raising, shearing, feeding, caring for, training or managing 
livestock, bees, poultry, fur-bearing animals or wildlife; or
    (iii) Raising or harvesting any other agricultural or horticultural 
commodity.
    (2) If you work on a farm as an employee of any person in connection 
with the production or harvesting of maple sap, the raising or 
harvesting of mushrooms, or the hatching of poultry, you are doing 
agricultural labor. If you work in the processing of maple sap into 
maple syrup or maple sugar you are not doing agricultural labor even 
though you work on a farm. Work in a mushroom cave or poultry hatchery 
is agricultural labor only if the cave or hatchery is operated as part 
of a farm.
    (3) If you work as an employee of the owner, tenant, or other 
operator of a farm, you are doing agricultural labor if most of your 
work is done on a farm and is involved with--
    (i) The operation, management, conservation, improvement, or 
maintenance of the farm or its tools or equipment (this may include work 
by carpenters, painters, mechanics, farm supervisors, irrigation 
engineers, bookkeepers, and other skilled or semiskilled workers); or
    (ii) Salvaging timber or clearing the land of brush and other debris 
left by a hurricane.
    (4) You are doing agricultural labor no matter for whom or where you 
work, if your work involves--
    (i) Cotton ginning;
    (ii) Operating or maintaining ditches, canals, reservoirs, or 
waterways, if they are used only for supplying and storing water for 
farm purposes and are not owned or operated for profit; or
    (iii) Producing or harvesting crude gum (oleoresin) from living 
trees or processing the crude gum into gum spirits of turpentine and gum 
resin (if the processing is done by the original producer).
    (5) Your work as an employee in the handling, planting, drying, 
packing, packaging, processing, freezing, grading, storing, or 
delivering to storage, to a market or to a carrier for transportation to 
market, of any agricultural or horticultural commodity is agricultural 
labor if--
    (i) You work for a farm operator or a group of farm operators (other 
than a cooperative organization);
    (ii) Your work involves the commodity in its raw or unmanufactured 
state; and
    (iii) The operator produced most of the commodity you work with 
during the period for which you are paid, or if you work for a group of 
operators, all of the commodity you work with during the pay period is 
produced by that group.
    (6) If you do nonbusiness work, it is agricultural labor if you do 
the work on a farm operated for a profit. A farm is not operated for 
profit if the employer primarily uses it as a residence or for personal 
or family recreation or pleasure. (See Sec. 404.1058(a) for an 
explanation of nonbusiness work.)
    (7) The term farm operator means an owner, tenant, or other person, 
in possession of and operating a farm.
    (8) Work is not agricultural labor if it is done in the employ of a 
cooperative organization, which includes corporations, joint-stock 
companies, and associations treated as corporations under the Code. Any 
unincorporated group of operators is considered to be a cooperative 
organization if more than 20 operators are in the group at any time 
during the calendar year in which the work is done.
    (9) Processing work which changes the commodity from its raw or 
natural state is not agricultural labor. An example of this is the 
extraction of juices from fruits or vegetables. However, work in the 
cutting and drying of fruits or vegetables does not change

[[Page 303]]

the commodity from its raw or natural state and can be agricultural 
labor.
    (10) The term commodity means a single agricultural or horticultural 
product. For example, all apples are a commodity, while apples and 
oranges are two commodities.
    (11) Work connected with the commercial canning or freezing of a 
commodity is not agricultural labor nor is work done after the delivery 
of the commodity to a terminal market for distribution for consumption.
    (b) What is a farm. For purposes of social security coverage, farm 
includes a stock, dairy, poultry, fruit, fur-bearing animal, or truck 
farm, plantation, ranch, nursery, range or orchard. A farm also includes 
a greenhouse or other similar structure used mostly for raising 
agricultural or horticultural products. A greenhouse or other similar 
structure used mostly for other purposes such as display, storage, 
making wreaths and bouquets is not a farm.

[45 FR 20075, Mar. 27, 1980. Redesignated at 55 FR 7310, Mar. 1, 1990, 
as amended at 61 FR 38367, July 24, 1996; 70 FR 41955, July 21, 2005]



Sec. 404.1057  Domestic service in the employer's home.

    (a) Payments for domestic service--(1) The applicable dollar 
threshold. We do not include as wages cash payments that an employer 
makes to you in any calendar year for domestic service in the employer's 
private home if the cash pay in that calendar year is less than the 
applicable dollar threshold. The threshold per employer is $1000 in 
calendar year 1995. In calendar years after 1995, this amount will be 
subject to adjustment in $100 increments based on the formula in section 
215(a)(1)(B)(i) of the Act to reflect changes in wages in the economy. 
Non-cash payments for domestic service are not counted as wages.
    (2) How evaluation is made. We apply the applicable dollar threshold 
described in paragraph (a)(1) of this section based on when the payments 
are made to you rather than when the pay is earned. To count toward the 
applicable dollar threshold, payment must be made to you in cash 
(including checks or other forms of money). We apply the applicable 
dollar threshold only to services performed as a domestic employee. If 
an employer pays you for performing other work, the cash pay for the 
nondomestic work does not count toward the applicable dollar threshold 
domestic service pay required for the remuneration to count as wages.
    (3) More than one domestic employer. The applicable dollar threshold 
as explained in paragraph (a)(1) of this section applies to each 
employer when you perform domestic services for more than one employer 
in a calendar year. The wages paid by more than one employer for 
domestic services may not be combined to decide whether you have been 
paid the applicable dollar threshold or more in a calendar year. The 
standard applies to each employee when an employer has two or more 
domestic employees during a calendar year.
    (4) Rounding dollar amounts for reporting. For social security 
purposes, an employer has an option in the way he or she reports cash 
wages paid for domestic service in his or her private home. The employer 
may report the actual wages paid or may round the wages to the nearest 
dollar. For purposes of rounding to the nearest dollar the cents are 
disregarded unless it amounts to one-half dollar or more, in which case 
it will be raised to $1. If an employer uses this method to report a 
cash payment to you for domestic services in his or her private home in 
a calendar year, he or she must use the same method to report payments 
to other employees in that year for similar services.
    (b) What is domestic service. Domestic service is work of a 
household nature done by you in or about a private home of the employer. 
A private home is a fixed place of residence of a person or family. A 
separate dwelling unit maintained by a person in an apartment house, 
hotel, or other similar establishment may be a private home. If a house 
is used primarily for supplying board or lodging to the public as a 
business enterprise, it is not a private home. In general, services of a 
household nature in or about a private home include services performed 
by cooks, waiters, butlers, housekeepers, governessess, maids, valets, 
baby sitters, janitors, laundresses, furnacemen, caretakers,

[[Page 304]]

handymen, gardeners, footmen, grooms, and chauffeurs of automobiles for 
family use. Pay for these services does not come under this provision 
unless the services are performed in or about a private home of the 
employer. Pay for services not of a household nature, such as services 
performed as a private secretary, tutor, or librarian, even though 
performed in the employer's home, does not come under this provision.

[45 FR 20075, Mar. 27, 1980; 45 FR 25060, Apr. 14, 1980. Redesignated at 
55 FR 7310, Mar. 1, 1990, as amended at 61 FR 38367, July 24, 1996]



Sec. 404.1058  Special situations.

    (a) Payments for service not in course of employer's trade or 
business (nonbusiness work) and payments to certain home workers--(1) 
The $100 standard. We do not include as wages cash pay of less than $100 
paid to you in a calendar year by an employer for services not in the 
course of the employer's trade or business (nonbusiness work) and for 
services as a home worker as described in Sec. 404.1008(d).
    (2) How evaluation is made. (i) We apply the $100 standard for a 
calendar year based on when the payments are made to you rather than 
when the pay is earned. To count toward the $100 amount, payment must be 
in cash (including checks or other forms of money). The $100 standard 
applies to each employer when you perform services not in the course of 
the employer's trade or business or as a homeworker for two or more 
employers.
    (ii) If the employer has two or more employees, the standard applies 
to each employee. In applying the $100 standard, we disregard cash 
payments for any other type of services you perform for the employer.
    (iii) The noncash payments an employer pays you for services not in 
the course of the employer's trade or business are not wages even if the 
employer has paid you cash wages of $100 or more in the calendar year 
for services of that type.
    (iv) Amounts paid to you as a home worker as described in 
Sec. 404.1008(d) are not wages unless you are paid $100 or more in cash 
in a calendar year. If you meet this test, any noncash payments you 
receive for your services also count as wages.
    (v) Amounts paid to you as a home worker in a common-law employment 
relationship (see Sec. 404.1007) count as wages regardless of amount or 
whether paid in cash or kind.
    (3) Definitions. The term services not in the course of the 
employer's trade or business (also called nonbusiness work) means 
services that do not promote or advance the trade or business of the 
employer. Services performed for a corporation do not come within this 
definition. A homeworker is described in Sec. 404.1008(c).
    (b) Nonprofit, income-tax exempt organizations--(1) The $100 
standard. We do not include as wages payments of less than $100 in a 
calendar year made by an employer that is an organization exempt from 
income tax under section 501 of the Code.
    (2) How evaluation is made. We apply the $100 standard for a 
calendar year based on when the payments are made to you rather than 
when the pay is earned. To figure the $100 amount, both cash and noncash 
payments are counted. The $100 standard applies to each employer where 
you render services for two or more nonprofit, income-tax exempt 
organizations during a calendar year. The $100 standard also applies to 
each of you where a nonprofit, income-tax exempt organization has two or 
more employees. In applying the standard, the tax-exempt status of the 
employer and not the nature or place of your services is controlling.
    (c) Payments to members of the uniformed services--(1) The standard. 
We include as the wages of a member of the uniformed services--
    (i) Basic pay, as explained in paragraph (c)(3) of this section, for 
performing the services described in paragraph (a)(1) of Sec. 404.1019 
of this subpart; or
    (ii) Compensation, as explained in paragraph (c)(4) of this section, 
for performing the services described in paragraph (a)(2) of 
Sec. 404.1019 of this subpart.
    (2) Wages deemed paid. These following provisions apply to members 
of the uniformed services who perform services as described in paragraph 
(a)(1) of Sec. 404.1019 of this subpart.

[[Page 305]]

    (i) After 1977, a member of the uniformed services is considered to 
have been paid additional wages of $100 for each $300 of basic pay paid 
to the individual in a calendar year. The amount of additional wages 
deemed paid cannot be more than $1,200 for any calendar year. No wages 
may be deemed paid for units of basic pay which are less than $300.
    (ii) Before 1978, a member of the uniformed services is considered 
to have been paid additional wages of $300 for each calendar quarter 
after 1956 in which the individual is paid any amount of basic pay.
    (3) Basic pay. Basic pay means the monthly pay prescribed by 37 
U.S.C. 203 (Pay and Allowances for the Uniformed Services) for a member 
of the uniformed services on active duty or on active duty for training.
    (4) Compensation. ``Compensation'' refers to the remuneration 
received for services as a member of a uniformed service, based on 
regulations issued by the Secretary concerned (as defined in 37 U.S.C. 
101(5) under 37 U.S.C. 206(a), where such member is not entitled to the 
basic pay (as defined by paragraph (3) of this section).
    (d) Payments to volunteers and volunteer leaders in the Peace Corps. 
If you are a volunteer or volunteer leader under the provisions of the 
Peace Corps Act (22 U.S.C. 2501ff), payments for your services are wages 
with the exception of amounts in excess of the amounts certified as 
payable under section 5(c) or 6(1) of the Peace Corps Act. Amounts 
certified under those sections are considered to have been paid to the 
individual at the time the service is performed. See Sec. 404.1018(e) on 
coverage of these services.
    (e) Moving expenses. We do not include as wages amounts paid to, or 
on behalf of, an employee for moving expenses if it is reasonable to 
believe that a similar deduction is allowable under section 217 of the 
Code.
    (f) Payments by employer to survivor or estate of former employee. 
We do not include as wages any payment by an employer to a survivor or 
the estate of a former employee after the calendar year in which the 
employee died.
    (g) Payments to an employee who is entitled to disability insurance 
benefits. We do not include as wages any payments made by an employer to 
an employee if at the time such payment is made--
    (1) The employee is entitled to disability insurance benefits under 
the Act;
    (2) The employee's entitlement to such benefits began before the 
calendar year in which the employer's payment is made; and
    (3) The employee performed no work for the employer in the period in 
which the payments were paid by such employer (regardless of whether the 
employee worked in the period the payments were earned).
    (h) Tips. (1) We include as wages tips received by an employee if--
    (i) The tips are paid in cash; and
    (ii) The tips amount to $20 or more and are received in the course 
of employment by an employee in a calendar month.
    (2) Cash tips include checks and other forms of money. Tips received 
in a form other than cash, such as passes, tickets, or other goods are 
not wages. If an employee works for more than one employer in a calendar 
month, we apply the $20 tip test to work done for each employer.
    (i) Payments by employer under group legal services plan. We do not 
include as wages any contribution, payment, or service, provided by an 
employer under a qualified group legal services plan which is excludable 
from the gross income of an employee, or the employee's spouse or 
dependents, under section 120 of the Code.

[45 FR 20075, Mar. 27, 1980, as amended at 52 FR 29662, Aug. 11, 1987. 
Redesignated and amended at 55 FR 7310, Mar. 1, 1990; 57 FR 59914, Dec. 
17, 1992]



Sec. 404.1059  Deemed wages for certain individuals interned during 
World War II.

    (a) In general. Persons who were interned during any period of time 
from December 7, 1941, through December 31, 1946, by the United States 
Government at a place operated by the Government within the United 
States for the internment of United States citizens of Japanese ancestry 
are deemed to have been paid wages (in addition to wages actually paid) 
as provided in paragraph (c) of this section during any period

[[Page 306]]

after attaining age 18 while interned. This provision is effective for 
determining entitlement to, and the amount of, any monthly benefit for 
months after December 1972, for determining entitlement to, and the 
amount of, any lump-sum death payment in the case of a death after 
December 1972, and for establishing a period of disability.
    (b) Information needed to process deemed wages. Unless we have 
already made a determination on deemed wages for a period of internment 
of an individual, any person applying for a monthly benefit, a 
recalculation of benefits by reason of this section, or a lump-sum death 
payment, must submit certain information before the benefit or payment 
may be computed on the basis of deemed wages. This information is--
    (1) The place where the individual worked before internment;
    (2) The highest hourly wage before internment;
    (3) The place and date of internment;
    (4) Date of birth (if not previously furnished);
    (5) Whether or not another Federal benefit is being received based 
wholly or in part upon the period of internment; and
    (6) In the case of a woman, her maiden name.
    (c) Amount of deemed wages. The amount of wages which may be deemed 
is determined as follows:
    (1) Employed prior to internment. If the individual was employed 
before being interned, the deemed wages are the greater of--
    (i) The highest actual hourly rate of pay received for any 
employment before internment, multiplied by 40 for each full week during 
the period of internment; or
    (ii) The Federal minimum hourly rate in effect for the period of 
internment, multiplied by 40 for each full week during that period.
    (2) Self-employed or not employed prior to internment. If the 
individual was self-employed or was not employed before the period of 
internment, the deemed wages are the Federal minimum hourly rate in 
effect for that period, multiplied by 40 for each full week during the 
period.
    (d) When wages are not deemed. Wages are not deemed under this 
section--
    (1) For any period before the quarter in which the individual 
attained age 18; or
    (2) If a larger benefit is payable without the deemed wages; or
    (3) If a benefit based in whole or in part upon internment is 
determined by any agency of the United States to be payable under any 
other law of the United States or under a system set up by that agency. 
However, this exception does not apply in cases where the failure to 
receive deemed wages reduces the primary insurance amount by 50 cents or 
less.
    (e) Certification of internment. The certification concerning the 
internment is made by the Archivist of the United States or his or her 
representative. After the internment has been verified, wages are deemed 
to have been paid to the internee.

[45 FR 20075, Mar. 27, 1980, as amended at 52 FR 29662, Aug. 11, 1987. 
Redesignated at 55 FR 7310, Mar. 1, 1990]



Sec. 404.1060  [Reserved]

                             Self-Employment



Sec. 404.1065  Self-employment coverage.

    For an individual to have self-employment coverage under social 
security, the individual must be engaged in a trade or business and have 
net earnings from self-employment that can be counted as self-employment 
income for social security purposes. The rules explaining whether you 
are engaged in a trade or business are in Secs. 404.1066 through 
404.1077. What are net earnings from self-employment is discussed in 
Secs. 404.1080 through 404.1095. Section 404.1096 describes the net 
earnings from self-employment that are counted as self-employment income 
for social security purposes. See Sec. 404.1913 for the effect of a 
totalization agreement on self-employment coverage. An agreement may 
exempt an activity from coverage as well as extend coverage to an 
activity.

[50 FR 36574, Sept. 9, 1985]

[[Page 307]]



Sec. 404.1066  Trade or business in general.

    For you to be covered as a self-employed person for social security 
purposes, you must be engaged in a trade or business. You can carry on a 
trade or business as an individual or as a member of a partnership. With 
some exceptions, the term trade or business has the same meaning as it 
does when used in section 162 of the Code.



Sec. 404.1068  Employees who are considered self-employed.

    (a) General. Although we generally exclude services performed by 
employees from the definition of trade or business, certain types of 
services are considered a trade or business even though performed by 
employees. If you perform any of the services described in paragraphs 
(b) through (f) of this section, you are self-employed for social 
security purposes. Certain other services described in Sec. 404.1071 
(relating to ministers and members of religious orders) and 
Sec. 404.1073 (relating to certain public officers) may be considered a 
trade or business even though performed by employees.
    (b) Newspaper vendors. If you have attained age 18 and perform 
services as a newspaper vendor that are described in Sec. 404.1030(b), 
you are engaged in a trade or business.
    (c) Sharefarmers. If you perform services as a sharefarmer that are 
described in Sec. 404.1017, you are engaged in a trade or business.
    (d) Employees of a foreign government, an instrumentality wholly 
owned by a foreign government, or an international organization. If you 
are a United States citizen and perform the services that are described 
in Sec. 404.1032, Sec. 404.1033(a), or Sec. 404.1034(a), you are engaged 
in a trade or business if the services are performed in the United 
States and are not covered as employment based upon Sec. 404.1034(c).
    (e) Certain fishermen. If you perform services as a fisherman that 
are described in Sec. 404.1031, you are engaged in a trade or business.
    (f) Employees of a church or church-controlled organization that has 
elected to exclude employees from coverage as employment. If you perform 
services that are excluded from employment as described in 
Sec. 404.1026, you are engaged in a trade or business. Special rules 
apply to your earnings from those services which are known as church 
employee income. If you are paid $100 or more in a taxable year by an 
employer who has elected to have its employees excluded, those earnings 
are self-employment income (see Sec. 404.1096(c)(1)). In figuring your 
church employee income you may not reduce that income by any deductions 
attributable to your work. Your church employee income and deductions 
may not be taken into account in determining the amount of other net 
earnings from self-employment. Effective for taxable years beginning on 
or after January 1, 1990, your church employee income is exempt from 
self-employment tax under the conditions set forth for members of 
certain religious groups (see Sec. 404.1075).

[45 FR 20075, Mar. 27, 1980, as amended at 50 FR 36574, Sept. 9, 1985; 
58 FR 64889, Dec. 10, 1993; 61 FR 38367, July 24, 1996]



Sec. 404.1069  Real estate agents and direct sellers.

    (a) Trade or business. If you perform services after 1982 as a 
qualified real estate agent or as a direct seller, as defined in section 
3508 of the Code, you are considered to be engaging in a trade or 
business.
    (b) Who is a qualified real estate agent. You are a qualified real 
estate agent as defined in section 3508 of the Code if you are a 
salesperson and--
    (1) You are a licensed real estate agent;
    (2) Substantially all of the earnings (whether or not paid in cash) 
for the services you perform as a real estate agent are directly related 
to sales or other output (including the performance of services) rather 
than to the number of hours worked; and
    (3) Your services are performed under a written contract between 
yourself and the person for whom the services are performed which 
provides you will not be treated as an employee with respect to these 
services for Federal tax purposes.
    (c) Who is a direct seller. You are a direct seller as defined in 
section 3508 of the Code if--

[[Page 308]]

    (1) You are engaged in the trade or business of selling (or 
soliciting the sale of) consumer products--
    (i) To any buyer on a buy-sell basis, a deposit-commission basis, or 
any similar basis which the Secretary of the Treasury prescribes by 
regulations, for resale (by the buyer or any other person) in the home 
or in other than a permanent retail establishment; or
    (ii) In the home or in other than a permanent retail establishment; 
and
    (2) Substantially all of your earnings (whether or not paid in cash) 
for the performance of these services are directly related to sales or 
other output (including the performance of services) rather than to the 
number of hours worked; and
    (3) Your services are performed under a written contract between 
yourself and the person for whom the services are performed which 
provides you will not be treated as an employee with respect to these 
services for Federal tax purposes.

[48 FR 40515, Sept. 8, 1983]



Sec. 404.1070  Christian Science practitioners.

    If you are a Christian Science practitioner, the services you 
perform in the exercise of your profession are a trade or business 
unless you were granted an exemption from coverage under section 1402(e) 
of the Code, and you did not revoke such exemption in accordance with 
section 1704(b) of the Tax Reform Act of 1986. An exemption cannot be 
granted if you filed a valid waiver certificate under the provisions 
that apply to taxable years ending before 1968.

[55 FR 7311, Mar. 1, 1990]



Sec. 404.1071  Ministers and members of religious orders.

    (a) If you are a duly ordained, commissioned, or licensed minister 
of a church, or a member of a religious order who has not taken a vow of 
poverty, the services you perform in the exercise of your ministry or in 
the exercise of duties required by the order (Sec. 404.1023(c) and (e)) 
are a trade or business unless you filed for and were granted an 
exemption from coverage under section 1402(e) of the Code, and you did 
not revoke such exemption in accordance with the Social Security 
Amendments of 1977, section 1704(b) of the Tax Reform Act of 1986, or 
section 403 of the Ticket to Work and Work Incentives Improvement Act of 
1999. An exemption cannot be granted if you filed a valid waiver 
certificate under the provisions of section 1402(e) that apply to 
taxable years ending before 1968.
    (b) If you are a member of a religious order and have taken a vow of 
poverty, the services you perform in the exercise of your duties 
required by the order may be covered as employment. (See Sec. 404.1023 
(a) and (e)).

[45 FR 20075, Mar. 27, 1980, as amended at 55 FR 7311, Mar. 1, 1990; 69 
FR 51556, Aug. 20, 2004]



Sec. 404.1073  Public office.

    (a) General. The performance of the functions of a public office is 
not a trade or business except under the circumstances explained in 
paragraph (b) of this section. If you are an officer of a State or 
political subdivision, you are considered as employee of the State or 
political subdivision.
    (b) State and local governmental employees paid by fees--(1) 
Voluntary coverage under section 218 of the Act. The services of 
employees of States and political subdivisions, including those in 
positions paid solely on a fee-basis, may be covered as employment by a 
Federal-State agreement under section 218 of the Act (see subpart M of 
this part). States, when entering into these agreements, have the option 
of excluding under the agreement coverage of services in positions paid 
solely by fees. If you occupy a position paid solely on a fee-basis and 
the State has not covered your services under section 218 of the Act, 
you are considered to be engaged in a trade or business.
    (2) Mandatory old-age, survivors, disability, and hospital insurance 
coverage. Beginning with services performed after July 1, 1991, Social 
Security coverage (old-age, survivors, disability, and hospital 
insurance) is mandatory, with certain exceptions, for services performed 
by employees of a State, a political subdivision of a State, or of a 
wholly owned instrumentality of one or more of the foregoing, if the 
employees are not members of a retirement

[[Page 309]]

system of the State, political subdivision, or instrumentality. Among 
the exclusions from such mandatory coverage is service performed by an 
employee in a position compensated solely on a fee-basis which is 
treated pursuant to section 211(c)(2)(E) of the Act as a trade or 
business for purposes of inclusion of such fees in the net earnings from 
self-employment.
    (3) If you are a notary public, you are not a public officer even 
though you perform a public function. Your services as a notary public 
are not covered for social security purposes.

[45 FR 20075, Mar. 27, 1980, as amended at 57 FR 59910, Dec. 17, 1992]



Sec. 404.1074  Farm crew leader who is self-employed.

    If you are a farm crew leader and are deemed the employer of the 
workers as described in Sec. 404.1010, we consider you to be engaged in 
a trade or business. This includes services performed in furnishing 
workers to perform agricultural labor for others, as well as services 
performed as a member of the crew.



Sec. 404.1075  Members of certain religious groups opposed to insurance.

    (a) You may file an application with the Internal Revenue Service 
for exemption from social security self-employment tax if--
    (1) You are a member of a recognized religious sect or division of 
the sect; and
    (2) You adhere to the tenets or teachings of the sect or division of 
the sect and for this reason are conscientiously opposed to receiving 
benefits from any private or public insurance that--
    (i) Makes payments in the event of death, disability, old age, or 
retirement; or
    (ii) Makes payments toward the cost of, or provides services for, 
medical care (including the benefits of any insurance system established 
by the Act).
    (b) Your application must be filed under the rules described in 26 
CFR 1.1402(h). An application must contain or be accompanied by the 
applicant's waiver of all benefits and payments under title II and part 
A of title XVIII of the Act. See Sec. 404.305 for the effect of the 
filing of the waiver and the granting of the exemption.
    (c) Regardless of whether you meet all these conditions, your 
application for exemption will not be approved unless we find that--
    (1) The sect or division of the sect has established tenets or 
teachings which cause you to be conscientiously opposed to the types of 
insurance benefits described in paragraph (a)(2) of this section;
    (2) For a substantial period of time it has been the practice for 
members of the sect or division of the sect to make provision for their 
dependent members which is reasonable in view of their general level of 
living; and
    (3) The sect or division of the sect has been in existence 
continuously since December 31, 1950.
    (d) Your application for exemption will be approved by the Internal 
Revenue Service only if no benefit or other payment under title II or 
part A of title XVIII of the Act became payable or, but for section 203 
or section 222(b) of the Act, would have become payable, to you or on 
your behalf at or before the time of the filing of your application for 
exemption.
    (e) The tax exemption ceases to be effective for any taxable year 
ending after the time you do not meet the requirements of paragraph (a) 
of this section or after the time we find the religious sect or division 
of the sect of which you are a member no longer meets the requirements 
of paragraph (c) of this section. If your tax exemption ceases to be 
effective, your waiver of the right to receive Social Security and 
Medicare part A benefits will also no longer be effective. Benefits may 
be payable based upon your wages for and after the calendar year 
following the calendar year in which the event occurred upon which the 
cessation of the exemption is based. Benefits may be payable based upon 
your self-employment income for and after the taxable year in which the 
event occurred upon which the cessation of the exemption is based.

[45 FR 20075, Mar. 27, 1980, as amended at 58 FR 64890, Dec. 10, 1993]

[[Page 310]]



Sec. 404.1077  Individuals under railroad retirement system.

    If you are an employee or employee representative as defined in 
section 3231 (b) and (c) of the Code, your work is not a trade or 
business. Your services are covered under the railroad retirement 
system.

                         Self-Employment Income



Sec. 404.1080  Net earnings from self-employment.

    (a) Definition of net earnings from self-employment. If you are 
self-employed, you must first determine the amount of your net earnings 
from self-employment before figuring the amount of your earnings that 
count for social security purposes. Some of your earnings may not be 
included as net earnings from self-employment even though they are 
taxable for income tax purposes. If you are an employee but we consider 
you to be self-employed for social security purposes, you must figure 
your earnings as though you were actually self-employed unless you work 
for a church or church-controlled organization that has exempted its 
employees (see Sec. 404.1068(f)). Subject to the special rules in 
Secs. 404.1081 through 404.1095, the term net earnings from self-
employment means--
    (1) Your gross income, as figured under subtitle A of the Code, from 
any trade or business you carried on, less deductions attributed to your 
trade or business that are allowed by that subtitle; plus
    (2) Your distributive share of income (or loss) from a trade or 
business carried on by a partnership of which you are a member, as 
described in paragraph (b) of this section.
    (b) Income or loss from a partnership. (1) Your distributive share 
(whether or not actually distributed) of the income or loss from any 
trade or business carried on by a partnership of which you are a member, 
other than as a limited partner, is determined under section 704 of the 
Code.
    (2) If you are a limited partner, your distributive share is 
included in your net earnings from self-employment if--
    (i) The amount is payable to you for services you render to or on 
behalf of the partnerships; and
    (ii) It is a guaranteed payment described in section 707(c) of the 
Code.
    (3) You are a limited partner if your financial liability for the 
obligations of the partnership is limited to the amount of your 
financial investment in the partnership. Generally, you will not have to 
perform services in the operation of, or participate in the control of, 
the business carried on by the partnership for the taxable year 
involved.
    (c) Reporting methods. Your gross income from a trade or business 
includes the gross income you received (under the cash method) or that 
accrued to you (under the accrual method) from the trade or business in 
the taxable year. It is immaterial that the income may be attributable 
in whole or in part to services you rendered or other acts you performed 
in a prior taxable year.
    (d) What is a taxable year. (1) The term taxable year means--
    (i) Your annual accounting period on which you regularly figure your 
income in keeping your books; or
    (ii) A short period resulting from your death before the end of your 
annual accounting period or from a change of your annual accounting 
period.
    (2) The term annual accounting period means--
    (i) A calendar year, consisting of 12 months ending on December 31; 
or
    (ii) A fiscal year, consisting of--
    (A) 12 months ending on the last day of any month other than 
December; or
    (B) A period, if elected under section 441 of the Code, that varies 
from 52 to 53 weeks and always ends on the same day of the week that 
occurs last in a calendar month or nearest to the last day of the 
calendar month.
    (3) Your taxable year for figuring self-employment income is the 
same as your taxable year for the purposes of subtitle A of the Code. 
Your taxable year is a calendar year if--
    (i) You keep no books;
    (ii) You have no annual accounting period; or
    (iii) You have an annual accounting period that differs from the 
definition of fiscal year as described in paragraph (d)(2)(ii) of this 
section.

[45 FR 20075, Mar. 27, 1980, as amended at 50 FR 36574, Sept. 9, 1985]

[[Page 311]]



Sec. 404.1081  General rules for figuring net earnings from
self-employment.

    (a) Determining net earnings. (1) In determining your gross income 
and the deductions attributable to your trade or business for the 
purpose of determining your net earnings from self-employment, the 
provisions that apply to the taxes imposed by sections 1 and 3 of the 
Code are used.
    (2) If you use the accrual method of accounting to figure your 
taxable income from a trade or business, you must use the same method in 
determining your net earnings from self-employment.
    (3) If you are engaged in a trade or business of selling property on 
the installment plan and elect, under the provisions of section 453 of 
the Code, to use the installment method of accounting in figuring your 
income, you must use the installment method in determining your net 
earnings from self-employment.
    (4) Any income which can be excluded from gross income under any 
provision of subtitle A of the Code cannot be counted in determining 
your net earnings from self-employment, unless--
    (i) You are a resident of Puerto Rico (see Sec. 404.1089);
    (ii) You are a minister or member of a religious order (see 
Sec. 404.1091);
    (iii) You are a United States citizen or resident engaged in a trade 
or business outside the United States (see Sec. 404.1092); or
    (iv) You are a citizen of, or have income from sources within, 
certain possessions of the United States (see Sec. 404.1093).
    (b) Trade or business carried on. You must carry on the trade or 
business either personally or through agents or employees. Income from a 
trade or business carried on by an estate or trust is not included in 
determining the net earnings from self-employment of the individual 
beneficiaries of the estate or trust.
    (c) Aggregate net earnings. If you are engaged in more than one 
trade or business, your net earnings from self-employment consist of the 
total of the net income and losses of all the trades or businesses you 
carry on. A loss in one trade or business you carry on offsets the 
income from another trade or business.
    (d) Partnerships. When you have net earnings from self-employment 
from a partnership as described in Sec. 404.1080 (a) and (b), those net 
earnings are combined with your other net earnings from self-employment 
in determining your total net earnings from self-employment for the 
taxable year.
    (e) Different taxable years. If you are a partner and your taxable 
year is different from that of the partnership, you must include, in 
figuring your net earnings from self-employment, your distributive share 
of the income or loss of the partnership for its taxable year ending 
with or within your taxable year. For the special rule in case of the 
termination of a partner's taxable year as a result of death, see 
Sec. 404.1087.
    (f) Meaning of partnerships. A partnership for social security 
purposes is one that is recognized as a partnership for income tax 
purposes. For income tax purposes, the term partnership includes not 
only a partnership as known under common law, but also a syndicate, 
group, pool, joint venture, or other unincorporated organization that 
carries on any trade or business, financial operation, or venture, and 
which is not a trust, estate, or a corporation.
    (g) Proprietorship taxed as domestic corporation. If you are a 
proprietor of an unincorporated business enterprise and have elected to 
be taxed as a domestic corporation, you must figure your net earnings 
from self-employment without regard to the election you have made.

[45 FR 20075, Mar. 27, 1980, as amended at 50 FR 36574, Sept. 9, 1985]



Sec. 404.1082  Rentals from real estate; material participation.

    (a) In general. Your rentals from real estate and from personal 
property leased with the real estate (including rentals paid in crop 
shares) and the deductions attributable to the rentals are excluded in 
figuring your net earnings from self-employment, unless you receive the 
rentals in the course of a trade or business as a real estate dealer. If 
you are an owner or lessee of

[[Page 312]]

land, rentals paid in crop shares include income you get under an 
agreement with another person if the arrangement provides for the 
following:
    (1) The other person will produce agricultural or horticultural 
commodities on the land.
    (2) The commodities produced, or the income from their sale, will be 
divided between you and the other person.
    (3) The amount of your share depends on the amount of the 
commodities produced.
    (b) Real estate dealers. (1) You are a real estate dealer if you are 
engaged in the business of selling real estate to customers for profit.
    (2) If you merely hold real estate for investment or speculation and 
receive rental income from it, you are not considered a real estate 
dealer.
    (3) If you are a real estate dealer, but also hold real estate for 
investment or speculation in addition to real estate you hold for sale 
to customers, only the rental income from the real estate held for sale 
to customers and the deductions attributable to it are included in 
determining your net earnings from self-employment. The rental income 
from real estate you hold for investment or speculation and the 
deductions attributable to it are not counted in figuring your net 
earnings from self-employment.
    (c) Special rule for farm rental income--(1) In general. If you own 
or lease land, any income you derive from it is included in figuring 
your net earnings from self-employment if--
    (i) The income results from an arrangement between you and another 
person which provides for the other person to produce agricultural or 
horticultural commodities on the land that you own or lease and for you 
to materially participate in the production or the management of the 
production of the agricultural or horticultural commodities; and
    (ii) You actually do materially participate.
    (2) Nature of arrangement. (i) The arrangement between you and the 
other person may be either oral or written. It must provide that the 
other person will produce one or more agricultural or horticultural 
commodities and that you will materially participate in the production 
or the management of the production of the commodities.
    (ii) The term production, refers to the physical work performed and 
the expenses incurred in producing a commodity. It includes activities 
like the actual work of planting, cultivating, and harvesting crops, and 
the furnishing of machinery, implements, seed, and livestock.
    (iii) The term management of the production, refers to services 
performed in making managerial decisions about the production of the 
crop, such as when to plant, cultivate, dust, spray, or harvest, and 
includes advising and consulting, making inspections, and making 
decisions on matters, such as rotation of crops, the type of crops to be 
grown, the type of livestock to be raised, and the type of machinery and 
implements to be furnished.
    (3) Material participation. (i) If you show that you periodically 
advise or consult with the other person, who under the rental 
arrangement produces the agricultural or horticultural commodities, and 
also show that you periodically inspect the production activities on the 
land, you will have presented strong evidence that you are materially 
participating.
    (ii) If you also show that you furnish a large portion of the 
machinery, tools, and livestock used in the production of the 
commodities, or that you furnish or advance monies, or assume financial 
responsibility, for a substantial part of the expense involved in the 
production of the commodities, you will have established that you are 
materially participating.
    (4) Employees or agents. We consider any farm rental arrangement 
entered into by your employee or agent and another person to be an 
arrangement entered into by you. However, we do not consider the 
services of an employee or agent as your services in determining the 
extent to which you have participated in the production or management of 
production of a commodity.
    (5) Examples.

    Example 1. After the death of her husband, Ms. A rents her farm, 
together with its machinery and equipment, to B for one-half of the 
proceeds from the commodities produced on the farm by B. It is agreed 
that B will live

[[Page 313]]

in the tenant house on the farm and be responsible for the overall 
operation of the farm, such as planting, cultivating, and harvesting the 
field crops, caring for the orchard and harvesting the fruit and caring 
for the livestock and poultry. It also is agreed that Ms. A will 
continue to live in the farm residence and help B operate the farm. 
Under the agreement it is expected that Ms. A will regularly operate and 
clean the cream separator and feed the poultry flock and collect the 
eggs. When possible she will assist B in such work as spraying the fruit 
trees, penning livestock, culling the poultry, and controlling weeds. 
She will also assist in preparing the meals when B engages seasonal 
workers. The agreement between Ms. A and B clearly provides that she 
will materially participate in the overall production operations to be 
conducted on her farm by B. In actual practice, Ms. A regularly performs 
those services. The regularly performed services are material to the 
production of an agricultural commodity, and the services performed are 
material to the production operations to which they relate. The 
furnishing of a substantial portion of the farm machinery and equipment 
also supports the conclusion that Ms. A has materially participated. 
Accordingly, the rental income Ms. A receives from her farm should be 
included in her net earnings from self-employment.
    Example 2. G owns a fully-equipped farm which he rents to H under an 
arrangement which provides that G will materially participate in the 
management of the production of crops raised on the farm under the 
arrangement. G lives in town about 5 miles from the farm. About twice a 
month he visits the farm and looks over the buildings and equipment. G 
may occasionally, in an emergency, discuss with H some phase of a crop 
production activity. In effect, H has complete charge of the management 
of farming operations regardless of the understanding between him and G. 
Although G pays one-half of the cost of the seed and fertilizer and is 
charged for the cost of materials purchased by H to make all necessary 
repairs, G's activities are not material in the crop production 
activities. Accordingly, G's income from the crops is not included in 
net earnings from self-employment.

    (d) Rental income from living quarters--(1) No services provided for 
occupants. Payments you receive for renting living quarters in a private 
residence, duplex, or multiple-housing unit are generally rental income 
from real estate. Except in the case of real estate dealers, these 
payments are excluded in determining net earnings from self-employment, 
even if the payments are in part attributable to personal property 
furnished under the lease.
    (2) Services provided for occupants. (i) Payments you receive for 
renting living quarters where services are also provided to the 
occupant, as in hotels, boarding houses, or apartment houses furnishing 
hotel services, or in tourist camps or tourist homes, are included in 
determining your net earnings from self-employment. Any payments you 
receive for the use of space in parking lots, warehouses, or storage 
garages are also included in determining your net earnings from self-
employment.
    (ii) Generally, we consider services to be provided to the occupant 
if they are primarily for the occupant's convenience and are other than 
those usually provided in connection with the rental of rooms or other 
space for occupancy only. We consider the supplying of maid service to 
be a service provided to the occupant. However, we do not consider the 
furnishing of heat and light, the cleaning of public entrances, exits, 
stairways, and lobbies and the collection of trash, as services provided 
to the occupant.

    Example: A owns a building containing four apartments. During the 
taxable year, A received $1,400 from apartments numbered 1 and 2, which 
are rented without services provided to the occupants, and $3,600 from 
apartments numbered 3 and 4, which are rented with services provided. 
A's fixed expenses for the four apartments are $1,200 during the taxable 
year. In addition, A has $500 of expenses attributable to the services 
provided to the occupants of apartments 3 and 4. In determining his net 
earnings from self-employment, A includes the $3,600 received from 
apartments 3 and 4, and the expenses of $1,100 ($500 plus one-half of 
$1,200) attributable to them. The rentals and expenses attributable to 
apartments 1 and 2 are excluded. Therefore, A has $2,500 of net earnings 
from self-employment from the building for the taxable year.

    (e) Treatment of business income which includes rentals from real 
estate. If an individual or a partnership is engaged in a trade or 
business other than real estate, and part of the income is rentals from 
real estate, only that part of the income which is not rentals and the 
expenses attributable to that portion are included in determining net 
earnings from self-employment.

[[Page 314]]



Sec. 404.1083  Dividends and interest.

    (a) The dividends you receive on shares of stock are excluded in 
determining your net earnings from self-employment, unless you are a 
dealer in stocks and securities and receive the dividends in the course 
of your trade or business.
    (b) The interest you receive on a bond, debenture, note, 
certificate, or other evidence of indebtedness issued with interest 
coupons or in registered form by any corporation (including one issued 
by a government or political subdivision) is excluded in determining 
your net earnings from self-employment, unless you are a dealer in 
stocks and securities and receive the interest in the course of your 
trade or business.
    (c) If you hold stocks or securities for investment or speculation 
purposes, any dividends and interest you receive that are excludable 
under paragraphs (a) and (b) of this section are excluded in determining 
your net earnings from self-employment, whether or not you are a dealer 
in stocks and securities.
    (d) A dealer in stocks or securities is a merchant with an 
established place of business who is regularly engaged in the business 
of purchasing stocks or securities and reselling them to customers. The 
dealer, as a merchant, buys stocks or securities and sells them to 
customers with a view to making a profit. Persons who buy and sell or 
hold stocks or securities for investment or speculation, regardless of 
whether the buying or selling constitutes a trade or business, are not 
dealers in stocks or securities.

[45 FR 20075, Mar. 25, 1980; 45 FR 25060, Apr. 14, 1980]



Sec. 404.1084  Gain or loss from disposition of property; capital
assets; timber, coal, and iron ore; involuntary conversion.

    (a) If you are engaged in a trade or business, you must, in 
determining your net earnings from self-employment, exclude any gain or 
loss--
    (1) That is considered a gain or loss from the sale or exchange of a 
capital asset;
    (2) From the cutting of timber or from the disposal of timber or 
coal, even if held primarily for sale to customers, if section 631 of 
the Code applies to the gain or loss;
    (3) From the disposal of iron ore mined in the United States, even 
if held primarily for sale to customers, if section 631 of the Code 
applies to the gain or loss; and
    (4) From the sale, exchange, involuntary conversion, or other 
disposition of property that is not--
    (i) Stock in trade or other property of a kind which would properly 
be included in inventory if on hand at the close of the taxable year; or
    (ii) Property held primarily for sale to customers in the ordinary 
course of a trade or business;
    (b) For purposes of paragraph (a)(4) of this section, it is 
immaterial whether a gain or loss is treated as a capital gain or as an 
ordinary gain or loss for purposes other than determining earnings from 
self-employment.
    (c) For purposes of paragraph (a)(4) of this section--
    (1) The term involuntary conversion means a compulsory or unintended 
change of property into other property or money as a result of such 
things as destruction, theft or seizure; and
    (2) The term other disposition includes destruction or loss by fire, 
theft, storm, shipwreck, or other casualty, even though there is no 
change of the property into other property or money.

    Example: During the taxable year 1976, A, who owns a grocery store, 
had a net profit of $1,500 from the sale of groceries and a gain of $350 
from the sale of a refrigerator case. During the same year, he had a 
loss of $2,000 as a result of damage by fire to the store building. In 
figuring taxable income for income tax purposes, all of these items are 
considered. In determining net earnings from self-employment, however, 
only the $1,500 of profit derived from the sale of groceries is 
included. The $350 gain and the $2,000 loss are excluded.



Sec. 404.1085  Net operating loss deduction.

    When determining your net earnings from self-employment, you 
disregard the deduction provided by section 172 of the Code that relates 
to net operating losses sustained in years other than the taxable year.

[[Page 315]]



Sec. 404.1086  Community income.

    If community property laws apply to income that an individual 
derives from a trade or business (other than a trade or business carried 
on by a partnership), the gross income and deductions attributable to 
such trade or business shall be treated as the gross income and 
deductions of the spouse carrying on such trade or business or, if such 
trade or business is jointly operated, treated as the gross income and 
deductions of each spouse on the basis of his or her respective 
distributive share of the gross income and deductions.

[70 FR 41955, July 21, 2005]



Sec. 404.1087  Figuring partner's net earnings from self-employment
for taxable year which ends as a result of death.

    (a) General. In the case of a deceased partner whose taxable year 
ends because of death, the deceased partner's net earnings from self-
employment includes the amount of his or her distributive share of 
partnership ordinary income or loss for the partnership's taxable year 
that is attributable to an interest in the partnership through the month 
of death.
    (b) Computation. (1) The deceased partner's distributive share of 
partnership ordinary income or loss for the partnership taxable year in 
which death occurred is determined by applying the rules contained in 
paragraphs (d) and (f) of Sec. 404.1081.
    (2) The portion of the distributive share to be included in the 
deceased partner's net earnings from self-employment for his or her last 
taxable year is determined by treating the ordinary income or loss 
constituting the distributive share as having been realized or sustained 
ratably over the partnership taxable year during which the deceased 
partner had an interest in the partnership and during which the deceased 
partner's estate, or any other person succeeding by reason of the death 
to rights to his partnership interest, held an interest in the 
partnership.
    (c) Deceased partner's distributive share. A deceased partner's 
distributive share includes the distributive share of the estate or of 
any other person succeeding to the interest of a deceased partner. It 
does not include any share attributable to a partnership interest that 
was not held by the deceased partner at the time of death. If a deceased 
partner's estate should acquire an interest in a partnership in addition 
to the interest to which it succeeded upon the death of the deceased 
partner, the amount of the distributive share attributable to the 
additional interest acquired by the estate is not included in computing 
the deceased partner's distributive share of the partnership's ordinary 
income or loss for the partnership taxable year.
    (d) Options available to farmers. In determining the applicability 
of the optional method of figuring net earnings from self-employment to 
a member of a farm partnership it is necessary to determine the 
partner's distributive share of partnership gross income or distributive 
share of income described in section 702(a)(8) of the Code.



Sec. 404.1088  Retirement payment to retired partners.

    (a) In general. If you are a retired partner, in figuring your net 
earnings from self-employment you must exclude payments made to you on a 
periodic basis by a partnershp on account of your retirement and which 
are to continue until your death. This exclusion applies only if the 
payments are made under a written plan which meets the requirements set 
out in 26 CFR 1.1402(a)-(17) and the conditions in paragraph (b) of this 
section are met. The necessary requirements and conditions must be met 
throughout the entire partnership's taxable year for the payments to be 
excluded so that either all or none of the payments are excluded.
    (b) Other conditions. You must have been paid your full share of the 
partnership's capital before the close of the partnership's taxable year 
in which retirement payments are made. Also, no member of the 
partnership can have any financial obligations to you (in his or her 
capacity as a partner) except to make the retirement payments. Lastly, 
you cannot perform any services for the partnership in the partnership's 
taxable year which falls wholly or partially in your taxable year in 
which you receive the retirement payments.


[[Page 316]]


    Example: D, a partner in the DEF partnership, retired from the 
partnership as of December 31, 1976. The taxable year of both D and the 
partnership is the calendar year. During the partnership's taxable year 
ending December 31, 1977, D rendered no service to any trade or business 
carried on by the partnership. On or before December 31, 1977, all 
obligations (other than retirement payments under the plan) from the 
other partners to D were liquidated, and D's share of the capital of the 
partnership was paid to him. Retirement payments received by D under the 
partnership's plan in his taxable year ending December 31, 1977, are 
excluded in determining net earnings from self-employment (if any) for 
that taxable year.



Sec. 404.1089  Figuring net earnings for residents and nonresidents
of Puerto Rico.

    (a) Residents. If you are a resident of Puerto Rico, whether or not 
you are an alien, a citizen of the United States, or a citizen of Puerto 
Rico, you must figure your net earnings from self-employment in the same 
manner as would a citizen of the United States residing in the United 
States. In figuring your net earnings from self-employment you must 
include your income from sources in Puerto Rico even though you are a 
resident of Puerto Rico during the entire taxable year.
    (b) Nonresidents. A citizen of Puerto Rico, who is also a citizen of 
the United States and who is not a resident of Puerto Rico must figure 
net earnings from self-employment in the same manner as other citizens 
of the United States.



Sec. 404.1090  Personal exemption deduction.

    The deduction provided by section 151 of the Code, relating to 
personal exemptions, is excluded in determining net earnings from self-
employment.



Sec. 404.1091  Figuring net earnings for ministers and members of
religious orders.

    (a) General. If you are a duly ordained, commissioned, or licensed 
minister of a church or a member of a religious order who has not taken 
a vow of poverty, we consider you to be engaged in a trade or business 
under the conditions described in Sec. 404.1071 with regard to services 
described in Sec. 404.1023 (c) and (e). In figuring your net earnings 
from self-employment from performing these services, you must include 
certain income (described in paragraphs (b) and (c) of this section) 
that may be excluded from your gross income for income tax purposes.
    (b) Housing and meals. You must include in figuring your net 
earnings from self-employment the rental value of a home furnished to 
you and any rental allowance paid to you as payment for services 
performed in the exercise of your ministry or in the exercise of duties 
required by your order even though the rental value or rental allowance 
may be excluded from gross income by section 107 of the Code. Also, the 
value of any meals or lodging furnished to you in connection with the 
performance of these services is included in figuring your net earnings 
from self-employment even though their value is excluded from gross 
income by section 119 of the Code.
    (c) Housing allowance when included in retirement pay. You must 
exclude any parsonage or housing allowance included in your retirement 
pay or any other retirement benefit received after retirement pursuant 
to a church plan as defined in section 414(e) of the Internal Revenue 
Code when computing your net earnings from self-employment. For example, 
if a minister retires from Church A and the rental value of a parsonage 
or any other allowance is included in his/her retirement pay, the 
parsonage allowance must be excluded when determining net earnings from 
self-employment. However, if this same retired minister goes to work for 
Church B and is paid a parsonage allowance by Church B, this new income 
must be included when computing net earnings from self-employment.
    (d) Services outside the United States. If you are a citizen or 
resident of the United States performing services outside the United 
States which are in the exercise of your ministry or in the exercise of 
duties required by your order, your net earnings from self-employment 
from the performance of these services are figured as described in 
paragraph (b) of this section. However, they are figured without regard 
to the exclusions from gross income provided

[[Page 317]]

in sections 911 and 931 of the Code relating to earned income from 
services performed outside the United States and from sources within 
possessions of the United States.

[45 FR 20075, Mar. 27, 1980, as amended at 50 FR 36574, Sept. 9, 1985; 
70 FR 41955, July 21, 2005]



Sec. 404.1092  Figuring net earnings for U.S. citizens or residents
living outside the United States.

    (a) Taxable years beginning after December 31, 1983. If you are a 
citizen or resident of the United States and are engaged in a trade or 
business outside the United States, your net earnings from self-
employment are figured without regard to the exclusion from gross income 
provided by section 911 (a)(1) of the Code.
    (b) Taxable years beginning after December 31, 1981, and before 
January 1, 1984. If you are a citizen of the United States and were 
engaged in a trade or business outside the United States, your net 
earnings from self-employment are figured without regard to the 
exclusion from gross income provided by section 911(a)(1) of the Code 
unless you are a resident of a foreign country or countries for an 
uninterrupted period which includes an entire taxable year.

[50 FR 36574, Sept. 9, 1985]



Sec. 404.1093  Possession of the United States.

    In using the exclusions from gross income provided under section 931 
of the Code (relating to income from sources within possessions of the 
United States) and section 932 of the Code (relating to citizens of 
possessions of the United States) for purposes of figuring your net 
earnings from self-employment, the term possession of the United States 
shall be deemed not to include the Virgin Islands, Guam, the 
Commonwealth of the Northern Mariana Islands, or American Samoa.

[45 FR 20075, Mar. 27, 1980, as amended at 69 FR 51556, Aug. 20, 2004]



Sec. 404.1094  Options available for figuring net earnings from
self-employment.

    (a) General. If you have income from a trade or business in certain 
situations, you have options for figuring your net earnings from self-
employment. The options available to you depend on whether you have 
income from an agricultural trade or business or a non-agricultural 
trade or business. For a definition of agricultural trade or business 
see Sec. 404.1095.
    (b) Agricultural trade or business. The net earnings from self-
employment you derive from an agricultural trade or business may, at 
your option, be figured as follows:
    (1) Gross income of $2,400 or less. If your gross income is $2,400 
or less you may, at your option, report 66\2/3\ percent of the gross 
income as net earnings from self-employment instead of your actual net 
earnings from your business.
    (2) Gross income of more than $2,400. If your gross income is more 
than $2,400 and your actual net earnings from your business are less 
than $1,600 you may, at your option, report $1,600 as net earnings from 
self-employment instead of your actual net earnings. If your actual net 
earnings are $1,600 or more you cannot use the optional method.
    (3) Two or more agricultural trades or businesses. If you carry on 
more than one agricultural trade or business as a sole proprietor or as 
a partner, you must combine your gross income and net income from each 
trade or business to find out whether you may use the optional method of 
figuring net earnings.
    (c) Non-agricultural trade or business. (1) The net earnings from 
self-employment you derive from a non-agricultural trade or business may 
be reported under an optional method if you are self-employed on a 
regular basis (as defined in paragraph (c)(4) of this section). You 
cannot use the optional method of reporting for more than 5 taxable 
years, and you cannot report less than your actual net earnings from 
self-employment.
    (2) Computation. If your actual net earnings from self-employment 
are less than $1,600 and less than 66\2/3\ percent of your gross income, 
you may, at your

[[Page 318]]

option, report 66\2/3\ percent of your gross income (but not more than 
$1,600) as your net earnings from self-employment.

    Example: A operates a grocery store and files income tax returns on 
a calendar year basis. A meets the self-employed on a regular basis 
requirement because actual net earnings from self-employment were $400 
or more in 1976 and in 1977. Gross income and net profit from operating 
the grocery store in 1978 through 1980 are as follows:

------------------------------------------------------------------------
                                                 1978     1979     1980
------------------------------------------------------------------------
Gross income.................................   $2,800   $1,200   $1,000
Net profit...................................      300      400      800
------------------------------------------------------------------------

    For the year 1978, A may report as annual net earnings from self-
employment either--
    (i) None. (Actual net earnings from self-employment are less than 
$400); or
    (ii) $1,600. (Non-agricultural option, 66\2/3\ percent of $2,800, 
but not to exceed the $1,600 maximum.)
    For the year 1979, A may report as annual net earnings from self-
employment either--
    (i) $400. (Actual net earnings from self-employment); or
    (ii) $800. (Non-agricultural option, 66\2/3\ percent of $1,200.)
    For the year 1980, A must report $800, the actual net earnings from 
self-employment. The non-agricultural option is not available because 
A's actual net earnings are not less than 66\2/3\ percent of the gross 
income.

    (3) Figuring net earnings from both non-agricultural and 
agricultural self-employment. If you are self-employed on a regular 
basis, you may use the non-agricultural optional method of reporting 
when you have both non-agricultural and agricultural trades or 
businesses. However, in order to use this method, your actual net 
earnings from non-agricultural self-employment combined with your actual 
net earnings from agricultural self-employment, or your optional net 
earnings from agricultural self-employment, must be less than $1,600, 
and the net non-agricultural earnings must be less than 66\2/3\ percent 
of your gross non-agricultural income. If you qualify for using both the 
non-agricultural and agricultural option, you may report less than your 
actual total net earnings, but not less than your actual net earnings 
from non-agricultural self-employment alone. If you elect to use both 
options in a given taxable year, the combined maximum reportable net 
earnings from self-employment may not exceed $1,600.

    Example: C was regularly self-employed. She derived actual net 
earnings from self-employment of $400 or more in 1975 and in 1976. Her 
gross income and net profit from operating both a grocery store and a 
farm in 1978 are:

                              Grocery Store
Gross income...................................................   $1,000
Net profit.....................................................      800
                                  Farm
Gross income...................................................   $2,600
Net profit.....................................................      400
 

    For the year 1978, C may report $1,200 (actual net earnings from 
self-employment from both businesses), or $2,400 ($1,600 agricultural 
option (66\2/3\ percent of $2,600 farm gross income not to exceed 
$1,600) and $800 grocery store profit). C cannot use the non-
agricultural option for 1978 because her actual grocery store net 
exceeds 66\2/3\ percent of her grocery store gross income.

    (4) Self-employed on a regular basis. For any taxable year beginning 
after 1972, we consider you to be self-employed on a regular basis, or 
to be a member of a partnership on a regular basis, if, in at least 2 of 
the 3 taxable years immediately before that taxable year, you had actual 
net earnings from self-employment of not less than $400 from 
agricultural and non-agricultural trades or businesses (including your 
distributive share of the net income or loss from any partnership of 
which you are a member).
    (d) Members of partnerships. If you are a member of a partnership 
you may use the optional method of reporting. Your gross income is your 
distributive share of the partnership's gross income (after all 
guaranteed payments to which section 707(c) of the Code applies have 
been deducted), plus your own guaranteed payment.
    (e) Computing gross income. For purposes of this section gross 
income means--
    (1) Under the cash method of computing, the gross receipts from the 
trade or business reduced by the cost or other basis of property that 
was purchased and sold, minus any income that is excluded in computing 
net earnings from self-employment; or
    (2) Under the accrual method of computing, the gross income minus 
any income that is excluded in figuring net earnings from self-
employment.

[[Page 319]]

    (f) Exercise of option. For each taxable year for which you are 
eligible to use the optional method and elect to use that method, you 
must figure your net earnings from self-employment in that manner on 
your tax return for that year. If you wish to change your method of 
reporting after your tax return is filed, you may change it by filing an 
amended tax return with the Internal Revenue Service or by filing with 
us Form 2190, Change in Method of Computing Net Earnings from Self-
Employment.



Sec. 404.1095  Agricultural trade or business.

    (a) An agricultural trade or business is one in which, if the trade 
or business were carried on entirely by employees, the major portion of 
the services would be agricultural labor (Sec. 404.1057).
    (b)(1) If the services are partly agricultural and partly non-
agricultural, the time devoted to the performance of each type of 
service is the test used to determine whether the major portion of the 
services is agricultural labor.
    (2) If more than half of the time spent in performing all the 
services is spent in performing services that are agricultural labor, 
the trade or business is agricultural.
    (3) If half or less of the time spent in performing all the services 
is spent in performing services that are agricultural labor, the trade 
or business is not agricultural. The time spent in performing the 
services is figured by adding the time spent in the trade or business 
during the taxable year by every individual (including the individual 
carrying on the trade or business and the members of that individual's 
family).
    (c) We do not apply the rules in this section if the non-
agricultural services are performed in connection with a trade or 
business separate and distinct from the agricultural trade or business. 
A roadside automobile service station on a farm is a trade or business 
separate and distinct from the agricultural trade or business, and the 
gross income from the service station, less the deductions attributable 
to it, is to be considered in determining net earnings from self-
employment.
    (d) We consider a sharefarmer (see Sec. 404.1068(c)) or a materially 
participating owner or tenant (see Sec. 404.1082(c)) to be engaged in an 
agricultural trade or business. We use the rules in this section to 
determine whether a farm crew leader who is self-employed (see 
Sec. 404.1074) is engaged in an agricultural trade or business.



Sec. 404.1096  Self-employment income.

    (a) General. Self-employment income is the amount of your net 
earnings from self-employment that is subject to social security tax and 
counted for social security benefit purposes. The term self-employment 
income means the net earnings from self-employment you derive in a 
taxable year, except as described in paragraphs (b), (c) and (d) of this 
section.
    (b) Maximum self-employment income. (1) The term self-employment 
income does not include that part of your net earnings from self-
employment that exceeds (or that part of your net earnings from self-
employment which, when added to the wages you received in that taxable 
year, exceeds)--

------------------------------------------------------------------------
                        Taxable year                            Amount
------------------------------------------------------------------------
Ending before 1955.........................................       $3,600
Ending in 1955 through 1958................................        4,200
Ending in 1959 through 1965................................        4,800
Ending in 1966 and 1967....................................        6,600
Ending after 1967 and beginning before 1972................        7,800
Beginning in 1972..........................................        9,000
Beginning in 1973..........................................       10,800
Beginning in 1974..........................................       13,200
Beginning in 1975..........................................       14,100
Beginning in 1976..........................................       15,300
Beginning in 1977..........................................       16,500
Beginning in 1978..........................................       17,700
Beginning in 1979..........................................       22,900
Beginning in 1980..........................................       25,900
Beginning in 1981..........................................       29,700
Beginning in 1982..........................................       32,400
Beginning in 1983..........................................       35,700
Beginning in 1984..........................................       37,800
Beginning in 1985..........................................       39,600
Beginning in 1986..........................................       42,000
Beginning in 1987..........................................       43,800
Beginning in 1988..........................................       45,000
Beginning in 1989..........................................       48,000
Beginning in 1990..........................................       51,300
Beginning in 1991..........................................       53,400
Beginning in 1992..........................................       55,500
------------------------------------------------------------------------

    (2) For the purpose of this paragraph the term wages includes 
remuneration paid to an employee for services covered by an agreement 
entered into under section 218 of the Act, or an agreement entered into 
under section 3121(l) of the Code, which would be

[[Page 320]]

wages under section 209 of Act if the services were considered 
employment under section 210(a) of the Act.
    (c) Minimum net earnings from self employment. (1) Self-employment 
income does not include your net earnings from self-employment when the 
amount of those earnings for the taxable year is less than $400. If you 
have only $300 of net earnings from self-employment for the taxable year 
you would not have any self-employment income. (Special rules apply if 
you are paid $100 or more and work for a church or church-controlled 
organization that has exempted its employees (see Sec. 404.1068(f)).)
    (2) If you have net earnings from self-employment of $400 or more 
for the taxable year you may have less than $400 of creditable self-
employment income. This occurs where your net earnings from self-
employment is $400 or more for a taxable year and the amount of your net 
earnings from self-employment plus the amount of the wages paid to you 
during that taxable year exceed the maximum creditable earnings for a 
year. For example, if you had net earnings from self-employment of 
$1,000 for 1978, and were also paid wages of $17,500 during 1978, your 
creditable self-employment income for 1978 would be $200.
    (d) Nonresident aliens. A nonresident alien has self-employment 
income only if coverage is provided under a totalization agreement [see 
Sec. 404.1913]. We do not consider an individual who is a resident of 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the 
Commonwealth of the Northern Mariana Islands, or American Samoa to be a 
nonresident alien.

[45 FR 20075, Mar. 27, 1980, as amended at 50 FR 36575, Sept. 9, 1985; 
52 FR 8250, Mar. 17, 1987; 57 FR 44098, Sept. 24, 1992; 69 FR 51556, 
Aug. 20, 2004]

Subpart L [Reserved]



     Subpart M_Coverage of Employees of State and Local Governments

    Authority: Secs. 205, 210, 218, and 702(a)(5) of the Social Security 
Act (42 U.S.C. 405, 410, 418, and 902(a)(5)); sec. 12110, Pub. L. 99-
272, 100 Stat. 287 (42 U.S.C. 418 note); sec. 9002, Pub. L. 99-509, 100 
Stat. 1970.

    Source: 53 FR 32976, Aug. 29, 1988, unless otherwise noted.

                                 General



Sec. 404.1200  General.

    (a) Coverage under section 218 of the Act. Under section 218 of the 
Social Security Act (the Act) a State may ask the Commissioner of Social 
Security to enter into an agreement to extend Federal old-age, 
survivors, disability and hospital insurance coverage to groups of 
employees of the State and its political subdivisions. The Commissioner 
shall enter into such an agreement. State and local government 
employees, after being covered under an agreement, have the same benefit 
rights and responsibilities as other employees who are mandatorily 
covered under the programs. For payments due on wages paid before 1987, 
the State assumes full financial and reporting responsibility for all 
groups covered under its agreement. The agreement may not be terminated 
in its entirety or with respect to any coverage group under that 
agreement. For payments due on wages paid in the year 1987 and years 
later, section 9002 of Pub. L. 99-509 amends section 218 of the Act by 
transferring responsibility for collecting contributions due and 
receiving wage reports from the Social Security Administration (SSA) to 
the Internal Revenue Service (IRS). Sections of the regulations wholly 
or partly affected by this amendment to the Act are appended with the 
phrase ``--for wages paid prior to 1987.''
    (b) Mandatory old-age, survivors, disability, and hospital insurance 
coverage. Under section 210(a)(7)(F) of the Act, mandatory old-age, 
survivors, disability, and hospital insurance coverage is extended to 
certain services performed after July 1, 1991, by individuals who are 
employees of a State (other than the District of Columbia, Guam, the 
Commonwealth of the Northern Mariana Islands, or American Samoa), a 
political subdivision of the State, or any wholly owned instrumentality 
of one or more of the foregoing, and who are not members of the 
employer's retirement system. Certain

[[Page 321]]

services are excluded from such mandatory coverage (see 
Sec. 404.1020(a)(3).

[53 FR 32976, Aug. 29, 1988, as amended at 57 FR 59911, Dec. 17, 1992; 
62 FR 38450, July 18, 1997; 69 FR 51556, Aug. 20, 2004]



Sec. 404.1201  Scope of this subpart regarding coverage and wage 
reports and adjustments.

    This subpart contains the rules of SSA about:
    (a) Coverage under section 218 of the Act--
    (1) How a State enters into and modifies an agreement; and
    (2) What groups of employees a State can cover by agreement.
    (b) Contributions, wage reports, and adjustments--for wages paid 
prior to 1987--
    (1) How a State must identify covered employees and what records it 
must keep on those employees;
    (2) Periodic reviews of the source records kept on covered 
employees;
    (3) How and when a State must report wages and pay contributions;
    (4) What the State's liability for contributions is and how SSA 
figures the amount of those contributions;
    (5) What happens if a State fails to pay its contributions timely;
    (6) How errors in reports and contribution payments are corrected;
    (7) How overpayments of contributions are credited or refunded;
    (8) How assessments are made if contributions are underpaid; and
    (9) How a State can obtain administrative or judicial review of a 
decision on a credit, refund, or assessment.

[53 FR 32976, Aug. 29, 1988, as amended at 57 FR 59911, Dec. 17, 1992; 
65 FR 16813, Mar. 30, 2000]



Sec. 404.1202  Definitions.

    (a) Terms which have special meaning in this subpart are described 
in this section. Where necessary, further explanation is included in the 
section where the term is used.
    (b) Coverage terms:
    Agreement--The agreement between the Commissioner of Social Security 
and the State containing the conditions under which retirement, 
survivors, disability and hospital insurance coverage is provided for 
State and local government employees.
    Coverage--The extension of Social Security protection (retirement, 
survivors, disability, and hospital insurance) by agreement between the 
Commissioner of Social Security and a State to employees of the State 
and its political subdivisions or by agreement between the Commissioner 
of Social Security and an interstate instrumentality to employees of the 
interstate instrumentality.
    Coverage group--The grouping by which employees are covered under an 
agreement.
    Employee--An employee as defined in section 210(j) of the Act. 
Usually, the common-law control test is used in determining whether an 
employer-employee relationship exists. The term also includes an officer 
of a State or political subdivision.
    Governmental function--The traditional functions of government: 
legislative, executive, and judicial.
    Interstate instrumentality--An independent legal entity organized by 
two or more States to carry out one or more functions. For Social 
Security coverage purposes under section 218 of the Act, an interstate 
instrumentality is treated, to the extent practicable, as a ``State.''
    Modification--A change to the agreement between the Commissioner of 
Social Security and a State which provides coverage of the services of 
employees not previously covered or which alters the agreement in some 
other respect.
    Political subdivision--A separate legal entity of a State which 
usually has specific governmental functions. The term ordinarily 
includes a county, city, town, village, or school district, and in many 
States, a sanitation, utility, reclamation, drainage, flood control, or 
similar district. A political subdivision includes an instrumentality of 
a State, one or more politicial subdivisions of a State, or a State and 
one or more of its political subdivisions.
    Proprietary function--A business engaged in by a State or political 
subdivision such as a public amusement park or public parking lot.

[[Page 322]]

    Retirement system--A pension, annuity, retirement, or similar fund 
or system established by a State or political subdivision.
    SSA--The Social Security Administration.
    State--Includes the fifty States, Puerto Rico, and the Virgin 
Islands. It does not include the District of Columbia, Guam, the 
Commonwealth of the Northern Mariana Islands, or American Samoa. 
``State'' also refers to an interstate instrumentality where applicable.
    We--The Social Security Administration.
    (c) Contributions, wage reporting, and adjustment terms--for wages 
paid prior to 1987:
    Allowance of a credit or refund--The written notice to a State of 
the determination by SSA of the amount owed to the State by SSA, the 
period involved, and the basis for the determination.
    Assessment--The written notice to a State of the determination by 
SSA of the amount (contributions or accrued interest) owed to SSA by the 
State, the period involved, and the basis for the determination.
    Contributions--Payments made under an agreement which the State 
deposits in a Federal Reserve bank. The amounts are based on the wages 
paid to employees whose services are covered under an agreement. These 
amounts are equal to the taxes imposed under the Internal Revenue Code 
on emp1oyers and employees in private employment.
    Contribution return--Form used to identify and account for all 
contributions actions.
    Disallowance of a State's claim for credit or refund--The written 
notice to a State of the determination by SSA that the State's claim for 
credit or refund is denied, the period involved, and the basis for the 
determination.
    Overpayment--A payment of more than the correct amount of 
contributions or interest.
    Underpayment--A payment of less than the correct amount of 
contributions or interest.
    Wage reports--Forms used to identify employees who were paid wages 
for covered employment and the amounts of those wages paid. This 
includes corrective reports.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38450, July 18, 1997; 
69 FR 51556, Aug. 20, 2004]



Sec. 404.1203  Evidence--for wages paid prior to 1987.

    (a) State's responsibility for submitting evidence. The State, under 
the provisions of the agreement, is responsible for accurately reporting 
the wages paid employees for services covered by the agreement and for 
paying the correct amount of contributions due on those wages. This 
responsibility includes submitting evidence to verify the accuracy of 
the reports and payments.
    (b) Failure to submit requested evidence. The State is required to 
submit information timely to SSA. If we request additional evidence to 
verify the accuracy of reports and payments, we specify when that 
evidence must be submitted. If we do not receive the evidence timely, 
and the State provides no satisfactory explanation for its failure to 
submit the evidence timely, we may proceed, if appropriate, on the basis 
of the information we have. Proceeding on the basis of the information 
we have permits us to credit the wage records of employees properly, 
where possible, while continuing to work with the State to resolve 
remaining discrepancies.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1204  Designating officials to act on behalf of the State.

    (a) Each State which enters into an agreement shall designate the 
official or officials authorized to act on the State's behalf in 
administering the agreement. Each State shall inform SSA of the name, 
title, and address of the designated official(s) and the extent of each 
official's authority. For example, a State may indicate that the State 
official is authorized:
    (1) To enter into an agreement and execute modifications to the 
agreement; and

[[Page 323]]

    (2) To carry out the ministerial duties necessary to administer the 
agreement.
    For wages paid prior to 1987:
    (3) To enter into agreements to extend or re-extend the time limit 
for assessment or credit;
    (4) To make arrangements in connection with onsite reviews; and
    (5) To request administrative review of an assessment, an allowance 
of a credit or refund, or a disallowance of a credit or refund.
    (b) Each State shall inform SSA timely of changes in designated 
officials or changes in their authority.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]

                 What Groups of Employees May Be Covered



Sec. 404.1205  Absolute coverage groups.

    (a) General. An absolute coverage group is a permanent grouping of 
employees, e.g., all the employees of a city or town. It is a coverage 
group for coverage and reporting purposes. When used for coverage 
purposes, the term refers to groups of employees whose positions are not 
under a retirement system. An absolute coverage group may include 
positions which were formerly under a retirement system and, at the 
State's option, employees who are in positions under a retirement system 
but who are ineligible (see Sec. 404.1208) to become members of that 
system.
    (b) What an absolute coverage group consists of. An absolute 
coverage group consists of one of the following employee groups:
    (1) State employees performing services in connection with the 
State's governmental functions;
    (2) State employees performing services in connection with a single 
proprietary function of the State;
    (3) Employees of a State's political subdivision performing services 
in connection with that subdivision's governmental functions;
    (4) Employees of a State's political subdivision performing services 
in connection with a single proprietary function of the subdivision;
    (5) Civilian employees of a State's National Guard units; and
    (6) Individuals employed under an agreement between a State and the 
U.S. Department of Agriculture as agricultural products inspectors.
    (c) Designated coverage groups. A State may provide coverage for 
designated (i.e., selected) absolute coverage groups of the State or a 
political subdivision. When coverage is extended to these designated 
groups, the State must specifically identify each group as a designated 
absolute coverage group and furnish the effective date of coverage and 
any optional exclusion(s) for each group. Where a State has provided 
coverage to designated absolute coverage groups, the State may, by 
modifying its agreement, extend that coverage to any absolute coverage 
group in the State.



Sec. 404.1206  Retirement system coverage groups.

    (a) General. Section 218(d) of the Act authorizes coverage of 
services of employees in positions under a retirement system. For 
purposes of obtaining coverage, a system may be considered a separate 
retirement system authorized by sections 218(d)(6) (A) or (B) or 218(l) 
of the Act. Under these sections of the Act a State may designate the 
positions of any one of the following groupings of employees as a 
separate retirement system:
    (1) The entire system;
    (2) The employees of the State under the system;
    (3) The employees of each political subdivision in the State under 
the system;
    (4) The employees of the State and the employees of any one or more 
of the State's political subdivisions;
    (5) The employees of any combination of the State's political 
subdivisions;
    (6) The employees of each institution of higher learning, including 
junior colleges and teachers colleges;
    (7) The employees of a hospital which is an integral part of a 
political subdivision; or
    (8) The employees in police officers' positions or firefighters' 
positions, or both.

[[Page 324]]


If State law requires a State or political subdivision to have a 
retirement system, it is considered established even though no action 
has been taken to establish the system.
    (b) Retirement system coverage groups. A retirement system coverage 
group is a grouping of employees in positions under a retirement system. 
Employees in positions under the system have voted for coverage for the 
system by referendum and a State has provided coverage by agreement or 
modification of its agreement. It is not a permanent grouping. It exists 
only for referendum and coverage purposes and is not a separate group 
for reporting purposes. Once coverage has been obtained, the retirememt 
system coverage group becomes part of one of the absolute coverage 
groups described in Sec. 404.1205(b).
    (c) What a retirement system coverage group consists of. A 
retirement system coverage group consists of:
    (1) Current employees--all employees whose services are not already 
covered by the agreement, who are in positions covered by the same 
retirement system on the date an agreement or modification of the 
agreement is made applicable to the system;
    (2) Future employees--all employees in positions brought under the 
system after an agreement or modification of the agreement is signed; 
and
    (3) Other employees--all employees in positions which had been under 
the retirement system but which were not under the retirement system 
when the group was covered (including ineligibles who had been 
optionally excluded from coverage under section 218(c)(3)(B) of the 
Act).
    (d) Referendum procedures. Prior to signing the agreement or 
modification, the governor or an official of the State named by the 
governor (for an interstate instrumentality, its chief executive 
officer) must certify to the Commissioner that:
    (1) All eligible employees were given at least 90 days' notice of 
the referendum;
    (2) All eligible employees were given an opportunity to vote in the 
referendum;
    (3) Only eligible employees were permitted to vote in the 
referendum;
    (4) Voting was by secret written ballot on the question of whether 
service in positions covered by the retirement system should be included 
under an agreement;
    (5) The referendum was conducted under the supervision of the 
governor or agency or individual named by him; and
    (6) A majority of the retirement system's eligible employees voted 
for coverage under an agreement.

The State has two years from the date of a favorable referendum to enter 
into an agreement or modification extending coverage to the retirement 
system coverage group. If the referendum is unfavorable, another 
referendum cannot be held until at least one year after that unfavorable 
referendum.
    (e) Who is covered. If a majority of the eligible employees in a 
retirement system vote for coverage, all employees in positions in that 
retirement system become covered.
    (f) Coverage of employees in positions under more than one 
retirement system. (1) If an employee occupies two or more positions 
each of which is under a different retirement system, the employee's 
coverage in each position depends upon the coverage extended to each 
position under each system.
    (2) If an employee is in a single position which is under more than 
one retirement system (because the employee's occupancy of that position 
permits her or him to become a member of more than one retirement 
system), the employee is covered when the retirement system coverage 
group including her or his position is covered under an agreement unless 
(A) he or she is not a member of the retirement system being covered and 
(B) he or she is a member of a retirement system which has not been 
covered. This rule also applies to the coverage of services in police 
officers' and firefighters' positions in States and interstate 
instrumentalities as discussed in Sec. 404.1212(c).

[53 FR 32976, Aug. 29, 1988, as amended at 61 FR 38367, July 24, 1996; 
62 FR 38451, July 18, 1997]



Sec. 404.1207  Divided retirement system coverage groups.

    (a) General. Under section 218(d)(6)(C) of the Act certain States 
and under

[[Page 325]]

section 218(g)(2) of the Act all interstate instrumentalities may divide 
a retirement system based on whether the employees in positions under 
that system want coverage. The States having this authority are Alaska, 
California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kentucky, 
Louisiana, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New 
York, North Dakota, Pennsylvania, Rhode Island, Tennessee, Texas, 
Vermont, Washington, and Wisconsin.
    (b) Divided retirement system coverage group. A divided retirement 
system coverage group is a grouping under a retirement system of 
positions of members of the system who voted for coverage and positions 
of individuals who become members of the system (the ``yes'' group), and 
positions of members of the system who did not elect coverage (the 
``no'' group) and ineligible employees (see Sec. 404.1208). For purposes 
of this section for groups covered after 1959, the term ``member'' also 
includes individuals who have an option to become members of the 
retirement system but have not done so. The position of a member in the 
``no'' group can be covered if, within two years after the agreement or 
modification extending coverage to the ``yes'' group is executed, the 
State provides an opportunity to transfer the position to the covered 
``yes'' group and the individual occupying the position makes a written 
request for the transfer. The members of the ``no'' group can also be 
covered if, by referendum, a majority of them vote for coverage. If the 
majority votes for coverage, all positions of the members of the ``no'' 
group become covered. There is no further subdivision of the ``no'' 
group into those who voted for and those who voted against coverage. If 
the State requests, the ineligibles in the ``no'' group may become part 
of the ``yes'' group and have their services covered.
    (c) Referendum procedures. To divide a retirement system, the State 
must conduct a referendum among the system's employees. If the system is 
to be divided, the governor or an individual named by him must certify 
to the Secretary that:
    (1) The referendum was held by written ballot on the question of 
whether members of a retirement system wish coverage under an agreement;
    (2) All members of the retirement system at the time the vote was 
held had the opportunity to vote;
    (3) All members of the system on the date the notice of the 
referendum was issued were given at least 90 days' notice regarding the 
referendum;
    (4) The referendum was conducted under the supervision of the 
governor or agency or person designated by him; and
    (5) The retirement system was divided into two parts, one composed 
of positions of members of the system who voted for coverage and the 
other composed of the remaining positions under the retirement system.

After the referendum the State may include those members who chose 
coverage under its agreement as a retirement system coverage group. The 
State has two years from the date of the referendum to enter into an 
agreement or modification extending coverage to that group.

[53 FR 32976, Aug. 29, 1988, as amended at 70 FR 41956, July 21, 2005]



Sec. 404.1208  Ineligible employees.

    (a) Definition. An ineligible is an employee who, on first occupying 
a position under a retirement system, is not eligible for membership in 
that system because of a personal disqualification like age, physical 
condition, or length of service.
    (b) Coverage of ineligible employees. A State may, in its agreement 
or any modification to the agreement, provide coverage for the services 
of ineligible employees in one of three ways:
    (1) As part of or as an addition to an absolute coverage group;
    (2) As part of a retirement system coverage group covering all 
positions under the retirement system; or
    (3) As part of or as an addition to a retirement system coverage 
group composed of those members in positions in a retirement system who 
chose coverage.



Sec. 404.1209  Mandatorily excluded services.

    Some services are mandatorily excluded from coverage under a State's 
agreement. They are:

[[Page 326]]

    (a) Services of employees who are hired to relieve them from 
unemployment;
    (b) Services performed in an institution by a patient or inmate of 
the institution;
    (c) Transportation service subject to the Federal Insurance 
Contributions Act;
    (d) Certain emergency services in case of fire, storm, snow, 
volcano, earthquake, flood or other similar emergency; and
    (e) Services other than agricultural labor or student services which 
would be excluded from coverage if performed for a private employer.
    (f) Services covered under section 210(a)(7)(F) of the Act. (See 
Sec. 404.1200(b).)

[53 FR 32976, Aug. 29, 1988, as amended at 57 FR 59911, Dec. 17, 1992]



Sec. 404.1210  Optionally excluded services.

    Certain services and positions may, if the State requests it, be 
excluded from coverage. These exclusions may be applied on a statewide 
basis or selectively by coverage groups. They are:
    (a) Services in any class or classes of elective positions;
    (b) Services in any class or classes of part-time positions;
    (c) Services in any class or classes of positions where the pay is 
on a fee basis;
    (d) Any agricultural labor or student services which would also be 
excluded if performed for a private employer; and
    (e) For modifications executed after 1994, services performed by 
election officials or election workers if the payments for those 
services in a calendar year are less than $1000 for calendar years after 
1994 and before 2000, or, for calendar years after 1999, are less than 
the $1000 base amount as adjusted pursuant to section 218(c)(8)(B) of 
the Act to reflect changes in wages in the economy. We will publish this 
adjustment of the $1000 base amount in the Federal Register on or before 
November 1 preceding the year for which the adjustment is made.

[53 FR 32976, Aug. 29, 1988, as amended at 61 FR 38367, July 24, 1996]



Sec. 404.1211  Interstate instrumentalities.

    For Social Security coverage purposes under section 218 of the Act, 
interstate instrumentalities are treated, to the extent practicable, as 
States, that is:
    (a) They must be legally authorized to enter into an agreement with 
the Commissioner;
    (b) They are subject to the same rules that are applied to the 
States;
    (c) They may divide retirement systems and cover only the positions 
of members who want coverage; and
    (d) They may provide coverage for firefighters and police officers 
in positions under a retirement system.

[53 FR 32976, Aug. 29, 1988, as amended at 61 FR 38368, July 24, 1996; 
62 FR 38451, July 18, 1997]



Sec. 404.1212  Police officers and firefighters.

    (a) General. For Social Security coverage purposes under section 218 
of the Act, a police officer's or firefighter's position is any position 
so classified under State statutes or court decisions. Generally, these 
positions are in the organized police and fire departments of 
incorporated cities, towns, and villages. In most States, a police 
officer is a member of the ``police'' which is an organized civil force 
for maintaining order, preventing and detecting crimes, and enforcing 
laws. The terms ``police officer'' and ``firefighter'' do not include 
services in positions which, although connected with police and 
firefighting functions, are not police officer or firefighter positions.
    (b) Providing coverage. A State may provide coverage of:
    (1) Police officers' and firefighters' positions not under a 
retirement system as part of an absolute coverage group; or
    (2) Police officers' or firefighters' positions, or both, as part of 
a retirement system coverage group.
    (c) Police officers and firefighters in positions under a retirement 
system. All States and interstate instrumentalities may provide coverage 
for employees in police officers' or firefighters' positions, or both, 
which are under a retirement system by following the majority vote 
referendum procedures in

[[Page 327]]

Sec. 404.1206(d). In addition, all interstate instrumentalities and the 
States listed in Sec. 404.1207 may use the desire for coverage 
procedures described in Sec. 404.1207.

[61 FR 38368, July 24, 1996]

         How Coverage Under Agreements Is Obtained and Continues



Sec. 404.1214  Agreement for coverage.

    (a) General. A State may enter into a written agreement with the 
Commissioner to provide for Social Security coverage for its employees 
or the employees of one or more of its political subdivisions. An 
interstate instrumentality may enter into a similar agreement for its 
employees. These agreements cover employees in groups of positions or by 
types of services rather than the individual employees.
    (b) Procedures. A State or interstate instrumentality may request 
coverage by submitting to SSA a proposed written agreement for the 
desired coverage.
    (c) Authority to enter into an agreement for coverage--(1) Federal 
law. Section 218(a) of the Act requires the Commissioner to enter into 
an agreement, at the request of the State, to extend Social Security 
coverage to the State's employees or those of its political 
subdivisions. Section 218(g) authorizes the Commissioner to enter into 
an agreement, at the request of an interstate instrumentality, to extend 
Social Security coverage to the employees of the interstate 
instrumentality.
    (2) State law. State law must authorize a State or an interstate 
instrumentality to enter into an agreement with the Commissioner for 
Social Security coverage.
    (d) Provisions of the agreement. The agreement must include:
    (1) A description of the specific services to be covered and 
excluded;
    (2) The State's promise to pay, to the Secretary of the Treasury, 
contributions equal to the sum of the taxes which would be required 
under the Federal Insurance Contributions Act from employers and 
employees if the employment were in the private sector;
    (3) The State's promise to comply with the regulations the 
Commissioner prescribes for carrying out the provisions of section 218 
of the Act; and
    (4) Identification of the political subdivisions, coverage groups, 
or services being covered and the services that are excluded.


The agreement must be signed by the authorized State or interstate 
instrumentality official and the Commissioner or his or her designee.
    (e) Effective date. The agreement must specify an effective date of 
coverage. However, the effective date cannot be earlier than the last 
day of the sixth calendar year preceding the year in which the agreement 
is mailed or delivered by other means to the Commissioner. The agreement 
is effective after the effective date.
    (f) Applicability of agreement. The agreement establishes the 
continuing relationship between the Commissioner and the State or 
interstate instrumentality except as it is modified (see Secs. 404.1215-
404.1217).

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997; 
66 FR 28836, May 25, 2001]



Sec. 404.1215  Modification of agreement.

    (a) General. A State or interstate instrumentality may modify in 
writing its agreement, for example, to:
    (1) Exclude, in limited situations, employee services or positions 
previously covered;
    (2) Include additional coverage groups; or
    (3) Include as covered services:
    (i) Services of covered employees for additional retroactive periods 
of time; and
    (ii) Services previously excluded from coverage.
    (b) Controlling date for retroactive coverage. A State may specify 
in the modification a date to make all individuals in the coverage group 
who were in an employment relationship on that date eligible for 
retroactive coverage. This date is known as the controlling date for 
retroactive coverage. It can be no earlier than the date the 
modification is mailed or otherwise delivered to the Commissioner nor 
can it be later than the date the modification is signed by the 
Commissioner. If the State does not designate a controlling date, the

[[Page 328]]

date the modification is signed by the Commissioner is the controlling 
date.
    (c) Conditions for modification. The provisions of section 218 of 
the Act which apply to the original agreement also apply to a 
modification to the agreement.
    (d) Effective date. Generally, a modification must specify an 
effective date of coverage. However, the effective date cannot be 
earlier than the last day of the sixth calendar year preceding the year 
in which the modification is mailed or delivered by other means to the 
Commissioner. The modification is effective after the effective date.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997; 
66 FR 28836, May 25, 2001]



Sec. 404.1216  Modification of agreement to correct an error.

    (a) General. If an agreement or modification contains an error, the 
State may correct the error by a subsequent modification to the 
agreement. For example, the agreement or modification incorrectly lists 
a covered service as an optionally excluded service or shows an improper 
effective date of coverage. In correcting this type of error, which 
affects the extent of coverage, the State must submit a modification 
along with evidence to establish that the error occurred. However, a 
modification is not needed to correct minor typographical or clerical 
errors. For example, an agreement or modification incorrectly lists 
School District No. 12 as School District No. 13. This type of error can 
be corrected based on a written request from the appropriate official of 
the State or interstate instrumentality.
    (b) Correction of errors involving erroneous reporting to the IRS--
for wages paid prior to 1987. Where a State or political subdivision 
makes reports and payments to the Internal Revenue Service under the 
provisions of the Federal Insurance Contributions Act which apply to 
employees in private employment in the mistaken belief that this action 
would provide coverage for its employees, the State may provide the 
desired coverage for those same periods of time by a subsequent 
modification to its agreement. If State law permits, the State may make 
that coverage effective with the first day of the first period for which 
the erroneous reports and payments were made. (In this instance, the 
limitation on retroactive coverage described in Sec. 404.1215(d) is not 
applicable.) Where the State does not want to provide such retroactive 
coverage or is not permitted to do so by State law, the State may 
provide the coverage for the affected coverage group as of a specified 
date (Sec. 404.1215(b)). The coverage would then apply to the services 
performed by individuals as members of the coverage group
    (1) Who were employees on that date, and
    (2) Whose wages were erroneously reported to IRS, and
    (3) For whom a refund of FICA taxes has not been obtained at the 
time the Commissioner.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997; 
66 FR 28836, May 25, 2001]



Sec. 404.1217  Continuation of coverage.

    The coverage of State and local government employees continues as 
follows:
    (a) Absolute coverage group. Generally, the services of an employee 
covered as a part of an absolute coverage group (see Sec. 404.1205) 
continue to be covered indefinitely. A position covered as a part of an 
absolute coverage group continues to be covered even if the position 
later comes under a retirement system. This includes policemen's and 
firemen's positions which are covered with an absolute coverage group.
    (b) Retirement system coverage group. Generally, the services of 
employees in positions covered as a part of a retirement system coverage 
group continue to be covered indefinitely. For a retirement system 
coverage group made up of members who chose coverage, a position 
continues to be covered until it is removed from the retirement system 
and is no longer occupied by a member who chose coverage or by a new 
member of the system. Coverage is not terminated because the positions 
are later covered under additional retirement

[[Page 329]]

systems or removed from coverage under a retirement system, or because 
the retirement system is abolished with respect to the positions. 
However, if the retirement system has been abolished, newly created or 
reclassified positions or positions in a newly created political 
subdivision cannot be covered as a part of the retirement system 
coverage group. If the retirement system is not abolished, a newly 
created or reclassified position is a part of the coverage group if the 
position would have been a part of the group had it existed earlier. If 
the retirement system coverage group is made up of members who chose 
coverage, the newly created or reclassified position is a part of the 
coverage group if it is occupied by a member who chose coverage or by a 
new member.



Sec. 404.1218  Resumption of coverage.

    Before April 20, 1983, an agreement could be terminated in its 
entirety or with respect to one or more coverage groups designated by 
the State. Coverage of any coverage group which has been previously 
terminated may be resumed by a modification to the agreement.



Sec. 404.1219  Dissolution of political subdivision.

    If a political subdivision whose employees are covered under the 
agreement is legally dissolved, the State shall give us satisfactory 
evidence of its dissolution or nonexistence. The evidence must establish 
that the entity is not merely inactive or dormant, but that it no longer 
legally exists. We will notify the State whether the evidence is 
satisfactory.

                    How To Identify Covered Employees



Sec. 404.1220  Identification numbers.

    (a) State and local governments. When a State submits a modification 
to its agreement under section 218 of the Act, which extends coverage to 
periods prior to 1987, SSA will assign a special identification number 
to each political subdivision included in that modification. SSA will 
send the State a Form SSA-214-CD, ``Notice of Identifying Number,'' to 
inform the State of the special identification number(s). The special 
number will be used for reporting the pre-1987 wages to SSA. The special 
number will also be assigned to an interstate instrumentality if pre-
1987 coverage is obtained and SSA will send a Form SSA-214-CD to the 
interstate instrumentality to notify it of the number assigned.
    (b) Coverage group number for coverage groups. If a State's 
agreement provides coverage for a State or a political subdivision based 
on designated proprietary or governmental functions, the State shall 
furnish a list of those groups. The list shall identify each designated 
function and the title and business address of the official responsible 
for filing each designated group's wage report. SSA assigns a coverage 
group number to each designated group based on the information furnished 
in the list.
    (c) Unit numbers for payroll record units. SSA assigns, at a State's 
request, unit numbers to payroll record units within a State or 
political subdivision. When a State requests separate payroll record 
unit numbers, it must furnish the following:
    (1) The name of each payroll record unit for the coverage group; and
    (2) The title and business address of the official responsible for 
each payroll unit.
    (d) Unit numbers where contribution amounts are limited--for wages 
paid prior to 1987. An agreement, or modification of an agreement, may 
provide for the computation of contributions as prescribed in 
Sec. 404.1256 for some employees of a political subdivision. In this 
situation, SSA assigns special unit numbers to the political subdivision 
to identify those employees. SSA does not assign a special unit number 
to a political subdivision in which the contributions for all employees 
are computed as prescribed in Sec. 404.1256.
    (e) Use. For wages paid prior to 1987, the employer shall show the 
appropriate SSA-issued identifying number,

[[Page 330]]

including any coverage group or payroll record unit number, on records, 
reports, returns, and claims to report wages, adjustments, and 
contributions.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 60 FR 42433, Aug. 16, 1995; 
64 FR 33016, June 21, 1999; 66 FR 28836, May 25, 2001]

                  What Records of Coverage Must Be Kept



Sec. 404.1225  Records--for wages paid prior to 1987.

    (a) Who keeps the records. Every State which enters into an 
agreement shall keep, or require the political subdivisions whose 
employees are included under its agreement to keep, accurate records of 
all remuneration (whether in cash or in a medium other than cash) paid 
to employees performing services covered by that agreement. These 
records shall show for each employee:
    (1) The employee's name, address, and Social Security number;
    (2) The total amount of remuneration (including any amount withheld 
as contributions or for any other reason) and the date the remuneration 
was paid and the period of services covered by the payment;
    (3) The amount of remuneration which constitutes wages (see 
Sec. 404.1041 for wages and Secs. 404.1047-404.1059 for exclusions from 
wages); and
    (4) The amount of the employee's contribution, if any, withheld or 
collected, and if collected at a time other than the time such payment 
was made, the date collected. If the total remuneration (paragraph 
(a)(2) of this section) and the amount which is subject to contribution 
(paragraph (a)(3) of this section) are not equal, the reason shall be 
stated.

The State shall keep copies of all returns, reports, schedules, and 
statements required by this subpart, copies of claims for refund or 
credit, and copies of documents about each adjustment made under 
Sec. 404.1265 or Sec. 404.1271 as part of its records. These records may 
be maintained by the State or, for employees of a political subdivision, 
by the political subdivision. Each State shall use forms and systems of 
accounting as will enable the Commissioner to determine whether the 
contributions for which the State is liable are correctly figured and 
paid.
    (b) Place and period of time for keeping records. All records 
required by this section shall:
    (1) Be kept at one or more convenient and safe locations accessible 
to reviewing personnel (see Sec. 404.1232(a));
    (2) Be available for inspection by reviewing personnel at any time; 
and
    (3) Be maintained for at least four years from the date of the event 
recorded. (This four-year requirement applies regardless of whether, in 
the meantime, the employing entity has been legally dissolved or, before 
April 20, 1983, the agreement was terminated in its entirety or in 
part.)

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997; 
66 FR 28836, May 25, 2001]

            Review of Compliance by State With Its Agreement



Sec. 404.1230  Onsite review program.

    To ensure that the services of employees covered by a State's 
agreement are reported and that those employees receive Social Security 
credit for their covered earnings, we periodically review the source 
records upon which a State's contribution returns and wage reports are 
based. These reviews are designed:
    (a) To measure the effectiveness of the State's systems for ensuring 
that all wages for those employees covered by its agreement are reported 
and Social Security contributions on those wages are paid;
    (b) To detect any misunderstanding of coverage or reporting errors 
and to advise the State of the corrective action it must take; and
    (c) To find ways to improve a State's recordkeeping and reporting 
operations for the mutual benefit of the State and SSA.



Sec. 404.1231  Scope of review.

    The onsite review focuses on four areas:
    (a) State's controls and recordkeeping--to assess a State's systems

[[Page 331]]

for assuring timely receipt, correctness, and completeness of wage 
reports and contribution returns;
    (b) Instruction, education, and guidance a State provides local 
reporting officials--to assess a State's systems for assuring on a 
continuing basis that all reporting officials and their staffs have the 
necessary instructions, guidelines, and training to meet the State's 
coverage, reporting and recordkeeping requirements;
    (c) Compliance by reporting officials--to assess a State's systems 
for assuring that the reporting officials in the State have adequate 
recordkeeping procedures, are properly applying the appropriate 
provisions of the State's agreement, and are complying with reporting 
requirements; and
    (d) Quality control with prompt corrective action--to assess a 
State's systems for assuring that its reports and those of its political 
subdivisions are correct, for identifying the causes and extent of any 
deficiencies, and for promptly correcting these deficiencies.



Sec. 404.1232  Conduct of review.

    (a) Generally, SSA staff personnel conduct the onsite review. 
Occasionally, members of the Office of the Inspector General may conduct 
or participate in the review.
    (b) The review is done when considered necessary by SSA or, if 
practicable, in response to a State's specific request for a review.
    (c) All pertinent source records prepared by the State or its 
political subdivisions are reviewed, on site, to verify the wage reports 
and contribution returns. We may review with the appropriate employees 
in a subdivision those source records and how the information is 
gathered, processed, and maintained. We notify the State's Social 
Security Administrator when we plan to make the review and request her 
or him to make the necessary arrangements.
    (d) The review is a cooperative effort between SSA and the States to 
improve the methods for reporting and maintaining wage data to carry out 
the provisions of the agreement.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]



Sec. 404.1234  Reports of review's findings.

    We provide the State Social Security Administrator with reports of 
the review's findings. These reports may contain coverage questions 
which need development and resolution and reporting errors or omissions 
for the State to correct promptly. These reports may also recommend 
actions the State can take to improve its information gathering, 
recordkeeping, and wage reporting systems, and those of its political 
subdivisions.

   How To Report Wages and Contributions--for Wages Paid Prior to 1987



Sec. 404.1237  Wage reports and contribution returns--general--for
wages paid prior to 1987.

    (a) Wage reports. Each State shall report each year the wages paid 
each covered employee during that year. With the wage report the State 
shall also identify, as prescribed by SSA, each political subdivision by 
its assigned identification number and, where appropriate, any coverage 
group or payroll record unit number assigned.
    (b) Wage reports of remuneration for agricultural labor. A State may 
exclude from its agreement any services of employees the remuneration 
for which is not wages under section 209(h)(2) of the Act. Section 
209(h)(2) excludes as wages the cash remuneration an employer pays 
employees for agricultural labor which is less than $150 in a calendar 
year, or, if the employee performs the agricultural labor for the 
employer on less than 20 days during a calendar year, the cash 
remuneration computed on a time basis. If a State does exclude the 
services and the individual meets the cash-pay or 20-day test described 
in Sec. 404.1056, the State shall identify on the wage report and on any 
adjustment report each individual performing agricultural labor and the 
amount paid to her or him.
    (c) Contribution returns. The State shall forward the contribution 
return as set out in Sec. 404.1249(b). It shall make contribution 
payments under Sec. 404.1262.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]

[[Page 332]]



Sec. 404.1239  Wage reports for employees performing services in more 
than one coverage group--for wages paid prior to 1987.

    (a) Employee of State in more than one coverage group. If a State 
employee is in more than one coverage group, the State shall report the 
employee's total wages, up to the annual wage limitations in 
Sec. 404.1047, as though the wages were paid by only one of the coverage 
groups.
    (b) Employee of political subdivision in more than one coverage 
group. If an employee of a political subdivision is in more than one 
coverage group, the State shall report the employee's total wages, up to 
the annual wage limitations in Sec. 404.1047, as though the wages were 
paid by only one of the coverage groups.
    (c) Employee of State and one or more political subdivisions. If an 
individual performs covered services as an employee of the State and an 
employee of one or more political subdivisions and the State agreement 
does not provide for limiting contributions under section 218(e)(2) of 
the Act as it read prior to the enactment of Pub. L. 99-509, the State 
and each political subdivision shall report the amount of covered wages 
it paid the employee up to the annual wage limitations in Sec. 404.1047.
    (d) Employee of more than one political subdivision. If an 
individual performs covered services as an employee of more than one 
political subdivision and the State agreement does not provide for 
limiting contributions under section 218(e)(2) of the Act as it read 
prior to the enactment of Pub. L. 99-509, each political subdivision 
shall report the covered wages it paid the employee up to the annual 
wage limitations in Sec. 404.1047.
    (e) Employee performing covered services for more than one political 
entity where section 218(e)(2) of the Act is applicable. If an agreement 
provides for limiting contributions under section 218(e)(2) of the Act 
as it read prior to the enactment of Pub. L. 99-509, the reporting 
officials compute the total amount of wages paid the employee by two or 
more political subdivisions of a State, or a State and one or more of 
its political subdivisions, which were subject to section 218(e)(2) of 
the Act. The State reports the amount of wages paid up to the annual 
wage limitations in Sec. 404.1047. The employee is treated as having 
only one employer. If the employee also had wages not subject to section 
218(e)(2) of the Act, the State shall report those wages separately.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1242  Back pay.

    (a) Back pay defined. Back pay is pay received in one period of time 
which would have been paid in a prior period of time except for a 
wrongful or improper action taken by an employer. It includes pay made 
under Federal or State laws intended to create an employment 
relationship (including situations where there is unlawful refusal to 
hire) or to protect an employee's right to wages.
    (b) Back pay under a statute. Back pay under a statute is a payment 
by an employer following an award, determination or agreement approved 
or sanctioned by a court or administrative agency responsible for 
enforcing a Federal or State statute protecting an employee's right to 
employment or wages. Examples of these statutes are:
    (1) National Labor Relations Act or a State labor relations act;
    (2) Federal or State laws providing reemployment rights to veterans;
    (3) State minimum wage laws; and
    (4) Civil Rights Act of 1964.

Payments based on legislation comparable to and having a similar effect 
as those listed in this paragraph may also qualify as having been made 
under a statute. Back pay under a statute, excluding penalties, is wages 
if paid for covered employment. It is allocated to the periods of time 
in which it should have been paid if the employer had not violated the 
statute. For backpay awards affecting periods prior to 1987, a State 
must fill a wage report and pay the contributions due for all periods 
involved in the back pay award under the rules applicable to those 
periods.
    (c) Back pay not under a statute. Where the employer and the 
employee agree on the amount payable without

[[Page 333]]

any award, determination or agreement approved or sanctioned by a court 
or administrative agency, the payment is not made under a statute. This 
back pay cannot be allocated to prior periods of time but must be 
reported by the employer for the period in which it is paid.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1243  Use of reporting forms--for wages paid prior to 1987.

    (a) Submitting wage reports. In the form and manner required by SSA, 
a State shall submit an annual report of the covered wages the State and 
its political subdivisions paid their employees. Any supplemental, 
adjustment, or correctional wage report filed is considered a part of 
the State's wage report.
    (b) Correction of errors. If a State fails to report or incorrectly 
reports an employee's wages on its wage report, the State shall submit a 
corrective report as required by SSA.
    (c) Reporting on magnetic tape or other media. After approval by 
SSA, a State may substitute magnetic tape or other media for any form 
required for submitting a report or reporting information.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1247  When to report wages--for wages paid prior to 1987.

    A State shall report wages for the calendar year in which they were 
actually paid. If the wages were constructively paid in a prior calendar 
year, the wages shall be reported for the prior year (see 
Sec. 404.1042(b) regarding constructive payment of wages).

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1249  When and where to make deposits of contributions and
to file contribution returns and wage reports--for wages paid prior 
to 1987.

    (a) Deposits of contributions. The State shall pay contributions in 
the manner required in Sec. 404.1262. (For failure to make deposits when 
due see Sec. 404.1265.) The contribution payment is considered made when 
received by the appropriate Federal Reserve bank or branch (see 
Sec. 404.1262). Except as provided in paragraphs (b) (2) and (3) and 
paragraph (c) of this section, contributions are due and payable as 
follows:
    (1) For wages paid before July 1, 1980. Contribution payments for 
wages paid in a calendar quarter are due on the 15th day of the second 
month following the end of the calendar quarter during which the wages 
were paid.
    (2) For wages paid beginning July 1, 1980, and before January 1984. 
Contribution payments for wages paid in a calendar month are due within 
the thirty day period following the last day of that month.
    (3) For wages paid after December 1983 and prior to 1987. 
Contribution payments for wages paid in the first half of a calendar 
month are due on the last day of that month. Contribution payments for 
wages paid in the second half of that calendar month are due on the 
fifteenth day of the next month. (For purposes of this section, the 
first half of a calendar month is the first 15 days of that month and 
the second half is the remainder of that month.)
    (b) Contribution returns and wage reports--(1) Where to be filed. 
The State shall file the original copies of all contribution returns, 
wage reports, and adjustment reports with the SSA.
    (2) When to be filed--(i) For years prior to execution of agreement 
or modification. If an agreement or modification provides for the 
coverage of employees for periods prior to 1987, the State shall pay 
contributions due and shall file wage reports with SSA for these periods 
within 90 days after the date of the notice that the Commissioner has 
signed the agreement or modification.
    (ii) For year of execution of agreement or modification. If the 
agreement or modification provides for the coverage of employees for the 
year of execution of the agreement or modification, the

[[Page 334]]

State may, within 90 days after the date of the notice that the 
Commissioner has signed the agreement or modification, submit a single 
contribution return and pay all contributions due for the following 
periods:
    (A) The month in which the agreement or modification was signed;
    (B) Any prior months in that year; and
    (C) Any subsequent months before January 1984 (half-months after 
December 1983) whose contribution return and payment due date is within 
this 90 day period. The State shall file wage reports for that year by 
February 28 of the year following the date of execution or within 90 
days of the date of the notice, whichever is later.
    (iii) For years after execution of agreement or modification. Except 
as described in paragraph (b)(2)(ii) of this section, when the State 
pays its contributions under paragraph (a) of this section, it shall 
also file a contribution return. The State shall file the wage report 
for any calendar year after the year of execution of the agreement or 
modification by February 28 of the following calendar year.
    (iv) For good cause shown, and upon written request by a State, the 
Commissioner may allow additional time for filing the reports and paying 
the related contributions described in paragraphs (b)(2)(i) and 
(b)(2)(ii) of this section.
    (3) Due date is on a weekend, legal holiday or Federal nonworkday. 
If the last day for filing the wage report falls on a weekend, legal 
holiday or Federal nonworkday, the State may file the wage report on the 
next Federal workday. If the due date for paying contributions for the 
wages paid in a period (as specified in paragraph (a) of this section) 
falls on a weekend, legal holiday or Federal nonworkday, the State shall 
pay the contributions and shall file the contribution return no later 
than--
    (i) The preceding Federal workday for wages paid in July 1980 
through December 1983;
    (ii) The next Federal workday for wages paid before July 1980 or 
after December 1983.
    (4) Submitting reports and payments. When submitting the 
contribution returns or wage reports the State shall release them in 
time to reach SSA by the due date. When submitting contribution payments 
as described in Sec. 404.1262, the State shall release the payments in 
time to reach the appropriate Federal Reserve bank or branch by the due 
date. In determining when to release any returns, reports, or payments 
the State shall provide sufficient time for them to timely reach their 
destination under the method of submission used, e.g., mail or 
electronic transfer of funds.
    (c) Payments by third party on account of sickness or accident 
disability. Where a third party makes a payment to an employee on 
account of sickness or accident disability which constitutes wages for 
services covered under a State agreement, the wages will be considered, 
for purposes of the deposits required under this section, to have been 
paid to the employee on the date on which the employer receives notice 
from the third party of the amount of the payment. No interest will be 
assessed for failure to make a timely deposit of contributions due on 
such wages for which a deposit was made after December 1981 and before 
July 1982, to the extent that the failure to make the deposit timely is 
due to reasonable cause and not willful neglect.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997; 
66 FR 28836, May 25, 2001]



Sec. 404.1251  Final reports--for wages paid prior to 1987.

    If a political subdivision is legally dissolved, the State shall 
file a final report on that entity. The report shall include each 
coverage group whose existence ceases with that of the entity. It shall:
    (a) Be marked ``final report'';
    (b) Cover the period during which final payment of wages subject to 
the agreement is made; and
    (c) Indicate the last date wages were paid.

With the final report, the State shall submit a statement showing the 
title and business address of the State official responsible for keeping 
the State's records and of each State and local official responsible for 
keeping the records for each coverage group whose existence is ended. 
The State shall also

[[Page 335]]

identify, as prescribed by SSA, each political subdivision by its 
assigned number and, where applicable, any coverage group or payroll 
record unit number assigned.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]

 What Is a State's Liability for Contributions--for Wages Paid Prior to 
                                  1987



Sec. 404.1255  State's liability for contributions--for wages paid 
prior to 1987.

    A State's liability for contributions equals the sum of the taxes 
which would be imposed by sections 3101 and 3111 of the Internal Revenue 
Code of 1954, if the services of the employees covered by the State's 
agreement were employment as defined in section 3121 of the Code. The 
State's liability begins when those covered services are performed, for 
which wages are actually or constructively paid to those individuals, 
including wages paid in a form other than cash (see Sec. 404.1041(d)). 
If an agreement is effective retroactively, the State's liability for 
contributions on wages paid during the retroactive period begins with 
the date of execution of the agreement or applicable modification. Where 
coverage of a coverage group has been terminated, the State is liable 
for contributions on wages paid for covered services even if the wages 
are paid after the effective date of termination of coverage.



Sec. 404.1256  Limitation on State's liability for contributions for 
multiple employment situations--for wages paid prior to 1987.

    (a) Limitation due to multiple employment. Where an individual in 
any calendar year performs covered services as an employee of a State 
and as an employee of one or more political subdivisions of the State, 
or as an employee of more than one political subdivision; and the State 
provides all the funds for payment of the amounts which are equivalent 
to the taxes imposed on the employer under FICA on that individual's 
remuneration for those services; and no political subdivision reimburses 
the State for paying those amounts; the State's agreement or 
modification of an agreement may provide that the State's liability for 
the contributions on that individual's remuneration shall be computed as 
though the individual had performed services in employment for only one 
political subdivision. The State may then total the individual's covered 
wages from all these governmental employers and compute the 
contributions based on that total subject to the wage limitations in 
Sec. 404.1047.
    (b) Identification of employees in multiple employment. An agreement 
or modification of an agreement providing for the computation of 
contributions as described in paragraph (a) of this section shall 
identify the class or classes of employees to whose wages this method of 
computing contributions applies. For example, the State may provide that 
such computation shall apply to the wages paid to all individuals for 
services performed in positions covered by a particular retirement 
system, or to the wages paid to all individuals who are members of any 
two or more coverage groups designated in an agreement or modification. 
The State shall promptly notify SSA if the conditions in paragraph (a) 
of this section are no longer met by any class or classes of employees 
identified in an agreement or modification. In its notification, the 
State shall identify each class of employees and the date on which the 
conditions ceased to be met.
    (c) Effective date. In the agreement or modification, the State 
shall provide that the computation of contributions shall apply to wages 
paid after the effective date stated in the agreement or modification. 
That date may be the last day of any calendar year; however, it may be 
no earlier than January 1 of the year in which the agreement or 
modification is submitted to SSA.

 Figuring the Amount of the State's Contributions--for Wages Paid Prior 
                                 to 1987



Sec. 404.1260  Amount of contributions--for wages paid prior to 1987.

    The State's contributions are equal to the product of the applicable 
contribution rate (which is equivalent to

[[Page 336]]

both the tax rates imposed under sections 3101 and 3111 of the Internal 
Revenue Code) times the amount of wages actually or constructively paid 
for covered services each year (subject to the wage limitations in 
Sec. 404.1047) to the employee.



Sec. 404.1262  Manner of payment of contributions by State--for wages
paid prior to 1987.

    When paying its contributions, the State shall deposit its payment 
at the specific Federal Reserve bank or branch designated by SSA.



Sec. 404.1263  When fractional part of a cent may be disregarded
--for wages paid prior to 1987.

    In paying contributions to a Federal Reserve bank or branch, a State 
may disregard a fractional part of a cent unless it amounts to one-half 
cent or more, in which case it shall be increased to one cent. 
Fractional parts of a cent shall be used in computing the total of 
contributions.

 If a State Fails To Make Timely Payments--for Wages Paid Prior to 1987



Sec. 404.1265  Addition of interest to contributions--for wages paid 
prior to 1987.

    (a) Contributions not paid timely. If a State fails to pay its 
contributions to the appropriate Federal Reserve bank or branch (see 
Sec. 404.1262), when due under Sec. 404.1249(a), we add interest on the 
unpaid amount of the contributions beginning with the date the payment 
was due, except as described in paragraphs (b) and (c) of this section. 
Interest, if charged, begins with the due date even if it is a weekend, 
legal holiday or Federal nonwork day. Interest is added at the rate 
prescribed in section 218(j) of the Act as it read prior to the 
enactment of Pub. L. 99-509.
    (b) Method of making adjustment. (1) If a State shall file a 
contribution return and shall accompany such return with payment of 
contributions due and payable as reported on such return in accordance 
with Sec. 404.1249 but the amount of the contributions reported and paid 
is less than the correct amount of contributions due and payable and the 
underpayment of contributions is attributable to an error in computing 
the contributions (other than an error in applying the rate of 
contributions in effect at the time the wages were paid), the State 
shall adjust the underpayment by reporting the additional amount due by 
reason of such underpayment either as an adjustment of total 
contributions due with the first wage report filed after notification of 
the underpayment by the Social Security Administration, or as a single 
adjustment of total contributions due with any contribution return filed 
prior to the filing of such wage report.
    (2) If an underpayment of contributions is due to an underreporting 
of or a failure to report one or more employees:
    (i) Where the underreporting or failure to report has been 
ascertained by the State, the State may cause an adjustment by filing a 
report within 30 days after ascertainment of the error by the State;
    (ii) Where the underreporting or failure to report has been 
ascertained by the Social Security Administration, a notification of 
underpayment shall be forwarded to the State, and the State may cause an 
adjustment of the underpayment by returning to the Social Security 
Administration, within 30 days from the date of the notification, a copy 
of the notification of underpayment and the State's corrected report. 
The report shall show the amount of wages, if any, erroneously reported 
for the reporting period and the correct amount of wages that should 
have been reported and the identification number of the State or the 
political subdivision for each employee who was omitted or erroneously 
reported. The filing to correct an underreporting of or a failure to 
report one or more employees' wages shall not constitute an adjustment 
under this section unless the wages were erroneously omitted or 
erroneously reported.
    (c) Payment. The amount of each underpayment adjusted in accordance 
with this section shall be paid to the Federal Reserve Bank, or branch 
thereof, serving the district in which the State is located, without 
interest, at the time of reporting the adjustment; except that where any 
amounts due with respect to such an adjustment had

[[Page 337]]

been paid in error to IRS and a refund thereof timely requested from, or 
instituted by, IRS, the amount of underpayment adjusted in accordance 
with this section, plus any interest paid by IRS on the amount of such 
underpayment, shall be paid to the Federal Reserve Bank, or branch 
thereof, serving the district in which the State is located, at the time 
of reporting the adjustment or within 30 days after the date of issuance 
by IRS of the refund of the erroneous payments, whichever is later. 
Except as provided in the preceding sentence of this paragraph, if an 
adjustment is reported pursuant to paragraph (b) of this section, but 
the amount thereof is not paid when due, interest thereafter accrues.
    (d) Verifying contributions paid against reported wages. We check 
the computation of contributions to verify that a State has paid the 
correct amount of contributions on the wages it reports for a calendar 
year (see Sec. 404.1249(b)(2)). If we determine that a State paid less 
than the amount of contributions due for that year, we add interest to 
the amount of the underpayment. We would add interest beginning with the 
date the unpaid contributions were initially due to the date those 
contributions are paid. However, if the total amount of the underpayment 
is 5 percent or less than 5 percent of the contributions due for a 
calendar year based upon the State's wage report and the State deposits 
the underpaid amount within 30 days after the date of our notification 
to the State of the amount due, the State may request that the interest 
on the underpaid amount be waived for good cause. This request must be 
made within 30 days of our notification to the State of the amount due. 
Such requests will be evaluated on an individual basis. The evaluation 
will include, but not be limited to, consideration of such factors as 
the circumstances causing the late payment, the State's past record of 
late payments and the amount involved.

    Examples (1) The records of a political subdivision for the month of 
June are destroyed by fire. The State makes an estimated deposit of 
contributions for the month of June for that political subdivision and 
deposits contributions for the month of June for all other political 
subdivisions based on actual records. At the time SSA verifies 
contributions paid against reported wages, we discover that the State 
has paid only 97 percent of its total liability for the year. Within 30 
days after we notify it of the amount due, the State asks that we waive 
the interest on the unpaid amount and the State deposits the unpaid 
amount. In this situation, we would waive the interest on the unpaid 
contributions.
    (2) We would waive interest if:
    (i) Some of the political subdivisions made small arithmetical 
errors in preparing their reports of wages,
    (ii) After verification of the contributions paid against reported 
wages, SSA discovers that minimal additional contributions are due,
    (iii) Within 30 days of our notice to the State regarding this 
underpayment the State, which usually makes its deposits timely, pays 
the amount due, and
    (iv) Within that same 30 day period the State requests that we waive 
the interest due.
    (3) We would not waive interest where a State frequently has 
problems depositing its contributions timely. Reasons given for the 
delays are, e.g., the computer was down, the 5 p.m. mail pickup was 
missed, one of the school district reports was misplaced. If requested 
we would not waive interest on this State's late payment of 
contributions based upon its past record of late payments and because of 
the circumstances cited.

    (e) Due date is on a weekend, legal holiday or Federal nonworkday. 
If the last day of the 30-day periods specified in paragraphs (b) and 
(d) of this section is on a weekend, legal holiday or Federal 
nonworkday, the State shall make the required deposit or request for 
waiver of payment of interest on the next Federal workday.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1267  Failure to make timely payments--for wages paid prior
to 1987.

    If a State does not pay its contributions when due, the Commissioner 
has the authority under section 218(j) of the Act as it read prior to 
the enactment of Pub. L. 99-509 to deduct the amounts of the unpaid 
contributions plus interest at the rate prescribed from any amounts 
certified by her or him to the Secretary of the Treasury

[[Page 338]]

for payments to the State under any other provision of the Social 
Security Act. The Commissioner notifies the Secretary of the Treasury of 
the amounts deducted and requests that the amount be credited to the 
Trust Funds. Amounts deducted are considered paid to the State under the 
other provision of the Social Security Act.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]

  How Errors in Reports and Contributions Are Adjusted--for Wages Paid 
                              Prior to 1987



Sec. 404.1270  Adjustments in general--for wages paid prior to 1987.

    States have the opportunity to adjust errors in the payment of 
contributions. A State but not its political subdivisions is authorized 
to adjust errors in the underpayment of contributions. Similarly, the 
State shall file all claims for credits or refunds and SSA makes the 
credits and refunds only to the State. Generally, we do not refund 
contributions in cash to a State unless the State is not expected to 
have future liability for contributions under section 218 of the Act.



Sec. 404.1271  Adjustment of overpayment of contributions--for wages
paid prior to 1987.

    (a) General. If a State pays more than the correct amount of 
contributions, the State shall adjust the overpayment with the next 
contribution return filed on which the amount owed equals or exceeds the 
amount of the overpayment.
    (b) Overpayment due to overreporting of wages--(1) Report to file. 
If the overpayment is due to the State's reporting more than the correct 
amount of wages paid to one or more employees during a reporting period 
and the overpayment is not adjusted under paragraph (a) of this section, 
the State shall file a report on the appropriate form showing:
    (i) The corrected wage data as prescribed by SSA; and
    (ii) The reason why the original reporting was incorrect.
    (2) Refund or credit of overpayment where section 218(e)(2) of the 
Act not applicable. If:
    (i) The State collected contributions from employees in excess of 
the amount of taxes that would have been required under section 3101 of 
the Internal Revenue Code; and
    (ii) The State paid to the Secretary of the Treasury those 
contributions plus a matching amount in excess of the taxes which would 
have been required from an employer under section 3111 of the Code; and
    (iii) The services of the employees in question would have 
constituted employment under section 3121(b) of the Code; and
    (iv) Section 218(e)(2) of the Act as it read prior to the enactment 
of Pub. L. 99-509 does not apply (see Sec. 404.1256(a)), then the State 
shall adjust the overpaid contributions under paragraph (b)(1) of this 
section. With its adjustment the State, where appropriate, shall include 
on the prescribed form a statement that the employees from whom the 
excess contributions were collected have not received nor expect to 
receive a refund of excess contributions under section 6413(c) of the 
Internal Revenue Code of 1954 (see Sec. 404.1275(b)). Generally, if the 
State does not include this statement with its adjustment request, we 
only refund or credit the State for up to one-half of the overpaid 
amount.
    (c) Refund or credit of overpayment where section 218(e)(2) of the 
Act applicable--(1) General. If--
    (i) The overreporting of the amount of wages paid to one or more 
employees during a reporting period(s) is due to a computation of 
contributions under Sec. 404.1256 for a year or years prior to the year 
in which the agreement or modification providing for the computation is 
entered into, or
    (ii) The overreporting is due to a failure to compute Sec. 404.1256,


the State shall adjust the overpayment under paragraph (b)(1) of this 
section. An overpayment due to overreported wages which does not result 
from the computation of contributions or a failure to compute 
contributions under Sec. 404.1256 shall also be adjusted by the State 
under paragraph (b)(1) of this section. If the adjustment of the 
overpayment results in an underreporting of wages for any employee by 
the State or any political subdivision, the State

[[Page 339]]

shall include with the report adjusting the overpayment a report 
adjusting each underreporting. If the adjustment of the overpayment does 
not result in an underreporting of wages for any employee by the State 
or any political subdivision, the State shall include with the report 
adjusting the overpayment a statement that the adjustment of the 
overpayment does not result in any underreporting.
    (2) Amount of refund or credit. If the State collects excess 
contributions from employees, the State's claim for refund or credit is 
limited to the overpaid amounts. (See Sec. 404.1275 relating to 
adjustment of employee contributions.) If--
    (i) The State collected the correct amount of contributions from 
employees based on the amount of wages reported and the Forms W-2 issued 
to the employees show only the amount of contributions actually 
collected, but the amount of wages reported is being adjusted downward, 
or
    (ii) The State collects excess contributions from employees but 
Forms W-2 have not been issued for an amount of wages which is being 
adjusted downward, the State may claim a refund or credit for the 
overpaid amounts. Where the State's claim for refund or credit is for 
the total overpaid amount, the adjustment report shall include a 
statement that excess contributions have not been collected from 
employees, or, where excess contributions have been collected, that 
Forms W-2 have not been issued and that, when issued, they will show the 
correct amount of employee contributions.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1272  Refund or recomputation of overpayments which are not
adjustable--for wages paid prior to 1987.

    (a) General. If a State pays more than the correct amount of 
contributions or interest to the appropriate Federal Reserve bank or 
branch (see Sec. 404.1262), and no adjustment in the amount of reported 
wages is necessary, that State may file a claim for refund or 
recomputation of the overpayment.
    (b) Form of claim. No special form is required to make a claim for a 
refund or recomputation. If a credit is taken under Sec. 404.1271, a 
claim is not required.
    (c) Proof of representative capacity. If a report or return is made 
by an authorized official of the State who ceases to act in an official 
capacity and a claim for a refund is made by a successor official, the 
successor official must submit with the claim written evidence showing 
that he or she has the authority to make a claim for and receive a 
refund of any contributions paid by the former official. The written 
evidence is not necessary if the successor official has previously filed 
one or more reports or returns which contain her or his signature and 
official title.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1275  Adjustment of employee contributions--for wages paid
prior to 1987.

    The amount of contributions a State deducts from an employee's 
remuneration for covered services, or any correction of that amount, is 
a matter between the employee and the State or political subdivision. 
The State shall show any correction of an employee's contribution on 
statements it furnishes the employee under Sec. 404.1225 of this part. 
Where the State issues an employee a Form W-2 and then submits an 
overpayment adjustment but claims less than the total overpaid amount as 
a refund or credit, the State shall not correct the previously issued 
Form W-2 to reflect that adjustment.

[53 FR 32976, Aug. 29, 1988, as amended at 65 FR 16813, Mar. 30, 2000]



Sec. 404.1276  Reports and payments erroneously made to Internal 
Revenue Service-transfer of funds--for wages paid prior to 1987.

    (a) General. In some instances, State or local governmental entities 
not covered under an agreement make reports and pay contributions to IRS 
under the Federal Insurance Contributions Act (FICA) procedures 
applicable to private employers in the mistaken belief that this 
provides Social Security coverage under section 218 of the Act for their

[[Page 340]]

employees. In other instances, entities which are covered under an 
agreement erroneously report to IRS, or a State or local government 
employee reports other employees to IRS or reports to IRS as a self-
employed individual. Where these reports and payments are erroneously 
made to IRS, the State may correct the error and obtain coverage under 
its agreement as described in paragraphs (b) through (f) of this 
section.
    (b) Political subdivision not included in the State agreement. We 
notify the State that if it desires coverage, it may be provided by 
either a regular modification or an error modification, depending on the 
circumstances (Secs. 404.1215 and 404.1216). In most cases, the State 
may obtain coverage by a regular modification. If a regular modification 
cannot be used (e.g., State law does not permit the retroactive 
effective date which would be desired), the State may use an error 
modification. The effective date of either modification depends on the 
facts of the situation being corrected.
    (c) Political subdivision included in the agreement. If a political 
subdivision included in the agreement erroneously makes reports and 
payments under FICA procedures, the State must correct the reportings 
for periods not barred by the statute of limitations. If the covered 
entity reported both under the agreement and under FICA procedures, we 
notify IRS and make necessary corrections in the earnings records. We 
also advise the State that the entity which reported under FICA 
procedures should request a refund of payments erroneously made to IRS.
    (d) State and local government employees erroneously reported as 
employees of individual or as self-employed--(1) Covered entity. If 
employees of a covered entity are erroneously reported as employees of 
an individual or as self-employed, we advise the State that the 
individual who made the reports should request a refund from IRS for 
periods not barred by the statute of limitations. We require the State 
to file correctional reports and returns for any periods open under the 
State and local statute of limitations.
    (2) Noncovered entity. We advise the State that the individual who 
made the reports should request a refund from IRS for the periods not 
barred by the statute of limitations. If the State wishes to provide 
coverage, it must submit a modification as discussed in paragraph (b) of 
this section. If the State does not wish to provide coverage, we void 
the reports. Amounts reported for periods barred by the statute of 
limitations remain on the earnings records.
    (e) Filing wage reports and paying contributions. Generally, the 
entity or individual that makes the erroneous reports and payments 
requests the refund from IRS for periods not barred by the statute of 
limitations. The State files the necessary reports with SSA and pays any 
contributions due. The reports shall conform to the coverage provided by 
the agreement to the extent permitted by the statute of limitations. The 
due date for these reports depends on whether original reports or 
adjustment reports are involved. Reports and contribution returns for 
the entire retroactive period of coverage provided by a regular or error 
modification are due 90 days after the date of execution of the 
modification. The time limitations for issuing assessments and credits 
or refunds extend from this due date. Thus, SSA may issue assessments or 
credits or refunds for periods barred to refund by IRS. The State may 
request that reports and payments for the IRS barred periods be 
considered made under the agreement as described in paragraph (f) of 
this section.
    (f) Use of transfer procedure. In limited situations, the State may 
request that reports and payments the State or a political subdivision 
(but not an individual) erroneously made under FICA procedures and which 
have been posted to the employee's earnings record be considered made 
under the State's agreement. We use a transfer procedure to do this. The 
transfer procedure may be used only where
    (1) The periods are open to assessment under the State and local 
statute of limitations;
    (2) The erroneous reports to be transferred are posted to SSA's 
records;
    (3) The periods are barred to refund under the IRS statute of 
limitations; and

[[Page 341]]

    (4) A refund is not obtained from IRS by the reporting entity.

 How Overpayments of Contributions Are Credited or Refunded--for Wages 
                           Paid Prior to 1987



Sec. 404.1280  Allowance of credits or refunds--for wages paid prior 
to 1987.

    If a State pays more than the amount of contributions due under an 
agreement, SSA may allow the State, subject to the time limitations in 
Sec. 404.1282 and the exceptions to the time limitations in 
Sec. 404.1283, a credit or refund of the overpayment.



Sec. 404.1281  Credits or refunds for periods of time during which 
no liability exists--for wages paid prior to 1987.

    If a State pays contributions for any period of time for which 
contributions are not due, but the State is liable for contributions for 
another period, we credit the amount paid against the amount of 
contributions for which the State is liable. We refund any balance to 
the State.



Sec. 404.1282  Time limitations on credits or refunds--for wages paid
prior to 1987.

    (a) General. To get a credit or refund, a State must file a claim 
for a credit or refund of the overpaid amount with the Commissioner 
before the applicable time limitation expires. The State's claim for 
credit or refund is considered filed with the Commissioner when it is 
delivered or mailed to the Commissioner. Where the time limitation ends 
on a weekend, legal holiday or Federal nonworkday, we consider a claim 
timely filed if it is filed on the next Federal workday.
    (b) Time limitation. Subject to the exceptions in Sec. 404.1283, a 
State must file a claim for credit or refund of an overpayment before 
the end of the latest of the following time periods:
    (1) 3 years, 3 months, and 15 days after the year in which the wages 
in question were paid or alleged to have been paid; or
    (2) 3 years after the due date of the payment which included the 
overpayment; or
    (3) 2 years after the overpayment was made to the Secretary of the 
Treasury.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]



Sec. 404.1283  Exceptions to the time limitations on credits or
refunds--for wages paid prior to 1987.

    (a)(1) Extension by agreement. The applicable time period described 
in Sec. 404.1282 for filing a claim for credit for, or refund of, an 
overpayment may, before the expiration of such period, be extended for 
no more than 6 months by written agreement between the State and the 
Commissioner. The agreement must involve and identify a known issue or 
reporting error. It must also identify the periods involved, the time 
limitation which is being extended and the date to which it is being 
extended, and the coverage group(s) and position(s) or individual(s) to 
which the agreement applies. The extension of the period of limitation 
shall not become effective until the agreement is signed by the 
appropriate State official and the Commissioner. (See Sec. 404.3(c) for 
the applicable rule where periods of limitation expire on nonwork days.) 
A claim for credit or refund filed by the State before the extended time 
limit ends shall be considered to have been filed within the time period 
limitation specified in section 218(r)(1) of the Act as it read prior to 
the enactment of Pub. L. 99-509. (See Sec. 404.1282.)
    (2) Reextension. An extension agreement provided for in paragraph 
(a)(1) of this section may be reextended by written agreement between 
the State and the Commissioner for no more than 6 months at a time 
beyond the expiration of the prior extension or reextension agreement, 
and only if one of the following conditions is met:
    (i) Litigation (including intrastate litigation) or a review under 
Secs. 404.1290 or 404.1297 involving wage reports or corrections on the 
same issue is pending; or
    (ii) The State is actively pursuing corrections of a known error 
which require additional time to complete; or
    (iii) The Social Security Administration is developing a coverage or 
wage issue which was being considered before the statute of limitations 
expired

[[Page 342]]

and additional time is needed to make a determination; or
    (iv) The Social Security Administration has not issued to the State 
a final audit statement on the State's wage or correction reports; or
    (v) There is pending Federal legislation which may substantially 
affect the issue in question, or the issue has national implications.
    (b) Deletion of wage entry on employee's earnings record. If the 
Commissioner, under section 205(c)(5) (A), (B), or (E) of the Act, 
deletes a wage entry on an individual's earnings record, a claim for 
credit or refund of the overpayment resulting from the deletion is 
considered filed within the applicable time limitations in Sec. 404.1282 
if
    (1) The State files the claim before the Commissioner's decision 
regarding the deletion of the wage entry from the individual's earnings 
record becomes final or
    (2) The State files a claim regarding the deletion of the wage entry 
from the individual's earnings record which entry is erroneous because 
of fraud.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]



Sec. 404.1284  Offsetting underpayments against overpayments--for
wages paid prior to 1987.

    (a) State fails to make adjustment for allowance of credit. If SSA 
notifies a State that a credit is due the State, and the State does not 
make the adjustment for the allowance of the credit, SSA offsets the 
credit against any contributions or interest due. Before making the 
offset, SSA will give the State an opportunity to make the adjustment.
    (b) State fails to make adjustment for underpayment of contributions 
or interest due. If SSA notifies a State that contributions or interest 
are due, and the State does not pay the contributions or interest, SSA 
offsets the contributions or interest due against any credit due the 
State. Before making the offset, SSA will give the State an opportunity 
to pay the underpayment or interest due.

 How Assessments for Underpayments of Contributions Are Made--for Wages 
                           Paid Prior to 1987



Sec. 404.1285  Assessments of amounts due--for wages paid prior to 1987.

    (a) A State is liable for any amount due (which includes 
contributions or interest) under an agreement until the Commissioner is 
satisfied that the amount has been paid to the Secretary of the 
Treasury. If the Commissioner is not satisfied that a State has paid the 
amount due, the Commissioner issues an assessment for the amount due 
subject to the time limitations in Sec. 404.1286 and the exceptions to 
the time limitations in Secs. 404.1287 and 404.1289. If detailed wage 
information is not available, the assessment is issued based on the 
following:
    (1) The largest number of individuals whose services are known to be 
covered under the agreement is used for computation purposes;
    (2) The individuals are assumed to have maximum creditable earnings 
each year;
    (3) The earnings are considered wages for covered services; and
    (4) The amount computed is increased by twenty percent to insure 
that all covered wages are included in the assessment.
    (b) If the State pays the amount assessed and the assessed amount is 
later determined to be more than the amount actually due, we issue a 
refund or credit to that State for the excess amount. When the 
assessment is issued within the applicable time limitation, there is no 
time limit on collecting the amount due. An assessment is issued on the 
date that it is mailed or otherwise delivered to the State.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]



Sec. 404.1286  Time limitations on assessments--for wages paid
prior to 1987.

    (a) Subject to the exceptions to the time limitations in 
Secs. 404.1287 and 404.1289, a State is not liable for an amount due 
under an agreement unless the Commissioner makes an assessment for that 
amount before the later of the following periods ends:

[[Page 343]]

    (1) Three years, 3 months, and 15 days after the year in which the 
wages, upon which the amount is due, were paid; or
    (2) Three years after the date the amount became due.
    (b) Where the time limitation ends on a weekend, legal holiday or 
Federal nonworkday, an assessment is considered timely if the 
Commissioner makes the assessment on the next Federal workday.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]



Sec. 404.1287  Exceptions to the time limitations on assessments--for
wages paid prior to 1987.

    (a)(1) Extension by agreement. The applicable time period described 
in Sec. 404.1286 for assessment of an amount due may, before the 
expiration of such period, be extended for no more than 6 months by 
written agreement between the State and the Commissioner. The agreement 
must involve and identify a known issue or reporting error. It must also 
identify the periods involved, the time limitation which is being 
extended and the date to which it is being extended, and the coverage 
group(s) and position(s) or individual(s) to which the agreement 
applies. The extension of the period of limitation shall not become 
effective until the agreement is signed by the appropriate State 
official and the Commissioner. (See Sec. 404.3(c) for the applicable 
rule where periods of limitation expire on nonwork days.) An assessment 
made by the Commissioner before the extended time limit ends shall be 
considered to have been made within the time period limitation specified 
in section 218(q)(2) of the Act as it read prior to the enactment of 
Pub. L. 99-509. (See Sec. 404.1286.)
    (2) Reextension. An extension agreement provided for in paragraph 
(a)(1) of this section may be reextended by written agreement between 
the State and the Commissioner for no more than 6 months at a time 
beyond the expiration of the prior extension or reextension agreement, 
and only if one of the following conditions is met:
    (i) Litigation (including intrastate litigation) or a review under 
Sec. 404.1290 or Sec. 404.1297 involving wage reports or corrections on 
the same issue is pending; or
    (ii) The State is actively pursuing corrections of a known error 
which require additional time to complete; or
    (iii) The Social Security Administration is developing a coverage or 
wage issue which was being considered before the statute of limitations 
expired and additional time is needed to make a determination; or
    (iv) The Social Security Administration has not issued to the State 
a final audit statement on the State's wage or correction reports; or
    (v) There is pending Federal legislation which may substantially 
affect the issue in question, or the issue has national implications.
    (b) The 365-day period. If a State files a report before the 
applicable time limitation in Sec. 404.1286 (or any extension under 
paragraph (a) of this section) ends and makes no payment or pays less 
than the correct amount due, the Commissioner may assess the State for 
the amount due after the applicable time limitation has ended. However, 
the Commissioner must make the assessment no later than the 365th day 
after the day the State makes payment to the Secretary of the Treasury. 
The Commissioner can only make this assessment on the wages paid to the 
reported individuals for the reported periods. The Commissioner, in 
making this assessment, credits the amount paid by the State on these 
individuals' wages for those reported periods.
    (c) Revision of employee's earnings record. If, under section 
205(c)(5) (A) or (B) of the Act, the Commissioner credits wages to an 
individual's earnings record, the Commissioner may make an assessment 
for any amount due on those wages before the Commissioner's decision on 
revising the individual's earnings record becomes final. (Sections 
404.822(c) (1) and (2) describe the time limits for revising an earnings 
record where an individual has applied for monthly benefits or a lump-
sum death payment or requested that we correct his earnings record.)
    (d) Overpayment of contributions on wages of employee having other 
wages in a period barred to assessment. If the Commissioner allows a 
State a credit or refund of an overpayment for wages paid or alleged to 
have been paid an individual in a calendar year but the

[[Page 344]]

facts upon which the allowance is based establish that contributions are 
due on other wages paid that individual in that year which are barred to 
assessment, we may make an assessment notwithstanding the periods of 
limitation in Sec. 404.1286. The assessment, however, must be made 
before or at the time we notify the State of the allowance of the credit 
or refund. In this situation, the Commissioner reduces the amount of the 
State's credit or refund by the assessed amount and notifies the State 
accordingly. For purposes of this paragraph, the assessment shall only 
include contributions and not interest as provided for in section 218(j) 
of the Act as it read prior to the enactment of Pub. L. 99-509.

    Example: The State files an adjustment report timely to correct an 
error in the amount reported as wages for an employee. The correction 
reduces the employee's wages for the year to less than the maximum 
amount creditable. The employee has other earnings in the same year 
which were not reported because of the previously reported maximum 
amounts. The applicable time limitation for assessing contributions on 
wages for the year has expired before the credit was allowed. The 
Commissioner may assess for the underpaid contributions but no later 
than thd date of the notice to the State that its claim for a credit had 
been allowed.

    (e) Evasion of payment. The Commissioner may make an assessment of 
an amount due at any time where the State's failure to pay the amount 
due results from the fraudulent attempt of an officer or employee of the 
State or political subdivision to defeat or evade payment of that 
amount.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]



Sec. 404.1289  Payment after expiration of time limitation for
assessment--for wages paid prior to 1987.

    The Commissioner accepts wage reports filed by a State even though 
the applicable time limitation described in Sec. 404.1286 (or as the 
time limitation is extended under Sec. 404.1287) has expired, provided:
    (a) The State pays to the Secretary of the Treasury the amount due 
on the wages paid to employees performing services in the coverage group 
in the calendar years for which the wage reports are being made; and
    (b) The State agrees in writing with the Secretary to extend the 
time limitation for all employees in the coverage group in the calendar 
years for which the wage reports are being made.

In this situation, the time period for assessment is extended until the 
Commissioner notifies the State that the wage reports are accepted. 
Where the State pays the amount due within the time period as extended 
under this section, the amount shall not include interest as provided 
for in section 218(j) of the Act as it read prior to the enactment of 
Pub. L. 99-509.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]

Secretary's Review of Decisions on Credits, Refunds, or Assessments--for 
                        Wages Paid Prior to 1987



Sec. 404.1290  Review of decisions by the Secretary--for wages paid 
prior to 1987.

    What decisions will be reviewed. A State, under section 218(s) of 
the Act as it read prior to the enactment of Pub. L. 99-509, may request 
review of an assessment of an amount due from the State, an allowance to 
the State of a credit or refund of an overpayment, or a disallowance of 
the State's claim for credit or refund of an overpayment. The 
Commissioner may review regardless of whether the amount assessed has 
been paid or whether the credit or refund has been accepted by the 
State. Prior to the Commissioner's review, however, an assessment, 
allowance or disallowance may be reconsidered under Secs. 404.1291 
through 404.1293.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]



Sec. 404.1291  Reconsideration--for wages paid prior to 1987.

    After the State requests review of the assessment or allowance or 
disallowance of a credit or refund, and prior to the Commissioner's 
review, that decision may be reconsidered, and affirmed, modified, or 
reversed. We notify the State of the reconsidered determination and the 
basis for it. The State may request the Commissioner to review this 
reconsidered determination under Sec. 404.1294(b). In limited 
situations, SSA and the State may agree

[[Page 345]]

that the reconsideration process should be waived, e.g., where major 
policy is at issue.



Sec. 404.1292  How to request review--for wages paid prior to 1987.

    (a) Form of request. No particular form of request is required. 
However, a written request for review must:
    (1) Identify the assessment, allowance or disallowance being 
questioned;
    (2) Describe the specific issue on which the review is requested;
    (3) Contain any additional information or argument relevant to that 
issue; and
    (4) Be signed by an official authorized to request the review on 
behalf of the State.
    (b) Submitting additional material. A State has 90 days from the 
date it requests review to submit additional evidence it wishes 
considered during the review process. The time limit for submitting 
additional evidence may be extended upon written request of the State 
and for good cause shown.

(Approved by the Office of Management and Budget under control number 
0960-0425)

[53 FR 32976, Aug. 29, 1988, as amended at 66 FR 28836, May 25, 2001]



Sec. 404.1293  Time for filing request for review--for wages paid
prior to 1987.

    (a) Time for filing. The State must file its request for review 
within 90 days after the date of the notice of assessment, allowance, or 
disallowance. Usually, the date of the request for review is considered 
the filing date. Where the 90-day period ends on a weekend, legal 
holiday or Federal nonworkday, a request filed on the next Federal 
workday is considered as timely filed.
    (b) Extension of time. For good cause shown, and upon written 
application by a State filed prior to the expiration of the time for 
filing a request for review, additional time for filing the request may 
be allowed.



Sec. 404.1294  Notification to State after reconsideration--for 
wages paid prior to 1987.

    (a) The State will be notified in writing of the reconsidered 
determination on the assessment, allowance, or disallowance, and the 
basis for the determination.
    (b) If the State does not agree with the reconsidered determination, 
it has 90 days from the date of notice of the reconsidered determination 
to request the Commissioner to review that determination. The rules on 
what the request should contain and the time for filing the request are 
the same as in Secs. 404.1292 and 404.1293.



Sec. 404.1295  Commissioner's review--for wages paid prior to 1987.

    Upon request by the State, the Commissioner will review the 
reconsidered determination (or the assessment, allowance or disallowance 
as initially issued if reconsideration is waived under Sec. 404.1291). 
If necessary, the Commissioner may request the State to furnish 
additional evidence. Based upon the evidence considered in connection 
with the assessment, allowance or disallowance and any additional 
evidence submitted by the State or otherwise obtained by the 
Commissioner, the Commissioner affirms, modifies, or reverses the 
assessment, allowance or disallowance.



Sec. 404.1296  Commissioner's notification to the State--for wages
paid prior to 1987.

    The Commissioner notifies the State in writing of the decision on 
the assessment, allowance, or disallowance, and the basis for the 
decision.

How a State May Seek Court Review of Commissioner's Decision--for Wages 
                           Paid Prior to 1987



Sec. 404.1297  Review by court--for wages paid prior to 1987.

    (a) Who can file civil action in court. A State may file a civil 
action under section 218(t) of the Act as it read prior to the enactment 
of Pub. L. 99-509 requesting a district court of the United States to 
review any decision the Commissioner makes under section 218(s) of the 
Act as it read prior to the enactment of Pub. L. 99-509 concerning the 
assessment of an amount due, the allowance of a credit or refund, or the 
disallowance of a claim for credit or refund.
    (b) Where the civil action must be filed. A State must file the 
civil action in

[[Page 346]]

the district court of the United States for the judicial district in 
which the State's capital is located. If the civil action is brought by 
an interstate instrumentality, it must file the civil action in the 
district court of the United States for the judicial district in which 
the instrumentality's principal office is located. The district court's 
judgment is final except that it is subject to review in the same manner 
as judgments of the court in other civil actions.
    (c) No interest on credit or refund of overpayment. SSA has no 
authority to pay interest to a State after final judgment of a court 
involving a credit or refund of an overpayment made under section 218 of 
the Act.

[53 FR 32976, Aug. 29, 1988, as amended at 62 FR 38451, July 18, 1997]



Sec. 404.1298  Time for filing civil action--for wages paid 
prior to 1987.

    (a) Time for filing. The State must file the civil action for a 
redetermination of the correctness of the assessment, allowance or 
disallowance within 2 years from the date the Commissioner mails to the 
State the notice of the decision under Sec. 404.1296. Where the 2-year 
period ends on a Saturday, Sunday, legal holiday or Federal nonwork day, 
an action filed on the next Federal workday is considered timely filed.
    (b) Extension of time for filing. The Commissioner, for good cause 
shown, may upon written application by a State filed prior to the end of 
the two-year period, extend the time for filing the civil action.



Sec. 404.1299  Final judgments--for wages paid prior to 1987.

    (a) Overpayments. Payment of amounts due to a State required as the 
result of a final judgment of the court shall be adjusted under 
Secs. 404.1271 and 404.1272.
    (b) Underpayments. Wage reports and contribution returns required as 
the result of a final judgment of the court shall be filed under 
Secs. 404.1237-404.1251. We will assess interest under Sec. 404.1265 
where, based upon a final judgment of the court, contributions are due 
from a State because the amount of contributions assessed was not paid 
by the State or the State had used an allowance of a credit or refund of 
an overpayment.



    Subpart N_Wage Credits for Veterans and Members of the Uniformed 
                                Services

    Authority: Secs. 205 (a) and (p), 210 (l) and (m), 215(h), 217, 229, 
and 702(a)(5) of the Social Security Act (42 U.S.C. 405 (a) and (p), 410 
(l) and (m), 415(h), 417, 429, and 902(a)(5)).

    Source: 45 FR 16464, Mar. 14, 1980, unless otherwise noted.

                                 General



Sec. 404.1301  Introduction.

    (a) The Social Security Act (Act), under section 217, provides for 
noncontributory wage credits to veterans who served in the active 
military or naval service of the United States from September 16, 1940, 
through December 31, 1956. These individuals are considered World War II 
or post-World War II veterans. The Act also provides for noncontributory 
wage credits to certain individuals who served in the active military or 
naval service of an allied country during World War II. These 
individuals are considered World War II veterans. In addition, certain 
individuals get wage credits, under section 229 of the Act, for service 
as members of the uniformed services on active duty or active duty for 
training beginning in 1957 when that service was first covered for 
social security purposes on a contributory basis through 2001. These 
individuals are considered members of the uniformed services.
    (b) World War II or post-World War II veterans receive wage credits 
based on the length of active military or naval service, type of 
separation from service and, in some cases, whether the veteran is 
receiving another Federal benefit. However, a member of a uniformed 
service receives wage credits regardless of length of service, type of 
separation, or receipt of another Federal benefit.
    (c) The Social Security Administration (SSA) uses these wage 
credits, along with any covered wages or self-employment income of the 
veteran or member of a uniformed service, to determine entitlement to, 
and the amount of, benefits and the lump-sum death payment that may be 
paid to

[[Page 347]]

them, their dependents or survivors under the old-age, survivors', and 
disability insurance programs. These wage credits can also be used by 
the veteran or member of the uniformed service to meet the insured 
status and quarters of coverage requirements for a period of disability.
    (d) This subpart tells how veterans or members of the uniformed 
services obtain wage credits, what evidence of service SSA requires, how 
SSA uses the wage credits, and how the wage credits are affected by 
payment of other benefits.
    (e) This subpart explains that certain World War II veterans who die 
are considered (deemed) fully insured. This gives those veterans' 
survivors the same benefit rights as if the veterans were actually fully 
insured when they died.
    (f) The rules are organized in the following manner:
    (1) Sections 404.1310 through 404.1313 contain the rules on World 
War II veterans. We discuss who may qualify as a World War II veteran, 
how we determine whether the 90-day active service requirement for a 
World War II veteran is met, what we consider to be World War II active 
military or naval service, and what we do not consider to be World War 
II active military or naval service.
    (2) Sections 404.1320 through 404.1323 contain the rules on post-
World War II veterans. We discuss who may qualify as a post-World War II 
veteran, how we determine whether the 90-day active service requirement 
for a post-World War II veteran is met, what we consider to be post-
World War II active military or naval service, and what we do not 
consider to be post-World War II active military or naval service.
    (3) In Sec. 404.1325 we discuss what is a separation under 
conditions other than dishonorable. The law requires that a World War II 
or post-World War II veteran's separation from active military or naval 
service be other than dishonorable for the veteran to get wage credits.
    (4) Section 404.1330 contains the rules on members of the uniformed 
services. We discuss who may qualify as a member of a uniformed service.
    (5) In Secs. 404.1340 through 404.1343, we discuss the amount of 
wage credits for veterans and members of the uniformed services, 
situations which may limit the use of wage credits for World War II and 
post-World War II veterans, and situations in which the limits do not 
apply.
    (6) Sections 404.1350 through 404.1352 contain the rules on deemed 
insured status for World War II veterans. We discuss when deemed insured 
status applies, the amount of wage credits used for deemed insured World 
War II veterans, how the wage credits affect survivors' social security 
benefits, and when deemed insured status does not apply.
    (7) Sections 404.1360 through 404.1363 contain the rules on the 
effect of other benefits on the payment of social security benefits and 
lump-sum death payments based on wage credits for veterans. We discuss 
what happens when we learn of a determination that a Veterans 
Administration pension or compensation is payable or that a Federal 
benefit is payable before or after we determine entitlement to a montly 
benefit or lump-sum death payment based on the death of the veteran.
    (8) Sections 404.1370 and 404.1371 contain the rules on what we 
accept as evidence of a World War II and post-World War II veteran's 
active military or naval service, including date and type of separation, 
and what we accept as evidence of entitlement to wage credits for 
membership in a uniformed service during the years 1957 through 1967.

[45 FR 16464, Mar. 14, 1980, as amended at 70 FR 11865, Mar. 10, 2005]



Sec. 404.1302  Definitions.

    As used in this subpart--
    Act means the Social Security Act, as amended.
    Active duty means periods of time an individual is on full-time duty 
in the active military or naval service after 1956 and includes active 
duty for training after 1956.
    Active service means periods of time prior to 1957 an individual was 
on full-time duty in the active military or naval service. It does not 
include totaling periods of active duty for training purposes before 
1957 which are less than 90 days.

[[Page 348]]

    Allied country means a country at war on September 16, 1940, with a 
country with which the United States was at war during the World War II 
period. Each of the following countries is considered an allied country: 
Australia, Belgium, Canada, Czechoslovakia, Denmark, France, India, 
Luxembourg, the Netherlands, New Zealand, Norway, Poland, Union of South 
Africa, and the United Kingdom.
    Domiciled in the United States means an individual has a true, 
fixed, and permanent home in the United States to which the individual 
intends to return whenever he or she is absent.
    Federal benefit means a benefit which is payable by another Federal 
agency (other than the Veterans Administration) or an instrumentality 
owned entirely by the United States under any law of the United States 
or under a program or pension system set up by the agency or 
instrumentality.
    Post-World War II period means the time period July 25, 1947, 
through December 31, 1956.
    Reserve component means Army Reserve, Naval Reserve, Marine Corps 
Reserve, Air Force Reserve, Coast Guard Reserve, National Guard of the 
United States or Air National Guard of the United States.
    Resided in the United States means an individual had a place where 
he or she lived, whether permanently or temporarily, in the United 
States and was bodily present in that place.
    Survivor means you are a parent, widow, divorced wife, widower, or 
child of a deceased veteran or member of a uniformed service.
    United States means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American 
Samoa.
    Veteran means an individual who served in the active military or 
naval service of the United States and was discharged or released from 
that service under conditions other than dishonorable. For a more 
detailed definition of the World War II veteran and a post-World War II 
veteran, see Secs. 404.1310 and 404.1320.
    Wage credit means a dollar amount we add to the earnings record of a 
veteran of the World War II or the post-World War II period. It is also 
a dollar amount we add to the earnings record of a member of a uniformed 
service who was on active duty from 1957 through 2001. The amount is set 
out in the Act and is added for each month, calendar quarter, or 
calendar year of service as required by law.
    We, us, or our means the Social Security Administration.
    World War II period means the time period September 16, 1940, 
through July 24, 1947.
    You or your means a veteran, a veteran's survivor or a member of a 
uniformed service applying for or entitled to a social security benefit 
or a lump-sum death payment.

[45 FR 16464, Mar. 14, 1980, as amended at 70 FR 11865, Mar. 10, 2005]

                          World War II Veterans



Sec. 404.1310  Who is a World War II veteran.

    You are a World War II veteran if you were in the active service of 
the United States during the World War II period and, if no longer in 
active service, you were separated from that service under conditions 
other than dishonorable after at least 90 days of active service. The 
90-day active service requirement is discussed in Sec. 404.1311.



Sec. 404.1311  Ninety-day active service requirement for
World War II veterans.

    (a) The 90 days of active service required for World War II veterans 
do not have to be consecutive if the 90 days were in the World War II 
period. The 90-day requirement cannot be met by totaling the periods of 
active duty for training purposes which were less than 90 days.
    (b) If, however, all of the 90 days of active service required for 
World War II veterans were not in the World War II period, the 90 days 
must (only in those circumstances) be consecutive if the 90 days began 
before September 16, 1940, and ended on or after that date, or began 
before July 25, 1947, and ended on or after that date.
    (c) The 90 days of active service is not required if the World War 
II veteran died in service or was separated from service under 
conditions other

[[Page 349]]

than dishonorable because of a disability or injury which began or 
worsened while performing service duties.



Sec. 404.1312  World War II service included.

    Your service was in the active service of the United States during 
the World War II period if you were in the--
    (a) Army, Navy, Marine Corps, or Coast Guard, or any part of them;
    (b) Commissioned corps of the United States Public Health Service 
and were--
    (1) On active commissioned service during the period beginning 
September 16, 1940, through July 28, 1945, and the active service was 
done while on detail to the Army, Navy, Marine Corps, or Coast Guard; or
    (2) On active commissioned service during the period beginning July 
29, 1945, through July 24, 1947, regardless of whether on detail to the 
Army, Navy, Marine Corps, or Coast Guard;
    (c) Commissioned corps of the United States Coast and Geodetic 
Survey and were--
    (1) During the World War II period--
    (i) Transferred to active service with the Army, Navy, Marine Corps, 
or Coast Guard; or
    (ii) Assigned to active service on military projects in areas 
determined by the Secretary of Defense to be areas of immediate military 
hazard; or
    (2) On active service in the Philippine Islands on December 7, 1941; 
or
    (3) On active service during the period beginning July 29, 1945, 
through July 24, 1947;
    (d) Philippine Scouts and performed active service during the World 
War II period under the direct supervision of recognized military 
authority;
    (e) Active service of an allied country during the World War II 
period and--
    (1) Had entered into that active service before December 9, 1941;
    (2) Were a citizen of the United States throughout that period of 
active service or lost your United States citizenship solely because of 
your entrance into that service;
    (3) Had resided in the United States for a total of four years 
during the five-year period ending on the day you entered that active 
service; and
    (4) Were domiciled in the United States on that day; or
    (f) Women's Army Auxiliary Corps, during the period May 14, 1942, 
through September 29, 1943, and performed active service with the Army, 
Navy, Marine Corps, or Coast Guard after September 29, 1943.



Sec. 404.1313  World War II service excluded.

    Your service was not in the active service of the United States 
during the World War II period if, for example, you were in the--
    (a) Women's Army Auxiliary Corps, except as described in 
Sec. 404.1312(f);
    (b) Coast Guard Auxiliary;
    (c) Coast Guard Reserve (Temporary) unless you served on active 
full-time service with military pay and allowances;
    (d) Civil Air Patrol; or
    (e) Civilian Auxiliary to the Military Police.

                       Post-World War II Veterans



Sec. 404.1320  Who is a post-World War II veteran.

    You are a post-World War II veteran if you were in the active 
service of the United States during the post-World War II period and, if 
no longer in active service, you were separated from the service under 
conditions other than dishonorable after at least 90 days of active 
service. The 90-day active service requirement is discussed in 
Sec. 404.1321.



Sec. 404.1321  Ninety-day active service requirement for post-
World War II veterans.

    (a) The 90 days of active service required for post-World War II 
veterans do not have to be consecutive if the 90 days were in the post-
World War II period. The 90-day requirement cannot be met by totaling 
the periods of active duty for training purposes before 1957 which were 
less than 90 days.
    (b) If, however, all of the 90 days of active service required for 
post-World War II veterans were not in the post-World War II period, the 
90 days must (only in those circumstances) be consecutive if the 90 days 
began before July 25, 1947, and ended on or after that

[[Page 350]]

date, or began before January 1, 1957, and ended on or after that date.
    (c) The 90 days of active service is not required if the post-World 
War II veteran died in service or was separated from service under 
conditions other than dishonorable because of a disability or injury 
which began or worsened while performing service duties.



Sec. 404.1322  Post-World War II service included.

    Your service was in the active service of the United States during 
the post-World War II period if you were in the--
    (a) Air Force, Army, Navy, Marine Corps, Coast Guard, or any part of 
them;
    (b) Commissioned corps of the United States Public Health Service 
and were on active service during that period;
    (c) Commissioned corps of the United States Coast and Geodetic 
Survey and were on active service during that period; or
    (d) Philippine Scouts and performed active service during the post-
World War II period under the direct supervision of recognized military 
authority.



Sec. 404.1323  Post-World War II service excluded.

    Your service was not in the active service of the United States 
during the post-World War II period if, for example, you were in the--
    (a) Coast Guard Auxiliary;
    (b) Coast Guard Reserve (Temporary) unless you served on active 
full-time service with military pay and allowances;
    (c) Civil Air Patrol; or
    (d) Civilian Auxiliary to the Military Police.

                     Separation from Active Service



Sec. 404.1325  Separation from active service under conditions
other than dishonorable.

    Separation from active service under conditions other than 
dishonorable means any discharge or release from the active service 
except--
    (a) A discharge or release for desertion, absence without leave, or 
fraudulent entry;
    (b) A dishonorable or bad conduct discharge issued by a general 
court martial of the Army, Navy, Air Force, Marine Corps, or Coast Guard 
of the United States, or by the active service of an allied country 
during the World War II period;
    (c) A dishonorable discharge issued by the United States Public 
Health Service or the United States Coast and Geodetic Survey;
    (d) A resignation by an officer for the good of the service;
    (e) A discharge or release because the individual was a 
conscientious objector; or
    (f) A discharge or release because the individual was convicted by a 
civil court for treason, sabotage, espionage, murder, rape, arson, 
burglary, robbery, kidnapping, assault with intent to kill, assault with 
a deadly weapon, or because of an attempt to commit any of these crimes.

[45 FR 16464, Mar. 14, 1980; 45 FR 22023, Apr. 3, 1980]

                    Members of the Uniformed Services



Sec. 404.1330  Who is a member of a uniformed service.

    A member of a uniformed service is an individual who served on 
active duty after 1956. You are a member of a uniformed service if you--
    (a) Are appointed, enlisted, or inducted into--
    (1) The Air Force, Army, Navy, Coast Guard, or Marine Corps; or
    (2) A reserve component of the uniformed services in paragraph 
(a)(1) of this section (except the Coast Guard Reserve as a temporary 
member);
    (b) Served in the Army or Air Force under call or conscription;
    (c) Are a commissioned officer of the National Oceanic and 
Atmospheric Administration or its predecessors, the Environmental 
Science Services Administration and the Coast and Geodetic Survey;
    (d) Are a commissioned officer of the Regular or Reserve Corps of 
the Public Health Service;
    (e) Are a retired member of any of the above services;
    (f) Are a member of the Fleet Reserve or Fleet Marine Corps Reserve;

[[Page 351]]

    (g) Are a cadet at the United States Military Academy, Air Force 
Academy, or Coast Guard Academy, or a midshipman at the United States 
Naval Academy; or
    (h) Are a member of the Reserve Officers Training Corps of the Army, 
Navy or Air Force, when ordered to annual training duty for at least 14 
days and while performing official travel to and from that duty.

             Amounts of Wage Credits and Limits on Their Use



Sec. 404.1340  Wage credits for World War II and post-World War II
veterans.

    In determining your entitlement to, and the amount of, your monthly 
benefit or lump-sum death payment based on your active service during 
the World War II period or the post-World War II period, and for 
establishing a period of disability as discussed in Secs. 404.132 and 
404.133, we add the (deemed) amount of $160 for each month during a part 
of which you were in the active service as described in Sec. 404.1312 or 
Sec. 404.1322. For example, if you were in active service from October 
11, 1942, through August 10, 1943, we add the (deemed) amount of $160 
for October 1942 and August 1943 as well as November 1942 through July 
1943. The amount of wage credits that are added in a calendar year 
cannot cause the total amount credited to your earnings record to exceed 
the annual earnings limitation explained in Secs. 404.1047 and 
404.1096(b).



Sec. 404.1341  Wage credits for a member of a uniformed service.

    (a) General. In determining your entitlement to, and the amount of 
your monthly benefit (or lump sum death payment) based on your wages 
while on active duty as a member of the uniformed service from 1957 
through 2001, and for establishing a period of disability as discussed 
in Sec. 404.132, we add wage credits to the wages paid you as a member 
of that service. The amount of the wage credits, the applicable time 
periods, the wage credit amount limits, and the requirement of a minimum 
period of active duty service for granting these wage credits, are 
discussed in paragraphs (b), (c), and (d) of this section.
    (b) Amount of wage credits. The amount of wage credits added is--
    (1) $100 for each $300 in wages paid to you for your service in each 
calendar year from 1978 through 2001; and
    (2) $300 for each calendar quarter in 1957 through 1977, regardless 
of the amount of wages actually paid you during that quarter for your 
service.
    (c) Limits on wage credits. The amount of these wage credits cannot 
exceed--
    (1) $1200 for any calendar year, or
    (2) An amount which when added to other earnings causes the total 
earnings for the year to exceed the annual earnings limitation explained 
in Secs. 404.1047 and 404.1096(b).
    (d) Minimum active-duty service requirement. (1) If you enlisted for 
the first time in a regular component of the Armed Forces on or after 
September 8, 1980, you must complete the shorter of 24 months of 
continuous active duty or the full period that you were called to active 
duty to receive these wage credits, unless:
    (i) You are discharged or released from active duty for the 
convenience of the government in accordance with section 1171 of title 
10 U.S.C. or because of hardship as specified in section 1173 of title 
10 U.S.C.;
    (ii) You are discharged or released from active duty for a 
disability incurred or aggravated in line of duty;
    (iii) You are entitled to compensation for service-connected 
disability or death under chapter 11 of title 38 U.S.C.;
    (iv) You die during your period of enlistment; or
    (v) You were discharged prior to October 14, 1982, and your 
discharge was--
    (A) Under chapter 61 of title 10 U.S.C.; or
    (B) Because of a disability which resulted from an injury or disease 
incurred in or aggravated during your enlistment which was not the 
result of your intentional misconduct and did not occur during a period 
of unauthorized absence.
    (2) If you entered on active duty as a member of the uniformed 
services as defined in Sec. 404.1330 on or after October 14, 1982, 
having neither previously completed a period of 24 months' active duty 
nor been discharged or released from this period of active duty under

[[Page 352]]

section 1171, title 10 U.S.C. (i.e., convenience of the government), you 
must complete the shorter of 24 months of continuous active duty or the 
full period you were called or ordered to active duty to receive these 
wage credits, unless:
    (i) You are discharged or released from active duty for the 
convenience of the government in accordance with section 1171 of title 
10 U.S.C. or because of hardship as specified in section 1173 of title 
10 U.S.C.;
    (ii) You are discharged or released from active duty for a 
disability incurred or aggravated in line of duty;
    (iii) You are entitled to compensation for service-connected 
disability or death under chapter 11 of title 38 U.S.C.; or
    (iv) You die during your period of active service.

[45 FR 16464, Mar. 14, 1980, as amended at 52 FR 29663, Aug. 11, 1987; 
70 FR 11865, Mar. 10, 2005]



Sec. 404.1342  Limits on granting World War II and post-World War II
wage credits.

    (a) You get wage credits for World War II or post-World War II 
active service only if the use of the wage credits results in 
entitlement to a monthly benefit, a higher monthly benefit, or a lump-
sum death payment.
    (b) You may get wage credits for active service in July 1947 for 
either the World War II period or the post-World War II period but not 
for both. If your active service is before and on or after July 25, 
1947, we add the $160 wage credit to the period which is most 
advantageous to you.
    (c) You do not get wage credits for the World War II period if 
another Federal benefit (other than one payable by the Veterans 
Administration) is determined by a Federal agency or an instrumentality 
owned entirely by the United States to be payable to you, even though 
the Federal benefit is not actually paid or is paid and then terminated, 
based in part on your active service during the World War II period 
except as explained in Sec. 404.1343.
    (d) You do not get wage credits for the post-World War II period if 
another Federal benefit (other than one payable by the Veterans 
Administration) is determined by a Federal agency or an instrumentality 
owned entirely by the United States to be payable to you, even though 
the Federal benefit is not actually paid or is paid and then terminated, 
based in part on your active service during the post-World War II period 
except as explained in Sec. 404.1343.



Sec. 404.1343  When the limits on granting World War II 
and post-World War II wage credits do not apply.

    The limits on granting wage credits described in Sec. 404.1342 (c) 
and (d) do not apply--
    (a) If the wage credits are used solely to meet the insured status 
and quarters of coverage requirements for a period of disability as 
described in Secs. 404.132 and 404.133;
    (b) If you are the surviving spouse or child of a veteran of the 
World War II period or post-World War II period and you are entitled 
under the Civil Service Retirement Act of 1930 to a survivor's annuity 
based on the veteran's active service and--
    (1) You give up your right to receive the survivor's annuity;
    (2) A benefit under the Civil Service Retirement Act of 1930 based 
on the veteran's active service was not payable to the veteran; and
    (3) Another Federal benefit is not payable to the veteran or his or 
her survivors except as described in paragraph (c) of this section; or
    (c) For the years 1951 through 1956, if another Federal benefit is 
payable by the Army, Navy, Air Force, Marine Corps, Coast Guard, Coast 
and Geodetic Survey, or the Public Health Service based on post-World 
War II active service but only if the veteran was also paid wages as a 
member of a uniformed service after 1956.

[45 FR 16464, Mar. 14, 1980, as amended at 49 FR 24118, June 12, 1984]

               Deemed Insured Status for World II Veterans



Sec. 404.1350  Deemed insured status.

    (a) When deemed insured status applies. If you are the survivor of a 
World War II veteran, we consider the veteran to have died fully insured 
as discussed in Sec. 404.111 and we include wage credits in

[[Page 353]]

determining your monthly benefit or lump-sum death payment if--
    (1) The veteran was separated from active service of the United 
States before July 27, 1951; and
    (2) The veteran died within 3 years after separation from active 
service and before July 27, 1954.
    (b) Amount of credit given for deemed insured World War II veterans. 
(1) When we compute a survivor's benefit or lump-sum death payment, we 
give credit for--
    (i) $200 (for increment year purposes) for each calendar year in 
which the veteran had at least 30 days of active service beginning 
September 16, 1940, through 1950; and
    (ii) An average monthly wage of $160.
    (2) If the World War II veteran was fully or currently insured 
without the wage credits, we add increment years (years after 1936 and 
prior to 1951 in which the veteran had at least $200 in creditable 
earnings) to the increment years based on the veteran's wages.



Sec. 404.1351  When deemed insured status does not apply.

    As a survivor of a World War II veteran, you cannot get a monthly 
benefit or lump-sum death payment based on the veteran's deemed insured 
status as explained in Sec. 404.1350 if--
    (a) Your monthly benefit or lump-sum death payment is larger without 
using the wage credits;
    (b) The Veterans Administration has determined that a pension or 
compensation is payable to you based on the veteran's death;
    (c) The veteran died while in the active service of the United 
States;
    (d) The veteran was first separated from active service after July 
26, 1951;
    (e) The veteran died after July 26, 1954; or
    (f) The veteran's only service during the World War II period was by 
enlistment in the Philippine Scouts as authorized by the Armed Forces 
Voluntary Recruitment Act of 1945 (Pub. L. 190 of the 79th Congress).



Sec. 404.1352  Benefits and payments based on deemed insured status.

    (a) Our determination. We determine your monthly benefit or lump-sum 
death payment under the deemed insured status provisions in 
Secs. 404.1350 and 404.1351 regardless of whether the Veterans 
Administration has determined that any pension or compensation is 
payable to you.
    (b) Certification for payment. If we determine that you can be paid 
a monthly benefit or lump-sum death payment, we certify these benefits 
for payment. However, the amount of your monthly benefit or lump-sum 
death payment may be changed if we are informed by the Veterans 
Administration that a pension or compensation is payable because of the 
veteran's death as explained in Sec. 404.1360.
    (c) Payments not considered as pension or compensation. We do not 
consider as pension or compensation--
    (1) National Service Life Insurance payments;
    (2) United States Government Life Insurance payments; or
    (3) Burial allowance payments made by the Veterans Administration.

  Effect of Other Benefits on Payment of Social Security Benefits and 
                                Payments



Sec. 404.1360  Veterans Administration pension or compensation payable.

    (a) Before we determine and certify payment. If we are informed by 
the Veterans Administration that a pension or compensation is payable to 
you before we determine and certify payment of benefits based on deemed 
insured status, we compute your monthly benefit or lump-sum death 
payment based on the death of the World War II veteran without using the 
wage credits discussed in Sec. 404.1350.
    (b) After we determine and certify payment. If we are informed by 
the Veterans Administration that a pension or compensation is payable to 
you after we determine and certify payment of benefits based on deemed 
insured status, we--
    (1) Stop payment of your benefits or recompute the amount of any 
further benefits that can be paid to you; and
    (2) Determine whether you were erroneously paid and the amount of 
any erroneous payment.

[[Page 354]]



Sec. 404.1361  Federal benefit payable other than by Veterans Administration.

    (a) Before we determine and certify payment. If we are informed by 
another Federal agency or instrumentality of the United States (other 
than the Veterans Administration) that a Federal benefit is payable to 
you by that agency or instrumentality based on the veteran's World War 
II or post-World War II active service before we determine and certify 
your monthly benefit or lump-sum death payment, we compute your monthly 
benefit or lump-sum death payment without using the wage credits 
discussed in Sec. 404.1340.
    (b) After we determine and certify payment. If we are informed by 
another Federal agency or instrumentality of the United States (other 
than the Veterans Administration) that a Federal benefit is payable to 
you by that agency or instrumentality based on the veteran's World War 
II or post-World War II active service after we determine and certify 
payment, we--
    (1) Stop payment of your benefits or recompute the amount of any 
further benefits that can be paid to you; and
    (2) Determine whether you were erroneously paid and the amount of 
any erroneous payment.



Sec. 404.1362  Treatment of social security benefits or payments 
where Veterans Administration pension or compensation payable.

    (a) Before we receive notice from the Veterans Administration. If we 
certify your monthly benefit or a lump-sum death payment as determined 
under the deemed insured status provisions in Sec. 404.1350 before we 
receive notice from the Veterans Administration that a pension or 
compensation is payable to you, our payments to you are erroneous only 
to the extent that they exceed the amount of the accrued pension of 
compensation payable.
    (b) After we receive notice from the Veterans Administration. If we 
certify your monthly benefit or lump-sum death payment as determined 
under the deemed insured status provisions in Sec. 404.1350 after we 
receive notice from the Veterans Administration that a pension or 
compensation is payable to you, our payments to you are erroneous 
whether or not they exceed the amount of the accrued pension or 
compensation payable.



Sec. 404.1363  Treatment of social security benefits or payments where
Federal benefit payable other than by Veterans Administration.

    If we certify your monthly benefit or lump-sum death payment based 
on World War II or post-World War II wage credits after we receive 
notice from another Federal agency or instrumentality of the United 
States (other than the Veterans Administration) that a Federal benefit 
is payable to you by that agency or instrumentality based on the 
veteran's World War II or post-World War II active service, our payments 
to you are erroneous to the extent the payments are based on the World 
War II or post-World War II wage credits. The payments are erroneous 
beginning with the first month you are eligible for the Federal benefit.

    Evidence of Active Service and Membership in a Uniformed Service



Sec. 404.1370  Evidence of active service and separation from active
service.

    (a) General. When you file an application for a monthly benefit or 
lump-sum death payment based on the active service of a World War II or 
post-World War II veteran, you must submit evidence of--
    (1) Your entitlement as required by subpart H of this part or other 
evidence that may be expressly required;
    (2) The veteran's period in active service of the United States; and
    (3) The veteran's type of separation from active service of the 
United States.
    (b) Evidence we accept. We accept as proof of a veteran's active 
service and separation from active service--
    (1) An original certificate of discharge, or an original certificate 
of service, from the appropriate military service, from the United 
States Public Health Service, or from the United States Coast and 
Geodetic Survey;
    (2) A certified copy of the original certificate of discharge or 
service made by the State, county, city agency or department in which 
the original certificate is recorded;

[[Page 355]]

    (3) A certification from the appropriate military service, United 
States Public Health Service, or United States Coast and Geodetic Survey 
showing the veteran's period of active service and type of separation;
    (4) A certification from a local selective service board showing the 
veteran's period of active service and type of separation; or
    (5) Other evidence that proves the veteran's period of active 
service and type of separation.



Sec. 404.1371  Evidence of membership in a uniformed service during
the years 1957 through 1967.

    (a) General. When you file an application for a monthly benefit or 
lump-sum death payment based on the services of a member of a uniformed 
service during the years 1957 through 1967, you should submit evidence 
identifying the member's uniformed service and showing the period(s) he 
or she was on active duty during those years.
    (b) Evidence we accept. The evidence we will accept includes any 
official correspondence showing the member's status as an active service 
member during the appropriate period, a certification of service by the 
uniformed service, official earnings statements, copies of the member's 
Form W-2, and military orders, for the appropriate period.



    Subpart O_Interrelationship of Old-Age, Survivors and Disability 
         Insurance Program With the Railroad Retirement Program

    Authority: Secs. 202(l), 205(a), (c)(5)(D), (i), and (o), 210 (a)(9) 
and (l)(4), 211(c)(3), and 702(a)(5) of the Social Security Act (42 
U.S.C. 402(l), 405(a), (c)(5)(D), (i), and (o), 410 (a)(9) and (l)(4), 
411(c)(3), and 902(a)(5)).

    Cross Reference: For regulations under the Railroad Retirement Act, 
see chapter II of this title.



Sec. 404.1401  What is the interrelationship between the Railroad 
Retirement Act and the Old-Age, Survivors and Disability Insurance 
Program of the Social Security Act?

    (a) Background. The Railroad Retirement Act provides a system of 
benefits for railroad employees, their dependents and survivors, and is 
integrated with the Social Security Act to provide a coordinated system 
of retirement, survivor, dependent and disability benefits payable on 
the basis of an individual's work in the railroad industry and in 
employment and self-employment covered by the Social Security Act. With 
respect to the coordination between the two programs, the Railroad 
Retirement Act distinguishes between ``career'' or ``vested'' railroad 
workers and those individuals who may be considered ``casual'' or ``non-
vested'' railroad workers based on the total amount of railroad service 
credited to the worker, as explained in paragraph (b) of this section. 
The Railroad Retirement Board transfers to the Social Security 
Administration (SSA) the compensation records of workers who at the time 
of retirement, onset of disability or death, are non-vested and meet 
certain other requirements. Any compensation paid to non-vested workers 
for service after 1936 becomes wages under the Social Security Act (to 
the extent they do not exceed the annual wage limitations described in 
Sec. 404.1047). Any benefits payable to non-vested workers, their 
dependents, and their survivors, are computed on the basis of the 
combined compensation and social security covered earnings creditable to 
the workers' records. Once a railroad worker meets the vesting 
requirements, the record of the worker's railroad service and 
compensation generally may not be used for benefit purposes under the 
Social Security Act, but under certain circumstances may be transferred 
after the worker's death to SSA for use in determining social security 
benefit entitlement for the railroad worker's survivors (see 
Sec. 404.1407). Under certain circumstances (see Sec. 404.1413), 
certification of benefits payable under the provisions of the Social 
Security Act will be made to the Railroad Retirement Board. The Railroad 
Retirement Board will certify such benefits to the Secretary of the 
Treasury.
    (b) Who is a vested railroad worker? You are a vested railroad 
worker if you have:
    (1) Ten years or more of service in the railroad industry, or

[[Page 356]]

    (2) Effective January 1, 2002, you have at least 5 years of service 
in the railroad industry, all of which accrue after December 31, 1995.
    (c) Definition of years of service. As used in paragraph (b) of this 
section, the term years of service has the same meaning as assigned to 
it by section 1(f) of the Railroad Retirement Act of 1974, as amended, 
(45 U.S.C. 231(f)).

[69 FR 5692, Feb. 6, 2004]



Sec. 404.1402  When are railroad industry services by a non-vested
worker covered under Social Security?

    If you are a non-vested worker, we (the Social Security 
Administration) will consider your services in the railroad industry to 
be ``employment'' as defined in section 210 of the Social Security Act 
for the following purposes:
    (a) To determine entitlement to, or the amount of, any monthly 
benefits or lump-sum death payment on the basis of your wages and self-
employment income;
    (b) To determine entitlement to, or the amount of, any survivor 
monthly benefit or any lump-sum death payment on the basis of your wages 
and self-employment income provided you did not have a ``current 
connection'' with the railroad industry, as defined in section 1(o) of 
the Railroad Retirement Act of 1974, as amended, (45 U.S.C. 231(o)), at 
the time of your death; (in such cases, survivor benefits are not 
payable under the Railroad Retirement Act);
    (c) To determine entitlement to a period of disability (see subpart 
B of this part) on the basis of your wages and self-employment income; 
or
    (d) To apply the provisions of section 203 of the Social Security 
Act concerning deductions from benefits under the annual earnings test 
(see subpart E of this part).

[69 FR 5693, Feb. 6, 2004]



Sec. 404.1404  Effective date of coverage of railroad services 
under the act.

    Coverage under the act of services performed after 1936 by an 
individual in the railroad industry is effective as follows:
    (a) The provisions of paragraphs (a) and (b) of Sec. 404.1402 
insofar as they relate to survivor monthly benefits are effective for 
months after December 1946 and insofar as they relate to lump-sum death 
payments are effective with respect to deaths after 1946;
    (b) The provisions of paragraph (a) of Sec. 404.1402 insofar as they 
relate to old-age insurance benefits or monthly benefits of dependents 
of old-age insurance beneficiaries are effective November 1, 1951; 
insofar as they relate to disability insurance benefits are effective 
for months after June 1957; and insofar as they relate to monthly 
benefits for dependents of disability insurance beneficiaries are 
effective for months after August 1958;
    (c) The provisions of paragraph (c) of Sec. 404.1402 are effective 
for benefits for months after June 1955; and
    (d) The provisions of paragraph (d) of Sec. 404.1402 are effective 
November 1, 1951.

[25 FR 5182, June 10, 1960]



Sec. 404.1405  If you have been considered a non-vested worker, 
what are the situations when your railroad industry work will not
be covered under Social Security?

    (a) Awards by the Railroad Retirement Board prior to October 30, 
1951. The provisions of Sec. 404.1402(a) shall not apply with respect to 
the wages and self-employment income of an individual if, prior to 
October 30, 1951, the Railroad Retirement Board has awarded under the 
Railroad Retirement Act a retirement annuity to such individual or a 
survivor annuity with respect to the death of such individual and such 
retirement or survivor annuity, as the case may be, was payable at the 
time an application for benefits is filed under the Social Security Act 
on the basis of the wages and self-employment income of such individual. 
A pension payable under section 6 of the Railroad Retirement Act of 1937 
as in effect prior to the Railroad Retirement Act of 1974, or an annuity 
paid in a lump sum equal to its commuted value under section 3(i) of the 
Railroad Retirement Act in effect prior to the Social Security Act of 
October 30, 1951, is not a ``retirement or survivor annuity'' for the 
purpose of this paragraph.
    (b) You continue to work in the railroad industry after establishing 
entitlement to old-age insurance benefits under section

[[Page 357]]

202(a) of the Social Security Act. If your service in the railroad 
industry is used to establish your entitlement to, or to determine the 
amount of, your old-age insurance benefits under section 202(a) of the 
Social Security Act, but you become vested after the effective date of 
your benefits, your railroad service will no longer be deemed to be in 
``employment'' as defined in section 210 of the Act. Your benefits and 
any benefits payable to your spouse or child under section 202(b), (c), 
or (d) of the Act will be terminated with the month preceding the month 
in which you become a vested worker. However, if you remain insured (see 
subpart B of this part) without the use of your railroad compensation, 
your benefits will instead be recalculated without using your railroad 
compensation. The recalculated benefits will be payable beginning with 
the month in which you become a vested worker. Any monthly benefits paid 
prior to the month you become a vested worker are deemed to be correct 
payments.

[18 FR 8694, Dec. 24, 1953, as amended at 25 FR 5182, June 10, 1960; 42 
FR 18273, Apr. 6, 1977; 69 FR 5693, Feb. 6, 2004]



Sec. 404.1406  Eligibility to railroad retirement benefits as a 
bar to payment of social security benefits.

    Notwithstanding the fact that, pursuant to the preceding provisions 
of this subpart, services rendered by an individual in the railroad 
industry are in employment, no lump-sum death payment or survivor 
monthly benefits shall be paid (except as provided in Sec. 404.1407) 
under the regulations in this part on the basis of such individual's 
wages and self-employment income if any person, upon filing application 
therefor, would be entitled to an annuity under section 2 of the 
Railroad Retirement Act of 1974 or a lump-sum payment under section 6(b) 
of such Act with respect to the death of that individual; or for periods 
prior to 1975, would have been entitled to an annuity under section 5 or 
a lump-sum payment under section 5(f)(1) of the Railroad Retirement Act 
of 1937 with respect to the death of that individual.

[42 FR 18273, Apr. 6, 1977]



Sec. 404.1407  When railroad retirement benefits do not bar payment
of social security benefits.

    The provisions of Sec. 404.1406 shall not operate if:
    (a) The survivor is, or upon filing application would be, entitled 
to a monthly benefit with respect to the death of an insured individual 
for a month prior to January 1947, if such monthly benefit is greater in 
amount than the survivor annuity payable to such survivor after 1946 
under the Railroad Retirement Act; or
    (b) The residual lump-sum payment provided by section 6(c) of the 
Railroad Retirement Act of 1974 (or section 5(f)(2) of the Railroad 
Retirement Act of 1937 prior to the 1974 Act) with respect to the death 
of an insured individual is paid by the Railroad Retirement Board 
pursuant to an irrevocable election filed with the Board by the widow, 
widower, or parent of such individual to waive all future annuities or 
benefits based on the combined record of earnings and compensation to 
which such widow, widower or parent might become entitled, but only to 
the extent that widow's, widower's or parent's benefits may be payable 
under the regulations of this part to such widow, widower or parent, as 
the case may be, solely on the basis of the wages and self-employment 
income of such deceased individual and without regard to any 
compensation which may be treated as wages pursuant to Sec. 404.1408.

[42 FR 18273, Apr. 6, 1977]



Sec. 404.1408  Compensation to be treated as wages.

    (a) General. Where pursuant to the preceding provisions of this 
subpart, services rendered by an individual in the railroad industry are 
considered to be employment as defined in section 210 of the Social 
Security Act (see Sec. 404.1027 of this part). Thus, any compensation 
(as defined in section 1(h) of the Railroad Retirement Act of 1974 or 
prior to the 1974 Act, section 1(h) of the Railroad Retirement Act of 
1937) received by such individual for such services shall constitute 
wages, provided that the provisions of Sec. 404.1406 do not operate to 
bar the payments of benefits under title II of the Social Security Act.

[[Page 358]]

    (b) Military service exception. An exception to paragraph (a) of 
this section applies to any compensation attributable as having been 
paid during any month on account of military service creditable under 
section 1 of the Railroad Retirement Act of 1974 (or section 4 of the 
Railroad Retirement Act of 1937 prior to the 1974 Act). Such 
compensation shall not constitute wages for purposes of title II of the 
Social Security Act if, based on such services, wages are deemed to have 
been paid to such individual during such month under the provisions 
described in Secs. 404.1350 through 404.1352 of this part.

[65 FR 16813, Mar. 30, 2000]



Sec. 404.1409  Purposes of using compensation.

    Compensation which is treated as wages under Sec. 404.1408 shall be 
used, together with wages (see subpart K of this part) and self-
employment income (see subpart K of this part), for purposes of:
    (a) Determining an individual's insured status for monthly benefits 
or the lump-sum death payment (see subpart B of this part);
    (b) Computing such individual's primary insurance amount (see 
subpart C of this part);
    (c) Determining an individual's entitlement to the establishment of 
a period of disability (see subpart B of this part for disability 
insured status requirements); and
    (d) Applying the deduction provisions of section 203 of the act (see 
subpart E of this part).

[25 FR 5183, June 10, 1960]



Sec. 404.1410  Presumption on basis of certified compensation record.

    (a) Years prior to 1975. Where the Railroad Retirement Board 
certifies to SSA a report of record of compensation, such compensation 
is treated as wages under Sec. 404.1408. For periods of service which do 
not identify the months or quarters in which such compensation was paid, 
the sum of the compensation quarters of coverage (see Sec. 404.1412) 
will be presumed, in the absence of evidence to the contrary, to 
represent an equivalent number of quarters of coverage (see 
Sec. 404.101). No more than four quarters of coverage shall be credited 
to an individual in a single calendar year.
    (b) Years after 1974. Compensation paid in a calendar year will, in 
the absence of evidence to the contrary, be presumed to have been paid 
in equal proportions with respect to all months in the year in which the 
employee will have been in railroad service. (For years prior to 1975, 
see Sec. 404.1412.)
    (c) Allocation of compensation to months of service. If by means of 
the presumptions in this section an individual does not have an insured 
status (see subpart B of this part) on the basis of quarters of coverage 
with which he is credited, or a deceased individual's primary insurance 
amount (see Sec. 404.201) may be affected because he attained age 22 
after 1936, the Administration may request the Railroad Retirement Board 
to furnish a report of the months in which such individual rendered 
service for compensation which is treated as wages under Sec. 404.1408 
if it appears the identification of such months may result in an insured 
status or if it will affect such primary insurance amount.
    (d) Effect of self-employment income and maximum earnings. However, 
if such individual also had self-employment income for a taxable year 
and the sum of such income and wages (including compensation which is 
treated as wages under Sec. 404.1408) paid to or received by him during 
such taxable year equals the following amounts, each calendar quarter 
any part of which falls in such taxable year, shall be a quarter of 
coverage:
    (1) After 1950 and prior to 1955, equals $3,600 of remuneration;
    (2) After 1954 and prior to 1959, equals $4,200 of remuneration;
    (3) After 1958 and prior to 1966, equals $4,800 of remuneration;
    (4) After 1965 and prior to 1968, equals $6,600 of remuneration;
    (5) After 1967 and beginning prior to 1972, equals $7,800 of 
remuneration (including a fiscal year which began in 1971 and ended in 
1972);
    (6) Beginning after 1971 and prior to 1973, equals $9,000 of 
remuneration;
    (7) Beginning after 1972 and prior to 1974, equals $10,800 of 
remuneration;
    (8) Beginning after 1973 and prior to 1975, equals $13,200 of 
remuneration;

[[Page 359]]

    (9) Beginning after 1974 and prior to 1976, equals $14,100 of 
remuneration;
    (10) Beginning after 1975 and prior to 1977, equals $15,300 of 
remuneration; or
    (11) Beginning after 1976, and amount equal to the contribution and 
benefit base as determined under section 230 of the Social Security Act 
which is effective for such calendar year.


This subsection is an exception to the rule in paragraph (a) of this 
section concerning a presumption applicable to conversion of railroad 
compensation into quarters of coverage for years prior to 1975.

[42 FR 18273, Apr. 6, 1977, as amended at 65 FR 16814, Mar. 30, 2000]



Sec. 404.1412  Compensation quarters of coverage.

    As used in this subpart, a compensation quarter of coverage is any 
quarter of coverage computed with respect to compensation paid to an 
individual for railroad employment after 1936 and prior to 1975 in 
accordance with the provisions for determining such quarters of coverage 
as contained in section 5(l)(4) of the Railroad Retirement Act of 1937. 
(For years beginning 1975, see Sec. 404.1410(b)).

[42 FR 18274, Apr. 6, 1977]



Sec. 404.1413  When will we certify payment to the Railroad Retirement
Board (RRB)?

    (a) When we will certify payment to RRB. If we find that you are 
entitled to any payment under title II of the Social Security Act, we 
will certify payment to the Railroad Retirement Board if you meet any of 
the following requirements:
    (1) You are a vested worker; or
    (2) You are the wife or husband of a vested worker; or
    (3) You are the survivor of a vested worker and you are entitled, or 
could upon application be entitled to, an annuity under section 2 of the 
Railroad Retirement Act of 1974, as amended, (45 U.S.C. 231(a)); or
    (4) You are entitled to benefits under section 202 of the Social 
Security Act on the basis of the wages and self-employment income of a 
vested worker (unless you are the survivor of a vested worker who did 
not have a current connection, as defined in section 1(o) of the 
Railroad Retirement Act of 1974, as amended, (45 U.S.C. 231(o)) with the 
railroad industry at the time of his or her death).
    (b) What information does certification include? The certification 
we make to the Railroad Retirement Board for individuals entitled to any 
payment(s) under title II will include your name, address, payment 
amount(s), and the date the payment(s) should begin.
    (c) Applicability limitations. The applicability limitations in 
paragraphs (a)(1) through (4) of this section affect claimants who first 
become entitled to benefits under title II of the Social Security Act 
after 1974. (See also Sec. 404.1810.)

[69 FR 5693, Feb. 6, 2004]



             Subpart P_Determining Disability and Blindness

    Authority: Secs. 202, 205(a)-(b) and (d)-(h), 216(i), 221(a) and 
(h)-(j), 222(c), 223, 225, and 702(a)(5) of the Social Security Act (42 
U.S.C. 402, 405(a)-(b) and (d)-(h), 416(i), 421(a) and (h)-(j), 422(c), 
423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 Stat. 2105, 
2189; sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note).

    Source: 45 FR 55584, Aug. 20, 1980, unless otherwise noted.

                                 General



Sec. 404.1501  Scope of subpart.

    In order for you to become entitled to any benefits based upon 
disability or blindness or to have a period of disability established, 
you must be disabled or blind as defined in title II of the Social 
Security Act. This subpart explains how we determine whether you are 
disabled or blind. We discuss a period of disability in subpart D of 
this part. We have organized the rules in the following way.
    (a) We define general terms, then discuss who makes our disability 
determinations and state that disability determinations made under other 
programs are not binding on our determinations.
    (b) We explain the term disability and note some of the major 
factors that are considered in determining whether you

[[Page 360]]

are disabled in Secs. 404.1505 through 404.1510.
    (c) Sections 404.1512 through 404.1518 contain our rules on 
evidence. We explain your responsibilities for submitting evidence of 
your impairment, state what we consider to be acceptable sources of 
medical evidence, and describe what information should be included in 
medical reports.
    (d) Our general rules on evaluating disability if you are filing a 
new application are stated in Secs. 404.1520 through 404.1523. We 
describe the steps that we go through and the order in which they are 
considered.
    (e) Our rules on medical considerations are found in Secs. 404.1525 
through 404.1530. We explain in these rules--
    (1) The purpose of the Listing of Impairments found in appendix 1 of 
this subpart and how to use it;
    (2) What we mean by the term medical equivalence and how we 
determine medical equivalence;
    (3) The effect of a conclusion by your physician that you are 
disabled;
    (4) What we mean by symptoms, signs, and laboratory findings;
    (5) How we evaluate pain and other symptoms; and
    (6) The effect on your benefits if you fail to follow treatment that 
is expected to restore your ability to work, and how we apply the rule.
    (f) In Secs. 404.1545 through 404.1546 we explain what we mean by 
the term residual functional capacity, state when an assessment of 
residual functional capacity is required, and who may make it.
    (g) Our rules on vocational considerations are in Secs. 404.1560 
through 404.1569a. We explain in these rules--
    (1) When we must consider vocational factors along with the medical 
evidence;
    (2) How we use our residual functional capacity assessment to 
determine if you can still do your past relevant work or other work;
    (3) How we consider the vocational factors of age, education, and 
work experience;
    (4) What we mean by ``work which exists in the national economy'';
    (5) How we consider the exertional, nonexertional, and skill 
requirements of work, and when we will consider the limitations or 
restrictions that result from your impairment(s) and related symptoms to 
be exertional, nonexertional, or a combination of both; and
    (6) How we use the Medical-Vocational Guidelines in appendix 2 of 
this subpart.
    (h) Our rules on substantial gainful activity are found in 
Secs. 404.1571 through 404.1574. These explain what we mean by 
substantial gainful activity and how we evaluate your work activity.
    (i) In Secs. 404.1577, 404.1578, and 404.1579, we explain the 
special rules covering disability for widows, widowers, and surviving 
divorced spouses for monthly benefits payable for months prior to 
January 1991, and in Secs. 404.1581 through 404.1587 we discuss 
disability due to blindness.
    (j) Our rules on when disability continues and stops are contained 
in Sec. 404.1579 and Secs. 404.1588 through 404.1598. We explain what 
your responsibilities are in telling us of any events that may cause a 
change in your disability status, when you may have a trial work period, 
and when we will review to see if you are still disabled. We also 
explain how we consider the issue of medical improvement (and the 
exceptions to medical improvement) in deciding whether you are still 
disabled.

[45 FR 55584, Aug. 20, 1980, as amended at 50 FR 50126, Dec. 6, 1985; 56 
FR 57941, Nov. 14, 1991; 57 FR 30120, July 8, 1992; 68 FR 51161, Aug. 
26, 2003]



Sec. 404.1502  Definitions for this subpart.

    As used in the subpart--
    (a) Acceptable medical source means a medical source who is a:
    (1) Licensed physician (medical or osteopathic doctor);
    (2) Licensed psychologist, which includes:
    (i) A licensed or certified psychologist at the independent practice 
level; or
    (ii) A licensed or certified school psychologist, or other licensed 
or certified individual with another title who performs the same 
function as a school psychologist in a school setting, for impairments 
of intellectual disability, learning disabilities, and borderline 
intellectual functioning only;

[[Page 361]]

    (3) Licensed optometrist for impairments of visual disorders, or 
measurement of visual acuity and visual fields only, depending on the 
scope of practice in the State in which the optometrist practices;
    (4) Licensed podiatrist for impairments of the foot, or foot and 
ankle only, depending on whether the State in which the podiatrist 
practices permits the practice of podiatry on the foot only, or the foot 
and ankle;
    (5) Qualified speech-language pathologist for speech or language 
impairments only. For this source, qualified means that the speech-
language pathologist must be licensed by the State professional 
licensing agency, or be fully certified by the State education agency in 
the State in which he or she practices, or hold a Certificate of 
Clinical Competence in Speech-Language Pathology from the American 
Speech-Language-Hearing Association;
    (6) Licensed audiologist for impairments of hearing loss, auditory 
processing disorders, and balance disorders within the licensed scope of 
practice only (with respect to claims filed (see Sec. 404.614) on or 
after March 27, 2017);
    (7) Licensed Advanced Practice Registered Nurse, or other licensed 
advanced practice nurse with another title, for impairments within his 
or her licensed scope of practice (only with respect to claims filed 
(see Sec. 404.614) on or after March 27, 2017); or
    (8) Licensed Physician Assistant for impairments within his or her 
licensed scope of practice (only with respect to claims filed (see 
Sec. 404.614) on or after March 27, 2017).
    (b) Commissioner means the Commissioner of Social Security or his or 
her authorized designee.
    (c) Laboratory findings means one or more anatomical, physiological, 
or psychological phenomena that can be shown by the use of medically 
acceptable laboratory diagnostic techniques. Diagnostic techniques 
include chemical tests (such as blood tests), electrophysiological 
studies (such as electrocardiograms and electroencephalograms), medical 
imaging (such as X-rays), and psychological tests.
    (d) Medical source means an individual who is licensed as a 
healthcare worker by a State and working within the scope of practice 
permitted under State or Federal law, or an individual who is certified 
by a State as a speech-language pathologist or a school psychologist and 
acting within the scope of practice permitted under State or Federal 
law.
    (e) Nonmedical source means a source of evidence who is not a 
medical source. This includes, but is not limited to:
    (1) You;
    (2) Educational personnel (for example, school teachers, counselors, 
early intervention team members, developmental center workers, and 
daycare center workers);
    (3) Public and private social welfare agency personnel; and
    (4) Family members, caregivers, friends, neighbors, employers, and 
clergy.
    (f) Objective medical evidence means signs, laboratory findings, or 
both.
    (g) Signs means one or more anatomical, physiological, or 
psychological abnormalities that can be observed, apart from your 
statements (symptoms). Signs must be shown by medically acceptable 
clinical diagnostic techniques. Psychiatric signs are medically 
demonstrable phenomena that indicate specific psychological 
abnormalities, e.g., abnormalities of behavior, mood, thought, memory, 
orientation, development, or perception, and must also be shown by 
observable facts that can be medically described and evaluated.
    (h) State agency means an agency of a State designated by that State 
to carry out the disability or blindness determination function.
    (i) Symptoms means your own description of your physical or mental 
impairment.
    (j) We or us means, as appropriate, either the Social Security 
Administration or the State agency making the disability or blindness 
determination.
    (k) You or your means, as appropriate, the person who applies for 
benefits or for a period of disability, the person for whom an 
application is filed, or the person who is receiving benefits based on 
disability or blindness.

[82 FR 5864, Jan. 18, 2017; 82 FR 15132, Mar. 27, 2017]

[[Page 362]]

                             Determinations



Sec. 404.1503  Who makes disability and blindness determinations.

    (a) State agencies. State agencies make disability and blindness 
determinations for the Commissioner for most persons living in the 
State. State agencies make these disability and blindness determinations 
under regulations containing performance standards and other 
administrative requirements relating to the disability and blindness 
determination function. States have the option of turning the function 
over to the Federal Government if they no longer want to make disability 
determinations. Also, the Commissioner may take the function away from 
any State which has substantially failed to make disability and 
blindness determinations in accordance with these regulations. Subpart Q 
of this part contains the rules the States must follow in making 
disability and blindness determinations.
    (b) Social Security Administration. The Social Security 
Administration will make disability and blindness determinations for--
    (1) Any person living in a State which is not making for the 
Commissioner any disability and blindness determinations or which is not 
making those determinations for the class of claimants to which that 
person belongs; and
    (2) Any person living outside the United States.
    (c) What determinations are authorized. The Commissioner has 
authorized the State agencies and the Social Security Administration to 
make determinations about--
    (1) Whether you are disabled or blind;
    (2) The date your disability or blindness began; and
    (3) The date your disability or blindness stopped.
    (d) Review of State Agency determinations. On review of a State 
agency determination or redetermination of disability or blindness we 
may find that--
    (1) You are, or are not, disabled or blind, regardless of what the 
State agency found;
    (2) Your disability or blindness began earlier or later than the 
date found by the State agency; and
    (3) Your disability or blindness stopped earlier or later than the 
date found by the State agency.

[46 FR 29204, May 29, 1981, as amended at 52 FR 33926, Sept. 9, 1987; 62 
FR 38451, July 18, 1997; 65 FR 34957, June 1, 2000; 71 FR 16443, Mar. 
31, 2006; 72 FR 51177, Sept. 6, 2007; 82 FR 5864, Jan. 18, 2017]



Sec. 404.1503a  Program integrity.

    We will not use in our program any individual or entity, except to 
provide existing medical evidence, who is currently excluded, suspended, 
or otherwise barred from participation in the Medicare or Medicaid 
programs, or any other Federal or Federally-assisted program; whose 
license to provide health care services is currently revoked or 
suspended by any State licensing authority pursuant to adequate due 
process procedures for reasons bearing on professional competence, 
professional conduct, or financial integrity; or who, until a final 
determination is made, has surrendered such a license while formal 
disciplinary proceedings involving professional conduct are pending. By 
individual or entity we mean a medical or psychological consultant, 
consultative examination provider, or diagnostic test facility. Also see 
Secs. 404.1519 and 404.1519g(b).

[56 FR 36954, Aug. 1, 1991]



Sec. 404.1503b  Evidence from excluded medical sources of evidence.

    (a) General. We will not consider evidence from the following 
medical sources excluded under section 223(d)(5)(C)(i) of the Social 
Security Act (Act), as amended, unless we find good cause under 
paragraph (b) of this section:
    (1) Any medical source that has been convicted of a felony under 
section 208 or under section 1632 of the Act;
    (2) Any medical source that has been excluded from participation in 
any Federal health care program under section 1128 of the Act; or
    (3) Any medical source that has received a final decision imposing a 
civil monetary penalty or assessment, or both, for submitting false 
evidence under section 1129 of the Act.

[[Page 363]]

    (b) Good cause. We may find good cause to consider evidence from an 
excluded medical source of evidence under section 223(d)(5)(C)(i) of the 
Act, as amended, if:
    (1) The evidence from the medical source consists of evidence of 
treatment that occurred before the date the source was convicted of a 
felony under section 208 or under section 1632 of the Act;
    (2) The evidence from the medical source consists of evidence of 
treatment that occurred during a period in which the source was not 
excluded from participation in any Federal health care program under 
section 1128 of the Act;
    (3) The evidence from the medical source consists of evidence of 
treatment that occurred before the date the source received a final 
decision imposing a civil monetary penalty or assessment, or both, for 
submitting false evidence under section 1129 of the Act;
    (4) The sole basis for the medical source's exclusion under section 
223(d)(5)(C)(i) of the Act, as amended, is that the source cannot 
participate in any Federal health care program under section 1128 of the 
Act, but the Office of Inspector General of the Department of Health and 
Human Services granted a waiver of the section 1128 exclusion; or
    (5) The evidence is a laboratory finding about a physical impairment 
and there is no indication that the finding is unreliable.
    (c) Reporting requirements for excluded medical sources of evidence. 
Excluded medical sources of evidence (as described in paragraph (a) of 
this section) must inform us in writing that they are excluded under 
section 223(d)(5)(C)(i) of the Act, as amended, each time they submit 
evidence related to a claim for initial or continuing benefits under 
titles II or XVI of the Act. This reporting requirement applies to 
evidence that excluded medical sources of evidence submit to us either 
directly or through a representative, claimant, or other individual or 
entity.
    (1) Excluded medical sources of evidence must provide a written 
statement, which contains the following information:
    (i) A heading stating: ``WRITTEN STATEMENT REGARDING SECTION 
223(d)(5)(C) OF THE SOCIAL SECURITY ACT--DO NOT REMOVE''
    (ii) The name and title of the medical source;
    (iii) The applicable excluding event(s) stated in paragraph (a)(1)-
(a)(3) of this section;
    (iv) The date of the medical source's felony conviction under 
sections 208 or 1632 of the Act, if applicable;
    (v) The date of the imposition of a civil monetary penalty or 
assessment, or both, for the submission of false evidence, under section 
1129 of the Act, if applicable; and
    (vi) The basis, effective date, anticipated length of the exclusion, 
and whether the Office of the Inspector General of the Department of 
Health and Human Services waived the exclusion, if the excluding event 
was the medical source's exclusion from participation in any Federal 
health care program under section 1128 of the Act.
    (2) The written statement provided by an excluded medical source of 
evidence may not be removed by any individual or entity prior to 
submitting evidence to us.
    (3) We may request that the excluded medical source of evidence 
provide us with additional information or clarify any information 
submitted that bears on the medical source's exclusion(s) under section 
223(d)(5)(C)(i) of the Act, as amended.

[81 FR 65540, Sept. 22, 2016]



Sec. 404.1504  Decisions by other governmental agencies and 
nongovernmental entities.

    Other governmental agencies and nongovernmental entities--such as 
the Department of Veterans Affairs, the Department of Defense, the 
Department of Labor, the Office of Personnel Management, State agencies, 
and private insurers-- make disability, blindness, employability, 
Medicaid, workers' compensation, and other benefits decisions for their 
own programs using their own rules. Because a decision by any other 
governmental agency or a nongovernmental entity about whether you are 
disabled, blind, employable, or entitled to any benefits is based on its 
rules, it is not binding on us and is not

[[Page 364]]

our decision about whether you are disabled or blind under our rules. 
Therefore, in claims filed (see Sec. 404.614) on or after March 27, 
2017, we will not provide any analysis in our determination or decision 
about a decision made by any other governmental agency or a 
nongovernmental entity about whether you are disabled, blind, 
employable, or entitled to any benefits. However, we will consider all 
of the supporting evidence underlying the other governmental agency or 
nongovernmental entity's decision that we receive as evidence in your 
claim in accordance with Sec. 404.1513(a)(1) through (4).

[82 FR 5864, Jan. 18, 2017]

                        Definition of Disability



Sec. 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 must have a 
severe impairment(s) that makes you unable to do your past relevant work 
(see Sec. 404.1560(b)) or any other substantial gainful work that exists 
in the national economy. If your severe impairment(s) does not meet or 
medically equal a listing in appendix 1, we will assess your residual 
functional capacity as provided in Secs. 404.1520(e) and 404.1545. (See 
Secs. 404.1520(g)(2) and 404.1562 for an exception to this rule.) We 
will use this residual functional capacity assessment to determine if 
you can do your past relevant work. If we find that you cannot do your 
past relevant work, we will use the same residual functional capacity 
assessment and your vocational factors of age, education, and work 
experience to determine if you can do other work. (See Sec. 404.1520(h) 
for an exception to this rule.) We will use this definition of 
disability if you are applying for a period of disability, or disability 
insurance 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 disability for 
individuals who are statutorily blind. We discuss these in 
Secs. 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 Secs. 404.1577, 404.1578, and 404.1579.

[45 FR 55584, Aug. 20, 1980, as amended at 51 FR 10616, Mar. 28, 1986; 
57 FR 30120, July 8, 1992; 68 FR 51161, Aug. 26, 2003; 77 FR 43494, July 
25, 2012]



Sec. 404.1506  When we will not consider your impairment.

    (a) Permanent exclusion of felony-related impairment. In determining 
whether you are under a disability, we will not consider any physical or 
mental impairment, or any increase in severity (aggravation) of a 
preexisting impairment, which arises in connection with your commission 
of a felony after October 19, 1980, if you are subsequently convicted of 
this crime. Your subsequent conviction will invalidate any prior 
determination establishing disability if that determination was based 
upon any impairment, or aggravation, which we must exclude under this 
rule.
    (b) Limited use of impairment arising in prison. In determining 
whether you are under a disability for purposes of benefit payments, we 
will not consider any physical or mental impairment, or any increase in 
severity (aggravation) of a preexisting impairment, which arises in 
connection with your confinement in a jail, prison, or other penal 
institution or correctional facility for conviction of a felony 
committed after October 19, 1980. The exclusion of the impairment, or 
aggravation, applies in determining disability for benefits payable for 
any month during which you are confined. This rule does not preclude the 
establishment of a period of disability based upon the impairment or 
aggravation. You may become entitled to benefits upon release from 
prison provided that you apply and are under a disability at the time.
    (c) Felonious offenses. We will consider an offense a felony if--

[[Page 365]]

    (1) It is a felony under applicable law; or
    (2) In a jurisdiction which does not classify any crime as a felony, 
it is an offense punishable by death or imprisonment for a term 
exceeding one year.
    (d) Confinement. In general, a jail, prison, or other penal 
institution or correctional facility is a facility which is under the 
control and jurisdiction of the agency in charge of the penal system or 
in which convicted criminals can be incarcerated. Confinement in such a 
facility continues as long as you are under a sentence of confinement 
and have not been released due to parole or pardon. You are considered 
confined even though you are temporarily or intermittently outside of 
the facility (e.g., on work release, attending school, or hospitalized).

[48 FR 5714, Feb. 8, 1983]



Sec. 404.1508  [Reserved]



Sec. 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.



Sec. 404.1510  Meaning of substantial gainful activity.

    Substantial gainful activity means work that--
    (a) Involves doing significant and productive physical or mental 
duties; and
    (b) Is done (or intended) for pay or profit.
    (See Sec. 404.1572 for further details about what we mean by 
substantial gainful activity.)



Sec. 404.1511  Definition of a disabling impairment.

    (a) Disabled workers, persons disabled since childhood and, for 
months after December 1990, disabled widows, widowers, and surviving 
divorced spouses. If you are entitled to disability cash benefits as a 
disabled worker, or to child's insurance benefits, or, for monthly 
benefits payable after December 1990, to widow's, widower's, or 
surviving divorced spouse's monthly benefits, a disabling impairment is 
an impairment (or combination of impairments) which, of itself, is so 
severe that it meets or equals a set of criteria in the Listing of 
Impairments in appendix 1 of this subpart or which, when considered with 
your age, education, and work experience, would result in a finding that 
you are disabled under Sec. 404.1594. In determining whether you have a 
disabling impairment, earnings are not considered.
    (b) Disabled widows, widowers, and surviving divorced spouses, for 
monthly benefits for months prior to January 1991. If you have been 
entitled to disability benefits as a disabled widow, widower, or 
surviving divorced spouse and we must decide whether you had a disabling 
impairment for any time prior to January 1991, a disabling impairment is 
an impairment (or combination of impairments) which, of itself, was so 
severe that it met or equaled a set of criteria in the Listing of 
Impairments in appendix 1 of this subpart, or results in a finding that 
you were disabled under Sec. 404.1579. In determining whether you had a 
disabling impairment, earnings are not considered.

[57 FR 30120, July 8, 1992]

                                Evidence



Sec. 404.1512  Responsibility for evidence.

    (a) Your responsibility. (1) General. In general, you have to prove 
to us that you are blind or disabled. You must inform us about or submit 
all evidence known to you that relates to whether or not you are blind 
or disabled (see Sec. 404.1513). This duty is ongoing and requires you 
to disclose any additional related evidence about which you become 
aware. This duty applies at each level of the administrative review 
process, including the Appeals Council level if the evidence relates to 
the period on or before the date of the administrative law judge hearing 
decision. We will consider only impairment(s) you say you have or about 
which we receive evidence. When you submit evidence received from 
another source, you must submit that evidence in its entirety, unless 
you previously submitted the same evidence to us or we instruct you 
otherwise. If we ask you, you must inform us about:
    (i) Your medical source(s);

[[Page 366]]

    (ii) Your age;
    (iii) Your education and training;
    (iv) Your work experience;
    (v) Your daily activities both before and after the date you say 
that you became disabled;
    (vi) Your efforts to work; and
    (vii) Any other factors showing how your impairment(s) affects your 
ability to work. In Secs. 404.1560 through 404.1569, we discuss in more 
detail the evidence we need when we consider vocational factors.
    (2) Completeness. The evidence in your case record must be complete 
and detailed enough to allow us to make a determination or decision 
about whether you are disabled or blind. It must allow us to determine--
    (i) The nature and severity of your impairment(s) for any period in 
question;
    (ii) Whether the duration requirement described in Sec. 404.1509 is 
met; and
    (iii) Your residual functional capacity to do work-related physical 
and mental activities, when the evaluation steps described in 
Sec. 404.1520(e) or (f)(1) apply.
    (b) Our responsibility. (1) Development. Before we make a 
determination that you are not disabled, we will develop your complete 
medical history for at least the 12 months preceding the month in which 
you file your application unless there is a reason to believe that 
development of an earlier period is necessary or unless you say that 
your disability began less than 12 months before you filed your 
application. We will make every reasonable effort to help you get 
medical evidence from your own medical sources and entities that 
maintain your medical sources' evidence when you give us permission to 
request the reports.
    (i) Every reasonable effort means that we will make an initial 
request for evidence from your medical source or entity that maintains 
your medical source's evidence, and, at any time between 10 and 20 
calendar days after the initial request, if the evidence has not been 
received, we will make one follow-up request to obtain the medical 
evidence necessary to make a determination. The medical source or entity 
that maintains your medical source's evidence will have a minimum of 10 
calendar days from the date of our follow-up request to reply, unless 
our experience with that source indicates that a longer period is 
advisable in a particular case.
    (ii) Complete medical history means the records of your medical 
source(s) covering at least the 12 months preceding the month in which 
you file your application. If you say that your disability began less 
than 12 months before you filed your application, we will develop your 
complete medical history beginning with the month you say your 
disability began unless we have reason to believe your disability began 
earlier. If applicable, we will develop your complete medical history 
for the 12-month period prior to the month you were last insured for 
disability insurance benefits (see Sec. 404.130), the month ending the 
7-year period you may have to establish your disability and you are 
applying for widow's or widower's benefits based on disability (see 
Sec. 404.335(c)(1)), or the month you attain age 22 and you are applying 
for child's benefits based on disability (see Sec. 404.350).
    (2) Obtaining a consultative examination. We may ask you to attend 
one or more consultative examinations at our expense. See Secs. 404.1517 
through 404.1519t for the rules governing the consultative examination 
process. Generally, we will not request a consultative examination until 
we have made every reasonable effort to obtain evidence from your own 
medical sources. We may order a consultative examination while awaiting 
receipt of medical source evidence in some instances, such as when we 
know a source is not productive, is uncooperative, or is unable to 
provide certain tests or procedures. We will not evaluate this evidence 
until we have made every reasonable effort to obtain evidence from your 
medical sources.
    (3) Other work. In order to determine under Sec. 404.1520(g) that 
you are able to adjust to other work, we must provide evidence about the 
existence of work in the national economy that you can do (see 
Secs. 404.1560 through 404.1569a), given your residual functional 
capacity (which we have already assessed, as described in 
Sec. 404.1520(e)), age, education, and work experience.

[82 FR 5864, Jan. 18, 2017]

[[Page 367]]



Sec. 404.1513  Categories of evidence.

    (a) What we mean by evidence. Subject to the provisions of paragraph 
(b), evidence is anything you or anyone else submits to us or that we 
obtain that relates to your claim. We consider evidence under 
Secs. 404.1520b, 404.1520c (or under Sec. 404.1527 for claims filed (see 
Sec. 404.614) before March 27, 2017). We evaluate evidence we receive 
according to the rules pertaining to the relevant category of evidence. 
The categories of evidence are:
    (1) Objective medical evidence. Objective medical evidence is 
medical signs, laboratory findings, or both, as defined in 
Sec. 404.1502(f).
    (2) Medical opinion. A medical opinion is a statement from a medical 
source about what you can still do despite your impairment(s) and 
whether you have one or more impairment-related limitations or 
restrictions in the following abilities: (For claims filed (see 
Sec. 404.614) before March 27, 2017, see Sec. 404.1527(a) for the 
definition of medical opinion.)
    (i) Your ability to perform physical demands of work activities, 
such as sitting, standing, walking, lifting, carrying, pushing, pulling, 
or other physical functions (including manipulative or postural 
functions, such as reaching, handling, stooping, or crouching);
    (ii) Your ability to perform mental demands of work activities, such 
as understanding; remembering; maintaining concentration, persistence, 
or pace; carrying out instructions; or responding appropriately to 
supervision, co-workers, or work pressures in a work setting;
    (iii) Your ability to perform other demands of work, such as seeing, 
hearing, or using other senses; and
    (iv) Your ability to adapt to environmental conditions, such as 
temperature extremes or fumes.
    (3) Other medical evidence. Other medical evidence is evidence from 
a medical source that is not objective medical evidence or a medical 
opinion, including judgments about the nature and severity of your 
impairments, your medical history, clinical findings, diagnosis, 
treatment prescribed with response, or prognosis. (For claims filed (see 
Sec. 404.614) before March 27, 2017, other medical evidence does not 
include a diagnosis, prognosis, or a statement that reflects a 
judgment(s) about the nature and severity of your impairment(s)).
    (4) Evidence from nonmedical sources. Evidence from nonmedical 
sources is any information or statement(s) from a nonmedical source 
(including you) about any issue in your claim. We may receive evidence 
from nonmedical sources either directly from the nonmedical source or 
indirectly, such as from forms we receive and our administrative 
records.
    (5) Prior administrative medical finding. A prior administrative 
medical finding is a finding, other than the ultimate determination 
about whether you are disabled, about a medical issue made by our 
Federal and State agency medical and psychological consultants at a 
prior level of review (see Sec. 404.900) in your current claim based on 
their review of the evidence in your case record, such as:
    (i) The existence and severity of your impairment(s);
    (ii) The existence and severity of your symptoms;
    (iii) Statements about whether your impairment(s) meets or medically 
equals any listing in the Listing of Impairments in Part 404, Subpart P, 
Appendix 1;
    (iv) Your residual functional capacity;
    (v) Whether your impairment(s) meets the duration requirement; and
    (vi) How failure to follow prescribed treatment (see Sec. 404.1530) 
and drug addiction and alcoholism (see Sec. 404.1535) relate to your 
claim.
    (b) Exceptions for privileged communications.
    (1) The privileged communications listed in paragraphs (b)(1)(i) and 
(b)(1)(ii) of this section are not evidence, and we will neither 
consider nor provide any analysis about them in your determination or 
decision. This exception for privileged communications applies equally 
whether your representative is an attorney or a non-attorney.
    (i) Oral or written communications between you and your 
representative that are subject to the attorney-client privilege, unless 
you voluntarily disclose the communication to us.

[[Page 368]]

    (ii) Your representative's analysis of your claim, unless he or she 
voluntarily discloses it to us. This analysis means information that is 
subject to the attorney work product doctrine, but it does not include 
medical evidence, medical opinions, or any other factual matter that we 
may consider in determining whether or not you are entitled to benefits 
(see paragraph (b)(2) of this section).
    (2) The attorney-client privilege generally protects confidential 
communications between an attorney and his or her client that are 
related to providing or obtaining legal advice. The attorney work 
product doctrine generally protects an attorney's analyses, theories, 
mental impressions, and notes. In the context of your disability claim, 
neither the attorney-client privilege nor the attorney work product 
doctrine allow you to withhold factual information, medical opinions, or 
other medical evidence that we may consider in determining whether or 
not you are entitled to benefits. For example, if you tell your 
representative about the medical sources you have seen, your 
representative cannot refuse to disclose the identity of those medical 
sources to us based on the attorney-client privilege. As another 
example, if your representative asks a medical source to complete an 
opinion form related to your impairment(s), symptoms, or limitations, 
your representative cannot withhold the completed opinion form from us 
based on the attorney work product doctrine. The attorney work product 
doctrine would not protect the source's opinions on the completed form, 
regardless of whether or not your representative used the form in his or 
her analysis of your claim or made handwritten notes on the face of the 
report.

[82 FR 5865, Jan. 18, 2017; 82 FR 15132, Mar. 27, 2017]



Sec. 404.1513a  Evidence from our Federal or State agency medical
or psychological consultants.

    The following rules apply to our Federal or State agency medical or 
psychological consultants that we consult in connection with 
administrative law judge hearings and Appeals Council reviews:
    (a) In claims adjudicated by the State agency, a State agency 
medical or psychological consultant may make the determination of 
disability together with a State agency disability examiner or provide 
medical evidence to a State agency disability examiner when the 
disability examiner makes the initial or reconsideration determination 
alone (see Sec. 404.1615(c)). The following rules apply:
    (1) When a State agency medical or psychological consultant makes 
the determination together with a State agency disability examiner at 
the initial or reconsideration level of the administrative review 
process as provided in Sec. 404.1615(c)(1), he or she will consider the 
evidence in your case record and make administrative findings about the 
medical issues, including, but not limited to, the existence and 
severity of your impairment(s), the existence and severity of your 
symptoms, whether your impairment(s) meets or medically equals the 
requirements for any impairment listed in appendix 1 to this subpart, 
and your residual functional capacity. These administrative medical 
findings are based on the evidence in your case but are not in 
themselves evidence at the level of the administrative review process at 
which they are made. See Sec. 404.1513(a)(5).
    (2) When a State agency disability examiner makes the initial 
determination alone as provided in Sec. 404.1615(c)(3), he or she may 
obtain medical evidence from a State agency medical or psychological 
consultant about one or more of the medical issues listed in paragraph 
(a)(1) of this section. In these cases, the State agency disability 
examiner will consider the medical evidence of the State agency medical 
or psychological consultant under Secs. 404.1520b, 404.1520c, and 
404.1527.
    (3) When a State agency disability examiner makes a reconsideration 
determination alone as provided in Sec. 404.1615(c)(3), he or she will 
consider prior administrative medical findings made by a State agency 
medical or psychological consultant at the initial level of the 
administrative review process, and any medical evidence provided by such 
consultants at the initial and reconsideration levels, about one or more 
of the medical issues listed in

[[Page 369]]

paragraph (a)(1)(i) of this section under Secs. 404.1520b, 404.1520c, 
and 404.1527.
    (b) Administrative law judges are responsible for reviewing the 
evidence and making administrative findings of fact and conclusions of 
law. They will consider prior administrative medical findings and 
medical evidence from our Federal or State agency medical or 
psychological consultants as follows:
    (1) Administrative law judges are not required to adopt any prior 
administrative medical findings, but they must consider this evidence 
according to Secs. 404.1520b, 404.1520c, and 404.1527, as appropriate, 
because our Federal or State agency medical or psychological consultants 
are highly qualified and experts in Social Security disability 
evaluation.
    (2) Administrative law judges may also ask for medical evidence from 
expert medical sources. Administrative law judges will consider this 
evidence under Secs. 404.1520b, 404.1520c, and 404.1527, as appropriate.
    (c) When the Appeals Council makes a decision, it will consider 
prior administrative medical findings according to the same rules for 
considering prior administrative medical findings as administrative law 
judges follow under paragraph (b) of this section.

[82 FR 5866, Jan 18, 2017]



Sec. 404.1514  When we will purchase existing evidence.

    We need specific medical evidence to determine whether you are 
disabled or blind. You are responsible for providing that evidence. 
However, we will pay physicians not employed by the Federal government 
and other non-Federal providers of medical services for the reasonable 
cost of providing us with existing medical evidence that we need and ask 
for after November 30, 1980.

[46 FR 45757, Sept. 15, 1981]



Sec. 404.1515  Where and how to submit evidence.

    You may give us evidence about your impairment at any of our offices 
or at the office of any State agency authorized to make disability 
determinations. You may also give evidence to one of our employees 
authorized to accept evidence at another place. For more information 
about this, see subpart H of this part.



Sec. 404.1516  If you fail to submit medical and other evidence.

    If you do not give us the medical and other evidence that we need 
and request, we will have to make a decision based on information 
available in your case. We will not excuse you from giving us evidence 
because you have religious or personal reasons against medical 
examinations, tests, or treatment.



Sec. 404.1517  Consultative examination at our expense.

    If your medical sources cannot or will not give us sufficient 
medical evidence about your impairment for us to determine whether you 
are disabled or blind, we may ask you to have one or more physical or 
mental examinations or tests. We will pay for these examinations. 
However, we will not pay for any medical examination arranged by you or 
your representative without our advance approval. If we arrange for the 
examination or test, we will give you reasonable notice of the date, 
time, and place the examination or test will be given, and the name of 
the person or facility who will do it. We will also give the examiner 
any necessary background information about your condition.

[56 FR 36956, Aug. 1, 1991]



Sec. 404.1518  If you do not appear at a consultative examination.

    (a) General. If you are applying for benefits and do not have a good 
reason for failing or refusing to take part in a consultative 
examination or test which we arrange for you to get information we need 
to determine your disability or blindness, we may find that you are not 
disabled or blind. If you are already receiving benefits and do not have 
a good reason for failing or refusing to take part in a consultative 
examination or test which we arranged for you, we may determine that 
your disability or blindness has stopped because of your failure or 
refusal. Therefore, if you have any reason why you cannot go for the 
scheduled appointment, you should tell us about this as soon as possible 
before the examination date. If

[[Page 370]]

you have a good reason, we will schedule another examination. We will 
consider your physical, mental, educational, and linguistic limitations 
(including any lack of facility with the English language) when 
determining if you have a good reason for failing to attend a 
consultative examination.
    (b) Examples of good reasons for failure to appear. Some examples of 
what we consider good reasons for not going to a scheduled examination 
include--
    (1) Illness on the date of the scheduled examination or test;
    (2) Not receiving timely notice of the scheduled examination or 
test, or receiving no notice at all;
    (3) Being furnished incorrect or incomplete information, or being 
given incorrect information about the physician involved or the time or 
place of the examination or test, or;
    (4) Having had death or serious illness occur in your immediate 
family.
    (c) Objections by your medical source(s). If any of your medical 
sources tell you that you should not take the examination or test, you 
should tell us at once. In many cases, we may be able to get the 
information we need in another way. Your medical source(s) may agree to 
another type of examination for the same purpose.

[45 FR 55584, Aug. 20, 1980, as amended at 59 FR 1635, Jan. 12, 1994; 82 
FR 5866, Jan. 18, 2017]

Standards To Be Used in Determining When a Consultative Examination Will 
        Be Obtained in Connection With Disability Determinations



Sec. 404.1519  The consultative examination.

    A consultative examination is a physical or mental examination or 
test purchased for you at our request and expense from a treating source 
or another medical source, including a pediatrician when appropriate. 
The decision to purchase a consultative examination will be made on an 
individual case basis in accordance with the provisions of 
Secs. 404.1519a through 404.1519f. Selection of the source for the 
examination will be consistent with the provisions of Sec. 404.1503a and 
Secs. 404.1519g through 404.1519j. The rules and procedures for 
requesting consultative examinations set forth in Secs. 404.1519a and 
404.1519b are applicable at the reconsideration and hearing levels of 
review, as well as the initial level of determination.

[56 FR 36956, Aug. 1, 1991, as amended at 65 FR 11875, Mar. 7, 2000]



Sec. 404.1519a  When we will purchase a consultative examination
and how we will use it.

    (a) General. If we cannot get the information we need from your 
medical sources, we may decide to purchase a consultative examination. 
See Sec. 404.1512 for the procedures we will follow to obtain evidence 
from your medical sources and Sec. 404.1520b for how we consider 
evidence. Before purchasing a consultative examination, we will consider 
not only existing medical reports, but also the disability interview 
form containing your allegations as well as other pertinent evidence in 
your file.
    (b) Situations that may require a consultative examination. We may 
purchase a consultative examination to try to resolve an inconsistency 
in the evidence, or when the evidence as a whole is insufficient to 
allow us to make a determination or decision on your claim. Some 
examples of when we might purchase a consultative examination to secure 
needed medical evidence, such as clinical findings, laboratory tests, a 
diagnosis, or prognosis, include but are not limited to:
    (1) The additional evidence needed is not contained in the records 
of your medical sources;
    (2) The evidence that may have been available from your treating or 
other medical sources cannot be obtained for reasons beyond your 
control, such as death or noncooperation of a medical source;
    (3) Highly technical or specialized medical evidence that we need is 
not available from your treating or other medical sources; or
    (4) There is an indication of a change in your condition that is 
likely to affect your ability to work, but the current severity of your 
impairment is not established.

[56 FR 36956, Aug. 1, 1991, as amended at 77 FR 10655, Feb. 23, 2012]

[[Page 371]]



Sec. 404.1519b  When we will not purchase a consultative examination.

    We will not purchase a consultative examination in situations 
including, but not limited to, the following situations:
    (a) In period of disability and disability insurance benefit claims, 
when you do not meet the insured status requirement in the calendar 
quarter you allege you became disabled or later and there is no 
possibility of establishing an earlier onset;
    (b) In claims for widow's or widower's benefits based on disability, 
when your alleged month of disability is after the end of the 7-year 
period specified in Sec. 404.335(c)(1) and there is no possibility of 
establishing an earlier onset date, or when the 7-year period expired in 
the past and there is no possibility of establishing an onset date prior 
to the date the 7-year period expired;
    (c) In disability insurance benefit claims, when your insured status 
expired in the past and there is no possibility of establishing an onset 
date prior to the date your insured status expired;
    (d) When any issues about your actual performance of substantial 
gainful activity or gainful activity have not been resolved;
    (e) In claims for child's benefits based on disability, when it is 
determined that your alleged disability did not begin before the month 
you attained age 22, and there is no possibility of establishing an 
onset date earlier than the month in which you attained age 22;
    (f) In claims for child's benefits based on disability that are 
filed concurrently with the insured individual's claim and entitlement 
cannot be established for the insured individual;
    (g) In claims for child's benefits based on disability where 
entitlement is precluded based on other nondisability factors.

[56 FR 36956, Aug. 1, 1991]

        Standards for the Type of Referral and for Report Content



Sec. 404.1519f  Type of purchased examinations.

    We will purchase only the specific examinations and tests we need to 
make a determination in your claim. For example, we will not authorize a 
comprehensive medical examination when the only evidence we need is a 
special test, such as an X-ray, blood studies, or an electrocardiogram.

[56 FR 36956, Aug. 1, 1991]



Sec. 404.1519g  Who we will select to perform a consultative
examination.

    (a) We will purchase a consultative examination only from a 
qualified medical source. The medical source may be your own medical 
source or another medical source. If you are a child, the medical source 
we choose may be a pediatrician.
    (b) By ``qualified,'' we mean that the medical source must be 
currently licensed in the State and have the training and experience to 
perform the type of examination or test we will request; the medical 
source must not be barred from participation in our programs under the 
provisions of Sec. 404.1503a. The medical source must also have the 
equipment required to provide an adequate assessment and record of the 
existence and level of severity of your alleged impairments.
    (c) The medical source we choose may use support staff to help 
perform the consultative examination. Any such support staff (e.g., X-
ray technician, nurse) must meet appropriate licensing or certification 
requirements of the State. See Sec. 404.1503a.

[56 FR 36957, Aug. 1, 1991, as amended at 65 FR 11876, Mar. 7, 2000; 82 
FR 5866, Jan. 18, 2017]



Sec. 404.1519h  Your medical source.

    When, in our judgment, your medical source is qualified, equipped, 
and willing to perform the additional examination or test(s) for the fee 
schedule payment, and generally furnishes complete and timely reports, 
your medical source will be the preferred source for the purchased 
examination or test(s).

[82 FR 5866, Jan. 18, 2017]



Sec. 404.1519i  Other sources for consultative examinations.

    We will use a different medical source than your medical source for 
a

[[Page 372]]

purchased examination or test in situations including, but not limited 
to, the following:
    (a) Your medical source prefers not to perform such an examination 
or does not have the equipment to provide the specific data needed;
    (b) There are conflicts or inconsistencies in your file that cannot 
be resolved by going back to your medical source;
    (c) You prefer a source other than your medical source and have a 
good reason for your preference;
    (d) We know from prior experience that your medical source may not 
be a productive source, such as when he or she has consistently failed 
to provide complete or timely reports; or
    (e) Your medical source is not a qualified medical source as defined 
in Sec. 404.1519g.

[82 FR 5866, Jan. 18, 2017]



Sec. 404.1519j  Objections to the medical source designated to perform
the consultative examination.

    You or your representative may object to your being examined by a 
medical source we have designated to perform a consultative examination. 
If there is a good reason for the objection, we will schedule the 
examination with another medical source. A good reason may be that the 
medical source we designated had previously represented an interest 
adverse to you. For example, the medical source may have represented 
your employer in a workers' compensation case or may have been involved 
in an insurance claim or legal action adverse to you. Other things we 
will consider include: The presence of a language barrier, the medical 
source's office location (e.g., 2nd floor, no elevator), travel 
restrictions, and whether the medical source had examined you in 
connection with a previous disability determination or decision that was 
unfavorable to you. If your objection is that a medical source allegedly 
``lacks objectivity'' in general, but not in relation to you personally, 
we will review the allegations. See Sec. 404.1519s. To avoid a delay in 
processing your claim, the consultative examination in your case will be 
changed to another medical source while a review is being conducted. We 
will handle any objection to use of the substitute medical source in the 
same manner. However, if we had previously conducted such a review and 
found that the reports of the medical source in question conformed to 
our guidelines, we will not change your examination.

[65 FR 11876, Mar. 7, 2000]



Sec. 404.1519k  Purchase of medical examinations, laboratory tests,
and other services.

    We may purchase medical examinations, including psychiatric and 
psychological examinations, X-rays and laboratory tests (including 
specialized tests, such as pulmonary function studies, 
electrocardiograms, and stress tests) from a medical source.
    (a) The rate of payment for purchasing medical or other services 
necessary to make determinations of disability may not exceed the 
highest rate paid by Federal or public agencies in the State for the 
same or similar types of service. See Secs. 404.1624 and 404.1626 of 
this part.
    (b) If a physician's bill or a request for payment for a physician's 
services includes a charge for a laboratory test for which payment may 
be made under this part, the amount payable with respect to the test 
shall be determined as follows:
    (1) If the bill or request for payment indicates that the test was 
personally performed or supervised by the physician who submitted the 
bill (or for whose services the request for payment was made) or by 
another physician with whom that physician shares his or her practice, 
the payment will be based on the physician's usual and customary charge 
for the test or the rates of payment which the State uses for purchasing 
such services, whichever is the lesser amount.
    (2) If the bill or request for payment indicates that the test was 
performed by an independent laboratory, the amount of reimbursement will 
not exceed the billed cost of the independent laboratory or the rate of 
payment which the State uses for purchasing such services, whichever is 
the lesser amount. A nominal payment may be made to the physician for 
collecting, handling and shipping a specimen to the laboratory if the 
physician bills for

[[Page 373]]

such a service. The total reimbursement may not exceed the rate of 
payment which the State uses for purchasing such services.
    (c) The State will assure that it can support the rate of payment it 
uses. The State shall also be responsible for monitoring and overseeing 
the rate of payment it uses to ensure compliance with paragraphs (a) and 
(b) of this section.

[56 FR 36957, Aug. 1, 1991, as amended at 65 FR 11876, Mar. 7, 2000; 71 
FR 16444, Mar. 31, 2006; 76 FR 24806, May 3, 2011]



Sec. 404.1519m  Diagnostic tests or procedures.

    We will request the results of any diagnostic tests or procedures 
that have been performed as part of a workup by your treating source or 
other medical source and will use the results to help us evaluate 
impairment severity or prognosis. However, we will not order diagnostic 
tests or procedures that involve significant risk to you, such as 
myelograms, arteriograms, or cardiac catheterizations for the evaluation 
of disability under the Social Security program. A State agency medical 
consultant must approve the ordering of any diagnostic test or procedure 
when there is a chance it may involve significant risk. The 
responsibility for deciding whether to perform the examination rests 
with the medical source designated to perform the consultative 
examination.

[56 FR 36957, Aug. 1, 1991, as amended at 65 FR 11876, Mar. 7, 2000; 71 
FR 16444, Mar. 31, 2006; 76 FR 24806, May 3, 2011]



Sec. 404.1519n  Informing the medical source of examination scheduling,
report content, and signature requirements.

    The medical sources who perform consultative examinations will have 
a good understanding of our disability programs and their evidentiary 
requirements. They will be made fully aware of their responsibilities 
and obligations regarding confidentiality as described in 
Sec. 401.105(e). We will fully inform medical sources who perform 
consultative examinations at the time we first contact them, and at 
subsequent appropriate intervals, of the following obligations:
    (a) Scheduling. In scheduling full consultative examinations, 
sufficient time should be allowed to permit the medical source to take a 
case history and perform the examination, including any needed tests. 
The following minimum scheduling intervals (i.e., time set aside for the 
individual, not the actual duration of the consultative examination) 
should be used.
    (1) Comprehensive general medical examination--at least 30 minutes;
    (2) Comprehensive musculoskeletal or neurological examination--at 
least 20 minutes;
    (3) Comprehensive psychiatric examination--at least 40 minutes;
    (4) Psychological examination--at least 60 minutes (Additional time 
may be required depending on types of psychological tests administered); 
and
    (5) All others--at least 30 minutes, or in accordance with accepted 
medical practices.


We recognize that actual practice will dictate that some examinations 
may require longer scheduling intervals depending on the circumstances 
in a particular situation. We also recognize that these minimum 
intervals may have to be adjusted to allow for those claimants who do 
not attend their scheduled examination. The purpose of these minimum 
scheduling timeframes is to ensure that such examinations are complete 
and that sufficient time is made available to obtain the information 
needed to make an accurate determination in your case. State agencies 
will monitor the scheduling of examinations (through their normal 
consultative examination oversight activities) to ensure that any 
overscheduling is avoided, as overscheduling may lead to examinations 
that are not thorough.
    (b) Report content. The reported results of your medical history, 
examination, requested laboratory findings, discussions and conclusions 
must conform to accepted professional standards and practices in the 
medical field for a complete and competent examination. The facts in a 
particular case and the information and findings already reported in the 
medical and other evidence of record will dictate the extent of detail 
needed in the consultative examination report for that case. Thus, the 
detail and format for reporting the

[[Page 374]]

results of a purchased examination will vary depending upon the type of 
examination or testing requested. The reporting of information will 
differ from one type of examination to another when the requested 
examination relates to the performance of tests such as ventilatory 
function tests, treadmill exercise tests, or audiological tests. The 
medical report must be complete enough to help us determine the nature, 
severity, and duration of the impairment, and residual functional 
capacity. The report should reflect your statement of your symptoms, not 
simply the medical source's statements or conclusions. The medical 
source's report of the consultative examination should include the 
objective medical facts as well as observations and opinions.
    (c) Elements of a complete consultative examination. A complete 
consultative examination is one which involves all the elements of a 
standard examination in the applicable medical specialty. When the 
report of a complete consultative examination is involved, the report 
should include the following elements:
    (1) Your major or chief complaint(s);
    (2) A detailed description, within the area of specialty of the 
examination, of the history of your major complaint(s);
    (3) A description, and disposition, of pertinent ``positive'' and 
``negative'' detailed findings based on the history, examination and 
laboratory tests related to the major complaint(s), and any other 
abnormalities or lack thereof reported or found during examination or 
laboratory testing;
    (4) The results of laboratory and other tests (e.g., X-rays) 
performed according to the requirements stated in the Listing of 
Impairments (see appendix 1 of this subpart P);
    (5) The diagnosis and prognosis for your impairment(s);
    (6) A medical opinion. Although we will ordinarily request a medical 
opinion as part of the consultative examination process, the absence of 
a medical opinion in a consultative examination report will not make the 
report incomplete. See Sec. 404.1513(a)(3); and
    (7) In addition, the medical source will consider, and provide some 
explanation or comment on, your major complaint(s) and any other 
abnormalities found during the history and examination or reported from 
the laboratory tests. The history, examination, evaluation of laboratory 
test results, and the conclusions will represent the information 
provided by the medical source who signs the report.
    (d) When a complete consultative examination is not required. When 
the evidence we need does not require a complete consultative 
examination (for example, we need only a specific laboratory test result 
to complete the record), we may not require a report containing all of 
the elements in paragraph (c).
    (e) Signature requirements. All consultative examination reports 
will be personally reviewed and signed by the medical source who 
actually performed the examination. This attests to the fact that the 
medical source doing the examination or testing is solely responsible 
for the report contents and for the conclusions, explanations or 
comments provided with respect to the history, examination and 
evaluation of laboratory test results. The signature of the medical 
source on a report annotated ``not proofed'' or ``dictated but not 
read'' is not acceptable. A rubber stamp signature of a medical source 
or the medical source's signature entered by any other person is not 
acceptable.

[56 FR 36958, Aug. 1, 1991, as amended at 65 FR 11876, Mar. 7, 2000; 82 
FR 5866, Jan. 18, 2017]



Sec. 404.1519o  When a properly signed consultative examination
report has not been received.

    If a consultative examination report is received unsigned or 
improperly signed we will take the following action.
    (a) When we will make determinations and decisions without a 
properly signed report. We will make a determination or decision in the 
circumstances specified in paragraphs (a)(1) and (a)(2) of this section 
without waiting for a properly signed consultative examination report. 
After we have made the determination or decision, we will obtain a 
properly signed report and include it in the file unless the medical 
source who performed the original consultative examination has died:

[[Page 375]]

    (1) Continuous period of disability allowance with an onset date as 
alleged or earlier than alleged; or
    (2) Continuance of disability.
    (b) When we will not make determinations and decisions without a 
properly signed report. We will not use an unsigned or improperly signed 
consultative examination report to make the determinations or decisions 
specified in paragraphs (b)(1), (b)(2), (b)(3), and (b)(4) of this 
section. When we need a properly signed consultative examination report 
to make these determinations or decisions, we must obtain such a report. 
If the signature of the medical source who performed the original 
examination cannot be obtained because the medical source is out of the 
country for an extended period of time, or on an extended vacation, 
seriously ill, deceased, or for any other reason, the consultative 
examination will be rescheduled with another medical source:
    (1) Denial; or
    (2) Cessation; or
    (3) Allowance of a period of disability which has ended; or
    (4) Allowance with an onset date later than alleged.

[56 FR 36958, Aug. 1, 1991, as amended at 65 FR 11877, Mar. 7, 2000]



Sec. 404.1519p  Reviewing reports of consultative examinations.

    (a) We will review the report of the consultative examination to 
determine whether the specific information requested has been furnished. 
We will consider the following factors in reviewing the report:
    (1) Whether the report provides evidence which serves as an adequate 
basis for decisionmaking in terms of the impairment it assesses;
    (2) Whether the report is internally consistent; Whether all the 
diseases, impairments and complaints described in the history are 
adequately assessed and reported in the clinical findings; Whether the 
conclusions correlate the findings from your medical history, clinical 
examination and laboratory tests and explain all abnormalities;
    (3) Whether the report is consistent with the other information 
available to us within the specialty of the examination requested; 
Whether the report fails to mention an important or relevant complaint 
within that specialty that is noted in other evidence in the file (e.g., 
your blindness in one eye, amputations, pain, alcoholism, depression);
    (4) Whether this is an adequate report of examination as compared to 
standards set out in the course of a medical education; and
    (5) Whether the report is properly signed.
    (b) If the report is inadequate or incomplete, we will contact the 
medical source who performed the consultative examination, give an 
explanation of our evidentiary needs, and ask that the medical source 
furnish the missing information or prepare a revised report.
    (c) With your permission, or when the examination discloses new 
diagnostic information or test results that reveal a potentially life-
threatening situation, we will refer the consultative examination report 
to your treating source. When we refer the consultative examination 
report to your treating source without your permission, we will notify 
you that we have done so.
    (d) We will perform ongoing special management studies on the 
quality of consultative examinations purchased from major medical 
sources and the appropriateness of the examinations authorized.
    (e) We will take steps to ensure that consultative examinations are 
scheduled only with medical sources who have access to the equipment 
required to provide an adequate assessment and record of the existence 
and level of severity of your alleged impairments.

[56 FR 36959, Aug. 1, 1991, as amended at 65 FR 11877, Mar. 7, 2000]



Sec. 404.1519q  Conflict of interest.

    All implications of possible conflict of interest between medical or 
psychological consultants and their medical or psychological practices 
will be avoided. Such consultants are not only those physicians and 
psychologists who work for us directly but are also those who do review 
and adjudication work in the State agencies. Physicians and 
psychologists who work for us directly as employees or under contract 
will not work concurrently for a State agency. Physicians and 
psychologists

[[Page 376]]

who do review work for us will not perform consultative examinations for 
us without our prior approval. In such situations, the physician or 
psychologist will disassociate himself or herself from further 
involvement in the case and will not participate in the evaluation, 
decision, or appeal actions. In addition, neither they, nor any member 
of their families, will acquire or maintain, either directly or 
indirectly, any financial interest in a medical partnership, 
corporation, or similar relationship in which consultative examinations 
are provided. Sometimes physicians and psychologists who do review work 
for us will have prior knowledge of a case; for example, when the 
claimant was a patient. Where this is so, the physician or psychologist 
will not participate in the review or determination of the case. This 
does not preclude the physician or psychologist from submitting medical 
evidence based on treatment or examination of the claimant.

[56 FR 36959, Aug. 1, 1991]

             Authorizing and Monitoring the Referral Process



Sec. 404.1519s  Authorizing and monitoring the consultative 
examination.

    (a) Day-to-day responsibility for the consultative examination 
process rests with the State agencies that make disability 
determinations for us.
    (b) The State agency will maintain a good working relationship with 
the medical community in order to recruit sufficient numbers of 
physicians and other providers of medical services to ensure ready 
availability of consultative examination providers.
    (c) Consistent with Federal and State laws, the State agency 
administrator will work to achieve appropriate rates of payment for 
purchased medical services.
    (d) Each State agency will be responsible for comprehensive 
oversight management of its consultative examination program, with 
special emphasis on key providers.
    (e) A key consultative examination provider is a provider that meets 
at least one of the following conditions:
    (1) Any consultative examination provider with an estimated annual 
billing to the disability programs we administer of at least $150,000; 
or
    (2) Any consultative examination provider with a practice directed 
primarily towards evaluation examinations rather than the treatment of 
patients; or
    (3) Any consultative examination provider that does not meet the 
above criteria, but is one of the top five consultative examination 
providers in the State by dollar volume, as evidenced by prior year 
data.
    (f) State agencies have flexibility in managing their consultative 
examination programs, but at a minimum will provide:
    (1) An ongoing active recruitment program for consultative 
examination providers;
    (2) A process for orientation, training, and review of new 
consultative examination providers, with respect to SSA's program 
requirements involving consultative examination report content and not 
with respect to medical techniques;
    (3) Procedures for control of scheduling consultative examinations;
    (4) Procedures to ensure that close attention is given to specific 
evaluation issues involved in each case;
    (5) Procedures to ensure that only required examinations and tests 
are authorized in accordance with the standards set forth in this 
subpart;
    (6) Procedures for providing medical or supervisory approval for the 
authorization or purchase of consultative examinations and for 
additional tests or studies requested by consulting medical sources. 
This includes physician approval for the ordering of any diagnostic test 
or procedure where the question of significant risk to the claimant/
beneficiary might be raised. See Sec. 404.1519m.
    (7) Procedures for the ongoing review of consultative examination 
results to ensure compliance with written guidelines;
    (8) Procedures to encourage active participation by physicians in 
the consultative examination oversight program;
    (9) Procedures for handling complaints;
    (10) Procedures for evaluating claimant reactions to key providers; 
and

[[Page 377]]

    (11) A program of systematic, onsite reviews of key providers that 
will include annual onsite reviews of such providers when claimants are 
present for examinations. This provision does not contemplate that such 
reviews will involve participation in the actual examinations but, 
rather, offer an opportunity to talk with claimants at the provider's 
site before and after the examination and to review the provider's 
overall operation.
    (g) The State agencies will cooperate with us when we conduct 
monitoring activities in connection with their oversight management of 
their consultative examination programs.

[56 FR 36959, Aug. 1, 1991, as amended at 65 FR 11877, Mar. 7, 2000; 71 
FR 16444, Mar. 31, 2006; 75 FR 32846, June 10, 2010; 76 FR 24806, May 3, 
2011]

           Procedures To Monitor the Consultative Examination



Sec. 404.1519t  Consultative examination oversight.

    (a) We will ensure that referrals for consultative examinations and 
purchases of consultative examinations are made in accordance with our 
policies. We will also monitor both the referral processes and the 
product of the consultative examinations obtained. This monitoring may 
include reviews by independent medical specialists under direct contract 
with SSA.
    (b) Through our regional offices, we will undertake periodic 
comprehensive reviews of each State agency to evaluate each State's 
management of the consultative examination process. The review will 
involve visits to key providers, with State staff participating, 
including a program physician when the visit will deal with medical 
techniques or judgment, or factors that go to the core of medical 
professionalism.
    (c) We will also perform ongoing special management studies of the 
quality of consultative examinations purchased from key providers and 
other sources and the appropriateness of the examinations authorized.

[56 FR 36960, Aug. 1, 1991]

                        Evaluation of Disability



Sec. 404.1520  Evaluation of disability in general.

    (a) General--(1) Purpose of this section. This section explains the 
five-step sequential evaluation process we use to decide whether you are 
disabled, as defined in Sec. 404.1505.
    (2) Applicability of these rules. These rules apply to you if you 
file an application for a period of disability or disability insurance 
benefits (or both) or for child's insurance benefits based on 
disability. They also apply if you file an application for widow's or 
widower's benefits based on disability for months after December 1990. 
(See Sec. 404.1505(a).)
    (3) Evidence considered. We will consider all evidence in your case 
record when we make a determination or decision whether you are 
disabled. See Sec. 404.1520b.
    (4) The five-step sequential evaluation process. The sequential 
evaluation process is a series of five ``steps'' that we follow in a set 
order. See paragraph (h) of this section for an exception to this rule. 
If we can find that you are disabled or not disabled at a step, we make 
our determination or decision and we do not go on to the next step. If 
we cannot find that you are disabled or not disabled at a step, we go on 
to the next step. Before we go from step three to step four, we assess 
your residual functional capacity. (See paragraph (e) of this section.) 
We use this residual functional capacity assessment at both step four 
and step five when we evaluate your claim at these steps. These are the 
five steps we follow:
    (i) At the first step, we consider your work activity, if any. If 
you are doing substantial gainful activity, we will find that you are 
not disabled. (See paragraph (b) of this section.)
    (ii) At the second step, we consider the medical severity of your 
impairment(s). If you do not have a severe medically determinable 
physical or mental impairment that meets the duration requirement in 
Sec. 404.1509, or a combination of impairments that is severe and meets 
the duration requirement, we will find that you are not disabled. (See 
paragraph (c) of this section.)

[[Page 378]]

    (iii) At the third step, we also consider the medical severity of 
your impairment(s). If you have an impairment(s) that meets or equals 
one of our listings in appendix 1 of this subpart and meets the duration 
requirement, we will find that you are disabled. (See paragraph (d) of 
this section.)
    (iv) At the fourth step, we consider our assessment of your residual 
functional capacity and your past relevant work. If you can still do 
your past relevant work, we will find that you are not disabled. See 
paragraphs (f) and (h) of this section and Sec. 404.1560(b).
    (v) At the fifth and last step, we consider our assessment of your 
residual functional capacity and your age, education, and work 
experience to see if you can make an adjustment to other work. If you 
can make an adjustment to other work, we will find that you are not 
disabled. If you cannot make an adjustment to other work, we will find 
that you are disabled. See paragraphs (g) and (h) of this section and 
Sec. 404.1560(c).
    (5) When you are already receiving disability benefits. If you are 
already receiving disability benefits, we will use a different 
sequential evaluation process to decide whether you continue to be 
disabled. We explain this process in Sec. 404.1594(f).
    (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 impairments 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 
impairment(s), we will find you disabled without considering your age, 
education, and work experience.
    (e) When your impairment(s) does not meet or equal a listed 
impairment. If your impairment(s) does not meet or equal a listed 
impairment, we will assess and make a finding about your residual 
functional capacity based on all the relevant medical and other evidence 
in your case record, as explained in Sec. 404.1545. (See paragraph 
(g)(2) of this section and Sec. 404.1562 for an exception to this rule.) 
We use our residual functional capacity assessment at the fourth step of 
the sequential evaluation process to determine if you can do your past 
relevant work (paragraph (f) of this section) and at the fifth step of 
the sequential evaluation process (if the evaluation proceeds to this 
step) to determine if you can adjust to other work (paragraph (g) of 
this section).
    (f) Your impairment(s) must prevent you from doing your past 
relevant work. If we cannot make a determination or decision at the 
first three steps of the sequential evaluation process, we will compare 
our residual functional capacity assessment, which we made under 
paragraph (e) of this section, with the physical and mental demands of 
your past relevant work. See paragraph (h) of this section and 
Sec. 404.1560(b). If you can still do this kind of work, we will find 
that you are not disabled.
    (g) Your impairment(s) must prevent you from making an adjustment to 
any other work. (1) If we find that you cannot do your past relevant 
work because you have a severe impairment(s) (or you do not have any 
past relevant work), we will consider the same residual functional 
capacity assessment we made under paragraph (e) of this section, 
together with your vocational factors (your age, education, and work 
experience) to determine if you can make an adjustment to other work. 
(See Sec. 404.1560(c).) If you can make an adjustment to other work, we 
will find you not disabled. If you cannot, we will find you disabled.
    (2) We use different rules if you meet one of the two special 
medical-vocational profiles described in Sec. 404.1562. If you meet one 
of those profiles, we will find that you cannot make an adjustment to 
other work, and that you are disabled.

[[Page 379]]

    (h) Expedited process. If we do not find you disabled at the third 
step, and we do not have sufficient evidence about your past relevant 
work to make a finding at the fourth step, we may proceed to the fifth 
step of the sequential evaluation process. If we find that you can 
adjust to other work based solely on your age, education, and the same 
residual functional capacity assessment we made under paragraph (e) of 
this section, we will find that you are not disabled and will not make a 
finding about whether you can do your past relevant work at the fourth 
step. If we find that you may be unable to adjust to other work or if 
Sec. 404.1562 may apply, we will assess your claim at the fourth step 
and make a finding about whether you can perform your past relevant 
work. See paragraph (g) of this section and Sec. 404.1560(c).

[50 FR 8727, Mar. 5, 1985; 50 FR 19164, May 7, 1985, as amended at 56 FR 
36960, Aug. 1, 1991; 65 FR 80308, Dec. 21, 2000; 68 FR 51161, Aug. 26, 
2003; 77 FR 10655, Feb. 23, 2012; 77 FR 43494, July 25, 2012]



Sec. 404.1520a  Evaluation of mental impairments.

    (a) General. The steps outlined in Sec. 404.1520 apply to the 
evaluation of physical and mental impairments. In addition, when we 
evaluate the severity of mental impairments for adults (persons age 18 
and over) and in persons under age 18 when Part A of the Listing of 
Impairments is used, we must follow a special technique at each level in 
the administrative review process. We describe this special technique in 
paragraphs (b) through (e) of this section. Using the technique helps 
us:
    (1) Identify the need for additional evidence to determine 
impairment severity;
    (2) Consider and evaluate functional consequences of the mental 
disorder(s) relevant to your ability to work; and
    (3) Organize and present our findings in a clear, concise, and 
consistent manner.
    (b) Use of the technique. (1) Under the special technique, we must 
first evaluate your pertinent symptoms, signs, and laboratory findings 
to determine whether you have a medically determinable mental 
impairment(s). See Sec. 404.1521 for more information about what is 
needed to show a medically determinable impairment. If we determine that 
you have a medically determinable mental impairment(s), we must specify 
the symptoms, signs, and laboratory findings that substantiate the 
presence of the impairment(s) and document our findings in accordance 
with paragraph (e) of this section.
    (2) We must then rate the degree of functional limitation resulting 
from the impairment(s) in accordance with paragraph (c) of this section 
and record our findings as set out in paragraph (e) of this section.
    (c) Rating the degree of functional limitation. (1) Assessment of 
functional limitations is a complex and highly individualized process 
that requires us to consider multiple issues and all relevant evidence 
to obtain a longitudinal picture of your overall degree of functional 
limitation. We will consider all relevant and available clinical signs 
and laboratory findings, the effects of your symptoms, and how your 
functioning may be affected by factors including, but not limited to, 
chronic mental disorders, structured settings, medication, and other 
treatment.
    (2) We will rate the degree of your functional limitation based on 
the extent to which your impairment(s) interferes with your ability to 
function independently, appropriately, effectively, and on a sustained 
basis. Thus, we will consider such factors as the quality and level of 
your overall functional performance, any episodic limitations, the 
amount of supervision or assistance you require, and the settings in 
which you are able to function. See 12.00C through 12.00H of the Listing 
of Impairments in appendix 1 to this subpart for more information about 
the factors we consider when we rate the degree of your functional 
limitation.
    (3) We have identified four broad functional areas in which we will 
rate the degree of your functional limitation: Understand, remember, or 
apply information; interact with others; concentrate, persist, or 
maintain pace; and adapt or manage oneself. See 12.00E of the Listing of 
Impairments in appendix 1 to this subpart.
    (4) When we rate your degree of limitation in these areas 
(understand, remember, or apply information; interact

[[Page 380]]

with others; concentrate, persist, or maintain pace; and adapt or manage 
oneself), we will use the following five-point scale: None, mild, 
moderate, marked, and extreme. The last point on the scale represents a 
degree of limitation that is incompatible with the ability to do any 
gainful activity.
    (d) Use of the technique to evaluate mental impairments. After we 
rate the degree of functional limitation resulting from your 
impairment(s), we will determine the severity of your mental 
impairment(s).
    (1) If we rate the degrees of your limitation as ``none'' or 
``mild,'' we will generally conclude that your impairment(s) is not 
severe, unless the evidence otherwise indicates that there is more than 
a minimal limitation in your ability to do basic work activities (see 
Sec. 404.1522).
    (2) If your mental impairment(s) is severe, we will then determine 
if it meets or is equivalent in severity to a listed mental disorder. We 
do this by comparing the medical findings about your impairment(s) and 
the rating of the degree of functional limitation to the criteria of the 
appropriate listed mental disorder. We will record the presence or 
absence of the criteria and the rating of the degree of functional 
limitation on a standard document at the initial and reconsideration 
levels of the administrative review process, or in the decision at the 
administrative law judge hearing and Appeals Council levels (in cases in 
which the Appeals Council issues a decision). See paragraph (e) of this 
section.
    (3) If we find that you have a severe mental impairment(s) that 
neither meets nor is equivalent in severity to any listing, we will then 
assess your residual functional capacity.
    (e) Documenting application of the technique. At the initial and 
reconsideration levels of the administrative review process, we will 
complete a standard document to record how we applied the technique. At 
the administrative law judge hearing and Appeals Council levels (in 
cases in which the Appeals Council issues a decision), we will document 
application of the technique in the decision. The following rules apply:
    (1) When a State agency medical or psychological consultant makes 
the determination together with a State agency disability examiner at 
the initial or reconsideration level of the administrative review 
process as provided in Sec. 404.1615(c)(1) of this part, the State 
agency medical or psychological consultant has overall responsibility 
for assessing medical severity. A State agency disability examiner may 
assist in preparing the standard document. However, our medical or 
psychological consultant must review and sign the document to attest 
that it is complete and that he or she is responsible for its content, 
including the findings of fact and any discussion of supporting 
evidence.
    (2) When a State agency disability examiner makes the determination 
alone as provided in Sec. 404.1615(c)(3), the State agency disability 
examiner has overall responsibility for assessing medical severity and 
for completing and signing the standard document.
    (3) When a disability hearing officer makes a reconsideration 
determination as provided in Sec. 404.1615(c)(4), the determination must 
document application of the technique, incorporating the disability 
hearing officer's pertinent findings and conclusions based on this 
technique.
    (4) At the administrative law judge hearing and Appeals Council 
levels, the written decision must incorporate the pertinent findings and 
conclusions based on the technique. The decision must show the 
significant history, including examination and laboratory findings, and 
the functional limitations that were considered in reaching a conclusion 
about the severity of the mental impairment(s). The decision must 
include a specific finding as to the degree of limitation in each of the 
functional areas described in paragraph (c) of this section.
    (5) If the administrative law judge requires the services of a 
medical expert to assist in applying the technique but such services are 
unavailable, the administrative law judge may return the case to the 
State agency or the appropriate Federal component, using the rules in 
Sec. 404.941 of this part, for completion of the standard document. If, 
after reviewing the case file and completing the standard document, the 
State agency or Federal component

[[Page 381]]

concludes that a determination favorable to you is warranted, it will 
process the case using the rules found in Sec. 404.941(d) or (e) of this 
part. If, after reviewing the case file and completing the standard 
document, the State agency or Federal component concludes that a 
determination favorable to you is not warranted, it will send the 
completed standard document and the case to the administrative law judge 
for further proceedings and a decision.

[65 FR 50774, Aug. 21, 2000; 65 FR 60584, Oct. 12, 2000, as amended at 
71 FR 16444, Mar. 31, 2006; 75 FR 62680, Oct. 13, 2010; 76 FR 24806, May 
3, 2011; 81 FR 66160, Sept. 26, 2016; 82 FR 5867. Jan. 18, 2017]



Sec. 404.1520b  How we consider evidence.

    After we review all of the evidence relevant to your claim, we make 
findings about what the evidence shows.
    (a) Complete and consistent evidence. If all of the evidence we 
receive, including all medical opinion(s), is consistent and there is 
sufficient evidence for us to determine whether you are disabled, we 
will make our determination or decision based on that evidence.
    (b) Incomplete or inconsistent evidence. In some situations, we may 
not be able to make our determination or decision because the evidence 
in your case record is insufficient or inconsistent. We consider 
evidence to be insufficient when it does not contain all the information 
we need to make our determination or decision. We consider evidence to 
be inconsistent when it conflicts with other evidence, contains an 
internal conflict, is ambiguous, or when the medical evidence does not 
appear to be based on medically acceptable clinical or laboratory 
diagnostic techniques. If the evidence in your case record is 
insufficient or inconsistent, we may need to take the additional actions 
in paragraphs (b)(1) through (4) of this section.
    (1) If any of the evidence in your case record, including any 
medical opinion(s) and prior administrative medical findings, is 
inconsistent, we will consider the relevant evidence and see if we can 
determine whether you are disabled based on the evidence we have.
    (2) If the evidence is consistent but we have insufficient evidence 
to determine whether you are disabled, or if after considering the 
evidence we determine we cannot reach a conclusion about whether you are 
disabled, we will determine the best way to resolve the inconsistency or 
insufficiency. The action(s) we take will depend on the nature of the 
inconsistency or insufficiency. We will try to resolve the inconsistency 
or insufficiency by taking any one or more of the actions listed in 
paragraphs (b)(2)(i) through (b)(2)(iv) of this section. We might not 
take all of the actions listed below. We will consider any additional 
evidence we receive together with the evidence we already have.
    (i) We may recontact your medical source. We may choose not to seek 
additional evidence or clarification from a medical source if we know 
from experience that the source either cannot or will not provide the 
necessary evidence. If we obtain medical evidence over the telephone, we 
will send the telephone report to the source for review, signature, and 
return;
    (ii) We may request additional existing evidence;
    (iii) We may ask you to undergo a consultative examination at our 
expense (see Secs. 404.1517 through 404.1519t); or
    (iv) We may ask you or others for more information.
    (3) When there are inconsistencies in the evidence that we cannot 
resolve or when, despite efforts to obtain additional evidence, the 
evidence is insufficient to determine whether you are disabled, we will 
make a determination or decision based on the evidence we have.
    (c) Evidence that is inherently neither valuable nor persuasive. 
Paragraphs (c)(1) through (c)(3) apply in claims filed (see 
Sec. 404.614) on or after March 27, 2017. Because the evidence listed in 
paragraphs (c)(1) through (c)(3) of this section is inherently neither 
valuable nor persuasive to the issue of whether you are disabled or 
blind under the Act, we will not provide any analysis about how we 
considered such evidence in our determination or decision, even under 
Sec. 404.1520c:
    (1) Decisions by other governmental agencies and nongovernmental 
entities. See Sec. 404.1504.

[[Page 382]]

    (2) Disability examiner findings. Findings made by a State agency 
disability examiner made at a previous level of adjudication about a 
medical issue, vocational issue, or the ultimate determination about 
whether you are disabled.
    (3) Statements on issues reserved to the Commissioner. The 
statements listed in paragraphs (c)(3)(i) through (c)(3)(viii) of this 
section would direct our determination or decision that you are or are 
not disabled or blind within the meaning of the Act, but we are 
responsible for making the determination or decision about whether you 
are disabled or blind:
    (i) Statements that you are or are not disabled, blind, able to 
work, or able to perform regular or continuing work;
    (ii) Statements about whether or not you have a severe 
impairment(s);
    (iii) Statements about whether or not your impairment(s) meets the 
duration requirement (see Sec. 404.1509);
    (iv) Statements about whether or not your impairment(s) meets or 
medically equals any listing in the Listing of Impairments in Part 404, 
Subpart P, Appendix 1;
    (v) Statements about what your residual functional capacity is using 
our programmatic terms about the functional exertional levels in Part 
404, Subpart P, Appendix 2, Rule 200.00 instead of descriptions about 
your functional abilities and limitations (see Sec. 404.1545);
    (vi) Statements about whether or not your residual functional 
capacity prevents you from doing past relevant work (see Sec. 404.1560);
    (vii) Statements that you do or do not meet the requirements of a 
medical-vocational rule in Part 404, Subpart P, Appendix 2; and
    (viii) Statements about whether or not your disability continues or 
ends when we conduct a continuing disability review (see Sec. 404.1594).

[82 FR 5867, Jan. 18, 2017]



Sec. 404.1520c  How we consider and articulate medical opinions and
prior administrative medical findings for claims filed on or after
March 27, 2017.

    For claims filed (see Sec. 404.614) on or after March 27, 2017, the 
rules in this section apply. For claims filed before March 27, 2017, the 
rules in Sec. 404.1527 apply.
    (a) How we consider medical opinions and prior administrative 
medical findings. We will not defer or give any specific evidentiary 
weight, including controlling weight, to any medical opinion(s) or prior 
administrative medical finding(s), including those from your medical 
sources. When a medical source provides one or more medical opinions or 
prior administrative medical findings, we will consider those medical 
opinions or prior administrative medical findings from that medical 
source together using the factors listed in paragraphs (c)(1) through 
(c)(5) of this section, as appropriate. The most important factors we 
consider when we evaluate the persuasiveness of medical opinions and 
prior administrative medical findings are supportability (paragraph 
(c)(1) of this section) and consistency (paragraph (c)(2) of this 
section). We will articulate how we considered the medical opinions and 
prior administrative medical findings in your claim according to 
paragraph (b) of this section.
    (b) How we articulate our consideration of medical opinions and 
prior administrative medical findings. We will articulate in our 
determination or decision how persuasive we find all of the medical 
opinions and all of the prior administrative medical findings in your 
case record. Our articulation requirements are as follows:
    (1) Source-level articulation. Because many claims have voluminous 
case records containing many types of evidence from different sources, 
it is not administratively feasible for us to articulate in each 
determination or decision how we considered all of the factors for all 
of the medical opinions and prior administrative medical findings in 
your case record. Instead, when a medical source provides multiple 
medical opinion(s) or prior administrative medical finding(s), we will 
articulate

[[Page 383]]

how we considered the medical opinions or prior administrative medical 
findings from that medical source together in a single analysis using 
the factors listed in paragraphs (c)(1) through (c)(5) of this section, 
as appropriate. We are not required to articulate how we considered each 
medical opinion or prior administrative medical finding from one medical 
source individually.
    (2) Most important factors. The factors of supportability (paragraph 
(c)(1) of this section) and consistency (paragraph (c)(2) of this 
section) are the most important factors we consider when we determine 
how persuasive we find a medical source's medical opinions or prior 
administrative medical findings to be. Therefore, we will explain how we 
considered the supportability and consistency factors for a medical 
source's medical opinions or prior administrative medical findings in 
your determination or decision. We may, but are not required to, explain 
how we considered the factors in paragraphs (c)(3) through (c)(5) of 
this section, as appropriate, when we articulate how we consider medical 
opinions and prior administrative medical findings in your case record.
    (3) Equally persuasive medical opinions or prior administrative 
medical findings about the same issue. When we find that two or more 
medical opinions or prior administrative medical findings about the same 
issue are both equally well-supported (paragraph (c)(1) of this section) 
and consistent with the record (paragraph (c)(2) of this section) but 
are not exactly the same, we will articulate how we considered the other 
most persuasive factors in paragraphs (c)(3) through (c)(5) of this 
section for those medical opinions or prior administrative medical 
findings in your determination or decision.
    (c) Factors. We will consider the following factors when we consider 
the medical opinion(s) and prior administrative medical finding(s) in 
your case:
    (1) Supportability. The more relevant the objective medical evidence 
and supporting explanations presented by a medical source are to support 
his or her medical opinion(s) or prior administrative medical 
finding(s), the more persuasive the medical opinions or prior 
administrative medical finding(s) will be.
    (2) Consistency. The more consistent a medical opinion(s) or prior 
administrative medical finding(s) is with the evidence from other 
medical sources and nonmedical sources in the claim, the more persuasive 
the medical opinion(s) or prior administrative medical finding(s) will 
be.
    (3) Relationship with the claimant. This factor combines 
consideration of the issues in paragraphs (c)(3)(i) through (v) of this 
section.
    (i) Length of the treatment relationship. The length of time a 
medical source has treated you may help demonstrate whether the medical 
source has a longitudinal understanding of your impairment(s).
    (ii) Frequency of examinations. The frequency of your visits with 
the medical source may help demonstrate whether the medical source has a 
longitudinal understanding of your impairment(s).
    (iii) Purpose of the treatment relationship. The purpose for 
treatment you received from the medical source may help demonstrate the 
level of knowledge the medical source has of your impairment(s).
    (iv) Extent of the treatment relationship. The kinds and extent of 
examinations and testing the medical source has performed or ordered 
from specialists or independent laboratories may help demonstrate the 
level of knowledge the medical source has of your impairment(s).
    (v) Examining relationship. A medical source may have a better 
understanding of your impairment(s) if he or she examines you than if 
the medical source only reviews evidence in your folder.
    (4) Specialization. The medical opinion or prior administrative 
medical finding of a medical source who has received advanced education 
and training to become a specialist may be more persuasive about medical 
issues related to his or her area of specialty than the medical opinion 
or prior administrative medical finding of a medical source who is not a 
specialist in the relevant area of specialty.
    (5) Other factors. We will consider other factors that tend to 
support or

[[Page 384]]

contradict a medical opinion or prior administrative medical finding. 
This includes, but is not limited to, evidence showing a medical source 
has familiarity with the other evidence in the claim or an understanding 
of our disability program's policies and evidentiary requirements. When 
we consider a medical source's familiarity with the other evidence in a 
claim, we will also consider whether new evidence we receive after the 
medical source made his or her medical opinion or prior administrative 
medical finding makes the medical opinion or prior administrative 
medical finding more or less persuasive.
    (d) Evidence from nonmedical sources. We are not required to 
articulate how we considered evidence from nonmedical sources using the 
requirements in paragraphs (a)-(c) in this section.

[82 FR 5867, Jan. 18, 2017]



Sec. 404.1521   Establishing that you have a medically determinable 
impairment(s).

    If you are not doing substantial gainful activity, we will then 
determine whether you have a medically determinable physical or mental 
impairment(s) (see Sec. 404.1520(a)(4)(ii)). Your impairment(s) must 
result from anatomical, physiological, or psychological abnormalities 
that can be shown by medically acceptable clinical and laboratory 
diagnostic techniques. Therefore, a physical or mental impairment must 
be established by objective medical evidence from an acceptable medical 
source. We will not use your statement of symptoms, a diagnosis, or a 
medical opinion to establish the existence of an impairment(s). After we 
establish that you have a medically determinable impairment(s), then we 
determine whether your impairment(s) is severe.

[82 FR 5868, Jan. 18, 2017]



Sec. 404.1522  What we mean by an impairment(s) that is not severe.

    (a) Non-severe impairment(s). An impairment or combination of 
impairments is not severe if it does not significantly limit your 
physical or mental ability to do basic work activities.
    (b) Basic work activities. When we talk about basic work activities, 
we mean the abilities and aptitudes necessary to do most jobs. Examples 
of these include--
    (1) Physical functions such as walking, standing, sitting, lifting, 
pushing, pulling, reaching, carrying, or handling;
    (2) Capacities for seeing, hearing, and speaking;
    (3) Understanding, carrying out, and remembering simple 
instructions;
    (4) Use of judgment;
    (5) Responding appropriately to supervision, co-workers and usual 
work situations; and
    (6) Dealing with changes in a routine work setting.

[82 FR 5869, Jan. 18, 2017]



Sec. 404.1523  Multiple impairments.

    (a) Unrelated severe impairments. We cannot combine two or more 
unrelated severe impairments to meet the 12-month duration test. If you 
have a severe impairment(s) and then develop another unrelated severe 
impairment(s) but neither one is expected to last for 12 months, we 
cannot find you disabled, even though the two impairments in combination 
last for 12 months.
    (b) Concurrent impairments. If you have two or more concurrent 
impairments that, when considered in combination, are severe, we must 
determine whether the combined effect of your impairments can be 
expected to continue to be severe for 12 months. If one or more of your 
impairments improves or is expected to improve within 12 months, so that 
the combined effect of your remaining impairments is no longer severe, 
we will find that you do not meet the 12-month duration test.
    (c) Combined effect. In determining whether your physical or mental 
impairment or impairments are of a sufficient medical severity that such 
impairment or impairments could be the basis of eligibility under the 
law, we will consider the combined effect of all of your impairments 
without regard to whether any such impairment, if considered separately, 
would be of sufficient severity. If we do find a medically severe 
combination of impairments, we will consider the combined

[[Page 385]]

impact of the impairments throughout the disability determination 
process. If we do not find that you have a medically severe combination 
of impairments, we will determine that you are not disabled (see 
Sec. 404.1520).

[82 FR 5869, Jan. 18, 2017]

                         Medical Considerations



Sec. 404.1525  Listing of Impairments in appendix 1.

    (a) What is the purpose of the Listing of Impairments? The Listing 
of Impairments (the listings) is in appendix 1 of this subpart. It 
describes for each of the major body systems impairments that we 
consider to be severe enough to prevent an individual from doing any 
gainful activity, regardless of his or her age, education, or work 
experience.
    (b) How is appendix 1 organized? There are two parts in appendix 1:
    (1) Part A contains criteria that apply to individuals age 18 and 
over. We may also use part A for individuals who are under age 18 if the 
disease processes have a similar effect on adults and children.
    (2) Part B contains criteria that apply only to individuals who are 
under age 18; we never use the listings in part B to evaluate 
individuals who are age 18 or older. In evaluating disability for a 
person under age 18, we use part B first. If the criteria in part B do 
not apply, we may use the criteria in part A when those criteria give 
appropriate consideration to the effects of the impairment(s) in 
children. To the extent possible, we number the provisions in part B to 
maintain a relationship with their counterparts in part A.
    (c) How do we use the listings? (1) Most body system sections in 
parts A and B of appendix 1 are in two parts: an introduction, followed 
by the specific listings.
    (2) The introduction to each body system contains information 
relevant to the use of the listings in that body system; for example, 
examples of common impairments in the body system and definitions used 
in the listings for that body system. We may also include specific 
criteria for establishing a diagnosis, confirming the existence of an 
impairment, or establishing that your impairment(s) satisfies the 
criteria of a particular listing in the body system. Even if we do not 
include specific criteria for establishing a diagnosis or confirming the 
existence of your impairment, you must still show that you have a severe 
medically determinable impairment(s), as defined in Sec. 404.1521.
    (3) In most cases, the specific listings follow the introduction in 
each body system, after the heading, Category of Impairments. Within 
each listing, we specify the objective medical and other findings needed 
to satisfy the criteria of that listing. We will find that your 
impairment(s) meets the requirements of a listing when it satisfies all 
of the criteria of that listing, including any relevant criteria in the 
introduction, and meets the duration requirement (see Sec. 404.1509).
    (4) Most of the listed impairments are permanent or expected to 
result in death. For some listings, we state a specific period of time 
for which your impairment(s) will meet the listing. For all others, the 
evidence must show that your impairment(s) has lasted or can be expected 
to last for a continuous period of at least 12 months.
    (5) If your impairment(s) does not meet the criteria of a listing, 
it can medically equal the criteria of a listing. We explain our rules 
for medical equivalence in Sec. 404.1526. We use the listings only to 
find that you are disabled or still disabled. If your impairment(s) does 
not meet or medically equal the criteria of a listing, we may find that 
you are disabled or still disabled at a later step in the sequential 
evaluation process.
    (d) Can your impairment(s) meet a listing based only on a diagnosis? 
No. Your impairment(s) cannot meet the criteria of a listing based only 
on a diagnosis. To meet the requirements of a listing, you must have a 
medically determinable impairment(s) that satisfies all of the criteria 
in the listing.
    (e) How do we consider your symptoms when we determine whether your 
impairment(s) meets a listing? Some listed impairments include symptoms, 
such as pain, as criteria. Section 404.1529(d)(2)

[[Page 386]]

explains how we consider your symptoms when your symptoms are included 
as criteria in a listing.

[71 FR 10428, Mar. 1, 2006, as amended at 76 FR 19696, Apr. 8, 2011; 82 
FR 5868, Jan. 18, 2017]



Sec. 404.1526  Medical equivalence.

    (a) What is medical equivalence? Your impairment(s) is medically 
equivalent to a listed impairment in appendix 1 if it is at least equal 
in severity and duration to the criteria of any listed impairment.
    (b) How do we determine medical equivalence? We can find medical 
equivalence in three ways.
    (1)(i) If you have an impairment that is described in appendix 1, 
but --
    (A) You do not exhibit one or more of the findings specified in the 
particular listing, or
    (B) You exhibit all of the findings, but one or more of the findings 
is not as severe as specified in the particular listing,
    (ii) We will find that your impairment is medically equivalent to 
that listing if you have other findings related to your impairment that 
are at least of equal medical significance to the required criteria.
    (2) If you have an impairment(s) that is not described in appendix 
1, we will compare your findings with those for closely analogous listed 
impairments. If the findings related to your impairment(s) are at least 
of equal medical significance to those of a listed impairment, we will 
find that your impairment(s) is medically equivalent to the analogous 
listing.
    (3) If you have a combination of impairments, no one of which meets 
a listing (see Sec. 404.1525(c)(3)), we will compare your findings with 
those for closely analogous listed impairments. If the findings related 
to your impairments are at least of equal medical significance to those 
of a listed impairment, we will find that your combination of 
impairments is medically equivalent to that listing.
    (4) Section 404.1529(d)(3) explains how we consider your symptoms, 
such as pain, when we make findings about medical equivalence.
    (c) What evidence do we consider when we determine if your 
impairment(s) medically equals a listing? When we determine if your 
impairment medically equals a listing, we consider all evidence in your 
case record about your impairment(s) and its effects on you that is 
relevant to this finding. We do not consider your vocational factors of 
age, education, and work experience (see, for example, 
Sec. 404.1560(c)(1)). We also consider the opinion given by one or more 
medical or psychological consultants designated by the Commissioner. 
(See Sec. 404.1616.)
    (d) Who is a designated medical or psychological consultant? A 
medical or psychological consultant designated by the Commissioner 
includes any medical or psychological consultant employed or engaged to 
make medical judgments by the Social Security Administration, the 
Railroad Retirement Board, or a State agency authorized to make 
disability determinations. See Sec. 404.1616 for the necessary 
qualifications for medical consultants and psychological consultants.
    (e) Who is responsible for determining medical equivalence?
    (1) In cases where the State agency or other designee of the 
Commissioner makes the initial or reconsideration disability 
determination, a State agency medical or psychological consultant or 
other designee of the Commissioner (see Sec. 404.1616 of this part) has 
the overall responsibility for determining medical equivalence.
    (2) For cases in the disability hearing process or otherwise decided 
by a disability hearing officer, the responsibility for determining 
medical equivalence rests with either the disability hearing officer or, 
if the disability hearing officer's reconsideration determination is 
changed under Sec. 404.918 of this part, with the Associate Commissioner 
for Disability Policy or his or her delegate.
    (3) For cases at the administrative law judge or Appeals Council 
level, the responsibility for deciding medical

[[Page 387]]

equivalence rests with the administrative law judge or Appeals 
Council.

[45 FR 55584, Aug. 20, 1980, as amended at 52 FR 33926, Sept. 9, 1987; 
62 FR 38451, July 18, 1997; 65 FR 34957, June 1, 2000; 71 FR 10429, Mar. 
1, 2006; 71 FR 16445, Mar. 31, 2006; 71 FR 57415, Sept. 29, 2006; 76 FR 
24807, May 3, 2011; 82 FR 5869, Jan. 18, 2017; 82 FR 15132, Mar. 27, 
2017]



Sec. 404.1527  Evaluating opinion evidence for claims filed before
March 27, 2017.

    For claims filed (see Sec. 404.614) before March 27, 2017, the rules 
in this section apply. For claims filed on or after March 27, 2017, the 
rules in Sec. 404.1520c apply.
    (a) Definitions.
    (1) Medical opinions. Medical opinions are statements from 
acceptable medical sources that reflect judgments about the nature and 
severity of your impairment(s), including your symptoms, diagnosis and 
prognosis, what you can still do despite impairment(s), and your 
physical or mental restrictions.
    (2) Treating source. Treating source means your own acceptable 
medical source who provides you, or has provided you, with medical 
treatment or evaluation and who has, or has had, an ongoing treatment 
relationship with you. Generally, we will consider that you have an 
ongoing treatment relationship with an acceptable medical source when 
the medical evidence establishes that you see, or have seen, the source 
with a frequency consistent with accepted medical practice for the type 
of treatment and/or evaluation required for your medical condition(s). 
We may consider an acceptable medical source who has treated or 
evaluated you only a few times or only after long intervals (e.g., twice 
a year) to be your treating source if the nature and frequency of the 
treatment or evaluation is typical for your condition(s). We will not 
consider an acceptable medical source to be your treating source if your 
relationship with the source is not based on your medical need for 
treatment or evaluation, but solely on your need to obtain a report in 
support of your claim for disability. In such a case, we will consider 
the acceptable medical source to be a nontreating source.
    (b) How we consider medical opinions. In determining whether you are 
disabled, we will always consider the medical opinions in your case 
record together with the rest of the relevant evidence we receive. See 
Sec. 404.1520b.
    (c) How we weigh medical opinions. Regardless of its source, we will 
evaluate every medical opinion we receive. Unless we give a treating 
source's medical opinion controlling weight under paragraph (c)(2) of 
this section, we consider all of the following factors in deciding the 
weight we give to any medical opinion.
    (1) Examining relationship. Generally, we give more weight to the 
medical opinion of a source who has examined you than to the medical 
opinion of a medical source who has not examined you.
    (2) Treatment relationship. Generally, we give more weight to 
medical opinions from your treating sources, since these sources are 
likely to be the medical professionals most able to provide a detailed, 
longitudinal picture of your medical impairment(s) and may bring a 
unique perspective to the medical evidence that cannot be obtained from 
the objective medical findings alone or from reports of individual 
examinations, such as consultative examinations or brief 
hospitalizations. If we find that a treating source's medical opinion on 
the issue(s) of the nature and severity of your impairment(s) is well-
supported by medically acceptable clinical and laboratory diagnostic 
techniques and is not inconsistent with the other substantial evidence 
in your case record, we will give it controlling weight. When we do not 
give the treating source's medical opinion controlling weight, we apply 
the factors listed in paragraphs (c)(2)(i) and (c)(2)(ii) of this 
section, as well as the factors in paragraphs (c)(3) through (c)(6) of 
this section in determining the weight to give the medical opinion. We 
will always give good reasons in our notice of determination or decision 
for the weight we give your treating source's medical opinion.
    (i) Length of the treatment relationship and the frequency of 
examination. Generally, the longer a treating source has treated you and 
the more times you have been seen by a treating source,

[[Page 388]]

the more weight we will give to the source's medical opinion. When the 
treating source has seen you a number of times and long enough to have 
obtained a longitudinal picture of your impairment, we will give the 
medical source's medical opinion more weight than we would give it if it 
were from a nontreating source.
    (ii) Nature and extent of the treatment relationship. Generally, the 
more knowledge a treating source has about your impairment(s) the more 
weight we will give to the source's medical opinion. We will look at the 
treatment the source has provided and at the kinds and extent of 
examinations and testing the source has performed or ordered from 
specialists and independent laboratories. For example, if your 
ophthalmologist notices that you have complained of neck pain during 
your eye examinations, we will consider his or her medical opinion with 
respect to your neck pain, but we will give it less weight than that of 
another physician who has treated you for the neck pain. When the 
treating source has reasonable knowledge of your impairment(s), we will 
give the source's medical opinion more weight than we would give it if 
it were from a nontreating source.
    (3) Supportability. The more a medical source presents relevant 
evidence to support a medical opinion, particularly medical signs and 
laboratory findings, the more weight we will give that medical opinion. 
The better an explanation a source provides for a medical opinion, the 
more weight we will give that medical opinion. Furthermore, because 
nonexamining sources have no examining or treating relationship with 
you, the weight we will give their medical opinions will depend on the 
degree to which they provide supporting explanations for their medical 
opinions. We will evaluate the degree to which these medical opinions 
consider all of the pertinent evidence in your claim, including medical 
opinions of treating and other examining sources.
    (4) Consistency. Generally, the more consistent a medical opinion is 
with the record as a whole, the more weight we will give to that medical 
opinion.
    (5) Specialization. We generally give more weight to the medical 
opinion of a specialist about medical issues related to his or her area 
of specialty than to the medical opinion of a source who is not a 
specialist.
    (6) Other factors. When we consider how much weight to give to a 
medical opinion, we will also consider any factors you or others bring 
to our attention, or of which we are aware, which tend to support or 
contradict the medical opinion. For example, the amount of understanding 
of our disability programs and their evidentiary requirements that a 
medical source has, regardless of the source of that understanding, and 
the extent to which a medical source is familiar with the other 
information in your case record are relevant factors that we will 
consider in deciding the weight to give to a medical opinion.
    (d) Medical source opinions on issues reserved to the Commissioner. 
Opinions on some issues, such as the examples that follow, are not 
medical opinions, as described in paragraph (a)(1) of this section, but 
are, instead, opinions on issues reserved to the Commissioner because 
they are administrative findings that are dispositive of a case; i.e., 
that would direct the determination or decision of disability.
    (1) Opinions that you are disabled. We are responsible for making 
the determination or decision about whether you meet the statutory 
definition of disability. In so doing, we review all of the medical 
findings and other evidence that support a medical source's statement 
that you are disabled. A statement by a medical source that you are 
``disabled'' or ``unable to work'' does not mean that we will determine 
that you are disabled.
    (2) Other opinions on issues reserved to the Commissioner. We use 
medical sources, including your treating source, to provide evidence, 
including opinions, on the nature and severity of your impairment(s). 
Although we consider opinions from medical sources on issues such as 
whether your impairment(s) meets or equals the requirements of any 
impairment(s) in the Listing of Impairments in appendix 1 to this 
subpart, your residual functional capacity (see Secs. 404.1545 and 
404.1546), or the application of vocational factors, the final 
responsibility

[[Page 389]]

for deciding these issues is reserved to the Commissioner.
    (3) We will not give any special significance to the source of an 
opinion on issues reserved to the Commissioner described in paragraphs 
(d)(1) and (d)(2) of this section.
    (e) Evidence from our Federal or State agency medical or 
psychological consultants. The rules in Sec. 404.1513a apply except that 
when an administrative law judge gives controlling weight to a treating 
source's medical opinion, the administrative law judge is not required 
to explain in the decision the weight he or she gave to the prior 
administrative medical findings in the claim.
    (f) Opinions from medical sources who are not acceptable medical 
sources and from nonmedical sources.
    (1) Consideration. Opinions from medical sources who are not 
acceptable medical sources and from nonmedical sources may reflect the 
source's judgment about some of the same issues addressed in medical 
opinions from acceptable medical sources. Although we will consider 
these opinions using the same factors as listed in paragraph (c)(1) 
through (c)(6) in this section, not every factor for weighing opinion 
evidence will apply in every case because the evaluation of an opinion 
from a medical source who is not an acceptable medical source or from a 
nonmedical source depends on the particular facts in each case. 
Depending on the particular facts in a case, and after applying the 
factors for weighing opinion evidence, an opinion from a medical source 
who is not an acceptable medical source or from a nonmedical source may 
outweigh the medical opinion of an acceptable medical source, including 
the medical opinion of a treating source. For example, it may be 
appropriate to give more weight to the opinion of a medical source who 
is not an acceptable medical source if he or she has seen the individual 
more often than the treating source, has provided better supporting 
evidence and a better explanation for the opinion, and the opinion is 
more consistent with the evidence as a whole.
    (2) Articulation. The adjudicator generally should explain the 
weight given to opinions from these sources or otherwise ensure that the 
discussion of the evidence in the determination or decision allows a 
claimant or subsequent reviewer to follow the adjudicator's reasoning, 
when such opinions may have an effect on the outcome of the case. In 
addition, when an adjudicator determines that an opinion from such a 
source is entitled to greater weight than a medical opinion from a 
treating source, the adjudicator must explain the reasons in the notice 
of decision in hearing cases and in the notice of determination (that 
is, in the personalized disability notice) at the initial and 
reconsideration levels, if the determination is less than fully 
favorable.

[82 FR 5869, Jan. 18, 2017; 82 FR 15132, Mar. 27, 2017]



Sec. 404.1528  [Reserved]



Sec. 404.1529  How we evaluate symptoms, including pain.

    (a) General. In determining whether you are disabled, we consider 
all your symptoms, including pain, and the extent to which your symptoms 
can reasonably be accepted as consistent with the objective medical 
evidence and other evidence. We will consider all of your statements 
about your symptoms, such as pain, and any description your medical 
sources or nonmedical sources may provide about how the symptoms affect 
your activities of daily living and your ability to work. However, 
statements about your pain or other symptoms will not alone establish 
that you are disabled. There must be objective medical evidence from an 
acceptable medical source that shows you have a medical impairment(s) 
which could reasonably be expected to produce the pain or other symptoms 
alleged and that, when considered with all of the other evidence 
(including statements about the intensity and persistence of your pain 
or other symptoms which may reasonably be accepted as consistent with 
the medical signs and laboratory findings), would lead to a conclusion 
that you are disabled. In evaluating the intensity and persistence of 
your symptoms, including pain, we will consider all of the available 
evidence, including your medical history, the medical signs and 
laboratory findings, and statements about how

[[Page 390]]

your symptoms affect you. We will then determine the extent to which 
your alleged functional limitations and restrictions due to pain or 
other symptoms can reasonably be accepted as consistent with the medical 
signs and laboratory findings and other evidence to decide how your 
symptoms affect your ability to work.
    (b) Need for medically determinable impairment that could reasonably 
be expected to produce your symptoms, such as pain. Your symptoms, such 
as pain, fatigue, shortness of breath, weakness, or nervousness, will 
not be found to affect your ability to do basic work activities unless 
medical signs or laboratory findings show that a medically determinable 
impairment(s) is present. Medical signs and laboratory findings, 
established by medically acceptable clinical or laboratory diagnostic 
techniques, must show the existence of a medical impairment(s) which 
results from anatomical, physiological, or psychological abnormalities 
and which could reasonably be expected to produce the pain or other 
symptoms alleged. In cases decided by a State agency (except in 
disability hearings under Secs. 404.914 through 404.918 of this part and 
in fully favorable determinations made by State agency disability 
examiners alone under Sec. 404.1615(c)(3) of this part), a State agency 
medical or psychological consultant or other medical or psychological 
consultant designated by the Commissioner directly participates in 
determining whether your medically determinable impairment(s) could 
reasonably be expected to produce your alleged symptoms. In the 
disability hearing process, a medical or psychological consultant may 
provide an advisory assessment to assist a disability hearing officer in 
determining whether your impairment(s) could reasonably be expected to 
produce your alleged symptoms. At the administrative law judge hearing 
or Appeals Council level of the administrative review process, the 
adjudicator(s) may ask for and consider the opinion of a medical or 
psychological expert concerning whether your impairment(s) could 
reasonably be expected to produce your alleged symptoms. The finding 
that your impairment(s) could reasonably be expected to produce your 
pain or other symptoms does not involve a determination as to the 
intensity, persistence, or functionally limiting effects of your 
symptoms. We will develop evidence regarding the possibility of a 
medically determinable mental impairment when we have information to 
suggest that such an impairment exists, and you allege pain or other 
symptoms but the medical signs and laboratory findings do not 
substantiate any physical impairment(s) capable of producing the pain or 
other symptoms.
    (c) Evaluating the intensity and persistence of your symptoms, such 
as pain, and determining the extent to which your symptoms limit your 
capacity for work--(1) General. When the medical signs or laboratory 
findings show that you have a medically determinable impairment(s) that 
could reasonably be expected to produce your symptoms, such as pain, we 
must then evaluate the intensity and persistence of your symptoms so 
that we can determine how your symptoms limit your capacity for work. In 
evaluating the intensity and persistence of your symptoms, we consider 
all of the available evidence from your medical sources and nonmedical 
sources about how your symptoms affect you. We also consider the medical 
opinions as explained in Sec. 404.1520c. Paragraphs (c)(2) through 
(c)(4) of this section explain further how we evaluate the intensity and 
persistence of your symptoms and how we determine the extent to which 
your symptoms limit your capacity for work, when the medical signs or 
laboratory findings show that you have a medically determinable 
impairment(s) that could reasonably be expected to produce your 
symptoms, such as pain.
    (2) Consideration of objective medical evidence. Objective medical 
evidence is evidence obtained from the application of medically 
acceptable clinical and laboratory diagnostic techniques, such as 
evidence of reduced joint motion, muscle spasm, sensory deficit or motor 
disruption. Objective medical evidence of this type is a useful 
indicator to assist us in making reasonable conclusions about the 
intensity and persistence of your symptoms and the effect those 
symptoms, such as pain, may have on your ability to work. We must always 
attempt to obtain objective

[[Page 391]]

medical evidence and, when it is obtained, we will consider it in 
reaching a conclusion as to whether you are disabled. However, we will 
not reject your statements about the intensity and persistence of your 
pain or other symptoms or about the effect your symptoms have on your 
ability to work solely because the available objective medical evidence 
does not substantiate your statements.
    (3) Consideration of other evidence. Because symptoms sometimes 
suggest a greater severity of impairment than can be shown by objective 
medical evidence alone, we will carefully consider any other information 
you may submit about your symptoms. The information that your medical 
sources or nonmedical sources provide about your pain or other symptoms 
(e.g., what may precipitate or aggravate your symptoms, what 
medications, treatments or other methods you use to alleviate them, and 
how the symptoms may affect your pattern of daily living) is also an 
important indicator of the intensity and persistence of your symptoms. 
Because symptoms, such as pain, are subjective and difficult to 
quantify, any symptom-related functional limitations and restrictions 
that your medical sources or nonmedical sources report, which can 
reasonably be accepted as consistent with the objective medical evidence 
and other evidence, will be taken into account as explained in paragraph 
(c)(4) of this section in reaching a conclusion as to whether you are 
disabled. We will consider all of the evidence presented, including 
information about your prior work record, your statements about your 
symptoms, evidence submitted by your medical sources, and observations 
by our employees and other persons. Section 404.1520c explains in detail 
how we consider medical opinions and prior administrative medical 
findings about the nature and severity of your impairment(s) and any 
related symptoms, such as pain. Factors relevant to your symptoms, such 
as pain, which we will consider include:
    (i) Your daily activities;
    (ii) The location, duration, frequency, and intensity of your pain 
or other symptoms;
    (iii) Precipitating and aggravating factors;
    (iv) The type, dosage, effectiveness, and side effects of any 
medication you take or have taken to alleviate your pain or other 
symptoms;
    (v) Treatment, other than medication, you receive or have received 
for relief of your pain or other symptoms;
    (vi) Any measures you use or have used to relieve your pain or other 
symptoms (e.g., lying flat on your back, standing for 15 to 20 minutes 
every hour, sleeping on a board, etc.); and
    (vii) Other factors concerning your functional limitations and 
restrictions due to pain or other symptoms.
    (4) How we determine the extent to which symptoms, such as pain, 
affect your capacity to perform basic work activities. In determining 
the extent to which your symptoms, such as pain, affect your capacity to 
perform basic work activities, we consider all of the available evidence 
described in paragraphs (c)(1) through (c)(3) of this section. We will 
consider your statements about the intensity, persistence, and limiting 
effects of your symptoms, and we will evaluate your statements in 
relation to the objective medical evidence and other evidence, in 
reaching a conclusion as to whether you are disabled. We will consider 
whether there are any inconsistencies in the evidence and the extent to 
which there are any conflicts between your statements and the rest of 
the evidence, including your history, the signs and laboratory findings, 
and statements by your medical sources or other persons about how your 
symptoms affect you. Your symptoms, including pain, will be determined 
to diminish your capacity for basic work activities to the extent that 
your alleged functional limitations and restrictions due to symptoms, 
such as pain, can reasonably be accepted as consistent with the 
objective medical evidence and other evidence.
    (d) Consideration of symptoms in the disability determination 
process. We follow a set order of steps to determine whether you are 
disabled. If you are not doing substantial gainful activity, we consider 
your symptoms, such as pain, to evaluate whether you have a severe 
physical or mental impairment(s), and at each of the remaining steps in 
the process. Sections 404.1520

[[Page 392]]

and 404.1520a explain this process in detail. We also consider your 
symptoms, such as pain, at the appropriate steps in our review when we 
consider whether your disability continues. Sections 404.1579 and 
404.1594 explain the procedure we follow in reviewing whether your 
disability continues.
    (1) Need to establish a severe medically determinable impairment(s). 
Your symptoms, such as pain, fatigue, shortness of breath, weakness, or 
nervousness, are considered in making a determination as to whether your 
impairment or combination of impairment(s) is severe. (See 
Sec. 404.1520(c).)
    (2) Decision whether the Listing of Impairments is met. Some listed 
impairments include symptoms usually associated with those impairments 
as criteria. Generally, when a symptom is one of the criteria in a 
listing, it is only necessary that the symptom be present in combination 
with the other criteria. It is not necessary, unless the listing 
specifically states otherwise, to provide information about the 
intensity, persistence, or limiting effects of the symptom as long as 
all other findings required by the specific listing are present.
    (3) Decision whether the Listing of Impairments is medically 
equaled. If your impairment is not the same as a listed impairment, we 
must determine whether your impairment(s) is medically equivalent to a 
listed impairment. Section 404.1526 explains how we make this 
determination. Under Sec. 404.1526(b), we will consider medical 
equivalence based on all evidence in your case record about your 
impairment(s) and its effects on you that is relevant to this finding. 
In considering whether your symptoms, signs, and laboratory findings are 
medically equal to the symptoms, signs, and laboratory findings of a 
listed impairment, we will look to see whether your symptoms, signs, and 
laboratory findings are at least equal in severity to the listed 
criteria. However, we will not substitute your allegations of pain or 
other symptoms for a missing or deficient sign or laboratory finding to 
raise the severity of your impairment(s) to that of a listed impairment. 
If the symptoms, signs, and laboratory findings of your impairment(s) 
are equivalent in severity to those of a listed impairment, we will find 
you disabled. If it does not, we will consider the impact of your 
symptoms on your residual functional capacity. (See paragraph (d)(4) of 
this section.)
    (4) Impact of symptoms (including pain) on residual functional 
capacity. If you have a medically determinable severe physical or mental 
impairment(s), but your impairment(s) does not meet or equal an 
impairment listed in appendix 1 of this subpart, we will consider the 
impact of your impairment(s) and any related symptoms, including pain, 
on your residual functional capacity. (See Sec. 404.1545.)

[56 FR 57941, Nov. 14, 1991, as amended at 62 FR 38451, July 18, 1997; 
71 FR 10429, Mar. 1, 2006; 71 FR 16445, Mar. 31, 2006; 75 FR 62681, Oct. 
13, 2010; 76 FR 24807, May 3, 2011; 82 FR 5871, Jan. 18, 2017]



Sec. 404.1530  Need to follow prescribed treatment.

    (a) What treatment you must follow. In order to get benefits, you 
must follow treatment prescribed by your medical source(s) if this 
treatment is expected to restore your ability to work.
    (b) When you do not follow prescribed treatment. If you do not 
follow the prescribed treatment without a good reason, we will not find 
you disabled or, if you are already receiving benefits, we will stop 
paying you benefits.
    (c) Acceptable reasons for failure to follow prescribed treatment. 
We will consider your physical, mental, educational, and linguistic 
limitations (including any lack of facility with the English language) 
when determining if you have an acceptable reason for failure to follow 
prescribed treatment. The following are examples of a good reason for 
not following treatment:
    (1) The specific medical treatment is contrary to the established 
teaching and tenets of your religion.
    (2) The prescribed treatment would be cataract surgery for one eye, 
when there is an impairment of the other eye resulting in a severe loss 
of vision and is not subject to improvement through treatment.
    (3) Surgery was previously performed with unsuccessful results and 
the same surgery is again being recommended for the same impairment.

[[Page 393]]

    (4) The treatment because of its magnitude (e.g., open heart 
surgery), unusual nature (e.g., organ transplant), or other reason is 
very risky for you; or
    (5) The treatment involves amputation of an extremity, or a major 
part of an extremity.

[45 FR 55584, Aug. 20, 1980, as amended at 59 FR 1635, Jan. 12, 1994; 82 
FR 5871, Jan. 18, 2017]



Sec. 404.1535  How we will determine whether your drug addiction or
alcoholism is a contributing factor material to the determination 
of disability.

    (a) General. If we find that you are disabled and have medical 
evidence of your drug addiction or alcoholism, we must determine whether 
your drug addiction or alcoholism is a contributing factor material to 
the determination of disability.
    (b) Process we will follow when we have medical evidence of your 
drug addiction or alcoholism. (1) The key factor we will examine in 
determining whether drug addiction or alcoholism is a contributing 
factor material to the determination of disability is whether we would 
still find you disabled if you stopped using drugs or alcohol.
    (2) In making this determination, we will evaluate which of your 
current physical and mental limitations, upon which we based our current 
disability determination, would remain if you stopped using drugs or 
alcohol and then determine whether any or all of your remaining 
limitations would be disabling.
    (i) If we determine that your remaining limitations would not be 
disabling, we will find that your drug addiction or alcoholism is a 
contributing factor material to the determination of disability.
    (ii) If we determine that your remaining limitations are disabling, 
you are disabled independent of your drug addiction or alcoholism and we 
will find that your drug addiction or alcoholism is not a contributing 
factor material to the determination of disability.

[60 FR 8147, Feb. 10, 1995]



Sec. 404.1536  Treatment required for individuals whose drug 
addiction or alcoholism is a contributing factor material to the
determination of disability.

    (a) If we determine that you are disabled and drug addiction or 
alcoholism is a contributing factor material to the determination of 
disability (as described in Sec. 404.1535), you must avail yourself of 
appropriate treatment for your drug addiction or alcoholism at an 
institution or facility approved by us when this treatment is available 
and make progress in your treatment. Generally, you are not expected to 
pay for this treatment. You will not be paid benefits for any month 
after the month we have notified you in writing that--
    (1) You did not comply with the terms, conditions and requirements 
of the treatment which has been made available to you; or
    (2) You did not avail yourself of the treatment after you had been 
notified that it is available to you.
    (b) If your benefits are suspended for failure to comply with 
treatment requirements, your benefits can be reinstated in accordance 
with the rules in Sec. 404.470.

[60 FR 8147, Feb. 10, 1995]



Sec. 404.1537  What we mean by appropriate treatment.

    By appropriate treatment, we mean treatment for drug addiction or 
alcoholism that serves the needs of the individual in the least 
restrictive setting possible consistent with your treatment plan. These 
settings range from outpatient counseling services through a variety of 
residential treatment settings including acute detoxification, short-
term intensive residential treatment, long-term therapeutic residential 
treatment, and long-term recovery houses. Appropriate treatment is 
determined with the involvement of a State licensed or certified 
addiction professional on the basis of a detailed assessment of the 
individual's presenting symptomatology, psychosocial profile, and other 
relevant factors. This assessment may lead to a determination that more 
than one treatment modality is appropriate for the individual. The 
treatment will be provided or overseen by an approved institution or 
facility.

[[Page 394]]

This treatment may include (but is not limited to)--
    (a) Medical examination and medical management;
    (b) Detoxification;
    (c) Medication management to include substitution therapy (e.g., 
methadone);
    (d) Psychiatric, psychological, psychosocial, vocational, or other 
substance abuse counseling in a residential or outpatient treatment 
setting; or
    (e) Relapse prevention.

[60 FR 8148, Feb. 10, 1995]



Sec. 404.1538  What we mean by approved institutions or facilities.

    Institutions or facilities that we may approve include--
    (a) An institution or facility that furnishes medically recognized 
treatment for drug addiction or alcoholism in conformity with applicable 
Federal or State laws and regulations;
    (b) An institution or facility used by or licensed by an appropriate 
State agency which is authorized to refer persons for treatment of drug 
addiction or alcoholism;
    (c) State licensed or certified care providers;
    (d) Programs accredited by the Commission on Accreditation for 
Rehabilitation Facilities (CARF) and/or the Joint Commission for the 
Accreditation of Healthcare Organizations (JCAHO) for the treatment of 
drug addiction or alcoholism;
    (e) Medicare or Medicaid certified care providers; or
    (f) Nationally recognized self-help drug addiction or alcoholism 
recovery programs (e.g., Alcoholics Anonymous or Narcotics Anonymous) 
when participation in these programs is specifically prescribed by a 
treatment professional at an institution or facility described in 
paragraphs (a) through (e) of this section as part of an individual's 
treatment plan.

[60 FR 8148, Feb. 10, 1995]



Sec. 404.1539  How we consider whether treatment is available.

    Our determination about whether treatment is available to you for 
your drug addiction or your alcoholism will depend upon--
    (a) The capacity of an approved institution or facility to admit you 
for appropriate treatment;
    (b) The location of the approved institution or facility, or the 
place where treatment, services or resources could be provided to you;
    (c) The availability and cost of transportation for you to the place 
of treatment;
    (d) Your general health, including your ability to travel and 
capacity to understand and follow the prescribed treatment;
    (e) Your particular condition and circumstances; and
    (f) The treatment that is prescribed for your drug addiction or 
alcoholism.

[60 FR 8148, Feb. 10, 1995]



Sec. 404.1540  Evaluating compliance with the treatment requirements.

    (a) General. Generally, we will consider information from the 
treatment institution or facility to evaluate your compliance with your 
treatment plan. The treatment institution or facility will:
    (1) Monitor your attendance at and participation in treatment 
sessions;
    (2) Provide reports of the results of any clinical testing (such as, 
hematological or urinalysis studies for individuals with drug addiction 
and hematological studies and breath analysis for individuals with 
alcoholism) when such tests are likely to yield important information;
    (3) Provide observational reports from the treatment professionals 
familiar with your individual case (subject to verification and Federal 
confidentiality requirements); or
    (4) Provide their assessment or views on your noncompliance with 
treatment requirements.
    (b) Measuring progress. Generally, we will consider information from 
the treatment institution or facility to evaluate your progress in 
completing your treatment plan. Examples of milestones for measuring 
your progress with the treatment which has been prescribed for your drug 
addiction or alcoholism may include (but are not limited to)--
    (1) Abstinence from drug or alcohol use (initial progress may 
include significant reduction in use);

[[Page 395]]

    (2) Consistent attendance at and participation in treatment 
sessions;
    (3) Improved social functioning and levels of gainful activity;
    (4) Participation in vocational rehabilitation activities; or
    (5) Avoidance of criminal activity.

[60 FR 8148, Feb. 10, 1995]



Sec. 404.1541  Establishment and use of referral and monitoring
agencies.

    We will contract with one or more agencies in each of the States, 
Puerto Rico and the District of Columbia to provide services to 
individuals whose disabilities are based on a determination that drug 
addiction or alcoholism is a contributing factor material to the 
determination of disability (as described in Sec. 404.1535) and to 
submit information to us which we will use to make decisions about these 
individuals' benefits. These agencies will be known as referral and 
monitoring agencies. Their duties and responsibilities include (but are 
not limited to)--
    (a) Identifying appropriate treatment placements for individuals we 
refer to them;
    (b) Referring these individuals for treatment;
    (c) Monitoring the compliance and progress with the appropriate 
treatment of these individuals; and
    (d) Promptly reporting to us any individual's failure to comply with 
treatment requirements as well as failure to achieve progress through 
the treatment.

[60 FR 8148, Feb. 10, 1995]

                      Residual Functional Capacity



Sec. 404.1545  Your residual functional capacity.

    (a) General--(1) Residual functional capacity assessment. Your 
impairment(s), and any related symptoms, such as pain, may cause 
physical and mental limitations that affect what you can do in a work 
setting. Your residual functional capacity is the most you can still do 
despite your limitations. We will assess your residual functional 
capacity based on all the relevant evidence in your case record. (See 
Secs. 404.1512(d) through (e).)
    (2) If you have more than one impairment. We will consider all of 
your medically determinable impairments of which we are aware, including 
your medically determinable impairments that are not ``severe,'' as 
explained in Secs. 404.1520(c), 404.1521, and 404.1523, when we assess 
your residual functional capacity. (See paragraph (e) of this section.)
    (3) Evidence we use to assess your residual functional capacity. We 
will assess your residual functional capacity based on all of the 
relevant medical and other evidence. In general, you are responsible for 
providing the evidence we will use to make a finding about your residual 
functional capacity. (See Sec. 404.1512(c).) However, before we make a 
determination that you are not disabled, we are responsible for 
developing your complete medical history, including arranging for a 
consultative examination(s) if necessary, and making every reasonable 
effort to help you get medical reports from your own medical sources. 
(See Secs. 404.1512(d) through (f).) We will consider any statements 
about what you can still do that have been provided by medical sources, 
whether or not they are based on formal medical examinations. (See 
Sec. 404.1513.) We will also consider descriptions and observations of 
your limitations from your impairment(s), including limitations that 
result from your symptoms, such as pain, provided by you, your family, 
neighbors, friends, or other persons. (See paragraph (e) of this section 
and Sec. 404.1529.)
    (4) What we will consider in assessing residual functional capacity. 
When we assess your residual functional capacity, we will consider your 
ability to meet the physical, mental, sensory, and other requirements of 
work, as described in paragraphs (b), (c), and (d) of this section.
    (5) How we will use our residual functional capacity assessment. (i) 
We will first use our residual functional capacity assessment at step 
four of the sequential evaluation process to decide if you can do your 
past relevant work. (See Secs. 404.1520(f) and 404.1560(b).)
    (ii) If we find that you cannot do your past relevant work, you do 
not have any past relevant work, or if we use the procedures in 
Sec. 404.1520(h) and Sec. 404.1562 does not apply, we will use the

[[Page 396]]

same assessment of your residual functional capacity at step five of the 
sequential evaluation process to decide if you can adjust to any other 
work that exists in the national economy. (See Secs. 404.1520(g) and 
404.1566.) At this step, we will not use our assessment of your residual 
functional capacity alone to decide if you are disabled. We will use the 
guidelines in Secs. 404.1560 through 404.1569a, and consider our 
residual functional capacity assessment together with the information 
about your vocational background to make our disability determination or 
decision. For our rules on residual functional capacity assessment in 
deciding whether your disability continues or ends, see Sec. 404.1594.
    (b) Physical abilities. When we assess your physical abilities, we 
first assess the nature and extent of your physical limitations and then 
determine your residual functional capacity for work activity on a 
regular and continuing basis. A limited ability to perform certain 
physical demands of work activity, such as sitting, standing, walking, 
lifting, carrying, pushing, pulling, or other physical functions 
(including manipulative or postural functions, such as reaching, 
handling, stooping or crouching), may reduce your ability to do past 
work and other work.
    (c) Mental abilities. When we assess your mental abilities, we first 
assess the nature and extent of your mental limitations and restrictions 
and then determine your residual functional capacity for work activity 
on a regular and continuing basis. A limited ability to carry out 
certain mental activities, such as limitations in understanding, 
remembering, and carrying out instructions, and in responding 
appropriately to supervision, co-workers, and work pressures in a work 
setting, may reduce your ability to do past work and other work.
    (d) Other abilities affected by impairment(s). Some medically 
determinable impairment(s), such as skin impairment(s), epilepsy, 
impairment(s) of vision, hearing or other senses, and impairment(s) 
which impose environmental restrictions, may cause limitations and 
restrictions which affect other work-related abilities. If you have this 
type of impairment(s), we consider any resulting limitations and 
restrictions which may reduce your ability to do past work and other 
work in deciding your residual functional capacity.
    (e) Total limiting effects. When you have a severe impairment(s), 
but your symptoms, signs, and laboratory findings do not meet or equal 
those of a listed impairment in appendix 1 of this subpart, we will 
consider the limiting effects of all your impairment(s), even those that 
are not severe, in determining your residual functional capacity. Pain 
or other symptoms may cause a limitation of function beyond that which 
can be determined on the basis of the anatomical, physiological or 
psychological abnormalities considered alone; e.g., someone with a low 
back disorder may be fully capable of the physical demands consistent 
with those of sustained medium work activity, but another person with 
the same disorder, because of pain, may not be capable of more than the 
physical demands consistent with those of light work activity on a 
sustained basis. In assessing the total limiting effects of your 
impairment(s) and any related symptoms, we will consider all of the 
medical and nonmedical evidence, including the information described in 
Sec. 404.1529(c).

[56 FR 57943, Nov. 14, 1991, as amended at 68 FR 51162, Aug. 26, 2003; 
77 FR 10656, Feb. 23, 2012; 77 FR 43494, July 25, 2012]



Sec. 404.1546  Responsibility for assessing your residual functional 
capacity.

    (a) Responsibility for assessing residual functional capacity at the 
State agency. When a State agency medical or psychological consultant 
and a State agency disability examiner make the disability determination 
as provided in Sec. 404.1615(c)(1) of this part, a State agency medical 
or psychological consultant(s) is responsible for assessing your 
residual functional capacity. When a State agency disability examiner 
makes a disability determination alone as provided in 
Sec. 404.1615(c)(3), the disability examiner is responsible for 
assessing your residual functional capacity.

[[Page 397]]

    (b) Responsibility for assessing residual functional capacity in the 
disability hearings process. If your case involves a disability hearing 
under Sec. 404.914, a disability hearing officer is responsible for 
assessing your residual functional capacity. However, if the disability 
hearing officer's reconsidered determination is changed under 
Sec. 404.918, the Associate Commissioner for the Office of Disability 
Determinations or his or her delegate is responsible for assessing your 
residual functional capacity.
    (c) Responsibility for assessing residual functional capacity at the 
administrative law judge hearing or Appeals Council level. If your case 
is at the administrative law judge hearing level or at the Appeals 
Council review level, the administrative law judge or the administrative 
appeals judge at the Appeals Council (when the Appeals Council makes a 
decision) is responsible for assessing your residual functional 
capacity.

[68 FR 51162, Aug. 26, 2003, as amended at 71 FR 16445, Mar. 31, 2006; 
75 FR 62681, Oct. 13, 2010; 76 FR 24807, May 3, 2011]

                        Vocational Considerations



Sec. 404.1560  When we will consider your vocational background.

    (a) General. If you are applying for a period of disability, or 
disability insurance benefits as a disabled worker, or child's insurance 
benefits based on disability which began before age 22, or widow's or 
widower's benefits based on disability for months after December 1990, 
and we cannot decide whether you are disabled at one of the first three 
steps of the sequential evaluation process (see Sec. 404.1520), we will 
consider your residual functional capacity together with your vocational 
background, as discussed in paragraphs (b) and (c) of this section.
    (b) Past relevant work. We will first compare our assessment of your 
residual functional capacity with the physical and mental demands of 
your past relevant work. See Sec. 404.1520(h) for an exception to this 
rule.
    (1) Definition of past relevant work. Past relevant work is work 
that you have done within the past 15 years, that was substantial 
gainful activity, and that lasted long enough for you to learn to do it. 
(See Sec. 404.1565(a).)
    (2) Determining whether you can do your past relevant work. We will 
ask you for information about work you have done in the past. We may 
also ask other people who know about your work. (See Sec. 404.1565(b).) 
We may use the services of vocational experts or vocational specialists, 
or other resources, such as the ``Dictionary of Occupational Titles'' 
and its companion volumes and supplements, published by the Department 
of Labor, to obtain evidence we need to help us determine whether you 
can do your past relevant work, given your residual functional capacity. 
A vocational expert or specialist may offer relevant evidence within his 
or her expertise or knowledge concerning the physical and mental demands 
of a claimant's past relevant work, either as the claimant actually 
performed it or as generally performed in the national economy. Such 
evidence may be helpful in supplementing or evaluating the accuracy of 
the claimant's description of his past work. In addition, a vocational 
expert or specialist may offer expert opinion testimony in response to a 
hypothetical question about whether a person with the physical and 
mental limitations imposed by the claimant's medical impairment(s) can 
meet the demands of the claimant's previous work, either as the claimant 
actually performed it or as generally performed in the national economy.
    (3) If you can do your past relevant work. If we find that you have 
the residual functional capacity to do your past relevant work, we will 
determine that you can still do your past work and are not disabled. We 
will not consider your vocational factors of age, education, and work 
experience or whether your past relevant work exists in significant 
numbers in the national economy.
    (c) Other work. (1) If we find that your residual functional 
capacity does not enable you to do any of your past relevant work or if 
we use the procedures in Sec. 404.1520(h), we will use the same residual 
functional capacity assessment when we decide if you can adjust to any 
other work. We will look at your

[[Page 398]]

ability to adjust to other work by considering your residual functional 
capacity and the vocational factors of age, education, and work 
experience, as appropriate in your case. (See Sec. 404.1520(h) for an 
exception to this rule.) Any other work (jobs) that you can adjust to 
must exist in significant numbers in the national economy (either in the 
region where you live or in several regions in the country).
    (2) In order to support a finding that you are not disabled at this 
fifth step of the sequential evaluation process, we are responsible for 
providing evidence that demonstrates that other work exists in 
significant numbers in the national economy that you can do, given your 
residual functional capacity and vocational factors. We are not 
responsible for providing additional evidence about your residual 
functional capacity because we will use the same residual functional 
capacity assessment that we used to determine if you can do your past 
relevant work.

[68 FR 51163, Aug. 26, 2003, as amended at 77 FR 43494, July 25, 2012]



Sec. 404.1562  Medical-vocational profiles showing an inability to
make an adjustment to other work.

    (a) If you have done only arduous unskilled physical labor. If you 
have no more than a marginal education (see Sec. 404.1564) and work 
experience of 35 years or more during which you did only arduous 
unskilled physical labor, and you are not working and are no longer able 
to do this kind of work because of a severe impairment(s) (see 
Secs. 404.1520(c), 404.1521, and 404.1523), we will consider you unable 
to do lighter work, and therefore, disabled.

    Example to paragraph (a): B is a 58-year-old miner's helper with a 
fourth grade education who has a lifelong history of unskilled arduous 
physical labor. B says that he is disabled because of arthritis of the 
spine, hips, and knees, and other impairments. Medical evidence shows a 
``severe'' combination of impairments that prevents B from performing 
his past relevant work. Under these circumstances, we will find that B 
is disabled.

    (b) If you are at least 55 years old, have no more than a limited 
education, and have no past relevant work experience. If you have a 
severe, medically determinable impairment(s) (see Secs. 404.1520(c), 
404.1521, and 404.1523), are of advanced age (age 55 or older, see 
Sec. 404.1563), have a limited education or less (see Sec. 404.1564), 
and have no past relevant work experience (see Sec. 404.1565), we will 
find you disabled. If the evidence shows that you meet this profile, we 
will not need to assess your residual functional capacity or consider 
the rules in appendix 2 to this subpart.

[68 FR 51163, Aug. 26, 2003]



Sec. 404.1563  Your age as a vocational factor.

    (a) General. ``Age'' means your chronological age. When we decide 
whether you are disabled under Sec. 404.1520(g)(1), we will consider 
your chronological age in combination with your residual functional 
capacity, education, and work experience. We will not consider your 
ability to adjust to other work on the basis of your age alone. In 
determining the extent to which age affects a person's ability to adjust 
to other work, we consider advancing age to be an increasingly limiting 
factor in the person's ability to make such an adjustment, as we explain 
in paragraphs (c) through (e) of this section. If you are unemployed but 
you still have the ability to adjust to other work, we will find that 
you are not disabled. In paragraphs (b) through (e) of this section and 
in appendix 2 to this subpart, we explain in more detail how we consider 
your age as a vocational factor.
    (b) How we apply the age categories. When we make a finding about 
your ability to do other work under Sec. 404.1520(f)(1), we will use the 
age categories in paragraphs (c) through (e) of this section. We will 
use each of the age categories that applies to you during the period for 
which we must determine if you are disabled. We will not apply the age 
categories mechanically in a borderline situation. If you are within a 
few days to a few months of reaching an older age category, and using 
the older age category would result in a determination or decision that 
you are disabled, we will consider whether to use the older age category 
after evaluating the overall impact of all the factors of your case.

[[Page 399]]

    (c) Younger person. If you are a younger person (under age 50), we 
generally do not consider that your age will seriously affect your 
ability to adjust to other work. However, in some circumstances, we 
consider that persons age 45-49 are more limited in their ability to 
adjust to other work than persons who have not attained age 45. See Rule 
201.17 in appendix 2.
    (d) Person closely approaching advanced age. If you are closely 
approaching advanced age (age 50-54), we will consider that your age 
along with a severe impairment(s) and limited work experience may 
seriously affect your ability to adjust to other work.
    (e) Person of advanced age. We consider that at advanced age (age 55 
or older), age significantly affects a person's ability to adjust to 
other work. We have special rules for persons of advanced age and for 
persons in this category who are closely approaching retirement age (age 
60 or older). See Sec. 404.1568(d)(4).
    (f) Information about your age. We will usually not ask you to prove 
your age. However, if we need to know your exact age to determine 
whether you get disability benefits or if the amount of your benefit 
will be affected, we will ask you for evidence of your age.

[45 FR 55584, Aug. 20, 1980, as amended at 65 FR 18000, Apr. 6, 2000; 68 
FR 51163, Aug. 26, 2003; 73 FR 64196, Oct. 29, 2008]



Sec. 404.1564  Your education as a vocational factor.

    (a) General. Education is primarily used to mean formal schooling or 
other training which contributes to your ability to meet vocational 
requirements, for example, reasoning ability, communication skills, and 
arithmetical ability. However, if you do not have formal schooling, this 
does not necessarily mean that you are uneducated or lack these 
abilities. Past work experience and the kinds of responsibilities you 
had when you were working may show that you have intellectual abilities, 
although you may have little formal education. Your daily activities, 
hobbies, or the results of testing may also show that you have 
significant intellectual ability that can be used to work.
    (b) How we evaluate your education. The importance of your 
educational background may depend upon how much time has passed between 
the completion of your formal education and the beginning of your 
physical or mental impairment(s) and by what you have done with your 
education in a work or other setting. Formal education that you 
completed many years before your impairment began, or unused skills and 
knowledge that were a part of your formal education, may no longer be 
useful or meaningful in terms of your ability to work. Therefore, the 
numerical grade level that you completed in school may not represent 
your actual educational abilities. These may be higher or lower. 
However, if there is no other evidence to contradict it, we will use 
your numerical grade level to determine your educational abilities. The 
term education also includes how well you are able to communicate in 
English since this ability is often acquired or improved by education. 
In evaluating your educational level, we use the following categories:
    (1) Illiteracy. Illiteracy means the inability to read or write. We 
consider someone illiterate if the person cannot read or write a simple 
message such as instructions or inventory lists even though the person 
can sign his or her name. Generally, an illiterate person has had little 
or no formal schooling.
    (2) Marginal education. Marginal education means ability in 
reasoning, arithmetic, and language skills which are needed to do 
simple, unskilled types of jobs. We generally consider that formal 
schooling at a 6th grade level or less is a marginal education.
    (3) Limited education. Limited education means ability in reasoning, 
arithmetic, and language skills, but not enough to allow a person with 
these educational qualifications to do most of the more complex job 
duties needed in semi-skilled or skilled jobs. We generally consider 
that a 7th grade through the 11th grade level of formal education is a 
limited education.
    (4) High school education and above. High school education and above 
means abilities in reasoning, arithmetic, and language skills acquired 
through formal schooling at a 12th grade level or

[[Page 400]]

above. We generally consider that someone with these educational 
abilities can do semi-skilled through skilled work.
    (5) Inability to communicate in English. Since the ability to speak, 
read and understand English is generally learned or increased at school, 
we may consider this an educational factor. Because English is the 
dominant language of the country, it may be difficult for someone who 
doesn't speak and understand English to do a job, regardless of the 
amount of education the person may have in another language. Therefore, 
we consider a person's ability to communicate in English when we 
evaluate what work, if any, he or she can do. It generally doesn't 
matter what other language a person may be fluent in.
    (6) Information about your education. We will ask you how long you 
attended school and whether you are able to speak, understand, read and 
write in English and do at least simple calculations in arithmetic. We 
will also consider other information about how much formal or informal 
education you may have had through your previous work, community 
projects, hobbies, and any other activities which might help you to 
work.



Sec. 404.1565  Your work experience as a vocational factor.

    (a) General. Work experience means skills and abilities you have 
acquired through work you have done which show the type of work you may 
be expected to do. Work you have already been able to do shows the kind 
of work that you may be expected to do. We consider that your work 
experience applies when it was done within the last 15 years, lasted 
long enough for you to learn to do it, and was substantial gainful 
activity. We do not usually consider that work you did 15 years or more 
before the time we are deciding whether you are disabled (or when the 
disability insured status requirement was last met, if earlier) applies. 
A gradual change occurs in most jobs so that after 15 years it is no 
longer realistic to expect that skills and abilities acquired in a job 
done then continue to apply. The 15-year guide is intended to insure 
that remote work experience is not currently applied. If you have no 
work experience or worked only ``off-and-on'' or for brief periods of 
time during the 15-year period, we generally consider that these do not 
apply. If you have acquired skills through your past work, we consider 
you to have these work skills unless you cannot use them in other 
skilled or semi-skilled work that you can now do. If you cannot use your 
skills in other skilled or semi-skilled work, we will consider your work 
background the same as unskilled. However, even if you have no work 
experience, we may consider that you are able to do unskilled work 
because it requires little or no judgment and can be learned in a short 
period of time.
    (b) Information about your work. Under certain circumstances, we 
will ask you about the work you have done in the past. If you cannot 
give us all of the information we need, we may try, with your 
permission, to get it from your employer or other person who knows about 
your work, such as a member of your family or a co-worker. When we need 
to consider your work experience to decide whether you are able to do 
work that is different from what you have done in the past, we will ask 
you to tell us about all of the jobs you have had in the last 15 years. 
You must tell us the dates you worked, all of the duties you did, and 
any tools, machinery, and equipment you used. We will need to know about 
the amount of walking, standing, sitting, lifting and carrying you did 
during the work day, as well as any other physical or mental duties of 
your job. If all of your work in the past 15 years has been arduous and 
unskilled, and you have very little education, we will ask you to tell 
us about all of your work from the time you first began working. This 
information could help you to get disability benefits.

[45 FR 55584, Aug. 20, 1980, as amended at 77 FR 43494, July 25, 2012]



Sec. 404.1566  Work which exists in the national economy.

    (a) General. We consider that work exists in the national economy 
when it exists in significant numbers either in the region where you 
live or in several

[[Page 401]]

other regions of the country. It does not matter whether--
    (1) Work exists in the immediate area in which you live;
    (2) A specific job vacancy exists for you; or
    (3) You would be hired if you applied for work.
    (b) How we determine the existence of work. Work exists in the 
national economy when there is a significant number of jobs (in one or 
more occupations) having requirements which you are able to meet with 
your physical or mental abilities and vocational qualifications. 
Isolated jobs that exist only in very limited numbers in relatively few 
locations outside of the region where you live are not considered ``work 
which exists in the national economy''. We will not deny you disability 
benefits on the basis of the existence of these kinds of jobs. If work 
that you can do does not exist in the national economy, we will 
determine that you are disabled. However, if work that you can do does 
exist in the national economy, we will determine that you are not 
disabled.
    (c) Inability to obtain work. We will determine that you are not 
disabled if your residual functional capacity and vocational abilities 
make it possible for you to do work which exists in the national 
economy, but you remain unemployed because of--
    (1) Your inability to get work;
    (2) Lack of work in your local area;
    (3) The hiring practices of employers;
    (4) Technological changes in the industry in which you have worked;
    (5) Cyclical economic conditions;
    (6) No job openings for you;
    (7) You would not actually be hired to do work you could otherwise 
do; or
    (8) You do not wish to do a particular type of work.
    (d) Administrative notice of job data. When we determine that 
unskilled, sedentary, light, and medium jobs exist in the national 
economy (in significant numbers either in the region where you live or 
in several regions of the country), we will take administrative notice 
of reliable job information available from various governmental and 
other publications. For example, we will take notice of--
    (1) Dictionary of Occupational Titles, published by the Department 
of Labor;
    (2) County Business Patterns, published by the Bureau of the Census;
    (3) Census Reports, also published by the Bureau of the Census;
    (4) Occupational Analyses, prepared for the Social Security 
Administration by various State employment agencies; and
    (5) Occupational Outlook Handbook, published by the Bureau of Labor 
Statistics.
    (e) Use of vocational experts and other specialists. If the issue in 
determining whether you are disabled is whether your work skills can be 
used in other work and the specific occupations in which they can be 
used, or there is a similarly complex issue, we may use the services of 
a vocational expert or other specialist. We will decide whether to use a 
vocational expert or other specialist.



Sec. 404.1567  Physical exertion requirements.

    To determine the physical exertion requirements of work in the 
national economy, we classify jobs as sedentary, light, medium, heavy, 
and very heavy. These terms have the same meaning as they have in the 
Dictionary of Occupational Titles, published by the Department of Labor. 
In making disability determinations under this subpart, we use the 
following definitions:
    (a) Sedentary work. Sedentary work involves lifting no more than 10 
pounds at a time and occasionally lifting or carrying articles like 
docket files, ledgers, and small tools. Although a sedentary job is 
defined as one which involves sitting, a certain amount of walking and 
standing is often necessary in carrying out job duties. Jobs are 
sedentary if walking and standing are required occasionally and other 
sedentary criteria are met.
    (b) Light work. Light work involves lifting no more than 20 pounds 
at a time with frequent lifting or carrying of objects weighing up to 10 
pounds. Even though the weight lifted may be very little, a job is in 
this category when it requires a good deal of walking or standing, or 
when it involves sitting most of the time with some pushing and pulling 
of arm or leg controls. To

[[Page 402]]

be considered capable of performing a full or wide range of light work, 
you must have the ability to do substantially all of these activities. 
If someone can do light work, we determine that he or she can also do 
sedentary work, unless there are additional limiting factors such as 
loss of fine dexterity or inability to sit for long periods of time.
    (c) Medium work. Medium work involves lifting no more than 50 pounds 
at a time with frequent lifting or carrying of objects weighing up to 25 
pounds. If someone can do medium work, we determine that he or she can 
also do sedentary and light work.
    (d) Heavy work. Heavy work involves lifting no more than 100 pounds 
at a time with frequent lifting or carrying of objects weighing up to 50 
pounds. If someone can do heavy work, we determine that he or she can 
also do medium, light, and sedentary work.
    (e) Very heavy work. Very heavy work involves lifting objects 
weighing more than 100 pounds at a time with frequent lifting or 
carrying of objects weighing 50 pounds or more. If someone can do very 
heavy work, we determine that he or she can also do heavy, medium, light 
and sedentary work.



Sec. 404.1568  Skill requirements.

    In order to evaluate your skills and to help determine the existence 
in the national economy of work you are able to do, occupations are 
classified as unskilled, semi-skilled, and skilled. In classifying these 
occupations, we use materials published by the Department of Labor. When 
we make disability determinations under this subpart, we use the 
following definitions:
    (a) Unskilled work. Unskilled work is work which needs little or no 
judgment to do simple duties that can be learned on the job in a short 
period of time. The job may or may not require considerable strength. 
For example, we consider jobs unskilled if the primary work duties are 
handling, feeding and offbearing (that is, placing or removing materials 
from machines which are automatic or operated by others), or machine 
tending, and a person can usually learn to do the job in 30 days, and 
little specific vocational preparation and judgment are needed. A person 
does not gain work skills by doing unskilled jobs.
    (b) Semi-skilled work. Semi-skilled work is work which needs some 
skills but does not require doing the more complex work duties. Semi-
skilled jobs may require alertness and close attention to watching 
machine processes; or inspecting, testing or otherwise looking for 
irregularities; or tending or guarding equipment, property, materials, 
or persons against loss, damage or injury; or other types of activities 
which are similarly less complex than skilled work, but more complex 
than unskilled work. A job may be classified as semi-skilled where 
coordination and dexterity are necessary, as when hands or feet must be 
moved quickly to do repetitive tasks.
    (c) Skilled work. Skilled work requires qualifications in which a 
person uses judgment to determine the machine and manual operations to 
be performed in order to obtain the proper form, quality, or quantity of 
material to be produced. Skilled work may require laying out work, 
estimating quality, determining the suitability and needed quantities of 
materials, making precise measurements, reading blueprints or other 
specifications, or making necessary computations or mechanical 
adjustments to control or regulate the work. Other skilled jobs may 
require dealing with people, facts, or figures or abstract ideas at a 
high level of complexity.
    (d) Skills that can be used in other work (transferability)--(1) 
What we mean by transferable skills. We consider you to have skills that 
can be used in other jobs, when the skilled or semi-skilled work 
activities you did in past work can be used to meet the requirements of 
skilled or semi-skilled work activities of other jobs or kinds of work. 
This depends largely on the similarity of occupationally significant 
work activities among different jobs.
    (2) How we determine skills that can be transferred to other jobs. 
Transferability is most probable and meaningful among jobs in which--
    (i) The same or a lesser degree of skill is required;
    (ii) The same or similar tools and machines are used; and

[[Page 403]]

    (iii) The same or similar raw materials, products, processes, or 
services are involved.
    (3) Degrees of transferability. There are degrees of transferability 
of skills ranging from very close similarities to remote and incidental 
similarities among jobs. A complete similarity of all three factors is 
not necessary for transferability. However, when skills are so 
specialized or have been acquired in such an isolated vocational setting 
(like many jobs in mining, agriculture, or fishing) that they are not 
readily usable in other industries, jobs, and work settings, we consider 
that they are not transferable.
    (4) Transferability of skills for persons of advanced age. If you 
are of advanced age (age 55 or older), and you have a severe 
impairment(s) that limits you to sedentary or light work, we will find 
that you cannot make an adjustment to other work unless you have skills 
that you can transfer to other skilled or semiskilled work (or you have 
recently completed education which provides for direct entry into 
skilled work) that you can do despite your impairment(s). We will decide 
if you have transferable skills as follows. If you are of advanced age 
and you have a severe impairment(s) that limits you to no more than 
sedentary work, we will find that you have skills that are transferable 
to skilled or semiskilled sedentary work only if the sedentary work is 
so similar to your previous work that you would need to make very 
little, if any, vocational adjustment in terms of tools, work processes, 
work settings, or the industry. (See Sec. 404.1567(a) and Sec. 201.00(f) 
of appendix 2.) If you are of advanced age but have not attained age 60, 
and you have a severe impairment(s) that limits you to no more than 
light work, we will apply the rules in paragraphs (d)(1) through (d)(3) 
of this section to decide if you have skills that are transferable to 
skilled or semiskilled light work (see Sec. 404.1567(b)). If you are 
closely approaching retirement age (age 60 or older) and you have a 
severe impairment(s) that limits you to no more than light work, we will 
find that you have skills that are transferable to skilled or 
semiskilled light work only if the light work is so similar to your 
previous work that you would need to make very little, if any, 
vocational adjustment in terms of tools, work processes, work settings, 
or the industry. (See Sec. 404.1567(b) and Rule 202.00(f) of appendix 2 
to this subpart.)

[45 FR 55584, Aug. 20, 1980, as amended at 65 FR 18000, Apr. 6, 2000; 73 
FR 64197, Oct. 29, 2008]



Sec. 404.1569  Listing of Medical-Vocational Guidelines in appendix 2.

    The Dictionary of Occupational Titles includes information about 
jobs (classified by their exertional and skill requirements) that exist 
in the national economy. Appendix 2 provides rules using this data 
reflecting major functional and vocational patterns. We apply these 
rules in cases where a person is not doing substantial gainful activity 
and is prevented by a severe medically determinable impairment from 
doing vocationally relevant past work. (See Sec. 404.1520(h) for an 
exception to this rule.) The rules in appendix 2 do not cover all 
possible variations of factors. Also, as we explain in Sec. 200.00 of 
appendix 2, we do not apply these rules if one of the findings of fact 
about the person's vocational factors and residual functional capacity 
is not the same as the corresponding criterion of a rule. In these 
instances, we give full consideration to all relevant facts in 
accordance with the definitions and discussions under vocational 
considerations. However, if the findings of fact made about all factors 
are the same as the rule, we use that rule to decide whether a person is 
disabled.

[45 FR 55584, Aug. 20, 1980, as amended at 77 FR 43494, July 25, 2012]



Sec. 404.1569a  Exertional and nonexertional limitations.

    (a) General. Your impairment(s) and related symptoms, such as pain, 
may cause limitations of function or restrictions which limit your 
ability to meet certain demands of jobs. These limitations may be 
exertional, nonexertional, or a combination of both. Limitations are 
classified as exertional if they affect your ability to meet the 
strength demands of jobs. The classification of a limitation as 
exertional is related to the United States Department of Labor's 
classification of jobs

[[Page 404]]

by various exertional levels (sedentary, light, medium, heavy, and very 
heavy) in terms of the strength demands for sitting, standing, walking, 
lifting, carrying, pushing, and pulling. Sections 404.1567 and 404.1569 
explain how we use the classification of jobs by exertional levels 
(strength demands) which is contained in the Dictionary of Occupational 
Titles published by the Department of Labor, to determine the exertional 
requirements of work which exists in the national economy. Limitations 
or restrictions which affect your ability to meet the demands of jobs 
other than the strength demands, that is, demands other than sitting, 
standing, walking, lifting, carrying, pushing or pulling, are considered 
nonexertional. When we decide whether you can do your past relevant work 
(see Secs. 404.1520(f) and 404.1594(f)(7)), we will compare our 
assessment of your residual functional capacity with the demands of your 
past relevant work. If you cannot do your past relevant work, we will 
use the same residual functional capacity assessment along with your 
age, education, and work experience to decide if you can adjust to any 
other work which exists in the national economy. (See Secs. 404.1520(g) 
and 404.1594(f)(8).) Paragraphs (b), (c), and (d) of this section 
explain how we apply the medical-vocational guidelines in appendix 2 of 
this subpart in making this determination, depending on whether the 
limitations or restrictions imposed by your impairment(s) and related 
symptoms, such as pain, are exertional, nonexertional, or a combination 
of both.
    (b) Exertional limitations. When the limitations and restrictions 
imposed by your impairment(s) and related symptoms, such as pain, affect 
only your ability to meet the strength demands of jobs (sitting, 
standing, walking, lifting, carrying, pushing, and pulling), we consider 
that you have only exertional limitations. When your impairment(s) and 
related symptoms only impose exertional limitations and your specific 
vocational profile is listed in a rule contained in appendix 2 of this 
subpart, we will directly apply that rule to decide whether you are 
disabled.
    (c) Nonexertional limitations. (1) When the limitations and 
restrictions imposed by your impairment(s) and related symptoms, such as 
pain, affect only your ability to meet the demands of jobs other than 
the strength demands, we consider that you have only nonexertional 
limitations or restrictions. Some examples of nonexertional limitations 
or restrictions include the following:
    (i) You have difficulty functioning because you are nervous, 
anxious, or depressed;
    (ii) You have difficulty maintaining attention or concentrating;
    (iii) You have difficulty understanding or remembering detailed 
instructions;
    (iv) You have difficulty in seeing or hearing;
    (v) You have difficulty tolerating some physical feature(s) of 
certain work settings, e.g., you cannot tolerate dust or fumes; or
    (vi) You have difficulty performing the manipulative or postural 
functions of some work such as reaching, handling, stooping, climbing, 
crawling, or crouching.
    (2) If your impairment(s) and related symptoms, such as pain, only 
affect your ability to perform the nonexertional aspects of work-related 
activities, the rules in appendix 2 do not direct factual conclusions of 
disabled or not disabled. The determination as to whether disability 
exists will be based on the principles in the appropriate sections of 
the regulations, giving consideration to the rules for specific case 
situations in appendix 2.
    (d) Combined exertional and nonexertional limitations. When the 
limitations and restrictions imposed by your impairment(s) and related 
symptoms, such as pain, affect your ability to meet both the strength 
and demands of jobs other than the strength demands, we consider that 
you have a combination of exertional and nonexertional limitations or 
restrictions. If your impairment(s) and related symptoms, such as pain, 
affect your ability to meet both the strength and demands of jobs other 
than the strength demands, we will not directly apply the rules in 
appendix 2 unless there is a rule that

[[Page 405]]

directs a conclusion that you are disabled based upon your strength 
limitations; otherwise the rules provide a framework to guide our 
decision.

[56 FR 57943, Nov. 14, 1991, as amended at 68 FR 51163, Aug. 26, 2003]

                      Substantial Gainful Activity



Sec. 404.1571  General.

    The work, without regard to legality, that you have done during any 
period in which you believe you are disabled may show that you are able 
to work at the substantial gainful activity level. If you are able to 
engage in substantial gainful activity, we will find that you are not 
disabled. (We explain the rules for persons who are statutorily blind in 
Sec. 404.1584.) Even if the work you have done was not substantial 
gainful activity, it may show that you are able to do more work than you 
actually did. We will consider all of the medical and vocational 
evidence in your file to decide whether or not you have the ability to 
engage in substantial gainful activity.

[45 FR 55584, Aug. 20, 1980, as amended at 65 FR 42783, July 11, 2000]



Sec. 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.



Sec. 404.1573  General information about work activity.

    (a) The nature of your work. If your duties require use of your 
experience, skills, supervision and responsibilities, or contribute 
substantially to the operation of a business, this tends to show that 
you have the ability to work at the substantial gainful activity level.
    (b) How well you perform. We consider how well you do your work when 
we determine whether or not you are doing substantial gainful activity. 
If you do your work satisfactorily, this may show that you are working 
at the substantial gainful activity level. If you are unable, because of 
your impairments, to do ordinary or simple tasks satisfactorily without 
more supervision or assistance than is usually given other people doing 
similar work, this may show that you are not working at the substantial 
gainful activity level. If you are doing work that involves minimal 
duties that make little or no demands on you and that are of little or 
no use to your employer, or to the operation of a business if you are 
self-employed, this does not show that you are working at the 
substantial gainful activity level.
    (c) If your work is done under special conditions. The work you are 
doing may be done under special conditions that take into account your 
impairment, such as work done in a sheltered workshop or as a patient in 
a hospital. If your work is done under special conditions, we may find 
that it does not show that you have the ability to do substantial 
gainful activity. Also, if you are forced to stop or reduce your work 
because of the removal of special conditions that were related to your 
impairment and essential to your work, we may find that your work does 
not show that you are able to do substantial gainful activity. However, 
work done under special conditions may show that you have the necessary 
skills and ability to work at the substantial gainful activity level. 
Examples of the special conditions that may relate to your impairment 
include, but are not limited to, situations in which--
    (1) You required and received special assistance from other 
employees in performing your work;

[[Page 406]]

    (2) You were allowed to work irregular hours or take frequent rest 
periods;
    (3) You were provided with special equipment or were assigned work 
especially suited to your impairment;
    (4) You were able to work only because of specially arranged 
circumstances, for example, other persons helped you prepare for or get 
to and from your work;
    (5) You were permitted to work at a lower standard of productivity 
or efficiency than other employees; or
    (6) You were given the opportunity to work despite your impairment 
because of family relationship, past association with your employer, or 
your employer's concern for your welfare.
    (d) If you are self-employed. Supervisory, managerial, advisory or 
other significant personal services that you perform as a self-employed 
individual may show that you are able to do substantial gainful 
activity.
    (e) Time spent in work. While the time you spend in work is 
important, we will not decide whether or not you are doing substantial 
gainful activity only on that basis. We will still evaluate the work to 
decide whether it is substantial and gainful regardless of whether you 
spend more time or less time at the job than workers who are not 
impaired and who are doing similar work as a regular means of their 
livelihood.

[45 FR 55584, Aug. 20, 1980, as amended at 65 FR 42783, July 11, 2000]



Sec. 404.1574  Evaluation guides if you are an employee.

    (a) We use several guides to decide whether the work you have done 
shows that you are able to do substantial gainful activity. If you are 
working or have worked as an employee, we will use the provisions in 
paragraphs (a) through (d) of this section that are relevant to your 
work activity. We will use these provisions whenever they are 
appropriate, whether in connection with your application for disability 
benefits (when we make an initial determination on your application and 
throughout any appeals you may request), after you have become entitled 
to a period of disability or to disability benefits, or both.
    (1) Your earnings may show you have done substantial gainful 
activity. Generally, in evaluating your work activity for substantial 
gainful activity purposes, our primary consideration will be the 
earnings you derive from the work activity. We will use your earnings to 
determine whether you have done substantial gainful activity unless we 
have information from you, your employer, or others that shows that we 
should not count all of your earnings. The amount of your earnings from 
work you have done (regardless of whether it is unsheltered or sheltered 
work) may show that you have engaged in substantial gainful activity. 
Generally, if you worked for substantial earnings, we will find that you 
are able to do substantial gainful activity. However, the fact that your 
earnings were not substantial will not necessarily show that you are not 
able to do substantial gainful activity. We generally consider work that 
you are forced to stop or to reduce below the substantial gainful 
activity level after a short time because of your impairment to be an 
unsuccessful work attempt. Your earnings from an unsuccessful work 
attempt will not show that you are able to do substantial gainful 
activity. We will use the criteria in paragraph (c) of this section to 
determine if the work you did was an unsuccessful work attempt.
    (2) We consider only the amounts you earn. When we decide whether 
your earnings show that you have done substantial gainful activity, we 
do not consider any income that is not directly related to your 
productivity. When your earnings exceed the reasonable value of the work 
you perform, we consider only that part of your pay which you actually 
earn. If your earnings are being subsidized, we do not consider the 
amount of the subsidy when we determine if your earnings show that you 
have done substantial gainful activity. We consider your work to be 
subsidized if the true value of your work, when compared with the same 
or similar work done by unimpaired persons, is less than the actual 
amount of earnings paid to you for your work. For example, when a person 
with a serious impairment does simple

[[Page 407]]

tasks under close and continuous supervision, our determination of 
whether that person has done substantial gainful activity will not be 
based only on the amount of the wages paid. We will first determine 
whether the person received a subsidy; that is, we will determine 
whether the person was being paid more than the reasonable value of the 
actual services performed. We will then subtract the value of the 
subsidy from the person's gross earnings to determine the earnings we 
will use to determine if he or she has done substantial gainful 
activity.
    (3) If you are working in a sheltered or special environment. If you 
are working in a sheltered workshop, you may or may not be earning the 
amounts you are being paid. The fact that the sheltered workshop or 
similar facility is operating at a loss or is receiving some charitable 
contributions or governmental aid does not establish that you are not 
earning all you are being paid. Since persons in military service being 
treated for severe impairments usually continue to receive full pay, we 
evaluate work activity in a therapy program or while on limited duty by 
comparing it with similar work in the civilian work force or on the 
basis of reasonable worth of the work, rather than on the actual amount 
of the earnings.
    (b) Earnings guidelines--(1) General. If you are an employee, we 
first consider the criteria in paragraph (a) of this section and 
Sec. 404.1576, and then the guides in paragraphs (b)(2) and (3) of this 
section. When we review your earnings to determine if you have been 
performing substantial gainful activity, we will subtract the value of 
any subsidized earnings (see paragraph (a)(2) of this section) and the 
reasonable cost of any impairment-related work expenses from your gross 
earnings (see Sec. 404.1576). The resulting amount is the amount we use 
to determine if you have done substantial gainful activity. We will 
generally average your earnings for comparison with the earnings 
guidelines in paragraphs (b)(2) and (3) of this section. See 
Sec. 404.1574a for our rules on averaging earnings.
    (2) Earnings that will ordinarily show that you have engaged in 
substantial gainful activity. We will consider that your earnings from 
your work activity as an employee (including earnings from work in a 
sheltered workshop or a comparable facility especially set up for 
severely impaired persons) show that you engaged in substantial gainful 
activity if:
    (i) Before January 1, 2001, they averaged more than the amount(s) in 
Table 1 of this section for the time(s) in which you worked.
    (ii) Beginning January 1, 2001, and each year thereafter, they 
average more than the larger of:
    (A) The amount for the previous year, or
    (B) An amount adjusted for national wage growth, calculated by 
multiplying $700 by the ratio of the national average wage index for the 
year 2 calendar years before the year for which the amount is being 
calculated to the national average wage index for the year 1998. We will 
then round the resulting amount to the next higher multiple of $10 where 
such amount is a multiple of $5 but not of $10 and to the nearest 
multiple of $10 in any other case.

                                 Table 1
------------------------------------------------------------------------
                                                           Your monthly
                                                             earnings
                       For months:                         averaged more
                                                               than:
------------------------------------------------------------------------
In calendar years before 1976...........................            $200
In calendar year 1976...................................             230
In calendar year 1977...................................             240
In calendar year 1978...................................             260
In calendar year 1979...................................             280
In calendar years 1980-1989.............................             300
January 1990-June 1999..................................             500
July 1999-December 2000.................................             700
------------------------------------------------------------------------

    (3) Earnings that will ordinarily show that you have not engaged in 
substantial gainful activity--(i) General. If your average monthly 
earnings are equal to or less than the amount(s) determined under 
paragraph (b)(2) of this section for the year(s) in which you work, we 
will generally consider that the earnings from your work as an employee 
(including earnings from work in a sheltered workshop or comparable 
facility) will show that you have not engaged in substantial gainful 
activity. We will generally not consider other information in addition 
to your earnings except in the circumstances described in paragraph 
(b)(3)(ii) of this section.

[[Page 408]]

    (ii) When we will consider other information in addition to your 
earnings. We will generally consider other information in addition to 
your earnings if there is evidence indicating that you may be engaging 
in substantial gainful activity or that you are in a position to control 
when earnings are paid to you or the amount of wages paid to you (for 
example, if you are working for a small corporation owned by a 
relative). (See paragraph (b)(3)(iii) of this section for when we do not 
apply this rule.) Examples of other information we may consider include, 
whether--
    (A) Your work is comparable to that of unimpaired people in your 
community who are doing the same or similar occupations as their means 
of livelihood, taking into account the time, energy, skill, and 
responsibility involved in the work; and
    (B) Your work, although significantly less than that done by 
unimpaired people, is clearly worth the amounts shown in paragraph 
(b)(2) of this section, according to pay scales in your community.
    (iii) Special rule for considering earnings alone when evaluating 
the work you do after you have received social security disability 
benefits for at least 24 months. Notwithstanding paragraph (b)(3)(ii) of 
this section, we will not consider other information in addition to your 
earnings to evaluate the work you are doing or have done if--
    (A) At the time you do the work, you are entitled to social security 
disability benefits and you have received such benefits for at least 24 
months (see paragraph (b)(3)(iv) of this section); and
    (B) We are evaluating that work to consider whether you have engaged 
in substantial gainful activity or demonstrated the ability to engage in 
substantial gainful activity for the purpose of determining whether your 
disability has ceased because of your work activity (see 
Secs. 404.1592a(a)(1) and (3)(ii) and 404.1594(d)(5) and (f)(1)).
    (iv) When we consider you to have received social security 
disability benefits for at least 24 months. For purposes of paragraph 
(b)(3)(iii) of this section, social security disability benefits means 
disability insurance benefits for a disabled worker, child's insurance 
benefits based on disability, or widow's or widower's insurance benefits 
based on disability. We consider you to have received such benefits for 
at least 24 months beginning with the first day of the first month 
following the 24th month for which you actually received social security 
disability benefits that you were due or constructively received such 
benefits. The 24 months do not have to be consecutive. We will consider 
you to have constructively received a benefit for a month for purposes 
of the 24-month requirement if you were otherwise due a social security 
disability benefit for that month and your monthly benefit was withheld 
to recover an overpayment. Any months for which you were entitled to 
benefits but for which you did not actually or constructively receive a 
benefit payment will not be counted for the 24-month requirement. If you 
also receive supplemental security income payments based on disability 
or blindness under title XVI of the Social Security Act, months for 
which you received only supplemental security income payments will not 
be counted for the 24-month requirement.
    (c) The unsuccessful work attempt--(1) General. Ordinarily, work you 
have done will not show that you are able to do substantial gainful 
activity if, after you worked for a period of 6 months or less, your 
impairment forced you to stop working or to reduce the amount of work 
you do so that your earnings from such work fall below the substantial 
gainful activity earnings level in paragraph (b)(2) of this section, and 
you meet the conditions described in paragraphs (c)(2), (3), and (4) of 
this section. We will use the provisions of this paragraph when we make 
an initial determination on your application for disability benefits and 
throughout any appeal you may request. Except as set forth in 
Sec. 404.1592a(a), we will also apply the provisions of this paragraph 
if you are already entitled to disability benefits, when you work and we 
consider whether the work you are doing is substantial gainful activity 
or demonstrates the ability to do substantial gainful activity.
    (2) Event that must precede an unsuccessful work attempt. There must 
be a significant break in the continuity of

[[Page 409]]

your work before we will consider that you began a work attempt that 
later proved unsuccessful. You must have stopped working or reduced your 
work and earnings below the substantial gainful activity earnings level 
because of your impairment or because of the removal of special 
conditions that were essential to the further performance of your work. 
We explain what we mean by special conditions in Sec. 404.1573(c). We 
will consider your prior work to be ``discontinued'' for a significant 
period if you were out of work at least 30 consecutive days. We will 
also consider your prior work to be ``discontinued'' if, because of your 
impairment, you were forced to change to another type of work or another 
employer.
    (3) If you worked 6 months or less. We will consider work of 6 
months or less to be an unsuccessful work attempt if you stopped working 
or you reduced your work and earnings below the substantial gainful 
activity earnings level because of your impairment or because of the 
removal of special conditions that took into account your impairment and 
permitted you to work.
    (4) If you worked more than 6 months. We will not consider work you 
performed at the substantial gainful activity earnings level for more 
than 6 months to be an unsuccessful work attempt regardless of why it 
ended or was reduced below the substantial gainful activity earnings 
level.
    (d) Work activity in certain volunteer programs. If you work as a 
volunteer in certain programs administered by the Federal government 
under the Domestic Volunteer Service Act of 1973 or the Small Business 
Act, we will not count any payments you receive from these programs as 
earnings when we determine whether you are engaging in substantial 
gainful activity. These payments may include a minimal stipend, payments 
for supportive services such as housing, supplies and equipment, an 
expense allowance, or reimbursement of out-of-pocket expenses. We will 
also disregard the services you perform as a volunteer in applying any 
of the substantial gainful activity tests discussed in paragraph (b)(6) 
of this section. This exclusion from the substantial gainful activity 
provisions will apply only if you are a volunteer in a program 
explicitly mentioned in the Domestic Volunteer Service Act of 1973 or 
the Small Business Act. Programs explicitly mentioned in those Acts 
include Volunteers in Service to America, University Year for ACTION, 
Special Volunteer Programs, Retired Senior Volunteer Program, Foster 
Grandparent Program, Service Corps of Retired Executives, and Active 
Corps of Executives. We will not exclude under this paragraph, volunteer 
work you perform in other programs or any nonvolunteer work you may 
perform, including nonvolunteer work under one of the specified 
programs. For civilians in certain government-sponsored job training and 
employment programs, we evaluate the work activity on a case-by-case 
basis under the substantial gainful activity earnings test. In programs 
such as these, subsidies often occur. We will subtract the value of any 
subsidy and use the remainder to determine if you have done substantial 
gainful activity. See paragraphs (a)(2)-(3) of this section.
    (e) Work activity as a member or consultant of an advisory committee 
established under the Federal Advisory Committee Act (FACA), 5 U.S.C. 
App. 2. If you are serving as a member or consultant of an advisory 
committee, board, commission, council, or similar group established 
under FACA, we will not count any payments you receive from serving on 
such committees as earnings when we determine whether you are engaging 
in substantial gainful activity. These payments may include 
compensation, travel expenses, and special assistance. We also will 
exclude the services you perform as a member or consultant of an 
advisory committee established under FACA in applying any of the 
substantial gainful activity tests discussed in paragraph (b)(6) of this 
section. This exclusion from the substantial gainful activity provisions 
will apply only if you are a member or consultant of an advisory 
committee specifically authorized by statute, or by the President, or 
determined as a matter of formal record by the head of a federal 
government agency. This exclusion from the substantial gainful activity 
provisions will not apply if your service as a member or consultant of 
an advisory committee is part of your duties or is required as an 
employee of

[[Page 410]]

any governmental or non-governmental organization, agency, or business.

[46 FR 4869, Jan. 19, 1981, as amended at 48 FR 21936, May 16, 1983; 49 
FR 22272, May 29, 1984; 54 FR 53605, Dec. 29, 1989; 64 FR 18570, Apr. 
15, 1999; 64 FR 22903, Apr. 28, 1999; 65 FR 42783, July 11, 2000; 65 FR 
82910, Dec. 29, 2000; 71 FR 3219, Jan. 20, 2006; 71 FR 66853, Nov. 17, 
2006; 81 FR 71369, Oct. 17, 2016]



Sec. 404.1574a  When and how we will average your earnings.

    (a) If your work as an employee or as a self-employed person was 
continuous without significant change in work patterns or earnings, and 
there has been no change in the substantial gainful activity earnings 
levels, we will average your earnings over the entire period of work 
requiring evaluation to determine if you have done substantial gainful 
activity. See Sec. 404.1592a for information on the reentitlement 
period.
    (b) If you work over a period of time during which the substantial 
gainful activity earnings levels change, we will average your earnings 
separately for each period in which a different substantial gainful 
activity earnings level applies.
    (c) If there is a significant change in your work pattern or 
earnings during the period of work requiring evaluation, we will average 
your earnings over each separate period of work to determine if any of 
your work efforts were substantial gainful activity.
    (d) We will not average your earnings in determining whether 
benefits should be paid for any month(s) during or after the 
reentitlement period that occurs after the month disability has been 
determined to have ceased because of the performance of substantial 
gainful activity. See Sec. 404.1592a for information on the 
reentitlement period. The following examples illustrate what we mean by 
a significant change in the work pattern of an employee and when we will 
average and will not average earnings.

    Example 1: Mrs. H. began receiving disability insurance benefits in 
March 1993. In January 1995 she began selling magazines by telephone 
solicitation, expending a minimum of time, for which she received $225 
monthly. As a result, Mrs. H. used up her trial work period during the 
months of January 1995 through September 1995. After the trial work 
period ended, we determined that Mrs. H. had not engaged in substantial 
gainful activity during her trial work period. Her reentitlement period 
began October 1995. In December 1995, Mrs. H. discontinued her telephone 
solicitation work to take a course in secretarial skills. In January 
1997, she began work as a part-time temporary secretary in a banking 
firm. Mrs. H. worked 20 hours a week, without any subsidy or impairment-
related work expenses, at beginner rates. She earned $285 per month in 
January 1997 and February 1997. In March 1997 she had increased her 
secretarial skills to journeyman level and was assigned as a part-time 
private secretary to one of the vice presidents of the banking firm. 
Mrs. H.'s earnings increased to $525 per month effective March 1997. We 
determined that Mrs. H. was engaging in substantial gainful activity 
beginning March 1997 and that her disability ceased that month, the 
first month of substantial gainful activity after the end of the trial 
work period. Mrs. H. is due payment for March 1997, the month of 
cessation, and the following 2 months (April 1997 and May 1997) because 
disability benefits terminate the third month following the earliest 
month in which she performed substantial gainful activity. We did not 
average earnings for the period January 1997 and February 1997 with the 
period beginning March 1997 because there was a significant change in 
earnings and work activity beginning March 1997. Thus, the earnings of 
January 1997 and February 1997 could not be averaged with those of March 
1997 to reduce March 1997 earnings below the substantial gainful 
activity level. After we determine that Mrs. H.'s disability had ceased 
because of her performance of substantial gainful activity, we cannot 
average her earnings to determine whether she is due payment for any 
month during or after the reentitlement period. Beginning June 1997, the 
third month following the cessation month, we would evaluate all of Mrs. 
H.'s work activity on a month-by-month basis (see Sec. 404.1592a(a)).
    Example 2: Ms. M. began receiving disability insurance benefits in 
March 1992. In January 1995, she began selling cable television 
subscriptions by telephone solicitation, expending a minimum of time, 
for which she received $275 monthly. Ms. M. did not work in June 1995, 
and she resumed selling cable television subscriptions beginning July 
1995. In this way, Ms. M. used up her 9-month trial work period during 
the months of January 1995 through May 1995 and July 1995 through 
October 1995. After Ms. M.'s trial work period ended, we determined that 
she had not engaged in substantial gainful activity during her trial 
work period. Ms. M.'s reentitlement period began November 1995. In 
December 1995, Ms. M. discontinued her telephone solicitation work to 
take a course in secretarial skills. In January 1997,

[[Page 411]]

she began work as a part-time temporary secretary in an accounting firm. 
Ms. M. worked, without any subsidy or impairment-related work expenses, 
at beginner rates. She earned $460 in January 1997, $420 in February 
1997, and $510 in March 1997. In April 1997, she had increased her 
secretarial skills to journeyman level, and she was assigned as a part-
time private secretary to one of the vice presidents of the firm. Ms. 
M.'s earnings increased to $860 per month effective April 1997. We 
determined that Ms. M. was engaging in substantial gainful activity 
beginning April 1997 and that her disability ceased that month, the 
first month of substantial gainful activity after the end of the trial 
work period. She is due payment for April 1997, May 1997 and June 1997, 
because disability benefits terminate the third month following the 
earliest month in which she performs substantial gainful activity (the 
month of cessation). We averaged her earnings for the period January 
1997 through March 1997 and determined them to be about $467 per month 
for that period. We did not average earnings for the period January 1997 
through March 1997 with earnings for the period beginning April 1997 
because there was a significant change in work activity and earnings 
beginning April 1997. Therefore, we found that the earnings for January 
1997 through March 1997 were under the substantial gainful activity 
level. After we determine that Ms M.'s disability has ceased because she 
performed substantial gainful activity, we cannot average her earnings 
in determining whether she is due payment for any month during or after 
the reentitlement period. In this example, beginning July 1997, the 
third month following the month of cessation, we would evaluate all of 
Ms. M.'s work activity on a month-by-month basis (see 
Sec. 404.1592a(a)).

[65 FR 42784, July 11, 2000]



Sec. 404.1575  Evaluation guides if you are self-employed.

    (a) If you are a self-employed person. If you are working or have 
worked as a self-employed person, we will use the provisions in 
paragraphs (a) through (e) of this section that are relevant to your 
work activity. We will use these provisions whenever they are 
appropriate, whether in connection with your application for disability 
benefits (when we make an initial determination on your application and 
throughout any appeals you may request), after you have become entitled 
to a period of disability or to disability benefits, or both.
    (1) How we evaluate the work you do after you have become entitled 
to disability benefits. If you are entitled to social security 
disability benefits and you work as a self-employed person, the way we 
will evaluate your work activity will depend on whether the work 
activity occurs before or after you have received such benefits for at 
least 24 months and on the purpose of the evaluation. For purposes of 
paragraphs (a) and (e) of this section, social security disability 
benefits means disability insurance benefits for a disabled worker, 
child's insurance benefits based on disability, or widow's or widower's 
insurance benefits based on disability. We will use the rules in 
paragraph (e)(2) of this section to determine if you have received such 
benefits for at least 24 months.
    (i) We will use the guides in paragraph (a)(2) of this section to 
evaluate any work activity you do before you have received social 
security disability benefits for at least 24 months to determine whether 
you have engaged in substantial gainful activity, regardless of the 
purpose of the evaluation.
    (ii) We will use the guides in paragraph (e) of this section to 
evaluate any work activity you do after you have received social 
security disability benefits for at least 24 months to determine whether 
you have engaged in substantial gainful activity for the purpose of 
determining whether your disability has ceased because of your work 
activity.
    (iii) If we have determined under Sec. 404.1592a(a)(1) that your 
disability ceased in a month during the reentitlement period because you 
performed substantial gainful activity, and we need to decide under 
Sec. 404.1592a(a)(2)(i) or (a)(3)(i) whether you are doing substantial 
gainful activity in a subsequent month in or after your reentitlement 
period, we will use the guides in paragraph (a)(2) of this section 
(subject to the limitations described in Sec. 404.1592a(a)(2)(i) and 
(a)(3)(i)) to determine whether your work activity in that month is 
substantial gainful activity. We will use the guides in paragraph (a)(2) 
of this section for these purposes, regardless of whether your work 
activity in that month occurs before or after you have received social 
security disability benefits for at least 24 months.

[[Page 412]]

    (2) General rules for evaluating your work activity if you are self-
employed. We will consider your activities and their value to your 
business to decide whether you have engaged in substantial gainful 
activity if you are self-employed. We will not consider your income 
alone because the amount of income you actually receive may depend on a 
number of different factors, such as capital investment and profit-
sharing agreements. We will generally consider work that you were forced 
to stop or reduce to below substantial gainful activity after 6 months 
or less because of your impairment as an unsuccessful work attempt. See 
paragraph (d) of this section. We will evaluate your work activity based 
on the value of your services to the business regardless of whether you 
receive an immediate income for your services. We determine whether you 
have engaged in substantial gainful activity by applying three tests. If 
you have not engaged in substantial gainful activity under test one, 
then we will consider tests two and three. The tests are as follows:
    (i) Test one: You have engaged in substantial gainful activity if 
you render services that are significant to the operation of the 
business and receive a substantial income from the business. Paragraphs 
(b) and (c) of this section explain what we mean by significant services 
and substantial income for purposes of this test.
    (ii) Test Two: You have engaged in substantial gainful activity if 
your work activity, in terms of factors such as hours, skills, energy 
output, efficiency, duties, and responsibilities, is comparable to that 
of unimpaired individuals in your community who are in the same or 
similar businesses as their means of livelihood.
    (iii) Test Three: You have engaged in substantial gainful activity 
if your work activity, although not comparable to that of unimpaired 
individuals, is clearly worth the amount shown in Sec. 404.1574(b)(2) 
when considered in terms of its value to the business, or when compared 
to the salary that an owner would pay to an employee to do the work you 
are doing.
    (b) What we mean by significant services. (1) If you are not a farm 
landlord and you operate a business entirely by yourself, any services 
that you render are significant to the business. If your business 
involves the services of more than one person, we will consider you to 
be rendering significant services if you contribute more than half the 
total time required for the management of the business, or you render 
management services for more than 45 hours a month regardless of the 
total management time required by the business.
    (2) If you are a farm landlord, that is, you rent farm land to 
another, we will consider you to be rendering significant services if 
you materially particpate in the production or the management of the 
production of the things raised on the rented farm. (See Sec. 404.1082 
of this chapter for an explanation of material participation.) If you 
were given social security earnings credits because you materially 
participated in the activities of the farm and you continue these same 
activities, we will consider you to be rendering significant services.
    (c) What we mean by substantial income--(1) Determining countable 
income. We deduct your normal business expenses from your gross income 
to determine net income. Once we determine your net income, we deduct 
the reasonable value of any significant amount of unpaid help furnished 
by your spouse, children, or others. Miscellaneous duties that 
ordinarily would not have commercial value would not be considered 
significant. We deduct impairment-related work expenses that have not 
already been deducted in determining your net income. Impairment-related 
work expenses are explained in Sec. 404.1576. We deduct unincurred 
business expenses paid for you by another individual or agency. An 
unincurred business expense occurs when a sponsoring agency or another 
person incurs responsibility for the payment of certain business 
expenses, e.g., rent, utilities, or purchases and repair of equipment, 
or provides you with equipment, stock, or other material for the 
operation of your business. We deduct soil bank payments if they were 
included as farm income. That part of your income remaining after we 
have made all applicable deductions represents the actual value of work

[[Page 413]]

performed. The resulting amount is the amount we use to determine if you 
have done substantial gainful activity. For purposes of this section, we 
refer to this amount as your countable income. We will generally average 
your countable income for comparison with the earnings guidelines in 
Sec. 404.1574(b)(2). See Sec. 404.1574a for our rules on averaging of 
earnings.
    (2) When countable income is considered substantial. We will 
consider your countable income to be substantial if--
    (i) It averages more than the amounts described in 
Sec. 404.1574(b)(2); or
    (ii) It averages less than the amounts described in 
Sec. 404.1574(b)(2) but it is either comparable to what it was before 
you became seriously impaired if we had not considered your earnings or 
is comparable to that of unimpaired self-employed persons in your 
community who are in the same or a similar business as their means of 
livelihood.
    (d) The unsuccessful work attempt--(1) General. Ordinarily, work you 
have done will not show that you are able to do substantial gainful 
activity if, after working for a period of 6 months or less, you were 
forced by your impairment to stop working or to reduce the amount of 
work you do so that you are no longer performing substantial gainful 
activity and you meet the conditions described in paragraphs (d)(2), 
(3), and (4) of this section. We will use the provisions of this 
paragraph when we make an initial determination on your application for 
disability benefits and throughout any appeal you may request. Except as 
set forth in Sec. 404.1592a(a), we will also apply the provisions of 
this paragraph if you are already entitled to disability benefits, when 
you work and we consider whether the work you are doing is substantial 
gainful activity or demonstrates the ability to do substantial gainful 
activity.
    (2) Event that must precede an unsuccessful work attempt. There must 
be a significant break in the continuity of your work before we will 
consider you to have begun a work attempt that later proved 
unsuccessful. You must have stopped working or reduced your work and 
earnings below substantial gainful activity because of your impairment 
or because of the removal of special conditions which took into account 
your impairment and permitted you to work. Examples of such special 
conditions may include any significant amount of unpaid help furnished 
by your spouse, children, or others, or unincurred business expenses, as 
described in paragraph (c) of this section, paid for you by another 
individual or agency. We will consider your prior work to be 
``discontinued'' for a significant period if you were out of work at 
least 30 consecutive days. We will also consider your prior work to be 
``discontinued'' if, because of your impairment, you were forced to 
change to another type of work.
    (3) If you worked 6 months or less. We will consider work of 6 
months or less to be an unsuccessful work attempt if you stopped working 
or you reduced your work and earnings below the substantial gainful 
activity earnings level because of your impairment or because of the 
removal of special conditions that took into account your impairment and 
permitted you to work.
    (4) If you worked more than 6 months. We will not consider work you 
performed at the substantial gainful activity level for more than 6 
months to be an unsuccessful work attempt regardless of why it ended or 
was reduced below the substantial gainful activity earnings level.
    (e) Special rules for evaluating the work you do after you have 
received social security disability benefits for at least 24 months--(1) 
General. We will apply the provisions of this paragraph to evaluate the 
work you are doing or have done if, at the time you do the work, you are 
entitled to social security disability benefits and you have received 
such benefits for at least 24 months. We will apply the provisions of 
this paragraph only when we are evaluating that work to consider whether 
you have engaged in substantial gainful activity or demonstrated the 
ability to engage in substantial gainful activity for the purpose of 
determining whether your disability has ceased because of your work 
activity (see Secs. 404.1592a(a)(1) and (3)(ii) and 404.1594(d)(5) and 
(f)(1)). We will use the countable income test described in paragraph 
(e)(3) of this section to determine whether the work you do after you 
have received such

[[Page 414]]

benefits for at least 24 months is substantial gainful activity or 
demonstrates the ability to do substantial gainful activity. We will not 
consider the services you perform in that work to determine that the 
work you are doing shows that you are able to engage in substantial 
gainful activity and are, therefore, no longer disabled. However, we may 
consider the services you perform to determine that you are not doing 
substantial gainful activity. We will generally consider work that you 
were forced to stop or reduce below substantial gainful activity after 6 
months or less because of your impairment as an unsuccessful work 
attempt. See paragraph (d) of this section.
    (2) The 24-month requirement. For purposes of paragraphs (a)(1) and 
(e) of this section, we consider you to have received social security 
disability benefits for at least 24 months beginning with the first day 
of the first month following the 24th month for which you actually 
received social security disability benefits that you were due or 
constructively received such benefits. The 24 months do not have to be 
consecutive. We will consider you to have constructively received a 
benefit for a month for purposes of the 24-month requirement if you were 
otherwise due a social security disability benefit for that month and 
your monthly benefit was withheld to recover an overpayment. Any months 
for which you were entitled to benefits but for which you did not 
actually or constructively receive a benefit payment will not be counted 
for the 24-month requirement. If you also receive supplemental security 
income payments based on disability or blindness under title XVI of the 
Social Security Act, months for which you received only supplemental 
security income payments will not be counted for the 24-month 
requirement.
    (3) Countable income test. We will compare your countable income to 
the earnings guidelines in Sec. 404.1574(b)(2) to determine if you have 
engaged in substantial gainful activity. See paragraph (c)(1) of this 
section for an explanation of countable income. We will consider that 
you have engaged in substantial gainful activity if your monthly 
countable income averages more than the amounts described in 
Sec. 404.1574(b)(2) for the month(s) in which you work, unless the 
evidence shows that you did not render significant services in the 
month(s). See paragraph (b) of this section for what we mean by 
significant services. If your average monthly countable income is equal 
to or less than the amounts in Sec. 404.1574(b)(2) for the month(s) in 
which you work, or if the evidence shows that you did not render 
significant services in the month(s), we will consider that your work as 
a self-employed person shows that you have not engaged in substantial 
gainful activity.

[46 FR 4870, Jan. 19, 1981, as amended at 48 FR 21936, May 16, 1983; 49 
FR 22272, May 29, 1984; 65 FR 42785, July 11, 2000; 71 FR 66854, Nov. 
17, 2006; 81 FR 71369, Oct. 17, 2016]



Sec. 404.1576  Impairment-related work expenses.

    (a) General. When we figure your earnings in deciding if you have 
done substantial gainful activity, we will subtract the reasonable costs 
to you of certain items and services which, because of your 
impairment(s), you need and use to enable you to work. The costs are 
deductible even though you also need or use the items and services to 
carry out daily living functions unrelated to your work. Paragraph (b) 
of this section explains the conditions for deducting work expenses. 
Paragraph (c) of this section describes the expenses we will deduct. 
Paragraph (d) of this section explains when expenses may be deducted. 
Paragraph (e) of this section describes how expenses may be allocated. 
Paragraph (f) of this section explains the limitations on deducting 
expenses. Paragraph (g) of this section explains our verification 
procedures.
    (b) Conditions for deducting impairment-related work expenses. We 
will deduct impairment-related work expenses if--
    (1) You are otherwise disabled as defined in Secs. 404.1505, 
404.1577 and 404.1581-404.1583;
    (2) The severity of your impairment(s) requires you to purchase (or 
rent) certain items and services in order to work;
    (3) You pay the cost of the item or service. No deduction will be 
allowed to the extent that payment has been or

[[Page 415]]

will be made by another source. No deduction will be allowed to the 
extent that you have been, could be, or will be reimbursed for such cost 
by any other source (such as through a private insurance plan, Medicare 
or Medicaid, or other plan or agency). For example, if you purchase 
crutches for $80 but you were, could be, or will be reimbursed $64 by 
some agency, plan, or program, we will deduct only $16;
    (4) You pay for the item or service in a month you are working (in 
accordance with paragraph (d) of this section); and
    (5) Your payment is in cash (including checks or other forms of 
money). Payment in kind is not deductible.
    (c) What expenses may be deducted--(1) Payments for attendant care 
services. (i) If because of your impairment(s) you need assistance in 
traveling to and from work, or while at work you need assistance with 
personal functions (e.g., eating, toileting) or with work-related 
functions (e.g., reading, communicating), the payments you make for 
those services may be deducted.
    (ii) If because of your impairment(s) you need assistance with 
personal functions (e.g., dressing, administering medications) at home 
in preparation for going to and assistance in returning from work, the 
payments you make for those services may be deducted.
    (iii)(A) We will deduct payments you make to a family member for 
attendant care services only if such person, in order to perform the 
services, suffers an economic loss by terminating his or her employment 
or by reducing the number of hours he or she worked.
    (B) We consider a family member to be anyone who is related to you 
by blood, marriage or adoption, whether or not that person lives with 
you.
    (iv) If only part of your payment to a person is for services that 
come under the provisions of paragraph (c)(1) of this section, we will 
only deduct that part of the payment which is attributable to those 
services. For example, an attendant gets you ready for work and helps 
you in returning from work, which takes about 2 hours a day. The rest of 
his or her 8 hour day is spent cleaning your house and doing your 
laundry, etc. We would only deduct one-fourth of the attendant's daily 
wages as an impairment-related work expense.
    (2) Payments for medical devices. If your impairment(s) requires 
that you utilize medical devices in order to work, the payments you make 
for those devices may be deducted. As used in this subparagraph, medical 
devices include durable medical equipment which can withstand repeated 
use, is customarily used for medical purposes, and is generally not 
useful to a person in the absence of an illness or injury. Examples of 
durable medical equipment are wheelchairs, hemodialysis equipment, 
canes, crutches, inhalators and pacemakers.
    (3) Payments for prosthetic devices. If your impairment(s) requires 
that you utilize a prosthetic device in order to work, the payments you 
make for that device may be deducted. A prosthetic device is that which 
replaces an internal body organ or external body part. Examples of 
prosthetic devices are artificial replacements of arms, legs and other 
parts of the body.
    (4) Payments for equipment. (i) Work-related equipment. If your 
impairment(s) requires that you utilize special equipment in order to do 
your job, the payments you make for that equipment may be deducted. 
Examples of work-related equipment are one-hand typewriters, vision 
aids, sensory aids for the blind, telecommunication devices for the deaf 
and tools specifically designed to accommodate a person's impairment(s).
    (ii) Residential modifications. If your impairment(s) requires that 
you make modifications to your residence, the location of your place of 
work will determine if the cost of these modifications will be deducted. 
If you are employed away from home, only the cost of changes made 
outside of your home to permit you to get to your means of 
transportation (e.g., the installation of an exterior ramp for a 
wheelchair confined person or special exterior railings or pathways for 
someone who requires crutches) will be deducted. Costs relating to 
modifications of the inside of your home will not be deducted. If you 
work at home, the costs of modifying the inside of your home in order to 
create a working space to accommodate your impairment(s) will be 
deducted to

[[Page 416]]

the extent that the changes pertain specifically to the space in which 
you work. Examples of such changes are the enlargement of a doorway 
leading into the workspace or modification of the workspace to 
accommodate problems in dexterity. However, if you are self-employed at 
home, any cost deducted as a business expense cannot be deducted as an 
impairment-related work expense.
    (iii) Nonmedical appliances and equipment. Expenses for appliances 
and equipment which you do not ordinarily use for medical purposes are 
generally not deductible. Examples of these items are portable room 
heaters, air conditioners, humidifiers, dehumidifiers, and electric air 
cleaners. However, expenses for such items may be deductible when 
unusual circumstances clearly establish an impairment-related and 
medically verified need for such an item because it is essential for the 
control of your disabling condition, thus enabling you to work. To be 
considered essential, the item must be of such a nature that if it were 
not available to you there would be an immediate adverse impact on your 
ability to function in your work activity. In this situation, the 
expense is deductible whether the item is used at home or in the working 
place. An example would be the need for an electric air cleaner by an 
individual with severe respiratory disease who cannot function in a non-
purified air environment. An item such as an exercycle is not deductible 
if used for general physical fitness. If it is prescribed and used as 
necessary treatment of your impairment and necessary to enable you to 
work, we will deduct payments you make toward its cost.
    (5) Payments for drugs and medical services. (i) If you must use 
drugs or medical services (including diagnostic procedures) to control 
your impairment(s) the payments you make for them may be deducted. The 
drugs or services must be prescribed (or utilized) to reduce or 
eliminate symptoms of your impairment(s) or to slow down its 
progression. The diagnostic procedures must be performed to ascertain 
how the impairment(s) is progressing or to determine what type of 
treatment should be provided for the impairment(s).
    (ii) Examples of deductible drugs and medical services are 
anticonvulsant drugs to control epilepsy or anticonvulsant blood level 
monitoring; antidepressant medication for mental disorders; medication 
used to allay the side effects of certain treatments; radiation 
treatment or chemotherapy for cancer patients; corrective surgery for 
spinal disorders; electroencephalograms and brain scans related to a 
disabling epileptic condition; tests to determine the efficacy of 
medication on a diabetic condition; and immunosuppressive medications 
that kidney transplant patients regularly take to protect against graft 
rejection.
    (iii) We will only deduct the costs of drugs or services that are 
directly related to your impairment(s). Examples of non-deductible items 
are routine annual physical examinations, optician services (unrelated 
to a disabling visual impairment) and dental examinations.
    (6) Payments for similar items and services--(i) General. If you are 
required to utilize items and services not specified in paragraphs (c) 
(1) through (5) of this section but which are directly related to your 
impairment(s) and which you need to work, their costs are deductible. 
Examples of such items and services are medical supplies and services 
not discussed above, the purchase and maintenance of a dog guide which 
you need to work, and transportation.
    (ii) Medical supplies and services not described above. We will 
deduct payments you make for expendable medical supplies, such as 
incontinence pads, catheters, bandages, elastic stockings, face masks, 
irrigating kits, and disposable sheets and bags. We will also deduct 
payments you make for physical therapy which you require because of your 
impairment(s) and which you need in order to work.
    (iii) Payments for transportation costs. We will deduct 
transportation costs in these situations:
    (A) Your impairment(s) requires that in order to get to work you 
need a vehicle that has structural or operational modifications. The 
modifications must be critical to your operation or use of the vehicle 
and directly related to your

[[Page 417]]

impairment(s). We will deduct the costs of the modifications, but not 
the cost of the vehicle. We will also deduct a mileage allowance for the 
trip to and from work. The allowance will be based on data compiled by 
the Federal Highway Administration relating to vehicle operating costs.
    (B) Your impairment(s) requires you to use driver assistance, 
taxicabs or other hired vehicles in order to work. We will deduct 
amounts paid to the driver and, if your own vehicle is used, we will 
also deduct a mileage allowance, as provided in paragraph (c)(6)(iii)(A) 
of this section, for the trip to and from work.
    (C) Your impairment(s) prevents your taking available public 
transportation to and from work and you must drive your (unmodified) 
vehicle to work. If we can verify through your physician or other 
sources that the need to drive is caused by your impairment(s) (and not 
due to the unavailability of public transportation), we will deduct a 
mileage allowance, as provided in paragraph (c)(6)(iii)(A) of this 
section, for the trip to and from work.
    (7) Payments for installing, maintaining, and repairing deductible 
items. If the device, equipment, appliance, etc., that you utilize 
qualifies as a deductible item as described in paragraphs (c) (2), (3), 
(4) and (6) of this section, the costs directly related to installing, 
maintaining and repairing these items are also deductible. (The costs 
which are associated with modifications to a vehicle are deductible. 
Except for a mileage allowance, as provided for in paragraph (c)(6)(iii) 
of this section, the costs which are associated with the vehicle itself 
are not deductible.)
    (d) When expenses may be deducted--(1) Effective date. To be 
deductible an expense must be incurred after November 30, 1980. An 
expense may be considered incurred after that date if it is paid 
thereafter even though pursuant to a contract or other arrangement 
entered into before December 1, 1980.
    (2) Payments for services. A payment you make for services may be 
deducted if the services are received while you are working and the 
payment is made in a month you are working. We consider you to be 
working even though you must leave work temporarily to receive the 
services.
    (3) Payments for items. A payment you make toward the cost of a 
deductible item (regardless of when it is acquired) may be deducted if 
payment is made in a month you are working. See paragraph (e)(4) of this 
section when purchases are made in anticipation of work.
    (e) How expenses are allocated--(1) Recurring expenses. You may pay 
for services on a regular periodic basis, or you may purchase an item on 
credit and pay for it in regular periodic installments or you may rent 
an item. If so, each payment you make for the services and each payment 
you make toward the purchase or rental (including interest) is 
deductible in the month it is made.

    Example: B starts work in October 1981 at which time she purchases a 
medical device at a cost of $4,800 plus interest charges of $720. Her 
monthly payments begin in October. She earns and receives $400 a month. 
The term of the installment contract is 48 months. No downpayment is 
made. The monthly allowable deduction for the item would be $115 ($5520 
divided by 48) for each month of work during the 48 months.

    (2) Nonrecurring expenses. Part or all of your expenses may not be 
recurring. For example, you may make a one-time payment in full for an 
item or service or make a downpayment. If you are working when you make 
the payment we will either deduct the entire amount in the month you pay 
it or allocate the amount over a 12 consecutive month period beginning 
with the month of payment, whichever you select.

    Example: A begins working in October 1981 and earns $525 a month. In 
the same month he purchases and pays for a deductible item at a cost of 
$250. In this situation we could allow a $250 deduction for October 
1981, reducing A's earnings below the SGA level for that month.
    If A's earnings had been $15 above the SGA earnings amount, A 
probably would select the option of projecting the $250 payment over the 
12-month period, October 1981-September 1982, giving A an allowable 
deduction of $20.83 a month for each month of work during that period. 
This deduction would reduce A's earnings below the SGA level for 12 
months.


[[Page 418]]


    (3) Allocating downpayments. If you make a downpayment we will, if 
you choose, make a separate calculation for the downpayment in order to 
provide for uniform monthly deductions. In these situations we will 
determine the total payment that you will make over a 12 consecutive 
month period beginning with the month of the downpayment and allocate 
that amount over the 12 months. Beginning with the 13th month, the 
regular monthly payment will be deductible. This allocation process will 
be for a shorter period if your regular monthly payments will extend 
over a period of less than 12 months.

    Example 1. C starts working in October 1981, at which time he 
purchases special equipment at a cost of $4,800, paying $1,200 down. The 
balance of $3,600, plus interest of $540, is to be repaid in 36 
installments of $115 a month beginning November 1981. C earns $500 a 
month. He chooses to have the downpayment allocated. In this situation 
we would allow a deduction of $205.42 a month for each month of work 
during the period October 1981 through September 1982. After September 
1982, the deduction amount would be the regular monthly payment of $115 
for each month of work during the remaining installment period.

Explanation:
  Downpayment in 10/81..........................      $1,200
  Monthly payments 11/81 through 09/82..........       1,265
                                                 ------------
                                                   12) 2,465   = $205.42
 

    Example 2. D, while working, buys a deductible item in July 1981, 
paying $1,450 down. However, his first monthly payment of $125 is not 
due until September 1981. D chooses to have the downpayment allocated. 
In this situation we would allow a deduction of $225 a month for each 
month of work during the period July 1981 through June 1982. After June 
1982, the deduction amount would be the regular monthly payment of $125 
for each month of work.

Explanation:
  Downpayment in 07/81..........................        $1,450
  Monthly payments 09/81 through 06/82..........         1,250
                                                 --------------
                                                     12) 2,700    = $225
 

    (4) Payments made in anticipation of work. A payment toward the cost 
of a deductible item that you made in any of the 11 months preceding the 
month you started working will be taken into account in determining your 
impairment-related work expenses. When an item is paid for in full 
during the 11 months preceding the month you started working the payment 
will be allocated over the 12-consecutive month period beginning with 
the month of the payment. However, the only portion of the payment which 
may be deductible is the portion allocated to the month work begins and 
the following months. For example, if an item is purchased 3 months 
before the month work began and is paid for with a one-time payment of 
$600, the deductible amount would be $450 ($600 divided by 12, 
multiplied by 9). Installment payments (including a downpayment) that 
you made for a particular item during the 11 months preceding the month 
you started working will be totaled and considered to have been made in 
the month of your first payment for that item within this 11 month 
period. The sum of these payments will be allocated over the 12-
consecutive month period beginning with the month of your first payment 
(but never earlier than 11 months before the month work began). However, 
the only portion of the total which may be deductible is the portion 
allocated to the month work begins and the following months. For 
example, if an item is purchased 3 months before the month work began 
and is paid for in 3 monthly installments of $200 each, the total 
payment of $600 will be considered to have been made in the month of the 
first payment, that is, 3 months before the month work began. The 
deductible amount would be $450 ($600 divided by 12, multiplied by 9). 
The amount, as determined by these formulas, will then be considered to 
have been paid in the first month of work. We will deduct either this 
entire amount in the first month of work or allocate it over a 12-
consecutive month period beginning with the first month of work, 
whichever you select. In the above examples, the individual would have 
the choice of having the entire $450 deducted in the first month of work 
or of having $37.50 a month ($450 divided by 12) deducted for each month 
that he works over a 12-consecutive month period, beginning with the 
first month of work. To be deductible the payments must be for durable 
items such as medical devices, prostheses, work-related equipment, 
residential modifications, nonmedical appliances

[[Page 419]]

and vehicle modifications. Payments for services and expendable items 
such as drugs, oxygen, diagnostic procedures, medical supplies and 
vehicle operating costs are not deductible for purposes of this 
paragraph.
    (f) Limits on deductions. (1) We will deduct the actual amounts you 
pay towards your impairment-related work expenses unless the amounts are 
unreasonable. With respect to durable medical equipment, prosthetic 
devices, medical services, and similar medically-related items and 
services, we will apply the prevailing charges under Medicare (part B of 
title XVIII, Health Insurance for the Aged and Disabled) to the extent 
that this information is readily available. Where the Medicare guides 
are used, we will consider the amount that you pay to be reasonable if 
it is no more than the prevailing charge for the same item or service 
under the Medicare guidelines. If the amount you actually pay is more 
than the prevailing charge for the same item under the Medicare 
guidelines, we will deduct from your earnings the amount you paid to the 
extent you establish that the amount is consistent with the standard or 
normal charge for the same or similar item or service in your community. 
For items and services that are not listed in the Medicare guidelines, 
and for items and services that are listed in the Medicare guidelines 
but for which such guides cannot be used because the information is not 
readily available, we will consider the amount you pay to be reasonable 
if it does not exceed the standard or normal charge for the same or 
similar item(s) or service(s) in your community.
    (2) Impairment-related work expenses are not deducted in computing 
your earnings for purposes of determining whether your work was 
``services'' as described in Sec. 404.1592(b).
    (3) The decision as to whether you performed substantial gainful 
activity in a case involving impairment-related work expenses for items 
or services necessary for you to work generally will be based upon your 
``earnings'' and not on the value of ``services'' you rendered. (See 
Secs. 404.1574(b)(6) (i) and (ii), and 404.1575(a)). This is not 
necessarily so, however, if you are in a position to control or 
manipulate your earnings.
    (4) The amount of the expenses to be deducted must be determined in 
a uniform manner in both the disability insurance and SSI programs.
    (5) No deduction will be allowed to the extent that any other source 
has paid or will pay for an item or service. No deduction will be 
allowed to the extent that you have been, could be, or will be, 
reimbursed for payments you made. (See paragraph (b)(3) of this 
section.)
    (6) The provisions described in the foregoing paragraphs of this 
section are effective with respect to expenses incurred on and after 
December 1, 1980, although expenses incurred after November 1980 as a 
result of contractual or other arrangements entered into before December 
1980, are deductible. For months before December 1980 we will deduct 
impairment-related work expenses from your earnings only to the extent 
they exceeded the normal work-related expenses you would have had if you 
did not have your impairment(s). We will not deduct expenses, however, 
for those things which you needed even when you were not working.
    (g) Verification. We will verify your need for items or services for 
which deductions are claimed, and the amount of the charges for those 
items or services. You will also be asked to provide proof that you paid 
for the items or services.

[48 FR 21936, May 16, 1983]

            Widows, Widowers, and Surviving Divorced Spouses



Sec. 404.1577  Disability defined for widows, widowers, and surviving 
divorced spouses for monthly benefits payable for months prior to 
January 1991.

    For monthly benefits payable for months prior to January 1991, the 
law provides that to be entitled to a widow's or widower's benefit as a 
disabled widow, widower, or surviving divorced spouse, you must have a 
medically determinable physical or mental impairment which can be 
expected to result in death or has lasted or can be expected to last for 
a continuous period of not less than 12 months. The impairment(s) must 
have been of a level of severity to prevent a person from doing

[[Page 420]]

any gainful activity. To determine whether you were disabled, we 
consider only your physical or mental impairment(s). We do not consider 
your age, education, and work experience. We also do not consider 
certain felony-related and prison-related impairments, as explained in 
Sec. 404.1506. (For monthly benefits payable for months after December 
1990, see Sec. 404.1505(a).)

[57 FR 30120, July 8, 1992]



Sec. 404.1578  How we determine disability for widows, widowers, 
and surviving divorced spouses for monthly benefits payable for
months prior to January 1991.

    (a) For monthly benefits payable for months prior to January 1991, 
we will find that you were disabled and pay you widow's or widower's 
benefits as a widow, widower, or surviving divorced spouse if--
    (1) Your impairment(s) had specific clinical findings that were the 
same as those for any impairment in the Listing of Impairments in 
appendix 1 of this subpart or were medically equivalent to those for any 
impairment shown there;
    (2) Your impairment(s) met the duration requirement.
    (b) However, even if you met the requirements in paragraphs (a) (1) 
and (2) of this section, we will not find you disabled if you were doing 
substantial gainful activity.

[57 FR 30121, July 8, 1992]



Sec. 404.1579  How we will determine whether your disability continues or ends.

    (a) General. (1) The rules for determining whether disability 
continues for widow's or widower's monthly benefits for months after 
December 1990 are discussed in Secs. 404.1594 through 404.1598. The 
rules for determining whether disability continues for monthly benefits 
for months prior to January 1991 are discussed in paragraph (a)(2) of 
this section and paragraphs (b) through (h) of this section.
    (2) If you are entitled to disability benefits as a disabled widow, 
widower, or surviving divorced spouse, and we must decide whether your 
disability continued or ended for monthly benefits for months prior to 
January 1991, there are a number of factors we consider in deciding 
whether your disability continued. We must determine if there has been 
any medical improvement in your impairment(s) and, if so, whether this 
medical improvement is related to your ability to work. If your 
impairment(s) has not so medically improved, we must address whether one 
or more exceptions applies. If medical improvement related to your 
ability to work has not occurred and no exception applies, your benefits 
will continue. Even where medical improvement related to your ability to 
work has occurred or an exception applies, in most cases (see paragraph 
(e) of this section for exceptions) before we can find that you are no 
longer disabled, we must also show that your impairment(s), as shown by 
current medical evidence, is no longer deemed, under appendix 1 of this 
subpart, sufficient to preclude you from engaging in gainful activity.
    (b) Terms and definitions. There are several terms and definitions 
which are important to know in order to understand how we review your 
claim to determine whether your disability continues.
    (1) Medical improvement. Medical improvement is any decrease in the 
medical severity of your impairment(s) which was present at the time of 
the most recent favorable medical decision that you were disabled or 
continued to be disabled. A determination that there has been a decrease 
in medical severity must be based on improvement in the symptoms, signs, 
and/or laboratory findings associated with your impairment(s).

    Example 1: You were awarded disability benefits due to a herniated 
nucleus pulposus which was determined to equal the level of severity 
contemplated by Listing 1.05.C. At the time of our prior favorable 
decision, you had had a laminectomy. Postoperatively, a myelogram still 
showed evidence of a persistent deficit in your lumbar spine. You had 
pain in your back, and pain and a burning sensation in your right foot 
and leg. There were no muscle weakness or neurological changes and a 
modest decrease in motion in your back and leg. When we reviewed your 
claim your treating physician reported that he had seen you regularly 
every 2 to 3 months for the past 2 years. No further myelograms had been 
done, complaints of

[[Page 421]]

pain in the back and right leg continued especially on sitting or 
standing for more than a short period of time. Your doctor further 
reported a moderately decreased range of motion in your back and right 
leg, but again no muscle atrophy or neurological changes were reported. 
Medical improvement has not occurred because there has been no decrease 
in the severity of your back impairment as shown by changes in symptoms, 
signs, or laboratory findings.
    Example 2: You were awarded disability benefits due to rheumatoid 
arthritis of a severity as described in Listing 1.02 of appendix 1 of 
this subpart. At the time, laboratory findings were positive for this 
condition. Your doctor reported persistent swelling and tenderness of 
your fingers and wrists and that you complained of joint pain. Current 
medical evidence shows that while laboratory tests are still positive 
for rheumatoid arthritis, your impairment has responded favorably to 
therapy so that for the last year your fingers and wrists have not been 
significantly swollen or painful. Medical improvement has occurred 
because there has been a decrease in the severity of your impairment as 
documented by the current symptoms and signs reported by your physician. 
Although your impairment is subject to temporary remissions and 
exacerbations the improvement that has occurred has been sustained long 
enough to permit a finding of medical improvement. We would then 
determine if this medical improvement is related to your ability to 
work.

    (2) Determining whether medical improvement is related to your 
ability to work. If medical improvement has occurred and the severity of 
the prior impairment(s) no longer meets or equals the listing section 
which was used in making our most recent favorable decision, we will 
find that the medical improvement was related to your ability to work. 
We make this finding because the criteria in appendix 1 of this subpart 
are related to ability to work because they reflect impairments which 
are considered severe enough to prevent a person from doing any gainful 
work. We must, of course, also establish that, considering all of your 
current impairments not just those which existed at the time of the most 
recent prior favorable medical decision, your condition does not meet or 
equal the requirements of appendix 1 before we could find that your 
disability has ended. If there has been any medical improvement in your 
impairment(s), but it is not related to your ability to do work and none 
of the exceptions applies, your benefits will be continued.
    (3) Determining whether your impairment(s) is deemed, under appendix 
1 of this subpart, sufficient to preclude you from engaging in gainful 
activity. Even where medical improvement related to your ability to work 
has occurred or an exception applies, in most cases before we can find 
that you are no longer disabled, we must also show that your 
impairment(s) is no longer deemed, under appendix 1 of this subpart, 
sufficient to preclude you from engaging in gainful activity. All 
current impairments will be considered, not just the impairment(s) 
present at the time of our most recent favorable determination. Sections 
404.1525, 404.1526, and 404.1578 set out how we will decide whether your 
impairment(s) meets or equals the requirements of appendix 1 of this 
subpart.
    (4) Evidence and basis for our decision. Our decisions under this 
section will be made on a neutral basis without any initial inference as 
to the presence or absence of disability being drawn from the fact that 
you have previously been determined to be disabled. We will consider all 
evidence you submit and that we obtain from your medical sources and 
nonmedical sources. What constitutes ``evidence'' and our procedures for 
obtaining it are set out in Secs. 404.1512 through 404.1518. Our 
determination regarding whether your disability continues will be made 
on the basis of the weight of the evidence.
    (5) Point of comparison. For purposes of determining whether medical 
improvement has occurred, we will compare the current severity of that 
impairment(s) which was present at the time of the most recent favorable 
medical decision that you were disabled or continued to be disabled to 
the medical severity of that impairment(s) at that time. If medical 
improvement has occurred, we will determine whether the medical 
improvement is related to your ability to do work based on this 
previously existing impairment(s). The most recent favorable medical 
decision is the latest decision involving a consideration of the medical 
evidence and the issue of whether you were disabled or continued to be 
disabled which became final.

[[Page 422]]

    (c) Determining medical improvement and its relationship to your 
ability to do work. Paragraphs (b) (1) and (2) of this section discuss 
what we mean by medical improvement and how we determine whether medical 
improvement is related to your ability to work.
    (1) Medical improvement. Medical improvement is any decrease in the 
medical severity of impairment(s) present at the time of the most recent 
favorable medical decision that you were disabled or continued to be 
disabled. Whether medical improvement has occurred is determined by a 
comparison of prior and current medical evidence which must show that 
there have been changes (improvement) in the symptoms, signs or 
laboratory findings associated with that impairment(s).
    (2) Determining whether medical improvement is related to ability to 
work. If there is a decrease in medical severity as shown by the signs, 
symptoms and laboratory findings, we then must determine if it is 
related to your ability to do work, as explained in paragraph (b)(2) of 
this section. In determining if the medical improvement that has 
occurred is related to your ability to work, we will assess whether the 
previously existing impairments still meet or equal the level of 
severity contemplated by the same listing section in appendix 1 of this 
subpart which was used in making our most recent favorable decision. 
Appendix 1 of this subpart describes impairments which, if severe 
enough, affect a person's ability to work. If the appendix level of 
severity is met or equaled, the individual is deemed, in the absence of 
evidence of the contrary, to be unable to engage in gainful activity. If 
there has been medical improvement to the degree that the requirement of 
the listing section is no longer met or equaled, then the medical 
improvement is related to your ability to work. Unless an objective 
assessment shows that the listing requirement is no longer met or 
equaled based on actual changes shown by the medical evidence, the 
medical improvement that has occurred will not be considered to be 
related to your ability to work.
    (3) Prior file cannot be located. If the prior file cannot be 
located, we will first determine whether your current impairment(s) is 
deemed, under appendix 1 of this subpart, sufficient to preclude you 
from engaging in gainful activity. (In this way, we will be able to 
determine that your disability continues at the earliest time without 
addressing the issue of reconstructing prior evidence which can be a 
lengthy process.) If so, your benefits will continue unless one of the 
second group of exceptions applies (see paragraph (e) of this section). 
If not, we will determine whether an attempt should be made to 
reconstruct those portions of the file that were relevant to our most 
recent favorable medical decision (e.g., medical evidence from treating 
sources and the results of consultative examinations). This 
determination will consider the potential availability of old records in 
light of their age, whether the source of the evidence is still in 
operation, etc.; and whether reconstruction efforts will yield a 
complete record of the basis for the most recent favorable medical 
decision. If relevant parts of the prior record are not reconstructed 
either because it is determined not to attempt reconstruction or because 
such efforts fail, medical improvement cannot be found. The 
documentation of your current impairments will provide a basis for any 
future reviews. If the missing file is later found, it may serve as a 
basis for reopening any decision under this section in accordance with 
the rules in Sec. 404.988.
    (4) Impairment(s) subject to temporary remission. In some cases the 
evidence shows that an individual's impairment is subject to temporary 
remission. In assessing whether medical improvement has occurred in 
persons with this type of impairment, we will be careful to consider the 
longitudinal history of the impairment(s), including the occurrence of 
prior remissions, and prospects for future worsening of the 
impairment(s). Improvement in such impairments that is only temporary 
will not warrant a finding of medical improvement.
    (5) Applicable listing has been revised since the most recent 
favorable medical decision. When determining whether any medical 
improvement is related to your ability to work, we use the same listing 
section in appendix 1 of this

[[Page 423]]

subpart which was used to make our prior favorable decision. We will use 
the listing as it appeared at the time of the prior decision, even where 
the requirement(s) of the listing was subsequently changed. The current 
revised listing requirement will be used if we determine that you have 
medically improved and it is necessary to determine whether you are now 
considered unable to engage in gainful activity.
    (d) First group of exceptions to medical improvement. The law 
provides for certain limited situations when your disability can be 
found to have ended even though medical improvement has not occurred, if 
your impairment(s) is no longer considered, under appendix 1 of this 
subpart, sufficient to preclude you from engaging in gainful activity. 
These exceptions to medical improvement are intended to provide a way of 
finding that a person is no longer disabled in those limited situations 
where, even though there has been no decrease in severity of the 
impairment(s), evidence shows that the person should no longer be 
considered disabled or never should have been considered disabled. If 
one of these exceptions applies, before we can find you are no longer 
disabled, we must also show that, taking all your current impairment(s) 
into account, not just those that existed at the time of our most recent 
favorable medical decision, your impairment(s) is no longer deemed, 
under appendix 1 of this subpart, sufficient to preclude you from 
engaging in gainful activity. As part of the review process, you will be 
asked about any medical therapy you received or are receiving. Your 
answers and the evidence gathered as a result as well as all other 
evidence, will serve as the basis for the finding that an exception does 
or does not apply.
    (1) Substantial evidence shows that you are the beneficiary of 
advances in medical therapy or technology (related to your ability to 
work). Advances in medical therapy or technology are improvements in 
treatment or rehabilitative methods which have favorably affected the 
severity of your impairment(s). We will apply this exception when 
substantial evidence shows that you have been the beneficiary of 
services which reflect these advances and they have favorably affected 
the severity of your impairment(s). This decision will be based on new 
medical evidence. In many instances, an advanced medical therapy or 
technology will result in a decrease in severity as shown by symptoms, 
signs and laboratory findings which will meet the definition of medical 
improvement. This exception will, therefore, see very limited 
application.
    (2) Substantial evidence shows that based on new or improved 
diagnostic or evaluative techniques your impairment(s) is not as 
disabling as it was considered to be at the time of the most recent 
favorable decision. Changing methodologies and advances in medical and 
other diagnostic or evaluative techniques have given, and will continue 
to give, rise to improved methods for measuring and documenting the 
effect of various impairments on the ability to do work. Where, by such 
new or improved methods, substantial evidence shows that your 
impairment(s) is not as severe as was determined at the time of our most 
recent favorable medical decision, such evidence may serve as a basis 
for finding that you are no longer disabled, if your impairment(s) is no 
longer deemed, under appendix 1 of this subpart, sufficient to preclude 
you from engaging in gainful activity. In order to be used under this 
exception, however, the new or improved techniques must have become 
generally available after the date of our most recent favorable medical 
decision.
    (i) How we will determine which methods are new or improved 
techniques and when they become generally available. New or improved 
diagnostic techniques or evaluations will come to our attention by 
several methods. In reviewing cases, we often become aware of new 
techniques when their results are presented as evidence. Such techniques 
and evaluations are also discussed and acknowledged in medical 
literature by medical professional groups and other governmental 
entities. Through these sources, we develop listings of new techniques 
and when they become generally available. For example, we will consult 
the Health Care Financing Administration for its experience regarding 
when a technique is recognized for payment under Medicare and when they 
began paying for the technique.

[[Page 424]]

    (ii) How you will know which methods are new or improved techniques 
and when they become generally available. We will let you know which 
methods we consider to be new or improved techniques and when they 
become available through two vehicles.
    (A) Some of the future changes in the Listing of Impairments in 
appendix 1 of this subpart will be based on new or improved diagnostic 
or evaluative techniques. Such listing changes will clearly state this 
fact as they are published as Notices of Proposed Rulemaking and the new 
or improved technique will be considered generally available as of the 
date of the final publication of that particular listing in the Federal 
Register.
    (B) A cumulative list since 1970 of new or improved diagnostic 
techniques or evaluations, how they changed the evaluation of the 
applicable impairment and the month and year they became generally 
available, will be published in the Notices section of the Federal 
Register. Included will be any changes in the Listing of Impairments 
published in the Code of Federal Regulations since 1970 which are 
reflective of new or improved techniques. No cases will be processed 
under this exception until this cumulative listing is so published. 
Subsequent changes to the list will be published periodically. The 
period will be determined by the volume of changes needed.

    Example: The electrocardiographic exercise test has replaced the 
Master's 2-step test as a measurement of heart function since the time 
of your last favorable medical decision. Current evidence could show 
that your condition, which was previously evaluated based on the 
Master's 2-step test, is not now as disabling as was previously thought. 
If, taking all your current impairments into account, you are now able 
to engage in gainful activity, this exception would be used to find that 
you are no longer disabled even if medical improvement has not occurred.

    (3) Substantial evidence demonstrates that any prior disability 
decision was in error. We will apply the exception to medical 
improvement based on error if substantial evidence (which may be 
evidence on the record at the time any prior determination of the 
entitlement to benefits based on disability was made, or newly obtained 
evidence which relates to that determination) demonstrates that a prior 
determination was in error. A prior determination will be found in error 
only if:
    (i) Substantial evidence shows on its face that the decision in 
question should not have been made (e.g., the evidence in your file such 
as pulmonary function study values was misread or an adjudicative 
standard such as a listing in appendix 1 of this subpart was 
misapplied).

    Example: You were granted benefits when it was determined that your 
epilepsy met Listing 11.02. This listing calls for a finding of major 
motor seizures more frequently than once a month as documented by EEG 
evidence and by a detailed description of a typical seizure pattern. A 
history of either diurnal episodes or nocturnal episodes with residuals 
interfering with daily activities is also required. On review, it is 
found that a history of the frequency of your seizures showed that they 
occurred only once or twice a year. The prior decision would be found to 
be in error, and whether you were still considered to be disabled would 
be based on whether your current impairment(s) meets or equals the 
requirements of appendix 1 of this subpart.

    (ii) At the time of the prior evaluation, required and material 
evidence of the severity of your impairment(s) was missing. That 
evidence becomes available upon review, and substantial evidence 
demonstrates that had such evidence been present at the time of the 
prior determination, disability would not have been found.
    (iii) Substantial evidence which is new evidence which relates to 
the prior determination (of allowance or continuance) refutes the 
conclusions that were based upon the prior evidence (e.g., a tumor 
thought to be malignant was later shown to have actually been benign). 
Substantial evidence must show that had the new evidence (which relates 
to the prior determination) been considered at the time of the prior 
decision, the claim would not have been allowed or continued. A 
substitution of current judgment for that used in the prior favorable 
decision will not be the basis for applying this exception.

    Example: You were previously granted disability benefits on the 
basis of diabetes mellitus which the prior adjudicator believed was 
equivalent to the level of severity contemplated in the Listing of 
Impairments.

[[Page 425]]

The prior record shows that you had ``brittle'' diabetes for which you 
were taking insulin. Your urine was 3 + for sugar, and you alleged 
occasional hypoglycemic attacks caused by exertion. On review, symptoms, 
signs and laboratory findings are unchanged. The current adjudicator 
believes, however, that your impairment does not equal the severity 
contemplated by the listings. Error cannot be found because it would 
represent a substitution of current judgment for that of the prior 
adjudicator that your impairment equaled a listing.

    (iv) The exception for error will not be applied retroactively under 
the conditions set out above unless the conditions for reopening the 
prior decision (see Sec. 404.988) are met.
    (4) You are currently engaging in substantial gainful activity. If 
you are currently engaging in substantial gainful activity before we 
determine whether you are no longer disabled because of your work 
activity, we will consider whether you are entitled to a trial work 
period as set out in Sec. 404.1592. We will find that your disability 
has ended in the month in which you demonstrated your ability to engage 
in substantial gainful activity (following completion of a trial work 
period, where it applies). This exception does not apply in determining 
whether you continue to have a disabling impairment(Sec. 404.1511) for 
purposes of deciding your eligibility for a reentitlement period 
(Sec. 404.1592a).
    (e) Second group of exceptions to medical improvement. In addition 
to the first group of exceptions to medical improvement, the following 
exceptions may result in a determination that you are no longer 
disabled. In these situations the decision will be made without a 
determination that you have medically improved or can engage in gainful 
activity.
    (1) A prior determination or decision was fraudulently obtained. If 
we find that any prior favorable determination or decision was obtained 
by fraud, we may find that you are not disabled. In addition, we may 
reopen your claim under the rules in Sec. 404.988. In determining 
whether a prior favorable determination or decision was fraudulently 
obtained, we will take into account any physical, mental, educational, 
or linguistic limitations (including any lack of facility with the 
English language) which you may have had at the time.
    (2) You do not cooperate with us. If there is a question about 
whether you continue to be disabled and we ask you to give us medical or 
other evidence or to go for a physical or mental examination by a 
certain date, we will find that your disability has ended if you fail, 
without good cause, to do what we ask. Section 404.911 explains the 
factors we consider and how we will determine generally whether you have 
good cause for failure to cooperate. In addition, Sec. 404.1518 
discusses how we determine whether you have good cause for failing to 
attend a consultative examination. The month in which your disability 
ends will be the first month in which you failed to do what we asked.
    (3) We are unable to find you. If there is a question about whether 
you continue to be disabled and we are unable to find you to resolve the 
question, we will determine that your disability has ended. The month 
your disability ends will be the first month in which the question arose 
and we could not find you.
    (4) You fail to follow prescribed treatment which would be expected 
to restore your ability to engage in gainful activity. If treatment has 
been prescribed for you which would be expected to restore your ability 
to work, you must follow that treatment in order to be paid benefits. If 
you are not following that treatment and you do not have good cause for 
failing to follow that treatment, we will find that your disability has 
ended (see Sec. 404.1530(c)). The month your disability ends will be the 
first month in which you failed to follow the prescribed treatment.
    (f) Evaluation steps. To assure that disability reviews are carried 
out in a uniform manner, that decisions of continuing disability can be 
made in the most expeditious and administratively efficient way, and 
that any decisions to stop disability benefits are made objectively, 
neutrally and are fully documented, we will follow specific steps in 
reviewing the question of whether your disability continues. Our review 
may stop and benefits may be continued at any point if we determine 
there is sufficient evidence to find that you are

[[Page 426]]

still unable to engage in gainful activity. The steps are:
    (1) Are you engaging in substantial gainful activity? If you are 
(and any applicable trial work period has been completed), we will find 
disability to have ended.
    (2) If you are not, has there been medical improvement as defined in 
paragraph (b)(1) of this section? If there has been medical improvement 
as shown by a decrease in medical severity, see step (3). If there has 
been no decrease in medical severity, there has been no medical 
improvement. (see step (4).)
    (3) If there has been medical improvement, we must determine (in 
accordance with paragraph (b)(2) of this section) whether it is related 
to your ability to work. If medical improvement is not related to your 
ability to do work, see step (4). If medical improvement is related to 
your ability to do work, see step (5).
    (4) If we found at step (2) that there has been no medical 
improvement or if we found at step (3) that the medical improvement is 
not related to your ability to work, we consider whether any of the 
exceptions in paragraphs (d) and (e) of this section apply. If none of 
them apply, your disability will be found to continue. If one of the 
first group of exceptions to medical improvement (see paragraph (d) of 
this section) applies, we will proceed to step (5). If an exception from 
the second group of exceptions to medical improvement applies, your 
disability will be found to have ended. The second group of exceptions 
to medical improvement may be considered at any point in this process.
    (5) If medical improvement is related to your ability to work or if 
one of the first group of exceptions to medical improvement applies, we 
will determine (considering all your impairments) whether the 
requirements of appendix 1 of this subpart are met or equaled. If your 
impairment(s) meets or equals the requirements of appendix 1 of this 
subpart, your disability will be found to continue. If not, your 
disability will be found to have ended.
    (g) The month in which we will find you are no longer disabled. If 
the evidence shows that you are no longer disabled, we will find that 
your disability ended in the earliest of the following months--
    (1) The month the evidence shows you are no longer disabled under 
the rules set out in this section, and you were disabled only for a 
specified period of time in the past;
    (2) The month the evidence shows you are no longer disabled under 
the rules set out in this section, but not earlier than the month in 
which we mail you a notice saying that the information we have shows 
that you are not disabled;
    (3) The month in which you demonstrated your ability to engage in 
substantial gainful activity (following completion of a trial work 
period); however, we may pay you benefits for certain months in and 
after the reentitlement period which follows the trial work period. (See 
Sec. 404.1592 for a discussion of the trial work period, Sec. 404.1592a 
for a discussion of the reentitlement period, and Sec. 404.337 for when 
your benefits will end.);
    (4) The month in which you return to full-time work, with no 
significant medical restrictions and acknowledge that medical 
improvement has occurred, as long as we expected your impairment(s) to 
improve (see Sec. 404.1591);
    (5) The first month in which you failed to do what we asked, without 
good cause when the rule set out in paragraph (e)(2) of this section 
applies;
    (6) The first month in which the question of continuing disability 
arose and we could not find you, when the rule set out in paragraph 
(e)(3) of this section applies;
    (7) The first month in which you failed to follow prescribed 
treatment without good cause, when the rule set out in paragraph (e)(4) 
of this section applies; or
    (8) The first month you were told by your physician that you could 
return to work provided there is no substantial conflict between your 
physician's and your statements regarding your awareness of your 
capacity for work and the earlier date is supported by medical evidence.

[[Page 427]]

    (h) Before we stop your benefits. Before we determine you are no 
longer disabled, we will give you a chance to explain why we should not 
do so. Sections 404.1595 and 404.1597 describe your rights (including 
appeal rights) and the procedures we will follow.

[50 FR 50126, Dec. 6, 1985; 51 FR 7063, Feb. 28, 1986; 51 FR 16015, Apr. 
30, 1986, as amended at 57 FR 30121, July 8, 1992; 59 FR 1635, Jan. 12, 
1994; 82 FR 5871, Jan. 18, 2017]

                                Blindness



Sec. 404.1581  Meaning of blindness as defined in the law.

    We will consider you blind under the law for a period of disability 
and for payment of disability insurance benefits if we determine that 
you are statutorily blind. Statutory blindness is defined in the law as 
central visual acuity of 20/200 or less in the better eye with the use 
of correcting lens. An eye which has a limitation in the field of vision 
so that the widest diameter of the visual field subtends an angle no 
greater than 20 degrees is considered to have a central visual acuity of 
20/200 or less. Your blindness must meet the duration requirement in 
Sec. 404.1509. We do not consider certain felony-related and prison-
related impairments, as explained in Sec. 404.1506.

[45 FR 55584, Aug. 20, 1980, as amended at 48 FR 5715, Feb. 8, 1983]



Sec. 404.1582  A period of disability based on blindness.

    If we find that you are blind and you meet the insured status 
requirement, we may establish a period of disability for you regardless 
of whether you can do substantial gainful activity. A period of 
disability protects your earnings record under Social Security so that 
the time you are disabled will not count against you in determining 
whether you will have worked long enough to qualify for benefits and the 
amount of your benefits. However, you will not necessarily be entitled 
to receive disability insurance cash benefits even though you are blind. 
If you are a blind person under age 55, you must be unable to do any 
substantial gainful activity in order to be paid disability insurance 
cash benefits.



Sec. 404.1583  How we determine disability for blind persons who are 
age 55 or older.

    We will find that you are eligible for disability insurance benefits 
even though you are still engaging in substantial gainful activity, if--
    (a) You are blind;
    (b) You are age 55 or older; and
    (c) You are unable to use the skills or abilities like the ones you 
used in any substantial gainful activity which you did regularly and for 
a substantial period of time. (However, you will not be paid any cash 
benefits for any month in which you are doing substantial gainful 
activity.)



Sec. 404.1584  Evaluation of work activity of blind people.

    (a) General. If you are blind (as explained in Sec. 404.1581), we 
will consider the earnings from the work you are doing to determine 
whether or not you should be paid cash benefits.
    (b) Under Age 55. If you are under age 55, we will evaluate the work 
you are doing using the guides in paragraph (d) of this section to 
determine whether or not your work shows that you are doing substantial 
gainful activity. If you are not doing substantial gainful activity, we 
will pay you cash benefits. If you are doing substantial gainful 
activity, we will not pay you cash benefits. However, you will be given 
a period of disability as described in subpart D of this part.
    (c) Age 55 or older. If you are age 55 or older, we will evaluate 
your work using the guides in paragraph (d) of this section to determine 
whether or not your work shows that you are doing substantial gainful 
activity. If you have not shown this ability, we will pay you cash 
benefits. If you have shown an ability to do substantial gainful 
activity, we will evaluate your work activity to find out how your work 
compares with the work you did before. If the skills and abilities of 
your new work are about the same as those you used in the work you did 
before, we will not pay you cash benefits. However, if your new work 
requires skills and abilities which are less than or different than 
those you used in the work you did before, we will pay you cash 
benefits, but not for any month in

[[Page 428]]

which you actually perform substantial gainful activity.
    (d) Evaluation of earnings--(1) Earnings that will ordinarily show 
that you have engaged in substantial gainful activity. We will 
ordinarily consider that your earnings from your work activities show 
that you have engaged in substantial gainful activity if your monthly 
earnings average more than the amount(s) shown in paragraphs (d)(2) and 
(3) of this section. We will apply Secs. 404.1574(a)(2), 404.1575(c), 
and 404.1576 in determining the amount of your average earnings.
    (2) Substantial gainful activity guidelines for taxable years before 
1978. For work activity performed in taxable years before 1978, the 
average earnings per month that we ordinarily consider enough to show 
that you have done substantial gainful activity are the same for blind 
people as for others. See Sec. 404.1574(b)(2) for the earnings 
guidelines for other than blind individuals.
    (3) Substantial gainful activity guidelines for taxable years 
beginning 1978. For taxable years beginning 1978, if you are blind, the 
law provides different earnings guidelines for determining if your 
earnings from your work activities are substantial gainful activity. 
Ordinarily, we consider your work to be substantial gainful activity, if 
your average monthly earnings are more than those shown in Table I. For 
years after 1977 and before 1996, increases in the substantial gainful 
activity guideline were linked to increases in the monthly exempt amount 
under the retirement earnings test for individuals aged 65 to 69. 
Beginning with 1996, increases in the substantial gainful activity 
amount have depended only on increases in the national average wage 
index.

                                 Table I
------------------------------------------------------------------------
                            Over                              In year(s)
------------------------------------------------------------------------
$334........................................................        1978
$375........................................................        1979
$417........................................................        1980
$459........................................................        1981
$500........................................................        1982
$550........................................................        1983
$580........................................................        1984
$610........................................................        1985
$650........................................................        1986
$680........................................................        1987
$700........................................................        1988
$740........................................................        1989
$780........................................................        1990
$810........................................................        1991
$850........................................................        1992
$880........................................................        1993
$930........................................................        1994
$940........................................................        1995
$960........................................................        1996
$1,000......................................................        1997
$1,050......................................................        1998
$1,110......................................................        1999
$1,170......................................................        2000
------------------------------------------------------------------------


[45 FR 55584, Aug. 20, 1980, as amended at 48 FR 21939, May 16, 1983; 65 
FR 42786, July 11, 2000]



Sec. 404.1585  Trial work period for persons age 55 or older who are 
blind.

    If you become eligible for disability benefits even though you were 
doing substantial gainful activity because you are blind and age 55 or 
older, you are entitled to a trial work period if--
    (a) You later return to substantial gainful activity that requires 
skills or abilities comparable to those required in the work you 
regularly did before you became blind or became 55 years old, whichever 
is later; or
    (b) Your last previous work ended because of an impairment and the 
current work requires a significant vocational adjustment.



Sec. 404.1586  Why and when we will stop your cash benefits.

    (a) When you are not entitled to benefits. If you become entitled to 
disability cash benefits as a statutorily blind person, we will find 
that you are no longer entitled to benefits beginning with the earliest 
of--
    (1) The month your vision, based on current medical evidence, does 
not meet the definition of blindness and your disability does not 
continue under the rules in Sec. 404.1594 and you were disabled only for 
a specified period of time in the past;
    (2) The month your vision, based on current medical evidence, does 
not meet the definition of blindness and your disability does not 
continue under the rules in Sec. 404.1594, but not earlier than the 
month in which we mail you a notice saying that the information we have 
shows that you are not disabled;

[[Page 429]]

    (3) If you are under age 55, the month in which you demonstrated 
your ability to engage in substantial gainful activity (following 
completion of a trial work period); however, we may pay you benefits for 
certain months in and after the reentitlement period which follows the 
trial work period. (See Sec. 404.1592a for a discussion of the 
reentitlement period, and Sec. 404.316 on when your benefits will end.); 
or
    (4) If you are age 55 or older, the month (following completion of a 
trial work period) when your work activity shows you are able to use, in 
substantial gainful activity, skills and abilities comparable to those 
of some gainful activity which you did with some regularity and over a 
substantial period of time. The skills and abilities are compared to the 
activity you did prior to age 55 or prior to becoming blind, whichever 
is later.
    (b) If we find that you are not entitled to disability cash 
benefits. If we find that you are not entitled to disability cash 
benefits on the basis of your work activity but your visual impairment 
is sufficiently severe to meet the definition of blindness, the period 
of disability that we established for you will continue.
    (c) If you do not follow prescribed treatment. If treatment has been 
prescribed for you that can restore your ability to work, you must 
follow that treatment in order to be paid benefits. If you are not 
following that treatment and you do not have a good reason for failing 
to follow that treatment (see Sec. 404.1530(c)), we will find that your 
disability has ended. The month in which your disability will be found 
to have ended will be the first month in which you failed to follow the 
prescribed treatment.
    (d) If you do not cooperate with us. If we ask you to give us 
medical or other evidence or to go for a medical examination by a 
certain date, we will find that your disability has ended if you fail, 
without good cause, to do what we ask. Section 404.911 explains the 
factors we consider and how we will determine generally whether you have 
good cause for failure to cooperate. In addition, Sec. 404.1518 
discusses how we determine whether you have good cause for failing to 
attend a consultative examination. The month in which your disability 
will be found to have ended will be the month in which you failed to do 
what we asked.
    (e) If we are unable to find you. If there is a question about 
whether you continue to be disabled by blindness and we are unable to 
find you to resolve the question, we will find that your disability, has 
ended. The month it ends will be the first month in which the question 
arose and we could not find you.
    (f) Before we stop your benefits. Before we stop your benefits or 
period of disability, we will give you a chance to give us your reasons 
why we should not stop your benefits or your period of disability. 
Section 404.1595 describes your rights and the procedures we will 
follow.
    (g) If you are in an appropriate program of vocational 
rehabilitation services, employment services, or other support services. 
(1) Your benefits, and those of your dependents, may be continued after 
your impairment is no longer disabling if--
    (i) You are participating in an appropriate program of vocational 
rehabilitation services, employment services, or other support services, 
as described in Sec. 404.327(a) and (b);
    (ii) You began participating in the program before the date your 
disability ended; and
    (iii) We have determined under Sec. 404.328 that your completion of 
the program, or your continuation in the program for a specified period 
of time, will increase the likelihood that you will not have to return 
to the disability benefit rolls.
    (2) We generally will stop your benefits with the earliest of these 
months--
    (i) The month in which you complete the program; or
    (ii) The month in which you stop participating in the program for 
any reason (see Sec. 404.327(b) for what we mean by ``participating'' in 
the program); or
    (iii) The month in which we determine under Sec. 404.328 that your 
continuing participation in the program will no longer increase the 
likelihood that you will not have to return to the disability benefit 
rolls.
    Exception to paragraph (d): In no case will we stop your benefits 
with a month earlier than the second month

[[Page 430]]

after the month your disability ends, provided that you meet all other 
requirements for entitlement to and payment of benefits through such 
month.

[45 FR 55584, Aug. 20, 1980, as amended at 47 FR 31543, July 21, 1982; 
47 FR 52693, Nov. 23, 1982; 49 FR 22272, May 29, 1984; 50 FR 50130, Dec. 
6, 1985; 51 FR 17617, May 14, 1986; 59 FR 1635, Jan. 12, 1994; 70 FR 
36507, June 24, 2005]



Sec. 404.1587  Circumstances under which we may suspend and terminate
your benefits before we make a determination.

    (a) We will suspend your benefits if you are not disabled. We will 
suspend your benefits if all of the information we have clearly shows 
that you are not disabled and we will be unable to complete a 
determination soon enough to prevent us from paying you more monthly 
benefits than you are entitled to. This may occur when you are blind as 
defined in the law and age 55 or older and you have returned to work 
similar to work you previously performed.
    (b) We will suspend your benefits if you fail to comply with our 
request for necessary information. We will suspend your benefits 
effective with the month in which it is determined in accordance with 
Sec. 404.1596(b)(2)(i) that your disability benefits should stop due to 
your failure, without good cause (see Sec. 404.911), to comply with our 
request for necessary information. When we have received the 
information, we will reinstate your benefits for any previous month for 
which they are otherwise payable, and continue with the CDR process.
    (c) We will terminate your benefits. We will terminate your benefits 
following 12 consecutive months of benefit suspension because you did 
not comply with our request for information in accordance with 
Sec. 404.1596(b)(2)(i). We will count the 12-month suspension period 
from the start of the first month that you stopped receiving benefits 
(see paragraph (b) of this section). This termination is effective with 
the start of the 13th month after the suspension began because you 
failed to cooperate.

[71 FR 60822, Oct. 17, 2006]

                    Continuing or Stopping Disability



Sec. 404.1588  Your responsibility to tell us of events that may 
change your disability status.

    (a) Your responsibility to report changes to us. If you are entitled 
to cash benefits or to a period of disability because you are disabled, 
you should promptly tell us if--
    (1) Your condition improves;
    (2) You return to work;
    (3) You increase the amount of your work; or
    (4) Your earnings increase.
    (b) Our responsibility when you report your work to us. When you or 
your representative report changes in your work activity to us under 
paragraphs (a)(2), (a)(3), and (a)(4) of this section, we will issue a 
receipt to you or your representative at least until a centralized 
computer file that records the information that you give us and the date 
that you make your report is in place. Once the centralized computer 
file is in place, we will continue to issue receipts to you or your 
representative if you request us to do so.

[71 FR 66866, Nov. 17, 2006]



Sec. 404.1589  We may conduct a review to find out whether you continue
to be disabled.

    After we find that you are disabled, we must evaluate your 
impairment(s) from time to time to determine if you are still eligible 
for disability cash benefits. We call this evaluation a continuing 
disability review. We may begin a continuing disability review for any 
number of reasons including your failure to follow the provisions of the 
Social Security Act or these regulations. When we begin such a review, 
we will notify you that we are reviewing your eligibility for disability 
benefits, why we are reviewing your eligibility, that in medical reviews 
the medical improvement review standard will apply, that our review 
could result in the termination of your benefits, and that you have the 
right to submit medical and other evidence for our consideration during 
the continuing disability review. In doing a medical review, we will 
develop a complete medical history of at least the preceding 12

[[Page 431]]

months in any case in which a determination is made that you are no 
longer under a disability. If this review shows that we should stop 
payment of your benefits, we will notify you in writing and give you an 
opportunity to appeal. In Sec. 404.1590 we describe those events that 
may prompt us to review whether you continue to be disabled.

[51 FR 16825, May 7, 1986]



Sec. 404.1590  When and how often we will conduct a continuing 
disability review.

    (a) General. We conduct continuing disability reviews to determine 
whether or not you continue to meet the disability requirements of the 
law. Payment of cash benefits or a period of disability ends if the 
medical or other evidence shows that you are not disabled as determined 
under the standards set out in section 223(f) of the Social Security 
Act. In paragraphs (b) through (g) of this section, we explain when and 
how often we conduct continuing disability reviews for most individuals. 
In paragraph (h) of this section, we explain special rules for some 
individuals who are participating in the Ticket to Work program. In 
paragraph (i) of this section, we explain special rules for some 
individuals who work.
    (b) When we will conduct a continuing disability review. Except as 
provided in paragraphs (h) and (i) of this section, we will start a 
continuing disability review if--
    (1) You have been scheduled for a medical improvement expected diary 
review;
    (2) You have been scheduled for a periodic review (medical 
improvement possible or medical improvement not expected) in accordance 
with the provisions of paragraph (d) of this section;
    (3) We need a current medical or other report to see if your 
disability continues. (This could happen when, for example, an advance 
in medical technology, such as improved treatment for Alzheimer's 
disease or a change in vocational therapy or technology raises a 
disability issue.);
    (4) You return to work and successfully complete a period of trial 
work;
    (5) Substantial earnings are reported to your wage record;
    (6) You tell us that--
    (i) You have recovered from your disability; or
    (ii) You have returned to work;
    (7) Your State Vocational Rehabilitation Agency tells us that--
    (i) The services have been completed; or
    (ii) You are now working; or
    (iii) You are able to work;
    (8) Someone in a position to know of your physical or mental 
condition tells us any of the following, and it appears that the report 
could be substantially correct:
    (i) You are not disabled; or
    (ii) You are not following prescribed treatment; or
    (iii) You have returned to work; or
    (iv) You are failing to follow the provisions of the Social Security 
Act or these regulations;
    (9) Evidence we receive raises a question as to whether your 
disability continues; or
    (10) You have been scheduled for a vocational reexamination diary 
review.
    (c) Definitions. As used in this section--
    Medical improvement expected diary--refers to a case which is 
scheduled for review at a later date because the individual's 
impairment(s) is expected to improve. Generally, the diary period is set 
for not less than 6 months or for not more than 18 months. Examples of 
cases likely to be scheduled for medical improvement expected diary are 
fractures and cases in which corrective surgery is planned and recovery 
can be anticipated.
    Permanent impairment--medical improvement not expected--refers to a 
case in which any medical improvement in the person's impairment(s) is 
not expected. This means an extremely severe condition determined on the 
basis of our experience in administering the disability programs to be 
at least static, but more likely to be progressively disabling either by 
itself or by reason of impairment complications, and unlikely to improve 
so as to permit the individual to engage in substantial gainful 
activity. The interaction of the individual's age, impairment 
consequences and lack of recent attachment to the labor market may also 
be considered in determining whether an impairment is permanent.

[[Page 432]]

Improvement which is considered temporary under Sec. 404.1579(c)(4) or 
Sec. 404.1594(c)(3)(iv), as appropriate, will not be considered in 
deciding if an impairment is permanent. Examples of permanent 
impairments taken from the list contained in our other written 
guidelines which are available for public review are as follows and are 
not intended to be all inclusive:
    (1) Parkinsonian Syndrome which has reached the level of severity 
necessary to meet the Listing in appendix 1.
    (2) Amyotrophic Lateral Sclerosis which has reached the level of 
severity necessary to meet the Listing in appendix 1.
    (3) Diffuse pulmonary fibrosis in an individual age 55 or over which 
has reached the level of severity necessary to meet the Listing in 
appendix 1.
    (4) Amputation of leg at hip.
    Nonpermanent impairment--refers to a case in which any medical 
improvement in the person's impairment(s) is possible. This means an 
impairment for which improvement cannot be predicted based on current 
experience and the facts of the particular case but which is not at the 
level of severity of an impairment that is considered permanent. 
Examples of nonpermanent impairments are: regional enteritis, 
hyperthyroidism, and chronic ulcerative colitis.
    Vocational reexamination diary--refers to a case which is scheduled 
for review at a later date because the individual is undergoing 
vocational therapy, training or an educational program which may improve 
his or her ability to work so that the disability requirement of the law 
is no longer met. Generally, the diary period will be set for the length 
of the training, therapy, or program of education.
    (d) Frequency of review. If your impairment is expected to improve, 
generally we will review your continuing eligibility for disability 
benefits at intervals from 6 months to 18 months following our most 
recent decision. Our notice to you about the review of your case will 
tell you more precisely when the review will be conducted. If your 
disability is not considered permanent but is such that any medical 
improvement in your impairment(s) cannot be accurately predicted, we 
will review your continuing eligibility for disability benefits at least 
once every 3 years. If your disability is considered permanent, we will 
review your continuing eligibility for benefits no less frequently than 
once every 7 years but no more frequently than once every 5 years. 
Regardless of your classification, we will conduct an immediate 
continuing disability review if a question of continuing disability is 
raised pursuant to paragraph (b) of this section.
    (e) Change in classification of impairment. If the evidence 
developed during a continuing disability review demonstrates that your 
impairment has improved, is expected to improve, or has worsened since 
the last review, we may reclassify your impairment to reflect this 
change in severity. A change in the classification of your impairment 
will change the frequency with which we will review your case. We may 
also reclassify certain impairments because of improved tests, 
treatment, and other technical advances concerning those impairments.
    (f) Review after administrative appeal. If you were found eligible 
to receive or to continue to receive disability benefits on the basis of 
a decision by an administrative law judge, the Appeals Council or a 
Federal court, we will not conduct a continuing disability review 
earlier than 3 years after that decision unless your case should be 
scheduled for a medical improvement expected or vocational reexamination 
diary review or a question of continuing disability is raised pursuant 
to paragraph (b) of this section.
    (g) Waiver of timeframes. All cases involving a nonpermanent 
impairment will be reviewed by us at least once every 3 years unless we, 
after consultation with the State agency, determine that the requirement 
should be waived to ensure that only the appropriate number of cases are 
reviewed. The appropriate number of cases to be reviewed is to be based 
on such considerations as the backlog of pending reviews, the projected 
number of new applications, and projected staffing levels. Such waiver 
shall be given only after good faith effort on the part of

[[Page 433]]

the State to meet staffing requirements and to process the reviews on a 
timely basis. Availability of independent medical resources may also be 
a factor. A waiver in this context refers to our administrative 
discretion to determine the appropriate number of cases to be reviewed 
on a State by State basis. Therefore, your continuing disability review 
may be delayed longer than 3 years following our original decision or 
other review under certain circumstances. Such a delay would be based on 
our need to ensure that backlogs, reviews required to be performed by 
the Social Security Disability Benefits Reform Act of 1984 (Pub. L. 98-
460), and new disability claims workloads are accomplished within 
available medical and other resources in the State agency and that such 
reviews are done carefully and accurately.
    (h) If you are participating in the Ticket to Work program. If you 
are participating in the Ticket to Work program, we will not start a 
continuing disability review during the period in which you are using a 
ticket. However, this provision does not apply to reviews we conduct 
using the rules in Secs. 404.1571-404.1576 to determine whether the work 
you have done shows that you are able to do substantial gainful activity 
and are, therefore, no longer disabled. See subpart C of part 411 of 
this chapter.
    (i) If you are working and have received social security disability 
benefits for at least 24 months--(1) General. Notwithstanding the 
provisions in paragraphs (b)(4), (b)(5), (b)(6)(ii), (b)(7)(ii), and 
(b)(8)(iii) of this section, we will not start a continuing disability 
review based solely on your work activity if--
    (i) You are currently entitled to disability insurance benefits as a 
disabled worker, child's insurance benefits based on disability, or 
widow's or widower's insurance benefits based on disability; and
    (ii) You have received such benefits for at least 24 months (see 
paragraph (i)(2) of this section).
    (2) The 24-month requirement. (i) The months for which you have 
actually received disability insurance benefits as a disabled worker, 
child's insurance benefits based on disability, or widow's or widower's 
insurance benefits based on disability that you were due, or for which 
you have constructively received such benefits, will count for the 24-
month requirement under paragraph (i)(1)(ii) of this section, regardless 
of whether the months were consecutive. We will consider you to have 
constructively received a benefit for a month for purposes of the 24-
month requirement if you were otherwise due a social security disability 
benefit for that month and your monthly benefit was withheld to recover 
an overpayment. Any month for which you were entitled to benefits but 
for which you did not actually or constructively receive a benefit 
payment will not be counted for the 24-month requirement. Months for 
which your social security disability benefits are continued under 
Sec. 404.1597a pending reconsideration and/or a hearing before an 
administrative law judge on a medical cessation determination will not 
be counted for the 24-month requirement. If you also receive 
supplemental security income payments based on disability or blindness 
under title XVI of the Social Security Act, months for which you 
received only supplemental security income payments will not be counted 
for the 24-month requirement.
    (ii) In determining whether paragraph (i)(1) of this section 
applies, we consider whether you have received disability insurance 
benefits as a disabled worker, child's insurance benefits based on 
disability, or widow's or widower's insurance benefits based on 
disability for at least 24 months as of the date on which we start a 
continuing disability review. For purposes of this provision, the date 
on which we start a continuing disability review is the date on the 
notice we send you that tells you that we are beginning to review your 
disability case.
    (3) When we may start a continuing disability review even if you 
have received social security disability benefits for at least 24 
months. Even if you meet the requirements of paragraph (i)(1) of this 
section, we may still start a continuing disability review for a 
reason(s) other than your work activity. We may start a continuing 
disability review if we have scheduled you for a periodic review of your 
continuing disability, we

[[Page 434]]

need a current medical or other report to see if your disability 
continues, we receive evidence which raises a question as to whether 
your disability continues, or you fail to follow the provisions of the 
Social Security Act or these regulations. For example, we will start a 
continuing disability review when you have been scheduled for a medical 
improvement expected diary review, and we may start a continuing 
disability review if you failed to report your work to us.
    (4) Reviews to determine whether the work you have done shows that 
you are able to do substantial gainful activity. Paragraph (i)(1) of 
this section does not apply to reviews we conduct using the rules in 
Secs. 404.1571-404.1576 to determine whether the work you have done 
shows that you are able to do substantial gainful activity and are, 
therefore, no longer disabled.
    (5) Erroneous start of the continuing disability review. If we start 
a continuing disability review based solely on your work activity that 
results in a medical cessation determination, we will vacate the medical 
cessation determination if--
    (i) You provide us evidence that establishes that you met the 
requirements of paragraph (i)(1) of this section as of the date of the 
start of your continuing disability review and that the start of the 
review was erroneous; and
    (ii) We receive the evidence within 12 months of the date of the 
notice of the initial determination of medical cessation.

[51 FR 16825, May 7, 1986, as amended at 71 FR 66856, Nov. 17, 2006]



Sec. 404.1591  If your medical recovery was expected and you returned
to work.

    If your impairment was expected to improve and you returned to full-
time work with no significant medical limitations and acknowledge that 
medical improvement has occurred, we may find that your disability ended 
in the month you returned to work. Unless there is evidence showing that 
your disability has not ended, we will use the medical and other 
evidence already in your file and the fact that you returned to full-
time work without significant limitations to determine that you are no 
longer disabled. (If your impairment is not expected to improve, we will 
not ordinarily review your claim until the end of the trial work period, 
as described in Sec. 404.1592.)

    Example: Evidence obtained during the processing of your claim 
showed that you had an impairment that was expected to improve about 18 
months after your disability began. We, therefore, told you that your 
claim would be reviewed again at that time. However, before the time 
arrived for your scheduled medical re-examination, you told us that you 
had returned to work and your impairment had improved. We investigated 
immediately and found that, in the 16th month after your disability 
began, you returned to full-time work without any significant medical 
restrictions. Therefore, we would find that your disability ended in the 
first month you returned to full-time work.

[50 FR 50130, Dec. 6, 1985]



Sec. 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.
    (b) What we mean by services. When used in this section, services 
means any activity (whether legal or illegal), even though it is not 
substantial gainful activity, which is done in employment or self-
employment for pay or profit, or is the kind normally done for pay or 
profit. We generally do not consider work done without remuneration to 
be services if it is done merely as therapy or training or if it is work 
usually done in a daily routine around the house or in self-care. We 
will not consider work you have done as a volunteer in the federal 
programs described in section 404.1574(d) in determining whether you

[[Page 435]]

have performed services in the trial work period.
    (1) If you are an employee. We will consider your work as an 
employee to be services if:
    (i) Before January 1, 2002, your earnings in a month were more than 
the amount(s) indicated in Table 1 for the year(s) in which you worked.
    (ii) Beginning January 1, 2002, your earnings in a month are more 
than an amount determined for each calendar year to be the larger of:
    (A) Such amount for the previous year, or
    (B) An amount adjusted for national wage growth, calculated by 
multiplying $530 by the ratio of the national average wage index for the 
year 2 calendar years before the year for which the amount is being 
calculated to the national average wage index for 1999. We will then 
round the resulting amount to the next higher multiple of $10 where such 
amount is a multiple of $5 but not of $10 and to the nearest multiple of 
$10 in any other case.
    (2) If you are self-employed. We will consider your activities as a 
self-employed person to be services if:
    (i) Before January 1, 2002, your net earnings in a month were more 
than the amount(s) indicated in Table 2 of this section for the year(s) 
in which you worked, or the hours you worked in the business in a month 
are more than the number of hours per month indicated in Table 2 for the 
years in which you worked.
    (ii) Beginning January 1, 2002, you work more than 80 hours a month 
in the business, or your net earnings in a month are more than an amount 
determined for each calendar year to be the larger of:
    (A) Such amount for the previous year, or
    (B) An amount adjusted for national wage growth, calculated by 
multiplying $530 by the ratio of the national average wage index for the 
year 2 calendar years before the year for which the amount is being 
calculated to the national average wage index for 1999. We will then 
round the resulting amount to the next higher multiple of $10 where such 
amount is a multiple of $5 but not of $10 and to the nearest multiple of 
$10 in any other case.

                         Table 1--For Employees
------------------------------------------------------------------------
                                                               You earn
                         For months                           more than
------------------------------------------------------------------------
In calendar years before 1979..............................          $50
In calendar years 1979-1989................................           75
In calendar years 1990-2000................................          200
In calendar year 2001......................................          530
------------------------------------------------------------------------


                     Table 2--For the Self-Employed
------------------------------------------------------------------------
                                     Your net
                                     earnings      Or you work in the
            For months               are more      business more than
                                       than
------------------------------------------------------------------------
In calendar years before 1979....          $50  15 hours.
In calendar years 1979-1989......           75  15 hours.
In calendar years 1990-2000......          200  40 hours.
In calendar year 2001............          530  80 hours.
------------------------------------------------------------------------

    (c) Limitations on the number of trial work periods. You may have 
only one trial work period during a period of entitlement to cash 
benefits.
    (d) Who is and is not entitled to a trial work period. (1) You are 
generally entitled to a trial work period if you are entitled to 
disability insurance benefits, child's benefits based on disability, or 
widow's or widower's or surviving divorced spouse's benefits based on 
disability.
    (2) You are not entitled to a trial work period--
    (i) If you are entitled to a period of disability but not to 
disability insurance benefits, and you are not entitled to any other 
type of disability benefit under title II of the Social Security Act 
(i.e., child's benefits based on disability, or widow's or widower's 
benefits or surviving divorced spouse's benefits based on disability);
    (ii) If you perform work demonstrating the ability to engage in 
substantial gainful activity during any required waiting period for 
benefits;

[[Page 436]]

    (iii) 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; or
    (iv) For any month prior to the month of your application for 
disability benefits (see paragraph (e) of this section).
    (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;
    (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 Sec. 404.1594 for information on how we decide whether your 
disability continues or ends.
    (f) Nonpayment of benefits for trial work period service months. See 
Sec. 404.471 for an explanation of when benefits for trial work period 
service months are not payable if you are convicted by a Federal court 
of fraudulently concealing your work activity.

[45 FR 55584, Aug. 20, 1980, as amended at 49 FR 22273, May 29, 1984; 50 
FR 50130, Dec. 6, 1985; 54 FR 53605, Dec. 29, 1989; 65 FR 42787, July 
11, 2000; 65 FR 82910, Dec. 29, 2000; 71 FR 66866, Nov. 17, 2006]



Sec. 404.1592a  The reentitlement period.

    (a) General. The reentitlement period is an additional period after 
9 months of trial work during which you may continue to test your 
ability to work if you have a disabling impairment, as defined in 
Sec. 404.1511. If you work during the reentitlement period, we may 
decide that your disability has ceased because your work is substantial 
gainful activity and stop your benefits. However, if, after the month 
for which we found that your disability ceased because you performed 
substantial gainful activity, you stop engaging in substantial gainful 
activity, we will start paying you benefits again; you will not have to 
file a new application. The following rules apply if you complete a 
trial work period and continue to have a disabling impairment:
    (1) The first time you work after the end of your trial work period 
and engage in substantial gainful activity, we will find that your 
disability ceased. When we decide whether this work is substantial 
gainful activity, we will apply all of the relevant provisions of 
Secs. 404.1571-404.1576 including, but not limited to, the provisions 
for averaging earnings, unsuccessful work attempts, and deducting 
impairment-related work expenses, as well as the special rules for 
evaluating the work you do after you have received disability benefits 
for at least 24 months. We will find that your disability ceased in the 
first month after the end of your trial work period in which you do 
substantial gainful activity, applying all the relevant provisions in 
Secs. 404.1571-404.1576.
    (2)(i) If we determine under paragraph (a)(1) of this section that 
your disability ceased during the reentitlement period because you 
perform substantial gainful activity, you will be paid benefits for the 
first month after the trial work period in which you do substantial 
gainful activity (i.e., the month your disability ceased) and the two 
succeeding months, whether or not

[[Page 437]]

you do substantial gainful activity in those succeeding months. After 
those three months, we will stop your benefits for any month in which 
you do substantial gainful activity. (See Secs. 404.316, 404.337, 
404.352 and 404.401a.) If your benefits are stopped because you do 
substantial gainful activity, they may be started again without a new 
application and a new determination of disability if you stop doing 
substantial gainful activity in a month during the reentitlement period. 
In determining whether you do substantial gainful activity in a month 
for purposes of stopping or starting benefits during the reentitlement 
period, we will consider only your work in, or earnings for, that month. 
Once we have determined that your disability has ceased during the 
reentitlement period because of the performance of substantial gainful 
activity as explained in paragraph (a)(1) of this section, we will not 
apply the provisions of Secs. 404.1574(c) and 404.1575(d) regarding 
unsuccessful work attempts, the provisions of Sec. 404.1574a regarding 
averaging of earnings, or the special rules in Secs. 404.1574(b)(3)(iii) 
and 404.1575(e) for evaluating the work you do after you have received 
disability benefits for at least 24 months, to determine whether 
benefits should be paid for any particular month in the reentitlement 
period that occurs after the month your disability ceased.
    (ii) If anyone else is receiving monthly benefits based on your 
earnings record, that individual will not be paid benefits for any month 
for which you cannot be paid benefits during the reentitlement period.
    (3) The way we will consider your work activity after your 
reentitlement period ends (see paragraph (b)(2) of this section) will 
depend on whether you worked during the reentitlement period and if you 
did substantial gainful activity.
    (i) If you worked during the reentitlement period and we decided 
that your disability ceased during the reentitlement period because of 
your work under paragraph (a)(1) of this section, we will find that your 
entitlement to disability benefits terminates in the first month in 
which you engaged in substantial gainful activity after the end of the 
reentitlement period (see Sec. 404.325). (See Sec. 404.321 for when 
entitlement to a period of disability ends.) When we make this 
determination, we will consider only your work in, or earnings for, that 
month; we will not apply the provisions of Secs. 404.1574(c) and 
404.1575(d) regarding unsuccessful work attempts, the provisions of 
Sec. 404.1574a regarding averaging of earnings, or the special rules in 
Secs. 404.1574(b)(3)(iii) and 404.1575(e) for evaluating the work you do 
after you have received disability benefits for at least 24 months.
    (ii) If we did not find that your disability ceased because of work 
activity during the reentitlement period, we will apply all of the 
relevant provisions of Secs. 404.1571-404.1576 including, but not 
limited to, the provisions for averaging earnings, unsuccessful work 
attempts, and deducting impairment-related work expenses, as well as the 
special rules for evaluating the work you do after you have received 
disability benefits for at least 24 months, to determine whether your 
disability ceased because you performed substantial gainful activity 
after the reentitlement period. If we find that your disability ceased 
because you performed substantial gainful activity in a month after your 
reentitlement period ended, you will be paid benefits for the month in 
which your disability ceased and the two succeeding months. After those 
three months, your entitlement to a period of disability or to 
disability benefits terminates (see Secs. 404.321 and 404.325).
    (b) When the reentitlement period begins and ends. The reentitlement 
period begins with the first month following completion of 9 months of 
trial work but cannot begin earlier than December 1, 1980. It ends with 
whichever is earlier--
    (1) The month before the first month in which your impairment no 
longer exists or is not medically disabling; or
    (2)(i) The last day of the 15th month following the end of your 
trial work period if you were not entitled to benefits after December 
1987; or
    (ii) The last day of the 36th month following the end of your trial 
work period if you were entitled to benefits after December 1987 or if 
the 15-month period described in paragraph (b)(2)(i)

[[Page 438]]

of this section had not ended as of January 1988. (See Secs. 404.316, 
404.337, and 404.352 for when your benefits end.)
    (c) When you are not entitled to a reentitlement period. You are not 
entitled to a reentitlement period if:
    (1) You are entitled to a period of disability, but not to 
disability insurance cash benefits;
    (2) You are not entitled to a trial work period;
    (3) Your entitlement to disability insurance benefits ended before 
you completed 9 months of trial work in that period of disability.

[49 FR 22273, May 29, 1984, as amended at 58 FR 64883, Dec. 10, 1993; 65 
FR 42787, July 11, 2000; 71 FR 66856, Nov. 17, 2006]



Sec. 404.1592b  What is expedited reinstatement?

    The expedited reinstatement provision provides you another option 
for regaining entitlement to benefits when we previously terminated your 
entitlement to disability benefits due to your work activity. The 
expedited reinstatement provision provides you the option of requesting 
that your prior entitlement to disability benefits be reinstated, rather 
than filing a new application for a new period of entitlement. Since 
January 1, 2001, you can request to be reinstated to benefits if you 
stop doing substantial gainful activity within 60 months of your prior 
termination. You must not be able to do substantial gainful activity 
because of your medical condition. Your current impairment must be the 
same as or related to your prior impairment and you must be disabled. To 
determine if you are disabled, we will use our medical improvement 
review standard that we use in our continuing disability review process. 
The advantage of using the medical improvement review standard is that 
we will generally find that you are disabled unless your impairment has 
improved so that you are able to work or unless an exception under the 
medical improvement review standard process applies. We explain the 
rules for expedited reinstatement in Secs. 404.1592c through 404.1592f.

[70 FR 57142, Sept. 30, 2005]



Sec. 404.1592c  Who is entitled to expedited reinstatement?

    (a) You can have your entitlement to benefits reinstated under 
expedited reinstatement if--
    (1) You were previously entitled to a disability benefit on your own 
record of earnings as indicated in Sec. 404.315, or as a disabled widow 
or widower as indicated in Sec. 404.335, or as a disabled child as 
indicated in Sec. 404.350, or to Medicare entitlement based on 
disability and Medicare qualified government employment as indicated in 
42 CFR 406.15;
    (2) Your disability entitlement referred to in paragraph (a)(1) of 
this section was terminated because you did substantial gainful 
activity;
    (3) You file your request for reinstatement timely under 
Sec. 404.1592d; and
    (4) In the month you file your request for reinstatement--
    (i) You are not able to do substantial gainful activity because of 
your medical condition as determined under paragraph (c) of this 
section;
    (ii) Your current impairment is the same as or related to the 
impairment that we used as the basis for your previous entitlement 
referred to in paragraph (a)(2) of this section; and
    (iii) You are disabled, as determined under the medical improvement 
review standard in Secs. 404.1594(a) through (e).
    (b) You are entitled to reinstatement on the record of an insured 
person who is or has been reinstated if--
    (1) You were previously entitled to one of the following benefits on 
the record of the insured person--
    (i) A spouse or divorced spouse benefit under Secs. 404.330 and 
404.331;
    (ii) A child's benefit under Sec. 404.350; or
    (iii) A parent's benefit under Sec. 404.370;
    (2) You were entitled to benefits on the record when we terminated 
the insured person's entitlement;
    (3) You meet the requirements for entitlement to the benefit 
described in the applicable paragraph (b)(1)(i) through (b)(1)(iii) of 
this section; and
    (4) You request to be reinstated.
    (c) We will determine that you are not able to do substantial 
gainful activity because of your medical condition, under paragraph 
(a)(4)(i) of this section, when:
    (1) You certify under Sec. 404.1592d(d)(2) that you are unable to do 
substantial

[[Page 439]]

gainful activity because of your medical condition;
    (2) You do not do substantial gainful activity in the month you file 
your request for reinstatement; and
    (3) We determine that you are disabled under paragraph (a)(4)(iii) 
of this section.

[70 FR 57142, Sept. 30, 2005]

    Effective Date Note: At 81 FR 71369, Oct. 17, 2016, Sec. 404.1592c 
was amended by revising paragraphs (a)(4)(i) and (c)(2), effective Apr. 
17, 2017. For the convenience of the user, the revised text is set forth 
as follows:



Sec. 404.1592c  Who is entitled to expedited reinstatement?

    (a) * * *
    (4) * * *
    (i) You are not able or become unable to do substantial gainful 
activity because of your medical condition as determined under paragraph 
(c) of this section;

                                * * * * *

    (c) * * *
    (2) You are not able or become unable to do substantial gainful 
activity in the month you file your request for reinstatement; and

                                * * * * *



Sec. 404.1592d  How do I request reinstatement?

    (a) You must make your request for reinstatement in writing.
    (b) You must have filed your request on or after January 1, 2001.
    (c) You must provide the information we request so that we can 
determine whether you meet the requirements for reinstatement as 
indicated in Sec. 404.1592c.
    (d) If you request reinstatement under Sec. 404.1592c(a)--
    (1) We must receive your request within the consecutive 60-month 
period that begins with the month in which your entitlement terminated 
due to doing substantial gainful activity. If we receive your request 
after the 60-month period we can grant you an extension if we determine 
you had good cause under the standards explained in Sec. 404.911 for not 
filing the request timely; and
    (2) You must certify that you are disabled, that your current 
impairment(s) is the same as or related to the impairment(s) that we 
used as the basis for the benefit you are requesting to be reinstated, 
and that you are unable to do substantial gainful activity because of 
your medical condition.

[70 FR 57142, Sept. 30, 2005]



Sec. 404.1592e  How do we determine provisional benefits?

    (a) You may receive up to 6 consecutive months of provisional cash 
benefits and Medicare during the provisional benefit period, while we 
determine whether we can reinstate your disability benefit entitlement 
under Sec. 404.1592c--
    (1) We will pay you provisional benefits, and reinstate your 
Medicare if you are not already entitled to Medicare, beginning with the 
month you file your request for reinstatement under Sec. 404.1592c(a) if 
you do not perform substantial gainful activity in that month. We will 
pay you provisional benefits, and reinstate your Medicare if you are not 
already entitled to Medicare, beginning with the month after you file 
your request for reinstatement under Sec. 404.1592c(a) if you perform 
substantial gainful activity in the month in which you file your request 
for reinstatement.
    (2) We will pay you a monthly provisional benefit amount equal to 
the last monthly benefit payable to you during your prior entitlement, 
increased by any cost of living increases that would have been 
applicable to the prior benefit amount under Sec. 404.270. The last 
monthly benefit payable is the amount of the monthly insurance benefit 
we determined that was actually paid to you for the month before the 
month in which your entitlement was terminated, after we applied the 
reduction, deduction and nonpayment provisions in Sec. 404.401 through 
Sec. 404.480.
    (3) If you are entitled to another monthly benefit payable under the 
provisions of title II of the Act for the same month you can be paid a 
provisional benefit, we will pay you an amount equal to the higher of 
the benefits payable.
    (4) If you request reinstatement for more than one benefit 
entitlement, we will pay you an amount equal to the higher of the 
provisional benefits payable.

[[Page 440]]

    (5) If you are eligible for Supplemental Security Income payments, 
including provisional payments, we will reduce your provisional benefits 
under Sec. 404.408b if applicable.
    (6) We will not reduce your provisional benefit, or the payable 
benefit to other individuals entitled on an earnings record, under 
Sec. 404.403, when your provisional benefit causes the total benefits 
payable on the earnings record to exceed the family maximum.
    (b) You cannot receive provisional cash benefits or Medicare a 
second time under this section when--
    (1) You request reinstatement under Sec. 404.1592c(a);
    (2) You previously received provisional cash benefits or Medicare 
under this section based upon a prior request for reinstatement filed 
under Sec. 404.1592c(a); and
    (3) Your requests under paragraphs (b)(1) and (b)(2) are for the 
same previous disability entitlement referred to in 
Sec. 404.1592c(a)(2).
    (4) Examples:

    Example 1: Mr. K files a request for reinstatement in April 2004. 
His disability benefit had previously terminated in January 2003. Since 
Mr. K meets other factors for possible reinstatement (i.e., his prior 
entitlement was terminated within the last 60 months because he was 
engaging in substantial gainful activity), we start paying him 
provisional benefits beginning April 2004 while we determine whether he 
is disabled and whether his current impairment(s) is the same as or 
related to the impairment(s) that we used as the basis for the benefit 
that was terminated in January 2003. In July 2004 we determine that Mr. 
K cannot be reinstated because he is not disabled under the medical 
improvement review standard; therefore we stop his provisional benefits. 
Mr. K does not request review of that determination. In January 2005 Mr. 
K again requests reinstatement on the entitlement that terminated in 
January 2003. Since this request meets all the factors for possible 
reinstatement, and his request is still within 60 months from January 
2003, we will make a new determination on whether he is disabled and 
whether his current impairment(s) is the same as or related to the 
impairment(s) that we used as the basis for the benefit that was 
terminated in January 2003. Since the January 2005 request and the April 
2004 request both request reinstatement on the same entitlement that 
terminated in January 2003, and since we already paid Mr. K provisional 
benefits based upon the April 2004 request, we will not pay additional 
provisional benefits on the January 2005 request for reinstatement.
    Example 2: Assume the same facts as shown in Example 1 of this 
section, with the addition of these facts. We approve Mr. K's January 
2005 request for reinstatement and start his reinstated benefits 
beginning January 2005. Mr. K subsequently returns to work and his 
benefits are again terminated due to engaging in substantial gainful 
activity in January 2012. Mr. K must again stop work and requests 
reinstatement in January 2015. Since Mr. K meets other factors for 
possible reinstatement (i.e., his prior entitlement was terminated 
within the last 60 months because he was engaging in substantial gainful 
activity) we start paying him provisional benefits beginning January 
2015 while we determine whether he is disabled and whether his current 
impairment(s) is the same as or related to the impairment(s) that we 
used as the basis for the benefit that was terminated in January 2012.

    (c) We will not pay you a provisional benefit for a month when an 
applicable nonpayment rule applies. Examples of when we will not pay a 
benefit include, but are not limited to--
    (1) If you are a prisoner under Sec. 404.468;
    (2) If you have been removed/deported under Sec. 404.464; or
    (3) If you are an alien outside the United States under 
Sec. 404.460.
    (d) We will not pay you a provisional benefit for any month that is 
after the earliest of the following months--
    (1) The month we send you a notice of our determination on your 
request for reinstatement;
    (2) The month you do substantial gainful activity;
    (3) The month before the month you attain full retirement age; or
    (4) The fifth month following the month you requested expedited 
reinstatement.
    (e) You are not entitled to provisional benefits if--
    (1) Prior to starting your provisional benefits, we determine that 
you do not meet the requirements for reinstatement under 
Secs. 404.1592c(a); or
    (2) We determine that your statements on your request for 
reinstatement, made under Sec. 404.1592d(d)(2), are false.
    (f) Determinations we make regarding your provisional benefits under

[[Page 441]]

paragraphs (a) through (e) of this section are final and are not subject 
to administrative and judicial review under subpart J of part 404.
    (g) If you were previously overpaid benefits under title II or title 
XVI of the Act, we will not recover the overpayment from your 
provisional benefits unless you give us permission. We can recover 
Medicare premiums you owe from your provisional benefits.
    (h) If we determine you are not entitled to reinstated benefits, 
provisional benefits we have already paid you under this section that 
were made prior to the termination month under paragraph (d) of this 
section will not be subject to recovery as an overpayment unless we 
determine that you knew, or should have known, you did not meet the 
requirements for reinstatement in Sec. 404.1592c. If we inadvertently 
pay you provisional benefits when you are not entitled to them because 
we have already made a determination described in paragraph (e) of this 
section, they will be subject to recover as an overpayment under subpart 
F of part 404.

[70 FR 57142, Sept. 30, 2005, as amended at 81 FR 71369, Oct. 17, 2016]



Sec. 404.1592f  How do we determine reinstated benefits?

    (a) If you meet the requirements for reinstatement under 
Sec. 404.1592c(a), we will then consider in which month to reinstate 
your entitlement. We will reinstate your entitlement with the earliest 
month, in the 12-month period that ends with the month before you filed 
your request for reinstatement, that you would have met all of the 
requirements under Sec. 404.1592c(a) if you had filed your request for 
reinstatement in that month. Otherwise, you will be entitled to 
reinstated benefits beginning with the month in which you filed your 
request for such benefits. We cannot reinstate your entitlement for any 
month prior to January 2001.
    (b) When your entitlement is reinstated, you are also entitled to 
Medicare benefits under the provisions of 42 CFR part 406.
    (c) We will compute your reinstated benefit amount and determine 
benefits payable under the applicable paragraphs of Secs. 404.201 
through 404.480 with certain exceptions--
    (1) We will reduce your reinstated benefit due in a month by the 
amount of the provisional benefit we already paid you for that month. If 
your provisional benefit paid for a month exceeds the reinstated 
benefit, we will treat the difference as an overpayment under 
Secs. 404.501 through 404.527.
    (2) If you are reinstated on your own earnings record, we will 
compute your primary insurance amount with the same date of onset we 
used in your most recent period of disability on your earnings record.
    (d) We will not pay you reinstated benefits for any months of 
substantial gainful activity during your initial reinstatement period. 
During the initial reinstatement period, the trial work period 
provisions of Sec. 404.1592 and the reentitlement period provisions of 
Sec. 404.1592a do not apply. The initial reinstatement period begins 
with the month your reinstated benefits begin under paragraph (a) of 
this section and ends when you have had 24 payable months of reinstated 
benefits. We consider you to have a payable month for the purposes of 
this paragraph when you do not do substantial gainful activity in that 
month and when the non-payment provisions in subpart E of part 404 also 
do not apply. If the amount of the provisional benefit already paid you 
for a month equals or exceeds the amount of the reinstated benefit 
payable for that month so that no additional payment is due, we will 
consider that month a payable month. When we determine if you have done 
substantial gainful activity in a month during the initial reinstatement 
period, we will consider only your work in, or earnings for, that month. 
We will not apply the unsuccessful work attempt provisions of 
Secs. 404.1574(c) and 404.1575(d) or the averaging of earnings 
provisions in Sec. 404.1574a.
    (e) After you complete the 24-month initial reinstatement period as 
indicated in paragraph (d) of this section, your subsequent work will be 
evaluated under the trial work provisions in Sec. 404.1592 and then the 
reentitlement period in Sec. 404.1592a.
    (f) Your entitlement to reinstated benefits ends with the month 
before the earliest of the following months--

[[Page 442]]

    (1) The month an applicable terminating event in Sec. 404.301 
through 404.389 occurs;
    (2) The month in which you reach retirement age;
    (3) The third month following the month in which your disability 
ceases; or
    (4) The month in which you die.
    (g) Determinations we make under Secs. 404.1592f are initial 
determinations under Sec. 404.902 and subject to review under subpart J 
of part 404.
    (h) If we determine you are not entitled to reinstated benefits we 
will consider your request filed under Sec. 404.1592c(a) your intent to 
claim benefits under Sec. 404.630.

[70 FR 57142, Sept. 30, 2005]

    Effective Date Note: At 82 FR 7648, Jan. 23, 2017, Sec. 404.1592f 
was amended by revising paragraph (a), effective Apr. 17, 2017. For the 
convenience of the user, the revised text is set forth as follows:



Sec. 404.1592f  How do we determine reinstated benefits?

    (a) If you meet the requirements for reinstatement under 
Sec. 404.1592c(a), we will then consider in which month to reinstate 
your entitlement. We will reinstate your entitlement with the earliest 
month, in the 12-month period that ends with the month before you filed 
your request for reinstatement, that you would have met all of the 
requirements under Sec. 404.1592c(a) if you had filed your request for 
reinstatement in that month. Otherwise, you will be entitled to 
reinstated benefits beginning with the month in which you filed your 
request for such benefits if you did not perform substantial gainful 
activity in that month. If you performed substantial gainful activity in 
the month of filing, but are no longer able to perform substantial 
gainful activity, we will reinstate your benefits with the month after 
the month you filed your request for reinstatement. We cannot reinstate 
your entitlement for any month prior to January 2001.

                                * * * * *



Sec. 404.1593  Medical evidence in continuing disability review cases.

    (a) General. If you are entitled to benefits or if a period of 
disability has been established for you because you are disabled, we 
will have your case file with the supporting medical evidence previously 
used to establish or continue your entitlement. Generally, therefore, 
the medical evidence we will need for a continuing disability review 
will be that required to make a current determination or decision as to 
whether you are still disabled, as defined under the medical improvement 
review standard. See Secs. 404.1579 and 404.1594.
    (b) Obtaining evidence from your medical sources. You must provide 
us with reports from your physician, psychologist, or others who have 
treated or evaluated you, as well as any other evidence that will help 
us determine if you are still disabled. See Sec. 404.1512. You must have 
a good reason for not giving us this information or we may find that 
your disability has ended. See Sec. 404.1594(e)(2). If we ask you, you 
must contact your medical sources to help us get the medical reports. We 
will make every reasonable effort to help you in getting medical reports 
when you give us permission to request them from your physician, 
psychologist, or other medical sources. See Sec. 404.1512(d)(1) 
concerning what we mean by every reasonable effort. In some instances, 
such as when a source is known to be unable to provide certain tests or 
procedures or is known to be nonproductive or uncooperative, we may 
order a consultative examination while awaiting receipt of medical 
source evidence. Before deciding that your disability has ended, we will 
develop a complete medical history covering at least the 12 months 
preceding the date you sign a report about your continuing disability 
status. See Sec. 404.1512(c).
    (c) When we will purchase a consultative examination. A consultative 
examination may be purchased when we need additional evidence to 
determine whether or not your disability continues. As a result, we may 
ask you, upon our request and reasonable notice, to undergo consultative 
examinations and tests to help us determine if you are still disabled. 
See Sec. 404.1517. We will decide whether or not to purchase a 
consultative examination in accordance with the standards in 
Secs. 404.1519a through 404.1519b.

[56 FR 36962, Aug. 1, 1991]

[[Page 443]]



Sec. 404.1594  How we will determine whether your disability
continues or ends.

    (a) General. There is a statutory requirement that, if you are 
entitled to disability benefits, your continued entitlement to such 
benefits must be reviewed periodically. If you are entitled to 
disability benefits as a disabled worker or as a person disabled since 
childhood, or, for monthly benefits payable for months after December 
1990, as a disabled widow, widower, or surviving divorced spouse, there 
are a number of factors we consider in deciding whether your disability 
continues. We must determine if there has been any medical improvement 
in your impairment(s) and, if so, whether this medical improvement is 
related to your ability to work. If your impairment(s) has not medically 
improved we must consider whether one or more of the exceptions to 
medical improvement applies. If medical improvement related to your 
ability to work has not occurred and no exception applies, your benefits 
will continue. Even where medical improvement related to your ability to 
work has occurred or an exception applies, in most cases (see paragraph 
(e) of this section for exceptions), we must also show that you are 
currently able to engage in substantial gainful activity before we can 
find that you are no longer disabled.
    (b) Terms and definitions. There are several terms and definitions 
which are important to know in order to understand how we review whether 
your disability continues. In addition, see paragraph (i) of this 
section if you work during your current period of entitlement based on 
disability or during certain other periods.
    (1) Medical improvement. Medical improvement is any decrease in the 
medical severity of your impairment(s) which was present at the time of 
the most recent favorable medical decision that you were disabled or 
continued to be disabled. A determination that there has been a decrease 
in medical severity must be based on improvement in the symptoms, signs, 
and/or laboratory findings associated with your impairment(s).

    Example 1: You were awarded disability benefits due to a herniated 
nucleus pulposus. At the time of our prior decision granting you 
benefits you had had a laminectomy. Postoperatively, a myelogram still 
shows evidence of a persistent deficit in your lumbar spine. You had 
pain in your back, and pain and a burning sensation in your right foot 
and leg. There were no muscle weakness or neurological changes and a 
modest decrease in motion in your back and leg. When we reviewed your 
claim, your medical source, who has treated you, reported that he or she 
had seen you regularly every 2 to 3 months for the past 2 years. No 
further myelograms had been done, complaints of pain in the back and 
right leg continued especially on sitting or standing for more than a 
short period of time. Your doctor further reported a moderately 
decreased range of motion in your back and right leg, but again no 
muscle atrophy or neurological changes were reported. Medical 
improvement has not occurred because there has been no decrease in the 
severity of your back impairment as shown by changes in symptoms, signs 
or laboratory findings.
    Example 2: You were awarded disability benefits due to rheumatoid 
arthritis. At the time, laboratory findings were positive for this 
condition. Your doctor reported persistent swelling and tenderness of 
your fingers and wrists and that you complained of joint pain. Current 
medical evidence shows that while laboratory tests are still positive 
for rheumatoid arthritis, your impairment has responded favorably to 
therapy so that for the last year your fingers and wrists have not been 
significantly swollen or painful. Medical improvement has occurred 
because there has been a decrease in the severity of your impairment as 
documented by the current symptoms and signs reported by your physician. 
Although your impairment is subject to temporary remission and 
exacerbations, the improvement that has occurred has been sustained long 
enough to permit a finding of medical improvement. We would then 
determine if this medical improvement is related to your ability to 
work.

    (2) Medical improvement not related to ability to do work. Medical 
improvement is not related to your ability to work if there has been a 
decrease in the severity of the impairment(s) as defined in paragraph 
(b)(1) of this section, present at the time of the most recent favorable 
medical decision, but no increase in your functional capacity to do 
basic work activities as defined in paragraph (b)(4) of this section. If 
there has been any medical improvement in your impairment(s), but it is 
not related to your ability to do work and none of the exceptions 
applies, your benefits will be continued.


[[Page 444]]


    Example: You are 65 inches tall and weighed 246 pounds at the time 
your disability was established. You had venous insufficiency and 
persistent edema in your legs. At the time, your ability to do basic 
work activities was affected because you were able to sit for 6 hours, 
but were able to stand or walk only occasionally. At the time of our 
continuing disability review, you had undergone a vein stripping 
operation. You now weigh 220 pounds and have intermittent edema. You are 
still able to sit for 6 hours at a time and to stand or walk only 
occasionally although you report less discomfort on walking. Medical 
improvement has occurred because there has been a decrease in the 
severity of the existing impairment as shown by your weight loss and the 
improvement in your edema. This medical improvement is not related to 
your ability to work, however, because your functional capacity to do 
basic work activities (i.e., the ability to sit, stand and walk) has not 
increased.

    (3) Medical improvement that is related to ability to do work. 
Medical improvement is related to your ability to work if there has been 
a decrease in the severity, as defined in paragraph (b)(1) of this 
section, of the impairment(s) present at the time of the most recent 
favorable medical decision and an increase in your functional capacity 
to do basic work activities as discussed in paragraph (b)(4) of this 
section. A determination that medical improvement related to your 
ability to do work has occurred does not, necessarily, mean that your 
disability will be found to have ended unless it is also shown that you 
are currently able to engage in substantial gainful activity as 
discussed in paragraph (b)(5) of this section.

    Example 1: You have a back impairment and had a laminectomy to 
relieve the nerve root impingement and weakness in your left leg. At the 
time of our prior decision, basic work activities were affected because 
you were able to stand less than 6 hours, and sit no more than \1/2\ 
hour at a time. You had a successful fusion operation on your back about 
1 year before our review of your entitlement. At the time of our review, 
the weakness in your leg has decreased. Your functional capacity to 
perform basic work activities now is unimpaired because you now have no 
limitation on your ability to sit, walk, or stand. Medical improvement 
has occurred because there has been a decrease in the severity of your 
impairment as demonstrated by the decreased weakness in your leg. This 
medical improvement is related to your ability to work because there has 
also been an increase in your functional capacity to perform basic work 
activities (or residual functional capacity) as shown by the absence of 
limitation on your ability to sit, walk, or stand. Whether or not your 
disability is found to have ended, however, will depend on our 
determination as to whether you can currently engage in substantial 
gainful activity.
    Example 2: You were injured in an automobile accident receiving a 
compound fracture to your right femur and a fractured pelvis. When you 
applied for disability benefits 10 months after the accident your doctor 
reported that neither fracture had yet achieved solid union based on his 
clinical examination. X-rays supported this finding. Your doctor 
estimated that solid union and a subsequent return to full weight 
bearing would not occur for at least 3 more months. At the time of our 
review 6 months later, solid union had occurred and you had been 
returned to full weight-bearing for over a month. Your doctor reported 
this and the fact that your prior fractures no longer placed any 
limitation on your ability to walk, stand, lift, etc., and, that in 
fact, you could return to fulltime work if you so desired.
    Medical improvement has occurred because there has been a decrease 
in the severity of your impairments as shown by X-ray and clinical 
evidence of solid union and your return to full weight-bearing. This 
medical improvement is related to your ability to work because you no 
longer meet the same listed impairment in appendix 1 of this subpart 
(see paragraph (c)(3)(i) of this section). In fact, you no longer have 
an impairment which is severe (see Sec. 404.1521) and your disability 
will be found to have ended.

    (4) Functional capacity to do basic work activities. Under the law, 
disability is defined, in part, as the inability to do any substantial 
gainful activity by reason of any medically determinable physical or 
mental impairment(s). In determining whether you are disabled under the 
law, we must measure, therefore, how and to what extent your 
impairment(s) has affected your ability to do work. We do this by 
looking at how your functional capacity for doing basic work activities 
has been affected. Basic work activities means the abilities and 
aptitudes necessary to do most jobs. Included are exertional abilities 
such as walking, standing, pushing, pulling, reaching and carrying, and 
nonexertional abilities and aptitudes such as seeing, hearing, speaking, 
remembering, using judgment, dealing

[[Page 445]]

with changes and dealing with both supervisors and fellow workers. A 
person who has no impairment(s) would be able to do all basic work 
activities at normal levels; he or she would have an unlimited 
functional capacity to do basic work activities. Depending on its nature 
and severity, an impairment will result in some limitation to the 
functional capacity to do one or more of these basic work activities. 
Diabetes, for example, can result in circulatory problems which could 
limit the length of time a person could stand or walk and damage to his 
or her eyes as well, so that the person also had limited vision. What a 
person can still do despite an impairment, is called his or her residual 
functional capacity. How the residual functional capacity is assessed is 
discussed in more detail in Sec. 404.1545. Unless an impairment is so 
severe that it is deemed to prevent you from doing substantial gainful 
activity (see Secs. 404.1525 and 404.1526), it is this residual 
functional capacity that is used to determine whether you can still do 
your past work or, in conjunction with your age, education and work 
experience, any other work.
    (i) A decrease in the severity of an impairment as measured by 
changes (improvement) in symptoms, signs or laboratory findings can, if 
great enough, result in an increase in the functional capacity to do 
work activities. Vascular surgery (e.g., femoropopliteal bypass) may 
sometimes reduce the severity of the circulatory complications of 
diabetes so that better circulation results and the person can stand or 
walk for longer periods. When new evidence showing a change in signs, 
symptoms and laboratory findings establishes that both medical 
improvement has occurred and your functional capacity to perform basic 
work activities, or residual functional capacity, has increased, we say 
that medical improvement which is related to your ability to do work has 
occurred. A residual functional capacity assessment is also used to 
determine whether you can engage in substantial gainful activity and, 
thus, whether you continue to be disabled (see paragraph (b)(5) of this 
section).
    (ii) Many impairment-related factors must be considered in assessing 
your functional capacity for basic work activities. Age is one key 
factor. Medical literature shows that there is a gradual decrease in 
organ function with age; that major losses and deficits become 
irreversible over time and that maximum exercise performance diminishes 
with age. Other changes related to sustained periods of inactivity and 
the aging process include muscle atrophy, degenerative joint changes, 
decrease in range of motion, and changes in the cardiac and respiratory 
systems which limit the exertional range.
    (iii) Studies have also shown that the longer an individual is away 
from the workplace and is inactive, the more difficult it becomes to 
return to ongoing gainful employment. In addition, a gradual change 
occurs in most jobs so that after about 15 years, it is no longer 
realistic to expect that skills and abilities acquired in these jobs 
will continue to apply to the current workplace. Thus, if you are age 50 
or over and have been receiving disability benefits for a considerable 
period of time, we will consider this factor along with your age in 
assessing your residual functional capacity. This will ensure that the 
disadvantages resulting from inactivity and the aging process during a 
long period of disability will be considered. In some instances where 
available evidence does not resolve what you can or cannot do on a 
sustained basis, we will provide special work evaluations or other 
appropriate testing.
    (5) Ability to engage in substantial gainful activity. In most 
instances, we must show that you are able to engage in substantial 
gainful activity before your benefits are stopped. When doing this, we 
will consider all your current impairments not just that impairment(s) 
present at the time of the most recent favorable determination. If we 
cannot determine that you are still disabled based on medical 
considerations alone (as discussed in Secs. 404.1525 and 404.1526), we 
will use the new symptoms, signs and laboratory findings to make an 
objective assessment of your functional capacity to do basic work 
activities or residual functional capacity and we will consider your 
vocational factors. See Secs. 404.1545 through 404.1569.

[[Page 446]]

    (6) Evidence and basis for our decision. Our decisions under this 
section will be made on a neutral basis without any initial inference as 
to the presence or absence of disability being drawn from the fact that 
you have previously been determined to be disabled. We will consider all 
evidence you submit and that we obtain from your medical sources and 
nonmedical sources. What constitutes evidence and our procedures for 
obtaining it are set out in Secs. 404.1512 through 404.1518. Our 
determination regarding whether your disability continues will be made 
on the basis of the weight of the evidence.
    (7) Point of comparison. For purposes of determining whether medical 
improvement has occurred, we will compare the current medical severity 
of that impairment(s) which was present at the time of the most recent 
favorable medical decision that you were disabled or continued to be 
disabled to the medical severity of that impairment(s) at that time. If 
medical improvement has occurred, we will compare your current 
functional capacity to do basic work activities (i.e., your residual 
functional capacity) based on this previously existing impairment(s) 
with your prior residual functional capacity in order to determine 
whether the medical improvement is related to your ability to do work. 
The most recent favorable medical decision is the latest decision 
involving a consideration of the medical evidence and the issue of 
whether you were disabled or continued to be disabled which became 
final.
    (c) Determining medical improvement and its relationship to your 
abilities to do work. Paragraphs (b) (1) through (3) of this section 
discuss what we mean by medical improvement, medical improvement not 
related to your ability to work and medical improvement that is related 
to your ability to work. (In addition, see paragraph (i) of this section 
if you work during your current period of entitlement based on 
disability or during certain other periods.) How we will arrive at the 
decision that medical improvement has occurred and its relationship to 
the ability to do work, is discussed below.
    (1) Medical improvement. Medical improvement is any decrease in the 
medical severity of impairment(s) present at the time of the most recent 
favorable medical decision that you were disabled or continued to be 
disabled and is determined by a comparison of prior and current medical 
evidence which must show that there have been changes (improvement) in 
the symptoms, signs or laboratory findings associated with that 
impairment(s).
    (2) Determining if medical improvement is related to ability to 
work. If there is a decrease in medical severity as shown by the 
symptoms, signs and laboratory findings, we then must determine if it is 
related to your ability to do work. In paragraph (b)(4) of this section, 
we explain the relationship between medical severity and limitation on 
functional capacity to do basic work activities (or residual functional 
capacity) and how changes in medical severity can affect your residual 
functional capacity. In determining whether medical improvement that has 
occurred is related to your ability to do work, we will assess your 
residual functional capacity (in accordance with paragraph (b)(4) of 
this section) based on the current severity of the impairment(s) which 
was present at your last favorable medical decision. Your new residual 
functional capacity will then be compared to your residual functional 
capacity at the time of our most recent favorable medical decision. 
Unless an increase in the current residual functional capacity is based 
on changes in the signs, symptoms, or laboratory findings, any medical 
improvement that has occurred will not be considered to be related to 
your ability to do work.
    (3) Following are some additional factors and considerations which 
we will apply in making these determinations.
    (i) Previous impairment met or equaled listings. If our most recent 
favorable decision was based on the fact that your impairment(s) at the 
time met or equaled the severity contemplated by the Listing of 
Impairments in appendix 1 of this subpart, an assessment of your 
residual functional capacity would not have been made. If medical 
improvement has occurred and the severity of the prior impairment(s) no 
longer

[[Page 447]]

meets or equals the same listing section used to make our most recent 
favorable decision, we will find that the medical improvement was 
related to your ability to work. Appendix 1 of this subpart describes 
impairments which, if severe enough, affect a person's ability to work. 
If the appendix level of severity is met or equaled, the individual is 
deemed, in the absence of evidence to the contrary, to be unable to 
engage in substantial gainful activity. If there has been medical 
improvement to the degree that the requirement of the listing section is 
no longer met or equaled, then the medical improvement is related to 
your ability to work. We must, of course, also establish that you can 
currently engage in gainful activity before finding that your disability 
has ended.
    (ii) Prior residual functional capacity assessment made. The 
residual functional capacity assessment used in making the most recent 
favorable medical decision will be compared to the residual functional 
capacity assessment based on current evidence in order to determine if 
your functional capacity for basic work activities has increased. There 
will be no attempt made to reassess the prior residual functional 
capacity.
    (iii) Prior residual functional capacity assessment should have been 
made, but was not. If the most recent favorable medical decision should 
have contained an assessment of your residual functional capacity (i.e., 
your impairments did not meet or equal the level of severity 
contemplated by the Listing of Impairments in appendix 1 of this 
subpart) but does not, either because this assessment is missing from 
your file or because it was not done, we will reconstruct the residual 
functional capacity. This reconstructed residual functional capacity 
will accurately and objectively assess your functional capacity to do 
basic work activities. We will assign the maximum functional capacity 
consistent with an allowance.

    Example: You were previously found to be disabled on the basis that 
``while your impairment did not meet or equal a listing, it did prevent 
you from doing your past or any other work.'' The prior adjudicator did 
not, however, include a residual functional capacity assessment in the 
rationale of this decision and a review of the prior evidence does not 
show that such an assessment was ever made. If a decrease in medical 
severity, i.e., medical improvement, has occurred, the residual 
functional capacity based on the current level of severity of your 
impairment will have to be compared with your residual functional 
capacity based on its prior severity in order to determine if the 
medical improvement is related to your ability to do work. In order to 
make this comparison, we will review the prior evidence and make an 
objective assessment of your residual functional capacity at the time of 
our most recent favorable medical determination, based on the symptoms, 
signs and laboratory findings as they then existed.

    (iv) Impairment subject to temporary remission. In some cases the 
evidence shows that an individual's impairments are subject to temporary 
remission. In assessing whether medical improvement has occurred in 
persons with this type of impairment, we will be careful to consider the 
longitudinal history of the impairments, including the occurrence of 
prior remission, and prospects for future worsenings. Improvement in 
such impairments that is only temporary will not warrant a finding of 
medical improvement.
    (v) Prior file cannot be located. If the prior file cannot be 
located, we will first determine whether you are able to now engage in 
substantial gainful activity based on all your current impairments. (In 
this way, we will be able to determine that your disability continues at 
the earliest point without addressing the often lengthy process of 
reconstructing prior evidence.) If you cannot engage in substantial 
gainful activity currently, your benefits will continue unless one of 
the second group of exceptions applies (see paragraph (e) of this 
section). If you are able to engage in substantial gainful activity, we 
will determine whether an attempt should be made to reconstruct those 
portions of the missing file that were relevant to our most recent 
favorable medical decision (e.g., work history, medical evidence, and 
the results of consultative examinations). This determination will 
consider the potential availability of old records in light of their 
age, whether the source of the evidence is still in operation; and 
whether reconstruction efforts will yield a complete record of the basis 
for the most recent favorable medical decision. If relevant parts of the 
prior

[[Page 448]]

record are not reconstructed either because it is determined not to 
attempt reconstruction or because such efforts fail, medical improvement 
cannot be found. The documentation of your current impairments will 
provide a basis for any future reviews. If the missing file is later 
found, it may serve as a basis for reopening any decision under this 
section in accordance with the rules in Sec. 404.988.
    (d) First group of exceptions to medical improvement. The law 
provides for certain limited situations when your disability can be 
found to have ended even though medical improvement has not occurred, if 
you can engage in substantial gainful activity. These exceptions to 
medical improvement are intended to provide a way of finding that a 
person is no longer disabled in those limited situations where, even 
though there has been no decrease in severity of the impairment(s), 
evidence shows that the person should no longer be considered disabled 
or never should have been considered disabled. If one of these 
exceptions applies, we must also show that, taking all your current 
impairment(s) into account, not just those that existed at the time of 
our most recent favorable medical decision, you are now able to engage 
in substantial gainful activity before your disability can be found to 
have ended. As part of the review process, you will be asked about any 
medical or vocational therapy you received or are receiving. Your 
answers and the evidence gathered as a result as well as all other 
evidence, will serve as the basis for the finding that an exception 
applies.
    (1) Substantial evidence shows that you are the beneficiary of 
advances in medical or vocational therapy or technology (related to your 
ability to work). Advances in medical or vocational therapy or 
technology are improvements in treatment or rehabilitative methods which 
have increased your ability to do basic work activities. We will apply 
this exception when substantial evidence shows that you have been the 
beneficiary of services which reflect these advances and they have 
favorably affected the severity of your impairment or your ability to do 
basic work activities. This decision will be based on new medical 
evidence and a new residual functional capacity assessment. (See 
Sec. 404.1545.) In many instances, an advanced medical therapy or 
technology will result in a decrease in severity as shown by symptoms, 
signs and laboratory findings which will meet the definition of medical 
improvement. This exception will, therefore, see very limited 
application.
    (2) Substantial evidence shows that you have undergone vocational 
therapy (related to your ability to work). Vocational therapy (related 
to your ability to work) may include, but is not limited to, additional 
education, training, or work experience that improves your ability to 
meet the vocational requirements of more jobs. This decision will be 
based on substantial evidence which includes new medical evidence and a 
new residual functional capacity assessment. (See Sec. 404.1545.) If, at 
the time of our review you have not completed vocational therapy which 
could affect the continuance of your disability, we will review your 
claim upon completion of the therapy.

    Example 1: You were found to be disabled because the limitations 
imposed on you by your impairment allowed you to only do work that was 
at a sedentary level of exertion. Your prior work experience was work 
that required a medium level of exertion. Your age and education at the 
time would not have qualified you for work that was below this medium 
level of exertion. You enrolled in and completed a specialized training 
course which qualifies you for a job in data processing as a computer 
programmer in the period since you were awarded benefits. On review of 
your claim, current evidence shows that there is no medical improvement 
and that you can still do only sedentary work. As the work of a computer 
programmer is sedentary in nature, you are now able to engage in 
substantial gainful activity when your new skills are considered.
    Example 2: You were previously entitled to benefits because the 
medical evidence and assessment of your residual functional capacity 
showed you could only do light work. Your prior work was considered to 
be heavy in nature and your age, education and the nature of your prior 
work qualified you for work which was no less than medium in exertion. 
The current evidence and residual functional capacity show there has 
been no medical improvement and that you can still do only light work. 
Since you were originally entitled to benefits, your vocational 
rehabilitation agency enrolled you in and you successfully completed a 
trade school course so that you are now qualified to do

[[Page 449]]

small appliance repair. This work is light in nature, so when your new 
skills are considered, you are now able to engage in substantial gainful 
activity even though there has been no change in your residual 
functional capacity.

    (3) Substantial evidence shows that based on new or improved 
diagnostic or evaluative techniques your impairment(s) is not as 
disabling as it was considered to be at the time of the most recent 
favorable decision. Changing methodologies and advances in medical and 
other diagnostic or evaluative techniques have given, and will continue 
to give, rise to improved methods for measuring and documenting the 
effect of various impairments on the ability to do work. Where, by such 
new or improved methods, substantial evidence shows that your 
impairment(s) is not as severe as was determined at the time of our most 
recent favorable medical decision, such evidence may serve as a basis 
for finding that you are no longer disabled, if you can currently engage 
in substantial gainful activity. In order to be used under this 
exception, however, the new or improved techniques must have become 
generally available after the date of our most recent favorable medical 
decision.
    (i) How we will determine which methods are new or improved 
techniques and when they become generally available. New or improved 
diagnostic techniques or evaluations will come to our attention by 
several methods. In reviewing cases, we often become aware of new 
techniques when their results are presented as evidence. Such techniques 
and evaluations are also discussed and acknowledged in medical 
literature by medical professional groups and other governmental 
entities. Through these sources, we develop listings of new techniques 
and when they become generally available. For example, we will consult 
the Health Care Financing Administration for its experience regarding 
when a technique is recognized for payment under Medicare and when they 
began paying for the technique.
    (ii) How you will know which methods are new or improved techniques 
and when they become generally available. We will let you know which 
methods we consider to be new or improved techniques and when they 
become available through two vehicles.
    (A) Some of the future changes in the Listing of Impairments in 
appendix 1 of this subpart will be based on new or improved diagnostic 
or evaluative techniques. Such listings changes will clearly state this 
fact as they are published as Notices of Proposed Rulemaking and the new 
or improved technique will be considered generally available as of the 
date of the final publication of that particular listing in the Federal 
Register.
    (B) A cumulative list since 1970 of new or improved diagnostic 
techniques or evaluations, how they changed the evaluation of the 
applicable impairment and the month and year they became generally 
available, will be published in the Notices section of the Federal 
Register. Included will be any changes in the Listing of Impairments 
published in the Code of Federal Regulations since 1970 which are 
reflective of new or improved techniques. No cases will be processed 
under this exception until this cumulative listing is so published. 
Subsequent changes to the list will be published periodically. The 
period will be determined by the volume of changes needed.

    Example: The electrocardiographic exercise test has replaced the 
Master's 2-step test as a measurement of heart function since the time 
of your last favorable medical decision. Current evidence could show 
that your condition, which was previously evaluated based on the 
Master's 2-step test, is not now as disabling as was previously thought. 
If, taking all your current impairments into account, you are now able 
to engage in substantial gainful activity, this exception would be used 
to find that you are no longer disabled even if medical improvement has 
not occurred.

    (4) Substantial evidence demonstrates that any prior disability 
decision was in error. We will apply the exception to medical 
improvement based on error if substantial evidence (which may be 
evidence on the record at the time any prior determination of the 
entitlement to benefits based on disability was made, or newly obtained 
evidence which relates to that determination) demonstrates that a prior 
determination was in error. A prior determination will be found in error 
only if:

[[Page 450]]

    (i) Substantial evidence shows on its face that the decision in 
question should not have been made (e.g., the evidence in your file such 
as pulmonary function study values was misread or an adjudicative 
standard such as a listing in appendix 1 or a medical/vocational rule in 
appendix 2 of this subpart was misapplied).

    Example 1: You were granted benefits when it was determined that 
your epilepsy met Listing 11.02. This listing calls for a finding of 
major motor seizures more frequently than once a month as documented by 
EEG evidence and by a detailed description of a typical seizure pattern. 
A history of either diurnal episodes or nocturnal episodes with 
residuals interfering with daily activities is also required. On review, 
it is found that a history of the frequency of your seizures showed that 
they occurred only once or twice a year. The prior decision would be 
found to be in error, and whether you were still considered to be 
disabled would be based on whether you could currently engage in 
substantial gainful activity.
    Example 2: Your prior award of benefits was based on vocational rule 
201.12 in appendix 2 of this subpart. This rule applies to a person age 
50-54 who has at least a high school education, whose previous work was 
entirely at a semiskilled level, and who can do only sedentary work. On 
review, it is found that at the time of the prior determination you were 
actually only age 46 and vocational rule 201.21 should have been used. 
This rule would have called for a denial of your claim and the prior 
decision is found to have been in error. Continuation of your disability 
would depend on a finding of your current ability to engage in 
substantial gainful activity.

    (ii) At the time of the prior evaluation, required and material 
evidence of the severity of your impairment(s) was missing. That 
evidence becomes available upon review, and substantial evidence 
demonstrates that had such evidence been present at the time of the 
prior determination, disability would not have been found.

    Example: You were found disabled on the basis of chronic obstructive 
pulmonary disease. The severity of your impairment was documented 
primarily by pulmonary function testing results. The evidence showed 
that you could do only light work. Spirometric tracings of this testing, 
although required, were not obtained, however. On review, the original 
report is resubmitted by the consultative examining physician along with 
the corresponding spirometric tracings. A review of the tracings shows 
that the test was invalid. Current pulmonary function testing supported 
by spirometric tracings reveals that your impairment does not limit your 
ability to perform basic work activities in any way. Error is found 
based on the fact that required, material evidence which was originally 
missing now becomes available and shows that if it had been available at 
the time of the prior determination, disability would not have been 
found.

    (iii) Substantial evidence which is new evidence which relates to 
the prior determination (of allowance or continuance) refutes the 
conclusions that were based upon the prior evidence (e.g., a tumor 
thought to be malignant was later shown to have actually been benign). 
Substantial evidence must show that had the new evidence (which relates 
to the prior determination) been considered at the time of the prior 
decision, the claim would not have been allowed or continued. A 
substitution of current judgment for that used in the prior favorable 
decision will not be the basis for applying this exception.

    Example: You were previously found entitled to benefits on the basis 
of diabetes mellitus which the prior adjudicator believed was equivalent 
to the level of severity contemplated in the Listing of Impairments. The 
prior record shows that you had ``brittle'' diabetes for which you were 
taking insulin. Your urine was 3 + for sugar, and you alleged occasional 
hypoglycemic attacks caused by exertion. On review, symptoms, signs and 
laboratory findings are unchanged. The current adjudicator feels, 
however, that your impairment clearly does not equal the severity 
contemplated by the listings. Error cannot be found because it would 
represent a substitution of current judgment for that of the prior 
adjudicator that your impairment equaled a listing.

    (iv) The exception for error will not be applied retroactively under 
the conditions set out above unless the conditions for reopening the 
prior decision (see Sec. 404.988) are met.
    (5) You are currently engaging in substantial gainful activity. If 
you are currently engaging in substantial gainful activity before we 
determine whether you are no longer disabled because of your work 
activity, we will consider whether you are entitled to a trial work 
period as set out in Sec. 404.1592. We will find that your disability 
has ended in the month in which you demonstrated your ability to engage 
in substantial gainful activity (following

[[Page 451]]

completion of a trial work period, where it applies). This exception 
does not apply in determining whether you continue to have a disabling 
impairment(s) (Sec. 404.1511) for purposes of deciding your eligibility 
for a reentitlement period (Sec. 404.1592a).
    (e) Second group of exceptions to medical improvement. In addition 
to the first group of exceptions to medical improvement, the following 
exceptions may result in a determination that you are no longer 
disabled. In these situations the decision will be made without a 
determination that you have medically improved or can engage in 
substantial gainful activity.
    (1) A prior determination or decision was fraudulently obtained. If 
we find that any prior favorable determination or decision was obtained 
by fraud, we may find that you are not disabled. In addition, we may 
reopen your claim under the rules in Sec. 404.988. In determining 
whether a prior favorable determination or decision was fraudulently 
obtained, we will take into account any physical, mental, educational, 
or linguistic limitations (including any lack of facility with the 
English language) which you may have had at the time.
    (2) You do not cooperate with us. If there is a question about 
whether you continue to be disabled and we ask you to give us medical or 
other evidence or to go for a physical or mental examination by a 
certain date, we will find that your disability has ended if you fail, 
without good cause, to do what we ask. Section 404.911 explains the 
factors we consider and how we will determine generally whether you have 
good cause for failure to cooperate. In addition, Sec. 404.1518 
discusses how we determine whether you have good cause for failing to 
attend a consultative examination. The month in which your disability 
ends will be the first month in which you failed to do what we asked.
    (3) We are unable to find you. If there is a question about whether 
you continue to be disabled and we are unable to find you to resolve the 
question, we will determine that your disability has ended. The month 
your disability ends will be the first month in which the question arose 
and we could not find you.
    (4) You fail to follow prescribed treatment which would be expected 
to restore your ability to engage in substantial gainful activity. If 
treatment has been prescribed for you which would be expected to restore 
your ability to work, you must follow that treatment in order to be paid 
benefits. If you are not following that treatment and you do not have 
good cause for failing to follow that treatment, we will find that your 
disability has ended (see Sec. 404.1530(c)). The month your disability 
ends will be the first month in which you failed to follow the 
prescribed treatment.
    (f) Evaluation steps. To assure that disability reviews are carried 
out in a uniform manner, that decisions of continuing disability can be 
made in the most expeditious and administratively efficient way, and 
that any decisions to stop disability benefits are made objectively, 
neutrally and are fully documented, we will follow specific steps in 
reviewing the question of whether your disability continues. Our review 
may cease and benefits may be continued at any point if we determine 
there is sufficient evidence to find that you are still unable to engage 
in substantial gainful activity. The steps are as follows. (See 
paragraph (i) of this section if you work during your current period of 
entitlement based on disability or during certain other periods.)
    (1) Are you engaging in substantial gainful activity? If you are 
(and any applicable trial work period has been completed), we will find 
disability to have ended (see paragraph (d)(5) of this section).
    (2) If you are not, do you have an impairment or combination of 
impairments which meets or equals the severity of an impairment listed 
in appendix 1 of this subpart? If you do, your disability will be found 
to continue.
    (3) If you do not, has there been medical improvement as defined in 
paragraph (b)(1) of this section? If there has been medical improvement 
as shown by a decrease in medical severity, see step (4). If there has 
been no decrease in medical severity, there has been no medical 
improvement. (See step (5).)
    (4) If there has been medical improvement, we must determine whether 
it is related to your ability to do work in

[[Page 452]]

accordance with paragraphs (b) (1) through (4) of this section; i.e., 
whether or not there has been an increase in the residual functional 
capacity based on the impairment(s) that was present at the time of the 
most recent favorable medical determination. If medical improvement is 
not related to your ability to do work, see step (5). If medical 
improvement is related to your ability to do work, see step (6).
    (5) If we found at step (3) that there has been no medical 
improvement or if we found at step (4) that the medical improvement is 
not related to your ability to work, we consider whether any of the 
exceptions in paragraphs (d) and (e) of this section apply. If none of 
them apply, your disability will be found to continue. If one of the 
first group of exceptions to medical improvement applies, see step (6). 
If an exception from the second group of exceptions to medical 
improvement applies, your disability will be found to have ended. The 
second group of exceptions to medical improvement may be considered at 
any point in this process.
    (6) If medical improvement is shown to be related to your ability to 
do work or if one of the first group of exceptions to medical 
improvement applies, we will determine whether all your current 
impairments in combination are severe (see Sec. 404.1521). This 
determination will consider all your current impairments and the impact 
of the combination of those impairments on your ability to function. If 
the residual functional capacity assessment in step (4) above shows 
significant limitation of your ability to do basic work activities, see 
step (7). When the evidence shows that all your current impairments in 
combination do not significantly limit your physical or mental abilities 
to do basic work activities, these impairments will not be considered 
severe in nature. If so, you will no longer be considered to be 
disabled.
    (7) If your impairment(s) is severe, we will assess your current 
ability to do substantial gainful activity in accordance with 
Sec. 404.1560. That is, we will assess your residual functional capacity 
based on all your current impairments and consider whether you can still 
do work you have done in the past. If you can do such work, disability 
will be found to have ended.
    (8) If you are not able to do work you have done in the past, we 
will consider whether you can do other work given the residual 
functional capacity assessment made under paragraph (f)(7) of this 
section and your age, education, and past work experience (see paragraph 
(f)(9) of this section for an exception to this rule). If you can, we 
will find that your disability has ended. If you cannot, we will find 
that your disability continues.
    (9) We may proceed to the final step, described in paragraph (f)(8) 
of this section, if the evidence in your file about your past relevant 
work is not sufficient for us to make a finding under paragraph (f)(7) 
of this section about whether you can perform your past relevant work. 
If we find that you can adjust to other work based solely on your age, 
education, and residual functional capacity, we will find that you are 
no longer disabled, and we will not make a finding about whether you can 
do your past relevant work under paragraph (f)(7) of this section. If we 
find that you may be unable to adjust to other work or if Sec. 404.1562 
may apply, we will assess your claim under paragraph (f)(7) of this 
section and make a finding about whether you can perform your past 
relevant work.
    (g) The month in which we will find you are no longer disabled. If 
the evidence shows that you are no longer disabled, we will find that 
your disability ended in the earliest of the following months.
    (1) The month the evidence shows you are no longer disabled under 
the rules set out in this section, and you were disabled only for a 
specified period of time in the past;
    (2) The month the evidence shows you are no longer disabled under 
the rules set out in this section, but not earlier than the month in 
which we mail you a notice saying that the information we have shows 
that you are not disabled;
    (3) The month in which you demonstrated your ability to engage in 
substantial gainful activity (following completion of a trial work 
period); however, we may pay you benefits for

[[Page 453]]

certain months in and after the reentitlement period which follows the 
trial work period. (See Sec. 404.1592a for a discussion of the 
reentitlement period. If you are receiving benefits on your own earnings 
record, see Sec. 404.316 for when your benefits will end. See 
Sec. 404.352 if you are receiving benefits on a parent's earnings as a 
disabled adult child.);
    (4) The month in which you actually do substantial gainful activity 
(where you are not entitled to a trial work period);
    (5) The month in which you return to full-time work, with no 
significant medical restrictions and acknowledge that medical 
improvement has occurred, and we expected your impairment(s) to improve 
(see Sec. 404.1591);
    (6) The first month in which you failed without good cause to do 
what we asked, when the rule set out in paragraph (e)(2) of this section 
applies;
    (7) The first month in which the question of continuing disability 
arose and we could not find you, when the rule set out in paragraph 
(e)(3) of this section applies;
    (8) The first month in which you failed without good cause to follow 
prescribed treatment, when the rule set out in paragraph (e)(4) of this 
section applies; or
    (9) The first month you were told by your physician that you could 
return to work, provided there is no substantial conflict between your 
physician's and your statements regarding your awareness of your 
capacity for work and the earlier date is supported by substantial 
evidence.
    (h) Before we stop your benefits. Before we stop your benefits or a 
period of disability, we will give you a chance to explain why we should 
not do so. Sections 404.1595 and 404.1597 describe your rights 
(including appeal rights) and the procedures we will follow.
    (i) If you work during your current period of entitlement based on 
disability or during certain other periods. (1) We will not consider the 
work you are doing or have done during your current period of 
entitlement based on disability (or, when determining whether you are 
entitled to expedited reinstatement of benefits under section 223(i) of 
the Act, the work you are doing or have done during or after the 
previously terminated period of entitlement referred to in section 
223(i)(1)(B) of the Act) to be past relevant work under paragraph (f)(7) 
of this section or past work experience under paragraph (f)(8) of this 
section. In addition, if you are currently entitled to disability 
benefits under title II of the Social Security Act, we may or may not 
consider the physical and mental activities that you perform in the work 
you are doing or have done during your current period of entitlement 
based on disability, as explained in paragraphs (i)(2) and (3) of this 
section.
    (2) If you are currently entitled to disability insurance benefits 
as a disabled worker, child's insurance benefits based on disability, or 
widow's or widower's insurance benefits based on disability under title 
II of the Social Security Act, and at the time we are making a 
determination on your case you have received such benefits for at least 
24 months, we will not consider the activities you perform in the work 
you are doing or have done during your current period of entitlement 
based on disability if they support a finding that your disability has 
ended. (We will use the rules in Sec. 404.1590(i)(2) to determine 
whether the 24-month requirement is met.) However, we will consider the 
activities you do in that work if they support a finding that your 
disability continues or they do not conflict with a finding that your 
disability continues. We will not presume that you are still disabled if 
you stop working.
    (3) If you are not a person described in paragraph (i)(2) of this 
section, we will consider the activities you perform in your work at any 
of the evaluation steps in paragraph (f) of this section at which we 
need to assess your ability to function.

[50 FR 50130, Dec. 6, 1985; 51 FR 7063, Feb. 28, 1986; 51 FR 16015, Apr. 
30, 1986, as amended at 52 FR 44971, Nov. 24, 1987; 57 FR 30121, July 8, 
1992; 59 FR 1635, Jan. 12, 1994; 65 FR 42788, July 11, 2000; 68 FR 
51163, Aug. 26, 2003; 71 FR 66857, Nov. 17, 2006; 77 FR 43495, July 25, 
2012; 82 FR 5871, Jan. 18, 2017]



Sec. 404.1595  When we determine that you are not now disabled.

    (a) When we will give you advance notice. Except in those 
circumstances described in paragraph (d) of this section,

[[Page 454]]

we will give you advance notice when we have determined that you are not 
now disabled because the information we have conflicts with what you 
have told us about your disability. If your dependents are receiving 
benefits on your Social Security number and do not live with you, we 
will also give them advance notice. To give you advance notice, we will 
contact you by mail, telephone or in person.
    (b) What the advance notice will tell you. We will give you a 
summary of the information we have. We will also tell you why we have 
determined that you are not now disabled, and will give you a chance to 
reply. If it is because of--
    (1) Medical reasons. The advance notice will tell you what the 
medical information in your file shows;
    (2) Your work activity. The advance notice will tell you what 
information we have about the work you are doing or have done, and why 
this work shows that you are not disabled; or
    (3) Your failure to give us information we need or do what we ask. 
The advance notice will tell you what information we need and why we 
need it or what you have to do and why.
    (c) What you should do if you receive an advance notice. If you 
agree with the advance notice, you do not need to take any action. If 
you desire further information or disagree with what we have told you, 
you should immediately write or telephone the State agency or the social 
security office that gave you the advance notice or you may visit any 
social security office. If you believe you are now disabled, you should 
tell us why. You may give us any additional or new information, 
including reports from your doctors, hospitals, employers or others, 
that you believe we should have. You should send these as soon as 
possible to the local social security office or to the office that gave 
you the advance notice. We consider 10 days to be enough time for you to 
tell us, although we will allow you more time if you need it. You will 
have to ask for additional time beyond 10 days if you need it.
    (d) When we will not give you advance notice. We will not give you 
advance notice when we determine that you are not disabled if--
    (1) We recently told you that the information we have shows that you 
are not now disabled, that we were gathering more information, and that 
your benefits will stop; or
    (2) We are stopping your benefits because you told us you are not 
now disabled; or
    (3) We recently told you that continuing your benefits would 
probably cause us to overpay you and you asked us to stop your benefits.



Sec. 404.1596  Circumstances under which we may suspend and terminate
your benefits before we make a determination.

    (a) General. Under some circumstances, we may stop your benefits 
before we make a determination. Generally, we do this when the 
information we have clearly shows you are not now disabled but we cannot 
determine when your disability ended. These situations are described in 
paragraph (b)(1) and other reasons are given in paragraph (b)(2) of this 
section. We refer to this as a suspension of benefits. Your benefits, as 
well as those of your dependents (regardless of where they receive their 
benefits), may be suspended. When we do this we will give you advance 
notice. (See Sec. 404.1595.) We will contact your spouse and children if 
they are receiving benefits on your Social Security number, and the 
benefits are being mailed to an address different from your own.
    (b) When we will suspend your benefits--(1) You are not now 
disabled. We will suspend your benefits if the information we have 
clearly shows that you are not disabled and we will be unable to 
complete a determination soon enough to prevent us from paying you more 
monthly benefits than you are entitled to. This may occur when--
    (i) New medical or other information clearly shows that you are able 
to do substantial gainful activity and your benefits should have stopped 
more than 2 months ago;
    (ii) You completed a 9-month period of trial work more than 2 months 
ago and you are still working;
    (iii) At the time you filed for benefits your condition was expected 
to improve and you were expected to be able to return to work. You 
subsequently

[[Page 455]]

did return to work more than 2 months ago with no significant medical 
restrictions; or
    (iv) You are not entitled to a trial work period and you are 
working.
    (2) Other reasons. We will also suspend your benefits if--
    (i) You have failed to respond to our request for additional medical 
or other evidence and we are satisfied that you received our request and 
our records show that you should be able to respond; or
    (ii) We are unable to locate you and your checks have been returned 
by the Post Office as undeliverable.
    (c) When we will not suspend your cash benefits. We will not suspend 
your cash benefits if--
    (1) You have become disabled by another impairment; or
    (2) Even though your impairment is no longer disabling,
    (i) You are participating in an appropriate program of vocational 
rehabilitation services, employment services, or other support services, 
as described in Sec. 404.327(a) and (b);
    (ii) You began participating in the program before the date your 
disability ended; and
    (iii) We have determined under Sec. 404.328 that your completion of 
the program, or your continuation in the program for a specified period 
of time, will increase the likelihood that you will not have to return 
to the disability benefit rolls.
    (d) When the suspension is effective. We will suspend your benefits 
effective with the month in which it is determined in accordance with 
paragraph (b)(2)(i) of this section that your disability benefits should 
stop due to your failure, without good cause (see Sec. 404.911), to 
comply with our request for necessary information for your continuing 
disability review. This review is to determine whether or not you 
continue to meet the disability requirements of the law. When we have 
received the information, we will reinstate your benefits for any 
previous month for which they are otherwise payable, and continue with 
the CDR process.
    (e) When we will terminate your benefits. We will terminate your 
benefits following 12 consecutive months of benefit suspension because 
you did not comply with our request for information in accordance with 
paragraph (b)(2)(i) of this section. We will count the 12-month 
suspension period from the start of the first month that you stopped 
receiving benefits (see paragraph (d) of this section). This termination 
is effective with the start of the 13th month after the suspension began 
because you failed to cooperate.

[45 FR 55584, Aug. 20, 1980, as amended at 47 FR 31543, July 21, 1982; 
47 FR 52693, Nov. 23, 1982; 51 FR 17617, May 14, 1986; 68 FR 40123, July 
7, 2003; 70 FR 36507, June 24, 2005; 71 FR 60822, Oct. 17, 2006]



Sec. 404.1597  After we make a determination that you are not now
disabled.

    (a) General. If we determine that you do not meet the disability 
requirements of the law, your benefits generally will stop. We will send 
you a formal written notice telling you why we believe you are not 
disabled and when your benefits should stop. If your spouse and children 
are receiving benefits on your social security number, we will also stop 
their benefits and tell them why. The notices will explain your right to 
reconsideration if you disagree with our determination. However, your 
benefits may continue even though your impairment is no longer 
disabling, if you are participating in an appropriate program of 
vocational rehabilitation services, employment services, or other 
support services (see Sec. 404.327). You must have started participating 
in the program before the date your disability ended. In addition, we 
must have determined that your completion of the program, or your 
continuation in the program for a specified period of time, will 
increase the likelihood that you will not have to return to the 
disability benefit rolls. (See Secs. 404.316(c), 404.328, 404.337(c), 
404.352(d), and 404.1586(g).) You may still appeal our determination 
that you are not disabled even though your benefits are continuing 
because of your participation in an appropriate program of vocational 
rehabilitation services, employment services, or other support services. 
You may also appeal a determination that your completion of the program, 
or your continuation in the program for a specified period of time, will

[[Page 456]]

not increase the likelihood that you will not have to return to the 
disability benefit rolls and, therefore, you are not entitled to 
continue to receive benefits.
    (b) If we make a determination that your physical or mental 
impairment(s) has ceased, did not exist, or is no longer disabling 
(Medical Cessation Determination). If we make a determination that the 
physical or mental impairment(s) on the basis of which benefits were 
payable has ceased, did not exist, or is no longer disabling (a medical 
cessation determination), your benefits will stop. As described in 
paragraph (a) of this section, you will receive a written notice 
explaining this determination and the month your benefits will stop. The 
written notice will also explain your right to appeal if you disagree 
with our determination and your right to request that your benefits and 
the benefits, if any, of your spouse or children, be continued under 
Sec. 404.1597a. For the purpose of this section, benefits means 
disability cash payments and/or Medicare, if applicable. The continued 
benefit provisions of this section do not apply to an initial 
determination on an application for disability benefits, or to a 
determination that you were disabled only for a specified period of 
time.

[47 FR 31544, July 21, 1982, as amended at 51 FR 17618, May 14, 1986; 53 
FR 29020, Aug. 2, 1988; 53 FR 39015, Oct. 4, 1988; 70 FR 36507, June 24, 
2005]



Sec. 404.1597a  Continued benefits pending appeal of a medical 
cessation determination.

    (a) General. If we determine that you are not entitled to benefits 
because the physical or mental impairment(s) on the basis of which such 
benefits were payable is found to have ceased, not to have existed, or 
to no longer be disabling, and you appeal that determination, you may 
choose to have your benefits continued pending reconsideration and/or a 
hearing before an administrative law judge on the disability cessation 
determination. For the purpose of this entire section, the election of 
continued benefits means the election of disability cash payments and/or 
Medicare, if applicable. You can also choose to have the benefits 
continued for anyone else receiving benefits based on your wages and 
self-employment income (and anyone else receiving benefits because of 
your entitlement to benefits based on disability). If you appeal a 
medical cessation under both title II and title XVI (a concurrent case), 
the title II claim will be handled in accordance with title II 
regulations while the title XVI claim will be handled in accordance with 
the title XVI regulations.
    (b) When the provisions of this section are available. (1) Benefits 
may be continued under this section only if the determination that your 
physical or mental impairment(s) has ceased, has never existed, or is no 
longer disabling is made on or after January 12, 1983 (or before January 
12, 1983, and a timely request for reconsideration or a hearing before 
an administrative law judge is pending on that date).
    (2) Benefits may be continued under this section only for months 
beginning with January 1983, or the first month for which benefits are 
no longer otherwise payable following our determination that your 
physical or mental impairment(s) has ceased, has never existed, or is no 
longer disabling, whichever is later.
    (3) Continued payment of benefits under this section will stop 
effective with the earlier of:
    (i) The month before the month in which an administrative law 
judge's hearing decision finds that your physical or mental 
impairment(s) has ceased, has never existed, or is no longer disabling 
or the month before the month of a new administrative law judge decision 
(or final action by the Appeals Council on the administrative law 
judge's recommended decision) if your case was sent back to an 
administrative law judge for further action; or
    (ii) The month before the month no timely request for a 
reconsideration or a hearing before an administrative law judge is 
pending. These continued benefits may be stopped or adjusted because of 
certain events (such as work and earnings or receipt of worker's 
compensation) which occur while you are receiving these continued 
benefits and affect your right to receive continued benefits.

[[Page 457]]

    (c) Continuation of benefits for anyone else pending your appeal. 
(1) When you file a request for reconsideration or hearing before an 
administrative law judge on our determination that your physical or 
mental impairment(s) has ceased, has never existed, or is no longer 
disabling, or your case has been sent back (remanded) to an 
administrative law judge for further action, you may also choose to have 
benefits continue for anyone else who is receiving benefits based on 
your wages and self-employment income (and for anyone else receiving 
benefits because of your entitlement to benefits based on disability), 
pending the outcome of your appeal.
    (2) If anyone else is receiving benefits based on your wages and 
self-employment income, we will notify him or her of the right to choose 
to have his or her benefits continue pending the outcome of your appeal. 
Such benefits can be continued for the time period in paragraph (b) of 
this section only if he or she chooses to have benefits continued and 
you also choose to have his or her benefits continued.
    (d) Statement of choice. When you or another party request 
reconsideration under Sec. 404.908(a) or a hearing before an 
administrative law judge under Sec. 404.932(a) on our determination that 
your physical or mental impairment(s) has ceased, has never existed, or 
is no longer disabling, or if your case is sent back (remanded) to an 
administrative law judge for further action, we will explain your right 
to receive continued benefits and ask you to complete a statement 
specifying which benefits you wish to have continued pending the outcome 
of the reconsideration or hearing before an administrative law judge. 
You may elect to receive only Medicare benefits during appeal even if 
you do not want to receive continued disability benefits. If anyone else 
is receiving benefits based on your wages and self-employment income (or 
because of your entitlement to benefits based on disability), we will 
ask you to complete a statement specifying which benefits you wish to 
have continued for them, pending the outcome of the request for 
reconsideration or hearing before an administrative law judge. If you 
request appeal but you do not want to receive continued benefits, we 
will ask you to complete a statement declining continued benefits 
indicating that you do not want to have your benefits and those of your 
family, if any, continued during the appeal.
    (e) Your spouse's or children's statement of choice. If you request, 
in accordance with paragraph (d) of this section, that benefits also be 
continued for anyone who had been receiving benefits based on your wages 
and self-employment, we will send them a written notice. The notice will 
explain their rights and ask them to complete a statement either 
declining continued benefits, or specifying which benefits they wish to 
have continued, pending the outcome of the request for reconsideration 
or a hearing before an administrative law judge.
    (f) What you must do to receive continued benefits pending notice of 
our reconsideration determination. (1) If you want to receive continued 
benefits pending the outcome of your request for reconsideration, you 
must request reconsideration and continuation of benefits no later than 
10 days after the date you receive the notice of our initial 
determination that your physical or mental impairment(s) has ceased, has 
never existed, or is no longer disabling. Reconsideration must be 
requested as provided in Sec. 404.909, and you must request continued 
benefits using a statement in accordance with paragraph (d) of this 
section.
    (2) If you fail to request reconsideration and continued benefits 
within the 10-day period required by paragraph (f)(1) of this section, 
but later ask that we continue your benefits pending a reconsidered 
determination, we will use the rules in Sec. 404.911 to determine 
whether good cause exists for your failing to request benefit 
continuation within 10 days after receipt of the notice of the initial 
cessation determination. If you request continued benefits after the 10-
day period, we will consider the request to be timely and will pay 
continued benefits only if good cause for delay is established.
    (g) What you must do to receive continued benefits pending an 
administrative

[[Page 458]]

law judge's decision. (1) To receive continued benefits pending an 
administrative law judge's decision on our reconsideration 
determination, you must request a hearing and continuation of benefits 
no later than 10 days after the date you receive the notice of our 
reconsideration determination that your physical or mental impairment(s) 
has ceased, has never existed, or is no longer disabling. A hearing must 
be requested as provided in Sec. 404.933, and you must request continued 
benefits using a statement in accordance with paragraph (d) of this 
section.
    (2) If you request continued benefits pending an administrative law 
judge's decision but did not request continued benefits while we were 
reconsidering the initial cessation determination, your benefits will 
begin effective the month of the reconsideration determination.
    (3) If you fail to request continued payment of benefits within the 
10-day period required by paragraph (g)(1) of this section, but you 
later ask that we continue your benefits pending an administrative law 
judge's decision on our reconsidered determination, we will use the 
rules as provided in Sec. 404.911 to determine whether good cause exists 
for your failing to request benefit continuation within 10 days after 
receipt of the reconsideration determination. If you request continued 
benefits after the 10-day period, we will consider the request to be 
timely and will pay continued benefits only if good cause for delay is 
established.
    (h) What anyone else must do to receive continued benefits pending 
our reconsideration determination or an administrative law judge's 
decision. (1) When you or another party (see Secs. 404.908(a) and 
404.932(a)) request a reconsideration or a hearing before an 
administrative law judge on our medical cessation determination or when 
your case is sent back (remanded) to an administrative law judge for 
further action, you may choose to have benefits continue for anyone else 
who is receiving benefits based on your wages and self-employment 
income. An eligible individual must also choose whether or not to have 
his or her benefits continue pending your appeal by completing a 
separate statement of election as described in paragraph (e) of this 
section.
    (2) He or she must request continuation of benefits no later than 10 
days after the date he or she receives notice of termination of 
benefits. He or she will then receive continued benefits beginning with 
the later of January 1983, or the first month for which benefits are no 
longer otherwise payable following our initial or reconsideration 
determination that your physical or mental impairment(s) has ceased, has 
never existed, or is no longer disabling. Continued benefits will 
continue until the earlier of:
    (i) The month before the month in which an administrative law 
judge's hearing decision finds that your physical or mental 
impairment(s) has ceased, has never existed, or is no longer disabling 
or the month before the month of the new administrative law judge 
decision (or final action is taken by the Appeals Council on the 
administrative law judge's recommended decision) if your case was sent 
back to an administrative law judge for further action; or
    (ii) The month before the month no timely request for a 
reconsideration or a hearing before an administrative law judge is 
pending. These continued benefits may be stopped or adjusted because of 
certain events (such as work and earnings or payment of worker's 
compensation) which occur while an eligible individual is receiving 
continued benefits and affect his or her right to receive continued 
benefits.
    (3) If he or she fails to request continuation of benefits within 
the 10-day period required by this paragraph, but requests continuation 
of benefits at a later date, we will use the rules as provided in 
Sec. 404.911 to determine whether good cause exists for his or her 
failure to request continuation of benefits within 10 days after receipt 
of the notice of termination of his or her benefits. His or her late 
request will be considered to be timely and we will pay him or her 
continued benefits only if good cause for delay is established.
    (4) If you choose not to have benefits continued for anyone else who 
is receiving benefits based on your wages and self-employment income, 
pending the appeal on our determination, we

[[Page 459]]

will not continue benefits to him or her.
    (i) What you must do when your case is remanded to an administrative 
law judge. If we send back (remand) your case to an administrative law 
judge for further action under the rules provided in Sec. 404.977, and 
the administrative law judge's decision or dismissal order issued on 
your medical cessation appeal is vacated and is no longer in effect, 
continued benefits are payable pending a new decision by the 
administrative law judge or final action is taken by the Appeals Council 
on the administrative law judge's recommended decision.
    (1) If you (and anyone else receiving benefits based on your wages 
and self-employment income or because of your disability) previously 
elected to receive continued benefits pending the administrative law 
judge's decision, we will automatically start these same continued 
benefits again. We will send you a notice telling you this, and that you 
do not have to do anything to have these same benefits continued until 
the month before the month the new decision of order of dismissal is 
issued by the administrative law judge or until the month before the 
month the Appeals Council takes final action on the administrative law 
judge's recommended decision. These benefits will begin again with the 
first month of nonpayment based on the prior administrative law judge 
hearing decision or dismissal order. Our notice explaining reinstatement 
of continued benefits will also tell you to report to us any changes or 
events that affect your receipt of benefits.
    (2) After we automatically reinstate your continued benefits as 
described in paragraph (h)(1) of this section, we will contact you to 
determine if any adjustment is required to the amount of continued 
benefits payable due to events that affect the right to receive benefits 
involving you, your spouse and/or children. If you have returned to 
work, we will request additional information about this work activity. 
If you are working, your continued benefits will not be stopped while 
your appeal of the medical cessation of disability is still pending 
unless you have completed a trial work period and are engaging in 
substantial gainful activity. In this event, we will suspend your 
continued benefits. If any other changes have occurred which would 
require a reduction in benefit amounts, or nonpayment of benefits, we 
will send an advance notice to advise of any adverse change before the 
adjustment action is taken. The notice will also advise you of the right 
to explain why these benefits should not be adjusted or stopped. You 
will also receive a written notice of our determination. The notice will 
also explain your right to reconsideration if you disagree with this 
determination.
    (3) If the final decision on your appeal of your medical cessation 
is a favorable one, we will send you a written notice in which we will 
advise you of your right to benefits, if any, before you engaged in 
substantial gainful activity and to reentitlement should you stop 
performing substantial gainful activity. If you disagree with our 
determination, you will have the right to appeal this decision.
    (4) If the final decision on your appeal of your medical cessation 
is an unfavorable one (the cessation is affirmed), you will also be sent 
a written notice advising you of our determination, and your right to 
appeal if you think we are wrong.
    (5) If you (or the others receiving benefits based on your wages and 
self-employment income or because of your disability) did not previously 
elect to have benefits continued pending an administrative law judge 
decision, and you now want to elect continued benefits, you must request 
to do so no later than 10 days after you receive our notice telling you 
about continued benefits. If you fail to request continued benefits 
within the 10-day period required by paragraph (f)(1) of this section, 
but later ask that we continue your benefits pending an administrative 
law judge remand decision, we will use the rules in Sec. 404.911 to 
determine whether good cause exists for your failing to request benefit 
continuation within 10 days after receipt of the notice telling you 
about benefit continuation. We will consider the request to be timely 
and will pay continued benefits only if good cause for delay is 
established. If you make this new election, benefits may begin with the

[[Page 460]]

month of the order sending (remanding) your case back to the 
administrative law judge. Before we begin to pay you continued benefits 
as described in paragraph (h)(1) of this section we will contact you to 
determine if any adjustment is required to the amount of continued 
benefits payable due to events which may affect your right to benefits. 
If you have returned to work, we will request additional information 
about this work activity. If you are working, continued benefits may be 
started and will not be stopped because of your work while your appeal 
of the medical cessation of your disability is still pending unless you 
have completed a trial work period and are engaging in substantial 
gainful activity. If any changes have occurred which establish a basis 
for not paying continued benefits or a reduction in benefit amount, we 
will send you a notice explaining the adjustment or the reason why we 
cannot pay continued benefits. The notice will also explain your right 
to reconsideration if you disagree with this determination. If the final 
decision on your appeal of your medical cessation is a favorable one, we 
will send you a written notice in which we will advise you of your right 
to benefits, if any, before you engaged in substantial gainful activity 
and to reentitlement should you stop performing substantial gainful 
activity. If you disagree with our determination, you will have the 
right to appeal this decision. If the final decision on your appeal of 
your medical cessation is an unfavorable one (the cessation is 
affirmed), you will also be sent a written notice advising you of our 
determination, and your right to appeal if you think we are wrong.
    (6) If a court orders that your case be sent back to us (remanded) 
and your case is sent to an administrative law judge for further action 
under the rules provided in Sec. 404.983, the administrative law judge's 
decision or dismissal order on your medical cessation appeal is vacated 
and is no longer in effect. Continued benefits are payable to you and 
anyone else receiving benefits based on your wages and self-employment 
income or because of your disability pending a new decision by the 
administrative law judge or final action is taken by the Appeals Council 
on the administrative law judge's recommended decision. In these court-
remanded cases reaching the administrative law judge, we will follow the 
same rules provided in paragraphs (i) (1), (2), (3), (4) and (5) of this 
section.
    (j) Responsibility to pay back continued benefits. (1) If the final 
decision of the Commissioner affirms the determination that you are not 
entitled to benefits, you will be asked to pay back any continued 
benefits you receive. However, as described in the overpayment recovery 
and waiver provisions of subpart F of this part, you will have the right 
to ask that you not be required to pay back the benefits. You will not 
be asked to pay back any Medicare benefits you received during the 
appeal.
    (2) Anyone else receiving benefits based on your wages and self-
employment income (or because of your disability) will be asked to pay 
back any continued benefits he or she received if the determination that 
your physical or mental impairment(s) has ceased, has never existed, or 
is no longer disabling, is not changed by the final decision of the 
Commissioner. However, he or she will have the right to ask that he or 
she not be required to pay them back, as described in the overpayment 
recovery and waiver provisions of subpart F of this part. He or she will 
not be asked to pay back any Medicare benefits he or she received during 
the appeal.
    (3) Waiver of recovery of an overpayment resulting from the 
continued benefits paid to you or anyone else receiving benefits based 
on your wages and self-employment income (or because of your disability) 
may be considered as long as the determination was appealed in good 
faith. It will be assumed that such appeal is made in good faith and, 
therefore, any overpaid individual has the right to waiver consideration 
unless such individual fails to cooperate in connection with the appeal, 
e.g., if the individual fails (without good reason) to give us medical 
or other evidence we request, or to go for a physical or mental 
examination when requested by us, in connection with the appeal. In 
determining whether an individual has good cause for failure to 
cooperate and, thus, whether an appeal was made in

[[Page 461]]

good faith, we will take into account any physical, mental, educational, 
or linguistic limitations (including any lack of facility with the 
English language) the individual may have which may have caused the 
individual's failure to cooperate.

[53 FR 29020, Aug. 2, 1988; 53 FR 39015, Oct. 4, 1988, as amended at 57 
FR 1383, Jan. 14, 1992; 59 FR 1635, Jan. 12, 1994; 62 FR 38451, July 18, 
1997; 65 FR 16814, Mar. 30, 2000]



Sec. 404.1598  If you become disabled by another impairment(s).

    If a new severe impairment(s) begins in or before the month in which 
your last impairment(s) ends, we will find that your disability is 
continuing. The new impairment(s) need not be expected to last 12 months 
or to result in death, but it must be severe enough to keep you from 
doing substantial gainful activity, or severe enough so that you are 
still disabled under Sec. 404.1594.

[50 FR 50136, Dec. 6, 1985]



Sec. 404.1599  Work incentive experiments and rehabilitation 
demonstration projects in the disability program.

    (a) Authority and purpose. Section 505(a) of the Social Security 
Disability Amendments of 1980, Pub. L. 96-265, directs the Commissioner 
to develop and conduct experiments and demonstration projects designed 
to provide more cost-effective ways of encouraging disabled 
beneficiaries to return to work and leave benefit rolls. These 
experiments and demonstration projects will test the advantages and 
disadvantages of altering certain limitations and conditions that apply 
to title II disabled beneficiaries. The objective of all work incentive 
experiments or rehabilitation demonstrations is to determine whether the 
alternative requirements will save Trust Fund monies or otherwise 
improve the administration of the disability program established under 
title II of the Act.
    (b) Altering benefit requirements, limitations or conditions. 
Notwithstanding any other provision of this part, the Commissioner may 
waive compliance with the entitlement and payment requirements for 
disabled beneficiaries to carry our experiments and demonstration 
projects in the title II disability program. The projects involve 
altering certain limitations and conditions that currently apply to 
applicants and beneficiaries to test their effect on the program.
    (c) Applicability and scope--(1) Participants and nonparticipants. 
If you are selected to participate in an experiment or demonstration 
project, we may temporarily set aside one or more of the current benefit 
entitlement or payment requirements, limitations or conditions and apply 
alternative provisions to you. We may also modify current methods of 
administering the Act as part of a project and apply alternative 
procedures or policies to you. The alternative provisions or methods of 
administration used in the projects will not disadvantage you in 
contrast to current provisions, procedures or policies. If you are not 
selected to participate in the experiments or demonstration projects (or 
if you are placed in a control group which is not subject to alternative 
requirements and methods) we will continue to apply to you the current 
benefit entitlement and payment requirements, limitations and conditions 
and methods of administration in the title II disability program.
    (2) Alternative provisions or methods of administration. The 
alternative provisions or methods of administration that apply to you in 
an experiment or demonstration project may include (but are not limited 
to) one or more of the following:
    (i) Reducing your benefits (instead of not paying) on the basis of 
the amount of your earnings in excess of the SGA amount;
    (ii) Extending your benefit eligibility period that follows 9 months 
of trial work, perhaps coupled with benefit reductions related to your 
earnings;
    (iii) Extending your Medicare benefits if you are severely impaired 
and return to work even though you may not be entitled to monthly cash 
benefits;
    (iv) Altering the 24-month waiting period for Medicare entitlement; 
and
    (v) Stimulating new forms of rehabilitation.
    (d) Selection of participants. We will select a probability sample 
of participants for the work incentive experiments and demonstration 
projects from newly awarded beneficiaries who meet

[[Page 462]]

certain pre-selection criteria (for example, individuals who are likely 
to be able to do substantial work despite continuing severe 
impairments). These criteria are designed to provide larger subsamples 
of beneficiaries who are not likely either to recover medically or die. 
Participants may also be selected from persons who have been receiving 
DI benefits for 6 months or more at the time of selection.
    (e) Duration of experiments and demonstration projects. A notice 
describing each experiment or demonstration project will be published in 
the Federal Register before each experiment or project is placed in 
operation. The work incentive experiments and rehabilitation 
demonstrations will be activated in 1982. A final report on the results 
of the experiments and projects is to be completed and transmitted to 
Congress by June 9, 1993. However, the authority for the experiments and 
demonstration projects will not terminate at that time. Some of the 
alternative provisions or methods of administration may continue to 
apply to participants in an experiment or demonstration project beyond 
that date in order to assure the validity of the research. Each 
experiment and demonstration project will have a termination date (up to 
10 years from the start of the experiment or demonstration project).

[48 FR 7575, Feb. 23, 1983, as amended at 52 FR 37605, Oct. 8, 1987; 55 
FR 51687, Dec. 17, 1990; 62 FR 38451, July 18, 1997]



    Sec. Appendix 1 to Subpart P of Part 404--Listing of Impairments

    The body system listings in parts A and B of the Listing of 
Impairments will no longer be effective on the following dates unless 
extended by the Commissioner or revised and promulgated again.
1. Low Birth Weight and Failure to Thrive (100.00): June 12, 2020.
2. Musculoskeletal System (1.00 and 101.00): January 26, 2018.
3. Special Senses and Speech (2.00 and 102.00): April 29, 2018.
4. Respiratory Disorders (3.00 and 103.00): October 7, 2019.
5. Cardiovascular System (4.00 and 104.00): January 26, 2018.
6. Digestive System (5.00 and 105.00): January 26, 2018.
7. Genitourinary Disorders (6.00 and 106.00): December 9, 2019.
8. Hematological Disorders (7.00 and 107.00): May 18, 2020.
9. Skin Disorders (8.00 and 108.00): January 26, 2018.
10. Endocrine Disorders (9.00 and 109.00): June 8, 2018.
11. Congenital Disorders That Affect Multiple Body Systems (10.00 and 
          110.00): April 5, 2018.
12. Neurological Disorders (11.00 and 111.00): September 29, 2021.
13. Mental Disorders (12.00 and 112.00): January 17, 2022.
14. Cancer (Malignant Neoplastic Diseases) (13.00 and 113.00): July 20, 
          2020.
15. Immune System Disorders (14.00 and 114.00): January 17, 2020.

                                 Part A

    Criteria applicable to individuals age 18 and over and to children 
under age 18 where criteria are appropriate.

Sec.
1.00 Musculoskeletal System.
2.00 Special Senses and Speech.
3.00 Respiratory Disorders.
4.00 Cardiovascular System.
5.00 Digestive System.
6.00 Genitourinary Disorders.
7.00 Hematological Disorders.
8.00 Skin Disorders.
9.00 Endocrine Disorders.
10.00 Congenital Disorders That Affect Multiple Body Systems
11.00 Neurological Disorders.
12.00 Mental Disorders.
13.00 Cancer (Malignant Neoplastic Diseases).
14.00 Immune System Disorders.

                       1.00 Musculoskeletal System

    A. Disorders of the musculoskeletal system may result from 
hereditary, congenital, or acquired pathologic processes. Impairments 
may result from infectious, inflammatory, or degenerative processes, 
traumatic or developmental events, or neoplastic, vascular, or toxic/
metabolic diseases.
    B. Loss of function.
    1. General. Under this section, loss of function may be due to bone 
or joint deformity or destruction from any cause; miscellaneous 
disorders of the spine with or without radiculopathy or other 
neurological deficits; amputation; or fractures or soft tissue injuries, 
including burns, requiring prolonged periods of immobility or 
convalescence. The provisions of 1.02 and 1.03 notwithstanding, 
inflammatory arthritis is evaluated under 14.09 (see 14.00D6). 
Impairments with neurological causes are to be evaluated under 11.00ff.

           2. How We Define Loss of Function in These Listings

    a. General. Regardless of the cause(s) of a musculoskeletal 
impairment, functional loss

[[Page 463]]

for purposes of these listings is defined as the inability to ambulate 
effectively on a sustained basis for any reason, including pain 
associated with the underlying musculoskeletal impairment, or the 
inability to perform fine and gross movements effectively on a sustained 
basis for any reason, including pain associated with the underlying 
musculoskeletal impairment. The inability to ambulate effectively or the 
inability to perform fine and gross movements effectively must have 
lasted, or be expected to last, for at least 12 months. For the purposes 
of these criteria, consideration of the ability to perform these 
activities must be from a physical standpoint alone. When there is an 
inability to perform these activities due to a mental impairment, the 
criteria in 12.00ff are to be used. We will determine whether an 
individual can ambulate effectively or can perform fine and gross 
movements effectively based on the medical and other evidence in the 
case record, generally without developing additional evidence about the 
individual's ability to perform the specific activities listed as 
examples in 1.00B2b(2) and 1.00B2c.

          b. What We Mean by Inability To Ambulate Effectively

    (1) Definition. Inability to ambulate effectively means an extreme 
limitation of the ability to walk; i.e., an impairment(s) that 
interferes very seriously with the individual's ability to independently 
initiate, sustain, or complete activities. Ineffective ambulation is 
defined generally as having insufficient lower extremity functioning 
(see 1.00J) to permit independent ambulation without the use of a hand-
held assistive device(s) that limits the functioning of both upper 
extremities. (Listing 1.05C is an exception to this general definition 
because the individual has the use of only one upper extremity due to 
amputation of a hand.)
    (2) To ambulate effectively, individuals must be capable of 
sustaining a reasonable walking pace over a sufficient distance to be 
able to carry out activities of daily living. They must have the ability 
to travel without companion assistance to and from a place of employment 
or school. Therefore, examples of ineffective ambulation include, but 
are not limited to, the inability to walk without the use of a walker, 
two crutches or two canes, the inability to walk a block at a reasonable 
pace on rough or uneven surfaces, the inability to use standard public 
transportation, the inability to carry out routine ambulatory 
activities, such as shopping and banking, and the inability to climb a 
few steps at a reasonable pace with the use of a single hand rail. The 
ability to walk independently about one's home without the use of 
assistive devices does not, in and of itself, constitute effective 
ambulation.
    c. What we mean by inability to perform fine and gross movements 
effectively. Inability to perform fine and gross movements effectively 
means an extreme loss of function of both upper extremities; i.e., an 
impairment(s) that interferes very seriously with the individual's 
ability to independently initiate, sustain, or complete activities. To 
use their upper extremities effectively, individuals must be capable of 
sustaining such functions as reaching, pushing, pulling, grasping, and 
fingering to be able to carry out activities of daily living. Therefore, 
examples of inability to perform fine and gross movements effectively 
include, but are not limited to, the inability to prepare a simple meal 
and feed oneself, the inability to take care of personal hygiene, the 
inability to sort and handle papers or files, and the inability to place 
files in a file cabinet at or above waist level.
    d. Pain or other symptoms. Pain or other symptoms may be an 
important factor contributing to functional loss. In order for pain or 
other symptoms to be found to affect an individual's ability to perform 
basic work activities, medical signs or laboratory findings must show 
the existence of a medically determinable impairment(s) that could 
reasonably be expected to produce the pain or other symptoms. The 
musculoskeletal listings that include pain or other symptoms among their 
criteria also include criteria for limitations in functioning as a 
result of the listed impairment, including limitations caused by pain. 
It is, therefore, important to evaluate the intensity and persistence of 
such pain or other symptoms carefully in order to determine their impact 
on the individual's functioning under these listings. See also 
Secs. 404.1525(f) and 404.1529 of this part, and Secs. 416.925(f) and 
416.929 of part 416 of this chapter.

                       C. Diagnosis and Evaluation

    1. General. Diagnosis and evaluation of musculoskeletal impairments 
should be supported, as applicable, by detailed descriptions of the 
joints, including ranges of motion, condition of the musculature (e.g., 
weakness, atrophy), sensory or reflex changes, circulatory deficits, and 
laboratory findings, including findings on x-ray or other appropriate 
medically acceptable imaging. Medically acceptable imaging includes, but 
is not limited to, x-ray imaging, computerized axial tomography (CAT 
scan) or magnetic resonance imaging (MRI), with or without contrast 
material, myelography, and radionuclear bone scans. ``Appropriate'' 
means that the technique used is the proper one to support the 
evaluation and diagnosis of the impairment.
    2. Purchase of certain medically acceptable imaging. While any 
appropriate medically acceptable imaging is useful in establishing

[[Page 464]]

the diagnosis of musculoskeletal impairments, some tests, such as CAT 
scans and MRIs, are quite expensive, and we will not routinely purchase 
them. Some, such as myelograms, are invasive and may involve significant 
risk. We will not order such tests. However, when the results of any of 
these tests are part of the existing evidence in the case record we will 
consider them together with the other relevant evidence.
    3. Consideration of electrodiagnostic procedures. Electrodiagnostic 
procedures may be useful in establishing the clinical diagnosis, but do 
not constitute alternative criteria to the requirements of 1.04.
    D. The physical examination must include a detailed description of 
the rheumatological, orthopedic, neurological, and other findings 
appropriate to the specific impairment being evaluated. These physical 
findings must be determined on the basis of objective observation during 
the examination and not simply a report of the individual's allegation; 
e.g., ``He says his leg is weak, numb.'' Alternative testing methods 
should be used to verify the abnormal findings; e.g., a seated straight-
leg raising test in addition to a supine straight-leg raising test. 
Because abnormal physical findings may be intermittent, their presence 
over a period of time must be established by a record of ongoing 
management and evaluation. Care must be taken to ascertain that the 
reported examination findings are consistent with the individual's daily 
activities.

                       E. Examination of the Spine

    1. General. Examination of the spine should include a detailed 
description of gait, range of motion of the spine given quantitatively 
in degrees from the vertical position (zero degrees) or, for straight-
leg raising from the sitting and supine position (zero degrees), any 
other appropriate tension signs, motor and sensory abnormalities, muscle 
spasm, when present, and deep tendon reflexes. Observations of the 
individual during the examination should be reported; e.g., how he or 
she gets on and off the examination table. Inability to walk on the 
heels or toes, to squat, or to arise from a squatting position, when 
appropriate, may be considered evidence of significant motor loss. 
However, a report of atrophy is not acceptable as evidence of 
significant motor loss without circumferential measurements of both 
thighs and lower legs, or both upper and lower arms, as appropriate, at 
a stated point above and below the knee or elbow given in inches or 
centimeters. Additionally, a report of atrophy should be accompanied by 
measurement of the strength of the muscle(s) in question generally based 
on a grading system of 0 to 5, with 0 being complete loss of strength 
and 5 being maximum strength. A specific description of atrophy of hand 
muscles is acceptable without measurements of atrophy but should include 
measurements of grip and pinch strength.
    2. When neurological abnormalities persist. Neurological 
abnormalities may not completely subside after treatment or with the 
passage of time. Therefore, residual neurological abnormalities that 
persist after it has been determined clinically or by direct surgical or 
other observation that the ongoing or progressive condition is no longer 
present will not satisfy the required findings in 1.04. More serious 
neurological deficits (paraparesis, paraplegia) are to be evaluated 
under the criteria in 11.00ff.
    F. Major joints refers to the major peripheral joints, which are the 
hip, knee, shoulder, elbow, wrist-hand, and ankle-foot, as opposed to 
other peripheral joints (e.g., the joints of the hand or forefoot) or 
axial joints (i.e., the joints of the spine.) The wrist and hand are 
considered together as one major joint, as are the ankle and foot. Since 
only the ankle joint, which consists of the juncture of the bones of the 
lower leg (tibia and fibula) with the hindfoot (tarsal bones), but not 
the forefoot, is crucial to weight bearing, the ankle and foot are 
considered separately in evaluating weight bearing.
    G. Measurements of joint motion are based on the techniques 
described in the chapter on the extremities, spine, and pelvis in the 
current edition of the ``Guides to the Evaluation of Permanent 
Impairment'' published by the American Medical Association.

                            H. Documentation

    1. General. Musculoskeletal impairments frequently improve with time 
or respond to treatment. Therefore, a longitudinal clinical record is 
generally important for the assessment of severity and expected duration 
of an impairment unless the claim can be decided favorably on the basis 
of the current evidence.
    2. Documentation of medically prescribed treatment and response. 
Many individuals, especially those who have listing-level impairments, 
will have received the benefit of medically prescribed treatment. 
Whenever evidence of such treatment is available it must be considered.
    3. When there is no record of ongoing treatment. Some individuals 
will not have received ongoing treatment or have an ongoing relationship 
with the medical community despite the existence of a severe 
impairment(s). In such cases, evaluation will be made on the basis of 
the current objective medical evidence and other available evidence, 
taking into consideration the individual's medical history, symptoms, 
and medical source opinions. Even though an individual who does not 
receive treatment may not be able to show an impairment that meets the 
criteria of one of the musculoskeletal listings, the individual may have 
an impairment(s) equivalent in severity to one

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of the listed impairments or be disabled based on consideration of his 
or her residual functional capacity (RFC) and age, education and work 
experience.
    4. Evaluation when the criteria of a musculoskeletal listing are not 
met. These listings are only examples of common musculoskeletal 
disorders that are severe enough to prevent a person from engaging in 
gainful activity. Therefore, in any case in which an individual has a 
medically determinable impairment that is not listed, an impairment that 
does not meet the requirements of a listing, or a combination of 
impairments no one of which meets the requirements of a listing, we will 
consider medical equivalence. (See Secs. 404.1526 and 416.926.) 
Individuals who have an impairment(s) with a level of severity that does 
not meet or equal the criteria of the musculoskeletal listings may or 
may not have the RFC that would enable them to engage in substantial 
gainful activity. Evaluation of the impairment(s) of these individuals 
should proceed through the final steps of the sequential evaluation 
process in Secs. 404.1520 and 416.920 (or, as appropriate, the steps in 
the medical improvement review standard in Secs. 404.1594 and 416.994).

                         I. Effects of Treatment

    1. General. Treatments for musculoskeletal disorders may have 
beneficial effects or adverse side effects. Therefore, medical treatment 
(including surgical treatment) must be considered in terms of its 
effectiveness in ameliorating the signs, symptoms, and laboratory 
abnormalities of the disorder, and in terms of any side effects that may 
further limit the individual.
    2. Response to treatment. Response to treatment and adverse 
consequences of treatment may vary widely. For example, a pain 
medication may relieve an individual's pain completely, partially, or 
not at all. It may also result in adverse effects, e.g., drowsiness, 
dizziness, or disorientation, that compromise the individual's ability 
to function. Therefore, each case must be considered on an individual 
basis, and include consideration of the effects of treatment on the 
individual's ability to function.
    3. Documentation. A specific description of the drugs or treatment 
given (including surgery), dosage, frequency of administration, and a 
description of the complications or response to treatment should be 
obtained. The effects of treatment may be temporary or long-term. As 
such, the finding regarding the impact of treatment must be based on a 
sufficient period of treatment to permit proper consideration or 
judgment about future functioning.

              J. Orthotic, Prosthetic, or Assistive Devices

    1. General. Consistent with clinical practice, individuals with 
musculoskeletal impairments may be examined with and without the use of 
any orthotic, prosthetic, or assistive devices as explained in this 
section.
    2. Orthotic devices. Examination should be with the orthotic device 
in place and should include an evaluation of the individual's maximum 
ability to function effectively with the orthosis. It is unnecessary to 
routinely evaluate the individual's ability to function without the 
orthosis in place. If the individual has difficulty with, or is unable 
to use, the orthotic device, the medical basis for the difficulty should 
be documented. In such cases, if the impairment involves a lower 
extremity or extremities, the examination should include information on 
the individual's ability to ambulate effectively without the device in 
place unless contraindicated by the medical judgment of a physician who 
has treated or examined the individual.
    3. Prosthetic devices. Examination should be with the prosthetic 
device in place. In amputations involving a lower extremity or 
extremities, it is unnecessary to evaluate the individual's ability to 
walk without the prosthesis in place. However, the individual's medical 
ability to use a prosthesis to ambulate effectively, as defined in 
1.00B2b, should be evaluated. The condition of the stump should be 
evaluated without the prosthesis in place.
    4. Hand-held assistive devices. When an individual with an 
impairment involving a lower extremity or extremities uses a hand-held 
assistive device, such as a cane, crutch or walker, examination should 
be with and without the use of the assistive device unless 
contraindicated by the medical judgment of a physician who has treated 
or examined the individual. The individual's ability to ambulate with 
and without the device provides information as to whether, or the extent 
to which, the individual is able to ambulate without assistance. The 
medical basis for the use of any assistive device (e.g., instability, 
weakness) should be documented. The requirement to use a hand-held 
assistive device may also impact on the individual's functional capacity 
by virtue of the fact that one or both upper extremities are not 
available for such activities as lifting, carrying, pushing, and 
pulling.
    K. Disorders of the spine, listed in 1.04, result in limitations 
because of distortion of the bony and ligamentous architecture of the 
spine and associated impingement on nerve roots (including the cauda 
equina) or spinal cord. Such impingement on nerve tissue may result from 
a herniated nucleus pulposus, spinal stenosis, arachnoiditis, or other 
miscellaneous conditions.
    1. Herniated nucleus pulposus is a disorder frequently associated 
with the impingement

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of a nerve root. Nerve root compression results in a specific neuro-
anatomic distribution of symptoms and signs depending upon the nerve 
root(s) compromised.

                         2. Spinal Arachnoiditis

    a. General. Spinal arachnoiditis is a condition characterized by 
adhesive thickening of the arachnoid which may cause intermittent ill-
defined burning pain and sensory dysesthesia, and may cause neurogenic 
bladder or bowel incontinence when the cauda equina is involved.
    b. Documentation. Although the cause of spinal arachnoiditis is not 
always clear, it may be associated with chronic compression or 
irritation of nerve roots (including the cauda equina) or the spinal 
cord. For example, there may be evidence of spinal stenosis, or a 
history of spinal trauma or meningitis. Diagnosis must be confirmed at 
the time of surgery by gross description, microscopic examination of 
biopsied tissue, or by findings on appropriate medically acceptable 
imaging. Arachnoiditis is sometimes used as a diagnosis when such a 
diagnosis is unsupported by clinical or laboratory findings. Therefore, 
care must be taken to ensure that the diagnosis is documented as 
described in 1.04B. Individuals with arachnoiditis, particularly when it 
involves the lumbosacral spine, are generally unable to sustain any 
given position or posture for more than a short period of time due to 
pain.
    3. Lumbar spinal stenosis is a condition that may occur in 
association with degenerative processes, or as a result of a congenital 
anomaly or trauma, or in association with Paget's disease of the bone. 
Pseudoclaudication, which may result from lumbar spinal stenosis, is 
manifested as pain and weakness, and may impair ambulation. Symptoms are 
usually bilateral, in the low back, buttocks, or thighs, although some 
individuals may experience only leg pain and, in a few cases, the leg 
pain may be unilateral. The pain generally does not follow a particular 
neuro-anatomical distribution, i.e., it is distinctly different from the 
radicular type of pain seen with a herniated intervertebral disc, is 
often of a dull, aching quality, which may be described as 
``discomfort'' or an ``unpleasant sensation,'' or may be of even greater 
severity, usually in the low back and radiating into the buttocks region 
bilaterally. The pain is provoked by extension of the spine, as in 
walking or merely standing, but is reduced by leaning forward. The 
distance the individual has to walk before the pain comes on may vary. 
Pseudoclaudication differs from peripheral vascular claudication in 
several ways. Pedal pulses and Doppler examinations are unaffected by 
pseudoclaudication. Leg pain resulting from peripheral vascular 
claudication involves the calves, and the leg pain in vascular 
claudication is ordinarily more severe than any back pain that may also 
be present. An individual with vascular claudication will experience 
pain after walking the same distance time after time, and the pain will 
be relieved quickly when walking stops.
    4. Other miscellaneous conditions that may cause weakness of the 
lower extremities, sensory changes, areflexia, trophic ulceration, 
bladder or bowel incontinence, and that should be evaluated under 1.04 
include, but are not limited to, osteoarthritis, degenerative disc 
disease, facet arthritis, and vertebral fracture. Disorders such as 
spinal dysrhaphism (e.g., spina bifida), diastematomyelia, and tethered 
cord syndrome may also cause such abnormalities. In these cases, there 
may be gait difficulty and deformity of the lower extremities based on 
neurological abnormalities, and the neurological effects are to be 
evaluated under the criteria in 11.00ff.
    L. Abnormal curvatures of the spine. Abnormal curvatures of the 
spine (specifically, scoliosis, kyphosis and kyphoscoliosis) can result 
in impaired ambulation, but may also adversely affect functioning in 
body systems other than the musculoskeletal system. For example, an 
individual's ability to breathe may be affected; there may be cardiac 
difficulties (e.g., impaired myocardial function); or there may be 
disfigurement resulting in withdrawal or isolation. When there is 
impaired ambulation, evaluation of equivalence may be made by reference 
to 14.09A. When the abnormal curvature of the spine results in symptoms 
related to fixation of the dorsolumbar or cervical spine, evaluation of 
equivalence may be made by reference to 14.09C. When there is 
respiratory or cardiac involvement or an associated mental disorder, 
evaluation may be made under 3.00ff, 4.00ff, or 12.00ff, as appropriate. 
Other consequences should be evaluated according to the listing for the 
affected body system.
    M. Under continuing surgical management, as used in 1.07 and 1.08, 
refers to surgical procedures and any other associated treatments 
related to the efforts directed toward the salvage or restoration of 
functional use of the affected part. It may include such factors as 
post-surgical procedures, surgical complications, infections, or other 
medical complications, related illnesses, or related treatments that 
delay the individual's attainment of maximum benefit from therapy. When 
burns are not under continuing surgical management, see 8.00F.
    N. After maximum benefit from therapy has been achieved in 
situations involving fractures of an upper extremity (1.07), or soft 
tissue injuries (1.08), i.e., there have been no significant changes in 
physical findings or on appropriate medically acceptable imaging for any 
6-month period after the last definitive surgical procedure or other 
medical

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intervention, evaluation must be made on the basis of the demonstrable 
residuals, if any. A finding that 1.07 or 1.08 is met must be based on a 
consideration of the symptoms, signs, and laboratory findings associated 
with recent or anticipated surgical procedures and the resulting 
recuperative periods, including any related medical complications, such 
as infections, illnesses, and therapies which impede or delay the 
efforts toward restoration of function. Generally, when there has been 
no surgical or medical intervention for 6 months after the last 
definitive surgical procedure, it can be concluded that maximum 
therapeutic benefit has been reached. Evaluation at this point must be 
made on the basis of the demonstrable residual limitations, if any, 
considering the individual's impairment-related symptoms, signs, and 
laboratory findings, any residual symptoms, signs, and laboratory 
findings associated with such surgeries, complications, and recuperative 
periods, and other relevant evidence.
    O. Major function of the face and head, for purposes of listing 
1.08, relates to impact on any or all of the activities involving 
vision, hearing, speech, mastication, and the initiation of the 
digestive process.
    P. When surgical procedures have been performed, documentation 
should include a copy of the operative notes and available pathology 
reports.
    Q. Effects of obesity. Obesity is a medically determinable 
impairment that is often associated with disturbance of the 
musculoskeletal system, and disturbance of this system can be a major 
cause of disability in individuals with obesity. The combined effects of 
obesity with musculoskeletal impairments can be greater than the effects 
of each of the impairments considered separately. Therefore, when 
determining whether an individual with obesity has a listing-level 
impairment or combination of impairments, and when assessing a claim at 
other steps of the sequential evaluation process, including when 
assessing an individual's residual functional capacity, adjudicators 
must consider any additional and cumulative effects of obesity.

             1.01  Category of Impairments, Musculoskeletal

    1.02 Major dysfunction of a joint(s) (due to any cause): 
Characterized by gross anatomical deformity (e.g., subluxation, 
contracture, bony or fibrous ankylosis, instability) and chronic joint 
pain and stiffness with signs of limitation of motion or other abnormal 
motion of the affected joint(s), and findings on appropriate medically 
acceptable imaging of joint space narrowing, bony destruction, or 
ankylosis of the affected joint(s). With:
    A. Involvement of one major peripheral weight-bearing joint (i.e., 
hip, knee, or ankle), resulting in inability to ambulate effectively, as 
defined in 1.00B2b;

or

    B. Involvement of one major peripheral joint in each upper extremity 
(i.e., shoulder, elbow, or wrist-hand), resulting in inability to 
perform fine and gross movements effectively, as defined in 1.00B2c.
    1.03 Reconstructive surgery or surgical arthrodesis of a major 
weight-bearing joint, with inability to ambulate effectively, as defined 
in 1.00B2b, and return to effective ambulation did not occur, or is not 
expected to occur, within 12 months of onset.
    1.04  Disorders of the spine (e.g., herniated nucleus pulposus, 
spinal arachnoiditis, spinal stenosis, osteoarthritis, degenerative disc 
disease, facet arthritis, vertebral fracture), resulting in compromise 
of a nerve root (including the cauda equina) or the spinal cord. With:
    A. Evidence of nerve root compression characterized by neuro-
anatomic distribution of pain, limitation of motion of the spine, motor 
loss (atrophy with associated muscle weakness or muscle weakness) 
accompanied by sensory or reflex loss and, if there is involvement of 
the lower back, positive straight-leg raising test (sitting and supine);

or

    B. Spinal arachnoiditis, confirmed by an operative note or pathology 
report of tissue biopsy, or by appropriate medically acceptable imaging, 
manifested by severe burning or painful dysesthesia, resulting in the 
need for changes in position or posture more than once every 2 hours;

or

    C. Lumbar spinal stenosis resulting in pseudoclaudication, 
established by findings on appropriate medically acceptable imaging, 
manifested by chronic nonradicular pain and weakness, and resulting in 
inability to ambulate effectively, as defined in 1.00B2b.
    1.05 Amputation (due to any cause).
    A. Both hands; or

or

    B. One or both lower extremities at or above the tarsal region, with 
stump complications resulting in medical inability to use a prosthetic 
device to ambulate effectively, as defined in 1.00B2b, which have lasted 
or are expected to last for at least 12 months;

or

    C. One hand and one lower extremity at or above the tarsal region, 
with inability to ambulate effectively, as defined in 1.00B2b; OR
    D. Hemipelvectomy or hip disarticulation.

    1.06 Fracture of the femur, tibia, pelvis, or one or more of the 
tarsal bones. With:

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    A. Solid union not evident on appropriate medically acceptable 
imaging and not clinically solid;
and

    B. Inability to ambulate effectively, as defined in 1.00B2b, and 
return to effective ambulation did not occur or is not expected to occur 
within 12 months of onset.
    1.07 Fracture of an upper extremity with nonunion of a fracture of 
the shaft of the humerus, radius, or ulna, under continuing surgical 
management, as defined in 1.00M, directed toward restoration of 
functional use of the extremity, and such function was not restored or 
expected to be restored within 12 months of onset.
    1.08 Soft tissue injury (e.g., burns) of an upper or lower 
extremity, trunk, or face and head, under continuing surgical 
management, as defined in 1.00M, directed toward the salvage or 
restoration of major function, and such major function was not restored 
or expected to be restored within 12 months of onset. Major function of 
the face and head is described in 1.00O.

                     2.00 Special Senses and Speech

    A. How do we evaluate visual disorders?
    1. What are visual disorders? Visual disorders are abnormalities of 
the eye, the optic nerve, the optic tracts, or the brain that may cause 
a loss of visual acuity or visual fields. A loss of visual acuity limits 
your ability to distinguish detail, read, or do fine work. A loss of 
visual fields limits your ability to perceive visual stimuli in the 
peripheral extent of vision.
    2. How do we define statutory blindness? Statutory blindness is 
blindness as defined in sections 216(i)(1) and 1614(a)(2) of the Social 
Security Act (Act).
    a. The Act defines blindness as central visual acuity of 20/200 or 
less in the better eye with the use of a correcting lens. We use your 
best-corrected central visual acuity for distance in the better eye when 
we determine if this definition is met. (For visual acuity testing 
requirements, see 2.00A5.)
    b. The Act also provides that an eye that has a visual field 
limitation such that the widest diameter of the visual field subtends an 
angle no greater than 20 degrees is considered as having a central 
visual acuity of 20/200 or less. (For visual field testing requirements, 
see 2.00A6.)
    c. You have statutory blindness only if your visual disorder meets 
the criteria of 2.02 or 2.03A. You do not have statutory blindness if 
your visual disorder medically equals the criteria of 2.02 or 2.03A or 
meets or medically equals the criteria of 2.03B, 2.03C, 2.04A, or 2.04B 
because your disability is based on criteria other than those in the 
statutory definition of blindness.
    3. What evidence do we need to establish statutory blindness under 
title XVI? To establish that you have statutory blindness under title 
XVI, we need evidence showing only that your central visual acuity in 
your better eye or your visual field in your better eye meets the 
criteria in 2.00A2, provided that those measurements are consistent with 
the other evidence in your case record. We do not need documentation of 
the cause of your blindness. Also, there is no duration requirement for 
statutory blindness under title XVI (see Secs. 416.981 and 416.983 of 
this chapter).
    4. What evidence do we need to evaluate visual disorders, including 
those that result in statutory blindness under title II? To evaluate 
your visual disorder, we usually need a report of an eye examination 
that includes measurements of your best-corrected central visual acuity 
(see 2.00A5) or the extent of your visual fields (see 2.00A6), as 
appropriate. If you have visual acuity or visual field loss, we need 
documentation of the cause of the loss. A standard eye examination will 
usually indicate the cause of any visual acuity loss. A standard eye 
examination can also indicate the cause of some types of visual field 
deficits. Some disorders, such as cortical visual disorders, may result 
in abnormalities that do not appear on a standard eye examination. If 
the standard eye examination does not indicate the cause of your vision 
loss, we will request the information used to establish the presence of 
your visual disorder. If your visual disorder does not satisfy the 
criteria in 2.02, 2.03, or 2.04, we will request a description of how 
your visual disorder affects your ability to function.
    5. How do we measure your best-corrected central visual acuity?
    a. Visual acuity testing. When we need to measure your best-
corrected central visual acuity (your optimal visual acuity attainable 
with the use of a corrective lens), we use visual acuity testing for 
distance that was carried out using Snellen methodology or any other 
testing methodology that is comparable to Snellen methodology.
    (i) Your best-corrected central visual acuity for distance is 
usually measured by determining what you can see from 20 feet. If your 
visual acuity is measured for a distance other than 20 feet, we will 
convert it to a 20-foot measurement. For example, if your visual acuity 
is measured at 10 feet and is reported as 10/40, we will convert this 
measurement to 20/80.
    (ii) A visual acuity recorded as CF (counts fingers), HM (hand 
motion only), LP or LPO (light perception or light perception only), or 
NLP (no light perception) indicates that no optical correction will 
improve your visual acuity. If your central visual acuity in an eye is 
recorded as CF, HM, LP or LPO, or NLP, we will determine that your best-
corrected central visual acuity is 20/200 or less in that eye.

[[Page 469]]

    (iii) We will not use the results of pinhole testing or automated 
refraction acuity to determine your best-corrected central visual 
acuity. These tests provide an estimate of potential visual acuity but 
not an actual measurement of your best-corrected central visual acuity.
    b. Other test charts. Most test charts that use Snellen methodology 
do not have lines that measure visual acuity between 20/100 and 20/200. 
Some test charts, such as the Bailey-Lovie or the Early Treatment 
Diabetic Retinopathy Study (ETDRS), used mostly in research settings, 
have such lines. If your visual acuity is measured with one of these 
charts, and you cannot read any of the letters on the 20/100 line, we 
will determine that you have statutory blindness based on a visual 
acuity of 20/200 or less. For example, if your best-corrected central 
visual acuity for distance in the better eye is 20/160 using an ETDRS 
chart, we will find that you have statutory blindness. Regardless of the 
type of test chart used, you do not have statutory blindness if you can 
read at least one letter on the 20/100 line. For example, if your best-
corrected central visual acuity for distance in the better eye is 20/125 
+ 1 using an ETDRS chart, we will find that you do not have statutory 
blindness because you are able to read one letter on the 20/100 line.
    c. Testing using a specialized lens. In some instances, you may have 
visual acuity testing performed using specialized lens, such as a 
contact lens. We will use the visual acuity measurements obtained with a 
specialized lens only if you have demonstrated the ability to use the 
specialized lens on a sustained basis. We will not use visual acuity 
measurements obtained with telescopic lenses.
    d. Cycloplegic refraction is an examination of the eye performed 
after administering cycloplegic eye drops capable of relaxing the 
ability of the pupil to become smaller and temporarily paralyzing the 
focusing muscles. If your case record contains the results of 
cycloplegic refraction, we may use the results to determine your best-
corrected central visual acuity. We will not purchase cycloplegic 
refraction.
    e. Visual evoked response (VER) testing measures your response to 
visual events and can often detect dysfunction that is undetectable 
through other types of examinations. If you have an absent response to 
VER testing in your better eye, we will determine that your best-
corrected central visual acuity is 20/200 or less in that eye and that 
your visual acuity loss satisfies the criterion in 2.02 when these test 
results are consistent with the other evidence in your case record. If 
you have a positive response to VER testing in an eye, we will not use 
that result to determine your best-corrected central visual acuity in 
that eye.
    6. How do we measure your visual fields?
    a. General. We generally need visual field testing when you have a 
visual disorder that could result in visual field loss, such as 
glaucoma, retinitis pigmentosa, or optic neuropathy, or when you display 
behaviors that suggest a visual field loss. When we need to measure the 
extent of your visual field loss, we use visual field testing (also 
referred to as perimetry) carried out using automated static threshold 
perimetry performed on an acceptable perimeter. (For perimeter 
requirements, see 2.00A9.)
    b. Automated static threshold perimetry requirements.
    (i) The test must use a white size III Goldmann stimulus and a 31.5 
apostilb (asb) white background (or a 10 candela per square meter (cd/
m\2\) white background). The stimuli test locations must be no more than 
6 degrees apart horizontally or vertically. Measurements must be 
reported on standard charts and include a description of the size and 
intensity of the test stimulus.
    (ii) We measure the extent of your visual field loss by determining 
the portion of the visual field in which you can see a white III4e 
stimulus. The ``III'' refers to the standard Goldmann test stimulus size 
III (4 mm\2\), and the ``4e'' refers to the standard Goldmann intensity 
filter (0 decibel (dB) attenuation, which allows presentation of the 
maximum luminance) used to determine the intensity of the stimulus.
    (iii) In automated static threshold perimetry, the intensity of the 
stimulus varies. The intensity of the stimulus is expressed in decibels 
(dB). A perimeter's maximum stimulus luminance is usually assigned the 
value 0 dB. We need to determine the dB level that corresponds to a 4e 
intensity for the particular perimeter being used. We will then use the 
dB printout to determine which points you see at a 4e intensity level (a 
``seeing point''). For example:
    A. When the maximum stimulus luminance (0 dB stimulus) on an 
acceptable perimeter is 10,000 asb, a 10 dB stimulus is equivalent to a 
4e stimulus. Any point you see at 10 dB or greater is a seeing point.
    B. When the maximum stimulus luminance (0 dB stimulus) on an 
acceptable perimeter is 4,000 asb, a 6 dB stimulus is equivalent to a 4e 
stimulus. Any point you see at 6 dB or greater is a seeing point.
    C. When the maximum stimulus luminance (0 dB stimulus) on an 
acceptable perimeter is 1,000 asb, a 0 dB stimulus is equivalent to a 4e 
stimulus. Any point you see at 0 dB or greater is a seeing point.
    c. Evaluation under 2.03A. To determine statutory blindness based on 
visual field loss in your better eye (2.03A), we need the results of a 
visual field test that measures the central 24 to 30 degrees of your 
visual field; that is, the area measuring 24 to 30 degrees from the 
point of fixation. Acceptable tests

[[Page 470]]

include the Humphrey Field Analyzer (HFA) 30-2, HFA 24-2, and Octopus 
32.
    d. Evaluation under 2.03B. To determine whether your visual field 
loss meets listing 2.03B, we use the mean deviation or defect (MD) from 
acceptable automated static threshold perimetry that measures the 
central 30 degrees of the visual field. MD is the average sensitivity 
deviation from normal values for all measured visual field locations. 
When using results from HFA tests, which report the MD as a negative 
number, we use the absolute value of the MD to determine whether your 
visual field loss meets listing 2.03B. We cannot use tests that do not 
measure the central 30 degrees of the visual field, such as the HFA 24-
2, to determine if your impairment meets or medically equals 2.03B.
    e. Other types of perimetry. If the evidence in your case contains 
visual field measurements obtained using manual or automated kinetic 
perimetry, such as Goldmann perimetry or the HFA ``SSA Test Kinetic,'' 
we can generally use these results if the kinetic test was performed 
using a white III4e stimulus projected on a white 31.5 asb (10 cd/m\2\) 
background. Automated kinetic perimetry, such as the HFA ``SSA Test 
Kinetic,'' does not detect limitations in the central visual field 
because testing along a meridian stops when you see the stimulus. If 
your visual disorder has progressed to the point at which it is likely 
to result in a significant limitation in the central visual field, such 
as a scotoma (see 2.00A6h), we will not use automated kinetic perimetry 
to determine the extent of your visual field loss. Instead, we will 
determine the extent of your visual field loss using automated static 
threshold perimetry or manual kinetic perimetry.
    f. Screening tests. We will not use the results of visual field 
screening tests, such as confrontation tests, tangent screen tests, or 
automated static screening tests, to determine that your impairment 
meets or medically equals a listing or to evaluate your residual 
functional capacity. We can consider normal results from visual field 
screening tests to determine whether your visual disorder is severe when 
these test results are consistent with the other evidence in your case 
record. (See Secs. 404.1520(c), 404.1521, 416.920(c), and 416.921 of 
this chapter.) We will not consider normal test results to be consistent 
with the other evidence if the clinical findings indicate that your 
visual disorder has progressed to the point that it is likely to cause 
visual field loss, or you have a history of an operative procedure for 
retinal detachment.
    g. Use of corrective lenses. You must not wear eyeglasses during 
visual field testing because they limit your field of vision. You may 
wear contact lenses to correct your visual acuity during the visual 
field test to obtain the most accurate visual field measurements. For 
this single purpose, you do not need to demonstrate that you have the 
ability to use the contact lenses on a sustained basis.
    h. Scotoma. A scotoma is a field defect or non-seeing area (also 
referred to as a ``blind spot'') in the visual field surrounded by a 
normal field or seeing area. When we measure your visual field, we 
subtract the length of any scotoma, other than the normal blind spot, 
from the overall length of any diameter on which it falls.
    7. How do we determine your visual acuity efficiency, visual field 
efficiency, and visual efficiency?
    a. General. Visual efficiency, a calculated value of your remaining 
visual function, is the combination of your visual acuity efficiency and 
your visual field efficiency expressed as a percentage.
    b. Visual acuity efficiency. Visual acuity efficiency is a 
percentage that corresponds to the best-corrected central visual acuity 
for distance in your better eye. See Table 1.

                    Table 1--Visual Acuity Efficiency
------------------------------------------------------------------------
Snellen best-corrected central visual acuity for
                    distance                           Visual acuity
------------------------------------------------- efficiency (%) (2.04A)
        English                   Metric
------------------------------------------------------------------------
           20/16                      6/5                      100
           20/20                      6/6                      100
           20/25                    6/7.5                       95
           20/30                      6/9                       90
           20/40                     6/12                       85
           20/50                     6/15                       75
           20/60                     6/18                       70
           20/70                     6/21                       65
           20/80                     6/24                       60
          20/100                     6/30                       50
------------------------------------------------------------------------

    c. Visual field efficiency. Visual field efficiency is a percentage 
that corresponds to the visual field in your better eye. Under 2.03C, we 
require kinetic perimetry to determine your visual field efficiency 
percentage. We calculate the visual field efficiency percentage by 
adding the number of degrees you see along the eight principal meridians 
found on a visual field chart (0, 45, 90, 135, 180, 225, 270, and 315) 
in your better eye and dividing by 5. For example, in Figure 1:
    A. The diagram of the left eye illustrates a visual field, as 
measured with a III4e stimulus, contracted to 30 degrees in two 
meridians (180 and 225) and to 20 degrees in the remaining six 
meridians. The visual efficiency percentage of this field is: ((2  x  
30) + (6  x  20))  5 = 36 percent.
    B. The diagram of the right eye illustrates the extent of a normal 
visual field as measured with a III4e stimulus. The sum of the eight 
principal meridians of this field is 500 degrees. The visual efficiency 
percentage of this field is 500  5 = 100 percent.

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[GRAPHIC] [TIFF OMITTED] TR28MR13.002

    d. Visual efficiency. Under 2.04A, we calculate the visual 
efficiency percentage by multiplying your visual acuity efficiency 
percentage (see 2.00A7b) by your visual field efficiency percentage (see 
2.00A7c) and dividing by 100. For example, if your visual acuity 
efficiency percentage is 75 and your visual field efficiency percentage 
is 36, your visual efficiency percentage is: (75  x  36)  100 = 27 
percent.
    8. How do we determine your visual acuity impairment value, visual 
field impairment value, and visual impairment value?
    a. General. Visual impairment value, a calculated value of your loss 
of visual function, is the combination of your visual acuity impairment 
value and your visual field impairment value.
    b. Visual acuity impairment value. Your visual acuity impairment 
value corresponds to the best-corrected central visual acuity for 
distance in your better eye. See Table 2.

                 Table 2--Visual Acuity Impairment Value
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Snellen best-corrected central visual acuity for       Visual acuity
 distance                                               impairment
                                                     value (2.04B)
------------------------------------------------------------------------
        English                   Metric
------------------------------------------------------------------------
           20/16                      6/5                     0.00
           20/20                      6/6                     0.00
           20/25                    6/7.5                     0.10
           20/30                      6/9                     0.18
           20/40                     6/12                     0.30
           20/50                     6/15                     0.40
           20/60                     6/18                     0.48
           20/70                     6/21                     0.54
           20/80                     6/24                     0.60
          20/100                     6/30                     0.70
------------------------------------------------------------------------

    c. Visual field impairment value. Your visual field impairment value 
corresponds to the visual field in your better eye. Using the MD from 
acceptable automated static threshold perimetry, we calculate the visual 
field impairment value by dividing the absolute value of the MD by 22. 
For example, if your MD on an HFA 30-2 is ^16, your visual field 
impairment value is: ^16  22 = 0.73.
    d. Visual impairment value. Under 2.04B, we calculate the visual 
impairment value by adding your visual acuity impairment value (see 
2.00A8b) and your visual field impairment value (see 2.00A8c). For 
example, if your visual acuity impairment value is 0.48 and your visual 
field impairment value is 0.73, your visual impairment value is: 0.48 + 
0.73 = 1.21.

[[Page 472]]

    9. What are our requirements for an acceptable perimeter? We will 
use results from automated static threshold perimetry performed on a 
perimeter that:
    a. Uses optical projection to generate the test stimuli.
    b. Has an internal normative database for automatically comparing 
your performance with that of the general population.
    c. Has a statistical analysis package that is able to calculate 
visual field indices, particularly MD.
    d. Demonstrates the ability to correctly detect visual field loss 
and correctly identify normal visual fields.
    e. Demonstrates good test-retest reliability.
    f. Has undergone clinical validation studies by three or more 
independent laboratories with results published in peer-reviewed 
ophthalmic journals.
    B. How do we evaluate hearing loss?
    1. What evidence do we need?
    a. We need evidence showing that you have a medically determinable 
impairment that causes your hearing loss and audiometric measurements of 
the severity of your hearing loss. We generally require both an otologic 
examination and audiometric testing to establish that you have a 
medically determinable impairment that causes your hearing loss. You 
should have this audiometric testing within 2 months of the otologic 
examination. Once we have evidence that you have a medically 
determinable impairment, we can use the results of later audiometric 
testing to assess the severity of your hearing loss without another 
otologic examination. We will consider your test scores together with 
any other relevant information we have about your hearing, including 
information from outside of the test setting.
    b. The otologic examination must be performed by a licensed 
physician (medical or osteopathic doctor) or audiologist. It must 
include your medical history, your description of how your hearing loss 
affects you, and the physician's or audiologist's description of the 
appearance of the external ears (pinnae and external ear canals), 
evaluation of the tympanic membranes, and assessment of any middle ear 
abnormalities.
    c. Audiometric testing must be performed by, or under the 
directsupervision of, a licensed audiologist or an otolaryngologist.
    2. What audiometric testing do we need when you do not have a 
cochlear implant?
    a. We generally need pure tone air conduction and bone conduction 
testing, speech reception threshold (SRT) testing (also referred to as 
``spondee threshold'' or ``ST'' testing), and word recognition testing 
(also referred to as ``word discrimination'' or ``speech 
discrimination'' testing). This testing must be conducted in a sound-
treated booth or room and must be in accordance with the most recently 
published standards of the American National Standards Institute (ANSI). 
Each ear must be tested separately.
    b. You must not wear hearing aids during the testing. Additionally, 
a person described in 2.00B1c must perform an otoscopic examination 
immediately before the audiometric testing. (An otoscopic examination 
provides a description of the appearance of your external ear canals and 
an evaluation of the tympanic membranes. In these rules, we use the term 
to include otoscopic examinations performed by physicians and otoscopic 
inspections performed by audiologists and others.) The otoscopic 
examination must show that there are no conditions that would prevent 
valid audiometric testing, such as fluid in the ear, ear infection, or 
obstruction in an ear canal. The person performing the test should also 
report on any other factors, such as your cooperation with the test, 
that can affect the interpretation of the test results.
    c. To determine whether your hearing loss meets the air and bone 
conduction criteria in 2.10A, we will average your air and bone 
conduction hearing thresholds at 500, 1000, and 2000 Hertz (Hz). If you 
do not have a response at a particular frequency, we will use a 
threshold of 5 decibels (dB) over the limit of the audiometer.
    d. The SRT is the minimum dB level required for you to recognize 50 
percent of the words on a standard list of spondee words. (Spondee words 
are two-syllable words that have equal stress on each syllable.) The SRT 
is usually within 10 dB of the average pure tone air conduction hearing 
thresholds at 500, 1000, and 2000 Hz. If the SRT is not within 10 dB of 
the average pure tone air conduction threshold, the reason for the 
discrepancy must be documented. If we cannot determine that there is a 
medical basis for the discrepancy, we will not use the results of the 
testing to determine whether your hearing loss meets a listing.
    e. Word recognition testing determines your ability to recognize a 
standardized list of phonetically balanced monosyllabic words in the 
absence of any visual cues. This testing must be performed in quiet. The 
list may be recorded or presented live, but in either case the words 
should be presented at a level of amplification that will measure your 
maximum ability to discriminate words, usually 35 to 40 dB above your 
SRT. However, the amplification level used in the testing must be 
medically appropriate, and you must be able to tolerate it. If you 
cannot be tested at 35 to 40 dB above your SRT, the person who performs 
the test should report your word recognition testing score at your 
highest comfortable level of amplification.
    3. What audiometric testing do we need when you have a cochlear 
implant?

[[Page 473]]

    a. If you have a cochlear implant, we will consider you to be 
disabled until 1 year after initial implantation.
    b. After that period, we need word recognition testing performed 
with any version of the Hearing in Noise Test (HINT) to determine 
whether your impairment meets 2.11B. This testing must be conducted in 
quiet in a sound field. Your implant must be functioning properly and 
adjusted to your normal settings. The sentences should be presented at 
60 dB HL (Hearing Level) and without any visual cues.
    4. How do we evaluate your word recognition ability if you are not 
fluent in English?
    If you are not fluent in English, you should have word recognition 
testing using an appropriate word list for the language in which you are 
most fluent. The person conducting the test should be fluent in the 
language used for the test. If there is no appropriate word list or no 
person who is fluent in the language and qualified to perform the test, 
it may not be possible to measure your word recognition ability. If your 
word recognition ability cannot be measured, your hearing loss cannot 
meet 2.10B or 2.11B. Instead, we will consider the facts of your case to 
determine whether you have difficulty understanding words in the 
language in which you are most fluent, and if so, whether that degree of 
difficulty medically equals 2.10B or 2.11B. For example, we will 
consider how you interact with family members, interpreters, and other 
persons who speak the language in which you are most fluent.
    C. How do we evaluate vertigo associated with disturbances of 
labyrinthine-vestibular function, including Meniere's disease?
    1. These disturbances of balance are characterized by an 
hallucination of motion or loss of position sense and a sensation of 
dizziness which may be constant or may occur in paroxysmal attacks. 
Nausea, vomiting, ataxia, and incapacitation are frequently observed, 
particularly during the acute attack. It is important to differentiate 
the report of rotary vertigo from that of ``dizziness'' which is 
described as lightheadedness, unsteadiness, confusion, or syncope.
    2. Meniere's disease is characterized by paroxysmal attacks of 
vertigo, tinnitus, and fluctuating hearing loss. Remissions are 
unpredictable and irregular, but may be longlasting; hence, the severity 
of impairment is best determined after prolonged observation and serial 
reexaminations.
    3. The diagnosis of a vestibular disorder requires a comprehensive 
neuro-otolaryngologic examination with a detailed description of the 
vertiginous episodes, including notation of frequency, severity, and 
duration of the attacks. Pure tone and speech audiometry with the 
appropriate special examinations, such as Bekesy audiometry, are 
necessary. Vestibular functions is assessed by positional and caloric 
testing, preferably by electronystagmography. When polytomograms, 
contrast radiography, or other special tests have been performed, copies 
of the reports of these tests should be obtained in addition to 
appropriate medically acceptable imaging reports of the skull and 
temporal bone. Medically acceptable imaging includes, but is not limited 
to, x-ray imaging, computerized axial tomography (CAT scan) or magnetic 
resonance imaging (MRI), with or without contrast material, myelography, 
and radionuclear bone scans. ``Appropriate'' means that the technique 
used is the proper one to support the evaluation and diagnosis of the 
impairment.
    D. Loss of speech. In evaluating the loss of speech, the ability to 
produce speech by any means includes the use of mechanical or electronic 
devices that improve voice or articulation. Impairments of speech may 
also be evaluated under the body system for the underlying disorder, 
such as neurological disorders, 11.00ff.
    E. How do we evaluate impairments that do not meet one of the 
special senses and speech listings?
    1. These listings are only examples of common special senses and 
speech disorders that we consider severe enough to prevent an individual 
from doing any gainful activity. If your impairment(s) does not meet the 
criteria of any of these listings, we must also consider whether you 
have an impairment(s) that satisfies the criteria of a listing in 
another body system.
    2. If you have a medically determinable impairment(s) that does not 
meet a listing, we will determine whether the impairment(s) medically 
equals a listing. (See Secs. 404.1526 and 416.926.) If you have an 
impairment(s) that does not meet or medically equal a listing, you may 
or may not have the residual functional capacity to engage in 
substantial gainful activity. Therefore, we proceed to the fourth, and 
if necessary, the fifth steps of the sequential evaluation process in 
Secs. 404.1520 and 416.920. When we decide whether you continue to be 
disabled, we use the rules in Secs. 404.1594, 416.994, or 416.994a, as 
appropriate.
    2.01  Category of Impairments, Special Senses and Speech
    2.02  Loss of central visual acuity. Remaining vision in the better 
eye after best correction is 20/200 or less.
    2.03  Contraction of the visual field in the better eye, with:
    A. The widest diameter subtending an angle around the point of 
fixation no greater than 20 degrees.

OR

    B. An MD of 22 decibels or greater, determined by automated static 
threshold perimetry that measures the central 30 degrees of the visual 
field (see 2.00A6d).

OR


[[Page 474]]


    C. A visual field efficiency of 20 percent or less, determined by 
kinetic perimetry (see 2.00A7c).
    2.04  Loss of visual efficiency, or visual impairment, in the better 
eye:
    A. A visual efficiency percentage of 20 or less after best 
correction (see 2.00A7d).

OR

    B. A visual impairment value of 1.00 or greater after best 
correction (see 2.00A8d).
    2.07 Disturbance of labyrinthine-vestibular function (including 
Meniere's disease), characterized by a history of frequent attacks of 
balance disturbance, tinnitus, and progressive loss of hearing. With 
both A and B:
    A. Disturbed function of vestibular labyrinth demonstrated by 
caloric or other vestibular tests; and
    B. Hearing loss established by audiometry.
    2.09  Loss of speech due to any cause, with inability to produce by 
any means speech that can be heard, understood, or sustained.

  Table 1--Percentage of Visual Acuity Efficiency Corresponding to the
 Best-Corrected Visual Acuity Measurement for Distance in the Better Eye
------------------------------------------------------------------------
                         Snellen                          Percent visual
---------------------------------------------------------     acuity
                   English                       Metric     efficiency
------------------------------------------------------------------------
20/16........................................        6/5             100
20/20........................................        6/6             100
20/25........................................      6/7.5              95
20/30........................................        6/9              90
20/40........................................       6/12              85
20/50........................................       6/15              75
20/60........................................       6/18              70
20/70........................................       6/21              65
20/80........................................       6/24              60
20/100.......................................       6/30              50
------------------------------------------------------------------------


                     Table 2--Chart of Visual Fields
 
 

[GRAPHIC] [TIFF OMITTED] TR20NO06.000

    1. The diagram of the right eye illustrates the extent of a normal 
visual field as measured with a III4e stimulus. The sum of the eight 
principal meridians of this field is 500 degrees.
    2. The diagram of the left eye illustrates a visual field contracted 
to 30 degrees in two meridians and to 20 degrees in the remaining six 
meridians. The percent of visual field efficiency of this field is: (2 
x  30) + (6  x  20) = 180  500 = 0.36 or 36 percent visual field 
efficiency.
    2.10  Hearing loss not treated with cochlear implantation.
    A. An average air conduction hearing threshold of 90 decibels or 
greater in the better ear and an average bone conduction hearing 
threshold of 60 decibels or greater in the better ear (see 2.00B2c).
    OR
    B. A word recognition score of 40 percent or less in the better ear 
determined using a standardized list of phonetically balanced 
monosyllabic words (see 2.00B2e).

[[Page 475]]

    2.11  Hearing loss treated with cochlear implantation.
    A. Consider under a disability for 1 year after initial 
implantation.

    OR

    B. If more than 1 year after initial implantation, a word 
recognition score of 60 percent or less determined using the HINT (see 
2.00B3b).

                       3.00 Respiratory Disorders

    A. Which disorders do we evaluate in this body system?
    1. We evaluate respiratory disorders that result in obstruction 
(difficulty moving air out of the lungs) or restriction (difficulty 
moving air into the lungs), or that interfere with diffusion (gas 
exchange) across cell membranes in the lungs. Examples of such disorders 
and the listings we use to evaluate them include chronic obstructive 
pulmonary disease (chronic bronchitis and emphysema, 3.02), pulmonary 
fibrosis and pneumoconiosis (3.02), asthma (3.02 or 3.03), cystic 
fibrosis (3.04), and bronchiectasis (3.02 or 3.07). We also use listings 
in this body system to evaluate respiratory failure (3.04D or 3.14), 
chronic pulmonary hypertension (3.09), and lung transplantation (3.11).
    2. We evaluate cancers affecting the respiratory system under the 
listings in 13.00. We evaluate the pulmonary effects of neuromuscular 
and autoimmune disorders under these listings or under the listings in 
11.00 or 14.00, respectively.
    B. What are the symptoms and signs of respiratory disorders? 
Symptoms and signs of respiratory disorders include dyspnea (shortness 
of breath), chest pain, coughing, wheezing, sputum production, 
hemoptysis (coughing up blood from the respiratory tract), use of 
accessory muscles of respiration, and tachypnea (rapid rate of 
breathing).
    C. What abbreviations do we use in this body system?
    1. ABG means arterial blood gas.
    2. BiPAP means bi-level positive airway pressure ventilation.
    3. BTPS means body temperature and ambient pressure, saturated with 
water vapor.
    4. CF means cystic fibrosis.
    5. CFRD means CF-related diabetes.
    6. CFTR means CF transmembrane conductance regulator.
    7. CO means carbon monoxide.
    8. COPD means chronic obstructive pulmonary disease.
    9. DLCO means diffusing capacity of the lungs for carbon monoxide.
    10. FEV1 means forced expiratory volume in the first 
second of a forced expiratory maneuver.
    11. FVC means forced vital capacity.
    12. L means liter.
    13. mL CO (STPD)/min/mmHg means milliliters of carbon monoxide at 
standard temperature and pressure, dry, per minute, per millimeter of 
mercury.
    14. PaO2 means arterial blood partial pressure of oxygen.
    15. PaCO2 means arterial blood partial 
pressure of carbon dioxide.
    16. SpO2 means percentage of oxygen saturation 
of blood hemoglobin measured by pulse oximetry.
    17. 6MWT means 6-minute walk test.
    18. VI means volume of inhaled gas during a DLCO test.
    D. What documentation do we need to evaluate your respiratory 
disorder?
    1. We need medical evidence to document and assess the severity of 
your respiratory disorder. Medical evidence should include your medical 
history, physical examination findings, the results of imaging (see 
3.00D3), pulmonary function tests (see 3.00D4), other relevant 
laboratory tests, and descriptions of any prescribed treatment and your 
response to it. We may not need all of this evidence depending on your 
particular respiratory disorder and its effects on you.
    2. If you use supplemental oxygen, we still need medical evidence to 
establish the severity of your respiratory disorder.
    3. Imaging refers to medical imaging techniques, such as x-ray and 
computerized tomography. The imaging must be consistent with the 
prevailing state of medical knowledge and clinical practice as the 
proper technique to support the evaluation of the disorder.
    4. Pulmonary function tests include spirometry (which measures 
ventilation of the lungs), DLCO tests (which measure gas diffusion in 
the lungs), ABG tests (which measure the partial pressure of oxygen, 
PaO2, and carbon dioxide, PaCO2, in the arterial blood), and pulse 
oximetry (which measures oxygen saturation, SpO2, of peripheral blood 
hemoglobin).
    E. What is spirometry and what are our requirements for an 
acceptable test and report?
    1. Spirometry, which measures how well you move air into and out of 
your lungs, involves at least three forced expiratory maneuvers during 
the same test session. A forced expiratory maneuver is a maximum 
inhalation followed by a forced maximum exhalation, and measures exhaled 
volumes of air over time. The volume of air you exhale in the first 
second of the forced expiratory maneuver is the FEV1. The 
total volume of air that you exhale during the entire forced expiratory 
maneuver is the FVC. We use your highest FEV1 value to 
evaluate your respiratory disorder under 3.02A, 3.03A, and 3.04A, and 
your highest FVC value to evaluate your respiratory disorder under 
3.02B, regardless of whether the values are from the same forced 
expiratory maneuver or different forced expiratory maneuvers.

[[Page 476]]

    2. We have the following requirements for spirometry under these 
listings:
    a. You must be medically stable at the time of the test. Examples of 
when we would not consider you to be medically stable include when you 
are:
    (i) Within 2 weeks of a change in your prescribed respiratory 
medication.
    (ii) Experiencing, or within 30 days of completion of treatment for, 
a lower respiratory tract infection.
    (iii) Experiencing, or within 30 days of completion of treatment 
for, an acute exacerbation (temporary worsening) of a chronic 
respiratory disorder. Wheezing by itself does not indicate that you are 
not medically stable.
    (iv) Hospitalized, or within 30 days of a hospital discharge, for an 
acute myocardial infarction (heart attack).
    b. During testing, if your FEV1 is less than 70 percent 
of your predicted normal value, we require repeat spirometry after 
inhalation of a bronchodilator to evaluate your respiratory disorder 
under these listings, unless it is medically contraindicated. If you 
used a bronchodilator before the test and your FEV1 is less 
than 70 percent of your predicted normal value, we still require repeat 
spirometry after inhalation of a bronchodilator unless the supervising 
physician determines that it is not safe for you to take a 
bronchodilator again (in which case we may need to reschedule the test). 
If you do not have post-bronchodilator spirometry, the test report must 
explain why. We can use the results of spirometry administered without 
bronchodilators when the use of bronchodilators is medically 
contraindicated.
    c. Your forced expiratory maneuvers must be satisfactory. We 
consider a forced expiratory maneuver to be satisfactory when you exhale 
with maximum effort following a full inspiration, and when the test 
tracing has a sharp takeoff and rapid rise to peak flow, has a smooth 
contour, and either lasts for at least 6 seconds or maintains a plateau 
for at least 1 second.
    3. The spirometry report must include the following information:
    a. The date of the test and your name, age or date of birth, gender, 
and height without shoes. (We will assume that your recorded height on 
the date of the test is without shoes, unless we have evidence to the 
contrary.) If your spine is abnormally curved (for example, you have 
kyphoscoliosis), we will substitute the longest distance between your 
outstretched fingertips with your arms abducted 90 degrees in place of 
your height when this measurement is greater than your standing height 
without shoes.
    b. Any factors, if applicable, that can affect the interpretation of 
the test results (for example, your cooperation or effort in doing the 
test).
    c. Legible tracings of your forced expiratory maneuvers in a volume-
time format showing your name and the date of the test for each 
maneuver.
    4. If we purchase spirometry, the medical source we designate to 
administer the test is solely responsible for deciding whether it is 
safe for you to do the test and for how to administer it.
    F. What is a DLCO test, and what are our requirements for an 
acceptable test and report?
    1. A DLCO test measures the gas exchange across cell membranes in 
your lungs. It measures how well CO diffuses from the alveoli (air sacs) 
of your lungs into your blood. DLCO may be severely reduced in some 
disorders, such as interstitial lung disease (for example, idiopathic 
pulmonary fibrosis, asbestosis, and sarcoidosis) and COPD (particularly 
emphysema), even when the results of spirometry are not significantly 
reduced. We use the average of two of your unadjusted (that is, 
uncorrected for hemoglobin concentration) DLCO measurements reported in 
mL CO (STPD)/min/mmHg to evaluate your respiratory disorder under 
3.02C1.
    2. We have the following requirements for DLCO tests under these 
listings:
    a. You must be medically stable at the time of the test. See 
3.00E2a.
    b. The test must use the single-breath technique.
    (i) The VI during the DLCO maneuver must be at least 85 percent of 
your current FVC, and your time of inhalation must be less than 4 
seconds. (See 3.00E for our rules for programmatically acceptable 
spirometry.) If you do not have an FVC measurement on the same day as 
the DLCO test, we may use your FVC from programmatically acceptable 
spirometry administered within 90 days of the DLCO test.
    (ii) Your breath-hold time must be between 8 and 12 seconds.
    (iii) Your total exhalation time must be less than or equal to 4 
seconds, with a sample collection time of less than 3 seconds. If your 
FVC is at least 2.0 L, the washout volume must be between 0.75 L and 1.0 
L. If your FVC is less than 2.0 L, the washout volume must be at least 
0.5 L.
    3. The DLCO test report must include the following information:
    a. The date of the test and your name, age or date of birth, gender, 
and height without shoes. (We will assume that your recorded height on 
the date of the test is without shoes, unless we have evidence to the 
contrary.) If your spine is abnormally curved (for example, you have 
kyphoscoliosis), we will substitute the longest distance between your 
outstretched fingertips with your arms abducted 90 degrees in place of 
your height when this measurement is greater than your standing height 
without shoes.

[[Page 477]]

    b. Any factors, if applicable, that can affect the interpretation of 
the test results (for example, your cooperation or effort in doing the 
test).
    c. Legible tracings of your VI, breath-hold maneuver, and volume of 
exhaled gas showing your name and the date of the test for each DLCO 
maneuver.
    d. At least two acceptable (see 3.00F2) DLCO measurements within 3 
mL CO (STPD)/min/mmHg of each other or within 10 percent of the highest 
value.
    4. We may need to purchase a DLCO test to determine whether your 
disorder meets 3.02C1 when we have evidence showing that you have a 
chronic respiratory disorder that could result in impaired gas exchange, 
unless we can make a fully favorable determination or decision on 
another basis. Since the DLCO calculation requires a current FVC 
measurement, we may also purchase spirometry at the same time as the 
DLCO test, even if we already have programmatically acceptable 
spirometry.
    5. Before we purchase a DLCO test, a medical consultant (see 
Secs. 404.1616 and 416.1016 of this chapter), preferably one with 
experience in the care of people with respiratory disorders, must review 
your case record to determine if we need the test. The medical source we 
designate to administer the test is solely responsible for deciding 
whether it is safe for you to do the test and for how to administer it.
    G. What is an ABG test, and what are our requirements for an 
acceptable test and report?
    1. General. An ABG test measures PaO2, 
PaCO2, and the concentration of hydrogen ions in 
your arterial blood. We use a resting or an exercise ABG measurement to 
evaluate your respiratory disorder under 3.02C2.
    2. Resting ABG tests.
    a. We have the following requirements for resting ABG tests under 
these listings:
    (i) You must be medically stable at the time of the test. See 
3.00E2a.
    (ii) The test must be administered while you are breathing room air; 
that is, without oxygen supplementation.
    b. The resting ABG test report must include the following 
information:
    (i) Your name, the date of the test, and either the altitude or both 
the city and State of the test site.
    (ii) The PaO2 and PaCO2 
values.
    c. We may need to purchase a resting ABG test to determine whether 
your disorder meets 3.02C2 when we have evidence showing that you have a 
chronic respiratory disorder that could result in impaired gas exchange, 
unless we can make a fully favorable determination or decision on 
another basis.
    d. Before we purchase a resting ABG test, a medical consultant (see 
Secs. 404.1616 and 416.1016 of this chapter), preferably one with 
experience in the care of people with respiratory disorders, must review 
your case record to determine if we need the test. The medical source we 
designate to administer the test is solely responsible for deciding 
whether it is safe for you to do the test and for how to administer it.
    3. Exercise ABG tests.
    a. We will not purchase an exercise ABG test.
    b. We have the following requirements for exercise ABG tests under 
these listings:
    (i) You must have done the exercise under steady state conditions 
while breathing room air. If you were tested on a treadmill, you 
generally must have exercised for at least 4 minutes at a grade and 
speed providing oxygen (O2) consumption of approximately 17.5 
milliliters per kilogram per minute (mL/kg/min) or 5.0 metabolic 
equivalents (METs). If you were tested on a cycle ergometer, you 
generally must have exercised for at least 4 minutes at an exercise 
equivalent of 5.0 METs.
    (ii) We may use a test in which you have not exercised for at least 
4 minutes. If you were unable to complete at least 4 minutes of steady 
state exercise, we need a statement by the person administering the test 
about whether the results are a valid indication of your respiratory 
status. For example, this statement may include information about your 
cooperation or effort in doing the test and whether you were limited in 
completing the test because of your respiratory disorder or another 
impairment.
    c. The exercise ABG test report must include the following 
information:
    (i) Your name, the date of the test, and either the altitude or both 
the city and state of the test site.
    (ii) The PaO2 and PaCO2 
values.
    H. What is pulse oximetry, and what are our requirements for an 
acceptable test and report?
    1. Pulse oximetry measures SpO2, the 
percentage of oxygen saturation of blood hemoglobin. We use a pulse 
oximetry measurement (either at rest, during a 6MWT, or after a 6MWT) to 
evaluate your respiratory disorder under 3.02C3 or, if you have CF, to 
evaluate it under 3.04F.
    2. We have the following requirements for pulse oximetry under 
3.02C3:
    a. You must be medically stable at the time of the test. See 
3.00E2a.
    b. Your pulse oximetry measurement must be recorded while you are 
breathing room air; that is, without oxygen supplementation.
    c. Your pulse oximetry measurement must be stable. By ``stable,'' we 
mean that the range of SpO2 values (that is, 
lowest to highest) during any 15-second interval cannot exceed 2 
percentage points. For example: (1) The measurement is stable if the 
lowest SpO2 value during a 15-second interval is 
87 percent and the highest value is 89 percent--a range of 2 percentage 
points. (2) The measurement is not stable if the lowest value is 86

[[Page 478]]

percent and the highest value is 89 percent--a range of 3 percentage 
points.
    d. If you have had more than one measurement (for example, at rest 
and after a 6MWT), we will use the measurement with the lowest 
SpO2 value.
    e. The pulse oximetry report must include the following information:
    (i) Your name, the date of the test, and either the altitude or both 
the city and State of the test site.
    (ii) A graphical printout showing your SpO2 
value and a concurrent, acceptable pulse wave. An acceptable pulse wave 
is one that shows the characteristic pulse wave; that is, sawtooth-
shaped with a rapid systolic upstroke (nearly vertical) followed by a 
slower diastolic downstroke (angled downward).
    f. We may need to purchase pulse oximetry at rest to determine 
whether your disorder meets 3.02C3 when we have evidence showing that 
you have a chronic respiratory disorder that could result in impaired 
gas exchange, unless we can make a fully favorable determination or 
decision on another basis. We may purchase pulse oximetry during and 
after a 6MWT if your SpO2 value at rest is greater 
than the value in Table V.
    g. Before we purchase pulse oximetry, a medical consultant (see 
Secs. 404.1616 and 416.1016 of this chapter), preferably one with 
experience in the care of people with respiratory disorders, must review 
your case record to determine if we need the test. The medical source we 
designate to administer the test is solely responsible for deciding 
whether it is safe for you to do the test and for how to administer it.
    3. We have the following requirements for pulse oximetry under 
3.04F:
    a. You must be medically stable at the time of the test. See 
3.00E2a.
    b. Your pulse oximetry measurement must be recorded while you are 
breathing room air; that is, without oxygen supplementation.
    c. If you have had more than one measurement (for example, at rest 
and after a 6MWT), we will use the measurement with the lowest 
SpO2 value.
    d. The pulse oximetry report must include your name, the date of the 
test, and either the altitude or both the city and State of the test 
site. If you have CF, we do not require a graphical printout showing 
your SpO2 value and a concurrent, acceptable pulse 
wave.
    I. What is asthma and how do we evaluate it?
    1. Asthma is a chronic inflammatory disorder of the lung airways 
that we evaluate under 3.02 or 3.03. If you have respiratory failure 
resulting from chronic asthma (see 3.00N), we will evaluate it under 
3.14.
    2. For the purposes of 3.03:
    a. We need evidence showing that you have listing-level (see Table 
VI in 3.03A) airflow obstruction at baseline while you are medically 
stable.
    b. The phrase ``consider under a disability for 1 year'' in 3.03B 
does not refer to the date on which your disability began, only to the 
date on which we must reevaluate whether your asthma continues to meet a 
listing or is otherwise disabling.
    c. We determine the onset of your disability based on the facts of 
your case, but it will be no later than the admission date of your first 
of three hospitalizations that satisfy the criteria of 3.03B.
    J. What is CF and how do we evaluate it?
    1. General. We evaluate CF, a genetic disorder that results in 
abnormal salt and water transport across cell membranes in the lungs, 
pancreas, and other body organs, under 3.04. We need the evidence 
described in 3.00J2 to establish that you have CF.
    2. Documentation of CF. We need a report signed by a physician (see 
Secs. 404.1513(a) and 416.913(a) of this chapter) showing both a and b:
    a. One of the following:
    (i) A positive newborn screen for CF; or
    (ii) A history of CF in a sibling; or
    (iii) Documentation of at least one specific CF phenotype or 
clinical criterion (for example, chronic sino-pulmonary disease with 
persistent colonization or infections with typical CF pathogens, 
pancreatic insufficiency, or salt-loss syndromes); and
    b. One of the following definitive laboratory tests:
    (i) An elevated sweat chloride concentration equal to or greater 
than 60 millimoles per L; or
    (ii) The identification of two CF gene mutations affecting the CFTR; 
or
    (iii) Characteristic abnormalities in ion transport across the nasal 
epithelium.
    c. When we have the report showing a and b, but it is not signed by 
a physician, we also need a report from a physician stating that you 
have CF.
    d. When we do not have the report showing a and b, we need a report 
from a physician that is persuasive that a positive diagnosis of CF was 
confirmed by an appropriate definitive laboratory test. To be 
persuasive, this report must include a statement by the physician that 
you had the appropriate definitive laboratory test for diagnosing CF. 
The report must provide the test results or explain how your diagnosis 
was established that is consistent with the prevailing state of medical 
knowledge and clinical practice.
    3. CF pulmonary exacerbations. Examples of CF pulmonary 
exacerbations include increased cough and sputum production, hemoptysis, 
increased shortness of breath, increased fatigue, and reduction in 
pulmonary function. Treatment usually includes intravenous antibiotics 
and intensified airway clearance therapy (for example, increased 
frequencies of chest percussion or

[[Page 479]]

increased use of inhaled nebulized therapies, such as bronchodilators or 
mucolytics).
    4. For 3.04G, we require any two exacerbations or complications from 
the list in 3.04G1 through 3.04G4 within a 12-month period. You may have 
two of the same exacerbation or complication or two different ones.
    a. If you have two of the acute exacerbations or complications we 
describe in 3.04G1 and 3.04G2, there must be at least 30 days between 
the two.
    b. If you have one of the acute exacerbations or complications we 
describe in 3.04G1 and 3.04G2 and one of the chronic complications we 
describe in 3.04G3 and 3.04G4, the two can occur during the same time. 
For example, your CF meets 3.04G if you have the pulmonary hemorrhage we 
describe in 3.04G2 and the weight loss we describe in 3.04G3 even if the 
pulmonary hemorrhage occurs during the 90-day period in 3.04G3.
    c. Your CF also meets 3.04G if you have both of the chronic 
complications in 3.04G3 and 3.04G4.
    5. CF may also affect other body systems such as digestive or 
endocrine. If your CF, including pulmonary exacerbations and 
nonpulmonary complications, does not meet or medically equal a 
respiratory disorders listing, we may evaluate your CF-related 
impairments under the listings in the affected body system.
    K. What is bronchiectasis and how do we evaluate it? Bronchiectasis 
is a chronic respiratory disorder that is characterized by abnormal and 
irreversible dilatation (enlargement) of the airways below the trachea, 
which may be associated with the accumulation of mucus, bacterial 
infections, and eventual airway scarring. We require imaging (see 
3.00D3) to document this disorder. We evaluate your bronchiectasis under 
3.02, or under 3.07 if you are having exacerbations or complications 
(for example, acute bacterial infections, increased shortness of breath, 
or coughing up blood) that require hospitalization.
    L. What is chronic pulmonary hypertension and how do we evaluate it?
    1. Chronic pulmonary hypertension is an increase in the blood 
pressure of the blood vessels of the lungs. If pulmonary hypertension is 
not adequately treated, it can eventually result in right heart failure. 
We evaluate chronic pulmonary hypertension due to any cause under 3.09.
    2. Chronic pulmonary hypertension is usually diagnosed by 
catheterization of the pulmonary artery. We will not purchase cardiac 
catheterization.
    M. How do we evaluate lung transplantation? If you receive a lung 
transplant (or a lung transplant simultaneously with other organs, such 
as the heart), we will consider you to be disabled under 3.11 for 3 
years from the date of the transplant. After that, we evaluate your 
residual impairment(s) by considering the adequacy of your post-
transplant function, the frequency and severity of any rejection 
episodes you have, complications in other body systems, and adverse 
treatment effects. People who receive organ transplants generally have 
impairments that meet our definition of disability before they undergo 
transplantation. The phrase ``consider under a disability for 3 years'' 
in 3.11 does not refer to the date on which your disability began, only 
to the date on which we must reevaluate whether your impairment(s) 
continues to meet a listing or is otherwise disabling. We determine the 
onset of your disability based on the facts of your case.
    N. What is respiratory failure and how do we evaluate it? 
Respiratory failure is the inability of the lungs to perform their basic 
function of gas exchange. We evaluate respiratory failure under 3.04D if 
you have CF-related respiratory failure, or under 3.14 if you have 
respiratory failure due to any other chronic respiratory disorder. 
Continuous positive airway pressure does not satisfy the criterion in 
3.04D or 3.14, and cannot be substituted as an equivalent finding, for 
invasive mechanical ventilation or noninvasive ventilation with BiPAP.
    O. How do we consider the effects of obesity when we evaluate your 
respiratory disorder? Obesity is a medically determinable impairment 
that is often associated with respiratory disorders. Obesity makes it 
harder for the chest and lungs to expand, which can compromise the 
ability of the respiratory system to supply adequate oxygen to the body. 
The combined effects of obesity with a respiratory disorder can be 
greater than the effects of each of the impairments considered 
separately. We consider any additional and cumulative effects of your 
obesity when we determine whether you have a severe respiratory 
disorder, a listing-level respiratory disorder, a combination of 
impairments that medically equals the severity of a listed impairment, 
and when we assess your residual functional capacity.
    P. What are sleep-related breathing disorders and how do we evaluate 
them?
    1. Sleep-related breathing disorders (for example, sleep apnea) are 
characterized by transient episodes of interrupted breathing during 
sleep, which disrupt normal sleep patterns. Prolonged episodes can 
result in disorders such as hypoxemia (low blood oxygen) and pulmonary 
vasoconstriction (restricted blood flow in pulmonary blood vessels). 
Over time, these disorders may lead to chronic pulmonary hypertension or 
other complications.
    2. We evaluate the complications of sleep-related breathing 
disorders under the listings in the affected body system(s). For 
example, we evaluate chronic pulmonary hypertension due to any cause 
under 3.09; chronic heart failure under 4.02; and disturbances in mood, 
cognition, and behavior under

[[Page 480]]

12.02 or another appropriate mental disorders listing. We will not 
purchase polysomnography (sleep study).
    Q. How do we evaluate mycobacterial, mycotic, and other chronic 
infections of the lungs? We evaluate chronic infections of the lungs 
that result in limitations in your respiratory function under 3.02.
    R. How do we evaluate respiratory disorders that do not meet one of 
these listings?
    1. These listings are only examples of common respiratory disorders 
that we consider severe enough to prevent you from doing any gainful 
activity. If your impairment(s) does not meet the criteria of any of 
these listings, we must also consider whether you have an impairment(s) 
that meets the criteria of a listing in another body system. For 
example, if your CF has resulted in chronic pancreatic or hepatobiliary 
disease, we evaluate your impairment under the listings in 5.00.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. See Secs. 404.1526 and 416.926 of this 
chapter. Respiratory disorders may be associated with disorders in other 
body systems, and we consider the combined effects of multiple 
impairments when we determine whether they medically equal a listing. If 
your impairment(s) does not meet or medically equal a listing, you may 
or may not have the residual functional capacity to engage in 
substantial gainful activity. We proceed to the fourth step and, if 
necessary, the fifth step of the sequential evaluation process in 
Secs. 404.1520 and 416.920 of this chapter. We use the rules in 
Secs. 404.1594 and 416.994 of this chapter, as appropriate, when we 
decide whether you continue to be disabled.

          3.01  Category of Impairments, Respiratory Disorders

    3.02  Chronic respiratory disorders due to any cause except CF (for 
CF, see 3.04) with A, B, C, or D:
    A. FEV1 (see 3.00E) less than or equal to the value in 
Table I-A or I-B for your age, gender, and height without shoes (see 
3.00E3a).

                                        Table I--FEV1 Criteria for 3.02A
----------------------------------------------------------------------------------------------------------------
                                                             Table I-A                       Table I-B
                                                 ---------------------------------------------------------------
                                                  Age 18 to attainment of age 20          Age 20 or older
     Height without shoes        Height without  ---------------------------------------------------------------
  (centimeters) < means less    shoes (inches) <   Females FEV1     Males FEV1     Females FEV1     Males FEV1
             than                means less than   less than or    less than or    less than or    less than or
                                                   equal to (L,    equal to (L,    equal to (L,    equal to (L,
                                                       BTPS)           BTPS)           BTPS)           BTPS)
----------------------------------------------------------------------------------------------------------------
<153.0........................  <60.25..........            1.20            1.45            1.05            1.20
153.0 to <159.0...............  60.25 to <62.50.            1.30            1.55            1.15            1.35
159.0 to <164.0...............  62.50 to <64.50.            1.40            1.65            1.25            1.40
164.0 to <169.0...............  64.50 to <66.50.            1.45            1.75            1.35            1.50
169.0 to <174.0...............  66.50 to <68.50.            1.55            1.85            1.45            1.60
174.0 to <180.0...............  68.50 to <70.75.            1.65            2.00            1.55            1.75
180.0 to <185.0...............  70.75 to <72.75.            1.75            2.10            1.65            1.85
185.0 or more.................  72.75 or more...            1.80            2.15            1.70            1.90
----------------------------------------------------------------------------------------------------------------

    OR
    B. FVC (see 3.00E) less than or equal to the value in Table II-A or 
II-B for your age, gender, and height without shoes (see 3.00E3a).

 
                                                            Table II-A                      Table II-B
                                                 ---------------------------------------------------------------
                                                  Age 18 to attainment of age 20          Age 20 or older
     Height without shoes        Height without  ---------------------------------------------------------------
  (centimeters) < means less    shoes (inches) <    Females FVC                     Females FVC
             than                means less than   less than or   Males FVC less   less than or   Males FVC less
                                                   equal to (L,    than or equal   equal to (L,    than or equal
                                                       BTPS)       to (L, BTPS)        BTPS)       to (L, BTPS)
----------------------------------------------------------------------------------------------------------------
<153.0........................  <60.25..........            1.35            1.65            1.30            1.50
153.0 to <159.0...............  60.25 to <62.50.            1.50            1.80            1.40            1.65
159.0 to <164.0...............  62.50 to <64.50.            1.60            1.90            1.50            1.75
164.0 to <169.0...............  64.50 to <66.50.            1.70            2.05            1.60            1.90
169.0 to <174.0...............  66.50 to <68.50.            1.80            2.20            1.70            2.00
174.0 to <180.0...............  68.50 to <70.75.            1.90            2.35            1.85            2.20
180.0 to <185.0...............  70.75 to <72.75.            2.05            2.50            1.95            2.30
185.0 or more.................  72.75 or more...            2.10            2.60            2.00            2.40
----------------------------------------------------------------------------------------------------------------


[[Page 481]]

    OR
    C. Chronic impairment of gas exchange demonstrated by 1, 2, or 3:
    1. Average of two unadjusted, single-breath DLCO measurements (see 
3.00F) less than or equal to the value in Table III for your gender and 
height without shoes (see 3.00F3a); or

                                       Table III--DLCO Criteria for 3.02C1
----------------------------------------------------------------------------------------------------------------
                                        Height without shoes     Females DLCO less than  Males DLCO less than or
Height without shoes (centimeters) <    (inches) < means less      or equal to (mL CO    equal to (mL CO (STPD)/
           means less than                      than                (STPD)/min/mmHg)            min/mmHg)
----------------------------------------------------------------------------------------------------------------
<153.0..............................  < 60.25.................                      8.0                      9.0
153.0 to <159.0.....................  60.25 to <62.50.........                      8.5                      9.5
159.0 to <164.0.....................  62.50 to <64.50.........                      9.0                     10.0
164.0 to <169.0.....................  64.50 to <66.50.........                      9.5                     10.5
169.0 to <174.0.....................  66.50 to <68.50.........                     10.0                     11.0
174.0 to <180.0.....................  68.50 to <70.75.........                     10.5                     11.5
180.0 to <185.0.....................  70.75 to <72.75.........                     11.0                     12.0
185.0 or more.......................  72.75 or more...........                     11.5                     12.5
----------------------------------------------------------------------------------------------------------------

    2. Arterial PaO2 and 
PaCO2 measured concurrently by an ABG test, while 
at rest or during steady state exercise, breathing room air (see 
3.00G3b), less than or equal to the applicable values in Table IV-A, IV-
B, or IV-C; or

          Tables IV-A, IV-B, and IV-C--ABG Criteria for 3.02C2

                               Table IV-A
     [Applicable at test sites less than 3,000 feet above sea level]
------------------------------------------------------------------------
                                                           Arterial PaO2
                                                           less than or
               Arterial PaCO2 (mm Hg) and                  equal to (mm
                                                                Hg)
------------------------------------------------------------------------
30 or below.............................................              65
31......................................................              64
32......................................................              63
33......................................................              62
34......................................................              61
35......................................................              60
36......................................................              59
37......................................................              58
38......................................................              57
39......................................................              56
40 or above.............................................              55
------------------------------------------------------------------------


                               Table IV-B
[Applicable at test sites from 3,000 through 6,000 feet above sea level]
------------------------------------------------------------------------
                                                           Arterial PaO2
                                                           less than or
               Arterial PaCO2 (mm Hg) and                  equal to (mm
                                                                Hg)
------------------------------------------------------------------------
30 or below.............................................              60
31......................................................              59
32......................................................              58
33......................................................              57
34......................................................              56
35......................................................              55
36......................................................              54
37......................................................              53
38......................................................              52
39......................................................              51
40 or above.............................................              50
------------------------------------------------------------------------


                               Table IV-C
       [Applicable at test sites over 6,000 feet above sea level]
------------------------------------------------------------------------
                                                           Arterial PaO2
                                                           less than or
               Arterial PaCO2 (mm Hg) and                  equal to (mm
                                                                Hg)
------------------------------------------------------------------------
30 or below.............................................              55
31......................................................              54
32......................................................              53
33......................................................              52
34......................................................              51
35......................................................              50
36......................................................              49
37......................................................              48
38......................................................              47
39......................................................              46
40 or above.............................................              45
------------------------------------------------------------------------

    3. SpO2 measured by pulse oximetry (see 
3.00H2) either at rest, during a 6MWT, or after a 6MWT, less than or 
equal to the value in Table V.

                    Table V--SpO2 Criteria for 3.02C3
------------------------------------------------------------------------
   Test site altitude (feet above sea
                 level)                     SpO2 less than or equal to
------------------------------------------------------------------------
Less than 3,000.........................  87 percent.
3,000 through 6,000.....................  85 percent.
Over 6,000..............................  83 percent.
------------------------------------------------------------------------

    OR
    D. Exacerbations or complications requiring three hospitalizations 
within a 12-month period and at least 30 days apart (the 12-month period 
must occur within the period we are considering in connection with your 
application or continuing disability review). Each hospitalization must 
last at least 48 hours, including hours in a hospital emergency 
department immediately before the hospitalization.
    3.03  Asthma (see 3.00I), with both A and B:
    A. FEV1 (see 3.00E1) less than or equal to the value in 
Table VI-A or VI-B for your age, gender, and height without shoes (see

[[Page 482]]

3.00E3a) measured within the same 12-month period as the 
hospitalizations in 3.03B.

                                        Table VI--FEV1 Criteria for 3.03A
----------------------------------------------------------------------------------------------------------------
                                                            Table VI-A                      Table VI-B
                                                 ---------------------------------------------------------------
                                                  Age 18 to attainment of age 20          Age 20 or older
     Height without shoes        Height without  ---------------------------------------------------------------
  (centimeters) < means less    shoes (inches) <   Females FEV1     Males FEV1     Females FEV1     Males FEV1
             than                means less than   less than or    less than or    less than or    less than or
                                                   equal to (L,    equal to (L,    equal to (L,    equal to (L,
                                                       BTPS)           BTPS)           BTPS)           BTPS)
----------------------------------------------------------------------------------------------------------------
<153.0........................  <60.25..........            1.65            1.90            1.45            1.60
153.0 to <159.0...............  60.25 to <62.50.            1.75            2.05            1.55            1.75
159.0 to <164.0...............  62.50 to <64.50.            1.85            2.15            1.65            1.90
164.0 to <169.0...............  64.50 to <66.50.            1.95            2.30            1.75            2.00
169.0 to <174.0...............  66.50 to <68.50.            2.05            2.45            1.85            2.15
174.0 to <180.0...............  68.50 to <70.75.            2.20            2.60            2.00            2.30
180.0 to <185.0...............  70.75 to <72.75.            2.35            2.75            2.10            2.45
185.0 or more.................  72.75 or more...            2.40            2.85            2.20            2.55
----------------------------------------------------------------------------------------------------------------

    AND
    B. Exacerbations or complications requiring three hospitalizations 
within a 12-month period and at least 30 days apart (the 12-month period 
must occur within the period we are considering in connection with your 
application or continuing disability review). Each hospitalization must 
last at least 48 hours, including hours in a hospital emergency 
department immediately before the hospitalization. Consider under a 
disability for 1 year from the discharge date of the last 
hospitalization; after that, evaluate the residual impairment(s) under 
3.03 or another appropriate listing.
    3.04  Cystic fibrosis (documented as described in 3.00J2) with A, B, 
C, D, E, F, or G:
    A. FEV1 (see 3.00E) less than or equal to the value in 
Table VII-A or VII-B for your age, gender, and height without shoes (see 
3.00E3a).

                                       Table VII--FEV1 Criteria for 3.04A
----------------------------------------------------------------------------------------------------------------
                                                            Table VII-A                     Table VII-B
                                                 ---------------------------------------------------------------
                                                  Age 18 to attainment of age 20          Age 20 or older
     Height without shoes        Height without  ---------------------------------------------------------------
  (centimeters) < means less    shoes (inches) <   Females FEV1     Males FEV1     Females FEV1     Males FEV1
             than                means less than   less than or    less than or    less than or    less than or
                                                   equal to (L,    equal to (L,    equal to (L,    equal to (L,
                                                       BTPS)           BTPS)           BTPS)           BTPS)
----------------------------------------------------------------------------------------------------------------
<153.0........................  <60.25..........            1.65            1.90            1.45            1.60
153.0 to <159.0...............  60.25 to <62.50.            1.75            2.05            1.55            1.75
159.0 to <164.0...............  62.50 to <64.50.            1.85            2.15            1.65            1.90
164.0 to <169.0...............  64.50 to <66.50.            1.95            2.30            1.75            2.00
169.0 to <174.0...............  66.50 to <68.50.            2.05            2.45            1.85            2.15
174.0 to <180.0...............  68.50 to <70.75.            2.20            2.60            2.00            2.30
180.0 to <185.0...............  70.75 to <72.75.            2.35            2.75            2.10            2.45
185.0 or more.................  72.75 or more...            2.40            2.85            2.20            2.55
----------------------------------------------------------------------------------------------------------------

    OR
    B. Exacerbations or complications (see 3.00J3) requiring three 
hospitalizations of any length within a 12-month period and at least 30 
days apart (the 12-month period must occur within the period we are 
considering in connection with your application or continuing disability 
review).
    OR
    C. Spontaneous pneumothorax, secondary to CF, requiring chest tube 
placement.
    OR
    D. Respiratory failure (see 3.00N) requiring invasive mechanical 
ventilation, noninvasive ventilation with BiPAP, or a combination of 
both treatments, for a continuous period of at least 48 hours, or for a 
continuous period of at least 72 hours if postoperatively.
    OR
    E. Pulmonary hemorrhage requiring vascular embolization to control 
bleeding.
    OR
    F. SpO2 measured by pulse oximetry (see 
3.00H3) either at rest, during a 6MWT, or after a 6MWT, less than or 
equal to the value

[[Page 483]]

in Table VIII, twice within a 12-month period and at least 30 days apart 
(the 12-month period must occur within the period we are considering in 
connection with your application or continuing disability review).

                  Tables VIII--SpO2 Criteria for 3.04F
------------------------------------------------------------------------
   Test site altitude (feet above sea
                 level)                     SpO2 less than or equal to
------------------------------------------------------------------------
Less than 3,000.........................  89 percent.
3,000 through 6,000.....................  87 percent.
Over 6,000..............................  85 percent.
------------------------------------------------------------------------

    OR
    G. Two of the following exacerbations or complications (either two 
of the same or two different, see 3.00J3 and 3.00J4) within a 12-month 
period (the 12-month period must occur within the period we are 
considering in connection with your application or continuing disability 
review):
    1. Pulmonary exacerbation requiring 10 consecutive days of 
intravenous antibiotic treatment.
    2. Pulmonary hemorrhage (hemoptysis with more than blood-streaked 
sputum but not requiring vascular embolization) requiring 
hospitalization of any length.
    3. Weight loss requiring daily supplemental enteral nutrition via a 
gastrostomy for at least 90 consecutive days or parenteral nutrition via 
a central venous catheter for at least 90 consecutive days.
    4. CFRD requiring daily insulin therapy for at least 90 consecutive 
days.
    3.05 [Reserved]
    3.06 [Reserved]
    3.07  Bronchiectasis (see 3.00K), documented by imaging (see 
3.00D3), with exacerbations or complications requiring three 
hospitalizations within a 12-month period and at least 30 days apart 
(the 12-month period must occur within the period we are considering in 
connection with your application or continuing disability review). Each 
hospitalization must last at least 48 hours, including hours in a 
hospital emergency department immediately before the hospitalization.
    3.08 [Reserved]
    3.09  Chronic pulmonary hypertension due to any cause (see 3.00L) 
documented by mean pulmonary artery pressure equal to or greater than 40 
mm Hg as determined by cardiac catheterization while medically stable 
(see 3.00E2a).
    3.10 [Reserved]
    3.11  Lung transplantation (see 3.00M). Consider under a disability 
for 3 years from the date of the transplant; after that, evaluate the 
residual impairment(s).
    3.12 [Reserved]
    3.13 [Reserved]
    3.14  Respiratory failure (see 3.00N) resulting from any underlying 
chronic respiratory disorder except CF (for CF, see 3.04D), requiring 
invasive mechanical ventilation, noninvasive ventilation with BiPAP, or 
a combination of both treatments, for a continuous period of at least 48 
hours, or for a continuous period of at least 72 hours if 
postoperatively, twice within a 12-month period and at least 30 days 
apart (the 12-month period must occur within the period we are 
considering in connection with your application or continuing disability 
review).

                       4.00 Cardiovascular System

                               A. General

    1. What do we mean by a cardiovascular impairment?
    a. We mean any disorder that affects the proper functioning of the 
heart or the circulatory system (that is, arteries, veins, capillaries, 
and the lymphatic drainage). The disorder can be congenital or acquired.
    b. Cardiovascular impairment results from one or more of four 
consequences of heart disease:
    (i) Chronic heart failure or ventricular dysfunction.
    (ii) Discomfort or pain due to myocardial ischemia, with or without 
necrosis of heart muscle.
    (iii) Syncope, or near syncope, due to inadequate cerebral perfusion 
from any cardiac cause, such as obstruction of flow or disturbance in 
rhythm or conduction resulting in inadequate cardiac output.
    (iv) Central cyanosis due to right-to-left shunt, reduced oxygen 
concentration in the arterial blood, or pulmonary vascular disease.
    c. Disorders of the veins or arteries (for example, obstruction, 
rupture, or aneurysm) may cause impairments of the lower extremities 
(peripheral vascular disease), the central nervous system, the eyes, the 
kidneys, and other organs. We will evaluate peripheral vascular disease 
under 4.11 or 4.12 and impairments of another body system(s) under the 
listings for that body system(s).
    2. What do we consider in evaluating cardiovascular impairments? The 
listings in this section describe cardiovascular impairments based on 
symptoms, signs, laboratory findings, response to a regimen of 
prescribed treatment, and functional limitations.
    3. What do the following terms or phrases mean in these listings?
    a. Medical consultant is an individual defined in Secs. 404.1616(a) 
and 416.1016(a). This term does not include medical sources who provide 
consultative examinations for us. We use the abbreviation ``MC'' 
throughout this section to designate a medical consultant.
    b. Persistent means that the longitudinal clinical record shows 
that, with few exceptions, the required finding(s) has been present, or 
is expected to be present, for a continuous period of at least 12 
months, such that a pattern of continuing severity is established.

[[Page 484]]

    c. Recurrent means that the longitudinal clinical record shows that, 
within a consecutive 12-month period, the finding(s) occurs at least 
three times, with intervening periods of improvement of sufficient 
duration that it is clear that separate events are involved.
    d. Appropriate medically acceptable imaging means that the technique 
used is the proper one to evaluate and diagnose the impairment and is 
commonly recognized as accurate for assessing the cited finding.
    e. A consecutive 12-month period means a period of 12 consecutive 
months, all or part of which must occur within the period we are 
considering in connection with an application or continuing disability 
review.
    f. Uncontrolled means the impairment does not adequately respond to 
standard prescribed medical treatment.

                B. Documenting Cardiovascular Impairment

    1. What basic documentation do we need? We need sufficiently 
detailed reports of history, physical examinations, laboratory studies, 
and any prescribed treatment and response to allow us to assess the 
severity and duration of your cardiovascular impairment. A longitudinal 
clinical record covering a period of not less than 3 months of 
observations and treatment is usually necessary, unless we can make a 
determination or decision based on the current evidence.
    2. Why is a longitudinal clinical record important? We will usually 
need a longitudinal clinical record to assess the severity and expected 
duration of your impairment(s). If you have a listing-level impairment, 
you probably will have received medically prescribed treatment. Whenever 
there is evidence of such treatment, your longitudinal clinical record 
should include a description of the ongoing management and evaluation 
provided by your treating or other medical source. It should also 
include your response to this medical management, as well as information 
about the nature and severity of your impairment. The record will 
provide us with information on your functional status over an extended 
period of time and show whether your ability to function is improving, 
worsening, or unchanging.
    3. What if you have not received ongoing medical treatment?
    a. You may not have received ongoing treatment or have an ongoing 
relationship with the medical community despite the existence of a 
severe impairment(s). In this situation, we will base our evaluation on 
the current objective medical evidence and the other evidence we have. 
If you do not receive treatment, you cannot show an impairment that 
meets the criteria of most of these listings. However, we may find you 
disabled because you have another impairment(s) that in combination with 
your cardiovascular impairment medically equals the severity of a listed 
impairment or based on consideration of your residual functional 
capacity and age, education, and work experience.
    b. Unless we can decide your claim favorably on the basis of the 
current evidence, a longitudinal record is still important. In rare 
instances where there is no or insufficient longitudinal evidence, we 
may purchase a consultative examination(s) to help us establish the 
severity and duration of your impairment.
    4. When will we wait before we ask for more evidence?
    a. We will wait when we have information showing that your 
impairment is not yet stable and the expected change in your impairment 
might affect our determination or decision. In these situations, we need 
to wait to properly evaluate the severity and duration of your 
impairment during a stable period. Examples of when we might wait are:
    (i) If you have had a recent acute event; for example, a myocardial 
infarction (heart attack).
    (ii) If you have recently had a corrective cardiac procedure; for 
example, coronary artery bypass grafting.
    (iii) If you have started new drug therapy and your response to this 
treatment has not yet been established; for example, beta-blocker 
therapy for dilated congestive cardiomyopathy.
    b. In these situations, we will obtain more evidence 3 months 
following the event before we evaluate your impairment. However, we will 
not wait if we have enough information to make a determination or 
decision based on all of the relevant evidence in your case.
    5. Will we purchase any studies? In appropriate situations, we will 
purchase studies necessary to substantiate the diagnosis or to document 
the severity of your impairment, generally after we have evaluated the 
medical and other evidence we already have. We will not purchase studies 
involving exercise testing if there is significant risk involved or if 
there is another medical reason not to perform the test. We will follow 
sections 4.00C6, 4.00C7, and 4.00C8 when we decide whether to purchase 
exercise testing.
    6. What studies will we not purchase? We will not purchase any 
studies involving cardiac catheterization, such as coronary angiography, 
arteriograms, or electrophysiological studies. However, if the results 
of catheterization are part of the existing evidence we have, we will 
consider them together with the other relevant evidence. See 4.00C15a.

                  C. Using Cardiovascular Test Results

    1. What is an ECG?
    a. ECG stands for electrocardiograph or electrocardiogram. An 
electrocardiograph is a machine that records electrical impulses of your 
heart on a strip of paper called an electrocardiogram or a tracing. To 
record the ECG, a technician positions a number of

[[Page 485]]

small contacts (or leads) on your arms, legs, and across your chest to 
connect them to the ECG machine. An ECG may be done while you are 
resting or exercising.
    b. The ECG tracing may indicate that you have a heart abnormality. 
It may indicate that your heart muscle is not getting as much oxygen as 
it needs (ischemia), that your heart rhythm is abnormal (arrhythmia), or 
that there are other abnormalities of your heart, such as left 
ventricular enlargement.
    2. How do we evaluate ECG evidence? We consider a number of factors 
when we evaluate ECG evidence:
    a. An original or legible copy of the 12-lead ECG obtained at rest 
must be appropriately dated and labeled, with the standardization 
inscribed on the tracing. Alteration in standardization of specific 
leads (such as to accommodate large QRS amplitudes) must be identified 
on those leads.
    (i) Detailed descriptions or computer-averaged signals without 
original or legible copies of the ECG as described in listing 4.00C2a 
are not acceptable.
    (ii) The effects of drugs or electrolyte abnormalities must be 
considered as possible noncardiac causes of ECG abnormalities of 
ventricular repolarization; that is, those involving the ST segment and 
T wave. If available, the predrug (especially digitalis glycosides) ECG 
should be submitted.
    b. ECGs obtained in conjunction with treadmill, bicycle, or arm 
exercise tests should meet the following specifications:
    (i) ECG reports must include the original calibrated ECG tracings or 
a legible copy.
    (ii) A 12-lead baseline ECG must be recorded in the upright position 
before exercise.
    (iii) A 12-lead ECG should be recorded at the end of each minute of 
exercise.
    (iv) If ECG documentation of the effects of hyperventilation is 
obtained, the exercise test should be deferred for at least 10 minutes 
because metabolic changes of hyperventilation may alter the physiologic 
and ECG-recorded response to exercise.
    (v) Post-exercise ECGs should be recorded using a generally accepted 
protocol consistent with the prevailing state of medical knowledge and 
clinical practice.
    (vi) All resting, exercise, and recovery ECG strips must have the 
standardization inscribed on the tracing. The ECG strips should be 
labeled to indicate the date, the times recorded and the relationship to 
the stage of the exercise protocol. The speed and grade (treadmill test) 
or work rate (bicycle or arm ergometric test) should be recorded. The 
highest level of exercise achieved, heart rate and blood pressure levels 
during testing, and the reason(s) for terminating the test (including 
limiting signs or symptoms) must be recorded.
    3. What are exercise tests and what are they used for?
    a. Exercise tests have you perform physical activity and record how 
your cardiovascular system responds. Exercise tests usually involve 
walking on a treadmill, but other forms of exercise, such as an exercise 
bicycle or an arm exercise machine, may be used. Exercise testing may be 
done for various reasons; such as to evaluate the severity of your 
coronary artery disease or peripheral vascular disease or to evaluate 
your progress after a cardiac procedure or an acute event, like a 
myocardial infarction (heart attack). Exercise testing is the most 
widely used testing for identifying the presence of myocardial ischemia 
and for estimating maximal aerobic capacity (usually expressed in METs--
metabolic equivalents) if you have heart disease.
    b. We include exercise tolerance test (ETT) criteria in 4.02B3 
(chronic heart failure) and 4.04A (ischemic heart disease). To meet the 
ETT criteria in these listings, the ETT must be a sign-or symptom-
limited test in which you exercise while connected to an ECG until you 
develop a sign or symptom that indicates that you have exercised as much 
as is considered safe for you.
    c. In 4.12B, we also refer to exercise testing for peripheral 
vascular disease. In this test, you walk on a treadmill, usually for a 
specified period of time, and the individual who administers the test 
measures the effect of exercise on the flow of blood in your legs, 
usually by using ultrasound. The test is also called an exercise Doppler 
test. Even though this test is intended to evaluate peripheral vascular 
disease, it will be stopped for your safety if you develop abnormal 
signs or symptoms because of heart disease.
    d. Each type of test is done in a certain way following specific 
criteria, called a protocol. For our program, we also specify certain 
aspects of how any exercise test we purchase is to be done. See 4.00C10 
and 4.00C17.
    4. Do ETTs have limitations? An ETT provides an estimate of aerobic 
capacity for walking on a grade, bicycling, or moving one's arms in an 
environmentally controlled setting. Therefore, ETT results do not 
correlate with the ability to perform other types of exertional 
activities, such as lifting and carrying heavy loads, and do not provide 
an estimate of the ability to perform activities required for work in 
all possible work environments or throughout a workday. Also, certain 
medications (such as beta blockers) and conduction disorders (such as 
left or right bundle branch blocks) can cause false-negative or false-
positive results. Therefore, we must consider the results of an ETT 
together with all the other relevant evidence in your case record.
    5. How does an ETT with measurement of maximal or peak oxygen uptake 
VO2) differ from other ETTs? Occasionally, medical evidence

[[Page 486]]

will include the results of an ETT with VO2 While ETTs 
without measurement of VO2 provide only an estimate of 
aerobic capacity, measured maximal or peak oxygen uptake provides an 
accurate measurement of aerobic capacity, which is often expressed in 
METs (metabolic equivalents). The MET level may not be indicated in the 
report of attained maximal or peak VO2 testing, but can be 
calculated as follows: 1 MET = 3.5 milliliters (ml) of oxygen uptake per 
kilogram (kg) of body weight per minute. For example, a 70 kg (154 lb.) 
individual who achieves a maximal or peak VO2 of 1225 ml in 1 
minute has attained 5 METs (1225 ml/70 kg/1 min = 17.5 ml/kg/min. 17.5/
3.5 = 5 METs).
    6. When will we consider whether to purchase an exercise test?
    a. We will consider whether to purchase an exercise test when:
    (i) There is a question whether your cardiovascular impairment meets 
or medically equals the severity of one of the listings, or there is no 
timely test in the evidence we have (see 4.00C9), and we cannot find you 
disabled on some other basis; or
    (ii) We need to assess your residual functional capacity and there 
is insufficient evidence in the record to make a determination or 
decision.
    b. We will not purchase an exercise test when we can make our 
determination or decision based on the evidence we already have.
    7. What must we do before purchasing an exercise test?
    a. Before we purchase an exercise test, an MC, preferably one with 
experience in the care of patients with cardiovascular disease, must 
review the pertinent history, physical examinations, and laboratory 
tests that we have to determine whether the test would present a 
significant risk to you or if there is some other medical reason not to 
purchase the test (see 4.00C8).
    b. If you are under the care of a treating source (see 
Secs. 404.1502 and 416.902) for a cardiovascular impairment, this source 
has not performed an exercise test, and there are no reported 
significant risks to testing, we will request a statement from that 
source explaining why it was not done or should not be done before we 
decide whether we will purchase the test.
    c. The MC, in accordance with the regulations and other instructions 
on consultative examinations, will generally give great weight to the 
treating source's opinion about the risk of exercise testing to you and 
will generally not override it. In the rare situation in which the MC 
does override the treating source's opinion, the MC must prepare a 
written rationale documenting the reasons for overriding the opinion.
    d. If you do not have a treating source or we cannot obtain a 
statement from your treating source, the MC is responsible for assessing 
the risk to exercise testing based on a review of the records we have 
before purchasing an exercise test for you.
    e. We must also provide your records to the medical source who 
performs the exercise test for review prior to conducting the test if 
the source does not already have them. The medical source who performs 
the exercise test has the ultimate responsibility for deciding whether 
you would be at risk.
    8. When will we not purchase an exercise test or wait before we 
purchase an exercise test?
    a. We will not purchase an exercise test when an MC finds that you 
have one of the following significant risk factors:
    (i) Unstable angina not previously stabilized by medical treatment.
    (ii) Uncontrolled cardiac arrhythmias causing symptoms or 
hemodynamic compromise.
    (iii) An implanted cardiac defibrillator.
    (iv) Symptomatic severe aortic stenosis.
    (v) Uncontrolled symptomatic heart failure.
    (vi) Aortic dissection.
    (vii) Severe pulmonary hypertension (pulmonary artery systolic 
pressure greater than 60 mm Hg).
    (viii) Left main coronary stenosis of 50 percent or greater that has 
not been bypassed.
    (ix) Moderate stenotic valvular disease with a systolic gradient 
across the aortic valve of 50 mm Hg or greater.
    (x) Severe arterial hypertension (systolic greater than 200 mm Hg or 
diastolic greater than 110 mm Hg).
    (xi) Hypertrophic cardiomyopathy with a systolic gradient of 50 mm 
Hg or greater.
    b. We also will not purchase an exercise test when you are prevented 
from performing exercise testing due to another impairment affecting 
your ability to use your arms and legs.
    c. We will not purchase an ETT to document the presence of a cardiac 
arrhythmia.
    d. We will wait to purchase an exercise test until 3 months after 
you have had one of the following events. This will allow for maximal, 
attainable restoration of functional capacity.
    (i) Acute myocardial infarction.
    (ii) Surgical myocardial revascularization (bypass surgery).
    (iii) Other open-heart surgical procedures.
    (iv) Percutaneous transluminal coronary angioplasty with or without 
stenting.
    e. If you are deconditioned after an extended period of bedrest or 
inactivity and could improve with activity, or if you are in acute heart 
failure and are expected to improve with treatment, we will wait an 
appropriate period of time for you to recuperate before we purchase an 
exercise test.
    9. What do we mean by a ``timely'' test?
    a. We consider exercise test results to be timely for 12 months 
after the date they are performed, provided there has been no

[[Page 487]]

change in your clinical status that may alter the severity of your 
cardiovascular impairment.
    b. However, an exercise test that is older than 12 months, 
especially an abnormal one, can still provide information important to 
our adjudication. For example, a test that is more than 12 months old 
can provide evidence of ischemic heart disease or peripheral vascular 
disease, information on decreased aerobic capacity, or information about 
the duration or onset of your impairment. Such tests can be an important 
component of the longitudinal record.
    c. When we evaluate a test that is more than 12 months old, we must 
consider the results in the context of all the relevant evidence, 
including why the test was performed and whether there has been an 
intervening event or improvement or worsening of your impairment.
    d. We will purchase a new exercise test only if we cannot make a 
determination or decision based on the evidence we have.
    10. How must ETTs we purchase be performed?
    a. The ETT must be a sign- or symptom-limited test characterized by 
a progressive multistage regimen. It must be performed using a generally 
accepted protocol consistent with the prevailing state of medical 
knowledge and clinical practice. A description of the protocol that was 
followed must be provided, and the test must meet the requirements of 
4.00C2b and this section. A radionuclide perfusion scan may be useful 
for detecting or confirming ischemia when resting ECG abnormalities, 
medications, or other factors may decrease the accuracy of ECG 
interpretation of ischemia. (The perfusion imaging is done at the 
termination of exercise, which may be at a higher MET level than that at 
which ischemia first occurs. If the imaging confirms the presence of 
reversible ischemia, the exercise ECG may be useful for detecting the 
MET level at which ischemia initially appeared.) Exercise tests may also 
be performed using echocardiography to detect stress-induced ischemia 
and left ventricular dysfunction (see 4.00C12 and 4.00C13).
    b. The exercise test must be paced to your capabilities and be 
performed following the generally accepted standards for adult exercise 
test laboratories. With a treadmill test, the speed, grade (incline), 
and duration of exercise must be recorded for each exercise test stage 
performed. Other exercise test protocols or techniques should use 
similar workloads. The exercise protocol may need to be modified in 
individual cases to allow for a lower initial workload with more slowly 
graded increments than the standard Bruce protocol.
    c. Levels of exercise must be described in terms of workload and 
duration of each stage; for example, treadmill speed and grade, or 
bicycle ergometer work rate in kpm/min or watts.
    d. The exercise laboratory's physical environment, staffing, and 
equipment must meet the generally accepted standards for adult exercise 
test laboratories.
    11. How do we evaluate ETT results? We evaluate ETT results on the 
basis of the work level at which the test becomes abnormal, as 
documented by onset of signs or symptoms and any ECG or imaging 
abnormalities. The absence of an ischemic response on an ETT alone does 
not exclude the diagnosis of ischemic heart disease. We must consider 
the results of an ETT in the context of all of the other evidence in 
your case record.
    12. When are ETTs done with imaging? When resting ECG abnormalities 
preclude interpretation of ETT tracings relative to ischemia, a 
radionuclide (for example, thallium-201 or technetium-99m) perfusion 
scan or echocardiography in conjunction with an ETT provides better 
results. You may have resting ECG abnormalities when you have a 
conduction defect--for example, Wolff-Parkinson-White syndrome, left 
bundle branch block, left ventricular hypertrophy--or when you are 
taking digitalis or other antiarrhythmic drugs, or when resting ST 
changes are present. Also, these techniques can provide a reliable 
estimate of ejection fraction.
    13. Will we purchase ETTs with imaging? We may purchase an ETT with 
imaging in your case after an MC, preferably one with experience in the 
care of patients with cardiovascular disease, has reviewed your medical 
history and physical examination, any report(s) of appropriate medically 
acceptable imaging, ECGs, and other appropriate tests. We will consider 
purchasing an ETT with imaging when other information we have is not 
adequate for us to assess whether you have severe ventricular 
dysfunction or myocardial ischemia, there is no significant risk 
involved (see 4.00C8a), and we cannot make our determination or decision 
based on the evidence we already have.
    14. What are drug-induced stress tests? These tests are designed 
primarily to provide evidence about myocardial ischemia or prior 
myocardial infarction, but do not require you to exercise. These tests 
are used when you cannot exercise or cannot exercise enough to achieve 
the desired cardiac stress. Drug-induced stress tests can also provide 
evidence about heart chamber dimensions and function; however, these 
tests do not provide information about your aerobic capacity and cannot 
be used to help us assess your ability to function. Some of these tests 
use agents, such as Persantine or adenosine, that dilate the coronary 
arteries and are used in combination with nuclear agents, such as 
thallium or technetium (for example, Cardiolyte or Myoview), and a 
myocardial

[[Page 488]]

scan. Other tests use agents, such as dobutamine, that stimulate the 
heart to contract more forcefully and faster to simulate exercise and 
are used in combination with a 2-dimensional echocardiogram. We may, 
when appropriate, purchase a drug-induced stress test to confirm the 
presence of myocardial ischemia after a review of the evidence in your 
file by an MC, preferably one with experience in the care of patients 
with cardiovascular disease.
    15. How do we evaluate cardiac catheterization evidence?
    a. We will not purchase cardiac catheterization; however, if you 
have had catheterization, we will make every reasonable effort to obtain 
the report and any ancillary studies. We will consider the quality and 
type of data provided and its relevance to the evaluation of your 
impairment. For adults, we generally see two types of catheterization 
reports: Coronary arteriography and left ventriculography.
    b. For coronary arteriography, the report should provide information 
citing the method of assessing coronary arterial lumen diameter and the 
nature and location of obstructive lesions. Drug treatment at baseline 
and during the procedure should be reported. Some individuals with 
significant coronary atherosclerotic obstruction have collateral vessels 
that supply the myocardium distal to the arterial obstruction so that 
there is no evidence of myocardial damage or ischemia, even with 
exercise. When the results of quantitative computer measurements and 
analyses are included in your case record, we will consider them in 
interpreting the severity of stenotic lesions.
    c. For left ventriculography, the report should describe the wall 
motion of the myocardium with regard to any areas of hypokinesis 
(abnormally decreased motion), akinesis (lack of motion), or dyskinesis 
(distortion of motion), and the overall contraction of the ventricle as 
measured by the ejection fraction. Measurement of chamber volumes and 
pressures may be useful. Quantitative computer analysis provides precise 
measurement of segmental left ventricular wall thickness and motion. 
There is often a poor correlation between left ventricular function at 
rest and functional capacity for physical activity.
    16. What details should exercise Doppler test reports contain? The 
reports of exercise Doppler tests must describe the level of exercise; 
for example, the speed and grade of the treadmill settings, the duration 
of exercise, symptoms during exercise, and the reasons for stopping 
exercise if the expected level of exercise was not attained. They must 
also include the blood pressures at the ankle and other pertinent sites 
measured after exercise and the time required for the systolic blood 
pressure to return toward or to the pre-exercise level. The graphic 
tracings, if available, should also be included with the report. All 
tracings must be annotated with the standardization used by the testing 
facility.
    17. How must exercise Doppler tests we purchase be performed? When 
we purchase an exercise Doppler test, you must exercise on a treadmill 
at 2 mph on a 12 percent grade for up to 5 minutes. The reports must 
include the information specified in 4.00C16. Because this is an 
exercise test, we must evaluate whether such testing would put you at 
significant risk, in accordance with the guidance found in 4.00C6, 
4.00C7, and 4.00C8.

                   D. Evaluating Chronic Heart Failure

    1. What is chronic heart failure (CHF)?
    a. CHF is the inability of the heart to pump enough oxygenated blood 
to body tissues. This syndrome is characterized by symptoms and signs of 
pulmonary or systemic congestion (fluid retention) or limited cardiac 
output. Certain laboratory findings of cardiac functional and structural 
abnormality support the diagnosis of CHF. There are two main types of 
CHF:
    (i) Predominant systolic dysfunction (the inability of the heart to 
contract normally and expel sufficient blood), which is characterized by 
a dilated, poorly contracting left ventricle and reduced ejection 
fraction (abbreviated EF, it represents the percentage of the blood in 
the ventricle actually pumped out with each contraction), and
    (ii) Predominant diastolic dysfunction (the inability of the heart 
to relax and fill normally), which is characterized by a thickened 
ventricular muscle, poor ability of the left ventricle to distend, 
increased ventricular filling pressure, and a normal or increased EF.
    b. CHF is considered in these listings as a single category whether 
due to atherosclerosis (narrowing of the arteries), cardiomyopathy, 
hypertension, or rheumatic, congenital, or other heart disease. However, 
if the CHF is the result of primary pulmonary hypertension secondary to 
disease of the lung (cor pulmonale), we will evaluate your impairment 
using 3.09, in the respiratory system listings.
    2. What evidence of CHF do we need?
    a. Cardiomegaly or ventricular dysfunction must be present and 
demonstrated by appropriate medically acceptable imaging, such as chest 
x-ray, echocardiography (M-Mode, 2-dimensional, and Doppler), 
radionuclide studies, or cardiac catheterization.
    (i) Abnormal cardiac imaging showing increased left ventricular end 
diastolic diameter (LVEDD), decreased EF, increased left atrial chamber 
size, increased ventricular filling pressures measured at cardiac 
catheterization, or increased left ventricular wall or septum thickness, 
provides objective measures of both left ventricular function and 
structural abnormality in heart failure.

[[Page 489]]

    (ii) An LVEDD greater than 6.0 cm or an EF of 30 percent or less 
measured during a period of stability (that is, not during an episode of 
acute heart failure) may be associated clinically with systolic failure.
    (iii) Left ventricular posterior wall thickness added to septal 
thickness totaling 2.5 cm or greater with left atrium enlarged to 4.5 cm 
or greater may be associated clinically with diastolic failure.
    (iv) However, these measurements alone do not reflect your 
functional capacity, which we evaluate by considering all of the 
relevant evidence. In some situations, we may need to purchase an ETT to 
help us assess your functional capacity.
    (v) Other findings on appropriate medically acceptable imaging may 
include increased pulmonary vascular markings, pleural effusion, and 
pulmonary edema. These findings need not be present on each report, 
since CHF may be controlled by prescribed treatment.
    b. To establish that you have chronic heart failure, your medical 
history and physical examination should describe characteristic symptoms 
and signs of pulmonary or systemic congestion or of limited cardiac 
output associated with the abnormal findings on appropriate medically 
acceptable imaging. When an acute episode of heart failure is triggered 
by a remediable factor, such as an arrhythmia, dietary sodium overload, 
or high altitude, cardiac function may be restored and a chronic 
impairment may not be present.
    (i) Symptoms of congestion or of limited cardiac output include easy 
fatigue, weakness, shortness of breath (dyspnea), cough, or chest 
discomfort at rest or with activity. Individuals with CHF may also 
experience shortness of breath on lying flat (orthopnea) or episodes of 
shortness of breath that wake them from sleep (paroxysmal nocturnal 
dyspnea). They may also experience cardiac arrhythmias resulting in 
palpitations, lightheadedness, or fainting.
    (ii) Signs of congestion may include hepatomegaly, ascites, 
increased jugular venous distention or pressure, rales, peripheral 
edema, or rapid weight gain. However, these signs need not be found on 
all examinations because fluid retention may be controlled by prescribed 
treatment.
    3. Is it safe for you to have an ETT, if you have CHF? The presence 
of CHF is not necessarily a contraindication to an ETT, unless you are 
having an acute episode of heart failure. Measures of cardiac 
performance are valuable in helping us evaluate your ability to do work-
related activities. Exercise testing has been safely used in individuals 
with CHF; therefore, we may purchase an ETT for evaluation under 4.02B3 
if an MC, preferably one experienced in the care of patients with 
cardiovascular disease, determines that there is no significant risk to 
you. (See 4.00C6 for when we will consider the purchase of an ETT. See 
4.00C7-4.00C8 for what we must do before we purchase an ETT and when we 
will not purchase one.) ST segment changes from digitalis use in the 
treatment of CHF do not preclude the purchase of an ETT.
    4. How do we evaluate CHF using 4.02?
    a. We must have objective evidence, as described in 4.00D2, that you 
have chronic heart failure.
    b. To meet the required level of severity for this listing, your 
impairment must satisfy the requirements of one of the criteria in A and 
one of the criteria in B.
    c. In 4.02B2, the phrase periods of stabilization means that, for at 
least 2 weeks between episodes of acute heart failure, there must be 
objective evidence of clearing of the pulmonary edema or pleural 
effusions and evidence that you returned to, or you were medically 
considered able to return to, your prior level of activity.
    d. Listing 4.02B3c requires a decrease in systolic blood pressure 
below the baseline level (taken in the standing position immediately 
prior to exercise) or below any systolic pressure reading recorded 
during exercise. This is because, normally, systolic blood pressure and 
heart rate increase gradually with exercise. Decreases in systolic blood 
pressure below the baseline level that occur during exercise are often 
associated with ischemia-induced left ventricular dysfunction resulting 
in decreased cardiac output. However, a blunted response (that is, 
failure of the systolic blood pressure to rise 10 mm Hg or more), 
particularly in the first 3 minutes of exercise, may be drug-related and 
is not necessarily associated with left ventricular dysfunction. Also, 
some individuals with increased sympathetic responses because of 
deconditioning or apprehension may increase their systolic blood 
pressure and heart rate above their baseline level just before and early 
into exercise. This can be associated with a drop in systolic pressure 
in early exercise that is not due to left ventricular dysfunction. 
Therefore, an early decrease in systolic blood pressure must be 
interpreted within the total context of the test; that is, the presence 
or absence of symptoms such as lightheadedness, ischemic changes, or 
arrhythmias on the ECG.

                  E. Evaluating Ischemic Heart Disease

    1. What is ischemic heart disease (IHD)? IHD results when one or 
more of your coronary arteries is narrowed or obstructed or, in rare 
situations, constricted due to vasospasm, interfering with the normal 
flow of blood to your heart muscle (ischemia). The obstruction may be 
the result of an embolus, a thrombus, or plaque. When heart muscle 
tissue dies as a result of the reduced blood supply, it is called a 
myocardial infarction (heart attack).

[[Page 490]]

    2. What causes chest discomfort of myocardial origin?
    a. Chest discomfort of myocardial ischemic origin, commonly known as 
angina pectoris, is usually caused by coronary artery disease (often 
abbreviated CAD). However, ischemic discomfort may be caused by a 
noncoronary artery impairment, such as aortic stenosis, hypertrophic 
cardiomyopathy, pulmonary hypertension, or anemia.
    b. Instead of typical angina pectoris, some individuals with IHD 
experience atypical angina, anginal equivalent, variant angina, or 
silent ischemia, all of which we may evaluate using 4.04. We discuss the 
various manifestations of ischemia in 4.00E3-4.00E7.
    3. What are the characteristics of typical angina pectoris? 
Discomfort of myocardial ischemic origin (angina pectoris) is discomfort 
that is precipitated by effort or emotion and promptly relieved by rest, 
sublingual nitroglycerin (that is, nitroglycerin tablets that are placed 
under the tongue), or other rapidly acting nitrates. Typically, the 
discomfort is located in the chest (usually substernal) and described as 
pressing, crushing, squeezing, burning, aching, or oppressive. Sharp, 
sticking, or cramping discomfort is less common. Discomfort occurring 
with activity or emotion should be described specifically as to timing 
and usual inciting factors (type and intensity), character, location, 
radiation, duration, and response to nitrate treatment or rest.
    4. What is atypical angina? Atypical angina describes discomfort or 
pain from myocardial ischemia that is felt in places other than the 
chest. The common sites of cardiac pain are the inner aspect of the left 
arm, neck, jaw(s), upper abdomen, and back, but the discomfort or pain 
can be elsewhere. When pain of cardiac ischemic origin presents in an 
atypical site in the absence of chest discomfort, the source of the pain 
may be difficult to diagnose. To represent atypical angina, your 
discomfort or pain should have precipitating and relieving factors 
similar to those of typical chest discomfort, and we must have objective 
medical evidence of myocardial ischemia; for example, ECG or ETT 
evidence or appropriate medically acceptable imaging.
    5. What is anginal equivalent? Often, individuals with IHD will 
complain of shortness of breath (dyspnea) on exertion without chest pain 
or discomfort. In a minority of such situations, the shortness of breath 
is due to myocardial ischemia; this is called anginal equivalent. To 
represent anginal equivalent, your shortness of breath should have 
precipitating and relieving factors similar to those of typical chest 
discomfort, and we must have objective medical evidence of myocardial 
ischemia; for example, ECG or ETT evidence or appropriate medically 
acceptable imaging. In these situations, it is essential to establish 
objective evidence of myocardial ischemia to ensure that you do not have 
effort dyspnea due to non-ischemic or non-cardiac causes.
    6. What is variant angina?
    a. Variant angina (Prinzmetal's angina, vasospastic angina) refers 
to the occurrence of anginal episodes at rest, especially at night, 
accompanied by transitory ST segment elevation (or, at times, ST 
depression) on an ECG. It is due to severe spasm of a coronary artery, 
causing ischemia of the heart wall, and is often accompanied by major 
ventricular arrhythmias, such as ventricular tachycardia. We will 
consider variant angina under 4.04 only if you have spasm of a coronary 
artery in relation to an obstructive lesion of the vessel. If you have 
an arrhythmia as a result of variant angina, we may consider your 
impairment under 4.05.
    b. Variant angina may also occur in the absence of obstructive 
coronary disease. In this situation, an ETT will not demonstrate 
ischemia. The diagnosis will be established by showing the typical 
transitory ST segment changes during attacks of pain, and the absence of 
obstructive lesions shown by catheterization. Treatment in cases where 
there is no obstructive coronary disease is limited to medications that 
reduce coronary vasospasm, such as calcium channel blockers and 
nitrates. In such situations, we will consider the frequency of anginal 
episodes despite prescribed treatment when evaluating your residual 
functional capacity.
    c. Vasospasm that is catheter-induced during coronary angiography is 
not variant angina.
    7. What is silent ischemia?
    a. Myocardial ischemia, and even myocardial infarction, can occur 
without perception of pain or any other symptoms; when this happens, we 
call it silent ischemia. Pain sensitivity may be altered by a variety of 
diseases, most notably diabetes mellitus and other neuropathic 
disorders. Individuals also vary in their threshold for pain.
    b. Silent ischemia occurs most often in:
    (i) Individuals with documented past myocardial infarction or 
established angina without prior infarction who do not have chest pain 
on ETT, but have a positive test with ischemic abnormality on ECG, 
perfusion scan, or other appropriate medically acceptable imaging.
    (ii) Individuals with documented past myocardial infarction or 
angina who have ST segment changes on ambulatory monitoring (Holter 
monitoring) that are similar to those that occur during episodes of 
angina. ST depression shown on the ambulatory recording should not be 
interpreted as positive for ischemia unless similar depression is also 
seen during chest pain episodes annotated in the diary that the 
individual keeps while wearing the Holter monitor.

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    c. ST depression can result from a variety of factors, such as 
postural changes and variations in cardiac sympathetic tone. In 
addition, there are differences in how different Holter monitors record 
the electrical responses. Therefore, we do not consider the Holter 
monitor reliable for the diagnosis of silent ischemia except in the 
situation described in 4.00E7b(ii).
    8. What other sources of chest discomfort are there? Chest 
discomfort of nonischemic origin may result from other cardiac 
impairments, such as pericarditis. Noncardiac impairments may also 
produce symptoms mimicking that of myocardial ischemia. These 
impairments include acute anxiety or panic attacks, gastrointestinal 
tract disorders, such as esophageal spasm, esophagitis, hiatal hernia, 
biliary tract disease, gastritis, peptic ulcer, and pancreatitis, and 
musculoskeletal syndromes, such as chest wall muscle spasm, chest wall 
syndrome (especially after coronary bypass surgery), costochondritis, 
and cervical or dorsal spine arthritis. Hyperventilation may also mimic 
ischemic discomfort. Thus, in the absence of documented myocardial 
ischemia, such disorders should be considered as possible causes of 
chest discomfort.
    9. How do we evaluate IHD using 4.04?
    a. We must have objective evidence, as described under 4.00C, that 
your symptoms are due to myocardial ischemia.
    b. Listing-level changes on the ECG in 4.04A1 are the classically 
accepted changes of horizontal or downsloping ST depression occurring 
both during exercise and recovery. Although we recognize that ischemic 
changes may at times occur only during exercise or recovery, and may at 
times be upsloping with only junctional ST depression, such changes can 
be false positive; that is, occur in the absence of ischemia. Diagnosis 
of ischemia in this situation requires radionuclide or echocardiogram 
confirmation. See 4.00C12 and 4.00C13.
    c. Also in 4.04A1, we require that the depression of the ST segment 
last for at least 1 minute of recovery because ST depression that occurs 
during exercise but that rapidly normalizes in recovery is a common 
false-positive response.
    d. In 4.04A2, we specify that the ST elevation must be in non-
infarct leads during both exercise and recovery. This is because, in the 
absence of ECG signs of prior infarction, ST elevation during exercise 
denotes ischemia, usually severe, requiring immediate termination of 
exercise. However, if there is baseline ST elevation in association with 
a prior infarction or ventricular aneurysm, further ST elevation during 
exercise does not necessarily denote ischemia and could be a false-
positive ECG response. Diagnosis of ischemia in this situation requires 
radionuclide or echocardiogram confirmation. See 4.00C12 and 4.00C13.
    e. Listing 4.04A3 requires a decrease in systolic blood pressure 
below the baseline level (taken in the standing position immediately 
prior to exercise) or below any systolic pressure reading recorded 
during exercise. This is the same finding required in 4.02B3c. See 
4.00D4d for full details.
    f. In 4.04B, each of the three ischemic episodes must require 
revascularization or be not amenable to treatment. Revascularization 
means angioplasty (with or without stent placement) or bypass surgery. 
However, reocclusion that occurs after a revascularization procedure but 
during the same hospitalization and that requires a second procedure 
during the same hospitalization will not be counted as another ischemic 
episode. Not amenable means that the revascularization procedure could 
not be done because of another medical impairment or because the vessel 
was not suitable for revascularization.
    g. We will use 4.04C only when you have symptoms due to myocardial 
ischemia as described in 4.00E3-4.00E7 while on a regimen of prescribed 
treatment, you are at risk for exercise testing (see 4.00C8), and we do 
not have a timely ETT or a timely normal drug-induced stress test for 
you. See 4.00C9 for what we mean by a timely test.
    h. In 4.04C1 the term nonbypassed means that the blockage is in a 
vessel that is potentially bypassable; that is, large enough to be 
bypassed and considered to be a cause of your ischemia. These vessels 
are usually major arteries or one of a major artery's major branches. A 
vessel that has become obstructed again after angioplasty or stent 
placement and has remained obstructed or is not amenable to another 
revascularization is considered a nonbypassed vessel for purposes of 
this listing. When you have had revascularization, we will not use the 
pre-operative findings to assess the current severity of your coronary 
artery disease under 4.04C, although we will consider the severity and 
duration of your impairment prior to your surgery in making our 
determination or decision.

                        F. Evaluating Arrhythmias

    1. What is an arrhythmia? An arrhythmia is a change in the regular 
beat of the heart. Your heart may seem to skip a beat or beat 
irregularly, very quickly (tachycardia), or very slowly (bradycardia).
    2. What are the different types of arrhythmias?
    a. There are many types of arrhythmias. Arrhythmias are identified 
by where they occur in the heart (atria or ventricles) and by what 
happens to the heart's rhythm when they occur.
    b. Arrhythmias arising in the cardiac atria (upper chambers of the 
heart) are called atrial or supraventricular arrhythmias. Ventricular 
arrhythmias begin in the ventricles

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(lower chambers). In general, ventricular arrhythmias caused by heart 
disease are the most serious.
    3. How do we evaluate arrhythmias using 4.05?
    a. We will use 4.05 when you have arrhythmias that are not fully 
controlled by medication, an implanted pacemaker, or an implanted 
cardiac defibrillator and you have uncontrolled recurrent episodes of 
syncope or near syncope. If your arrhythmias are controlled, we will 
evaluate your underlying heart disease using the appropriate listing. 
For other considerations when we evaluate arrhythmias in the presence of 
an implanted cardiac defibrillator, see 4.00F4.
    b. We consider near syncope to be a period of altered consciousness, 
since syncope is a loss of consciousness or a faint. It is not merely a 
feeling of light-headedness, momentary weakness, or dizziness.
    c. For purposes of 4.05, there must be a documented association 
between the syncope or near syncope and the recurrent arrhythmia. The 
recurrent arrhythmia, not some other cardiac or non-cardiac disorder, 
must be established as the cause of the associated symptom. This 
documentation of the association between the symptoms and the arrhythmia 
may come from the usual diagnostic methods, including Holter monitoring 
(also called ambulatory electrocardiography) and tilt-table testing with 
a concurrent ECG. Although an arrhythmia may be a coincidental finding 
on an ETT, we will not purchase an ETT to document the presence of a 
cardiac arrhythmia.
    4. What will we consider when you have an implanted cardiac 
defibrillator and you do not have arrhythmias that meet the requirements 
of 4.05?
    a. Implanted cardiac defibrillators are used to prevent sudden 
cardiac death in individuals who have had, or are at high risk for, 
cardiac arrest from life-threatening ventricular arrhythmias. The 
largest group at risk for sudden cardiac death consists of individuals 
with cardiomyopathy (ischemic or non-ischemic) and reduced ventricular 
function. However, life-threatening ventricular arrhythmias can also 
occur in individuals with little or no ventricular dysfunction. The 
shock from the implanted cardiac defibrillator is a unique form of 
treatment; it rescues an individual from what may have been cardiac 
arrest. However, as a consequence of the shock(s), individuals may 
experience psychological distress, which we may evaluate under the 
mental disorders listings in 12.00ff.
    b. Most implantable cardiac defibrillators have rhythm-correcting 
and pacemaker capabilities. In some individuals, these functions may 
result in the termination of ventricular arrhythmias without an 
otherwise painful shock. (The shock is like being kicked in the chest.) 
Implanted cardiac defibrillators may deliver inappropriate shocks, often 
repeatedly, in response to benign arrhythmias or electrical malfunction. 
Also, exposure to strong electrical or magnetic fields, such as from MRI 
(magnetic resonance imaging), can trigger or reprogram an implanted 
cardiac defibrillator, resulting in inappropriate shocks. We must 
consider the frequency of, and the reason(s) for, the shocks when 
evaluating the severity and duration of your impairment.
    c. In general, the exercise limitations imposed on individuals with 
an implanted cardiac defibrillator are those dictated by the underlying 
heart impairment. However, the exercise limitations may be greater when 
the implanted cardiac defibrillator delivers an inappropriate shock in 
response to the increase in heart rate with exercise, or when there is 
exercise-induced ventricular arrhythmia.

                G. Evaluating Peripheral Vascular Disease

    1. What is peripheral vascular disease (PVD)? Generally, PVD is any 
impairment that affects either the arteries (peripheral arterial 
disease) or the veins (venous insufficiency) in the extremities, 
particularly the lower extremities. The usual effect is blockage of the 
flow of blood either from the heart (arterial) or back to the heart 
(venous). If you have peripheral arterial disease, you may have pain in 
your calf after walking a distance that goes away when you rest 
(intermittent claudication); at more advanced stages, you may have pain 
in your calf at rest or you may develop ulceration or gangrene. If you 
have venous insufficiency, you may have swelling, varicose veins, skin 
pigmentation changes, or skin ulceration.
    2. How do we assess limitations resulting from PVD? We will assess 
your limitations based on your symptoms together with physical findings, 
Doppler studies, other appropriate non-invasive studies, or angiographic 
findings. However, if the PVD has resulted in amputation, we will 
evaluate any limitations related to the amputation under the 
musculoskeletal listings, 1.00ff.
    3. What is brawny edema? Brawny edema (4.11A) is swelling that is 
usually dense and feels firm due to the presence of increased connective 
tissue; it is also associated with characteristic skin pigmentation 
changes. It is not the same thing as pitting edema. Brawny edema 
generally does not pit (indent on pressure), and the terms are not 
interchangeable. Pitting edema does not satisfy the requirements of 
4.11A.
    4. What is lymphedema and how will we evaluate it?
    a. Lymphedema is edema of the extremities due to a disorder of the 
lymphatic circulation; at its worst, it is called elephantiasis. Primary 
lymphedema is caused by abnormal development of lymph vessels and may be 
present at birth (congenital lymphedema),

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but more often develops during the teens (lymphedema praecox). It may 
also appear later, usually after age 35 (lymphedema tarda). Secondary 
lymphedema is due to obstruction or destruction of normal lymphatic 
channels due to tumor, surgery, repeated infections, or parasitic 
infection such as filariasis. Lymphedema most commonly affects one 
extremity.
    b. Lymphedema does not meet the requirements of 4.11, although it 
may medically equal the severity of that listing. We will evaluate 
lymphedema by considering whether the underlying cause meets or 
medically equals any listing or whether the lymphedema medically equals 
a cardiovascular listing, such as 4.11, or a musculoskeletal listing, 
such as 1.02A or 1.03. If no listing is met or medically equaled, we 
will evaluate any functional limitations imposed by your lymphedema when 
we assess your residual functional capacity.
    5. When will we purchase exercise Doppler studies for evaluating 
peripheral arterial disease (PAD)? If we need additional evidence of 
your PAD, we will generally purchase exercise Doppler studies (see 
4.00C16 and 4.00C17) when your resting ankle/brachial systolic blood 
pressure ratio is at least 0.50 but less than 0.80, and only rarely when 
it is 0.80 or above. We will not purchase exercise Doppler testing if 
you have a disease that results in abnormal arterial calcification or 
small vessel disease, but will use your resting toe systolic blood 
pressure or resting toe/brachial systolic blood pressure ratio. (See 
4.00G7c and 4.00G8.) There are no current medical standards for 
evaluating exercise toe pressures. Because any exercise test stresses 
your entire cardiovascular system, we will purchase exercise Doppler 
studies only after an MC, preferably one with experience in the care of 
patients with cardiovascular disease, has determined that the test would 
not present a significant risk to you and that there is no other medical 
reason not to purchase the test (see 4.00C6, 4.00C7, and 4.00C8).
    6. Are there any other studies that are helpful in evaluating PAD? 
Doppler studies done using a recording ultrasonic Doppler unit and 
strain-gauge plethysmography are other useful tools for evaluating PAD. 
A recording Doppler, which prints a tracing of the arterial pulse wave 
in the femoral, popliteal, dorsalis pedis, and posterior tibial 
arteries, is an excellent evaluation tool to compare wave forms in 
normal and compromised peripheral blood flow. Qualitative analysis of 
the pulse wave is very helpful in the overall assessment of the severity 
of the occlusive disease. Tracings are especially helpful in assessing 
severity if you have small vessel disease related to diabetes mellitus 
or other diseases with similar vascular changes, or diseases causing 
medial calcifications when ankle pressure is either normal or falsely 
high.
    7. How do we evaluate PAD under 4.12?
    a. The ankle blood pressure referred to in 4.12A and B is the higher 
of the pressures recorded from the posterior tibial and dorsalis pedis 
arteries in the affected leg. The higher pressure recorded from the two 
sites is the more significant measurement in assessing the extent of 
arterial insufficiency. Techniques for obtaining ankle systolic blood 
pressures include Doppler (See 4.00C16 and 4.00C17), plethysmographic 
studies, or other techniques. We will request any available tracings 
generated by these studies so that we can review them.
    b. In 4.12A, the ankle/brachial systolic blood pressure ratio is the 
ratio of the systolic blood pressure at the ankle to the systolic blood 
pressure at the brachial artery; both taken at the same time while you 
are lying on your back. We do not require that the ankle and brachial 
pressures be taken on the same side of your body. This is because, as 
with the ankle pressure, we will use the higher brachial systolic 
pressure measured. Listing 4.12A is met when your resting ankle/brachial 
systolic blood pressure ratio is less than 0.50. If your resting ankle/
brachial systolic blood pressure ratio is 0.50 or above, we will use 
4.12B to evaluate the severity of your PAD, unless you also have a 
disease causing abnormal arterial calcification or small vessel disease, 
such as diabetes mellitus. See 4.00G7c and 4.00G8.
    c. We will use resting toe systolic blood pressures or resting toe/
brachial systolic blood pressure ratios (determined the same way as 
ankle/brachial ratios, see 4.00G7b) when you have intermittent 
claudication and a disease that results in abnormal arterial 
calcification (for example, Monckeberg's sclerosis or diabetes mellitus) 
or small vessel disease (for example, diabetes mellitus). These diseases 
may result in misleadingly high blood pressure readings at the ankle. 
However, high blood pressures due to vascular changes related to these 
diseases seldom occur at the toe level. While the criteria in 4.12C and 
4.12D are intended primarily for individuals who have a disease causing 
abnormal arterial calcification or small vessel disease, we may also use 
them for evaluating anyone with PAD.
    8. How are toe pressures measured? Toe pressures are measured 
routinely in most vascular laboratories through one of three methods: 
most frequently, photoplethysmography; less frequently, plethysmography 
using strain gauge cuffs; and Doppler ultrasound. Toe pressure can also 
be measured by using any blood pressure cuff that fits snugly around the 
big toe and is neither too tight nor too loose. A neonatal cuff or a 
cuff designed for use on fingers or toes can be used in the measurement 
of toe pressure.
    9. How do we use listing 4.12 if you have had a peripheral graft? 
Peripheral grafting serves the same purpose as coronary grafting; that

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is, to bypass a narrow or obstructed arterial segment. If intermittent 
claudication recurs or persists after peripheral grafting, we may 
purchase Doppler studies to assess the flow of blood through the 
bypassed vessel and to establish the current severity of the peripheral 
arterial impairment. However, if you have had peripheral grafting done 
for your PAD, we will not use the findings from before the surgery to 
assess the current severity of your impairment, although we will 
consider the severity and duration of your impairment prior to your 
surgery in making our determination or decision.

             H. Evaluating Other Cardiovascular Impairments

    1. How will we evaluate hypertension? Because hypertension (high 
blood pressure) generally causes disability through its effects on other 
body systems, we will evaluate it by reference to the specific body 
system(s) affected (heart, brain, kidneys, or eyes) when we consider its 
effects under the listings. We will also consider any limitations 
imposed by your hypertension when we assess your residual functional 
capacity.
    2. How will we evaluate symptomatic congenital heart disease? 
Congenital heart disease is any abnormality of the heart or the major 
blood vessels that is present at birth. Because of improved treatment 
methods, more children with congenital heart disease are living to 
adulthood. Although some types of congenital heart disease may be 
corrected by surgery, many individuals with treated congenital heart 
disease continue to have problems throughout their lives (symptomatic 
congenital heart disease). If you have congenital heart disease that 
results in chronic heart failure with evidence of ventricular 
dysfunction or in recurrent arrhythmias, we will evaluate your 
impairment under 4.02 or 4.05. Otherwise, we will evaluate your 
impairment under 4.06.
    3. What is cardiomyopathy and how will we evaluate it? 
Cardiomyopathy is a disease of the heart muscle. The heart loses its 
ability to pump blood (heart failure), and in some instances, heart 
rhythm is disturbed, leading to irregular heartbeats (arrhythmias). 
Usually, the exact cause of the muscle damage is never found (idiopathic 
cardiomyopathy). There are various types of cardiomyopathy, which fall 
into two major categories: Ischemic and nonischemic cardiomyopathy. 
Ischemic cardiomyopathy typically refers to heart muscle damage that 
results from coronary artery disease, including heart attacks. 
Nonischemic cardiomyopathy includes several types: Dilated, 
hypertrophic, and restrictive. We will evaluate cardiomyopathy under 
4.02, 4.04, 4.05, or 11.04, depending on its effects on you.
    4. How will we evaluate valvular heart disease? We will evaluate 
valvular heart disease under the listing appropriate for its effect on 
you. Thus, we may use 4.02, 4.04, 4.05, 4.06, or an appropriate 
neurological listing in 11.00ff.
    5. What do we consider when we evaluate heart transplant recipients?
    a. After your heart transplant, we will consider you disabled for 1 
year following the surgery because there is a greater likelihood of 
rejection of the organ and infection during the first year.
    b. However, heart transplant patients generally meet our definition 
of disability before they undergo transplantation. We will determine the 
onset of your disability based on the facts in your case.
    c. We will not assume that you became disabled when your name was 
placed on a transplant waiting list. This is because you may be placed 
on a waiting list soon after diagnosis of the cardiac disorder that may 
eventually require a transplant. Physicians recognize that candidates 
for transplantation often have to wait months or even years before a 
suitable donor heart is found, so they place their patients on the list 
as soon as permitted.
    d. When we do a continuing disability review to determine whether 
you are still disabled, we will evaluate your residual impairment(s), as 
shown by symptoms, signs, and laboratory findings, including any side 
effects of medication. We will consider any remaining symptoms, signs, 
and laboratory findings indicative of cardiac dysfunction in deciding 
whether medical improvement (as defined in Secs. 404.1594 and 416.994) 
has occurred.
    6. When does an aneurysm have ``dissection not controlled by 
prescribed treatment,'' as required under 4.10? An aneurysm (or bulge in 
the aorta or one of its major branches) is dissecting when the inner 
lining of the artery begins to separate from the arterial wall. We 
consider the dissection not controlled when you have persistence of 
chest pain due to progression of the dissection, an increase in the size 
of the aneurysm, or compression of one or more branches of the aorta 
supplying the heart, kidneys, brain, or other organs. An aneurysm with 
dissection can cause heart failure, renal (kidney) failure, or 
neurological complications. If you have an aneurysm that does not meet 
the requirements of 4.10 and you have one or more of these associated 
conditions, we will evaluate the condition(s) using the appropriate 
listing.
    7. What is hyperlipidemia and how will we evaluate it? 
Hyperlipidemia is the general term for an elevation of any or all of the 
lipids (fats or cholesterol) in the blood; for example, 
hypertriglyceridemia, hypercholesterolemia, and hyperlipoproteinemia. 
These disorders of lipoprotein metabolism and transport can cause 
defects throughout the body. The effects most likely to interfere with 
function are those produced by atherosclerosis (narrowing of the 
arteries) and coronary artery

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disease. We will evaluate your lipoprotein disorder by considering its 
effects on you.
    8. What is Marfan syndrome and how will we evaluate it?
    a. Marfan syndrome is a genetic connective tissue disorder that 
affects multiple body systems, including the skeleton, eyes, heart, 
blood vessels, nervous system, skin, and lungs. There is no specific 
laboratory test to diagnose Marfan syndrome. The diagnosis is generally 
made by medical history, including family history, physical examination, 
including an evaluation of the ratio of arm/leg size to trunk size, a 
slit lamp eye examination, and a heart test(s), such as an 
echocardiogram. In some cases, a genetic analysis may be useful, but 
such analyses may not provide any additional helpful information.
    b. The effects of Marfan syndrome can range from mild to severe. In 
most cases, the disorder progresses as you age. Most individuals with 
Marfan syndrome have abnormalities associated with the heart and blood 
vessels. Your heart's mitral valve may leak, causing a heart murmur. 
Small leaks may not cause symptoms, but larger ones may cause shortness 
of breath, fatigue, and palpitations. Another effect is that the wall of 
the aorta may be weakened and abnormally stretch (aortic dilation). This 
aortic dilation may tear, dissect, or rupture, causing serious heart 
problems or sometimes sudden death. We will evaluate the manifestations 
of your Marfan syndrome under the appropriate body system criteria, such 
as 4.10, or if necessary, consider the functional limitations imposed by 
your impairment.

                       I. Other Evaluation Issues

    1. What effect does obesity have on the cardiovascular system and 
how will we evaluate it? Obesity is a medically determinable impairment 
that is often associated with disorders of the cardiovascular system. 
Disturbance of this system can be a major cause of disability if you 
have obesity. Obesity may affect the cardiovascular system because of 
the increased workload the additional body mass places on the heart. 
Obesity may make it harder for the chest and lungs to expand. This can 
mean that the respiratory system must work harder to provide needed 
oxygen. This in turn would make the heart work harder to pump blood to 
carry oxygen to the body. Because the body would be working harder at 
rest, its ability to perform additional work would be less than would 
otherwise be expected. Thus, the combined effects of obesity with 
cardiovascular impairments can be greater than the effects of each of 
the impairments considered separately. We must consider any additional 
and cumulative effects of obesity when we determine whether you have a 
severe cardiovascular impairment or a listing-level cardiovascular 
impairment (or a combination of impairments that medically equals the 
severity of a listed impairment), and when we assess your residual 
functional capacity.
    2. How do we relate treatment to functional status? In general, 
conclusions about the severity of a cardiovascular impairment cannot be 
made on the basis of type of treatment rendered or anticipated. The 
amount of function restored and the time required for improvement after 
treatment (medical, surgical, or a prescribed program of progressive 
physical activity) vary with the nature and extent of the disorder, the 
type of treatment, and other factors. Depending upon the timing of this 
treatment in relation to the alleged onset date of disability, we may 
need to defer evaluation of the impairment for a period of up to 3 
months from the date treatment began to permit consideration of 
treatment effects, unless we can make a determination or decision using 
the evidence we have. See 4.00B4.
    3. How do we evaluate impairments that do not meet one of the 
cardiovascular listings?
    a. These listings are only examples of common cardiovascular 
impairments that we consider severe enough to prevent you from doing any 
gainful activity. If your severe impairment(s) does not meet the 
criteria of any of these listings, we must also consider whether you 
have an impairment(s) that satisfies the criteria of a listing in 
another body system.
    b. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairments(s) 
medically equals a listing. (See Secs. 404.1526 and 416.926.) If you 
have a severe impairment(s) that does not meet or medically equal the 
criteria of a listing, you may or may not have the residual functional 
capacity to engage in substantial gainful activity. Therefore, we 
proceed to the fourth and, if necessary, the fifth steps of the 
sequential evaluation process in Secs. 404.1520 and 416.920. If you are 
an adult, we use the rules in Secs. 404.1594 or 416.994, as appropriate, 
when we decide whether you continue to be disabled.

          4.01  Category of Impairments, Cardiovascular System

    4.02  Chronic heart failure while on a regimen of prescribed 
treatment, with symptoms and signs described in 4.00D2. The required 
level of severity for this impairment is met when the requirements in 
both A and B are satisfied.
    A. Medically documented presence of one of the following:
    1. Systolic failure (see 4.00D1a(i)), with left ventricular end 
diastolic dimensions greater than 6.0 cm or ejection fraction of 30 
percent or less during a period of stability (not during an episode of 
acute heart failure); or
    2. Diastolic failure (see 4.00D1a(ii)), with left ventricular 
posterior wall plus septal

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thickness totaling 2.5 cm or greater on imaging, with an enlarged left 
atrium greater than or equal to 4.5 cm, with normal or elevated ejection 
fraction during a period of stability (not during an episode of acute 
heart failure);

AND

    B. Resulting in one of the following:
    1. Persistent symptoms of heart failure which very seriously limit 
the ability to independently initiate, sustain, or complete activities 
of daily living in an individual for whom an MC, preferably one 
experienced in the care of patients with cardiovascular disease, has 
concluded that the performance of an exercise test would present a 
significant risk to the individual; or
    2. Three or more separate episodes of acute congestive heart failure 
within a consecutive 12-month period (see 4.00A3e), with evidence of 
fluid retention (see 4.00D2b(ii)) from clinical and imaging assessments 
at the time of the episodes, requiring acute extended physician 
intervention such as hospitalization or emergency room treatment for 12 
hours or more, separated by periods of stabilization (see 4.00D4c); or
    3. Inability to perform on an exercise tolerance test at a workload 
equivalent to 5 METs or less due to:
    a. Dyspnea, fatigue, palpitations, or chest discomfort; or
    b. Three or more consecutive premature ventricular contractions 
(ventricular tachycardia), or increasing frequency of ventricular ectopy 
with at least 6 premature ventricular contractions per minute; or
    c. Decrease of 10 mm Hg or more in systolic pressure below the 
baseline systolic blood pressure or the preceding systolic pressure 
measured during exercise (see 4.00D4d) due to left ventricular 
dysfunction, despite an increase in workload; or
    d. Signs attributable to inadequate cerebral perfusion, such as 
ataxic gait or mental confusion.
    4.04  Ischemic heart disease, with symptoms due to myocardial 
ischemia, as described in 4.00E3-4.00E7, while on a regimen of 
prescribed treatment (see 4.00B3 if there is no regimen of prescribed 
treatment), with one of the following:
    A. Sign-or symptom-limited exercise tolerance test demonstrating at 
least one of the following manifestations at a workload equivalent to 5 
METs or less:
    1. Horizontal or downsloping depression, in the absence of digitalis 
glycoside treatment or hypokalemia, of the ST segment of at least ^0.10 
millivolts (^1.0 mm) in at least 3 consecutive complexes that are on a 
level baseline in any lead other than aVR, and depression of at least 
^0.10 millivolts lasting for at least 1 minute of recovery; or
    2. At least 0.1 millivolt (1 mm) ST elevation above resting baseline 
in non-infarct leads during both exercise and 1 or more minutes of 
recovery; or
    3. Decrease of 10 mm Hg or more in systolic pressure below the 
baseline blood pressure or the preceding systolic pressure measured 
during exercise (see 4.00E9e) due to left ventricular dysfunction, 
despite an increase in workload; or
    4. Documented ischemia at an exercise level equivalent to 5 METs or 
less on appropriate medically acceptable imaging, such as radionuclide 
perfusion scans or stress echocardiography.

OR

    B. Three separate ischemic episodes, each requiring 
revascularization or not amenable to revascularization (see 4.00E9f), 
within a consecutive 12-month period (see 4.00A3e).

OR

    C. Coronary artery disease, demonstrated by angiography (obtained 
independent of Social Security disability evaluation) or other 
appropriate medically acceptable imaging, and in the absence of a timely 
exercise tolerance test or a timely normal drug-induced stress test, an 
MC, preferably one experienced in the care of patients with 
cardiovascular disease, has concluded that performance of exercise 
tolerance testing would present a significant risk to the individual, 
with both 1 and 2:
    1. Angiographic evidence showing:
    a. 50 percent or more narrowing of a nonbypassed left main coronary 
artery; or
    b. 70 percent or more narrowing of another nonbypassed coronary 
artery; or
    c. 50 percent or more narrowing involving a long (greater than 1 cm) 
segment of a nonbypassed coronary artery; or
    d. 50 percent or more narrowing of at least two nonbypassed coronary 
arteries; or
    e. 70 percent or more narrowing of a bypass graft vessel; and
    2. Resulting in very serious limitations in the ability to 
independently initiate, sustain, or complete activities of daily living.
    4.05  Recurrent arrhythmias, not related to reversible causes, such 
as electrolyte abnormalities or digitalis glycoside or antiarrhythmic 
drug toxicity, resulting in uncontrolled (see 4.00A3f), recurrent (see 
4.00A3c) episodes of cardiac syncope or near syncope (see 4.00F3b), 
despite prescribed treatment (see 4.00B3 if there is no prescribed 
treatment), and documented by resting or ambulatory (Holter) 
electrocardiography, or by other appropriate medically acceptable 
testing, coincident with the occurrence of syncope or near syncope (see 
4.00F3c).
    4.06  Symptomatic congenital heart disease (cyanotic or acyanotic), 
documented by appropriate medically acceptable imaging (see 4.00A3d) or 
cardiac catheterization, with one of the following:
    A. Cyanosis at rest, and:

[[Page 497]]

    1. Hematocrit of 55 percent or greater; or
    2. Arterial O2 saturation of less than 90 percent in room 
air, or resting arterial PO2 of 60 Torr or less.

OR

    B. Intermittent right-to-left shunting resulting in cyanosis on 
exertion (e.g., Eisenmenger's physiology) and with arterial 
PO2 of 60 Torr or less at a workload equivalent to 5 METs or 
less.

OR

    C. Secondary pulmonary vascular obstructive disease with pulmonary 
arterial systolic pressure elevated to at least 70 percent of the 
systemic arterial systolic pressure.
    4.09  Heart transplant. Consider under a disability for 1 year 
following surgery; thereafter, evaluate residual impairment under the 
appropriate listing.
    4.10  Aneurysm of aorta or major branches, due to any cause (e.g., 
atherosclerosis, cystic medial necrosis, Marfan syndrome, trauma), 
demonstrated by appropriate medically acceptable imaging, with 
dissection not controlled by prescribed treatment (see 4.00H6).
    4.11  Chronic venous insufficiency of a lower extremity with 
incompetency or obstruction of the deep venous system and one of the 
following:
    A. Extensive brawny edema (see 4.00G3) involving at least two-thirds 
of the leg between the ankle and knee or the distal one-third of the 
lower extremity between the ankle and hip.

OR

    B. Superficial varicosities, stasis dermatitis, and either recurrent 
ulceration or persistent ulceration that has not healed following at 
least 3 months of prescribed treatment.
    4.12  Peripheral arterial disease, as determined by appropriate 
medically acceptable imaging (see 4.00A3d, 4.00G2, 4.00G5, and 4.00G6), 
causing intermittent claudication (see 4.00G1) and one of the following:
    A. Resting ankle/brachial systolic blood pressure ratio of less than 
0.50.

OR

    B. Decrease in systolic blood pressure at the ankle on exercise (see 
4.00G7a and 4.00C16-4.00C17) of 50 percent or more of pre-exercise level 
and requiring 10 minutes or more to return to pre-exercise level.

OR

    C. Resting toe systolic pressure of less than 30 mm Hg (see 4.00G7c 
and 4.00G8).

OR

    D. Resting toe/brachial systolic blood pressure ratio of less than 
0.40 (see 4.00G7c).

                         5.00  Digestive System

    A. What kinds of disorders do we consider in the digestive system? 
Disorders of the digestive system include gastrointestinal hemorrhage, 
hepatic (liver) dysfunction, inflammatory bowel disease, short bowel 
syndrome, and malnutrition. They may also lead to complications, such as 
obstruction, or be accompanied by manifestations in other body systems.
    B. What documentation do we need? We need a record of your medical 
evidence, including clinical and laboratory findings. The documentation 
should include appropriate medically acceptable imaging studies and 
reports of endoscopy, operations, and pathology, as appropriate to each 
listing, to document the severity and duration of your digestive 
disorder. Medically acceptable imaging includes, but is not limited to, 
x-ray imaging, sonography, computerized axial tomography (CAT scan), 
magnetic resonance imaging (MRI), and radionuclide scans. Appropriate 
means that the technique used is the proper one to support the 
evaluation and diagnosis of the disorder. The findings required by these 
listings must occur within the period we are considering in connection 
with your application or continuing disability review.
    C. How do we consider the effects of treatment?
    1. Digestive disorders frequently respond to medical or surgical 
treatment; therefore, we generally consider the severity and duration of 
these disorders within the context of prescribed treatment.
    2. We assess the effects of treatment, including medication, 
therapy, surgery, or any other form of treatment you receive, by 
determining if there are improvements in the symptoms, signs, and 
laboratory findings of your digestive disorder. We also assess any side 
effects of your treatment that may further limit your functioning.
    3. To assess the effects of your treatment, we may need information 
about:
    a. The treatment you have been prescribed (for example, the type of 
medication or therapy, or your use of parenteral (intravenous) nutrition 
or supplemental enteral nutrition via a gastrostomy);
    b. The dosage, method, and frequency of administration;
    c. Your response to the treatment;
    d. Any adverse effects of such treatment; and
    e. The expected duration of the treatment.
    4. Because the effects of treatment may be temporary or long-term, 
in most cases we need information about the impact of your treatment, 
including its expected duration and side effects, over a sufficient 
period of time to help us assess its outcome. When adverse effects of 
treatment contribute to the severity of your impairment(s), we will 
consider the duration or expected duration of the treatment when we 
assess the duration of your impairment(s).
    5. If you need parenteral (intravenous) nutrition or supplemental 
enteral nutrition via

[[Page 498]]

a gastrostomy to avoid debilitating complications of a digestive 
disorder, this treatment will not, in itself, indicate that you are 
unable to do any gainful activity, except under 5.07, short bowel 
syndrome (see 5.00F).
    6. If you have not received ongoing treatment or have not had an 
ongoing relationship with the medical community despite the existence of 
a severe impairment(s), we will evaluate the severity and duration of 
your digestive impairment on the basis of the current medical and other 
evidence in your case record. If you have not received treatment, you 
may not be able to show an impairment that meets the criteria of one of 
the digestive system listings, but your digestive impairment may 
medically equal a listing or be disabling based on consideration of your 
residual functional capacity, age, education, and work experience.
    D. How do we evaluate chronic liver disease?
    1. General. Chronic liver disease is characterized by liver cell 
necrosis, inflammation, or scarring (fibrosis or cirrhosis), due to any 
cause, that persists for more than 6 months. Chronic liver disease may 
result in portal hypertension, cholestasis (suppression of bile flow), 
extrahepatic manifestations, or liver cancer. (We evaluate liver cancer 
under 13.19.) Significant loss of liver function may be manifested by 
hemorrhage from varices or portal hypertensive gastropathy, ascites 
(accumulation of fluid in the abdominal cavity), hydrothorax (ascitic 
fluid in the chest cavity), or encephalopathy. There can also be 
progressive deterioration of laboratory findings that are indicative of 
liver dysfunction. Liver transplantation is the only definitive cure for 
end stage liver disease (ESLD).
    2. Examples of chronic liver disease include, but are not limited 
to, chronic hepatitis, alcoholic liver disease, non-alcoholic 
steatohepatitis (NASH), primary biliary cirrhosis (PBC), primary 
sclerosing cholangitis (PSC), autoimmune hepatitis, hemochromatosis, 
drug-induced liver disease, Wilson's disease, and serum alpha-1 
antitrypsin deficiency. Acute hepatic injury is frequently reversible, 
as in viral, drug-induced, toxin-induced, alcoholic, and ischemic 
hepatitis. In the absence of evidence of a chronic impairment, episodes 
of acute liver disease do not meet 5.05.
    3. Manifestations of chronic liver disease.
    a. Symptoms may include, but are not limited to, pruritis (itching), 
fatigue, nausea, loss of appetite, or sleep disturbances. Symptoms of 
chronic liver disease may have a poor correlation with the severity of 
liver disease and functional ability.
    b. Signs may include, but are not limited to, jaundice, enlargement 
of the liver and spleen, ascites, peripheral edema, and altered mental 
status.
    c. Laboratory findings may include, but are not limited to, 
increased liver enzymes, increased serum total bilirubin, increased 
ammonia levels, decreased serum albumin, and abnormal coagulation 
studies, such as increased International Normalized Ratio (INR) or 
decreased platelet counts. Abnormally low serum albumin or elevated INR 
levels indicate loss of synthetic liver function, with increased 
likelihood of cirrhosis and associated complications. However, other 
abnormal lab tests, such as liver enzymes, serum total bilirubin, or 
ammonia levels, may have a poor correlation with the severity of liver 
disease and functional ability. A liver biopsy may demonstrate the 
degree of liver cell necrosis, inflammation, fibrosis, and cirrhosis. If 
you have had a liver biopsy, we will make every reasonable effort to 
obtain the results; however, we will not purchase a liver biopsy. 
Imaging studies (CAT scan, ultrasound, MRI) may show the size and 
consistency (fatty liver, scarring) of the liver and document ascites 
(see 5.00D6).
    4. Chronic viral hepatitis infections.
    a. General.
    (i) Chronic viral hepatitis infections are commonly caused by 
hepatitis C virus (HCV), and to a lesser extent, hepatitis B virus 
(HBV). Usually, these are slowly progressive disorders that persist over 
many years during which the symptoms and signs are typically 
nonspecific, intermittent, and mild (for example, fatigue, difficulty 
with concentration, or right upper quadrant pain). Laboratory findings 
(liver enzymes, imaging studies, liver biopsy pathology) and 
complications are generally similar in HCV and HBV. The spectrum of 
these chronic viral hepatitis infections ranges widely and includes an 
asymptomatic state; insidious disease with mild to moderate symptoms 
associated with fluctuating liver tests; extrahepatic manifestations; 
cirrhosis, both compensated and decompensated; ESLD with the need for 
liver transplantation; and liver cancer. Treatment for chronic viral 
hepatitis infections varies considerably based on medication tolerance, 
treatment response, adverse effects of treatment, and duration of the 
treatment. Comorbid disorders, such as HIV infection, may accelerate the 
clinical course of viral hepatitis infection(s) or may result in a 
poorer response to medical treatment.
    (ii) We evaluate all types of chronic viral hepatitis infections 
under 5.05 or any listing in an affected body system(s). If your 
impairment(s) does not meet or medically equal a listing, we will 
consider the effects of your hepatitis when we assess your residual 
functional capacity.
    b. Chronic hepatitis B virus (HBV) infection.
    (i) Chronic HBV infection can be diagnosed by the detection of 
hepatitis B surface antigen (HBsAg) or hepatitis B virus DNA (HBV DNA) 
in the blood for at least 6 months. In addition, detection of the 
hepatitis B e antigen (HBeAg) suggests an increased likelihood of 
progression to cirrhosis, ESLD, and hepatocellular carcinoma. (HBeAg may 
also

[[Page 499]]

be referred to as ``hepatitis B early antigen'' or ``hepatitis B 
envelope antigen.'')
    (ii) The therapeutic goal of treatment is to suppress HBV 
replication and thereby prevent progression to cirrhosis, ESLD, and 
hepatocellular carcinoma. Treatment usually includes interferon 
injections, oral antiviral agents, or a combination of both. Common 
adverse effects of treatment are the same as noted in 5.00D4c(ii) for 
HCV, and generally end within a few days after treatment is 
discontinued.
    c. Chronic hepatitis C virus (HCV) infection.
    (i) Chronic HCV infection is diagnosed by the detection of hepatitis 
C viral RNA in the blood for at least 6 months. Documentation of the 
therapeutic response to treatment is also monitored by the quantitative 
assay of serum HCV RNA (``HCV viral load''). Treatment usually includes 
a combination of interferon injections and oral ribavirin; whether a 
therapeutic response has occurred is usually assessed after 12 weeks of 
treatment by checking the HCV viral load. If there has been a 
substantial reduction in HCV viral load (also known as early viral 
response, or EVR), this reduction is predictive of a sustained viral 
response with completion of treatment. Combined therapy is commonly 
discontinued after 12 weeks when there is no early viral response, since 
in that circumstance there is little chance of obtaining a sustained 
viral response (SVR). Otherwise, treatment is usually continued for a 
total of 48 weeks.
    (ii) Combined interferon and ribavirin treatment may have 
significant adverse effects that may require dosing reduction, planned 
interruption of treatment, or discontinuation of treatment. Adverse 
effects may include: Anemia (ribavirin-induced hemolysis), neutropenia, 
thrombocytopenia, fever, cough, fatigue, myalgia, arthralgia, nausea, 
loss of appetite, pruritis, and insomnia. Behavioral side effects may 
also occur. Influenza-like symptoms are generally worse in the first 4 
to 6 hours after each interferon injection and during the first weeks of 
treatment. Adverse effects generally end within a few days after 
treatment is discontinued.
    d. Extrahepatic manifestations of HBV and HCV. In addition to their 
hepatic manifestations, both HBV and HCV may have significant 
extrahepatic manifestations in a variety of body systems. These include, 
but are not limited to: Keratoconjunctivitis (sicca syndrome), 
glomerulonephritis, skin disorders (for example, lichen planus, 
porphyria cutanea tarda), neuropathy, and immune dysfunction (for 
example, cryoglobulinemia, Sjogren's syndrome, and vasculitis). The 
extrahepatic manifestations of HBV and HCV may not correlate with the 
severity of your hepatic impairment. If your impairment(s) does not meet 
or medically equal a listing in an affected body system(s), we will 
consider the effects of your extrahepatic manifestations when we assess 
your residual functional capacity.
    5. Gastrointestinal hemorrhage (5.02 and 5.05A). Gastrointestinal 
hemorrhaging can result in hematemesis (vomiting of blood), melena 
(tarry stools), or hematochezia (bloody stools). Under 5.02, the 
required transfusions of at least 2 units of blood must be at least 30 
days apart and occur at least three times during a consecutive 6-month 
period. Under 5.05A, hemodynamic instability is diagnosed with signs 
such as pallor (pale skin), diaphoresis (profuse perspiration), rapid 
pulse, low blood pressure, postural hypotension (pronounced fall in 
blood pressure when arising to an upright position from lying down) or 
syncope (fainting). Hemorrhaging that results in hemodynamic instability 
is potentially life-threatening and therefore requires hospitalization 
for transfusion and supportive care. Under 5.05A, we require only one 
hospitalization for transfusion of at least 2 units of blood.
    6. Ascites or hydrothorax (5.05B) indicates significant loss of 
liver function due to chronic liver disease. We evaluate ascites or 
hydrothorax that is not attributable to other causes under 5.05B. The 
required findings must be present on at least two evaluations at least 
60 days apart within a consecutive 6-month period and despite continuing 
treatment as prescribed.
    7. Spontaneous bacterial peritonitis (5.05C) is an infectious 
complication of chronic liver disease. It is diagnosed by ascitic 
peritoneal fluid that is documented to contain an absolute neutrophil 
count of at least 250 cells/mm\3\. The required finding in 5.05C is 
satisfied with one evaluation documenting peritoneal fluid infection. We 
do not evaluate other causes of peritonitis that are unrelated to 
chronic liver disease, such as tuberculosis, malignancy, and perforated 
bowel, under this listing. We evaluate these other causes of peritonitis 
under the appropriate body system listings.
    8. Hepatorenal syndrome (5.05D) is defined as functional renal 
failure associated with chronic liver disease in the absence of 
underlying kidney pathology. Hepatorenal syndrome is documented by 
elevation of serum creatinine, marked sodium retention, and oliguria 
(reduced urine output). The requirements of 5.05D are satisfied with 
documentation of any one of the three laboratory findings on one 
evaluation. We do not evaluate known causes of renal dysfunction, such 
as glomerulonephritis, tubular necrosis, drug-induced renal disease, and 
renal infections, under this listing. We evaluate these other renal 
impairments under 6.00ff.
    9. Hepatopulmonary syndrome (5.05E) is defined as arterial 
deoxygenation (hypoxemia) that is associated with chronic liver disease 
due to intrapulmonary arteriovenous shunting and vasodilatation in the 
absence of

[[Page 500]]

other causes of arterial deoxygenation. Clinical manifestations usually 
include dyspnea, orthodeoxia (increasing hypoxemia with erect position), 
platypnea (improvement of dyspnea with flat position), cyanosis, and 
clubbing. The requirements of 5.05E are satisfied with documentation of 
any one of the findings on one evaluation. In 5.05E1, we require 
documentation of the altitude of the testing facility because altitude 
affects the measurement of arterial oxygenation. We will not purchase 
the specialized studies described in 5.05E2; however, if you have had 
these studies at a time relevant to your claim, we will make every 
reasonable effort to obtain the reports for the purpose of establishing 
whether your impairment meets 5.05E2.
    10. Hepatic encephalopathy (5.05F).
    a. General. Hepatic encephalopathy usually indicates severe loss of 
hepatocellular function. We define hepatic encephalopathy under 5.05F as 
a recurrent or chronic neuropsychiatric disorder, characterized by 
abnormal behavior, cognitive dysfunction, altered state of 
consciousness, and ultimately coma and death. The diagnosis is 
established by changes in mental status associated with fleeting 
neurological signs, including ``flapping tremor'' (asterixis), 
characteristic electroencephalographic (EEG) abnormalities, or abnormal 
laboratory values that indicate loss of synthetic liver function. We 
will not purchase the EEG testing described in 5.05F3b; however, if you 
have had this test at a time relevant to your claim, we will make every 
reasonable effort to obtain the report for the purpose of establishing 
whether your impairment meets 5.05F.
    b. Acute encephalopathy. We will not evaluate your acute 
encephalopathy under 5.05F if it results from conditions other than 
chronic liver disease, such as vascular events and neoplastic diseases. 
We will evaluate these other causes of acute encephalopathy under the 
appropriate body system listings.
    11. End stage liver disease (ESLD) documented by scores from the SSA 
Chronic Liver Disease (SSA CLD) calculation (5.05G).
    a. We will use the SSA CLD score to evaluate your ESLD under 5.05G. 
We explain how we calculate the SSA CLD score in b. through g. of this 
section.
    b. To calculate the SSA CLD score, we use a formula that includes 
three laboratory values: Serum total bilirubin (mg/dL), serum creatinine 
(mg/dL), and International Normalized Ratio (INR). The formula for the 
SSA CLD score calculation is:

9.57  x  [Loge(serum creatinine mg/dL)]
 + 3.78  x  [Loge(serum total bilirubin mg/dL)]
 + 11.2  x  [Loge(INR)]
 + 6.43

    c. When we indicate ``Loge'' in the formula for the SSA CLD score 
calculation, we mean the ``base e logarithm'' or ``natural logarithm'' 
(ln) of a numerical laboratory value, not the ``base 10 logarithm'' or 
``common logarithm'' (log) of the laboratory value, and not the actual 
laboratory value. For example, if an individual has laboratory values of 
serum creatinine 1.2 mg/dL, serum total bilirubin 2.2 mg/dL, and INR 
1.0, we would compute the SSA CLD score as follows:

9.57  x  [Loge(serum creatinine 1.2 mg/dL) = 0.182]
 + 3.78  x  [Loge(serum total bilirubin 2.2 mg/dL) = 0.788]
 + 11.2  x  [Loge(INR 1.0) = 0]
 + 6.43
___
    = 1.74 + 2.98 + 0 + 6.43
    = 11.15, which is then rounded to an SSA CLD score of 11.

    d. For any SSA CLD score calculation, all of the required laboratory 
values must have been obtained within 30 days of each other. If there 
are multiple laboratory values within the 30-day interval for any given 
laboratory test (serum total bilirubin, serum creatinine, or INR), we 
will use the highest value for the SSA CLD score calculation. We will 
round all laboratory values less than 1.0 up to 1.0.
    e. Listing 5.05G requires two SSA CLD scores. The laboratory values 
for the second SSA CLD score calculation must have been obtained at 
least 60 days after the latest laboratory value for the first SSA CLD 
score and within the required 6-month period. We will consider the date 
of each SSA CLD score to be the date of the first laboratory value used 
for its calculation.
    f. If you are in renal failure or on dialysis within a week of any 
serum creatinine test in the period used for the SSA CLD calculation, we 
will use a serum creatinine of 4, which is the maximum serum creatinine 
level allowed in the calculation, to calculate your SSA CLD score.
    g. If you have the two SSA CLD scores required by 5.05G, we will 
find that your impairment meets the criteria of the listing from at 
least the date of the first SSA CLD score.
    12. Liver transplantation (5.09) may be performed for metabolic 
liver disease, progressive liver failure, life-threatening complications 
of liver disease, hepatic malignancy, and acute fulminant hepatitis 
(viral, drug-induced, or toxin-induced). We will consider you to be 
disabled for 1 year from the date of the transplantation. Thereafter, we 
will evaluate your residual impairment(s) by considering the adequacy of 
post-transplant liver function, the requirement for post-transplant 
antiviral therapy, the frequency and severity of rejection episodes, 
comorbid complications, and all adverse treatment effects.
    E. How do we evaluate inflammatory bowel disease (IBD)?

[[Page 501]]

    1. Inflammatory bowel disease (5.06) includes, but is not limited 
to, Crohn's disease and ulcerative colitis. These disorders, while 
distinct entities, share many clinical, laboratory, and imaging 
findings, as well as similar treatment regimens. Remissions and 
exacerbations of variable duration are the hallmark of IBD. Crohn's 
disease may involve the entire alimentary tract from the mouth to the 
anus in a segmental, asymmetric fashion. Obstruction, stenosis, 
fistulization, perineal involvement, and extraintestinal manifestations 
are common. Crohn's disease is rarely curable and recurrence may be a 
lifelong problem, even after surgical resection. In contrast, ulcerative 
colitis only affects the colon. The inflammatory process may be limited 
to the rectum, extend proximally to include any contiguous segment, or 
involve the entire colon. Ulcerative colitis may be cured by total 
colectomy.
    2. Symptoms and signs of IBD include diarrhea, fecal incontinence, 
rectal bleeding, abdominal pain, fatigue, fever, nausea, vomiting, 
arthralgia, abdominal tenderness, palpable abdominal mass (usually 
inflamed loops of bowel) and perineal disease. You may also have signs 
or laboratory findings indicating malnutrition, such as weight loss, 
edema, anemia, hypoalbuminemia, hypokalemia, hypocalcemia, or 
hypomagnesemia.
    3. IBD may be associated with significant extraintestinal 
manifestations in a variety of body systems. These include, but are not 
limited to, involvement of the eye (for example, uveitis, episcleritis, 
iritis); hepatobiliary disease (for example, gallstones, primary 
sclerosing cholangitis); urologic disease (for example, kidney stones, 
obstructive hydronephrosis); skin involvement (for example, erythema 
nodosum, pyoderma gangrenosum); or non-destructive inflammatory 
arthritis. You may also have associated thromboembolic disorders or 
vascular disease. These manifestations may not correlate with the 
severity of your IBD. If your impairment does not meet any of the 
criteria of 5.06, we will consider the effects of your extraintestinal 
manifestations in determining whether you have an impairment(s) that 
meets or medically equals another listing, and we will also consider the 
effects of your extraintestinal manifestations when we assess your 
residual functional capacity.
    4. Surgical diversion of the intestinal tract, including ileostomy 
and colostomy, does not preclude any gainful activity if you are able to 
maintain adequate nutrition and function of the stoma. However, if you 
are not able to maintain adequate nutrition, we will evaluate your 
impairment under 5.08.
    F. How do we evaluate short bowel syndrome (SBS)?
    1. Short bowel syndrome (5.07) is a disorder that occurs when 
ischemic vascular insults (for example, volvulus), trauma, or IBD 
complications require surgical resection of more than one-half of the 
small intestine, resulting in the loss of intestinal absorptive surface 
and a state of chronic malnutrition. The management of SBS requires 
long-term parenteral nutrition via an indwelling central venous catheter 
(central line); the process is often referred to as hyperalimentation or 
total parenteral nutrition (TPN). Individuals with SBS can also feed 
orally, with variable amounts of nutrients being absorbed through their 
remaining intestine. Over time, some of these individuals can develop 
additional intestinal absorptive surface, and may ultimately be able to 
be weaned off their parenteral nutrition.
    2. Your impairment will continue to meet 5.07 as long as you remain 
dependent on daily parenteral nutrition via a central venous catheter 
for most of your nutritional requirements. Long-term complications of 
SBS and parenteral nutrition include central line infections (with or 
without septicemia), thrombosis, hepatotoxicity, gallstones, and loss of 
venous access sites. Intestinal transplantation is the only definitive 
treatment for individuals with SBS who remain chronically dependent on 
parenteral nutrition.
    3. To document SBS, we need a copy of the operative report of 
intestinal resection, the summary of the hospitalization(s) including: 
Details of the surgical findings, medically appropriate postoperative 
imaging studies that reflect the amount of your residual small 
intestine, or if we cannot get one of these reports, other medical 
reports that include details of the surgical findings. We also need 
medical documentation that you are dependent on daily parenteral 
nutrition to provide most of your nutritional requirements.
    G. How do we evaluate weight loss due to any digestive disorder?
    1. In addition to the impairments specifically mentioned in these 
listings, other digestive disorders, such as esophageal stricture, 
pancreatic insufficiency, and malabsorption, may result in significant 
weight loss. We evaluate weight loss due to any digestive disorder under 
5.08 by using the Body Mass Index (BMI). We also provide a criterion in 
5.06B for lesser weight loss resulting from IBD.
    2. BMI is the ratio of your weight to the square of your height. 
Calculation and interpretation of the BMI are independent of gender in 
adults.
    a. We calculate BMI using inches and pounds, meters and kilograms, 
or centimeters and kilograms. We must have measurements of your weight 
and height without shoes for these calculations.
    b. We calculate BMI using one of the following formulas:

[[Page 502]]

[GRAPHIC] [TIFF OMITTED] TR19OC07.003

[GRAPHIC] [TIFF OMITTED] TR19OC07.004

[GRAPHIC] [TIFF OMITTED] TR19OC07.005

    H. What do we mean by the phrase ``consider under a disability for 1 
year''? We use the phrase ``consider under a disability for 1 year'' 
following a specific event in 5.02, 5.05A, and 5.09 to explain how long 
your impairment can meet the requirements of those particular listings. 
This phrase does not refer to the date on which your disability began, 
only to the date on which we must reevaluate whether your impairment 
continues to meet a listing or is otherwise disabling. For example, if 
you have received a liver transplant, you may have become disabled 
before the transplant because of chronic liver disease. Therefore, we do 
not restrict our determination of the onset of disability to the date of 
the specified event. We will establish an onset date earlier than the 
date of the specified event if the evidence in your case record supports 
such a finding.
    I. How do we evaluate impairments that do not meet one of the 
digestive disorder listings?
    1. These listings are only examples of common digestive disorders 
that we consider severe enough to prevent you from doing any gainful 
activity. If your impairment(s) does not meet the criteria of any of 
these listings, we must also consider whether you have an impairment(s) 
that satisfies the criteria of a listing in another body system. For 
example, if you have hepatitis B or C and you are depressed, we will 
evaluate your impairment under 12.04.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See Secs. 404.1526 and 416.926.) If your 
impairment(s) does not meet or medically equal a listing, you may or may 
not have the residual functional capacity to engage in substantial 
gainful activity. In this situation, we will proceed to the fourth, and 
if necessary, the fifth steps of the sequential evaluation process in 
Secs. 404.1520 and 416.920. When we decide whether you continue to be 
disabled, we use the rules in Secs. 404.1594, 416.994, and 416.994a as 
appropriate.
    5.01  Category of Impairments, Digestive System
    5.02  Gastrointestinal hemorrhaging from any cause, requiring blood 
transfusion (with or without hospitalization) of at least 2 units of 
blood per transfusion, and occurring at least three times during a 
consecutive 6-month period. The transfusions must be at least 30 days 
apart within the 6-month period. Consider under a disability for 1 year 
following the last documented transfusion; thereafter, evaluate the 
residual impairment(s).
    5.03-5.04 [Reserved]
    5.05  Chronic liver disease, with:
    A. Hemorrhaging from esophageal, gastric, or ectopic varices or from 
portal hypertensive gastropathy, demonstrated by endoscopy, x-ray, or 
other appropriate medically acceptable imaging, resulting in hemodynamic 
instability as defined in 5.00D5, and requiring hospitalization for 
transfusion of at least 2 units of blood. Consider under a disability 
for 1 year following the last documented transfusion; thereafter, 
evaluate the residual impairment(s).

OR

    B. Ascites or hydrothorax not attributable to other causes, despite 
continuing treatment as prescribed, present on at least two evaluations 
at least 60 days apart within a consecutive 6-month period. Each 
evaluation must be documented by:

[[Page 503]]

    1. Paracentesis or thoracentesis; or
    2. Appropriate medically acceptable imaging or physical examination 
and one of the following:
    a. Serum albumin of 3.0 g/dL or less; or
    b. International Normalized Ratio (INR) of at least 1.5.

OR

    C. Spontaneous bacterial peritonitis with peritoneal fluid 
containing an absolute neutrophil count of at least 250 cells/mm\3\.

OR

    D. Hepatorenal syndrome as described in 5.00D8, with one of the 
following:
    1. Serum creatinine elevation of at least 2 mg/dL; or
    2. Oliguria with 24-hour urine output less than 500 mL; or
    3. Sodium retention with urine sodium less than 10 mEq per liter.

OR

    E. Hepatopulmonary syndrome as described in 5.00D9, with:
    1. Arterial oxygenation (PaO2) on room air of:
    a. 60 mm Hg or less, at test sites less than 3000 feet above sea 
level, or
    b. 55 mm Hg or less, at test sites from 3000 to 6000 feet, or
    c. 50 mm Hg or less, at test sites above 6000 feet; or
    2. Documentation of intrapulmonary arteriovenous shunting by 
contrast-enhanced echocardiography or macroaggregated albumin lung 
perfusion scan.

OR

    F. Hepatic encephalopathy as described in 5.00D10, with 1 and either 
2 or 3:
    1. Documentation of abnormal behavior, cognitive dysfunction, 
changes in mental status, or altered state of consciousness (for 
example, confusion, delirium, stupor, or coma), present on at least two 
evaluations at least 60 days apart within a consecutive 6-month period; 
and
    2. History of transjugular intrahepatic portosystemic shunt (TIPS) 
or any surgical portosystemic shunt: or
    3. One of the following occurring on at least two evaluations at 
least 60 days apart within the same consecutive 6-month period as in F1:
    a. Asterixis or other fluctuating physical neurological 
abnormalities; or
    b. Electroencephalogram (EEG) demonstrating triphasic slow wave 
activity; or
    c. Serum albumin of 3.0 g/dL or less; or
    d. International Normalized Ratio (INR) of 1.5 or greater.

OR

    G. End stage liver disease with SSA CLD scores of 22 or greater 
calculated as described in 5.00D11. Consider under a disability from at 
least the date of the first score.
    5.06  Inflammatory bowel disease (IBD) documented by endoscopy, 
biopsy, appropriate medically acceptable imaging, or operative findings 
with:
    A. Obstruction of stenotic areas (not adhesions) in the small 
intestine or colon with proximal dilatation, confirmed by appropriate 
medically acceptable imaging or in surgery, requiring hospitalization 
for intestinal decompression or for surgery, and occurring on at least 
two occasions at least 60 days apart within a consecutive 6-month 
period;

OR

    B. Two of the following despite continuing treatment as prescribed 
and occurring within the same consecutive 6-month period:
    1. Anemia with hemoglobin of less than 10.0 g/dL, present on at 
least two evaluations at least 60 days apart; or
    2. Serum albumin of 3.0 g/dL or less, present on at least two 
evaluations at least 60 days apart; or
    3. Clinically documented tender abdominal mass palpable on physical 
examination with abdominal pain or cramping that is not completely 
controlled by prescribed narcotic medication, present on at least two 
evaluations at least 60 days apart; or
    4. Perineal disease with a draining abscess or fistula, with pain 
that is not completely controlled by prescribed narcotic medication, 
present on at least two evaluations at least 60 days apart; or
    5. Involuntary weight loss of at least 10 percent from baseline, as 
computed in pounds, kilograms, or BMI, present on at least two 
evaluations at least 60 days apart; or
    6. Need for supplemental daily enteral nutrition via a gastrostomy 
or daily parenteral nutrition via a central venous catheter.
    5.07  Short bowel syndrome (SBS), due to surgical resection of more 
than one-half of the small intestine, with dependence on daily 
parenteral nutrition via a central venous catheter (see 5.00F).
    5.08  Weight loss due to any digestive disorder despite continuing 
treatment as prescribed, with BMI of less than 17.50 calculated on at 
least two evaluations at least 60 days apart within a consecutive 6-
month period.
    5.09  Liver transplantation. Consider under a disability for 1 year 
following the date of transplantation; thereafter, evaluate the residual 
impairment(s) (see 5.00D12 and 5.00H).

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                      6.00  Genitourinary disorders

         A. Which disorders do we evaluate under these listings?

    We evaluate genitourinary disorders resulting in chronic kidney 
disease (CKD). Examples of such disorders include chronic 
glomerulonephritis, hypertensive nephropathy, diabetic nephropathy, 
chronic obstructive uropathy, and hereditary nephropathies. We also 
evaluate nephrotic syndrome due to glomerular dysfunction under these 
listings.

                      B. What evidence do we need?

    1. We need evidence that documents the signs, symptoms, and 
laboratory findings of your CKD. This evidence should include reports of 
clinical examinations, treatment records, and documentation of your 
response to treatment. Laboratory findings, such as serum creatinine or 
serum albumin levels, may document your kidney function. We generally 
need evidence covering a period of at least 90 days unless we can make a 
fully favorable determination or decision without it.
    2. Estimated glomerular filtration rate (eGFR). The eGFR is an 
estimate of the filtering capacity of the kidneys that takes into 
account serum creatinine concentration and other variables, such as your 
age, gender, and body size. If your medical evidence includes eGFR 
findings, we will consider them when we evaluate your CKD under 6.05.
    3. Kidney or bone biopsy. If you have had a kidney or bone biopsy, 
we need a copy of the pathology report. When we cannot get a copy of the 
pathology report, we will accept a statement from an acceptable medical 
source verifying that a biopsy was performed and describing the results.

C. What other factors do we consider when we evaluate your genitourinary 
                                disorder?

    1. Chronic hemodialysis or peritoneal dialysis.
    a. Dialysis is a treatment for CKD that uses artificial means to 
remove toxic metabolic byproducts from the blood. Hemodialysis uses an 
artificial kidney machine to clean waste products from the blood; 
peritoneal dialysis uses a dialyzing solution that is introduced into 
and removed from the abdomen (peritoneal cavity) either continuously or 
intermittently. Under 6.03, your ongoing dialysis must have lasted or be 
expected to last for a continuous period of at least 12 months. To 
satisfy the requirements in 6.03, we will accept a report from an 
acceptable medical source that describes your CKD and your current 
dialysis, and indicates that your dialysis will be ongoing.
    b. If you are undergoing chronic hemodialysis or peritoneal 
dialysis, your CKD may meet our definition of disability before you 
started dialysis. We will determine the onset of your disability based 
on the facts in your case record.
    2. Kidney transplant.
    a. If you receive a kidney transplant, we will consider you to be 
disabled under 6.04 for 1 year from the date of transplant. After that, 
we will evaluate your residual impairment(s) by considering your post-
transplant function, any rejection episodes you have had, complications 
in other body systems, and any adverse effects related to ongoing 
treatment.
    b. If you received a kidney transplant, your CKD may meet our 
definition of disability before you received the transplant. We will 
determine the onset of your disability based on the facts in your case 
record.
    3. Renal osteodystrophy. This condition is the bone degeneration 
resulting from chronic kidney disease-mineral and bone disorder (CKD-
MBD). CKD-MBD occurs when the kidneys are unable to maintain the 
necessary levels of minerals, hormones, and vitamins required for bone 
structure and function. Under 6.05B1, ``severe bone pain'' means 
frequent or intractable (resistant to treatment) bone pain that 
interferes with physical activity or mental functioning.
    4. Peripheral neuropathy. This disorder results when the kidneys do 
not adequately filter toxic substances from the blood. These toxins can 
adversely affect nerve tissue. The resulting neuropathy may affect 
peripheral motor or sensory nerves, or both, causing pain, numbness, 
tingling, and muscle weakness in various parts of the body. Under 
6.05B2, the peripheral neuropathy must be a severe impairment. (See 
Secs. 404.1520(c), 404.1521, 416.920(c), and 416.921 of this chapter.) 
It must also have lasted or be expected to last for a continuous period 
of at least 12 months.
    5. Fluid overload syndrome. This condition occurs when excess sodium 
and water retention in the body due to CKD results in vascular 
congestion. Under 6.05B3, we need a description of a physical 
examination that documents signs and symptoms of vascular congestion, 
such as congestive heart failure, pleural effusion (excess fluid in the 
chest), ascites (excess fluid in the abdomen), hypertension, fatigue, 
shortness of breath, or peripheral edema.
    6. Anasarca (generalized massive edema or swelling). Under 6.05B3 
and 6.06B, we need a description of the extent of edema, including 
pretibial (in front of the tibia), periorbital (around the eyes), or 
presacral (in front of the sacrum) edema. We also need a description of 
any ascites, pleural effusion, or pericardial effusion.
    7. Anorexia (diminished appetite) with weight loss. Anorexia is a 
frequent sign of CKD and can result in weight loss. We will use body 
mass index (BMI) to determine the severity of your weight loss under 
6.05B4. (BMI is the

[[Page 505]]

ratio of your measured weight to the square of your measured height.) 
The formula for calculating BMI is in section 5.00G.
    8. Complications of CKD. The hospitalizations in 6.09 may be for 
different complications of CKD. Examples of complications from CKD that 
may result in hospitalization include stroke, congestive heart failure, 
hypertensive crisis, or acute kidney failure requiring a short course of 
hemodialysis. If the CKD complication occurs during a hospitalization 
that was initially for a co-occurring condition, we will evaluate it 
under our rules for determining medical equivalence. (See Secs. 404.1526 
and 416.926 of this chapter.) We will evaluate co-occurring conditions, 
including those that result in hospitalizations, under the listings for 
the affected body system or under our rules for medical equivalence.

      D. How do we evaluate disorders that do not meet one of the 
                         genitourinary listings?

    1. The listed disorders are only examples of common genitourinary 
disorders that we consider severe enough to prevent you from doing any 
gainful activity. If your impairment(s) does not meet the criteria of 
any of these listings, we must also consider whether you have an 
impairment(s) that satisfies the criteria of a listing in another body 
system.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See Secs. 404.1526 and 416.926 of this 
chapter.) Genitourinary disorders may be associated with disorders in 
other body systems, and we consider the combined effects of multiple 
impairments when we determine whether they medically equal a listing. If 
your impairment(s) does not meet or medically equal the criteria of a 
listing, you may or may not have the residual functional capacity to 
engage in substantial gainful activity. We proceed to the fourth and, if 
necessary, the fifth steps of the sequential evaluation process in 
Secs. 404.1520 and 416.920 of this chapter. We use the rules in 
Secs. 404.1594 and 416.994 of this chapter, as appropriate, when we 
decide whether you continue to be disabled.

         6.01  Category of Impairments, Genitourinary Disorders

    6.03  Chronic kidney disease, with chronic hemodialysis or 
peritoneal dialysis (see 6.00C1).
    6.04  Chronic kidney disease, with kidney transplant. Consider under 
a disability for 1 year following the transplant; thereafter, evaluate 
the residual impairment (see 6.00C2).
    6.05  Chronic kidney disease, with impairment of kidney function, 
with A and B:
    A. Reduced glomerular filtration evidenced by one of the following 
laboratory findings documented on at least two occasions at least 90 
days apart during a consecutive 12-month period:
    1. Serum creatinine of 4 mg/dL or greater; or
    2. Creatinine clearance of 20 ml/min. or less; or
    3. Estimated glomerular filtration rate (eGFR) of 20 ml/min/1.73m\2\ 
or less.

AND

    B. One of the following:
    1. Renal osteodystrophy (see 6.00C3) with severe bone pain and 
imaging studies documenting bone abnormalities, such as osteitis 
fibrosa, osteomalacia, or pathologic fractures; or
    2. Peripheral neuropathy (see 6.00C4); or
    3. Fluid overload syndrome (see 6.00C5) documented by one of the 
following:
    a. Diastolic hypertension greater than or equal to diastolic blood 
pressure of 110 mm Hg despite at least 90 consecutive days of prescribed 
therapy, documented by at least two measurements of diastolic blood 
pressure at least 90 days apart during a consecutive 12-month period; or
    b. Signs of vascular congestion or anasarca (see 6.00C6) despite at 
least 90 consecutive days of prescribed therapy, documented on at least 
two occasions at least 90 days apart during a consecutive 12-month 
period; or
    4. Anorexia with weight loss (see 6.00C7) determined by body mass 
index (BMI) of 18.0 or less, calculated on at least two occasions at 
least 90 days apart during a consecutive 12-month period.
    6.06  Nephrotic syndrome, with A and B:
    A. Laboratory findings as described in 1 or 2, documented on at 
least two occasions at least 90 days apart during a consecutive 12-month 
period:
    1. Proteinuria of 10.0 g or greater per 24 hours; or
    2. Serum albumin of 3.0 g/dL or less, and
    a. Proteinuria of 3.5 g or greater per 24 hours; or
    b. Urine total-protein-to-creatinine ratio of 3.5 or greater.

AND

    B. Anasarca (see 6.00C6) persisting for at least 90 days despite 
prescribed treatment.
    6.09  Complications of chronic kidney disease (see 6.00C8) requiring 
at least three hospitalizations within a consecutive 12-month period and 
occurring at least 30 days apart. Each hospitalization must last at 
least 48 hours, including hours in a hospital emergency department 
immediately before the hospitalization.

[[Page 506]]

                      7.00  Hematological Disorders

  A. What hematological disorders do we evaluate under these listings?

    1. We evaluate non-malignant (non-cancerous) hematological 
disorders, such as hemolytic anemias (7.05), disorders of thrombosis and 
hemostasis (7.08), and disorders of bone marrow failure (7.10). These 
disorders disrupt the normal development and function of white blood 
cells, red blood cells, platelets, and clotting-factor proteins 
(factors).
    2. We evaluate malignant (cancerous) hematological disorders, such 
as lymphoma, leukemia, and multiple myeloma, under the appropriate 
listings in 13.00, except for two lymphomas associated with human 
immunodeficiency virus (HIV) infection. We evaluate primary central 
nervous system lymphoma associated with HIV infection under 14.11B, and 
primary effusion lymphoma associated with HIV infection under 14.11C.

  B. What evidence do we need to document that you have a hematological 
                                disorder?

    We need the following evidence to document that you have a 
hematological disorder:
    1. A laboratory report of a definitive test that establishes a 
hematological disorder, signed by a physician; or
    2. A laboratory report of a definitive test that establishes a 
hematological disorder that is not signed by a physician and a report 
from a physician that states you have the disorder; or
    3. When we do not have a laboratory report of a definitive test, a 
persuasive report from a physician that a diagnosis of your 
hematological disorder was confirmed by appropriate laboratory analysis 
or other diagnostic method(s). To be persuasive, this report must state 
that you had the appropriate definitive laboratory test or tests for 
diagnosing your disorder and provide the results, or explain how your 
diagnosis was established by other diagnostic method(s) consistent with 
the prevailing state of medical knowledge and clinical practice.
    4. We will make every reasonable effort to obtain the results of 
appropriate laboratory testing you have had. We will not purchase 
complex, costly, or invasive tests, such as tests of clotting-factor 
proteins, and bone marrow aspirations.

 C. What are hemolytic anemias, and how do we evaluate them under 7.05?

    1. Hemolytic anemias, both congenital and acquired, are disorders 
that result in premature destruction of red blood cells (RBCs). 
Hemolytic disorders include abnormalities of hemoglobin structure 
(hemoglobinopathies), abnormal RBC enzyme content and function, and RBC 
membrane (envelope) defects that are congenital or acquired. The 
diagnosis of hemolytic anemia is based on hemoglobin electrophoresis or 
analysis of the contents of the RBC (enzymes) and membrane. Examples of 
congenital hemolytic anemias include sickle cell disease, thalassemia 
and their variants, and hereditary spherocytosis. Acquired hemolytic 
anemias may result from autoimmune disease (for example, systemic lupus 
erythematosus) or mechanical devices (for example, heart valves, 
intravascular patches).
    2. The hospitalizations in 7.05B do not all have to be for the same 
complication of the hemolytic anemia. They may be for three different 
complications of the disorder. Examples of complications of hemolytic 
anemia that may result in hospitalization include osteomyelitis, painful 
(vaso-occlusive) crisis, pulmonary infections or infarctions, acute 
chest syndrome, pulmonary hypertension, chronic heart failure, 
gallbladder disease, hepatic (liver) failure, renal (kidney) failure, 
nephrotic syndrome, aplastic crisis, and stroke. We will count the hours 
you receive emergency treatment in a comprehensive sickle cell disease 
center immediately before the hospitalization if this treatment is 
comparable to the treatment provided in a hospital emergency department.
    3. For 7.05C, we do not require hemoglobin to be measured during a 
period in which you are free of pain or other symptoms of your disorder. 
We will accept hemoglobin measurements made while you are experiencing 
complications of your hemolytic anemia.
    4. 7.05D refers to the most serious type of beta thalassemia major 
in which the bone marrow cannot produce sufficient numbers of normal 
RBCs to maintain life. The only available treatments for beta 
thalassemia major are life-long RBC transfusions (sometimes called 
hypertransfusion) or bone marrow transplantation. For purposes of 7.05D, 
we do not consider prophylactic RBC transfusions to prevent strokes or 
other complications in sickle cell disease and its variants to be of 
equal significance to life-saving RBC transfusions for beta thalassemia 
major. However, we will consider the functional limitations associated 
with prophylactic RBC transfusions and any associated side effects (for 
example, iron overload) under 7.18 and any affected body system(s). We 
will also evaluate strokes and resulting complications under 11.00 and 
12.00.

   D. What are disorders of thrombosis and hemostasis, and how do we 
                        evaluate them under 7.08?

    1. Disorders of thrombosis and hemostasis include both clotting and 
bleeding disorders, and may be congenital or acquired. These disorders 
are characterized by abnormalities in blood clotting that result in 
hypercoagulation (excessive blood clotting)

[[Page 507]]

or hypocoagulation (inadequate blood clotting). The diagnosis of a 
thrombosis or hemostasis disorder is based on evaluation of plasma 
clotting-factor proteins (factors) and platelets. Protein C or protein S 
deficiency and Factor V Leiden are examples of hypercoagulation 
disorders. Hemophilia, von Willebrand disease, and thrombocytopenia are 
examples of hypocoagulation disorders. Acquired excessive blood clotting 
may result from blood protein defects and acquired inadequate blood 
clotting (for example, acquired hemophilia A) may be associated with 
inhibitor autoantibodies.
    2. The hospitalizations in 7.08 do not all have to be for the same 
complication of a disorder of thrombosis and hemostasis. They may be for 
three different complications of the disorder. Examples of complications 
that may result in hospitalization include anemias, thromboses, 
embolisms, and uncontrolled bleeding requiring multiple factor 
concentrate infusions or platelet transfusions. We will also consider 
any surgery that you have, even if it is not related to your 
hematological disorder, to be a complication of your disorder of 
thrombosis and hemostasis if you require treatment with clotting-factor 
proteins (for example, factor VIII or factor IX) or anticoagulant 
medication to control bleeding or coagulation in connection with your 
surgery. We will count the hours you receive emergency treatment in a 
comprehensive hemophilia treatment center immediately before the 
hospitalization if this treatment is comparable to the treatment 
provided in a hospital emergency department.

  E. What are disorders of bone marrow failure, and how do we evaluate 
                            them under 7.10?

    1. Disorders of bone marrow failure may be congenital or acquired, 
characterized by bone marrow that does not make enough healthy RBCs, 
platelets, or granulocytes (specialized types of white blood cells); 
there may also be a combined failure of these bone marrow-produced 
cells. The diagnosis is based on peripheral blood smears and bone marrow 
aspiration or bone marrow biopsy, but not peripheral blood smears alone. 
Examples of these disorders are myelodysplastic syndromes, aplastic 
anemia, granulocytopenia, and myelofibrosis. Acquired disorders of bone 
marrow failure may result from viral infections, chemical exposure, or 
immunologic disorders.
    2. The hospitalizations in 7.10A do not all have to be for the same 
complication of bone marrow failure. They may be for three different 
complications of the disorder. Examples of complications that may result 
in hospitalization include uncontrolled bleeding, anemia, and systemic 
bacterial, viral, or fungal infections.
    3. For 7.10B, the requirement of life-long RBC transfusions to 
maintain life in myelodysplastic syndromes or aplastic anemias has the 
same meaning as it does for beta thalassemia major. (See 7.00C4.)

  F. How do we evaluate bone marrow or stem cell transplantation under 
                                  7.17?

    We will consider you to be disabled for 12 months from the date of 
bone marrow or stem cell transplantation, or we may consider you to be 
disabled for a longer period if you are experiencing any serious post-
transplantation complications, such as graft-versus-host (GVH) disease, 
frequent infections after immunosuppressive therapy, or significant 
deterioration of organ systems. We do not restrict our determination of 
the onset of disability to the date of the transplantation in 7.17. We 
may establish an earlier onset date of disability due to your 
transplantation if evidence in your case record supports such a finding.

            G. How do we use the functional criteria in 7.18?

    1. When we use the functional criteria in 7.18, we consider all 
relevant information in your case record to determine the impact of your 
hematological disorder on your ability to function independently, 
appropriately, effectively, and on a sustained basis in a work setting. 
Factors we will consider when we evaluate your functioning under 7.18 
include, but are not limited to: Your symptoms, the frequency and 
duration of complications of your hematological disorder, periods of 
exacerbation and remission, and the functional impact of your treatment, 
including the side effects of your medication.
    2. Repeated complications means that the complications occur on an 
average of three times a year, or once every 4 months, each lasting 2 
weeks or more; or the complications do not last for 2 weeks but occur 
substantially more frequently than three times in a year or once every 4 
months; or they occur less frequently than an average of three times a 
year or once every 4 months but last substantially longer than 2 weeks. 
Your impairment will satisfy this criterion regardless of whether you 
have the same kind of complication repeatedly, all different 
complications, or any other combination of complications; for example, 
two of the same kind of complication and a different one. You must have 
the required number of complications with the frequency and duration 
required in this section. Additionally, the complications must occur 
within the period we are considering in connection with your application 
or continuing disability review.
    3. To satisfy the functional criteria in 7.18, your hematological 
disorder must result in a ``marked'' level of limitation in one of three 
general areas of functioning: Activities of daily living, social 
functioning, or difficulties in completing tasks due to deficiencies

[[Page 508]]

in concentration, persistence, or pace. Functional limitations may 
result from the impact of the disease process itself on your mental 
functioning, physical functioning, or both your mental and physical 
functioning. This limitation could result from persistent or 
intermittent symptoms, such as pain, severe fatigue, or malaise, 
resulting in a limitation of your ability to do a task, to concentrate, 
to persevere at a task, or to perform the task at an acceptable rate of 
speed. (Severe fatigue means a frequent sense of exhaustion that results 
in significant reduced physical activity or mental function. Malaise 
means frequent feelings of illness, bodily discomfort, or lack of well-
being that result in significantly reduced physical activity or mental 
function.) You may also have limitations because of your treatment and 
its side effects.
    4. Marked limitation means that the symptoms and signs of your 
hematological disorder interfere seriously with your ability to 
function. Although we do not require the use of such a scale, ``marked'' 
would be the fourth point on a five-point scale consisting of no 
limitation, mild limitation, moderate limitation, marked limitation, and 
extreme limitation. We do not define ``marked'' by a specific number of 
different activities of daily living or different behaviors in which 
your social functioning is impaired, or a specific number of tasks that 
you are able to complete, but by the nature and overall degree of 
interference with your functioning. You may have a marked limitation 
when several activities or functions are impaired, or even when only one 
is impaired. Additionally, you need not be totally precluded from 
performing an activity to have a marked limitation, as long as the 
degree of limitation interferes seriously with your ability to function 
independently, appropriately, and effectively. The term ``marked'' does 
not imply that you must be confined to bed, hospitalized, or in a 
nursing home.
    5. Activities of daily living include, but are not limited to, such 
activities as doing household chores, grooming and hygiene, using a post 
office, taking public transportation, or paying bills. We will find that 
you have a ``marked'' limitation in activities of daily living if you 
have a serious limitation in your ability to maintain a household or 
take public transportation because of symptoms such as pain, severe 
fatigue, anxiety, or difficulty concentrating, caused by your 
hematological disorder (including complications of the disorder) or its 
treatment, even if you are able to perform some self-care activities.
    6. Social functioning includes the capacity to interact with others 
independently, appropriately, effectively, and on a sustained basis. It 
includes the ability to communicate effectively with others. We will 
find that you have a ``marked'' limitation in maintaining social 
functioning if you have a serious limitation in social interaction on a 
sustained basis because of symptoms such as pain, severe fatigue, 
anxiety, or difficulty concentrating, or a pattern of exacerbation and 
remission, caused by your hematological disorder (including 
complications of the disorder) or its treatment, even if you are able to 
communicate with close friends or relatives.
    7. Completing tasks in a timely manner involves the ability to 
sustain concentration, persistence, or pace to permit timely completion 
of tasks commonly found in work settings. We will find that you have a 
``marked'' limitation in completing tasks if you have a serious 
limitation in your ability to sustain concentration or pace adequate to 
complete work-related tasks because of symptoms, such as pain, severe 
fatigue, anxiety, or difficulty concentrating caused by your 
hematological disorder (including complications of the disorder) or its 
treatment, even if you are able to do some routine activities of daily 
living.

    H. How do we consider your symptoms, including your pain, severe 
                          fatigue, and malaise?

    Your symptoms, including pain, severe fatigue, and malaise, may be 
important factors in our determination whether your hematological 
disorder(s) meets or medically equals a listing, or in our determination 
whether you are otherwise able to work. We cannot consider your symptoms 
unless you have medical signs or laboratory findings showing the 
existence of a medically determinable impairment(s) that could 
reasonably be expected to produce the symptoms. If you have such an 
impairment(s), we will evaluate the intensity, persistence, and 
functional effects of your symptoms using the rules throughout 7.00 and 
in our other regulations. (See sections 404.1521, 404.1529, 416.921, and 
416.929 of this chapter.) Additionally, when we assess the credibility 
of your complaints about your symptoms and their functional effects, we 
will not draw any inferences from the fact that you do not receive 
treatment or that you are not following treatment without considering 
all of the relevant evidence in your case record, including any 
explanations you provide that may explain why you are not receiving or 
following treatment.

    I. How do we evaluate episodic events in hematological disorders?

    Some of the listings in this body system require a specific number 
of events within a consecutive 12-month period. (See 7.05, 7.08, and 
7.10A.) When we use such criteria, a consecutive 12-month period means a 
period of 12 consecutive months, all or part of which must occur within 
the period we are considering in connection with your application or

[[Page 509]]

continuing disability review. These events must occur at least 30 days 
apart to ensure that we are evaluating separate events.

 J. How do we evaluate hematological disorders that do not meet one of 
                             these listings?

    1. These listings are only common examples of hematological 
disorders that we consider severe enough to prevent a person from doing 
any gainful activity. If your disorder does not meet the criteria of any 
of these listings, we must consider whether you have a disorder that 
satisfies the criteria of a listing in another body system. For example, 
we will evaluate hemophilic joint deformity or bone or joint pain from 
myelofibrosis under 1.00; polycythemia vera under 3.00, 4.00, or 11.00; 
chronic iron overload resulting from repeated RBC transfusion 
(transfusion hemosiderosis) under 3.00, 4.00, or 5.00; and the effects 
of intracranial bleeding or stroke under 11.00 or 12.00.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See sections 404.1526 and 416.926 of this 
chapter.) Hematological disorders may be associated with disorders in 
other body systems, and we consider the combined effects of multiple 
impairments when we determine whether they medically equal a listing. If 
your impairment(s) does not medically equal a listing, you may or may 
not have the residual functional capacity to engage in substantial 
gainful activity. We proceed to the fourth, and, if necessary, the fifth 
steps of the sequential evaluation process in sections 404.1520 and 
416.920. We use the rules in sections 404.1594, 416.994, and 416.994a of 
this chapter, as appropriate, when we decide whether you continue to be 
disabled.
    7.01 Category of Impairments, Hematological Disorders
    7.05 Hemolytic anemias, including sickle cell disease, thalassemia, 
and their variants (see 7.00C), with:
    A. Documented painful (vaso-occlusive) crises requiring parenteral 
(intravenous or intramuscular) narcotic medication, occurring at least 
six times within a 12-month period with at least 30 days between crises.
    OR
    B. Complications of hemolytic anemia requiring at least three 
hospitalizations within a 12-month period and occurring at least 30 days 
apart. Each hospitalization must last at least 48 hours, which can 
include hours in a hospital emergency department or comprehensive sickle 
cell disease center immediately before the hospitalization (see 7.00C2).
    OR
    C. Hemoglobin measurements of 7.0 grams per deciliter (g/dL) or 
less, occurring at least three times within a 12-month period with at 
least 30 days between measurements.
    OR
    D. Beta thalassemia major requiring life-long RBC transfusions at 
least once every 6 weeks to maintain life (see 7.00C4).
    7.08 Disorders of thrombosis and hemostasis, including hemophilia 
and thrombocytopenia (see 7.00D), with complications requiring at least 
three hospitalizations within a 12-month period and occurring at least 
30 days apart. Each hospitalization must last at least 48 hours, which 
can include hours in a hospital emergency department or comprehensive 
hemophilia treatment center immediately before the hospitalization (see 
7.00D2).
    7.10 Disorders of bone marrow failure, including myelodysplastic 
syndromes, aplastic anemia, granulocytopenia, and myelofibrosis (see 
7.00E), with:
    A. Complications of bone marrow failure requiring at least three 
hospitalizations within a 12-month period and occurring at least 30 days 
apart. Each hospitalization must last at least 48 hours, which can 
include hours in a hospital emergency department immediately before the 
hospitalization (see 7.00E2).
    OR
    B. Myelodysplastic syndromes or aplastic anemias requiring life-long 
RBC transfusions at least once every 6 weeks to maintain life (see 
7.00E3).
    7.17 Hematological disorders treated by bone marrow or stem cell 
transplantation (see 7.00F). Consider under a disability for at least 12 
consecutive months from the date of transplantation. After that, 
evaluate any residual impairment(s) under the criteria for the affected 
body system.
    7.18 Repeated complications of hematological disorders (see 7.00G2), 
including those complications listed in 7.05, 7.08, and 7.10 but without 
the requisite findings for those listings, or other complications (for 
example, anemia, osteonecrosis, retinopathy, skin ulcers, silent central 
nervous system infarction, cognitive or other mental limitation, or 
limitation of joint movement), resulting in significant, documented 
symptoms or signs (for example, pain, severe fatigue, malaise, fever, 
night sweats, headaches, joint or muscle swelling, or shortness of 
breath), and one of the following at the marked level (see 7.00G4):
    A. Limitation of activities of daily living (see 7.00G5).
    B. Limitation in maintaining social functioning (see 7.00G6).
    C. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace (see 7.00G7).

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                          8.00  Skin Disorders

    A. What skin disorders do we evaluate with these listings? We use 
these listings to evaluate skin disorders that may result from 
hereditary, congenital, or acquired pathological processes. The kinds of 
impairments covered by these listings are: Ichthyosis, bullous diseases, 
chronic infections of the skin or mucous membranes, dermatitis, 
hidradenitis suppurativa, genetic photosensitivity disorders, and burns.
    B. What documentation do we need? When we evaluate the existence and 
severity of your skin disorder, we generally need information about the 
onset, duration, frequency of flareups, and prognosis of your skin 
disorder; the location, size, and appearance of lesions; and, when 
applicable, history of exposure to toxins, allergens, or irritants, 
familial incidence, seasonal variation, stress factors, and your ability 
to function outside of a highly protective environment. To confirm the 
diagnosis, we may need laboratory findings (for example, results of a 
biopsy obtained independently of Social Security disability evaluation 
or blood tests) or evidence from other medically acceptable methods 
consistent with the prevailing state of medical knowledge and clinical 
practice.
    C. How do we assess the severity of your skin disorder(s)? We 
generally base our assessment of severity on the extent of your skin 
lesions, the frequency of flareups of your skin lesions, how your 
symptoms (including pain) limit you, the extent of your treatment, and 
how your treatment affects you.
    1. Extensive skin lesions. Extensive skin lesions are those that 
involve multiple body sites or critical body areas, and result in a very 
serious limitation. Examples of extensive skin lesions that result in a 
very serious limitation include but are not limited to:
    a. Skin lesions that interfere with the motion of your joints and 
that very seriously limit your use of more than one extremity; that is, 
two upper extremities, two lower extremities, or one upper and one lower 
extremity.
    b. Skin lesions on the palms of both hands that very seriously limit 
your ability to do fine and gross motor movements.
    c. Skin lesions on the soles of both feet, the perineum, or both 
inguinal areas that very seriously limit your ability to ambulate.
    2. Frequency of flareups. If you have skin lesions, but they do not 
meet the requirements of any of the listings in this body system, you 
may still have an impairment that prevents you from doing any gainful 
activity when we consider your condition over time, especially if your 
flareups result in extensive skin lesions, as defined in C1 of this 
section. Therefore, if you have frequent flareups, we may find that your 
impairment(s) is medically equal to one of these listings even though 
you have some periods during which your condition is in remission. We 
will consider how frequent and serious your flareups are, how quickly 
they resolve, and how you function between flareups to determine whether 
you have been unable to do any gainful activity for a continuous period 
of at least 12 months or can be expected to be unable to do any gainful 
activity for a continuous period of at least 12 months. We will also 
consider the frequency of your flareups when we determine whether you 
have a severe impairment and when we need to assess your residual 
functional capacity.
    3. Symptoms (including pain). Symptoms (including pain) may be 
important factors contributing to the severity of your skin disorder(s). 
We assess the impact of symptoms as explained in Secs. 404.1521, 
404.1529, 416.921, and 416.929 of this chapter.
    4. Treatment. We assess the effects of medication, therapy, surgery, 
and any other form of treatment you receive when we determine the 
severity and duration of your impairment(s). Skin disorders frequently 
respond to treatment; however, response to treatment can vary widely, 
with some impairments becoming resistant to treatment. Some treatments 
can have side effects that can in themselves result in limitations.
    a. We assess the effects of continuing treatment as prescribed by 
determining if there is improvement in the symptoms, signs, and 
laboratory findings of your disorder, and if you experience side effects 
that result in functional limitations. To assess the effects of your 
treatment, we may need information about:
    i. The treatment you have been prescribed (for example, the type, 
dosage, method, and frequency of administration of medication or 
therapy);
    ii. Your response to the treatment;
    iii. Any adverse effects of the treatment; and
    iv. The expected duration of the treatment.
    b. Because treatment itself or the effects of treatment may be 
temporary, in most cases sufficient time must elapse to allow us to 
evaluate the impact and expected duration of treatment and its side 
effects. Except under 8.07 and 8.08, you must follow continuing 
treatment as prescribed for at least 3 months before your impairment can 
be determined to meet the requirements of a skin disorder listing. (See 
8.00H if you are not undergoing treatment or did not have treatment for 
3 months.) We consider your specific response to treatment when we 
evaluate the overall severity of your impairment.
    D. How do we assess impairments that may affect the skin and other 
body systems? When your impairment affects your skin and has

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effects in other body systems, we first evaluate the predominant feature 
of your impairment under the appropriate body system. Examples include, 
but are not limited to the following.
    1. Tuberous sclerosis primarily affects the brain. The predominant 
features are seizures, which we evaluate under the neurological listings 
in 11.00, and developmental delays or other mental disorders, which we 
evaluate under the mental disorders listings in 12.00.
    2. Malignant tumors of the skin (for example, malignant melanomas) 
are cancers, or neoplastic diseases, which we evaluate under the 
listings in 13.00.
    3. Autoimmune disorders and other immune system disorders (for 
example, systemic lupus erythematosus (SLE), scleroderma, human 
immunodeficiency virus (HIV) infection, and Sjogren's syndrome) often 
involve more than one body system. We first evaluate these disorders 
under the immune system disorders listings in 14.00. We evaluate SLE 
under 14.02, scleroderma under 14.04, Sjogren's syndrome under 14.10, 
and HIV infection under 14.11.
    4. Disfigurement or deformity resulting from skin lesions may result 
in loss of sight, hearing, speech, and the ability to chew 
(mastication). We evaluate these impairments and their effects under the 
special senses and speech listings in 2.00 and the digestive system 
listings in 5.00. Facial disfigurement or other physical deformities may 
also have effects we evaluate under the mental disorders listings in 
12.00, such as when they affect mood or social functioning.
    E. How do we evaluate genetic photosensitivity disorders?
    1. Xeroderma pigmentosum (XP). When you have XP, your impairment 
meets the requirements of 8.07A if you have clinical and laboratory 
findings showing that you have the disorder. (See 8.00E3.) People who 
have XP have a lifelong hypersensitivity to all forms of ultraviolet 
light and generally lead extremely restricted lives in highly protective 
environments in order to prevent skin cancers from developing. Some 
people with XP also experience problems with their eyes, neurological 
problems, mental disorders, and problems in other body systems.
    2. Other genetic photosensitivity disorders. Other genetic 
photosensitivity disorders may vary in their effects on different 
people, and may not result in an inability to engage in any gainful 
activity for a continuous period of at least 12 months. Therefore, if 
you have a genetic photosensitivity disorder other than XP (established 
by clinical and laboratory findings as described in 8.00E3), you must 
show that you have either extensive skin lesions or an inability to 
function outside of a highly protective environment to meet the 
requirements of 8.07B. You must also show that your impairment meets the 
duration requirement. By inability to function outside of a highly 
protective environment we mean that you must avoid exposure to 
ultraviolet light (including sunlight passing through windows and light 
from unshielded fluorescent bulbs), wear protective clothing and 
eyeglasses, and use opaque broad-spectrum sunscreens in order to avoid 
skin cancer or other serious effects. Some genetic photosensitivity 
disorders can have very serious effects in other body systems, 
especially special senses and speech (2.00), neurological (11.00), 
mental (12.00), and neoplastic (13.00). We will evaluate the predominant 
feature of your impairment under the appropriate body system, as 
explained in 8.00D.
    3. Clinical and laboratory findings.
    a. General. We need documentation from an acceptable medical source 
to establish that you have a medically determinable impairment. In 
general, we must have evidence of appropriate laboratory testing showing 
that you have XP or another genetic photosensitivity disorder. We will 
find that you have XP or another genetic photosensitivity disorder based 
on a report from an acceptable medical source indicating that you have 
the impairment, supported by definitive genetic laboratory studies 
documenting appropriate chromosomal changes, including abnormal DNA 
repair or another DNA or genetic abnormality specific to your type of 
photosensitivity disorder.
    b. What we will accept as medical evidence instead of the actual 
laboratory report. When we do not have the actual laboratory report, we 
need evidence from an acceptable medical source that includes 
appropriate clinical findings for your impairment and that is persuasive 
that a positive diagnosis has been confirmed by appropriate laboratory 
testing at some time prior to our evaluation. To be persuasive, the 
report must state that the appropriate definitive genetic laboratory 
study was conducted and that the results confirmed the diagnosis. The 
report must be consistent with other evidence in your case record.
    F. How do we evaluate burns? Electrical, chemical, or thermal burns 
frequently affect other body systems; for example, musculoskeletal, 
special senses and speech, respiratory, cardiovascular, renal, 
neurological, or mental. Consequently, we evaluate burns the way we 
evaluate other disorders that can affect the skin and other body 
systems, using the listing for the predominant feature of your 
impairment. For example, if your soft tissue injuries are under 
continuing surgical management (as defined in 1.00M), we will evaluate 
your impairment under 1.08. However, if your burns do not meet the 
requirements of 1.08 and you have extensive skin lesions that result in 
a very serious limitation (as defined in 8.00C1) that has lasted or can 
be expected to last for a continuous

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period of at least 12 months, we will evaluate them under 8.08.
    G. How do we determine if your skin disorder(s) will continue at a 
disabling level of severity in order to meet the duration requirement? 
For all of these skin disorder listings except 8.07 and 8.08, we will 
find that your impairment meets the duration requirement if your skin 
disorder results in extensive skin lesions that persist for at least 3 
months despite continuing treatment as prescribed. By persist, we mean 
that the longitudinal clinical record shows that, with few exceptions, 
your lesions have been at the level of severity specified in the 
listing. For 8.07A, we will presume that you meet the duration 
requirement. For 8.07B and 8.08, we will consider all of the relevant 
medical and other information in your case record to determine whether 
your skin disorder meets the duration requirement.
    H. How do we assess your skin disorder(s) if your impairment does 
not meet the requirements of one of these listings?
    1. These listings are only examples of common skin disorders that we 
consider severe enough to prevent you from engaging in any gainful 
activity. For most of these listings, if you do not have continuing 
treatment as prescribed, if your treatment has not lasted for at least 3 
months, or if you do not have extensive skin lesions that have persisted 
for at least 3 months, your impairment cannot meet the requirements of 
these skin disorder listings. (This provision does not apply to 8.07 and 
8.08.) However, we may still find that you are disabled because your 
impairment(s) meets the requirements of a listing in another body system 
or medically equals the severity of a listing. (See Secs. 404.1526 and 
416.926 of this chapter.) We may also find you disabled at the last step 
of the sequential evaluation process.
    2. If you have not received ongoing treatment or do not have an 
ongoing relationship with the medical community despite the existence of 
a severe impairment(s), or if your skin lesions have not persisted for 
at least 3 months but you are undergoing continuing treatment as 
prescribed, you may still have an impairment(s) that meets a listing in 
another body system or that medically equals a listing. If you do not 
have an impairment(s) that meets or medically equals a listing, we will 
assess your residual functional capacity and proceed to the fourth and, 
if necessary, the fifth step of the sequential evaluation process in 
Secs. 404.1520 and 416.920 of this chapter. When we decide whether you 
continue to be disabled, we use the rules in Secs. 404.1594 and 416.994 
of this chapter.

              8.01  Category of Impairments, Skin Disorders

    8.02  Ichthyosis, with extensive skin lesions that persist for at 
least 3 months despite continuing treatment as prescribed.
    8.03  Bullous disease (for example, pemphigus, erythema multiforme 
bullosum, epidermolysis bullosa, bullous pemphigoid, dermatitis 
herpetiformis), with extensive skin lesions that persist for at least 3 
months despite continuing treatment as prescribed.
    8.04  Chronic infections of the skin or mucous membranes, with 
extensive fungating or extensive ulcerating skin lesions that persist 
for at least 3 months despite continuing treatment as prescribed.
    8.05  Dermatitis (for example, psoriasis, dyshidrosis, atopic 
dermatitis, exfoliative dermatitis, allergic contact dermatitis), with 
extensive skin lesions that persist for at least 3 months despite 
continuing treatment as prescribed.
    8.06  Hidradenitis suppurativa, with extensive skin lesions 
involving both axillae, both inguinal areas or the perineum that persist 
for at least 3 months despite continuing treatment as prescribed.
    8.07  Genetic photosensitivity disorders, established as described 
in 8.00E.
    A. Xeroderma pigmentosum. Consider the individual disabled from 
birth.
    B. Other genetic photosensitivity disorders, with:
    1. Extensive skin lesions that have lasted or can be expected to 
last for a continuous period of at least 12 months, or
    2. Inability to function outside of a highly protective environment 
for a continuous period of at least 12 months (see 8.00E2).
    8.08  Burns, with extensive skin lesions that have lasted or can be 
expected to last for a continuous period of at least 12 months (see 
8.00F).

                        9.00  Endocrine Disorders

    A. What is an endocrine disorder?
    An endocrine disorder is a medical condition that causes a hormonal 
imbalance. When an endocrine gland functions abnormally, producing 
either too much of a specific hormone (hyperfunction) or too little 
(hypofunction), the hormonal imbalance can cause various complications 
in the body. The major glands of the endocrine system are the pituitary, 
thyroid, parathyroid, adrenal, and pancreas.
    B. How do we evaluate the effects of endocrine disorders? We 
evaluate impairments that result from endocrine disorders under the 
listings for other body systems. For example:
    1. Pituitary gland disorders can disrupt hormone production and 
normal functioning in other endocrine glands and in many body

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systems. The effects of pituitary gland disorders vary depending on 
which hormones are involved. For example, when pituitary hypofunction 
affects water and electrolyte balance in the kidney and leads to 
diabetes insipidus, we evaluate the effects of recurrent dehydration 
under 6.00.
    2. Thyroid gland disorders affect the sympathetic nervous system and 
normal metabolism. We evaluate thyroid-related changes in blood pressure 
and heart rate that cause arrhythmias or other cardiac dysfunction under 
4.00; thyroid-related weight loss under 5.00; hypertensive 
cerebrovascular accidents (strokes) under 11.00; and cognitive 
limitations, mood disorders, and anxiety under 12.00.
    3. Parathyroid gland disorders affect calcium levels in bone, blood, 
nerves, muscle, and other body tissues. We evaluate parathyroid-related 
osteoporosis and fractures under 1.00; abnormally elevated calcium 
levels in the blood (hypercalcemia) that lead to cataracts under 2.00; 
kidney failure under 6.00; and recurrent abnormally low blood calcium 
levels (hypocalcemia) that lead to increased excitability of nerves and 
muscles, such as tetany and muscle spasms, under 11.00.
    4. Adrenal gland disorders affect bone calcium levels, blood 
pressure, metabolism, and mental status. We evaluate adrenal-related 
osteoporosis with fractures that compromises the ability to walk or to 
use the upper extremities under 1.00; adrenal-related hypertension that 
worsens heart failure or causes recurrent arrhythmias under 4.00; 
adrenal-related weight loss under 5.00; and mood disorders under 12.00.
    5. Diabetes mellitus and other pancreatic gland disorders disrupt 
the production of several hormones, including insulin, that regulate 
metabolism and digestion. Insulin is essential to the absorption of 
glucose from the bloodstream into body cells for conversion into 
cellular energy. The most common pancreatic gland disorder is diabetes 
mellitus (DM). There are two major types of DM: type 1 and type 2. Both 
type 1 and type 2 DM are chronic disorders that can have serious 
disabling complications that meet the duration requirement. Type 1 DM--
previously known as ``juvenile diabetes'' or ``insulin-dependent 
diabetes mellitus'' (IDDM)--is an absolute deficiency of insulin 
production that commonly begins in childhood and continues throughout 
adulthood. Treatment of type 1 DM always requires lifelong daily 
insulin. With type 2 DM--previously known as ``adult-onset diabetes 
mellitus'' or ``non-insulin-dependent diabetes mellitus'' (NIDDM)--the 
body's cells resist the effects of insulin, impairing glucose absorption 
and metabolism. Treatment of type 2 DM generally requires lifestyle 
changes, such as increased exercise and dietary modification, and 
sometimes insulin in addition to other medications. While both type 1 
and type 2 DM are usually controlled, some persons do not achieve good 
control for a variety of reasons including, but not limited to, 
hypoglycemia unawareness, other disorders that can affect blood glucose 
levels, inability to manage DM due to a mental disorder, or inadequate 
treatment.
    a. Hyperglycemia. Both types of DM cause hyperglycemia, which is an 
abnormally high level of blood glucose that may produce acute and long-
term complications. Acute complications of hyperglycemia include 
diabetic ketoacidosis. Long-term complications of chronic hyperglycemia 
include many conditions affecting various body systems.
    (i) Diabetic ketoacidosis (DKA). DKA is an acute, potentially life-
threatening complication of DM in which the chemical balance of the body 
becomes dangerously hyperglycemic and acidic. It results from a severe 
insulin deficiency, which can occur due to missed or inadequate daily 
insulin therapy or in association with an acute illness. It usually 
requires hospital treatment to correct the acute complications of 
dehydration, electrolyte imbalance, and insulin deficiency. You may have 
serious complications resulting from your treatment, which we evaluate 
under the affected body system. For example, we evaluate cardiac 
arrhythmias under 4.00, intestinal necrosis under 5.00, and cerebral 
edema and seizures under 11.00. Recurrent episodes of DKA may result 
from mood or eating disorders, which we evaluate under 12.00.
    (ii) Chronic hyperglycemia. Chronic hyperglycemia, which is 
longstanding abnormally high levels of blood glucose, leads to long-term 
diabetic complications by disrupting nerve and blood vessel functioning. 
This disruption can have many different effects in other body systems. 
For example, we evaluate diabetic peripheral neurovascular disease that 
leads to gangrene and subsequent amputation of an extremity under 1.00; 
diabetic retinopathy under 2.00; coronary artery disease and peripheral 
vascular disease under 4.00; diabetic gastroparesis that results in 
abnormal gastrointestinal motility under 5.00; diabetic nephropathy 
under 6.00; poorly healing bacterial and fungal skin infections under 
8.00; diabetic peripheral and sensory neuropathies under 11.00; and 
cognitive impairments, depression, and anxiety under 12.00.
    b. Hypoglycemia. Persons with DM may experience episodes of 
hypoglycemia, which is an abnormally low level of blood glucose. Most 
adults recognize the symptoms of hypoglycemia and reverse them by 
consuming substances containing glucose; however, some do not take this 
step because of hypoglycemia unawareness. Severe hypoglycemia can lead 
to complications, including seizures or loss of consciousness, which we 
evaluate

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under 11.00, or altered mental status and cognitive deficits, which we 
evaluate under 12.00.
    C. How do we evaluate endocrine disorders that do not have effects 
that meet or medically equal the criteria of any listing in other body 
systems? If your impairment(s) does not meet or medically equal a 
listing in another body system, you may or may not have the residual 
functional capacity to engage in substantial gainful activity. In this 
situation, we proceed to the fourth and, if necessary, the fifth steps 
of the sequential evaluation process in Secs. 404.1520 and 416.920. When 
we decide whether you continue to be disabled, we use the rules in 
Secs. 404.1594, 416.994, and 416.994a.

      10.00  Congenital Disorders that Affect Multiple Body Systems

    A. Which disorder do we evaluate under this body system? Although 
Down syndrome exists in non-mosaic and mosaic forms, we evaluate only 
non-mosaic Down syndrome under this body system.
    B. What is non-mosaic Down syndrome? Non-mosaic Down syndrome is a 
genetic disorder. Most people with non-mosaic Down syndrome have three 
copies of chromosome 21 in all of their cells (chromosome 21 trisomy); 
some have an extra copy of chromosome 21 attached to a different 
chromosome in all of their cells (chromosome 21 translocation). 
Virtually all people with non-mosaic Down syndrome have characteristic 
facial or other physical features, delayed physical development, and 
intellectual disability. People with non-mosaic Down syndrome may also 
have congenital heart disease, impaired vision, hearing problems, and 
other disorders. We evaluate non-mosaic Down syndrome under 10.06. If 
you have non-mosaic Down syndrome documented as described in 10.00C, we 
consider you disabled from birth.

 C. What evidence do we need to document non-mosaic Down syndrome under 
                                 10.06?

    1. Under 10.06A, we will find you disabled based on laboratory 
findings.
    a. To find that your disorder meets 10.06A, we need a copy of the 
laboratory report of karyotype analysis, which is the definitive test to 
establish non-mosaic Down syndrome. We will not purchase karyotype 
analysis. We will not accept a fluorescence in situ hybridization (FISH) 
test because it does not distinguish between the mosaic and non-mosaic 
forms of Down syndrome.
    b. If a physician (see Secs. 404.1513(a)(1) and 416.913(a)(1) of 
this chapter) has not signed the laboratory report of karyotype 
analysis, the evidence must also include a physician's statement that 
you have Down syndrome.
    c. For purposes of 10.06A, we do not require additional evidence 
stating that you have the distinctive facial or other physical features 
of Down syndrome.
    2. If we do not have a laboratory report of karyotype analysis 
showing that you have non-mosaic Down syndrome, we may find you disabled 
under 10.06B or 10.06C.
    a. Under 10.06B, we need a physician's report stating: (i) your 
karyotype diagnosis or evidence that documents your type of Down 
syndrome is consistent with prior karyotype analysis (for example, 
reference to a diagnosis of ``trisomy 21''), and (ii) that you have the 
distinctive facial or other physical features of Down syndrome. We do 
not require a detailed description of the facial or other physical 
features of the disorder. However, we will not find that your disorder 
meets 10.06B if we have evidence--such as evidence of functioning 
inconsistent with the diagnosis--that indicates that you do not have 
non-mosaic Down syndrome.
    b. If we do not have evidence of prior karyotype analysis (you did 
not have testing, or you had testing but we do not have information from 
a physician about the test results), we will find that your disorder 
meets 10.06C if we have: (i) a physician's report stating that you have 
the distinctive facial or other physical features of Down syndrome, and 
(ii) evidence that your functioning is consistent with a diagnosis of 
non-mosaic Down syndrome. This evidence may include medical or 
nonmedical information about your physical and mental abilities, 
including information about your education, work history, or the results 
of psychological testing. However, we will not find that your disorder 
meets 10.06C if we have evidence--such as evidence of functioning 
inconsistent with the diagnosis--that indicates that you do not have 
non-mosaic Down syndrome.

    D. How do we evaluate mosaic Down syndrome and other congenital 
              disorders that affect multiple body systems?

    1. Mosaic Down syndrome. Approximately 2 percent of people with Down 
syndrome have the mosaic form. In mosaic Down syndrome, there are some 
cells with an extra copy of chromosome 21 and other cells with the 
normal two copies of chromosome 21. Mosaic Down syndrome can be so 
slight as to be undetected clinically, but it can also be profound and 
disabling, affecting various body systems.
    2. Other congenital disorders that affect multiple body systems. 
Other congenital disorders, such as congenital anomalies, chromosomal 
disorders, dysmorphic syndromes, inborn metabolic syndromes, and 
perinatal infectious diseases, can cause deviation from, or interruption 
of, the normal function of the body or can interfere with development. 
Examples of these disorders include both the juvenile and late-onset 
forms of Tay-Sachs disease, trisomy X syndrome (XXX syndrome), fragile X 
syndrome, phenylketonuria (PKU), caudal regression syndrome, and fetal 
alcohol syndrome. For these disorders and

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other disorders like them, the degree of deviation, interruption, or 
interference, as well as the resulting functional limitations and their 
progression, may vary widely from person to person and may affect 
different body systems.
    3. Evaluating the effects of mosaic Down syndrome or another 
congenital disorder under the listings. When the effects of mosaic Down 
syndrome or another congenital disorder that affects multiple body 
systems are sufficiently severe we evaluate the disorder under the 
appropriate affected body system(s), such as musculoskeletal, special 
senses and speech, neurological, or mental disorders. Otherwise, we 
evaluate the specific functional limitations that result from the 
disorder under our other rules described in 10.00E.

            E. What if your disorder does not meet a listing?

    If you have a severe medically determinable impairment(s) that does 
not meet a listing, we will consider whether your impairment(s) 
medically equals a listing. See Secs. 404.1526 and 416.926 of this 
chapter. If your impairment(s) does not meet or medically equal a 
listing, you may or may not have the residual functional capacity to 
engage in substantial gainful activity. We proceed to the fourth, and if 
necessary, the fifth steps of the sequential evaluation process in 
Secs. 404.1520 and 416.920 of this chapter. We use the rules in 
Secs. 404.1594 and 416.994 of this chapter, as appropriate, when we 
decide whether you continue to be disabled.

    10.01  Category of Impairments, Congenital Disorders That Affect 
                          Multiple Body Systems

    10.06  Non-mosaic Down syndrome (chromosome 21 trisomy or chromosome 
21 translocation), documented by:
    A. A laboratory report of karyotype analysis signed by a physician, 
or both a laboratory report of karyotype analysis not signed by a 
physician and a statement by a physician that you have Down syndrome 
(see 10.00C1), or
    B. A physician's report stating that you have chromosome 21 trisomy 
or chromosome 21 translocation consistent with prior karyotype analysis 
with the distinctive facial or other physical features of Down syndrome 
(see 10.00C2a), or
    C. A physician's report stating that you have Down syndrome with the 
distinctive facial or other physical features and evidence demonstrating 
that you function at a level consistent with non-mosaic Down syndrome 
(see 10.00C2b).

                      11.00  Neurological Disorders

    A. Which neurological disorders do we evaluate under these listings? 
We evaluate epilepsy, amyotrophic lateral sclerosis, coma or persistent 
vegetative state (PVS), and neurological disorders that cause 
disorganization of motor function, bulbar and neuromuscular dysfunction, 
communication impairment, or a combination of limitations in physical 
and mental functioning. We evaluate neurological disorders that may 
manifest in a combination of limitations in physical and mental 
functioning. For example, if you have a neurological disorder that 
causes mental limitations, such as Huntington's disease or early-onset 
Alzheimer's disease, which may limit executive functioning (e.g., 
regulating attention, planning, inhibiting responses, decision-making), 
we evaluate your limitations using the functional criteria under these 
listings (see 11.00G). Under this body system, we evaluate the 
limitations resulting from the impact of the neurological disease 
process itself. If your neurological disorder results in only mental 
impairment or if you have a co-occurring mental condition that is not 
caused by your neurological disorder (for example, dementia), we will 
evaluate your mental impairment under the mental disorders body system, 
12.00.
    B. What evidence do we need to document your neurological disorder?
    1. We need both medical and non-medical evidence (signs, symptoms, 
and laboratory findings) to assess the effects of your neurological 
disorder. Medical evidence should include your medical history, 
examination findings, relevant laboratory tests, and the results of 
imaging. Imaging refers to medical imaging techniques, such as x-ray, 
computerized tomography (CT), magnetic resonance imaging (MRI), and 
electroencephalography (EEG). The imaging must be consistent with the 
prevailing state of medical knowledge and clinical practice as the 
proper technique to support the evaluation of the disorder. In addition, 
the medical evidence may include descriptions of any prescribed 
treatment and your response to it. We consider non-medical evidence such 
as statements you or others make about your impairments, your 
restrictions, your daily activities, or your efforts to work.
    2. We will make every reasonable effort to obtain the results of 
your laboratory and imaging evidence. When the results of any of these 
tests are part of the existing evidence in your case record, we will 
evaluate the test results and all other relevant evidence. We will not 
purchase imaging, or other diagnostic tests, or laboratory tests that 
are complex, may involve significant risk, or that are invasive. We will 
not routinely purchase tests that are expensive or not readily 
available.
    C. How do we consider adherence to prescribed treatment in 
neurological disorders? In 11.02 (Epilepsy), 11.06 (Parkinsonian 
syndrome), and 11.12 (Myasthenia gravis), we require that limitations 
from these neurological disorders exist despite adherence to

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prescribed treatment. ``Despite adherence to prescribed treatment'' 
means that you have taken medication(s) or followed other treatment 
procedures for your neurological disorder(s) as prescribed by a 
physician for three consecutive months but your impairment continues to 
meet the other listing requirements despite this treatment. You may 
receive your treatment at a health care facility that you visit 
regularly, even if you do not see the same physician on each visit.
    D. What do we mean by disorganization of motor function?
    1. Disorganization of motor function means interference, due to your 
neurological disorder, with movement of two extremities; i.e., the lower 
extremities, or upper extremities (including fingers, wrists, hands, 
arms, and shoulders). By two extremities we mean both lower extremities, 
or both upper extremities, or one upper extremity and one lower 
extremity. All listings in this body system, except for 11.02 
(Epilepsy), 11.10 (Amyotrophic lateral sclerosis), and 11.20 (Coma and 
persistent vegetative state), include criteria for disorganization of 
motor function that results in an extreme limitation in your ability to:
    a. Stand up from a seated position; or
    b. Balance while standing or walking; or
    c. Use the upper extremities (including fingers, wrists, hands, 
arms, and shoulders).
    2. Extreme limitation means the inability to stand up from a seated 
position, maintain balance in a standing position and while walking, or 
use your upper extremities to independently initiate, sustain, and 
complete work-related activities. The assessment of motor function 
depends on the degree of interference with standing up; balancing while 
standing or walking; or using the upper extremities (including fingers, 
hands, arms, and shoulders).
    a. Inability to stand up from a seated position means that once 
seated you are unable to stand and maintain an upright position without 
the assistance of another person or the use of an assistive device, such 
as a walker, two crutches, or two canes.
    b. Inability to maintain balance in a standing position means that 
you are unable to maintain an upright position while standing or walking 
without the assistance of another person or an assistive device, such as 
a walker, two crutches, or two canes.
    c. Inability to use your upper extremities means that you have a 
loss of function of both upper extremities (including fingers, wrists, 
hands, arms, and shoulders) that very seriously limits your ability to 
independently initiate, sustain, and complete work-related activities 
involving fine and gross motor movements. Inability to perform fine and 
gross motor movements could include not being able to pinch, manipulate, 
and use your fingers; or not being able to use your hands, arms, and 
shoulders to perform gross motor movements, such as handling, gripping, 
grasping, holding, turning, and reaching; or not being able to engage in 
exertional movements such a lifting, carrying, pushing, and pulling.
    E. How do we evaluate communication impairments under these 
listings? We must have a description of a recent comprehensive 
evaluation including all areas of communication, performed by an 
acceptable medical source, to document a communication impairment 
associated with a neurological disorder. A communication impairment may 
occur when a medically determinable neurological impairment results in 
dysfunction in the parts of the brain responsible for speech and 
language. We evaluate communication impairments associated with 
neurological disorders under 11.04A, 11.07C, or 11.11B. We evaluate 
communication impairments due to non-neurological disorders under 2.09.
    1. Under 11.04A, we need evidence documenting that your central 
nervous system vascular accident or insult (CVA) and sensory or motor 
aphasia have resulted in ineffective speech or communication. 
Ineffective speech or communication means there is an extreme limitation 
in your ability to understand or convey your message in simple spoken 
language resulting in your inability to demonstrate basic communication 
skills, such as following one-step commands or telling someone about 
your basic personal needs without assistance.
    2. Under 11.07C, we need evidence documenting that your cerebral 
palsy has resulted in significant interference in your ability to speak, 
hear, or see. We will find you have ``significant interference'' in your 
ability to speak, hear, or see if your signs, such as aphasia, 
strabismus, or sensorineural hearing loss, seriously limit your ability 
to communicate on a sustained basis.
    3. Under 11.11B, we need evidence documenting that your post-polio 
syndrome has resulted in the inability to produce intelligible speech.
    F. What do we mean by bulbar and neuromuscular dysfunction? The 
bulbar region of the brain is responsible for controlling the bulbar 
muscles in the throat, tongue, jaw, and face. Bulbar and neuromuscular 
dysfunction refers to weakness in these muscles, resulting in breathing, 
swallowing, and speaking impairments. Listings 11.11 (Post-polio 
syndrome), 11.12 (Myasthenia gravis), and 11.22 (Motor neuron disorders 
other than ALS) include criteria for evaluating bulbar and neuromuscular 
dysfunction. If your neurological disorder has resulted in a breathing 
disorder, we may evaluate that condition under the respiratory system, 
3.00.
    G. How do we evaluate limitations in physical and mental functioning 
under these listings?
    1. Neurological disorders may manifest in a combination of 
limitations in physical and mental functioning. We consider all relevant

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information in your case record to determine the effects of your 
neurological disorder on your physical and mental functioning. To 
satisfy the requirement described under 11.00G, your neurological 
disorder must result in a marked limitation in physical functioning and 
a marked limitation in at least one of four areas of mental functioning: 
Understanding, remembering, or applying information; interacting with 
others; concentrating, persisting, or maintaining pace; or adapting or 
managing oneself. If your neurological disorder results in an extreme 
limitation in at least one of the four areas of mental functioning, or 
results in marked limitation in at least two of the four areas of mental 
functioning, but you do not have at least a marked limitation in your 
physical functioning, we will consider whether your condition meets or 
medically equals one of the mental disorders body system listings, 
12.00.
    2. Marked Limitation. To satisfy the requirements of the functional 
criteria, your neurological disorder must result in a marked limitation 
in physical functioning and a marked limitation in one of the four areas 
of mental functioning (see 11.00G3). Although we do not require the use 
of such a scale, ``marked'' would be the fourth point on a five-point 
scale consisting of no limitation, mild limitation, moderate limitation, 
marked limitation, and extreme limitation. We consider the nature and 
overall degree of interference with your functioning. The term 
``marked'' does not require that you must be confined to bed, 
hospitalized, or in a nursing home.
    a. Marked limitation and physical functioning. For this criterion, a 
marked limitation means that, due to the signs and symptoms of your 
neurological disorder, you are seriously limited in the ability to 
independently initiate, sustain, and complete work-related physical 
activities (see 11.00G3). You may have a marked limitation in your 
physical functioning when your neurological disease process causes 
persistent or intermittent symptoms that affect your abilities to 
independently initiate, sustain, and complete work-related activities, 
such as standing, balancing, walking, using both upper extremities for 
fine and gross movements, or results in limitations in using one upper 
and one lower extremity. The persistent and intermittent symptoms must 
result in a serious limitation in your ability to do a task or activity 
on a sustained basis. We do not define ``marked'' by a specific number 
of different physical activities or tasks that demonstrate your ability, 
but by the overall effects of your neurological symptoms on your ability 
to perform such physical activities on a consistent and sustained basis. 
You need not be totally precluded from performing a function or activity 
to have a marked limitation, as long as the degree of limitation 
seriously limits your ability to independently initiate, sustain, and 
complete work-related physical activities.
    b. Marked limitation and mental functioning. For this criterion, a 
marked limitation means that, due to the signs and symptoms of your 
neurological disorder, you are seriously limited in the ability to 
function independently, appropriately, effectively, and on a sustained 
basis in work settings (see 11.03G3). We do not define ``marked'' by a 
specific number of mental activities, such as: The number of activities 
that demonstrate your ability to understand, remember, and apply 
information; the number of tasks that demonstrate your ability to 
interact with others; a specific number of tasks that demonstrate you 
are able to concentrate, persist or maintain pace; or a specific number 
of tasks that demonstrate you are able to manage yourself. You may have 
a marked limitation in your mental functioning when several activities 
or functions are impaired, or even when only one is impaired. You need 
not be totally precluded from performing an activity to have a marked 
limitation, as long as the degree of limitation seriously limits your 
ability to function independently, appropriately, and effectively on a 
sustained basis, and complete work-related mental activities.
    3. Areas of physical and mental functioning.
    a. Physical functioning. Examples of this criterion include specific 
motor abilities, such as independently initiating, sustaining, and 
completing the following activities: Standing up from a seated position, 
balancing while standing or walking, or using both your upper 
extremities for fine and gross movements (see 11.00D). Physical 
functioning may also include functions of the body that support motor 
abilities, such as the abilities to see, breathe, and swallow (see 
11.00E and 11.00F). Examples of when your limitation in seeing, 
breathing, or swallowing may, on its own, rise to a ``marked'' 
limitation include: Prolonged and uncorrectable double vision causing 
difficulty with balance; prolonged difficulty breathing requiring the 
use of a prescribed assistive breathing device, such as a portable 
continuous positive airway pressure machine; or repeated instances, 
occurring at least weekly, of aspiration without causing aspiration 
pneumonia. Alternatively, you may have a combination of limitations due 
to your neurological disorder that together rise to a ``marked'' 
limitation in physical functioning. We may also find that you have a 
``marked'' limitation in this area if, for example, your symptoms, such 
as pain or fatigue (see 11.00T), as documented in your medical record, 
and caused by your neurological disorder or its treatment, seriously 
limit your ability to independently initiate, sustain, and complete 
these work-related motor functions, or the other physical functions or 
physiological processes that support

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those motor functions. We may also find you seriously limited in an area 
if, while you retain some ability to perform the function, you are 
unable to do so consistently and on a sustained basis. The limitation in 
your physical functioning must last or be expected to last at least 12 
months. These examples illustrate the nature of physical functioning. We 
do not require documentation of all of the examples.
    b. Mental functioning.
    (i) Understanding, remembering, or applying information. This area 
of mental functioning refers to the abilities to learn, recall, and use 
information to perform work activities. Examples include: Understanding 
and learning terms, instructions, procedures; following one- or two-step 
oral instructions to carry out a task; describing work activity to 
someone else; asking and answering questions and providing explanations; 
recognizing a mistake and correcting it; identifying and solving 
problems; sequencing multi-step activities; and using reason and 
judgment to make work-related decisions. These examples illustrate the 
nature of this area of mental functioning. We do not require 
documentation of all of the examples.
    (ii) Interacting with others. This area of mental functioning refers 
to the abilities to relate to and work with supervisors, co-workers, and 
the public. Examples include: Cooperating with others; asking for help 
when needed; handling conflicts with others; stating your own point of 
view; initiating or sustaining conversation; understanding and 
responding to social cues (physical, verbal, emotional); responding to 
requests, suggestions, criticism, correction, and challenges; and 
keeping social interactions free of excessive irritability, sensitivity, 
argumentativeness, or suspiciousness. These examples illustrate the 
nature of this area of mental functioning. We do not require 
documentation of all of the examples.
    (iii) Concentrating, persisting, or maintaining pace. This area of 
mental functioning refers to the abilities to focus attention on work 
activities and to stay on-task at a sustained rate. Examples include: 
Initiating and performing a task that you understand and know how to do; 
working at an appropriate and consistent pace; completing tasks in a 
timely manner; ignoring or avoiding distractions while working; changing 
activities or work settings without being disruptive; working close to 
or with others without interrupting or distracting them; sustaining an 
ordinary routine and regular attendance at work; and working a full day 
without needing more than the allotted number or length of rest periods 
during the day. These examples illustrate the nature of this area of 
mental functioning. We do not require documentation of all of the 
examples.
    (iv) Adapting or managing oneself. This area of mental functioning 
refers to the abilities to regulate emotions, control behavior, and 
maintain well-being in a work setting. Examples include: Responding to 
demands; adapting to changes; managing your psychologically based 
symptoms; distinguishing between acceptable and unacceptable work 
performance; setting realistic goals; making plans for yourself 
independently of others; maintaining personal hygiene and attire 
appropriate to a work setting; and being aware of normal hazards and 
taking appropriate precautions. These examples illustrate the nature of 
this area of mental functioning. We do not require documentation of all 
of the examples.
    4. Signs and symptoms of your disorder and the effects of treatment.
    a. We will consider your signs and symptoms and how they affect your 
ability to function in the work place. When we evaluate your 
functioning, we will consider whether your signs and symptoms are 
persistent or intermittent, how frequently they occur and how long they 
last, their intensity, and whether you have periods of exacerbation and 
remission.
    b. We will consider the effectiveness of treatment in improving the 
signs, symptoms, and laboratory findings related to your neurological 
disorder, as well as any aspects of treatment that may interfere with 
your ability to function. We will consider, for example: The effects of 
medications you take (including side effects); the time-limited efficacy 
of some medications; the intrusiveness, complexity, and duration of your 
treatment (for example, the dosing schedule or need for injections); the 
effects of treatment, including medications, therapy, and surgery, on 
your functioning; the variability of your response to treatment; and any 
drug interactions.
    H. What is epilepsy, and how do we evaluate it under 11.02?
    1. Epilepsy is a pattern of recurrent and unprovoked seizures that 
are manifestations of abnormal electrical activity in the brain. There 
are various types of generalized and ``focal'' or partial seizures. 
However, psychogenic nonepileptic seizures and pseudoseizures are not 
epileptic seizures for the purpose of 11.02. We evaluate psychogenic 
seizures and pseudoseizures under the mental disorders body system, 
12.00. In adults, the most common potentially disabling seizure types 
are generalized tonic-clonic seizures and dyscognitive seizures 
(formerly complex partial seizures).
    a. Generalized tonic-clonic seizures are characterized by loss of 
consciousness accompanied by a tonic phase (sudden muscle tensing 
causing the person to lose postural control) followed by a clonic phase 
(rapid cycles of muscle contraction and relaxation, also called 
convulsions). Tongue biting and incontinence may occur during 
generalized

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tonic-clonic seizures, and injuries may result from falling.
    b. Dyscognitive seizures are characterized by alteration of 
consciousness without convulsions or loss of muscle control. During the 
seizure, blank staring, change of facial expression, and automatisms 
(such as lip smacking, chewing or swallowing, or repetitive simple 
actions, such as gestures or verbal utterances) may occur. During its 
course, a dyscognitive seizure may progress into a generalized tonic-
clonic seizure (see 11.00H1a).
    2. Description of seizure. We require at least one detailed 
description of your seizures from someone, preferably a medical 
professional, who has observed at least one of your typical seizures. If 
you experience more than one type of seizure, we require a description 
of each type.
    3. Serum drug levels. We do not require serum drug levels; 
therefore, we will not purchase them. However, if serum drug levels are 
available in your medical records, we will evaluate them in the context 
of the other evidence in your case record.
    4. Counting seizures. The period specified in 11.02A, B, or C cannot 
begin earlier than one month after you began prescribed treatment. The 
required number of seizures must occur within the period we are 
considering in connection with your application or continuing disability 
review. When we evaluate the frequency of your seizures, we also 
consider your adherence to prescribed treatment (see 11.00C). When we 
determine the number of seizures you have had in the specified period, 
we will:
    a. Count multiple seizures occurring in a 24-hour period as one 
seizure.
    b. Count status epilepticus (a continuous series of seizures without 
return to consciousness between seizures) as one seizure.
    c. Count a dyscognitive seizure that progresses into a generalized 
tonic-clonic seizure as one generalized tonic-clonic seizure.
    d. We do not count seizures that occur during a period when you are 
not adhering to prescribed treatment without good reason. When we 
determine that you had good reason for not adhering to prescribed 
treatment, we will consider your physical, mental, educational, and 
communicative limitations (including any language barriers). We will 
consider you to have good reason for not following prescribed treatment 
if, for example, the treatment is very risky for you due to its 
consequences or unusual nature, or if you are unable to afford 
prescribed treatment that you are willing to accept, but for which no 
free community resources are available. We will follow guidelines found 
in our policy, such as Secs. 404.1530(c) and 416.930(c) of this chapter, 
when we determine whether you have a good reason for not adhering to 
prescribed treatment.
    e. We do not count psychogenic nonepileptic seizures or 
pseudoseizures under 11.02. We evaluate these seizures under the mental 
disorders body system, 12.00.
    5. Electroencephalography (EEG) testing. We do not require EEG test 
results; therefore, we will not purchase them. However, if EEG test 
results are available in your medical records, we will evaluate them in 
the context of the other evidence in your case record.
    I. What is vascular insult to the brain, and how do we evaluate it 
under 11.04?
    1. Vascular insult to the brain (cerebrum, cerebellum, or 
brainstem), commonly referred to as stroke or cerebrovascular accident 
(CVA), is brain cell death caused by an interruption of blood flow 
within or leading to the brain, or by a hemorrhage from a ruptured blood 
vessel or aneurysm in the brain. If you have a vision impairment 
resulting from your vascular insult, we may evaluate that impairment 
under the special senses body system, 2.00.
    2. We need evidence of sensory or motor aphasia that results in 
ineffective speech or communication under 11.04A (see 11.00E). We may 
evaluate your communication impairment under listing 11.04C if you have 
marked limitation in physical functioning and marked limitation in one 
of the four areas of mental functioning.
    3. We generally need evidence from at least 3 months after the 
vascular insult to evaluate whether you have disorganization of motor 
functioning under 11.04B, or the impact that your disorder has on your 
physical and mental functioning under 11.04C. In some cases, evidence of 
your vascular insult is sufficient to allow your claim within 3 months 
post-vascular insult. If we are unable to allow your claim within 3 
months after your vascular insult, we will defer adjudication of the 
claim until we obtain evidence of your neurological disorder at least 3 
months post-vascular insult.
    J. What are benign brain tumors, and how do we evaluate them under 
11.05? Benign brain tumors are noncancerous (nonmalignant) abnormal 
growths of tissue in or on the brain that invade healthy brain tissue or 
apply pressure on the brain or cranial nerves. We evaluate their effects 
on your functioning as discussed in 11.00D and 11.00G. We evaluate 
malignant brain tumors under the cancer body system in 13.00. If you 
have a vision impairment resulting from your benign brain tumor, we may 
evaluate that impairment under the special senses body system, 2.00.
    K. What is Parkinsonian syndrome, and how do we evaluate it under 
11.06? Parkinsonian syndrome is a term that describes a group of 
chronic, progressive movement disorders resulting from loss or decline 
in the function of dopamine-producing brain cells. Dopamine is a 
neurotransmitter that regulates muscle movement throughout the body. 
When we evaluate your Parkinsonian syndrome, we

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will consider your adherence to prescribed treatment (see 11.00C).
    L. What is cerebral palsy, and how do we evaluate it under 11.07?
    1. Cerebral palsy (CP) is a term that describes a group of static, 
nonprogressive disorders caused by abnormalities within the brain that 
disrupt the brain's ability to control movement, muscle coordination, 
and posture. The resulting motor deficits manifest very early in a 
person's development, with delayed or abnormal progress in attaining 
developmental milestones. Deficits may become more obvious as the person 
grows and matures over time.
    2. We evaluate your signs and symptoms, such as ataxia, spasticity, 
flaccidity, athetosis, chorea, and difficulty with precise movements 
when we determine your ability to stand up, balance, walk, or perform 
fine and gross motor movements. We will also evaluate your signs, such 
as dysarthria and apraxia of speech, and receptive and expressive 
language problems when we determine your ability to communicate.
    3. We will consider your other impairments or signs and symptoms 
that develop secondary to the disorder, such as post-impairment syndrome 
(a combination of pain, fatigue, and weakness due to muscle 
abnormalities); overuse syndromes (repetitive motion injuries); 
arthritis; abnormalities of proprioception (perception of the movements 
and position of the body); abnormalities of stereognosis (perception and 
identification of objects by touch); learning problems; anxiety; and 
depression.
    M. What are spinal cord disorders, and how do we evaluate them under 
11.08?
    1. Spinal cord disorders may be congenital or caused by injury to 
the spinal cord. Motor signs and symptoms of spinal cord disorders 
include paralysis, flaccidity, spasticity, and weakness.
    2. Spinal cord disorders with complete loss of function (11.08A) 
addresses spinal cord disorders that result in a complete lack of motor, 
sensory, and autonomic function of the affected part(s) of the body.
    3. Spinal cord disorders with disorganization of motor function 
(11.08B) addresses spinal cord disorders that result in less than a 
complete loss of function of the affected part(s) of the body, reducing, 
but not eliminating, motor, sensory, and autonomic function.
    4. When we evaluate your spinal cord disorder, we generally need 
evidence from at least 3 months after your symptoms began in order to 
evaluate your disorganization of motor function. In some cases, evidence 
of your spinal cord disorder may be sufficient to allow your claim 
within 3 months after the spinal cord disorder. If the medical evidence 
demonstrates total cord transection causing a loss of motor and sensory 
functions below the level of injury, we will not wait 3 months but will 
make the allowance decision immediately.
    N. What is multiple sclerosis, and how do we evaluate it under 
11.09?
    1. Multiple sclerosis (MS) is a chronic, inflammatory, degenerative 
disorder that damages the myelin sheath surrounding the nerve fibers in 
the brain and spinal cord. The damage disrupts the normal transmission 
of nerve impulses within the brain and between the brain and other parts 
of the body, causing impairment in muscle coordination, strength, 
balance, sensation, and vision. There are several forms of MS, ranging 
from mildly to highly aggressive. Milder forms generally involve acute 
attacks (exacerbations) with partial or complete recovery from signs and 
symptoms (remissions). Aggressive forms generally exhibit a steady 
progression of signs and symptoms with few or no remissions. The effects 
of all forms vary from person to person.
    2. We evaluate your signs and symptoms, such as flaccidity, 
spasticity, spasms, incoordination, imbalance, tremor, physical fatigue, 
muscle weakness, dizziness, tingling, and numbness when we determine 
your ability to stand up, balance, walk, or perform fine and gross motor 
movements. When determining whether you have limitations of physical and 
mental functioning, we will consider your other impairments or signs and 
symptoms that develop secondary to the disorder, such as fatigue; visual 
loss; trouble sleeping; impaired attention, concentration, memory, or 
judgment; mood swings; and depression. If you have a vision impairment 
resulting from your MS, we may evaluate that impairment under the 
special senses body system, 2.00.
    O. What is amyotrophic lateral sclerosis, and how do we evaluate it 
under 11.10? Amyotrophic lateral sclerosis (ALS) is a type of motor 
neuron disorder that rapidly and progressively attacks the nerve cells 
responsible for controlling voluntary muscles. We establish ALS under 
11.10 when you have a documented diagnosis of ALS. We require 
documentation based on generally accepted methods consistent with the 
prevailing state of medical knowledge and clinical practice. We require 
laboratory testing to establish the diagnosis when the clinical findings 
of upper and lower motor neuron disease are not present in three or more 
regions. Electrophysiological studies, such as nerve conduction velocity 
studies and electromyography (EMG), may support your diagnosis of ALS; 
however, we will not purchase these studies.
    P. What are neurodegenerative disorders of the central nervous 
system, such as Huntington's disease, Friedreich's ataxia, and 
spinocerebellar degeneration, and how do we evaluate them under 11.17? 
Neurodegenerative disorders of the central nervous system are disorders 
characterized by progressive and

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irreversible degeneration of neurons or their supporting cells. Over 
time, these disorders impair many of the body's motor, cognitive, and 
other mental functions. We consider neurodegenerative disorders of the 
central nervous system under 11.17 that we do not evaluate elsewhere in 
section 11.00, such as Huntington's disease (HD), Friedreich's ataxia, 
spinocerebellar degeneration, Creutzfeldt-Jakob disease (CJD), 
progressive supranuclear palsy (PSP), early-onset Alzheimer's disease, 
and frontotemporal dementia (Pick's disease). When these disorders 
result in solely cognitive and other mental function effects, we will 
evaluate the disorder under the mental disorder listings.
    Q. What is traumatic brain injury, and how do we evaluate it under 
11.18?
    1. Traumatic brain injury (TBI) is damage to the brain resulting 
from skull fracture, collision with an external force leading to a 
closed head injury, or penetration by an object that enters the skull 
and makes contact with brain tissue. We evaluate TBI that results in 
coma or persistent vegetative state (PVS) under 11.20.
    2. We generally need evidence from at least 3 months after the TBI 
to evaluate whether you have disorganization of motor function under 
11.18A or the impact that your disorder has on your physical and mental 
functioning under 11.18B. In some cases, evidence of your TBI is 
sufficient to determine disability within 3 months post-TBI. If we are 
unable to allow your claim within 3 months post-TBI, we will defer 
adjudication of the claim until we obtain evidence of your neurological 
disorder at least 3 months post-TBI. If a finding of disability still is 
not possible at that time, we will again defer adjudication of the claim 
until we obtain evidence at least 6 months after your TBI.
    R. What are coma and persistent vegetative state, and how do we 
evaluate them under 11.20? Coma is a state of unconsciousness in which a 
person does not exhibit a sleep/wake cycle, and is unable to perceive or 
respond to external stimuli. People who do not fully emerge from coma 
may progress into a persistent vegetative state (PVS). PVS is a 
condition of partial arousal in which a person may have a low level of 
consciousness but is still unable to react to external stimuli. In 
contrast to coma, a person in a PVS retains sleep/wake cycles and may 
exhibit some key lower brain functions, such as spontaneous movement, 
opening and moving eyes, and grimacing. Coma or PVS may result from TBI, 
a nontraumatic insult to the brain (such as a vascular insult, 
infection, or brain tumor), or a neurodegenerative or metabolic 
disorder. Medically induced comas are not considered under 11.20 and 
should be considered under the section pertaining to the underlying 
reason the coma was medically induced and not under this section.
    S. What are motor neuron disorders, other than ALS, and how do we 
evaluate them under 11.22? Motor neuron disorders such as progressive 
bulbar palsy, primary lateral sclerosis (PLS), and spinal muscular 
atrophy (SMA) are progressive neurological disorders that destroy the 
cells that control voluntary muscle activity, such as walking, 
breathing, swallowing, and speaking. We evaluate the effects of these 
disorders on motor functioning, bulbar and neuromuscular functioning, 
oral communication, or limitations in physical and mental functioning.
    T. How do we consider symptoms of fatigue in these listings? Fatigue 
is one of the most common and limiting symptoms of some neurological 
disorders, such as multiple sclerosis, post-polio syndrome, and 
myasthenia gravis. These disorders may result in physical fatigue (lack 
of muscle strength) or mental fatigue (decreased awareness or 
attention). When we evaluate your fatigue, we will consider the 
intensity, persistence, and effects of fatigue on your functioning. This 
may include information such as the clinical and laboratory data and 
other objective evidence concerning your neurological deficit, a 
description of fatigue considered characteristic of your disorder, and 
information about your functioning. We consider the effects of physical 
fatigue on your ability to stand up, balance, walk, or perform fine and 
gross motor movements using the criteria described in 11.00D. We 
consider the effects of physical and mental fatigue when we evaluate 
your physical and mental functioning described in 11.00G.
    U. How do we evaluate your neurological disorder when it does not 
meet one of these listings?
    1. If your neurological disorder does not meet the criteria of any 
of these listings, we must also consider whether your impairment(s) 
meets the criteria of a listing in another body system. If you have a 
severe medically determinable impairment(s) that does not meet a 
listing, we will determine whether your impairment(s) medically equals a 
listing. See Secs. 404.1526 and 416.926 of this chapter.
    2. If your impairment(s) does not meet or medically equal the 
criteria of a listing, you may or may not have the residual functional 
capacity to perform your past relevant work or adjust to other work that 
exists in significant numbers in the national economy, which we 
determine at the fourth and, if necessary, the fifth steps of the 
sequential evaluation process in Secs. 404.1520 and 416.920 of this 
chapter.
    3. We use the rules in Secs. 404.1594 and 416.994 of this chapter, 
as appropriate, when we decide whether you continue to be disabled.

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         11.01  Category of Impairments, Neurological Disorders

    11.02  Epilepsy, documented by a detailed description of a typical 
seizure and characterized by A, B, C, or D:
    A. Generalized tonic-clonic seizures (see 11.00H1a), occurring at 
least once a month for at least 3 consecutive months (see 11.00H4) 
despite adherence to prescribed treatment (see 11.00C); or
    B. Dyscognitive seizures (see 11.00H1b), occurring at least once a 
week for at least 3 consecutive months (see 11.00H4) despite adherence 
to prescribed treatment (see 11.00C); or
    C. Generalized tonic-clonic seizures (see 11.00H1a), occurring at 
least once every 2 months for at least 4 consecutive months (see 
11.00H4) despite adherence to prescribed treatment (see 11.00C); and a 
marked limitation in one of the following:
    1. Physical functioning (see 11.00G3a); or
    2. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    3. Interacting with others (see 11.00G3b(ii)); or
    4. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    5. Adapting or managing oneself (see 11.00G3b(iv)); or
    D. Dyscognitive seizures (see 11.00H1b), occurring at least once 
every 2 weeks for at least 3 consecutive months (see 11.00H4) despite 
adherence to prescribed treatment (see 11.00C); and a marked limitation 
in one of the following:
    1. Physical functioning (see 11.00G3a); or
    2. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    3. Interacting with others (see 11.00G3b(ii)); or
    4. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    5. Adapting or managing oneself (see 11.00G3b(iv)).
    11.03  [Reserved]
    11.04  Vascular insult to the brain, characterized by A, B, or C:
    A. Sensory or motor aphasia resulting in ineffective speech or 
communication (see 11.00E1) persisting for at least 3 consecutive months 
after the insult; or
    B. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities, persisting for at least 3 
consecutive months after the insult; or
    C. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a) and in one of the following areas of mental functioning, both 
persisting for at least 3 consecutive months after the insult:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.05  Benign brain tumors, characterized by A or B:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.06  Parkinsonian syndrome, characterized by A or B despite 
adherence to prescribed treatment for at least 3 consecutive months (see 
11.00C):
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.07  Cerebral palsy, characterized by A, B, or C:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)); or

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    C. Significant interference in communication due to speech, hearing, 
or visual deficit (see 11.00E2).
    11.08  Spinal cord disorders, characterized by A, B, or C:
    A. Complete loss of function, as described in 11.00M2, persisting 
for 3 consecutive months after the disorder (see 11.00M4); or
    B. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities persisting for 3 consecutive 
months after the disorder (see 11.00M4); or
    C. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a) and in one of the following areas of mental functioning, both 
persisting for 3 consecutive months after the disorder (see 11.00M4):
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.09  Multiple sclerosis, characterized by A or B:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.10  Amyotrophic lateral sclerosis (ALS) established by clinical 
and laboratory findings (see 11.00O).
    11.11  Post-polio syndrome, characterized by A, B, C, or D:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Unintelligible speech (see 11.00E3); or
    C. Bulbar and neuromuscular dysfunction (see 11.00F), resulting in:
    1. Acute respiratory failure requiring mechanical ventilation; or
    2. Need for supplemental enteral nutrition via a gastrostomy or 
parenteral nutrition via a central venous catheter; or
    D. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.12  Myasthenia gravis, characterized by A, B, or C despite 
adherence to prescribed treatment for at least 3 months (see 11.00C):
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Bulbar and neuromuscular dysfunction (see 11.00F), resulting in:
    1. One myasthenic crisis requiring mechanical ventilation; or
    2. Need for supplemental enteral nutrition via a gastrostomy or 
parenteral nutrition via a central venous catheter; or
    C. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.13  Muscular dystrophy, characterized by A or B:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.14  Peripheral neuropathy, characterized by A or B:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or

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    B. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.15 [Reserved]
    11.16 [Reserved]
    11.17 Neurodegenerative disorders of the central nervous system, 
such as Huntington's disease, Friedreich's ataxia, and spinocerebellar 
degeneration, characterized by A or B:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.18  Traumatic brain injury, characterized by A or B:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities, persisting for at least 3 
consecutive months after the injury; or
    B. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following areas of mental functioning, 
persisting for at least 3 consecutive months after the injury:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).
    11.19 [Reserved]
    11.20  Coma or persistent vegetative state, persisting for at least 
1 month.
    11.21 [Reserved]
    11.22 Motor neuron disorders other than ALS, characterized by A, B, 
or C:
    A. Disorganization of motor function in two extremities (see 
11.00D1), resulting in an extreme limitation (see 11.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Bulbar and neuromuscular dysfunction (see 11.00F), resulting in:
    1. Acute respiratory failure requiring invasive mechanical 
ventilation; or
    2. Need for supplemental enteral nutrition via a gastrostomy or 
parenteral nutrition via a central venous catheter; or
    C. Marked limitation (see 11.00G2) in physical functioning (see 
11.00G3a), and in one of the following:
    1. Understanding, remembering, or applying information (see 
11.00G3b(i)); or
    2. Interacting with others (see 11.00G3b(ii)); or
    3. Concentrating, persisting, or maintaining pace (see 
11.00G3b(iii)); or
    4. Adapting or managing oneself (see 11.00G3b(iv)).

                         12.00  Mental Disorders

    A. How are the listings for mental disorders arranged, and what do 
they require?
    1. The listings for mental disorders are arranged in 11 categories: 
Neurocognitive disorders (12.02); schizophrenia spectrum and other 
psychotic disorders (12.03); depressive, bipolar and related disorders 
(12.04); intellectual disorder (12.05); anxiety and obsessive-compulsive 
disorders (12.06); somatic symptom and related disorders (12.07); 
personality and impulse-control disorders (12.08); autism spectrum 
disorder (12.10); neurodevelopmental disorders (12.11); eating disorders 
(12.13); and trauma- and stressor-related disorders (12.15).
    2. Listings 12.07, 12.08, 12.10, 12.11, and 12.13 have two 
paragraphs, designated A and B; your mental disorder must satisfy the 
requirements of both paragraphs A and B. Listings 12.02, 12.03, 12.04, 
12.06, and 12.15 have three paragraphs, designated A, B, and C; your 
mental disorder must satisfy the requirements of both paragraphs A and 
B, or the requirements of both paragraphs A and C. Listing 12.05 has two 
paragraphs that are unique to that listing (see 12.00A3); your mental 
disorder must satisfy the requirements of either paragraph A or 
paragraph B.
    a. Paragraph A of each listing (except 12.05) includes the medical 
criteria that must be present in your medical evidence.
    b. Paragraph B of each listing (except 12.05) provides the 
functional criteria we assess, in conjunction with a rating scale (see 
12.00E and 12.00F), to evaluate how your mental disorder limits your 
functioning. These criteria represent the areas of mental functioning a 
person uses in a work setting. They are: Understand, remember, or apply 
information; interact with others; concentrate, persist, or maintain 
pace; and adapt or manage oneself. We will determine the degree to which 
your medically determinable mental impairment affects the four areas of 
mental functioning and your ability to function independently,

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appropriately, effectively, and on a sustained basis (see 
Secs. 404.1520a(c)(2) and 416.920a(c)(2) of this chapter). To satisfy 
the paragraph B criteria, your mental disorder must result in 
``extreme'' limitation of one, or ``marked'' limitation of two, of the 
four areas of mental functioning. (When we refer to ``paragraph B 
criteria'' or ``area[s] of mental functioning'' in the introductory text 
of this body system, we mean the criteria in paragraph B of every 
listing except 12.05.)
    c. Paragraph C of listings 12.02, 12.03, 12.04, 12.06, and 12.15 
provides the criteria we use to evaluate ``serious and persistent mental 
disorders.'' To satisfy the paragraph C criteria, your mental disorder 
must be ``serious and persistent''; that is, there must be a medically 
documented history of the existence of the disorder over a period of at 
least 2 years, and evidence that satisfies the criteria in both C1 and 
C2 (see 12.00G). (When we refer to ``paragraph C'' or ``the paragraph C 
criteria'' in the introductory text of this body system, we mean the 
criteria in paragraph C of listings 12.02, 12.03, 12.04, 12.06, and 
12.15.)
    3. Listing 12.05 has two paragraphs, designated A and B, that apply 
to only intellectual disorder. Each paragraph requires that you have 
significantly subaverage general intellectual functioning; significant 
deficits in current adaptive functioning; and evidence that demonstrates 
or supports (is consistent with) the conclusion that your disorder began 
prior to age 22.
    B. Which mental disorders do we evaluate under each listing 
category?
    1. Neurocognitive disorders (12.02).
    a. These disorders are characterized by a clinically significant 
decline in cognitive functioning. Symptoms and signs may include, but 
are not limited to, disturbances in memory, executive functioning (that 
is, higher-level cognitive processes; for example, regulating attention, 
planning, inhibiting responses, decision-making), visual-spatial 
functioning, language and speech, perception, insight, judgment, and 
insensitivity to social standards.
    b. Examples of disorders that we evaluate in this category include 
major neurocognitive disorder; dementia of the Alzheimer type; vascular 
dementia; dementia due to a medical condition such as a metabolic 
disease (for example, late-onset Tay-Sachs disease), human 
immunodeficiency virus infection, vascular malformation, progressive 
brain tumor, neurological disease (for example, multiple sclerosis, 
Parkinsonian syndrome, Huntington disease), or traumatic brain injury; 
or substance-induced cognitive disorder associated with drugs of abuse, 
medications, or toxins. (We evaluate neurological disorders under that 
body system (see 11.00). We evaluate cognitive impairments that result 
from neurological disorders under 12.02 if they do not satisfy the 
requirements in 11.00 (see 11.00G).)
    c. This category does not include the mental disorders that we 
evaluate under intellectual disorder (12.05), autism spectrum disorder 
(12.10), and neurodevelopmental disorders (12.11).
    2. Schizophrenia spectrum and other psychotic disorders (12.03).
    a. These disorders are characterized by delusions, hallucinations, 
disorganized speech, or grossly disorganized or catatonic behavior, 
causing a clinically significant decline in functioning. Symptoms and 
signs may include, but are not limited to, inability to initiate and 
persist in goal-directed activities, social withdrawal, flat or 
inappropriate affect, poverty of thought and speech, loss of interest or 
pleasure, disturbances of mood, odd beliefs and mannerisms, and 
paranoia.
    b. Examples of disorders that we evaluate in this category include 
schizophrenia, schizoaffective disorder, delusional disorder, and 
psychotic disorder due to another medical condition.
    3. Depressive, bipolar and related disorders (12.04).
    a. These disorders are characterized by an irritable, depressed, 
elevated, or expansive mood, or by a loss of interest or pleasure in all 
or almost all activities, causing a clinically significant decline in 
functioning. Symptoms and signs may include, but are not limited to, 
feelings of hopelessness or guilt, suicidal ideation, a clinically 
significant change in body weight or appetite, sleep disturbances, an 
increase or decrease in energy, psychomotor abnormalities, disturbed 
concentration, pressured speech, grandiosity, reduced impulse control, 
sadness, euphoria, and social withdrawal.
    b. Examples of disorders that we evaluate in this category include 
bipolar disorders (I or II), cyclothymic disorder, major depressive 
disorder, persistent depressive disorder (dysthymia), and bipolar or 
depressive disorder due to another medical condition.
    4. Intellectual disorder (12.05).
    a. This disorder is characterized by significantly subaverage 
general intellectual functioning, significant deficits in current 
adaptive functioning, and manifestation of the disorder before age 22. 
Signs may include, but are not limited to, poor conceptual, social, or 
practical skills evident in your adaptive functioning.
    b. The disorder that we evaluate in this category may be described 
in the evidence as intellectual disability, intellectual developmental 
disorder, or historically used terms such as ``mental retardation.''
    c. This category does not include the mental disorders that we 
evaluate under neurocognitive disorders (12.02), autism spectrum 
disorder (12.10), or neurodevelopmental disorders (12.11).

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    5. Anxiety and obsessive-compulsive disorders (12.06).
    a. These disorders are characterized by excessive anxiety, worry, 
apprehension, and fear, or by avoidance of feelings, thoughts, 
activities, objects, places, or people. Symptoms and signs may include, 
but are not limited to, restlessness, difficulty concentrating, hyper-
vigilance, muscle tension, sleep disturbance, fatigue, panic attacks, 
obsessions and compulsions, constant thoughts and fears about safety, 
and frequent physical complaints.
    b. Examples of disorders that we evaluate in this category include 
social anxiety disorder, panic disorder, generalized anxiety disorder, 
agoraphobia, and obsessive-compulsive disorder.
    c. This category does not include the mental disorders that we 
evaluate under trauma- and stressor-related disorders (12.15).
    6. Somatic symptom and related disorders (12.07).
    a. These disorders are characterized by physical symptoms or 
deficits that are not intentionally produced or feigned, and that, 
following clinical investigation, cannot be fully explained by a general 
medical condition, another mental disorder, the direct effects of a 
substance, or a culturally sanctioned behavior or experience. These 
disorders may also be characterized by a preoccupation with having or 
acquiring a serious medical condition that has not been identified or 
diagnosed. Symptoms and signs may include, but are not limited to, pain 
and other abnormalities of sensation, gastrointestinal symptoms, 
fatigue, a high level of anxiety about personal health status, abnormal 
motor movement, pseudoseizures, and pseudoneurological symptoms, such as 
blindness or deafness.
    b. Examples of disorders that we evaluate in this category include 
somatic symptom disorder, illness anxiety disorder, and conversion 
disorder.
    7. Personality and impulse-control disorders (12.08).
    a. These disorders are characterized by enduring, inflexible, 
maladaptive, and pervasive patterns of behavior. Onset typically occurs 
in adolescence or young adulthood. Symptoms and signs may include, but 
are not limited to, patterns of distrust, suspiciousness, and odd 
beliefs; social detachment, discomfort, or avoidance; hypersensitivity 
to negative evaluation; an excessive need to be taken care of; 
difficulty making independent decisions; a preoccupation with 
orderliness, perfectionism, and control; and inappropriate, intense, 
impulsive anger and behavioral expression grossly out of proportion to 
any external provocation or psychosocial stressors.
    b. Examples of disorders that we evaluate in this category include 
paranoid, schizoid, schizotypal, borderline, avoidant, dependent, 
obsessive-compulsive personality disorders, and intermittent explosive 
disorder.
    8. Autism spectrum disorder (12.10).
    a. These disorders are characterized by qualitative deficits in the 
development of reciprocal social interaction, verbal and nonverbal 
communication skills, and symbolic or imaginative activity; restricted 
repetitive and stereotyped patterns of behavior, interests, and 
activities; and stagnation of development or loss of acquired skills 
early in life. Symptoms and signs may include, but are not limited to, 
abnormalities and unevenness in the development of cognitive skills; 
unusual responses to sensory stimuli; and behavioral difficulties, 
including hyperactivity, short attention span, impulsivity, 
aggressiveness, or self-injurious actions.
    b. Examples of disorders that we evaluate in this category include 
autism spectrum disorder with or without accompanying intellectual 
impairment, and autism spectrum disorder with or without accompanying 
language impairment.
    c. This category does not include the mental disorders that we 
evaluate under neurocognitive disorders (12.02), intellectual disorder 
(12.05), and neurodevelopmental disorders (12.11).
    9. Neurodevelopmental disorders (12.11).
    a. These disorders are characterized by onset during the 
developmental period, that is, during childhood or adolescence, although 
sometimes they are not diagnosed until adulthood. Symptoms and signs may 
include, but are not limited to, underlying abnormalities in cognitive 
processing (for example, deficits in learning and applying verbal or 
nonverbal information, visual perception, memory, or a combination of 
these); deficits in attention or impulse control; low frustration 
tolerance; excessive or poorly planned motor activity; difficulty with 
organizing (time, space, materials, or tasks); repeated accidental 
injury; and deficits in social skills. Symptoms and signs specific to 
tic disorders include sudden, rapid, recurrent, non-rhythmic, motor 
movement or vocalization.
    b. Examples of disorders that we evaluate in this category include 
specific learning disorder, borderline intellectual functioning, and tic 
disorders (such as Tourette syndrome).
    c. This category does not include the mental disorders that we 
evaluate under neurocognitive disorders (12.02), autism spectrum 
disorder (12.10), or personality and impulse-control disorders (12.08).
    10. Eating disorders (12.13).
    a. These disorders are characterized by disturbances in eating 
behavior and preoccupation with, and excessive self-evaluation of, body 
weight and shape. Symptoms and signs may include, but are not limited 
to, restriction of energy consumption when compared

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with individual requirements; recurrent episodes of binge eating or 
behavior intended to prevent weight gain, such as self-induced vomiting, 
excessive exercise, or misuse of laxatives; mood disturbances, social 
withdrawal, or irritability; amenorrhea; dental problems; abnormal 
laboratory findings; and cardiac abnormalities.
    b. Examples of disorders that we evaluate in this category include 
anorexia nervosa, bulimia nervosa, binge-eating disorder, and avoidant/
restrictive food disorder.
    11. Trauma- and stressor-related disorders (12.15).
    a. These disorders are characterized by experiencing or witnessing a 
traumatic or stressful event, or learning of a traumatic event occurring 
to a close family member or close friend, and the psychological 
aftermath of clinically significant effects on functioning. Symptoms and 
signs may include, but are not limited to, distressing memories, dreams, 
and flashbacks related to the trauma or stressor; avoidant behavior; 
diminished interest or participation in significant activities; 
persistent negative emotional states (for example, fear, anger) or 
persistent inability to experience positive emotions (for example, 
satisfaction, affection); anxiety; irritability; aggression; exaggerated 
startle response; difficulty concentrating; and sleep disturbance.
    b. Examples of disorders that we evaluate in this category include 
posttraumatic stress disorder and other specified trauma- and stressor-
related disorders (such as adjustment-like disorders with prolonged 
duration without prolonged duration of stressor).
    c. This category does not include the mental disorders that we 
evaluate under anxiety and obsessive-compulsive disorders (12.06), and 
cognitive impairments that result from neurological disorders, such as a 
traumatic brain injury, which we evaluate under neurocognitive disorders 
(12.02).
    C. What evidence do we need to evaluate your mental disorder?
    1. General. We need objective medical evidence from an acceptable 
medical source to establish that you have a medically determinable 
mental disorder. We also need evidence to assess the severity of your 
mental disorder and its effects on your ability to function in a work 
setting. We will determine the extent and kinds of evidence we need from 
medical and nonmedical sources based on the individual facts about your 
disorder. For additional evidence requirements for intellectual disorder 
(12.05), see 12.00H. For our basic rules on evidence, see 
Secs. 404.1512, 404.1513, 404.1520b, 416.912, 416.913, and 416.920b of 
this chapter. For our rules on evaluating medical opinions, see 
Secs. 404.1520c, 404.1527, 416.920c, and 416.927 of this chapter. For 
our rules on evidence about your symptoms, see Secs. 404.1529 and 
416.929 of this chapter.
    2. Evidence from medical sources. We will consider all relevant 
medical evidence about your disorder from your physician, psychologist, 
and other medical sources, which include health care providers such as 
physician assistants, psychiatric nurse practitioners, licensed clinical 
social workers, and clinical mental health counselors. Evidence from 
your medical sources may include:
    a. Your reported symptoms.
    b. Your medical, psychiatric, and psychological history.
    c. The results of physical or mental status examinations, structured 
clinical interviews, psychiatric or psychological rating scales, 
measures of adaptive functioning, or other clinical findings.
    d. Psychological testing, imaging results, or other laboratory 
findings.
    e. Your diagnosis.
    f. The type, dosage, and beneficial effects of medications you take.
    g. The type, frequency, duration, and beneficial effects of therapy 
you receive.
    h. Side effects of medication or other treatment that limit your 
ability to function.
    i. Your clinical course, including changes in your medication, 
therapy, or other treatment, and the time required for therapeutic 
effectiveness.
    j. Observations and descriptions of how you function during 
examinations or therapy.
    k. Information about sensory, motor, or speech abnormalities, or 
about your cultural background (for example, language or customs) that 
may affect an evaluation of your mental disorder.
    l. The expected duration of your symptoms and signs and their 
effects on your functioning, both currently and in the future.
    3. Evidence from you and people who know you. We will consider all 
relevant evidence about your mental disorder and your daily functioning 
that we receive from you and from people who know you. We will ask about 
your symptoms, your daily functioning, and your medical treatment. We 
will ask for information from third parties who can tell us about your 
mental disorder, but you must give us permission to do so. This evidence 
may include information from your family, caregivers, friends, 
neighbors, clergy, case managers, social workers, shelter staff, or 
other community support and outreach workers. We will consider whether 
your statements and the statements from third parties are consistent 
with the medical and other evidence we have.
    4. Evidence from school, vocational training, work, and work-related 
programs.
    a. School. You may have recently attended or may still be attending 
school, and you may have received or may still be receiving special 
education services. If so, we will try to obtain information from your 
school sources when we need it to assess how your

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mental disorder affects your ability to function. Examples of this 
information include your Individualized Education Programs (IEPs), your 
Section 504 plans, comprehensive evaluation reports, school-related 
therapy progress notes, information from your teachers about how you 
function in a classroom setting, and information about any special 
services or accommodations you receive at school.
    b. Vocational training, work, and work-related programs. You may 
have recently participated in or may still be participating in 
vocational training, work-related programs, or work activity. If so, we 
will try to obtain information from your training program or your 
employer when we need it to assess how your mental disorder affects your 
ability to function. Examples of this information include training or 
work evaluations, modifications to your work duties or work schedule, 
and any special supports or accommodations you have required or now 
require in order to work. If you have worked or are working through a 
community mental health program, sheltered or supported work program, 
rehabilitation program, or transitional employment program, we will 
consider the type and degree of support you have received or are 
receiving in order to work (see 12.00D).
    5. Need for longitudinal evidence.
    a. General. Longitudinal medical evidence can help us learn how you 
function over time, and help us evaluate any variations in the level of 
your functioning. We will request longitudinal evidence of your mental 
disorder when your medical providers have records concerning you and 
your mental disorder over a period of months or perhaps years (see 
Secs. 404.1512(d) and 416.912(d) of this chapter).
    b. Non-medical sources of longitudinal evidence. Certain situations, 
such as chronic homelessness, may make it difficult for you to provide 
longitudinal medical evidence. If you have a severe mental disorder, you 
will probably have evidence of its effects on your functioning over 
time, even if you have not had an ongoing relationship with the medical 
community or are not currently receiving treatment. For example, family 
members, friends, neighbors, former employers, social workers, case 
managers, community support staff, outreach workers, or government 
agencies may be familiar with your mental health history. We will ask 
for information from third parties who can tell us about your mental 
disorder, but you must give us permission to do so.
    c. Absence of longitudinal evidence. In the absence of longitudinal 
evidence, we will use current objective medical evidence and all other 
relevant evidence available to us in your case record to evaluate your 
mental disorder. If we purchase a consultative examination to document 
your disorder, the record will include the results of that examination 
(see Secs. 404.1514 and 416.914 of this chapter). We will take into 
consideration your medical history, symptoms, clinical and laboratory 
findings, and medical source opinions. If you do not have longitudinal 
evidence, the current evidence alone may not be sufficient or 
appropriate to show that you have a disorder that meets the criteria of 
one of the mental disorders listings. In that case, we will follow the 
rules in 12.00J.
    6. Evidence of functioning in unfamiliar situations or supportive 
situations.
    a. Unfamiliar situations. We recognize that evidence about your 
functioning in unfamiliar situations does not necessarily show how you 
would function on a sustained basis in a work setting. In one-time, 
time-limited, or other unfamiliar situations, you may function 
differently than you do in familiar situations. In unfamiliar 
situations, you may appear more, or less, limited than you do on a daily 
basis and over time.
    b. Supportive situations. Your ability to complete tasks in settings 
that are highly structured, or that are less demanding or more 
supportive than typical work settings does not necessarily demonstrate 
your ability to complete tasks in the context of regular employment 
during a normal workday or work week.
    c. Our assessment. We must assess your ability to complete tasks by 
evaluating all the evidence, such as reports about your functioning from 
you and third parties who are familiar with you, with an emphasis on how 
independently, appropriately, and effectively you are able to complete 
tasks on a sustained basis.
    D. How do we consider psychosocial supports, structured settings, 
living arrangements, and treatment?
    1. General. Psychosocial supports, structured settings, and living 
arrangements, including assistance from your family or others, may help 
you by reducing the demands made on you. In addition, treatment you 
receive may reduce your symptoms and signs and possibly improve your 
functioning, or may have side effects that limit your functioning. 
Therefore, when we evaluate the effects of your mental disorder and rate 
the limitation of your areas of mental functioning, we will consider the 
kind and extent of supports you receive, the characteristics of any 
structured setting in which you spend your time, and the effects of any 
treatment. This evidence may come from reports about your functioning 
from you or third parties who are familiar with you, and other third-
party statements or information. Following are some examples of the 
supports you may receive:

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    a. You receive help from family members or other people who monitor 
your daily activities and help you to function. For example, family 
members administer your medications, remind you to eat, shop for you and 
pay your bills, or change their work hours so you are never home alone.
    b. You participate in a special education or vocational training 
program, or a psychosocial rehabilitation day treatment or community 
support program, where you receive training in daily living and entry-
level work skills.
    c. You participate in a sheltered, supported, or transitional work 
program, or in a competitive employment setting with the help of a job 
coach or supervisor.
    d. You receive comprehensive ``24/7 wrap-around'' mental health 
services while living in a group home or transitional housing, while 
participating in a semi-independent living program, or while living in 
individual housing (for example, your own home or apartment).
    e. You live in a hospital or other institution with 24-hour care.
    f. You receive assistance from a crisis response team, social 
workers, or community mental health workers who help you meet your 
physical needs, and who may also represent you in dealings with 
government or community social services.
    g. You live alone and do not receive any psychosocial support(s); 
however, you have created a highly structured environment by eliminating 
all but minimally necessary contact with the world outside your living 
space.
    2. How we consider different levels of support and structure in 
psychosocial rehabilitation programs.
    a. Psychosocial rehabilitation programs are based on your specific 
needs. Therefore, we cannot make any assumptions about your mental 
disorder based solely on the fact that you are associated with such a 
program. We must know the details of the program(s) in which you are 
involved and the pattern(s) of your involvement over time.
    b. The kinds and levels of supports and structures in psychosocial 
rehabilitation programs typically occur on a scale of ``most 
restrictive'' to ``least restrictive.'' Participation in a psychosocial 
rehabilitation program at the most restrictive level would suggest 
greater limitation of your areas of mental functioning than would 
participation at a less restrictive level. The length of time you spend 
at different levels in a program also provides information about your 
functioning. For example, you could begin participation at the most 
restrictive crisis intervention level but gradually improve to the point 
of readiness for a lesser level of support and structure and possibly 
some form of employment.
    3. How we consider the help or support you receive.
    a. We will consider the complete picture of your daily functioning, 
including the kinds, extent, and frequency of help and support you 
receive, when we evaluate your mental disorder and determine whether you 
are able to use the four areas of mental functioning in a work setting. 
The fact that you have done, or currently do, some routine activities 
without help or support does not necessarily mean that you do not have a 
mental disorder or that you are not disabled. For example, you may be 
able to take care of your personal needs, cook, shop, pay your bills, 
live by yourself, and drive a car. You may demonstrate both strengths 
and deficits in your daily functioning.
    b. You may receive various kinds of help and support from others 
that enable you to do many things that, because of your mental disorder, 
you might not be able to do independently. Your daily functioning may 
depend on the special contexts in which you function. For example, you 
may spend your time among only familiar people or surroundings, in a 
simple and steady routine or an unchanging environment, or in a highly 
structured setting. However, this does not necessarily show how you 
would function in a work setting on a sustained basis, throughout a 
normal workday and workweek. (See 12.00H for further discussion of these 
issues regarding significant deficits in adaptive functioning for the 
purpose of 12.05.)
    4. How we consider treatment. We will consider the effect of any 
treatment on your functioning when we evaluate your mental disorder. 
Treatment may include medication(s), psychotherapy, or other forms of 
intervention, which you receive in a doctor's office, during a 
hospitalization, or in a day program at a hospital or outpatient 
treatment program. With treatment, you may not only have your symptoms 
and signs reduced, but may also be able to function in a work setting. 
However, treatment may not resolve all of the limitations that result 
from your mental disorder, and the medications you take or other 
treatment you receive for your disorder may cause side effects that 
limit your mental or physical functioning. For example, you may 
experience drowsiness, blunted affect, memory loss, or abnormal 
involuntary movements.
    E. What are the paragraph B criteria?
    1. Understand, remember, or apply information (paragraph B1). This 
area of mental functioning refers to the abilities to learn, recall, and 
use information to perform work activities. Examples include: 
Understanding and learning terms, instructions, procedures; following 
one- or two-step oral instructions to carry out a task; describing work 
activity to

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someone else; asking and answering questions and providing explanations; 
recognizing a mistake and correcting it; identifying and solving 
problems; sequencing multi-step activities; and using reason and 
judgment to make work-related decisions. These examples illustrate the 
nature of this area of mental functioning. We do not require 
documentation of all of the examples.
    2. Interact with others (paragraph B2). This area of mental 
functioning refers to the abilities to relate to and work with 
supervisors, co-workers, and the public. Examples include: cooperating 
with others; asking for help when needed; handling conflicts with 
others; stating own point of view; initiating or sustaining 
conversation; understanding and responding to social cues (physical, 
verbal, emotional); responding to requests, suggestions, criticism, 
correction, and challenges; and keeping social interactions free of 
excessive irritability, sensitivity, argumentativeness, or 
suspiciousness. These examples illustrate the nature of this area of 
mental functioning. We do not require documentation of all of the 
examples.
    3. Concentrate, persist, or maintain pace (paragraph B3). This area 
of mental functioning refers to the abilities to focus attention on work 
activities and stay on task at a sustained rate. Examples include: 
Initiating and performing a task that you understand and know how to do; 
working at an appropriate and consistent pace; completing tasks in a 
timely manner; ignoring or avoiding distractions while working; changing 
activities or work settings without being disruptive; working close to 
or with others without interrupting or distracting them; sustaining an 
ordinary routine and regular attendance at work; and working a full day 
without needing more than the allotted number or length of rest periods 
during the day. These examples illustrate the nature of this area of 
mental functioning. We do not require documentation of all of the 
examples.
    4. Adapt or manage oneself (paragraph B4). This area of mental 
functioning refers to the abilities to regulate emotions, control 
behavior, and maintain well-being in a work setting. Examples include: 
Responding to demands; adapting to changes; managing your 
psychologically based symptoms; distinguishing between acceptable and 
unacceptable work performance; setting realistic goals; making plans for 
yourself independently of others; maintaining personal hygiene and 
attire appropriate to a work setting; and being aware of normal hazards 
and taking appropriate precautions. These examples illustrate the nature 
of this area of mental functioning. We do not require documentation of 
all of the examples.
    F. How do we use the paragraph B criteria to evaluate your mental 
disorder?
    1. General. We use the paragraph B criteria, in conjunction with a 
rating scale (see 12.00F2), to rate the degree of your limitations. We 
consider only the limitations that result from your mental disorder(s). 
We will determine whether you are able to use each of the paragraph B 
areas of mental functioning in a work setting. We will consider, for 
example, the kind, degree, and frequency of difficulty you would have; 
whether you could function without extra help, structure, or 
supervision; and whether you would require special conditions with 
regard to activities or other people (see 12.00D).
    2. The five-point rating scale. We evaluate the effects of your 
mental disorder on each of the four areas of mental functioning based on 
a five-point rating scale consisting of none, mild, moderate, marked, 
and extreme limitation. To satisfy the paragraph B criteria, your mental 
disorder must result in extreme limitation of one, or marked limitation 
of two, paragraph B areas of mental functioning. Under these listings, 
the five rating points are defined as follows:
    a. No limitation (or none). You are able to function in this area 
independently, appropriately, effectively, and on a sustained basis.
    b. Mild limitation. Your functioning in this area independently, 
appropriately, effectively, and on a sustained basis is slightly 
limited.
    c. Moderate limitation. Your functioning in this area independently, 
appropriately, effectively, and on a sustained basis is fair.
    d. Marked limitation. Your functioning in this area independently, 
appropriately, effectively, and on a sustained basis is seriously 
limited.
    e. Extreme limitation. You are not able to function in this area 
independently, appropriately, effectively, and on a sustained basis.
    3. Rating the limitations of your areas of mental functioning.
    a. General. We use all of the relevant medical and non-medical 
evidence in your case record to evaluate your mental disorder: The 
symptoms and signs of your disorder, the reported limitations in your 
activities, and any help and support you receive that is necessary for 
you to function. The medical evidence may include descriptors regarding 
the diagnostic stage or level of your disorder, such as ``mild'' or 
``moderate.'' Clinicians may use these terms to characterize your 
medical condition. However, these terms will not always be the same as 
the degree of your limitation in a paragraph B area of mental 
functioning.
    b. Areas of mental functioning in daily activities. You use the same 
four areas of mental functioning in daily activities at home and in the 
community that you would use to

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function at work. With respect to a particular task or activity, you may 
have trouble using one or more of the areas. For example, you may have 
difficulty understanding and remembering what to do; or concentrating 
and staying on task long enough to do it; or engaging in the task or 
activity with other people; or trying to do the task without becoming 
frustrated and losing self-control. Information about your daily 
functioning can help us understand whether your mental disorder limits 
one or more of these areas; and, if so, whether it also affects your 
ability to function in a work setting.
    c. Areas of mental functioning in work settings. If you have 
difficulty using an area of mental functioning from day-to-day at home 
or in your community, you may also have difficulty using that area to 
function in a work setting. On the other hand, if you are able to use an 
area of mental functioning at home or in your community, we will not 
necessarily assume that you would also be able to use that area to 
function in a work setting where the demands and stressors differ from 
those at home. We will consider all evidence about your mental disorder 
and daily functioning before we reach a conclusion about your ability to 
work.
    d. Overall effect of limitations. Limitation of an area of mental 
functioning reflects the overall degree to which your mental disorder 
interferes with that area. The degree of limitation is how we document 
our assessment of your limitation when using the area of mental 
functioning independently, appropriately, effectively, and on a 
sustained basis. It does not necessarily reflect a specific type or 
number of activities, including activities of daily living, that you 
have difficulty doing. In addition, no single piece of information 
(including test results) can establish the degree of limitation of an 
area of mental functioning.
    e. Effects of support, supervision, structure on functioning. The 
degree of limitation of an area of mental functioning also reflects the 
kind and extent of supports or supervision you receive and the 
characteristics of any structured setting where you spend your time, 
which enable you to function. The more extensive the support you need 
from others or the more structured the setting you need in order to 
function, the more limited we will find you to be (see 12.00D).
    f. Specific instructions for paragraphs B1, B3, and B4. For 
paragraphs B1, B3, and B4, the greatest degree of limitation of any part 
of the area of mental functioning directs the rating of limitation of 
that whole area of mental functioning.
    (i) To do a work-related task, you must be able to understand and 
remember and apply information required by the task. Similarly, you must 
be able to concentrate and persist and maintain pace in order to 
complete the task, and adapt and manage yourself in the workplace. 
Limitation in any one of these parts (understand or remember or apply; 
concentrate or persist or maintain pace; adapt or manage oneself) may 
prevent you from completing a work-related task.
    (ii) We will document the rating of limitation of the whole area of 
mental functioning, not each individual part. We will not add ratings of 
the parts together. For example, with respect to paragraph B3, if you 
have marked limitation in maintaining pace, and mild or moderate 
limitations in concentrating and persisting, we will find that you have 
marked limitation in the whole paragraph B3 area of mental functioning.
    (iii) Marked limitation in more than one part of the same paragraph 
B area of mental functioning does not satisfy the requirement to have 
marked limitation in two paragraph B areas of mental functioning.
    4. How we evaluate mental disorders involving exacerbations and 
remissions.
    a. When we evaluate the effects of your mental disorder, we will 
consider how often you have exacerbations and remissions, how long they 
last, what causes your mental disorder to worsen or improve, and any 
other relevant information. We will assess any limitation of the 
affected paragraph B area(s) of mental functioning using the rating 
scale for the paragraph B criteria. We will consider whether you can use 
the area of mental functioning on a regular and continuing basis (8 
hours a day, 5 days a week, or an equivalent work schedule). We will not 
find that you are able to work solely because you have a period(s) of 
improvement (remission), or that you are disabled solely because you 
have a period of worsening (exacerbation), of your mental disorder.
    b. If you have a mental disorder involving exacerbations and 
remissions, you may be able to use the four areas of mental functioning 
to work for a few weeks or months. Recurrence or worsening of symptoms 
and signs, however, can interfere enough to render you unable to sustain 
the work.
    G. What are the paragraph C criteria, and how do we use them to 
evaluate your mental disorder?
    1. General. The paragraph C criteria are an alternative to the 
paragraph B criteria under listings 12.02, 12.03, 12.04, 12.06, and 
12.15. We use the paragraph C criteria to evaluate mental disorders that 
are ``serious and persistent.'' In the paragraph C criteria, we 
recognize that mental health interventions may control the more obvious 
symptoms and signs of your mental disorder.
    2. Paragraph C criteria.
    a. We find a mental disorder to be ``serious and persistent'' when 
there is a medically documented history of the existence of the mental 
disorder in the listing category over a period of at least 2 years, and 
evidence shows that your disorder satisfies both C1 and C2.

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    b. The criterion in C1 is satisfied when the evidence shows that you 
rely, on an ongoing basis, upon medical treatment, mental health 
therapy, psychosocial support(s), or a highly structured setting(s), to 
diminish the symptoms and signs of your mental disorder (see 12.00D). We 
consider that you receive ongoing medical treatment when the medical 
evidence establishes that you obtain medical treatment with a frequency 
consistent with accepted medical practice for the type of treatment or 
evaluation required for your medical condition. We will consider periods 
of inconsistent treatment or lack of compliance with treatment that may 
result from your mental disorder. If the evidence indicates that the 
inconsistent treatment or lack of compliance is a feature of your mental 
disorder, and it has led to an exacerbation of your symptoms and signs, 
we will not use it as evidence to support a finding that you have not 
received ongoing medical treatment as required by this paragraph.
    c. The criterion in C2 is satisfied when the evidence shows that, 
despite your diminished symptoms and signs, you have achieved only 
marginal adjustment. ``Marginal adjustment'' means that your adaptation 
to the requirements of daily life is fragile; that is, you have minimal 
capacity to adapt to changes in your environment or to demands that are 
not already part of your daily life. We will consider that you have 
achieved only marginal adjustment when the evidence shows that changes 
or increased demands have led to exacerbation of your symptoms and signs 
and to deterioration in your functioning; for example, you have become 
unable to function outside of your home or a more restrictive setting, 
without substantial psychosocial supports (see 12.00D). Such 
deterioration may have necessitated a significant change in medication 
or other treatment. Similarly, because of the nature of your mental 
disorder, evidence may document episodes of deterioration that have 
required you to be hospitalized or absent from work, making it difficult 
for you to sustain work activity over time.
    H. How do we document and evaluate intellectual disorder under 
12.05?
    1. General. Listing 12.05 is based on the three elements that 
characterize intellectual disorder: Significantly subaverage general 
intellectual functioning; significant deficits in current adaptive 
functioning; and the disorder manifested before age 22.
    2. Establishing significantly subaverage general intellectual 
functioning.
    a. Definition. Intellectual functioning refers to the general mental 
capacity to learn, reason, plan, solve problems, and perform other 
cognitive functions. Under 12.05A, we identify significantly subaverage 
general intellectual functioning by the cognitive inability to function 
at a level required to participate in standardized intelligence testing. 
Our findings under 12.05A are based on evidence from an acceptable 
medical source. Under 12.05B, we identify significantly subaverage 
general intellectual functioning by an IQ score(s) on an individually 
administered standardized test of general intelligence that meets 
program requirements and has a mean of 100 and a standard deviation of 
15. A qualified specialist (see 12.00H2c) must administer the 
standardized intelligence testing.
    b. Psychometric standards. We will find standardized intelligence 
test results usable for the purposes of 12.05B1 when the measure 
employed meets contemporary psychometric standards for validity, 
reliability, normative data, and scope of measurement; and a qualified 
specialist has individually administered the test according to all pre-
requisite testing conditions.
    c. Qualified specialist. A ``qualified specialist'' is currently 
licensed or certified at the independent level of practice in the State 
where the test was performed, and has the training and experience to 
administer, score, and interpret intelligence tests. If a psychological 
assistant or paraprofessional administered the test, a supervisory 
qualified specialist must interpret the test findings and co-sign the 
examination report.
    d. Responsibility for conclusions based on testing. We generally 
presume that your obtained IQ score(s) is an accurate reflection of your 
general intellectual functioning, unless evidence in the record suggests 
otherwise. Examples of this evidence include: a statement from the test 
administrator indicating that your obtained score is not an accurate 
reflection of your general intellectual functioning, prior or internally 
inconsistent IQ scores, or information about your daily functioning. 
Only qualified specialists, Federal and State agency medical and 
psychological consultants, and other contracted medical and 
psychological experts may conclude that your obtained IQ score(s) is not 
an accurate reflection of your general intellectual functioning. This 
conclusion must be well supported by appropriate clinical and laboratory 
diagnostic techniques and must be based on relevant evidence in the case 
record, such as:
    (i) The data obtained in testing;
    (ii) Your developmental history, including when your signs and 
symptoms began;
    (iii) Information about how you function on a daily basis in a 
variety of settings; and
    (iv) Clinical observations made during the testing period, such as 
your ability to sustain attention, concentration, and effort; to relate 
appropriately to the examiner; and to perform tasks independently 
without prompts or reminders.
    3. Establishing significant deficits in adaptive functioning.
    a. Definition. Adaptive functioning refers to how you learn and use 
conceptual, social, and practical skills in dealing with common

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life demands. It is your typical functioning at home and in the 
community, alone or among others. Under 12.05A, we identify significant 
deficits in adaptive functioning based on your dependence on others to 
care for your personal needs, such as eating and bathing. We will base 
our conclusions about your adaptive functioning on evidence from a 
variety of sources (see 12.00H3b) and not on your statements alone. 
Under 12.05B2, we identify significant deficits in adaptive functioning 
based on whether there is extreme limitation of one, or marked 
limitation of two, of the paragraph B criteria (see 12.00E; 12.00F).
    b. Evidence. Evidence about your adaptive functioning may come from:
    (i) Medical sources, including their clinical observations;
    (ii) Standardized tests of adaptive functioning (see 12.00H3c);
    (iii) Third party information, such as a report of your functioning 
from a family member or friend;
    (iv) School records, if you were in school recently;
    (v) Reports from employers or supervisors; and
    (vi) Your own statements about how you handle all of your daily 
activities.
    c. Standardized tests of adaptive functioning. We do not require the 
results of an individually administered standardized test of adaptive 
functioning. If your case record includes these test results, we will 
consider the results along with all other relevant evidence; however, we 
will use the guidelines in 12.00E and F to evaluate and determine the 
degree of your deficits in adaptive functioning, as required under 
12.05B2.
    d. How we consider common everyday activities.
    (i) The fact that you engage in common everyday activities, such as 
caring for your personal needs, preparing simple meals, or driving a 
car, will not always mean that you do not have deficits in adaptive 
functioning as required by 12.05B2. You may demonstrate both strengths 
and deficits in your adaptive functioning. However, a lack of deficits 
in one area does not negate the presence of deficits in another area. 
When we assess your adaptive functioning, we will consider all of your 
activities and your performance of them.
    (ii) Our conclusions about your adaptive functioning rest on whether 
you do your daily activities independently, appropriately, effectively, 
and on a sustained basis. If you receive help in performing your 
activities, we need to know the kind, extent, and frequency of help you 
receive in order to perform them. We will not assume that your ability 
to do some common everyday activities, or to do some things without help 
or support, demonstrates that your mental disorder does not meet the 
requirements of 12.05B2. (See 12.00D regarding the factors we consider 
when we evaluate your functioning, including how we consider any help or 
support you receive.)
    e. How we consider work activity. The fact that you have engaged in 
work activity, or that you work intermittently or steadily in a job 
commensurate with your abilities, will not always mean that you do not 
have deficits in adaptive functioning as required by 12.05B2. When you 
have engaged in work activity, we need complete information about the 
work, and about your functioning in the work activity and work setting, 
before we reach any conclusions about your adaptive functioning. We will 
consider all factors involved in your work history before concluding 
whether your impairment satisfies the criteria for intellectual disorder 
under 12.05B. We will consider your prior and current work history, if 
any, and various other factors influencing how you function. For 
example, we consider whether the work was in a supported setting, 
whether you required more supervision than other employees, how your job 
duties compared to others in the same job, how much time it took you to 
learn the job duties, and the reason the work ended, if applicable.
    4. Establishing that the disorder began before age 22. We require 
evidence that demonstrates or supports (is consistent with) the 
conclusion that your mental disorder began prior to age 22. We do not 
require evidence that your impairment met all of the requirements of 
12.05A or 12.05B prior to age 22. Also, we do not require you to have 
met our statutory definition of disability prior to age 22. When we do 
not have evidence that was recorded before you attained age 22, we need 
evidence about your current intellectual and adaptive functioning and 
the history of your disorder that supports the conclusion that the 
disorder began before you attained age 22. Examples of evidence that can 
demonstrate or support this conclusion include:
    a. Tests of intelligence or adaptive functioning;
    b. School records indicating a history of special education services 
based on your intellectual functioning;
    c. An Individualized Education Program (IEP), including your 
transition plan;
    d. Reports of your academic performance and functioning at school;
    e. Medical treatment records;
    f. Interviews or reports from employers;
    g. Statements from a supervisor in a group home or a sheltered 
workshop; and
    h. Statements from people who have known you and can tell us about 
your functioning in the past and currently.
    I. How do we evaluate substance use disorders? If we find that you 
are disabled and there is medical evidence in your case record 
establishing that you have a substance use disorder, we will determine 
whether your

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substance use disorder is a contributing factor material to the 
determination of disability (see Secs. 404.1535 and 416.935 of this 
chapter).
    J. How do we evaluate mental disorders that do not meet one of the 
mental disorders listings?
    1. These listings include only examples of mental disorders that we 
consider serious enough to prevent you from doing any gainful activity. 
If your severe mental disorder does not meet the criteria of any of 
these listings, we will consider whether you have an impairment(s) that 
meets the criteria of a listing in another body system. You may have 
another impairment(s) that is secondary to your mental disorder. For 
example, if you have an eating disorder and develop a cardiovascular 
impairment because of it, we will evaluate your cardiovascular 
impairment under the listings for the cardiovascular body system.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing (see Secs. 404.1526 and 416.926 of this 
chapter).
    3. If your impairment(s) does not meet or medically equal a listing, 
we will assess your residual functional capacity for engaging in 
substantial gainful activity (see Secs. 404.1545 and 416.945 of this 
chapter). When we assess your residual functional capacity, we consider 
all of your impairment-related mental and physical limitations. For 
example, the side effects of some medications may reduce your general 
alertness, concentration, or physical stamina, affecting your residual 
functional capacity for non-exertional or exertional work activities. 
Once we have determined your residual functional capacity, we proceed to 
the fourth, and if necessary, the fifth steps of the sequential 
evaluation process in Secs. 404.1520 and 416.920 of this chapter. We use 
the rules in Secs. 404.1594 and 416.994 of this chapter, as appropriate, 
when we decide whether you continue to be disabled.

            12.01  Category of Impairments, Mental Disorders

    12.02  Neurocognitive disorders (see 12.00B1), satisfied by A and B, 
or A and C:
    A. Medical documentation of a significant cognitive decline from a 
prior level of functioning in one or more of the cognitive areas:
    1. Complex attention;
    2. Executive function;
    3. Learning and memory;
    4. Language;
    5. Perceptual-motor; or
    6. Social cognition.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
12.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 12.00G2c).
    12.03  Schizophrenia spectrum and other psychotic disorders (see 
12.00B2), satisfied by A and B, or A and C:
    A. Medical documentation of one or more of the following:
    1. Delusions or hallucinations;
    2. Disorganized thinking (speech); or
    3. Grossly disorganized behavior or catatonia.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
12.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 12.00G2c).
    12.04  Depressive, bipolar and related disorders (see 12.00B3), 
satisfied by A and B, or A and C:

[[Page 535]]

    A. Medical documentation of the requirements of paragraph 1 or 2:
    1. Depressive disorder, characterized by five or more of the 
following:
    a. Depressed mood;
    b. Diminished interest in almost all activities;
    c. Appetite disturbance with change in weight;
    d. Sleep disturbance;
    e. Observable psychomotor agitation or retardation;
    f. Decreased energy;
    g. Feelings of guilt or worthlessness;
    h. Difficulty concentrating or thinking; or
    i. Thoughts of death or suicide.
    2. Bipolar disorder, characterized by three or more of the 
following:
    a. Pressured speech;
    b. Flight of ideas;
    c. Inflated self-esteem;
    d. Decreased need for sleep;
    e. Distractibility;
    f. Involvement in activities that have a high probability of painful 
consequences that are not recognized; or
    g. Increase in goal-directed activity or psychomotor agitation.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
12.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 12.00G2c).
    12.05  Intellectual disorder (see 12.00B4), satisfied by A or B:
    A. Satisfied by 1, 2, and 3 (see 12.00H):
    1. Significantly subaverage general intellectual functioning evident 
in your cognitive inability to function at a level required to 
participate in standardized testing of intellectual functioning; and
    2. Significant deficits in adaptive functioning currently manifested 
by your dependence upon others for personal needs (for example, 
toileting, eating, dressing, or bathing); and
    3. The evidence about your current intellectual and adaptive 
functioning and about the history of your disorder demonstrates or 
supports the conclusion that the disorder began prior to your attainment 
of age 22.

                                   OR

    B. Satisfied by 1, 2, and 3 (see 12.00H):
    1. Significantly subaverage general intellectual functioning 
evidenced by a or b:
    a. A full scale (or comparable) IQ score of 70 or below on an 
individually administered standardized test of general intelligence; or
    b. A full scale (or comparable) IQ score of 71-75 accompanied by a 
verbal or performance IQ score (or comparable part score) of 70 or below 
on an individually administered standardized test of general 
intelligence; and
    2. Significant deficits in adaptive functioning currently manifested 
by extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning:
    a. Understand, remember, or apply information (see 12.00E1); or
    b. Interact with others (see 12.00E2); or
    c. Concentrate, persist, or maintain pace (see 12.00E3); or
    d. Adapt or manage oneself (see 12.00E4); and
    3. The evidence about your current intellectual and adaptive 
functioning and about the history of your disorder demonstrates or 
supports the conclusion that the disorder began prior to your attainment 
of age 22.
    12.06  Anxiety and obsessive-compulsive disorders (see 12.00B5), 
satisfied by A and B, or A and C:
    A. Medical documentation of the requirements of paragraph 1, 2, or 
3:
    1. Anxiety disorder, characterized by three or more of the 
following;
    a. Restlessness;
    b. Easily fatigued;
    c. Difficulty concentrating;
    d. Irritability;
    e. Muscle tension; or
    f. Sleep disturbance.
    2. Panic disorder or agoraphobia, characterized by one or both:
    a. Panic attacks followed by a persistent concern or worry about 
additional panic attacks or their consequences; or
    b. Disproportionate fear or anxiety about at least two different 
situations (for example, using public transportation, being in a crowd, 
being in a line, being outside of your home, being in open spaces).
    3. Obsessive-compulsive disorder, characterized by one or both:
    a. Involuntary, time-consuming preoccupation with intrusive, 
unwanted thoughts; or
    b. Repetitive behaviors aimed at reducing anxiety.

[[Page 536]]

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
12.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 12.00G2c).
    12.07  Somatic symptom and related disorders (see 12.00B6), 
satisfied by A and B:
    A. Medical documentation of one or more of the following:
    1. Symptoms of altered voluntary motor or sensory function that are 
not better explained by another medical or mental disorder;
    2. One or more somatic symptoms that are distressing, with excessive 
thoughts, feelings, or behaviors related to the symptoms; or
    3. Preoccupation with having or acquiring a serious illness without 
significant symptoms present.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).
    12.08  Personality and impulse-control disorders (see 12.00B7), 
satisfied by A and B:
    A. Medical documentation of a pervasive pattern of one or more of 
the following:
    1. Distrust and suspiciousness of others;
    2. Detachment from social relationships;
    3. Disregard for and violation of the rights of others;
    4. Instability of interpersonal relationships;
    5. Excessive emotionality and attention seeking;
    6. Feelings of inadequacy;
    7. Excessive need to be taken care of;
    8. Preoccupation with perfectionism and orderliness; or
    9. Recurrent, impulsive, aggressive behavioral outbursts.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).
    12.09  [Reserved]
    12.10  Autism spectrum disorder (see 12.00B8), satisfied by A and B:
    A. Medical documentation of both of the following:
    1. Qualitative deficits in verbal communication, nonverbal 
communication, and social interaction; and
    2. Significantly restricted, repetitive patterns of behavior, 
interests, or activities.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).
    12.11  Neurodevelopmental disorders (see 12.00B9), satisfied by A 
and B:
    A. Medical documentation of the requirements of paragraph 1, 2, or 
3:
    1. One or both of the following:
    a. Frequent distractibility, difficulty sustaining attention, and 
difficulty organizing tasks; or
    b. Hyperactive and impulsive behavior (for example, difficulty 
remaining seated, talking excessively, difficulty waiting, appearing 
restless, or behaving as if being ``driven by a motor'').
    2. Significant difficulties learning and using academic skills; or
    3. Recurrent motor movement or vocalization.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).

[[Page 537]]

    12.12  [Reserved]
    12.13  Eating disorders (see 12.00B10), satisfied by A and B:
    A. Medical documentation of a persistent alteration in eating or 
eating-related behavior that results in a change in consumption or 
absorption of food and that significantly impairs physical or 
psychological health.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).
    12.15  Trauma- and stressor-related disorders (see 12.00B11), 
satisfied by A and B, or A and C:
    A. Medical documentation of all of the following:
    1. Exposure to actual or threatened death, serious injury, or 
violence;
    2. Subsequent involuntary re-experiencing of the traumatic event 
(for example, intrusive memories, dreams, or flashbacks);
    3. Avoidance of external reminders of the event;
    4. Disturbance in mood and behavior; and
    5. Increases in arousal and reactivity (for example, exaggerated 
startle response, sleep disturbance).

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 12.00F):
    1. Understand, remember, or apply information (see 12.00E1).
    2. Interact with others (see 12.00E2).
    3. Concentrate, persist, or maintain pace (see 12.00E3).
    4. Adapt or manage oneself (see 12.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
12.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 12.00G2c).

              13.00  Cancer (Malignant Neoplastic Diseases)

    A. What impairments do these listings cover? We use these listings 
to evaluate all cancers (malignant neoplastic diseases) except certain 
cancers associated with human immunodeficiency virus (HIV) infection. We 
use the criteria in 14.11B to evaluate primary central nervous system 
lymphoma, 14.11C to evaluate primary effusion lymphoma, and 14.11E to 
evaluate pulmonary Kaposi sarcoma if you also have HIV infection. We 
evaluate all other cancers associated with HIV infection, for example, 
Hodgkin lymphoma or non-pulmonary Kaposi sarcoma, under this body system 
or under 14.11F-I in the immune system disorders body system.
    B. What do we consider when we evaluate cancer under these listings? 
We will consider factors including:
    1. Origin of the cancer.
    2. Extent of involvement.
    3. Duration, frequency, and response to anticancer therapy.
    4. Effects of any post-therapeutic residuals.
    C. How do we apply these listings? We apply the criteria in a 
specific listing to a cancer originating from that specific site.
    D. What evidence do we need?
    1. We need medical evidence that specifies the type, extent, and 
site of the primary, recurrent, or metastatic lesion. When the primary 
site cannot be identified, we will use evidence documenting the site(s) 
of metastasis to evaluate the impairment under 13.27.
    2. For operative procedures, including a biopsy or a needle 
aspiration, we generally need a copy of both the:
    a. Operative note, and
    b. Pathology report.
    3. When we cannot get these documents, we will accept the summary of 
hospitalization(s) or other medical reports. This evidence should 
include details of the findings at surgery and, whenever appropriate, 
the pathological findings.
    4. In some situations, we may also need evidence about recurrence, 
persistence, or progression of the cancer, the response to therapy, and 
any significant residuals. (See 13.00G.)
    E. When do we need longitudinal evidence?
    1. Cancer with distant metastases. We generally do not need 
longitudinal evidence for cancer that has metastasized beyond the 
regional lymph nodes because this cancer usually meets the requirements 
of a listing. Exceptions are for cancer with distant metastases that we 
expect to respond to anticancer therapy. For these exceptions, we 
usually need a longitudinal record of 3 months after therapy starts to 
determine whether the therapy achieved its intended effect, and whether 
this effect is likely to persist.

[[Page 538]]

    2. Other cancers. When there are no distant metastases, many of the 
listings require that we consider your response to initial anticancer 
therapy; that is, the initial planned treatment regimen. This therapy 
may consist of a single modality or a combination of modalities; that 
is, multimodal therapy. (See 13.00I4.)
    3. Types of treatment.
    a. Whenever the initial planned therapy is a single modality, enough 
time must pass to allow a determination about whether the therapy will 
achieve its intended effect. If the treatment fails, the failure often 
happens within 6 months after treatment starts, and there will often be 
a change in the treatment regimen.
    b. Whenever the initial planned therapy is multimodal, we usually 
cannot make a determination about the effectiveness of the therapy until 
we can determine the effects of all the planned modalities. In some 
cases, we may need to defer adjudication until we can assess the 
effectiveness of therapy. However, we do not need to defer adjudication 
to determine whether the therapy will achieve its intended effect if we 
can make a fully favorable determination or decision based on the length 
and effects of therapy, or the residuals of the cancer or therapy (see 
13.00G).
    c. We need evidence under 13.02E, 13.11D, and 13.14C to establish 
that your treating source initiated multimodal anticancer therapy. We do 
not need to make a determination about the length or effectiveness of 
your therapy. Multimodal therapy has been initiated, and satisfies the 
requirements in 13.02E, 13.11D, and 13.14C, when your treating source 
starts the first modality. We may defer adjudication if your treating 
source plans multimodal therapy and has not yet initiated it.
    F. How do we evaluate impairments that do not meet one of the cancer 
listings?
    1. These listings are only examples of cancer that we consider 
severe enough to prevent you from doing any gainful activity. If your 
severe impairment(s) does not meet the criteria of any of these 
listings, we must also consider whether you have an impairment(s) that 
meets the criteria of a listing in another body system.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See Secs. 404.1526 and 416.926 of this 
chapter.) If your impairment(s) does not meet or medically equal a 
listing, you may or may not have the residual functional capacity to 
engage in substantial gainful activity. In that situation, we proceed to 
the fourth, and, if necessary, the fifth steps of the sequential 
evaluation process in Secs. 404.1520 and 416.920 of this chapter. We use 
the rules in Secs. 404.1594 and 416.994 of this chapter, as appropriate, 
when we decide whether you continue to be disabled.
    G. How do we consider the effects of anticancer therapy?
    1. How we consider the effects of anticancer therapy under the 
listings. In many cases, cancers meet listing criteria only if the 
therapy is not effective and the cancer persists, progresses, or recurs. 
However, as explained in the following paragraphs, we will not delay 
adjudication if we can make a fully favorable determination or decision 
based on the evidence in the case record.
    2. Effects can vary widely.
    a. We consider each case on an individual basis because the therapy 
and its toxicity may vary widely. We will request a specific description 
of the therapy, including these items:
    i. Drugs given.
    ii. Dosage.
    iii. Frequency of drug administration.
    iv. Plans for continued drug administration.
    v. Extent of surgery.
    vi. Schedule and fields of radiation therapy.
    b. We will also request a description of the complications or 
adverse effects of therapy, such as the following:
    i. Continuing gastrointestinal symptoms.
    ii. Persistent weakness.
    iii. Neurological complications.
    iv. Cardiovascular complications.
    v. Reactive mental disorders.
    3. Effects of therapy may change. The severity of the adverse 
effects of anticancer therapy may change during treatment; therefore, 
enough time must pass to allow us to evaluate the therapy's effect. The 
residual effects of treatment are temporary in most instances; however, 
on occasion, the effects may be disabling for a consecutive period of at 
least 12 months. In some situations, very serious adverse effects may 
interrupt and prolong multimodal anticancer therapy for a continuous 
period of almost 12 months. In these situations, we may determine there 
is an expectation that your impairment will preclude you from engaging 
in any gainful activity for at least 12 months.
    4. When the initial anticancer therapy is effective. We evaluate any 
post-therapeutic residual impairment(s) not included in these listings 
under the criteria for the affected body system. We must consider any 
complications of therapy. When the residual impairment(s) does not meet 
or medically equal a listing, we must consider its effect on your 
ability to do substantial gainful activity.
    H. How long do we consider your impairment to be disabling?
    1. In some listings, we specify that we will consider your 
impairment to be disabling until a particular point in time (for 
example, until at least 12 months from the date of

[[Page 539]]

transplantation). We may consider your impairment to be disabling beyond 
this point when the medical and other evidence justifies it.
    2. When a listing does not contain such a specification, we will 
consider an impairment(s) that meets or medically equals a listing in 
this body system to be disabling until at least 3 years after onset of 
complete remission. When the impairment(s) has been in complete 
remission for at least 3 years, that is, the original tumor or a 
recurrence (or relapse) and any metastases have not been evident for at 
least 3 years, the impairment(s) will no longer meet or medically equal 
the criteria of a listing in this body system.
    3. Following the appropriate period, we will consider any residuals, 
including residuals of the cancer or therapy (see 13.00G), in 
determining whether you are disabled. If you have a recurrence or 
relapse of your cancer, your impairment may meet or medically equal one 
of the listings in this body system again.
    I. What do we mean by the following terms?
    1. Anticancer therapy means surgery, radiation, chemotherapy, 
hormones, immunotherapy, or bone marrow or stem cell transplantation. 
When we refer to surgery as an anticancer treatment, we mean surgical 
excision for treatment, not for diagnostic purposes.
    2. Inoperable means surgery is thought to be of no therapeutic value 
or the surgery cannot be performed; for example, when you cannot 
tolerate anesthesia or surgery because of another impairment(s), or you 
have a cancer that is too large or that has invaded crucial structures. 
This term does not include situations in which your cancer could have 
been surgically removed but another method of treatment was chosen; for 
example, an attempt at organ preservation. Your physician may determine 
whether the cancer is inoperable before or after you receive neoadjuvant 
therapy. Neoadjuvant therapy is anticancer therapy, such as chemotherapy 
or radiation, given before surgery in order to reduce the size of the 
cancer.
    3. Metastases means the spread of cancer cells by blood, lymph, or 
other body fluid. This term does not include the spread of cancer cells 
by direct extension of the cancer to other tissues or organs.
    4. Multimodal therapy means anticancer therapy that is a combination 
of at least two types of treatment given in close proximity as a unified 
whole and usually planned before any treatment has begun. There are 
three types of treatment modalities: surgery, radiation, and systemic 
drug therapy (chemotherapy, hormone therapy, and immunotherapy or 
biological modifier therapy). Examples of multimodal therapy include:
    a. Surgery followed by chemotherapy or radiation.
    b. Chemotherapy followed by surgery.
    c. Chemotherapy and concurrent radiation.
    5. Persistent means the planned initial anticancer therapy failed to 
achieve a complete remission of your cancer; that is, your cancer is 
evident, even if smaller, after the therapy has ended.
    6. Progressive means the cancer becomes more extensive after 
treatment; that is, there is evidence that your cancer is growing after 
you have completed at least half of your planned initial anticancer 
therapy.
    7. Recurrent or relapse means the cancer that was in complete 
remission or entirely removed by surgery has returned.
    8. Unresectable means surgery or surgeries did not completely remove 
the cancer. This term includes situations in which your cancer is 
incompletely resected or the surgical margins are positive. It does not 
include situations in which there is a finding of a positive margin(s) 
if additional surgery obtains a margin(s) that is clear. It also does 
not include situations in which the cancer is completely resected but 
you are receiving adjuvant therapy. Adjuvant therapy is anticancer 
therapy, such as chemotherapy or radiation, given after surgery in order 
to eliminate any remaining cancer cells or lessen the chance of 
recurrence.
    J. Can we establish the existence of a disabling impairment prior to 
the date of the evidence that shows the cancer satisfies the criteria of 
a listing? Yes. We will consider factors such as:
    1. The type of cancer and its location.
    2. The extent of involvement when the cancer was first demonstrated.
    3. Your symptoms.
    K. How do we evaluate specific cancers?
    1. Lymphoma.
    a. Many indolent (non-aggressive) lymphomas are controlled by well-
tolerated treatment modalities, although the lymphomas may produce 
intermittent symptoms and signs. We may defer adjudicating these cases 
for an appropriate period after therapy is initiated to determine 
whether the therapy will achieve its intended effect, which is usually 
to stabilize the disease process. (See 13.00E3.) Once your disease 
stabilizes, we will assess severity based on the extent of involvement 
of other organ systems and residuals from therapy.
    b. A change in therapy for indolent lymphomas is usually an 
indicator that the therapy is not achieving its intended effect. 
However, your impairment will not meet the requirements of 13.05A2 if 
your therapy is changed solely because you or your physician chooses to 
change it and not because of a failure to achieve stability.
    c. We consider Hodgkin lymphoma that recurs more than 12 months 
after completing

[[Page 540]]

initial anticancer therapy to be a new disease rather than a recurrence.
    2. Leukemia.
    a. Acute leukemia. The initial diagnosis of acute leukemia, 
including the accelerated or blast phase of chronic myelogenous 
(granulocytic) leukemia, is based on definitive bone marrow examination. 
Additional diagnostic information is based on chromosomal analysis, 
cytochemical and surface marker studies on the abnormal cells, or other 
methods consistent with the prevailing state of medical knowledge and 
clinical practice. Recurrent disease must be documented by peripheral 
blood, bone marrow, or cerebrospinal fluid examination, or by testicular 
biopsy. The initial and follow-up pathology reports should be included.
    b. Chronic myelogenous leukemia (CML). We need a diagnosis of CML 
based on documented granulocytosis, including immature forms such as 
differentiated or undifferentiated myelocytes and myeloblasts, and a 
chromosomal analysis that demonstrates the Philadelphia chromosome. In 
the absence of a chromosomal analysis, or if the Philadelphia chromosome 
is not present, the diagnosis may be made by other methods consistent 
with the prevailing state of medical knowledge and clinical practice. 
The requirement for CML in the accelerated or blast phase is met in 
13.06B if laboratory findings show the proportion of blast (immature) 
cells in the peripheral blood or bone marrow is 10 percent or greater.
    c. Chronic lymphocytic leukemia.
    i. We require the diagnosis of chronic lymphocytic leukemia (CLL) to 
be documented by evidence of a chronic lymphocytosis of at least 10,000 
cells/mm\3\ for 3 months or longer, or other acceptable diagnostic 
techniques consistent with the prevailing state of medical knowledge and 
clinical practice.
    ii. We evaluate the complications and residual impairment(s) from 
CLL under the appropriate listings, such as 13.05A2 or the hematological 
listings (7.00).
    d. Elevated white cell count. In cases of chronic leukemia (either 
myelogenous or lymphocytic), an elevated white cell count, in itself, is 
not a factor in determining the severity of the impairment.
    3. Macroglobulinemia or heavy chain disease. We require the 
diagnosis of these diseases to be confirmed by protein electrophoresis 
or immunoelectrophoresis. We evaluate the resulting impairment(s) under 
the appropriate listings, such as 13.05A2 or the hematological listings 
(7.00).
    4. Primary breast cancer.
    a. We evaluate bilateral primary breast cancer (synchronous or 
metachronous) under 13.10A, which covers local primary disease, and not 
as a primary disease that has metastasized.
    b. We evaluate secondary lymphedema that results from anticancer 
therapy for breast cancer under 13.10E if the lymphedema is treated by 
surgery to salvage or restore the functioning of an upper extremity. 
Secondary lymphedema is edema that results from obstruction or 
destruction of normal lymphatic channels. We may not restrict our 
determination of the onset of disability to the date of the surgery; we 
may establish an earlier onset date of disability if the evidence in 
your case record supports such a finding.
    5. Carcinoma-in-situ. Carcinoma-in-situ, or preinvasive carcinoma, 
usually responds to treatment. When we use the term ``carcinoma'' in 
these listings, it does not include carcinoma-in-situ.
    6. Primary central nervous system (CNS) cancers. We use the criteria 
in 13.13 to evaluate cancers that originate within the CNS (that is, 
brain and spinal cord cancers).
    a. The CNS cancers listed in 13.13A1 are highly malignant and 
respond poorly to treatment, and therefore we do not require additional 
criteria to evaluate them. We do not list pituitary gland cancer (for 
example, pituitary gland carcinoma) in 13.13A1, although this CNS cancer 
is highly malignant and responds poorly to treatment. We evaluate 
pituitary gland cancer under 13.13A1 and do not require additional 
criteria to evaluate it.
    b. We consider a CNS tumor to be malignant if it is classified as 
Grade II, Grade III, or Grade IV under the World Health Organization 
(WHO) classification of tumors of the CNS (WHO Classification of Tumours 
of the Central Nervous System, 2007).
    c. We evaluate benign (for example, WHO Grade I) CNS tumors under 
11.05. We evaluate metastasized CNS cancers from non-CNS sites under the 
primary cancers (see 13.00C). We evaluate any complications of CNS 
cancers, such as resultant neurological or psychological impairments, 
under the criteria for the affected body system.
    7. Primary peritoneal carcinoma. We use the criteria in 13.23E to 
evaluate primary peritoneal carcinoma in women because this cancer is 
often indistinguishable from ovarian cancer and is generally treated the 
same way as ovarian cancer. We use the criteria in 13.15A to evaluate 
primary peritoneal carcinoma in men because many of these cases are 
similar to malignant mesothelioma.
    8. Prostate cancer. We exclude ``biochemical recurrence'' in 13.24A, 
which is defined as an increase in the serum prostate-specific antigen 
(PSA) level following the completion of the hormonal intervention 
therapy. We need corroborating evidence to document recurrence, such as 
radiological studies or findings on physical examination.
    9. Melanoma. We evaluate malignant melanoma that affects the skin 
(cutaneous melanoma), eye (ocular melanoma), or mucosal

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membranes (mucosal melanoma) under 13.29. We evaluate melanoma that is 
not malignant that affects the skin (benign melanocytic tumor) under the 
listings in 8.00 or other affected body systems.
    L. How do we evaluate cancer treated by bone marrow or stem cell 
transplantation, including transplantation using stem cells from 
umbilical cord blood? Bone marrow or stem cell transplantation is 
performed for a variety of cancers. We require the transplantation to 
occur before we evaluate it under these listings. We do not need to 
restrict our determination of the onset of disability to the date of the 
transplantation (13.05, 13.06, or 13.07) or the date of first treatment 
under the treatment plan that includes transplantation (13.28). We may 
be able to establish an earlier onset date of disability due to your 
transplantation if the evidence in your case record supports such a 
finding.
    1. Acute leukemia (including T-cell lymphoblastic lymphoma) or 
accelerated or blast phase of CML. If you undergo bone marrow or stem 
cell transplantation for any of these disorders, we will consider you to 
be disabled until at least 24 months from the date of diagnosis or 
relapse, or at least 12 months from the date of transplantation, 
whichever is later.
    2. Lymphoma, multiple myeloma, or chronic phase of CML. If you 
undergo bone marrow or stem cell transplantation for any of these 
disorders, we will consider you to be disabled until at least 12 months 
from the date of transplantation.
    3. Other cancers. We will evaluate any other cancer treated with 
bone marrow or stem cell transplantation under 13.28, regardless of 
whether there is another listing that addresses that impairment. The 
length of time we will consider you to be disabled depends on whether 
you undergo allogeneic or autologous transplantation.
    a. Allogeneic bone marrow or stem cell transplantation. If you 
undergo allogeneic transplantation (transplantation from an unrelated 
donor or a related donor other than an identical twin), we will consider 
you to be disabled until at least 12 months from the date of 
transplantation.
    b. Autologous bone marrow or stem cell transplantation. If you 
undergo autologous transplantation (transplantation of your own cells or 
cells from your identical twin (syngeneic transplantation)), we will 
consider you to be disabled until at least 12 months from the date of 
the first treatment under the treatment plan that includes 
transplantation. The first treatment usually refers to the initial 
therapy given to prepare you for transplantation.
    4. Evaluating disability after the appropriate time period has 
elapsed. We consider any residual impairment(s), such as complications 
arising from:
    a. Graft-versus-host (GVH) disease.
    b. Immunosuppressant therapy, such as frequent infections.
    c. Significant deterioration of other organ systems.

      13.01  Category of Impairments, Malignant Neoplastic Diseases

    13.02  Soft tissue cancers of the head and neck (except salivary 
glands--13.08--and thyroid gland--13.09).
    A. Inoperable or unresectable.

OR

    B. Persistent or recurrent disease following initial anticancer 
therapy, except persistence or recurrence in the true vocal cord.

OR


OR

    C. With metastases beyond the regional lymph nodes.

OR

    D. Small-cell (oat cell) carcinoma.

OR

    E. Soft tissue cancers originating in the head and neck treated with 
multimodal anticancer therapy (see 13.00E3c). Consider under a 
disability until at least 18 months from the date of diagnosis. 
Thereafter, evaluate any residual impairment(s) under the criteria for 
the affected body system.
    13.03  Skin.
    A. Sarcoma or carcinoma with metastases to or beyond the regional 
lymph nodes.

OR

    B. Carcinoma invading deep extradermal structures (for example, 
skeletal muscle, cartilage, or bone).
    1. Recurrent after wide excision (except an additional primary 
melanoma at a different site, which is not considered to be recurrent 
disease).
    2. With metastases as described in a, b, or c:
    a. Metastases to one or more clinically apparent nodes; that is, 
nodes that are detected by imaging studies (excluding 
lymphoscintigraphy) or by clinical examination.
    b. If the nodes are not clinically apparent, with metastases to four 
or more nodes.
    c. Metastases to adjacent skin (satellite lesions) or distant sites.
    13.04  Soft tissue sarcoma.
    A. With regional or distant metastases.

OR

    B. Persistent or recurrent following initial anticancer therapy.
    13.05  Lymphoma (including mycosis fungoides, but excluding T-cell 
lymphoblastic lymphoma--13.06). (See 13.00K1 and 13.00K2c.)
    A. Non-Hodgkin's lymphoma, as described in 1 or 2:

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    1. Aggressive lymphoma (including diffuse large B-cell lymphoma) 
persistent or recurrent following initial anticancer therapy.
    2. Indolent lymphoma (including mycosis fungoides and follicular 
small cleaved cell) requiring initiation of more than one (single mode 
or multimodal) anticancer treatment regimen within a period of 12 
consecutive months. Consider under a disability from at least the date 
of initiation of the treatment regimen that failed within 12 months.

OR

    B. Hodgkin lymphoma with failure to achieve clinically complete 
remission, or recurrent lymphoma within 12 months of completing initial 
anticancer therapy.

OR

    C. With bone marrow or stem cell transplantation. Consider under a 
disability until at least 12 months from the date of transplantation. 
Thereafter, evaluate any residual impairment(s) under the criteria for 
the affected body system.
OR
    D. Mantle cell lymphoma.
    13.06  Leukemia. (See 13.00K2.)
    A. Acute leukemia (including T-cell lymphoblastic lymphoma). 
Consider under a disability until at least 24 months from the date of 
diagnosis or relapse, or at least 12 months from the date of bone marrow 
or stem cell transplantation, whichever is later. Thereafter, evaluate 
any residual impairment(s) under the criteria for the affected body 
system.

OR

    B. Chronic myelogenous leukemia, as described in 1 or 2:
    1. Accelerated or blast phase (see 13.00K2b). Consider under a 
disability until at least 24 months from the date of diagnosis or 
relapse, or at least 12 months from the date of bone marrow or stem cell 
transplantation, whichever is later. Thereafter, evaluate any residual 
impairment(s) under the criteria for the affected body system.
    2. Chronic phase, as described in a or b:
    a. Consider under a disability until at least 12 months from the 
date of bone marrow or stem cell transplantation. Thereafter, evaluate 
any residual impairment(s) under the criteria for the affected body 
system.
    b. Progressive disease following initial anticancer therapy.
    13.07  Multiple myeloma (confirmed by appropriate serum or urine 
protein electrophoresis and bone marrow findings).
    A. Failure to respond or progressive disease following initial 
anticancer therapy.

OR

    B. With bone marrow or stem cell transplantation. Consider under a 
disability until at least 12 months from the date of transplantation. 
Thereafter, evaluate any residual impairment(s) under the criteria for 
the affected body system.
    13.08  Salivary glands--carcinoma or sarcoma with metastases beyond 
the regional lymph nodes.
    13.09  Thyroid gland.
    A. Anaplastic (undifferentiated) carcinoma.

OR

    B. Carcinoma with metastases beyond the regional lymph nodes 
progressive despite radioactive iodine therapy.

OR

    C. Medullary carcinoma with metastases beyond the regional lymph 
nodes.
    13.10  Breast (except sarcoma--13.04). (See 13.00K4.)
    A. Locally advanced cancer (inflammatory carcinoma, cancer of any 
size with direct extension to the chest wall or skin, or cancer of any 
size with metastases to the ipsilateral internal mammary nodes).

OR

    B. Carcinoma with metastases to the supraclavicular or 
infraclavicular nodes, to 10 or more axillary nodes, or with distant 
metastases.

OR

    C. Recurrent carcinoma, except local recurrence that remits with 
anticancer therapy.
OR
    D. Small-cell (oat cell) carcinoma.
OR
    E. With secondary lymphedema that is caused by anticancer therapy 
and treated by surgery to salvage or restore the functioning of an upper 
extremity. (See 13.00K4b.) Consider under a disability until at least 12 
months from the date of the surgery that treated the secondary 
lymphedema. Thereafter, evaluate any residual impairment(s) under the 
criteria for the affected body system.
    13.11  Skeletal system--sarcoma.
    A. Inoperable or unresectable.

OR

    B. Recurrent cancer (except local recurrence) after initial 
anticancer therapy.

OR

    C. With distant metastases.

OR

    D. All other cancers originating in bone with multimodal anticancer 
therapy (see 13.00E3c). Consider under a disability for 12 months from 
the date of diagnosis. Thereafter, evaluate any residual impairment(s) 
under the criteria for the affected body system.
    13.12  Maxilla, orbit, or temporal fossa.
    A. Sarcoma or carcinoma of any type with regional or distant 
metastases.

OR


[[Page 543]]


    B. Carcinoma of the antrum with extension into the orbit or ethmoid 
or sphenoid sinus.

OR

    C. Cancer with extension to the orbit, meninges, sinuses, or base of 
the skull.
    13.13  Nervous system. (See 13.00K6.)
    A. Primary central nervous system (CNS; that is, brain and spinal 
cord) cancers, as described in 1, 2, or 3:
    1. Glioblastoma multiforme, ependymoblastoma, and diffuse intrinsic 
brain stem gliomas (see 13.00K6a).
    2. Any Grade III or Grade IV CNS cancer (see 13.00K6b), including 
astrocytomas, sarcomas, and medulloblastoma and other primitive 
neuroectodermal tumors (PNETs).
    3. Any primary CNS cancer, as described in a or b:
    a. Metastatic.
    b. Progressive or recurrent following initial anticancer therapy.

OR

    B. Primary peripheral nerve or spinal root cancers, as described in 
1 or 2:
    1. Metastatic.
    2. Progressive or recurrent following initial anticancer therapy.
    13.14  Lungs.
    A. Non-small-cell carcinoma--inoperable, unresectable, recurrent, or 
metastatic disease to or beyond the hilar nodes.

OR

    B. Small-cell (oat cell) carcinoma.

OR

    C. Carcinoma of the superior sulcus (including Pancoast tumors) with 
multimodal anticancer therapy (see 13.00E3c). Consider under a 
disability until at least 18 months from the date of diagnosis. 
Thereafter, evaluate any residual impairment(s) under the criteria for 
the affected body system.
    13.15  Pleura or mediastinum.
    A. Malignant mesothelioma of pleura.

OR

    B. Tumors of the mediastinum, as described in 1 or 2:
    1. With metastases to or beyond the regional lymph nodes.
    2. Persistent or recurrent following initial anticancer therapy.
OR
    C. Small-cell (oat cell) carcinoma.
    13.16  Esophagus or stomach.
    A. Carcinoma or sarcoma of the esophagus.

    OR

    B. Carcinoma or sarcoma of the stomach, as described in 1 or 2:
    1. Inoperable, unresectable, extending to surrounding structures, or 
recurrent.
    2. With metastases to or beyond the regional lymph nodes.
OR
    C. Small-cell (oat cell) carcinoma.
    13.17  Small intestine--carcinoma, sarcoma, or carcinoid.
    A. Inoperable, unresectable, or recurrent.

OR

    B. With metastases beyond the regional lymph nodes.
OR
    C. Small-cell (oat cell) carcinoma.
    13.18  Large intestine (from ileocecal valve to and including anal 
canal).
    A. Adenocarcinoma that is inoperable, unresectable, or recurrent.

OR

    B. Squamous cell carcinoma of the anus, recurrent after surgery.

OR

    C. With metastases beyond the regional lymph nodes.
OR
    D. Small-cell (oat cell) carcinoma.
    13.19  Liver or gallbladder--cancer of the liver, gallbladder, or 
bile ducts.
    13.20  Pancreas.
    A. Carcinoma (except islet cell carcinoma).
OR

    B. Islet cell carcinoma that is physiologically active and is either 
inoperable or unresectable.
    13.21  Kidneys, adrenal glands, or ureters--carcinoma.
    A. Inoperable, unresectable, or recurrent.

OR

    B. With metastases to or beyond the regional lymph nodes.
    13.22  Urinary bladder--carcinoma.
    A. With infiltration beyond the bladder wall.

OR

    B. Recurrent after total cystectomy.

OR

    C. Inoperable or unresectable.

OR

    D. With metastases to or beyond the regional lymph nodes.
OR
    E. Small-cell (oat cell) carcinoma.
    13.23  Cancers of the female genital tract--carcinoma or sarcoma 
(including primary peritoneal carcinoma).
    A. Uterus (corpus), as described in 1, 2, or 3:
    1. Invading adjoining organs.
    2. With metastases to or beyond the regional lymph nodes.
    3. Persistent or recurrent following initial anticancer therapy.

OR

    B. Uterine cervix, as described in 1, 2, or 3:
    1. Extending to the pelvic wall, lower portion of the vagina, or 
adjacent or distant organs.
    2. Persistent or recurrent following initial anticancer therapy.

[[Page 544]]

    3. With metastases to distant (for example, para-aortic or 
supraclavicular) lymph nodes.

OR

    C. Vulva or vagina, as described in 1, 2, or 3:
    1. Invading adjoining organs.
    2. With metastases to or beyond the regional lymph nodes.
    3. Persistent or recurrent following initial anticancer therapy.

OR

    D. Fallopian tubes, as described in 1 or 2:
    1. Extending to the serosa or beyond.
    2. Persistent or recurrent following initial anticancer therapy.
    E. Ovaries, as described in 1 or 2:
    1. All cancers except germ-cell cancers, with at least one of the 
following:
    a. Extension beyond the pelvis; for example, implants on, or direct 
extension to, peritoneal, omental, or bowel surfaces.
    b. Metastases to or beyond the regional lymph nodes.
    c. Recurrent following initial anticancer therapy.
    2. Germ-cell cancers--progressive or recurrent following initial 
anticancer therapy.
OR
    F. Small-cell (oat cell) carcinoma.
    13.24  Prostate gland--carcinoma.
    A. Progressive or recurrent (not including biochemical recurrence) 
despite initial hormonal intervention. (See 13.00K8.)

OR

    B. With visceral metastases (metastases to internal organs).
OR
    C. Small cell (oat cell) carcinoma.
    13.25  Testicles--cancer with metastatic disease progressive or 
recurrent following initial chemotherapy.
    13.26  Penis--carcinoma with metastases to or beyond the regional 
lymph nodes.
    13.27  Primary site unknown after appropriate search for primary--
metastatic carcinoma or sarcoma, except for squamous cell carcinoma 
confined to the neck nodes.
    13.28  Cancer treated by bone marrow or stem cell transplantation. 
(See 13.00L.)
    A. Allogeneic transplantation. Consider under a disability until at 
least 12 months from the date of transplantation. Thereafter, evaluate 
any residual impairment(s) under the criteria for the affected body 
system.

OR

    B. Autologous transplantation. Consider under a disability until at 
least 12 months from the date of the first treatment under the treatment 
plan that includes transplantation. Thereafter, evaluate any residual 
impairment(s) under the criteria for the affected body system.
    13.29  Malignant melanoma (including skin, ocular, or mucosal 
melanomas), as described in either A, B, or C:
    A. Recurrent (except an additional primary melanoma at a different 
site, which is not considered to be recurrent disease) following either 
1 or 2:
    1. Wide excision (skin melanoma).
    2. Enucleation of the eye (ocular melanoma).
OR
    B. With metastases as described in 1, 2, or 3:
    1. Metastases to one or more clinically apparent nodes; that is, 
nodes that are detected by imaging studies (excluding 
lymphoscintigraphy) or by clinical evaluation (palpable).
    2. If the nodes are not clinically apparent, with metastases to four 
or more nodes.
    3. Metastases to adjacent skin (satellite lesions) or distant sites 
(for example, liver, lung, or brain).
OR
    C. Mucosal melanoma.

                     14.00  Immune System Disorders

    A. What disorders do we evaluate under the immune system disorders 
listings?
    1. We evaluate immune system disorders that cause dysfunction in one 
or more components of your immune system.
    a. The dysfunction may be due to problems in antibody production, 
impaired cell-mediated immunity, a combined type of antibody/cellular 
deficiency, impaired phagocytosis, or complement deficiency.
    b. Immune system disorders may result in recurrent and unusual 
infections, or inflammation and dysfunction of the body's own tissues. 
Immune system disorders can cause a deficit in a single organ or body 
system that results in extreme (that is, very serious) loss of function. 
They can also cause lesser degrees of limitations in two or more organs 
or body systems, and when associated with symptoms or signs, such as 
severe fatigue, fever, malaise, diffuse musculoskeletal pain, or 
involuntary weight loss, can also result in extreme limitation.
    c. We organize the discussions of immune system disorders in three 
categories: Autoimmune disorders; Immune deficiency disorders, excluding 
human immunodeficiency virus (HIV) infection; and HIV infection.
    2. Autoimmune disorders (14.00D). Autoimmune disorders are caused by 
dysfunctional immune responses directed against the body's own tissues, 
resulting in chronic, multisystem impairments that differ in clinical 
manifestations, course, and outcome. They are sometimes referred to as 
rheumatic diseases, connective tissue disorders, or collagen vascular 
disorders. Some of the features of autoimmune disorders in adults differ 
from the features of the same disorders in children.

[[Page 545]]

    3. Immune deficiency disorders, excluding HIV infection (14.00E). 
Immune deficiency disorders are characterized by recurrent or unusual 
infections that respond poorly to treatment, and are often associated 
with complications affecting other parts of the body. Immune deficiency 
disorders are classified as either primary (congenital) or acquired. 
Individuals with immune deficiency disorders also have an increased risk 
of malignancies and of having autoimmune disorders.
    4. Human immunodeficiency virus (HIV) infection (14.00F). HIV 
infection may be characterized by increased susceptibility to common 
infections as well as opportunistic infections, cancers, or other 
conditions listed in 14.11.
    B. What information do we need to show that you have an immune 
system disorder? Generally, we need your medical history, a report(s) of 
a physical examination, a report(s) of laboratory findings, and in some 
instances, appropriate medically acceptable imaging or tissue biopsy 
reports to show that you have an immune system disorder. Therefore, we 
will make every reasonable effort to obtain your medical history, 
medical findings, and results of laboratory tests. We explain the 
information we need in more detail in the sections below.

                             C. Definitions

    1. Appropriate medically acceptable imaging includes, but is not 
limited to, angiography, x-ray imaging, computerized axial tomography 
(CAT scan) or magnetic resonance imaging (MRI), with or without contrast 
material, myelography, and radionuclear bone scans. ``Appropriate'' 
means that the technique used is the proper one to support the 
evaluation and diagnosis of the impairment.
    2. Constitutional symptoms or signs, as used in these listings, 
means severe fatigue, fever, malaise, or involuntary weight loss. Severe 
fatigue means a frequent sense of exhaustion that results in 
significantly reduced physical activity or mental function. Malaise 
means frequent feelings of illness, bodily discomfort, or lack of well-
being that result in significantly reduced physical activity or mental 
function.
    3. Disseminated means that a condition is spread over a considerable 
area. The type and extent of the spread will depend on your specific 
disease.
    4. Dysfunction means that one or more of the body regulatory 
mechanisms are impaired, causing either an excess or deficiency of 
immunocompetent cells or their products.
    5. Extra-articular means ``other than the joints''; for example, an 
organ(s) such as the heart, lungs, kidneys, or skin.
    6. Inability to ambulate effectively has the same meaning as in 
1.00B2b.
    7. Inability to perform fine and gross movements effectively has the 
same meaning as in 1.00B2c.
    8. Major peripheral joints has the same meaning as in 1.00F.
    9. Persistent means that a sign(s) or symptom(s) has continued over 
time. The precise meaning will depend on the specific immune system 
disorder, the usual course of the disorder, and the other circumstances 
of your clinical course.
    10. Recurrent means that a condition that previously responded 
adequately to an appropriate course of treatment returns after a period 
of remission or regression. The precise meaning, such as the extent of 
response or remission and the time periods involved, will depend on the 
specific disease or condition you have, the body system affected, the 
usual course of the disorder and its treatment, and the other facts of 
your particular case.
    11. Resistant to treatment means that a condition did not respond 
adequately to an appropriate course of treatment. Whether a response is 
adequate or a course of treatment is appropriate will depend on the 
specific disease or condition you have, the body system affected, the 
usual course of the disorder and its treatment, and the other facts of 
your particular case.
    12. Severe means medical severity as used by the medical community. 
The term does not have the same meaning as it does when we use it in 
connection with a finding at the second step of the sequential 
evaluation processes in Secs. 404.1520, 416.920, and 416.924.

   D. How do we document and evaluate the listed autoimmune disorders?

    1. Systemic lupus erythematosus (14.02).
    a. General. Systemic lupus erythematosus (SLE) is a chronic 
inflammatory disease that can affect any organ or body system. It is 
frequently, but not always, accompanied by constitutional symptoms or 
signs (severe fatigue, fever, malaise, involuntary weight loss). Major 
organ or body system involvement can include: Respiratory (pleuritis, 
pneumonitis), cardiovascular (endocarditis, myocarditis, pericarditis, 
vasculitis), renal (glomerulonephritis), hematologic (anemia, 
leukopenia, thrombocytopenia), skin (photosensitivity), neurologic 
(seizures), mental (anxiety, fluctuating cognition (``lupus fog''), mood 
disorders, organic brain syndrome, psychosis), or immune system 
disorders (inflammatory arthritis). Immunologically, there is an array 
of circulating serum auto-antibodies and pro- and anti-coagulant 
proteins that may occur in a highly variable pattern.
    b. Documentation of SLE. Generally, but not always, the medical 
evidence will show that your SLE satisfies the criteria in the current 
``Criteria for the Classification of Systemic

[[Page 546]]

Lupus Erythematosus'' by the American College of Rheumatology found in 
the most recent edition of the Primer on the Rheumatic Diseases 
published by the Arthritis Foundation.
    2. Systemic vasculitis (14.03).
    a. General.
    (i) Vasculitis is an inflammation of blood vessels. It may occur 
acutely in association with adverse drug reactions, certain chronic 
infections, and occasionally, malignancies. More often, it is chronic 
and the cause is unknown. Symptoms vary depending on which blood vessels 
are involved. Systemic vasculitis may also be associated with other 
autoimmune disorders; for example, SLE or dermatomyositis.
    (ii) There are several clinical patterns, including but not limited 
to polyarteritis nodosa, Takayasu's arteritis (aortic arch arteritis), 
giant cell arteritis (temporal arteritis), and Wegener's granulomatosis.
    b. Documentation of systemic vasculitis. Angiography or tissue 
biopsy confirms a diagnosis of systemic vasculitis when the disease is 
suspected clinically. When you have had angiography or tissue biopsy for 
systemic vasculitis, we will make every reasonable effort to obtain 
reports of the results of that procedure. However, we will not purchase 
angiography or tissue biopsy.
    3. Systemic sclerosis (scleroderma) (14.04).
    a. General. Systemic sclerosis (scleroderma) constitutes a spectrum 
of disease in which thickening of the skin is the clinical hallmark. 
Raynaud's phenomenon, often medically severe and progressive, is present 
frequently and may be the peripheral manifestation of a vasospastic 
abnormality in the heart, lungs, and kidneys. The CREST syndrome 
(calcinosis, Raynaud's phenomenon, esophageal dysmotility, 
sclerodactyly, and telangiectasia) is a variant that may slowly progress 
over years to the generalized process, systemic sclerosis.
    b. Diffuse cutaneous systemic sclerosis. In diffuse cutaneous 
systemic sclerosis (also known as diffuse scleroderma), major organ or 
systemic involvement can include the gastrointestinal tract, lungs, 
heart, kidneys, and muscle in addition to skin or blood vessels. 
Although arthritis can occur, joint dysfunction results primarily from 
soft tissue/cutaneous thickening, fibrosis, and contractures.
    c. Localized scleroderma (linear scleroderma and morphea).
    (i) Localized scleroderma (linear scleroderma and morphea) is more 
common in children than in adults. However, this type of scleroderma can 
persist into adulthood. To assess the severity of the impairment, we 
need a description of the extent of involvement of linear scleroderma 
and the location of the lesions. For example, linear scleroderma 
involving the arm but not crossing any joints is not as functionally 
limiting as sclerodactyly (scleroderma localized to the fingers). Linear 
scleroderma of a lower extremity involving skin thickening and atrophy 
of underlying muscle or bone can result in contractures and leg length 
discrepancy. In such cases, we may evaluate your impairment under the 
musculoskeletal listings (1.00).
    (ii) When there is isolated morphea of the face causing facial 
disfigurement from unilateral hypoplasia of the mandible, maxilla, 
zygoma, or orbit, adjudication may be more appropriate under the 
criteria in the affected body system, such as special senses and speech 
(2.00) or mental disorders (12.00).
    (iii) Chronic variants of these syndromes include disseminated 
morphea, Shulman's disease (diffuse fasciitis with eosinophilia), and 
eosinophilia-myalgia syndrome (often associated with toxins such as 
toxic oil or contaminated tryptophan), all of which can impose medically 
severe musculoskeletal dysfunction and may also lead to restrictive 
pulmonary disease. We evaluate these variants of the disease under the 
criteria in the musculoskeletal listings (1.00) or respiratory system 
listings (3.00).
    d. Documentation of systemic sclerosis (scleroderma). Documentation 
involves differentiating the clinical features of systemic sclerosis 
(scleroderma) from other autoimmune disorders. However, there may be an 
overlap.
    4. Polymyositis and dermatomyositis (14.05).
    a. General. Polymyositis and dermatomyositis are related disorders 
that are characterized by an inflammatory process in striated muscle, 
occurring alone or in association with other autoimmune disorders or 
malignancy. The most common manifestations are symmetric weakness, and 
less frequently, pain and tenderness of the proximal limb-girdle 
(shoulder or pelvic) musculature. There may also be involvement of the 
cervical, cricopharyngeal, esophageal, intercostal, and diaphragmatic 
muscles.
    b. Documentation of polymyositis and dermatomyositis. Generally, but 
not always, polymyositis is associated with elevated serum muscle 
enzymes (creatine phosphokinase (CPK), aminotransferases, and aldolase), 
and characteristic abnormalities on electromyography and muscle biopsy. 
In dermatomyositis there are characteristic skin findings in addition to 
the findings of polymyositis. When you have had electromyography or 
muscle biopsy for polymyositis or dermatomyositis, we will make every 
reasonable effort to obtain reports of the results of that procedure. 
However, we will not purchase electromyography or muscle biopsy.
    c. Additional information about how we evaluate polymyositis and 
dermatomyositis under the listings.

[[Page 547]]

    (i) Weakness of your pelvic girdle muscles that results in your 
inability to rise independently from a squatting or sitting position or 
to climb stairs may be an indication that you are unable to ambulate 
effectively. Weakness of your shoulder girdle muscles may result in your 
inability to perform lifting, carrying, and reaching overhead, and also 
may seriously affect your ability to perform activities requiring fine 
movements. We evaluate these limitations under 14.05A.
    (ii) We use the malignant neoplastic diseases listings (13.00) to 
evaluate malignancies associated with polymyositis or dermatomyositis. 
We evaluate the involvement of other organs/body systems under the 
criteria for the listings in the affected body system.
    5. Undifferentiated and mixed connective tissue disease (14.06).
    a. General. This listing includes syndromes with clinical and 
immunologic features of several autoimmune disorders, but which do not 
satisfy the criteria for any of the specific disorders described. For 
example, you may have clinical features of SLE and systemic vasculitis, 
and the serologic (blood test) findings of rheumatoid arthritis.
    b. Documentation of undifferentiated and mixed connective tissue 
disease. Undifferentiated connective tissue disease is diagnosed when 
clinical features and serologic (blood test) findings, such as 
rheumatoid factor or antinuclear antibody (consistent with an autoimmune 
disorder) are present but do not satisfy the criteria for a specific 
disease. Mixed connective tissue disease (MCTD) is diagnosed when 
clinical features and serologic findings of two or more autoimmune 
diseases overlap.
    6. Inflammatory arthritis (14.09).
    a. General. The spectrum of inflammatory arthritis includes a vast 
array of disorders that differ in cause, course, and outcome. 
Clinically, inflammation of major peripheral joints may be the dominant 
manifestation causing difficulties with ambulation or fine and gross 
movements; there may be joint pain, swelling, and tenderness. The 
arthritis may affect other joints, or cause less limitation in 
ambulation or the performance of fine and gross movements. However, in 
combination with extra-articular features, including constitutional 
symptoms or signs (severe fatigue, fever, malaise, involuntary weight 
loss), inflammatory arthritis may result in an extreme limitation.
    b. Inflammatory arthritis involving the axial spine 
(spondyloarthropathy). In adults, inflammatory arthritis involving the 
axial spine may be associated with disorders such as:
    (i) Reiter's syndrome;
    (ii) Ankylosing spondylitis;
    (iii) Psoriatic arthritis;
    (iv) Whipple's disease;
    (v) Behcet's disease; and
    (vi) Inflammatory bowel disease.
    c. Inflammatory arthritis involving the peripheral joints. In 
adults, inflammatory arthritis involving peripheral joints may be 
associated with disorders such as:
    (i) Rheumatoid arthritis;
    (ii) Sjogren's syndrome;
    (iii) Psoriatic arthritis;
    (iv) Crystal deposition disorders (gout and pseudogout);
    (v) Lyme disease; and
    (vi) Inflammatory bowel disease.
    d. Documentation of inflammatory arthritis. Generally, but not 
always, the diagnosis of inflammatory arthritis is based on the clinical 
features and serologic findings described in the most recent edition of 
the Primer on the Rheumatic Diseases published by the Arthritis 
Foundation.
    e. How we evaluate inflammatory arthritis under the listings.
    (i) Listing-level severity in 14.09A and 14.09C1 is shown by an 
impairment that results in an ``extreme'' (very serious) limitation. In 
14.09A, the criterion is satisfied with persistent inflammation or 
deformity in one major peripheral weight-bearing joint resulting in the 
inability to ambulate effectively (as defined in 14.00C6) or one major 
peripheral joint in each upper extremity resulting in the inability to 
perform fine and gross movements effectively (as defined in 14.00C7). In 
14.09C1, if you have the required ankylosis (fixation) of your cervical 
or dorsolumbar spine, we will find that you have an extreme limitation 
in your ability to see in front of you, above you, and to the side. 
Therefore, inability to ambulate effectively is implicit in 14.09C1, 
even though you might not require bilateral upper limb assistance.
    (ii) Listing-level severity is shown in 14.09B, 14.09C2, and 14.09D 
by inflammatory arthritis that involves various combinations of 
complications of one or more major peripheral joints or other joints, 
such as inflammation or deformity, extra-articular features, repeated 
manifestations, and constitutional symptoms or signs. Extra-articular 
impairments may also meet listings in other body systems.
    (iii) Extra-articular features of inflammatory arthritis may involve 
any body system; for example: Musculoskeletal (heel enthesopathy), 
ophthalmologic (iridocyclitis, keratoconjunctivitis sicca, uveitis), 
pulmonary (pleuritis, pulmonary fibrosis or nodules, restrictive lung 
disease), cardiovascular (aortic valve insufficiency, arrhythmias, 
coronary arteritis, myocarditis, pericarditis, Raynaud's phenomenon, 
systemic vasculitis), renal (amyloidosis of the kidney), hematologic 
(chronic anemia, thrombocytopenia), neurologic (peripheral neuropathy, 
radiculopathy, spinal cord or cauda equina compression with sensory and 
motor loss), mental (cognitive dysfunction, poor memory), and immune 
system (Felty's

[[Page 548]]

syndrome (hypersplenism with compromised immune competence)).
    (iv) If both inflammation and chronic deformities are present, we 
evaluate your impairment under the criteria of any appropriate listing.
    7. Sjogren's syndrome (14.10).
    a. General.
    (i) Sjogren's syndrome is an immune-mediated disorder of the 
exocrine glands. Involvement of the lacrimal and salivary glands is the 
hallmark feature, resulting in symptoms of dry eyes and dry mouth, and 
possible complications, such as corneal damage, blepharitis (eyelid 
inflammation), dysphagia (difficulty in swallowing), dental caries, and 
the inability to speak for extended periods of time. Involvement of the 
exocrine glands of the upper airways may result in persistent dry cough.
    (ii) Many other organ systems may be involved, including 
musculoskeletal (arthritis, myositis), respiratory (interstitial 
fibrosis), gastrointestinal (dysmotility, dysphagia, involuntary weight 
loss), genitourinary (interstitial cystitis, renal tubular acidosis), 
skin (purpura, vasculitis), neurologic (central nervous system 
disorders, cranial and peripheral neuropathies), mental (cognitive 
dysfunction, poor memory), and neoplastic (lymphoma). Severe fatigue and 
malaise are frequently reported. Sjogren's syndrome may be associated 
with other autoimmune disorders (for example, rheumatoid arthritis or 
SLE); usually the clinical features of the associated disorder 
predominate.
    b. Documentation of Sjogren's syndrome. If you have Sjogren's 
syndrome, the medical evidence will generally, but not always, show that 
your disease satisfies the criteria in the current ``Criteria for the 
Classification of Sjogren's Syndrome'' by the American College of 
Rheumatology found in the most recent edition of the Primer on the 
Rheumatic Diseases published by the Arthritis Foundation.

    E. How do we document and evaluate immune deficiency disorders, 
                        excluding HIV infection?

    1. General.
    a. Immune deficiency disorders can be classified as:
    (i) Primary (congenital); for example, X-linked agammaglobulinemia, 
thymic hypoplasia (DiGeorge syndrome), severe combined immunodeficiency 
(SCID), chronic granulomatous disease (CGD), C1 esterase inhibitor 
deficiency.
    (ii) Acquired; for example, medication-related.
    b. Primary immune deficiency disorders are seen mainly in children. 
However, recent advances in the treatment of these disorders have 
allowed many affected children to survive well into adulthood. 
Occasionally, these disorders are first diagnosed in adolescence or 
adulthood.
    2. Documentation of immune deficiency disorders. The medical 
evidence must include documentation of the specific type of immune 
deficiency. Documentation may be by laboratory evidence or by other 
generally acceptable methods consistent with the prevailing state of 
medical knowledge and clinical practice.
    3. Immune deficiency disorders treated by stem cell transplantation.
    a. Evaluation in the first 12 months. If you undergo stem cell 
transplantation for your immune deficiency disorder, we will consider 
you disabled until at least 12 months from the date of the transplant.
    b. Evaluation after the 12-month period has elapsed. After the 12-
month period has elapsed, we will consider any residuals of your immune 
deficiency disorder as well as any residual impairment(s) resulting from 
the treatment, such as complications arising from:
    (i) Graft-versus-host (GVH) disease.
    (ii) Immunosuppressant therapy, such as frequent infections.
    (iii) Significant deterioration of other organ systems.
    4. Medication-induced immune suppression. Medication effects can 
result in varying degrees of immune suppression, but most resolve when 
the medication is ceased. However, if you are prescribed medication for 
long-term immune suppression, such as after an organ transplant, we will 
evaluate:
    a. The frequency and severity of infections.
    b. Residuals from the organ transplant itself, after the 12-month 
period has elapsed.
    c. Significant deterioration of other organ systems.
    F. How do we document and evaluate HIV infection? Any individual 
with HIV infection, including one with a diagnosis of acquired immune 
deficiency syndrome (AIDS), may be found disabled under 14.11 if his or 
her impairment meets the criteria in that listing or is medically 
equivalent to the criteria in that listing.
    1. Documentation of HIV infection.
    a. Definitive documentation of HIV infection. We may document a 
diagnosis of HIV infection by positive findings on one or more of the 
following definitive laboratory tests:
    (i) HIV antibody screening test (for example, enzyme immunoassay, or 
EIA), confirmed by a supplemental HIV antibody test such as the Western 
blot (immunoblot), an immunofluorescence assay, or an HIV-1/HIV-2 
antibody differentiation immunoassay.
    (ii) HIV nucleic acid (DNA or RNA) detection test (for example, 
polymerase chain reaction, or PCR).
    (iii) HIV p24 antigen (p24Ag) test.
    (iv) Isolation of HIV in viral culture.
    (v) Other tests that are highly specific for detection of HIV and 
that are consistent with the prevailing state of medical knowledge.

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    b. We will make every reasonable effort to obtain the results of 
your laboratory testing. Pursuant to Secs. 404.1519f and 416.919f of 
this chapter, we will purchase examinations or tests necessary to make a 
determination in your claim if no other acceptable documentation exists.
    c. Other acceptable documentation of HIV infection. We may also 
document HIV infection without definitive laboratory evidence.
    (i) We will accept a persuasive report from a physician that a 
positive diagnosis of your HIV infection was confirmed by an appropriate 
laboratory test(s), such as those described in 14.00F1a. To be 
persuasive, this report must state that you had the appropriate 
definitive laboratory test(s) for diagnosing your HIV infection and 
provide the results. The report must also be consistent with the 
remaining evidence of record.
    (ii) We may also document HIV infection by the medical history, 
clinical and laboratory findings, and diagnosis(es) indicated in the 
medical evidence, provided that such documentation is consistent with 
the prevailing state of medical knowledge and clinical practice and is 
consistent with the other evidence in your case record. For example, we 
will accept a diagnosis of HIV infection without definitive laboratory 
evidence of the HIV infection if you have an opportunistic disease that 
is predictive of a defect in cell-mediated immunity (for example, 
toxoplasmosis of the brain or Pneumocystis pneumonia (PCP)), and there 
is no other known cause of diminished resistance to that disease (for 
example, long-term steroid treatment or lymphoma). In such cases, we 
will make every reasonable effort to obtain full details of the history, 
medical findings, and results of testing.
    2. Documentation of the manifestations of HIV infection.
    a. Definitive documentation of manifestations of HIV infection. We 
may document manifestations of HIV infection by positive findings on 
definitive laboratory tests, such as culture, microscopic examination of 
biopsied tissue or other material (for example, bronchial washings), 
serologic tests, or on other generally acceptable definitive tests 
consistent with the prevailing state of medical knowledge and clinical 
practice.
    b. We will make every reasonable effort to obtain the results of 
your laboratory testing. Pursuant to Secs. 404.1519f and 416.919f of 
this chapter, we will purchase examinations or tests necessary to make a 
determination of your claim if no other acceptable documentation exists.
    c. Other acceptable documentation of manifestations of HIV 
infection. We may also document manifestations of HIV infection without 
definitive laboratory evidence.
    (i) We will accept a persuasive report from a physician that a 
positive diagnosis of your manifestation of HIV infection was confirmed 
by an appropriate laboratory test(s). To be persuasive, this report must 
state that you had the appropriate definitive laboratory test(s) for 
diagnosing your manifestation of HIV infection and provide the results. 
The report must also be consistent with the remaining evidence of 
record.
    (ii) We may also document manifestations of HIV infection without 
the definitive laboratory evidence described in 14.00F2a, provided that 
such documentation is consistent with the prevailing state of medical 
knowledge and clinical practice and is consistent with the other 
evidence in your case record. For example, many conditions are now 
commonly diagnosed based on some or all of the following: Medical 
history, clinical manifestations, laboratory findings (including 
appropriate medically acceptable imaging), and treatment responses. In 
such cases, we will make every reasonable effort to obtain full details 
of the history, medical findings, and results of testing.
    3. Disorders associated with HIV infection (14.11A-E).
    a. Multicentric Castleman disease (MCD, 14.11A) affects multiple 
groups of lymph nodes and organs containing lymphoid tissue. This 
widespread involvement distinguishes MCD from localized (or unicentric) 
Castleman disease, which affects only a single set of lymph nodes. While 
not a cancer, MCD is known as a lymphoproliferative disorder. Its 
clinical presentation and progression is similar to that of lymphoma, 
and its treatment may include radiation or chemotherapy. We require 
characteristic findings on microscopic examination of the biopsied lymph 
nodes or other generally acceptable methods consistent with the 
prevailing state of medical knowledge and clinical practice to establish 
the diagnosis. Localized (or unicentric) Castleman disease does not meet 
or medically equal the criterion in 14.11A, but we may evaluate it under 
the criteria in 14.11H or 14.11I.
    b. Primary central nervous system lymphoma (PCNSL, 14.11B) 
originates in the brain, spinal cord, meninges, or eye. Imaging tests 
(for example, MRI) of the brain, while not diagnostic, may show a single 
lesion or multiple lesions in the white matter of the brain. We require 
characteristic findings on microscopic examination of the cerebral 
spinal fluid or of the biopsied brain tissue, or other generally 
acceptable methods consistent with the prevailing state of medical 
knowledge and clinical practice to establish the diagnosis.
    c. Primary effusion lymphoma (PEL, 14.11C) is also known as body 
cavity lymphoma. We require characteristic findings on microscopic 
examination of the effusion fluid or of the biopsied tissue from the 
affected internal organ, or other generally acceptable methods

[[Page 550]]

consistent with the prevailing state of medical knowledge and clinical 
practice to establish the diagnosis.
    d. Progressive multifocal leukoencephalopathy (PML, 14.11D) is a 
progressive neurological degenerative syndrome caused by the John 
Cunningham (JC) virus in immunosuppressed individuals. Clinical findings 
of PML include clumsiness, progressive weakness, and visual and speech 
changes. Personality and cognitive changes may also occur. We require 
appropriate clinical findings, characteristic white matter lesions on 
MRI, and a positive PCR test for the JC virus in the cerebrospinal fluid 
to establish the diagnosis. We also accept a positive brain biopsy for 
JC virus or other generally acceptable methods consistent with the 
prevailing state of medical knowledge and clinical practice to establish 
the diagnosis.
    e. Pulmonary Kaposi sarcoma (Kaposi sarcoma in the lung, 14.11E) is 
the most serious form of Kaposi sarcoma (KS). Other internal KS tumors 
(for example, tumors of the gastrointestinal tract) have a more variable 
prognosis. We require characteristic findings on microscopic examination 
of the induced sputum, bronchoalveolar lavage washings, or of the 
biopsied transbronchial tissue, or by other generally acceptable methods 
consistent with the prevailing state of medical knowledge and clinical 
practice to establish the diagnosis.
    4. CD4 measurement (14.11F). To evaluate your HIV infection under 
14.11F, we require one measurement of your absolute CD4 count (also 
known as CD4 count or CD4+ T-helper lymphocyte count). This measurement 
must occur within the period we are considering in connection with your 
application or continuing disability review. If you have more than one 
measurement of your absolute CD4 count within this period, we will use 
your lowest absolute CD4 count.
    5. Measurement of CD4 and either body mass index or hemoglobin 
(14.11G). To evaluate your HIV infection under 14.11G, we require one 
measurement of your absolute CD4 count or your CD4 percentage, and 
either a measurement of your body mass index (BMI) or your hemoglobin. 
These measurements must occur within the period we are considering in 
connection with your application or continuing disability review. If you 
have more than one measurement of your CD4 (absolute count or 
percentage), BMI, or hemoglobin within this period, we will use the 
lowest of your CD4 (absolute count or percentage), BMI, or hemoglobin. 
The date of your lowest CD4 (absolute count or percentage) measurement 
may be different from the date of your lowest BMI or hemoglobin 
measurement. We calculate your BMI using the formulas in 5.00G2.
    6. Complications of HIV infection requiring hospitalization 
(14.11H).
    a. Complications of HIV infection may include infections (common or 
opportunistic), cancers, and other conditions. Examples of complications 
that may result in hospitalization include: Depression; diarrhea; immune 
reconstitution inflammatory syndrome; malnutrition; and PCP and other 
severe infections.
    b. Under 14.11H, we require three hospitalizations within a 12-month 
period that are at least 30 days apart and that result from a 
complication(s) of HIV infection. The hospitalizations may be for the 
same complication or different complications of HIV infection and are 
not limited to the examples of complications that may result in 
hospitalization listed in 14.00F6a. All three hospitalizations must 
occur within the period we are considering in connection with your 
application or continuing disability review. Each hospitalization must 
last at least 48 hours, including hours in a hospital emergency 
department immediately before the hospitalization.
    c. We will use the rules on medical equivalence in Secs. 404.1526 
and 416.926 of this chapter to evaluate your HIV infection if you have 
fewer, but longer, hospitalizations, or more frequent, but shorter, 
hospitalizations, or if you receive nursing, rehabilitation, or other 
care in alternative settings.
    7. HIV infection manifestations specific to women.
    a. General. Most women with severe immunosuppression secondary to 
HIV infection exhibit the typical opportunistic infections and other 
conditions, such as PCP, Candida esophagitis, wasting syndrome, 
cryptococcosis, and toxoplasmosis. However, HIV infection may have 
different manifestations in women than in men. Adjudicators must 
carefully scrutinize the medical evidence and be alert to the variety of 
medical conditions specific to, or common in, women with HIV infection 
that may affect their ability to function in the workplace.
    b. Additional considerations for evaluating HIV infection in women. 
Many of these manifestations (for example, vulvovaginal candidiasis or 
pelvic inflammatory disease) occur in women with or without HIV 
infection, but can be more severe or resistant to treatment, or occur 
more frequently in a woman whose immune system is suppressed. Therefore, 
when evaluating the claim of a woman with HIV infection, it is important 
to consider gynecologic and other problems specific to women, including 
any associated symptoms (for example, pelvic pain), in assessing the 
severity of the impairment and resulting functional limitations. We may 
evaluate manifestations of HIV infection in women under 14.11H-I, or 
under the criteria for the appropriate body system (for example, 
cervical cancer under 13.23).

[[Page 551]]

    8. HIV-associated dementia (HAD). HAD is an advanced neurocognitive 
disorder, characterized by a significant decline in cognitive 
functioning. We evaluate HAD under 14.11I. Other names associated with 
neurocognitive disorders due to HIV infection include: AIDS dementia 
complex, HIV dementia, HIV encephalopathy, and major neurocognitive 
disorder due to HIV infection.

   G. How do we consider the effects of treatment in evaluating your 
   autoimmune disorder, immune deficiency disorder, or HIV infection?

    1. General. If your impairment does not otherwise meet the 
requirements of a listing, we will consider your medical treatment in 
terms of its effectiveness in improving the signs, symptoms, and 
laboratory abnormalities of your specific immune system disorder or its 
manifestations, and in terms of any side effects that limit your 
functioning. We will make every reasonable effort to obtain a specific 
description of the treatment you receive (including surgery) for your 
immune system disorder. We consider:
    a. The effects of medications you take.
    b. Adverse side effects (acute and chronic).
    c. The intrusiveness and complexity of your treatment (for example, 
the dosing schedule, need for injections).
    d. The effect of treatment on your mental functioning (for example, 
cognitive changes, mood disturbance).
    e. Variability of your response to treatment (see 14.00G2).
    f. The interactive and cumulative effects of your treatments. For 
example, many individuals with immune system disorders receive treatment 
both for their immune system disorders and for the manifestations of the 
disorders or co-occurring impairments, such as treatment for HIV 
infection and hepatitis C. The interactive and cumulative effects of 
these treatments may be greater than the effects of each treatment 
considered separately.
    g. The duration of your treatment.
    h. Any other aspects of treatment that may interfere with your 
ability to function.
    2. Variability of your response to treatment. Your response to 
treatment and the adverse or beneficial consequences of your treatment 
may vary widely. The effects of your treatment may be temporary or long 
term. For example, some individuals may show an initial positive 
response to a drug or combination of drugs followed by a decrease in 
effectiveness. When we evaluate your response to treatment and how your 
treatment may affect you, we consider such factors as disease activity 
before treatment, requirements for changes in therapeutic regimens, the 
time required for therapeutic effectiveness of a particular drug or 
drugs, the limited number of drug combinations that may be available for 
your impairment(s), and the time-limited efficacy of some drugs. For 
example, an individual with HIV infection or another immune deficiency 
disorder who develops pneumonia or tuberculosis may not respond to the 
same antibiotic regimen used in treating individuals without HIV 
infection or another immune deficiency disorder, or may not respond to 
an antibiotic that he or she responded to before. Therefore, we must 
consider the effects of your treatment on an individual basis, including 
the effects of your treatment on your ability to function.
    3. How we evaluate the effects of treatment for autoimmune disorders 
on your ability to function. Some medications may have acute or long-
term side effects. When we consider the effects of corticosteroids or 
other treatments for autoimmune disorders on your ability to function, 
we consider the factors in 14.00G1 and 14.00G2. Long-term corticosteroid 
treatment can cause ischemic necrosis of bone, posterior subcapsular 
cataract, weight gain, glucose intolerance, increased susceptibility to 
infection, and osteoporosis that may result in a loss of function. In 
addition, medications used in the treatment of autoimmune disorders may 
also have effects on mental functioning, including cognition (for 
example, memory), concentration, and mood.
    4. How we evaluate the effects of treatment for immune deficiency 
disorders, excluding HIV infection, on your ability to function. When we 
consider the effects of your treatment for your immune deficiency 
disorder on your ability to function, we consider the factors in 14.00G1 
and 14.00G2. A frequent need for treatment such as intravenous 
immunoglobulin and gamma interferon therapy can be intrusive and 
interfere with your ability to work. We will also consider whether you 
have chronic side effects from these or other medications, including 
severe fatigue, fever, headaches, high blood pressure, joint swelling, 
muscle aches, nausea, shortness of breath, or limitations in mental 
function including cognition (for example, memory), concentration, and 
mood.
    5. How we evaluate the effects of treatment for HIV infection on 
your ability to function.
    a. General. When we consider the effects of antiretroviral drugs 
(including the effects of highly active antiretroviral therapy (HAART)) 
and the effects of treatments for the manifestations of HIV infection on 
your ability to function, we consider the factors in 14.00G1 and 
14.00G2. Side effects of antiretroviral drugs include, but are not 
limited to: Bone marrow suppression, pancreatitis, gastrointestinal 
intolerance (nausea, vomiting, diarrhea), neuropathy, rash, 
hepatotoxicity, lipodystrophy (fat redistribution, such as ``buffalo 
hump''), glucose intolerance, and lactic acidosis. In addition, 
medications used in the treatment of HIV infection may also have effects 
on mental functioning, including cognition (for example, memory), 
concentration, and mood, and

[[Page 552]]

may result in malaise, severe fatigue, joint and muscle pain, and 
insomnia. The symptoms of HIV infection and the side effects of 
medication may be indistinguishable from each other. We will consider 
all of your functional limitations, whether they result from your 
symptoms or signs of HIV infection or the side effects of your 
treatment.
    b. Structured treatment interruptions. A structured treatment 
interruption (STI, also called a ``drug holiday'') is a treatment 
practice during which your treating source advises you to stop taking 
your medications temporarily. An STI in itself does not imply that your 
medical condition has improved; nor does it imply that you are 
noncompliant with your treatment because you are following your treating 
source's advice. Therefore, if you have stopped taking medication 
because your treating source prescribed or recommended an STI, we will 
not find that you are failing to follow treatment or draw inferences 
about the severity of your impairment on this fact alone. We will 
consider why your treating source has prescribed or recommended an STI 
and all the other information in your case record when we determine the 
severity of your impairment.
    6. When there is no record of ongoing treatment. If you have not 
received ongoing treatment or have not had an ongoing relationship with 
the medical community despite the existence of a severe impairment(s), 
we will evaluate the medical severity and duration of your immune system 
disorder on the basis of the current objective medical evidence and 
other evidence in your case record, taking into consideration your 
medical history, symptoms, clinical and laboratory findings, and medical 
source opinions. If you have just begun treatment and we cannot 
determine whether you are disabled based on the evidence we have, we may 
need to wait to determine the effect of the treatment on your ability to 
function. The amount of time we need to wait will depend on the facts of 
your case. If you have not received treatment, you may not be able to 
show an impairment that meets the criteria of one of the immune system 
disorders listings, but your immune system disorder may medically equal 
a listing or be disabling based on a consideration of your residual 
functional capacity, age, education, and work experience.

    H. How do we consider your symptoms, including your pain, severe 
                          fatigue, and malaise?

    Your symptoms, including pain, severe fatigue, and malaise, may be 
important factors in our determination whether your immune system 
disorder(s) meets or medically equals a listing or in our determination 
whether you are otherwise able to work. In order for us to consider your 
symptoms, you must have medical signs or laboratory findings showing the 
existence of a medically determinable impairment(s) that could 
reasonably be expected to produce the symptoms. If you have such an 
impairment(s), we will evaluate the intensity, persistence, and 
functional effects of your symptoms using the rules throughout 14.00 and 
in our other regulations. See Secs. 404.1521, 404.1529, 416.921, and 
416.929. Additionally, when we assess the credibility of your complaints 
about your symptoms and their functional effects, we will not draw any 
inferences from the fact that you do not receive treatment or that you 
are not following treatment without considering all of the relevant 
evidence in your case record, including any explanations you provide 
that may explain why you are not receiving or following treatment.
    I. How do we use the functional criteria in these listings?
    1. The following listings in this body system include standards for 
evaluating the functional limitations resulting from immune system 
disorders: 14.02B, for systemic lupus erythematosus; 14.03B, for 
systemic vasculitis; 14.04D, for systemic sclerosis (scleroderma); 
14.05E, for polymyositis and dermatomyositis; 14.06B, for 
undifferentiated and mixed connective tissue disease; 14.07C, for immune 
deficiency disorders, excluding HIV infection; 14.09D, for inflammatory 
arthritis; 14.10B, for Sjogren's syndrome; and 14.11I, for HIV 
infection.
    2. When we use one of the listings cited in 14.00I1, we will 
consider all relevant information in your case record to determine the 
full impact of your immune system disorder on your ability to function 
on a sustained basis. Important factors we will consider when we 
evaluate your functioning under these listings include, but are not 
limited to: Your symptoms, the frequency and duration of manifestations 
of your immune system disorder, periods of exacerbation and remission, 
and the functional impact of your treatment, including the side effects 
of your medication.
    3. As used in these listings, ``repeated'' means that the 
manifestations occur on an average of three times a year, or once every 
4 months, each lasting 2 weeks or more; or the manifestations do not 
last for 2 weeks but occur substantially more frequently than three 
times in a year or once every 4 months; or they occur less frequently 
than an average of three times a year or once every 4 months but last 
substantially longer than 2 weeks. Your impairment will satisfy this 
criterion regardless of whether you have the same kind of manifestation 
repeatedly, all different manifestations, or any other combination of 
manifestations; for example, two of the same kind of manifestation and a 
different one. You must have the required number of manifestations with 
the frequency and duration required in this section. Also, the 
manifestations must occur within the period covered by your claim.

[[Page 553]]

    4. To satisfy the functional criterion in a listing, your immune 
system disorder must result in a ``marked'' level of limitation in one 
of three general areas of functioning: Activities of daily living, 
social functioning, or difficulties in completing tasks due to 
deficiencies in concentration, persistence, or pace. Functional 
limitation may result from the impact of the disease process itself on 
your mental functioning, physical functioning, or both your mental and 
physical functioning. This could result from persistent or intermittent 
symptoms, such as depression, severe fatigue, or pain, resulting in a 
limitation of your ability to do a task, to concentrate, to persevere at 
a task, or to perform the task at an acceptable rate of speed. You may 
also have limitations because of your treatment and its side effects 
(see 14.00G).
    5. Marked limitation means that the signs and symptoms of your 
immune system disorder interfere seriously with your ability to 
function. Although we do not require the use of such a scale, ``marked'' 
would be the fourth point on a five-point scale consisting of no 
limitation, mild limitation, moderate limitation, marked limitation, and 
extreme limitation. You may have a marked limitation when several 
activities or functions are impaired, or even when only one is impaired. 
Also, you need not be totally precluded from performing an activity to 
have a marked limitation, as long as the degree of limitation seriously 
interferes with your ability to function independently, appropriately, 
and effectively. The term ``marked'' does not imply that you must be 
confined to bed, hospitalized, or in a nursing home.
    6. Activities of daily living include, but are not limited to, such 
activities as doing household chores, grooming and hygiene, using a post 
office, taking public transportation, or paying bills. We will find that 
you have a ``marked'' limitation of activities of daily living if you 
have a serious limitation in your ability to maintain a household or 
take public transportation because of symptoms, such as pain, severe 
fatigue, anxiety, or difficulty concentrating, caused by your immune 
system disorder (including manifestations of the disorder) or its 
treatment, even if you are able to perform some self-care activities.
    7. Social functioning includes the capacity to interact 
independently, appropriately, effectively, and on a sustained basis with 
others. It includes the ability to communicate effectively with others. 
We will find that you have a ``marked'' limitation in maintaining social 
functioning if you have a serious limitation in social interaction on a 
sustained basis because of symptoms, such as pain, severe fatigue, 
anxiety, or difficulty concentrating, or a pattern of exacerbation and 
remission, caused by your immune system disorder (including 
manifestations of the disorder) or its treatment, even if you are able 
to communicate with close friends or relatives.
    8. Completing tasks in a timely manner involves the ability to 
sustain concentration, persistence, or pace to permit timely completion 
of tasks commonly found in work settings. We will find that you have a 
``marked'' limitation in completing tasks if you have a serious 
limitation in your ability to sustain concentration or pace adequate to 
complete work-related tasks because of symptoms, such as pain, severe 
fatigue, anxiety, or difficulty concentrating, caused by your immune 
system disorder (including manifestations of the disorder) or its 
treatment, even if you are able to do some routine activities of daily 
living.

J. How do we evaluate your immune system disorder when it does not meet 
                         one of these listings?

    1. These listings are only examples of immune system disorders that 
we consider severe enough to prevent you from doing any gainful 
activity. If your impairment(s) does not meet the criteria of any of 
these listings, we must also consider whether you have an impairment(s) 
that satisfies the criteria of a listing in another body system.
    2. Individuals with immune system disorders, including HIV 
infection, may manifest signs or symptoms of a mental impairment or of 
another physical impairment. For example, HIV infection may accelerate 
the onset of conditions such as diabetes or affect the course of or 
treatment options for diseases such as cardiovascular disease or 
hepatitis. We may evaluate these impairments under the affected body 
system.
    3. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See Secs. 404.1526 and 416.926.) If it does 
not, you may or may not have the residual functional capacity to engage 
in substantial gainful activity. Therefore, we proceed to the fourth, 
and if necessary, the fifth steps of the sequential evaluation process 
in Secs. 404.1520 and 416.920. We use the rules in Secs. 404.1594, 
416.994, and 416.994a as appropriate, when we decide whether you 
continue to be disabled.
    14.01  Category of Impairments, Immune System Disorders.
    14.02  Systemic lupus erythematosus. As described in 14.00D1. With:
    A. Involvement of two or more organs/body systems, with:
    1. One of the organs/body systems involved to at least a moderate 
level of severity; and
    2. At least two of the constitutional symptoms or signs (severe 
fatigue, fever, malaise, or involuntary weight loss).

or


[[Page 554]]


    B. Repeated manifestations of SLE, with at least two of the 
constitutional symptoms or signs (severe fatigue, fever, malaise, or 
involuntary weight loss) and one of the following at the marked level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social functioning.
    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.
    14.03  Systemic vasculitis. As described in 14.00D2. With:
    A. Involvement of two or more organs/body systems, with:
    1. One of the organs/body systems involved to at least a moderate 
level of severity; and
    2. At least two of the constitutional symptoms or signs (severe 
fatigue, fever, malaise, or involuntary weight loss).

or

    B. Repeated manifestations of systemic vasculitis, with at least two 
of the constitutional symptoms or signs (severe fatigue, fever, malaise, 
or involuntary weight loss) and one of the following at the marked 
level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social functioning.
    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.
    14.04  Systemic sclerosis (scleroderma). As described in 14.00D3. 
With:
    A. Involvement of two or more organs/body systems, with:
    1. One of the organs/body systems involved to at least a moderate 
level of severity; and
    2. At least two of the constitutional symptoms or signs (severe 
fatigue, fever, malaise, or involuntary weight loss).

or

    B. With one of the following:
    1. Toe contractures or fixed deformity of one or both feet, 
resulting in the inability to ambulate effectively as defined in 
14.00C6; or
    2. Finger contractures or fixed deformity in both hands, resulting 
in the inability to perform fine and gross movements effectively as 
defined in 14.00C7; or
    3. Atrophy with irreversible damage in one or both lower 
extremities, resulting in the inability to ambulate effectively as 
defined in 14.00C6; or
    4. Atrophy with irreversible damage in both upper extremities, 
resulting in the inability to perform fine and gross movements 
effectively as defined in 14.00C7.

or

    C. Raynaud's phenomenon, characterized by:
    1. Gangrene involving at least two extremities; or
    2. Ischemia with ulcerations of toes or fingers, resulting in the 
inability to ambulate effectively or to perform fine and gross movements 
effectively as defined in 14.00C6 and 14.00C7;

or

    D. Repeated manifestations of systemic sclerosis (scleroderma), with 
at least two of the constitutional symptoms or signs (severe fatigue, 
fever, malaise, or involuntary weight loss) and one of the following at 
the marked level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social functioning.
    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.
    14.05  Polymyositis and dermatomyositis. As described in 14.00D4. 
With:
    A. Proximal limb-girdle (pelvic or shoulder) muscle weakness, 
resulting in inability to ambulate effectively or inability to perform 
fine and gross movements effectively as defined in 14.00C6 and 14.00C7.

or

    B. Impaired swallowing (dysphagia) with aspiration due to muscle 
weakness.

or

    C. Impaired respiration due to intercostal and diaphragmatic muscle 
weakness.

or

    D. Diffuse calcinosis with limitation of joint mobility or 
intestinal motility.

or

    E. Repeated manifestations of polymyositis or dermatomyositis, with 
at least two of the constitutional symptoms or signs (severe fatigue, 
fever, malaise, or involuntary weight loss) and one of the following at 
the marked level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social functioning.
    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.
    14.06  Undifferentiated and mixed connective tissue disease. As 
described in 14.00D5. With:
    A. Involvement of two or more organs/body systems, with:
    1. One of the organs/body systems involved to at least a moderate 
level of severity; and
    2. At least two of the constitutional symptoms or signs (severe 
fatigue, fever, malaise, or involuntary weight loss).

or

    B. Repeated manifestations of undifferentiated or mixed connective 
tissue disease, with at least two of the constitutional symptoms or 
signs (severe fatigue, fever, malaise, or involuntary weight loss) and 
one of the following at the marked level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social functioning.

[[Page 555]]

    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.
    14.07  Immune deficiency disorders, excluding HIV infection. As 
described in 14.00E. With:
    A. One or more of the following infections. The infection(s) must 
either be resistant to treatment or require hospitalization or 
intravenous treatment three or more times in a 12-month period.
    1. Sepsis; or
    2. Meningitis; or
    3. Pneumonia; or
    4. Septic arthritis; or
    5. Endocarditis; or
    6. Sinusitis documented by appropriate medically acceptable imaging.

or

    B. Stem cell transplantation as described under 14.00E3. Consider 
under a disability until at least 12 months from the date of 
transplantation. Thereafter, evaluate any residual impairment(s) under 
the criteria for the affected body system.

or

    C. Repeated manifestations of an immune deficiency disorder, with at 
least two of the constitutional symptoms or signs (severe fatigue, 
fever, malaise, or involuntary weight loss) and one of the following at 
the marked level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social function.
    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.
    14.08  [Reserved]
    14.09  Inflammatory arthritis. As described in 14.00D6. With:
    A. Persistent inflammation or persistent deformity of:
    1. One or more major peripheral weight-bearing joints resulting in 
the inability to ambulate effectively (as defined in 14.00C6); or
    2. One or more major peripheral joints in each upper extremity 
resulting in the inability to perform fine and gross movements 
effectively (as defined in 14.00C7).

or

    B. Inflammation or deformity in one or more major peripheral joints 
with:
    1. Involvement of two or more organs/body systems with one of the 
organs/body systems involved to at least a moderate level of severity; 
and
    2. At least two of the constitutional symptoms or signs (severe 
fatigue, fever, malaise, or involuntary weight loss).

or

    C. Ankylosing spondylitis or other spondyloarthropathies, with:
    1. Ankylosis (fixation) of the dorsolumbar or cervical spine as 
shown by appropriate medically acceptable imaging and measured on 
physical examination at 45 or more of flexion from the vertical 
position (zero degrees); or
    2. Ankylosis (fixation) of the dorsolumbar or cervical spine as 
shown by appropriate medically acceptable imaging and measured on 
physical examination at 30 or more of flexion (but less than 45) 
measured from the vertical position (zero degrees), and involvement of 
two or more organs/body systems with one of the organs/body systems 
involved to at least a moderate level of severity.

or

    D. Repeated manifestations of inflammatory arthritis, with at least 
two of the constitutional symptoms or signs (severe fatigue, fever, 
malaise, or involuntary weight loss) and one of the following at the 
marked level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social functioning.
    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.
    14.10  Sjogren's syndrome. As described in 14.00D7. With:
    A. Involvement of two or more organs/body systems, with:
    1. One of the organs/body systems involved to at least a moderate 
level of severity; and
    2. At least two of the constitutional symptoms or signs (severe 
fatigue, fever, malaise, or involuntary weight loss).

or

    B. Repeated manifestations of Sjogren's syndrome, with at least two 
of the constitutional symptoms or signs (severe fatigue, fever, malaise, 
or involuntary weight loss) and one of the following at the marked 
level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social functioning.
    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.
    14.11  Human immunodeficiency virus (HIV) infection. With 
documentation as described in 14.00F1 and one of the following:
    A. Multicentric (not localized or unicentric) Castleman disease 
affecting multiple groups of lymph nodes or organs containing lymphoid 
tissue (see 14.00F3a).

OR

    B. Primary central nervous system lymphoma (see 14.00F3b).

OR

    C. Primary effusion lymphoma (see 14.00F3c).

OR

    D. Progressive multifocal leukoencephalopathy (see 14.00F3d).

OR


[[Page 556]]


    E. Pulmonary Kaposi sarcoma (see 14.00F3e).

OR

    F. Absolute CD4 count of 50 cells/mm\3\ or less (see 14.00F4).

OR

    G. Absolute CD4 count of less than 200 cells/mm\3\ or CD4 percentage 
of less than 14 percent, and one of the following (values do not have to 
be measured on the same date) (see 14.00F5):
    1. BMI measurement of less than 18.5; or
    2. Hemoglobin measurement of less than 8.0 grams per deciliter (g/
dL).

OR

    H. Complication(s) of HIV infection requiring at least three 
hospitalizations within a 12-month period and at least 30 days apart 
(see 14.00F6). Each hospitalization must last at least 48 hours, 
including hours in a hospital emergency department immediately before 
the hospitalization.

OR

    I. Repeated (as defined in 14.00I3) manifestations of HIV infection, 
including those listed in 14.11A-H, but without the requisite findings 
for those listings (for example, Kaposi sarcoma not meeting the criteria 
in 14.11E), or other manifestations (including, but not limited to, 
cardiovascular disease (including myocarditis, pericardial effusion, 
pericarditis, endocarditis, or pulmonary arteritis), diarrhea, distal 
sensory polyneuropathy, glucose intolerance, gynecologic conditions 
(including cervical cancer or pelvic inflammatory disease, see 14.00F7), 
hepatitis, HIV-associated dementia, immune reconstitution inflammatory 
syndrome (IRIS), infections (bacterial, fungal, parasitic, or viral), 
lipodystrophy (lipoatrophy or lipohypertrophy), malnutrition, muscle 
weakness, myositis, neurocognitive or other mental limitations not 
meeting the criteria in 12.00, oral hairy leukoplakia, osteoporosis, 
pancreatitis, peripheral neuropathy) resulting in significant, 
documented symptoms or signs (for example, but not limited to, fever, 
headaches, insomnia, involuntary weight loss, malaise, nausea, night 
sweats, pain, severe fatigue, or vomiting) and one of the following at 
the marked level:
    1. Limitation of activities of daily living.
    2. Limitation in maintaining social functioning.
    3. Limitation in completing tasks in a timely manner due to 
deficiencies in concentration, persistence, or pace.

                                 Part B

    Medical criteria for the evaluation of impairments of children under 
age 18 (where criteria in part A do not give appropriate consideration 
to the particular disease process in childhood).
Sec.
100.00 Low Birth Weight and Failure to Thrive.
101.00 Musculoskeletal System.
102.00 Special Senses and Speech.
103.00 Respiratory Disorders.
104.00 Cardiovascular System.
105.00 Digestive System.
106.00 Genitourinary Disorders.
107.00 Hematological Disorders.
108.00 Skin Disorders
109.00 Endocrine Disorders.
110.00 Congenital Disorders That Affect Multiple Body Systems.
111.00 Neurological Disorders.
112.00 Mental Disorders.
113.00 Cancer (Malignant Neoplastic Diseases)
114.00 Immune System Disorders.

             100.00  Low Birth Weight and Failure to Thrive

    A. What conditions do we evaluate under these listings? We evaluate 
low birth weight (LBW) in infants from birth to attainment of age 1 and 
failure to thrive (FTT) in infants and toddlers from birth to attainment 
of age 3.
    B. How do we evaluate disability based on LBW under 100.04? In 
100.04A and 100.04B, we use an infant's birth weight as documented by an 
original or certified copy of the infant's birth certificate or by a 
medical record signed by a physician. Birth weight means the first 
weight recorded after birth. In 100.04B, gestational age is the infant's 
age based on the date of conception as recorded in the medical record. 
If the infant's impairment meets the requirements for listing 100.04A or 
100.04B, we will follow the rule in Sec. 416.990(b)(11) of this chapter.
    C. How do we evaluate disability based on FTT under 100.05?
    1. General. We establish FTT with or without a known cause when we 
have documentation of an infant's or a toddler's growth failure and 
developmental delay from an acceptable medical source(s) as defined in 
Sec. 416.913(a) of this chapter. We require documentation of growth 
measurements in 100.05A and developmental delay described in 100.05B or 
100.05C within the same consecutive 12-month period. The dates of 
developmental testing and reports may be different from the dates of 
growth measurements. After the attainment of age 3, we evaluate growth 
failure under the affected body system(s).
    2. Growth failure. Under 100.05A, we use the appropriate table(s) 
under 105.08B in the digestive system to determine whether a child's 
growth is less than the third percentile. The child does not need to 
have a digestive disorder for purposes of 100.05.

[[Page 557]]

    a. For children from birth to attainment of age 2, we use the 
weight-for-length table corresponding to the child's gender (Table I or 
Table II).
    b. For children age 2 to attainment of age 3, we use the body mass 
index (BMI)-for-age table corresponding to the child's gender (Table III 
or Table IV).
    c. BMI is the ratio of a child's weight to the square of his or her 
height. We calculate BMI using the formulas in 105.00G2c.
    d. Growth measurements. The weight-for-length measurements for 
children from birth to the attainment of age 2 and BMI-for-age 
measurements for children age 2 to attainment of age 3 that are required 
for this listing must be obtained within a 12-month period and at least 
60 days apart. If a child attains age 2 during the evaluation period, 
additional measurements are not needed. Any measurements taken before 
the child attains age 2 can be used to evaluate the impairment under the 
appropriate listing for the child's age. If the child attains age 3 
during the evaluation period, the measurements can be used to evaluate 
the impairment in the affected body system.
    3. Developmental delay.
    a. Under 100.05B and C, we use reports from acceptable medical 
sources to establish delay in a child's development.
    b. Under 100.05B, we document the severity of developmental delay 
with results from a standardized developmental assessment, which 
compares a child's level of development to the level typically expected 
for his or her chronological age. If the child was born prematurely, we 
may use the corrected chronological age (CCA) for comparison. (See 
Sec. 416.924b(b) of this chapter.) CCA is the chronological age adjusted 
by a period of gestational prematurity. CCA = (chronological age)--
(number of weeks premature). Acceptable medical sources or early 
intervention specialists, physical or occupational therapists, and other 
sources may conduct standardized developmental assessments and 
developmental screenings. The results of these tests and screenings must 
be accompanied by a statement or records from an acceptable medical 
source who established the child has a developmental delay.
    c. Under 100.05C, when there are no results from a standardized 
developmental assessment in the case record, we need narrative 
developmental reports from the child's medical sources in sufficient 
detail to assess the severity of his or her developmental delay. A 
narrative developmental report is based on clinical observations, 
progress notes, and well-baby check-ups. To meet the requirements for 
100.05C, the report must include: The child's developmental history; 
examination findings (with abnormal findings noted on repeated 
examinations); and an overall assessment of the child's development 
(that is, more than one or two isolated skills) by the medical source. 
Some narrative developmental reports may include results from 
developmental screening tests, which can identify a child who is not 
developing or achieving skills within expected timeframes. Although 
medical sources may refer to screening test results as supporting 
evidence in the narrative developmental report, screening test results 
alone cannot establish a diagnosis or the severity of developmental 
delay.
    D. How do we evaluate disorders that do not meet one of these 
listings?
    1. We may find infants disabled due to other disorders when their 
birth weights are greater than 1200 grams but less than 2000 grams and 
their weight and gestational age do not meet listing 100.04. The most 
common disorders of prematurity and LBW include retinopathy of 
prematurity (ROP), chronic lung disease of infancy (CLD, previously 
known as bronchopulmonary dysplasia, or BPD), intraventricular 
hemorrhage (IVH), necrotizing enterocolitis (NEC), and periventricular 
leukomalacia (PVL). Other disorders include poor nutrition and growth 
failure, hearing disorders, seizure disorders, cerebral palsy, and 
developmental disorders. We evaluate these disorders under the affected 
body systems.
    2. We may evaluate infants and toddlers with growth failure that is 
associated with a known medical disorder under the body system of that 
medical disorder, for example, the respiratory or digestive body 
systems.
    3. If an infant or toddler has a severe medically determinable 
impairment(s) that does not meet the criteria of any listing, we must 
also consider whether the child has an impairment(s) that medically 
equals a listing (see Sec. 416.926 of this chapter). If the child's 
impairment(s) does not meet or medically equal a listing, we will 
determine whether the child's impairment(s) functionally equals the 
listings (see Sec. 416.926a of this chapter) considering the factors in 
Sec. 416.924a of this chapter. We use the rule in Sec. 416.994a of this 
chapter when we decide whether a child continues to be disabled.
    100.01  Category of Impairments, Low Birth Weight and Failure to 
Thrive
    100.04  Low birth weight in infants from birth to attainment of age 
1.
    A. Birth weight (see 100.00B) of less than 1200 grams.

OR

    B. The following gestational age and birth weight:

------------------------------------------------------------------------
     Gestational age (in weeks)                  Birth weight
------------------------------------------------------------------------
37-40...............................  2000 grams or less.
36..................................  1875 grams or less.
35..................................  1700 grams or less.
34..................................  1500 grams or less.
33..................................  1325 grams or less.
32..................................  1250 grams or less.
------------------------------------------------------------------------


[[Page 558]]

    100.05  Failure to thrive in children from birth to attainment of 
age 3 (see 100.00C), documented by A and B, or A and C.
    A. Growth failure as required in 1 or 2:
    1. For children from birth to attainment of age 2, three weight-for-
length measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate weight-for-
length table in listing 105.08B1; or
    2. For children age 2 to attainment of age 3, three BMI-for-age 
measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate BMI-for-age 
table in listing 105.08B2.

AND

    B. Developmental delay (see 100.00C1 and C3), established by an 
acceptable medical source and documented by findings from one current 
report of a standardized developmental assessment (see 100.00C3b) that:
    1. Shows development not more than two-thirds of the level typically 
expected for the child's age; or
    2. Results in a valid score that is at least two standard deviations 
below the mean.

OR

    C. Developmental delay (see 100.00C3), established by an acceptable 
medical source and documented by findings from two narrative 
developmental reports (see 100.00C3c) that:
    1. Are dated at least 120 days apart (see 100.00C1); and
    2. Indicate current development not more than two-thirds of the 
level typically expected for the child's age.

                     101.00  Musculoskeletal System

    A. Disorders of the musculoskeletal system may result from 
hereditary, congenital, or acquired pathologic processes. Impairments 
may result from infectious, inflammatory, or degenerative processes, 
traumatic or developmental events, or neoplastic, vascular, or toxic/
metabolic diseases.

                           B. Loss of Function

    1. General. Under this section, loss of function may be due to bone 
or joint deformity or destruction from any cause; miscellaneous 
disorders of the spine with or without radiculopathy or other 
neurological deficits; amputation; or fractures or soft tissue injuries, 
including burns, requiring prolonged periods of immobility or 
convalescence. The provisions of 101.02 and 101.03 notwithstanding, 
inflammatory arthritis is evaluated under 114.09 (see 114.00D6). We 
evaluate impairments with neurological causes under 111.00, as 
appropriate.

           2. How We Define Loss of Function in These Listings

    a. General. Regardless of the cause(s) of a musculoskeletal 
impairment, functional loss for purposes of these listings is defined as 
the inability to ambulate effectively on a sustained basis for any 
reason, including pain associated with the underlying musculoskeletal 
impairment, or the inability to perform fine and gross movements 
effectively on a sustained basis for any reason, including pain 
associated with the underlying musculoskeletal impairment. The inability 
to ambulate effectively or the inability to perform fine and gross 
movements effectively must have lasted, or be expected to last, for at 
least 12 months. For the purposes of these criteria, consideration of 
the ability to perform these activities must be from a physical 
standpoint alone. When there is an inability to perform these activities 
due to a mental impairment, the criteria in 112.00ff are to be used. We 
will determine whether a child can ambulate effectively or can perform 
fine and gross movements effectively based on the medical and other 
evidence in the case record, generally without developing additional 
evidence about the child's ability to perform the specific activities 
listed as examples in 101.00B2b(2) and (3) and 101.00B2c(2) and (3).

          b. What We Mean by Inability To Ambulate Effectively

    (1) Definition. Inability to ambulate effectively means an extreme 
limitation of the ability to walk; i.e., an impairment that interferes 
very seriously with the child's ability to independently initiate, 
sustain, or complete activities. Ineffective ambulation is defined 
generally as having insufficient lower extremity functioning (see 
101.00J) to permit independent ambulation without the use of a hand-held 
assistive device(s) that limits the functioning of both upper 
extremities. (Listing 101.05C is an exception to this general definition 
because the child has the use of only one upper extremity due to 
amputation of a hand.)
    (2) How we assess inability to ambulate effectively for children too 
young to be expected to walk independently. For children who are too 
young to be expected to walk independently, consideration of function 
must be based on assessment of limitations in the ability to perform 
comparable age-appropriate activities with the lower extremities, given 
normal developmental expectations. For such children, an extreme level 
of limitation means skills or performance at no greater

[[Page 559]]

than one-half of age-appropriate expectations based on an overall 
developmental assessment rather than on one or two isolated skills.
    (3) How we assess inability to ambulate effectively for older 
children. Older children, who would be expected to be able to walk when 
compared to other children the same age who do not have impairments, 
must be capable of sustaining a reasonable walking pace over a 
sufficient distance to be able to carry out age-appropriate activities. 
They must have the ability to travel age-appropriately without 
extraordinary assistance to and from school or a place of employment. 
Therefore, examples of ineffective ambulation for older children 
include, but are not limited to, the inability to walk without the use 
of a walker, two crutches or two canes, the inability to walk a block at 
a reasonable pace on rough or uneven surfaces, the inability to use 
standard public transportation, the inability to carry out age-
appropriate school activities independently, and the inability to climb 
a few steps at a reasonable pace with the use of a single hand rail. The 
ability to walk independently about the child's home or a short distance 
at school without the use of assistive devices does not, in and of 
itself, constitute effective ambulation.

    c. What We Mean by Inability To Perform Fine and Gross Movements 
                               Effectively

    (1) Definition. Inability to perform fine and gross movements 
effectively means an extreme loss of function of both upper extremities; 
i.e., an impairment that interferes very seriously with the child's 
ability to independently initiate, sustain, or complete activities. To 
use their upper extremities effectively, a child must be capable of 
sustaining such functions as reaching, pushing, pulling, grasping, and 
fingering in an age-appropriate manner to be able to carry out age-
appropriate activities.
    (2) How we assess inability to perform fine and gross movements in 
very young children. For very young children, we consider limitations in 
the ability to perform comparable age-appropriate activities involving 
the upper extremities compared to the ability of children the same age 
who do not have impairments. For such children, an extreme level of 
limitation means skills or performance at no greater than one-half of 
age-appropriate expectations based on an overall developmental 
assessment.
    (3) How we assess inability to perform fine and gross movements in 
older children. For older children, examples of inability to perform 
fine and gross movements effectively include, but are not limited to, 
the inability to prepare a simple meal and feed oneself, the inability 
to take care of personal hygiene, or the inability to sort and handle 
papers or files, depending upon which activities are age-appropriate.
    d. Pain or other symptoms. Pain or other symptoms may be an 
important factor contributing to functional loss. In order for pain or 
other symptoms to be found to affect a child's ability to function in an 
age-appropriate manner or to perform basic work activities, medical 
signs or laboratory findings must show the existence of a medically 
determinable impairment(s) that could reasonably be expected to produce 
the pain or other symptoms. The musculoskeletal listings that include 
pain or other symptoms among their criteria also include criteria for 
limitations in functioning as a result of the listed impairment, 
including limitations caused by pain. It is, therefore, important to 
evaluate the intensity and persistence of such pain or other symptoms 
carefully in order to determine their impact on the child's functioning 
under these listings. See also Secs. 404.1525(f) and 404.1529 of this 
part, and Secs. 416.925(f) and 416.929 of part 416 of this chapter.

                       C. Diagnosis and Evaluation

    1. General. Diagnosis and evaluation of musculoskeletal impairments 
should be supported, as applicable, by detailed descriptions of the 
joints, including ranges of motion, condition of the musculature (e.g., 
weakness, atrophy), sensory or reflex changes, circulatory deficits, and 
laboratory findings, including findings on x-ray or other appropriate 
medically acceptable imaging. Medically acceptable imaging includes, but 
is not limited to, x-ray imaging, computerized axial tomography (CAT 
scan) or magnetic resonance imaging (MRI), with or without contrast 
material, myelography, and radionuclear bone scans. ``Appropriate'' 
means that the technique used is the proper one to support the 
evaluation and diagnosis of the impairment.
    2. Purchase of certain medically acceptable imaging. While any 
appropriate medically acceptable imaging is useful in establishing the 
diagnosis of musculoskeletal impairments, some tests, such as CAT scans 
and MRIs, are quite expensive, and we will not routinely purchase them. 
Some, such as myelograms, are invasive and may involve significant risk. 
We will not order such tests. However, when the results of any of these 
tests are part of the existing evidence in the case record we will 
consider them together with the other relevant evidence.
    3. Consideration of electrodiagnostic procedures. Electrodiagnostic 
procedures may be useful in establishing the clinical diagnosis, but do 
not constitute alternative criteria to the requirements of 101.04.
    D. The physical examination must include a detailed description of 
the rheumatological, orthopedic, neurological, and other findings 
appropriate to the specific impairment being evaluated. These physical 
findings must be

[[Page 560]]

determined on the basis of objective observation during the examination 
and not simply a report of the child's allegation; e.g., ``He says his 
leg is weak, numb.'' Alternative testing methods should be used to 
verify the abnormal findings; e.g., a seated straight-leg raising test 
in addition to a supine straight-leg raising test. Because abnormal 
physical findings may be intermittent, their presence over a period of 
time must be established by a record of ongoing management and 
evaluation. Care must be taken to ascertain that the reported 
examination findings are consistent with the child's age and activities.

                       E. Examination of the Spine

    1. General. Examination of the spine should include a detailed 
description of gait, range of motion of the spine given quantitatively 
in degrees from the vertical position (zero degrees) or, for straight-
leg raising from the sitting and supine position (zero degrees), any 
other appropriate tension signs, motor and sensory abnormalities, muscle 
spasm, when present, and deep tendon reflexes. Observations of the child 
during the examination should be reported; e.g., how he or she gets on 
and off the examination table. Inability to walk on the heels or toes, 
to squat, or to arise from a squatting position, when appropriate, may 
be considered evidence of significant motor loss. However, a report of 
atrophy is not acceptable as evidence of significant motor loss without 
circumferential measurements of both thighs and lower legs, or both 
upper and lower arms, as appropriate, at a stated point above and below 
the knee or elbow given in inches or centimeters. Additionally, a report 
of atrophy should be accompanied by measurement of the strength of the 
muscle(s) in question generally based on a grading system of 0 to 5, 
with 0 being complete loss of strength and 5 being maximum strength. A 
specific description of atrophy of hand muscles is acceptable without 
measurements of atrophy but should include measurements of grip and 
pinch strength. However, because of the unreliability of such 
measurement in younger children, these data are not applicable to 
children under 5 years of age.
    2. When neurological abnormalities persist. Neurological 
abnormalities may not completely subside after treatment or with the 
passage of time. Therefore, residual neurological abnormalities that 
persist after it has been determined clinically or by direct surgical or 
other observation that the ongoing or progressive condition is no longer 
present will not satisfy the required findings in 101.04. More serious 
neurological deficits (paraparesis, paraplegia) are to be evaluated 
under the criteria in 111.00ff.
    F. Major joints refers to the major peripheral joints, which are the 
hip, knee, shoulder, elbow, wrist-hand, and ankle-foot, as opposed to 
other peripheral joints (e.g., the joints of the hand or forefoot) or 
axial joints (i.e., the joints of the spine.) The wrist and hand are 
considered together as one major joint, as are the ankle and foot. Since 
only the ankle joint, which consists of the juncture of the bones of the 
lower leg (tibia and fibula) with the hindfoot (tarsal bones), but not 
the forefoot, is crucial to weight bearing, the ankle and foot are 
considered separately in evaluating weight bearing.
    G. Measurements of joint motion are based on the techniques 
described in the chapter on the extremities, spine, and pelvis in the 
current edition of the ``Guides to the Evaluation of Permanent 
Impairment'' published by the American Medical Association.

                            H. Documentation.

    1. General. Musculoskeletal impairments frequently improve with time 
or respond to treatment. Therefore, a longitudinal clinical record is 
generally important for the assessment of severity and expected duration 
of an impairment unless the child is a newborn or the claim can be 
decided favorably on the basis of the current evidence.
    2. Documentation of medically prescribed treatment and response. 
Many children, especially those who have listing-level impairments, will 
have received the benefit of medically prescribed treatment. Whenever 
evidence of such treatment is available it must be considered.
    3. When there is no record of ongoing treatment. Some children will 
not have received ongoing treatment or have an ongoing relationship with 
the medical community despite the existence of a severe impairment(s). 
In such cases, evaluation will be made on the basis of the current 
objective medical evidence and other available evidence, taking into 
consideration the child's medical history, symptoms, and medical source 
opinions. Even though a child who does not receive treatment may not be 
able to show an impairment that meets the criteria of one of the 
musculoskeletal listings, the child may have an impairment(s) that is 
either medically or, in the case of a claim for benefits under part 416 
of this chapter, functionally equivalent in severity to one of the 
listed impairments.
    4. Evaluation when the criteria of a musculoskeletal listing are not 
met. These listings are only examples of common musculoskeletal 
disorders that are severe enough to find a child disabled. Therefore, in 
any case in which a child has a medically determinable impairment that 
is not listed, an impairment that does not meet the requirements of a 
listing, or a combination of impairments no one of which meets the 
requirements of a listing, we will consider whether the child's 
impairment(s) is medically or, in the case of a claim for benefits under 
part 416 of this chapter, functionally equivalent in severity

[[Page 561]]

to the criteria of a listing. (See Secs. 404.1526, 416.926, and 
416.926a.) Individuals with claims for benefits under part 404, who have 
an impairment(s) with a level of severity that does not meet or equal 
the criteria of the musculoskeletal listings may or may not have the RFC 
that would enable them to engage in substantial gainful activity. 
Evaluation of the impairment(s) of these individuals should proceed 
through the final steps of the sequential evaluation process in 
Sec. 404.1520 (or, as appropriate, the steps in the medical improvement 
review standard in Sec. 404.1594).

                         I. Effects of Treatment

    1. General. Treatments for musculoskeletal disorders may have 
beneficial effects or adverse side effects. Therefore, medical treatment 
(including surgical treatment) must be considered in terms of its 
effectiveness in ameliorating the signs, symptoms, and laboratory 
abnormalities of the disorder, and in terms of any side effects that may 
further limit the child.
    2. Response to treatment. Response to treatment and adverse 
consequences of treatment may vary widely. For example, a pain 
medication may relieve a child's pain completely, partially, or not at 
all. It may also result in adverse effects, e.g., drowsiness, dizziness, 
or disorientation, that compromise the child's ability to function. 
Therefore, each case must be considered on an individual basis, and 
include consideration of the effects of treatment on the child's ability 
to function.
    3. Documentation. A specific description of the drugs or treatment 
given (including surgery), dosage, frequency of administration, and a 
description of the complications or response to treatment should be 
obtained. The effects of treatment may be temporary or long-term. As 
such, the finding regarding the impact of treatment must be based on a 
sufficient period of treatment to permit proper consideration or 
judgment about future functioning.

              J. Orthotic, Prosthetic, or Assistive Devices

    1. General. Consistent with clinical practice, children with 
musculoskeletal impairments may be examined with and without the use of 
any orthotic, prosthetic, or assistive devices as explained in this 
section.
    2. Orthotic devices. Examination should be with the orthotic device 
in place and should include an evaluation of the child's maximum ability 
to function effectively with the orthosis. It is unnecessary to 
routinely evaluate the child's ability to function without the orthosis 
in place. If the child has difficulty with, or is unable to use, the 
orthotic device, the medical basis for the difficulty should be 
documented. In such cases, if the impairment involves a lower extremity 
or extremities, the examination should include information on the 
child's ability to ambulate effectively without the device in place 
unless contraindicated by the medical judgment of a physician who has 
treated or examined the child.
    3. Prosthetic devices. Examination should be with the prosthetic 
device in place. In amputations involving a lower extremity or 
extremities, it is unnecessary to evaluate the child's ability to walk 
without the prosthesis in place. However, the child's medical ability to 
use a prosthesis to ambulate effectively, as defined in 101.00B2b, 
should be evaluated. The condition of the stump should be evaluated 
without the prosthesis in place.
    4. Hand-held assistive devices. When a child with an impairment 
involving a lower extremity or extremities uses a hand-held assistive 
device, such as a cane, crutch or walker, examination should be with and 
without the use of the assistive device unless contraindicated by the 
medical judgment of a physician who has treated or examined the child. 
The child's ability to ambulate with and without the device provides 
information as to whether, or the extent to which, the child is able to 
ambulate without assistance. The medical basis for the use of any 
assistive device (e.g., instability, weakness) should be documented. The 
requirement to use a hand-held assistive device may also impact on the 
child's functional capacity by virtue of the fact that one or both upper 
extremities are not available for such activities as lifting, carrying, 
pushing, and pulling.
    K. Disorders of the spine, listed in 101.04, result in limitations 
because of distortion of the bony and ligamentous architecture of the 
spine and associated impingement on nerve roots (including the cauda 
equina) or spinal cord. Such impingement on nerve tissue may result from 
a herniated nucleus pulposus, spinal stenosis, arachnoiditis, or other 
miscellaneous conditions.
    L. Abnormal curvatures of the spine. Abnormal curvatures of the 
spine (specifically, scoliosis, kyphosis and kyphoscoliosis) can result 
in impaired ambulation, but may also adversely affect functioning in 
body systems other than the musculoskeletal system. For example, a 
child's ability to breathe may be affected; there may be cardiac 
difficulties (e.g., impaired myocardial function); or there may be 
disfigurement resulting in withdrawal or isolation. When there is 
impaired ambulation, evaluation of equivalence may be made by reference 
to 114.09A. When the abnormal curvature of the spine results in symptoms 
related to fixation of the dorsolumbar or cervical spine, evaluation of 
equivalence may be made by reference to 114.09C. When there is 
respiratory or cardiac involvement or an associated mental disorder, 
evaluation may be made under 103.00ff, 104.00ff, or 112.00ff, as 
appropriate. Other consequences should be evaluated according to the 
listing for the affected body system.

[[Page 562]]

    M. Under continuing surgical management, as used in 101.07 and 
101.08, refers to surgical procedures and any other associated 
treatments related to the efforts directed toward the salvage or 
restoration of functional use of the affected part. It may include such 
factors as post-surgical procedures, surgical complications, infections, 
or other medical complications, related illnesses, or related treatments 
that delay the child's attainment of maximum benefit from therapy. When 
burns are not under continuing surgical management, see 108.00F.
    N. After maximum benefit from therapy has been achieved in 
situations involving fractures of an upper extremity (101.07), or soft 
tissue injuries (101.08), i.e., there have been no significant changes 
in physical findings or on appropriate medically acceptable imaging for 
any 6-month period after the last definitive surgical procedure or other 
medical intervention, evaluation must be made on the basis of the 
demonstrable residuals, if any. A finding that 101.07 or 101.08 is met 
must be based on a consideration of the symptoms, signs, and laboratory 
findings associated with recent or anticipated surgical procedures and 
the resulting recuperative periods, including any related medical 
complications, such as infections, illnesses, and therapies which impede 
or delay the efforts toward restoration of function. Generally, when 
there has been no surgical or medical intervention for 6 months after 
the last definitive surgical procedure, it can be concluded that maximum 
therapeutic benefit has been reached. Evaluation at this point must be 
made on the basis of the demonstrable residual limitations, if any, 
considering the child's impairment-related symptoms, signs, and 
laboratory findings, any residual symptoms, signs, and laboratory 
findings associated with such surgeries, complications, and recuperative 
periods, and other relevant evidence.
    O. Major function of the face and head, for purposes of listing 
101.08, relates to impact on any or all of the activities involving 
vision, hearing, speech, mastication, and the initiation of the 
digestive process.
    P. When surgical procedures have been performed, documentation 
should include a copy of the operative notes and available pathology 
reports.

            101.01  Category of Impairments, Musculoskeletal

    101.02   Major dysfunction of a joint(s) (due to any cause): 
Characterized by gross anatomical deformity (e.g., subluxation, 
contracture, bony or fibrous ankylosis, instability) and chronic joint 
pain and stiffness with signs of limitation of motion or other abnormal 
motion of the affected joint(s), and findings on appropriate medically 
acceptable imaging of joint space narrowing, bony destruction, or 
ankylosis of the affected joint(s). With:
    A. Involvement of one major peripheral weight-bearing joint (i.e., 
hip, knee, or ankle), resulting in inability to ambulate effectively, as 
defined in 101.00B2b;

or

    B. Involvement of one major peripheral joint in each upper extremity 
(i.e., shoulder, elbow, or wrist-hand), resulting in inability to 
perform fine and gross movements effectively, as defined in 101.00B2c.
    101.03   Reconstructive surgery or surgical arthrodesis of a major 
weight-bearing joint, with inability to ambulate effectively, as defined 
in 101.00B2b, and return to effective ambulation did not occur, or is 
not expected to occur, within 12 months of onset.
    101.04   Disorders of the spine (e.g., lysosomal disorders, 
metabolic disorders, vertebral osteomyelitis, vertebral fracture, 
achondroplasia) resulting in compromise of a nerve root (including the 
cauda equina) or the spinal cord, with evidence of nerve root 
compression characterized by neuro-anatomic distribution of pain, 
limitation of motion of the spine, motor loss (atrophy with associated 
muscle weakness or muscle weakness) accompanied by sensory or reflex 
loss and, if there is involvement of the lower back, positive straight-
leg raising test (sitting and supine).
    101.05   Amputation (due to any cause).
    A. Both hands;

or

    B. One or both lower extremities at or above the tarsal region, with 
stump complications resulting in medical inability to use a prosthetic 
device to ambulate effectively, as defined in 101.00B2b, which have 
lasted or are expected to last for at least 12 months;

or

    C. One hand and one lower extremity at or above the tarsal region, 
with inability to ambulate effectively, as defined in 101.00B2b;

or

    D. Hemipelvectomy or hip disarticulation.
    101.06   Fracture of the femur, tibia, pelvis, or one or more of the 
tarsal bones. With:
    A. Solid union not evident on appropriate medically acceptable 
imaging, and not clinically solid;

and

    B. Inability to ambulate effectively, as defined in 101.00B2b, and 
return to effective ambulation did not occur or is not expected to occur 
within 12 months of onset.
    101.07   Fracture of an upper extremity with nonunion of a fracture 
of the shaft of the humerus, radius, or ulna, under continuing surgical 
management, as defined in 101.00M, directed toward restoration of 
functional use of the extremity, and such function was not

[[Page 563]]

restored or expected to be restored within 12 months of onset.
    101.08  Soft tissue injury (e.g., burns) of an upper or lower 
extremity, trunk, or face and head, under continuing surgical 
management, as defined in 101.00M, directed toward the salvage or 
restoration of major function, and such major function was not restored 
or expected to be restored within 12 months of onset. Major function of 
the face and head is described in 101.00O.

                    102.00 Special Senses and Speech

    A. How do we evaluate visual disorders?
    1. What are visual disorders? Visual disorders are abnormalities of 
the eye, the optic nerve, the optic tracts, or the brain that may cause 
a loss of visual acuity or visual fields. A loss of visual acuity limits 
your ability to distinguish detail, read, do fine work, or perform other 
age-appropriate activities. A loss of visual fields limits your ability 
to perceive visual stimuli in the peripheral extent of vision.
    2. How do we define statutory blindness? Statutory blindness is 
blindness as defined in sections 216(i)(1) and 1614(a)(2) of the Social 
Security Act (Act).
    a. The Act defines blindness as central visual acuity of 20/200 or 
less in the better eye with the use of a correcting lens. We use your 
best-corrected central visual acuity for distance in the better eye when 
we determine if this definition is met. (For visual acuity testing 
requirements, see 102.00A5.)
    b. The Act also provides that an eye that has a visual field 
limitation such that the widest diameter of the visual field subtends an 
angle no greater than 20 degrees is considered as having a central 
visual acuity of 20/200 or less. (For visual field testing requirements, 
see 102.00A6.)
    c. You have statutory blindness only if your visual disorder meets 
the criteria of 102.02A, 102.02B, or 102.03A. You do not have statutory 
blindness if your visual disorder medically equals the criteria of 
102.02A, 102.02B, or 102.03A or meets or medically equals the criteria 
of 102.03B, 102.03C, 102.04A, or 102.04B because your disability is 
based on criteria other than those in the statutory definition of 
blindness.
    3. What evidence do we need to establish statutory blindness under 
title XVI? To establish that you have statutory blindness under title 
XVI, we need evidence showing only that your central visual acuity in 
your better eye or your visual field in your better eye meets the 
criteria in 102.00A2, provided that those measurements are consistent 
with the other evidence in your case record. We do not need 
documentation of the cause of your blindness. Also, there is no duration 
requirement for statutory blindness under title XVI (see Secs. 416.981 
and 416.983 of this chapter).
    4. What evidence do we need to evaluate visual disorders, including 
those that result in statutory blindness under title II? To evaluate 
your visual disorder, we usually need a report of an eye examination 
that includes measurements of your best-corrected central visual acuity 
(see 102.00A5) or the extent of your visual fields (see 102.00A6), as 
appropriate. If you have visual acuity or visual field loss, we need 
documentation of the cause of the loss. A standard eye examination will 
usually indicate the cause of any visual acuity loss. A standard eye 
examination can also indicate the cause of some types of visual field 
deficits. Some disorders, such as cortical visual disorders, may result 
in abnormalities that do not appear on a standard eye examination. If 
the standard eye examination does not indicate the cause of your vision 
loss, we will request the information used to establish the presence of 
your visual disorder. If your visual disorder does not satisfy the 
criteria in 102.02, 102.03, or 102.04, we will request a description of 
how your visual disorder affects your ability to function.
    5. How do we measure your best-corrected central visual acuity?
    a. Visual acuity testing. When we need to measure your best-
corrected central visual acuity, which is your optimal visual acuity 
attainable with the use of a corrective lens, we use visual acuity 
testing for distance that was carried out using Snellen methodology or 
any other testing methodology that is comparable to Snellen methodology.
    (i) Your best-corrected central visual acuity for distance is 
usually measured by determining what you can see from 20 feet. If your 
visual acuity is measured for a distance other than 20 feet, we will 
convert it to a 20-foot measurement. For example, if your visual acuity 
is measured at 10 feet and is reported as 10/40, we will convert this 
measurement to 20/80.
    (ii) A visual acuity recorded as CF (counts fingers), HM (hand 
motion only), LP or LPO (light perception or light perception only), or 
NLP (no light perception) indicates that no optical correction will 
improve your visual acuity. If your central visual acuity in an eye is 
recorded as CF, HM, LP or LPO, or NLP, we will determine that your best-
corrected central visual acuity is 20/200 or less in that eye.
    (iii) We will not use the results of pinhole testing or automated 
refraction acuity to determine your best-corrected central visual 
acuity. These tests provide an estimate of potential visual acuity but 
not an actual measurement of your best-corrected central visual acuity.
    (iv) Very young children, such as infants and toddlers, cannot 
participate in testing using Snellen methodology or other comparable 
testing. If you are unable to participate in testing using Snellen 
methodology or other comparable testing due to your young age, we will 
consider clinical findings of your

[[Page 564]]

fixation and visual-following behavior. If both these behaviors are 
absent, we will consider the anatomical findings or the results of 
neuroimaging, electroretinogram, or visual evoked response (VER) testing 
when this testing has been performed.
    b. Other test charts.
    (i) Children between the ages of 3 and 5 often cannot identify the 
letters on a Snellen or other letter test chart. Specialists with 
expertise in assessment of childhood vision use alternate methods for 
measuring visual acuity in young children. We consider alternate 
methods, for example, the Landolt C test or the tumbling-E test, which 
are used to evaluate young children who are unable to participate in 
testing using Snellen methodology, to be comparable to testing using 
Snellen methodology.
    (ii) Most test charts that use Snellen methodology do not have lines 
that measure visual acuity between 20/100 and 20/200. Some test charts, 
such as the Bailey-Lovie or the Early Treatment Diabetic Retinopathy 
Study (ETDRS), used mostly in research settings, have such lines. If 
your visual acuity is measured with one of these charts, and you cannot 
read any of the letters on the 20/100 line, we will determine that you 
have statutory blindness based on a visual acuity of 20/200 or less. For 
example, if your best-corrected central visual acuity for distance in 
the better eye is 20/160 using an ETDRS chart, we will find that you 
have statutory blindness. Regardless of the type of test chart used, you 
do not have statutory blindness if you can read at least one letter on 
the 20/100 line. For example, if your best-corrected central visual 
acuity for distance in the better eye is 20/125 + 1 using an ETDRS 
chart, we will find that you do not have statutory blindness because you 
are able to read one letter on the 20/100 line.
    c. Testing using a specialized lens. In some instances, you may have 
visual acuity testing performed using a specialized lens, such as a 
contact lens. We will use the visual acuity measurements obtained with a 
specialized lens only if you have demonstrated the ability to use the 
specialized lens on a sustained basis. We will not use visual acuity 
measurements obtained with telescopic lenses.
    d. Cycloplegic refraction is an examination of the eye performed 
after administering cycloplegic eye drops capable of relaxing the 
ability of the pupil to become smaller and temporarily paralyzing the 
focusing muscles. If your case record contains the results of 
cycloplegic refraction, we may use the results to determine your best-
corrected central visual acuity. We will not purchase cycloplegic 
refraction.
    e. VER testing measures your response to visual events and can often 
detect dysfunction that is undetectable through other types of 
examinations. If you have an absent response to VER testing in your 
better eye, we will determine that your best-corrected central visual 
acuity is 20/200 or less in that eye and that your visual acuity loss 
satisfies the criterion in 102.02A or 102.02B4, as appropriate, when 
these test results are consistent with the other evidence in your case 
record. If you have a positive response to VER testing in an eye, we 
will not use that result to determine your best-corrected central visual 
acuity in that eye.
    6. How do we measure your visual fields?
    a. General. We generally need visual field testing when you have a 
visual disorder that could result in visual field loss, such as 
glaucoma, retinitis pigmentosa, or optic neuropathy, or when you display 
behaviors that suggest a visual field loss. When we need to measure the 
extent of your visual field loss, we use visual field testing (also 
referred to as perimetry) carried out using automated static threshold 
perimetry performed on an acceptable perimeter. (For perimeter 
requirements, see 102.00A9.)
    b. Automated static threshold perimetry requirements.
    (i) The test must use a white size III Goldmann stimulus and a 31.5 
apostilb (asb) white background (or a 10 candela per square meter (cd/
m\2\) white background). The stimuli test locations must be no more than 
6 degrees apart horizontally or vertically. Measurements must be 
reported on standard charts and include a description of the size and 
intensity of the test stimulus.
    (ii) We measure the extent of your visual field loss by determining 
the portion of the visual field in which you can see a white III4e 
stimulus. The ``III'' refers to the standard Goldmann test stimulus size 
III (4 mm\2\), and the ``4e'' refers to the standard Goldmann intensity 
filter (0 decibel (dB) attenuation, which allows presentation of the 
maximum luminance) used to determine the intensity of the stimulus.
    (iii) In automated static threshold perimetry, the intensity of the 
stimulus varies. The intensity of the stimulus is expressed in decibels 
(dB). A perimeter's maximum stimulus luminance is usually assigned the 
value 0 dB. We need to determine the dB level that corresponds to a 4e 
intensity for the particular perimeter being used. We will then use the 
dB printout to determine which points you see at a 4e intensity level (a 
``seeing point''). For example:
    A. When the maximum stimulus luminance (0 dB stimulus) on an 
acceptable perimeter is 10,000 asb, a 10 dB stimulus is equivalent to a 
4e stimulus. Any point you see at 10 dB or greater is a seeing point.
    B. When the maximum stimulus luminance (0 dB stimulus) on an 
acceptable perimeter is 4,000 asb, a 6 dB stimulus is equivalent to a 4e 
stimulus. Any point you see at 6 dB or greater is a seeing point.

[[Page 565]]

    C. When the maximum stimulus luminance (0 dB stimulus) on an 
acceptable perimeter is 1,000 asb, a 0 dB stimulus is equivalent to a 4e 
stimulus. Any point you see at 0 dB or greater is a seeing point.
    c. Evaluation under 102.03A. To determine statutory blindness based 
on visual field loss in your better eye (102.03A), we need the results 
of a visual field test that measures the central 24 to 30 degrees of 
your visual field; that is, the area measuring 24 to 30 degrees from the 
point of fixation. Acceptable tests include the Humphrey Field Analyzer 
(HFA) 30-2, HFA 24-2, and Octopus 32.
    d. Evaluation under 102.03B. To determine whether your visual field 
loss meets listing 102.03B, we use the mean deviation or defect (MD) 
from acceptable automated static threshold perimetry that measures the 
central 30 degrees of the visual field. MD is the average sensitivity 
deviation from normal values for all measured visual field locations. 
When using results from HFA tests, which report the MD as a negative 
number, we use the absolute value of the MD to determine whether your 
visual field loss meets listing 102.03B. We cannot use tests that do not 
measure the central 30 degrees of the visual field, such as the HFA 24-
2, to determine if your impairment meets or medically equals 102.03B.
    e. Other types of perimetry. If your case record contains visual 
field measurements obtained using manual or automated kinetic perimetry, 
such as Goldmann perimetry or the HFA ``SSA Test Kinetic,'' we can 
generally use these results if the kinetic test was performed using a 
white III4e stimulus projected on a white 31.5 asb (10 cd/m\2\) 
background. Automated kinetic perimetry, such as the HFA ``SSA Test 
Kinetic,'' does not detect limitations in the central visual field 
because testing along a meridian stops when you see the stimulus. If 
your visual disorder has progressed to the point at which it is likely 
to result in a significant limitation in the central visual field, such 
as a scotoma (see 102.00A6h), we will not use automated kinetic 
perimetry to determine the extent of your visual field loss. Instead, we 
will determine the extent of your visual field loss using automated 
static threshold perimetry or manual kinetic perimetry.
    f. Screening tests. We will not use the results of visual field 
screening tests, such as confrontation tests, tangent screen tests, or 
automated static screening tests, to determine that your impairment 
meets or medically equals a listing, or functionally equals the 
listings. We can consider normal results from visual field screening 
tests to determine whether your visual disorder is severe when these 
test results are consistent with the other evidence in your case record. 
(See Sec. 416.924(c) of this chapter.) We will not consider normal test 
results to be consistent with the other evidence if the clinical 
findings indicate that your visual disorder has progressed to the point 
that it is likely to cause visual field loss, or you have a history of 
an operative procedure for retinal detachment.
    g. Use of corrective lenses. You must not wear eyeglasses during 
visual field testing because they limit your field of vision. You may 
wear contact lenses to correct your visual acuity during the visual 
field test to obtain the most accurate visual field measurements. For 
this single purpose, you do not need to demonstrate that you have the 
ability to use the contact lenses on a sustained basis.
    h. Scotoma. A scotoma is a field defect or non-seeing area (also 
referred to as a ``blind spot'') in the visual field surrounded by a 
normal field or seeing area. When we measure your visual field, we 
subtract the length of any scotoma, other than the normal blind spot, 
from the overall length of any diameter on which it falls.
    7. How do we determine your visual acuity efficiency, visual field 
efficiency, and visual efficiency?
    a. General. Visual efficiency, a calculated value of your remaining 
visual function, is the combination of your visual acuity efficiency and 
your visual field efficiency expressed as a percentage.
    b. Visual acuity efficiency. Visual acuity efficiency is a 
percentage that corresponds to the best-corrected central visual acuity 
for distance in your better eye. See Table 1.

                    Table 1--Visual Acuity Efficiency
------------------------------------------------------------------------
Snellen best-corrected central visual acuity for
                    distance                           Visual acuity
-------------------------------------------------     efficiency (%)
        English                   Metric                 (102.04A)
------------------------------------------------------------------------
           20/16                      6/5                      100
           20/20                      6/6                      100
           20/25                    6/7.5                       95
           20/30                      6/9                       90
           20/40                     6/12                       85
           20/50                     6/15                       75
           20/60                     6/18                       70
           20/70                     6/21                       65
           20/80                     6/24                       60
          20/100                     6/30                       50
------------------------------------------------------------------------

    c. Visual field efficiency. Visual field efficiency is a percentage 
that corresponds to the visual field in your better eye. Under 102.03C, 
we require kinetic perimetry to determine your visual field efficiency 
percentage. We calculate the visual field efficiency percentage by 
adding the number of degrees you see along the eight principal meridians 
found on a visual field chart (0, 45, 90, 135, 180, 225, 270, and 315) 
in your better eye and dividing by 5. For example, in Figure 1:

[[Page 566]]

    A. The diagram of the left eye illustrates a visual field, as 
measured with a III4e stimulus, contracted to 30 degrees in two 
meridians (180 and 225) and to 20 degrees in the remaining six 
meridians. The visual efficiency percentage of this field is: ((2  x  
30) + (6  x  20))  5 = 36 percent.
    B. The diagram of the right eye illustrates the extent of a normal 
visual field as measured with a III4e stimulus. The sum of the eight 
principal meridians of this field is 500 degrees. The visual efficiency 
percentage of this field is 500  5 = 100 percent.
[GRAPHIC] [TIFF OMITTED] TR28MR13.003

    d. Visual efficiency. Under 102.04A, we calculate the visual 
efficiency percentage by multiplying your visual acuity efficiency 
percentage (see 102.00A7b) by your visual field efficiency percentage 
(see 102.00A7c) and dividing by 100. For example, if your visual acuity 
efficiency percentage is 75 and your visual field efficiency percentage 
is 36, your visual efficiency percentage is: (75  x  36)  100 = 27 
percent.
    8. How do we determine your visual acuity impairment value, visual 
field impairment value, and visual impairment value?
    a. General. Visual impairment value, a calculated value of your loss 
of visual function, is the combination of your visual acuity impairment 
value and your visual field impairment value.
    b. Visual acuity impairment value. Your visual acuity impairment 
value corresponds to the best-corrected central visual acuity for 
distance in your better eye. See Table 2.

                 Table 2--Visual Acuity Impairment Value
------------------------------------------------------------------------
Snellen best-corrected central visual acuity for
                    distance                           Visual acuity
-------------------------------------------------    impairment value
        English                   Metric                 (102.04B)
------------------------------------------------------------------------
           20/16                      6/5                     0.00
           20/20                      6/6                     0.00
           20/25                    6/7.5                     0.10
           20/30                      6/9                     0.18
           20/40                     6/12                     0.30
           20/50                     6/15                     0.40
           20/60                     6/18                     0.48
           20/70                     6/21                     0.54
           20/80                     6/24                     0.60
          20/100                     6/30                     0.70
------------------------------------------------------------------------

    c. Visual field impairment value. Your visual field impairment value 
corresponds to the visual field in your better eye. Using the MD from 
acceptable automated static threshold perimetry, we calculate the visual 
field impairment value by dividing the absolute value of the MD by 22. 
For example, if your MD on an HFA 30-2 is ^16, your visual field 
impairment value is: |^16|  22 = 0.73.

[[Page 567]]

    d. Visual impairment value. Under 102.04B, we calculate the visual 
impairment value by adding your visual acuity impairment value (see 
102.00A8b) and your visual field impairment value (see 102.00A8c). For 
example, if your visual acuity impairment value is 0.48 and your visual 
field impairment value is 0.73, your visual impairment value is: 0.48 + 
0.73 = 1.21.
    9. What are our requirements for an acceptable perimeter? We will 
use results from automated static threshold perimetry performed on a 
perimeter that:
    a. Uses optical projection to generate the test stimuli.
    b. Has an internal normative database for automatically comparing 
your performance with that of the general population.
    c. Has a statistical analysis package that is able to calculate 
visual field indices, particularly mean deviation or mean defect.
    d. Demonstrates the ability to correctly detect visual field loss 
and correctly identify normal visual fields.
    e. Demonstrates good test-retest reliability.
    f. Has undergone clinical validation studies by three or more 
independent laboratories with results published in peer-reviewed 
ophthalmic journals.
    B. How do we evaluate hearing loss?
    1. What evidence do we need?
    a. We need evidence showing that you have a medically determinable 
impairment that causes your hearing loss and audiometric measurements of 
the severity of your hearing loss. We generally require both an otologic 
examination and audiometric testing to establish that you have a 
medically determinable impairment that causes your hearing loss. You 
should have this audiometric testing within 2 months of the otologic 
examination. Once we have evidence that you have a medically 
determinable impairment, we can use the results of later audiometric 
testing to assess the severity of your hearing loss without another 
otologic examination. We will consider your test scores together with 
any other relevant information we have about your hearing, including 
information from outside of the test setting.
    b. The otologic examination must be performed by a licensed 
physician (medical or osteopathic doctor) or audiologist. It must 
include your medical history, your description of how your hearing loss 
affects you, and the physician's or audiologist's description of the 
appearance of the external ears (pinnae and external ear canals), 
evaluation of the tympanic membranes, and assessment of any middle ear 
abnormalities.
    c. Audiometric testing must be performed by, or under the direct 
supervision of, a licensed audiologist or an otolaryngologist.
    2. What audiometric testing do we need when you do not have a 
cochlear implant?
    a. General. We need either physiologic or behavioral testing (other 
than screening testing, see 102.00B2g) that is appropriate for your age 
at the time of testing. See 102.00B2c-102.00B2f. We will make every 
reasonable effort to obtain the results of physiologic testing that has 
been done; however, we will not purchase such testing.
    b. Testing requirements. The testing must be conducted in accordance 
with the most recently published standards of the American National 
Standards Institute (ANSI). You must not wear hearing aids during the 
testing. Additionally, a person described in 102.00B1c must perform an 
otoscopic examination immediately before the audiometric testing. (An 
otoscopic examination provides a description of the appearance of your 
external ear canals and an evaluation of the tympanic membranes. In 
these rules, we use the term to include otoscopic examinations performed 
by physicians and otoscopic inspections performed by audiologists and 
others.) The otoscopic examination must show that there are no 
conditions that would prevent valid audiometric testing, such as fluid 
in the ear, ear infection, or obstruction in an ear canal. The person 
performing the test should also report on any other factors, such as 
your ability to maintain attention, that can affect the interpretation 
of the test results.
    c. Children from birth to the attainment of age 6 months.
    (i) We need physiologic testing, such as auditory brainstem response 
(ABR) testing.
    (ii) To determine whether your hearing loss meets 102.10A, we will 
average your hearing thresholds at 500, 1000, 2000, and 4000 Hertz (Hz). 
If you do not have a response at a particular frequency, we will use a 
threshold of 5 decibels (dB) over the limit of the audiometer.
    d. Children from age 6 months to the attainment of age 2.
    (i) We need air conduction thresholds determined by a behavioral 
assessment, usually visual reinforcement audiometry (VRA). We can use 
ABR testing if the behavioral assessment cannot be completed or if the 
results are inconclusive or unreliable.
    (ii) To determine whether your hearing loss meets 102.10A, we will 
average your hearing thresholds at 500, 1000, 2000, and 4000 Hz. If you 
do not have a response at a particular frequency, we will use a 
threshold of 5 dB over the limit of the audiometer.
    (iii) For this age group, behavioral assessments are often performed 
in a sound field, and each ear is not tested separately. If each ear is 
not tested separately, we will consider the test results to represent 
the hearing in the better ear.
    e. Children from age 2 to the attainment of age 5.
    (i) We need air conduction thresholds determined by a behavioral 
assessment, such

[[Page 568]]

as conditioned play audiometry (CPA), tangible or visually reinforced 
operant conditioning audiometry (TROCA, VROCA), or VRA. If you have had 
ABR testing, we can use the results of that testing if the behavioral 
assessment cannot be completed or the results are inconclusive or 
unreliable.
    (ii) To determine whether your hearing loss meets 102.10A, we will 
average your hearing thresholds at 500, 1000, 2000, and 4000 Hz. If you 
do not have a response at a particular frequency, we will use a 
threshold of 5 dB over the limit of the audiometer.
    (iii) For this age group, behavioral assessments are often performed 
in a sound field and each ear is not tested separately. If each ear is 
not tested separately, we will consider the test results to represent 
the hearing in the better ear.
    f. Children from age 5 to the attainment of age 18.
    (i) We generally need pure tone air conduction and bone conduction 
testing, speech reception threshold (SRT) testing (also referred to as 
``spondee threshold'' or ``ST'' testing), and word recognition testing 
(also referred to as ``word discrimination'' or ``speech 
discrimination'' testing). This testing must be conducted in a sound-
treated booth or room and must be in accordance with the most recently 
published ANSI standards. Each ear must be tested separately.
    (ii) To determine whether your hearing loss meets the air and bone 
conduction criterion in 102.10B1 or 102.10B3, we will average your 
hearing thresholds at 500, 1000, 2000, and 4000 Hz. If you do not have a 
response at a particular frequency, we will use a threshold of 5 dB over 
the limit of the audiometer.
    (iii) The SRT is the minimum dB level required for you to recognize 
50 percent of the words on a standard list of spondee words. (Spondee 
words are two-syllable words that have equal stress on each syllable.) 
The SRT is usually within 10 dB of the average pure tone air conduction 
hearing thresholds at 500, 1000, and 2000 Hz. If the SRT is not within 
10 dB of the average pure tone air conduction threshold, the reason for 
the discrepancy must be documented. If we cannot determine that there is 
a medical basis for the discrepancy, we will not use the results of the 
testing to determine whether your hearing loss meets a listing.
    (iv) Word recognition testing determines your ability to recognize 
an age-appropriate, standardized list of phonetically balanced 
monosyllabic words in the absence of any visual cues. This testing must 
be performed in quiet. The list may be recorded or presented live, but 
in either case, the words should be presented at a level of 
amplification that will measure your maximum ability to discriminate 
words, usually 35 to 40 dB above your SRT. However, the amplification 
level used in the testing must be medically appropriate, and you must be 
able to tolerate it. If you cannot be tested at 35 to 40 dB above your 
SRT, the person who performs the test should report your word 
recognition testing score at your highest comfortable level of 
amplification.
    g. Screening testing. Physiologic testing, such as ABR and 
otoacoustic emissions (OAE), and pure tone testing can be used as 
hearing screening tests. We will not use these tests to determine that 
your hearing loss meets or medically equals a listing, or to assess 
functional limitations due to your hearing loss, when they are used only 
as screening tests. We can consider normal results from hearing 
screening tests to determine that your hearing loss is not ``severe'' 
when these test results are consistent with the other evidence in your 
case record. See Sec. 416.924(c).
    3. What audiometric testing do we need when you have a cochlear 
implant?
    a. If you have a cochlear implant, we will consider you to be 
disabled until age 5, or for 1 year after initial implantation, 
whichever is later.
    b. After that period, we need word recognition testing performed 
with any age-appropriate version of the Hearing in Noise Test (HINT) or 
the Hearing in Noise Test for Children (HINT-C) to determine whether 
your impairment meets 102.11B. This testing must be conducted in quiet 
in a sound field. Your implant must be functioning properly and adjusted 
to your normal settings. The sentences should be presented at 60 dB HL 
(Hearing Level) and without any visual cues.
    4. How do we evaluate your word recognition ability if you are not 
fluent in English?
    If you are not fluent in English, you should have word recognition 
testing using an appropriate word list for the language in which you are 
most fluent. The person conducting the test should be fluent in the 
language used for the test. If there is no appropriate word list or no 
person who is fluent in the language and qualified to perform the test, 
it may not be possible to measure your word recognition ability. If your 
word recognition ability cannot be measured, your hearing loss cannot 
meet 102.10B2 or 102.11B. Instead, we will consider the facts of your 
case to determine whether you have difficulty understanding words in the 
language in which you are most fluent, and if so, whether that degree of 
difficulty medically equals 102.10B2 or 102.11B. For example, we will 
consider how you interact with family members, interpreters, and other 
persons who speak the language in which you are most fluent.
    5. What do we mean by a marked limitation in speech or language as 
used in 102.10B3?
    a. We will consider you to have a marked limitation in speech if:
    (i) Entire phrases or sentences in your conversation are 
intelligible to unfamiliar listeners at least 50 percent (half) of the 
time

[[Page 569]]

but no more than 67 percent (two-thirds) of the time on your first 
attempt; and
    (ii) Your sound production or phonological patterns (the ways in 
which you combine speech sounds) are atypical for your age.
    b. We will consider you to have a marked limitation in language when 
your current and valid test score on an appropriate comprehensive, 
standardized test of overall language functioning is at least two 
standard deviations below the mean. In addition, the evidence of your 
daily communication functioning must be consistent with your test score. 
If you are not fluent in English, it may not be possible to test your 
language performance. If we cannot test your language performance, your 
hearing loss cannot meet 102.10B3. Instead, we will consider the facts 
of your case to determine whether your hearing loss medically equals 
102.10B3.
    102.01 Category of Impairments, Special Senses and Speech
    102.02  Loss of central visual acuity.
    A. Remaining vision in the better eye after best correction is 20/
200 or less.

OR

    B. An inability to participate in visual acuity testing using 
Snellen methodology or other comparable testing, clinical findings that 
fixation and visual-following behavior are absent in the better eye, and 
one of the following:
    1. Abnormal anatomical findings indicating a visual acuity of 20/200 
or less in the better eye (such as the presence of Stage III or worse 
retinopathy of prematurity despite surgery, hypoplasia of the optic 
nerve, albinism with macular aplasia, or bilateral optic atrophy); or
    2. Abnormal neuroimaging documenting damage to the cerebral cortex 
which would be expected to prevent the development of a visual acuity 
better than 20/200 in the better eye (such as neuroimaging showing 
bilateral encephalomyelitis or bilateral encephalomalacia); or
    3. Abnormal electroretinogram documenting the presence of Leber's 
congenital amaurosis or achromatopsia in the better eye; or
    4. An absent response to VER testing in the better eye.
    102.03  Contraction of the visual field in the better eye, with:
    A. The widest diameter subtending an angle around the point of 
fixation no greater than 20 degrees.

OR

    B. An MD of 22 decibels or greater, determined by automated static 
threshold perimetry that measures the central 30 degrees of the visual 
field (see 102.00A6d.).

OR

    C. A visual field efficiency of 20 percent or less, determined by 
kinetic perimetry (see 102.00A7c).
    102.04  Loss of visual efficiency, or visual impairment, in the 
better eye:
    A. A visual efficiency percentage of 20 or less after best 
correction (see 102.00A7d.).

OR

    B. A visual impairment value of 1.00 or greater after best 
correction (see 102.00A8d).
    102.10  Hearing loss not treated with cochlear implantation.
    A. For children from birth to the attainment of age 5, an average 
air conduction hearing threshold of 50 decibels or greater in the better 
ear (see 102.00B2).

OR

    B. For children from age 5 to the attainment of age 18:
    1. An average air conduction hearing threshold of 70 decibels or 
greater in the better ear and an average bone conduction hearing 
threshold of 40 decibels or greater in the better ear (see 102.00B2f); 
or
    2. A word recognition score of 40 percent or less in the better ear 
determined using a standardized list of phonetically balanced 
monosyllabic words (see 102.00B2f); or
    3. An average air conduction hearing threshold of 50 decibels or 
greater in the better ear and a marked limitation in speech or language 
(see 102.00B2f and 102.00B5).
    102.11  Hearing loss treated with cochlear implantation.
    A. Consider under a disability until the attainment of age 5 or for 
1 year after initial implantation, whichever is later.

OR

    B. Upon the attainment of age 5 or 1 year after initial 
implantation, whichever is later, a word recognition score of 60 percent 
or less determined using the HINT or the HINT-C (see 102.00B3b).

                      103.00  Respiratory Disorders

    A. Which disorders do we evaluate in this body system?
    1. We evaluate respiratory disorders that result in obstruction 
(difficulty moving air out of the lungs) or restriction (difficulty 
moving air into the lungs), or that interfere with diffusion (gas 
exchange) across cell membranes in the lungs. Examples of such disorders 
and the listings we use to evaluate them include chronic obstructive 
pulmonary disease (103.02), chronic lung disease of infancy (also known 
as bronchopulmonary dysplasia, 103.02C or 103.02E), pulmonary fibrosis 
(103.02), asthma (103.02 or 103.03), and cystic fibrosis (103.04). We 
also use listings in this body system to evaluate respiratory failure 
resulting from an underlying chronic respiratory disorder (103.04E or 
103.14) and lung transplantation (103.11).

[[Page 570]]

    2. We evaluate cancers affecting the respiratory system under the 
listings in 113.00. We evaluate the pulmonary effects of neuromuscular 
and autoimmune disorders under these listings or under the listings in 
111.00 or 114.00, respectively.
    B. What are the symptoms and signs of respiratory disorders? 
Symptoms and signs of respiratory disorders include dyspnea (shortness 
of breath), chest pain, coughing, wheezing, sputum production, 
hemoptysis (coughing up blood from the respiratory tract), use of 
accessory muscles of respiration, and tachypnea (rapid rate of 
breathing).
    C. What abbreviations do we use in this body system?
    1. BiPAP means bi-level positive airway pressure ventilation.
    2. BTPS means body temperature and ambient pressure, saturated with 
water vapor.
    3. CF means cystic fibrosis.
    4. CFRD means CF-related diabetes.
    5. CFTR means CF transmembrane conductance regulator.
    6. CLD means chronic lung disease of infancy.
    7. FEV 1 means forced expiratory volume in the first 
second of a forced expiratory maneuver.
    8. FVC means forced vital capacity.
    9. L means liter.
    D. What documentation do we need to evaluate your respiratory 
disorder?
    1. We need medical evidence to document and assess the severity of 
your respiratory disorder. Medical evidence should include your medical 
history, physical examination findings, the results of imaging (see 
103.00D3), spirometry (see 103.00E), other relevant laboratory tests, 
and descriptions of any prescribed treatment and your response to it. We 
may not need all of this evidence depending on your particular 
respiratory disorder and its effects on you.
    2. If you use supplemental oxygen, we still need medical evidence to 
establish the severity of your respiratory disorder.
    3. Imaging refers to medical imaging techniques, such as x-ray and 
computerized tomography. The imaging must be consistent with the 
prevailing state of medical knowledge and clinical practice as the 
proper technique to support the evaluation of the disorder.
    E. What is spirometry and what are our requirements for an 
acceptable test and report?
    1. Spirometry, which measures how well you move air into and out of 
your lungs, involves at least three forced expiratory maneuvers during 
the same test session. A forced expiratory maneuver is a maximum 
inhalation followed by a forced maximum exhalation, and measures exhaled 
volumes of air over time. The volume of air you exhale in the first 
second of the forced expiratory maneuver is the FEV1. The 
total volume of air that you exhale during the entire forced expiratory 
maneuver is the FVC. We use your highest FEV1 value to 
evaluate your respiratory disorder under 103.02A and 103.04A, and your 
highest FVC value to evaluate your respiratory disorder under 103.02B, 
regardless of whether the values are from the same forced expiratory 
maneuver or different forced expiratory maneuvers. We will not purchase 
spirometry for children who have not attained age 6.
    2. We have the following requirements for spirometry under these 
listings:
    a. You must be medically stable at the time of the test. Examples of 
when we would not consider you to be medically stable include when you 
are:
    (i) Within 2 weeks of a change in your prescribed respiratory 
medication.
    (ii) Experiencing, or within 30 days of completion of treatment for, 
a lower respiratory tract infection.
    (iii) Experiencing, or within 30 days of completion of treatment 
for, an acute exacerbation (temporary worsening) of a chronic 
respiratory disorder. Wheezing by itself does not indicate that you are 
not medically stable.
    b. During testing, if your FEV1 is less than 70 percent 
of your predicted normal value, we require repeat spirometry after 
inhalation of a bronchodilator to evaluate your respiratory disorder 
under these listings, unless it is medically contraindicated. If you 
used a bronchodilator before the test and your FEV1 is less 
than 70 percent of your predicted normal value, we still require repeat 
spirometry after inhalation of a bronchodilator unless the supervising 
physician determines that it is not safe for you to take a 
bronchodilator again (in which case we may need to reschedule the test). 
If you do not have post-bronchodilator spirometry, the test report must 
explain why. We can use the results of spirometry administered without 
bronchodilators when the use of bronchodilators is medically 
contraindicated.
    c. Your forced expiratory maneuvers must be satisfactory. We 
consider a forced expiratory maneuver to be satisfactory when you exhale 
with maximum effort following a full inspiration, and when the test 
tracing has a sharp takeoff and rapid rise to peak flow, has a smooth 
contour, and either lasts for at least 6 seconds (for children age 10 
and older) or for at least 3 seconds (for children who have not attained 
age 10), or maintains a plateau for at least 1 second.
    3. The spirometry report must include the following information:
    a. The date of the test and your name, age or date of birth, gender, 
and height without shoes. (We will assume that your recorded height on 
the date of the test is without shoes, unless we have evidence to the 
contrary.) If your spine is abnormally curved (for example, you have 
kyphoscoliosis), we

[[Page 571]]

will substitute the longest distance between your outstretched 
fingertips with your arms abducted 90 degrees in place of your height 
when this measurement is greater than your standing height without 
shoes.
    b. Any factors, if applicable, that can affect the interpretation of 
the test results (for example, your cooperation or effort in doing the 
test).
    c. Legible tracings of your forced expiratory maneuvers in a volume-
time format showing your name and the date of the test for each 
maneuver.
    4. If you have attained age 6, we may need to purchase spirometry to 
determine whether your disorder meets a listing, unless we can make a 
fully favorable determination or decision on another basis.
    5. Before we purchase spirometry for a child age 6 or older, a 
medical consultant (see Sec. 416.1016 of this chapter), preferably one 
with experience in the care of children with respiratory disorders, must 
review your case record to determine if we need the test. If we purchase 
spirometry, the medical source we designate to administer the test is 
solely responsible for deciding whether it is safe for you to do the 
test and for how to administer it.
    F. What is CLD and how do we evaluate it?
    1. CLD, also known as bronchopulmonary dysplasia, or BPD, is 
scarring of the immature lung. CLD may develop as a complication of 
mechanical ventilation and oxygen therapy for infants with significant 
neonatal respiratory problems. Within the first 6 months of life, most 
infants with CLD are successfully weaned from mechanical ventilation, 
and then weaned from oxygen supplementation. We evaluate CLD under 
103.02C, 103.02E, or if you are age 2 or older, under 103.03 or another 
appropriate listing.
    2. If you have CLD, are not yet 6 months old, and need 24-hour-per-
day oxygen supplementation, we will not evaluate your CLD under 103.02C 
until you are 6 months old. Depending on the evidence in your case 
record, we may make a fully favorable determination or decision under 
other rules before you are 6 months old.
    3. We evaluate your CLD under 103.02C if you are at least 6 months 
old and you need 24-hour-per-day oxygen supplementation. (If you were 
born prematurely, we use your corrected chronological age. See 
Sec. 416.924b(b) of this chapter.) We also evaluate your CLD under 
103.02C if you were weaned off oxygen supplementation but needed it 
again by the time you were 6 months old or older.
    4. We evaluate your CLD under 103.02E if you are any age from birth 
to the attainment of age 2 and have CLD exacerbations or complications 
(for example, wheezing, lower respiratory tract infections, or acute 
respiratory distress) that require hospitalization. For the purpose of 
103.02E, we count your initial birth hospitalization as one 
hospitalization. The phrase ``consider under a disability for 1 year 
from the discharge date of the last hospitalization or until the 
attainment of age 2, whichever is later'' in 103.02E does not refer to 
the date on which your disability began, only to the date on which we 
must reevaluate whether your impairment(s) continues to meet a listing 
or is otherwise disabling.
    G. What is asthma and how do we evaluate it?
    1. Asthma is a chronic inflammatory disorder of the lung airways 
that we evaluate under 103.02 or 103.03. If you have respiratory failure 
resulting from chronic asthma (see 103.00J), we will evaluate it under 
103.14.
    2. For the purposes of 103.03:
    a. The phrase ``consider under a disability for 1 year'' explains 
how long your asthma can meet the requirements of the listing. It does 
not refer to the date on which your disability began, only to the date 
on which we must reevaluate whether your asthma continues to meet a 
listing or is otherwise disabling.
    b. We determine the onset of your disability based on the facts of 
your case, but it will be no later than the admission date of your first 
of three hospitalizations that satisfy the criteria of 103.03.
    H. What is CF and how do we evaluate it?
    1. General. We evaluate CF, a genetic disorder that results in 
abnormal salt and water transport across cell membranes in the lungs, 
pancreas, and other body organs, under 103.04. We need the evidence 
described in 103.00H2 to establish that you have CF.
    2. Documentation of CF. We need a report signed by a physician (see 
Sec. 416.913(a) of this chapter) showing both a and b:
    a. One of the following:
    (i) A positive newborn screen for CF; or
    (ii) A history of CF in a sibling; or
    (iii) Documentation of at least one specific CF phenotype or 
clinical criterion (for example, chronic sino-pulmonary disease with 
persistent colonization or infections with typical CF pathogens, 
pancreatic insufficiency, or salt-loss syndromes); and
    b. One of the following definitive laboratory tests:
    (i) An elevated sweat chloride concentration equal to or greater 
than 60 millimoles per L; or
    (ii) The identification of two CF gene mutations affecting the CFTR; 
or
    (iii) Characteristic abnormalities in ion transport across the nasal 
epithelium.
    c. When we have the report showing a and b, but it is not signed by 
a physician, we also need a report from a physician stating that you 
have CF.
    d. When we do not have the report showing a and b, we need a report 
from a physician that is persuasive that a positive diagnosis of CF was 
confirmed by an appropriate definitive laboratory test. To be 
persuasive, this

[[Page 572]]

report must include a statement by the physician that you had the 
appropriate definitive laboratory test for diagnosing CF. The report 
must provide the test results or explain how your diagnosis was 
established that is consistent with the prevailing state of medical 
knowledge and clinical practice.
    3. CF pulmonary exacerbations. Examples of CF pulmonary 
exacerbations include increased cough and sputum production, hemoptysis, 
increased shortness of breath, increased fatigue, and reduction in 
pulmonary function. Treatment usually includes intravenous antibiotics 
and intensified airway clearance therapy (for example, increased 
frequencies of chest percussion or increased use of inhaled nebulized 
therapies, such as bronchodilators or mucolytics).
    4. For 103.04G, we require any two exacerbations or complications 
from the list in 103.04G1 through 103.04G4 within a 12-month period. You 
may have two of the same exacerbation or complication or two different 
ones.
    a. If you have two of the acute exacerbations or complications we 
describe in 103.04G1 and 103.04G2, there must be at least 30 days 
between the two.
    b. If you have one of the acute exacerbations or complications we 
describe in 103.04G1 and 103.04G2 and one of the chronic complications 
we describe in 103.04G3 and 103.04G4, the two can occur during the same 
time. For example, your CF meets 103.04G if you have the pulmonary 
hemorrhage we describe in 103.04G2 and the weight loss we describe in 
103.04G3 even if the pulmonary hemorrhage occurs during the 90-day 
period in 103.04G3.
    c. Your CF also meets 103.04G if you have both of the chronic 
complications in 103.04G3 and 103.04G4.
    5. CF may also affect other body systems such as digestive or 
endocrine. If your CF, including pulmonary exacerbations and 
nonpulmonary complications, does not meet or medically equal a 
respiratory disorders listing, we may evaluate your CF-related 
impairments under the listings in the affected body system.
    I. How do we evaluate lung transplantation? If you receive a lung 
transplant (or a lung transplant simultaneously with other organs, such 
as the heart), we will consider you to be disabled under 103.11 for 3 
years from the date of the transplant. After that, we evaluate your 
residual impairment(s) by considering the adequacy of your post-
transplant function, the frequency and severity of any rejection 
episodes you have, complications in other body systems, and adverse 
treatment effects. Children who receive organ transplants generally have 
impairments that meet our definition of disability before they undergo 
transplantation. The phrase ``consider under a disability for 3 years'' 
in 103.11 does not refer to the date on which your disability began, 
only to the date on which we must reevaluate whether your impairment(s) 
continues to meet a listing or is otherwise disabling. We determine the 
onset of your disability based on the facts of your case.
    J. What is respiratory failure and how do we evaluate it? 
Respiratory failure is the inability of the lungs to perform their basic 
function of gas exchange. We evaluate respiratory failure under 103.04E 
if you have CF-related respiratory failure, or under 103.14 if you have 
respiratory failure due to any other chronic respiratory disorder. 
Continuous positive airway pressure does not satisfy the criterion in 
103.04E or 103.14, and cannot be substituted as an equivalent finding, 
for invasive mechanical ventilation or noninvasive ventilation with 
BiPAP.
    K. How do we evaluate growth failure due to any chronic respiratory 
disorder?
    1. To evaluate growth failure due to any chronic respiratory 
disorder, we require documentation of the oxygen supplementation 
described in 103.06A and the growth measurements in 103.06B within the 
same consecutive 12-month period. The dates of oxygen supplementation 
may be different from the dates of growth measurements.
    2. Under 103.06B, we use the appropriate table(s) under 105.08B in 
the digestive system to determine whether a child's growth is less than 
the third percentile.
    a. For children from birth to attainment of age 2, we use the 
weight-for-length table corresponding to the child's gender (Table I or 
Table II).
    b. For children age 2 to attainment of age 18, we use the body mass 
index (BMI)-for-age table corresponding to the child's gender (Table III 
or Table IV).
    c. BMI is the ratio of a child's weight to the square of his or her 
height. We calculate BMI using the formulas in 105.00G2c.
    L. How do we evaluate respiratory disorders that do not meet one of 
these listings?
    1. These listings are only examples of common respiratory disorders 
that we consider severe enough to result in marked and severe functional 
limitations. If your impairment(s) does not meet the criteria of any of 
these listings, we must also consider whether you have an impairment(s) 
that meets the criteria of a listing in another body system. For 
example, if your CF has resulted in chronic pancreatic or hepatobiliary 
disease, we evaluate your impairment under the listings in 105.00.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. See Sec. 416.926 of this chapter. 
Respiratory disorders may be associated with disorders in other body 
systems, and we consider the combined effects of multiple impairments 
when we determine whether they medically

[[Page 573]]

equal a listing. If your impairment(s) does not meet or medically equal 
a listing, we will also consider whether it functionally equals the 
listings. See Sec. 416.926a of this chapter. We use the rules in 
Sec. 416.994a of this chapter when we decide whether you continue to be 
disabled.

         103.01  Category of Impairments, Respiratory Disorders

    103.02  Chronic respiratory disorders due to any cause except CF 
(for CF, see 103.04), with A, B, C, D, or E:
    A. FEV1 (see 103.00E) less than or equal to the value in 
Table I-A or I-B for your age, gender, and height without shoes (see 
103.00E3a).

[[Page 574]]



                                                           Table I--FEV1 Criteria for 103.02A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                 Table I-A                                                                    Table I-B
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Age 6 to attainment of age 13 (for both females and males)                                 Age 13 to attainment of age 18
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Females FEV1     Males FEV1
 Height without shoes (centimeters)   Height without shoes  FEV1 less than   Height without shoes   Height without shoes   less than or    less than or
         < means less than           (inches) < means less    or equal to   (centimeters) < means  (inches) < means less   equal to (L,    equal to (L,
                                              than             (L, BTPS)          less than                 than               BTPS)           BTPS)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<123.0.............................  <48.50...............            0.80  <153.0...............  <60.25...............            1.35            1.40
123.0 to <129.0....................  48.50 to <50.75......            0.90  153.0 to <159.0......  60.25 to <62.50......            1.45            1.50
129.0 to <134.0....................  50.75 to <52.75......            1.00  159.0 to <164.0......  62.50 to <64.50......            1.55            1.60
134.0 to <139.0....................  52.75 to <54.75......            1.10  164.0 to <169.0......  64.50 to <66.50......            1.65            1.70
139.0 to <144.0....................  54.75 to <56.75......            1.20  169.0 to <174.0......  66.50 to <68.50......            1.75            1.85
144.0 to <149.0....................  56.75 to <58.75......            1.30  174.0 to <180.0......  68.50 to <70.75......            1.85            2.00
149.0 or more......................  58.75 or more........            1.40  180.0 or more........  70.75 or more........            1.95            2.10
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 575]]

    OR
    B. FVC (see 103.00E) less than or equal to the value in Table II-A 
or II-B for your age, gender, and height without shoes (see 103.00E3a).

[[Page 576]]



                                                           Table II--FVC Criteria for 103.02B
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Table II-A                                                                   Table II-B
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Age 6 to attainment of age 13 (for both females and males)                                 Age 13 to attainment of age 18
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Females FVC
 Height without shoes (centimeters)   Height without shoes   FVC less than   Height without shoes   Height without shoes   less than or   Males FVC less
         < means less than           (inches) < means less    or equal to   (centimeters) < means  (inches) < means less   equal to (L,    than or equal
                                              than             (L, BTPS)          less than                 than               BTPS)       to (L, BTPS)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<123.0.............................  <48.50...............            0.85  <153.0...............  <60.25...............            1.65            1.65
123.0 to <129.0....................  48.50 to <50.75......            1.00  153.0 to <159.0......  60.25 to <62.50......            1.70            1.80
129.0 to <134.0....................  50.75 to <52.75......            1.10  159.0 to <164.0......  62.50 to <64.50......            1.80            1.95
134.0 to <139.0....................  52.75 to <54.75......            1.30  164.0 to <169.0......  64.50 to <66.50......            1.95            2.10
139.0 to <144.0....................  54.75 to <56.75......            1.40  169.0 to <174.0......  66.50 to <68.50......            2.05            2.25
144.0 to <149.0....................  56.75 to <58.75......            1.55  174.0 to <180.0......  68.50 to <70.75......            2.20            2.45
149.0 or more......................  58.75 or more........            1.70  180.0 or more........  70.75 or more........            2.30            2.55
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 577]]

    OR
    C. Hypoxemia with the need for at least 1.0 L per minute of 
continuous (24 hours per day) oxygen supplementation for at least 90 
consecutive days.
    OR
    D. The presence of a tracheostomy.
    1. Consider under a disability until the attainment of age 3; or
    2. Upon the attainment of age 3, documented need for mechanical 
ventilation via a tracheostomy for at least 4 hours per day and for at 
least 90 consecutive days.
    OR
    E. For children who have not attained age 2, CLD (see 103.00F) with 
exacerbations or complications requiring three hospitalizations within a 
12-month period and at least 30 days apart (the 12-month period must 
occur within the period we are considering in connection with your 
application or continuing disability review). Each hospitalization must 
last at least 48 hours, including hours in a hospital emergency 
department immediately before the hospitalization. (A child's initial 
birth hospitalization when CLD is first diagnosed counts as one 
hospitalization.) Consider under a disability for 1 year from the 
discharge date of the last hospitalization or until the attainment of 
age 2, whichever is later. After that, evaluate the impairment(s) under 
103.03 or another appropriate listing.
    103.03  Asthma (see 103.00G) with exacerbations or complications 
requiring three hospitalizations within a 12-month period and at least 
30 days apart (the 12-month period must occur within the period we are 
considering in connection with your application or continuing disability 
review). Each hospitalization must last at least 48 hours, including 
hours in a hospital emergency department immediately before the 
hospitalization. Consider under a disability for 1 year from the 
discharge date of the last hospitalization; after that, evaluate the 
residual impairment(s) under 103.03 or another appropriate listing.
    103.04  Cystic fibrosis (documented as described in 103.00H), with 
A, B, C, D, E, F, or G:
    A. FEV1 (see 103.00E) less than or equal to the value in 
Table III-A or Table III-B for your age, gender, and height without 
shoes (see 103.00E3a).

[[Page 578]]



                                                          Table III--FEV1 Criteria for 103.04A
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Table III-A                                                                  Table III-B
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Age 6 to attainment of age 13 (for both females and males)                                 Age 13 to attainment of age 18
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Females FEV1     Males FEV1
 Height without shoes (centimeters)   Height without shoes  FEV1 less than   Height without shoes   Height without shoes   less than or    less than or
         < means less than           (inches) < means less    or equal to   (centimeters) < means  (inches) < means less   equal to (L,    equal to (L,
                                              than             (L, BTPS)          less than                 than               BTPS)           BTPS)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<123.0.............................  <48.50...............            1.00  <153.0...............  <60.25...............            1.75            1.85
123.0 to <129.0....................  48.50 to <50.75......            1.15  153.0 to <159.0......  60.25 to <62.50......            1.85            2.05
129.0 to <134.0....................  50.75 to <52.75......            1.25  159.0 to <164.0......  62.50 to <64.50......            1.95            2.15
134.0 to <139.0....................  52.75 to <54.75......            1.40  164.0 to <169.0......  64.50 to <66.50......            2.10            2.30
139.0 to <144.0....................  54.75 to <56.75......            1.50  169.0 to <174.0......  66.50 to <68.50......            2.25            2.45
144.0 to <149.0....................  56.75 to <58.75......            1.70  174.0 to <180.0......  68.50 to <70.75......            2.35            2.60
149.0 or more......................  58.75 or more........            1.80  180.0 or more........  70.75 or more........            2.50            2.70
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 579]]

    OR
    B. For children who have not attained age 6, findings on imaging 
(see 103.00D3) of thickening of the proximal bronchial airways, nodular-
cystic lesions, segmental or lobular atelectasis, or consolidation, and 
documentation of one of the following:
    1. Shortness of breath with activity; or
    2. Accumulation of secretions as manifested by repetitive coughing; 
or
    3. Bilateral rales or rhonchi, or reduction of breath sounds.
    OR
    C. Exacerbations or complications (see 103.00H3) requiring three 
hospitalizations of any length within a 12-month period and at least 30 
days apart (the 12-month period must occur within the period we are 
considering in connection with your application or continuing disability 
review).
    OR
    D. Spontaneous pneumothorax, secondary to CF, requiring chest tube 
placement.
    OR
    E. Respiratory failure (see 103.00J) requiring invasive mechanical 
ventilation, noninvasive ventilation with BiPAP, or a combination of 
both treatments, for a continuous period of at least 48 hours, or for a 
continuous period of at least 72 hours if postoperatively.
    OR
    F. Pulmonary hemorrhage requiring vascular embolization to control 
bleeding.
    OR
    G. Two of the following exacerbations or complications (either two 
of the same or two different, see 103.00H3 and 103.00H4) within a 12-
month period (the 12-month period must occur within the period we are 
considering in connection with your application or continuing disability 
review):
    1. Pulmonary exacerbation requiring 10 consecutive days of 
intravenous antibiotic treatment.
    2. Pulmonary hemorrhage (hemoptysis with more than blood-streaked 
sputum but not requiring vascular embolization) requiring 
hospitalization of any length.
    3. Weight loss requiring daily supplemental enteral nutrition via a 
gastrostomy for at least 90 consecutive days or parenteral nutrition via 
a central venous catheter for at least 90 consecutive days.
    4. CFRD requiring daily insulin therapy for at least 90 consecutive 
days.
    103.05 [Reserved]
    103.06  Growth failure due to any chronic respiratory disorder (see 
103.00K), documented by:
    A. Hypoxemia with the need for at least 1.0 L per min of oxygen 
supplementation for at least 4 hours per day and for at least 90 
consecutive days.
    AND
    B. Growth failure as required in 1 or 2:
    1. For children from birth to attainment of age 2, three weight-for-
length measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate weight-for-
length table under 105.08B1; or
    2. For children age 2 to attainment of age 18, three BMI-for-age 
measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate BMI-for-age 
table under 105.08B2.
    103.07 [Reserved]
    103.08 [Reserved]
    103.09 [Reserved]
    103.10 [Reserved]
    103.11  Lung transplantation (see 103.00I). Consider under a 
disability for 3 years from the date of the transplant; after that, 
evaluate the residual impairment(s).
    103.12 [Reserved]
    103.13 [Reserved]
    103.14  Respiratory failure (see 103.00J) resulting from any 
underlying chronic respiratory disorder except CF (for CF, see 103.04E), 
requiring invasive mechanical ventilation, noninvasive ventilation with 
BiPAP, or a combination of both treatments, for a continuous period of 
at least 48 hours, or for a continuous period of at least 72 hours if 
postoperatively, twice within a 12-month period and at least 30 days 
apart (the 12-month period must occur within the period we are 
considering in connection with your application or continuing disability 
review).

                      104.00 Cardiovascular System

                               A. General

    1. What do we mean by a cardiovascular impairment?
    a. We mean any disorder that affects the proper functioning of the 
heart or the circulatory system (that is, arteries, veins, capillaries, 
and the lymphatic drainage). The disorder can be congenital or acquired.
    b. Cardiovascular impairment results from one or more of four 
consequences of heart disease:
    (i) Chronic heart failure or ventricular dysfunction.
    (ii) Discomfort or pain due to myocardial ischemia, with or without 
necrosis of heart muscle.
    (iii) Syncope, or near syncope, due to inadequate cerebral perfusion 
from any cardiac cause, such as obstruction of flow or disturbance in 
rhythm or conduction resulting in inadequate cardiac output.
    (iv) Central cyanosis due to right-to-left shunt, reduced oxygen 
concentration in the arterial blood, or pulmonary vascular disease.

[[Page 580]]

    c. Disorders of the veins or arteries (for example, obstruction, 
rupture, or aneurysm) may cause impairments of the lower extremities 
(peripheral vascular disease), the central nervous system, the eyes, the 
kidneys, and other organs. We will evaluate peripheral vascular disease 
under 4.11 or 4.12 in part A, and impairments of another body system(s) 
under the listings for that body system(s).
    2. What do we consider in evaluating cardiovascular impairments? The 
listings in this section describe cardiovascular impairments based on 
symptoms, signs, laboratory findings, response to a regimen of 
prescribed treatment, and functional limitations.
    3. What do the following terms or phrases mean in these listings?
    a. Medical consultant is an individual defined in Secs. 404.1616(a) 
and 416.1016(a). This term does not include medical sources who provide 
consultative examinations for us. We use the abbreviation ``MC'' 
throughout this section to designate a medical consultant.
    b. Persistent means that the longitudinal clinical record shows 
that, with few exceptions, the required finding(s) has been present, or 
is expected to be present, for a continuous period of at least 12 
months, such that a pattern of continuing severity is established.
    c. Recurrent means that the longitudinal clinical record shows that, 
within a consecutive 12-month period, the finding(s) occurs at least 
three times, with intervening periods of improvement of sufficient 
duration that it is clear that separate events are involved.
    d. Appropriate medically acceptable imaging means that the technique 
used is the proper one to evaluate and diagnose the impairment and is 
commonly recognized as accurate for assessing the cited finding.
    e. A consecutive 12-month period means a period of 12 consecutive 
months, all or part of which must occur within the period we are 
considering in connection with an application or continuing disability 
review.
    f. Currently present means that the finding is present at the time 
of adjudication.
    g. Uncontrolled means the impairment does not respond adequately to 
standard prescribed medical treatment.

                B. Documenting Cardiovascular Impairment

    1. What basic documentation do we need? We need sufficiently 
detailed reports of history, physical examinations, laboratory studies, 
and any prescribed treatment and response to allow us to assess the 
severity and duration of your cardiovascular impairment. A longitudinal 
clinical record covering a period of not less than 3 months of 
observations and treatment is usually necessary, unless we can make a 
determination or decision based on the current evidence.
    2. Why is a longitudinal clinical record important? We will usually 
need a longitudinal clinical record to assess the severity and expected 
duration of your impairment(s). If you have a listing-level impairment, 
you probably will have received medically prescribed treatment. Whenever 
there is evidence of such treatment, your longitudinal clinical record 
should include a description of the ongoing management and evaluation 
provided by your treating or other medical source. It should also 
include your response to this medical management, as well as information 
about the nature and severity of your impairment. The record will 
provide us with information on your functional status over an extended 
period of time and show whether your ability to function is improving, 
worsening, or unchanging.
    3. What if you have not received ongoing medical treatment?
    a. You may not have received ongoing treatment or have an ongoing 
relationship with the medical community despite the existence of a 
severe impairment(s). In this situation, we will base our evaluation on 
the current objective medical evidence and the other evidence we have. 
If you do not receive treatment, you cannot show an impairment that 
meets the criteria of these listings. However, we may find you disabled 
because you have another impairment(s) that in combination with your 
cardiovascular impairment medically equals the severity of a listed 
impairment or that functionally equals the listings.
    b. Unless we can decide your claim favorably on the basis of the 
current evidence, a longitudinal record is still important. In rare 
instances where there is no or insufficient longitudinal evidence, we 
may purchase a consultative examination(s) to help us establish the 
severity and duration of your impairment.
    4. When will we wait before we ask for more evidence?
    a. We will wait when we have information showing that your 
impairment is not yet stable and the expected change in your impairment 
might affect our determination or decision. In these situations, we need 
to wait to properly evaluate the severity and duration of your 
impairment during a stable period. Examples of when we might wait are:
    (i) If you have had a recent acute event; for example, acute 
rheumatic fever.
    (ii) If you have recently had a corrective cardiac procedure; for 
example, open-heart surgery.
    (iii) If you have started new drug therapy and your response to this 
treatment has not yet been established; for example, beta-blocker 
therapy for dilated congestive cardiomyopathy.
    b. In these situations, we will obtain more evidence 3 months 
following the event before we evaluate your impairment. However, we will 
not wait if we have enough information

[[Page 581]]

to make a determination or decision based on all of the relevant 
evidence in your case.
    5. Will we purchase any studies? In appropriate situations, we will 
purchase studies necessary to substantiate the diagnosis or to document 
the severity of your impairment, generally after we have evaluated the 
medical and other evidence we already have. We will not purchase studies 
involving exercise testing if there is significant risk involved or if 
there is another medical reason not to perform the test. We will follow 
sections 4.00C6, 4.00C7, 4.00C8, and 104.00B7 when we decide whether to 
purchase exercise testing. We will make a reasonable effort to obtain 
any additional studies from a qualified medical source in an office or 
center experienced in pediatric cardiac assessment. (See Sec. 416.919g.)
    6. What studies will we not purchase? We will not purchase any 
studies involving cardiac catheterization, such as coronary angiography, 
arteriograms, or electrophysiological studies. However, if the results 
of catheterization are part of the existing evidence we have, we will 
consider them together with the other relevant evidence. See 4.00C15a in 
part A.
    7. Will we use exercise tolerance tests (ETTs) for evaluating 
children with cardiovascular impairment?
    a. ETTs, though increasingly used, are still less frequently 
indicated in children than in adults, and can rarely be performed 
successfully by children under 6 years of age. An ETT may be of value in 
the assessment of some arrhythmias, in the assessment of the severity of 
chronic heart failure, and in the assessment of recovery of function 
following cardiac surgery or other treatment.
    b. We will purchase an ETT in a childhood claim only if we cannot 
make a determination or decision based on the evidence we have and an 
MC, preferably one with experience in the care of children with 
cardiovascular impairments, has determined that an ETT is needed to 
evaluate your impairment. We will not purchase an ETT if you are less 
than 6 years of age. If we do purchase an ETT for a child age 12 or 
younger, it must be performed by a qualified medical source in a 
specialty center for pediatric cardiology or other facility qualified to 
perform exercise tests of children.
    c. For full details on ETT requirements and usage, see 4.00C in part 
A.

                   C. Evaluating Chronic Heart Failure

    1. What is chronic heart failure (CHF)?
    a. CHF is the inability of the heart to pump enough oxygenated blood 
to body tissues. This syndrome is characterized by symptoms and signs of 
pulmonary or systemic congestion (fluid retention) or limited cardiac 
output. Certain laboratory findings of cardiac functional and structural 
abnormality support the diagnosis of CHF.
    b. CHF is considered in these listings as a single category whether 
due to atherosclerosis (narrowing of the arteries), cardiomyopathy, 
hypertension, or rheumatic, congenital, or other heart disease. However, 
if the CHF is the result of primary pulmonary hypertension secondary to 
disease of the lung (cor pulmonale), we will evaluate your impairment 
using 3.09 in the respiratory system listings in part A.
    2. What evidence of CHF do we need?
    a. Cardiomegaly or ventricular dysfunction must be present and 
demonstrated by appropriate medically acceptable imaging, such as chest 
x-ray, echocardiography (M-Mode, 2-dimensional, and Doppler), 
radionuclide studies, or cardiac catheterization.
    (i) Cardiomegaly is present when:
    (A) Left ventricular diastolic dimension or systolic dimension is 
greater than 2 standard deviations above the mean for the child's body 
surface area;
    (B) Left ventricular mass is greater than 2 standard deviations 
above the mean for the child's body surface area; or
    (C) Chest x-ray (6 foot PA film) is indicative of cardiomegaly if 
the cardiothoracic ratio is over 60 percent at 1 year of age or less, or 
55 percent or greater at more than 1 year of age.
    (ii) Ventricular dysfunction is present when indices of left 
ventricular function, such as fractional shortening or ejection fraction 
(the percentage of the blood in the ventricle actually pumped out with 
each contraction), are greater than 2 standard deviations below the mean 
for the child's age. (Fractional shortening, also called shortening 
fraction, reflects the left ventricular systolic function in the absence 
of segmental wall motion abnormalities and has a linear correlation with 
ejection fraction. In children, fractional shortening is more commonly 
used than ejection fraction.)
    (iii) However, these measurements alone do not reflect your 
functional capacity, which we evaluate by considering all of the 
relevant evidence.
    (iv) Other findings on appropriate medically acceptable imaging may 
include increased pulmonary vascular markings, pleural effusion, and 
pulmonary edema. These findings need not be present on each report, 
since CHF may be controlled by prescribed treatment.
    b. To establish that you have chronic heart failure, we require that 
your medical history and physical examination describe characteristic 
symptoms and signs of pulmonary or systemic congestion or of limited 
cardiac output associated with abnormal findings on appropriate 
medically acceptable imaging. When a remediable factor, such as 
arrhythmia, triggers an acute episode of heart failure, you may 
experience restored cardiac function, and a chronic impairment may not 
be present.

[[Page 582]]

    (i) Symptoms of congestion or of limited cardiac output include easy 
fatigue, weakness, shortness of breath (dyspnea), cough, or chest 
discomfort at rest or with activity. Children with CHF may also 
experience shortness of breath on lying flat (orthopnea) or episodes of 
shortness of breath that wake them from sleep (paroxysmal nocturnal 
dyspnea). They may also experience cardiac arrhythmias resulting in 
palpitations, lightheadedness, or fainting. Fatigue or exercise 
intolerance in an infant may be manifested by prolonged feeding time, 
often associated with excessive respiratory effort and sweating.
    (ii) During infancy, other manifestations of chronic heart failure 
may include repeated lower respiratory tract infections.
    (iii) Signs of congestion may include hepatomegaly, ascites, 
increased jugular venous distention or pressure, rales, peripheral 
edema, rapid shallow breathing (tachypnea), or rapid weight gain. 
However, these signs need not be found on all examinations because fluid 
retention may be controlled by prescribed treatment.
    3. How do we evaluate growth failure due to CHF?
    a. To evaluate growth failure due to CHF, we require documentation 
of the clinical findings of CHF described in 104.00C2 and the growth 
measurements in 104.02C within the same consecutive 12-month period. The 
dates of clinical findings may be different from the dates of growth 
measurements.
    b. Under 104.02C, we use the appropriate table(s) under 105.08B in 
the digestive system to determine whether a child's growth is less than 
the third percentile.
    (i) For children from birth to attainment of age 2, we use the 
weight-for-length table corresponding to the child's gender (Table I or 
Table II).
    (ii) For children age 2 to attainment of age 18, we use the body 
mass index (BMI)-for-age table corresponding to the child's gender 
(Table III or Table IV).
    (iii) BMI is the ratio of a child's weight to the square of his or 
her height. We calculate BMI using the formulas in 105.00G2c.

                 D. Evaluating Congenital Heart Disease

    1. What is congenital heart disease? Congenital heart disease is any 
abnormality of the heart or the major blood vessels that is present at 
birth. Examples include:
    a. Abnormalities of cardiac septation, including ventricular septal 
defect or atrioventricular canal;
    b. Abnormalities resulting in cyanotic heart disease, including 
tetralogy of Fallot or transposition of the great arteries;
    c. Valvular defects or obstructions to ventricular outflow, 
including pulmonary or aortic stenosis or coarctation of the aorta; and
    d. Major abnormalities of ventricular development, including 
hypoplastic left heart syndrome or pulmonary tricuspid atresia with 
hypoplastic right ventricle.
    2. How will we evaluate symptomatic congenital heart disease?
    a. Because of improved treatment methods, more children with 
congenital heart disease are living longer. Although some types of 
congenital heart disease may be corrected by surgery, many children with 
treated congenital heart disease continue to have problems throughout 
their lives (symptomatic congenital heart disease). If you have 
congenital heart disease that results in chronic heart failure with 
evidence of ventricular dysfunction or in recurrent arrhythmias, we will 
evaluate your impairment under 104.02 or 104.05. Otherwise, we will 
evaluate your impairment under 104.06.
    b. For 104.06A2, we will accept pulse oximetry measurements instead 
of arterial O2, but the arterial O2 values are 
preferred, if available.
    c. For 104.06D, examples of impairments that in most instances will 
require life-saving surgery or a combination of surgery and other major 
interventional procedures (for example, multiple ``balloon'' catheter 
procedures) before age 1 include, but are not limited to, the following:
    (i) Hypoplastic left heart syndrome,
    (ii) Critical aortic stenosis with neonatal heart failure,
    (iii) Critical coarctation of the aorta, with or without associated 
anomalies,
    (iv) Complete atrioventricular canal defects,
    (v) Transposition of the great arteries,
    (vi) Tetralogy of Fallot,
    (vii) Pulmonary atresia with intact ventricular septum,
    (viii) Single ventricle,
    (ix) Tricuspid atresia, and
    (x) Multiple ventricular septal defects.

                        E. Evaluating Arrhythmias

    1. What is an arrhythmia? An arrhythmia is a change in the regular 
beat of the heart. Your heart may seem to skip a beat or beat 
irregularly, very quickly (tachycardia), or very slowly (bradycardia).
    2. What are the different types of arrhythmias?
    a. There are many types of arrhythmias. Arrhythmias are identified 
by where they occur in the heart (atria or ventricles) and by what 
happens to the heart's rhythm when they occur.
    b. Arrhythmias arising in the cardiac atria (upper chambers of the 
heart) are called atrial or supraventricular arrhythmias. Ventricular 
arrhythmias begin in the ventricles (lower chambers). In general, 
ventricular arrhythmias caused by heart disease are the most serious.
    3. How do we evaluate arrhythmias using 104.05?

[[Page 583]]

    a. We will use 104.05 when you have arrhythmias that are not fully 
controlled by medication, an implanted pacemaker, or an implanted 
cardiac defibrillator and you have uncontrolled recurrent episodes of 
syncope or near syncope. If your arrhythmias are controlled, we will 
evaluate your underlying heart disease using the appropriate listing. 
For other considerations when we evaluate arrhythmias in the presence of 
an implanted cardiac defibrillator, see 104.00E4.
    b. We consider near syncope to be a period of altered consciousness, 
since syncope is a loss of consciousness or a faint. It is not merely a 
feeling of light-headedness, momentary weakness, or dizziness.
    c. For purposes of 104.05, there must be a documented association 
between the syncope or near syncope and the recurrent arrhythmia. The 
recurrent arrhythmia, not some other cardiac or non-cardiac disorder, 
must be established as the cause of the associated symptom. This 
documentation of the association between the symptoms and the arrhythmia 
may come from the usual diagnostic methods, including Holter monitoring 
(also called ambulatory electrocardiography) and tilt-table testing with 
a concurrent ECG. Although an arrhythmia may be a coincidental finding 
on an ETT, we will not purchase an ETT to document the presence of a 
cardiac arrhythmia.
    4. What will we consider when you have an implanted cardiac 
defibrillator and you do not have arrhythmias that meet the requirements 
of 104.05?
    a. Implanted cardiac defibrillators are used to prevent sudden 
cardiac death in children who have had, or are at high risk for, cardiac 
arrest from life-threatening ventricular arrhythmias. The largest group 
of children at risk for sudden cardiac death consists of children with 
cardiomyopathy (ischemic or non-ischemic) and reduced ventricular 
function. However, life-threatening ventricular arrhythmias can also 
occur in children with little or no ventricular dysfunction. The shock 
from the implanted cardiac defibrillator is a unique form of treatment; 
it rescues a child from what may have been cardiac arrest. However, as a 
consequence of the shock(s), children may experience psychological 
distress, which we may evaluate under the mental disorders listings in 
112.00ff.
    b. Most implantable cardiac defibrillators have rhythm-correcting 
and pacemaker capabilities. In some children, these functions may result 
in the termination of ventricular arrhythmias without an otherwise 
painful shock. (The shock is like being kicked in the chest.) Implanted 
cardiac defibrillators may deliver inappropriate shocks, often 
repeatedly, in response to benign arrhythmias or electrical malfunction. 
Also, exposure to strong electrical or magnetic fields, such as from MRI 
(magnetic resonance imaging), can trigger or reprogram an implanted 
cardiac defibrillator, resulting in inappropriate shocks. We must 
consider the frequency of, and the reason(s) for, the shocks when 
evaluating the severity and duration of your impairment.
    c. In general, the exercise limitations imposed on children with an 
implanted cardiac defibrillator are those dictated by the underlying 
heart impairment. However, the exercise limitations may be greater when 
the implanted cardiac defibrillator delivers an inappropriate shock in 
response to the increase in heart rate with exercise, or when there is 
exercise-induced ventricular arrhythmia.

             F. Evaluating Other Cardiovascular Impairments

    1. What is ischemic heart disease (IHD) and how will we evaluate it 
in children? IHD results when one or more of your coronary arteries is 
narrowed or obstructed or, in rare situations, constricted due to 
vasospasm, interfering with the normal flow of blood to your heart 
muscle (ischemia). The obstruction may be the result of an embolus, a 
thrombus, or plaque. When heart muscle tissue dies as a result of the 
reduced blood supply, it is called a myocardial infarction (heart 
attack). Ischemia is rare in children, but when it occurs, its effects 
on children are the same as on adults. If you have IHD, we will evaluate 
it under 4.00E and 4.04 in part A.
    2. How will we evaluate hypertension? Because hypertension (high 
blood pressure) generally causes disability through its effects on other 
body systems, we will evaluate it by reference to the specific body 
system(s) affected (heart, brain, kidneys, or eyes) when we consider its 
effects under the listings. We will also consider any limitations 
imposed by your hypertension when we consider whether you have an 
impairment that functionally equals the listings.
    3. What is cardiomyopathy and how will we evaluate it? 
Cardiomyopathy is a disease of the heart muscle. The heart loses its 
ability to pump blood (heart failure), and in some instances, heart 
rhythm is disturbed, leading to irregular heartbeats (arrhythmias). 
Usually, the exact cause of the muscle damage is never found (idiopathic 
cardiomyopathy). There are various types of cardiomyopathy, which fall 
into two major categories: Ischemic and nonischemic cardiomyopathy. 
Ischemic cardiomyopathy typically refers to heart muscle damage that 
results from coronary artery disease, including heart attacks. 
Nonischemic cardiomyopathy includes several types: Dilated, 
hypertrophic, and restrictive. We will evaluate cardiomyopathy under 
4.04 in part A, 104.02, 104.05, or 111.06, depending on its effects on 
you.
    4. How will we evaluate valvular heart disease? We will evaluate 
valvular heart disease under the listing appropriate for its effect on

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you. Thus, we may use 4.04 in part A, 104.02, 104.05, 104.06, or an 
appropriate neurological listing in 111.00ff.
    5. What do we consider when we evaluate heart transplant recipients?
    a. After your heart transplant, we will consider you disabled for 1 
year following the surgery because there is a greater likelihood of 
rejection of the organ and infection during the first year.
    b. However, heart transplant patients generally meet our definition 
of disability before they undergo transplantation. We will determine the 
onset of your disability based on the facts in your case.
    c. We will not assume that you became disabled when your name was 
placed on a transplant waiting list. This is because you may be placed 
on a waiting list soon after diagnosis of the cardiac disorder that may 
eventually require a transplant. Physicians recognize that candidates 
for transplantation often have to wait months or even years before a 
suitable donor heart is found, so they place their patients on the list 
as soon as permitted.
    d. When we do a continuing disability review to determine whether 
you are still disabled, we will evaluate your residual impairment(s), as 
shown by symptoms, signs, and laboratory findings, including any side 
effects of medication. We will consider any remaining symptoms, signs, 
and laboratory findings indicative of cardiac dysfunction in deciding 
whether medical improvement (as defined in Sec. 416.994a) has occurred.
    6. How will we evaluate chronic rheumatic fever or rheumatic heart 
disease? The diagnosis should be made in accordance with the current 
revised Jones criteria for guidance in the diagnosis of rheumatic fever. 
We will evaluate persistence of rheumatic fever activity under 104.13. 
If you have evidence of chronic heart failure or recurrent arrhythmias 
associated with rheumatic heart disease, we will use 104.02 or 104.05.
    7. What is hyperlipidemia and how will we evaluate it? 
Hyperlipidemia is the general term for an elevation of any or all of the 
lipids (fats or cholesterol) in the blood; for example, 
hypertriglyceridemia, hypercholesterolemia, and hyperlipoproteinemia. 
These disorders of lipoprotein metabolism and transport can cause 
defects throughout the body. The effects most likely to interfere with 
function are those produced by atherosclerosis (narrowing of the 
arteries) and coronary artery disease. We will evaluate your lipoprotein 
disorder by considering its effects on you.
    8. How will we evaluate Kawasaki disease? We will evaluate Kawasaki 
disease under the listing appropriate to its effects on you, which may 
include major coronary artery aneurysm or heart failure. A major 
coronary artery aneurysm may cause ischemia or arrhythmia, which we will 
evaluate under 4.04 in part A or 104.05. We will evaluate chronic heart 
failure under 104.02.
    9. What is lymphedema and how will we evaluate it?
    a. Lymphedema is edema of the extremities due to a disorder of the 
lymphatic circulation; at its worst, it is called elephantiasis. Primary 
lymphedema is caused by abnormal development of lymph vessels and may be 
present at birth (congenital lymphedema), but more often develops during 
the teens (lymphedema praecox). Secondary lymphedema is due to 
obstruction or destruction of normal lymphatic channels due to tumor, 
surgery, repeated infections, or parasitic infection such as filariasis. 
Lymphedema most commonly affects one extremity.
    b. Lymphedema does not meet the requirements of 4.11 in part A, 
although it may medically equal the severity of that listing. We will 
evaluate lymphedema by considering whether the underlying cause meets or 
medically equals any listing or whether the lymphedema medically equals 
a cardiovascular listing, such as 4.11, or a musculoskeletal listing, 
such as 101.02A or 101.03. If no listing is met or medically equaled, we 
will evaluate any functional limitations imposed by your lymphedema when 
we consider whether you have an impairment that functionally equals the 
listings.
    10. What is Marfan syndrome and how will we evaluate it?
    a. Marfan syndrome is a genetic connective tissue disorder that 
affects multiple body systems, including the skeleton, eyes, heart, 
blood vessels, nervous system, skin, and lungs. There is no specific 
laboratory test to diagnose Marfan syndrome. The diagnosis is generally 
made by medical history, including family history, physical examination, 
including an evaluation of the ratio of arm/leg size to trunk size, a 
slit lamp eye examination, and a heart test(s), such as an 
echocardiogram. In some cases, a genetic analysis may be useful, but 
such analyses may not provide any additional helpful information.
    b. The effects of Marfan syndrome can range from mild to severe. In 
most cases, the disorder progresses as you age. Most individuals with 
Marfan syndrome have abnormalities associated with the heart and blood 
vessels. Your heart's mitral valve may leak, causing a heart murmur. 
Small leaks may not cause symptoms, but larger ones may cause shortness 
of breath, fatigue, and palpitations. Another effect is that the wall of 
the aorta may be weakened and stretch (aortic dilation). This aortic 
dilation may tear, dissect, or rupture, causing serious heart problems 
or sometimes sudden death. We will evaluate the manifestations of your 
Marfan syndrome under the appropriate body system criteria, such as 4.10 
in part A, or if

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necessary consider the functional limitations imposed by your 
impairment.

                       G. Other Evaluation Issues

    1. What effect does obesity have on the cardiovascular system and 
how will we evaluate it? Obesity is a medically determinable impairment 
that is often associated with disorders of the cardiovascular system. 
Disturbance of this system can be a major cause of disability in 
children with obesity. Obesity may affect the cardiovascular system 
because of the increased workload the additional body mass places on the 
heart. Obesity may make it harder for the chest and lungs to expand. 
This can mean that the respiratory system must work harder to provide 
needed oxygen. This in turn would make the heart work harder to pump 
blood to carry oxygen to the body. Because the body would be working 
harder at rest, its ability to perform additional work would be less 
than would otherwise be expected. Thus, the combined effects of obesity 
with cardiovascular impairments can be greater than the effects of each 
of the impairments considered separately. We must consider any 
additional and cumulative effects of obesity when we determine whether 
you have a severe cardiovascular impairment or a listing-level 
cardiovascular impairment (or a combination of impairments that 
medically equals a listing), and when we determine whether your 
impairment(s) functionally equals the listings.
    2. How do we relate treatment to functional status? In general, 
conclusions about the severity of a cardiovascular impairment cannot be 
made on the basis of type of treatment rendered or anticipated. The 
amount of function restored and the time required for improvement after 
treatment (medical, surgical, or a prescribed program of progressive 
physical activity) vary with the nature and extent of the disorder, the 
type of treatment, and other factors. Depending upon the timing of this 
treatment in relation to the alleged onset date of disability, we may 
need to defer evaluation of the impairment for a period of up to 3 
months from the date treatment began to permit consideration of 
treatment effects, unless we can make a determination or decision using 
the evidence we have. See 104.00B4.
    3. How do we evaluate impairments that do not meet one of the 
cardiovascular listings?
    a. These listings are only examples of common cardiovascular 
disorders that we consider severe enough to result in marked and severe 
functional limitations. If your severe impairment(s) does not meet the 
criteria of any of these listings, we must also consider whether you 
have an impairment(s) that satisfies the criteria of a listing in 
another body system.
    b. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See Sec. 416.926.) If you have a severe 
impairment(s) that does not meet or medically equal the criteria of a 
listing, we will consider whether it functionally equals the listings. 
(See Sec. 416.926a.) When we decide whether you continue to be disabled, 
we use the rules in Sec. 416.994a.

         104.01  Category of Impairments, Cardiovascular System

    104.02.  Chronic heart failure while on a regimen of prescribed 
treatment, with symptoms and signs described in 104.00C2, and with one 
of the following:
    A. Persistent tachycardia at rest (see Table I);

OR

    B. Persistent tachypnea at rest (see Table II) or markedly decreased 
exercise tolerance (see 104.00C2b);

OR

    C. Growth failure as required in 1 or 2:
    1. For children from birth to attainment of age 2, three weight-for-
length measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate weight-for-
length table under 105.08B1; or
    2. For children age 2 to attainment of age 18, three BMI-for-age 
measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate BMI-for-age 
table under 105.08B2.
    104.05  Recurrent arrhythmias, not related to reversible causes such 
as electrolyte abnormalities or digitalis glycoside or antiarrhythmic 
drug toxicity, resulting in uncontrolled (see 104.00A3g), recurrent (see 
104.00A3c) episodes of cardiac syncope or near syncope (see 104.00E3b), 
despite prescribed treatment (see 104.00B3 if there is no prescribed 
treatment), and documented by resting or ambulatory (Holter) 
electrocardiography, or by other appropriate medically acceptable 
testing, coincident with the occurrence of syncope or near syncope (see 
104.00E3c).
    104.06  Congenital heart disease, documented by appropriate 
medically acceptable imaging (see 104.00A3d) or cardiac catheterization, 
with one of the following:
    A. Cyanotic heart disease, with persistent, chronic hypoxemia as 
manifested by:
    1. Hematocrit of 55 percent or greater on two evaluations 3 months 
or more apart within a consecutive 12-month period (see 104.00A3e); or
    2. Arterial O2 saturation of less than 90 percent in room 
air, or resting arterial PO2 of 60 Torr or less; or

[[Page 586]]

    3. Hypercyanotic spells, syncope, characteristic squatting, or other 
incapacitating symptoms directly related to documented cyanotic heart 
disease; or
    4. Exercise intolerance with increased hypoxemia on exertion.

OR

    B. Secondary pulmonary vascular obstructive disease with pulmonary 
arterial systolic pressure elevated to at least 70 percent of the 
systemic arterial systolic pressure.

OR

    C. Symptomatic acyanotic heart disease, with ventricular dysfunction 
interfering very seriously with the ability to independently initiate, 
sustain, or complete activities.

OR

    D. For infants under 12 months of age at the time of filing, with 
life-threatening congenital heart impairment that will require or 
already has required surgical treatment in the first year of life, and 
the impairment is expected to be disabling (because of residual 
impairment following surgery, or the recovery time required, or both) 
until the attainment of at least 1 year of age, consider the infant to 
be under disability until the attainment of at least age 1; thereafter, 
evaluate impairment severity with reference to the appropriate listing.
    104.09  Heart transplant. Consider under a disability for 1 year 
following surgery; thereafter, evaluate residual impairment under the 
appropriate listing.
    104.13  Rheumatic heart disease, with persistence of rheumatic fever 
activity manifested by significant murmurs(s), cardiac enlargement or 
ventricular dysfunction (see 104.00C2a), and other associated abnormal 
laboratory findings; for example, an elevated sedimentation rate or ECG 
findings, for 6 months or more in a consecutive 12-month period (see 
104.00A3e). Consider under a disability for 18 months from the 
established onset of impairment, then evaluate any residual 
impairment(s).

                        105.00  Digestive System

    A. What kinds of disorders do we consider in the digestive system? 
Disorders of the digestive system include gastrointestinal hemorrhage, 
hepatic (liver) dysfunction, inflammatory bowel disease, short bowel 
syndrome, and malnutrition. They may also lead to complications, such as 
obstruction, or be accompanied by manifestations in other body systems. 
Congenital abnormalities involving the organs of the gastrointestinal 
system may interfere with the ability to maintain adequate nutrition, 
growth, and development.
    B. What documentation do we need? We need a record of your medical 
evidence, including clinical and laboratory findings. The documentation 
should include appropriate medically acceptable imaging studies and 
reports of endoscopy, operations, and pathology, as appropriate to each 
listing, to document the severity and duration of your digestive 
disorder. We may also need assessments of your growth and development. 
Medically acceptable imaging includes, but is not limited to, x-ray 
imaging, sonography, computerized axial tomography (CAT scan), magnetic 
resonance imaging (MRI), and radionuclide scans. Appropriate means that 
the technique used is the proper one to support the evaluation and 
diagnosis of the disorder. The findings required by these listings must 
occur within the period we are considering in connection with your 
application or continuing disability review.
    C. How do we consider the effects of treatment?
    1. Digestive disorders frequently respond to medical or surgical 
treatment; therefore, we generally consider the severity and duration of 
these disorders within the context of the prescribed treatment.
    2. We assess the effects of treatment, including medication, 
therapy, surgery, or any other form of treatment you receive, by 
determining if there are improvements in the symptoms, signs, and 
laboratory findings of your digestive disorder. We also assess any side 
effects of your treatment that may further limit your functioning.
    3. To assess the effects of your treatment, we may need information 
about:
    a. The treatment you have been prescribed (for example, the type of 
medication or therapy, or your use of parenteral (intravenous) nutrition 
or supplemental enteral nutrition via a gastrostomy);
    b. The dosage, method, and frequency of administration;
    c. Your response to the treatment;
    d. Any adverse effects of such treatment; and
    e. The expected duration of the treatment.
    4. Because the effects of treatment may be temporary or long-term, 
in most cases we need information about the impact of your treatment, 
including its expected duration and side effects, over a sufficient 
period of time to help us assess its outcome. When adverse effects of 
treatment contribute to the severity of your impairment(s), we will 
consider the duration or expected duration of the treatment when we 
assess the duration of your impairment(s).
    5. If you need parenteral (intravenous) nutrition or supplemental 
enteral nutrition via a gastrostomy to avoid debilitating complications 
of a digestive disorder, this treatment will not, in itself, indicate 
that you have marked and severe functional limitations. The exceptions 
are 105.07, short bowel syndrome, and 105.10, for children who have

[[Page 587]]

not attained age 3 and who require supplemental daily enteral feedings 
via a gastrostomy (see 105.00F and 105.00H).
    6. If you have not received ongoing treatment or have not had an 
ongoing relationship with the medical community despite the existence of 
a severe impairment(s), we will evaluate the severity and duration of 
your digestive impairment on the basis of current medical and other 
evidence in your case record. If you have not received treatment, you 
may not be able to show an impairment that meets the criteria of one of 
the digestive system listings, but your digestive impairment may 
medically equal a listing or functionally equal the listings.
    D. How do we evaluate chronic liver disease?
    1. General. Chronic liver disease is characterized by liver cell 
necrosis, inflammation, or scarring (fibrosis or cirrhosis), due to any 
cause, that persists for more than 6 months. Chronic liver disease may 
result in portal hypertension, cholestasis (suppression of bile flow), 
extrahepatic manifestations, or liver cancer. (We evaluate liver cancer 
under 113.03.) Significant loss of liver function may be manifested by 
hemorrhage from varices or portal hypertensive gastropathy, ascites 
(accumulation of fluid in the abdominal cavity), hydrothorax (ascitic 
fluid in the chest cavity), or encephalopathy. There can also be 
progressive deterioration of laboratory findings that are indicative of 
liver dysfunction. Liver transplantation is the only definitive cure for 
end stage liver disease (ESLD).
    2. Examples of chronic liver disease include, but are not limited 
to, biliary atresia, chronic hepatitis, non-alcoholic steatohepatitis 
(NASH), primary biliary cirrhosis (PBC), primary sclerosing cholangitis 
(PSC), autoimmune hepatitis, hemochromatosis, drug-induced liver 
disease, Wilson's disease, and serum alpha-1 antitrypsin deficiency. 
Children can also have congenital abnormalities of abdominal organs or 
inborn metabolic disorders that result in chronic liver disease. Acute 
hepatic injury is frequently reversible as in viral, drug-induced, 
toxin-induced, and ischemic hepatitis. In the absence of evidence of a 
chronic impairment, episodes of acute liver disease do not meet 105.05.
    3. Manifestations of chronic liver disease.
    a. Symptoms may include, but are not limited to, pruritis (itching), 
fatigue, nausea, loss of appetite, or sleep disturbances. Children can 
also have associated developmental delays or poor school performance. 
Symptoms of chronic liver disease may have a poor correlation with the 
severity of liver disease and functional ability.
    b. Signs may include, but are not limited to, jaundice, enlargement 
of the liver and spleen, ascites, peripheral edema, and altered mental 
status.
    c. Laboratory findings may include, but are not limited to, 
increased liver enzymes, increased serum total bilirubin, increased 
ammonia levels, decreased serum albumin, and abnormal coagulation 
studies, such as increased International Normalized Ratio (INR) or 
decreased platelet counts. Abnormally low serum albumin or elevated INR 
levels indicate loss of synthetic liver function, with increased 
likelihood of cirrhosis and associated complications. However, other 
abnormal lab tests, such as liver enzymes, serum total bilirubin, or 
ammonia levels, may have a poor correlation with the severity of liver 
disease and functional ability. A liver biopsy may demonstrate the 
degree of liver cell necrosis, inflammation, fibrosis, and cirrhosis. If 
you have had a liver biopsy, we will make every reasonable effort to 
obtain the results; however, we will not purchase a liver biopsy. 
Imaging studies (CAT scan, ultrasound, MRI) may show the size and 
consistency (fatty liver, scarring) of the liver and document ascites 
(see 105.00D6).
    4. Chronic viral hepatitis infections.
    a. General.
    (i) Chronic viral hepatitis infections are commonly caused by 
hepatitis C virus (HCV), and to a lesser extent, hepatitis B virus 
(HBV). Usually, these are slowly progressive disorders that persist over 
many years during which the symptoms and signs are typically 
nonspecific, intermittent, and mild (for example, fatigue, difficulty 
with concentration, or right upper quadrant pain). Laboratory findings 
(liver enzymes, imaging studies, liver biopsy pathology) and 
complications are generally similar in HCV and HBV. The spectrum of 
these chronic viral hepatitis infections ranges widely and includes an 
asymptomatic state; insidious disease with mild to moderate symptoms 
associated with fluctuating liver tests; extrahepatic manifestations; 
cirrhosis, both compensated and decompensated; ESLD with the need for 
liver transplantation; and liver cancer. Treatment for chronic viral 
hepatitis infections varies considerably based on age, medication 
tolerance, treatment response, adverse effects of treatment, and 
duration of the treatment. Comorbid disorders, such as HIV infection, 
may accelerate the clinical course of viral hepatitis infection(s) or 
may result in a poorer response to medical treatment.
    (ii) We evaluate all types of chronic viral hepatitis infections 
under 105.05 or any listing in an affected body system(s). If your 
impairment(s) does not meet or medically equal a listing, we will 
consider the effects of your hepatitis when we assess whether your 
impairment(s) functionally equals the listings.
    b. Chronic hepatitis B virus (HBV) infection.
    (i) Chronic HBV infection can be diagnosed by the detection of 
hepatitis B surface antigen (HBsAg) or hepatitis B virus DNA (HBV DNA) 
in the blood for at least 6 months. In addition, detection of the 
hepatitis B e antigen (HBeAg) suggests an increased likelihood of 
progression to cirrhosis, ESLD, and

[[Page 588]]

hepatocellular carcinoma. (HBeAg may also be referred to as ``hepatitis 
B early antigen'' or ``hepatitis B envelope antigen.'')
    (ii) The therapeutic goal of treatment is to suppress HBV 
replication and thereby prevent progression to cirrhosis, ESLD, and 
hepatocellular carcinoma. Treatment usually includes interferon 
injections, oral antiviral agents, or a combination of both. Common 
adverse effects of treatment are the same as noted in 105.00D4c(ii) for 
HCV, and generally end within a few days after treatment is 
discontinued.
    c. Chronic hepatitis C virus (HCV) infection.
    (i) Chronic HCV infection is diagnosed by the detection of hepatitis 
C viral RNA in the blood for at least 6 months. Documentation of the 
therapeutic response to treatment is also monitored by the quantitative 
assay of serum HCV RNA (``HCV viral load''). Treatment usually includes 
a combination of interferon injections and oral ribavirin; whether a 
therapeutic response has occurred is usually assessed after 12 weeks of 
treatment by checking the HCV viral load. If there has been a 
substantial reduction in HCV viral load (also known as early viral 
response, or EVR), this reduction is predictive of a sustained viral 
response with completion of treatment. Combined therapy is commonly 
discontinued after 12 weeks when there is no early viral response, since 
in that circumstance there is little chance of obtaining a sustained 
viral response (SVR). Otherwise, treatment is usually continued for a 
total of 48 weeks.
    (ii) Combined interferon and ribavirin treatment may have 
significant adverse effects that may require dosing reduction, planned 
interruption of treatment, or discontinuation of treatment. Adverse 
effects may include: Anemia (ribavirin-induced hemolysis), neutropenia, 
thrombocytopenia, fever, cough, fatigue, myalgia, arthralgia, nausea, 
loss of appetite, pruritis, and insomnia. Behavioral side effects may 
also occur. Influenza-like symptoms are generally worse in the first 4 
to 6 hours after each interferon injection and during the first weeks of 
treatment. Adverse effects generally end within a few days after 
treatment is discontinued.
    d. Extrahepatic manifestations of HBV and HCV. In addition to their 
hepatic manifestations, both HBV and HCV may have significant 
extrahepatic manifestations in a variety of body systems. These include, 
but are not limited to: Keratoconjunctivitis (sicca syndrome), 
glomerulonephritis, skin disorders (for example, lichen planus, 
porphyria cutanea tarda), neuropathy, and immune dysfunction (for 
example, cryoglobulinemia, Sjogren's syndrome, and vasculitis). The 
extrahepatic manifestations of HBV and HCV may not correlate with the 
severity of your hepatic impairment. If your impairment(s) does not meet 
or medically equal a listing in an affected body system(s), we will 
consider the effects of your extrahepatic manifestations when we 
determine whether your impairment(s) functionally equals the listings.
    5. Gastrointestinal hemorrhage (105.02 and 105.05A). 
Gastrointestinal hemorrhaging can result in hematemesis (vomiting of 
blood), melena (tarry stools), or hematochezia (bloody stools). Under 
105.02, the required transfusions of at least 10 cc of blood/kg of body 
weight must be at least 30 days apart and occur at least three times 
during a consecutive 6-month period. Under 105.05A, hemodynamic 
instability is diagnosed with signs such as pallor (pale skin), 
diaphoresis (profuse perspiration), rapid pulse, low blood pressure, 
postural hypotension (pronounced fall in blood pressure when arising to 
an upright position from lying down) or syncope (fainting). Hemorrhaging 
that results in hemodynamic instability is potentially life-threatening 
and therefore requires hospitalization for transfusion and supportive 
care. Under 105.05A, we require only one hospitalization for transfusion 
of at least 10 cc of blood/kg of body weight.
    6. Ascites or hydrothorax (105.05B) indicates significant loss of 
liver function due to chronic liver disease. We evaluate ascites or 
hydrothorax that is not attributable to other causes under 105.05B. The 
required findings must be present on at least two evaluations at least 
60 days apart within a consecutive 6-month period and despite continuing 
treatment as prescribed.
    7. Spontaneous bacterial peritonitis (105.05C) is an infectious 
complication of chronic liver disease. It is diagnosed by ascitic 
peritoneal fluid that is documented to contain an absolute neutrophil 
count of at least 250 cells/mm \3\. The required finding in 105.05C is 
satisfied with one evaluation documenting peritoneal fluid infection. We 
do not evaluate other causes of peritonitis that are unrelated to 
chronic liver disease, such as tuberculosis, malignancy, and perforated 
bowel, under this listing. We evaluate these other causes of peritonitis 
under the appropriate body system listings.
    8. Hepatorenal syndrome (105.05D) is defined as functional renal 
failure associated with chronic liver disease in the absence of 
underlying kidney pathology. Hepatorenal syndrome is documented by 
elevation of serum creatinine, marked sodium retention, and oliguria 
(reduced urine output). The requirements of 105.05D are satisfied with 
documentation of any one of the three laboratory findings on one 
evaluation. We do not evaluate known causes of renal dysfunction, such 
as glomerulonephritis, tubular necrosis, drug-induced renal disease, and 
renal infections, under this listing. We evaluate these other renal 
impairments under 106.00ff.
    9. Hepatopulmonary syndrome (105.05E) is defined as arterial 
deoxygenation (hypoxemia) that is associated with chronic liver disease

[[Page 589]]

due to intrapulmonary arteriovenous shunting and vasodilatation, in the 
absence of other causes of arterial deoxygenation. Clinical 
manifestations usually include dyspnea, orthodeoxia (increasing 
hypoxemia with erect position), platypnea (improvement of dyspnea with 
flat position), cyanosis, and clubbing. The requirements of 105.05E are 
satisfied with documentation of any one of the findings on one 
evaluation. In 105.05E1, we require documentation of the altitude of the 
testing facility because altitude affects the measurement of arterial 
oxygenation. We will not purchase the specialized studies described in 
105.05E2; however, if you have had these studies at a time relevant to 
your claim, we will make every reasonable effort to obtain the reports 
for the purpose of establishing whether your impairment meets 105.05E2.
    10. Hepatic encephalopathy (105.05F).
    a. General. Hepatic encephalopathy usually indicates severe loss of 
hepatocellular function. We define hepatic encephalopathy under 105.05F 
as a recurrent or chronic neuropsychiatric disorder, characterized by 
abnormal behavior, cognitive dysfunction, altered state of 
consciousness, and ultimately coma and death. The diagnosis is 
established by changes in mental status associated with fleeting 
neurological signs, including ``flapping tremor'' (asterixis), 
characteristic electroencephalographic (EEG) abnormalities, or abnormal 
laboratory values that indicate loss of synthetic liver function. We 
will not purchase the EEG testing described in 105.05F3b. However, if 
you have had this test at a time relevant to your claim, we will make 
every reasonable effort to obtain the report for the purpose of 
establishing whether your impairment meets 105.05F.
    b. Acute encephalopathy. We will not evaluate your acute 
encephalopathy under 105.05F if it results from conditions other than 
chronic liver disease, such as vascular events and neoplastic diseases. 
We will evaluate these other causes of acute encephalopathy under the 
appropriate body system listings.
    11. End stage liver disease (ESLD) documented by scores from the SSA 
Chronic Liver Disease (SSA CLD) calculation (105.05G1) and SSA Chronic 
Liver Disease-Pediatric (SSA CLD-P) calculation (105.05G2).
    a. SSA CLD score.
    (i) If you are age 12 or older, we will use the SSA CLD score to 
evaluate your ESLD under 105.05G1. We explain how we calculate the SSA 
CLD score in a(ii) through a(vii) of this section.
    (ii) To calculate the SSA CLD score, we use a formula that includes 
three laboratory values: Serum total bilirubin (mg/dL), serum creatinine 
(mg/dL), and International Normalized Ratio (INR). The formula for the 
SSA CLD score calculation is:

9.57  x  [Loge (serum creatinine mg/dL)]
 + 3.78  x  [Loge (serum total bilirubin mg/dL)]
 + 11.2  x  [Loge (INR)]
 + 6.43

    (iii) When we indicate ``Loge'' in the formula for the SSA CLD score 
calculation, we mean the ``base e logarithm'' or ``natural logarithm'' 
(ln) of a numerical laboratory value, not the ``base 10 logarithm'' or 
``common logarithm'' (log) of the laboratory value, and not the actual 
laboratory value. For an example of SSA CLD calculation, see 5.00D11c.
    (iv) For any SSA CLD score calculation, all of the required 
laboratory values must have been obtained within 30 days of each other. 
If there are multiple laboratory values within the 30-day interval for 
any given laboratory test (serum total bilirubin, serum creatinine, or 
INR), we will use the highest value for the SSA CLD score calculation. 
We will round all laboratory values less than 1.0 up to 1.0.
    (v) Listing 105.05G requires two SSA CLD scores. The laboratory 
values for the second SSA CLD score calculation must have been obtained 
at least 60 days after the latest laboratory value for the first SSA CLD 
score and within the required 6-month period. We will consider the date 
of each SSA CLD score to be the date of the first laboratory value used 
for its calculation.
    (vi) If you are in renal failure or on dialysis within a week of any 
serum creatinine test in the period used for the SSA CLD calculation, we 
will use a serum creatinine of 4, which is the maximum serum creatinine 
level allowed in the calculation, to calculate your SSA CLD score.
    (vii) If you have the two SSA CLD scores required by 105.05G1, we 
will find that your impairment meets the criteria of the listing from at 
least the date of the first SSA CLD score.
    b. SSA CLD-P score.
    (i) If you have not attained age 12, we will use the SSA CLD-P score 
to evaluate your ESLD under 105.05G2. We explain how we calculate the 
SSA CLD-P score in b(ii) through b(vii) of this section.
    (ii) To calculate the SSA CLD-P score, we use a formula that 
includes four parameters: Serum total bilirubin (mg/dL), International 
Normalized Ratio (INR), serum albumin (g/dL), and whether growth failure 
is occurring. The formula for the SSA CLD-P score calculation is:

4.80  x  [Loge (serum total bilirubin mg/dL)]
 + 18.57  x  [Loge (INR)]
^6.87  x  [Loge (serum albumin g/dL)]
 + 6.67 if the child has growth failure (<^2 standard deviations for 
          weight or height)

    (iii) When we indicate ``Loge'' in the formula for the SSA CLD-P 
score calculation, we mean the ``base e logarithm'' or ``natural 
logarithm'' (ln) of a numerical laboratory

[[Page 590]]

value, not the ``base 10 logarithm'' or ``common logarithm'' (log) of 
the laboratory value, and not the actual laboratory value. For example, 
if a female child is 4.0 years old, has a current weight of 13.5 kg 
(10th percentile for age) and height of 92 cm (less than the third 
percentile for age), and has laboratory values of serum total bilirubin 
2.2 mg/dL, INR 1.0, and serum albumin 3.5 g/dL, we will compute the SSA 
CLD-P score as follows:

4.80  x  [Loge + (serum total bilirubin 2.2 mg/dL) = 0.788]
 + 18.57  x  [Loge (INR 1.0) = 0]
^6.87  x  [Loge + (serum albumin 3.5 g/dL) = 1.253]
 + 6.67
___
    = 3.78 + 0 ^ 8.61 + 6.67
    = 1.84, which is then rounded to an SSA CLD-P score of 2

    (iv) For any SSA CLD-P score calculation, all of the required 
laboratory values (serum total bilirubin, INR, or serum albumin) must 
have been obtained within 30 days of each other. We will not purchase 
INR values for children who have not attained age 12. If there is no INR 
value for a child under 12 within the applicable time period, we will 
use an INR value of 1.1 to calculate the SSA CLD-P score. If there are 
multiple laboratory values within the 30-day interval for any given 
laboratory test, we will use the highest serum total bilirubin and INR 
values and the lowest serum albumin value for the SSA CLD-P score 
calculation. We will round all laboratory values less than 1.0 up to 
1.0.
    (v) The weight and length/height measurements used for the 
calculation must be obtained from one evaluation within the same 30-day 
period as in D11b(iv).
    (vi) Listing 105.05G2 requires two SSA CLD-P scores. The laboratory 
values for the second SSA CLD-P score calculation must have been 
obtained at least 60 days after the latest laboratory value for the 
first SSA CLD-P score and within the required 6-month period. We will 
consider the date of each SSA CLD-P score to be the date of the first 
laboratory value used for its calculation.
    (vii) If you have the two SSA CLD-P scores required by listing 
105.05G2, we will find that your impairment meets the criteria of the 
listing from at least the date of the first SSA CLD-P score.
    12. Extrahepatic biliary atresia (EBA) (105.05H) usually presents in 
the first 2 months of life with persistent jaundice. The impairment 
meets 105.05H if the diagnosis of EBA is confirmed by liver biopsy or 
intraoperative cholangiogram that shows obliteration of the extrahepatic 
biliary tree. EBA is usually surgically treated by portoenterostomy (for 
example, Kasai procedure). If this surgery is not performed in the first 
months of life or is not completely successful, liver transplantation is 
indicated. If you have had a liver transplant, we will evaluate your 
impairment under 105.09.
    13. Liver transplantation (105.09) may be performed for metabolic 
liver disease, progressive liver failure, life-threatening complications 
of liver disease, hepatic malignancy, and acute fulminant hepatitis 
(viral, drug-induced, or toxin-induced). We will consider you to be 
disabled for 1 year from the date of the transplantation. Thereafter, we 
will evaluate your residual impairment(s) by considering the adequacy of 
post-transplant liver function, the requirement for post-transplant 
antiviral therapy, the frequency and severity of rejection episodes, 
comorbid complications, and all adverse treatment effects.
    E. How do we evaluate inflammatory bowel disease (IBD)?
    1. Inflammatory bowel disease (105.06) includes, but is not limited 
to, Crohn's disease and ulcerative colitis. These disorders, while 
distinct entities, share many clinical, laboratory, and imaging 
findings, as well as similar treatment regimens. Remissions and 
exacerbations of variable duration are the hallmark of IBD. Crohn's 
disease may involve the entire alimentary tract from the mouth to the 
anus in a segmental, asymmetric fashion. Obstruction, stenosis, 
fistulization, perineal involvement, and extraintestinal manifestations 
are common. Crohn's disease is rarely curable and recurrence may be a 
lifelong problem, even after surgical resection. In contrast, ulcerative 
colitis only affects the colon. The inflammatory process may be limited 
to the rectum, extend proximally to include any contiguous segment, or 
involve the entire colon. Ulcerative colitis may be cured by total 
colectomy.
    2. Symptoms and signs of IBD include diarrhea, fecal incontinence, 
rectal bleeding, abdominal pain, fatigue, fever, nausea, vomiting, 
arthralgia, abdominal tenderness, palpable abdominal mass (usually 
inflamed loops of bowel) and perineal disease. You may also have signs 
or laboratory findings indicating malnutrition, such as weight loss, 
edema, anemia, hypoalbuminemia, hypokalemia, hypocalcemia, or 
hypomagnesemia.
    3. IBD may be associated with significant extraintestinal 
manifestations in a variety of body systems. These include, but are not 
limited to, involvement of the eye (for example, uveitis, episcleritis, 
iritis); hepatobiliary disease (for example, gallstones, primary 
sclerosing cholangitis); urologic disease (for example, kidney stones, 
obstructive hydronephrosis); skin involvement (for example, erythema 
nodosum, pyoderma gangrenosum); or non-destructive inflammatory 
arthritis. You may also have associated thromboembolic disorders or 
vascular

[[Page 591]]

disease. These manifestations may not correlate with the severity of 
your IBD. If your impairment does not meet any of the criteria of 
105.06, we will consider the effects of your extraintestinal 
manifestations in determining whether you have an impairment(s) that 
meets or medically equals another listing, and we will also consider the 
effects of your extraintestinal manifestations when we determine whether 
your impairment(s) functionally equals the listings.
    4. Surgical diversion of the intestinal tract, including ileostomy 
and colostomy, does not very seriously interfere with age-appropriate 
functioning if you are able to maintain adequate nutrition and function 
of the stoma. However, if you are not able to maintain adequate 
nutrition, we will evaluate your impairment under 105.08.
    F. How do we evaluate short bowel syndrome (SBS)?
    1. Short bowel syndrome (105.07) is a disorder that occurs when 
congenital intestinal abnormalities, ischemic vascular insults (for 
example, necrotizing enterocolitis, volvulus), trauma, or IBD 
complications require surgical resection of more than one-half of the 
small intestine, resulting in the loss of intestinal absorptive surface 
and a state of chronic malnutrition. The management of SBS requires 
long-term parenteral nutrition via an indwelling central venous catheter 
(central line); the process is often referred to as hyperalimentation or 
total parenteral nutrition (TPN). Children with SBS can also feed 
orally, with variable amounts of nutrients being absorbed through their 
remaining intestine. Over time, some of these children can develop 
additional intestinal absorptive surface, and may ultimately be able to 
be weaned off their parenteral nutrition.
    2. Your impairment will continue to meet 105.07 as long as you 
remain dependent on daily parenteral nutrition via a central venous 
catheter for most of your nutritional requirements. Long-term 
complications of SBS and parenteral nutrition include abnormal growth 
rates, central line infections (with or without septicemia), thrombosis, 
hepatotoxicity, gallstones, and loss of venous access sites. Intestinal 
transplantation is the only definitive treatment for children with SBS 
who remain chronically dependent on parenteral nutrition.
    3. To document SBS, we need a copy of the operative report of 
intestinal resection, the summary of the hospitalization(s) including: 
Details of the surgical findings, medically appropriate postoperative 
imaging studies that reflect the amount of your residual small 
intestine, or if we cannot get one of these reports, other medical 
reports that include details of the surgical findings. We also need 
medical documentation that you are dependent on daily parenteral 
nutrition to provide most of your nutritional requirements.
    G. How do we evaluate growth failure due to any digestive disorder?
    1. To evaluate growth failure due to any digestive disorder, we 
require documentation of the laboratory findings of chronic nutritional 
deficiency described in 105.08A and the growth measurements in 105.08B 
within the same consecutive 12-month period. The dates of laboratory 
findings may be different from the dates of growth measurements.
    2. Under 105.08B, we evaluate a child's growth failure by using the 
appropriate table for age and gender.
    a. For children from birth to attainment of age 2, we use the 
weight-for-length table (see Table I or Table II).
    b. For children age 2 to attainment of age 18, we use the body mass 
index (BMI)-for-age table (see Tables III or IV).
    c. BMI is the ratio of a child's weight to the square of the child's 
height. We calculate BMI using one of the following formulas:

English Formula
    BMI = [Weight in Pounds/(Height in Inches  x  Height in Inches)]  x  
703
Metric Formulas
    BMI = Weight in Kilograms/(Height in Meters  x  Height in Meters)
    BMI = [Weight in Kilograms/(Height in Centimeters  x  Height in 
Centimeters)]  x  10,000
    H. How do we evaluate the need for supplemental daily enteral 
feeding via a gastrostomy?
    1. General. Infants and young children may have anatomical, 
neurological, or developmental disorders that interfere with their 
ability to feed by mouth, resulting in inadequate caloric intake to meet 
their growth needs. These disorders frequently result in the medical 
necessity to supplement caloric intake and to bypass the anatomical 
feeding route of mouth-throat-esophagus into the stomach.
    2. Children who have not attained age 3 and who require supplemental 
daily enteral nutrition via a feeding gastrostomy meet 105.10 regardless 
of the medical reason for the gastrostomy. Thereafter, we evaluate 
growth impairment under 100.02, malnutrition under 105.08, or other 
medical or developmental disorder(s) (including the disorder(s) that 
necessitated gastrostomy placement) under the appropriate listing(s).
    I. How do we evaluate esophageal stricture or stenosis? Esophageal 
stricture or stenosis (narrowing) from congenital atresia (absence or 
abnormal closure of a tubular body organ) or destructive esophagitis may 
result in malnutrition or the need for gastrostomy placement, which we 
evaluate under 105.08 or 105.10. Esophageal stricture or stenosis may 
also result in complications such as pneumonias due to frequent 
aspiration, or difficulty in maintaining nutritional status short of 
listing-level severity. While none of these complications may be of such 
severity that they would meet the criteria of another

[[Page 592]]

listing, the combination of impairments may medically equal the severity 
of a listing or functionally equal the listings.
    J. What do we mean by the phrase ``consider under a disability for 1 
year''? We use the phrase ``consider under a disability for 1 year'' 
following a specific event in 105.02, 105.05A, and 105.09 to explain how 
long your impairment can meet the requirements of those particular 
listings. This phrase does not refer to the date on which your 
disability began, only to the date on which we must reevaluate whether 
your impairment continues to meet a listing or is otherwise disabling. 
For example, if you have received a liver transplant, you may have 
become disabled before the transplant because of chronic liver disease. 
Therefore, we do not restrict our determination of the onset of 
disability to the date of the specified event. We will establish an 
onset date earlier than the date of the specified event if the evidence 
in your case record supports such a finding.
    K. How do we evaluate impairments that do not meet one of the 
digestive disorder listings?
    1. These listings are only examples of common digestive disorders 
that we consider severe enough to result in marked and severe functional 
limitations. If your impairment(s) does not meet the criteria of any of 
these listings, we must also consider whether you have an impairment(s) 
that satisfies the criteria of a listing in another body system. For 
example:
    a. If you have hepatitis B or C and you are depressed, we will 
evaluate your impairment under 112.04.
    b. If you have multiple congenital abnormalities, we will evaluate 
your impairment(s) under the criteria in the listings for impairments 
that affect multiple body systems (110.00) or the criteria of listings 
in other affected body systems.
    c. If you have digestive disorders that interfere with intake, 
digestion, or absorption of nutrition, and result in a reduction in your 
rate of growth, and your impairment does not satisfy the criteria in the 
malnutrition listing (105.08), we will evaluate your impairment under 
the growth impairment listings (100.00).
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See Sec. 416.926.) If your impairment(s) 
does not meet or medically equal a listing, you may or may not have an 
impairment(s) that functionally equals the listings. (See 
Sec. 416.926a.) When we decide whether you continue to be disabled, we 
use the rules in Sec. 416.994a.
    105.01  Category of Impairments, Digestive System
    105.02  Gastrointestinal hemorrhaging from any cause, requiring 
blood transfusion (with or without hospitalization) of at least 10 cc of 
blood/kg of body weight, and occurring at least three times during a 
consecutive 6-month period. The transfusions must be at least 30 days 
apart within the 6-month period. Consider under a disability for 1 year 
following the last documented transfusion; thereafter, evaluate the 
residual impairment(s).
    105.03-105.04 [Reserved]
    105.05  Chronic liver disease, with:
    A. Hemorrhaging from esophageal, gastric, or ectopic varices or from 
portal hypertensive gastropathy, demonstrated by endoscopy, x-ray, or 
other appropriate medically acceptable imaging, resulting in hemodynamic 
instability as defined in 105.00D5, and requiring hospitalization for 
transfusion of at least 10 cc of blood/kg of body weight. Consider under 
a disability for 1 year following the last documented transfusion; 
thereafter, evaluate the residual impairment(s).

OR

    B. Ascites or hydrothorax not attributable to other causes, despite 
continuing treatment as prescribed, present on at least two evaluations 
at least 60 days apart within a consecutive 6-month period. Each 
evaluation must be documented by:
    1. Paracentesis or thoracentesis; or
    2. Appropriate medically acceptable imaging or physical examination 
and one of the following:
    a. Serum albumin of 3.0 g/dL or less; or
    b. International Normalized Ratio (INR) of at least 1.5.

OR

    C. Spontaneous bacterial peritonitis with peritoneal fluid 
containing an absolute neutrophil count of at least 250 cells/mm \3\.

OR

    D. Hepatorenal syndrome as described in 105.00D8, with one of the 
following:
    1. Serum creatinine elevation of at least 2 mg/dL; or
    2. Oliguria with 24-hour urine output less than 1 mL/kg/hr; or
    3. Sodium retention with urine sodium less than 10 mEq per liter.

OR

    E. Hepatopulmonary syndrome as described in 105.00D9, with:
    1. Arterial oxygenation (PaO2,) on room air 
of:
    a. 60 mm Hg or less, at test sites less than 3000 feet above sea 
level, or
    b. 55 mm Hg or less, at test sites from 3000 to 6000 feet, or
    c. 50 mm Hg or less, at test sites above 6000 feet; or
    2. Documentation of intrapulmonary arteriovenous shunting by 
contrast-enhanced echocardiography or macroaggregated albumin lung 
perfusion scan.

OR


[[Page 593]]


    F. Hepatic encephalopathy as described in 105.00D10, with 1 and 
either 2 or 3:
    1. Documentation of abnormal behavior, cognitive dysfunction, 
changes in mental status, or altered state of consciousness (for 
example, confusion, delirium, stupor, or coma), present on at least two 
evaluations at least 60 days apart within a consecutive 6-month period; 
and
    2. History of transjugular intrahepatic portosystemic shunt (TIPS) 
or any surgical portosystemic shunt; or
    3. One of the following occurring on at least two evaluations at 
least 60 days apart within the same consecutive 6-month period as in F1:
    a. Asterixis or other fluctuating physical neurological 
abnormalities; or
    b. Electroencephalogram (EEG) demonstrating triphasic slow wave 
activity; or
    c. Serum albumin of 3.0 g/dL or less; or
    d. International Normalized Ratio (INR) of 1.5 or greater.

OR

    G. End Stage Liver Disease, with:
    1. For children 12 years of age or older, SSA CLD scores of 22 or 
greater calculated as described in 105.00D11a. Consider under a 
disability from at least the date of the first score.
    2. For children who have not attained age 12, SSA CLD-P scores of 11 
or greater calculated as described in 105.00D11b. Consider under a 
disability from at least the date of the first score.

OR

    H. Extrahepatic biliary atresia as diagnosed on liver biopsy or 
intraoperative cholangiogram. Consider under a disability for 1 year 
following the diagnosis; thereafter, evaluate the residual liver 
function.
    105.06  Inflammatory bowel disease (IBD) documented by endoscopy, 
biopsy, appropriate medically acceptable imaging, or operative findings 
with:
    A. Obstruction of stenotic areas (not adhesions) in the small 
intestine or colon with proximal dilatation, confirmed by appropriate 
medically acceptable imaging or in surgery, requiring hospitalization 
for intestinal decompression or for surgery, and occurring on at least 
two occasions at least 60 days apart within a consecutive 6-month 
period;

OR

    B. Two of the following despite continuing treatment as prescribed 
and occurring within the same consecutive 6-month period:
    1. Anemia with hemoglobin less than 10.0 g/dL, present on at least 
two evaluations at least 60 days apart; or
    2. Serum albumin of 3.0 g/dL or less, present on at least two 
evaluations at least 60 days apart; or
    3. Clinically documented tender abdominal mass palpable on physical 
examination with abdominal pain or cramping that is not completely 
controlled by prescribed narcotic medication, present on at least two 
evaluations at least 60 days apart; or
    4. Perineal disease with a draining abscess or fistula, with pain 
that is not completely controlled by prescribed narcotic medication, 
present on at least two evaluations at least 60 days apart; or
    5. Need for supplemental daily enteral nutrition via a gastrostomy 
or daily parenteral nutrition via a central venous catheter. (See 105.10 
for children who have not attained age 3.)
    105.07  Short bowel syndrome (SBS), due to surgical resection of 
more than one-half of the small intestine, with dependence on daily 
parenteral nutrition via a central venous catheter (see 105.00F).
    105.08  Growth failure due to any digestive disorder (see 105.00G), 
documented by A and B:
    A. Chronic nutritional deficiency present on at least two 
evaluations at least 60 days apart within a consecutive 12-month period 
documented by one of the following:
    1. Anemia with hemoglobin less than 10.0 g/dL; or
    2. Serum albumin of 3.0 g/dL or less;

AND

    B. Growth failure as required in 1 or 2:
    1. For children from birth to attainment of age 2, three weight-for-
length measurements that are:
    a. Within a 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on Table I or Table II; or

                                                       Table I--Males Birth to Attainment of Age 2
                                                     [Third Percentile Values for Weight-for-Length]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Weight            Length            Weight            Length            Weight
                     Length (centimeters)                          (kilograms)      (centimeters)      (kilograms)      (centimeters)      (kilograms)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45.0..........................................................             1.597              64.5             6.132              84.5            10.301
45.5..........................................................             1.703              65.5             6.359              85.5            10.499
46.5..........................................................             1.919              66.5             6.584              86.5            10.696
47.5..........................................................             2.139              67.5             6.807              87.5            10.895
48.5..........................................................             2.364              68.5             7.027              88.5            11.095
49.5..........................................................             2.592              69.5             7.245              89.5            11.296
50.5..........................................................             2.824              70.5             7.461              90.5            11.498
51.5..........................................................             3.058              71.5             7.674              91.5            11.703

[[Page 594]]

 
52.5..........................................................             3.294              72.5             7.885              92.5            11.910
53.5..........................................................             3.532              73.5             8.094              93.5            12.119
54.5..........................................................             3.771              74.5             8.301              94.5            12.331
55.5..........................................................             4.010              75.5             8.507              95.5            12.546
56.5..........................................................             4.250              76.5             8.710              96.5            12.764
57.5..........................................................             4.489              77.5             8.913              97.5            12.987
58.5..........................................................             4.728              78.5             9.113              98.5            13.213
59.5..........................................................             4.966              79.5             9.313              99.5            13.443
60.5..........................................................             5.203              80.5             9.512             100.5            13.678
61.5..........................................................             5.438              81.5             9.710             101.5            13.918
62.5..........................................................             5.671              82.5             9.907             102.5            14.163
63.5..........................................................             5.903              83.5            10.104             103.5            14.413
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                     Table II--Females Birth to Attainment of Age 2
                                                     [Third percentile values for weight-for-length]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Weight            Length            Weight            Length            Weight
                     Length (centimeters)                          (kilograms)      (centimeters)      (kilograms)      (centimeters)      (kilograms)
--------------------------------------------------------------------------------------------------------------------------------------------------------
45.0..........................................................             1.613              64.5             5.985              84.5            10.071
45.5..........................................................             1.724              65.5             6.200              85.5            10.270
46.5..........................................................             1.946              66.5             6.413              86.5            10.469
47.5..........................................................             2.171              67.5             6.625              87.5            10.670
48.5..........................................................             2.397              68.5             6.836              88.5            10.871
49.5..........................................................             2.624              69.5             7.046              89.5            11.074
50.5..........................................................             2.852              70.5             7.254              90.5            11.278
51.5..........................................................             3.081              71.5             7.461              91.5            11.484
52.5..........................................................             3.310              72.5             7.667              92.5            11.691
53.5..........................................................             3.538              73.5             7.871              93.5            11.901
54.5..........................................................             3.767              74.5             8.075              94.5            12.112
55.5..........................................................             3.994              75.5             8.277              95.5            12.326
56.5..........................................................             4.220              76.5             8.479              96.5            12.541
57.5..........................................................             4.445              77.5             8.679              97.5            12.760
58.5..........................................................             4.669              78.5             8.879              98.5            12.981
59.5..........................................................             4.892              79.5             9.078              99.5            13.205
60.5..........................................................             5.113              80.5             9.277             100.5            13.431
61.5..........................................................             5.333              81.5             9.476             101.5            13.661
62.5..........................................................             5.552              82.5             9.674             102.5            13.895
63.5..........................................................             5.769              83.5             9.872             103.5            14.132
--------------------------------------------------------------------------------------------------------------------------------------------------------

    2. For children age 2 to attainment of age 18, three BMI-for-age 
measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on Table III or Table IV.

                                 Table III--Males Age 2 to Attainment of Age 18
                                    [Third Percentile Values for BMI-for-Age]
----------------------------------------------------------------------------------------------------------------
                                            Age (yrs. and                       Age (yrs. and
  Age (yrs. and mos.)          BMI              mos.)              BMI              mos.)              BMI
----------------------------------------------------------------------------------------------------------------
2.0 to 2.1............              14.5     10.11 to 11.2              14.3     14.9 to 14.10              16.1
2.2 to 2.4............              14.4      11.3 to 11.5              14.4     14.11 to 15.0              16.2
2.5 to 2.7............              14.3      11.6 to 11.8              14.5      15.1 to 15.3              16.3
2.8 to 2.11...........              14.2     11.9 to 11.11              14.6      15.4 to 15.5              16.4
3.0 to 3.2............              14.1      12.0 to 12.1              14.7      15.6 to 15.7              16.5
3.3 to 3.6............              14.0      12.2 to 12.4              14.8      15.8 to 15.9              16.6
3.7 to 3.11...........              13.9      12.5 to 12.7              14.9    15.10 to 15.11              16.7
4.0 to 4.5............              13.8      12.8 to 12.9              15.0      16.0 to 16.1              16.8
4.6 to 5.0............              13.7     12.10 to 13.0              15.1      16.2 to 16.3              16.9
5.1 to 6.0............              13.6      13.1 to 13.2              15.2      16.4 to 16.5              17.0
6.1 to 7.6............              13.5      13.3 to 13.4              15.3      16.6 to 16.8              17.1
7.7 to 8.6............              13.6      13.5 to 13.7              15.4     16.9 to 16.10              17.2
8.7 to 9.1............              13.7      13.8 to 13.9              15.5     16.11 to 17.0              17.3
9.2 to 9.6............              13.8    13.10 to 13.11              15.6      17.1 to 17.2              17.4
9.7 to 9.11...........              13.9      14.0 to 14.1              15.7      17.3 to 17.5              17.5

[[Page 595]]

 
10.0 to 10.3..........              14.0      14.2 to 14.4              15.8      17.6 to 17.7              17.6
10.4 to 10.7..........              14.1      14.5 to 14.6              15.9      17.8 to 17.9              17.7
10.8 to 10.10.........              14.2      14.7 to 14.8              16.0    17.10 to 17.11              17.8
----------------------------------------------------------------------------------------------------------------


                                 Table IV--Females Age 2 to Attainment of Age 18
                                    [Third Percentile Values for BMI-for-Age]
----------------------------------------------------------------------------------------------------------------
                                                              Age (yrs. and              Age (yrs. and
               Age (yrs. and mos.)                   BMI          mos.)         BMI          mos.)         BMI
----------------------------------------------------------------------------------------------------------------
2.0 to 2.2.......................................     14.1     10.8 to 10.10     14.0      14.3 to 14.5     15.6
2.3 to 2.6.......................................     14.0     10.11 to 11.2     14.1      14.6 to 14.7     15.7
2.7 to 2.10......................................     13.9      11.3 to 11.5     14.2      14.8 to 14.9     15.8
2.11 to 3.2......................................     13.8      11.6 to 11.7     14.3     14.10 to 15.0     15.9
3.3 to 3.6.......................................     13.7     11.8 to 11.10     14.4      15.1 to 15.2     16.0
3.7 to 3.11......................................     13.6     11.11 to 12.1     14.5      15.3 to 15.5     16.1
4.0 to 4.4.......................................     13.5      12.2 to 12.4     14.6      15.6 to 15.7     16.2
4.5 to 4.11......................................     13.4      12.5 to 12.6     14.7     15.8 to 15.10     16.3
5.0 to 5.9.......................................     13.3      12.7 to 12.9     14.8     15.11 to 16.0     16.4
5.10 to 7.6......................................     13.2    12.10 to 12.11     14.9      16.1 to 16.3     16.5
7.7 to 8.4.......................................     13.3      13.0 to 13.2     15.0      16.4 to 16.6     16.6
8.5 to 8.10......................................     13.4      13.3 to 13.4     15.1      16.7 to 16.9     16.7
8.11 to 9.3......................................     13.5      13.5 to 13.7     15.2     16.10 to 17.0     16.8
9.4 to 9.8.......................................     13.6      13.8 to 13.9     15.3      17.1 to 17.3     16.9
9.9 to 10.0......................................     13.7     13.10 to 14.0     15.4      17.4 to 17.7     17.0
10.1 to 10.4.....................................     13.8      14.1 to 14.2     15.5     17.8 to 17.11     17.1
10.5 to 10.7.....................................     13.9
----------------------------------------------------------------------------------------------------------------

    105.09   Liver transplantation. Consider under a disability for 1 
year following the date of transplantation; thereafter, evaluate the 
residual impairment(s) (see 105.00D13 and 105.00J).
    105.10   Need for supplemental daily enteral feeding via a 
gastrostomy due to any cause, for children who have not attained age 3; 
thereafter, evaluate the residual impairment(s) (see 105.00H).

                     106.00  Genitourinary Disorders

         A. Which disorders do we evaluate under these listings?

    We evaluate genitourinary disorders resulting in chronic kidney 
disease (CKD). Examples of such disorders include chronic 
glomerulonephritis, hypertensive nephropathy, diabetic nephropathy, 
chronic obstructive uropathy, and hereditary nephropathies. We also 
evaluate nephrotic syndrome due to glomerular dysfunction, and 
congenital genitourinary disorders, such as ectopic ureter, exstrophic 
urinary bladder, urethral valves, and Eagle-Barrett syndrome (prune 
belly syndrome), under these listings.

                      B. What evidence do we need?

    1. We need evidence that documents the signs, symptoms, and 
laboratory findings of your CKD. This evidence should include reports of 
clinical examinations, treatment records, and documentation of your 
response to treatment. Laboratory findings, such as serum creatinine or 
serum albumin levels, may document your kidney function. We generally 
need evidence covering a period of at least 90 days unless we can make a 
fully favorable determination or decision without it.
    2. Estimated glomerular filtration rate (eGFR). The eGFR is an 
estimate of the filtering capacity of the kidneys that takes into 
account serum creatinine concentration and other variables, such as your 
age, gender, and body size. If your medical evidence includes eGFR 
findings, we will consider them when we evaluate your CKD under 106.05.
    3. Kidney or bone biopsy. If you have had a kidney or bone biopsy, 
we need a copy of the pathology report. When we cannot get a copy of the 
pathology report, we will accept a statement from an acceptable medical 
source verifying that a biopsy was performed and describing the results.

C. What other factors do we consider when we evaluate your genitourinary 
                                disorder?

    1. Chronic hemodialysis or peritoneal dialysis.
    a. Dialysis is a treatment for CKD that uses artificial means to 
remove toxic metabolic byproducts from the blood. Hemodialysis uses an 
artificial kidney machine to clean waste products from the blood; 
peritoneal dialysis uses a dialyzing solution that

[[Page 596]]

is introduced into and removed from the abdomen (peritoneal cavity) 
either continuously or intermittently. Under 106.03, your ongoing 
dialysis must have lasted or be expected to last for a continuous period 
of at least 12 months. To satisfy the requirement in 106.03, we will 
accept a report from an acceptable medical source that describes your 
CKD and your current dialysis, and indicates that your dialysis will be 
ongoing.
    b. If you are undergoing chronic hemodialysis or peritoneal 
dialysis, your CKD may meet our definition of disability before you 
started dialysis. We will determine the onset of your disability based 
on the facts in your case record.
    2. Kidney transplant.
    a. If you receive a kidney transplant, we will consider you to be 
disabled under 106.04 for 1 year from the date of transplant. After 
that, we will evaluate your residual impairment(s) by considering your 
post-transplant function, any rejection episodes you have had, 
complications in other body systems, and any adverse effects related to 
ongoing treatment.
    b. If you received a kidney transplant, your CKD may meet our 
definition of disability before you received the transplant. We will 
determine the onset of your disability based on the facts in your case 
record.
    3. Anasarca (generalized massive edema or swelling). Under 106.06B, 
we need a description of the extent of edema, including pretibial (in 
front of the tibia), periorbital (around the eyes), or presacral (in 
front of the sacrum) edema. We also need a description of any ascites, 
pleural effusion, or pericardial effusion.
    4. Congenital genitourinary disorder. Procedures such as diagnostic 
cystoscopy or circumcision do not satisfy the requirement for urologic 
surgical procedures in 106.07.
    5. Growth failure due to any chronic renal disease.
    a. To evaluate growth failure due to any chronic renal disease, we 
require documentation of the laboratory findings described in 106.08A 
and the growth measurements in 106.08B within the same consecutive 12-
month period. The dates of laboratory findings may be different from the 
dates of growth measurements.
    b. Under 106.08B, we use the appropriate table(s) under 105.08B in 
the digestive system to determine whether a child's growth is less than 
the third percentile.
    (i) For children from birth to attainment of age 2, we use the 
weight-for-length table corresponding to the child's gender (Table I or 
Table II).
    (ii) For children age 2 to attainment of age 18, we use the body 
mass index (BMI)-for-age table corresponding to the child's gender 
(Table III or Table IV).
    (iii) BMI is the ratio of a child's weight to the square of his or 
her height. We calculate BMI using the formulas in 105.00G2c.
    6. Complications of CKD. The hospitalizations in 106.09 may be for 
different complications of CKD. Examples of complications from CKD that 
may result in hospitalization include stroke, congestive heart failure, 
hypertensive crisis, or acute kidney failure requiring a short course of 
hemodialysis. If the CKD complication occurs during a hospitalization 
that was initially for a co-occurring condition, we will evaluate it 
under our rules for determining medical equivalence. (See Sec. 416.926 
of this chapter.) We will evaluate co-occurring conditions, including 
those that result in hospitalizations, under the listings for the 
affected body system or under our rules for medical equivalence.

      D. How do we evaluate disorders that do not meet one of the 
                         genitourinary listings?

    1. The listed disorders are only examples of common genitourinary 
disorders that we consider severe enough to result in marked and severe 
functional limitations. If your impairment(s) does not meet the criteria 
of any of these listings, we must also consider whether you have an 
impairment(s) that satisfies the criteria of a listing in another body 
system.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See Sec. 416.926 of this chapter.) 
Genitourinary disorders may be associated with disorders in other body 
systems, and we consider the combined effects of multiple impairments 
when we determine whether they medically equal a listing. If your 
impairment(s) does not medically equal a listing, we will also consider 
whether it functionally equals the listings. (See Sec. 416.926a of this 
chapter.) We use the rules in Sec. 416.994a of this chapter when we 
decide whether you continue to be disabled.

        106.01  Category of Impairments, Genitourinary Disorders

    106.03  Chronic kidney disease, with chronic hemodialysis or 
peritoneal dialysis (see 106.00C1).
    106.04  Chronic kidney disease, with kidney transplant. Consider 
under a disability for 1 year following the transplant; thereafter, 
evaluate the residual impairment (see 106.00C2).
    106.05  Chronic kidney disease, with impairment of kidney function, 
with one of the following documented on at least two occasions at least 
90 days apart during a consecutive 12-month period:
    A. Serum creatinine of 3 mg/dL or greater;

OR


[[Page 597]]


    B. Creatinine clearance of 30 ml/min/1.73m\2\ or less;

OR

    C. Estimated glomerular filtration rate (eGFR) of 30 ml/min/1.73m\2\ 
or less.
    106.06  Nephrotic syndrome, with A and B:
    A. Laboratory findings as described in 1 or 2, documented on at 
least two occasions at least 90 days apart during a consecutive 12-month 
period:
    1. Serum albumin of 3.0 g/dL or less, or
    2. Proteinuria of 40 mg/m\2\/hr or greater;

AND

    B. Anasarca (see 106.00C3) persisting for at least 90 days despite 
prescribed treatment.
    106.07  Congenital genitourinary disorder (see 106.00C4) requiring 
urologic surgical procedures at least three times in a consecutive 12-
month period, with at least 30 days between procedures. Consider under a 
disability for 1 year following the date of the last surgery; 
thereafter, evaluate the residual impairment.
    106.09  Complications of chronic kidney disease (see 106.00C5) 
requiring at least three hospitalizations within a consecutive 12-month 
period and occurring at least 30 days apart. Each hospitalization must 
last at least 48 hours, including hours in a hospital emergency 
department immediately before the hospitalization.
    106.08  Growth failure due to any chronic renal disease (see 
106.00C5), with:
    A. Serum creatinine of 2 mg/dL or greater, documented at least two 
times within a consecutive 12-month period with at least 60 days between 
measurements.

AND

    B. Growth failure as required in 1 or 2:
    1. For children from birth to attainment of age 2, three weight-for-
length measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate weight-for-
length table under 105.08B1; or
    2. For children age 2 to attainment of age 18, three BMI-for-age 
measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate BMI-for-age 
table under 105.08B2.

                     107.00  Hematological Disorders

  A. What hematological disorders do we evaluate under these listings?

    1. We evaluate non-malignant (non-cancerous) hematological 
disorders, such as hemolytic anemias (107.05), disorders of thrombosis 
and hemostasis (107.08), and disorders of bone marrow failure (107.10). 
These disorders disrupt the normal development and function of white 
blood cells, red blood cells, platelets, and clotting-factor proteins 
(factors).
    2. We evaluate malignant (cancerous) hematological disorders, such 
as lymphoma, leukemia, and multiple myeloma, under the appropriate 
listings in 113.00, except for two lymphomas associated with human 
immunodeficiency virus (HIV) infection. We evaluate primary central 
nervous system lymphoma associated with HIV infection under 114.11B, and 
primary effusion lymphoma associated with HIV infection under 114.11C.

  B. What evidence do we need to document that you have a hematological 
                                disorder?

    We need the following evidence to document that you have a 
hematological disorder:
    1. A laboratory report of a definitive test that establishes a 
hematological disorder, signed by a physician; or
    2. A laboratory report of a definitive test that establishes a 
hematological disorder that is not signed by a physician and a report 
from a physician that states you have the disorder; or
    3. When we do not have a laboratory report of a definitive test, a 
persuasive report from a physician that a diagnosis of your 
hematological disorder was confirmed by appropriate laboratory analysis 
or other diagnostic method(s). To be persuasive, this report must state 
that you had the appropriate definitive laboratory test or tests for 
diagnosing your disorder and provide the results, or explain how your 
diagnosis was established by other diagnostic method(s) consistent with 
the prevailing state of medical knowledge and clinical practice.
    4. We will make every reasonable effort to obtain the results of 
appropriate laboratory testing you have had. We will not purchase 
complex, costly, or invasive tests, such as tests of clotting-factor 
proteins, and bone marrow aspirations.

C. What are hemolytic anemias, and how do we evaluate them under 107.05?

    1. Hemolytic anemias, both congenital and acquired, are disorders 
that result in premature destruction of red blood cells (RBCs). 
Hemolytic anemias include abnormalities of hemoglobin structure 
(hemoglobinopathies), abnormal RBC enzyme content and function, and RBC 
membrane (envelope) defects that are congenital or acquired. The 
diagnosis of hemolytic anemia is based on hemoglobin electrophoresis or 
analysis of the contents of the RBC (enzymes) and membrane. Examples of 
congenital hemolytic anemias include sickle cell disease, thalassemia, 
and their variants, and hereditary spherocytosis. Acquired hemolytic 
anemias may result from autoimmune disease (for example, systemic

[[Page 598]]

lupus erythematosus) or mechanical devices (for example, heart valves, 
intravascular patches).
    2. The hospitalizations in 107.05B do not all have to be for the 
same complication of the hemolytic anemia. They may be for three 
different complications of the disorder. Examples of complications of 
hemolytic anemia that may result in hospitalization include dactylitis, 
osteomyelitis, painful (vaso-occlusive) crisis, pulmonary infections or 
infarctions, acute chest syndrome, pulmonary hypertension, chronic heart 
failure, gallbladder disease, hepatic (liver) failure, renal (kidney) 
failure, nephrotic syndrome, aplastic crisis, and strokes. We will count 
the hours you receive emergency treatment in a comprehensive sickle cell 
disease center immediately before the hospitalization if this treatment 
is comparable to the treatment provided in a hospital emergency 
department.
    3. For 107.05C, we do not require hemoglobin to be measured during a 
period in which you are free of pain or other symptoms of your disorder. 
We will accept hemoglobin measurements made while you are experiencing 
complications of your hemolytic anemia.
    4. 107.05D refers to the most serious type of beta thalassemia major 
in which the bone marrow cannot produce sufficient numbers of normal 
RBCs to maintain life. The only available treatments for beta 
thalassemia major are life-long RBC transfusions (sometimes called 
hypertransfusion) or bone marrow transplantation. For purposes of 
107.05D, we do not consider prophylactic RBC transfusions to prevent 
strokes or other complications in sickle cell disease and its variants 
to be of equal significance to life-saving RBC transfusions for beta 
thalassemia major. However, we will consider the functional limitations 
associated with prophylactic RBC transfusions and any associated side 
effects (for example, iron overload) under functional equivalence and 
any affected body system(s). We will also evaluate strokes and resulting 
complications under 111.00 and 112.00.

   D. What are disorders of thrombosis and hemostasis, and how do we 
                       evaluate them under 107.08?

    1. Disorders of thrombosis and hemostasis include both clotting and 
bleeding disorders, and may be congenital or acquired. These disorders 
are characterized by abnormalities in blood clotting that result in 
hypercoagulation (excessive blood clotting) or hypocoagulation 
(inadequate blood clotting). The diagnosis of a thrombosis or hemostasis 
disorder is based on evaluation of plasma clotting-factor proteins 
(factors) and platelets. Protein C or protein S deficiency and Factor V 
Leiden are examples of hypercoagulation disorders. Hemophilia, von 
Willebrand disease, and thrombocytopenia are examples of hypocoagulation 
disorders. Acquired excessive blood clotting may result from blood 
protein defects and acquired inadequate blood clotting (for example, 
acquired hemophilia A) may be associated with inhibitor autoantibodies.
    2. The hospitalizations in 107.08 do not all have to be for the same 
complication of a disorder of thrombosis and hemostasis. They may be for 
three different complications of the disorder. Examples of complications 
that may result in hospitalization include anemias, thromboses, 
embolisms, and uncontrolled bleeding requiring multiple factor 
concentrate infusions or platelet transfusions. We will also consider 
any surgery that you have, even if it is not related to your 
hematological disorder, to be a complication of your disorder of 
thrombosis and hemostasis if you require treatment with clotting-factor 
proteins (for example, factor VIII or IX) or anticoagulant medication to 
control bleeding or coagulation in connection with your surgery. We will 
count the hours you receive emergency treatment in a comprehensive 
hemophilia treatment center immediately before the hospitalization if 
this treatment is comparable to the treatment provided in a hospital 
emergency department.

  E. What are disorders of bone marrow failure, and how do we evaluate 
                           them under 107.10?

    1. Disorders of bone marrow failure may be congenital or acquired, 
characterized by bone marrow that does not make enough healthy RBCs, 
platelets, or granulocytes (specialized types of white blood cells); 
there may also be a combined failure of these bone marrow-producing 
cells. The diagnosis is based on peripheral blood smears and bone marrow 
aspiration or bone marrow biopsy, but not peripheral blood smears alone. 
Examples of these disorders are myelodysplastic syndromes, aplastic 
anemia, granulocytopenia, and myelofibrosis. Acquired disorders of bone 
marrow failure may result from viral infections, chemical exposure, or 
immunologic disorders.
    2. The hospitalizations in 107.10A do not all have to be for the 
same complication of bone marrow failure. They may be for three 
different complications of the disorder. Examples of complications that 
may result in hospitalization include uncontrolled bleeding, anemia, and 
systemic bacterial, viral, or fungal infections.
    3. For 107.10B, the requirement of life-long RBC transfusions to 
maintain life in myelodysplastic syndromes or aplastic anemias has the 
same meaning as it does for beta thalassemia major. (See 107.00C4.)

[[Page 599]]

  F. How do we evaluate bone marrow or stem cell transplantation under 
                                 107.17?

    We will consider you to be disabled for 12 months from the date of 
bone marrow or stem cell transplantation, or we may consider you to be 
disabled for a longer period if you are experiencing any serious post-
transplantation complications, such as graft-versus-host (GVH) disease, 
frequent infections after immunosuppressive therapy, or significant 
deterioration of organ systems. We do not restrict our determination of 
the onset of disability to the date of the transplantation in 107.17. We 
may establish an earlier onset of disability due to your transplantation 
if evidence in your case record supports such a finding.

    G. How do we consider your symptoms, including your pain, severe 
                          fatigue, and malaise?

    Your symptoms, including pain, severe fatigue, and malaise, may be 
important factors in our determination whether your hematological 
disorder meets or medically equals a listing, or in our determination 
whether you otherwise have marked and severe functional limitations. We 
cannot consider your symptoms unless you have medical signs or 
laboratory findings showing the existence of a medically determinable 
impairment(s) that could reasonably be expected to produce the symptoms. 
If you have such an impairment(s), we will evaluate the intensity, 
persistence, and functional effects of your symptoms using the rules 
throughout 107.00 and in our other regulations. (See sections 416.921 
and 416.929 of this chapter.) Additionally, when we assess the 
credibility of your complaints about your symptoms and their functional 
effects, we will not draw any inferences from the fact that you do not 
receive treatment or that you are not following treatment without 
considering all of the relevant evidence in your case record, including 
any explanations you provide on why you are not receiving or following 
treatment.

    H. How do we evaluate episodic events in hematological disorders?

    Some of the listings in this body system require a specific number 
of events within a consecutive 12-month period. (See 107.05, 107.08, and 
107.10A.) When we use such criteria, a consecutive 12-month period means 
a period of 12 consecutive months, all or part of which must occur 
within the period we are considering in connection with your application 
or continuing disability review. These events must occur at least 30 
days apart to ensure that we are evaluating separate events.

 I. How do we evaluate hematological disorders that do not meet one of 
                             these listings?

    1. These listings are only common examples of hematological 
disorders that we consider severe enough to result in marked and severe 
functional limitations. If your disorder does not meet the criteria of 
any of these listings, we must consider whether you have a disorder that 
satisfies the criteria of a listing in another body system. For example, 
we will evaluate hemophilic joint deformity under 101.00; polycythemia 
vera under 103.00, 104.00, or 111.00; chronic iron overload resulting 
from repeated RBC transfusion (transfusion hemosiderosis) under 103.00, 
104.00, or 105.00; and the effects of intracranial bleeding or stroke 
under 111.00 or 112.00.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See section 416.926 of this chapter.) 
Hematological disorders may be associated with disorders in other body 
systems, and we consider the combined effects of multiple impairments 
when we determine whether they medically equal a listing. If your 
impairment(s) does not medically equal a listing, we will also consider 
whether it functionally equals the listings. (See section 416.926a of 
this chapter.) We use the rules in Sec. 416.994a of this chapter when we 
decide whether you continue to be disabled.
    107.01 Category of Impairments, Hematological Disorders
    107.05 Hemolytic anemias, including sickle cell disease, 
thalassemia, and their variants (see 107.00C), with:
    A. Documented painful (vaso-occlusive) crises requiring parenteral 
(intravenous or intramuscular) narcotic medication, occurring at least 
six times within a 12-month period with at least 30 days between crises.
    OR
    B. Complications of hemolytic anemia requiring at least three 
hospitalizations within a 12-month period and occurring at least 30 days 
apart. Each hospitalization must last at least 48 hours, which can 
include hours in a hospital emergency department or comprehensive sickle 
cell disease center immediately before the hospitalization (see 
107.00C2).
    OR
    C. Hemoglobin measurements of 7.0 grams per deciliter (g/dL) or 
less, occurring at least three times within a 12-month period with at 
least 30 days between measurements.
    OR
    D. Beta thalassemia major requiring life-long RBC transfusions at 
least once every 6 weeks to maintain life (see 107.00C4).
    107.08 Disorders of thrombosis and hemostasis, including hemophilia 
and thrombocytopenia (see 107.00D), with complications requiring at

[[Page 600]]

least three hospitalizations within a 12-month period and occurring at 
least 30 days apart. Each hospitalization must last at least 48 hours, 
which can include hours in a hospital emergency department or 
comprehensive hemophilia treatment center immediately before the 
hospitalization (see 107.00D2).
    107.10 Disorders of bone marrow failure, including myelodysplastic 
syndromes, aplastic anemia, granulocytopenia, and myelofibrosis (see 
107.00E), with:
    A. Complications of bone marrow failure requiring at least three 
hospitalizations within a 12-month period and occurring at least 30 days 
apart. Each hospitalization must last at least 48 hours, which can 
include hours in a hospital emergency department immediately before the 
hospitalization (see 107.00E2).
    OR
    B. Myelodysplastic syndromes or aplastic anemias requiring life-long 
RBC transfusions at least once every 6 weeks to maintain life (see 
107.00E3).
    107.17 Hematological disorders treated by bone marrow or stem cell 
transplantation (see 107.00F). Consider under a disability for at least 
12 consecutive months from the date of transplantation. After that, 
evaluate any residual impairment(s) under the criteria for the affected 
body system.

                         108.00  Skin Disorders

    A. What skin disorders do we evaluate with these listings? We use 
these listings to evaluate skin disorders that may result from 
hereditary, congenital, or acquired pathological processes. The kinds of 
impairments covered by these listings are: Ichthyosis, bullous diseases, 
chronic infections of the skin or mucous membranes, dermatitis, 
hidradenitis suppurativa, genetic photosensitivity disorders, and burns.
    B. What documentation do we need? When we evaluate the existence and 
severity of your skin disorder, we generally need information about the 
onset, duration, frequency of flareups, and prognosis of your skin 
disorder; the location, size, and appearance of lesions; and, when 
applicable, history of exposure to toxins, allergens, or irritants, 
familial incidence, seasonal variation, stress factors, and your ability 
to function outside of a highly protective environment. To confirm the 
diagnosis, we may need laboratory findings (for example, results of a 
biopsy obtained independently of Social Security disability evaluation 
or blood tests) or evidence from other medically acceptable methods 
consistent with the prevailing state of medical knowledge and clinical 
practice.
    C. How do we assess the severity of your skin disorders(s)? We 
generally base our assessment of severity on the extent of your skin 
lesions, the frequency of flareups of your skin lesions, how your 
symptoms (including pain) limit you, the extent of your treatment, and 
how your treatment affects you.
    1. Extensive skin lesions. Extensive skin lesions are those that 
involve multiple body sites or critical body areas, and result in a very 
serious limitation. Examples of extensive skin lesions that result in a 
very serious limitation include but are not limited to:
    a. Skin lesions that interfere with the motion of your joints and 
that very seriously limit your use of more than one extremity; that is, 
two upper extremities, two lower extremities, or one upper and one lower 
extremity.
    b. Skin lesions on the palms of both hands that very seriously limit 
your ability to do fine and gross motor movements.
    c. Skin lesions on the soles of both feet, the perineum, or both 
inguinal areas that very seriously limit your ability to ambulate.
    2. Frequency of flareups. If you have skin lesions, but they do not 
meet the requirements of any of the listings in this body system, you 
may still have an impairment that results in marked and severe 
functional limitations when we consider your condition over time, 
especially if your flareups result in extensive skin lesions, as defined 
in C1 of this section. Therefore, if you have frequent flareups, we may 
find that your impairment(s) is medically equal to one of these listings 
even though you have some periods during which your condition is in 
remission. We will consider how frequent and serious your flareups are, 
how quickly they resolve, and how you function between flareups to 
determine whether you have marked and severe functional limitations that 
have lasted for a continuous period of at least 12 months or that can be 
expected to last for a continuous period of at least 12 months. We will 
also consider the frequency of your flareups when we determine whether 
you have a severe impairment and when we need to assess functional 
equivalence.
    3. Symptoms (including pain). Symptoms (including pain) may be 
important factors contributing to the severity of your skin disorder(s). 
We assess the impact of symptoms as explained in Secs. 416.921 and 
416.929 of this chapter.
    4. Treatment. We assess the effects of medication, therapy, surgery, 
and any other form of treatment you receive when we determine the 
severity and duration of your impairment(s). Skin disorders frequently 
respond to treatment; however, response to treatment can vary widely, 
with some impairments becoming resistant to treatment. Some treatments 
can have side effects that can in themselves result in limitations.
    a. We assess the effects of continuing treatment as prescribed by 
determining if there is improvement in the symptoms, signs, and 
laboratory findings of your disorder, and if you experience side effects 
that

[[Page 601]]

result in functional limitations. To assess the effects of your 
treatment, we may need information about:
    i. The treatment you have been prescribed (for example, the type, 
dosage, method and frequency of administration of medication or 
therapy);
    ii. Your response to the treatment;
    iii. Any adverse effects of the treatment; and
    iv. The expected duration of the treatment.
    b. Because treatment itself or the effects of treatment may be 
temporary, in most cases sufficient time must elapse to allow us to 
evaluate the impact and expected duration of treatment and its side 
effects. Except under 108.07 and 108.08, you must follow continuing 
treatment as prescribed for at least 3 months before your impairment can 
be determined to meet the requirements of a skin disorder listing. (See 
108.00H if you are not undergoing treatment or did not have treatment 
for 3 months.) We consider your specific response to treatment when we 
evaluate the overall severity of your impairment.
    D. How do we assess impairments that may affect the skin and other 
body systems? When your impairment affects your skin and has effects in 
other body systems, we first evaluate the predominant feature of your 
impairment under the appropriate body system. Examples include, but are 
not limited to the following.
    1. Tuberous sclerosis primarily affects the brain. The predominant 
features are seizures, which we evaluate under the neurological listings 
in 111.00, and developmental delays or other mental disorders, which we 
evaluate under the mental disorders listings in 112.00.
    2. Malignant tumors of the skin (for example, malignant melanoma) 
are cancers, or neoplastic diseases, which we evaluate under the 
listings in 113.00.
    3. Autoimmune disorders and other immune system disorders (for 
example, systemic lupus erythematosus (SLE), scleroderma, human 
immunodeficiency virus (HIV) infection, and Sjogren's syndrome) often 
involve more than one body system. We first evaluate these disorders 
under the immune system disorders listings in 114.00. We evaluate SLE 
under 114.02, scleroderma under 114.04, Sjogren's syndrome under 114.10, 
and HIV infection under 114.11.
    4. Disfigurement or deformity resulting from skin lesions may result 
in loss of sight, hearing, speech, and the ability to chew 
(mastication). We evaluate these impairments and their effects under the 
special senses and speech listings in 102.00 and the digestive system 
listings in 105.00. Facial disfigurement or other physical deformities 
may also have effects we evaluate under the mental disorders listings in 
112.00, such as when they affect mood or social functioning.
    5. We evaluate erythropoietic porphyrias under the hemic and 
lymphatic listings in 107.00.
    6. We evaluate hemangiomas associated with thrombocytopenia and 
hemorrhage (for example, Kasabach-Merritt syndrome) involving 
coagulation defects, under the hemic and lymphatic listings in 107.00. 
But, when hemangiomas impinge on vital structures or interfere with 
function, we evaluate their primary effects under the appropriate body 
system.
    E. How do we evaluate genetic photosensitivity disorders?
    1. Xeroderma pigmentosum (XP). When you have XP, your impairment 
meets the requirements of 108.07A if you have clinical and laboratory 
findings showing that you have the disorder. (See 108.00E3.) People who 
have XP have a lifelong hypersensitivity to all forms of ultraviolet 
light and generally lead extremely restricted lives in highly protective 
environments in order to prevent skin cancers from developing. Some 
people with XP also experience problems with their eyes, neurological 
problems, mental disorders, and problems in other body systems.
    2. Other genetic photosensitivity disorders. Other genetic 
photosensitivity disorders may vary in their effects on different 
people, and may not result in marked and severe functional limitations 
for a continuous period of at least 12 months. Therefore, if you have a 
genetic photosensitivity disorder other than XP (established by clinical 
and laboratory findings as described in 108.00E3), you must show that 
you have either extensive skin lesions or an inability to function 
outside of a highly protective environment to meet the requirements of 
108.07B. You must also show that your impairment meets the duration 
requirement. By inability to function outside of a highly protective 
environment we mean that you must avoid exposure to ultraviolet light 
(including sunlight passing through windows and light from unshielded 
fluorescent bulbs), wear protective clothing and eyeglasses, and use 
opaque broad-spectrum sunscreens in order to avoid skin cancer or other 
serious effects. Some genetic photosensitivity disorders can have very 
serious effects in other body systems, especially special senses and 
speech (102.00), neurological (111.00), mental (112.00), and neoplastic 
(113.00). We will evaluate the predominant feature of your impairment 
under the appropriate body system, as explained in 108.00D.
    3. Clinical and laboratory findings.
    a. General. We need documentation from an acceptable medical source 
to establish that you have a medically determinable impairment. In 
general, we must have evidence of appropriate laboratory testing showing 
that you have XP or another genetic photosensitivity disorder. We will 
find that you have XP or another genetic photosensitivity disorder based 
on a report

[[Page 602]]

from an acceptable medical source indicating that you have the 
impairment, supported by definitive genetic laboratory studies 
documenting appropriate chromosomal changes, including abnormal DNA 
repair or another DNA or genetic abnormality specific to your type of 
photosensitivity disorder.
    b. What we will accept as medical evidence instead of the actual 
laboratory report. When we do not have the actual laboratory report, we 
need evidence from an acceptable medical source that includes 
appropriate clinical findings for your impairment and that is persuasive 
that a positive diagnosis has been confirmed by appropriate laboratory 
testing at some time prior to our evaluation. To be persuasive, the 
report must state that the appropriate definitive genetic laboratory 
study was conducted and that the results confirmed the diagnosis. The 
report must be consistent with other evidence in your case record.
    F. How do we evaluate burns? Electrical, chemical, or thermal burns 
frequently affect other body systems; for example, musculoskeletal, 
special senses and speech, respiratory, cardiovascular, renal, 
neurological, or mental. Consequently, we evaluate burns the way we 
evaluate other disorders that can affect the skin and other body 
systems, using the listing for the predominant feature of your 
impairment. For example, if your soft tissue injuries are under 
continuing surgical management (as defined in 101.00M), we will evaluate 
your impairment under 101.08. However, if your burns do not meet the 
requirements of 101.08 and you have extensive skin lesions that result 
in a very serious limitation (as defined in 108.00C1) that has lasted or 
can be expected to last for a continuous period of at least 12 months, 
we will evaluate them under 108.08.
    G. How do we determine if your skin disorder(s) will continue at a 
disabling level of severity in order to meet the duration requirement? 
For all of these skin disorder listings except 108.07 and 108.08, we 
will find that your impairment meets the duration requirement if your 
skin disorder results in extensive skin lesions that persist for at 
least 3 months despite continuing treatment as prescribed. By persist, 
we mean that the longitudinal clinical record shows that, with few 
exceptions, your lesions have been at the level of severity specified in 
the listing. For 108.07A, we will presume that you meet the duration 
requirement. For 108.07B and 108.08, we will consider all of the 
relevant medical and other information in your case record to determine 
whether your skin disorder meets the duration requirement.
    H. How do we assess your skin disorder(s) if your impairment does 
not meet the requirements of one of these listings?
    1. These listings are only examples of common skin disorders that we 
consider severe enough to result in marked and severe functional 
limitations. For most of these listings, if you do not have continuing 
treatment as prescribed, if your treatment has not lasted for at least 3 
months, or if you do not have extensive skin lesions that have persisted 
for at least 3 months, your impairment cannot meet the requirements of 
these skin disorder listings. (This provision does not apply to 108.07 
and 108.08.) However, we may still find that you are disabled because 
your impairment(s) meets the requirements of a listing in another body 
system, medically equals (see Secs. 404.1526 and 416.926 of this 
chapter) the severity of a listing, or functionally equals the severity 
of the listings.
    2. If you have not received ongoing treatment or do not have an 
ongoing relationship with the medical community despite the existence of 
a severe impairment(s), or if your skin lesions have not persisted for 
at least 3 months but you are undergoing continuing treatment as 
prescribed, you may still have an impairment(s) that meets a listing in 
another body system or that medically equals a listing. If you do not 
have an impairment(s) that meets or medically equals a listing, we will 
consider whether your impairment(s) functionally equals the listings. 
(See Sec. 416.924 of this chapter.) When we decide whether you continue 
to be disabled, we use the rules in Sec. 416.994a of this chapter.

             108.01  Category of Impairments, Skin Disorders

    108.02  Ichthyosis, with extensive skin lesions that persist for at 
least 3 months despite continuing treatment as prescribed.
    108.03  Bullous disease (for example, pemphigus, erythema multiforme 
bullosum, epidermolysis bullosa, bullous pemphigoid, dermatitis 
herpetiformis), with extensive skin lesions that persist for at least 3 
months despite continuing treatment as prescribed.
    108.04  Chronic infections of the skin or mucous membranes, with 
extensive fungating or extensive ulcerating skin lesions that persist 
for at least 3 months despite continuing treatment as prescribed.
    108.05  Dermatitis (for example, psoriasis, dyshidrosis, atopic 
dermatitis, exfoliative dermatitis, allergic contact dermatitis), with 
extensive skin lesions that persist for at least 3 months despite 
continuing treatment as prescribed.
    108.06  Hidradenitis suppurativa, with extensive skin lesions 
involving both axillae, both inguinal areas, or the perineum that 
persist for at least 3 months despite continuing treatment as 
prescribed.
    108.07  Genetic photosensitivity disorders, established as described 
in 108.00E.
    A. Xeroderma pigmentosum. Consider the individual disabled from 
birth.
    B. Other genetic photosensitivity disorders, with:

[[Page 603]]

    1. Extensive skin lesions that have lasted or can be expected to 
last for a continuous period of at least 12 months, or
    2. Inability to function outside of a highly protective environment 
for a continuous period of at least 12 months (see 108.00E2).
    108.08  Burns, with extensive skin lesions that have lasted or can 
be expected to last for a continuous period of at least 12 months. (See 
108.00F).

                       109.00  Endocrine Disorders

    A. What is an endocrine disorder?
    An endocrine disorder is a medical condition that causes a hormonal 
imbalance. When an endocrine gland functions abnormally, producing 
either too much of a specific hormone (hyperfunction) or too little 
(hypofunction), the hormonal imbalance can cause various complications 
in the body. The major glands of the endocrine system are the pituitary, 
thyroid, parathyroid, adrenal, and pancreas.
    B. How do we evaluate the effects of endocrine disorders? The only 
listing in this body system addresses children from birth to the 
attainment of age 6 who have diabetes mellitus (DM) and require daily 
insulin. We evaluate other impairments that result from endocrine 
disorders under the listings for other body systems. For example:
    1. Pituitary gland disorders can disrupt hormone production and 
normal functioning in other endocrine glands and in many body systems. 
The effects of pituitary gland disorders vary depending on which 
hormones are involved. For example, when pituitary growth hormone 
deficiency in growing children limits bone maturation and results in 
pathological short stature, we evaluate this linear growth impairment 
under 100.00. When pituitary hypofunction affects water and electrolyte 
balance in the kidney and leads to diabetes insipidus, we evaluate the 
effects of recurrent dehydration under 106.00.
    2. Thyroid gland disorders affect the sympathetic nervous system and 
normal metabolism. We evaluate thyroid-related changes in linear growth 
under 100.00; thyroid-related changes in blood pressure and heart rate 
that cause cardiac arrhythmias or other cardiac dysfunction under 
104.00; thyroid-related weight loss under 105.00; and cognitive 
limitations, mood disorders, and anxiety under 112.00.
    3. Parathyroid gland disorders affect calcium levels in bone, blood, 
nerves, muscle, and other body tissues. We evaluate parathyroid-related 
osteoporosis and fractures under 101.00; abnormally elevated calcium 
levels in the blood (hypercalcemia) that lead to cataracts under 102.00; 
kidney failure under 106.00; and recurrent abnormally low blood calcium 
levels (hypocalcemia) that lead to increased excitability of nerves and 
muscles, such as tetany and muscle spasms, under 111.00.
    4. Adrenal gland disorders affect bone calcium levels, blood 
pressure, metabolism, and mental status. We evaluate adrenal-related 
linear growth impairments under 100.00; adrenal-related osteoporosis 
with fractures that compromises the ability to walk or to use the upper 
extremities under 101.00; adrenal-related hypertension that worsens 
heart failure or causes recurrent arrhythmias under 104.00; adrenal-
related weight loss under 105.00; and mood disorders under 112.00.
    5. Diabetes mellitus and other pancreatic gland disorders disrupt 
the production of several hormones, including insulin, that regulate 
metabolism and digestion. Insulin is essential to the absorption of 
glucose from the bloodstream into body cells for conversion into 
cellular energy. The most common pancreatic gland disorder is diabetes 
mellitus (DM). There are two major types of DM: type 1 and type 2. Both 
type 1 and type 2 DM are chronic disorders that can have serious, 
disabling complications that meet the duration requirement. Type 1 DM--
previously known as ``juvenile diabetes'' or ``insulin-dependent 
diabetes mellitus'' (IDDM)--is an absolute deficiency of insulin 
secretion that commonly begins in childhood and continues throughout 
adulthood. Treatment of type 1 DM always requires lifelong daily 
insulin. With type 2 DM--previously known as ``adult-onset diabetes 
mellitus'' or ``non-insulin-dependent diabetes mellitus'' (NIDDM)--the 
body's cells resist the effects of insulin, impairing glucose absorption 
and metabolism. Type 2 is less common than type 1 DM in children, but 
physicians are increasingly diagnosing type 2 DM before age 18. 
Treatment of type 2 DM generally requires lifestyle changes, such as 
increased exercise and dietary modification, and sometimes insulin in 
addition to other medications. While both type 1 and type 2 DM are 
usually controlled, some children do not achieve good control for a 
variety of reasons including, but not limited to, hypoglycemia 
unawareness, other disorders that can affect blood glucose levels, 
inability to manage DM due to a mental disorder, or inadequate 
treatment.
    a. Hyperglycemia. Both types of DM cause hyperglycemia, which is an 
abnormally high level of blood glucose that may produce acute and long-
term complications. Acute complications of hyperglycemia include 
diabetic ketoacidosis. Long-term complications of chronic hyperglycemia 
include many conditions affecting various body systems but are rare in 
children.
    b. Diabetic ketoacidosis (DKA). DKA is an acute, potentially life-
threatening complication of DM in which the chemical balance of the body 
becomes dangerously hyperglycemic and acidic. It results from a severe 
insulin deficiency, which can occur due to missed or inadequate daily 
insulin

[[Page 604]]

therapy or in association with an acute illness. It usually requires 
hospital treatment to correct the acute complications of dehydration, 
electrolyte imbalance, and insulin deficiency. You may have serious 
complications resulting from your treatment, which we evaluate under the 
affected body system. For example, we evaluate cardiac arrhythmias under 
104.00, intestinal necrosis under 105.00, and cerebral edema and 
seizures under 111.00. Recurrent episodes of DKA in adolescents may 
result from mood or eating disorders, which we evaluate under 112.00.
    c. Hypoglycemia. Children with DM may experience episodes of 
hypoglycemia, which is an abnormally low level of blood glucose. Most 
children age 6 and older recognize the symptoms of hypoglycemia and 
reverse them by consuming substances containing glucose; however, some 
do not take this step because of hypoglycemia unawareness. Severe 
hypoglycemia can lead to complications, including seizures or loss of 
consciousness, which we evaluate under 111.00, or altered mental status, 
cognitive deficits, and permanent brain damage, which we evaluate under 
112.00.
    C. How do we evaluate DM in children?
    Listing 109.08 is only for children with DM who have not attained 
age 6 and who require daily insulin. For all other children (that is, 
children with DM who are age 6 or older and require daily insulin, and 
children of any age with DM who do not require daily insulin), we follow 
our rules for determining whether the DM is severe, alone or in 
combination with another impairment, whether it meets or medically 
equals the criteria of a listing in another body system, or functionally 
equals the listings under the criteria in Sec. 416.926a, considering the 
factors in Sec. 416.924a. The management of DM in children can be 
complex and variable from day to day, and all children with DM require 
some level of adult supervision. For example, if a child age 6 or older 
has a medical need for 24-hour-a-day adult supervision of insulin 
treatment, food intake, and physical activity to ensure survival, we 
will find that the child's impairment functionally equals the listings 
based on the example in Sec. 416.926a(m)(5).
    D. How do we evaluate other endocrine disorders that do not have 
effects that meet or medically equal the criteria of any listing in 
other body systems? If your impairment(s) does not meet or medically 
equal a listing in another body system, we will consider whether your 
impairment(s) functionally equals the listings under the criteria in 
Sec. 416.926a, considering the factors in Sec. 416.924a. When we decide 
whether you continue to be disabled, we use the rules in Sec. 416.994a.
    109.01  Category of Impairments, Endocrine
    109.08  Any type of diabetes mellitus in a child who requires daily 
insulin and has not attained age 6. Consider under a disability until 
the attainment of age 6. Thereafter, evaluate the diabetes mellitus 
according to the rules in 109.00B5 and C.

     110.00  Congenital Disorders That Affect Multiple Body Systems

    A. Which disorders do we evaluate under this body system? We 
evaluate non-mosaic Down syndrome and catastrophic congenital disorders 
under this body system.
    B. What is non-mosaic Down syndrome? Non-mosaic Down syndrome is a 
genetic disorder. Most children with non-mosaic Down syndrome have three 
copies of chromosome 21 in all of their cells (chromosome 21 trisomy); 
some have an extra copy of chromosome 21 attached to a different 
chromosome in all of their cells (chromosome 21 translocation). 
Virtually all children with non-mosaic Down syndrome have characteristic 
facial or other physical features, delayed physical development, and 
intellectual disability. Children with non-mosaic Down syndrome may also 
have congenital heart disease, impaired vision, hearing problems, and 
other disorders. We evaluate non-mosaic Down syndrome under 110.06. If 
you have non-mosaic Down syndrome documented as described in 110.00C, we 
consider you disabled from birth.

 C. What evidence do we need to document non-mosaic Down syndrome under 
                                 110.06?

    1. Under 110.06A, we will find you disabled based on laboratory 
findings.
    a. To find that your disorder meets 110.06A, we need a copy of the 
laboratory report of karyotype analysis, which is the definitive test to 
establish non-mosaic Down syndrome. We will not purchase karyotype 
analysis. We will not accept a fluorescence in situ hybridization (FISH) 
test because it does not distinguish between the mosaic and non-mosaic 
forms of Down syndrome.
    b. If a physician (see Secs. 404.1513(a)(1) and 416.913(a)(1) of 
this chapter) has not signed the laboratory report of karyotype 
analysis, the evidence must also include a physician's statement that 
you have Down syndrome.
    c. For purposes of 110.06A, we do not require evidence stating that 
you have the distinctive facial or other physical features of Down 
syndrome.
    2. If we do not have a laboratory report of karyotype analysis 
documenting that you have non-mosaic Down syndrome, we may find you 
disabled under 110.06B or 110.06C.
    a. Under 110.06B, we need a physician's report stating: (i) your 
karyotype diagnosis or evidence that documents your type of Down 
syndrome that is consistent with prior karyotype analysis (for example, 
reference to a diagnosis of ``trisomy 21'') and (ii) that you have the 
distinctive facial or other physical features of Down syndrome. We do 
not require a detailed description of the facial or

[[Page 605]]

other physical features of the disorder. However, we will not find that 
your disorder meets 110.06B if we have evidence--such as evidence of 
functioning inconsistent with the diagnosis--that indicates that you do 
not have non-mosaic Down syndrome.
    b. If we do not have evidence of prior karyotype analysis (you did 
not have testing, or you had testing but we do not have information from 
a physician about the test results), we will find that your disorder 
meets 110.06C if we have: (i) a physician's report stating that you have 
the distinctive facial or other physical features of Down syndrome and 
(ii) evidence that your functioning is consistent with a diagnosis of 
non-mosaic Down syndrome. This evidence may include medical or 
nonmedical information about your physical and mental abilities, 
including information about your development, education, work history, 
or the results of psychological testing. However, we will not find that 
your disorder meets 110.06C if we have evidence--such as evidence of 
functioning inconsistent with the diagnosis--that indicates that you do 
not have non-mosaic Down syndrome.
    D. What are catastrophic congenital disorders? Some catastrophic 
congenital disorders, such as anencephaly, cyclopia, chromosome 13 
trisomy (Patau syndrome or trisomy D), and chromosome 18 trisomy 
(Edwards' syndrome or trisomy E), are usually expected to result in 
early death. Others such as cri du chat syndrome (chromosome 5p deletion 
syndrome) and the infantile onset form of Tay-Sachs disease interfere 
very seriously with development. We evaluate catastrophic congenital 
disorders under 110.08. The term ``very seriously'' in 110.08 has the 
same meaning as in the term ``extreme'' in Sec. 416.926a(e)(3) of this 
chapter.
    E. What evidence do we need under 110.08?
    We need one of the following to determine if your disorder meets 
110.08A or B:
    1. A laboratory report of the definitive test that documents your 
disorder (for example, genetic analysis or evidence of biochemical 
abnormalities) signed by a physician.
    2. A laboratory report of the definitive test that documents your 
disorder that is not signed by a physician and a report from a physician 
stating that you have the disorder.
    3. A report from a physician stating that you have the disorder with 
the typical clinical features of the disorder and that you had 
definitive testing that documented your disorder. In this case, we will 
find that your disorder meets 110.08A or B unless we have evidence that 
indicates that you do not have the disorder.
    4. If we do not have the definitive laboratory evidence we need 
under E1, E2, or E3, we will find that your disorder meets 110.08A or B 
if we have: (i) a report from a physician stating that you have the 
disorder and that you have the typical clinical features of the 
disorder, and (ii) other evidence that supports the diagnosis. This 
evidence may include medical or nonmedical information about your 
development and functioning.
    5. For obvious catastrophic congenital anomalies that are expected 
to result in early death, such as anencephaly and cyclopia, we need 
evidence from a physician that demonstrates that the infant has the 
characteristic physical features of the disorder. In these rare cases, 
we do not need laboratory testing or any other evidence that confirms 
the disorder.
    F. How do we evaluate mosaic Down syndrome and other congenital 
disorders that affect multiple body systems?
    1. Mosaic Down syndrome. Approximately 2 percent of children with 
Down syndrome have the mosaic form. In mosaic Down syndrome, there are 
some cells with an extra copy of chromosome 21 and other cells with the 
normal two copies of chromosome 21. Mosaic Down syndrome can be so 
slight as to be undetected clinically, but it can also be profound and 
disabling, affecting various body systems.
    2. Other congenital disorders that affect multiple body systems. 
Other congenital disorders, such as congenital anomalies, chromosomal 
disorders, dysmorphic syndromes, inborn metabolic syndromes, and 
perinatal infectious diseases, can cause deviation from, or interruption 
of, the normal function of the body or can interfere with development. 
Examples of these disorders include both the juvenile and late-onset 
forms of Tay-Sachs disease, trisomy X syndrome (XXX syndrome), fragile X 
syndrome, phenylketonuria (PKU), caudal regression syndrome, and fetal 
alcohol syndrome. For these disorders and other disorders like them, the 
degree of deviation, interruption, or interference, as well as the 
resulting functional limitations and their progression, may vary widely 
from child to child and may affect different body systems.
    3. Evaluating the effects of mosaic Down syndrome or another 
congenital disorder under the listings. When the effects of mosaic Down 
syndrome or another congenital disorder that affects multiple body 
systems are sufficiently severe we evaluate the disorder under the 
appropriate affected body system(s), such as musculoskeletal, special 
senses and speech, neurological, or mental disorders. Otherwise, we 
evaluate the specific functional limitations that result from the 
disorder under our other rules described in 110.00G.
    G. What if your disorder does not meet a listing? If you have a 
severe medically determinable impairment(s) that does not meet a 
listing, we will consider whether your impairment(s) medically equals a 
listing. See Sec. 416.926 of this chapter. If your impairment(s) does 
not meet or medically equal a

[[Page 606]]

listing, we will consider whether it functionally equals the listings. 
See Secs. 416.924a and 416.926a of this chapter. We use the rules in 
Sec. 416.994a of this chapter when we decide whether you continue to be 
disabled.

   110.01  Category of Impairments, Congenital Disorders That Affect 
                          Multiple Body Systems

    110.06  Non-mosaic Down syndrome (chromosome 21 trisomy or 
chromosome 21 translocation), documented by:
    A. A laboratory report of karyotype analysis signed by a physician, 
or both a laboratory report of karyotype analysis not signed by a 
physician and a statement by a physician that the child has Down 
syndrome (see 110.00C1), or
    B. A physician's report stating that the child has chromosome 21 
trisomy or chromosome 21 translocation consistent with karyotype 
analysis with the distinctive facial or other physical features of Down 
syndrome (see 110.00C2a), or
    C. A physician's report stating that the child has Down syndrome 
with the distinctive facial or other physical features and evidence 
demonstrating that the child is functioning at the level of a child with 
non-mosaic Down syndrome (see 110.00C2b).
    110.08  A catastrophic congenital disorder (see 110.00D and 110.00E) 
with:
    A. Death usually expected within the first months of life, or
    B. Very serious interference with development or functioning.

                     111.00  Neurological Disorders

    A. Which neurological disorders do we evaluate under these listings? 
We evaluate epilepsy, coma or persistent vegetative state (PVS), and 
neurological disorders that cause disorganization of motor function, 
bulbar and neuromuscular dysfunction, or communication impairment. Under 
this body system, we evaluate the limitations resulting from the impact 
of the neurological disease process itself. If you have a neurological 
disorder(s) that affects your physical and mental functioning, we will 
evaluate your impairments under the rules we use to determine functional 
equivalence. If your neurological disorder results in only mental 
impairment or if you have a co-occurring mental condition that is not 
caused by your neurological disorder (for example, Autism spectrum 
disorder), we will evaluate your mental impairment under the mental 
disorders body system, 112.00.
    B. What evidence do we need to document your neurological disorder?
    1. We need both medical and non-medical evidence (signs, symptoms, 
and laboratory findings) to assess the effects of your neurological 
disorder. Medical evidence should include your medical history, 
examination findings, relevant laboratory tests, and the results of 
imaging. Imaging refers to medical imaging techniques, such as x-ray, 
computerized tomography (CT), magnetic resonance imaging (MRI), and 
electroencephalography (EEG). The imaging must be consistent with the 
prevailing state of medical knowledge and clinical practice as the 
proper technique to support the evaluation of the disorder. In addition, 
the medical evidence may include descriptions of any prescribed 
treatment and your response to it. We consider non-medical evidence such 
as statements you or others make about your impairments, your 
restrictions, your daily activities, or, if you are an adolescent, your 
efforts to work.
    2. We will make every reasonable effort to obtain the results of 
your laboratory and imaging evidence. When the results of any of these 
tests are part of the existing evidence in your case record, we will 
evaluate the test results and all other relevant evidence. We will not 
purchase imaging, or other diagnostic tests or laboratory tests that are 
complex, may involve significant risk, or that are invasive. We will not 
routinely purchase tests that are expensive or not readily available.
    C. How do we consider adherence to prescribed treatment in 
neurological disorders? In 111.02 (Epilepsy) and 111.12 (Myasthenia 
gravis), we require that limitations from these neurological disorders 
exist despite adherence to prescribed treatment. ``Despite adherence to 
prescribed treatment'' means that you have taken medication(s) or 
followed other treatment procedures for your neurological disorder(s) as 
prescribed by a physician for three consecutive months but your 
impairment continues to meet the other listing requirements despite this 
treatment. You may receive your treatment at a health care facility that 
you visit regularly, even if you do not see the same physician on each 
visit.
    D. What do we mean by disorganization of motor function?
    1. Disorganization of motor function means interference, due to your 
neurological disorder, with movement of two extremities; i.e., the lower 
extremities, or upper extremities (including fingers, wrists, hands, 
arms, and shoulders). By two extremities we mean both lower extremities, 
or both upper extremities, or one upper extremity and one lower 
extremity. All listings in this body system, except for 111.02 
(Epilepsy) and 111.20 (Coma and persistent vegetative state), include 
criteria for disorganization of motor function that results in an 
extreme limitation in your ability to:
    a. Stand up from a seated position; or
    b. Balance while standing or walking; or
    c. Use the upper extremities (e.g., fingers, wrists, hands, arms, 
and shoulders).
    2. Extreme limitation means the inability to stand up from a seated 
position, maintain

[[Page 607]]

balance in a standing position and while walking, or use your upper 
extremities to independently initiate, sustain, and complete age-
appropriate activities. The assessment of motor function depends on the 
degree of interference with standing up; balancing while standing or 
walking; or using the upper extremities (including fingers, hands, arms, 
and shoulders).
    a. Inability to stand up from a seated position means that once 
seated you are unable to stand and maintain an upright position without 
the assistance of another person or the use of an assistive device, such 
as a walker, two crutches, or two canes.
    b. Inability to maintain balance in a standing position means that 
you are unable to maintain an upright position while standing or walking 
without the assistance of another person or an assistive device, such as 
a walker, two crutches, or two canes.
    c. Inability to use your upper extremities means that you have a 
loss of function of both upper extremities (e.g., fingers, wrists, 
hands, arms, and shoulders) that very seriously limits your ability to 
independently initiate, sustain, and complete age- appropriate 
activities involving fine and gross motor movements. Inability to 
perform fine and gross motor movements could include not being able to 
pinch, manipulate, and use your fingers; or not being able to use your 
hands, arms, and shoulders to perform gross motor movements, such as 
handling, gripping, grasping, holding, turning, and reaching; or not 
being able to engage in exertional movements such a lifting, carrying, 
pushing, and pulling.
    3. For children who are not yet able to balance, stand up, or walk 
independently, we consider their function based on assessments of 
limitations in the ability to perform comparable age-appropriate 
activities with the lower and upper extremities, given normal 
developmental milestones. For such children, an extreme level of 
limitation means developmental milestones at less than one-half of the 
child's chronological age.
    E. What do we mean by bulbar and neuromuscular dysfunction? The 
bulbar region of the brain is responsible for controlling the bulbar 
muscles in the throat, tongue, jaw, and face. Bulbar and neuromuscular 
dysfunction refers to weakness in these muscles, resulting in breathing, 
swallowing, and speaking impairments. Listings 111.12 (Myasthenia 
gravis) and 111.22 (Motor neuron disorders) include criteria for 
evaluating bulbar and neuromuscular dysfunction. If your neurological 
disorder has resulted in a breathing disorder, we may evaluate that 
condition under the respiratory system, 103.00.
    F. What is epilepsy, and how do we evaluate it under 111.02?
    1. Epilepsy is a pattern of recurrent and unprovoked seizures that 
are manifestations of abnormal electrical activity in the brain. There 
are various types of generalized and ``focal'' or partial seizures. In 
children, the most common potentially disabling seizure types are 
generalized tonic-clonic seizures, dyscognitive seizures (formerly 
complex partial seizures), and absence seizures. However, psychogenic 
nonepileptic seizures and pseudoseizures are not epileptic seizures for 
the purpose of 111.02. We evaluate psychogenic seizures and 
pseudoseizures under the mental disorders body system, 112.00.
    a. Generalized tonic-clonic seizures are characterized by loss of 
consciousness accompanied by a tonic phase (sudden muscle tensing 
causing the child to lose postural control) followed by a clonic phase 
(rapid cycles of muscle contraction and relaxation, also called 
convulsions). Tongue biting and incontinence may occur during 
generalized tonic-clonic seizures, and injuries may result from falling.
    b. Dyscognitive seizures are characterized by alteration of 
consciousness without convulsions or loss of muscle control. During the 
seizure, blank staring, change of facial expression, and automatisms 
(such as lip smacking, chewing or swallowing, or repetitive simple 
actions, such as gestures or verbal utterances) may occur. During its 
course, a dyscognitive seizure may progress into a generalized tonic-
clonic seizure (see 111.00F1a).
    c. Absence seizures (petit mal) are also characterized by an 
alteration in consciousness, but are shorter than other generalized 
seizures (e.g., tonic-clonic and dyscognitive) seizures, generally 
lasting for only a few seconds rather than minutes. They may present 
with blank staring, change of facial expression, lack of awareness and 
responsiveness, and a sense of lost time after the seizure. An aura 
never precedes absence seizures. Although absence seizures are brief, 
frequent occurrence may limit functioning. This type of seizure usually 
does not occur after adolescence.
    d. Febrile seizures may occur in young children in association with 
febrile illnesses. We will consider seizures occurring during febrile 
illnesses. To meet 111.02, we require documentation of seizures during 
nonfebrile periods and epilepsy must be established.
    2. Description of seizure. We require at least one detailed 
description of your seizures from someone, preferably a medical 
professional, who has observed at least one of your typical seizures. If 
you experience more than one type of seizure, we require a description 
of each type.
    3. Serum drug levels. We do not require serum drug levels; 
therefore, we will not purchase them. However, if serum drug levels are 
available in your medical records, we will evaluate them in the context 
of the other evidence in your case record.
    4. Counting seizures. The period specified in 111.02A or B cannot 
begin earlier than one

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month after you began prescribed treatment. The required number of 
seizures must occur within the period we are considering in connection 
with your application or continuing disability review. When we evaluate 
the frequency of your seizures, we also consider your adherence to 
prescribed treatment (see 111.00C). When we determine the number of 
seizures you have had in the specified period, we will:
    a. Count multiple seizures occurring in a 24-hour period as one 
seizure.
    b. Count status epilepticus (a continuous series of seizures without 
return to consciousness between seizures) as one seizure.
    c. Count a dyscognitive seizure that progresses into a generalized 
tonic-clonic seizure as one generalized tonic-clonic seizure.
    d. We do not count seizures that occur during a period when you are 
not adhering to prescribed treatment without good reason. When we 
determine that you had a good reason for not adhering to prescribed 
treatment, we will consider your physical, mental, educational, and 
communicative limitations (including any language barriers). We will 
consider you to have good reason for not following prescribed treatment 
if, for example, the treatment is very risky for you due to its 
consequences or unusual nature, or if you are unable to afford 
prescribed treatment that you are willing to accept, but for which no 
free community resources are available. We will follow guidelines found 
in our policy, such as Sec. 416.930(c) of this chapter, when we 
determine whether you have a good reason for not adhering to prescribed 
treatment.
    e. We do not count psychogenic nonepileptic seizures or 
pseudoseizures under 111.02.We evaluate these seizures under the mental 
disorders body system, 112.00.
    5. Electroencephalography (EEG) testing. We do not require EEG test 
results; therefore, we will not purchase them. However, if EEG test 
results are available in your medical records, we will evaluate them in 
the context of the other evidence in your case record.
    G. What is vascular insult to the brain, and how do we evaluate it 
under 111.04?
    1. Vascular insult to the brain (cerebrum, cerebellum, or 
brainstem), commonly referred to as stroke or cerebrovascular accident 
(CVA), is brain cell death caused by an interruption of blood flow 
within or leading to the brain, or by a hemorrhage from a ruptured blood 
vessel or aneurysm in the brain. If you have a vision impairment 
resulting from your vascular insult, we may evaluate that impairment 
under the special senses body system, 102.00.
    2. We generally need evidence from at least 3 months after the 
vascular insult to determine whether you have disorganization of motor 
function under 111.04. In some cases, evidence of your vascular insult 
is sufficient to allow your claim within 3 months post-vascular insult. 
If we are unable to allow your claim within 3 months after your vascular 
insult, we will defer adjudication of the claim until we obtain evidence 
of your neurological disorder at least 3 months post-vascular insult.
    H. What are benign brain tumors, and how do we evaluate them under 
111.05? Benign brain tumors are noncancerous (nonmalignant) abnormal 
growths of tissue in or on the brain that invade healthy brain tissue or 
apply pressure on the brain or cranial nerves. We evaluate their effects 
on your functioning as discussed in 111.00D. We evaluate malignant brain 
tumors under the cancer body system in 113.00. If you have a vision 
impairment resulting from your benign brain tumor, we may evaluate that 
impairment under the special senses body system, 102.00.
    I. What is cerebral palsy, and how do we evaluate it under 111.07?
    1. Cerebral palsy (CP) is a term that describes a group of static, 
nonprogressive disorders caused by abnormalities within the brain that 
disrupt the brain's ability to control movement, muscle coordination, 
and posture. The resulting motor deficits manifest very early in a 
child's development, with delayed or abnormal progress in attaining 
developmental milestones; deficits may become more obvious as the child 
grows and matures over time.
    2. We evaluate your signs and symptoms, such as ataxia, spasticity, 
flaccidity, athetosis, chorea, and difficulty with precise movements 
when we determine your ability to stand up, balance, walk, or perform 
fine and gross motor movements. We will also evaluate your signs, such 
as dysarthria and apraxia of speech, and receptive and expressive 
language problems when we determine your ability to communicate.
    3. We will consider your other impairments or signs and symptoms 
that develop secondary to the disorder, such as post-impairment syndrome 
(a combination of pain, fatigue, and weakness due to muscle 
abnormalities); overuse syndromes (repetitive motion injuries); 
arthritis; abnormalities of proprioception (perception of the movements 
and position of the body); abnormalities of stereognosis (perception and 
identification of objects by touch); learning problems; anxiety; and 
depression.
    J. What are spinal cord disorders, and how do we evaluate them under 
111.08?
    1. Spinal cord disorders may be congenital or caused by injury to 
the spinal cord. Motor signs and symptoms of spinal cord disorders 
include paralysis, flaccidity, spasticity, and weakness.
    2. Spinal cord disorders with complete loss of function (111.08A) 
addresses spinal cord disorders that result in complete lack of motor, 
sensory, and autonomic function of the affected part(s) of the body.
    3. Spinal cord disorders with disorganization of motor function 
(111.08B) addresses spinal

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cord disorders that result in less than complete loss of function of the 
affected part(s) of the body, reducing, but not eliminating, motor, 
sensory, and autonomic function.
    4. When we evaluate your spinal cord disorder, we generally need 
evidence from at least 3 months after your symptoms began in order to 
evaluate your disorganization of motor function. In some cases, evidence 
of your spinal cord disorder may be sufficient to allow your claim 
within 3 months after the spinal cord disorder. If the medical evidence 
demonstrates total cord transection causing a loss of motor and sensory 
functions below the level of injury, we will not wait 3 months but will 
make the allowance decision immediately.
    K. What are communication impairments associated with neurological 
disorders, and how do we evaluate them under 111.09?
    1. Communication impairments result from medically determinable 
neurological disorders that cause dysfunction in the parts of the brain 
responsible for speech and language. Under 111.09, we must have recent 
comprehensive evaluation including all areas of affective and effective 
communication, performed by a qualified professional, to document a 
communication impairment associated with a neurological disorder.
    2. Under 111.09A, we need documentation from a qualified 
professional that your neurological disorder has resulted in a speech 
deficit that significantly affects your ability to communicate. 
Significantly affects means that you demonstrate a serious limitation in 
communicating, and a person who is unfamiliar with you cannot easily 
understand or interpret your speech.
    3. Under 111.09B, we need documentation from a qualified 
professional that shows that your neurological disorder has resulted in 
a comprehension deficit that results in ineffective verbal communication 
for your age. For the purposes of 111.09B, comprehension deficit means a 
deficit in receptive language. Ineffective verbal communication means 
that you demonstrate serious limitation in your ability to communicate 
orally on the same level as other children of the same age and level of 
development.
    4. Under 111.09C, we need documentation of a neurological disorder 
that has resulted in hearing loss. Your hearing loss will be evaluated 
under listing 102.10 or 102.11.
    5. We evaluate speech deficits due to non-neurological disorders 
under 2.09.
    L. What are neurodegenerative disorders of the central nervous 
system, such as Juvenile-onset Huntington's disease and Friedreich's 
ataxia, and how do we evaluate them under 111.17? Neurodegenerative 
disorders of the central nervous system are disorders characterized by 
progressive and irreversible degeneration of neurons or their supporting 
cells. Over time, these disorders impair many of the body's motor or 
cognitive and other mental functions. We consider neurodegenerative 
disorders of the central nervous system under 111.17 that we do not 
evaluate elsewhere in section 111.00, such as juvenile-onset 
Huntington's disease (HD) and Friedreich's ataxia. When these disorders 
result in solely cognitive and other mental functional limitations, we 
will evaluate the disorder under the mental disorder listings, 112.00.
    M. What is traumatic brain injury, and how do we evaluate it under 
111.18?
    1. Traumatic brain injury (TBI) is damage to the brain resulting 
from skull fracture, collision with an external force leading to a 
closed head injury, or penetration by an object that enters the skull 
and makes contact with brain tissue. We evaluate a TBI that results in 
coma or persistent vegetative state (PVS) under 111.20.
    2. We generally need evidence from at least 3 months after the TBI 
to evaluate whether you have disorganization of motor function under 
111.18. In some cases, evidence of your TBI is sufficient to determine 
disability. If we are unable to allow your claim within 3 months post-
TBI, we will defer adjudication of the claim until we obtain evidence of 
your neurological disorder at least 3 months post-TBI. If a finding of 
disability still is not possible at that time, we will again defer 
adjudication of the claim until we obtain evidence at least 6 months 
after your TBI.
    N. What are coma and persistent vegetative state, and how do we 
evaluate them under 111.20? Coma is a state of unconsciousness in which 
a child does not exhibit a sleep/wake cycle, and is unable to perceive 
or respond to external stimuli. Children who do not fully emerge from 
coma may progress into persistent vegetative state (PVS). PVS is a 
condition of partial arousal in which a child may have a low level of 
consciousness but is still unable to react to external stimuli. In 
contrast to coma, a child in a PVS retains sleep/wake cycles and may 
exhibit some key lower brain functions, such as spontaneous movement, 
opening and moving eyes, and grimacing. Coma or PVS may result from a 
TBI, a nontraumatic insult to the brain (such as a vascular insult, 
infection, or brain tumor), or a neurodegenerative or metabolic 
disorder. Medically induced comas should be considered under the section 
pertaining to the underlying reason the coma was medically induced and 
not under this section.
    O. What is multiple sclerosis, and how do we evaluate it under 
111.21?
    1. Multiple sclerosis (MS) is a chronic, inflammatory, degenerative 
disorder that damages the myelin sheath surrounding the nerve fibers in 
the brain and spinal cord. The damage disrupts the normal transmission 
of nerve impulses within the brain and between the brain and other parts 
of the body causing impairment in muscle coordination, strength, 
balance, sensation, and vision.

[[Page 610]]

There are several forms of MS, ranging from slightly to highly 
aggressive. Milder forms generally involve acute attacks (exacerbations) 
with partial or complete recovery from signs and symptoms (remissions). 
Aggressive forms generally exhibit a steady progression of signs and 
symptoms with few or no remissions. The effects of all forms vary from 
child to child.
    2. We evaluate your signs and symptoms, such as flaccidity, 
spasticity, spasms, incoordination, imbalance, tremor, physical fatigue, 
muscle weakness, dizziness, tingling, and numbness when we determine 
your ability to stand up, balance, walk, or perform fine and gross motor 
movements, such as using your arms, hands, and fingers. If you have a 
vision impairment resulting from your MS, we may evaluate that 
impairment under the special senses body system, 102.00.
    P. What are motor neuron disorders, and how do we evaluate them 
under 111.22? Motor neuron disorders are progressive neurological 
disorders that destroy the cells that control voluntary muscle activity, 
such as walking, breathing, swallowing, and speaking. The most common 
motor neuron disorders in children are progressive bulbar palsy and 
spinal muscular dystrophy syndromes. We evaluate the effects of these 
disorders on motor functioning or bulbar and neuromuscular functioning.
    Q. How do we consider symptoms of fatigue in these listings? Fatigue 
is one of the most common and limiting symptoms of some neurological 
disorders, such as multiple sclerosis and myasthenia gravis. These 
disorders may result in physical fatigue (lack of muscle strength) or 
mental fatigue (decreased awareness or attention). When we evaluate your 
fatigue, we will consider the intensity, persistence, and effects of 
fatigue on your functioning. This may include information such as the 
clinical and laboratory data and other objective evidence concerning 
your neurological deficit, a description of fatigue considered 
characteristic of your disorder, and information about your functioning. 
We consider the effects of physical fatigue on your ability to stand up, 
balance, walk, or perform fine and gross motor movements using the 
criteria described in 111.00D.
    R. How do we evaluate your neurological disorder when it does not 
meet one of these listings?
    1. If your neurological disorder does not meet the criteria of any 
of these listings, we must also consider whether your impairment(s) 
meets the criteria of a listing in another body system. If you have a 
severe medically determinable impairment(s) that does not meet a 
listing, we will determine whether your impairment(s) medically equals a 
listing. See Sec. 416.926 of this chapter.
    2. If your impairment(s) does not meet or medically equal a listing, 
we will consider whether your impairment(s) functionally equals the 
listings. See Sec. 416.926a of this chapter.
    3. We use the rules in Sec. 416.994a of this chapter when we decide 
whether you continue to be disabled.

         111.01  Category of Impairments, Neurological Disorders

    111.02  Epilepsy, documented by a detailed description of a typical 
seizure and characterized by A or B:
    A. Generalized tonic-clonic seizures (see 111.00F1a), occurring at 
least once a month for at least 3 consecutive months (see 111.00F4) 
despite adherence to prescribed treatment (see 111.00C); or
    B. Dyscognitive seizures (see 111.00F1b) or absence seizures (see 
111.00F1c), occurring at least once a week for at least 3 consecutive 
months (see 111.00F4) despite adherence to prescribed treatment (see 
111.00C).
    111.03 [Reserved]
    111.04  Vascular insult to the brain, characterized by 
disorganization of motor function in two extremities (see 111.00D1), 
resulting in an extreme limitation (see 111.00D2) in the ability to 
stand up from a seated position, balance while standing or walking, or 
use the upper extremities, persisting for at least 3 consecutive months 
after the insult.
    111.05  Benign brain tumors, characterized by disorganization of 
motor function in two extremities (see 111.00D1), resulting in an 
extreme limitation (see 111.00D2) in the ability to stand up from a 
seated position, balance while standing or walking, or use the upper 
extremities.
    111.06 [Reserved]
    111.07  Cerebral palsy, characterized by disorganization of motor 
function in two extremities (see 111.00D1), resulting in an extreme 
limitation (see 111.00D2) in the ability to stand up from a seated 
position, balance while standing or walking, or use the upper 
extremities.
    111.08  Spinal cord disorders, characterized by A or B:
    A. Complete loss of function, as described in 111.00J2, persisting 
for 3 consecutive months after the disorder (see 111.00J4); or
    B. Disorganization of motor function in two extremities (see 
111.00D1), resulting in an extreme limitation (see 111.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities persisting for 3 consecutive 
months after the disorder (see 111.00J4).
    111.09  Communication impairment, associated with documented 
neurological disorder and one of the following:
    A. Documented speech deficit that significantly affects (see 
111.00K1) the clarity and content of the speech; or
    B. Documented comprehension deficit resulting in ineffective verbal 
communication (see 111.00K2) for age; or

[[Page 611]]

    C. Impairment of hearing as described under the criteria in 102.10 
or 102.11.
    111.10 [Reserved]
    111.11 [Reserved]
    111.12  Myasthenia gravis, characterized by A or B despite adherence 
to prescribed treatment for at least 3 months (see 111.00C):
    A. Disorganization of motor function in two extremities (see 
111.00D1), resulting in an extreme limitation (see 111.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Bulbar and neuromuscular dysfunction (see 111.00E), resulting in:
    1. One myasthenic crisis requiring mechanical ventilation; or
    2. Need for supplemental enteral nutrition via a gastrostomy or 
parenteral nutrition via a central venous catheter.
    111.13  Muscular dystrophy, characterized by disorganization of 
motor function in two extremities (see 111.00D1), resulting in an 
extreme limitation (see 111.00D2) in the ability to stand up from a 
seated position, balance while standing or walking, or use the upper 
extremities.
    111.14  Peripheral neuropathy, characterized by disorganization of 
motor function in two extremities (see 111.00D1), resulting in an 
extreme limitation (see 111.00D2) in the ability to stand up from a 
seated position, balance while standing or walking, or use the upper 
extremities.
    111.15 [Reserved]
    111.16 [Reserved]
    111.17  Neurodegenerative disorders of the central nervous system, 
such as Juvenile-onset Huntington's disease and Friedreich's ataxia, 
characterized by disorganization of motor function in two extremities 
(see 111.00D1), resulting in an extreme limitation (see 111.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities.
    111.18  Traumatic brain injury, characterized by disorganization of 
motor function in two extremities (see 111.00D1), resulting in an 
extreme limitation (see 111.00D2) in the ability to stand up from a 
seated position, balance while standing or walking, or use the upper 
extremities, persisting for at least 3 consecutive months after the 
injury.
    111.19 [Reserved]
    111.20  Coma or persistent vegetative state, persisting for at least 
1 month.
    111.21  Multiple sclerosis, characterized by disorganization of 
motor function in two extremities (see 111.00D1), resulting in an 
extreme limitation (see 111.00D2) in the ability to stand up from a 
seated position, balance while standing or walking, or use the upper 
extremities.
    111.22  Motor neuron disorders, characterized by A or B:
    A. Disorganization of motor function in two extremities (see 
111.00D1), resulting in an extreme limitation (see 111.00D2) in the 
ability to stand up from a seated position, balance while standing or 
walking, or use the upper extremities; or
    B. Bulbar and neuromuscular dysfunction (see 111.00E), resulting in:
    1. Acute respiratory failure requiring invasive mechanical 
ventilation; or
    2. Need for supplemental enteral nutrition via a gastrostomy or 
parenteral nutrition via a central venous catheter.

                        112.00  Mental Disorders

    A. How are the listings for mental disorders for children arranged, 
and what do they require?
    1. The listings for mental disorders for children are arranged in 12 
categories: neurocognitive disorders (112.02); schizophrenia spectrum 
and other psychotic disorders (112.03); depressive, bipolar and related 
disorders (112.04); intellectual disorder (112.05); anxiety and 
obsessive-compulsive disorders (112.06); somatic symptom and related 
disorders (112.07); personality and impulse-control disorders (112.08); 
autism spectrum disorder (112.10); neurodevelopmental disorders 
(112.11); eating disorders (112.13); developmental disorders in infants 
and toddlers (112.14); and trauma- and stressor-related disorders 
(112.15). All of these listings, with the exception of 112.14, apply to 
children from age three to attainment of age 18. Listing 112.14 is for 
children from birth to attainment of age 3.
    2. Listings 112.07, 112.08, 112.10, 112.11, 112.13, and 112.14 have 
two paragraphs, designated A and B; your mental disorder must satisfy 
the requirements of both paragraphs A and B. Listings 112.02, 112.03, 
112.04, 112.06, and 112.15 have three paragraphs, designated A, B, and 
C; your mental disorder must satisfy the requirements of both paragraphs 
A and B, or the requirements of both paragraphs A and C. Listing 112.05 
has two paragraphs that are unique to that listing (see 112.00A3); your 
mental disorder must satisfy the requirements of either paragraph A or 
paragraph B.
    a. Paragraph A of each listing (except 112.05) includes the medical 
criteria that must be present in your medical evidence.
    b. Paragraph B of each listing (except 112.05) provides the 
functional criteria we assess to evaluate how your mental disorder 
limits your functioning. For children ages 3 to 18, these criteria 
represent the areas of mental functioning a child uses to perform age-
appropriate activities. They are: understand, remember, or apply 
information; interact with others; concentrate, persist, or maintain 
pace; and adapt or manage oneself. (See 112.00I for a discussion of the 
criteria for children from birth to attainment of age 3 under 112.14.) 
We will determine the degree to which your medically determinable mental 
impairment affects the four areas of mental functioning and your ability 
to function

[[Page 612]]

age-appropriately in a manner comparable to that of other children your 
age who do not have impairments. (Hereinafter, the words ``age-
appropriately'' incorporate the qualifying statement, ``in a manner 
comparable to that of other children your age who do not have 
impairments.'') To satisfy the paragraph B criteria, your mental 
disorder must result in ``extreme'' limitation of one, or ``marked'' 
limitation of two, of the four areas of mental functioning. (When we 
refer to ``paragraph B criteria'' or ``area[s] of mental functioning'' 
in the introductory text of this body system, we mean the criteria in 
paragraph B of every listing except 112.05 and 112.14.)
    c. Paragraph C of listings 112.02, 112.03, 112.04, 112.06, and 
112.15 provides the criteria we use to evaluate ``serious and persistent 
mental disorders.'' To satisfy the paragraph C criteria, your mental 
disorder must be ``serious and persistent''; that is, there must be a 
medically documented history of the existence of the disorder over a 
period of at least 2 years, and evidence that satisfies the criteria in 
both C1 and C2 (see 112.00G). (When we refer to ``paragraph C'' or ``the 
paragraph C criteria'' in the introductory text of this body system, we 
mean the criteria in paragraph C of listings 112.02, 112.03, 112.04, 
112.06, and 112.15.)
    3. Listing 112.05 has two paragraphs, designated A and B, that apply 
to only intellectual disorder. Each paragraph requires that you have 
significantly subaverage general intellectual functioning and 
significant deficits in current adaptive functioning.
    B. Which mental disorders do we evaluate under each listing category 
for children?
    1. Neurocognitive disorders (112.02).
    a. These disorders are characterized in children by a clinically 
significant deviation in normal cognitive development or by a decline in 
cognitive functioning. Symptoms and signs may include, but are not 
limited to, disturbances in memory, executive functioning (that is, 
higher-level cognitive processes; for example, regulating attention, 
planning, inhibiting responses, decision-making), visual-spatial 
functioning, language and speech, perception, insight, and judgment.
    b. Examples of disorders that we evaluate in this category include 
major neurocognitive disorder; mental impairments resulting from medical 
conditions such as a metabolic disease (for example, juvenile Tay-Sachs 
disease), human immunodeficiency virus infection, vascular malformation, 
progressive brain tumor, or traumatic brain injury; or substance-induced 
cognitive disorder associated with drugs of abuse, medications, or 
toxins. (We evaluate neurological disorders under that body system (see 
111.00). We evaluate cognitive impairments that result from neurological 
disorders under 112.02 if they do not satisfy the requirements in 
111.00. We evaluate catastrophic genetic disorders under listings in 
110.00, 111.00, or 112.00, as appropriate. We evaluate genetic disorders 
that are not catastrophic under the affected body system(s).)
    c. This category does not include the mental disorders that we 
evaluate under intellectual disorder (112.05), autism spectrum disorder 
(112.10), and neurodevelopmental disorders (112.11).
    2. Schizophrenia spectrum and other psychotic disorders (112.03).
    a. These disorders are characterized by delusions, hallucinations, 
disorganized speech, or grossly disorganized or catatonic behavior, 
causing a clinically significant decline in functioning. Symptoms and 
signs may include, but are not limited to, inability to initiate and 
persist in goal-directed activities, social withdrawal, flat or 
inappropriate affect, poverty of thought and speech, loss of interest or 
pleasure, disturbances of mood, odd beliefs and mannerisms, and 
paranoia.
    b. Examples of disorders that we evaluate in this category include 
schizophrenia, schizoaffective disorder, delusional disorder, and 
psychotic disorder due to another medical condition.
    3. Depressive, bipolar and related disorders (112.04).
    a. These disorders are characterized by an irritable, depressed, 
elevated, or expansive mood, or by a loss of interest or pleasure in all 
or almost all activities, causing a clinically significant decline in 
functioning. Symptoms and signs may include, but are not limited to, 
feelings of hopelessness or guilt, suicidal ideation, a clinically 
significant change in body weight or appetite, sleep disturbances, an 
increase or decrease in energy, psychomotor abnormalities, disturbed 
concentration, pressured speech, grandiosity, reduced impulse control, 
sadness, euphoria, and social withdrawal. Depending on a child's age and 
developmental stage, certain features, such as somatic complaints, 
irritability, anger, aggression, and social withdrawal may be more 
commonly present than other features.
    b. Examples of disorders that we evaluate in this category include 
bipolar disorders (I or II), cyclothymic disorder, disruptive mood 
dysregulation disorder, major depressive disorder, persistent depressive 
disorder (dysthymia), and bipolar or depressive disorder due to another 
medical condition.
    4. Intellectual disorder (112.05).
    a. This disorder is characterized by significantly subaverage 
general intellectual functioning and significant deficits in current 
adaptive functioning. Signs may include, but are not limited to, poor 
conceptual, social, or practical skills evident in your adaptive 
functioning.
    b. The disorder that we evaluate in this category may be described 
in the evidence as

[[Page 613]]

intellectual disability, intellectual developmental disorder, or 
historically used terms such as ``mental retardation.''
    c. This category does not include the mental disorders that we 
evaluate under neurocognitive disorders (112.02), autism spectrum 
disorder (112.10), or neurodevelopmental disorders (112.11).
    5. Anxiety and obsessive-compulsive disorders (112.06).
    a. These disorders are characterized by excessive anxiety, worry, 
apprehension, and fear, or by avoidance of feelings, thoughts, 
activities, objects, places, or people. Symptoms and signs may include, 
but are not limited to, restlessness, difficulty concentrating, hyper-
vigilance, muscle tension, sleep disturbance, fatigue, panic attacks, 
obsessions and compulsions, constant thoughts and fears about safety, 
and frequent physical complaints. Depending on a child's age and 
developmental stage, other features may also include refusal to go to 
school, academic failure, frequent stomachaches and other physical 
complaints, extreme worries about sleeping away from home, being overly 
clinging, and exhibiting tantrums at times of separation from 
caregivers.
    b. Examples of disorders that we evaluate in this category include 
separation anxiety disorder, social anxiety disorder, panic disorder, 
generalized anxiety disorder, agoraphobia, and obsessive-compulsive 
disorder.
    c. This category does not include the mental disorders that we 
evaluate under trauma- and stressor-related disorders (112.15).
    6. Somatic symptom and related disorders (112.07).
    a. These disorders are characterized by physical symptoms or 
deficits that are not intentionally produced or feigned, and that, 
following clinical investigation, cannot be fully explained by a general 
medical condition, another mental disorder, the direct effects of a 
substance, or a culturally sanctioned behavior or experience. Symptoms 
and signs may include, but are not limited to, pain and other 
abnormalities of sensation, gastrointestinal symptoms, fatigue, abnormal 
motor movement, pseudoseizures, and pseudoneurological symptoms, such as 
blindness or deafness.
    b. Examples of disorders that we evaluate in this category include 
somatic symptom disorder and conversion disorder.
    7. Personality and impulse-control disorders (112.08).
    a. These disorders are characterized by enduring, inflexible, 
maladaptive, and pervasive patterns of behavior. Onset may occur in 
childhood but more typically occurs in adolescence or young adulthood. 
Symptoms and signs may include, but are not limited to, patterns of 
distrust, suspiciousness, and odd beliefs; social detachment, 
discomfort, or avoidance; hypersensitivity to negative evaluation; an 
excessive need to be taken care of; difficulty making independent 
decisions; a preoccupation with orderliness, perfectionism, and control; 
and inappropriate, intense, impulsive anger and behavioral expression 
grossly out of proportion to any external provocation or psychosocial 
stressors.
    b. Examples of disorders that we evaluate in this category include 
paranoid, schizoid, schizotypal, borderline, avoidant, dependent, 
obsessive-compulsive personality disorders, and intermittent explosive 
disorder.
    8. Autism spectrum disorder (112.10).
    a. These disorders are characterized by qualitative deficits in the 
development of reciprocal social interaction, verbal and nonverbal 
communication skills, and symbolic or imaginative play; restricted 
repetitive and stereotyped patterns of behavior, interests, and 
activities; and stagnation of development or loss of acquired skills. 
Symptoms and signs may include, but are not limited to, abnormalities 
and unevenness in the development of cognitive skills; unusual responses 
to sensory stimuli; and behavioral difficulties, including 
hyperactivity, short attention span, impulsivity, aggressiveness, or 
self-injurious actions.
    b. Examples of disorders that we evaluate in this category include 
autism spectrum disorder with or without accompanying intellectual 
impairment, and autism spectrum disorder with or without accompanying 
language impairment.
    c. This category does not include the mental disorders that we 
evaluate under neurocognitive disorders (112.02), intellectual disorder 
(112.05), and neurodevelopmental disorders (112.11).
    9. Neurodevelopmental disorders (112.11).
    a. These disorders are characterized by onset during the 
developmental period, that is, during childhood or adolescence, although 
sometimes they are not diagnosed until adulthood. Symptoms and signs may 
include, but are not limited to, underlying abnormalities in cognitive 
processing (for example, deficits in learning and applying verbal or 
nonverbal information, visual perception, memory, or a combination of 
these); deficits in attention or impulse control; low frustration 
tolerance; excessive or poorly planned motor activity; difficulty with 
organizing (time, space, materials, or tasks); repeated accidental 
injury; and deficits in social skills. Symptoms and signs specific to 
tic disorders include sudden, rapid, recurrent, non-rhythmic, motor 
movement or vocalization.
    b. Examples of disorders that we evaluate in this category include 
specific learning disorder, borderline intellectual functioning, and tic 
disorders (such as Tourette syndrome).
    c. This category does not include the mental disorders that we 
evaluate under neurocognitive disorders (112.02), autism

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spectrum disorder (112.10), or personality and impulse-control disorders 
(112.08).
    10. Eating disorders (112.13).
    a. These disorders are characterized in young children by persistent 
eating of nonnutritive substances or repeated episodes of regurgitation 
and re-chewing of food, or by persistent failure to consume adequate 
nutrition by mouth. In adolescence, these disorders are characterized by 
disturbances in eating behavior and preoccupation with, and excessive 
self-evaluation of, body weight and shape. Symptoms and signs may 
include, but are not limited to, failure to make expected weight gains; 
restriction of energy consumption when compared with individual 
requirements; recurrent episodes of binge eating or behavior intended to 
prevent weight gain, such as self-induced vomiting, excessive exercise, 
or misuse of laxatives; mood disturbances, social withdrawal, or 
irritability; amenorrhea; dental problems; abnormal laboratory findings; 
and cardiac abnormalities.
    b. Examples of disorders that we evaluate in this category include 
anorexia nervosa, bulimia nervosa, binge-eating disorder, and avoidant/
restrictive food disorder.
    11. Developmental disorders in infants and toddlers (112.14).
    a. Developmental disorders are characterized by a delay or deficit 
in the development of age-appropriate skills, or a loss of previously 
acquired skills, involving motor planning and control, learning, 
relating and communicating, and self-regulating.
    b. Examples of disorders that we evaluate in this category include 
developmental coordination disorder, separation anxiety disorder, autism 
spectrum disorder, and regulation disorders of sensory processing 
(difficulties in regulating emotions, behaviors, and motor abilities in 
response to sensory stimulation). Some infants and toddlers may have 
only a general diagnosis of ``developmental delay.''
    c. This category does not include eating disorders related to low 
birth weight and failure to thrive, which we evaluate under that body 
system (100.00).
    12. Trauma- and stressor-related disorders (112.15).
    a. These disorders are characterized by experiencing or witnessing a 
traumatic or stressful event, or learning of a traumatic event occurring 
to a close family member or close friend, and the psychological 
aftermath of clinically significant effects on functioning. Symptoms and 
signs may include, but are not limited to, distressing memories, dreams, 
and flashbacks related to the trauma or stressor; avoidant or withdrawn 
behavior; constriction of play and significant activities; increased 
frequency of negative emotional states (for example, fear, sadness) or 
reduced expression of positive emotions (for example, satisfaction, 
affection); anxiety; irritability; aggression; exaggerated startle 
response; difficulty concentrating; sleep disturbance; and a loss of 
previously acquired developmental skills.
    b. Examples of disorders that we evaluate in this category include 
posttraumatic stress disorder, reactive attachment disorder, and other 
specified trauma- and stressor-related disorders (such as adjustment-
like disorders with prolonged duration without prolonged duration of 
stressor).
    c. This category does not include the mental disorders that we 
evaluate under anxiety and obsessive-compulsive disorders (112.06), and 
cognitive impairments that result from neurological disorders, such as a 
traumatic brain injury, which we evaluate under neurocognitive disorders 
(112.02).
    C. What evidence do we need to evaluate your mental disorder?
    1. General. We need objective medical evidence from an acceptable 
medical source to establish that you have a medically determinable 
mental disorder. We also need evidence to assess the severity of your 
mental disorder and its effects on your ability to function age-
appropriately. We will determine the extent and kinds of evidence we 
need from medical and nonmedical sources based on the individual facts 
about your disorder. For additional evidence requirements for 
intellectual disorder (112.05), see 112.00H. For our basic rules on 
evidence, see Secs. 416.912, 416.913, and 416.920b of this chapter. For 
our rules on evaluating medical opinions, see Secs. 416.1520c and 
416.927 of this chapter. For our rules on evidence about your symptoms, 
see Sec. 416.929 of this chapter.
    2. Evidence from medical sources. We will consider all relevant 
medical evidence about your disorder from your physician, psychologist, 
and other medical sources, which include health care providers such as 
physician assistants, psychiatric nurse practitioners, licensed clinical 
social workers, and clinical mental health counselors. Evidence from 
your medical sources may include:
    a. Your reported symptoms.
    b. Your developmental, medical, psychiatric, and psychological 
history.
    c. The results of physical or mental status examinations, structured 
clinical interviews, psychiatric or psychological rating scales, 
measures of adaptive functioning, or other clinical findings.
    d. Developmental assessments, psychological testing, imaging 
results, or other laboratory findings.
    e. Your diagnosis.
    f. The type, dosage, and beneficial effects of medications you take.
    g. The type, frequency, duration, and beneficial effects of therapy 
you receive.
    h. Side effects of medication or other treatment that limit your 
ability to function.

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    i. Your clinical course, including changes in your medication, 
therapy, or other treatment, and the time required for therapeutic 
effectiveness.
    j. Observations and descriptions of how you function during 
examinations or therapy.
    k. Information about sensory, motor, or speech abnormalities, or 
about your cultural background (for example, language or customs) that 
may affect an evaluation of your mental disorder.
    l. The expected duration of your symptoms and signs and their 
effects on your ability to function age-appropriately, both currently 
and in the future.
    3. Evidence from you and people who know you. We will consider all 
relevant evidence about your mental disorder and your daily functioning 
that we receive from you and from people who know you. If you are too 
young or unable to describe your symptoms and your functioning, we will 
ask for a description from the person who is most familiar with you. We 
will ask about your symptoms, your daily functioning, and your medical 
treatment. We will ask for information from third parties who can tell 
us about your mental disorder, but we must have permission to do so. 
This evidence may include information from your family, caregivers, 
teachers, other educators, neighbors, clergy, case managers, social 
workers, shelter staff, or other community support and outreach workers. 
We will consider whether your statements and the statements from third 
parties are consistent with the medical and other evidence we have.
    4. Evidence from early intervention programs, school, vocational 
training, work, and work-related programs.
    a. Early intervention programs. You may receive services in an Early 
Intervention Program (EIP) to help you with your developmental needs. If 
so, we will consider information from your Individualized Family Service 
Plan (IFSP) and the early intervention specialists who help you.
    b. School. You may receive special education or related services at 
your preschool or school. If so, we will try to obtain information from 
your school sources when we need it to assess how your mental disorder 
affects your ability to function. Examples of this information include 
your Individualized Education Programs (IEPs), your Section 504 plans, 
comprehensive evaluation reports, school-related therapy progress notes, 
information from your teachers about how you function in a classroom 
setting, and information from special educators, nurses, school 
psychologists, and occupational, physical, and speech/language 
therapists about any special education services or accommodations you 
receive at school.
    c. Vocational training, work, and work-related programs. You may 
have recently participated in or may still be participating in 
vocational training, work-related programs, or work activity. If so, we 
will try to obtain information from your training program or your 
employer when we need it to assess how your mental disorder affects your 
ability to function. Examples of this information include training or 
work evaluations, modifications to your work duties or work schedule, 
and any special supports or accommodations you have required or now 
require in order to work. If you have worked or are working through a 
community mental health program, sheltered or supported work program, 
rehabilitation program, or transitional employment program, we will 
consider the type and degree of support you have received or are 
receiving in order to work (see 112.00D).
    5. Need for longitudinal evidence.
    a. General. Longitudinal medical evidence can help us learn how you 
function over time, and help us evaluate any variations in the level of 
your functioning. We will request longitudinal evidence of your mental 
disorder when your medical providers have records concerning you and 
your mental disorder over a period of months or perhaps years (see 
Sec. 416.912(d) of this chapter).
    b. Non-medical sources of longitudinal evidence. Certain situations, 
such as chronic homelessness, may make it difficult for you to provide 
longitudinal medical evidence. If you have a severe mental disorder, you 
will probably have evidence of its effects on your functioning over 
time, even if you have not had an ongoing relationship with the medical 
community or are not currently receiving treatment. For example, family 
members, caregivers, teachers, neighbors, former employers, social 
workers, case managers, community support staff, outreach workers, or 
government agencies may be familiar with your mental health history. We 
will ask for information from third parties who can tell us about your 
mental disorder, but you must give us permission to do so.
    c. Absence of longitudinal evidence. In the absence of longitudinal 
evidence, we will use current objective medical evidence and all other 
relevant evidence available to us in your case record to evaluate your 
mental disorder. If we purchase a consultative examination to document 
your disorder, the record will include the results of that examination 
(see Sec. 416.914 of this chapter). We will take into consideration your 
medical history, symptoms, clinical and laboratory findings, and medical 
source opinions. If you do not have longitudinal evidence, the current 
evidence alone may not be sufficient or appropriate to show that you 
have a disorder that meets the criteria of one of the mental disorders 
listings. In that case, we will follow the rules in 112.00K.
    6. Evidence of functioning in unfamiliar situations or supportive 
situations.

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    a. Unfamiliar situations. We recognize that evidence about your 
functioning in unfamiliar situations does not necessarily show how you 
would function on a sustained basis in a school or other age-appropriate 
setting. In one-time, time-limited, or other unfamiliar situations, you 
may function differently than you do in familiar situations. In 
unfamiliar situations, you may appear more, or less, limited than you do 
on a daily basis and over time.
    b. Supportive situations. Your ability to function in settings that 
are highly structured, or that are less demanding or more supportive 
than settings in which children your age without impairments typically 
function, does not necessarily demonstrate your ability to function age-
appropriately.
    c. Our assessment. We must assess your ability to function age-
appropriately by evaluating all the evidence, such as reports about your 
functioning from third parties who are familiar with you, with an 
emphasis on how well you can initiate, sustain, and complete age-
appropriate activities despite your impairment(s), compared to other 
children your age who do not have impairments.
    D. How do we consider psychosocial supports, structured settings, 
living arrangements, and treatment when we evaluate the functioning of 
children?
    1. General. Psychosocial supports, structured settings, and living 
arrangements, including assistance from your family or others, may help 
you by reducing the demands made on you. In addition, treatment you 
receive may reduce your symptoms and signs and possibly improve your 
functioning, or may have side effects that limit your functioning. 
Therefore, when we evaluate the effects of your mental disorder and rate 
the limitation of your areas of mental functioning, we will consider the 
kind and extent of supports you receive, the characteristics of any 
structured setting in which you spend your time (compared to children 
your age without impairments), and the effects of any treatment. This 
evidence may come from reports about your functioning from third parties 
who are familiar with you, and other third-party statements or 
information. Following are some examples of the supports you may 
receive:
    a. You receive help from family members or other people in ways that 
children your age without impairments typically do not need in order to 
function age-appropriately. For example, an aide may accompany you on 
the school bus to help you control your actions or to monitor you to 
ensure you do not injure yourself or others.
    b. You receive one-on-one assistance in your classes every day; or 
you have a full-time personal aide who helps you to function in your 
classroom; or you are a student in a self-contained classroom; or you 
attend a separate or alternative school where you receive special 
education services.
    c. You participate in a special education or vocational training 
program, or a psychosocial rehabilitation day treatment or community 
support program, where you receive training in daily living and entry-
level work skills.
    d. You participate in a sheltered, supported, or transitional work 
program, or in a competitive employment setting with the help of a job 
coach or supervisor.
    e. You receive comprehensive ``24/7 wrap-around'' mental health 
services while living in a group home or transitional housing, while 
participating in a semi-independent living program, or while living at 
home.
    f. You live in a residential school, hospital, or other institution 
with 24-hour care.
    g. You receive assistance from a crisis response team, social 
workers, or community mental health workers who help you meet your 
physical needs, and who may also represent you in dealings with 
government or community social services.
    2. How we consider different levels of support and structure in 
psychosocial rehabilitation programs.
    a. Psychosocial rehabilitation programs are based on your specific 
needs. Therefore, we cannot make any assumptions about your mental 
disorder based solely on the fact that you are associated with such a 
program. We must know the details of the program(s) in which you are 
involved and the pattern(s) of your involvement over time.
    b. The kinds and levels of supports and structures in psychosocial 
rehabilitation programs typically occur on a scale of ``most 
restrictive'' to ``least restrictive.'' Participation in a psychosocial 
rehabilitation program at the most restrictive level would suggest 
greater limitation of your areas of mental functioning than would 
participation at a less restrictive level. The length of time you spend 
at different levels in a program also provides information about your 
functioning. For example, you could begin participation at the most 
restrictive crisis intervention level but gradually improve to the point 
of readiness for a lesser level of support and structure and, if you are 
an older adolescent, possibly some form of employment.
    3. How we consider the help or support you receive.
    a. We will consider the complete picture of your daily functioning, 
including the kinds, extent, and frequency of help and support you 
receive, when we evaluate your mental disorder and determine whether you 
are able to use the four areas of mental functioning age-appropriately. 
The fact that you have done, or currently do, some routine activities 
without help or support does not necessarily mean that you do not have a 
mental

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disorder or that you are not disabled. For example, you may be able to 
take age-appropriate care of your personal needs, or you may be old 
enough and able to cook, shop, and take public transportation. You may 
demonstrate both strengths and deficits in your daily functioning.
    b. You may receive various kinds of help and support from others 
that enable you to do many things that, because of your mental disorder, 
you might not be able to do independently. Your daily functioning may 
depend on the special contexts in which you function. For example, you 
may spend your time among only familiar people or surroundings, in a 
simple and steady routine or an unchanging environment, or in a highly 
structured classroom or alternative school. However, this does not 
necessarily show whether you would function age-appropriately without 
those supports or contexts. (See 112.00H for further discussion of these 
issues regarding significant deficits in adaptive functioning for the 
purpose of 112.05.)
    4. How we consider treatment. We will consider the effect of any 
treatment on your functioning when we evaluate your mental disorder. 
Treatment may include medication(s), psychotherapy, or other forms of 
intervention, which you receive in a doctor's office, during a 
hospitalization, or in a day program at a hospital or outpatient 
treatment program. With treatment, you may not only have your symptoms 
and signs reduced, but may also be able to function age-appropriately. 
However, treatment may not resolve all of the limitations that result 
from your mental disorder, and the medications you take or other 
treatment you receive for your disorder may cause side effects that 
limit your mental or physical functioning. For example, you may 
experience drowsiness, blunted affect, memory loss, or abnormal 
involuntary movements.
    E. What are the paragraph B criteria for children age 3 to the 
attainment of age 18?
    1. Understand, remember, or apply information (paragraph B1). This 
area of mental functioning refers to the abilities to learn, recall, and 
use information to perform age-appropriate activities. Examples include: 
Understanding and learning terms, instructions, procedures; following 
one- or two-step oral instructions to carry out a task; describing an 
activity to someone else; asking and answering questions and providing 
explanations; recognizing a mistake and correcting it; identifying and 
solving problems; sequencing multi-step activities; and using reason and 
judgment to make decisions. These examples illustrate the nature of the 
area of mental functioning. We do not require documentation of all of 
the examples. How you manifest this area of mental functioning and your 
limitations in using it depends, in part, on your age.
    2. Interact with others (paragraph B2). This area of mental 
functioning refers to the abilities to relate to others age-
appropriately at home, at school, and in the community. Examples 
include: Engaging in interactive play; cooperating with others; asking 
for help when needed; initiating and maintaining friendships; handling 
conflicts with others; stating own point of view; initiating or 
sustaining conversation; understanding and responding to social cues 
(physical, verbal, emotional); responding to requests, suggestions, 
criticism, correction, and challenges; and keeping social interactions 
free of excessive irritability, sensitivity, argumentativeness, or 
suspiciousness. These examples illustrate the nature of this area of 
mental functioning. We do not require documentation of all of the 
examples. How you manifest this area of mental functioning and your 
limitations in using it depends, in part, on your age.
    3. Concentrate, persist, or maintain pace (paragraph B3). This area 
of mental functioning refers to the abilities to focus attention on 
activities and stay on task age-appropriately. Examples include: 
Initiating and performing an activity that you understand and know how 
to do; engaging in an activity at home or in school at an appropriate 
and consistent pace; completing tasks in a timely manner; ignoring or 
avoiding distractions while engaged in an activity or task; changing 
activities without being disruptive; engaging in an activity or task 
close to or with others without interrupting or distracting them; 
sustaining an ordinary routine and regular attendance at school; and 
engaging in activities at home, school, or in the community without 
needing an unusual amount of rest. These examples illustrate the nature 
of this area of mental functioning. We do not require documentation of 
all of the examples. How you manifest this area of mental functioning 
and your limitations in using it depends, in part, on your age.
    4. Adapt or manage oneself (paragraph B4). This area of mental 
functioning refers to the abilities to regulate emotions, control 
behavior, and maintain well-being in age-appropriate activities and 
settings. Examples include: Responding to demands; adapting to changes; 
managing your psychologically based symptoms; distinguishing between 
acceptable and unacceptable performance in community- or school-related 
activities; setting goals; making plans independently of others; 
maintaining personal hygiene; and protecting yourself from harm and 
exploitation by others. These examples illustrate the nature of this 
area of mental functioning. We do not require documentation of all of 
the examples. How you manifest this area of mental functioning and your 
limitations in using it depends, in part, on your age.

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    F. How do we use the paragraph B criteria to evaluate mental 
disorders in children?
    1. General. We use the paragraph B criteria to rate the degree of 
your limitations. We consider only the limitations that result from your 
mental disorder(s). We will determine whether you are able to use each 
of the paragraph B areas of mental functioning in age-appropriate 
activities in a manner comparable to that of other children your age who 
do not have impairments. We will consider, for example, the range of 
your activities and whether they are age-appropriate; how well you can 
initiate, sustain, and complete your activities; the kinds and frequency 
of help or supervision you receive; and the kinds of structured or 
supportive settings you need in order to function age-appropriately (see 
112.00D).
    2. Degrees of limitation. We evaluate the effects of your mental 
disorder on each of the four areas of mental functioning. To satisfy the 
paragraph B criteria, your mental disorder must result in extreme 
limitation of one, or marked limitation of two, paragraph B areas of 
mental functioning. See Secs. 416.925(b)(2)(ii) and 416.926a(e) of this 
chapter for the definitions of the terms marked and extreme as they 
apply to children.
    3. Rating the limitations of your areas of mental functioning.
    a. General. We use all of the relevant medical and non-medical 
evidence in your case record to evaluate your mental disorder: The 
symptoms and signs of your disorder, the reported limitations in your 
activities, and any help and support you receive that is necessary for 
you to function. The medical evidence may include descriptors regarding 
the diagnostic stage or level of your disorder, such as ``mild'' or 
``moderate.'' Clinicians may use these terms to characterize your 
medical condition. However, these terms will not always be the same as 
the degree of your limitation in a paragraph B area of mental 
functioning.
    b. Areas of mental functioning in daily activities. You use the same 
four areas of mental functioning in daily activities at home, at school, 
and in the community. With respect to a particular task or activity, you 
may have trouble using one or more of the areas. For example, you may 
have difficulty understanding and remembering what to do; or 
concentrating and staying on task long enough to do it; or engaging in 
the task or activity with other people; or trying to do the task without 
becoming frustrated and losing self-control. Information about your 
daily functioning in your activities at home, at school, or in your 
community can help us understand whether your mental disorder limits one 
or more of these areas; and, if so, whether it also affects your ability 
to function age-appropriately.
    c. Overall effect of limitations. Limitation of an area of mental 
functioning reflects the overall degree to which your mental disorder 
interferes with that area. The degree of limitation does not necessarily 
reflect a specific type or number of activities, including activities of 
daily living, that you have difficulty doing. In addition, no single 
piece of information (including test results) can establish whether you 
have extreme or marked limitation of an area of mental functioning.
    d. Effects of support, supervision, structure on functioning. The 
degree of limitation of an area of mental functioning also reflects the 
kind and extent of supports or supervision you receive (beyond what 
other children your age without impairments typically receive) and the 
characteristics of any structured setting where you spend your time, 
which enable you to function. The more extensive the support you need 
from others (beyond what is age-appropriate) or the more structured the 
setting you need in order to function, the more limited we will find you 
to be (see 112.00D).
    e. Specific instructions for paragraphs B1, B3, and B4. For 
paragraphs B1, B3, and B4, the greatest degree of limitation of any part 
of the area of mental functioning directs the rating of limitation of 
that whole area of mental functioning.
    (i) To do an age-appropriate activity, you must be able to 
understand and remember and apply information required by the activity. 
Similarly, you must be able to concentrate and persist and maintain pace 
in order to complete the activity, and adapt and manage yourself age-
appropriately. Limitation in any one of these parts (understand or 
remember or apply; concentrate or persist or maintain pace; adapt or 
manage oneself) may prevent you from completing age-appropriate 
activities.
    (ii) We will document the rating of limitation of the whole area of 
mental functioning, not each individual part. We will not add ratings of 
the parts together. For example, with respect to paragraph B3, if you 
have marked limitation in concentrating, but your limitations in 
persisting and maintaining pace do not rise to a marked level, we will 
find that you have marked limitation in the whole paragraph B3 area of 
mental functioning.
    (iii) Marked limitation in more than one part of the same paragraph 
B area of mental functioning does not satisfy the requirement to have 
marked limitation in two paragraph B areas of mental functioning.
    4. How we evaluate mental disorders involving exacerbations and 
remissions.
    a. When we evaluate the effects of your mental disorder, we will 
consider how often you have exacerbations and remissions, how long they 
last, what causes your mental disorder to worsen or improve, and any 
other relevant information. We will assess whether your mental 
impairment(s) causes marked or extreme limitation of the affected 
paragraph B area(s) of mental functioning (see

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112.00F2). We will consider whether you can use the area of mental 
functioning age-appropriately on a sustained basis. We will not find 
that you function age-appropriately solely because you have a period(s) 
of improvement (remission), or that you are disabled solely because you 
have a period of worsening (exacerbation), of your mental disorder.
    b. If you have a mental disorder involving exacerbations and 
remissions, you may be able to use the four areas of mental functioning 
at home, at school, or in the community for a few weeks or months. 
Recurrence or worsening of symptoms and signs, however, can interfere 
enough to render you unable to function age-appropriately.
    G. What are the paragraph C criteria, and how do we use them to 
evaluate mental disorders in children age 3 to the attainment of age 18?
    1. General. The paragraph C criteria are an alternative to the 
paragraph B criteria under listings 112.02, 112.03, 112.04, 112.06, and 
112.15. We use the paragraph C criteria to evaluate mental disorders 
that are ``serious and persistent.'' In the paragraph C criteria, we 
recognize that mental health interventions may control the more obvious 
symptoms and signs of your mental disorder.
    2. Paragraph C criteria.
    a. We find a mental disorder to be ``serious and persistent'' when 
there is a medically documented history of the existence of the mental 
disorder in the listing category over a period of at least 2 years, and 
evidence shows that your disorder satisfies both C1 and C2.
    b. The criterion in C1 is satisfied when the evidence shows that you 
rely, on an ongoing basis, upon medical treatment, mental health 
therapy, psychosocial support(s), or a highly structured setting(s), to 
diminish the symptoms and signs of your mental disorder (see 112.00D). 
We consider that you receive ongoing medical treatment when the medical 
evidence establishes that you obtain medical treatment with a frequency 
consistent with accepted medical practice for the type of treatment or 
evaluation required for your medical condition. We will consider periods 
of inconsistent treatment or lack of compliance with treatment that may 
result from your mental disorder. If the evidence indicates that the 
inconsistent treatment or lack of compliance is a feature of your mental 
disorder, and it has led to an exacerbation of your symptoms and signs, 
we will not use it as evidence to support a finding that you have not 
received ongoing medical treatment as required by this paragraph.
    c. The criterion in C2 is satisfied when the evidence shows that, 
despite your diminished symptoms and signs, you have achieved only 
marginal adjustment. ``Marginal adjustment'' means that your adaptation 
to the requirements of daily life is fragile; that is, you have minimal 
capacity to adapt to changes in your environment or to demands that are 
not already part of your daily life. We will consider that you have 
achieved only marginal adjustment when the evidence shows that changes 
or increased demands have led to exacerbation of your symptoms and signs 
and to deterioration in your functioning; for example, you have become 
unable to function outside of your home or a more restrictive setting, 
without substantial psychosocial supports (see 112.00D). Such 
deterioration may have necessitated a significant change in medication 
or other treatment. Similarly, because of the nature of your mental 
disorder, evidence may document episodes of deterioration that have 
required you to be hospitalized or absent from school, making it 
difficult for you to sustain age-appropriate activity over time.
    H. How do we document and evaluate intellectual disorder under 
112.05?
    1. General. Listing 112.05 is based on the two elements that 
characterize intellectual disorder for children up to age 18: 
Significantly subaverage general intellectual functioning and 
significant deficits in current adaptive functioning.
    2. Establishing significantly subaverage general intellectual 
functioning.
    a. Definition. Intellectual functioning refers to the general mental 
capacity to learn, reason, plan, solve problems, and perform other 
cognitive functions. Under 112.05A, we identify significantly subaverage 
general intellectual functioning by the cognitive inability to function 
at a level required to participate in standardized intelligence testing. 
Our findings under 112.05A are based on evidence from an acceptable 
medical source. Under 112.05B, we identify significantly subaverage 
general intellectual functioning by an IQ score(s) on an individually 
administered standardized test of general intelligence that meets 
program requirements and has a mean of 100 and a standard deviation of 
15. A qualified specialist (see 112.00H2c) must administer the 
standardized intelligence testing.
    b. Psychometric standards. We will find standardized intelligence 
test results usable for the purposes of 112.05B1 when the measure 
employed meets contemporary psychometric standards for validity, 
reliability, normative data, and scope of measurement; and a qualified 
specialist has individually administered the test according to all pre-
requisite testing conditions.
    c. Qualified specialist. A ``qualified specialist'' is currently 
licensed or certified at the independent level of practice in the State 
where the test was performed, and has the training and experience to 
administer, score, and interpret intelligence tests. If a psychological 
assistant or paraprofessional

[[Page 620]]

administered the test, a supervisory qualified specialist must interpret 
the test findings and co-sign the examination report.
    d. Responsibility for conclusions based on testing. We generally 
presume that your obtained IQ score(s) is an accurate reflection of your 
general intellectual functioning, unless evidence in the record suggests 
otherwise. Examples of this evidence include: A statement from the test 
administrator indicating that your obtained score is not an accurate 
reflection of your general intellectual functioning, prior or internally 
inconsistent IQ scores, or information about your daily functioning. 
Only qualified specialists, Federal and State agency medical and 
psychological consultants, and other contracted medical and 
psychological experts may conclude that your obtained IQ score(s) is not 
an accurate reflection of your general intellectual functioning. This 
conclusion must be well supported by appropriate clinical and laboratory 
diagnostic techniques and must be based on relevant evidence in the case 
record, such as:
    (i) The data obtained in testing;
    (ii) Your developmental history, including when your signs and 
symptoms began;
    (iii) Information about how you function on a daily basis in a 
variety of settings; and
    (iv) Clinical observations made during the testing period, such as 
your ability to sustain attention, concentration, and effort; to relate 
appropriately to the examiner; and to perform tasks independently 
without prompts or reminders.
    3. Establishing significant deficits in adaptive functioning.
    a. Definition. Adaptive functioning refers to how you learn and use 
conceptual, social, and practical skills in dealing with common life 
demands. It is your typical functioning at home, at school, and in the 
community, alone or among others. Under 112.05A, we identify significant 
deficits in adaptive functioning based on your dependence on others to 
care for your personal needs, such as eating and bathing (grossly in 
excess of age-appropriate dependence). We will base our conclusions 
about your adaptive functioning on evidence from a variety of sources 
(see 112.00H3b) and not on your statements alone. Under 112.05B2, we 
identify significant deficits in adaptive functioning based on whether 
there is extreme limitation of one, or marked limitation of two, of the 
paragraph B criteria (see 112.00E; 112.00F).
    b. Evidence. Evidence about your adaptive functioning may come from:
    (i) Medical sources, including their clinical observations;
    (ii) Standardized tests of adaptive functioning (see 112.00H3c);
    (iii) Third party information, such as a report of your functioning 
from a family member or your caregiver;
    (iv) School records;
    (v) A teacher questionnaire;
    (vi) Reports from employers or supervisors; and
    (vii) Your own statements about how you handle all of your daily 
activities.
    c. Standardized tests of adaptive functioning. We do not require the 
results of an individually administered standardized test of adaptive 
functioning. If your case record includes these test results, we will 
consider the results along with all other relevant evidence; however, we 
will use the guidelines in 112.00E and F to evaluate and determine the 
degree of your deficits in adaptive functioning, as required under 
112.05B2.
    d. Standardized developmental assessments. We do not require the 
results of standardized developmental assessments, which compare your 
level of development to the level typically expected for your 
chronological age. If your case record includes test results, we will 
consider the results along with all other relevant evidence. However, we 
will use the guidelines in 112.00E and F to evaluate and determine the 
degree of your deficits in adaptive functioning, as required under 
112.05B2.
    e. How we consider common everyday activities.
    (i) The fact that you engage in common everyday activities, such as 
caring for your personal needs, preparing simple meals, or driving a 
car, will not always mean that you do not have deficits in adaptive 
functioning as required by 112.05B2. You may demonstrate both strengths 
and deficits in your adaptive functioning. However, a lack of deficits 
in one area does not negate the presence of deficits in another area. 
When we assess your adaptive functioning, we will consider all of your 
activities and your performance of them.
    (ii) Our conclusions about your adaptive functioning rest on the 
quality of your daily activities and whether you do them age-
appropriately. If you receive help in performing your activities, we 
need to know the kind, extent, and frequency of help you receive in 
order to perform them. We will not assume that your ability to do some 
common everyday activities, or to do some things without help or 
support, demonstrates that your mental disorder does not meet the 
requirements of 112.05B2. (See 112.00D regarding the factors we consider 
when we evaluate your functioning, including how we consider any help or 
support you receive.)
    f. How we consider work activity. The fact that you have engaged in 
work activity, or that you work intermittently or steadily in a job 
commensurate with your abilities, will not always mean that you do not 
have deficits in adaptive functioning as required by 112.05B2. When you 
have engaged in work activity, we need complete information about the 
work, and about your functioning in the work activity and work setting, 
before we reach any conclusions about your adaptive

[[Page 621]]

functioning. We will consider all factors involved in your work history 
before concluding whether your impairment satisfies the criteria for 
intellectual disorder under 112.05B. We will consider your prior and 
current work history, if any, and various other factors influencing how 
you function. For example, we consider whether the work was in a 
supported setting, whether you required more supervision than other 
employees, how your job duties compared to others in the same job, how 
much time it took you to learn the job duties, and the reason the work 
ended, if applicable.
    I. What additional considerations do we use to evaluate 
developmental disorders of infants and toddlers?
    1. General. We evaluate developmental disorders from birth to 
attainment of age 3 under 112.14. We evaluate your ability to acquire 
and maintain the motor, cognitive, social/communicative, and emotional 
skills that you need to function age-appropriately. When we rate your 
impairment-related limitations for this listing (see 
Secs. 416.925(b)(2)(ii) and 416.926a(e) of this chapter), we consider 
only limitations you have because of your developmental disorder. If you 
have a chronic illness or physical abnormality(ies), we will evaluate it 
under the affected body system, for example, the cardiovascular or 
musculoskeletal system.
    2. Age and typical development in early childhood.
    a. Prematurity and age. If you were born prematurely, we will use 
your corrected chronological age (CCA) for comparison. CCA is your 
chronological age adjusted by a period of gestational prematurity. CCA = 
(chronological age)^(number of weeks premature). If you have not 
attained age 1, we will correct your chronological age, using the same 
formula. If you are over age 1, we will decide whether to correct your 
chronological age, based on our judgment and all the facts of your case 
(see Sec. 416.924b(b) of this chapter).
    b. Developmental assessment. We will use the results from a 
standardized developmental assessment to compare your level of 
development with that typically expected for your chronological age. 
When there are no results from a comprehensive standardized 
developmental assessment in the case record, we need narrative 
developmental reports from your medical sources in sufficient detail to 
assess the limitations resulting from your developmental disorder.
    c. Variation. When we evaluate your developmental disorder, we will 
consider the wide variation in the range of normal or typical 
development in early childhood. At the end of a recognized milestone 
period, new skills typically begin to emerge. If your new skills begin 
to emerge later than is typically expected, the timing of their 
emergence may or may not indicate that you have a developmental delay or 
deficit that can be expected to last for 1 year.
    3. Evidence.
    a. Standardized developmental assessments. We use standardized test 
reports from acceptable medical sources or from early intervention 
specialists, physical or occupational therapists, and other qualified 
professionals. Only the qualified professional who administers the test, 
Federal and State agency medical and psychological consultants, and 
other contracted medical and psychological experts may conclude that the 
assessment results are not an accurate reflection of your development. 
This conclusion must be well supported by appropriate clinical and 
laboratory diagnostic techniques and must be based on relevant evidence 
in the case record. If the assessment results are not an accurate 
reflection of your development, we may purchase a new developmental 
assessment. If the developmental assessment is inconsistent with other 
information in your case record, we will follow the guidelines in 
Sec. 416.920b of this chapter.
    b. Narrative developmental reports. A narrative developmental report 
is based on clinical observations, progress notes, and well-baby check-
ups, and includes your developmental history, examination findings (with 
abnormal findings noted on repeated examinations), and an overall 
assessment of your development (that is, more than one or two isolated 
skills) by the medical source. Although medical sources may refer to 
screening test results as supporting evidence in the narrative 
developmental report, screening test results alone cannot establish a 
diagnosis or the severity of developmental disorder.
    4. What are the paragraph B criteria for 112.14?
    a. General. The paragraph B criteria for 112.14 are slightly 
different from the paragraph B criteria for the other listings. They are 
the developmental abilities that infants and toddlers use to acquire and 
maintain the skills needed to function age-appropriately. An infant or 
toddler is expected to use his or her developmental abilities to achieve 
a recognized pattern of milestones, over a typical range of time, in 
order to acquire and maintain the skills needed to function age-
appropriately. We will find that your developmental disorder satisfies 
the requirements of 112.14 if it results in extreme limitation of one, 
or marked limitation of two, of the 112.14 paragraph B criteria. (See 
Secs. 416.925(b)(2)(ii) and 416.926a(e) of this chapter for the 
definitions of the terms marked and extreme as they apply to children.)
    b. Definitions of the 112.14 paragraph B developmental abilities.

[[Page 622]]

    (i) Ability to plan and control motor movement. This criterion 
refers to the developmental ability to plan, remember, and execute 
controlled motor movements by integrating and coordinating perceptual 
and sensory input with motor output. Using this ability develops gross 
and fine motor skills, and makes it possible for you to engage in age-
appropriate symmetrical or alternating motor activities. You use this 
ability when, for example, you grasp and hold objects with one or both 
hands, pull yourself up to stand, walk without holding on, and go up and 
down stairs with alternating feet. These examples illustrate the nature 
of the developmental ability. We do not require documentation of all of 
the examples. How you manifest this developmental ability and your 
limitations in using it depends, in part, on your age.
    (ii) Ability to learn and remember. This criterion refers to the 
developmental ability to learn by exploring the environment, engaging in 
trial-and-error experimentation, putting things in groups, understanding 
that words represent things, and participating in pretend play. Using 
this ability develops the skills that help you understand what things 
mean, how things work, and how you can make things happen. You use this 
ability when, for example, you show interest in objects that are new to 
you, imitate simple actions, name body parts, understand simple cause-
and-effect relationships, remember simple directions, or figure out how 
to take something apart. These examples illustrate the nature of the 
developmental ability. We do not require documentation of all of the 
examples. How you manifest this developmental ability and your 
limitations in using it depends, in part, on your age.
    (iii) Ability to interact with others. This criterion refers to the 
developmental ability to participate in reciprocal social interactions 
and relationships by communicating your feelings and intents through 
vocal and visual signals and exchanges; physical gestures and contact; 
shared attention and affection; verbal turn taking; and understanding 
and sending increasingly complex messages. Using this ability develops 
the social skills that make it possible for you to influence others (for 
example, by gesturing for a toy or saying ``no'' to stop an action); 
invite someone to interact with you (for example, by smiling or 
reaching); and draw someone's attention to what interests you (for 
example, by pointing or taking your caregiver's hand and leading that 
person). You use this ability when, for example, you use vocalizations 
to initiate and sustain a ``conversation'' with your caregiver; respond 
to limits set by an adult with words, gestures, or facial expressions; 
play alongside another child; or participate in simple group activities 
with adult help. These examples illustrate the nature of the 
developmental ability. We do not require documentation of all of the 
examples. How you manifest this developmental ability and your 
limitations in using it depends, in part, on your age.
    (iv) Ability to regulate physiological functions, attention, 
emotion, and behavior. This criterion refers to the developmental 
ability to stabilize biological rhythms (for example, by developing an 
age-appropriate sleep/wake cycle); control physiological functions (for 
example, by achieving regular patterns of feeding); and attend, react, 
and adapt to environmental stimuli, persons, objects, and events (for 
example, by becoming alert to things happening around you and in 
relation to you, and responding without overreacting or underreacting). 
Using this ability develops the skills you need to regulate yourself and 
makes it possible for you to achieve and maintain a calm, alert, and 
organized physical and emotional state. You use this ability when, for 
example, you recognize your body's needs for food or sleep, focus 
quickly and pay attention to things that interest you, cry when you are 
hurt but become quiet when your caregiver holds you, comfort yourself 
with your favorite toy when you are upset, ask for help when something 
frustrates you, or refuse help from your caregiver when trying to do 
something for yourself. These examples illustrate the nature of the 
developmental ability. We do not require documentation of all of the 
examples. How you manifest this developmental ability and your 
limitations in using it depends, in part, on your age.
    5. Deferral of determination.
    a. Full-term infants. In the first few months of life, full-term 
infants typically display some irregularities in observable behaviors 
(for example, sleep cycles, feeding, responding to stimuli, attending to 
faces, self-calming), making it difficult to assess the presence, 
extent, and duration of a developmental disorder. When the evidence 
indicates that you may have a significant developmental delay, but there 
is insufficient evidence to make a determination, we will defer making a 
disability determination under 112.14 until you are at least 6 months 
old. This deferral will allow us to obtain a longitudinal medical 
history so that we can more accurately evaluate your developmental 
patterns and functioning over time. In most cases, when you are at least 
6 months old, any developmental delay you may have can be better 
assessed, and you can undergo standardized developmental testing, if 
indicated.
    b. Premature infants. When the evidence indicates that you may have 
a significant developmental delay, but there is insufficient evidence to 
make a determination, we will defer your case until you attain a CCA 
(see 112.00I2a) of at least 6 months in order to better evaluate your 
developmental delay.
    c. When we will not defer a determination. We will not defer our 
determination if we have

[[Page 623]]

sufficient evidence to determine that you are disabled under 112.14 or 
any other listing, or that you have an impairment or combination of 
impairments that functionally equals the listings. In addition, we will 
not defer our determination if the evidence demonstrates that you are 
not disabled.
    J. How do we evaluate substance use disorders? If we find that you 
are disabled and there is medical evidence in your case record 
establishing that you have a substance use disorder, we will determine 
whether your substance use disorder is a contributing factor material to 
the determination of disability (see Sec. 416.935 of this chapter).
    K. How do we evaluate mental disorders that do not meet one of the 
mental disorders listings?
    1. These listings include only examples of mental disorders that we 
consider serious enough to result in marked and severe functional 
limitations. If your severe mental disorder does not meet the criteria 
of any of these listings, we will consider whether you have an 
impairment(s) that meets the criteria of a listing in another body 
system. You may have another impairment(s) that is secondary to your 
mental disorder. For example, if you have an eating disorder and develop 
a cardiovascular impairment because of it, we will evaluate your 
cardiovascular impairment under the listings for the cardiovascular body 
system.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing (see Sec. 416.926 of this chapter).
    3. If your impairment(s) does not meet or medically equal a listing, 
we will consider whether you have an impairment(s) that functionally 
equals the listings (see Sec. 416.926a of this chapter).
    4. Although we present these alternatives in a specific sequence 
above, each represents listing-level severity, and we can evaluate your 
claim in any order. For example, if the factors of your case indicate 
that the combination of your impairments may functionally equal the 
listings, we may start with that analysis. We use the rules in 
Sec. 416.994a of this chapter, as appropriate, when we decide whether 
you continue to be disabled.

            112.01  Category of Impairments, Mental Disorders

    112.02  Neurocognitive disorders (see 112.00B1), for children age 3 
to attainment of age 18, satisfied by A and B, or A and C:
    A. Medical documentation of a clinically significant deviation in 
normal cognitive development or by significant cognitive decline from a 
prior level of functioning in one or more of the cognitive areas:
    1. Complex attention;
    2. Executive function;
    3. Learning and memory;
    4. Language;
    5. Perceptual-motor; or
    6. Social cognition.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
112.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 112.00G2c).
    112.03  Schizophrenia spectrum and other psychotic disorders (see 
112.00B2), for children age 3 to attainment of age 18, satisfied by A 
and B, or A and C:
    A. Medical documentation of one or more of the following:
    1. Delusions or hallucinations;
    2. Disorganized thinking (speech); or
    3. Grossly disorganized behavior or catatonia.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
112.00G2b); and

[[Page 624]]

    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 112.00G2c).
    112.04  Depressive, bipolar and related disorders (see 112.00B3), 
for children age 3 to attainment of age 18, satisfied by A and B, or A 
and C:
    A. Medical documentation of the requirements of paragraph 1, 2, or 
3:
    1. Depressive disorder, characterized by five or more of the 
following:
    a. Depressed or irritable mood;
    b. Diminished interest in almost all activities;
    c. Appetite disturbance with change in weight (or a failure to 
achieve an expected weight gain);
    d. Sleep disturbance;
    e. Observable psychomotor agitation or retardation;
    f. Decreased energy;
    g. Feelings of guilt or worthlessness;
    h. Difficulty concentrating or thinking; or
    i. Thoughts of death or suicide.
    2. Bipolar disorder, characterized by three or more of the 
following:
    a. Pressured speech;
    b. Flight of ideas;
    c. Inflated self-esteem;
    d. Decreased need for sleep;
    e. Distractibility;
    f. Involvement in activities that have a high probability of painful 
consequences that are not recognized; or
    g. Increase in goal-directed activity or psychomotor agitation.
    3. Disruptive mood dysregulation disorder, beginning prior to age 
10, and all of the following:
    a. Persistent, significant irritability or anger;
    b. Frequent, developmentally inconsistent temper outbursts; and
    c. Frequent aggressive or destructive behavior.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
112.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 112.00G2c).
    112.05  Intellectual disorder (see 112.00B4), for children age 3 to 
attainment of age 18, satisfied by A or B:
    A. Satisfied by 1 and 2 (see 112.00H):
    1. Significantly subaverage general intellectual functioning evident 
in your cognitive inability to function at a level required to 
participate in standardized testing of intellectual functioning; and
    2. Significant deficits in adaptive functioning currently manifested 
by your dependence upon others for personal needs (for example, 
toileting, eating, dressing, or bathing) in excess of age-appropriate 
dependence.

                                   OR

    B. Satisfied by 1 and 2 (see 112.00H):
    1. Significantly subaverage general intellectual functioning 
evidenced by a or b:
    a. A full scale (or comparable) IQ score of 70 or below on an 
individually administered standardized test of general intelligence; or
    b. A full scale (or comparable) IQ score of 71-75 accompanied by a 
verbal or performance IQ score (or comparable part score) of 70 or below 
on an individually administered standardized test of general 
intelligence; and
    2. Significant deficits in adaptive functioning currently manifested 
by extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning:
    a. Understand, remember, or apply information (see 112.00E1); or
    b. Interact with others (see 112.00E2); or
    c. Concentrate, persist, or maintain pace (see 112.00E3); or
    d. Adapt or manage oneself (see 112.00E4).
    112.06  Anxiety and obsessive-compulsive disorders (see 112.00B5), 
for children age 3 to attainment of age 18, satisfied by A and B, or A 
and C:
    A. Medical documentation of the requirements of paragraph 1, 2, 3, 
or 4:
    1. Anxiety disorder, characterized by one or more of the following:
    a. Restlessness;
    b. Easily fatigued;
    c. Difficulty concentrating;
    d. Irritability;
    e. Muscle tension; or
    f. Sleep disturbance.
    2. Panic disorder or agoraphobia, characterized by one or both:
    a. Panic attacks followed by a persistent concern or worry about 
additional panic attacks or their consequences; or

[[Page 625]]

    b. Disproportionate fear or anxiety about at least two different 
situations (for example, using public transportation, being in a crowd, 
being in a line, being outside of your home, being in open spaces).
    3. Obsessive-compulsive disorder, characterized by one or both:
    a. Involuntary, time-consuming preoccupation with intrusive, 
unwanted thoughts; or;
    b. Repetitive behaviors that appear aimed at reducing anxiety.
    4. Excessive fear or anxiety concerning separation from those to 
whom you are attached.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
112.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 112.00G2c).
    112.07  Somatic symptom and related disorders (see 112.00B6), for 
children age 3 to attainment of age 18, satisfied by A and B:
    A. Medical documentation of one or both of the following:
    1. Symptoms of altered voluntary motor or sensory function that are 
not better explained by another medical or mental disorder; or
    2. One or more somatic symptoms that are distressing, with excessive 
thoughts, feelings, or behaviors related to the symptoms.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).
    112.08  Personality and impulse-control disorders (see 112.00B7), 
for children age 3 to attainment of age 18, satisfied by A and B:
    A. Medical documentation of a pervasive pattern of one or more of 
the following:
    1. Distrust and suspiciousness of others;
    2. Detachment from social relationships;
    3. Disregard for and violation of the rights of others;
    4. Instability of interpersonal relationships;
    5. Excessive emotionality and attention seeking;
    6. Feelings of inadequacy;
    7. Excessive need to be taken care of;
    8. Preoccupation with perfectionism and orderliness; or
    9. Recurrent, impulsive, aggressive behavioral outbursts.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).
    112.09  [Reserved]
    112.10  Autism spectrum disorder (see 112.00B8), for children age 3 
to attainment of age 18), satisfied by A and B:
    A. Medical documentation of both of the following:
    1. Qualitative deficits in verbal communication, nonverbal 
communication, and social interaction; and
    2. Significantly restricted, repetitive patterns of behavior, 
interests, or activities.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).
    112.11  Neurodevelopmental disorders (see 112.00B9), for children 
age 3 to attainment of age 18, satisfied by A and B:
    A. Medical documentation of the requirements of paragraph 1, 2, or 
3:
    1. One or both of the following:
    a. Frequent distractibility, difficulty sustaining attention, and 
difficulty organizing tasks; or
    b. Hyperactive and impulsive behavior (for example, difficulty 
remaining seated, talking excessively, difficulty waiting, appearing 
restless, or behaving as if being ``driven by a motor'').

[[Page 626]]

    2. Significant difficulties learning and using academic skills; or
    3. Recurrent motor movement or vocalization.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).
    112.12  [Reserved]
    112.13  Eating disorders (see 112.00B10), for children age 3 to 
attainment of age 18, satisfied by A and B:
    A. Medical documentation of a persistent alteration in eating or 
eating-related behavior that results in a change in consumption or 
absorption of food and that significantly impairs physical or 
psychological health.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).
    112.14  Developmental disorders in infants and toddlers (see 
112.00B11, 112.00I), satisfied by A and B:
    A. Medical documentation of one or both of the following:
    1. A delay or deficit in the development of age-appropriate skills; 
or
    2. A loss of previously acquired skills.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following developmental abilities (see 112.00F):
    1. Plan and control motor movement (see 112.00I4b(i)).
    2. Learn and remember (see 112.00I4b(ii)).
    3. Interact with others (see 112.00I4b(iii)).
    4. Regulate physiological functions, attention, emotion, and 
behavior (see 112.00I4b(iv)).
    112.15  Trauma- and stressor-related disorders (see 112.00B11), for 
children age 3 to attainment of age 18, satisfied by A and B, or A and 
C:
    A. Medical documentation of the requirements of paragraph 1 or 2:
    1. Posttraumatic stress disorder, characterized by all of the 
following:
    a. Exposure to actual or threatened death, serious injury, or 
violence;
    b. Subsequent involuntary re-experiencing of the traumatic event 
(for example, intrusive memories, dreams, or flashbacks);
    c. Avoidance of external reminders of the event;
    d. Disturbance in mood and behavior (for example, developmental 
regression, socially withdrawn behavior); and
    e. Increases in arousal and reactivity (for example, exaggerated 
startle response, sleep disturbance).
    2. Reactive attachment disorder, characterized by two or all of the 
following:
    a. Rarely seeks comfort when distressed;
    b. Rarely responds to comfort when distressed; or
    c. Episodes of unexplained emotional distress.

                                   AND

    B. Extreme limitation of one, or marked limitation of two, of the 
following areas of mental functioning (see 112.00F):
    1. Understand, remember, or apply information (see 112.00E1).
    2. Interact with others (see 112.00E2).
    3. Concentrate, persist, or maintain pace (see 112.00E3).
    4. Adapt or manage oneself (see 112.00E4).

                                   OR

    C. Your mental disorder in this listing category is ``serious and 
persistent;'' that is, you have a medically documented history of the 
existence of the disorder over a period of at least 2 years, and there 
is evidence of both:
    1. Medical treatment, mental health therapy, psychosocial 
support(s), or a highly structured setting(s) that is ongoing and that 
diminishes the symptoms and signs of your mental disorder (see 
112.00G2b); and
    2. Marginal adjustment, that is, you have minimal capacity to adapt 
to changes in your environment or to demands that are not already part 
of your daily life (see 112.00G2c).

             113.00  Cancer (Malignant Neoplastic Diseases)

    A. What impairments do these listings cover? We use these listings 
to evaluate all cancers (malignant neoplastic diseases) except certain 
cancers associated with human immunodeficiency virus (HIV) infection. We 
use the criteria in 114.11B to evaluate primary central nervous system 
lymphoma, 114.11C to evaluate primary effusion lymphoma, and 114.11E to 
evaluate pulmonary Kaposi sarcoma if you also have HIV infection. We 
evaluate all other cancers associated with HIV infection, for example, 
Hodgkin lymphoma or non-pulmonary Kaposi sarcoma, under this body system 
or under 114.11F-I in the immune system disorders body system.

[[Page 627]]

    B. What do we consider when we evaluate cancer under these listings? 
We will consider factors including:
    1. Origin of the cancer.
    2. Extent of involvement.
    3. Duration, frequency, and response to anticancer therapy.
    4. Effects of any post-therapeutic residuals.
    C. How do we apply these listings? We apply the criteria in a 
specific listing to a cancer originating from that specific site.
    D. What evidence do we need?
    1. We need medical evidence that specifies the type, extent, and 
site of the primary, recurrent, or metastatic lesion. When the primary 
site cannot be identified, we will use evidence documenting the site(s) 
of metastasis to evaluate the impairment under 13.27 in part A.
    2. For operative procedures, including a biopsy or a needle 
aspiration, we generally need a copy of both the:
    a. Operative note, and
    b. Pathology report.
    3. When we cannot get these documents, we will accept the summary of 
hospitalization(s) or other medical reports. This evidence should 
include details of the findings at surgery and, whenever appropriate, 
the pathological findings.
    4. In some situations, we may also need evidence about recurrence, 
persistence, or progression of the cancer, the response to therapy, and 
any significant residuals. (See 113.00G.)
    E. When do we need longitudinal evidence?
    1. Cancer with distant metastases. Most cancer of childhood consists 
of a local lesion with metastases to regional lymph nodes and, less 
often, distant metastases. We generally do not need longitudinal 
evidence for cancer that has metastasized beyond the regional lymph 
nodes because this cancer usually meets the requirements of a listing. 
Exceptions are for cancer with distant metastases that we expect to 
respond to anticancer therapy. For these exceptions, we usually need a 
longitudinal record of 3 months after therapy starts to determine 
whether the therapy achieved its intended effect, and whether this 
effect is likely to persist.
    2. Other cancers. When there are no distant metastases, many of the 
listings require that we consider your response to initial anticancer 
therapy; that is, the initial planned treatment regimen. This therapy 
may consist of a single modality or a combination of modalities; that 
is, multimodal therapy (see 113.00I3).
    3. Types of treatment.
    a. Whenever the initial planned therapy is a single modality, enough 
time must pass to allow a determination about whether the therapy will 
achieve its intended effect. If the treatment fails, the failure often 
happens within 6 months after treatment starts, and there will often be 
a change in the treatment regimen.
    b. Whenever the initial planned therapy is multimodal, we usually 
cannot make a determination about the effectiveness of the therapy until 
we can determine the effects of all the planned modalities. In some 
cases, we may need to defer adjudication until we can assess the 
effectiveness of therapy. However, we do not need to defer adjudication 
to determine whether the therapy will achieve its intended effect if we 
can make a fully favorable determination or decision based on the length 
and effects of therapy, or the residuals of the cancer or therapy (see 
113.00G).
    F. How do we evaluate impairments that do not meet one of the cancer 
listings?
    1. These listings are only examples of cancers that we consider 
severe enough to result in marked and severe functional limitations. If 
your severe impairment(s) does not meet the criteria of any of these 
listings, we must also consider whether you have an impairment(s) that 
meets the criteria of a listing in another body system.
    2. If you have a severe medically determinable impairment(s) that 
does not meet a listing, we will determine whether your impairment(s) 
medically equals a listing. (See Secs. 404.1526 and 416.926 of this 
chapter.) If your impairment(s) does not meet or medically equal a 
listing, we will also consider whether you have an impairment(s) that 
functionally equals the listings. (See Sec. 416.926a of this chapter.) 
We use the rules in Sec. 416.994a of this chapter when we decide whether 
you continue to be disabled.
    G. How do we consider the effects of anticancer therapy?
    1. How we consider the effects of anticancer therapy under the 
listings. In many cases, cancers meet listing criteria only if the 
therapy is not effective and the cancer persists, progresses, or recurs. 
However, as explained in the following paragraphs, we will not delay 
adjudication if we can make a fully favorable determination or decision 
based on the evidence in the case record.
    2. Effects can vary widely.
    a. We consider each case on an individual basis because the therapy 
and its toxicity may vary widely. We will request a specific description 
of the therapy, including these items:
    i. Drugs given.
    ii. Dosage.
    iii. Frequency of drug administration.
    iv. Plans for continued drug administration.
    v. Extent of surgery.
    vi. Schedule and fields of radiation therapy.
    b. We will also request a description of the complications or 
adverse effects of therapy, such as the following:
    i. Continuing gastrointestinal symptoms.
    ii. Persistent weakness.

[[Page 628]]

    iii. Neurological complications.
    iv. Cardiovascular complications.
    v. Reactive mental disorders.
    3. Effects of therapy may change. The severity of the adverse 
effects of anticancer therapy may change during treatment; therefore, 
enough time must pass to allow us to evaluate the therapy's effect. The 
residual effects of treatment are temporary in most instances; however, 
on occasion, the effects may be disabling for a consecutive period of at 
least 12 months. In some situations, very serious adverse effects may 
interrupt and prolong multimodal anticancer therapy for a continuous 
period of almost 12 months. In these situations, we may determine there 
is an expectation that your impairment will preclude you from engaging 
in any age-appropriate activities for at least 12 months.
    4. When the initial anticancer therapy is effective. We evaluate any 
post-therapeutic residual impairment(s) not included in these listings 
under the criteria for the affected body system. We must consider any 
complications of therapy. When the residual impairment(s) does not meet 
a listing, we must consider whether it medically equals a listing, or, 
as appropriate, functionally equals the listings.
    H. How long do we consider your impairment to be disabling?
    1. In some listings, we specify that we will consider your 
impairment to be disabling until a particular point in time (for 
example, until at least 12 months from the date of transplantation). We 
may consider your impairment to be disabling beyond this point when the 
medical and other evidence justifies it.
    2. When a listing does not contain such a specification, we will 
consider an impairment(s) that meets or medically equals a listing in 
this body system to be disabling until at least 3 years after onset of 
complete remission. When the impairment(s) has been in complete 
remission for at least 3 years, that is, the original tumor or a 
recurrence (or relapse) and any metastases have not been evident for at 
least 3 years, the impairment(s) will no longer meet or medically equal 
the criteria of a listing in this body system.
    3. Following the appropriate period, we will consider any residuals, 
including residuals of the cancer or therapy (see 113.00G), in 
determining whether you are disabled. If you have a recurrence or 
relapse of your cancer, your impairment may meet or medically equal one 
of the listings in this body system again.
    I. What do we mean by the following terms?
    1. Anticancer therapy means surgery, radiation, chemotherapy, 
hormones, immunotherapy, or bone marrow or stem cell transplantation. 
When we refer to surgery as an anticancer treatment, we mean surgical 
excision for treatment, not for diagnostic purposes.
    2. Metastases means the spread of cancer cells by blood, lymph, or 
other body fluid. This term does not include the spread of cancer cells 
by direct extension of the cancer to other tissues or organs.
    3. Multimodal therapy means anticancer therapy that is a combination 
of at least two types of treatment given in close proximity as a unified 
whole and usually planned before any treatment has begun. There are 
three types of treatment modalities: Surgery, radiation, and systemic 
drug therapy (chemotherapy, hormone therapy, and immunotherapy or 
biological modifier therapy). Examples of multimodal therapy include:
    a. Surgery followed by chemotherapy or radiation.
    b. Chemotherapy followed by surgery.
    c. Chemotherapy and concurrent radiation.
    4. Persistent means the planned initial anticancer therapy failed to 
achieve a complete remission of your cancer; that is, your cancer is 
evident, even if smaller, after the therapy has ended.
    5. Progressive means the cancer becomes more extensive after 
treatment; that is, there is evidence that your cancer is growing after 
you have completed at least half of your planned initial anticancer 
therapy.
    6. Recurrent or relapse means the cancer that was in complete 
remission or entirely removed by surgery has returned.
    J. Can we establish the existence of a disabling impairment prior to 
the date of the evidence that shows the cancer satisfies the criteria of 
a listing? Yes. We will consider factors such as:
    1. The type of cancer and its location.
    2. The extent of involvement when the cancer was first demonstrated.
    3. Your symptoms.
    K. How do we evaluate specific cancers?
    1. Lymphoma.
    a. We provide criteria for evaluating lymphomas that are 
disseminated or have not responded to anticancer therapy in 113.05.
    b. Lymphoblastic lymphoma is treated with leukemia-based protocols, 
so we evaluate this type of cancer under 113.06.
    2. Leukemia.
    a. Acute leukemia. The initial diagnosis of acute leukemia, 
including the accelerated or blast phase of chronic myelogenous 
(granulocytic) leukemia, is based on definitive bone marrow examination. 
Additional diagnostic information is based on chromosomal analysis, 
cytochemical and surface marker studies on the abnormal cells, or other 
methods consistent with the prevailing state of medical knowledge and 
clinical practice. Recurrent disease must be documented by peripheral 
blood, bone marrow, or cerebrospinal fluid examination, or by testicular

[[Page 629]]

biopsy. The initial and follow-up pathology reports should be included.
    b. Chronic myelogenous leukemia (CML). We need a diagnosis of CML 
based on documented granulocytosis, including immature forms such as 
differentiated or undifferentiated myelocytes and myeloblasts, and a 
chromosomal analysis that demonstrates the Philadelphia chromosome. In 
the absence of a chromosomal analysis, or if the Philadelphia chromosome 
is not present, the diagnosis may be made by other methods consistent 
with the prevailing state of medical knowledge and clinical practice. 
The requirement for CML in the accelerated or blast phase is met in 
113.06B if laboratory findings show the proportion of blast (immature) 
cells in the peripheral blood or bone marrow is 10 percent or greater.
    c. Juvenile chronic myelogenous leukemia (JCML). JCML is a rare, 
Philadelphia-chromosome-negative childhood leukemia that is aggressive 
and clinically similar to acute myelogenous leukemia. We evaluate JCML 
under 113.06A.
    d. Elevated white cell count. In cases of chronic leukemia (either 
myelogenous or lymphocytic), an elevated white cell count, in itself, is 
not a factor in determining the severity of the impairment.
    3. Malignant solid tumors. The tumors we consider under 113.03 
include the histiocytosis syndromes except for solitary eosinophilic 
granuloma. We do not evaluate thyroid cancer (see 113.09), 
retinoblastomas (see 113.12), primary central nervous system (CNS) 
cancers (see 113.13), neuroblastomas (see 113.21), or malignant melanoma 
(see 113.29) under this listing.
    4. Primary central nervous system (CNS) cancers. We use the criteria 
in 113.13 to evaluate cancers that originate within the CNS (that is, 
brain and spinal cord cancers).
    a. The CNS cancers listed in 113.13A are highly malignant and 
respond poorly to treatment, and therefore we do not require additional 
criteria to evaluate them. We do not list pituitary gland cancer (for 
example, pituitary gland carcinoma) in 113.13A, although this CNS cancer 
is highly malignant and responds poorly to treatment. We evaluate 
pituitary gland cancer under 113.13A and do not require additional 
criteria to evaluate it.
    b. We consider a CNS tumor to be malignant if it is classified as 
Grade II, Grade III, or Grade IV under the World Health Organization 
(WHO) classification of tumors of the CNS (WHO Classification of Tumours 
of the Central Nervous System, 2007).
    c. We evaluate benign (for example, WHO Grade I) CNS tumors under 
111.05. We evaluate metastasized CNS cancers from non-CNS sites under 
the primary cancers (see 113.00C). We evaluate any complications of CNS 
cancers, such as resultant neurological or psychological impairments, 
under the criteria for the affected body system.
    5. Retinoblastoma. The treatment for bilateral retinoblastoma 
usually results in a visual impairment. We will evaluate any resulting 
visual impairment under 102.02.
    6. Melanoma. We evaluate malignant melanoma that affects the skin 
(cutaneous melanoma), eye (ocular melanoma), or mucosal membranes 
(mucosal melanoma) under 113.29. We evaluate melanoma that is not 
malignant that affects the skin (benign melanocytic tumor) under the 
listings in 108.00 or other affected body systems.
    L. How do we evaluate cancer treated by bone marrow or stem cell 
transplantation, including transplantation using stem cells from 
umbilical cord blood? Bone marrow or stem cell transplantation is 
performed for a variety of cancers. We require the transplantation to 
occur before we evaluate it under these listings. We do not need to 
restrict our determination of the onset of disability to the date of 
transplantation (113.05 or 113.06). We may be able to establish an 
earlier onset date of disability due to your transplantation if the 
evidence in your case record supports such a finding.
    1. Acute leukemia (including all types of lymphoblastic lymphomas 
and JCML) or accelerated or blast phase of CML. If you undergo bone 
marrow or stem cell transplantation for any of these disorders, we will 
consider you to be disabled until at least 24 months from the date of 
diagnosis or relapse, or at least 12 months from the date of 
transplantation, whichever is later.
    2. Lymphoma or chronic phase of CML. If you undergo bone marrow or 
stem cell transplantation for any of these disorders, we will consider 
you to be disabled until at least 12 months from the date of 
transplantation.
    3. Evaluating disability after the appropriate time period has 
elapsed. We consider any residual impairment(s), such as complications 
arising from:
    a. Graft-versus-host (GVH) disease.
    b. Immunosuppressant therapy, such as frequent infections.
    c. Significant deterioration of other organ systems.
    113.01  Category of Impairments, Cancer (Malignant Neoplastic 
Diseases)

     113.01  Category of Impairments, Malignant Neoplastic Diseases

    113.03  Malignant solid tumors. Consider under a disability:
    A. For 24 months from the date of initial diagnosis. Thereafter, 
evaluate any residual impairment(s) under the criteria for the affected 
body system.
OR
    B. For 24 months from the date of recurrence of active disease. 
Thereafter, evaluate any residual impairment(s) under the criteria for 
the affected body system.

[[Page 630]]

    113.05  Lymphoma (excluding all types of lymphoblastic lymphomas--
113.06). (See 113.00K1.)
    A. Non-Hodgkin lymphoma (including Burkitt's and anaplastic large 
cell), with either 1 or 2:
    1. Bone marrow, brain, spinal cord, liver, or lung involvement at 
initial diagnosis. Consider under a disability for 24 months from the 
date of diagnosis. Thereafter, evaluate under 113.05A2, or any residual 
impairments(s) under the criteria for the affected body system.
    2. Persistent or recurrent following initial anticancer therapy.
OR
    B. Hodgkin lymphoma, with either 1 or 2:
    1. Bone marrow, brain, spinal cord, liver, or lung involvement at 
initial diagnosis. Consider under a disability for 24 months from the 
date of diagnosis. Thereafter, evaluate under 113.05B2, or any residual 
impairment(s) under the criteria for the affected body system.
    2. Persistent or recurrent following initial anticancer therapy.
OR

    C. With bone marrow or stem cell transplantation. Consider under a 
disability until at least 12 months from the date of transplantation. 
Thereafter, evaluate any residual impairment(s) under the criteria of 
the affected body system.
OR
    D. Mantle cell lymphoma.
    113.06  Leukemia. (See 113.00K2.)
    A. Acute leukemia (including all types of lymphoblastic lymphomas 
and juvenile chronic myelogenous leukemia (JCML)). Consider under a 
disability until at least 24 months from the date of diagnosis or 
relapse, or at least 12 months from the date of bone marrow or stem cell 
transplantation, whichever is later. Thereafter, evaluate any residual 
impairment(s) under the criteria for the affected body system.

OR

    B. Chronic myelogenous leukemia (except JCML), as described in 1 or 
2:
    1. Accelerated or blast phase (see 113.00K2b). Consider under a 
disability until at least 24 months from the date of diagnosis or 
relapse, or at least 12 months from the date of bone marrow or stem cell 
transplantation, whichever is later. Thereafter, evaluate any residual 
impairment(s) under the criteria for the affected body system.
    2. Chronic phase, as described in a or b:
    a. Consider under a disability until at least 12 months from the 
date of bone marrow or stem cell transplantation. Thereafter, evaluate 
any residual impairment(s) under the criteria for the affected body 
system.
    b. Progressive disease following initial antineoplastic therapy.
    113.09  Thyroid gland.
    A. Anaplastic (undifferentiated) carcinoma.

OR

    B. Carcinoma with metastases beyond the regional lymph nodes 
progressive despite radioactive iodine therapy.

OR

    C. Medullary carcinoma with metastases beyond the regional lymph 
nodes.
    113.12  Retinoblastoma.
    A. With extension beyond the orbit.

OR

    B. Persistent or recurrent following initial anticancer therapy.

OR

    C. With regional or distant metastases.
    113.13  Nervous system. (See 113.00K4.) Primary central nervous 
system (CNS; that is, brain and spinal cord) cancers, as described in A, 
B, or C:
    A. Glioblastoma multiforme, ependymoblastoma, and diffuse intrinsic 
brain stem gliomas (see 113.00K4a).
    B. Any Grade III or Grade IV CNS cancer (see 113.00K4b), including 
astrocytomas, sarcomas, and medulloblastoma and other primitive 
neuroectodermal tumors (PNETs).
    C. Any primary CNS cancer, as described in 1 or 2:
    1. Metastatic.
    2. Progressive or recurrent following initial anticancer therapy.
    113.21  Neuroblastoma.
    A. With extension across the midline.

OR

    B. With distant metastases.

OR

    C. Recurrent.

OR

    D. With onset at age 1 year or older.
    113.29  Malignant melanoma (including skin, ocular, or mucosal 
melanomas), as described in either A, B, or C:
    A. Recurrent (except an additional primary melanoma at a different 
site, which is not considered to be recurrent disease) following either 
1 or 2:
    1. Wide excision (skin melanoma).
    2. Enucleation of the eye (ocular melanoma).
OR
    B. With metastases as described in 1, 2, or 3:
    1. Metastases to one or more clinically apparent nodes; that is, 
nodes that are detected by imaging studies (excluding 
lymphoscintigraphy) or by clinical evaluation (palpable).
    2. If the nodes are not clinically apparent, with metastases to four 
or more nodes.
    3. Metastases to adjacent skin (satellite lesions) or distant sites 
(for example, liver, lung, or brain).

[[Page 631]]

OR
    C. Mucosal melanoma.

                     114.00  Immune System Disorders

   A. What disorders do we evaluate under the immune system disorders 
                                listings?

    1. We evaluate immune system disorders that cause dysfunction in one 
or more components of your immune system.
    a. The dysfunction may be due to problems in antibody production, 
impaired cell-mediated immunity, a combined type of antibody/cellular 
deficiency, impaired phagocytosis, or complement deficiency.
    b. Immune system disorders may result in recurrent and unusual 
infections, or inflammation and dysfunction of the body's own tissues. 
Immune system disorders can cause a deficit in a single organ or body 
system that results in extreme (that is, very serious) loss of function. 
They can also cause lesser degrees of limitations in two or more organs 
or body systems, and when associated with symptoms or signs, such as 
severe fatigue, fever, malaise, diffuse musculoskeletal pain, or 
involuntary weight loss, can also result in extreme limitation. In 
children, immune system disorders or their treatment may also affect 
growth, development, and the performance of age-appropriate activities.
    c. We organize the discussions of immune system disorders in three 
categories: Autoimmune disorders; Immune deficiency disorders, excluding 
human immunodeficiency virus (HIV) infection; and HIV infection.
    2. Autoimmune disorders (114.00D). Autoimmune disorders are caused 
by dysfunctional immune responses directed against the body's own 
tissues, resulting in chronic, multisystem impairments that differ in 
clinical manifestations, course, and outcome. They are sometimes 
referred to as rheumatic diseases, connective tissue disorders, or 
collagen vascular disorders. Some of the features of autoimmune 
disorders in children differ from the features of the same disorders in 
adults. The impact of the disorders or their treatment on physical, 
psychological, and developmental growth of pre-pubertal children may be 
considerable, and often differs from that of post-pubertal adolescents 
or adults.
    3. Immune deficiency disorders, excluding HIV infection (114.00E). 
Immune deficiency disorders are characterized by recurrent or unusual 
infections that respond poorly to treatment, and are often associated 
with complications affecting other parts of the body. Immune deficiency 
disorders are classified as either primary (congenital) or acquired. 
Children with immune deficiency disorders also have an increased risk of 
malignancies and of having autoimmune disorders.
    4. Human immunodeficiency virus (HIV) infection (114.00F). HIV 
infection may be characterized by increased susceptibility to common 
infections as well as opportunistic infections, cancers, or other 
conditions listed in 114.11.

 B. What information do we need to show that you have an immune system 
                                disorder?

    Generally, we need your medical history, a report(s) of a physical 
examination, a report(s) of laboratory findings, and in some instances, 
appropriate medically acceptable imaging or tissue biopsy reports to 
show that you have an immune system disorder. Therefore, we will make 
every reasonable effort to obtain your medical history, medical 
findings, and results of laboratory tests. We explain the information we 
need in more detail in the sections below.

                             C. Definitions

    1. Appropriate medically acceptable imaging includes, but is not 
limited to, angiography, x-ray imaging, computerized axial tomography 
(CAT scan) or magnetic resonance imaging (MRI), with or without contrast 
material, myelography, and radionuclear bone scans. ``Appropriate'' 
means that the technique used is the proper one to support the 
evaluation and diagnosis of the impairment.
    2. Constitutional symptoms or signs, as used in these listings, 
means severe fatigue, fever, malaise, or involuntary weight loss. Severe 
fatigue means a frequent sense of exhaustion that results in 
significantly reduced physical activity or mental function. Malaise 
means frequent feelings of illness, bodily discomfort, or lack of well-
being that result in significantly reduced physical activity or mental 
function.
    3. Disseminated means that a condition is spread over a considerable 
area. The type and extent of the spread will depend on your specific 
disease.
    4. Dysfunction means that one or more of the body regulatory 
mechanisms are impaired, causing either an excess or deficiency of 
immunocompetent cells or their products.
    5. Extra-articular means ``other than the joints''; for example, an 
organ(s) such as the heart, lungs, kidneys, or skin.
    6. Inability to ambulate effectively has the same meaning as in 
101.00B2b.
    7. Inability to perform fine and gross movements effectively has the 
same meaning as in 101.00B2c.
    8. Major peripheral joints has the same meaning as in 101.00F.
    9. Persistent means that a sign(s) or symptom(s) has continued over 
time. The precise meaning will depend on the specific immune system 
disorder, the usual course of the disorder, and the other circumstances 
of your clinical course.
    10. Recurrent means that a condition that previously responded 
adequately to an appropriate course of treatment returns after a period 
of remission or regression. The precise

[[Page 632]]

meaning, such as the extent of response or remission and the time 
periods involved, will depend on the specific disease or condition you 
have, the body system affected, the usual course of the disorder and its 
treatment, and the other facts of your particular case.
    11. Resistant to treatment means that a condition did not respond 
adequately to an appropriate course of treatment. Whether a response is 
adequate or a course of treatment is appropriate will depend on the 
specific disease or condition you have, the body system affected, the 
usual course of the disorder and its treatment, and the other facts of 
your particular case.
    12. Severe means medical severity as used by the medical community. 
The term does not have the same meaning as it does when we use it in 
connection with a finding at the second step of the sequential 
evaluation process in Sec. 416.924.

   D. How do we document and evaluate the listed autoimmune disorders?

    1. Systemic lupus erythematosus (114.02).
    a. General. Systemic lupus erythematosus (SLE) is a chronic 
inflammatory disease that can affect any organ or body system. It is 
frequently, but not always, accompanied by constitutional symptoms or 
signs (severe fatigue, fever, malaise, involuntary weight loss). Major 
organ or body system involvement can include: Respiratory (pleuritis, 
pneumonitis), cardiovascular (endocarditis, myocarditis, pericarditis, 
vasculitis), renal (glomerulonephritis), hematologic (anemia, 
leukopenia, thrombocytopenia), skin (photosensitivity), neurologic 
(seizures), mental (anxiety, fluctuating cognition (``lupus fog''), mood 
disorders, organic brain syndrome, psychosis), or immune system 
disorders (inflammatory arthritis). Immunologically, there is an array 
of circulating serum auto-antibodies and pro- and anti-coagulant 
proteins that may occur in a highly variable pattern.
    b. Documentation of SLE. Generally, but not always, the medical 
evidence will show that your SLE satisfies the criteria in the current 
``Criteria for the Classification of Systemic Lupus Erythematosus'' by 
the American College of Rheumatology found in the most recent edition of 
the Primer on the Rheumatic Diseases published by the Arthritis 
Foundation.
    2. Systemic vasculitis (114.03).
    a. General.
    (i) Vasculitis is an inflammation of blood vessels. It may occur 
acutely in association with adverse drug reactions, certain chronic 
infections, and occasionally, malignancies. More often, it is chronic 
and the cause is unknown. Symptoms vary depending on which blood vessels 
are involved. Systemic vasculitis may also be associated with other 
autoimmune disorders; for example, SLE or dermatomyositis.
    (ii) Children can develop the vasculitis of Kawasaki disease, of 
which the most serious manifestation is formation of coronary artery 
aneurysms and related complications. We evaluate heart problems related 
to Kawasaki disease under the criteria in the cardiovascular listings 
(104.00). Children can also develop the vasculitis of anaphylactoid 
purpura (Henoch-Schoenlein purpura), which may cause intestinal and 
renal disorders. We evaluate intestinal and renal disorders related to 
vasculitis of anaphylactoid purpura under the criteria in the digestive 
(105.00) or genitourinary (106.00) listings. Other clinical patterns 
include, but are not limited to, polyarteritis nodosa, Takayasu's 
arteritis (aortic arch arteritis), and Wegener's granulomatosis.
    b. Documentation of systemic vasculitis. Angiography or tissue 
biopsy confirms a diagnosis of systemic vasculitis when the disease is 
suspected clinically. When you have had angiography or tissue biopsy for 
systemic vasculitis, we will make every reasonable effort to obtain 
reports of the results of that procedure. However, we will not purchase 
angiography or tissue biopsy.
    3. Systemic sclerosis (scleroderma) (114.04).
    a. General. Systemic sclerosis (scleroderma) constitutes a spectrum 
of disease in which thickening of the skin is the clinical hallmark. 
Raynaud's phenomenon, often medically severe and progressive, is present 
frequently and may be the peripheral manifestation of a vasospastic 
abnormality in the heart, lungs, and kidneys. The CREST syndrome 
(calcinosis, Raynaud's phenomenon, esophageal dysmotility, 
sclerodactyly, and telangiectasia) is a variant that may slowly progress 
over years to the generalized process, systemic sclerosis.
    b. Diffuse cutaneous systemic sclerosis. In diffuse cutaneous 
systemic sclerosis (also known as diffuse scleroderma), major organ or 
systemic involvement can include the gastrointestinal tract, lungs, 
heart, kidneys, and muscle in addition to skin or blood vessels. 
Although arthritis can occur, joint dysfunction results primarily from 
soft tissue/cutaneous thickening, fibrosis, and contractures.
    c. Localized scleroderma (linear scleroderma and morphea).
    (i) Localized scleroderma (linear scleroderma and morphea) is more 
common in children than systemic scleroderma. To assess the severity of 
the impairment, we need a description of the extent of involvement of 
linear scleroderma and the location of the lesions. For example, linear 
scleroderma involving the arm but not crossing any joints is not as 
functionally limiting as sclerodactyly (scleroderma localized to the 
fingers). Linear scleroderma of a lower

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extremity involving skin thickening and atrophy of underlying muscle or 
bone can result in contractures and leg length discrepancy. In such 
cases, we may evaluate your impairment under the musculoskeletal 
listings (101.00).
    (ii) When there is isolated morphea of the face causing facial 
disfigurement from unilateral hypoplasia of the mandible, maxilla, 
zygoma, or orbit, adjudication may be more appropriate under the 
criteria in the affected body system, such as special senses and speech 
(102.00) or mental disorders (112.00).
    (iii) Chronic variants of these syndromes include disseminated 
morphea, Shulman's disease (diffuse fasciitis with eosinophilia), and 
eosinophilia-myalgia syndrome (often associated with toxins such as 
toxic oil or contaminated tryptophan), all of which can impose medically 
severe musculoskeletal dysfunction and may also lead to restrictive 
pulmonary disease. We evaluate these variants of the disease under the 
criteria in the musculoskeletal listings (101.00) or respiratory system 
listings (103.00).
    d. Documentation of systemic sclerosis (scleroderma). Documentation 
involves differentiating the clinical features of systemic sclerosis 
(scleroderma) from other autoimmune disorders. However, there may be an 
overlap.
    4. Polymyositis and dermatomyositis (114.05).
    a. General.
    (i) Polymyositis and dermatomyositis are related disorders that are 
characterized by an inflammatory process in striated muscle, occurring 
alone or in association with other autoimmune disorders. The most common 
manifestations are symmetric weakness, and less frequently, pain and 
tenderness of the proximal limb-girdle (shoulder or pelvic) musculature. 
There may also be involvement of the cervical, cricopharyngeal, 
esophageal, intercostal, and diaphragmatic muscles.
    (ii) Polymyositis occurs rarely in children; the more common 
presentation in children is dermatomyositis with symmetric proximal 
muscle weakness and characteristic skin findings. The clinical course of 
dermatomyositis can be more severe when it is accompanied by systemic 
vasculitis rather than just localized to striated muscle. Late in the 
disease, some children with dermatomyositis develop calcinosis of the 
skin and subcutaneous tissues, muscles, and joints. We evaluate the 
involvement of other organs/body systems under the criteria for the 
listings in the affected body system.
    b. Documentation of polymyositis and dermatomyositis. Generally, but 
not always, polymyositis is associated with elevated serum muscle 
enzymes (creatine phosphokinase (CPK), aminotransferases, and aldolase), 
and characteristic abnormalities on electromyography and muscle biopsy. 
In children, the diagnosis of dermatomyositis is supported largely by 
medical history, findings on physical examination that include the 
characteristic skin findings, and elevated serum muscle enzymes. Muscle 
inflammation or vasculitis depicted on MRI is additional evidence 
supporting the diagnosis of childhood dermatomyositis. When you have had 
electromyography, muscle biopsy, or MRI for polymyositis or 
dermatomyositis, we will make every reasonable effort to obtain reports 
of the results of that procedure. However, we will not purchase 
electromyography, muscle biopsy, or MRI.
    c. Additional information about how we evaluate polymyositis and 
dermatomyositis under the listings.
    (i) In newborn and younger infants (birth to attainment of age 1), 
we consider muscle weakness that affects motor skills, such as head 
control, reaching, grasping, taking solids, or self-feeding, under 
114.05A. In older infants and toddlers (age 1 to attainment of age 3), 
we also consider muscle weakness affecting your ability to roll over, 
sit, crawl, or walk under 114.05A.
    (ii) If you are of preschool age through adolescence (age 3 to 
attainment of age 18), weakness of your pelvic girdle muscles that 
results in your inability to rise independently from a squatting or 
sitting position or to climb stairs may be an indication that you are 
unable to ambulate effectively. Weakness of your shoulder girdle muscles 
may result in your inability to perform lifting, carrying, and reaching 
overhead, and also may seriously affect your ability to perform 
activities requiring fine movements. We evaluate these limitations under 
114.05A.
    5. Undifferentiated and mixed connective tissue disease (114.06).
    a. General. This listing includes syndromes with clinical and 
immunologic features of several autoimmune disorders, but which do not 
satisfy the criteria for any of the specific disorders described. For 
example, you may have clinical features of SLE and systemic vasculitis, 
and the serologic (blood test) findings of rheumatoid arthritis. The 
most common pattern of undifferentiated autoimmune disorders in children 
is mixed connective tissue disease (MCTD).
    b. Documentation of undifferentiated and mixed connective tissue 
disease. Undifferentiated connective tissue disease is diagnosed when 
clinical features and serologic (blood test) findings, such as 
rheumatoid factor or antinuclear antibody (consistent with an autoimmune 
disorder) are present but do not satisfy the criteria for a specific 
disease. Children with MCTD have laboratory findings of extremely high 
antibody titers to extractable nuclear antigen (ENA) or 
ribonucleoprotein (RNP) without high titers of anti-dsDNA or anti-SM 
antibodies. There are often clinical findings suggestive of SLE or 
childhood dermatomyositis. Many children later develop features of 
scleroderma.
    6. Inflammatory arthritis (114.09).

[[Page 634]]

    a. General. The spectrum of inflammatory arthritis includes a vast 
array of disorders that differ in cause, course, and outcome. 
Clinically, inflammation of major peripheral joints may be the dominant 
manifestation causing difficulties with ambulation or fine and gross 
movements; there may be joint pain, swelling, and tenderness. The 
arthritis may affect other joints, or cause less limitation in 
ambulation or the performance of fine and gross movements. However, in 
combination with extra-articular features, including constitutional 
symptoms or signs (severe fatigue, fever, malaise, involuntary weight 
loss), inflammatory arthritis may result in an extreme limitation. You 
may also have impaired growth as a result of the inflammatory arthritis 
because of its effects on the immature skeleton, open epiphyses, and 
young cartilage and bone. We evaluate any associated growth impairment 
under the criteria in 100.00.
    b. Inflammatory arthritis involving the axial spine 
(spondyloarthropathy). In children, inflammatory arthritis involving the 
axial spine may be associated with disorders such as:
    (i) Reactive arthropathies;
    (ii) Juvenile ankylosing spondylitis;
    (iii) Psoriatic arthritis;
    (iv) SEA syndrome (seronegative enthesopathy arthropathy syndrome);
    (v) Behcet's disease; and
    (vi) Inflammatory bowel disease.
    c. Inflammatory arthritis involving the peripheral joints. In 
children, inflammatory arthritis involving peripheral joints may be 
associated with disorders such as:
    (i) Juvenile rheumatoid arthritis;
    (ii) Sjoogren's syndrome;
    (iii) Psoriatic arthritis;
    (iv) Crystal deposition disorders (gout and pseudogout);
    (v) Lyme disease; and
    (vi) Inflammatory bowel disease.
    d. Documentation of inflammatory arthritis. Generally, but not 
always, the diagnosis of inflammatory arthritis is based on the clinical 
features and serologic findings described in the most recent edition of 
the Primer on the Rheumatic Diseases published by the Arthritis 
Foundation.
    e. How we evaluate inflammatory arthritis under the listings.
    (i) Listing-level severity in 114.09A and 114.09C1 is shown by an 
impairment that results in an ``extreme'' (very serious) limitation. In 
114.09A, the criterion is satisfied with persistent inflammation or 
deformity in one major peripheral weight-bearing joint resulting in the 
inability to ambulate effectively (as defined in 114.00C6) or one major 
peripheral joint in each upper extremity resulting in the inability to 
perform fine and gross movements effectively (as defined in 114.00C7). 
In 114.09C1, if you have the required ankylosis (fixation) of your 
cervical or dorsolumbar spine, we will find that you have an extreme 
limitation in your ability to see in front of you, above you, and to the 
side. Therefore, inability to ambulate effectively is implicit in 
114.09C1, even though you might not require bilateral upper limb 
assistance.
    (ii) Listing-level severity is shown in 114.09B and 114.09C2 by 
inflammatory arthritis that involves various combinations of 
complications of one or more major peripheral joints or involves other 
joints, such as inflammation or deformity, extra-articular features, 
repeated manifestations, and constitutional symptoms and signs. Extra-
articular impairments may also meet listings in other body systems.
    (iii) Extra-articular features of inflammatory arthritis may involve 
any body system; for example: Musculoskeletal (heel enthesopathy), 
ophthalmologic (iridocyclitis, keratoconjunctivitis sicca, uveitis), 
pulmonary (pleuritis, pulmonary fibrosis or nodules, restrictive lung 
disease), cardiovascular (aortic valve insufficiency, arrhythmias, 
coronary arteritis, myocarditis, pericarditis, Raynaud's phenomenon, 
systemic vasculitis), renal (amyloidosis of the kidney), hematologic 
(chronic anemia, thrombocytopenia), neurologic (peripheral neuropathy, 
radiculopathy, spinal cord or cauda equina compression with sensory and 
motor loss), mental (cognitive dysfunction, poor memory), and immune 
system (Felty's syndrome (hypersplenism with compromised immune 
competence)).
    (iv) If both inflammation and chronic deformities are present, we 
evaluate your impairment under the criteria of any appropriate listing.
    7. Sjogren's syndrome (114.10).
    a. General.
    (i) Sjogren's syndrome is an immune-mediated disorder of the 
exocrine glands. Involvement of the lacrimal and salivary glands is the 
hallmark feature, resulting in symptoms of dry eyes and dry mouth, and 
possible complications, such as corneal damage, blepharitis (eyelid 
inflammation), dysphagia (difficulty in swallowing), dental caries, and 
the inability to speak for extended periods of time. Involvement of the 
exocrine glands of the upper airways may result in persistent dry cough.
    (ii) Many other organ systems may be involved, including 
musculoskeletal (arthritis, myositis), respiratory (interstitial 
fibrosis), gastrointestinal (dysmotility, dysphagia, involuntary weight 
loss), genitourinary (interstitial cystitis, renal tubular acidosis), 
skin (purpura, vasculitis,), neurologic (central nervous system 
disorders, cranial and peripheral neuropathies), mental (cognitive 
dysfunction, poor memory), and neoplastic (lymphoma). Severe fatigue and 
malaise are frequently reported. Sjogren's syndrome may

[[Page 635]]

be associated with other autoimmune disorders (for example, rheumatoid 
arthritis or SLE); usually the clinical features of the associated 
disorder predominate.
    b. Documentation of Sjogren's syndrome. If you have Sjogren's 
syndrome, the medical evidence will generally, but not always, show that 
your disease satisfies the criteria in the current ``Criteria for the 
Classification of Sjogren's Syndrome'' by the American College of 
Rheumatology found in the most recent edition of the Primer on the 
Rheumatic Diseases published by the Arthritis Foundation.

    E. How do we document and evaluate immune deficiency disorders, 
                        excluding HIV infection?

    1. General.
    a. Immune deficiency disorders can be classified as:
    (i) Primary (congenital); for example, X-linked agammaglobulinemia, 
thymic hypoplasia (DiGeorge syndrome), severe combined immunodeficiency 
(SCID), chronic granulomatous disease (CGD), C1 esterase inhibitor 
deficiency.
    (ii) Acquired; for example, medication-related.
    b. Primary immune deficiency disorders are seen mainly in children. 
However, recent advances in the treatment of these disorders have 
allowed many affected children to survive well into adulthood. 
Occasionally, these disorders are first diagnosed in adolescence or 
adulthood.
    2. Documentation of immune deficiency disorders. The medical 
evidence must include documentation of the specific type of immune 
deficiency. Documentation may be by laboratory evidence or by other 
generally acceptable methods consistent with the prevailing state of 
medical knowledge and clinical practice.
    3. Immune deficiency disorders treated by stem cell transplantation.
    a. Evaluation in the first 12 months. If you undergo stem cell 
transplantation for your immune deficiency disorder, we will consider 
you disabled until at least 12 months from the date of the transplant.
    b. Evaluation after the 12-month period has elapsed. After the 12-
month period has elapsed, we will consider any residuals of your immune 
deficiency disorder as well as any residual impairment(s) resulting from 
the treatment, such as complications arising from:
    (i) Graft-versus-host (GVH) disease.
    (ii) Immunosuppressant therapy, such as frequent infections.
    (iii) Significant deterioration of other organ systems.
    4. Medication-induced immune suppression. Medication effects can 
result in varying degrees of immune suppression, but most resolve when 
the medication is ceased. However, if you are prescribed medication for 
long-term immune suppression, such as after an organ transplant, we will 
evaluate:
    a. The frequency and severity of infections.
    b. Residuals from the organ transplant itself, after the 12-month 
period has elapsed.
    c. Significant deterioration of other organ systems.
    F. How do we document and evaluate HIV infection? Any child with HIV 
infection, including one with a diagnosis of acquired immune deficiency 
syndrome (AIDS), may be found disabled under 114.11 if his or her 
impairment meets the criteria in that listing or is medically equivalent 
to the criteria in that listing.
    1. Documentation of HIV infection.
    a. Definitive documentation of HIV infection. We may document a 
diagnosis of HIV infection by positive findings on one or more of the 
following definitive laboratory tests:
    (i) HIV antibody screening test (for example, enzyme immunoassay, or 
EIA), confirmed by a supplemental HIV antibody test such as the Western 
blot (immunoblot) or immunofluorescence assay, for any child age 18 
months or older.
    (ii) HIV nucleic acid (DNA or RNA) detection test (for example, 
polymerase chain reaction, or PCR).
    (iii) HIV p24 antigen (p24Ag) test, for any child age 1 month or 
older.
    (iv) Isolation of HIV in viral culture.
    (v) Other tests that are highly specific for detection of HIV and 
that are consistent with the prevailing state of medical knowledge.
    b. We will make every reasonable effort to obtain the results of 
your laboratory testing. Pursuant to Sec. 416.919f of this chapter, we 
will purchase examinations or tests necessary to make a determination in 
your claim if no other acceptable documentation exists.
    c. Other acceptable documentation of HIV infection. We may also 
document HIV infection without definitive laboratory evidence.
    (i) We will accept a persuasive report from a physician that a 
positive diagnosis of your HIV infection was confirmed by an appropriate 
laboratory test(s), such as those described in 114.00F1a. To be 
persuasive, this report must state that you had the appropriate 
definitive laboratory test(s) for diagnosing your HIV infection and 
provide the results. The report must also be consistent with the 
remaining evidence of record.
    (ii) We may also document HIV infection by the medical history, 
clinical and laboratory findings, and diagnosis(es) indicated in the 
medical evidence, provided that such documentation is consistent with 
the prevailing state of medical knowledge and clinical practice and is 
consistent with the other evidence in your case record. For example, we 
will accept a diagnosis of HIV infection without definitive laboratory 
evidence of the HIV infection if you have an opportunistic disease that 
is predictive of a defect in cell-

[[Page 636]]

mediated immunity (for example, toxoplasmosis of the brain or 
Pneumocystis pneumonia (PCP)), and there is no other known cause of 
diminished resistance to that disease (for example, long-term steroid 
treatment or lymphoma). In such cases, we will make every reasonable 
effort to obtain full details of the history, medical findings, and 
results of testing.
    2. Documentation of the manifestations of HIV infection.
    a. Definitive documentation of manifestations of HIV infection. We 
may document manifestations of HIV infection by positive findings on 
definitive laboratory tests, such as culture, microscopic examination of 
biopsied tissue or other material (for example, bronchial washings), 
serologic tests, or on other generally acceptable definitive tests 
consistent with the prevailing state of medical knowledge and clinical 
practice.
    b. We will make every reasonable effort to obtain the results of 
your laboratory testing. Pursuant to Sec. 416.919f of this chapter, we 
will purchase examinations or tests necessary to make a determination of 
your claim if no other acceptable documentation exists.
    c. Other acceptable documentation of manifestations of HIV 
infection. We may also document manifestations of HIV infection without 
definitive laboratory evidence.
    (i) We will accept a persuasive report from a physician that a 
positive diagnosis of your manifestation of HIV infection was confirmed 
by an appropriate laboratory test(s). To be persuasive, this report must 
state that you had the appropriate definitive laboratory test(s) for 
diagnosing your manifestation of HIV infection and provide the results. 
The report must also be consistent with the remaining evidence of 
record.
    (ii) We may also document manifestations of HIV infection without 
the definitive laboratory evidence described in 114.00F2a, provided that 
such documentation is consistent with the prevailing state of medical 
knowledge and clinical practice and is consistent with the other 
evidence in your case record. For example, many conditions are now 
commonly diagnosed based on some or all of the following: Medical 
history, clinical manifestations, laboratory findings (including 
appropriate medically acceptable imaging), and treatment responses. In 
such cases, we will make every reasonable effort to obtain full details 
of the history, medical findings, and results of testing.
    3. Disorders associated with HIV infection (114.11A-E).
    a. Multicentric Castleman disease (MCD, 114.11A) affects multiple 
groups of lymph nodes and organs containing lymphoid tissue. This 
widespread involvement distinguishes MCD from localized (or unicentric) 
Castleman disease, which affects only a single set of lymph nodes. While 
not a cancer, MCD is known as a lymphoproliferative disorder. Its 
clinical presentation and progression is similar to that of lymphoma, 
and its treatment may include radiation or chemotherapy. We require 
characteristic findings on microscopic examination of the biopsied lymph 
nodes or other generally acceptable methods consistent with the 
prevailing state of medical knowledge and clinical practice to establish 
the diagnosis. Localized (or unicentric) Castleman disease does not meet 
or medically equal the criterion in 114.11A, but we may evaluate it 
under the criteria in 114.11G or 14.11I in part A.
    b. Primary central nervous system lymphoma (PCNSL, 114.11B) 
originates in the brain, spinal cord, meninges, or eye. Imaging tests 
(for example, MRI) of the brain, while not diagnostic, may show a single 
lesion or multiple lesions in the white matter of the brain. We require 
characteristic findings on microscopic examination of the cerebral 
spinal fluid or of the biopsied brain tissue, or other generally 
acceptable methods consistent with the prevailing state of medical 
knowledge and clinical practice to establish the diagnosis.
    c. Primary effusion lymphoma (PEL, 114.11C) is also known as body 
cavity lymphoma. We require characteristic findings on microscopic 
examination of the effusion fluid or of the biopsied tissue from the 
affected internal organ, or other generally acceptable methods 
consistent with the prevailing state of medical knowledge and clinical 
practice to establish the diagnosis.
    d. Progressive multifocal leukoencephalopathy (PML, 114.11D) is a 
progressive neurological degenerative syndrome caused by the John 
Cunningham (JC) virus in immunosuppressed children. Clinical findings of 
PML include clumsiness, progressive weakness, and visual and speech 
changes. Personality and cognitive changes may also occur. We require 
appropriate clinical findings, characteristic white matter lesions on 
MRI, and a positive PCR test for the JC virus in the cerebrospinal fluid 
to establish the diagnosis. We also accept a positive brain biopsy for 
JC virus or other generally acceptable methods consistent with the 
prevailing state of medical knowledge and clinical practice to establish 
the diagnosis.
    e. Pulmonary Kaposi sarcoma (Kaposi sarcoma in the lung, 114.11E) is 
the most serious form of Kaposi sarcoma (KS). Other internal KS tumors 
(for example, tumors of the gastrointestinal tract) have a more variable 
prognosis. We require characteristic findings on microscopic examination 
of the induced sputum, bronchoalveolar lavage washings, or of the 
biopsied transbronchial tissue, or other generally acceptable methods 
consistent with the prevailing state of medical knowledge and clinical 
practice to establish the diagnosis.
    4. CD4 measurement (114.11F). To evaluate your HIV infection under 
114.11F, we require

[[Page 637]]

one measurement of your absolute CD4 count (also known as CD4 count or 
CD4+ T-helper lymphocyte count) or CD4 percentage for children from 
birth to attainment of age 5, or one measurement of your absolute CD4 
count for children from age 5 to attainment of age 18. These 
measurements (absolute CD4 count or CD4 percentage) must occur within 
the period we are considering in connection with your application or 
continuing disability review. If you have more than one CD4 measurement 
within this period, we will use your lowest absolute CD4 count or your 
lowest CD4 percentage.
    5. Complications of HIV infection requiring hospitalization 
(114.11G).
    a. Complications of HIV infection may include infections (common or 
opportunistic), cancers, and other conditions. Examples of complications 
that may result in hospitalization include: Depression; diarrhea; immune 
reconstitution inflammatory syndrome; malnutrition; and PCP and other 
severe infections.
    b. Under 114.11G, we require three hospitalizations within a 12-
month period that are at least 30 days apart and that result from a 
complication(s) of HIV infection. The hospitalizations may be for the 
same complication or different complications of HIV infection and are 
not limited to the examples of complications that may result in 
hospitalization listed in 114.00F5a. All three hospitalizations must 
occur within the period we are considering in connection with your 
application or continuing disability review. Each hospitalization must 
last at least 48 hours, including hours in a hospital emergency 
department immediately before the hospitalization.
    c. We will use the rules on medical equivalence in Sec. 416.926 of 
this chapter to evaluate your HIV infection if you have fewer, but 
longer, hospitalizations, or more frequent, but shorter, 
hospitalizations, or if you receive nursing, rehabilitation, or other 
care in alternative settings.
    6. Neurological manifestations specific to children (114.11H). The 
methods of identifying and evaluating neurological manifestations may 
vary depending on a child's age. For example, in an infant, impaired 
brain growth can be documented by a decrease in the growth rate of the 
head. In an older child, impaired brain growth may be documented by 
brain atrophy on a CT scan or MRI. Neurological manifestations may 
present in the loss of acquired developmental milestones (developmental 
regression) in infants and young children or, in the loss of acquired 
intellectual abilities in school-age children and adolescents. A child 
may demonstrate loss of intellectual abilities by a decrease in IQ 
scores, by forgetting information previously learned, by inability to 
learn new information, or by a sudden onset of a new learning 
disability. When infants and young children present with serious 
developmental delays (without regression), we evaluate the child's 
impairment(s) under 112.00.
    7. Growth failure due to HIV immune suppression (114.11I).
    a. To evaluate growth failure due to HIV immune suppression, we 
require documentation of the laboratory values described in 114.11I1 and 
the growth measurements in 114.11I2 or 114.11I3 within the same 
consecutive 12-month period. The dates of laboratory findings may be 
different from the dates of growth measurements.
    b. Under 114.11I2 and 114.11I3, we use the appropriate table under 
105.08B in the digestive system to determine whether a child's growth is 
less than the third percentile.
    (i) For children from birth to attainment of age 2, we use the 
weight-for-length table corresponding to the child's gender (Table I or 
Table II).
    (ii) For children from age 2 to attainment of age 18, we use the 
body mass index (BMI)-for-age corresponding to the child's gender (Table 
III or Table IV).
    (iii) BMI is the ratio of a child's weight to the square of his or 
her height. We calculate BMI using the formulas in 105.00G2c.

   G. How do we consider the effects of treatment in evaluating your 
   autoimmune disorder, immune deficiency disorder, or HIV infection?

    1. General. If your impairment does not otherwise meet the 
requirements of a listing, we will consider your medical treatment in 
terms of its effectiveness in improving the signs, symptoms, and 
laboratory abnormalities of your specific immune system disorder or its 
manifestations, and in terms of any side effects that limit your 
functioning. We will make every reasonable effort to obtain a specific 
description of the treatment you receive (including surgery) for your 
immune system disorder. We consider:
    a. The effects of medications you take.
    b. Adverse side effects (acute and chronic).
    c. The intrusiveness and complexity of your treatment (for example, 
the dosing schedule, need for injections).
    d. The effect of treatment on your mental functioning (for example, 
cognitive changes, mood disturbance).
    e. Variability of your response to treatment (see 114.00G2).
    f. The interactive and cumulative effects of your treatments. For 
example, many children with immune system disorders receive treatment 
both for their immune system disorders and for the manifestations of the 
disorders or co-occurring impairments, such as treatment for HIV 
infection and hepatitis C. The interactive and cumulative effects of 
these treatments may be greater than the effects of each treatment 
considered separately.
    g. The duration of your treatment.

[[Page 638]]

    h. Any other aspects of treatment that may interfere with your 
ability to function.
    2. Variability of your response to treatment. Your response to 
treatment and the adverse or beneficial consequences of your treatment 
may vary widely. The effects of your treatment may be temporary or long 
term. For example, some children may show an initial positive response 
to a drug or combination of drugs followed by a decrease in 
effectiveness. When we evaluate your response to treatment and how your 
treatment may affect you, we consider such factors as disease activity 
before treatment, requirements for changes in therapeutic regimens, the 
time required for therapeutic effectiveness of a particular drug or 
drugs, the limited number of drug combinations that may be available for 
your impairment(s), and the time-limited efficacy of some drugs. For 
example, a child with HIV infection or another immune deficiency 
disorder who develops otitis media may not respond to the same 
antibiotic regimen used in treating children without HIV infection or 
another immune deficiency disorder, or may not respond to an antibiotic 
that he or she responded to before. Therefore, we must consider the 
effects of your treatment on an individual basis, including the effects 
of your treatment on your ability to function.
    3. How we evaluate the effects of treatment for autoimmune disorders 
on your ability to function. Some medications may have acute or long-
term side effects. When we consider the effects of corticosteroids or 
other treatments for autoimmune disorders on your ability to function, 
we consider the factors in 114.00G1 and 114.00G2. Long-term 
corticosteroid treatment can cause ischemic necrosis of bone, posterior 
subcapsular cataract, impaired growth, weight gain, glucose intolerance, 
increased susceptibility to infection, and osteopenia that may result in 
a loss of function. In addition, medications used in the treatment of 
autoimmune disorders may also have effects on mental functioning, 
including cognition (for example, memory), concentration, and mood.
    4. How we evaluate the effects of treatment for immune deficiency 
disorders, excluding HIV infection, on your ability to function. When we 
consider the effects of your treatment for your immune deficiency 
disorder on your ability to function, we consider the factors in 
114.00G1 and 114.00G2. A frequent need for treatment such as intravenous 
immunoglobulin and gamma interferon therapy can be intrusive and 
interfere with your ability to function. We will also consider whether 
you have chronic side effects from these or other medications, including 
severe fatigue, fever, headaches, high blood pressure, joint swelling, 
muscle aches, nausea, shortness of breath, or limitations in mental 
function including cognition (for example, memory) concentration, and 
mood.
    5. How we evaluate the effects of treatment for HIV infection on 
your ability to function.
    a. General. When we consider the effects of antiretroviral drugs 
(including the effects of highly active antiretroviral therapy (HAART)) 
and the effects of treatments for the manifestations of HIV infection on 
your ability to function, we consider the factors in 114.00G1 and 
114.00G2. Side effects of antiretroviral drugs include, but are not 
limited to: Bone marrow suppression, pancreatitis, gastrointestinal 
intolerance (nausea, vomiting, diarrhea), neuropathy, rash, 
hepatotoxicity, lipodystrophy (fat redistribution, such as ``buffalo 
hump''), glucose intolerance, and lactic acidosis. In addition, 
medications used in the treatment of HIV infection may also have effects 
on mental functioning, including cognition (for example, memory), 
concentration, and mood, and may result in malaise, severe fatigue, 
joint and muscle pain, and insomnia. The symptoms of HIV infection and 
the side effects of medication may be indistinguishable from each other. 
We will consider all of your functional limitations, whether they result 
from your symptoms or signs of HIV infection or the side effects of your 
treatment.
    b. Structured treatment interruptions. A structured treatment 
interruption (STI, also called a ``drug holiday'') is a treatment 
practice during which your treating source advises you to stop taking 
your medications temporarily. An STI in itself does not imply that your 
medical condition has improved; nor does it imply that you are 
noncompliant with your treatment because you are following your treating 
source's advice. Therefore, if you have stopped taking medication 
because your treating source prescribed or recommended an STI, we will 
not find that you are failing to follow treatment or draw inferences 
about the severity of your impairment on this fact alone. We will 
consider why your treating source has prescribed or recommended an STI 
and all the other information in your case record when we determine the 
severity of your impairment.
    6. When there is no record of ongoing treatment. If you have not 
received ongoing treatment or have not had an ongoing relationship with 
the medical community despite the existence of a severe impairment(s), 
we will evaluate the medical severity and duration of your immune system 
disorder on the basis of the current objective medical evidence and 
other evidence in your case record, taking into consideration your 
medical history, symptoms, clinical and laboratory findings, and medical 
source opinions. If you have just begun treatment and we cannot 
determine whether you are disabled based on the evidence we have, we may 
need to wait to determine the effect of the treatment on your ability to 
develop and function in an age-appropriate manner. The amount of time we 
need to wait will depend on the facts of

[[Page 639]]

your case. If you have not received treatment, you may not be able to 
show an impairment that meets the criteria of one of the immune system 
disorders listings, but your immune system disorder may medically equal 
a listing or functionally equal the listings.

    H. How do we consider your symptoms, including your pain, severe 
                          fatigue, and malaise?

    Your symptoms, including pain, severe fatigue, and malaise, may be 
important factors in our determination whether your immune system 
disorder(s) meets or medically equals a listing or in our determination 
whether you otherwise have marked and severe functional limitations. In 
order for us to consider your symptoms, you must have medical signs or 
laboratory findings showing the existence of a medically determinable 
impairment(s) that could reasonably be expected to produce the symptoms. 
If you have such an impairment(s), we will evaluate the intensity, 
persistence, and functional effects of your symptoms using the rules 
throughout 114.00 and in our other regulations. See Secs. 416.921 and 
416.929. Additionally, when we assess the credibility of your complaints 
about your symptoms and their functional effects, we will not draw any 
inferences from the fact that you do not receive treatment or that you 
are not following treatment without considering all of the relevant 
evidence in your case record, including any explanations you provide 
that may explain why you are not receiving or following treatment.

I. How do we consider the impact of your immune system disorder on your 
                              functioning?

    1. We will consider all relevant information in your case record to 
determine the full impact of your immune system disorder, including HIV 
infection, on your ability to function. Functional limitation may result 
from the impact of the disease process itself on your mental 
functioning, physical functioning, or both your mental and physical 
functioning. This could result from persistent or intermittent symptoms, 
such as depression, diarrhea, severe fatigue, or pain, resulting in a 
limitation of your ability to acquire information, to concentrate, to 
persevere at a task, to interact with others, to move about, or to cope 
with stress. You may also have limitations because of your treatment and 
its side effects (see 114.00G).
    2. Important factors we will consider when we evaluate your 
functioning include, but are not limited to: Your symptoms (see 
114.00H), the frequency and duration of manifestations of your immune 
system disorder, periods of exacerbation and remission, and the 
functional impact of your treatment, including the side effects of your 
medication (see 114.00G). See Secs. 416.924a and 416.926a of this 
chapter for additional guidance on the factors we consider when we 
evaluate your functioning.
    3. We will use the rules in Secs. 416.924a and 416.926a of this 
chapter to evaluate your functional limitations and determine whether 
your impairment functionally equals the listings.

J. How do we evaluate your immune system disorder when it does not meet 
                         one of these listings?

    1. These listings are only examples of immune system disorders that 
we consider severe enough to result in marked and severe functional 
limitations. If your impairment(s) does not meet the criteria of any of 
these listings, we must also consider whether you have an impairment(s) 
that satisfies the criteria of a listing in another body system.
    2. Children with immune system disorders, including HIV infection, 
may manifest signs or symptoms of a mental impairment or of another 
physical impairment. For example, HIV infection may accelerate the onset 
of conditions such as diabetes or affect the course of or treatment 
options for diseases such as cardiovascular disease or hepatitis. We may 
evaluate these impairments under the affected body system. For example, 
we will evaluate:
    a. Growth impairment under 100.00.
    b. Musculoskeletal involvement, such as surgical reconstruction of a 
joint, under 101.00.
    c. Ocular involvement, such as dry eye, under 102.00.
    d. Respiratory impairments, such as pleuritis, under 103.00.
    e. Cardiovascular impairments, such as cardiomyopathy, under 104.00.
    f. Digestive impairments, such as hepatitis (including hepatitis C) 
or weight loss as a result of HIV infection that affects the digestive 
system, under 105.00.
    g. Genitourinary impairments, such as nephropathy, under 106.00.
    h. Hematologic abnormalities, such as anemia, granulocytopenia, and 
thrombocytopenia, under 107.00.
    i. Skin impairments, such as persistent fungal and other infectious 
skin eruptions, and photosensitivity, under 108.00.
    j. Neurologic impairments, such as neuropathy or seizures, under 
111.00.
    k. Mental disorders, such as depression, anxiety, or cognitive 
deficits, under 112.00.
    l. Allergic disorders, such as asthma or atopic dermatitis, under 
103.00 or 108.00 or under the criteria in another affected body system.
    m. Syphilis or neurosyphilis under the criteria for the affected 
body system, for example, 102.00  Special senses and speech, 104.00  
Cardiovascular system, or 111.00  Neurological.
    3. If you have a severe medically determinable impairment(s) that 
does not meet a

[[Page 640]]

listing, we will determine whether your impairment(s) medically equals a 
listing. (See Sec. 416.926.) If it does not, we will also consider 
whether you have an impairment(s) that functionally equals the listings. 
(See Sec. 416.926a.) We use the rules in Sec. 416.994a when we decide 
whether you continue to be disabled.
    114.01  Category of Impairments, Immune System Disorders.
    114.02  Systemic lupus erythematosus, as described in 114.00D1. With 
involvement of two or more organs/body systems, and with:
    A. One of the organs/body systems involved to at least a moderate 
level of severity;

                                   AND

    B. At least two of the constitutional symptoms and signs (severe 
fatigue, fever, malaise, or involuntary weight loss).
    114.03  Systemic vasculitis, as described in 114.00D2. With 
involvement of two or more organs/body systems, and with:
    A. One of the organs/body systems involved to at least a moderate 
level of severity;

                                   AND

    B. At least two of the constitutional symptoms and signs (severe 
fatigue, fever, malaise, or involuntary weight loss).
    114.04  Systemic sclerosis (scleroderma). As described in 114.00D3. 
With:
    A. Involvement of two or more organs/body systems, with:
    1. One of the organs/body systems involved to at least a moderate 
level of severity; and
    2. At least two of the constitutional symptoms or signs (severe 
fatigue, fever, malaise, or involuntary weight loss).
or
    B. With one of the following:
    1. Toe contractures or fixed deformity of one or both feet, 
resulting in the inability to ambulate effectively as defined in 
114.00C6; or
    2. Finger contractures or fixed deformity in both hands, resulting 
in the inability to perform fine and gross movements effectively as 
defined in 114.00C7; or
    3. Atrophy with irreversible damage in one or both lower 
extremities, resulting in the inability to ambulate effectively as 
defined in 114.00C6; or
    4. Atrophy with irreversible damage in both upper extremities, 
resulting in the inability to perform fine and gross movements 
effectively as defined in 114.00C7.
or
    C. Raynaud's phenomenon, characterized by:
    1. Gangrene involving at least two extremities; or
    2. Ischemia with ulcerations of toes or fingers, resulting in the 
inability to ambulate effectively or to perform fine and gross movements 
effectively as defined in 114.00C6 and 114.00C7.
    114.05  Polymyositis and dermatomyositis. As described in 114.00D4. 
With:
    A. Proximal limb-girdle (pelvic or shoulder) muscle weakness, 
resulting in inability to ambulate effectively or inability to perform 
fine and gross movements effectively as defined in 114.00C6 and 
114.00C7.
or
    B. Impaired swallowing (dysphagia) with aspiration due to muscle 
weakness.
or
    C. Impaired respiration due to intercostal and diaphragmatic muscle 
weakness.
or
    D. Diffuse calcinosis with limitation of joint mobility or 
intestinal motility.
    114.06  Undifferentiated and mixed connective tissue disease, as 
described in 114.00D5. With involvement of two or more organs/body 
systems, and with:
    A. One of the organs/body systems involved to at least a moderate 
level of severity;

                                   AND

    B. At least two of the constitutional symptoms and signs (severe 
fatigue, fever, malaise, or involuntary weight loss).
    114.07  Immune deficiency disorders, excluding HIV infection. As 
described in 114.00E. With:
    A. One or more of the following infections. The infection(s) must 
either be resistant to treatment or require hospitalization or 
intravenous treatment three or more times in a 12-month period.
    1. Sepsis; or
    2. Meningitis; or
    3. Pneumonia; or
    4. Septic arthritis; or
    5. Endocarditis; or
    6. Sinusitis documented by appropriate medically acceptable imaging.
or
    B. Stem cell transplantation as described under 114.00E3. Consider 
under a disability until at least 12 months from the date of 
transplantation. Thereafter, evaluate any residual impairment(s) under 
the criteria for the affected body system.
    114.08  [Reserved]
    114.09  Inflammatory arthritis. As described in 114.00D6. With:
    A. Persistent inflammation or persistent deformity of:
    1. One or more major peripheral weight-bearing joints resulting in 
the inability to ambulate effectively (as defined in 114.00C6); or
    2. One or more major peripheral joints in each upper extremity 
resulting in the inability to perform fine and gross movements 
effectively (as defined in 114.00C7).
or

[[Page 641]]

    B. Inflammation or deformity in one or more major peripheral joints 
with:
    1. Involvement of two or more organs/body systems with one of the 
organs/body systems involved to at least a moderate level of severity; 
and
    2. At least two of the constitutional symptoms or signs (severe 
fatigue, fever, malaise, or involuntary weight loss).
or
    C. Ankylosing spondylitis or other spondyloarthropathies, with:
    1. Ankylosis (fixation) of the dorsolumbar or cervical spine as 
shown by appropriate medically acceptable imaging and measured on 
physical examination at 45 or more of flexion from the vertical 
position (zero degrees); or
    2. Ankylosis (fixation) of the dorsolumbar or cervical spine as 
shown by appropriate medically acceptable imaging and measured on 
physical examination at 30 or more of flexion (but less than 45) 
measured from the vertical position (zero degrees), and involvement of 
two or more organs/body systems with one of the organs/body systems 
involved to at least a moderate level of severity.
    114.10  Sjogren's syndrome, as described in 114.00D7. With 
involvement of two or more organs/body systems, and with:
    A. One of the organs/body systems involved to at least a moderate 
level of severity;

                                   AND

    B. At least two of the constitutional symptoms and signs (severe 
fatigue, fever, malaise, or involuntary weight loss).
    114.11  Human immunodeficiency virus (HIV) infection. With 
documentation as described in 114.00F1 and one of the following:
    A. Multicentric (not localized or unicentric) Castleman disease 
affecting multiple groups of lymph nodes or organs containing lymphoid 
tissue (see 114.00F3a).

OR

    B. Primary central nervous system lymphoma (see 114.00F3b).

OR

    C. Primary effusion lymphoma (see 114.00F3c).

OR

    D. Progressive multifocal leukoencephalopathy (see 114.00F3d).

OR

    E. Pulmonary Kaposi sarcoma (see 114.00F3e).

OR

    F. Absolute CD4 count or CD4 percentage (see 114.00F4):
    1. For children from birth to attainment of age 1, absolute CD4 
count of 500 cells/mm\3\ or less, or CD4 percentage of less than 15 
percent; or
    2. For children from age 1 to attainment of age 5, absolute CD4 
count of 200 cells/mm\3\ or less, or CD4 percentage of less than 15 
percent; or
    3. For children from age 5 to attainment of age 18, absolute CD4 
count of 50 cells/mm\3\ or less.

OR

    G. Complication(s) of HIV infection requiring at least three 
hospitalizations within a 12-month period and at least 30 days apart 
(see 114.00F5). Each hospitalization must last at least 48 hours, 
including hours in a hospital emergency department immediately before 
the hospitalization.

OR

    H. A neurological manifestation of HIV infection (for example, HIV 
encephalopathy or peripheral neuropathy) (see 114.00F6) resulting in one 
of the following:
    1. Loss of previously acquired developmental milestones or 
intellectual ability (including the sudden onset of a new learning 
disability), documented on two examinations at least 60 days apart; or
    2. Progressive motor dysfunction affecting gait and station or fine 
and gross motor skills, documented on two examinations at least 60 days 
apart; or
    3. Microcephaly with head circumference that is less than the third 
percentile for age, documented on two examinations at least 60 days 
apart; or
    4. Brain atrophy, documented by appropriate medically acceptable 
imaging.

OR

    I. Immune suppression and growth failure (see 114.00F7) documented 
by 1 and 2, or by 1 and 3:
    1. CD4 measurement:
    a. For children from birth to attainment of age 5, CD4 percentage of 
less than 20 percent; or
    b. For children from age 5 to attainment of age 18, absolute CD4 
count of less than 200 cells/mm\3\ or CD4 percentage of less than 14 
percent; and
    2. For children from birth to attainment of age 2, three weight-for-
length measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate weight-for-
length table under 105.08B1; or
    3. For children from age 2 to attainment of age 18, three BMI-for-
age measurements that are:
    a. Within a consecutive 12-month period; and
    b. At least 60 days apart; and
    c. Less than the third percentile on the appropriate BMI-for-age 
table under 105.08B2.

[50 FR 35066, Aug. 28, 1985]

[[Page 642]]


    Editorial Note: For Federal Register citations affecting appendix 1, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and at www.fdsys.gov.



 Sec. Appendix 2 to Subpart P of Part 404--Medical-Vocational Guidelines

Sec.

200.00  Introduction.
201.00  Maximum sustained work capability limited to sedentary work as a 
          result of severe medically determinable impairment(s).
202.00  Maximum sustained work capability limited to light work as a 
          result of severe medically determinable impairment(s).
203.00  Maximum sustained work capability limited to medium work as a 
          result of severe medically determinable impairment(s).
204.00  Maximum sustained work capability limited to heavy work (or very 
          heavy work) as a result of severe medically determinable 
          impairment(s).

    200.00 Introduction. (a) The following rules reflect the major 
functional and vocational patterns which are encountered in cases which 
cannot be evaluated on medical considerations alone, where an individual 
with a severe medically determinable physical or mental impairment(s) is 
not engaging in substantial gainful activity and the individual's 
impairment(s) prevents the performance of his or her vocationally 
relevant past work. They also reflect the analysis of the various 
vocational factors (i.e., age, education, and work experience) in 
combination with the individual's residual functional capacity (used to 
determine his or her maximum sustained work capability for sedentary, 
light, medium, heavy, or very heavy work) in evaluating the individual's 
ability to engage in substantial gainful activity in other than his or 
her vocationally relevant past work. Where the findings of fact made 
with respect to a particular individual's vocational factors and 
residual functional capacity coincide with all of the criteria of a 
particular rule, the rule directs a conclusion as to whether the 
individual is or is not disabled. However, each of these findings of 
fact is subject to rebuttal and the individual may present evidence to 
refute such findings. Where any one of the findings of fact does not 
coincide with the corresponding criterion of a rule, the rule does not 
apply in that particular case and, accordingly, does not direct a 
conclusion of disabled or not disabled. In any instance where a rule 
does not apply, full consideration must be given to all of the relevant 
facts of the case in accordance with the definitions and discussions of 
each factor in the appropriate sections of the regulations.
    (b) The existence of jobs in the national economy is reflected in 
the ``Decisions'' shown in the rules; i.e., in promulgating the rules, 
administrative notice has been taken of the numbers of unskilled jobs 
that exist throughout the national economy at the various functional 
levels (sedentary, light, medium, heavy, and very heavy) as supported by 
the ``Dictionary of Occupational Titles'' and the ``Occupational Outlook 
Handbook,'' published by the Department of Labor; the ``County Business 
Patterns'' and ``Census Surveys'' published by the Bureau of the Census; 
and occupational surveys of light and sedentary jobs prepared for the 
Social Security Administration by various State employment agencies. 
Thus, when all factors coincide with the criteria of a rule, the 
existence of such jobs is established. However, the existence of such 
jobs for individuals whose remaining functional capacity or other 
factors do not coincide with the criteria of a rule must be further 
considered in terms of what kinds of jobs or types of work may be either 
additionally indicated or precluded.
    (c) In the application of the rules, the individual's residual 
functional capacity (i.e., the maximum degree to which the individual 
retains the capacity for sustained performance of the physical-mental 
requirements of jobs), age, education, and work experience must first be 
determined. When assessing the person's residual functional capacity, we 
consider his or her symptoms (such as pain), signs, and laboratory 
findings together with other evidence we obtain.
    (d) The correct disability decision (i.e., on the issue of ability 
to engage in substantial gainful activity) is found by then locating the 
individual's specific vocational profile. If an individual's specific 
profile is not listed within this appendix 2, a conclusion of disabled 
or not disabled is not directed. Thus, for example, an individual's 
ability to engage in substantial gainful work where his or her residual 
functional capacity falls between the ranges of work indicated in the 
rules (e.g., the individual who can perform more than light but less 
than medium work), is decided on the basis of the principles and 
definitions in the regulations, giving consideration to the rules for 
specific case situations in this appendix 2. These rules represent 
various combinations of exertional capabilities, age, education and work 
experience and also provide an overall structure for evaluation of those 
cases in which the judgments as to each factor do not coincide with 
those of any specific rule. Thus, when the necessary judgments have been 
made as to each factor and it is found that no specific rule applies, 
the rules still provide guidance for decisionmaking, such as in cases 
involving combinations of impairments. For example, if strength 
limitations resulting from an

[[Page 643]]

individual's impairment(s) considered with the judgments made as to the 
individual's age, education and work experience correspond to (or 
closely approximate) the factors of a particular rule, the adjudicator 
then has a frame of reference for considering the jobs or types of work 
precluded by other, nonexertional impairments in terms of numbers of 
jobs remaining for a particular individual.
    (e) Since the rules are predicated on an individual's having an 
impairment which manifests itself by limitations in meeting the strength 
requirements of jobs, they may not be fully applicable where the nature 
of an individual's impairment does not result in such limitations, e.g., 
certain mental, sensory, or skin impairments. In addition, some 
impairments may result solely in postural and manipulative limitations 
or environmental restrictions. Environmental restrictions are those 
restrictions which result in inability to tolerate some physical 
feature(s) of work settings that occur in certain industries or types of 
work, e.g., an inability to tolerate dust or fumes.
    (1) In the evaluation of disability where the individual has solely 
a nonexertional type of impairment, determination as to whether 
disability exists shall be based on the principles in the appropriate 
sections of the regulations, giving consideration to the rules for 
specific case situations in this appendix 2. The rules do not direct 
factual conclusions of disabled or not disabled for individuals with 
solely nonexertional types of impairments.
    (2) However, where an individual has an impairment or combination of 
impairments resulting in both strength limitations and nonexertional 
limitations, the rules in this subpart are considered in determining 
first whether a finding of disabled may be possible based on the 
strength limitations alone and, if not, the rule(s) reflecting the 
individual's maximum residual strength capabilities, age, education, and 
work experience provide a framework for consideration of how much the 
individual's work capability is further diminished in terms of any types 
of jobs that would be contraindicated by the nonexertional limitations. 
Also, in these combinations of nonexertional and exertional limitations 
which cannot be wholly determined under the rules in this appendix 2, 
full consideration must be given to all of the relevant facts in the 
case in accordance with the definitions and discussions of each factor 
in the appropriate sections of the regulations, which will provide 
insight into the adjudicative weight to be accorded each factor.
    201.00 Maximum sustained work capability limited to sedentary work 
as a result of severe medically determinable impairment(s). (a) Most 
sedentary occupations fall within the skilled, semi-skilled, 
professional, administrative, technical, clerical, and benchwork 
classifications. Approximately 200 separate unskilled sedentary 
occupations can be identified, each representing numerous jobs in the 
national economy. Approximately 85 percent of these jobs are in the 
machine trades and benchwork occupational categories. These jobs 
(unskilled sedentary occupations) may be performed after a short 
demonstration or within 30 days.
    (b) These unskilled sedentary occupations are standard within the 
industries in which they exist. While sedentary work represents a 
significantly restricted range of work, this range in itself is not so 
prohibitively restricted as to negate work capability for substantial 
gainful activity.
    (c) Vocational adjustment to sedentary work may be expected where 
the individual has special skills or experience relevant to sedentary 
work or where age and basic educational competences provide sufficient 
occupational mobility to adapt to the major segment of unskilled 
sedentary work. Inability to engage in substantial gainful activity 
would be indicated where an individual who is restricted to sedentary 
work because of a severe medically determinable impairment lacks special 
skills or experience relevant to sedentary work, lacks educational 
qualifications relevant to most sedentary work (e.g., has a limited 
education or less) and the individual's age, though not necessarily 
advanced, is a factor which significantly limits vocational 
adaptability.
    (d) The adversity of functional restrictions to sedentary work at 
advanced age (55 and over) for individuals with no relevant past work or 
who can no longer perform vocationally relevant past work and have no 
transferable skills, warrants a finding of disabled in the absence of 
the rare situation where the individual has recently completed education 
which provides a basis for direct entry into skilled sedentary work. 
Advanced age and a history of unskilled work or no work experience would 
ordinarily offset any vocational advantages that might accrue by reason 
of any remote past education, whether it is more or less than limited 
education.
    (e) The presence of acquired skills that are readily transferable to 
a significant range of skilled work within an individual's residual 
functional capacity would ordinarily warrant a finding of ability to 
engage in substantial gainful activity regardless of the adversity of 
age, or whether the individual's formal education is commensurate with 
his or her demonstrated skill level. The acquisition of work skills 
demonstrates the ability to perform work at the level of complexity 
demonstrated by the skill level attained regardless of the individual's 
formal educational attainments.
    (f) In order to find transferability of skills to skilled sedentary 
work for individuals who are of advanced age (55 and over), there

[[Page 644]]

must be very little, if any, vocational adjustment required in terms of 
tools, work processes, work settings, or the industry.
    (g) Individuals approaching advanced age (age 50-54) may be 
significantly limited in vocational adaptability if they are restricted 
to sedentary work. When such individuals have no past work experience or 
can no longer perform vocationally relevant past work and have no 
transferable skills, a finding of disabled ordinarily obtains. However, 
recently completed education which provides for direct entry into 
sedentary work will preclude such a finding. For this age group, even a 
high school education or more (ordinarily completed in the remote past) 
would have little impact for effecting a vocational adjustment unless 
relevant work experience reflects use of such education.
    (h)(1) The term younger individual is used to denote an individual 
age 18 through 49. For individuals who are age 45-49, age is a less 
advantageous factor for making an adjustment to other work than for 
those who are age 18-44. Accordingly, a finding of ``disabled'' is 
warranted for individuals age 45-49 who:
    (i) Are restricted to sedentary work,
    (ii) Are unskilled or have no transferable skills,
    (iii) Have no past relevant work or can no longer perform past 
relevant work, and
    (iv) Are unable to communicate in English, or are able to speak and 
understand English but are unable to read or write in English.
    (2) For individuals who are under age 45, age is a more advantageous 
factor for making an adjustment to other work. It is usually not a 
significant factor in limiting such individuals' ability to make an 
adjustment to other work, including an adjustment to unskilled sedentary 
work, even when the individuals are unable to communicate in English or 
are illiterate in English.
    (3) Nevertheless, a decision of ``disabled'' may be appropriate for 
some individuals under age 45 (or individuals age 45-49 for whom rule 
201.17 does not direct a decision of disabled) who do not have the 
ability to perform a full range of sedentary work. However, the 
inability to perform a full range of sedentary work does not necessarily 
equate with a finding of ``disabled.'' Whether an individual will be 
able to make an adjustment to other work requires an adjudicative 
assessment of factors such as the type and extent of the individual's 
limitations or restrictions and the extent of the erosion of the 
occupational base. It requires an individualized determination that 
considers the impact of the limitations or restrictions on the number of 
sedentary, unskilled occupations or the total number of jobs to which 
the individual may be able to adjust, considering his or her age, 
education and work experience, including any transferable skills or 
education providing for direct entry into skilled work.
    (4) ``Sedentary work'' represents a significantly restricted range 
of work, and individuals with a maximum sustained work capability 
limited to sedentary work have very serious functional limitations. 
Therefore, as with any case, a finding that an individual is limited to 
less than the full range of sedentary work will be based on careful 
consideration of the evidence of the individual's medical impairment(s) 
and the limitations and restrictions attributable to it. Such evidence 
must support the finding that the individual's residual functional 
capacity is limited to less than the full range of sedentary work.
    (i) While illiteracy or the inability to communicate in English may 
significantly limit an individual's vocational scope, the primary work 
functions in the bulk of unskilled work relate to working with things 
(rather than with data or people) and in these work functions at the 
unskilled level, literacy or ability to communicate in English has the 
least significance. Similarly the lack of relevant work experience would 
have little significance since the bulk of unskilled jobs require no 
qualifying work experience. Thus, the functional capability for a full 
range of sedentary work represents sufficient numbers of jobs to 
indicate substantial vocational scope for those individuals age 18-44 
even if they are illiterate or unable to communicate in English.

   Table No. 1--Residual Functional Capacity: Maximum Sustained Work Capability Limited to Sedentary Work as a
                              Result of Severe Medically Determinable Impairment(s)
----------------------------------------------------------------------------------------------------------------
                                                                         Previous work
      Rule                  Age                   Education                experience              Decision
----------------------------------------------------------------------------------------------------------------
201.01..........  Advanced age...........  Limited or less........  Unskilled or none......  Disabled
201.02..........  ......do...............  ......do...............  Skilled or semiskilled--     Do.
                                                                     skills not
                                                                     transferable \1\.
201.03..........  ......do...............  ......do...............  Skilled or semiskilled-- Not disabled
                                                                     skills transferable
                                                                     \1\.
201.04..........  ......do...............  High school graduate or  Unskilled or none......  Disabled
                                            more--does not provide
                                            for direct entry into
                                            skilled work \2\.
201.05..........  ......do...............  High school graduate or  ......do...............  Not disabled
                                            more--provides for
                                            direct entry into
                                            skilled work \2\.

[[Page 645]]

 
201.06..........  ......do...............  High school graduate or  Skilled or semiskilled-- Disabled
                                            more--does not provide   skills not
                                            for direct entry into    transferable \1\.
                                            skilled work \2\.
201.07..........  ......do...............  ......do...............  Skilled or semiskilled-- Not disabled
                                                                     skills transferable
                                                                     \1\.
201.08..........  ......do...............  High school graduate or  Skilled or semiskilled--     Do.
                                            more--provides for       skills not
                                            direct entry into        transferable \1\.
                                            skilled work \2\.
201.09..........  Closely approaching      Limited or less........  Unskilled or none......  Disabled
                   advanced age.
201.10..........  ......do...............  ......do...............  Skilled or semiskilled--     Do.
                                                                     skills not
                                                                     transferable.
201.11..........  ......do...............  ......do...............  Skilled or semiskilled-- Not disabled
                                                                     skills transferable.
201.12..........  ......do...............  High school graduate or  Unskilled or none......  Disabled
                                            more--does not provide
                                            for direct entry into
                                            skilled work \3\.
201.13..........  ......do...............  High school graduate or  ......do...............  Not disabled
                                            more--provides for
                                            direct entry into
                                            skilled work \3\.
201.14..........  ......do...............  High school graduate or  Skilled or semiskilled-- Disabled
                                            more--does not provide   skills not
                                            for direct entry into    transferable.
                                            skilled work \3\.
201.15..........  ......do...............  ......do...............  Skilled or semiskilled-- Not disabled
                                                                     skills transferable.
201.16..........  ......do...............  High school graduate or  Skilled or semiskilled--     Do.
                                            more--provides for       skills not
                                            direct entry into        transferable.
                                            skilled work \3\.
201.17..........  Younger individual age   Illiterate or unable to  Unskilled or none......  Disabled
                   45-49.                   communicate in English.
201.18..........  ......do...............  Limited or less--at      ......do...............  Not disabled
                                            least literate and
                                            able to communicate in
                                            English.
201.19..........  ......do...............  Limited or less........  Skilled or semiskilled--     Do.
                                                                     skills not
                                                                     transferable.
201.20..........  ......do...............  ......do...............  Skilled or semiskilled--     Do.
                                                                     skills transferable.
201.21..........  ......do...............  High school graduate or  Skilled or semiskilled--     Do.
                                            more.                    skills not
                                                                     transferable.
201.22..........  ......do...............  ......do...............  Skilled or semiskilled--     Do.
                                                                     skills transferable.
201.23..........  Younger individual age   Illiterate or unable to  Unskilled or none......      Do.\4\
                   18-44.                   communicate in English.
201.24..........  ......do...............  Limited or less--at      ......do...............      Do.\4\
                                            least literate and
                                            able to communicate in
                                            English.
201.25..........  ......do...............  Limited or less........  Skilled or semiskilled--     Do.\4\
                                                                     skills not
                                                                     transferable.
201.26..........  ......do...............  ......do...............  Skilled or semiskilled--     Do.\4\
                                                                     skills transferable.
201.27..........  ......do...............  High school graduate or  Unskilled or none......      Do.\4\
                                            more.
201.28..........  ......do...............  ......do...............  Skilled or semiskilled--     Do.\4\
                                                                     skills not
                                                                     transferable.
201.29..........  ......do...............  ......do...............  Skilled or semiskilled--     Do.\4\
                                                                     skills transferable.
----------------------------------------------------------------------------------------------------------------
\1\ See 201.00(f).
\2\ See 201.00(d).
\3\ See 201.00(g).
\4\ See 201.00(h).

    202.00  Maximum sustained work capability limited to light work as a 
result of severe medically determinable impairment(s). (a) The 
functional capacity to perform a full range of light work includes the 
functional capacity to perform sedentary as well as light work. 
Approximately 1,600 separate sedentary and light unskilled occupations 
can be identified in eight broad occupational categories, each 
occupation representing numerous jobs in the national economy. These 
jobs can be performed after a short demonstration or within 30 days, and 
do not require special skills or experience.
    (b) The functional capacity to perform a wide or full range of light 
work represents

[[Page 646]]

substantial work capability compatible with making a work adjustment to 
substantial numbers of unskilled jobs and, thus, generally provides 
sufficient occupational mobility even for severely impaired individuals 
who are not of advanced age and have sufficient educational competences 
for unskilled work.
    (c) However, for individuals of advanced age who can no longer 
perform vocationally relevant past work and who have a history of 
unskilled work experience, or who have only skills that are not readily 
transferable to a significant range of semi-skilled or skilled work that 
is within the individual's functional capacity, or who have no work 
experience, the limitations in vocational adaptability represented by 
functional restriction to light work warrant a finding of disabled. 
Ordinarily, even a high school education or more which was completed in 
the remote past will have little positive impact on effecting a 
vocational adjustment unless relevant work experience reflects use of 
such education.
    (d) Where the same factors in paragraph (c) of this section 
regarding education and work experience are present, but where age, 
though not advanced, is a factor which significantly limits vocational 
adaptability (i.e., closely approaching advanced age, 50-54) and an 
individual's vocational scope is further significantly limited by 
illiteracy or inability to communicate in English, a finding of disabled 
is warranted.
    (e) The presence of acquired skills that are readily transferable to 
a significant range of semi-skilled or skilled work within an 
individual's residual functional capacity would ordinarily warrant a 
finding of not disabled regardless of the adversity of age, or whether 
the individual's formal education is commensurate with his or her 
demonstrated skill level. The acquisition of work skills demonstrates 
the ability to perform work at the level of complexity demonstrated by 
the skill level attained regardless of the individual's formal 
educational attainments.
    (f) For a finding of transferability of skills to light work for 
persons of advanced age who are closely approaching retirement age (age 
60 or older), there must be very little, if any, vocational adjustment 
required in terms of tools, work processes, work settings, or the 
industry.
    (g) While illiteracy or the inability to communicate in English may 
significantly limit an individual's vocational scope, the primary work 
functions in the bulk of unskilled work relate to working with things 
(rather than with data or people) and in these work functions at the 
unskilled level, literacy or ability to communicate in English has the 
least significance. Similarly, the lack of relevant work experience 
would have little significance since the bulk of unskilled jobs require 
no qualifying work experience. The capability for light work, which 
includes the ability to do sedentary work, represents the capability for 
substantial numbers of such jobs. This, in turn, represents substantial 
vocational scope for younger individuals (age 18-49) even if illiterate 
or unable to communicate in English.

 Table No. 2--Residual Functional Capacity: Maximum Sustained Work Capability Limited to Light Work as a Result
                                 of Severe Medically Determinable Impairment(s)
----------------------------------------------------------------------------------------------------------------
                                                                         Previous work
         Rule                    Age                 Education            experience              Decision
----------------------------------------------------------------------------------------------------------------
202.01................  Advanced age.........  Limited or less.....  Unskilled or none...  Disabled.
202.02................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
202.03................  ......do.............  ......do............  Skilled or            Not disabled.
                                                                      semiskilled--skills
                                                                      transferable \1\.
202.04................  ......do.............  High school graduate  Unskilled or none...  Disabled.
                                                or more--does not
                                                provide for direct
                                                entry into skilled
                                                work \2\.
202.05................  ......do.............  High school graduate  ......do............  Not disabled.
                                                or more--provides
                                                for direct entry
                                                into skilled work
                                                \2\.
202.06................  ......do.............  High school graduate  Skilled or            Disabled.
                                                or more--does not     semiskilled--skills
                                                provide for direct    not transferable.
                                                entry into skilled
                                                work \2\.
202.07................  ......do.............  ......do............  Skilled or            Not disabled.
                                                                      semiskilled--skills
                                                                      transferable \2\.
202.08................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--provides     semiskilled--skills
                                                for direct entry      not transferable.
                                                into skilled work
                                                \2\.
202.09................  Closely approaching    Illiterate or unable  Unskilled or none...  Disabled.
                         advanced age.          to communicate in
                                                English.
202.10................  ......do.............  Limited or less--at   ......do............  Not disabled.
                                                least literate and
                                                able to communicate
                                                in English.

[[Page 647]]

 
202.11................  ......do.............  Limited or less.....  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
202.12................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
202.13................  ......do.............  High school graduate  Unskilled or none...      Do.
                                                or more.
202.14................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
202.15................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
202.16................  Younger individual...  Illiterate or unable  Unskilled or none...      Do.
                                                to communicate in
                                                English.
202.17................  ......do.............  Limited or less--at   ......do............      Do.
                                                least literate and
                                                able to communicate
                                                in English.
202.18................  ......do.............  Limited or less.....  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
202.19................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
202.20................  ......do.............  High school graduate  Unskilled or none...      Do.
                                                or more.
202.21................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
202.22................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
----------------------------------------------------------------------------------------------------------------
\1\ See 202.00(f).
\2\ See 202.00(c).

    203.00 Maximum sustained work capability limited to medium work as a 
result of severe medically determinable impairment(s). (a) The 
functional capacity to perform medium work includes the functional 
capacity to perform sedentary, light, and medium work. Approximately 
2,500 separate sedentary, light, and medium occupations can be 
identified, each occupation representing numerous jobs in the national 
economy which do not require skills or previous experience and which can 
be performed after a short demonstration or within 30 days.
    (b) The functional capacity to perform medium work represents such 
substantial work capability at even the unskilled level that a finding 
of disabled is ordinarily not warranted in cases where a severely 
impaired person retains the functional capacity to perform medium work. 
Even the adversity of advanced age (55 or over) and a work history of 
unskilled work may be offset by the substantial work capability 
represented by the functional capacity to perform medium work. However, 
we will find that a person who (1) has a marginal education, (2) has 
work experience of 35 years or more doing only arduous unskilled 
physical labor, (3) is not working, and (4) is no longer able to do this 
kind of work because of a severe impairment(s) is disabled, even though 
the person is able to do medium work. (See Sec. 404.1562(a) in this 
subpart and Sec. 416.962(a) in subpart I of part 416.)
    (c) However, the absence of any relevant work experience becomes a 
more significant adversity for persons of advanced age (55 and over). 
Accordingly, this factor, in combination with a limited education or 
less, militates against making a vocational adjustment to even this 
substantial range of work and a finding of disabled is appropriate. 
Further, for persons closely approaching retirement age (60 or older) 
with a work history of unskilled work and with marginal education or 
less, a finding of disabled is appropriate.

 Table No. 3--Residual Functional Capacity: Maximum Sustained Work Capability Limited to Medium Work as a Result
                                 of Severe Medically Determinable Impairment(s)
----------------------------------------------------------------------------------------------------------------
                                                                         Previous work
         Rule                    Age                 Education            experience              Decision
----------------------------------------------------------------------------------------------------------------
203.01................  Closely approaching    Marginal or none....  Unskilled or none...  Disabled.
                         retirement age.
203.02................  ......do.............  Limited or less.....  None................      Do.
203.03................  ......do.............  Limited.............  Unskilled...........  Not disabled.
203.04................  ......do.............  Limited or less.....  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
203.05................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
203.06................  ......do.............  High school graduate  Unskilled or none...      Do.
                                                or more.

[[Page 648]]

 
203.07................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--does not     semiskilled--skills
                                                provide for direct    not transferable.
                                                entry into skilled
                                                work.
203.08................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
203.09................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--provides     semiskilled--skills
                                                for direct entry      not transferable.
                                                into skilled work.
203.10................  Advanced age.........  Limited or less.....  None................  Disabled.
203.11................  ......do.............  ......do............  Unskilled...........  Not disabled.
203.12................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
203.13................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
203.14................  ......do.............  High school graduate  Unskilled or none...      Do.
                                                or more.
203.15................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--does not     semiskilled--skills
                                                provide for direct    not transferable.
                                                entry into skilled
                                                work.
203.16................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
203.17................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--provides     semiskilled--skills
                                                for direct entry      not transferable.
                                                into skilled work.
203.18................  Closely approaching    Limited or less.....  Unskilled or none...      Do.
                         advanced age.
203.19................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
203.20................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
203.21................  ......do.............  High school graduate  Unskilled or none...      Do.
                                                or more.
203.22................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--does not     semiskilled--skills
                                                provide for direct    not transferable.
                                                entry into skilled
                                                work.
203.23................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
203.24................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--provides     semiskilled--skills
                                                for direct entry      not transferable.
                                                into skilled work.
203.25................  Younger individual...  Limited or less.....  Unskilled or none...      Do.
203.26................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      not transferable.
203.27................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
203.28................  ......do.............  High school graduate  Unskilled or none...      Do.
                                                or more.
203.29................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--does not     semiskilled--skills
                                                provide for direct    not transferable.
                                                entry into skilled
                                                work.
203.30................  ......do.............  ......do............  Skilled or                Do.
                                                                      semiskilled--skills
                                                                      transferable.
203.31................  ......do.............  High school graduate  Skilled or                Do.
                                                or more--provides     semiskilled--skills
                                                for direct entry      not transferable.
                                                into skilled work.
----------------------------------------------------------------------------------------------------------------

    204.00 Maximum sustained work capability limited to heavy work (or 
very heavy work) as a result of severe medically determinable 
impairment(s). The residual functional capacity to perform heavy work or 
very heavy work includes the functional capability for work at the 
lesser functional levels as well, and represents substantial work 
capability for jobs in the national economy at all skill and physical 
demand levels. Individuals who retain the functional capacity to perform 
heavy work (or very heavy work) ordinarily will not have a severe 
impairment or will be able to do their past work--either of which would 
have already provided a basis for a decision of ``not disabled''. 
Environmental restrictions ordinarily would not significantly affect the 
range of work existing in the national economy for individuals with the 
physical capability for heavy work (or very heavy work). Thus an 
impairment which does not preclude heavy work (or very heavy work) would 
not ordinarily be the primary reason for unemployment, and generally is 
sufficient for a finding of not disabled, even though age, education, 
and skill level of

[[Page 649]]

prior work experience may be considered adverse.

[45 FR 55584, Aug. 20, 1980, as amended at 56 FR 57944, Nov. 14, 1991; 
68 FR 51164, Aug. 26, 2003; 73 FR 64197, Oct. 29, 2008]



                 Subpart Q_Determinations of Disability

    Authority: Secs. 205(a), 221, and 702(a)(5) of the Social Security 
Act (42 U.S.C. 405(a), 421, and 902(a)(5)).

    Source: 46 FR 29204, May 29, 1981, unless otherwise noted.

                           General Provisions



Sec. 404.1601  Purpose and scope.

    This subpart describes the standards of performance and 
administrative requirements and procedures for States making 
determinations of disability for the Commissioner under title II of the 
Act. It also establishes the Commissioner's responsibilities in carrying 
out the disability determination function.
    (a) Sections 404.1601 through 404.1603 describe the purpose of the 
regulations and the meaning of terms frequently used in the regulations. 
They also briefly set forth the responsibilities of the Commissioner and 
the States covered in detail in other sections.
    (b) Sections 404.1610 through 404.1618 describe the Commissioner's 
and the State's responsibilities in performing the disability 
determination function.
    (c) Sections 404.1620 through 404.1633 describe the administrative 
responsibilities and requirements of the States. The corresponding role 
of the Commissioner is also set out.
    (d) Sections 404.1640 through 404.1650 describe the performance 
accuracy and processing time standards for measuring State agency 
performance.
    (e) Sections 404.1660 through 404.1661 describe when and what kind 
of assistance the Commissioner will provide State agencies to help them 
improve performance.
    (f) Sections 404.1670 through 404.1675 describe the level of 
performance below which the Commissioner will consider a State agency to 
be substantially failing to make disability determinations consistent 
with the regulations and other written guidelines and the resulting 
action the Commissioner will take.
    (g) Sections 404.1680 through 404.1683 describe the rules for 
resolving disputes concerning fiscal issues and providing hearings when 
we propose to find that a State is in substantial failure.
    (h) Sections 404.1690 through 404.1694 describe when and what action 
the Commissioner will take and what action the State will be expected to 
take if the Commissioner assumes the disability determination function 
from a State agency.

[46 FR 29204, May 29, 1981, as amended at 62 FR 38451, July 18, 1997; 71 
FR 16445, Mar. 31, 2006; 76 FR 24808, May 3, 2011]



Sec. 404.1602  Definitions.

    For purposes of this subpart:
    Act means the Social Security Act, as amended.
    Class or classes of cases means the categories into which disability 
claims are divided according to their characteristics.
    Commissioner means the Commissioner of Social Security or his or her 
authorized designee.
    Compassionate allowance means a determination or decision we make 
under a process that identifies for expedited handling claims that 
involve impairments that invariably qualify under the Listing of 
Impairments in appendix 1 to subpart P based on minimal, but sufficient, 
objective medical evidence.
    Determination of disability or disability determination means one or 
more of the following decisions:
    (a) Whether or not a person is under a disability;
    (b) The date a person's disability began; or
    (c) The date a person's disability ended.
    Disability means disability or blindness as defined in sections 
216(i) and 223 of the Act or as defined in title IV of the Federal Mine 
Safety and Health Act of 1977, as amended.
    Disability determination function means making determinations as to 
disability and carrying out related administrative and other 
responsibilities.
    Disability program means, as appropriate, the Federal programs for 
providing disability insurance benefits

[[Page 650]]

under title II of the Act and disability benefits under title IV of the 
Federal Mine Safety and Health Act of 1977, as amended.
    Initial means the first level of disability adjudication.
    Other written guidelines means written issuances such as Social 
Security Rulings and memoranda by the Commissioner of Social Security, 
the Deputy Commissioner for Programs and Policy, or the Associate 
Commissioner for Disability and the procedures, guides, and operating 
instructions in the Disability Insurance sections of the Program 
Operations Manual System, that are instructive, interpretive, 
clarifying, and/or administrative and not designated as advisory or 
discretionary. The purpose of including the foregoing material in the 
definition is to assure uniform national application of program 
standards and service delivery to the public.
    Quick disability determination means an initial determination on a 
claim that we have identified as one that reflects a high degree of 
probability that you will be found disabled and where we expect that 
your allegations will be easily and quickly verified.
    Regulations means regulations in this subpart issued under sections 
205(a), 221 and 1102 of the Act, unless otherwise indicated.
    State means any of the 50 States of the United States, the 
Commonwealth of Puerto Rico, the District of Columbia, or Guam. It 
includes the State agency.
    State agency means that agency of a State which has been designated 
by the State to carry out the disability determination function.
    We, us, and our refers to the Social Security Administration (SSA).

[46 FR 29204, May 29, 1981, as amended at 56 FR 11018, Mar. 14, 1991; 62 
FR 38452, July 18, 1997; 72 FR 51177, Sept. 6, 2007; 75 FR 62682, Oct. 
13, 2010]



Sec. 404.1603  Basic responsibilities for us and the State.

    (a) General. We will work with the State to provide and maintain an 
effective system for processing claims of those who apply for and who 
are receiving benefits under the disability program. We will provide 
program standards, leadership, and oversight. We do not intend to become 
involved in the State's ongoing management of the program except as is 
necessary and in accordance with these regulations. The State will 
comply with our regulations and other written guidelines.
    (b) Our responsibilities. We will:
    (1) Periodically review the regulations and other written guidelines 
to determine whether they insure effective and uniform administration of 
the disability program. To the extent feasible, we will consult with and 
take into consideration the experience of the States in issuing 
regulations and guidelines necessary to insure effective and uniform 
administration of the disability program;
    (2) Provide training materials or in some instances conduct or 
specify training, see Sec. 404.1622;
    (3) Provide funds to the State agency for the necessary cost of 
performing the disability determination function, see Sec. 404.1626;
    (4) Monitor and evaluate the performance of the State agency under 
the established standards, see Secs. 404.1644 and 404.1645; and
    (5) Maintain liaison with the medical profession nationally and with 
national organizations and agencies whose interests or activities may 
affect the disability program.
    (c) Responsibilities of the State. The State will:
    (1) Provide management needed to insure that the State agency 
carries out the disability determination function so that disability 
determinations are made accurately and promptly;
    (2) Provide an organizational structure, adequate facilities, 
qualified personnel, medical consultant services, designated quick 
disability determination examiners (Secs. 404.1619 and 404.1620(c)), and 
a quality assurance function (Secs. 404.1620 through 404.1624);
    (3) Furnish reports and records relating to the administration of 
the disability program (Sec. 404.1625);
    (4) Submit budgets (Sec. 404.1626);
    (5) Cooperate with audits (Sec. 404.1627);
    (6) Insure that all applicants for and recipients of disability 
benefits are treated equally and courteously;

[[Page 651]]

    (7) Be responsible for property used for disability program purposes 
(Sec. 404.1628);
    (8) Take part in the research and demonstration projects 
(Sec. 404.1629);
    (9) Coordinate with other agencies (Sec. 404.1630);
    (10) Safeguard the records created by the State in performing the 
disability determination function (Sec. 404.1631);
    (11) Comply with other provisions of the Federal law and regulations 
that apply to the State in performing the disability determination 
function;
    (12) Comply with other written guidelines (Sec. 404.1633);
    (13) Maintain liaison with the medical profession and organizations 
that may facilitate performing the disability determination function; 
and
    (14) Assist us in other ways that we determine may promote the 
objectives of effective and uniform administration.

[46 FR 29204, May 29, 1981, as amended at 72 FR 51177, Sept. 6, 2007]

  Responsibilities for Performing the Disability Determination Function



Sec. 404.1610  How a State notifies us that it wishes to perform the 
disability determination function.

    (a) Deemed notice. Any State that has in effect as of June 1, 1981, 
an agreement with us to make disability determinations will be deemed to 
have given us notice that it wishes to perform the disability 
determination function, in lieu of continuing the agreement in effect 
after June 1, 1981.
    (b) Written notice. After June 1, 1981, a State not making 
disability determinations that wishes to perform the disability 
determination function under these regulations must notify us in 
writing. The notice must be from an official authorized to act for the 
State for this purpose. The State will provide an opinion from the 
State's Attorney General verifying the authority of the official who 
sent the notice to act for the State.



Sec. 404.1611  How we notify a State whether it may perform the 
disability determination function.

    (a) If a State notifies us in writing that it wishes to perform the 
disability determination function, we will notify the State in writing 
whether or not it may perform the function. The State will begin 
performing the disability determination function beginning with the 
month we and the State agree upon.
    (b) If we have previously found that a State agency has 
substantially failed to make disability determinations in accordance 
with the law or these regulations and other written guidelines or if the 
State has previously notified us in writing that it does not wish to 
make disability determinations, the notice will advise the State whether 
the State agency may again make the disability determinations and, if 
so, the date and the conditions under which the State may again make 
them.



Sec. 404.1613  Disability determinations the State makes.

    (a) General rule. A State agency will make determinations of 
disability with respect to all persons in the State except those 
individuals whose cases are in a class specifically excluded by our 
written guidelines. A determination of disability made by the State is 
the determination of the Commissioner, except as described in 
Sec. 404.1503(d)(1).
    (b) New classes of cases. Where any new class or classes of cases 
arise requiring determinations of disability, we will determine the 
conditions under which a State may choose not to make the disability 
determinations. We will provide the State with the necessary funding to 
do the additional work.
    (c) Temporary transfer of classes of cases. We will make disability 
determinations for classes of cases temporarily transferred to us by the 
State agency if the State agency asks us to do so and we agree. The 
State agency will make written arrangements with us which will specify 
the period of time and the class or classes of cases we will do.

[46 FR 29204, May 29, 1981, as amended at 62 FR 38452, July 18, 1997]



Sec. 404.1614  Responsibilities for obtaining evidence to make 
disability determinations.

    (a) We or the State agency will secure from the claimant or other 
sources any evidence the State agency

[[Page 652]]

needs to make a disability determination. When we secure the evidence, 
we will furnish it to the State agency for use in making the disability 
determination.
    (b) At our request, the State agency will obtain and furnish medical 
or other evidence and provide assistance as may be necessary for us to 
carry out our responsibilities--
    (1) For making disability determinations in those classes of cases 
described in the written guidelines for which the State agency does not 
make the determination; or
    (2) Under international agreements with respect to social security 
benefits payable under section 233 of the Act.

[46 FR 29204, May 29, 1981, as amended at 79 FR 33682, June 12, 2014]



Sec. 404.1615  Making disability determinations.

    (a) When making a disability determination, the State agency will 
apply subpart P, part 404, of our regulations.
    (b) The State agency will make disability determinations based only 
on the medical and nonmedical evidence in its files.
    (c) Disability determinations will be made by:
    (1) A State agency medical or psychological consultant and a State 
agency disability examiner;
    (2) A State agency disability examiner alone when there is no 
medical evidence to be evaluated (i.e., no medical evidence exists or we 
are unable, despite making every reasonable effort, to obtain any 
medical evidence that may exist) and the individual fails or refuses, 
without a good reason, to attend a consultative examination (see 
Sec. 404.1518);
    (3) A State agency disability examiner alone if the claim is 
adjudicated under the quick disability determination process (see 
Sec. 404.1619) or the compassionate allowance process (see 
Sec. 404.1602), and the initial or reconsidered determination is fully 
favorable to you. This paragraph (c)(3) will no longer be effective on 
December 28, 2018 unless we terminate it earlier by publication of a 
final rule in the Federal Register; or
    (4) A State agency disability hearing officer.
See Sec. 404.1616 for the definition of medical or psychological 
consultant and Sec. 404.915 for the definition of disability hearing 
officer. The State agency disability examiner and disability hearing 
officer must be qualified to interpret and evaluate medical reports and 
other evidence relating to the claimant's physical or mental impairments 
and as necessary to determine the capacities of the claimant to perform 
substantial gainful activity.
See Sec. 404.1572 for what we mean by substantial gainful activity.
    (d) The State agency will certify each determination of disability 
to us on forms we provide.
    (e) The State agency will furnish us with all the evidence it 
considered in making its determination.
    (f) The State agency will not be responsible for defending in court 
any determination made, or any procedure for making determinations, 
under these regulations.

[52 FR 33926, Sept. 9, 1987, as amended at 56 FR 11018, Mar. 14, 1991; 
61 FR 11135, Mar. 19, 1996; 62 FR 38452, July 18, 1997; 65 FR 34958, 
June 1, 2000; 75 FR 62682, Oct. 13, 2010; 78 FR 66639, Nov. 6, 2013; 79 
FR 51243, Aug. 28, 2014; 80 FR 63093, Oct. 19, 2015; 81 FR 73028, Oct. 
24, 2016; 82 FR 5872, Jan. 18, 2017]



Sec. 404.1616  Medical consultants and psychological consultants.

    (a) What is a medical consultant? A medical consultant is a member 
of a team that makes disability determinations in a State agency (see 
Sec. 404.1615), or who is a member of a team that makes disability 
determinations for us when we make disability determinations ourselves. 
The medical consultant completes the medical portion of the case review 
and any applicable residual functional capacity assessment about all 
physical impairment(s) in a claim.
    (b) What qualifications must a medical consultant have? A medical 
consultant is a licensed physician, as defined in Sec. 404.1502(a)(1).
    (c) What is a psychological consultant? A psychological consultant 
is a member of a team that makes disability determinations in a State 
agency (see Sec. 404.1615), or who is a member of a team that makes 
disability determinations for us when we make disability determinations 
ourselves. The psychological consultant completes the medical portion of 
the case review and any

[[Page 653]]

applicable residual functional capacity assessment about all mental 
impairment(s) in a claim. When we are unable to obtain the services of a 
qualified psychiatrist or psychologist despite making every reasonable 
effort (see Sec. 404.1617) in a claim involving a mental impairment(s), 
a medical consultant will evaluate the mental impairment(s).
    (d) What qualifications must a psychological consultant have? A 
psychological consultant can be either a licensed psychiatrist or 
psychologist. We will only consider a psychologist qualified to be a 
psychological consultant if he or she:
    (1) Is licensed or certified as a psychologist at the independent 
practice level of psychology by the State in which he or she practices; 
and
    (2)(i) Possesses a doctorate degree in psychology from a program in 
clinical psychology of an educational institution accredited by an 
organization recognized by the Council on Post-Secondary Accreditation; 
or
    (ii) Is listed in a national register of health service providers in 
psychology which the Commissioner of Social Security deems appropriate; 
and
    (3) Possesses 2 years of supervised clinical experience as a 
psychologist in health service, at least 1 year of which is post-masters 
degree.
    (e) Cases involving both physical and mental impairments. In a case 
where there is evidence of both physical and mental impairments, the 
medical consultant will evaluate the physical impairments in accordance 
with paragraph (a) of this section, and the psychological consultant 
will evaluate the mental impairment(s) in accordance with paragraph (c) 
of this section.

[82 FR 5873, Jan. 18, 2017]



Sec. 404.1617  Reasonable efforts to obtain review by a physician,
psychiatrist, and psychologist.

    (a) When the evidence of record indicates the existence of a 
physical impairment, the State agency must make every reasonable effort 
to ensure that a medical consultant completes the medical portion of the 
case review and any applicable residual functional capacity assessment. 
When the evidence of record indicates the existence of a mental 
impairment, the State agency must make every reasonable effort to ensure 
that a psychological consultant completes the medical portion of the 
case review and any applicable residual functional capacity assessment. 
The State agency must determine if additional physicians, psychiatrists, 
and psychologists are needed to make the necessary reviews. When it does 
not have sufficient resources to make the necessary reviews, the State 
agency must attempt to obtain the resources needed. If the State agency 
is unable to obtain additional physicians, psychiatrists, and 
psychologists because of low salary rates or fee schedules, it should 
attempt to raise the State agency's levels of compensation to meet the 
prevailing rates for these services. If these efforts are unsuccessful, 
the State agency will seek assistance from us. We will assist the State 
agency as necessary. We will also monitor the State agency's efforts and 
where the State agency is unable to obtain the necessary services, we 
will make every reasonable effort to provide the services using Federal 
resources.
    (b) Federal resources may include the use of Federal contracts for 
the services of qualified psychiatrists and psychologists to review 
mental impairment cases. Where Federal resources are required to perform 
these reviews, which are a basic State agency responsibility, and where 
appropriate, the State agency's budget will be reduced accordingly.
    (c) Where every reasonable effort is made to obtain the services of 
a qualified psychiatrist or psychologist to review a mental impairment 
case, but the professional services are not obtained, a physician who is 
not a psychiatrist will review the mental impairment case. For these 
purposes, every reasonable effort to ensure that a qualified 
psychiatrist or psychologist review mental impairment cases will be 
considered to have been made only after efforts by both State and 
Federal agencies as set forth in paragraphs (a) and (b) of this section 
are made.

[52 FR 33927, Sept. 9, 1987, as amended at 82 FR 5873, Jan. 18, 2017]

[[Page 654]]



Sec. 404.1618  Notifying claimants of the disability determination.

    The State agency will prepare denial notices in accordance with 
subpart J of this part whenever it makes a disability determination 
which is fully or partially unfavorable to the claimant.

[46 FR 29204, May 29, 1981, as amended at 75 FR 33168, June 11, 2010]

                     Quick Disability Determinations



Sec. 404.1619  Quick disability determination process.

    (a) If we identify a claim as one involving a high degree of 
probability that the individual is disabled, and we expect that the 
individual's allegations will be easily and quickly verified, we will 
refer the claim to the State agency for consideration under the quick 
disability determination process pursuant to this section and 
Sec. 404.1620(c).
    (b) If we refer a claim to the State agency for a quick disability 
determination, a designated quick disability determination examiner must 
do all of the following:
    (1) Subject to the provisions in paragraph (c) of this section, make 
the disability determination after consulting with a State agency 
medical or psychological consultant if the State agency disability 
examiner determines consultation is appropriate or if consultation is 
required under Sec. 404.1526(c). The State agency may certify the 
disability determination forms to us without the signature of the 
medical or psychological consultant.
    (2) Make the quick disability determination based only on the 
medical and nonmedical evidence in the file.
    (3) Subject to the provisions in paragraph (c) of this section, make 
the quick disability determination by applying the rules in subpart P of 
this part.
    (c) If the quick disability determination examiner cannot make a 
determination that is fully favorable, or if there is an unresolved 
disagreement between the disability examiner and the medical or 
psychological consultant (except when a disability examiner makes the 
determination alone under Sec. 404.1615(c)(3)), the State agency will 
adjudicate the claim using the regularly applicable procedures in this 
subpart.

[72 FR 51177, Sept. 6, 2007, as amended at 75 FR 62682, Oct. 13, 2010]

            Administrative Responsibilities and Requirements



Sec. 404.1620  General administrative requirements.

    (a) The State will provide the organizational structure, qualified 
personnel, medical consultant services, and a quality assurance function 
sufficient to ensure that disability determinations are made accurately 
and promptly. We may impose specific administrative requirements in 
these areas and in those under ``Administrative Responsibilities and 
Requirements'' in order to establish uniform, national administrative 
practices or to correct the areas of deficiencies which may later cause 
the State to be substantially failing to comply with our regulations or 
other written guidelines. We will notify the State, in writing, of the 
administrative requirements being imposed and of any administrative 
deficiencies it is required to correct. We will allow the State 90 days 
from the date of this notice to make appropriate corrections. Once 
corrected, we will monitor the State's administrative practices for 180 
days. If the State does not meet the requirements or correct all of the 
deficiencies, or, if some of the deficiencies recur, we may initiate 
procedures to determine if the State is substantially failing to follow 
our regulations or other written guidelines.
    (b) The State is responsible for making accurate and prompt 
disability determinations.
    (c) Each State agency will designate experienced disability 
examiners to handle claims we refer to it under Sec. 404.1619(a).

[46 FR 29204, May 29, 1981, as amended at 56 FR 11018, Mar. 14, 1991; 72 
FR 51177, Sept. 6, 2007]



Sec. 404.1621  Personnel.

    (a) Equal employment opportunity. The State will comply with all 
applicable Federal statutes, executive orders and regulations concerned 
with equal employment opportunities.

[[Page 655]]

    (b) Selection, tenure, and compensation. The State agency will, 
except as may be inconsistent with paragraph (a) of this section, adhere 
to applicable State approved personnel standards in the selection, 
tenure, and compensation of any individual employed in the disability 
program.
    (c) Travel. The State will make personnel available to attend 
meetings or workshops as may be sponsored or approved by us for 
furthering the purposes of the disability program.
    (d) Restrictions. Subject to appropriate Federal funding, the State 
will, to the best of its ability, facilitate the processing of 
disability claims by avoiding personnel freezes, restrictions against 
overtime work, or curtailment of facilities or activities.



Sec. 404.1622  Training.

    The State will insure that all employees have an acceptable level of 
competence. We will provide training and other instructional materials 
to facilitate basic and advanced technical proficiency of disability 
staff in order to insure uniformity and effectiveness in the 
administration of the disability program. We will conduct or specify 
training, as appropriate, but only if:
    (a) A State agency's performance approaches unacceptable levels; or
    (b) The material required for the training is complex or the 
capacity of the State to deliver the training is in doubt and uniformity 
of the training is essential.



Sec. 404.1623  Facilities.

    (a) Space, equipment, supplies, and other services. Subject to 
appropriate Federal funding, the State will provide adequate space, 
equipment, supplies, and other services to facilitate making accurate 
and prompt disability determinations.
    (b) Location of facilities. Subject to appropriate Federal funding, 
the State will determine the location where the disability determination 
function is to be performed so that disability determinations are made 
accurately and promptly.
    (c) Access. The State will permit us access to the premises where 
the disability determination function is performed and also where it is 
managed for the purposes of inspecting and obtaining information about 
the work and activities required by our regulations and assuring 
compliance with pertinent Federal statutes and regulations. Access 
includes personal onsite visits and other means, such as 
telecommunications, of contacting the State agency to obtain information 
about its functions. We will contact the State agency and give 
reasonable prior notice of the times and purposes of any visits.

[46 FR 29204, May 29, 1981, as amended at 56 FR 11019, Mar. 14, 1991]



Sec. 404.1624  Medical and other purchased services.

    The State will determine the rates of payment for purchasing medical 
or other services necessary to make determinations of disability. The 
rates may not exceed the highest rate paid by Federal or other agencies 
in the State for the same or similar type of service. The State will 
maintain documentation to support the rates of payment it uses.

[46 FR 29204, May 29, 1981,as amended at 71 FR 16445, Mar. 31, 2006; 76 
FR 24808, May 3, 2011]



Sec. 404.1625  Records and reports.

    (a) The State will establish and maintain the records and furnish 
the schedules, financial, cost, and other reports relating to the 
administration of the disability programs as we may require.
    (b) The State will permit us and the Comptroller General of the 
United States (including duly authorized representatives) access to and 
the right to examine records relating to the work which the State 
performs under these regulations. These records will be retained by the 
State for the periods of time specified for retention of records in the 
Federal Procurement Regulations (41 CFR parts 1-20).



Sec. 404.1626  Fiscal.

    (a) We will give the State funds, in advance or by way of 
reimbursement, for necessary costs in making disability determinations 
under these regulations. Necessary costs are direct as well as indirect 
costs as defined in 41

[[Page 656]]

CFR part 1-15, subpart 1-15.7 of the Federal Procurement Regulations 
System for costs incurred before April 1, 1984; and 48 CFR part 31, 
subpart 31.6 of the Federal Acquisition Regulations System and Federal 
Management Circular A-74-4 \1\ as amended or superseded for costs 
incurred after March 31, 1984.
---------------------------------------------------------------------------

    \1\ The circular is available from the Office of Administration, 
Publications Unit, Rm. G-236, New Executive Office Bldg., Washington, DC 
20503.
---------------------------------------------------------------------------

    (b) The State will submit estimates of anticipated costs in the form 
of a budget at the time and in the manner we require.
    (c) We will notify the State of the amount which will be made 
available to it as well as what anticipated costs are being approved.
    (d) The State may not incur or make expenditures for items of cost 
not approved by us or in excess of the amount we make available to the 
State.
    (e) After the close of a period for which funds have been made 
available to the State, the State will submit a report of its 
expenditures. Based on an audit arranged by the State under Pub. L. 98-
502, the Single Audit Act of 1984, or by the Inspector General of the 
Social Security Administration or based on an audit or review by the 
Social Security Administration (see Sec. 404.1627), we will determine 
whether the expenditures were consistent with cost principles described 
in 41 CFR part 1-15, subpart 1-15.7 for costs incurred before April 1, 
1984; and 48 CFR part 31, subpart 31.6 and Federal Management Circular 
A-741-4 for costs incurred after March 31, 1984: and in other applicable 
written guidelines in effect at the time the expenditures were made or 
incurred.
    (f) Any monies paid to the State which are used for purposes not 
within the scope of these regulations will be paid back to the Treasury 
of the United States.

[46 FR 29204, May 29, 1981, as amended at 56 FR 11019, Mar. 14, 1991; 62 
FR 38452, July 18, 1997]



Sec. 404.1627  Audits.

    (a) Audits performed by the State--(1) Generally. Audits of accounts 
and records pertaining to the administration of the disability program 
under the Act, will be performed by the States in accordance with the 
Single Audit Act of 1984 (Pub. L. 98-502) which establishes audit 
requirements for States receiving Federal assistance. If the audit 
performed by the State meets our program requirements, we will accept 
the findings and recommendations of the audit. The State will make every 
effort to act upon and resolve any items questioned in the audit.
    (2) Questioned items. Items questioned as a result of an audit under 
the Single Audit Act of 1984 of a cross-cutting nature will be resolved 
by the Department of Health and Human Services, Office of Grant and 
Contract Financial Management. A cross-cutting issue is one that 
involves more than one Federal awarding agency. Questioned items 
affecting only the disability program will be resolved by SSA in accord 
with paragraph (b)(2) of this section,
    (3) State appeal of audit determinations. The Office of Grant and 
Contract Financial Management will notify the State of its determination 
on questioned cross-cutting items. If the State disagrees with that 
determination, it may appeal in writing within 60 days of receiving the 
determination. State appeals of a cross-cutting issue as a result of an 
audit under the Single Audit Act of 1984 will be made to the Department 
of Health and Human Services' Departmental Appeals Board. The rules for 
hearings and appeals are provided in 45 CFR part 16.
    (b) Audits performed by the Commissioner--(1) Generally. If the 
State does not perform an audit under the Single Audit Act of 1984 or 
the audit performed is not satisfactory for disability program purposes, 
the books of account and records in the State pertaining to the 
administrations of the disability programs under the Act will be audited 
by the SSA's Inspector General or audited or reviewed by SSA as 
appropriate. These audits or reviews will be conducted to determine 
whether the expenditures were made for the intended purposes and in 
amounts necessary for the proper and efficient administration of the 
disability programs. Audits or reviews will also be

[[Page 657]]

made to inspect the work and activities required by the regulations to 
ensure compliance with pertinent Federal statutes and regulations. The 
State will make every effort to act upon and resolve any items 
questioned in an audit or review.
    (2) Questioned items. Expenditures of State agencies will be audited 
or reviewed, as appropriate, on the basis of cost principles and written 
guidelines in effect at the time the expenditures were made or incurred. 
Both the State and the State agency will be informed and given a full 
explanation of any items questioned. They will be given reasonable time 
to explain items questioned. Any explanation furnished by the State or 
State agency will be given full consideration before a final 
determination is made on the audit or review report.
    (3) State appeal of audit determinations. The appropriate Social 
Security Administration Regional Commissioner will notify the State of 
his or her determination on the audit or review report. If the State 
disagrees with that determination, the State may request reconsideration 
in writing within 60 days of the date of the Regional Commissioner's 
notice of the determination. The written request may be made, through 
the Associate Commissioner, Office of Disability, to the Commissioner of 
Social Security, room 900, Altmeyer Building, 6401 Security Boulevard, 
Baltimore, Maryland 21235. The Commissioner will make a determination 
and notify the State of the decision in writing no later than 90 days 
from the date the Social Security Administration receives the State's 
appeal and all supporting documents. The decision by the Commissioner on 
other than monetary disallowances will be final and binding upon the 
State. The decision by the Commissioner on monetary disallowances will 
be final and binding upon the State unless the State appeals the 
decision in writing to the Department of Health and Human Services, 
Departmental Appeals Board within 30 days after receiving the 
Commissioner's decision. See Sec. 404.1683.

[56 FR 11019, Mar. 14, 1991, as amended at 62 FR 38452, July 18, 1997]



Sec. 404.1628  Property.

    The State will have title to equipment purchased for disability 
program purposes. The State will be responsible for maintaining all 
property it acquires or which we furnish to it for performing the 
disability determination function. The State will identify the equipment 
by labeling and by inventory and will credit the SSA account with the 
fair market value of disposed property.
    In the event we assume the disability determination function from a 
State, ownership of all property and equipment acquired with SSA funds 
will be transferred to us effective on the date the State is notified 
that we are assuming the disability determination function or we are 
notified that the State is terminating the relationship.



Sec. 404.1629  Participation in research and demonstration projects.

    We will invite State participation in federally funded research and 
demonstration projects to assess the effectiveness of the disability 
program and to ascertain the effect of program policy changes. Where we 
determine that State participation is necessary for the project to be 
complete, for example, to provide national uniformity in a claims 
process, State participation is mandatory.



Sec. 404.1630  Coordination with other agencies.

    (a) The State will establish cooperative working relationships with 
other agencies concerned with serving the disabled and, insofar as 
practicable, use their services, facilities, and records to:
    (1) Assist the State in developing evidence and making 
determinations of disability; and
    (2) Insure that referral of disabled or blind persons for 
rehabilitation services will be carried out effectively.
    (b) The State may pay these agencies for the services, facilities, 
or records they provide. The State will include these costs in its 
estimates of anticipated costs and reports of actual expenditures.

[[Page 658]]



Sec. 404.1631  Confidentiality of information and records.

    The State will comply with the confidentiality of information, 
including the security of systems, and records requirements described in 
20 CFR part 401 and pertinent written guidelines (see Sec. 404.1633).



Sec. 404.1632  Other Federal laws and regulations.

    The State will comply with the provisions of other Federal laws and 
regulations that directly affect its responsibilities in carrying out 
the disability determination function; for example, Treasury Department 
regulations on letters of credit (31 CFR part 205).



Sec. 404.1633  Policies and operating instructions.

    (a) We will provide the State agency with written guidelines 
necessary for it to carry out its responsibilities in performing the 
disability determination function.
    (b) The State agency making determinations of disability will comply 
with our written guidelines that are not designated as advisory or 
discretionary. (See Sec. 404.1602 for what we mean by written 
guidelines.)
    (c) A representative group of State agencies will be given an 
opportunity to participate in formulating disability program policies 
that have an affect on their role in carrying out the disability 
determination function. State agencies will also be given an opportunity 
to comment before changes are made in written guidelines unless delay in 
issuing a change may impair service to the public.

[46 FR 29204, May 29, 1981, as amended at 56 FR 11020, Mar. 14, 1991]

                          Performance Standards



Sec. 404.1640  General.

    The following sections provide the procedures and guidelines we use 
to determine whether the State agency is substantially complying with 
our regulations and other written guidelines, including meeting 
established national performance standards. We use performance standards 
to help assure effective and uniform administration of our disability 
programs and to measure whether the performance of the disability 
determination function by each State agency is acceptable. Also, the 
standards are designed to improve overall State agency performance in 
the disability determination process and to ensure that benefits are 
made available to all eligible persons in an accurate and efficient 
manner. We measure the performance of a State agency in two areas--
processing time and quality of documentation and decisions on claims. 
State agency compliance is also judged by State agency adherence to 
other program requirements.

[56 FR 11020, Mar. 14, 1991]



Sec. 404.1641  Standards of performance.

    (a) General. The performance standards include both a target level 
of performance and a threshold level of performance for the State 
agency. The target level represents a level of performance that we and 
the States will work to attain in the future. The threshold level is the 
minimum acceptable level of performance. Performance below the threshold 
level will be the basis for the Commissioner's taking from the State 
agency partial or complete responsibility for performing the disability 
determination function. Intermediate State agency goals are designed to 
help each State agency move from its current performance levels to the 
target levels.
    (b) The target level. The target level is the optimum level of 
performance. There are three targets--one for combined title II and 
title XVI initial performance accuracy, one for title II initial 
processing time, and one for title XVI initial processing time.
    (c) The threshold level. The threshold level is the minimum 
acceptable level of performance. There are three thresholds--one for 
combined title II and title XVI initial performance accuracy, one for 
title II initial processing time, and one for title XVI initial 
processing time.
    (d) Intermediate goals. Intermediate goals are levels of performance 
between the threshold levels and the target levels established by our 
appropriate Regional Commissioner after negotiation with each State 
agency. The intermediate goals are designed to help

[[Page 659]]

the State agencies reach the target levels. Failure to meet these goals 
is not a cause for considering the State agency to be substantially 
failing to comply with the performance standards. However, failure to 
meet the intermediate goals may result in consultation and an offer of 
optional performance support depending on the availability of our 
resources.

[46 FR 29204, May 29, 1981, as amended at 56 FR 11020, Mar. 14, 1991; 62 
FR 38452, July 18, 1997]



Sec. 404.1642  Processing time standards.

    (a) General. Title II processing time refers to the average number 
of days, including Saturdays, Sundays, and holidays, it takes a State 
agency to process an initial disability claim from the day the case 
folder is received in the State agency until the day it is released to 
us by the State agency. Title XVI processing time refers to the average 
number of days, including Saturdays, Sundays, and holidays, from the day 
of receipt of the initial disability claim in the State agency until 
systems input of a presumptive disability decision or the day the case 
folder is released to us by the State agency, whichever is earlier.
    (b) Target levels. The processing time target levels are:
    (1) 37 days for title II initial claims.
    (2) 43 days for title XVI initial claims.
    (c) Threshold levels. The processing time threshold levels are:
    (1) 49.5 days for title II initial claims.
    (2) 57.9 days for title XVI initial claims.

[46 FR 29204, May 29, 1981, as amended at 56 FR 11020, Mar. 14, 1991]



Sec. 404.1643  Performance accuracy standard.

    (a) General. Performance accuracy refers to the percentage of cases 
that do not have to be returned to State agencies for further 
development or correction of decisions based on evidence in the files 
and as such represents the reliability of State agency adjudication. The 
definition of performance accuracy includes the measurement of factors 
that have a potential for affecting a decision, as well as the 
correctness of the decision. For example, if a particular item of 
medical evidence should have been in the file but was not included, even 
though its inclusion does not change the result in the case, that is a 
performance error. Performance accuracy, therefore, is a higher standard 
than decisional accuracy. As a result, the percentage of correct 
decisions is significantly higher than what is reflected in the error 
rate established by SSA's quality assurance system.
    (b) Target level. The State agency initial performance accuracy 
target level for combined title II and title XVI cases is 97 percent 
with a corresponding decision accuracy rate of 99 percent.
    (c) Intermediate goals. These goals will be established annually by 
SSA's regional commissioner after negotiation with the State and should 
be used as stepping stones to progress towards our targeted level of 
performance.
    (d) Threshold levels. The State agency initial performance accuracy 
threshold level for combined title II and title XVI cases is 90.6 
percent.



Sec. 404.1644  How and when we determine whether the processing time 
standards are met.

    (a) How we determine processing times. For all initial title II 
cases, we calculate the mean number of days, including Saturdays, 
Sundays and holidays, from the day the case folder is received in the 
State agency until the day it is released to us by the State agency. For 
initial title XVI cases, we calculate the mean number of days, including 
Saturdays, Sundays, and holidays, from the day the case folder is 
received in the State agency until the day there is a systems input of a 
presumptive disability decision or the day the case folder is released 
to us by the State agency, whichever is earlier.
    (b) Frequency of review. Title II processing times and title XVI 
processing times are monitored separately on a quarterly basis. The 
determination as to whether or not the processing time thresholds have 
been met is made at the end of each quarter each year. Quarterly State-
by-State mean processing times are compared with the

[[Page 660]]

threshold levels for both title II and title XVI.

[46 FR 29204, May 29, 1981, as amended at 56 FR 11020, Mar. 14, 1991]



Sec. 404.1645  How and when we determine whether the performance
accuracy standard is met.

    (a) How we determine performance accuracy. We determine a State 
agency's performance accuracy rate on the basis of decision and 
documentation errors identified in our review of the sample cases.
    (b) Frequency of review. Title II and title XVI initial performance 
accuracy are monitored together on a quarterly basis. The determinations 
as to whether the performance accuracy threshold has been met is made at 
the end of each quarter each year. Quarterly State-by-State combined 
initial performance accuracy rates are compared to the established 
threshold level.



Sec. 404.1650  Action we will take if a State agency does not meet
the standards.

    If a State agency does not meet two of the three established 
threshold levels (one of which must be performance accuracy) for two or 
more consecutive calendar quarters, we will notify the State agency in 
writing that it is not meeting the standards. Following our 
notification, we will provide the State agency appropriate performance 
support described in Secs. 404.1660, 404.1661 and 404.1662 for a period 
of up to 12 months.

[56 FR 11020, Mar. 14, 1991]

                   Performance Monitoring and Support



Sec. 404.1660  How we will monitor.

    We will regularly analyze State agency combined title II and title 
XVI initial performance accuracy rate, title II initial processing time, 
and title XVI initial processing time. Within budgeted resources, we 
will also routinely conduct fiscal and administrative management reviews 
and special onsite reviews. A fiscal and administrative management 
review is a fact-finding mission to review particular aspects of State 
agency operations. During these reviews we will also review the quality 
assurance function. This regular monitoring and review program will 
allow us to determine the progress each State is making and the type and 
extent of performance support we will provide to help the State progress 
toward threshold, intermediate, and/or target levels.

[56 FR 11020, Mar. 14, 1991]



Sec. 404.1661  When we will provide performance support.

    (a) Optional support. We may offer, or a State may request, 
performance support at any time that the regular monitoring and review 
process reveals that support could enhance performance. The State does 
not have to be below the initial performance accuracy rate of 90.6 
percent to receive performance support. Support will be offered, or 
granted upon request, based on available resources.
    (b) Mandatory support. (1) We will provide a State agency with 
mandatory performance support if regular monitoring and review reveal 
that two of three threshold levels (one of which must be performance 
accuracy) are not met for two consecutive calendar quarters.
    (2) We may also decide to provide a State agency with mandatory 
performance support if regular monitoring and review reveal that any one 
of the three threshold levels is not met for two consecutive calendar 
quarters. Support will be provided based on available resources.
    (3) The threshold levels are:
    (i) Combined title II and title XVI initial performance accuracy 
rate--90.6 percent,
    (ii) Title II initial processing time--49.5 days, and
    (iii) Title XVI initial processing time--57.9 days.

[56 FR 11020, Mar. 14, 1991]



Sec. 404.1662  What support we will provide.

    Performance support may include, but is not limited to, any or all 
of the following:
    (a) An onsite review of cases processed by the State agency 
emphasizing adherence to written guidelines.
    (b) A request that necessary administrative measures be implemented 
(e.g.,

[[Page 661]]

filling staffing vacancies, using overtime, assisting with training 
activities, etc.).
    (c) Provisions for Federal personnel to perform onsite reviews, 
conduct training, or perform other functions needed to improve 
performance.
    (d) Provisions for fiscal aid to allow for overtime, temporary 
hiring of additional staff, etc., above the authorized budget.

[56 FR 11020, Mar. 14, 1991]

                           Substantial Failure



Sec. 404.1670  General.

    After a State agency falls below two of three established threshold 
levels, one being performance accuracy, for two consecutive quarters, 
and after the mandatory performance support period, we will give the 
State agency a 3-month adjustment period. During this 3-month period we 
will not require the State agency to meet the threshold levels. 
Following the adjustment period, if the State agency again falls below 
two of three threshold levels, one being performance accuracy, in two 
consecutive quarters during the next 12 months, we will notify the State 
that we propose to find that the State agency has substantially failed 
to comply with our standards and advise it that it may request a hearing 
on that issue. After giving the State notice and an opportunity for a 
hearing, if it is found that a State agency has substantially failed to 
make disability determinations consistent with the Act, our regulations 
or other written guidelines, we will assume partial or complete 
responsibility for performing the disability determination function 
after we have complied with Secs. 404.1690 and 404.1692.

[56 FR 11021, Mar. 14, 1991]



Sec. 404.1671  Good cause for not following the Act, our regulations,
or other written guidelines.

    If a State has good cause for not following the Act, our 
regulations, or other written guidelines, we will not find that the 
State agency has substantially failed to meet our standards. We will 
determine if good cause exists. Some of the factors relevant to good 
cause are:
    (a) Disasters such as fire, flood, or civil disorder, that--
    (1) Require the diversion of significant personnel normally assigned 
to the disability determination function, or
    (2) Destroyed or delayed access to significant records needed to 
make accurate disability determinations;
    (b) Strikes of State agency staff or other government or private 
personnel necessary to the performance of the disability determination 
function;
    (c) Sudden and unanticipated workload changes which result from 
changes in Federal law, regulations, or written guidelines, systems 
modification or systems malfunctions, or rapid, unpredictable caseload 
growth for a 6-month period or longer.

[56 FR 11021, Mar. 14, 1991]



Sec. 404.1675  Finding of substantial failure.

    A finding of substantial failure with respect to a State may not be 
made unless and until the State is afforded an opportunity for a 
hearing.

                          Hearings and Appeals



Sec. 404.1680  Notice of right to hearing on proposed finding of
substantial failure.

    If, following the mandatory performance support period and the 3-
month adjustment period, a State agency again falls below two of three 
threshold levels (one being performance accuracy) in two consecutive 
quarters in the succeeding 12 months, we will notify the State in 
writing that we will find that the State agency has substantially failed 
to meet our standards unless the State submits a written request for a 
hearing with the Department of Health and Human Services' Departmental 
Appeals Board within 30 days after receiving the notice. The notice will 
identify the threshold levels that were not met by the State agency, the 
period during which the thresholds were not met and the accuracy and 
processing time levels attained by the State agency during this period. 
If a hearing is not requested, the State agency will be found to have 
substantially failed to meet our standards, and

[[Page 662]]

we will implement our plans to assume the disability determination 
function.

[56 FR 11021, Mar. 14, 1991]



Sec. 404.1681  Disputes on matters other than substantial failure.

    Disputes concerning monetary disallowances will be resolved in 
proceedings before the Department of Health and Human Services' 
Departmental Appeals Board if the issue cannot be resolved between us 
and the State. Disputes other than monetary disallowances will be 
resolved through an appeal to the Commissioner of Social Security, who 
will make the final decision. (See Sec. 404.1627.)

[56 FR 11021, Mar. 14, 1991]



Sec. 404.1682  Who conducts the hearings.

    If a hearing is required, it will be conducted by the Department of 
Health and Human Services' Grant Appeals Board (the Board).

[46 FR 29204, May 29, 1981, as amended at 62 FR 38452, July 18, 1997]



Sec. 404.1683  Hearings and appeals process.

    The rules for hearings and appeals before the Board are provided in 
45 CFR part 16. A notice under Sec. 404.1680 of this subpart will be 
considered a ``final written decision'' for purposes of Board review.

             Assumption of Disability Determination Function



Sec. 404.1690  Assumption when we make a finding of substantial
failure.

    (a) Notice to State. When we find that substantial failure exists, 
we will notify the State in writing that we will assume responsibility 
for performing the disability determination function from the State 
agency, whether the assumption will be partial or complete, and the date 
on which the assumption will be effective.
    (b) Effective date of assumption. The date of any partial or 
complete assumption of the disability determination function from a 
State agency may not be earlier than 180 days after our finding of 
substantial failure, and not before compliance with the requirements of 
Sec. 404.1692.



Sec. 404.1691  Assumption when State no longer wishes to perform 
the disability determination function.

    (a) Notice to the Commissioner. If a State no longer wishes to 
perform the disability determination function, it will notify us in 
writing. The notice must be from an official authorized to act for the 
State for this purpose. The State will provide an opinion from the 
State's Attorney General verifying the authority of the official who 
gave the notice.
    (b) Effective date of assumption. The State agency will continue to 
perform whatever activities of the disability determination function it 
is performing at the time the notice referred to in paragraph (a) of 
this section is given for not less than 180 days or, if later, until we 
have complied with the requirements of Sec. 404.1692. For example, if 
the State is not making disability determinations (because we previously 
assumed responsibility for making them) but is performing other 
activities related to the disability determination function at the time 
it gives notice, the State will continue to do these activities until 
the requirements of this paragraph are met. Thereafter, we will assume 
complete responsibility for performing the disability determination 
function.

[46 FR 29204, May 29, 1981, as amended at 62 FR 38452, July 18, 1997]



Sec. 404.1692  Protection of State employees.

    (a) Hiring preference. We will develop and initiate procedures to 
implement a plan to partially or completely assume the disability 
determination function from the State agency under Sec. 404.1690 or 
Sec. 404.1691, as appropriate. Except for the State agency's 
administrator, deputy administrator, or assistant administrator (or his 
equivalent), we will give employees of the State agency who are capable 
of performing duties in the disability determination function preference 
over any other persons in filling positions with us for which they are 
qualified. We may also give a preference in hiring to the State agency's 
administrator, deputy administrator, or assistant administrator (or his 
equivalent). We will establish a system for determining the hiring 
priority

[[Page 663]]

among the affected State agency employees in those instances where we 
are not hiring all of them.
    (b) Determination by Secretary of Labor. We will not assume 
responsibility for performing the disability determination function from 
a State until the Secretary of Labor determines that the State has made 
fair and equitable arrangements under applicable Federal, State and 
local law to protect the interests of employees who will be displaced 
from their employment because of the assumption and who we will not 
hire.



Sec. 404.1693  Limitation on State expenditures after notice.

    The State agency may not, after it receives the notice referred to 
in Sec. 404.1690, or gives the notice referred to in Sec. 404.1691, make 
any new commitments to spend funds allocated to it for performing the 
disability determination function without the approval of the 
appropriate SSA regional commissioner. The State will make every effort 
to close out as soon as possible all existing commitments that relate to 
performing the disability determination function.



Sec. 404.1694  Final accounting by the State.

    The State will submit its final claims to us as soon as possible, 
but in no event later than 1 year from the effective date of our 
assumption of the disability determination function unless we grant an 
extension of time. When the final claim(s) is submitted, a final 
accounting will be made by the State of any funds paid to the State 
under Sec. 404.1626 which have not been spent or committed prior to the 
effective date of our assumption of the disability determination 
function. Disputes concerning final accounting issues which cannot be 
resolved between the State and us will be resolved in proceedings before 
the Departmental Appeals Board as described in 45 CFR part 16.

[46 FR 29204, May 29, 1981, as amended at 62 FR 38452, July 18, 1997]



                   Subpart R_Representation of Parties

    Authority: Secs. 205(a), 206, 702(a)(5), and 1127 of the Social 
Security Act (42 U.S.C. 405(a), 406, 902(a)(5), and 1320a-6).

    Source: 45 FR 52090, Aug. 5, 1980, unless otherwise noted.



Sec. 404.1700  Introduction.

    You may appoint someone to represent you in any of your dealings 
with us. This subpart explains, among other things--
    (a) Who may be your representative and what his or her 
qualifications must be;
    (b) How you appoint a representative;
    (c) The payment of fees to a representative;
    (d) Our rules that representatives must follow; and
    (e) What happens to a representative who breaks the rules.



Sec. 404.1703  Definitions.

    As used in this subpart--
    Date we notify him or her means 5 days after the date on the notice, 
unless the recipient shows us that he or she did not receive it within 
the 5-day period.
    Eligible non-attorney means a non-attorney representative who we 
determine is qualified to receive direct payment of his or her fee under 
Sec. 404.1717(a).
    Entity means any business, firm, or other association, including but 
not limited to partnerships, corporations, for-profit organizations, and 
not-for-profit organizations.
    Federal agency refers to any authority of the Executive branch of 
the Government of the United States.
    Federal program refers to any program established by an Act of 
Congress or administered in whole or in part by a Federal agency.
    Legal guardian or court-appointed representative means a court-
appointed person, committee, or conservator who is responsible for 
taking care of and managing the property and rights of an individual who 
is considered incapable of managing his or her own affairs.
    Past-due benefits means the total amount of benefits under title II 
of the

[[Page 664]]

Act that has accumulated to all beneficiaries because of a favorable 
administrative or judicial determination or decision, up to but not 
including the month the determination or decision is made. For purposes 
of calculating fees for representation, we determine past-due benefits 
before any applicable reduction under section 1127 of the Act (for 
receipt of benefits for the same period under title XVI). Past-due 
benefits do not include:
    (1) Continued benefits paid pursuant to Sec. 404.1597a of this part; 
or
    (2) Interim benefits paid pursuant to section 223(h) of the Act.
    Representational services means services performed for a claimant in 
connection with any claim the claimant has before us, any asserted right 
the claimant may have for an initial or reconsidered determination, and 
any decision or action by an administrative law judge or the Appeals 
Council.
    Representative means an attorney who meets all of the requirements 
of Sec. 404.1705(a), or a person other than an attorney who meets all of 
the requirements of Sec. 404.1705(b), and whom you appoint to represent 
you in dealings with us.
    We, our, or us refers to the Social Security Administration.
    You or your refers to any person claiming a right under the old-age, 
disability, dependents', or survivors' benefits program.

[45 FR 52090, Aug. 5, 1980, as amended at 72 FR 16724, Apr. 5, 2007; 74 
FR 48384, Sept. 23, 2009; 76 FR 45192, July 28, 2011; 76 FR 80245, Dec. 
23, 2011]



Sec. 404.1705  Who may be your representative.

    (a) You may appoint as your representative in dealings with us, any 
attorney in good standing who--
    (1) Has the right to practice law before a court of a State, 
Territory, District, or island possession of the United States, or 
before the Supreme Court or a lower Federal court of the United States;
    (2) Is not disqualified or suspended from acting as a representative 
in dealings with us; and
    (3) Is not prohibited by any law from acting as a representative.
    (b) You may appoint any person who is not an attorney to be your 
representative in dealings with us if the person--
    (1) Is generally known to have a good character and reputation;
    (2) Is capable of giving valuable help to you in connection with 
your claim;
    (3) Is not disqualified or suspended from acting as a representative 
in dealings with us; and
    (4) Is not prohibited by any law from acting as a representative.
    (c) We may refuse to recognize the person you choose to represent 
you if the person does not meet the requirements in this section. We 
will notify you and the person you attempted to appoint as your 
representative if we do not recognize the person as a representative.

[45 FR 52090, Aug. 5, 1980, as amended at 76 FR 80245, Dec. 23, 2011]



Sec. 404.1706  Notification of options for obtaining attorney
representation.

    If you are not represented by an attorney and we make a 
determination or decision that is subject to the administrative review 
process provided under subpart J of this part and it does not grant all 
of the benefits or other relief you requested or it adversely affects 
any entitlement to benefits that we have established or may establish 
for you, we will include with the notice of that determination or 
decision information about your options for obtaining an attorney to 
represent you in dealing with us. We will also tell you that a legal 
services organization may provide you with legal representation free of 
charge if you satisfy the qualifying requirements applicable to that 
organization.

[58 FR 64886, Dec. 10, 1993]



Sec. 404.1707  Appointing a representative.

    We will recognize a person as your representative if the following 
things are done:
    (a) You sign a written notice stating that you want the person to be 
your representative in dealings with us.
    (b) That person signs the notice, agreeing to be your 
representative, if the person is not an attorney. An attorney does not 
have to sign a notice of appointment.

[[Page 665]]

    (c) The notice is filed at one of our offices if you have initially 
filed a claim or have requested reconsideration; with an administrative 
law judge if you requested a hearing; or with the Appeals Council if you 
have requested a review of the administrative law judge's decision.



Sec. 404.1710  Authority of a representative.

    (a) What a representative may do. Your representative may, on your 
behalf--
    (1) Obtain information about your claim to the same extent that you 
are able to do;
    (2) Submit evidence;
    (3) Make statements about facts and law; and
    (4) Make any request or give any notice about the proceedings before 
us.
    (b) What a representative may not do. A representative may not sign 
an application on behalf of a claimant for rights or benefits under 
title II of the Act unless authorized to do so under Sec. 404.612.



Sec. 404.1713  Mandatory use of electronic services.

    A representative must conduct business with us electronically at the 
times and in the manner we prescribe on matters for which the 
representative requests direct fee payment. (See Sec. 404.1740(b)(4)).

[76 FR 56109, Sept. 12, 2011]



Sec. 404.1715  Notice or request to a representative.

    (a) We shall send your representative--
    (1) Notice and a copy of any administrative action, determination, 
or decision; and
    (2) Requests for information or evidence.
    (b) A notice or request sent to your representative, will have the 
same force and effect as if it had been sent to you.



Sec. 404.1717  Direct payment of fees to eligible non-attorney
representatives.

    (a) Criteria for eligibility. An individual who is a licensed 
attorney or who is suspended or disbarred from the practice of law in 
any jurisdiction may not be an eligible non-attorney. A non-attorney 
representative is eligible to receive direct payment of his or her fee 
out of your past-due benefits if he or she:
    (1) Completes and submits to us an application as described in 
paragraph (b) of this section;
    (2) Pays the application fee as described in paragraph (c) of this 
section;
    (3) Demonstrates that he or she possesses:
    (i) A bachelor's degree from an accredited institution of higher 
learning; or
    (ii) At least four years of relevant professional experience and 
either a high school diploma or a General Educational Development 
certificate;
    (4) Passes our criminal background investigation (including checks 
of our administrative records), and attests under penalty of perjury 
that he or she:
    (i) Has not been suspended or disqualified from practice before us 
and is not suspended or disbarred from the practice of law in any 
jurisdiction;
    (ii) Has not had a judgment or lien assessed against him or her by a 
civil court for malpractice or fraud;
    (iii) Has not had a felony conviction; and
    (iv) Has not misrepresented information provided on his or her 
application or supporting materials for the application;
    (5) Takes and passes a written examination we administer;
    (6) Provides proof of and maintains continuous liability insurance 
coverage that is underwritten by an entity that is legally permitted to 
provide professional liability insurance in the States in which the 
representative conducts business. The policy must include coverage for 
malpractice claims against the representative and be in an amount we 
prescribe; and
    (7) Completes and provides proof that he or she has completed all 
continuing education courses that we prescribe by the deadline we 
prescribe.
    (b) Application. An applicant must timely submit his or her 
completed application form during an application period that we 
prescribe. The application must be postmarked by the last day of the 
application period. If an applicant timely submits the application fee 
and a defective application, we will

[[Page 666]]

give the applicant 10 calendar days after the date we notify him or her 
of the defect to correct the application.
    (c) Application fee. An applicant must timely submit his or her 
application fee during the application period. We will set the fee 
annually.
    (1) We will refund the fee if:
    (i) We do not administer an examination, and an applicant was unable 
to take the rescheduled examination; or
    (ii) Circumstances beyond the applicant's control that could not 
have been reasonably anticipated and planned for prevent an applicant 
from taking a scheduled examination.
    (2) We will not refund the fee if:
    (i) An applicant took and failed the examination; or
    (ii) An applicant failed to arrive on time for the examination 
because of circumstances within the applicant's control that could have 
been anticipated and planned for.
    (d) Protest procedures. (1) We may find that a non-attorney 
representative is ineligible to receive direct fee payment at any time 
because he or she fails to meet any of the criteria in paragraph (a) of 
this section. A non-attorney representative whom we find to be 
ineligible for direct fee payment may protest our finding only if we 
based it on the representative's failure to:
    (i) Attest on the application or provide sufficient documentation 
that he or she possesses the required education or equivalent 
qualifications, as described in paragraph (a)(3) of this section;
    (ii) Meet at all times the criminal background investigation 
criteria, as described in paragraph (a)(4) of this section;
    (iii) Provide proof that he or she has maintained continuous 
liability insurance coverage, as described in paragraph (a)(6) of this 
section, after we previously determined the representative was eligible 
to receive direct fee payment; or
    (iv) Complete continuing education courses or provide documentation 
of the required continuing education courses, as described in paragraph 
(a)(7) of this section.
    (2) A non-attorney representative who wants to protest our finding 
under paragraph (d)(1) of this section must file a protest in writing 
and provide all relevant supporting documentation to us within 10 
calendar days after the date we notify him or her of our finding.
    (3) A representative may not file a protest for reasons other than 
those listed in paragraph (d)(1) of this section. If a representative 
files a protest for reasons other than those listed in paragraph (d)(1) 
of this section, we will not process the protest and will implement our 
finding as if no protest had been filed. Our finding in response to the 
protest is final and not subject to further review.
    (e) Ineligibility and suspension. (1) If an applicant does not 
protest, in accordance with paragraph (d)(2) of this section, our 
finding about the criteria in paragraphs (a)(3) or (a)(4) of this 
section, the applicant will be either ineligible to take the written 
examination for which he or she applied or ineligible to receive direct 
fee payment if the applicant already took and passed the examination 
prior to our finding. If an applicant protests in accordance with 
paragraph (d)(2) of this section and we uphold our finding, the 
applicant will be either ineligible to take the written examination for 
which he or she applied or ineligible to receive direct fee payment if 
the applicant already took and passed the examination prior to our 
finding.
    (2) If an eligible non-attorney representative does not protest, in 
accordance with paragraph (d)(2) of this section, our finding about the 
criteria in paragraphs (a)(3) or (a)(4) of this section, the non-
attorney representative will be ineligible to receive direct fee payment 
beginning with the month after the month the protest period ends. If the 
eligible non-attorney representative protests in accordance with 
paragraph (d)(2) of this section and we uphold our finding, the non-
attorney representative will be ineligible to receive direct fee payment 
beginning with the month after the month we uphold our finding.
    (3) If an eligible non-attorney representative does not protest, in 
accordance with paragraph (d)(2) of this section, our finding about the 
criteria in paragraph (a)(6) of this section, the

[[Page 667]]

non-attorney representative will be ineligible to receive direct fee 
payment for 6 full calendar months beginning with the month after the 
month the protest period ends. If the eligible non-attorney 
representative protests in accordance with paragraph (d)(2) of this 
section and we uphold our finding, the non-attorney representative will 
be ineligible to receive direct fee payment for 6 full calendar months 
beginning with the month after the month we uphold our finding. In 
either case, the non-attorney representative may provide us with 
documentation that he or she has acquired and maintains the required 
liability insurance coverage described in paragraph (a)(6) of this 
section, no earlier than the sixth month of the ineligibility. The non-
attorney representative will again be eligible to receive direct fee 
payment beginning in the first month after the month we find that we 
have received sufficient documentation that the non-attorney 
representative meets the requirements of paragraph (a)(6) of this 
section.
    (4) If an eligible non-attorney representative does not protest, in 
accordance with paragraph (d)(2) of this section, our finding about the 
criteria in paragraph (a)(7) of this section, the non-attorney 
representative will be ineligible to receive direct fee payment for 6 
full calendar months beginning with the month after the month the 
protest period ends. If the eligible non-attorney representative 
protests in accordance with paragraph (d)(2) of this section and we 
uphold our finding, the non-attorney will be ineligible to receive 
direct fee payment for 6 full calendar months beginning with the month 
after the month we uphold our finding. In either case, the non-attorney 
representative may provide us with documentation that he or she has 
satisfied the criteria in paragraph (a)(7) of this section at any time. 
The non-attorney representative will again be eligible to receive direct 
fee payment beginning in the first month after the month we find that we 
have received sufficient documentation, but not earlier than the month 
following the end of the 6 month ineligibility period.
    (f) Reapplying. A representative may reapply to become eligible to 
receive direct fee payment under paragraph (a) of this section during 
any subsequent application period if he or she:
    (1) Did not meet the initial criteria for eligibility in paragraphs 
(a)(1), (a)(2), (a)(3), or (a)(5) of this section in a prior application 
period; or
    (2) Failed to timely correct a defective application in a prior 
application period, as described in paragraph (b) of this section.

[76 FR 45192, July 28, 2011, as amended at 80 FR 400, Jan. 6, 2015]



Sec. 404.1720  Fee for a representative's services.

    (a) General. A representative may charge and receive a fee for his 
or her services as a representative only as provided in paragraph (b) of 
this section.
    (b) Charging and receiving a fee. (1) The representative must file a 
written request with us before he or she may charge or receive a fee for 
his or her services.
    (2) We decide the amount of the fee, if any, a representative may 
charge or receive.
    (3) Subject to paragraph (e) of this section, a representative must 
not charge or receive any fee unless we have authorized it, and a 
representative must not charge or receive any fee that is more than the 
amount we authorize.
    (4) If your representative is an attorney or an eligible non-
attorney, and you are entitled to past-due benefits, we will pay the 
authorized fee, or a part of the authorized fee, directly to the 
attorney or eligible non-attorney out of the past-due benefits, subject 
to the limitations described in Sec. 404.1730(b)(1). If the 
representative is a non-attorney who is ineligible to receive direct fee 
payment, we assume no responsibility for the payment of any fee that we 
have authorized.
    (c) Notice of fee determination. We shall mail to both you and your 
representative at your last known address a written notice of what we 
decide about the fee. We shall state in the notice--
    (1) The amount of the fee that is authorized;
    (2) How we made that decision;

[[Page 668]]

    (3) Whether we are responsible for paying the fee from past-due 
benefits; and
    (4) That within 30 days of the date of the notice, either you or 
your representative may request us to review the fee determination.
    (d) Review of fee determination--(1) Request filed on time. We will 
review the decision we made about a fee if either you or your 
representative files a written request for the review at one of our 
offices within 30 days after the date of the notice of the fee 
determination. Either you or your representative, whoever requests the 
review, shall mail a copy of the request to the other person. An 
authorized official of the Social Security Administration who did not 
take part in the fee determination being questioned will review the 
determination. This determination is not subject to further review. The 
official shall mail a written notice of the decision made on review both 
to you and to your representative at your last known address.
    (2) Request not filed on time. (i) If you or your representative 
requests a review of the decision we made about a fee, but does so more 
than 30 days after the date of the notice of the fee determination, 
whoever makes the request shall state in writing why it was not filed 
within the 30-day period. We will review the determination if we decide 
that there was good cause for not filing the request on time.
    (ii) Some examples of good cause follow:
    (A) Either you or your representative was seriously ill and the 
illness prevented you or your representative from contacting us in 
person or in writing.
    (B) There was a death or serious illness in your family or in the 
family of your representative.
    (C) Material records were destroyed by fire or other accidental 
cause.
    (D) We gave you or your representative incorrect or incomplete 
information about the right to request review.
    (E) You or your representative did not timely receive notice of the 
fee determination.
    (F) You or your representative sent the request to another 
government agency in good faith within the 30-day period, and the 
request did not reach us until after the period had ended.
    (3) Payment of fees. We assume no responsibility for the payment of 
a fee based on a revised determination if the request for administrative 
review was not filed on time.
    (e) When we do not need to authorize a fee. We do not need to 
authorize a fee when:
    (1) An entity or a Federal, State, county, or city government agency 
pays from its funds the representative fees and expenses and both of the 
following conditions apply:
    (i) You and your auxiliary beneficiaries, if any, are not liable to 
pay a fee or any expenses, or any part thereof, directly or indirectly, 
to the representative or someone else; and
    (ii) The representative submits to us a writing in the form and 
manner that we prescribe waiving the right to charge and collect a fee 
and any expenses from you and your auxiliary beneficiaries, if any, 
directly or indirectly, in whole or in part; or
    (2) A court authorizes a fee for your representative based on the 
representative's actions as your legal guardian or a court-appointed 
representative.

[45 FR 52090, Aug. 5, 1980, as amended at 72 FR 16724, Apr. 5, 2007; 74 
FR 48384, Sept. 23, 2009; 76 FR 45193, July 28, 2011]



Sec. 404.1725  Request for approval of a fee.

    (a) Filing a request. In order for your representative to obtain 
approval of a fee for services he or she performed in dealings with us, 
he or she shall file a written request with one of our offices. This 
should be done after the proceedings in which he or she was a 
representative are completed. The request must contain--
    (1) The dates the representative's services began and ended;
    (2) A list of the services he or she gave and the amount of time he 
or she spent on each type of service;
    (3) The amount of the fee he or she wants to charge for the 
services;
    (4) The amount of fee the representative wants to request or charge 
for his or her services in the same matter before any State or Federal 
court;
    (5) The amount of and a list of any expenses the representative 
incurred

[[Page 669]]

for which he or she has been paid or expects to be paid;
    (6) A description of the special qualifications which enabled the 
representative, if he or she is not an attorney, to give valuable help 
in connection with your claim; and
    (7) A statement showing that the representative sent a copy of the 
request for approval of a fee to you.
    (b) Evaluating a request for approval of a fee. (1) When we evaluate 
a representative's request for approval of a fee, we consider the 
purpose of the social security program, which is to provide a measure of 
economic security for the beneficiaries of the program, together with--
    (i) The extent and type of services the representative performed;
    (ii) The complexity of the case;
    (iii) The level of skill and competence required of the 
representative in giving the services;
    (iv) The amount of time the representative spent on the case;
    (v) The results the representative achieved;
    (vi) The level of review to which the claim was taken and the level 
of the review at which the representative became your representative; 
and
    (vii) The amount of fee the representative requests for his or her 
services, including any amount authorized or requested before, but not 
including the amount of any expenses he or she incurred.
    (2) Although we consider the amount of benefits, if any, that are 
payable, we do not base the amount of fee we authorize on the amount of 
the benefit alone, but on a consideration of all the factors listed in 
this section. The benefits payable in any claim are determined by 
specific provisions of law and are unrelated to the efforts of the 
representative. We may authorize a fee even if no benefits are payable.



Sec. 404.1728  Proceedings before a State or Federal court.

    (a) Representation of a party in court proceedings. We shall not 
consider any service the representative gave you in any proceeding 
before a State or Federal court to be services as a representative in 
dealings with us. However, if the representative also has given service 
to you in the same connection in any dealings with us, he or she must 
specify what, if any, portion of the fee he or she wants to charge is 
for services performed in dealings with us. If the representative 
charges any fee for those services, he or she must file the request and 
furnish all of the information required by Sec. 404.1725.
    (b) Attorney fee allowed by a Federal court. If a Federal court in 
any proceeding under title II of the Act makes a judgment in favor of a 
claimant who was represented before the court by an attorney, and the 
court, under section 206(b) of the Act, allows to the attorney as part 
of its judgment a fee not in excess of 25 percent of the total of past-
due benefits to which the claimant is entitled by reason of the 
judgment, we may pay the attorney the amount of the fee out of, but not 
in addition to, the amount of the past-due benefits payable. We will not 
certify for direct payment any other fee your representative may 
request.



Sec. 404.1730  Payment of fees.

    (a) Fees allowed by a Federal court. We will pay an attorney 
representative out of your past-due benefits the amount of the fee 
allowed by a Federal court in a proceeding under title II of the Act. 
The payment we make to the attorney is subject to the limitations 
described in paragraph (b)(1) of this section.
    (b) Fees we may authorize--(1) Attorneys and eligible non-attorneys. 
Except as provided in paragraph (c) of this section, if we make a 
determination or decision in your favor and you were represented by an 
attorney or an eligible non-attorney, and as a result of the 
determination or decision you have past-due benefits, we will pay the 
representative out of the past-due benefits, the smaller of the amounts 
in paragraph (b)(1)(i) or (ii) of this section, less the amount of the 
assessment described in paragraph (d) of this section.
    (i) Twenty-five percent of the total of the past-due benefits; or
    (ii) The amount of the fee that we set.
    (2) Non-attorneys ineligible for direct payment. If the 
representative is a non-attorney who is ineligible to receive direct 
payment of his or her fee, we assume no responsibility for the payment

[[Page 670]]

of any fee that we authorized. We will not deduct the fee from your 
past-due benefits.
    (c) Time limit for filing request for approval of fee to obtain 
direct payment. (1) To receive direct fee payment from your past-due 
benefits, a representative who is an attorney or an eligible non-
attorney should file a request for approval of a fee, or written notice 
of the intent to file a request, at one of our offices, or 
electronically at the times and in the manner that we prescribe if we 
give notice that such a method is available, within 60 days of the date 
we mail the notice of the favorable determination or decision.
    (2)(i) If no request is filed within 60 days of the date the notice 
of the favorable determination is mailed, we will mail a written notice 
to you and your representative at your last known addresses. The notice 
will inform you and the representative that unless the representative 
files, within 20 days from the date of the notice, a written request for 
approval of a fee under Sec. 404.1725, or a written request for an 
extension of time, we will pay all the past-due benefits to you.
    (ii) The representative must send you a copy of any request made to 
us for an extension of time. If the request is not filed within 20 days 
of the date of the notice, or by the last day of any extension we 
approved, we will pay all past-due benefits to you. We must approve any 
fee the representative charges after that time, but the collection of 
any approved fee is a matter between you and the representative.
    (d) Assessment when we pay a fee directly to a representative. (1) 
Whenever we pay a fee directly to a representative from past-due 
benefits, we impose an assessment on the representative.
    (2) The amount of the assessment is equal to the lesser of:
    (i) The product we obtain by multiplying the amount of the fee we 
are paying to the representative by the percentage rate the Commissioner 
of Social Security determines is necessary to achieve full recovery of 
the costs of determining and paying fees directly to representatives, 
but not in excess of 6.3 percent; and
    (ii) The maximum assessment amount. The maximum assessment amount 
was initially set at $75, but by law is adjusted annually to reflect the 
increase in the cost of living. (See Secs. 404.270 through 404.277 for 
an explanation of how the cost-of-living adjustment is computed.) If the 
adjusted amount is not a multiple of $1, we round down the amount to the 
next lower $1, but the amount will not be less than $75. We will 
announce any increase in the maximum assessment amount and explain how 
the increase was determined in the Federal Register.
    (3) We collect the assessment by subtracting it from the amount of 
the fee to be paid to the representative. The representative who is 
subject to an assessment may not, directly or indirectly, request or 
otherwise obtain reimbursement of the assessment from you.

[72 FR 16724, Apr. 5, 2007, as amended at 76 FR 45193, July 28, 2011]



Sec. 404.1735  [Reserved]



Sec. 404.1740  Rules of conduct and standards of responsibility for 
representatives.

    (a) Purpose and scope. (1) All attorneys or other persons acting on 
behalf of a party seeking a statutory right or benefit must, in their 
dealings with us, faithfully execute their duties as agents and 
fiduciaries of a party. A representative must provide competent 
assistance to the claimant and recognize our authority to lawfully 
administer the process. The following provisions set forth certain 
affirmative duties and prohibited actions that will govern the 
relationship between the representative and us, including matters 
involving our administrative procedures and fee collections.
    (2) All representatives must be forthright in their dealings with us 
and with the claimant and must comport themselves with due regard for 
the nonadversarial nature of the proceedings by complying with our rules 
and standards, which are intended to ensure orderly and fair 
presentation of evidence and argument.
    (b) Affirmative duties. A representative must, in conformity with 
the regulations setting forth our existing duties and responsibilities 
and those of

[[Page 671]]

claimants (see Sec. 404.1512 in disability and blindness claims):
    (1) Act with reasonable promptness to help obtain the information or 
evidence that the claimant must submit under our regulations, and 
forward the information or evidence to us for consideration as soon as 
practicable.
    (2) Assist the claimant in complying, as soon as practicable, with 
our requests for information or evidence at any stage of the 
administrative decisionmaking process in his or her claim. In disability 
and blindness claims, this includes the obligation pursuant to 
Sec. 404.1512(c) to assist the claimant in providing, upon our request, 
evidence about:
    (i) The claimant's medical source(s);
    (ii) The claimant's age;
    (iii) The claimant's education and training;
    (iv) The claimant's work experience;
    (v) The claimant's daily activities both before and after the date 
the claimant alleges that he or she became disabled;
    (vi) The claimant's efforts to work; and
    (vii) Any other factors showing how the claimant's impairment(s) 
affects his or her ability to work. In Secs. 404.1560 through 404.1569a, 
we discuss in more detail the evidence we need when we consider 
vocational factors;
    (3) Conduct his or her dealings in a manner that furthers the 
efficient, fair and orderly conduct of the administrative decisionmaking 
process, including duties to:
    (i) Provide competent representation to a claimant. Competent 
representation requires the knowledge, skill, thoroughness and 
preparation reasonably necessary for the representation. This includes 
knowing the significant issue(s) in a claim and having a working 
knowledge of the applicable provisions of the Social Security Act, as 
amended, the regulations and the Rulings; and
    (ii) Act with reasonable diligence and promptness in representing a 
claimant. This includes providing prompt and responsive answers to our 
requests for information pertinent to processing of the claim; and
    (4) Conduct business with us electronically at the times and in the 
manner we prescribe on matters for which the representative requests 
direct fee payment. (See Sec. 404.1713).
    (c) Prohibited actions. A representative must not:
    (1) In any manner or by any means threaten, coerce, intimidate, 
deceive or knowingly mislead a claimant, or prospective claimant or 
beneficiary, regarding benefits or other rights under the Act;
    (2) Knowingly charge, collect or retain, or make any arrangement to 
charge, collect or retain, from any source, directly or indirectly, any 
fee for representational services in violation of applicable law or 
regulation;
    (3) Knowingly make or present, or participate in the making or 
presentation of, false or misleading oral or written statements, 
assertions or representations about a material fact or law concerning a 
matter within our jurisdiction;
    (4) Through his or her own actions or omissions, unreasonably delay 
or cause to be delayed, without good cause (see Sec. 404.911(b)), the 
processing of a claim at any stage of the administrative decisionmaking 
process;
    (5) Divulge, without the claimant's consent, except as may be 
authorized by regulations prescribed by us or as otherwise provided by 
Federal law, any information we furnish or disclose about a claim or 
prospective claim;
    (6) Attempt to influence, directly or indirectly, the outcome of a 
decision, determination, or other administrative action by offering or 
granting a loan, gift, entertainment, or anything of value to a 
presiding official, agency employee, or witness who is or may reasonably 
be expected to be involved in the administrative decisionmaking process, 
except as reimbursement for legitimately incurred expenses or lawful 
compensation for the services of an expert witness retained on a non-
contingency basis to provide evidence;
    (7) Engage in actions or behavior prejudicial to the fair and 
orderly conduct of administrative proceedings, including but not limited 
to:
    (i) Repeated absences from or persistent tardiness at scheduled 
proceedings without good cause (see Sec. 404.911(b));

[[Page 672]]

    (ii) Willful behavior which has the effect of improperly disrupting 
proceedings or obstructing the adjudicative process; and
    (iii) Threatening or intimidating language, gestures, or actions 
directed at a presiding official, witness, or agency employee that 
result in a disruption of the orderly presentation and reception of 
evidence;
    (8) Violate any section of the Act for which a criminal or civil 
monetary penalty is prescribed;
    (9) Refuse to comply with any of our rules or regulations;
    (10) Suggest, assist, or direct another person to violate our rules 
or regulations;
    (11) Advise any claimant or beneficiary not to comply with any of 
our rules or regulations;
    (12) Knowingly assist a person whom we suspended or disqualified to 
provide representational services in a proceeding under title II of the 
Act, or to exercise the authority of a representative described in 
Sec. 404.1710; or
    (13) Fail to comply with our sanction(s) decision.

[63 FR 41416, Aug. 4, 1998, as amended at 76 FR 56109, Sept. 12, 2011; 
76 FR 80245, Dec. 23, 2011; 80 FR 14837, Mar. 20, 2015]



Sec. 404.1745  Violations of our requirements, rules, or standards.

    When we have evidence that a representative fails to meet our 
qualification requirements or has violated the rules governing dealings 
with us, we may begin proceedings to suspend or disqualify that 
individual from acting in a representational capacity before us. We may 
file charges seeking such sanctions when we have evidence that a 
representative:
    (a) Does not meet the qualifying requirements described in 
Sec. 404.1705;
    (b) Has violated the affirmative duties or engaged in the prohibited 
actions set forth in Sec. 404.1740;
    (c) Has been convicted of a violation under section 206 of the Act;
    (d) Has been, by reason of misconduct, disbarred or suspended from 
any bar or court to which he or she was previously admitted to practice 
(see Sec. 404.1770(a)); or
    (e) Has been, by reason of misconduct, disqualified from 
participating in or appearing before any Federal program or agency (see 
Sec. 404.1770(a)).

[63 FR 41416, Aug. 4, 1998, as amended at 71 FR 2876, Jan. 18, 2006]



Sec. 404.1750  Notice of charges against a representative.

    (a) The General Counsel or other delegated official will prepare a 
notice containing a statement of charges that constitutes the basis for 
the proceeding against the representative.
    (b) We will send this notice to the representative either by 
certified or registered mail, to his or her last known address, or by 
personal delivery.
    (c) We will advise the representative to file an answer, within 30 
days from the date of the notice, or from the date the notice was 
delivered personally, stating why he or she should not be suspended or 
disqualified from acting as a representative in dealings with us.
    (d) The General Counsel or other delegated official may extend the 
30-day period for good cause in accordance with Sec. 404.911.
    (e) The representative must--
    (1) Answer the notice in writing under oath (or affirmation); and
    (2) File the answer with the Social Security Administration, at the 
address specified on the notice, within the 30-day time period.
    (f) If the representative does not file an answer within the 30-day 
time period, he or she does not have the right to present evidence, 
except as may be provided in Sec. 404.1765(g).

[45 FR 52090, Aug. 5, 1980, as amended at 56 FR 24131, May 29, 1991; 62 
FR 38452, July 18, 1997; 63 FR 41417, Aug. 4, 1998; 71 FR 2876, Jan. 18, 
2006; 76 FR 80246, Dec. 23, 2011]



Sec. 404.1755  Withdrawing charges against a representative.

    The General Counsel or other delegated official may withdraw charges 
against a representative. We will withdraw charges if the representative 
files an answer, or we obtain evidence, that satisfies us that we should 
not suspend or disqualify the representative from acting as a 
representative. When we consider withdrawing charges brought under 
Sec. 404.1745(d) or (e) based on the representative's assertion that, 
before

[[Page 673]]

or after our filing of charges, the representative has been reinstated 
to practice by the court, bar, or Federal program or Federal agency that 
suspended, disbarred, or disqualified the representative, the General 
Counsel or other delegated official will determine whether such 
reinstatement occurred, whether it remains in effect, and whether he or 
she is reasonably satisfied that the representative will in the future 
act in accordance with the provisions of section 206(a) of the Act and 
our rules and regulations. If the representative proves that 
reinstatement occurred and remains in effect and the General Counsel or 
other delegated official is so satisfied, the General Counsel or other 
delegated official will withdraw those charges. The action of the 
General Counsel or other delegated official regarding withdrawal of 
charges is solely that of the General Counsel or other delegated 
official and is not reviewable, or subject to consideration in decisions 
made under Secs. 404.1770 and 404.1790. If we withdraw the charges, we 
will notify the representative by mail at the representative's last 
known address.

[76 FR 80246, Dec. 23, 2011]



Sec. 404.1765  Hearing on charges.

    (a) Holding the hearing. If the General Counsel or other delegated 
official does not take action to withdraw the charges within 15 days 
after the date on which the representative filed an answer, we will hold 
a hearing and make a decision on the charges.
    (b) Hearing officer. (1) The Deputy Commissioner for Disability 
Adjudication and Review or other delegated official will assign an 
administrative law judge, designated to act as a hearing officer, to 
hold a hearing on the charges.
    (2) No hearing officer shall hold a hearing in a case in which he or 
she is prejudiced or partial about any party, or has any interest in the 
matter.
    (3) If the representative or any party to the hearing objects to the 
hearing officer who has been named to hold the hearing, we must be 
notified at the earliest opportunity. The hearing officer shall consider 
the objection(s) and either proceed with the hearing or withdraw from 
it.
    (4) If the hearing officer withdraws from the hearing, another one 
will be named.
    (5) If the hearing officer does not withdraw, the representative or 
any other person objecting may, after the hearing, present his or her 
objections to the Appeals Council explaining why he or she believes the 
hearing officer's decision should be revised or a new hearing held by 
another administrative law judge designated to act as a hearing officer.
    (c) Time and place of hearing. The hearing officer shall mail the 
parties a written notice of the hearing at their last known addresses, 
at least 20 days before the date set for the hearing.
    (d) Change of time and place for hearing. (1) The hearing officer 
may change the time and place for the hearing. This may be done either 
on his or her own initiative, or at the request of the representative or 
the other party to the hearing.
    (2) The hearing officer may adjourn or postpone the hearing.
    (3) The hearing officer may reopen the hearing for the receipt of 
additional evidence at any time before mailing notice of the decision.
    (4) The hearing officer shall give the representative and the other 
party to the hearing reasonable notice of any change in the time or 
place for the hearing, or of an adjournment or reopening of the hearing.
    (e) Parties. The representative against whom charges have been made 
is a party to the hearing. The General Counsel or other delegated 
official will also be a party to the hearing.
    (f) Subpoenas. (1) The representative or the other party to the 
hearing may request the hearing officer to issue a subpoena for the 
attendance and testimony of witnesses and for the production of books, 
records, correspondence, papers, or other documents that are material to 
any matter being considered at the hearing. The hearing officer may, on 
his or her own initiative, issue subpoenas for the same purposes when 
the action is reasonably necessary for the full presentation of the 
facts.
    (2) The representative or the other party who wants a subpoena 
issued shall file a written request with the hearing officer. This must 
be done at

[[Page 674]]

least 5 days before the date set for the hearing. The request must name 
the documents to be produced, and describe the address or location in 
enough detail to permit the witnesses or documents to be found.
    (3) The representative or the other party who wants a subpoena 
issued shall state in the request for a subpoena the material facts that 
he or she expects to establish by the witness or document, and why the 
facts could not be established by the use of other evidence which could 
be obtained without use of a subpoena.
    (4) We will pay the cost of the issuance and the fees and mileage of 
any witness subpoenaed, as provided in section 205(d) of the Act.
    (g) Conduct of the hearing. (1) The hearing officer shall make the 
hearing open to the representative, to the other party, and to any 
persons the hearing officer or the parties consider necessary or proper. 
The hearing officer shall inquire fully into the matters being 
considered, hear the testimony of witnesses, and accept any documents 
that are material.
    (2) If the representative did not file an answer to the charges, he 
or she has no right to present evidence at the hearing. The hearing 
officer may make or recommend a decision on the basis of the record, or 
permit the representative to present a statement about the sufficiency 
of the evidence or the validity of the proceedings upon which the 
suspension or disqualification, if it occurred, would be based.
    (3) If the representative did file an answer to the charges, and if 
the hearing officer believes that there is material evidence available 
that was not presented at the hearing, the hearing officer may at any 
time before mailing notice of the hearing decision reopen the hearing to 
accept the additional evidence.
    (4) The hearing officer has the right to decide the order in which 
the evidence and the allegations will be presented and the conduct of 
the hearing.
    (h) Evidence. The hearing officer may accept evidence at the 
hearing, even though it is not admissible under the rules of evidence 
that apply to Federal court procedure.
    (i) Witnesses. Witnesses who testify at the hearing shall do so 
under oath or affirmation. Either the representative or a person 
representing him or her may question the witnesses. The other party and 
that party's representative must also be allowed to question the 
witnesses. The hearing officer may also ask questions as considered 
necessary, and shall rule upon any objection made by either party about 
whether any question is proper.
    (j) Oral and written summation. (1) The hearing officer shall give 
the representative and the other party a reasonable time to present oral 
summation and to file briefs or other written statements about proposed 
findings of fact and conclusions of law if the parties request it.
    (2) The party that files briefs or other written statements shall 
provide enough copies so that they may be made available to any other 
party to the hearing who requests a copy.
    (k) Record of hearing. In all cases, the hearing officer shall have 
a complete record of the proceedings at the hearing made.
    (l) Representation. The representative, as the person charged, may 
appear in person and may be represented by an attorney or other 
representative. The General Counsel or other delegated official will be 
represented by one or more attorneys from the Office of the General 
Counsel.
    (m) Failure to appear. If the representative or the other party to 
the hearing fails to appear after being notified of the time and place, 
the hearing officer may hold the hearing anyway so that the party 
present may offer evidence to sustain or rebut the charges. The hearing 
officer shall give the party who failed to appear an opportunity to show 
good cause for failure to appear. If the party fails to show good cause, 
he or she is considered to have waived the right to be present at the 
hearing. If the party shows good cause, the hearing officer may hold a 
supplemental hearing.
    (n) Dismissal of charges. The hearing officer may dismiss the 
charges in the event of the death of the representative.
    (o) Cost of transcript. If the representative or the other party to 
a hearing

[[Page 675]]

requests a copy of the transcript of the hearing, the hearing officer 
will have it prepared and sent to the party upon payment of the cost, 
unless the payment is waived for good cause.

[45 FR 52090, Aug. 5, 1980, as amended at 56 FR 24131, 24132, May 29, 
1991; 62 FR 38452, July 18, 1997; 63 FR 41417, Aug. 4, 1998; 71 FR 2877, 
Jan. 18, 2006; 76 FR 80246, Dec. 23, 2011]



Sec. 404.1770  Decision by hearing officer.

    (a) General. (1) After the close of the hearing, the hearing officer 
will issue a decision or certify the case to the Appeals Council. The 
decision must be in writing, will contain findings of fact and 
conclusions of law, and be based upon the evidence of record.
    (2) In deciding whether a person has been, by reason of misconduct, 
disbarred or suspended by a court or bar, or disqualified from 
participating in or appearing before any Federal program or Federal 
agency, the hearing officer will consider the reasons for the 
disbarment, suspension, or disqualification action. If the action was 
taken for solely administrative reasons (e.g., failure to pay dues or to 
complete continuing legal education requirements), that will not 
disqualify the person from acting as a representative before us. 
However, this exception to disqualification does not apply if the 
administrative action was taken in lieu of disciplinary proceedings 
(e.g., acceptance of a voluntary resignation pending disciplinary 
action). Although the hearing officer will consider whether the 
disbarment, suspension, or disqualification action is based on 
misconduct when deciding whether a person should be disqualified from 
acting as a representative before us, the hearing officer will not re-
examine or revise the factual or legal conclusions that led to the 
disbarment, suspension, or disqualification. For purposes of determining 
whether a person has been, by reason of misconduct, disqualified from 
participating in or appearing before any Federal program or Federal 
agency, disqualified refers to any action that prohibits a person from 
participating in or appearing before any Federal program or Federal 
agency, regardless of how long the prohibition lasts or the specific 
terminology used.
    (3) If the hearing officer finds that the charges against the 
representative have been sustained, he or she will either--
    (i) Suspend the representative for a specified period of not less 
than 1 year, nor more than 5 years, from the date of the decision; or
    (ii) Disqualify the representative from acting as a representative 
in dealings with us until he or she may be reinstated under 
Sec. 404.1799. Disqualification is the sole sanction available if the 
charges have been sustained because the representative has been 
disbarred or suspended from any court or bar to which the representative 
was previously admitted to practice or disqualified from participating 
in or appearing before any Federal program or Federal agency, or because 
the representative has collected or received, and retains, a fee for 
representational services in excess of the amount authorized.
    (4) The hearing officer shall mail a copy of the decision to the 
parties at their last known addresses. The notice will inform the 
parties of the right to request the Appeals Council to review the 
decision.
    (b) Effect of hearing officer's decision. (1) The hearing officer's 
decision is final and binding unless reversed or modified by the Appeals 
Council upon review.
    (2) If the final decision is that a person is disqualified from 
being a representative in dealings with us, he or she will not be 
permitted to represent anyone in dealings with us until authorized to do 
so under the provisions of Sec. 404.1799.
    (3) If the final decision is that a person is suspended for a 
specified period of time from being a representative in dealings with 
us, he or she will not be permitted to represent anyone in dealings with 
us during the period of suspension unless authorized to do so under the 
provisions of Sec. 404.1799.

[45 FR 52090, Aug. 5, 1980, as amended at 56 FR 24132, May 29, 1991; 63 
FR 41417, Aug. 4, 1998; 71 FR 2877, Jan. 18, 2006; 76 FR 80246, Dec. 23, 
2011]

[[Page 676]]



Sec. 404.1775  Requesting review of the hearing officer's decision.

    (a) General. After the hearing officer issues a decision, either the 
representative or the other party to the hearing may ask the Appeals 
Council to review the decision.
    (b) Time and place of filing request for review. The party 
requesting review shall file the request for review in writing with the 
Appeals Council within 30 days from the date the hearing officer mailed 
the notice. The party requesting review shall certify that a copy of the 
request for review and of any documents that are submitted have been 
mailed to the opposing party.



Sec. 404.1776  Assignment of request for review of the hearing 
officer's decision.

    Upon receipt of a request for review of the hearing officer's 
decision, the matter will be assigned to a panel consisting of three 
members of the Appeals Council none of whom shall be the Chair of the 
Appeals Council. The panel shall jointly consider and rule by majority 
opinion on the request for review of the hearing officer's decision, 
including a determination to dismiss the request for review. Matters 
other than a final disposition of the request for review may be disposed 
of by the member designated chair of the panel.

[56 FR 24132, May 29, 1991]



Sec. 404.1780  Appeals Council's review of hearing officer's
decision.

    (a) Upon request, the Appeals Council shall give the parties a 
reasonable time to file briefs or other written statements as to fact 
and law, and to appear before the Appeals Council to present oral 
argument.
    (b) If a party files a brief or other written statement with the 
Appeals Council, he or she shall send a copy to the opposing party and 
certify that the copy has been sent.



Sec. 404.1785  Evidence permitted on review.

    (a) General. Generally, the Appeals Council will not consider 
evidence in addition to that introduced at the hearing. However, if the 
Appeals Council believes that the evidence offered is material to an 
issue it is considering, the evidence will be considered.
    (b) Individual charged filed an answer. (1) When the Appeals Council 
believes that additional material evidence is available, and the 
representative has filed an answer to the charges, the Appeals Council 
shall require that the evidence be obtained. The Appeals Council may 
name an administrative law judge or a member of the Appeals Council to 
receive the evidence.
    (2) Before additional evidence is admitted into the record, the 
Appeals Council shall mail a notice to the parties, telling them that 
evidence about certain issues will be obtained, unless the notice is 
waived. The Appeals Council shall give each party a reasonable 
opportunity to comment on the evidence and to present other evidence 
that is material to an issue it is considering.
    (c) Individual charged did not file an answer. If the representative 
did not file an answer to the charges, the Appeals Council will not 
permit the introduction of evidence that was not considered at the 
hearing.



Sec. 404.1790  Appeals Council's decision.

    (a) The Appeals Council shall base its decision upon the evidence in 
the hearing record and any other evidence it may permit on review. The 
Appeals Council shall either--
    (1) Affirm, reverse, or modify the hearing officer's decision; or
    (2) Return a case to the hearing officer when the Appeals Council 
considers it appropriate.
    (b) The Appeals Council, in changing a hearing officer's decision to 
suspend a representative for a specified period, shall in no event 
reduce the period of suspension to less than 1 year. In modifying a 
hearing officer's decision to disqualify a representative, the Appeals 
Council shall in no event impose a period of suspension of less than 1 
year. Further, the Appeals Council shall in no event impose a suspension 
when disqualification is the sole sanction available in accordance with 
Sec. 404.1770(a)(3)(ii).
    (c) If the Appeals Council affirms or changes a hearing officer's 
decision,

[[Page 677]]

the period of suspension or the disqualification is effective from the 
date of the Appeals Council's decision.
    (d) If the hearing officer did not impose a period of suspension or 
a disqualification, and the Appeals Council decides to impose one or the 
other, the suspension or disqualification is effective from the date of 
the Appeals Council's decision.
    (e) The Appeals Council shall make its decision in writing and shall 
mail a copy of the decision to the parties at their last known 
addresses.

[45 FR 52090, Aug. 5, 1980, as amended at 56 FR 24132, May 29, 1991; 71 
FR 2877, Jan. 18, 2006]



Sec. 404.1795  When the Appeals Council will dismiss a request for
review.

    The Appeals Council may dismiss a request for the review of any 
proceeding to suspend or disqualify a representative in any of the 
following circumstances:
    (a) Upon request of party. The Appeals Council may dismiss a request 
for review upon written request of the party or parties who filed the 
request if there is no other party who objects to the dismissal.
    (b) Death of party. The Appeals Council may dismiss a request for 
review in the event of the death of the representative.
    (c) Request for review not timely filed. The Appeals Council will 
dismiss a request for review if a party failed to file a request for 
review within the 30-day time period and the Appeals Council does not 
extend the time for good cause.



Sec. 404.1797  Reinstatement after suspension--period of suspension
expired.

    We shall automatically allow a person to serve again as a 
representative in dealings with us at the end of any suspension.



Sec. 404.1799  Reinstatement after suspension or disqualification
--period of suspension not expired.

    (a) After more than one year has passed, a person who has been 
suspended or disqualified, may ask the Appeals Council for permission to 
serve as a representative again.
    (b) The suspended or disqualified person must submit any evidence 
the person wishes to have considered along with the request to be 
allowed to serve as a representative again.
    (c) The General Counsel or other delegated official, upon 
notification of receipt of the request, will have 30 days in which to 
present a written report of any experiences with the suspended or 
disqualified person subsequent to that person's suspension or 
disqualification. The Appeals Council will make available to the 
suspended or disqualified person a copy of the report.
    (d)(1) The Appeals Council shall not grant the request unless it is 
reasonably satisfied that the person will in the future act according to 
the provisions of section 206(a) of the Act, and to our rules and 
regulations.
    (2) If a person was disqualified because he or she had been 
disbarred or suspended from a court or bar, the Appeals Council will 
grant a request for reinstatement as a representative only if the 
criterion in paragraph (d)(1) of this section is met and the 
disqualified person shows that he or she has been admitted (or 
readmitted) to and is in good standing with the court or bar from which 
he or she had been disbarred or suspended.
    (3) If a person was disqualified because the person had been 
disqualified from participating in or appearing before a Federal program 
or Federal agency, the Appeals Council will grant the request for 
reinstatement only if the criterion in paragraph (d)(1) of this section 
is met and the disqualified person shows that the person is now 
qualified to participate in or appear before that Federal program or 
Federal agency.
    (4) If the person was disqualified as a result of collecting or 
receiving, and retaining, a fee for representational services in excess 
of the amount authorized, the Appeals Council will grant the request 
only if the criterion in paragraph (d)(1) of this section is met and the 
disqualified person shows that full restitution has been made.
    (e) The Appeals Council will mail a notice of its decision on the 
request for reinstatement to the suspended or disqualified person. It 
will also mail a

[[Page 678]]

copy to the General Counsel or other delegated official.
    (f) If the Appeals Council decides not to grant the request, it 
shall not consider another request before the end of 1 year from the 
date of the notice of the previous denial.

[45 FR 52090, Aug. 5, 1980, as amended at 56 FR 24132, May 29, 1991; 62 
FR 38452, July 18, 1997; 63 FR 41417, Aug. 4, 1998; 71 FR 2877, Jan. 18, 
2006; 76 FR 80246, Dec. 23, 2011]



                      Subpart S_Payment Procedures

    Authority: Secs. 205 (a) and (n), 207, 702(a)(5), and 708(a) of the 
Social Security Act (42 U.S.C. 405 (a) and (n), 407, 902(a)(5) and 
909(a)).

    Source: 45 FR 52095, Aug. 5, 1980, unless otherwise noted.



Sec. 404.1800  Introduction.

    After we have made a determination or decision that you are entitled 
to benefits under title II of the Act, we begin paying those benefits to 
you as soon as possible. This subpart explains--
    (a) What we must do so that your benefits begin promptly;
    (b) When and how you may request that payment of benefits be 
expedited;
    (c) When we may cause your benefits to be withheld;
    (d) Our obligation not to assign or transfer your benefits to 
someone; and
    (e) When we will use one check to pay benefits to two or more 
persons in a family.



Sec. 404.1805  Paying benefits.

    (a) As soon as possible after we have made a determination or 
decision that you are entitled to benefits, we certify to the Secretary 
of the Treasury, who is the Managing Trustee of the Trust Funds--
    (1) Your name and address, or the name and address of the person to 
be paid if someone receives your benefits on your behalf as a 
representative payee;
    (2) The amount of the payment or payments to be made from the 
appropriate Trust Fund; and
    (3) The time at which the payment or payments should be made in 
accordance with Sec. 404.1807.
    (b) Under certain circumstances when you have had railroad 
employment, we will certify the information to the Railroad Retirement 
Board.

[45 FR 52095, Aug. 5, 1980, as amended at 62 FR 6120, Feb. 11, 1997]



Sec. 404.1807  Monthly payment day.

    (a) General. Once we have made a determination or decision that you 
are entitled to recurring monthly benefits, you will be assigned a 
monthly payment day. Thereafter, any recurring monthly benefits which 
are payable to you will be certified to the Managing Trustee for 
delivery on or before that day of the month as part of our certification 
under Sec. 404.1805(a)(3). Except as provided in paragraphs (c)(2) 
through (c)(6) of this section, once you have been assigned a monthly 
payment day, that day will not be changed.
    (b) Assignment of payment day. (1) We will assign the same payment 
day for all individuals who receive benefits on the earnings record of a 
particular insured individual.
    (2) The payment day will be selected based on the day of the month 
on which the insured individual was born. Insured individuals born on 
the 1st through the 10th of the month will be paid on the second 
Wednesday of each month. Insured individuals born on the 11th through 
the 20th of the month will be paid on the third Wednesday of each month. 
Insured individuals born after the 20th of the month will be paid on the 
fourth Wednesday of each month. See paragraph (c) of this section for 
exceptions.
    (3) We will notify you in writing of the particular monthly payment 
day that is assigned to you.
    (c) Exceptions. (1) If you or any other person became entitled to 
benefits on the earnings record of the insured individual based on an 
application filed before May 1, 1997, you will continue to receive your 
benefits on the 3rd day of the month (but see paragraph (c)(6) of this 
section). All persons who subsequently become entitled to benefits on 
that earnings record will be assigned to the 3rd day of the month as the 
monthly payment day.
    (2) If you or any other person become entitled to benefits on the 
earnings record of the insured individual based

[[Page 679]]

on an application filed after April 30, 1997, and also become entitled 
to Supplemental Security Income (SSI) benefits or have income which is 
deemed to an SSI beneficiary (per Sec. 416.1160), all persons who are or 
become entitled to benefits on that earnings record will be assigned to 
the 3rd day of the month as the monthly payment day. We will notify you 
in writing if your monthly payment day is being changed to the 3rd of 
the month due to this provision.
    (3) If you or any other person become entitled to benefits on the 
earnings record of the insured individual based on an application filed 
after April 30, 1997, and also reside in a foreign country, all persons 
who are or become entitled to benefits on that earnings record will be 
assigned to the 3rd day of the month as the monthly payment day. We will 
notify you in writing if your monthly payment day is being changed to 
the 3rd of the month due to this provision.
    (4) If you or any other person become entitled on the earnings 
record of the insured individual based on an application filed after 
April 30, 1997, and are not entitled to SSI but are or become eligible 
for the State where you live to pay your Medicare premium under the 
provisions of section 1843 of the Act, all persons who are or become 
entitled to benefits on that earnings record will be assigned to the 3rd 
day of the month as the monthly payment day. We will notify you in 
writing if your monthly payment day is being changed to the 3rd of the 
month due to this provision.
    (5) After April 30, 1997, all individuals who become entitled on one 
record and later entitled on another record, without a break in 
entitlement, will be paid all benefits to which they are entitled no 
later than their current payment day. Individuals who are being paid 
benefits on one record on the 3rd of the month, and who become entitled 
on another record without a break in entitlement, will continue to 
receive all benefits on the 3rd of the month.
    (6) If the day regularly scheduled for the delivery of your benefit 
payment falls on a Saturday, Sunday, or Federal legal holiday, you will 
be paid on the first preceding day that is not a Saturday, Sunday, or 
Federal legal holiday.

[62 FR 6120, Feb. 11, 1997]



Sec. 404.1810  Expediting benefit payments.

    (a) General. We have established special procedures to expedite the 
payment of benefits in certain initial and subsequent claims. This 
section tells how you may request an expedited payment and when we will 
be able to hasten your payments by means of this process.
    (b) Applicability of section. (1) This section applies to monthly 
benefits payable under title II of the Act, except as indicated in 
paragraph (b)(2) of this section; and to those cases where we certify 
information to the Railroad Retirement Board.
    (2) This section does not apply--
    (i) If an initial determination has been made and a request for a 
reconsideration, a hearing, a review by the Appeals Council, or review 
by a Federal court is pending on any issue of entitlement to or payment 
of a benefit;
    (ii) To any benefit for which a check has been cashed; or
    (iii) To any benefit based on an alleged disability.
    (c) Request for payment. (1) You shall submit to us a written 
request for payment of benefits in accordance with paragraph (c)(2) or 
(c)(3) of this section. Paragraph (c)(2) of this section applies if you 
were receiving payments regularly and you then fail to receive payment 
for one or more months. Paragraph (c)(3) of this section applies if we 
have not made a determination about your entitlement to benefits, or if 
we have suspended or withheld payment due, for example, to excess 
earnings or recovery of an overpayment.
    (2) If you received a regular monthly benefit in the month before 
the month in which a payment was allegedly due, you may make a written 
request for payment any time 30 days after the 15th day of the month in 
which the payment was allegedly due. If you request is made before the 
end of the 30-day period, we will consider it to have been made at the 
end of the period.
    (3)(i) If you did not receive a regular monthly benefit in the month 
before the month in which a payment was allegedly due, you may make a 
written request for payment any time 90 days after the later of--

[[Page 680]]

    (A) The date on which the benefit is alleged to have been due; or
    (B) The date on which you furnished us the last information we 
requested from you.
    (ii) If your request is made before the end of the 90-day period we 
will consider it to have been made at the end of the period.
    (d) Certification for payment. If we find that benefits are due, we 
shall certify the benefits for payment in sufficient time to permit the 
payment to be made within 15 days after the request for expedited 
payment is made, or considered to have been made, as provided in 
paragraph (c) of this section.
    (e) Preliminary certification for payment. If we determine that 
there is evidence, although additional evidence may be required for a 
final decision, that a monthly benefit due to you in a particular month 
was not paid, we may make preliminary certification of payment even 
though the 30-day or 90-day periods described in paragraph (c) of this 
section have not elapsed.



Sec. 404.1815  Withholding certification or payments.

    (a) When certification may be withheld. After a determination or 
decision, we may withhold certification to the Managing Trustee, or, if 
we have already made certification, we may notify the Managing Trustee 
to withhold payments. We may do this if a question about the validity of 
the payment or payments to be made under the determination or decision 
arises as the result of one of the following events:
    (1) A reconsideration (whether at the request of a claimant or on 
our own motion), hearing, or review is being conducted, or a civil 
action has been filed in a Federal district court concerning the 
determination or decision.
    (2) An application or request is pending concerning the payment of 
benefits or a lump sum to another person, and the application or request 
is inconsistent, in whole or in part, with the payment or payments under 
the determination or decision.
    (b) When certification will not be withheld. We will not withhold 
certification or payment as explained in paragraph (a) of this section 
unless evidence is submitted with the request or application that is 
sufficient to raise a reasonable question about the validity of the 
payment or payments under the determination or decision. We will not 
withhold certification of any amount of the payment or payments not in 
question. Your acceptance of any payment or payments will not affect 
your right to reconsideration, hearing, or review about any additional 
payment or payments you may claim.



Sec. 404.1820  Transfer or assignment of payments.

    (a) General. We shall not certify payment to--
    (1) Any person designated as your assignee or transferee; or
    (2) Any person claiming payment because of an execution, levy, 
attachment, garnishment, or other legal process, or because of any 
bankruptcy or insolvency proceeding against or affecting you.
    (b) Enforcement of a child support or alimony obligation. If you 
have a legal obligation to provide child support or make alimony 
payments and legal process is issued to enforce this obligation, the 
provisions of paragraph (a) of this section do not apply.



Sec. 404.1821  Garnishment of payments after disbursement.

    (a) Payments that are covered by section 207 of the Social Security 
Act and made by direct deposit are subject to 31 CFR part 212, 
Garnishment of Accounts Containing Federal Benefit Payments.
    (b) This section may be amended only by a rulemaking issued jointly 
by the Department of Treasury and the agencies defined as a ``benefit 
agency'' in 31 CFR 212.3.

[76 FR 9960, Feb. 23, 2011]



Sec. 404.1825  Joint payments to a family.

    (a) Two or more beneficiaries in same family. If an amount is 
payable under title II of the Act for any month to two or more persons 
who are members of the same family, we may certify any two or more of 
the individuals for joint payment of the total benefits payable to them 
for the month.
    (b) Joint payee dies before cashing a check. (1) If a check has been 
issued for joint payment to an individual and spouse residing in the 
same household,

[[Page 681]]

and one of the joint payees dies before the check has been cashed, we 
may authorize the surviving payee to cash the check. We make the 
authorization by placing on the face of the check a stamped legend 
signed by an official of the Social Security Administration or the 
Treasury Disbursing Office redesignating the survivor as the payee of 
the check.
    (2) If the uncashed check represents benefits for a month after the 
month of death, we will not authorize the surviving payee to cash the 
check unless the proceeds of the check are necessary to meet the 
ordinary and necessary living expenses of the surviving payee.
    (c) Adjustment or recovery of overpayment. If a check representing 
payment of benefits to an individual and spouse residing in the same 
household is cashed by the surviving payee under the authorization in 
paragraph (b) of this section, and the amount of the check exceeds the 
amount to which the surviving payee is entitled, we shall make 
appropriate adjustment or recovery of the excess amount.



                    Subpart T_Totalization Agreements

    Authority: Secs. 205(a), 233, and 702(a)(5) of the Social Security 
Act (42 U.S.C. 405(a), 433, and 902(a)(5)).

    Source: 44 FR 42964, July 23, 1979, unless otherwise noted.

                           General Provisions



Sec. 404.1901  Introduction.

    (a) Under section 233 of the Social Security Act, the President may 
enter into an agreement establishing a totalization arrangement between 
the social security system of the United States and the social security 
system of a foreign country. An agreement permits entitlement to and the 
amount of old-age, survivors, disability, or derivative benefits to be 
based on a combination of a person's periods of coverage under the 
social security system of the United States and the social security 
system of the foreign country. An agreement also provides for the 
precluding of dual coverage and dual social security taxation for work 
covered under both systems. An agreement may provide that the provisions 
of the social security system of each country will apply equally to the 
nationals of both countries (regardless of where they reside). For this 
purpose, refugees, stateless persons, and other nonnationals who derive 
benefit rights from nationals, refugees, or stateless persons may be 
treated as nationals if they reside within one of the countries.
    (b) The regulations in this subpart provide definitions and 
principles for the negotiation and administration of totalization 
agreements. Where necessary to accomplish the purposes of totalization, 
we will apply these definitions and principles, as appropriate and 
within the limits of the law, to accommodate the widely diverse 
characteristics of foreign social security systems.



Sec. 404.1902  Definitions.

    For purposes of this subpart--
    Act means the Social Security Act (42 U.S.C. 301 et seq.).
    Agency means the agency responsible for the specific administration 
of a social security system including responsibility for implementing an 
agreement; the Social Security Administration (SSA) is the agency in the 
U.S.
    Agreement means the agreement negotiated to provide coordination 
between the social security systems of the countries party to the 
agreement. The term agreement includes any administrative agreements 
concluded for purposes of administering the agreement.
    Competent authority means the official with overall responsibility 
for administration of a country's social security system including 
applicable laws and international social security agreements; the 
Commissioner of Social Security is the competent authority in the U.S.
    Period of coverage means a period of payment of contributions or a 
period of earnings based on wages for employment or on self-employment 
income, or any similar period recognized as equivalent under the social 
security system of the U.S. or under the social security system of the 
foreign country which is a party to an agreement.
    Residence or ordinarily resides, when used in agreements, has the 
following

[[Page 682]]

meaning for the U.S. Residence or ordinarily resides in a country means 
that a person has established a home in that country intending to remain 
there permanently or for an indefinite period of time. Generally, a 
person will be considered to have established a home in a country if 
that person assumes certain economic burdens, such as the purchase of a 
dwelling or establishment of a business, and participates in the social 
and cultural activities of the community. If residence in a country is 
established, it may continue even though the person is temporarily 
absent from that country. Generally, an absence of six months or less 
will be considered temporary. If an absence is for more than six months, 
residence in the country will generally be considered to continue only 
if there is sufficient evidence to establish that the person intends to 
maintain the residence. Sufficient evidence would include the 
maintenance of a home or apartment in that country, the departure from 
the country with a reentry permit, or similar acts. The existence of 
business or family associations sufficient to warrant the person's 
return would also be considered.
    Social security system means a social insurance or pension system 
which is of general application and which provides for paying periodic 
benefits, or the actuarial equivalent, because of old-age, death, or 
disability.

[44 FR 42964, July 23, 1979, as amended at 62 FR 38452, July 18, 1997]



Sec. 404.1903  Negotiating totalization agreements.

    An agreement shall be negotiated with the national government of the 
foreign country for the entire country. However, agreements may only be 
negotiated with foreign countries that have a social security system of 
general application in effect. The system shall be considered to be in 
effect if it is collecting social security taxes or paying social 
security benefits.



Sec. 404.1904  Effective date of a totalization agreement.

    Section 233 of the Social Security Act provides that a totalization 
agreement shall become effective on any date provided in the agreement 
if--
    (a) The date occurs after the expiration of a period during which at 
least one House of Congress has been in session on each of 60 days 
following the date on which the agreement is transmitted to Congress by 
the President; and
    (b) Neither House of Congress adopts a resolution of disapproval of 
the agreement within the 60-day period described in paragraph (a) of 
this section.

[49 FR 29775, July 24, 1984]



Sec. 404.1905  Termination of agreements.

    Each agreement shall contain provisions for its possible 
termination. If an agreement is terminated, entitlement to benefits and 
coverage acquired by an individual before termination shall be retained. 
The agreement shall provide for notification of termination to the other 
party and the effective date of termination.

                           Benefit Provisions



Sec. 404.1908  Crediting foreign periods of coverage.

    (a) General. To have foreign periods of coverage combined with U.S. 
periods of coverage for purposes of determining entitlement to and the 
amount of benefits payable under title II, an individual must have at 
least 6 quarters of coverage, as defined in section 213 of the Social 
Security Act, under the U.S. system. As a rule, SSA will accept foreign 
coverage information, as certified by the foreign country's agency, 
unless otherwise specified by the agreement. No credit will be given, 
however, for periods of coverage acquired before January 1, 1937.
    (b) For quarters of coverage purposes. (1) Generally, a quarter of 
coverage (QC) will be credited for every 3 months (or equivalent 
period), or remaining fraction of 3 months, of coverage in a reporting 
period certified to SSA by the other country's agency. A reporting 
period used by a foreign country may be one calendar year or some other 
period of time. QCs based on foreign periods of coverage may be credited 
as QCs only to calendar quarters not already QCs under title II. The QCs 
will be assigned chronologically beginning with the first calendar 
quarter (not already a QC under title II) within

[[Page 683]]

the reporting period and continuing until all the QCs are assigned, or 
the reporting period ends. Example: Country XYZ, which has an annual 
reporting period, certifies to SSA that a worker has 8 months of 
coverage in 1975, from January 1 to August 25. The worker has no QCs 
under title II in that year. Since 8 months divided by 3 months equals 2 
QCs with a remainder of 2 months, the U.S. will credit the worker with 3 
QCs. The QCs will be credited to the first 3 calendar quarters in 1975.
    (2) If an individual fails to meet the requirements for currently 
insured status or the insured status needed for establishing a period of 
disability solely because of the assignment of QCs based on foreign 
coverage to calendar quarters chronologically, the QCs based on foreign 
coverage may be assigned to different calendar quarters within the 
beginning and ending dates of the reporting period certified by the 
foreign country, but only as permitted under paragraph (b)(1) of this 
section.



Sec. 404.1910  Person qualifies under more than one totalization
agreement.

    (a) An agreement may not provide for combining periods of coverage 
under more than two social security systems.
    (b) If a person qualifies under more than one agreement, the person 
will receive benefits from the U.S. only under the agreement affording 
the most favorable treatment.
    (c) In the absence of evidence to the contrary, the agreement that 
affords the most favorable treatment for purposes of paragraph (b) of 
this section will be determined as follows:
    (1) If benefit amounts are the same under all such agreements, 
benefits will be paid only under the agreement which affords the 
earliest month of entitlement.
    (2) If benefit amounts and the month of entitlement are the same 
under all such agreements, benefits will be paid only under the 
agreement under which all information necessary to pay such benefits is 
first available.
    (3) If benefit amounts under all such agreements are not the same, 
benefits will be paid only under the agreement under which the highest 
benefit is payable. However, benefits may be paid under an agreement 
under which a lower benefit is payable for months prior to the month of 
first entitlement to such higher benefit.

[44 FR 42964, July 23, 1979, as amended at 49 FR 29775, July 24, 1984]



Sec. 404.1911  Effects of a totalization agreement on entitlement 
to hospital insurance benefits.

    A person may not become entitled to hospital insurance benefits 
under section 226 or section 226A of the Act by combining the person's 
periods of coverage under the social security system of the United 
States with the person's periods of coverage under the social security 
system of the foreign country. Entitlement to hospital insurance 
benefits is not precluded if the person otherwise meets the 
requirements.

                           Coverage Provisions



Sec. 404.1913  Precluding dual coverage.

    (a) General. Employment or self-employment or services recognized as 
equivalent under the Act or the social security system of the foreign 
country shall, on or after the effective date of the agreement, result 
in a period of coverage under the U.S. system or under the foreign 
system, but not under both. Methods shall be set forth in the agreement 
for determining under which system the employment, self-employment, or 
other service shall result in a period of coverage.
    (b) Principles for precluding dual coverage. (1) An agreement 
precludes dual coverage by assigning responsibility for coverage to the 
U.S. or a foreign country. An agreement may modify the coverage 
provisions of title II of the Act to accomplish this purpose. Where an 
agreement assigns coverage to the foreign country, it may exempt from 
coverage services otherwise covered by the Act. Where an agreement 
assigns coverage to the U.S., it may extend coverage to services not 
otherwise covered by the Act but only for taxable years beginning on or 
after April 20, 1983.
    (2) If the work would otherwise be covered by both countries, an 
agreement will exempt it from coverage by one of the countries.

[[Page 684]]

    (3) Generally, an agreement will provide that a worker will be 
covered by the country in which he or she is employed and will be exempt 
from coverage by the other country.

    Example: A U.S. national employed in XYZ country by an employer 
located in the United States will be covered by XYZ country and exempt 
from U.S. coverage.

    (4) An agreement may provide exceptions to the principle stated in 
paragraph (b)(3) of this section so that a worker will be covered by the 
country to which he or she has the greater attachment.

    Example: A U.S. national sent by his employer located in the United 
States to work temporarily for that employer in XYZ country will be 
covered by the United States and will be exempt from coverage by XYZ 
country.

    (5) Generally, if a national of either country resides in one 
country and has self employment income that is covered by both 
countries, an agreement will provide that the person will be covered by 
the country in which he or she resides and will be exempt from coverage 
by the other country.
    (6) Agreements may provide for variations from the general 
principles for precluding dual coverage to avoid inequitable or 
anomalous coverage situations for certain workers. However, in all cases 
coverage must be provided by one of the countries.

[44 FR 42964, July 23, 1979, as amended at 50 FR 36575, Sept. 9, 1985]



Sec. 404.1914  Certificate of coverage.

    Under some agreements, proof of coverage under one social security 
system may be required before the individual may be exempt from coverage 
under the other system. Requests for certificates of coverage under the 
U.S. system may be submitted by the employer, employee, or self-employed 
individual to SSA.



Sec. 404.1915  Payment of contributions.

    On or after the effective date of the agreement, to the extent that 
employment or self-employment (or service recognized as equivalent) 
under the U.S. social security system or foreign system is covered under 
the agreement, the agreement shall provide that the work or equivalent 
service be subject to payment of contributions or taxes under only one 
system (see sections 1401(c), 3101(c), and 3111(c) of the Internal 
Revenue Code of 1954). The system under which contributions or taxes are 
to be paid is the system under which there is coverage pursuant to the 
agreement.

                         Computation Provisions



Sec. 404.1918  How benefits are computed.

    (a) General. Unless otherwise provided in an agreement, benefits 
will be computed in accordance with this section. Benefits payable under 
an agreement are based on a pro rata primary insurance amount (PIA), 
which we determine as follows:
    (1) We establish a theoretical earnings record for a worker which 
attributes to all computation base years (see Secs. 404.211(b) and 
404.241(c)) the same relative earnings position (REP) as he or she has 
in the years of his or her actual U.S. covered work. As explained in 
paragraph (b)(3) of this section, the REP is derived by determining the 
ratio of the worker's actual U.S. covered earnings in each year to the 
average of the total U.S. covered wages of all workers for that year, 
and then averaging the ratios for all such years. This average is the 
REP and is expressed as a percentage.
    (2) We compute a theoretical PIA as prescribed in Sec. 404.1918(c) 
based on the theoretical earnings record and the provisions of subpart C 
of this part.
    (3) We multiply the theoretical PIA by a fraction equal to the 
number of quarters of coverage (QC's) which the worker completed under 
the U.S. Social Security system over the number of calendar quarters in 
the worker's coverage lifetime (see paragraph (d)(2) of this section). 
See Sec. 404.140 for the definition of QC.
    (4) If the pro rata PIA is higher than the PIA which would be 
computed if the worker were insured under the U.S. system without 
totalization, the pro rata PIA will be reduced to the later PIA.
    (b) Establishing a theoretical earnings record. (1) To establish a 
worker's theoretical earnings record, we divide his or her U.S. earnings 
in each year credited

[[Page 685]]

with at least one U.S. QC by the average of the total wages of all 
workers for that year and express the quotient as a percentage. For the 
years 1937 through 1950, the average of the total wages is as follows:

------------------------------------------------------------------------
                                                              Average of
                                                              the total
                            Year                               wages of
                                                             all workers
------------------------------------------------------------------------
1937.......................................................    $1,137.96
1938.......................................................     1,053.24
1939.......................................................     1,142.36
1940.......................................................     1,195.00
1941.......................................................     1,276.04
1942.......................................................     1,454.28
1943.......................................................     1,713.52
1944.......................................................     1,936.32
1945.......................................................     2,021.40
1946.......................................................     1,891.76
1947.......................................................     2,175.32
1948.......................................................     2,361.64
1949.......................................................     2,483.20
1950.......................................................     2,543.96
------------------------------------------------------------------------

    (2) For years after 1950, the average of the total wages is as 
prescribed in Sec. 404.211(c). If a worker has earnings in the year 
preceding the year of eligibility or death, or in a later year, we may 
not have been able to establish the average of the total wages of all 
workers for that year. Therefore, we will divide a worker's actual 
earnings in these years by the average of the total wages for the latest 
year for which that information is available. Average wage information 
is considered available on January 1 of the year following the year in 
which it is published in the Federal Register.
    (3) The percentages for all years of actual covered earnings are 
then averaged to give the worker's REP for the entire period of work in 
the U.S. In determining the percentages for all years of covered 
earnings and the REP, we make adjustments as necessary to take account 
of the fact that the covered earnings for some years may have involved 
less than four U.S. QC's. The actual earnings that are taken into 
account in determining the percentage for any year with 1, 2, or 3 QC's 
cannot exceed \1/4\, \1/2\, or \3/4\, respectively, of the maximum 
creditable earnings for that year. When we determine the REP from the 
percentages for all years, we add the percentages for all years, divide 
this sum by the total number of QC's credited to the worker, and 
multiply this quotient by 4 (see Example 1 of paragraph (d) of this 
section). This has the effect of calculating the REP on a quarterly 
basis.
    (4) For each of the worker's computation base years (see 
Secs. 404.211(b), 404.221(b) and 404.241(c)), we multiply the average of 
the total wages of all workers for that year by the worker's REP. The 
product is the amount of earnings attributed to the worker for that 
year, subject to the annual wage limitation (see Sec. 404.1047). The 
worker's theoretical earnings record consists of his or her attributed 
earnings based on his or her REP for all computation base years. 
However, we do not attribute earnings to computation base years before 
the year of attainment of age 22 or to computation base years beginning 
with the year of attainment of retirement age (or the year in which a 
period of disability begins), unless the worker is actually credited 
with U.S. earnings in those years. In death cases, earnings for the year 
of death will be attributed only through the quarter of death, on a 
proportional basis.
    (c) Determining the theoretical PIA. We determine the worker's 
theoretical PIA based on his or her theoretical earnings record by 
applying the same computation method that would have applied under 
subpart C if the worker had these theoretical earnings and had qualified 
for benefits without application of an agreement. However, when the 
criteria in Sec. 404.210(a) for the Average Indexed Monthly Earnings 
(AIME) computation method are met, only that method is used. If these 
criteria are not met but the criteria in Sec. 404.220(a) for the Average 
Monthly Wage method are met, then only that method is used. If neither 
of these criteria are met, then the old-start method described in 
Sec. 404.241 is used. If a theoretical PIA is to be determined based on 
a worker's AIME, theoretical earnings amounts for each year, determined 
under paragraph (b) of this section, are indexed in determining the AIME 
under Sec. 404.211.
    (d) Determining the pro rata PIA. We then determine a pro rata PIA 
from the theoretical PIA. The pro rata PIA is the product of--
    (1) The theoretical PIA; and
    (2) The ratio of the worker's actual number of U.S. QC's to the 
number of

[[Page 686]]

calendar quarters in the worker's coverage lifetime. A coverage lifetime 
means the worker's benefit computation years as determined under 
Sec. 404.211(e), Sec. 404.221(c), or Sec. 404.241(d).

    Example 1: C attains age 62 in 1982 and needs 31 QC's to be insured. 
C worked under the U.S. system from July 1, 1974 to December 31, 1980 
and therefore has only 6\1/2\ years during which he worked under the 
U.S. system (26 QC's). C, however, has worked under the Social Security 
system of a foreign country that is party to a totalization agreement, 
and his total U.S. and foreign work, combined as described in 
Sec. 404.1908, equals more than 31 QC's. Thus, the combined coverage 
gives C insured status. The benefit is computed as follows:
    Step 1: Establish C's theoretical earnings record:
    The following table shows: (1) C's actual U.S. covered earnings for 
each year, (2) the average of the total wages of all workers for that 
year and (3) the ratio of (1) to (2):

----------------------------------------------------------------------------------------------------------------
                                                                              C's actual
                                                                                 U.S.      National   Percentage
                                Year                                   QC's     covered     average    ratio of
                                                                               earnings      wage     (1) to (2)
----------------------------------------------------------------------------------------------------------------
                                                                                     (1)         (2)         (3)
----------------------------------------------------------------------------------------------------------------
1974...............................................................        2   $2,045.08   $8,030.76    25.46558
1975...............................................................        4    7,542.00    8,630.92    87.38350
1976...............................................................        4    9,016.00    9,226.48    97.71874
1977...............................................................        4    9,952.00    9,779.44   101.76452
1978...............................................................        4   10,924.00   10,556.03   103.48587
1979...............................................................        4   12,851.00   11,479.46   111.94777
1980...............................................................        4   11,924.00   12,513.46    95.28939
----------------------------------------------------------------------------------------------------------------

    C's REP is the average of the ratios in column 3, adjusted to take 
account of the fact that C had only 2 QC's in 1974. Thus, the REP equals 
the sum of the figures in column 3 (623.05537), divided by the total 
number of C's QC's (26) and multiplied by 4, or 95.85467 percent.
    Since C attained age 62 in 1982, his computation base years are 1951 
through 1981. To establish his theoretical earnings record we use 
95.85467 percent of the national average wage for each of the years 1951 
through 1981. Since national average wage data is not available for 
1981, for that year we attribute 95.85467 percent of the national 
average wage for 1980 or $11,994.74. His theoretical earnings record 
would look like this:

1951.......................................................    $2,683.13
1952.......................................................     2,850.07
1953.......................................................     3,009.30
1954.......................................................     3,024.83
1955.......................................................     3,164.58
1956.......................................................     3,385.93
1957.......................................................     3,490.76
1958.......................................................     3,521.51
1959.......................................................     3,695.96
1960.......................................................     3,841.01
1961.......................................................     3,917.35
1962.......................................................     4,113.51
1963.......................................................     4,214.38
1964.......................................................     4,386.62
1965.......................................................     4,465.60
1966.......................................................     4,733.65
1967.......................................................     4,997.33
1968.......................................................     5,340.79
1969.......................................................     5,649.44
1970.......................................................     5,929.80
1971.......................................................     6,227.75
1972.......................................................     6,838.08
1973.......................................................     7,265.94
1974.......................................................     7,697.86
1975.......................................................     8,273.14
1976.......................................................     8,844.01
1977.......................................................     9,374.05
1978.......................................................    10,118.45
1979.......................................................    11,003.60
1980.......................................................    11,994.74
1981.......................................................    11,994.74
 

    Step 2: Compute the theoretical PIA: Since C attains age 62 in 1982, 
we determine his theoretical PIA using an AIME computation. In applying 
the AIME computation, we index each year's earnings on the theoretical 
earnings record in accordance with Sec. 404.211(d). In this example, the 
theoretical PIA is $453.
    Step 3: Compute the pro rata PIA:

                                                        Theoretical PIA
                                                      ^ Actual U.S. QC's
                                        ----------------------------------------------
                                                     calendar quarters in
                                                   benefit computation years
 
 
                                                 $453 ^ 26 QC's (6\1/2\ years)
                                        ----------------------------------------------
                                                    104 quarters (26 years)
 
 
                                             = $113.20 pro rata PIA
 

    Example 2: M needs 27 QC's to be insured, but she has only 3 years 
of work (12 QC's) under the U.S. system. M has enough foreign work, 
however, to be insured. She attained age 62 in 1978, and her U.S. 
covered earnings were in 1947, 1948 and 1949. Based on M's date of 
birth, her theoretical PIA can be computed, in accordance with 
Sec. 404.220, under a new start method. If M's earnings in 1947, 1948, 
and 1949 were 50 percent, 60 percent and 70 percent, respectively, of 
the average wage for each year, her REP would be 60 percent. For each 
year in the computation period, 60 percent of the average wage for that 
year will be attributed as M's assumed earnings. The theoretical PIA 
will then be computed as described in Secs. 404.220 through 404.222.
    To determine M's pro rata PIA, the theoretical PIA will be 
multiplied by the ratio of the actual number of U.S. QC's to the number 
of calendar quarters in the benefit computation years. There are 22 
benefit computation years, or 88 quarters. The pro rata PIA would, 
therefore, be \12/88\  x  theoretical PIA.

    (e) Rounding of benefits. (1) If the effective date of the pro rata 
PIA is before June 1982, we will round to the

[[Page 687]]

next higher multiple of 10 cents if it is not already a multiple of 10 
cents.
    (2) If the effective date of the pro rata PIA is June 1982 or later, 
we will round to the next lower multiple of 10 cents if it is not 
already a multiple of 10 cents.
    (f) Auxiliary and survivors benefits; reductions; family maximum. We 
will determine auxiliary and survivors benefit amounts (see subpart D) 
on the basis of the pro rata PIA. We will apply the regular reductions 
for age under section 202(q) of the Act to the benefits of the worker or 
to any auxiliaries or survivors which are based on the pro rata PIA (see 
Sec. 404.410). Benefits will be payable subject to the family maximum 
(see Sec. 404.403) derived from the pro rata PIA. If the pro rata PIA is 
less than the minimum PIA, the family maximum will be 1\1/2\ times the 
pro rata PIA.

[49 FR 29775, July 24, 1984]



Sec. 404.1919  How benefits are recomputed.

    Unless otherwise provided in an agreement, we will recompute 
benefits in accordance with this section. We will recompute the pro rata 
PIA only if the inclusion of the additional earnings results in an 
increase in the benefits payable by the U.S. to all persons receiving 
benefits on the basis of the worker's earnings. Subject to this 
limitation, the pro rata PIA will be automatically recomputed (see 
Sec. 404.285) to include additional earnings under the U.S. system. In 
so doing, a new REP will be established for the worker, taking the 
additional earnings into account, and assumed earnings in the 
computation base years used in the original computation will be 
refigured using the new REP. Assumed earnings will also be determined 
for the year of additional earnings using the new REP. The additional 
U.S. earnings will also be used in refiguring the ratio described in 
Sec. 404.1918(d)(2).

[49 FR 29777, July 24, 1984]



Sec. 404.1920  Supplementing the U.S. benefit if the total amount of 
the combined benefits is less than the U.S. minimum benefit.

    If a resident of the U.S. receives benefits under an agreement from 
both the U.S. and from the foreign country, the total amount of the two 
benefits may be less than the amount for which the resident would 
qualify under the U.S. system based on the minimum PIA as in effect for 
persons first becoming eligible for benefits before January 1982. An 
agreement may provide that in the case of an individual who first 
becomes eligible for benefits before January 1982, the U.S. will 
supplement the total amount to raise it to the amount for which the 
resident would have qualified under the U.S. system based on the minimum 
PIA. (The minimum benefit will be based on the first figure in column IV 
in the table in section 215(a) of the Act for a person becoming eligible 
for the benefit before January 1, 1979, or the PIA determined under 
section 215(a)(1)(C)(i)(I) of the Act (as in effect in December 1981) 
for a person becoming eligible for the benefit after December 31, 1978.)

[49 FR 29777, July 24, 1984]



Sec. 404.1921  Benefits of less than $1 due.

    If the monthly benefit amount due an individual (or several 
individuals, e.g., children, where several benefits are combined in one 
check) as a result of a claim filed under an agreement is less than $1, 
the benefits may be accumulated until they equal or exceed $5.

                            Other Provisions



Sec. 404.1925  Applications.

    (a)(1) An application, or written statement requesting benefits, 
filed with the competent authority or agency of a country with which the 
U.S. has concluded an agreement shall be considered an application for 
benefits under title II of the Act as of the date it is filed with the 
competent authority or agency if--
    (i) An applicant expresses or implies an intent to claim benefits 
from the U.S. under an agreement; and
    (ii) The applicant files an application that meets the requirements 
in subpart G of this part.
    (2) The application described in paragraph (a)(1)(ii) of this 
section must be filed, even if it is not specifically provided for in 
the agreement.

[[Page 688]]

    (b) Benefits under an agreement may not be paid on the basis of an 
application filed before the effective date of the agreement.



Sec. 404.1926  Evidence.

    (a) An applicant for benefits under an agreement shall submit the 
evidence needed to establish entitlement, as provided in subpart H of 
this part. Special evidence requirements for disability benefits are in 
subpart P of this part.
    (b) Evidence submitted to the competent authority or agency of a 
country with which the U.S. has concluded an agreement shall be 
considered as evidence submitted to SSA. SSA shall use the rules in 
Secs. 404.708 and 404.709 to determine if the evidence submitted is 
sufficient, or if additional evidence is needed to prove initial or 
continuing entitlement to benefits.
    (c) If an application is filed for disability benefits, SSA shall 
consider medical evidence submitted to a competent authority or agency, 
as described in paragraph (b) of this section, and use the rules of 
subpart P of this part for making a disability determination.



Sec. 404.1927  Appeals.

    (a) A request for reconsideration, hearing, or Appeals Council 
review of a determination that is filed with the competent authority or 
agency of a country with which the U.S. has concluded an agreement, 
shall be considered to have been timely filed with SSA if it is filed 
within the 60-day time period provided in Secs. 404.911, 404.918, and 
404.946.
    (b) A request for reconsideration, hearing, or Appeals Council 
review of a determination made by SSA resulting from a claim filed under 
an agreement shall be subject to the provisions in subpart J of this 
part. The rules governing administrative finality in subpart J of this 
part shall also apply.



Sec. 404.1928  Effect of the alien non-payment provision.

    An agreement may provide that a person entitled to benefits under 
title II of the Social Security Act may receive those benefits while 
residing in the foreign country party to the agreement, regardless of 
the alien non-payment provision (see Sec. 404.460).



Sec. 404.1929  Overpayments.

    An agreement may not authorize the adjustment of title II benefits 
to recover an overpayment made under the social security system of a 
foreign country (see Sec. 404.501). Where an overpayment is made under 
the U.S. system, the provisions in subpart F of this part will apply.



Sec. 404.1930  Disclosure of information.

    The use of information furnished under an agreement generally shall 
be governed by the national statutes on confidentiality and disclosure 
of information of the country that has been furnished the information. 
(The U.S. will be governed by pertinent provisions of the Social 
Security Act, the Freedom of Information Act, the Privacy Act, the Tax 
Reform Act, and other related statutes.) In negotiating an agreement, 
consideration, should be given to the compatibility of the other 
country's laws on confidentiality and disclosure to those of the U.S. To 
the extent possible, information exchanged between the U.S. and the 
foreign country should be used exclusively for purposes of implementing 
the agreement and the laws to which the agreement pertains.



                    Subpart U_Representative Payment

    Authority: Secs. 205(a), (j), and (k), and 702(a)(5) of the Social 
Security Act (42 U.S.C. 405(a), (j), and (k), and 902(a)(5)).

    Source: 47 FR 30472, July 14, 1982, unless otherwise noted.



Sec. 404.2001  Introduction.

    (a) Explanation of representative payment. This subpart explains the 
principles and procedures that we follow in determining whether to make 
representative payment and in selecting a representative payee. It also 
explains the responsibilities that a representative payee has concerning 
the use of the funds he or she receives on behalf of a beneficiary. A 
representative payee may be either a person or an organization selected 
by us to receive

[[Page 689]]

benefits on behalf of a beneficiary. A representative payee will be 
selected if we believe that the interest of a beneficiary will be served 
by representative payment rather than direct payment of benefits. 
Generally, we appoint a representative payee if we have determined that 
the beneficiary is not able to manage or direct the management of 
benefit payments in his or her interest.
    (b) Policy used to determine whether to make representative payment. 
(1) Our policy is that every beneficiary has the right to manage his or 
her own benefits. However, some beneficiaries due to a mental or 
physical condition or due to their youth may be unable to do so. Under 
these circumstances, we may determine that the interests of the 
beneficiary would be better served if we certified benefit payments to 
another person as a representative payee.
    (2) If we determine that representative payment is in the interest 
of a beneficiary, we will appoint a representative payee. We may appoint 
a representative payee even if the beneficiary is a legally competent 
individual. If the beneficiary is a legally incompetent individual, we 
may appoint the legal guardian or some other person as a representative 
payee.
    (3) If payment is being made directly to a beneficiary and a 
question arises concerning his or her ability to manage or direct the 
management of benefit payments, we will, if the beneficiary is 18 years 
old or older and has not been adjudged legally incompetent, continue to 
pay the beneficiary until we make a determination about his or her 
ability to manage or direct the management of benefit payments and the 
selection of a representative payee.



Sec. 404.2010  When payment will be made to a representative payee.

    (a) We pay benefits to a representative payee on behalf of a 
beneficiary 18 years old or older when it appears to us that this method 
of payment will be in the interest of the beneficiary. We do this if we 
have information that the beneficiary is--
    (1) Legally incompetent or mentally incapable of managing benefit 
payments; or
    (2) Physically incapable of managing or directing the management of 
his or her benefit payments.
    (b) Generally, if a beneficiary is under age 18, we will pay 
benefits to a representative payee. However, in certain situations, we 
will make direct payments to a beneficiary under age 18 who shows the 
ability to manage the benefits. For example, we make direct payments to 
a beneficiary under age 18 if the beneficiary is--
    (1) Receiving disability insurance benefits on his or her own Social 
Security earnings record; or
    (2) Serving in the military services; or
    (3) Living alone and supporting himself or herself; or
    (4) A parent and files for himself or herself and/or his or her 
child and he or she has experience in handling his or her own finances; 
or
    (5) Capable of using the benefits to provide for his or her current 
needs and no qualified payee is available; or
    (6) Within 7 months of attaining age 18 and is initially filing an 
application for benefits.

[47 FR 30472, July 14, 1982, as amended at 54 FR 35483, Aug. 28, 1989]



Sec. 404.2011  What happens to your monthly benefits while we are
finding a suitable representative payee for you?

    (a) We may pay you directly. We will pay current monthly benefits 
directly to you while finding a suitable representative payee unless we 
determine that paying you directly would cause substantial harm to you. 
We determine substantial harm as follows:
    (1) If you are receiving disability payments and we have determined 
that you have a drug addiction or alcoholism condition, or you are 
legally incompetent, or you are under age 15, we will presume that 
substantial harm exists. However, we will allow you to rebut this 
presumption by presenting evidence that direct payment would not cause 
you substantial harm.
    (2) If you do not fit any of these categories, we make findings of 
substantial harm on a case-by-case basis. We consider all matters that 
may affect your ability to manage your benefits in your own best 
interest. We decide that

[[Page 690]]

substantial harm exists if both of the following conditions exist:
    (i) Directly receiving benefits can be expected to cause you serious 
physical or mental injury.
    (ii) The possible effect of the injury would outweigh the effect of 
having no income to meet your basic needs.
    (b) We may delay or suspend your payments. If we find that direct 
payment will cause substantial harm to you, we may delay (in the case of 
initial entitlement to benefits) or suspend (in the case of existing 
entitlement to benefits) payments for as long as one month while we try 
to find a suitable representative payee for you. If we do not find a 
payee within one month, we will pay you directly. If you are receiving 
disability payments and we have determined that you have a drug 
addiction and alcoholism condition, or you are legally incompetent, or 
you are under age 15, we will withhold payment until a representative 
payee is appointed even if it takes longer than one month. We will, 
however, as noted in paragraph (a)(1) of this section, allow you to 
present evidence to rebut the presumption that direct payment would 
cause you substantial harm. See Sec. 404.2001(b)(3) for our policy on 
suspending benefits if you are currently receiving benefits directly.

    Example 1: Substantial Harm Exists. We are unable to find a 
representative payee for Mr. X, a 67 year old retirement beneficiary who 
is an alcoholic. Based on contacts with the doctor and beneficiary, we 
determine that Mr. X was hospitalized recently for his drinking. Paying 
him directly will cause serious injury, so we may delay payment for as 
long as one month based on substantial harm while we locate a suitable 
representative payee.
    Example 2: Substantial Harm Does Not Exist. We approve a claim for 
Mr. Y, a title II claimant who suffers from a combination of mental 
impairments but who is not legally incompetent. We determine that Mr. Y 
needs assistance in managing his benefits, but we have not found a 
representative payee. Although we believe that Mr. Y may not use the 
money wisely, there is no indication that receiving funds directly would 
cause him substantial harm (i.e., serious physical or mental injury). We 
must pay current benefits directly to Mr. Y while we locate a suitable 
representative payee.

    (c) How we pay delayed or suspended benefits. Payment of benefits, 
which were delayed or suspended pending appointment of a representative 
payee, can be made to you or your representative payee as a single sum 
or in installments when we determine that installments are in your best 
interest.

[69 FR 60232, Oct. 7, 2004]



Sec. 404.2015  Information considered in determining whether to make
representative payments.

    In determining whether to make representative payment we consider 
the following information:
    (a) Court determinations. If we learn that a beneficiary has been 
found to be legally incompetent, a certified copy of the court's 
determination will be the basis of our determination to make 
representative payment.
    (b) Medical evidence. When available, we will use medical evidence 
to determine if a beneficiary is capable of managing or directing the 
management of benefit payments. For example, a statement by a physician 
or other medical professional based upon his or her recent examination 
of the beneficiary and his or her knowledge of the beneficiary's present 
condition will be used in our determination, if it includes information 
concerning the nature of the beneficiary's illness, the beneficiary's 
chances for recovery and the opinion of the physician or other medical 
professional as to whether the beneficiary is able to manage or direct 
the management of benefit payments.
    (c) Other evidence. We will also consider any statements of 
relatives, friends and other people in a position to know and observe 
the beneficiary, which contain information helpful to us in deciding 
whether the beneficiary is able to manage or direct the management of 
benefit payments.



Sec. 404.2020  Information considered in selecting a representative
payee.

    In selecting a payee we try to select the person, agency, 
organization or institution that will best serve the interest of the 
beneficiary. In making our selection we consider--
    (a) The relationship of the person to the beneficiary;
    (b) The amount of interest that the person shows in the beneficiary;

[[Page 691]]

    (c) Any legal authority the person, agency, organization or 
institution has to act on behalf of the beneficiary;
    (d) Whether the potential payee has custody of the beneficiary; and
    (e) Whether the potential payee is in a position to know of and look 
after the needs of the beneficiary.



Sec. 404.2021  What is our order of preference in selecting a
representative payee for you?

    As a guide in selecting a representative payee, categories of 
preferred payees have been established. These preferences are flexible. 
Our primary concern is to select the payee who will best serve the 
beneficiary's interest. The preferences are:
    (a) For beneficiaries 18 years old or older (except those described 
in paragraph (b) of this section), our preference is--
    (1) A legal guardian, spouse (or other relative) who has custody of 
the beneficiary or who demonstrates strong concern for the personal 
welfare of the beneficiary;
    (2) A friend who has custody of the beneficiary or demonstrates 
strong concern for the personal welfare of the beneficiary;
    (3) A public or nonprofit agency or institution having custody of 
the beneficiary;
    (4) A private institution operated for profit and licensed under 
State law, which has custody of the beneficiary; and
    (5) Persons other than above who are qualified to carry out the 
responsibilities of a payee and who are able and willing to serve as a 
payee for a beneficiary; e.g., members of community groups or 
organizations who volunteer to serve as payee for a beneficiary.
    (b) For individuals who are disabled and who have a drug addiction 
or alcoholism condition our preference is--
    (1) A community-based nonprofit social service agency which is 
licensed by the State, or bonded;
    (2) A Federal, State, or local government agency whose mission is to 
carry out income maintenance, social service, or health care-related 
activities;
    (3) A State or local government agency with fiduciary 
responsibilities;
    (4) A designee of an agency (other than a Federal agency) referred 
to in paragraphs (b)(1), (2), and (3) of this section, if appropriate; 
or
    (5) A family member.
    (c) For beneficiaries under age 18, our preference is--
    (1) A natural or adoptive parent who has custody of the beneficiary, 
or a guardian;
    (2) A natural or adoptive parent who does not have custody of the 
beneficiary, but is contributing toward the beneficiary's support and is 
demonstrating strong concern for the beneficiary's well being;
    (3) A natural or adoptive parent who does not have custody of the 
beneficiary and is not contributing toward his or her support but is 
demonstrating strong concern for the beneficiary's well being;
    (4) A relative or stepparent who has custody of the beneficiary;
    (5) A relative who does not have custody of the beneficiary but is 
contributing toward the beneficiary's support and is demonstrating 
concern for the beneficiary's well being;
    (6) A relative or close friend who does not have custody of the 
beneficiary but is demonstrating concern for the beneficiary's well 
being; and
    (7) An authorized social agency or custodial institution.

[47 FR 30472, July 14, 1982; 47 FR 32936, July 30, 1982, as amended at 
69 FR 60232, Oct. 7, 2004]



Sec. 404.2022  Who may not serve as a representative payee?

    A representative payee applicant may not serve if he/she:
    (a) Has been convicted of a violation under section 208, 811 or 1632 
of the Social Security Act.
    (b) Has been convicted of an offense resulting in imprisonment for 
more than 1 year. However, we may make an exception to this prohibition, 
if the nature of the conviction is such that selection of the applicant 
poses no risk to the beneficiary and the exception is in the 
beneficiary's best interest.
    (c) Receives title II, VIII, or XVI benefits through a 
representative payee.
    (d) Previously served as a representative payee and was found by us, 
or a court of competent jurisdiction, to

[[Page 692]]

have misused title II, VIII or XVI benefits. However, if we decide to 
make an exception to this prohibition, we must evaluate the payee's 
performance at least every 3 months until we are satisfied that the 
payee poses no risk to the beneficiary's best interest. Exceptions are 
made on a case-by-case basis if all of the following are true:
    (1) Direct payment of benefits to the beneficiary is not in the 
beneficiary's best interest.
    (2) No suitable alternative payee is available.
    (3) Selecting the payee applicant as representative payee would be 
in the best interest of the beneficiary.
    (4) The information we have indicates the applicant is now suitable 
to serve as a representative payee.
    (5) The payee applicant has repaid the misused benefits or has a 
plan to repay them.
    (e) Is a creditor. A creditor is someone who provides you with goods 
or services for consideration. This restriction does not apply to the 
creditor who poses no risk to you and whose financial relationship with 
you presents no substantial conflict of interest, and who is any of the 
following:
    (1) A relative living in the same household as you do.
    (2) Your legal guardian or legal representative.
    (3) A facility that is licensed or certified as a care facility 
under the law of a State or a political subdivision of a State.
    (4) A qualified organization authorized to collect a monthly fee 
from you for expenses incurred in providing representative payee 
services for you, under Sec. 404.2040a.
    (5) An administrator, owner, or employee of the facility in which 
you live, and we are unable to locate an alternative representative 
payee.
    (6) Any other individual we deem appropriate based on a written 
determination.

    Example 1: Sharon applies to be representative payee for Ron who we 
have determined cannot manage his benefits. Sharon has been renting a 
room to Ron for several years and assists Ron in handling his other 
financial obligations, as needed. She charges Ron a reasonable amount of 
rent. Ron has no other family or friends willing to help manage his 
benefits or to act as representative payee. Sharon has demonstrated that 
her interest in and concern for Ron goes beyond her desire to collect 
the rent each month. In this instance, we may select Sharon as Ron's 
representative payee because a more suitable payee is not available, she 
appears to pose no risk to Ron and there is minimal conflict of 
interest. We will document this decision.
    Example 2: In a situation similar to the one above, Ron's landlord 
indicates that she is applying to be payee only to ensure receipt of her 
rent. If there is money left after payment of the rent, she will give it 
directly to Ron to manage on his own. In this situation, we would not 
select the landlord as Ron's representative payee because of the 
substantial conflict of interest and lack of interest in his well being.

[69 FR 60232, Oct. 7, 2004, as amended at 71 FR 61407, Oct. 18, 2006]



Sec. 404.2024  How do we investigate a representative payee 
applicant?

    Before selecting an individual or organization to act as your 
representative payee, we will perform an investigation.
    (a) Nature of the investigation. As part of the investigation, we do 
the following:
    (1) Conduct a face-to-face interview with the payee applicant unless 
it is impracticable as explained in paragraph (c) of this section.
    (2) Require the payee applicant to submit documented proof of 
identity, unless information establishing identity has recently been 
submitted with an application for title II, VIII or XVI benefits.
    (3) Verify the payee applicant's Social Security account number or 
employer identification number.
    (4) Determine whether the payee applicant has been convicted of a 
violation of section 208, 811 or 1632 of the Social Security Act.
    (5) Determine whether the payee applicant has previously served as a 
representative payee and if any previous appointment as payee was 
revoked or terminated for misusing title II, VIII or XVI benefits.
    (6) Use our records to verify the payee applicant's employment and/
or direct receipt of title II, VIII, or XVI benefits.
    (7) Verify the payee applicant's concern for the beneficiary with 
the beneficiary's custodian or other interested person.

[[Page 693]]

    (8) Require the payee applicant to provide adequate information 
showing his or her relationship to the beneficiary and to describe his 
or her responsibility for the care of the beneficiary.
    (9) Determine whether the payee applicant is a creditor of the 
beneficiary (see Sec. 404.2022(d)).
    (b) Subsequent face-to-face interviews. After holding a face-to-face 
interview with a payee applicant, subsequent face-to-face interviews are 
not required if that applicant continues to be qualified and currently 
is acting as a payee, unless we determine, within our discretion, that a 
new face-to-face interview is necessary. We base this decision on the 
payee's past performance and knowledge of and compliance with our 
reporting requirements.
    (c) Impracticable. We may consider a face-to-face interview 
impracticable if it would cause the payee applicant undue hardship. For 
example, the payee applicant would have to travel a great distance to 
the field office. In this situation, we may conduct the investigation to 
determine the payee applicant's suitability to serve as a representative 
payee without a face-to-face interview.

[69 FR 60233, Oct. 7, 2004, as amended at 73 FR 66521, Nov. 10, 2008]



Sec. 404.2025  What information must a representative payee report
to us?

    Anytime after we select a representative payee for you, we may ask 
your payee to give us information showing a continuing relationship with 
you, a continuing responsibility for your care, and how he/she used the 
payments on your behalf. If your representative payee does not give us 
the requested information within a reasonable period of time, we may 
stop sending your benefit payment to him/her--unless we determine that 
he/she had a satisfactory reason for not meeting our request and we 
subsequently receive the requested information. If we decide to stop 
sending your payment to your representative payee, we will consider 
paying you directly (in accordance with Sec. 404.2011) while we look for 
a new payee.

[69 FR 60233, Oct. 7, 2004]



Sec. 404.2030  How will we notify you when we decide you need a
representative payee?

    (a) We notify you in writing of our determination to make 
representative payment. This advance notice explains that we have 
determined that representative payment is in your interest, and it 
provides the name of the representative payee we have selected. We 
provide this notice before we actually appoint the payee. If you are 
under age 15, an unemancipated minor under the age of 18, or legally 
incompetent, our written notice goes to your legal guardian or legal 
representative. The advance notice:
    (1) Contains language that is easily understandable to the reader.
    (2) Identifies the person designated as your representative payee.
    (3) Explains that you, your legal guardian, or your legal 
representative can appeal our determination that you need a 
representative payee.
    (4) Explains that you, your legal guardian, or your legal 
representative can appeal our designation of a particular person or 
organization to serve as your representative payee.
    (5) Explains that you, your legal guardian, or your legal 
representative can review the evidence upon which our designation of a 
particular representative payee is based and submit additional evidence.
    (b) If you, your legal guardian, or your legal representative 
objects to representative payment or to the designated payee, we will 
handle the objection as follows:
    (1) If you disagree with the decision and wish to file an appeal, we 
will process it under subpart J of this part.
    (2) If you received your advance notice by mail and you protest or 
file your appeal within 10 days after you receive this notice, we will 
delay the action until we make a decision on your protest or appeal. (If 
you received and signed your notice while you were in the local field 
office, our decision will be effective immediately.)

[69 FR 60233, Oct. 7, 2004]



Sec. 404.2035  What are the responsibilities of your representative
payee?

    A representative payee has a responsibility to--

[[Page 694]]

    (a) Use the benefits received on your behalf only for your use and 
benefit in a manner and for the purposes he or she determines, under the 
guidelines in this subpart, to be in your best interests;
    (b) Keep any benefits received on your behalf separate from his or 
her own funds and show your ownership of these benefits unless he or she 
is your spouse or natural or adoptive parent or stepparent and lives in 
the same household with you or is a State or local government agency for 
whom we have granted an exception to this requirement;
    (c) Treat any interest earned on the benefits as your property;
    (d) Notify us of any event or change in your circumstances that will 
affect the amount of benefits you receive, your right to receive 
benefits, or how you receive them;
    (e) Submit to us, upon our request, a written report accounting for 
the benefits received on your behalf, and make all supporting records 
available for review if requested by us; and
    (f) Notify us of any change in his or her circumstances that would 
affect performance of his/her payee responsibilities.

[71 FR 61407, Oct. 18, 2006]



Sec. 404.2040  Use of benefit payments.

    (a) Current maintenance. (1) We will consider that payments we 
certify to a representative payee have been used for the use and benefit 
of the beneficiary if they are used for the beneficiary's current 
maintenance. Current maintenance includes cost incurred in obtaining 
food, shelter, clothing, medical care, and personal comfort items.

    Example: An aged beneficiary is entitled to a monthly Social 
Security benefit of $400. Her son, who is her payee, disburses her 
benefits in the following manner:

Rent and utilities...............................................   $200
Medical..........................................................     25
Food.............................................................     60
Clothing (coat)..................................................     55
Savings..........................................................     30
Miscellaneous....................................................     30
 


The above expenditures would represent proper disbursements on behalf of 
the beneficiary.

    (2) Notwithstanding the provisions of paragraph (a)(1) of this 
section, if a beneficiary is a member of an Aid to Families With 
Dependent Children (AFDC) assistance unit, we do not consider it 
inappropriate for a representative payee to make the benefit payments 
available to the AFDC assistance unit.
    (b) Institutional care. If a beneficiary is receiving care in a 
Federal, State, or private institution because of mental or physical 
incapacity, current maintenance includes the customary charges made by 
the institution, as well as expenditures for those items which will aid 
in the beneficiary's recovery or release from the institution or 
expenses for personal needs which will improve the beneficiary's 
conditions while in the institution.

    Example: An institutionalized beneficiary is entitled to a monthly 
Social Security benefit of $320. The institution charges $700 a month 
for room and board. The beneficiary's brother, who is the payee, learns 
the beneficiary needs new shoes and does not have any funds to purchase 
miscellaneous items at the institution's canteen.
    The payee takes his brother to town and buys him a pair of shoes for 
$29. He also takes the beneficiary to see a movie which costs $3. When 
they return to the institution, the payee gives his brother $3 to be 
used at the canteen.
    Although the payee normally withholds only $25 a month from Social 
Security benefit for the beneficiary's personal needs, this month the 
payee deducted the above expenditures and paid the institution $10 less 
than he usually pays.
    The above expenditures represent what we would consider to be proper 
expenditures for current maintenance.

    (c) Support of legal dependents. If the current maintenance needs of 
the beneficiary are met, the payee may use part of the payments for the 
support of the beneficiary's legally dependent spouse, child, and/or 
parent.

    Example: A disabled beneficiary receives a Veterans Administration 
(VA) benefit of $325 and a Social Security benefit of $525. The 
beneficiary resides in a VA hospital and his VA benefits are sufficient 
to provide for all of his needs; i.e., cost of care and personal needs. 
The beneficiary's legal dependents--his wife and two children--have a 
total income of $250 per month in Social Security benefits. However, 
they have expenses of approximately $450 per month.

[[Page 695]]

    Because the VA benefits are sufficient to meet the beneficiary's 
needs, it would be appropriate to use part of his Social Security 
benefits to support his dependents.

    (d) Claims of creditors. A payee may not be required to use benefit 
payments to satisfy a debt of the beneficiary, if the debt arose prior 
to the first month for which payments are certified to a payee. If the 
debt arose prior to this time, a payee may satisfy it only if the 
current and reasonably foreseeable needs of the beneficiary are met.

    Example: A retroactive Social Security check in the amount of 
$1,640, representing benefits due for July 1980 through January 1981, 
was issued on behalf of the beneficiary to the beneficiary's aunt who is 
the representative payee. The check was certified in February 1981.
    The nursing home, where the beneficiary resides, submitted a bill 
for $1,139 to the payee for maintenance expenses the beneficiary 
incurred during the period from June 1980 through November 1980. 
(Maintenance charges for December 1980 through February 1981 had 
previously been paid.)
    Because the benefits were not required for the beneficiary's current 
maintenance, the payee had previously saved over $500 for the 
beneficiary and the beneficiary had no foreseeable needs which would 
require large disbursements, the expenditure for the maintenance charges 
would be consistent with our guidelines.

[47 FR 30472, July 14, 1982, as amended at 54 FR 35483, Aug. 28, 1989]



Sec. 404.2040a  Compensation for qualified organizations serving as 
representative payees.

    (a) Organizations that can request compensation. A qualified 
organization can request us to authorize it to collect a monthly fee 
from your benefit payment. A qualified organization is:
    (1) Any State or local government agency with fiduciary 
responsibilities or whose mission is to carry out income maintenance, 
social service, or health care-related activities; or
    (2) Any community-based nonprofit social service organization 
founded for religious, charitable or social welfare purposes, which is 
tax exempt under section 501(c) of the Internal Revenue Code and which 
is bonded/insured to cover misuse and embezzlement by officers and 
employees and which is licensed in each State in which it serves as 
representative payee (if licensing is available in the State). The 
minimum amount of bonding or insurance coverage must equal the average 
monthly amount of social security payments received by the organization 
plus the amount of the beneficiaries' conserved funds (i.e., 
beneficiaries' saved social security benefits) plus interest on hand. 
For example, an organization that has conserved funds of $5,000 and 
receives an average of $12,000 a month in social security payments must 
be bonded/insured for a minimum of $17,000. The license must be 
appropriate under the laws of the State for the type of services the 
organization provides. An example of an appropriately licensed 
organization is a community mental health center holding a State license 
to provide community mental health services.
    (b) Requirements qualified organizations must meet. Organizations 
that are qualified under paragraphs (a)(1) or (a)(2) of this section 
must also meet the following requirements before we can authorize them 
to collect a monthly fee.
    (1) A qualified organization must regularly provide representative 
payee services concurrently to at least five beneficiaries. An 
organization which has received our authorization to collect a fee for 
representative payee services, but is temporarily (not more than 6 
months) not a payee for at least five beneficiaries, may request our 
approval to continue to collect fees.
    (2) A qualified organization must demonstrate that it is not a 
creditor of the beneficiary. See paragraph (c) of this section for 
exceptions to the requirement regarding creditors.
    (c) Creditor relationship. On a case-by-case basis, we may authorize 
an organization to collect a fee for payee services despite the creditor 
relationship. (For example, the creditor is the beneficiary's landlord.) 
To provide this authorization, we will review all of the evidence 
submitted by the organization and authorize collection of a fee when:
    (1) The creditor services (e.g., providing housing) provided by the 
organization help to meet the current needs of the beneficiary; and

[[Page 696]]

    (2) The amount the organization charges the beneficiary for these 
services is commensurate with the beneficiary's ability to pay.
    (d) Authorization process. (1) An organization must request in 
writing and receive an authorization from us before it may collect a 
fee.
    (2) An organization seeking authorization to collect a fee must also 
give us evidence to show that it is qualified, pursuant to paragraphs 
(a), (b), and (c) of this section, to collect a fee.
    (3) If the evidence provided to us by the organization shows that it 
meets the requirements of this section, and additional investigation by 
us proves it suitable to serve, we will notify the organization in 
writing that it is authorized to collect a fee. If we need more 
evidence, or if we are not able to authorize the collection of a fee, we 
will also notify the organization in writing that we have not authorized 
the collection of a fee.
    (e) Revocation and cancellation of the authorization. (1) We will 
revoke an authorization to collect a fee if we have evidence which 
establishes that an organization no longer meets the requirements of 
this section. We will issue a written notice to the organization 
explaining the reason(s) for the revocation.
    (2) An organization may cancel its authorization at any time upon 
written notice to us.
    (f) Notices. The written notice we will send to an organization 
authorizing the collection of a fee will contain an effective date for 
the collection of a fee pursuant to paragraphs (a), (b) and (c) of this 
section. The effective date will be no earlier than the month in which 
the organization asked for authorization to collect a fee. The notice 
will be applicable to all beneficiaries for whom the organization was 
payee at the time of our authorization and all beneficiaries for whom 
the organization becomes payee while the authorization is in effect.
    (g) Limitation on fees. (1) An organization authorized to collect a 
fee under this section may collect from a beneficiary a monthly fee for 
expenses (including overhead) it has incurred in providing payee 
services to a beneficiary. The limit on the fee a qualified organization 
may collect for providing payee services increases by the same 
percentage as the annual cost of living adjustment (COLA). The increased 
fee amount (rounded to the nearest dollar) is taken beginning with the 
benefit for December (received in January).
    (2) Any agreement providing for a fee in excess of the amount 
permitted shall be void and treated as misuse of your benefits by the 
organization under Sec. 404.2041.
    (3) A fee may be collected for any month during which the 
organization--
    (i) Provides representative payee services;
    (ii) Receives a benefit payment for the beneficiary; and
    (iii) Is authorized to receive a fee for representative payee 
services.
    (4) Fees for services may not be taken from any funds conserved for 
the beneficiary by a payee in accordance with Sec. 404.2045.
    (5) Generally, an organization may not collect a fee for months in 
which it does not receive a benefit payment. However, an organization 
will be allowed to collect a fee for months in which it did not receive 
a payment if we later issue payment for these months and the 
organization:
    (i) Received our approval to collect a fee for the months for which 
payment is made;
    (ii) Provided payee services in the months for which payment is 
made; and
    (iii) Was the payee when the retroactive payment was paid by us.
    (6) Fees for services may not be taken from beneficiary benefits for 
the months for which we or a court of competent jurisdiction 
determine(s) that the representative payee misused benefits. Any fees 
collected for such months will be treated as a part of the beneficiary's 
misused benefits.
    (7) An authorized organization can collect a fee for providing 
representative payee services from another source if the total amount of 
the fee collected from both the beneficiary and the other source does 
not exceed the amount authorized by us.

[69 FR 60234, Oct. 7, 2004, as amended at 71 FR 61407, Oct. 18, 2006]

[[Page 697]]



Sec. 404.2041  Who is liable if your representative payee misuses 
your benefits?

    (a) A representative payee who misuses your benefits is responsible 
for paying back misused benefits. We will make every reasonable effort 
to obtain restitution of misused benefits so that we can repay these 
benefits to you.
    (b) Whether or not we have obtained restitution from the misuser, we 
will repay benefits in cases when we determine that a representative 
payee misused benefits and the representative payee is an organization 
or an individual payee serving 15 or more beneficiaries. When we make 
restitution, we will pay you or your alternative representative payee an 
amount equal to the misused benefits less any amount we collected from 
the misuser and repaid to you.
    (c) Whether or not we have obtained restitution from the misuser, we 
will repay benefits in cases when we determine that an individual 
representative payee serving 14 or fewer beneficiaries misused benefits 
and our negligent failure in the investigation or monitoring of that 
representative payee results in the misuse. When we make restitution, we 
will pay you or your alternative representative payee an amount equal to 
the misused benefits less any amount we collected from the misuser and 
repaid to you.
    (d) The term ``negligent failure'' used in this subpart means that 
we failed to investigate or monitor a representative payee or that we 
did investigate or monitor a representative payee but did not follow 
established procedures in our investigation or monitoring. Examples of 
our negligent failure include, but are not limited to, the following:
    (1) We did not follow our established procedures in this subpart 
when investigating, appointing, or monitoring a representative payee;
    (2) We did not timely investigate a reported allegation of misuse; 
or
    (3) We did not take the necessary steps to prevent the issuance of 
payments to the representative payee after it was determined that the 
payee misused benefits.
    (e) Our repayment of misused benefits under these provisions does 
not alter the representative payee's liability and responsibility as 
described in paragraph (a) of this section.
    (f) Any amounts that the representative payee misuses and does not 
refund will be treated as an overpayment to that representative payee. 
See subpart F of this part.

[69 FR 60234, Oct. 7, 2004, as amended at 71 FR 61408, Oct. 18, 2006]



Sec. 404.2045  Conservation and investment of benefit payments.

    (a) General. After the representative payee has used benefit 
payments consistent with the guidelines in this subpart (see 
Sec. 404.2040 regarding use of benefits), any remaining amount shall be 
conserved or invested on behalf of the beneficiary. Conserved funds 
should be invested in accordance with the rules followed by trustees. 
Any investment must show clearly that the payee holds the property in 
trust for the beneficiary.

    Example: A State institution for children with intellectual 
disability, which is receiving Medicaid funds, is representative payee 
for several Social Security beneficiaries. The checks the payee receives 
are deposited into one account which shows that the benefits are held in 
trust for the beneficiaries. The institution has supporting records 
which show the share each individual has in the account. Funds from this 
account are disbursed fairly quickly after receipt for the current 
support and maintenance of the beneficiaries as well as for 
miscellaneous needs the beneficiaries may have. Several of the 
beneficiaries have significant accumulated resources in this account. 
For those beneficiaries whose benefits have accumulated over $150, the 
funds should be deposited in an interest-bearing account or invested 
relatively free of risk on behalf of the beneficiaries.

    (b) Preferred investments. Preferred investments for excess funds 
are U.S. Savings Bonds and deposits in an interest or dividend paying 
account in a bank, trust company, credit union, or savings and loan 
association which is insured under either Federal or State law. The 
account must be in a form which shows clearly that the representative 
payee has only a fiduciary and not a personal interest in the funds. If 
the payee is the legally appointed guardian or fiduciary of the 
beneficiary, the account may be established to indicate this 
relationship. If the

[[Page 698]]

payee is not the legally appointed guardian or fiduciary, the accounts 
may be established as follows:
    (1) For U.S. Savings Bonds--

    ______ (Name of beneficiary) ______ (Social Security Number), for 
whom ___ (Name of payee) is representative payee for Social Security 
benefits;

    (2) For interest or dividend paying accounts--

    ______ (Name of beneficiary) by ______ (Name of payee), 
representative payee.

    (c) Interest and dividend payments. The interest and dividends which 
result from an investment are the property of the beneficiary and may 
not be considered to be the property of the payee.

[47 FR 30472, July 14, 1982, as amended at 54 FR 35483, Aug. 28, 1989; 
78 FR 46501, Aug. 1, 2013]



Sec. 404.2050  When will we select a new representative payee
for you?

    When we learn that your interest is not served by sending your 
benefit payment to your present representative payee or that your 
present payee is no longer able or willing to carry out payee 
responsibilities, we will promptly stop sending your payment to the 
payee. We will then send your benefit payment to an alternative payee or 
directly to you, until we find a suitable payee. We may suspend payment 
as explained in Sec. 404.2011(c) if we find that paying you directly 
would cause substantial harm and we cannot find a suitable alternative 
representative payee before your next payment is due. We will terminate 
payment of benefits to your representative payee and find a new payee or 
pay you directly if the present payee:
    (a) Has been found by us or a court of competent jurisdiction to 
have misused your benefits;
    (b) Has not used the benefit payments on your behalf in accordance 
with the guidelines in this subpart;
    (c) Has not carried out the other responsibilities described in this 
subpart;
    (d) Dies;
    (e) No longer wishes to be your payee;
    (f) Is unable to manage your benefit payments; or
    (g) Fails to cooperate, within a reasonable time, in providing 
evidence, accounting, or other information we request.

[69 FR 60235, Oct. 7, 2004]



Sec. 404.2055  When representative payment will be stopped.

    If a beneficiary receiving representative payment shows us that he 
or she is mentally and physically able to manage or direct the 
management of benefit payments, we will make direct payment. Information 
which the beneficiary may give us to support his or her request for 
direct payment include the following--
    (a) A physician's statement regarding the beneficiary's condition, 
or a statement by a medical officer of the institution where the 
beneficiary is or was confined, showing that the beneficiary is able to 
manage or direct the management of his or her funds; or
    (b) A certified copy of a court order restoring the beneficiary's 
rights in a case where a beneficiary was adjudged legally incompetent; 
or
    (c) Other evidence which establishes the beneficiary's ability to 
manage or direct the management of benefits.



Sec. 404.2060  Transfer of accumulated benefit payments.

    A representative payee who has conserved or invested benefit 
payments shall transfer these funds and the interest earned from the 
invested funds to either a successor payee, to the beneficiary, or to 
us, as we will specify. If the funds and the earned interest are 
returned to us, we will recertify them to a successor representative 
payee or to the beneficiary.

[47 FR 30472, July 14, 1982; 47 FR 34781, Aug. 11, 1982, as amended at 
75 FR 7552, Feb. 22, 2010]



Sec. 404.2065  How does your representative payee account for the 
use of benefits?

    Your representative payee must account for the use of your benefits. 
We require written reports from your representative payee at least once 
a year (except for certain State institutions that participate in a 
separate onsite review program). We may verify how your representative 
payee used your

[[Page 699]]

benefits. Your representative payee should keep records of how benefits 
were used in order to make accounting reports and must make those 
records available upon our request. If your representative payee fails 
to provide an annual accounting of benefits or other required reports, 
we may require your payee to receive your benefits in person at the 
local Social Security field office or a United States Government 
facility that we designate serving the area in which you reside. The 
decision to have your representative payee receive your benefits in 
person may be based on a variety of reasons. Some of these reasons may 
include the payee's history of past performance or our past difficulty 
in contacting the payee. We may ask your representative payee to give us 
the following information:
    (a) Where you lived during the accounting period;
    (b) Who made the decisions on how your benefits were spent or saved;
    (c) How your benefit payments were used; and
    (d) How much of your benefit payments were saved and how the savings 
were invested.

[69 FR 60235, Oct. 7, 2004, as amended at 71 FR 61408, Oct. 18, 2006]



        Subpart V_Payments for Vocational Rehabilitation Services

    Authority: Secs. 205(a), 222, and 702(a)(5) of the Social Security 
Act (42 U.S.C. 405(a), 422, and 902(a)(5)).

    Source: 48 FR 6293, Feb. 10, 1983, unless otherwise noted.

                           General Provisions



Sec. 404.2101  General.

    Section 222(d) of the Social Security Act authorizes the transfer 
from the Federal Old-Age and Survivors Insurance Trust Fund and the 
Federal Disability Insurance Trust Fund of such sums as may be necessary 
to pay for the reasonable and necessary costs of vocational 
rehabilitation (VR) services provided certain disabled individuals 
entitled under section 223, 225(b), 202(d), 202(e) or 202(f) of the 
Social Security Act. The purpose of this provision is to make VR 
services more readily available to disabled individuals and ensure that 
savings accrue to the Federal Old-Age and Survivors Insurance Trust Fund 
and the Federal Disability Insurance Trust Fund. Payment will be made 
for VR services provided on behalf of such an individual in cases 
where--
    (a) The furnishing of the VR services results in the individual's 
completion of a continuous 9-month period of substantial gainful 
activity (SGA) as specified in Secs. 404.2110 through 404.2111; or
    (b) The individual continues to receive disability payments from us, 
even though his or her disability has ceased, because of his or her 
continued participation in an approved VR program which we have 
determined will increase the likelihood that he or she will not return 
to the disability rolls (see Sec. 404.2112).

[68 FR 40123, July 7, 2003]



Sec. 404.2102  Purpose and scope.

    This subpart describes the rules under which the Commissioner will 
pay the State VR agencies or alternate participants for VR services. 
Payment will be provided for VR services provided on behalf of disabled 
individuals under one or more of the provisions discussed in 
Sec. 404.2101.
    (a) Sections 404.2101 through 404.2103 describe the purpose of these 
regulations and the meaning of terms we frequently use in them.
    (b) Section 404.2104 explains how State VR agencies or alternate 
participants may participate in the payment program under this subpart.
    (c) Section 404.2106 describes the basic qualifications for 
alternate participants.
    (d) Sections 404.2108 through 404.2109 describe the requirements and 
conditions under which we will pay a State VR agency or alternate 
participant under this subpart.
    (e) Sections 404.2110 through 404.2111 describe when an individual 
has completed a continuous period of SGA and when VR services will be 
considered to have contributed to that period.
    (f) Section 404.2112 describes when payment will be made to a VR 
agency or alternate participant because an individual's disability 
benefits are continued based on his or her participation

[[Page 700]]

in a VR program which we have determined will increase the likelihood 
that he or she will not return to the disability rolls.
    (g) Sections 404.2114 through 404.2115 describe services for which 
payment will be made.
    (h) Section 404.2116 describes the filing deadlines for claims for 
payment for VR services.
    (i) Section 404.2117 describes the payment conditions.
    (j) Section 404.2118 describes the applicability of these 
regulations to alternate participants.
    (k) Section 404.2119 describes how we will make payment to State VR 
agencies or alternate participants for rehabilitation services.
    (l) Sections 404.2120 and 404.2121 describe the audits and the 
prepayment and postpayment validation reviews we will conduct.
    (m) Section 404.2122 discusses confidentiality of information and 
records.
    (n) Section 404.2123 provides for the applicability of other Federal 
laws and regulations.
    (o) Section 404.2127 provides for the resolution of disputes.

[48 FR 6293, Feb. 10, 1983, as amended at 55 FR 8454, Mar. 8, 1990; 59 
FR 11912, Mar. 15, 1994; 62 FR 38452, July 18, 1997; 68 FR 40123, July 
7, 2003]



Sec. 404.2103  Definitions.

    For purposes of this subpart:
    Accept the beneficiary as a client for VR services means that the 
State VR agency determines that the individual is eligible for VR 
services and places the individual into an active caseload status for 
development of an individualized written rehabilitation program.
    Act means the Social Security Act, as amended.
    Alternate participants means any public or private agencies (except 
participating State VR agencies (see Sec. 404.2104)), organizations, 
institutions, or individuals with whom the Commissioner has entered into 
an agreement or contract to provide VR services.
    Commissioner means the Commissioner of Social Security or the 
Commissioner's designee.
    Disability means ``disability'' or ``blindness'' as defined in 
sections 216(i) and 223 of the Act.
    Disability beneficiary means a disabled individual who is entitled 
to benefits under section 223, 202(d), 202(e) or 202(f) of the act or is 
continuing to receive payment under section 225(b) of the Act after his 
or her disabling physical or mental impairments have ceased.
    Medical recovery for purposes of this subpart is established when a 
beneficiary's disability entitlement ceases for any medical reason 
(other than death). The determination of medical recovery is made by the 
Commissioner in deciding a beneficiary's continuing entitlement to 
benefits.
    Place the beneficiary into an extended evaluation process means that 
the State VR agency determines that an extended evaluation of the 
individual's VR potential is necessary to determine whether the 
individual is eligible for VR services and places the individual into an 
extended evaluation status.
    SGA means substantial gainful activity performed by an individual as 
defined in Secs. 404.1571 through 404.1575 or Sec. 404.1584 of this 
subpart.
    State means any of the 50 States of the United States, the 
Commonwealth of Puerto Rico, the District of Columbia, the Virgin 
Islands, or Guam. It includes the State VR agency.
    Trust Funds means the Federal Old-Age and Survivors Insurance Trust 
Fund and the Federal Disability Insurance Trust Fund.
    Vocational rehabilitation services has the meaning assigned to it 
under title I of the Rehabilitation Act of 1973.
    VR agency means an agency of the State which has been designated by 
the State to provide vocational rehabilitation services under title I of 
the Rehabilitation Act of 1973.
    Waiting period means a five consecutive calendar month period 
throughout which an individual must be under a disability and which must 
be served before disability benefits can be paid (see Sec. 404.315(d)).
    We, us and our refer to the Social Security Administration (SSA).

[48 FR 6293, Feb. 10, 1983, as amended at 55 FR 8454, Mar. 8, 1990; 59 
FR 11912, Mar. 15, 1994; 62 FR 38452, July 18, 1997; 68 FR 40123, July 
7, 2003]

[[Page 701]]



Sec. 404.2104  Participation by State VR agencies or alternate
participants.

    (a) General. In order to participate in the payment program under 
this subpart through its VR agency(ies), a State must have a plan which 
meets the requirements of title I of the Rehabilitation Act of 1973, as 
amended. An alternate participant must have a similar plan and otherwise 
qualify under Sec. 404.2106.
    (b) Participation by States. (1) The opportunity to participate 
through its VR agency(ies) with respect to disability beneficiaries in 
the State will be offered first to the State in accordance with 
paragraph (c) of this section, unless the State has notified us in 
advance under paragraph (e)(1) of this section of its decision not to 
participate or to limit such participation.
    (2) A State with one or more approved VR agencies may choose to 
limit participation of those agencies to a certain class(es) of 
disability beneficiaries. For example, a State with separate VR agencies 
for the blind and disabled may choose to limit participation to the VR 
agency for the blind. In such a case, we would give the State, through 
its VR agency for the blind, the opportunity to participate with respect 
to blind disability beneficiaries in the State in accordance with 
paragraph (d) of this section. We would arrange for VR services for non-
blind disability beneficiaries in the State through an alternate 
participant(s). A State that chooses to limit participation of its VR 
agency(ies) must notify us in advance under paragraph (e)(1) of this 
section of its decision to limit such participation.
    (3) If a State chooses to participate by using a State agency other 
than a VR agency with a plan for VR services approved under title I of 
the Rehabilitation Act of 1973, as amended, that State agency may 
participate only as an alternate participant.
    (c) Opportunity for participation through State VR agencies. (1) 
Unless a State has decided not to participate or to limit participation, 
we will give the State the opportunity to participate through its VR 
agency(ies) with respect to disability beneficiaries in the State by 
referring such beneficiaries first to the State VR agency(ies) for 
necessary VR services. A State, through its VR agency(ies), may 
participate with respect to any beneficiary so referred by accepting the 
beneficiary as a client for VR services or placing the beneficiary into 
an extended evaluation process and notifying us under paragraph (c)(2) 
of this section of such acceptance or placement.
    (2)(i) In order for the State to participate with respect to a 
disability beneficiary whom we referred to a State VR agency, the State 
VR agency must notify the appropriate Regional Commissioner (SSA) in 
writing or through electronic notification of its decision either to 
accept the beneficiary as a client for VR services or to place the 
beneficiary into an extended evaluation process. The notice must be 
received by the appropriate Regional Commissioner (SSA) no later than 
the close of the fourth month following the month in which we referred 
the beneficiary to the State VR agency. If we do not receive such notice 
with respect to a beneficiary whom we referred to the State VR agency, 
we may arrange for VR services for that beneficiary through an alternate 
participant.
    (ii) In any case in which a State VR agency notifies the appropriate 
Regional Commissioner (SSA) in writing within the stated time period 
under paragraph (c)(2)(i) of this section of its decision to place the 
beneficiary into an extended evaluation process, the State VR agency 
also must notify that Regional Commissioner in writing upon completion 
of the evaluation of its decision whether or not to accept the 
beneficiary as a client for VR services. If we receive a notice of a 
decision by the State VR agency to accept the beneficiary as a client 
for VR services following the completion of the extended evaluation, the 
State may continue to participate with respect to such beneficiary. If 
we receive a notice of a decision by the State VR agency not to accept 
the beneficiary as a client for VR services following the completion of 
the extended evaluation, we may arrange for VR services for that 
beneficiary through an alternate participant.
    (d) Opportunity for limited participation through State VR agencies. 
If a

[[Page 702]]

State has decided under paragraph (e)(1) of this section to limit 
participation of its VR agency(ies) to a certain class(es) of disability 
beneficiaries in the State, we will give the State the opportunity to 
participate with respect to such class(es) of disability beneficiaries 
by referring such beneficiaries first to the State VR agency(ies) for 
necessary VR services. The State, through its VR agency(ies), may 
participate with respect to any beneficiary so referred by accepting the 
beneficiary as a client for VR services or placing the beneficiary into 
an extended evaluation process and notifying us under paragraph (c)(2) 
of this section of such acceptance or placement.
    (e) Decision of a State not to participate or to limit 
participation. (1) A State may choose not to participate through its VR 
agency(ies) with respect to any disability beneficiaries in the State, 
or it may choose to limit participation of its VR agency(ies) to a 
certain class(es) of disability beneficiaries in the State. A State 
which decides not to participate or to limit participation must provide 
advance written notice of that decision to the appropriate Regional 
Commissioner (SSA). Unless a State specifies a later month, a decision 
not to participate or to limit participation will be effective beginning 
with the third month following the month in which the notice of the 
decision is received by the appropriate Regional Commissioner (SSA). The 
notice of the State decision must be submitted by an official authorized 
to act for the State for this purpose. A State must provide to the 
appropriate Regional Commissioner (SSA) an opinion from the State's 
Attorney General verifying the authority of the official who sent the 
notice to act for the State. This opinion will not be necessary if the 
notice is signed by the Governor of the State.
    (2)(i) If a State has decided not to participate through its VR 
agency(ies), we may arrange for VR services through an alternate 
participant(s) for disability beneficiaries in the State.
    (ii) If a State has decided to limit participation of its VR 
agency(ies) to a certain class(es) of disability beneficiaries, we may 
arrange for VR services through an alternate participant(s) for the 
class(es) of disability beneficiaries in the State excluded from the 
scope of the State's participation.
    (3) A State which has decided not to participate or to limit 
participation may participate later through its VR agency(ies) in 
accordance with paragraph (c) of this section, provided that such 
participation will not conflict with any previous commitment which we 
may have made to an alternate participant(s) under paragraph (e)(2) of 
this section. A State which decides to resume participation under 
paragraph (c) of this section must provide advance written notice of 
that decision to the appropriate Regional Commissioner (SSA). Unless a 
commitment to an alternate participant(s) requires otherwise, a decision 
of a State to resume participation under paragraph (c) of this section 
will be effective beginning with the third month following the month in 
which the notice of the decision is received by the appropriate Regional 
Commissioner (SSA) or, if later, with a month specified by the State. 
The notice of the State decision must be submitted by an official 
authorized to act for the State as explained in paragraph (e)(1) of this 
section.
    (f) Use of alternate participants. The Commissioner, by written 
agreement or contract, may arrange for VR services through an alternate 
participant(s) for any disability beneficiary in the State with respect 
to whom the State is unwilling to participate through its VR 
agency(ies). In such a case, we may refer the beneficiary to such 
alternate participant for necessary VR services. The Commissioner will 
find that a State is unwilling to participate with respect to any of the 
following disability beneficiaries in that State:
    (1) A disability beneficiary whom we referred to a State VR agency 
under paragraph (c) or (d) of this section if we do not receive a notice 
within the stated time period under paragraph (c)(2)(i) of this section 
of a decision by the VR agency either to accept the beneficiary as a 
client for VR services or to place the beneficiary into an extended 
evaluation process;

[[Page 703]]

    (2) A disability beneficiary with respect to whom we receive a 
notice under paragraph (c)(2)(ii) of this section of a decision by the 
VR agency not to accept the beneficiary as a client for VR services 
following the completion of the extended evaluation;
    (3) The class(es) of disability beneficiaries excluded from the 
scope of the State's participation if the State has decided to limit 
participation of its VR agency(ies); and
    (4) All disability beneficiaries in the State if the State has 
decided not to participate through its VR agency(ies).

[59 FR 11912, Mar. 15, 1994]



Sec. 404.2106  Basic qualifications for alternate participants.

    (a) General. We may arrange for VR services through an alternate 
participant by written agreement or contract as explained in 
Sec. 404.2104(f). An alternate participant may be a public or private 
agency, organization, institution or individual (that is, any entity 
whether for-profit or not-for-profit), other than a State VR agency.
    (1) An alternate participant must--
    (i) Be licensed, certified, accredited, or registered, as 
appropriate, to provide VR services in the State in which it provides 
services; and
    (ii) Under the terms of the written contract or agreement, have a 
plan similar to the State plan described in Sec. 404.2104(a) which shall 
govern the provision of VR services to individuals.
    (2) We will not use as an alternate participant any agency, 
organization, institution, or individual--
    (i) Whose license, accreditation, certification, or registration is 
suspended or revoked for reasons concerning professional competence or 
conduct or financial integrity;
    (ii) Who has surrendered such license, accreditation, certification, 
or registration pending a final determination of a formal disciplinary 
proceeding; or
    (iii) Who is precluded from Federal procurement or nonprocurement 
programs.
    (b) Standards for the provision of VR services. An alternate 
participant's plan must provide, among other things, that the provision 
of VR services to individuals will meet certain minimum standards, 
including, but not limited to, the following:
    (1) All medical and related health services furnished will be 
prescribed by, or provided under the formal supervision of, persons 
licensed to prescribe or supervise the provision of these services in 
the State;
    (2) Only qualified personnel and rehabilitation facilities will be 
used to furnish VR services; and
    (3) No personnel or rehabilitation facility described in paragraph 
(a)(2) (i), (ii), or (iii) of this section will be used to provide VR 
services.

[59 FR 11914, Mar. 15, 1994]

                           Payment Provisions



Sec. 404.2108  Requirements for payment.

    (a) The State VR agency or alternate participant must file a claim 
for payment in each individual case within the time periods specified in 
Sec. 404.2116;
    (b) The claim for payment must be in a form prescribed by us and 
contain the following information:
    (1) A description of each service provided;
    (2) When the service was provided; and
    (3) The cost of the service;
    (c) The VR services for which payment is being requested must have 
been provided during the period specified in Sec. 404.2115;
    (d) The VR services for which payment is being requested must have 
been provided under a State plan for VR services approved under title I 
of the Rehabilitation Act of 1973, as amended, or, in the case of an 
alternate participant, under a negotiated plan, and must be services 
that are described in Sec. 404.2114;
    (e) The individual must meet one of the VR payment provisions 
specified in Sec. 404.2101;
    (f) The State VR agency or alternate participant must maintain, and 
provide as we may require, adequate documentation of all services and 
costs for all disability beneficiaries with respect to whom a State VR 
agency or alternate participant could potentially request payment for 
services and costs under this subpart; and
    (g) The amount to be paid must be reasonable and necessary and be in

[[Page 704]]

compliance with the cost guidelines specified in Sec. 404.2117.

[48 FR 6293, Feb. 10, 1983, as amended at 55 FR 8454, Mar. 8, 1990; 59 
FR 11914, Mar. 15, 1994]



Sec. 404.2109  Responsibility for making payment decisions.

    The Commissioner will decide--
    (a) Whether a continuous period of 9 months of SGA has been 
completed;
    (b) Whether a disability beneficiary whose disability has ceased 
should continue to receive benefits under Sec. 404.316(c), 404.337(c), 
or 404.352(c) for a month after October 1984, based on his or her 
continued participation in a VR program;
    (c) If and when medical recovery has occurred;
    (d) Whether documentation of VR services and expenditures is 
adequate;
    (e) If payment is to be based on completion of a continuous 9-month 
period of SGA, whether the VR services contributed to the continuous 
period of SGA;
    (f) Whether a VR service is a service described in Sec. 404.2114; 
and
    (g) What VR costs were reasonable and necessary and will be paid.

[55 FR 8454, Mar. 8, 1990, as amended at 59 FR 11914, Mar. 15, 1994; 68 
FR 40123, July 7, 2003]



Sec. 404.2110  What we mean by ``SGA'' and by ``a continuous period 
of 9 months''.

    (a) What we mean by ``SGA''. In determining whether an individual's 
work is SGA, we will follow the rules in Secs. 404.1572 through 
404.1575. We will follow these same rules for individuals who are 
statutorily blind, but we will evaluate the earnings in accordance with 
the rules in Sec. 404.1584(d).
    (b) What we mean by ``a continuous period of 9 months''. A 
continuous period of 9 months ordinarily means a period of 9 consecutive 
calendar months. Exception: When an individual does not perform SGA in 9 
consecutive calendar months, he or she will be considered to have done 
so if--
    (1) The individual performs 9 months of SGA within 10 consecutive 
months and has monthly earnings that meet or exceed the guidelines in 
Sec. 404.1574(b)(2), or Sec. 404.1584(d) if the individual is 
statutorily blind; or
    (2) The individual performs at least 9 months of SGA within 12 
consecutive months, and the reason for not performing SGA in 2 or 3 of 
those months was due to circumstances beyond his or her control and 
unrelated to the impairment (e.g., the employer closed down for 3 
months).
    (c) What work we consider. In determining if a continuous period of 
SGA has been completed, all of an individual's work activity may be 
evaluated for purposes of this section, including work performed before 
October 1981, during the waiting period, during the trial work period 
and after entitlement to disability benefits terminated. We will 
ordinarily consider only the first 9 months of SGA that occur. The 
exception will be if an individual who completed 9 months of SGA later 
stops performing SGA, receives VR services and then performs SGA for a 
9-month period. See Sec. 404.2115 for the use of the continuous period 
in determining payment for VR services.

[48 FR 6293, Feb. 10, 1983, as amended at 55 FR 8454, Mar. 8, 1990]



Sec. 404.2111  Criteria for determining when VR services will be
considered to have contributed to a continuous period of 9 months.

    The State VR agency or alternate participant may be paid for VR 
services if such services contribute to the individual's performance of 
a continuous 9-month period of SGA. The following criteria apply to 
individuals who received more than just evaluation services. If a State 
VR agency or alternate participant claims payment for services to an 
individual who received only evaluation services, it must establish that 
the individual's continuous period or medical recovery (if medical 
recovery occurred before completion of a continuous period) would not 
have occurred without the services provided. In applying the criteria 
below, we will consider services described in Sec. 404.2114 that were 
initiated, coordinated or provided, including services before October 1, 
1981.
    (a) Continuous period without medical recovery. If an individual who 
has completed a ``continuous period'' of SGA has not medically recovered 
as of the date of completion of the period, the

[[Page 705]]

determination as to whether VR services contributed will depend on 
whether the continuous period began one year or less after VR services 
ended or more than one year after VR services ended.
    (1) One year or less. Any VR services which significantly motivated 
or assisted the individual in returning to, or continuing in, SGA will 
be considered to have contributed to the continuous period.
    (2) More than one year. (i) If the continuous period was preceded by 
transitional work activity (employment or self-employment which 
gradually evolved, with or without periodic interruption, into SGA), and 
that work activity began less than a year after VR services ended, any 
VR services which significantly motivated or assisted the individual in 
returning to, or continuing in, SGA will be considered to have 
contributed to the continuous period.
    (ii) If the continuous period was not preceded by transitional work 
activity that began less than a year after VR services ended, VR 
services will be considered to have contributed to the continuous period 
only if it is reasonable to conclude that the work activity which 
constitutes a continuous period could not have occurred without the VR 
services (e.g., training).
    (b) Continuous period with medical recovery occurring before 
completion. (1) If an individual medically recovers before a continuous 
period has been completed, VR services under paragraph (a) of this 
section will not be payable unless some VR services contributed to the 
medical recovery. VR services will be considered to have contributed to 
the medical recovery if--
    (i) The individualized written rehabilitation program (IWRP) or, in 
the case of an alternate participant, a similar document, included 
medical services; and
    (ii) The medical recovery occurred, at least in part, because of 
these medical services. (For example, the individual's medical recovery 
was based on improvement in a back condition which, at least in part, 
stemmed from surgery initiated, coordinated or provided under an IWRP).
    (2) In some instances, the State VR agency or alternate participant 
will not have provided, initiated, or coordinated medical services. If 
this happens, payment for VR services may still be possible under 
paragraph (a) of this section if: (i) The medical recovery was not 
expected by us; and (ii) the individual's impairment is determined by us 
to be of such a nature that any medical services provided would not 
ordinarily have resulted in, or contributed to, the medical cessation.

[48 FR 6293, Feb. 10, 1983, as amended at 59 FR 11914, Mar. 15, 1994]



Sec. 404.2112  Payment for VR services in a case where an individual
continues to receive disability payments based on participation in 
an approved VR program.

    Sections 404.1586(g), 404.316(c), 404.337(c), and 404.352(c) explain 
the criteria we will use in determining if an individual whose 
disability has ceased should continue to receive disability benefits 
from us because of his or her continued participation in a VR program. A 
VR agency or alternate participant can be paid for the cost of VR 
services provided to an individual if the individual was receiving 
benefits in a month or months, after October 1984, based on 
Sec. 404.316(c), 404.337(c), or 404.352(c). If this requirement is met, 
a VR agency or alternate participant can be paid for the costs of VR 
services provided within the period specified in Sec. 404.2115, subject 
to the other payment and administrative provisions of this subpart.

[55 FR 8455, Mar. 8, 1990]



Sec. 404.2114  Services for which payment may be made.

    (a) General. Payment may be made for VR services provided by a State 
VR agency in accordance with title I of the Rehabilitation Act of 1973, 
as amended, or by an alternate participant under a negotiated plan, 
subject to the limitations and conditions in this subpart. VR services 
for which payment may be made under this subpart include only those 
services described in paragraph (b) of this section which are--
    (1) Necessary to determine an individual's eligibility for VR 
services or

[[Page 706]]

the nature and scope of the services to be provided; or
    (2) Provided by a State VR agency under an IWRP, or by an alternate 
participant under a similar document, but only if the services could 
reasonably be expected to motivate or assist the individual in returning 
to, or continuing in, SGA.
    (b) Specific services. Payment may be made under this subpart only 
for the following VR services:
    (1) An assessment for determining an individual's eligibility for VR 
services and vocational rehabilitation needs by qualified personnel, 
including, if appropriate, an assessment by personnel skilled in 
rehabilitation technology, and which includes determining--
    (i) The nature and extent of the physical or mental impairment(s) 
and the resultant impact on the individual's employability;
    (ii) The likelihood that an individual will benefit from vocational 
rehabilitation services in terms of employability; and
    (iii) An employment goal consistent with the capacities of the 
individual and employment opportunities;
    (2) Counseling and guidance, including personal adjustment 
counseling, and those referrals and other services necessary to help an 
individual secure needed services from other agencies;
    (3) Physical and mental restoration services necessary to correct or 
substantially modify a physical or mental condition which is stable or 
slowly progressive and which constitutes an impediment to suitable 
employment at or above the SGA level;
    (4) Vocational and other training services, including personal and 
vocational adjustment, books, tools, and other training materials, 
except that training or training services in institutions of higher 
education will be covered under this section only if maximum efforts 
have been made by the State VR agency or alternate participant to secure 
grant assistance in whole or in part from other sources;
    (5) Maintenance expenses that are extra living expenses over and 
above the individual's normal living expenses and that are incurred 
solely because of and while the individual is participating in the VR 
program and that are necessary in order for the individual to benefit 
from other necessary VR services;
    (6) Travel and related expenses necessary to transport an individual 
for purpose of enabling the individual's participation in other 
necessary VR services;
    (7) Services to family members of a disabled individual only if 
necessary to the successful vocational rehabilitation of that 
individual;
    (8) Interpreter services and note-taking services for an individual 
who is deaf and tactile interpreting for an individual who is deaf and 
blind;
    (9) Reader services, rehabilitation teaching services, note-taking 
services, and orientation and mobility services for an individual who is 
blind;
    (10) Telecommunications, sensory, and other technological aids and 
devices;
    (11) Work-related placement services to secure suitable employment;
    (12) Post-employment services necessary to maintain, regain or 
advance into suitable employment at or above the SGA level;
    (13) Occupational licenses, tools, equipment, initial stocks, and 
supplies;
    (14) Rehabilitation technology services; and
    (15) Other goods and services that can reasonably be expected to 
motivate or assist the individual in returning to, or continuing in, 
SGA.

[59 FR 11915, Mar. 15, 1994]



Sec. 404.2115  When services must have been provided.

    (a) In order for the VR agency or alternate participant to be paid, 
the services must have been provided--
    (1) After September 30, 1981;
    (2) No earlier than the beginning of the waiting period or the first 
month of entitlement, if no waiting period is required; and
    (3) Before completion of a continuous 9-month period of SGA or 
termination of entitlement to disability benefits, whichever occurs 
first.
    (b) If an individual who is entitled to disability benefits under 
this part also is or has been receiving disability or blindness benefits 
under part 416 of this chapter, the determination as to when services 
must have been provided may

[[Page 707]]

be made under this section or Sec. 416.2215 of this chapter, whichever 
is advantageous to the State VR agency or alternate participant that is 
participating in both VR programs.

[55 FR 8455, Mar. 8, 1990, as amended at 61 FR 31025, June 19, 1996]



Sec. 404.2116  When claims for payment for VR services must be made 
(filing deadlines).

    The State VR agency or alternate participant must file a claim for 
payment in each individual case within the following time periods:
    (a) A claim for payment for VR services based on the individual's 
completion of a continuous 9-month period of SGA must be filed within 12 
months after the month in which the continuous 9-month period of SGA is 
completed.
    (b) A claim for payment for VR services provided to an individual 
whose disability benefits were continued after disability has ceased 
because of that individual's continued participation in a VR program 
must be filed as follows:
    (1) If a written notice requesting that a claim be filed was sent to 
the State VR agency or alternate participant, a claim must be filed 
within 90 days following the month in which VR services end, or if 
later, within 90 days after receipt of the notice.
    (2) If no written notice was sent to the State VR agency or 
alternate participant, a claim must be filed within 12 months after the 
month in which VR services end.

[55 FR 8455, Mar. 8, 1990, as amended at 61 FR 31025, June 19, 1996; 68 
FR 40124, July 7, 2003]



Sec. 404.2117  What costs will be paid.

    In accordance with section 222(d) of the Social Security Act, the 
Commissioner will pay the State VR agency or alternate participant for 
the VR services described in Sec. 404.2114 which were provided during 
the period described in Sec. 404.2115 and which meet the criteria in 
Sec. 404.2111 or Sec. 404.2112, but subject to the following 
limitations:
    (a) The cost must have been incurred by the State VR agency or 
alternate participant;
    (b) The cost must not have been paid or be payable from some other 
source. For this purpose, State VR agencies or alternate participants 
will be required to seek payment or services from other sources in 
accordance with the ``similar benefit'' provisions under 34 CFR part 
361, including making maximum efforts to secure grant assistance in 
whole or part from other sources for training or training services in 
institutions of higher education. Alternate participants will not be 
required to consider State VR services a similar benefit.
    (c)(1) The cost must be reasonable and necessary, in that it 
complies with the written cost-containment policies of the State VR 
agency or, in the case of an alternate participant, it complies with 
similar written policies established under a negotiated plan. A cost 
which complies with these policies will be considered necessary only if 
the cost is for a VR service described in Sec. 404.2114. The State VR 
agency or alternate participant must maintain and use these cost-
containment policies, including any reasonable and appropriate fee 
schedules, to govern the costs incurred for all VR services, including 
the rates of payment for all purchased services, for which payment will 
be requested under this subpart. For the purpose of this subpart, the 
written cost-containment policies must provide guidelines designed to 
ensure--
    (i) The lowest reasonable cost for such services; and
    (ii) Sufficient flexibility so as to allow for an individual's 
needs.
    (2) The State VR agency shall submit to us before the end of the 
first calendar quarter of each year a written statement certifying that 
cost-containment policies are in effect and are adhered to in procuring 
and providing goods and services for which the State VR agency requests 
payment under this subpart. Such certification must be signed by the 
State's chief financial official or the head of the VR agency. Each 
certification must specify the basis upon which it is made, e.g., a 
recent audit by an authorized State, Federal or private auditor (or 
other independent compliance review) and the date of such audit (or 
compliance review). In the case of an alternate participant, these 
certification requirements shall be incorporated into the negotiated 
agreement or contract. We

[[Page 708]]

may request the State VR agency or alternate participant to submit to us 
a copy(ies) of its specific written cost-containment policies and 
procedures (e.g., any guidelines and fee schedules for a given year) if 
we determine that such additional information is necessary to ensure 
compliance with the requirements of this subpart. The State VR agency or 
alternate participant shall provide such information when requested by 
us.
    (d) The total payment in each case, including any prior payments 
related to earlier continuous 9-month periods of SGA made under this 
subpart, must not be so high as to preclude a ``net saving'' to the 
trust funds (a ``net saving'' is the difference between the estimated 
saving to the trust funds, if disability benefits eventually terminate, 
and the total amount we pay to the State VR agency or alternate 
participant);
    (e) Any payment to the State VR agency for either direct or indirect 
VR expenses must be consistent with the cost principles described in OMB 
Circular No. A-87, published at 46 FR 9548 on January 28, 1981 (see 
Sec. 404.2118(a) for cost principles applicable to alternate 
participants);
    (f) Payment for VR services or costs may be made under more than one 
of the VR payment provisions described in Secs. 404.2111 and 404.2112 of 
this subpart and similar provisions in Secs. 416.2211 and 416.2212 of 
subpart V of part 416. However, payment will not be made more than once 
for the same VR service or cost; and
    (g) Payment will be made for administrative costs and for counseling 
and placement costs. This payment may be on a formula basis, or on an 
actual cost basis, whichever the State VR agency prefers. The formula 
will be negotiated. The payment will also be subject to the preceding 
limitations.

[48 FR 6293, Feb. 10, 1983. Redesignated and amended at 55 FR 8454, 
8455, Mar. 8, 1990; 59 FR 11915, Mar. 15, 1994; 62 FR 38452, July 18, 
1997; 68 FR 40124, July 7, 2003]

                        Administrative Provisions



Sec. 404.2118  Applicability of these provisions to alternate
participants.

    When an alternate participant provides rehabilitation services under 
this subpart, the payment procedures stated herein shall apply except 
that:
    (a) Payment must be consistent with the cost principles described in 
45 CFR part 74 or 41 CFR parts 1-15 as appropriate; and
    (b) Any disputes, including appeals of audit determinations, shall 
be resolved in accordance with applicable statutes and regulations which 
will be specified in the negotiated agreement or contract.

[48 FR 6293, Feb. 10, 1983. Redesignated at 55 FR 8454, Mar. 8, 1990]



Sec. 404.2119  Method of payment.

    Payment to the State VR agencies or alternate participants pursuant 
to this subpart will be made either by advancement of funds or by 
payment for services provided (with necessary adjustments for any 
overpayments and underpayments), as decided by the Commissioner.

[55 FR 8455, Mar. 8, 1990]



Sec. 404.2120  Audits.

    (a) General. The State or alternate participant shall permit us and 
the Comptroller General of the United States (including duly authorized 
representatives) access to and the right to examine records relating to 
the services and costs for which payment was requested or made under 
these regulations. These records shall be retained by the State or 
alternate participant for the periods of time specified for retention of 
records in the Federal Procurement Regulations (41 CFR parts 1-20).
    (b) Audit basis. Auditing will be based on cost principles and 
written guidelines in effect at the time services were provided and 
costs were incurred. The State VR agency or alternate participant will 
be informed and given a full explanation of any questioned items. It 
will be given a reasonable time to explain questioned items. Any 
explanation furnished by the State VR agency or alternate participant 
will be

[[Page 709]]

given full consideration before a final determination is made on 
questioned items in the audit report.
    (c) Appeal of audit determinations. The appropriate SSA Regional 
Commissioner will notify the State VR agency or alternate participant in 
writing of his or her final determination on the audit report. If the 
State VR agency (see Sec. 404.2118(b) for alternate participants) 
disagrees with that determination, it may request reconsideration in 
writing within 60 days after receiving the Regional Commissioner's 
notice of the determination. The Commissioner will make a determination 
and notify the State VR agency of that decision in writing, usually, no 
later than 45 days from the date of appeal. The decision by the 
Commissioner will be final and conclusive unless the State VR agency 
appeals that decision in writing in accordance with 45 CFR part 16 to 
the Department of Health and Human Services' Departmental Appeals Board 
within 30 days after receiving it.

[48 FR 6293, Feb. 10, 1983, as amended at 55 FR 8456, Mar. 8, 1990; 62 
FR 38452, July 18, 1997]



Sec. 404.2121  Validation reviews.

    (a) General. We will conduct a validation review of a sample of the 
claims for payment filed by each State VR agency or alternate 
participant. We will conduct some of these reviews on a prepayment basis 
and some on a postpayment basis. We may review a specific claim, a 
sample of the claims, or all the claims filed by any State VR agency or 
alternate participant, if we determine that such review is necessary to 
ensure compliance with the requirements of this subpart. For each claim 
selected for review, the State VR agency or alternate participant must 
submit such records of the VR services and costs for which payment has 
been requested or made under this subpart, or copies of such records, as 
we may require to ensure that the services and costs meet the 
requirements for payment. For claims for cases described in 
Sec. 404.2101(a), a clear explanation or existing documentation which 
demonstrates how the service contributed to the individual's performance 
of a continuous 9-month period of SGA must be provided. For claims for 
cases described in Sec. 404.2101 (b) or (c), a clear explanation or 
existing documentation which demonstrates how the service was reasonably 
expected to motivate or assist the individual to return to or continue 
in SGA must be provided. If we find in any prepayment validation review, 
that the scope or content of the information is inadequate, we will 
request additional information and will withhold payment until adequate 
information has been provided. The State VR agency or alternate 
participant shall permit us (including duly authorized representatives) 
access to, and the right to examine, any records relating to such 
services and costs. Any review performed under this section will not be 
considered an audit for purposes of this subpart.
    (b) Purpose. The primary purpose of these reviews is--
    (1) To ensure that the VR services and costs meet the requirements 
for payment under this subpart;
    (2) To assess the validity of our documentation requirements; and
    (3) To assess the need for additional validation reviews or 
additional documentation requirements for any State VR agency or 
alternate participant to ensure compliance with the requirements under 
this subpart.
    (c) Determinations. In any validation review, we will determine 
whether the VR services and costs meet the requirements for payment and 
determine the amount of payment. We will notify in writing the State VR 
agency or alternate participant of our determination. If we find in any 
postpayment validation review that more or less than the correct amount 
of payment was made for a claim, we will determine that an overpayment 
or underpayment has occurred and will notify the State VR agency or 
alternate participant that we will make the appropriate adjustment.
    (d) Appeals. If the State VR agency or alternate participant 
disagrees with our determination under this section, it may appeal that 
determination in accordance with Sec. 404.2127. For purposes of this 
section, an appeal must be filed within 60 days after receiving the 
notice of our determination.

[59 FR 11916, Mar. 15, 1994]

[[Page 710]]



Sec. 404.2122  Confidentiality of information and records.

    The State or alternate participant shall comply with the provisions 
for confidentiality of information, including the security of systems, 
and records requirements described in 20 CFR part 401 and pertinent 
written guidelines (see Sec. 404.2123).



Sec. 404.2123  Other Federal laws and regulations.

    Each State VR agency and alternate participant shall comply with the 
provisions of other Federal laws and regulations that directly affect 
its responsibilities in carrying out the vocational rehabilitation 
function.



Sec. 404.2127  Resolution of disputes.

    (a) Disputes on the amount to be paid. The appropriate SSA official 
will notify the State VR agency or alternative participant in writing of 
his or her determination concerning the amount to be paid. If the State 
VR agency (see Sec. 404.2118(b) for alternate participants) disagrees 
with that determination, the State VR agency may request reconsideration 
in writing within 60 days after receiving the notice of determination. 
The Commissioner will make a determination and notify the State VR 
agency of that decision in writing, usually no later than 45 days from 
the date of the State VR agency's appeal. The decision by the 
Commissioner will be final and conclusive upon the State VR agency 
unless the State VR agency appeals that decision in writing in 
accordance with 45 CFR part 16 to the Department of Health and Human 
Services' Departmental Appeals Board within 30 days after receiving the 
Commissioner's decision.
    (b) Disputes on whether there was a continuous period of SGA and 
whether VR services contributed to a continuous period of SGA. The rules 
in paragraph (a) of this section will apply, except that the 
Commissioner's decision will be final and conclusive. There is no right 
of appeal to the Departmental Appeals Board.
    (c) Disputes on determinations made by the Commissioner which affect 
a disability beneficiary's rights to benefits. Determinations made by 
the Commissioner which affect an individual's right to benefits (e.g., 
determinations that disability benefits should be terminated, denied, 
suspended, continued or begun at a different date than alleged) cannot 
be appealed by a State VR agency or alternate participant. Because these 
determinations are an integral part of the disability benefits claims 
process, they can only be appealed by the beneficiary or applicant whose 
rights are affected or by his or her authorized representative. However, 
if an appeal of an unfavorable determination is made by the individual 
and is successful, the new determination would also apply for purposes 
of this subpart. While a VR agency or alternate participant cannot 
appeal a determination made by the Commissioner which affects a 
beneficiary's or applicant's rights, the VR agency can furnish any 
evidence it may have which would support a revision of a determination.

[48 FR 6293, Feb. 10, 1983, as amended at 55 FR 8456, Mar. 8, 1990; 62 
FR 38452, July 18, 1997]



PART 405 [RESERVED]--Table of Contents





PART 408_SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS--
Table of Contents



        Subpart A_Introduction, General Provision and Definitions

Sec.
408.101  What is this part about?
408.105  Purpose and administration of the program.
408.110  General definitions and use of terms.
408.120  Periods of limitations ending on Federal nonworkdays.

               Subpart B_SVB Qualification and Entitlement

408.201  What is this subpart about?
408.202  How do you qualify for SVB?
408.204  What conditions will prevent you from qualifying for SVB or 
          being entitled to receive SVB payments?
408.206  What happens when you apply for SVB?
408.208  What happens if you establish residence outside the United 
          States within 4 calendar months?
408.210  What happens if you do not establish residence outside the 
          United States within 4 calendar months?
408.212  What happens if you are a qualified individual already residing 
          outside the United States?

[[Page 711]]

                                   Age

408.214  Are you age 65?

                            Military Service

408.216  Are you a World War II veteran?

                             SSI Eligibility

408.218  Do you meet the SSI eligibility requirements?

                          Other Benefit Income

408.220  Do you have other benefit income?
408.222  How does your other benefit income affect your SVB?
408.224  How do we determine the monthly amount of your other benefit 
          income?
408.226  What happens if you begin receiving other benefit income after 
          you become entitled to SVB?

                   Residence Outside the United States

408.228  When do we consider you to be residing outside the United 
          States?
408.230  When must you begin residing outside the United States?
408.232  When do you lose your foreign resident status?
408.234  Can you continue to receive SVB payments if you stay in the 
          United States for more than 1 full calendar month?

                      Subpart C_Filing Applications

                         Filing Your Application

408.301  What is this subpart about?
408.305  Why do you need to file an application to receive benefits?
408.310  What makes an application a claim for SVB?
408.315  Who may sign your application?
408.320  What evidence shows that a person has authority to sign an 
          application for you?
408.325  When is your application considered filed?
408.330  How long will your application remain in effect?

         Filing Date Based on Written Statement or Oral Inquiry

408.340  When will we use a written statement as your filing date?
408.345  When will we use the date of an oral inquiry as your 
          application filing date?

               Deemed Filing Date Based on Misinformation

408.351  What happens if we give you misinformation about filing an 
          application?

                        Withdrawal of Application

408.355  Can you withdraw your application?
408.360  Can you cancel your request to withdraw your application?

                     Subpart D_Evidence Requirements

                           General Information

408.401  What is this subpart about?
408.402  When do you need to give us evidence?
408.403  Where should you give us your evidence?
408.404  What happens if you fail to give us the evidence we ask for?
408.405  When do we require original records or copies as evidence?
408.406  How do we evaluate the evidence you give us?

                                   Age

408.410  When do you need to give us evidence of your age?
408.412  What kinds of evidence of age do you need to give us?
408.413  How do we evaluate the evidence of age you give us?

                            Military Service

408.420  What evidence of World War II military service do you need to 
          give us?

                             SSI Eligibility

408.425  How do we establish your eligibility for SSI?

                          Other Benefit Income

408.430  When do you need to give us evidence of your other benefit 
          income?
408.432  What kind of evidence of your other benefit income do you need 
          to give us?

                                Residence

408.435  How do you prove that you are residing outside the United 
          States?
408.437  How do you prove that you had good cause for staying in the 
          United States for more than 1 full calendar month?

                Subpart E_Amount and Payment of Benefits

408.501  What is this subpart about?
408.505  How do we determine the amount of your SVB payment?
408.510  How do we reduce your SVB when you receive other benefit 
          income?
408.515  When do we make SVB payments?

                    Subpart F_Representative Payment

408.601  What is this subpart about?
408.610  When will we send your SVB payments to a representative payee?
408.611  What happens to your monthly benefits while we are finding a 
          suitable representative payee for you?

[[Page 712]]

408.615  What information do we consider in determining whether we will 
          pay your benefits to a representative payee?
408.620  What information do we consider in selecting the proper 
          representative payee for you?
408.621  What is our order of preference in selecting a representative 
          payee for you?
408.622  Who may not serve as a representative payee?
408.624  How do we investigate a representative payee applicant?
408.625  What information must a representative payee report to us?
408.630  How will we notify you when we decide you need a representative 
          payee?
408.635  What are the responsibilities of your representative payee?
408.640  How must your representative payee use your benefits?
408.641  Who is liable if your representative payee misuses your 
          benefits?
408.645  What must your representative payee do with unused benefits?
408.650  When will we select a new representative payee for you?
408.655  When will we stop making your payments to a representative 
          payee?
408.660  What happens to your accumulated funds when your representative 
          payee changes?
408.665  How does your representative payee account for the use of your 
          SVB payments?

                    Subpart G_Reporting Requirements

408.701  What is this subpart about?
408.704  Who must make reports?
408.708  What events must you report to us?
408.710  What must your report include?
408.712  How should you make your report?
408.714  When are reports due?

                 Subpart H_Suspensions and Terminations

408.801  What is this subpart about?

                               Suspension

408.802  When will we suspend your SVB payments?
408.803  What happens to your SVB payments if you fail to comply with 
          our request for information?
408.806  What happens to your SVB payments if you are no longer residing 
          outside the United States?
408.808  What happens to your SVB payments if you begin receiving 
          additional benefit income?
408.809  What happens to your SVB payments if you are removed (including 
          deported) from the United States?
408.810  What happens to your SVB payments if you are fleeing to avoid 
          criminal prosecution or custody or confinement after 
          conviction, for certain crimes, or if you violate a condition 
          of probation or parole?
408.812  What happens to your SVB payments if you are not a citizen or 
          national of the United States and you begin residing in a 
          Treasury-restricted country?

                               Termination

408.814  Can you request termination of your SVB entitlement?
408.816  When does SVB entitlement end due to death?
408.818  When does SVB entitlement end if your benefit payments have 
          been in suspense for 12 consecutive months?
408.820  Will we send you a notice of intended action affecting your SVB 
          payment status?

                Subpart I_Underpayments and Overpayments

                              General Rules

408.900  What is this subpart about?
408.901  What is an underpayment?
408.902  What is an overpayment?
408.903  How do we determine the amount of an underpayment or 
          overpayment?
408.904  How will you receive an underpayment?
408.905  Will we withhold or adjust an underpayment to reduce an 
          overpayment if that overpayment occurred in a different 
          period?

                 Waiver of Recovery of SVB Overpayments

408.910  When will we waive recovery of an SVB overpayment?
408.911  What happens when we waive recovery of an SVB overpayment?
408.912  When are you without fault regarding an overpayment?
408.913  When would overpayment recovery defeat the purpose of the title 
          VIII program?
408.914  When would overpayment recovery be against equity and good 
          conscience?

                                 Notices

408.918  What notices will you receive if you are overpaid or underpaid?

                         Refund of Overpayments

408.920  When will we seek refund of an SVB overpayment?

                            Adjustment of SVB

408.922  When will we adjust your SVB payments to recover an 
          overpayment?
408.923  Is there a limit on the amount we will withhold from your SVB 
          payments to recover an overpayment?

[[Page 713]]

                     Adjustment of Title II Benefits

408.930  Are title II and title XVI benefits subject to adjustment to 
          recover title VIII overpayments?
408.931  How much will we withhold from your title II and title XVI 
          benefits to recover a title VIII overpayment?
408.932  Will you receive notice of our intention to apply cross-program 
          recovery?
408.933  When will we begin cross-program recovery from your current 
          monthly benefits?

                            Tax Refund Offset

408.940  When will we refer an SVB overpayment to the Department of the 
          Treasury for tax refund offset?
408.941  Will we notify you before we refer an SVB overpayment for tax 
          refund offset?
408.942  Will you have a chance to present evidence showing that the 
          overpayment is not past due or is not legally enforceable?
408.943  What happens after we make our determination on your request 
          for review or your request for waiver?
408.944  How can you review our records related to an SVB overpayment?
408.945  When will we suspend tax refund offset?
408.946  What happens if your tax refund is insufficient to cover the 
          amount of your SVB overpayment?

   Compromise Settlements, or Suspension or Termination of Collection

408.950  Will we accept a compromise settlement of an overpayment debt 
          or suspend or terminate collection of an overpayment?

     Subpart J_Determinations and the Administrative Review Process

          Introduction, Definitions, and Initial Determinations

408.1000  What is this subpart about?
408.1001  Definitions.
408.1002  What is an initial determination?
408.1003  Which administrative actions are initial determinations?
408.1004  Which administrative actions are not initial determinations?
408.1005  Will we mail you a notice of the initial determination?
408.1006  What is the effect of an initial determination?

                             Reconsideration

408.1007  What is reconsideration?
408.1009  How do you request reconsideration?
408.1011  How do we determine whether you had good cause for missing the 
          deadline to request review?
408.1013  What are the methods for reconsideration?
408.1014  What procedures apply if you request reconsideration of an 
          initial determination on your application for SVB?
408.1015  What procedures apply if you request reconsideration of an 
          initial determination that results in suspension, reduction, 
          or termination of your SVB?
408.1016  What happens if you request a conference?
408.1020  How do we make our reconsidered determination?
408.1021  How does the reconsidered determination affect you?
408.1022  How will we notify you of our reconsidered determination?

                        Expedited Appeals Process

408.1030  When can you use the expedited appeals process?

               Hearing Before an Administrative Law Judge

408.1040  When you can request a hearing before an administrative law 
          judge (ALJ)?

               Administrative Law Judge Hearing Procedures

408.1045  What procedures apply if you request an ALJ hearing?

                         Appeals Council Review

408.1050  When can you request Appeals Council review of an ALJ hearing 
          decision or dismissal of a hearing request?

                           Court Remand Cases

408.1060  What happens if a Federal court remands your case to the 
          Commissioner?

           Reopening and Revising Determinations and Decisions

408.1070  When will we reopen a final determination?

                   Subpart K_Representation of Parties

408.1101  Can you appoint someone to represent you?

     Subpart L_Federal Administration of State Recognition Payments

408.1201  What are State recognition payments?
408.1205  How can a State have SSA administer its State recognition 
          payment program?
408.1210  What are the essential elements of an administration 
          agreement?
408.1215  How do you establish eligibility for Federally administered 
          State recognition payments?
408.1220  How do we pay Federally administered State recognition 
          payments?

[[Page 714]]

408.1225  What happens if you receive an overpayment?
408.1226  What happens if you are underpaid?
408.1230  Can you waive State recognition payments?
408.1235  How does the State transfer funds to SSA to administer its 
          recognition payment program?

    Source: 68 FR 16418, Apr. 4, 2003, unless otherwise noted.



        Subpart A_Introduction, General Provision and Definitions

    Authority: Secs. 702(a)(5) and 801-813 of the Social Security Act 
(42 U.S.C. 902(a)(5) and 1001-1013).



Sec. 408.101  What is this part about?

    The regulations in this part 408 (Regulation No. 8 of the Social 
Security Administration) relate to the provisions of title VIII of the 
Social Security Act as added by Pub. L. 106-169 enacted December 14, 
1999. Title VIII (Special Benefits for Certain World War II Veterans) 
established a program for the payment of benefits to certain World War 
II veterans. The regulations in this part are divided into the following 
subparts according to subject content.
    (a) Subpart A contains this introductory section, a statement of the 
general purpose underlying the payment of special benefits to World War 
II veterans, general provisions applicable to the program and its 
administration, and defines certain terms that we use throughout part 
408.
    (b) Subpart B contains the requirements for qualification and 
entitlement to monthly title VIII benefits.
    (c) Subpart C contains the provisions relating to the filing and 
withdrawal of applications.
    (d) Subpart D contains the provisions relating to the evidence 
required for establishing qualification for and entitlement to monthly 
title VIII benefits.
    (e) Subpart E contains the provisions about the amount and payment 
of monthly benefits.
    (f) Subpart F is reserved for future use.
    (g) Subpart G contains the provisions on your requirement to report 
certain events to us.
    (h) Subpart H contains the provisions on suspension and termination 
of title VIII entitlement.
    (i) Subpart I contains the provisions on underpayments and 
overpayments.
    (j) Subpart J contains the provisions on determinations and the 
administrative review process.
    (k) Subpart K contains the provisions on claimant representation.
    (l) Subpart L contains the provisions on Federal administration of 
State recognition payments.

[68 FR 16418, Apr. 4, 2003, as amended at 69 FR 25955, May 10, 2004]



Sec. 408.105  Purpose and administration of the program.

    The purpose of the title VIII program is to assure a basic income 
level for certain veterans who are entitled to supplemental security 
income (SSI) and who want to leave the United States to live abroad. The 
title VIII program is administered by the Social Security 
Administration.



Sec. 408.110  General definitions and use of terms.

    (a) Terms relating to the Act and regulations. (1) The Act means the 
Social Security Act as amended (42 U.S.C. Chap.7).
    (2) Title means the title of the Act.
    (3) Section or Sec. means a section of the regulations in part 408 
of this chapter unless the context indicates otherwise.
    (b) Commissioner; Appeals Council; Administrative Law Judge defined. 
(1) Commissioner means the Commissioner of Social Security.
    (2) Appeals Council means the Appeals Council of the Office of 
Hearings and Appeals of the Social Security Administration or a member 
or members of the Council designated by the Chairman.
    (3) Administrative Law Judge means an Administrative Law Judge in 
the Office of Hearings and Appeals in the Social Security 
Administration.
    (c) Miscellaneous--(1) A calendar month. The period including all of 
24 hours of each day of January, February, March, April, May, June, 
July, August, September, October, November, or December.
    (2) Federal benefit rate (FBR). The amount of the cash benefit 
payable under title XVI for the month to an eligible individual who has 
no income. The FBR does not include any State

[[Page 715]]

supplementary payment that is paid by the Commissioner pursuant to an 
agreement with a State under section 1616(a) of the Act or section 
212(b) of Public Law 93-66.
    (3) Qualified individual. An individual who meets all the 
requirements for qualification for SVB in Sec. 408.202 and does not meet 
any of the conditions that prevent qualification in Sec. 408.204.
    (4) Special veterans benefits (SVB). The benefits payable to certain 
veterans of World War II under title VIII of the Act.
    (5) State. Unless otherwise indicated, this means:
    (i) A State of the United States
    (ii) The District of Columbia; or
    (iii) The Northern Mariana Islands.
    (6) Supplemental Security Income (SSI). SSI is the national program 
for providing a minimum level of income to aged, blind, and disabled 
individuals under title XVI of the Act.
    (7) United States. When used in the geographical sense, this is:
    (i) The 50 States;
    (ii) The District of Columbia; and
    (iii) The Northern Mariana Islands.
    (8) We, us or our means the Social Security Administration (SSA).
    (9) World War II. The period beginning September 16, 1940 and ending 
on July 24, 1947.
    (10) You or your means, as appropriate, the person who applies for 
benefits, the person for whom an application is filed, or the person who 
is considering applying for benefits.



Sec. 408.120  Periods of limitations ending on Federal nonworkdays.

    Title VIII of the Act and the regulations in this part require you 
to take certain actions within specified time periods or you may lose 
your right to a portion or all of your benefits. If any such period ends 
on a Saturday, Sunday, Federal legal holiday, or any other day all or 
part of which is declared to be a nonworkday for Federal employees by 
statute or Executive Order, you will have until the next Federal workday 
to take the prescribed action.



               Subpart B_SVB Qualification and Entitlement

    Authority: Secs. 702(a)(5), 801, 802, 803, 804, 806, 810 and 1129A 
of the Social Security Act (42 U.S.C. 902(a)(5), 1001, 1002, 1003, 1004, 
1006, 1010 and 1320a-8a); Sec. 251, Pub. L. 106-169, 113 Stat. 1844.



Sec. 408.201  What is this subpart about?

    You are qualified for SVB if you meet the requirements listed in 
Sec. 408.202 and if none of the conditions listed in Sec. 408.204 exist. 
However, you cannot be entitled to receive benefits for any month before 
the first month in which you reside outside the United States on the 
first day of the month and meet all the qualification requirements. You 
must give us any information we request and evidence to prove that you 
meet these requirements. You continue to be qualified for SVB unless we 
determine that you no longer meet the requirements for qualification in 
Sec. 408.202 or we determine that you are not qualified because one of 
the conditions listed in Sec. 404.204 of this chapter exists. You 
continue to be entitled to receive benefits unless we determine you are 
no longer residing outside the United States.



Sec. 408.202  How do you qualify for SVB?

    You qualify for SVB if you meet all of the following requirements.
    (a) Age. You were age 65 or older on December 14, 1999 (the date on 
which Pub. L. 106-169 was enacted into law).
    (b) World War II veteran. You are a World War II veteran as 
explained in Sec. 408.216.
    (c) SSI eligible. You were eligible for SSI, as explained in 
Sec. 408.218, for both December 1999 (the month in which Pub. L. 106-169 
was enacted into law) and for the month in which you file your 
application for SVB.
    (d) Application. You file an application for SVB as explained in 
subpart C of this part.
    (e) Other benefit income. You do not have other benefit income, as 
explained in Sec. 408.220, which is equal to, or more than, 75 percent 
of the current FBR.

[[Page 716]]



Sec. 408.204  What conditions will prevent you from qualifying 
for SVB or being entitled to receive SVB payments?

    (a) General rule. Even if you meet all the qualification 
requirements in Sec. 408.202, you will not be qualified for SVB for or 
entitled to receive SVB payments for any of the following months.
    (1) Removal from the United States. Any month that begins after the 
month in which we are advised by the Attorney General that you have been 
removed (including deported) from the United States pursuant to section 
237(a) or 212(a)(6)(A) of the Immigration and Nationality Act and before 
the month in which you are subsequently lawfully admitted to the United 
States for permanent residence.
    (2) Fleeing felon. Any month during any part of which you are 
fleeing to avoid prosecution, or custody or confinement after 
conviction, under the laws of the United States or the jurisdiction in 
the United States from which you fled, for a crime or an attempt to 
commit a crime that is a felony under the laws of the place from which 
you fled, or in the case of the State of New Jersey, is a high 
misdemeanor.
    (3) Parole violation. Any month during any part of which you violate 
a condition of probation or parole imposed under Federal or State law.
    (4) Residence in certain countries. Any month during which you are 
not a citizen or national of the United States and reside in a country 
to which payments to residents of that country are withheld by the 
Treasury Department under section 3329 of title 31, United States Code.
    (b) Condition occurs before we determine that you are qualified. If 
one of the conditions in paragraph (a) of this section occurs before we 
determine that you are qualified, we will deny your claim for SVB.
    (c) Condition occurs after we determine that you are qualified. If 
one of the conditions in paragraph (a) of this section occurs after we 
determine that you are qualified for SVB, you cannot receive SVB 
payments for any month in which the condition exists.



Sec. 408.206  What happens when you apply for SVB?

    (a) General rule. When you apply for SVB, we will ask you for 
documents and other information that we need to determine if you meet 
all the requirements for qualification. You must give us complete 
information (see subpart D of this part for our rules on evidence). If 
you do not meet all of the requirements for qualification listed in 
Sec. 408.202, or if one of the conditions listed in Sec. 408.204 exists, 
we will deny your claim.
    (b) If you are a qualified individual residing in the United States. 
If you meet all the requirements for qualification listed in 
Sec. 408.202 and if none of the conditions listed in Sec. 408.204 exist, 
we will send you a letter telling you the following:
    (1) You are qualified for SVB;
    (2) In order to become entitled to SVB, you will have to begin 
residing outside the United States by the end of the fourth calendar 
month after the month in which your notice of qualification is dated. 
For example, if our letter is dated May 15, you must establish residence 
outside the United States before October 1 of that year; and
    (3) What documents and information you must give us to establish 
that you are residing outside the United States.



Sec. 408.208  What happens if you establish residence outside the 
United States within 4 calendar months?

    If you begin residing outside the United States within 4 calendar 
months after the month in which your SVB qualification notice is dated, 
we will send you a letter telling you that you are entitled to SVB and 
the first month for which SVB payments can be made to you. The letter 
will also tell you the amount of your monthly benefit payments, whether 
your payments are reduced because of your other benefit income, and what 
rights you have to a reconsideration of our determination.

[[Page 717]]



Sec. 408.210  What happens if you do not establish residence outside 
the United States within 4 calendar months?

    If you do not establish residence outside the United States within 4 
calendar months after the month in which your SVB qualification notice 
is dated, we will deny your SVB claim. We will send you a notice 
explaining what rights you have to a reconsideration of our 
determination. You will have to file a new application and meet all the 
requirements for qualification and entitlement based on the new 
application to become entitled to SVB.



Sec. 408.212  What happens if you are a qualified individual already 
residing outside the United States?

    If you meet all the requirements for qualification listed in 
Sec. 408.202 and if none of the conditions listed in Sec. 408.204 exist, 
we will ask you for documents and information to establish your 
residence outside the United States. If you establish that you are 
residing outside the United States, we will send you a letter telling 
you that you are entitled to SVB and the first month for which SVB 
payments can be made to you. The letter will also tell you the amount of 
your monthly benefit payments, whether your payments are reduced because 
of your other benefit income, and what rights you have to a 
reconsideration of our determination.

                                   Age



Sec. 408.214  Are you age 65?

    You become age 65 on the first moment of the day before the 
anniversary of your birth corresponding to age 65. Thus, you must have 
been born on or before December 15, 1934 to be at least age 65 on 
December 14, 1999 and to qualify for SVB.

                            Military Service



Sec. 408.216  Are you a World War II veteran?

    (a) Service requirements. For SVB purposes, you are a World War II 
veteran if you:
    (1) Served in the active military, naval or air service of the 
United States during World War II at any time during the period 
beginning on September 16, 1940 and ending on July 24, 1947; or
    (2) Served in the organized military forces of the Government of the 
Commonwealth of the Philippines, while the forces were in the service of 
the U.S. Armed Forces pursuant to the military order of the President 
dated July 26, 1941, including among the military forces organized 
guerrilla forces under commanders appointed, designated, or subsequently 
recognized by the Commander in Chief, Southwest Pacific Area, or other 
competent authority in the U.S. Army. This service must have been 
rendered at any time during the period beginning July 26, 1941 and 
ending on December 30, 1946.
    (b) Discharge requirements. You must have been discharged or 
released from this service under conditions other than dishonorable 
after service of 90 days or more or, if your service was less than 90 
days, because of a disability or injury incurred or aggravated in the 
line of active duty.

                             SSI Eligibility



Sec. 408.218  Do you meet the SSI eligibility requirements?

    For SVB purposes, you are eligible for SSI for a given month if all 
of the following are met:
    (a) You have been determined to be eligible for SSI (except as noted 
in paragraph (c) of this section); you do not have to actually receive a 
payment for that month;
    (b) Your SSI eligibility has not been terminated for that month; and
    (c) Your SSI benefits are not subject to a penalty under 
Sec. 416.1340 of this chapter. This includes months in which a penalty 
has been imposed, as well as months in which a penalty cannot be imposed 
because you are in SSI nonpay status for some other reason.

                          Other Benefit Income



Sec. 408.220  Do you have other benefit income?

    (a) Description of other benefit income. Other benefit income is any 
regular periodic payment (such as an annuity, pension, retirement or 
disability benefit) that you receive. For other benefit income to affect 
your SVB eligibility, you must have been receiving the other

[[Page 718]]

benefit income in any part of the 12-month period before the month in 
which you filed your application for SVB. Payments received after you 
become entitled to SVB can be included as other benefit income only if 
you received a similar payment from the same or a related source during 
any part of the 12-month period before the month in which you filed your 
application for SVB.
    (b) When other benefit payments are considered to be similar 
payments from the same or a related source. Payments are similar 
payments from the same or a related source if they are received from 
sources substantially related to the sources of income received before 
you became entitled to SVB. For example, if you received U.S. Social 
Security spouse's benefits in the 12-month period before you filed your 
application for SVB and these were changed to widower's benefits after 
you became entitled to SVB, we would consider this to be from the same 
or a related source.
    (c) Examples of other benefit income. Other benefit income can come 
from a source inside or outside the United States. It includes, but is 
not limited to, any of the following:
    (1) Veterans' compensation or pension,
    (2) Workers' compensation,
    (3) U.S. or foreign Social Security benefits (not including SSI 
payments from the U.S.),
    (4) Railroad retirement annuity or pension,
    (5) Retirement or disability pension,
    (6) Individual Retirement Account (IRA) payments, and
    (7) Unemployment insurance benefit.
    (d) If you receive a lump-sum payment. Regular periodic payments can 
also include lump-sum payments made at your request or as an 
administrative convenience or practice in place of more frequent 
payments. See Sec. 408.224(e) for an explanation of how we determine the 
monthly amount of your benefit income if you receive a lump-sum payment.



Sec. 408.222  How does your other benefit income affect your SVB?

    (a) Income began before you qualify for SVB. If, at the time you 
file your application for SVB, your other benefit income is equal to, or 
more than, the maximum SVB payment possible (see Sec. 408.505), we will 
deny your SVB claim. If it is less, we will reduce any monthly SVB 
payments you become entitled to by the amount of your other benefit 
income (see Sec. 408.510 for a description of how we make the 
reduction).
    (b) Income begins after you qualify for SVB. If you have been 
determined to be qualified for SVB, we will reduce any monthly SVB 
payments you become entitled to by the amount of your other benefit 
income (see Sec. 408.510 for a description of how we make the 
reduction).



Sec. 408.224  How do we determine the monthly amount of your other 
benefit income?

    If your other benefit income is paid in other than monthly amounts, 
we will compute the equivalent monthly amount as follows:
    (a) Weekly payments. We multiply the amount of the weekly payment by 
52 and divide by 12 to determine the equivalent monthly payment amount.
    (b) Bi-weekly payments. We multiply the amount of the bi-weekly 
payment by 26 and divide by 12 to determine the equivalent monthly 
payment amount.
    (c) Quarterly payments. We multiply the amount of the quarterly 
payment by 4 and divide by 12 to determine the equivalent monthly 
payment amount.
    (d) Semi-annual payments. We multiply the amount of the semi-annual 
payment by 2 and divide by 12 to determine the equivalent monthly 
payment amount.
    (e) Lump sum payment. If the paying agency will not prorate the lump 
sum to determine the monthly amount, we will compute the amount as 
follows:
    (1) If the payment is for a specific period. We divide the lump sum 
by the number of months in the period for which the payment was made to 
determine the equivalent monthly payment amount.
    (2) If the payment is for a lifetime or for an unspecified period. 
We divide the lump sum amount by your life expectancy in months at the 
time the lump sum is paid.

[[Page 719]]



Sec. 408.226  What happens if you begin receiving other benefit
income after you become entitled to SVB?

    If you begin receiving other benefit income after you become 
entitled to SVB, we will reduce your SVB by the amount of those payments 
only if you were receiving similar benefits from the same or a related 
source during the 12-month period before you filed for SVB. (See 
Sec. 408.220(b) for a description of when we consider other benefit 
income to be from the same or a related source.)

                   Residence Outside the United States



Sec. 408.228  When do we consider you to be residing outside the 
United States?

    (a) Effect of residency on SVB eligibility. You can be paid SVB only 
for those months in which you are residing outside the United States but 
you can not be paid for a month that is earlier than the month in which 
you filed your application for SVB. You are residing outside the United 
States in a month only if you reside outside the United States on the 
first day of that month. For SVB purposes, you can be a resident of only 
one country at a time. You cannot, for example, maintain a residence in 
the United States and a residence outside the United States at the same 
time.
    (b) Definition of residing outside the United States. We consider 
you to be residing outside the United States if you:
    (1) Have established an actual dwelling place outside the United 
States; and
    (2) Intend to continue to live outside the United States.
    (c) When we will assume you intend to continue living outside the 
United States. If you tell us, or the evidence shows, that you intend to 
reside outside the United States for at least 6 months, we will assume 
you meet the intent requirement in paragraph (b)(2) of this section. 
Otherwise we will assume, absent convincing evidence to the contrary, 
that your stay is temporary and that you are not residing outside the 
United States.



Sec. 408.230  When must you begin residing outside the United States?

    (a) 4-month rule. Except as provided in paragraph (b) of this 
section, you must begin residing outside the United States by the end of 
the fourth calendar month after the month in which the notice explaining 
that you are qualified for SVB is dated, as explained in Sec. 408.206. 
If you do not establish residence outside the United States within this 
4-month period, we will deny your claim for SVB. You will have to file a 
new application and meet all the requirements for qualification and 
entitlement based on the new application to become entitled to SVB.
    (b) When we will extend the 4-month period. We will extend the 4-
month period for establishing residence outside the United States if you 
are in the United States and are appealing either:
    (1) A determination that we made on your SVB claim, or
    (2) A determination that we made on a title II and/or a title XVI 
claim but only if the determination affects your SVB qualification.
    (c) How we extend the 4-month period. If the requirements in 
paragraph (b) of this section are met, the 4-month period begins with 
the month after the month in which your notice of our decision on your 
appeal is dated or the month in which your appeal rights have expired.



Sec. 408.232  When do you lose your foreign resident status?

    (a) General rule. We consider you to have lost or abandoned your 
residence outside the United States if you:
    (1) Enter the United States and stay for more than 1 full calendar 
month (see Sec. 408.234 for exceptions to this rule);
    (2) Tell us that you no longer consider yourself to be residing 
outside the United States; or
    (3) Become eligible (as defined by title XVI) for SSI benefits.
    (b) Resumption of SVB following a period of U.S. residence. Once you 
lose or abandon your residence outside the United States, you cannot 
receive SVB again until you meet all the requirements for SVB 
qualification and reestablish your residence outside the United States.


[[Page 720]]


    Example: You leave your home outside the United States on June 15 to 
visit your son in the United States and return to your home abroad on 
August 15. Your SVB payments will continue for the months of June and 
July. However, because you were in the United States for the entire 
calendar month of July (i.e., all of the first day through all of the 
last day of July), you are not entitled to an SVB payment for the month 
of August. Your SVB payments resume with September, the month you 
reestablished your residence outside the United States.



Sec. 408.234  Can you continue to receive SVB payments if you stay
in the United States for more than 1 full calendar month?

    (a) When we will consider your foreign residence to continue. We 
will continue to consider you to be a foreign resident and will continue 
to pay you SVB payments even if you have been in the United States for 
more than 1 full calendar month if you--
    (1) Made a good faith effort to return to your home abroad within 
that 1-month period but were prevented from doing so by circumstances 
beyond your control (e.g., sickness, a death in the family, a 
transportation strike, etc.); or
    (2) Are exercising your option to be personally present in the 
United States to present testimony and other evidence in the appeal of 
an SSA decision on a claim filed under any SSA-administered program. 
This extension applies only as long as you are participating in 
activities where you are providing testimony and other evidence in 
connection with a determination or decision at a specific level of the 
appeals process (e.g., a hearing before an administrative law judge).
    (b) When you must return to your home abroad. When the circumstance/
event that was the basis for the continuation of your SVB payments 
ceases to exist, you must return to your home abroad within 1 full 
calendar month. If you do not return to your home abroad within this 1-
calendar-month period, we will consider you to have lost or abandoned 
your foreign resident status for SVB purposes and we will stop your SVB 
payments with the first day of the month following the first full 
calendar month you remain in the United States.



                      Subpart C_Filing Applications

    Authority: Secs. 702(a)(5), 802, 806, and 810 of the Social Security 
Act (42 U.S.C. 902(a)(5), 1102, 1106 and 1110); Sec. 251, Pub. L. 106-
169, 113 Stat. 1844.

                         Filing Your Application



Sec. 408.301  What is this subpart about?

    This subpart contains our rules about filing applications for SVB. 
It explains what an application is, who may sign it, where and when it 
must be signed and filed, the period of time it is in effect, and how it 
may be withdrawn. This subpart also explains when a written statement or 
an oral inquiry may be considered to establish your application filing 
date.



Sec. 408.305  Why do you need to file an application to receive
benefits?

    In addition to meeting other requirements, you must file an 
application to become entitled to SVB. If you believe you may be 
entitled to SVB, you should file an application. Filing an application 
will--
    (a) Permit us to make a formal decision on whether you qualify for 
SVB;
    (b) Assure that you receive SVB for any months you are entitled to 
receive payments; and
    (c) Give you the right to appeal if you are dissatisfied with our 
determination.



Sec. 408.310  What makes an application a claim for SVB?

    To be considered a claim for SVB, an application must generally meet 
all of the following conditions:
    (a) It must be on the prescribed SVB application form (SSA-2000-F6, 
Application for Special Benefits for World War II Veterans).
    (b) It must be completed and filed with SSA as described in 
Sec. 408.325.
    (c) It must be signed by you or by someone who may sign an 
application for you as described in Sec. 408.315.
    (d) You must be alive at the time it is filed.



Sec. 408.315  Who may sign your application?

    (a) When you must sign. If you are mentally competent, and 
physically

[[Page 721]]

able to do so, you must sign your own application.
    (b) When someone else may sign for you. (1) If you are mentally 
incompetent, or physically unable to sign, your application may be 
signed by a court-appointed representative or a person who is 
responsible for your care, including a relative. If you are in the care 
of an institution, the manager or principal officer of the institution 
may sign your application.
    (2) If it is necessary to protect you from losing benefits and there 
is good cause why you could not sign the application, we may accept an 
application signed by someone other than you or a person described in 
paragraph (b)(1) of this section.

    Example: Mr. Smith comes to a Social Security office a few days 
before the end of a month to file an application for SVB for his 
neighbor, Mr. Jones. Mr. Jones, a 68-year-old widower, just suffered a 
heart attack and is in the hospital. He asked Mr. Smith to file the 
application for him. We will accept an application signed by Mr. Smith 
because it would not be possible to have Mr. Jones sign and file the 
application until the next calendar month and a loss of one month's 
benefits would result.



Sec. 408.320  What evidence shows that a person has authority to sign
an application for you?

    (a) A person who signs an application for you will be required to 
give us evidence of his or her authority to sign the application for you 
under the following rules:
    (1) If the person who signs is a court-appointed representative, he 
or she must give us a certificate issued by the court showing authority 
to act for you.
    (2) If the person who signs is not a court-appointed representative, 
he or she must give us a statement describing his or her relationship to 
you. The statement must also describe the extent to which the person is 
responsible for your care.
    (3) If the person who signs is the manager or principal officer of 
an institution which is responsible for your care, he or she must give 
us a statement indicating the person's position of responsibility at the 
institution.
    (b) We may, at any time, require additional evidence to establish 
the authority of a person to sign an application for you.



Sec. 408.325  When is your application considered filed?

    (a) General rule. We consider an application for SVB filed on the 
day it is received by an SSA employee at one of our offices, by an SSA 
employee who is authorized to receive it at a place other than one of 
our offices, or by any office of the U.S. Foreign Service or by the 
Veterans Affairs Regional Office in the Philippines.
    (b) Exceptions. (1) When we receive an application that is mailed, 
we will use the date shown by the United States postmark as the filing 
date if using the date we receive it would result in your entitlement to 
additional benefits. If the postmark is unreadable, or there is no 
United States postmark, we will use the date the application is signed 
(if dated) or 5 days before the day we receive the signed application, 
whichever date is later.
    (2) We consider an application to be filed on the date of the filing 
of a written statement or the making of an oral inquiry under the 
conditions in Secs. 408.340 and 408.345.
    (3) We will establish a deemed filing date of an application in a 
case of misinformation under the conditions described in Sec. 408.351. 
The filing date of the application will be a date determined under 
Sec. 408.351(b).



Sec. 408.330  How long will your application remain in effect?

    Your application for SVB will remain in effect from the date it is 
filed until we make a final determination on it, unless there is a 
hearing decision on your application. If there is a hearing decision, 
your application will remain in effect until the hearing decision is 
issued.

         Filing Date Based on Written Statement or Oral Inquiry



Sec. 408.340  When will we use a written statement as your filing date?

    If you file with us under the rules stated in Sec. 408.325 a written 
statement, such as a letter, indicating your intent to claim SVB, we 
will use the filing date of the written statement as the

[[Page 722]]

filing date of your application. If the written statement is mailed, we 
will use the date the statement was mailed to us as shown by the United 
States postmark. If the postmark is unreadable or there is no United 
States postmark, we will use the date the statement is signed (if dated) 
or 5 days before the day we receive the written statement, whichever 
date is later, as the filing date. In order for us to use your written 
statement to protect your filing date, the following requirements must 
be met:
    (a) The statement indicates your intent to file for benefits.
    (b) The statement is signed by you, your spouse, or a person 
described in Sec. 408.315.
    (c) You file an application with us on an application form as 
described in Sec. 408.310(a), or one is filed for you by a person 
described in Sec. 408.315, within 60 days after the date of a notice we 
will send advising of the need to file an application. The notice will 
say that we will make an initial determination of your qualification if 
an application form is filed within 60 days after the date of the 
notice. We will send the notice to you. However, if it is clear from the 
information we receive that you are mentally incompetent, we will send 
the notice to the person who submitted the written statement.
    (d) You are alive when the application is filed.



Sec. 408.345  When will we use the date of an oral inquiry as your 
application filing date?

    We will use the date of an oral inquiry about SVB as the filing date 
of your application for SVB if the following requirements are met:
    (a) The inquiry asks about your entitlement to SVB.
    (b) The inquiry is made by you, your spouse, or a person who may 
sign an application on your behalf as described in Sec. 408.315.
    (c) The inquiry, whether in person or by telephone, is directed to 
an office or an official described in Sec. 408.325(a).
    (d) You, or a person on your behalf as described in Sec. 408.315, 
file an application on a prescribed form within 60 days after the date 
of the notice we will send telling of the need to file an application. 
The notice will say that we will make an initial determination on 
whether you qualify for SVB if an application form is filed within 60 
days after the date of the notice. However, if it is clear from the 
information we receive that you are mentally incompetent, we will send 
the notice to the person who made the inquiry.
    (e) You are alive when the prescribed application is filed.

               Deemed Filing Date Based on Misinformation



Sec. 408.351  What happens if we give you misinformation about filing
an application?

    (a) General rule. You may have considered applying for SVB, for 
yourself or another person and you may have contacted us in writing, by 
telephone or in person to inquire about filing an application for SVB. 
It is possible that in responding to your inquiry, we may have given you 
misinformation about qualification for such benefits that caused you not 
to file an application at that time. If this happened and use of that 
date will result in entitlement to additional benefits, and you later 
file an application for SVB with us, we may establish an earlier filing 
date as explained in paragraphs (b) through (f) of this section.
    (b) Deemed filing date of an application based on misinformation. 
Subject to the requirements and conditions in paragraphs (c) through (f) 
of this section, we may establish a deemed filing date of an application 
for SVB under the following provisions.
    (1) If we determine that you failed to apply for SVB because we gave 
you misinformation about qualification for or entitlement to such 
benefits, we will deem an application for such benefits to have been 
filed with us on the later of--
    (i) The date on which we gave you the misinformation; or
    (ii) The date on which all of the requirements for qualification to 
SVB were met, other than the requirement of filing an application.
    (2) Before we may establish a deemed filing date of an application 
for SVB under paragraph (b)(1) of this section, you or a person 
described in Sec. 408.315

[[Page 723]]

must file an application for such benefits.
    (c) Requirements concerning the misinformation. We apply the 
following requirements for purposes of paragraph (b) of this section.
    (1) The misinformation must have been provided to you by one of our 
employees while he or she was acting in his or her official capacity as 
our employee. For purposes of this section, an employee includes an 
officer of SSA, an employee of a U.S. Foreign Service office, and an 
employee of the SSA Division of the Veterans Affairs Regional Office in 
the Philippines who is authorized to take and develop Social Security 
claims.
    (2) Misinformation is information which we consider to be incorrect, 
misleading, or incomplete in view of the facts which you gave to the 
employee, or of which the employee was aware or should have been aware, 
regarding your particular circumstances. In addition, for us to find 
that the information you were given was incomplete, the employee must 
have failed to provide you with the appropriate, additional information 
which he or she would be required to provide in carrying out his or her 
official duties.
    (3) The misinformation may have been provided to you orally or in 
writing.
    (4) The misinformation must have been provided to you in response to 
a specific request by you to us for information about your qualification 
for SVB.
    (d) Evidence that misinformation was provided. We will consider the 
following evidence in making a determination under paragraph (b) of this 
section.
    (1) Preferred evidence. Preferred evidence is written evidence which 
relates directly to your inquiry about your qualification for SVB and 
which shows that we gave you misinformation which caused you not to file 
an application. Preferred evidence includes, but is not limited to, the 
following--
    (i) A notice, letter or other document which was issued by us and 
addressed to you; or
    (ii) Our record of your telephone call, letter or in-person contact.
    (2) Other evidence. In the absence of preferred evidence, we will 
consider other evidence, including your statements about the alleged 
misinformation, to determine whether we gave you misinformation, which 
caused you not to file an application. We will not find that we gave you 
misinformation, however, based solely on your statements. Other evidence 
which you provide or which we obtain must support your statements. 
Evidence which we will consider includes, but is not limited to, the 
following--
    (i) Your statements about the alleged misinformation, including 
statements about--
    (A) The date and time of the alleged contact(s);
    (B) How the contact was made, e.g., by telephone or in person;
    (C) The reason(s) the contact was made;
    (D) Who gave the misinformation; and
    (E) The questions you asked and the facts you gave us, and the 
questions we asked and the information we gave you, at the time of the 
contact;
    (ii) Statements from others who were present when you were given the 
alleged misinformation, e.g., a neighbor who accompanied you to our 
office;
    (iii) If you can identify the employee or the employee can recall 
your inquiry about benefits--
    (A) Statements from the employee concerning the alleged contact, 
including statements about the questions you asked, the facts you gave, 
the questions the employee asked, and the information provided to you at 
the time of the alleged contact; and
    (B) Our assessment of the likelihood that the employee provided the 
alleged misinformation;
    (iv) An evaluation of the credibility and the validity of your 
allegations in conjunction with other relevant information; and
    (v) Any other information regarding your alleged contact.
    (e) Information which does not constitute satisfactory proof that 
misinformation was given. Certain kinds of information will not be 
considered satisfactory proof that we gave you misinformation which 
caused you not to file an application. Examples of such information 
include--

[[Page 724]]

    (1) General informational pamphlets that we issue to provide basic 
program information;
    (2) General information which we review or prepare but which is 
disseminated by the media, e.g., radio, television, magazines, and 
newspapers; and
    (3) Information provided by other governmental agencies, e.g., the 
Department of Veterans Affairs (except for certain employees of the SSA 
Division of the Veterans Affairs Regional Office in the Philippines as 
provided in paragraph (c)(1) of this section), the Department of 
Defense, State unemployment agencies, and State and local governments.
    (f) Claim for benefits based on misinformation. You may make a claim 
for SVB based on misinformation at any time. Your claim must contain 
information that will enable us to determine if we did provide 
misinformation to you about qualification for SVB which caused you not 
to file an application. Specifically, your claim must be in writing and 
it must explain what information was provided, how, when and where it 
was provided and by whom, and why the information caused you not to file 
an application. If you give us this information, we will make a 
determination on such a claim for benefits if all of the following 
conditions are also met.
    (1) An application for SVB is filed with us by you or someone 
described in Sec. 408.315 who may file. The application must be filed 
after the alleged misinformation was provided. This application may be--
    (i) An application on which we have made a previous final 
determination or decision awarding SVB, but only if the claimant 
continues to be entitled to benefits based on that application;
    (ii) An application on which we have made a previous final 
determination or decision denying the benefits, but only if such 
determination or decision is reopened; or
    (iii) A new application on which we have not made a final 
determination or decision.
    (2) The establishment of a deemed filing date of an application for 
benefits based on misinformation could result in entitlement to benefits 
or payment of additional benefits.
    (3) We have not made a previous final determination or decision to 
which you were a party on a claim for benefits based on alleged 
misinformation involving the same facts and issues. This provision does 
not apply, however, if the final determination or decision may be 
reopened.

                        Withdrawal of Application



Sec. 408.355  Can you withdraw your application?

    (a) Request for withdrawal filed before a determination is made. You 
may withdraw your application for SVB before we make a determination on 
it if--
    (1) You, or a person who may sign an application for you under 
Sec. 408.315, file a written request for withdrawal at a place described 
in Sec. 408.325; and
    (2) You are alive at the time the request is filed.
    (b) Request for withdrawal filed after a determination is made. An 
application may be withdrawn after we make a determination on it if you 
repay all benefits already paid based on the application being withdrawn 
or we are satisfied that the benefits will be repaid.
    (c) Effect of withdrawal. If we approve your request to withdraw 
your application, we consider that the application was never filed. If 
we disapprove your request for withdrawal, we treat your application as 
though you did not file a request for withdrawal.



Sec. 408.360  Can you cancel your request to withdraw your application?

    You may request to cancel your request to withdraw your application 
and have your application reinstated if all of the following 
requirements are met:
    (a) You, or someone who may sign an application for you under 
Sec. 408.315, file a written request for cancellation at a place 
described in Sec. 408.325;
    (b) You are alive at the time you file your request for 
cancellation; and
    (c) A cancellation request received after we have approved your 
withdrawal must be filed no later than 60 days after the date of the 
notice of approval.

[[Page 725]]



                     Subpart D_Evidence Requirements

    Authority: Secs. 702(a)(5), 806, and 810 of the Social Security Act 
(42 U.S.C. 902(a)(5), 1006, and 1010); sec. 251, Pub. L. 106-169, 113 
Stat. 1844.

                           General Information



Sec. 408.401  What is this subpart about?

    We cannot determine your entitlement to SVB based solely on your 
statements about your qualification for benefits or other facts 
concerning payments to you. We will ask you for specific evidence or 
additional information. We may verify the evidence you give us with 
other sources to ensure that it is correct. This subpart contains our 
rules about the evidence you need to give us when you claim SVB.



Sec. 408.402  When do you need to give us evidence?

    When you apply for SVB, we will ask you for any evidence we need to 
make sure that you meet the SVB qualification and entitlement 
requirements. After you begin receiving SVB, we may ask you for evidence 
showing whether your SVB payments should be reduced or stopped. We will 
help you get any documents you need but do not have. If your evidence is 
a foreign-language record or document, we can have it translated for 
you. The evidence you give us will be kept confidential and not 
disclosed to anyone but you except under the rules set out in part 401 
of this chapter. You should also be aware that section 811 of the Act 
provides criminal penalties for misrepresenting the facts or for making 
false statements to obtain SVB payments for yourself or someone else, or 
to continue entitlement to benefits.



Sec. 408.403  Where should you give us your evidence?

    You should give your evidence to the people at a Social Security 
Administration office. In the Philippines, you should give your evidence 
to the people at the Veterans Affairs Regional Office. Elsewhere outside 
the United States, you should give your evidence to the people at the 
nearest U.S. Social Security office or a United States Foreign Service 
Office.



Sec. 408.404  What happens if you fail to give us the evidence we 
ask for?

    (a) You have not yet qualified for SVB. Generally, we will ask you 
to give us specific evidence or information by a certain date to prove 
that you qualify for SVB or to prove your foreign residence. If we do 
not receive the evidence or information by that date, we may decide that 
you do not qualify for SVB or may not receive SVB and deny your claim.
    (b) You have qualified for or become entitled to SVB. If you have 
already qualified for or become entitled to SVB, we may ask you to give 
us information by a specific date to decide whether you should receive 
benefits or, if you are already receiving benefits, whether your 
benefits should be stopped or reduced. If you do not give us the 
requested evidence or information by the date given, we may decide that 
you are no longer entitled to benefits or that your benefits should be 
stopped or reduced.
    (c) If you need more time. You should let us know if you are unable 
to give us the evidence or information within the specified time and 
explain why there will be a delay. If this delay is due to illness, 
failure to receive timely evidence you have asked for from another 
source, or a similar circumstance, we will give you additional time to 
give us the evidence.



Sec. 408.405  When do we require original records or copies as 
evidence?

    (a) General rule. To prove your qualification for or continuing 
entitlement to SVB, you may be asked to show us an original document or 
record. These original documents or records will be returned to you 
after we have photocopied them. We will also accept copies of original 
records that are properly certified and some uncertified birth 
certifications. These types of records are described in paragraphs (b) 
and (c) of this section.
    (b) Certified copies of original records. You may give us copies of 
original records or extracts from records if they are certified as true 
and exact copies by:

[[Page 726]]

    (1) The official custodian of the record;
    (2) A Social Security Administration employee authorized to certify 
copies;
    (3) A Veterans Affairs employee if the evidence was given to that 
agency to obtain veteran's benefits;
    (4) An employee of the Veterans Affairs Regional Office, Manila, 
Philippines who is authorized to certify copies; or
    (5) A U.S. Consular Officer or employee of the Department of State 
authorized to certify evidence received outside the United States.
    (c) Uncertified copies of original birth records. You may give us an 
uncertified photocopy of a birth registration notification as evidence 
of age where it is the practice of the local birth registrar to issue 
them in this way.



Sec. 408.406  How do we evaluate the evidence you give us?

    When you give us evidence, we examine it to see if it is convincing 
evidence. This means that unless we have information in our records that 
raises a doubt about the evidence, other evidence of the same fact will 
not be needed. If the evidence you give us is not convincing by itself, 
we may ask you for additional evidence. In evaluating whether the 
evidence you give us is convincing, we consider such things as whether:
    (a) The information contained in the evidence was given by a person 
in a position to know the facts;
    (b) There was any reason to give false information when the evidence 
was created;
    (c) The information in the evidence was given under oath, or with 
witnesses present, or with the knowledge that there was a penalty for 
giving false information;
    (d) The evidence was created at the time the event took place or 
shortly thereafter;
    (e) The evidence has been altered or has any erasures on it; and
    (f) The information contained in the evidence agrees with other 
available evidence including our records.

                                   Age



Sec. 408.410  When do you need to give us evidence of your age?

    To qualify for SVB you must establish that you were age 65 or older 
on December 14, 1999, the date on which Public Law 106-169 was enacted 
into law. If we have already established your age or date of birth in 
connection with your claim for other benefit programs that we 
administer, you will not have to give us evidence of your age for your 
SVB claim. If we have not established your age or date of birth, you 
must give us evidence of your age or date of birth. In the absence of 
information to the contrary, we generally will not ask for additional 
evidence of your age or date of birth if you state that you are at least 
age 68, and you submit documentary evidence that is at least 3 years old 
when the application is filed and supports your statement.



Sec. 408.412  What kinds of evidence of age do you need to give us?

    For a description of the kinds of evidence of age you may need to 
give us, see Sec. 416.802 of this chapter.



Sec. 408.413  How do we evaluate the evidence of age you give us?

    In evaluating the evidence of age you give us, we use the rules in 
Sec. 416.803 of this chapter.

                            Military Service



Sec. 408.420  What evidence of World War II military service do you 
need to give us?

    (a) Kinds of evidence you can give us. To show that you are a World 
War II veteran as defined in Sec. 408.216, you can give us any of the 
documents listed in Sec. 404.1370(b)(1) through (5) of this chapter that 
were issued by a U.S. Government agency. However, depending on the type 
of document you give us and what the document shows, we may verify your 
military service, or the dates of your service, with the National 
Personnel Records Center (NPRC) in St. Louis, Missouri. If we do, we 
will use the information in NPRC's records to determine whether you meet 
the military service requirements for SVB.

[[Page 727]]

    (b) What the evidence must show. When you file an application for 
SVB, you must give us evidence of your World War II military service. 
The evidence you give us must show:
    (1) Your name;
    (2) The branch of service in which you served;
    (3) The dates of your military service;
    (4) Your military service serial number;
    (5) The character of your discharge; and
    (6) If your service was in the organized military forces of the 
Government of the Commonwealth of the Philippines (including the 
organized guerrilla forces), the period of your service that was under 
the control of U.S. Armed Forces.

                             SSI Eligibility



Sec. 408.425  How do we establish your eligibility for SSI?

    To qualify for SVB, you must have been eligible for SSI for the 
month of December 1999, the month in which Public Law 106-169 was 
enacted, and for the month in which you filed your application for SVB. 
You do not have to submit evidence of this. We will use our SSI record 
of your eligibility to determine if you meet these requirements.

                          Other Benefit Income



Sec. 408.430  When do you need to give us evidence of your other
benefit income?

    If you tell us or if we have information indicating that you are 
receiving other benefit income that could affect your qualification for 
or the amount of your SVB payments, we will ask you to give us evidence 
of that income as explained in Sec. 408.432.



Sec. 408.432  What kind of evidence of your other benefit income do 
you need to give us?

    As evidence of your other benefit income, we may require a document 
such as an award notice or other letter from the paying agency or 
written notification from the former employer, insurance company, etc. 
The evidence should show the benefit payable, the current amount of the 
payment, and the date the payment began.

                                Residence



Sec. 408.435  How do you prove that you are residing outside the 
United States?

    (a) General rule. To establish that you are residing outside the 
United States for SVB purposes, you must give us all of the following:
    (1) Evidence of the date on which you arrived in the country in 
which you are residing;
    (2) A statement signed by you showing the address at which you are 
living and that you intend to continue living there; and
    (3) Evidence that you are actually living at the address given in 
your signed statement.
    (b) Evidence of the date you entered the foreign country. To 
establish the date you arrived in the country in which you are residing, 
you can give us evidence such as:
    (1) A visa or passport showing the date you entered that country;
    (2) Your plane ticket showing the date you arrived in that country; 
or
    (3) An entry permit showing the date you entered that country.
    (c) Evidence of your actual place of residence. To establish your 
actual place of residence, you can give us evidence such as:
    (1) A lease agreement showing where you live;
    (2) Rental or mortgage receipts;
    (3) Utility or other bills addressed to you at the address where you 
live;
    (4) A signed statement from a local official showing that he or she 
knows where you live, when you began living there and how he or she 
knows this information; or
    (5) A Standard Form 1199A, Direct Deposit Sign-Up Form, showing your 
address abroad and signed by an official of the financial institution 
after the date you arrived in the country in which you will be residing.



Sec. 408.437  How do you prove that you had good cause for staying in 
the United States for more than 1 full calendar month?

    (a) General rule. If you believe that you meet the requirements in 
Sec. 408.234

[[Page 728]]

and that you should continue to receive SVB payments even though you 
have been in the United States for more than 1 full calendar month, you 
must give us evidence that you had good cause for staying in the United 
States.
    (b) Circumstances prevent you from returning to your home abroad. To 
prove that you had good cause for staying in the United States for more 
than 1 full calendar month, you must give us evidence of your good faith 
effort to return to your home abroad before the 1-month period had 
elapsed and of the circumstances/event which prevented your return to 
your home abroad.
    (1) Evidence of your good faith effort to return to your home 
abroad. Evidence of your plans to return to your home abroad can 
include, but is not limited to:
    (i) A plane ticket showing that you intended to return to your home 
abroad before the expiration of 1 full calendar month; or
    (ii) Notice from a travel agency or airline confirming the 
cancellation of your reservation to return to your home abroad on a date 
within 1 full calendar month.
    (2) Evidence of the circumstances preventing your return to your 
home abroad. The evidence we will accept from you to support the 
circumstance or event that prevented you from returning to your home 
abroad will depend on the reason you are staying in the United States. 
It can include, but is not limited to, a:
    (i) Newspaper article or other publication describing the event or 
natural disaster which prevented your return; or
    (ii) Doctor's statement, etc. showing that you are unable to travel; 
or
    (iii) Death certificate or notice if you are staying in the United 
States to attend the funeral of a member of your family.
    (c) You are appealing a decision we made. To establish that you had 
good cause to stay in the United States for more than 1 full calendar 
month because you want to appear in person at the appeal of a decision 
on a claim filed under a program administered by the Social Security 
Administration, you must submit evidence of this. The evidence must 
identify the appeal proceeding and the dates you are scheduled to 
attend.
    (d) When we may ask for more evidence. If you stay in the United 
States for several months, we may ask you to give us more evidence to 
prove that you are still unable to return to your home abroad.



                Subpart E_Amount and Payment of Benefits

    Authority: Secs. 702(a)(5), 801, 805, and 810 of the Social Security 
Act (42 U.S.C. 902(a)(5), 1001, 1005, and 1010); Sec. 251, Pub. L. 106-
169, 113 Stat. 1844.



Sec. 408.501  What is this subpart about?

    This subpart explains how we compute the amount of your monthly SVB 
payment, including how we reduce your payments if you receive other 
benefit income. It also explains how we pay benefits under the SVB 
program.



Sec. 408.505  How do we determine the amount of your SVB payment?

    (a) Maximum SVB payment. The maximum monthly SVB payment is equal to 
75% of the FBR for an individual under title XVI of the Act. See 
Sec. 416.410 of this chapter.
    (b) Cost-of-living adjustments in the FBR. The maximum SVB amount 
will increase whenever there is a cost-of-living increase in the SSI FBR 
under the provisions of Sec. 416.405 of this chapter. The basic SVB 
amount following such an increase is equal to 75 percent of the 
increased FBR.
    (c) When we will reduce the amount of your basic benefit. We will 
reduce your basic benefit by the amount of the other benefit income you 
receive in that month, as explained in Sec. 408.510.



Sec. 408.510  How do we reduce your SVB when you receive other benefit 
income?

    (a) Amount of the reduction. If you receive other benefit income as 
defined in Sec. 408.220, we will reduce your SVB payment by the amount 
of the other benefit income you receive in that month. The reduction is 
on a dollar-for-dollar and cents-for-cents basis. We do not round SVB 
payment amounts

[[Page 729]]

except as described in paragraph (b) of this section.
    (b) Minimum benefit amount. If the reduction described in paragraph 
(a) of this section results in a benefit amount that is greater than 
zero but less than $1.00, we will pay you a benefit of $1.00 for that 
month.



Sec. 408.515  When do we make SVB payments?

    SVB payments are made on the first day of each month and represent 
payment for that month. If the first day of the month falls on a 
Saturday, Sunday, or Federal legal holiday, payment will be made on the 
first day preceding such day that is not a Saturday, Sunday, or Federal 
legal holiday.



                    Subpart F_Representative Payment

    Authority: Secs. 702(a)(5), 807, and 810 of the Social Security Act 
(42 U.S.C. 902(a)(5), 1007, and 1010).

    Source: 69 FR 60235, Oct. 7, 2004, unless otherwise noted.



Sec. 408.601  What is this subpart about?

    (a) Explanation of representative payment. This subpart explains the 
policies and procedures we follow to determine whether to pay your 
benefits to a representative payee and to select a representative payee 
for you. It also explains the responsibilities your representative payee 
has for using the funds he or she receives on your behalf. A 
representative payee may be either an individual or an organization. We 
will select a representative payee to receive your benefits if we 
believe your interests will be better served by paying a representative 
payee than by paying you directly. Generally, we appoint a 
representative payee if we determine you are unable to manage or direct 
the management of your own benefit payments. Because the representative 
payment policies and procedures we use for the title VIII program 
closely parallel our title II policies and procedures, we provide cross-
references to the appropriate material in our title II representative 
payment rules in subpart U of part 404 of this chapter.
    (b) Policy we use to determine whether to make representative 
payment. For an explanation of the policy we use to determine whether to 
pay your SVB to a representative payee, see Sec. 404.2001(b) of this 
chapter.



Sec. 408.610  When will we send your SVB payments to a representative payee?

    In determining when we will pay your benefits to a representative 
payee, we follow the rules in Sec. 404.2010(a) of this chapter.



Sec. 408.611  What happens to your monthly benefits while we are finding 
a suitable representative payee for you?

    For an explanation of the policy we use to determine what happens to 
your monthly benefits while we are finding a suitable representative 
payee for you, see Sec. 404.2011 of this chapter.



Sec. 408.615  What information do we consider in determining whether 
we will pay your benefits to a representative payee?

    We determine whether to pay your benefits to a representative payee 
after considering the information listed in Sec. 404.2015 of this 
chapter.



Sec. 408.620  What information do we consider in selecting the proper
representative payee for you?

    To select a proper representative payee for you, we consider the 
information listed in Sec. 404.2020 of this chapter.



Sec. 408.621  What is our order of preference in selecting a 
representative payee for you?

    We use the preference list in Sec. 404.2021(a) of this chapter as a 
guide in selecting the proper representative payee for you.



Sec. 408.622  Who may not serve as a representative payee?

    For a list of individuals who may not serve as a representative 
payee, see Sec. 404.2022 of this chapter.



Sec. 408.624  How do we investigate a representative payee applicant?

    Before selecting an individual or organization as your 
representative payee, we investigate him or her following the rules in 
Sec. 404.2024 of this chapter.

[[Page 730]]



Sec. 408.625  What information must a representative payee report
to us?

    Your representative payee must report to us information as described 
in Sec. 404.2025 of this chapter.



Sec. 408.630  How will we notify you when we decide you need a 
representative payee?

    (a) We notify you in writing of our determination to make 
representative payment. If you are legally incompetent, our written 
notice is sent to your legal guardian or legal representative. The 
notice explains that we have determined that representative payment is 
in your interest, and it provides the name of the representative payee 
we have selected. The notice:
    (1) Contains language that is easily understandable to the reader.
    (2) Identifies the person designated as your representative payee.
    (3) Explains that you, your legal guardian, or your legal 
representative can appeal our determination that you need a 
representative payee.
    (4) Explains that you, your legal guardian, or your legal 
representative can appeal our designation of a particular person to 
serve as representative payee.
    (b) If you, your legal guardian, or your legal representative 
objects to representative payment or to the designated payee, you can 
file a formal appeal.



Sec. 408.635  What are the responsibilities of your representative 
payee?

    For a list of your representative payee's responsibilities, see 
Sec. 404.2035 of this chapter.



Sec. 408.640  How must your representative payee use your benefits?

    Your representative payee must use your benefits in accordance with 
the rules in Sec. 404.2040 of this chapter.



Sec. 408.641  Who is liable if your representative payee misuses
your benefits?

    For the rules we follow to determine who is liable for repayment of 
misused benefits, see Sec. 404.2041 of this chapter.



Sec. 408.645  What must your representative payee do with unused
benefits?

    If your representative payee has accumulated benefits for you, he or 
she must conserve or invest them as provided in Sec. 404.2045 of this 
chapter.



Sec. 408.650  When will we select a new representative payee for you?

    We follow the rules in Sec. 404.2050 of this chapter to determine 
when we will select a new representative payee for you.



Sec. 408.655  When will we stop making your payments to a 
representative payee?

    To determine when we will stop representative payment for you, we 
follow the rules in Sec. 404.2055 of this chapter.



Sec. 408.660  What happens to your accumulated funds when your 
representative payee changes?

    For a description of what happens to your accumulated funds 
(including the interest earned on the funds) when we change your 
representative payee or when you begin receiving benefits directly, see 
Sec. 404.2060 of this chapter.



Sec. 408.665  How does your representative payee account for
the use of your SVB payments?

    Your representative payee must account for the use of your benefits. 
We require written reports from your representative payee at least once 
a year. We may verify how your representative payee used your benefits. 
Your representative payee should keep records of how benefits were used 
in order to provide accounting reports and must make those records 
available upon our request. If your representative payee fails to 
provide an annual accounting of benefits or other required report, we 
may require your payee to appear in person at the local Social Security 
field office or a United States Government facility that we designate 
serving the area in which you reside. The decision to have your 
representative payee receive your benefits in person may be based on a 
variety of reasons. Some of these reasons may include the payee's 
history of past performance or our past difficulty in contacting the 
payee. We

[[Page 731]]

may ask your representative payee to give us the following information:
    (a) Where you lived during the accounting period;
    (b) Who made the decisions on how your benefits were spent or saved;
    (c) How your benefit payments were used; and
    (d) How much of your benefit payments were saved and how the savings 
were invested.

[71 FR 61408, Oct. 18, 2006]



                    Subpart G_Reporting Requirements

    Authority: Secs. 702(a)(5), 802, 803, 804, 806, 807, and 810 of the 
Social Security Act (42 U.S.C. 902(a)(5), 1002, 1003, 1004, 1006, 1007, 
and 1010).

    Source: 69 FR 25955, May 10, 2004, unless otherwise noted.



Sec. 408.701  What is this subpart about?

    To achieve efficient administration of the Special Veterans Benefit 
(SVB) program, we require you (or your representative) to report certain 
events to us. It is important for us to know about these events because 
they may affect your right to receive SVB or the amount of your 
benefits. This subpart tells you what events you must report; what your 
reports must include; how you should make your report; and when reports 
are due.



Sec. 408.704  Who must make reports?

    (a) If you receive your own benefits, you are responsible for making 
required reports to us.
    (b) If you have a representative payee, and you have not been 
legally adjudged incompetent, either you or your representative payee 
must make the required reports.
    (c) If you have a representative payee and you have been legally 
adjudged incompetent, you are not responsible for making reports to us; 
however, your representative payee is responsible for making required 
reports to us.



Sec. 408.708  What events must you report to us?

    This section describes the events that you must report to us. They 
are--
    (a) A change of address or residence. You must report to us any 
change in your mailing address and any change in your residence, i.e., 
the address where you live.
    (b) A change in your other benefit income. You must report to us any 
increase or decrease in your other benefit income as described in 
Sec. 408.220.
    (c) Certain deaths. (1) If you are a representative payee, you must 
report the death of the entitled individual.
    (2) If you have a representative payee, you must report the death of 
your representative payee.
    (d) Entry into the United States. You must report to us if you enter 
the United States to visit or live even if you have no intention of 
abandoning your residence outside the United States.
    (e) Removal (including deportation) from the United States. You must 
report to us if you are removed (including deported) from the United 
States under section 237(a) or 212(a)(6)(A) of the Immigration and 
Nationality Act.
    (f) Fleeing to avoid criminal prosecution or custody or confinement 
after conviction, or violating probation or parole. You must report to 
us that you are--
    (1) Fleeing to avoid prosecution, under the laws of the United 
States or the jurisdiction within the United States from which you flee, 
for a crime, or an attempt to commit a crime, which is a felony under 
the laws of the place from which you flee (or which, in the case of the 
State of New Jersey, is a high misdemeanor under the laws of that 
State);
    (2) Fleeing to avoid custody or confinement after conviction under 
the laws of the United States or the jurisdiction within the United 
States from which you flee, for a crime, or an attempt to commit a 
crime, which is a felony under the laws of the place from which you flee 
(or which, in the case of the State of New Jersey, is a high misdemeanor 
under the laws of that State); or
    (3) Violating a condition of probation or parole imposed under 
Federal or State law.

[[Page 732]]



Sec. 408.710  What must your report include?

    When you make a report, you must tell us--
    (a) The name and social security number of the person to whom the 
report applies;
    (b) The event you are reporting and the date it happened; and
    (c) Your name if you are not the person to whom the report applies.



Sec. 408.712  How should you make your report?

    You should make your report in any of the ways described in this 
section.
    (a) Written reports. You may write a report on your own paper or on 
a printed form supplied by us. You may mail a written report or bring it 
to one of our offices.
    (b) Oral reports. You may report to us by telephone, or you may come 
to one of our offices and tell one of our employees what you are 
reporting.
    (c) Other methods of reporting. You may use any other suitable 
method of reporting--for example, a telegram or a cable.



Sec. 408.714  When are reports due?

    (a) A reportable event happens. You should report to us as soon as 
an event listed in Sec. 408.708 happens.
    (b) We request a report. We may request a report from you if we need 
information to determine continuing entitlement or the correct amount of 
your SVB payments. If you do not make the report within 30 days of our 
written request, we may determine that you may not continue to receive 
SVB. We will suspend your benefits effective with the month following 
the month in which we determine that you are not entitled to receive SVB 
because of your failure to give us necessary information (see 
Sec. 408.803).



                 Subpart H_Suspensions and Terminations

    Authority: Secs. 702(a)(5) and 810(d) of the Social Security Act (42 
U.S.C. 902(a)(5) and 1010(d)).

    Source: 69 FR 25955, May 10, 2004, unless otherwise noted.



Sec. 408.801  What is this subpart about?

    This subpart explains the circumstances that will result in 
suspension of your SVB payments or termination of your SVB entitlement.

                               Suspension



Sec. 408.802  When will we suspend your SVB payments?

    (a) When suspension is proper. Suspension of SVB payments is 
required when you no longer meet the SVB qualification requirements (see 
subpart B of this part) and termination in accordance with Secs. 408.814 
through 408.818 does not apply. (This subpart does not cover suspension 
of payments for administrative reasons, as, for example, when mail is 
returned as undeliverable by the Postal Service and we do not have a 
valid mailing address for you or when your representative payee dies and 
a search is underway for a substitute representative payee.)
    (b) Effect of suspension. When we correctly suspend your SVB 
payments, we will not resume them until you again meet all qualification 
requirements except the filing of a new application. If you request 
reinstatement, you are required to submit the evidence necessary to 
establish that you again meet all requirements for eligibility under 
this part. Your SVB payments will be reinstated effective with the first 
month in which you meet all requirements for eligibility except the 
filing of a new application.



Sec. 408.803  What happens to your SVB payments if you fail to comply 
with our request for information?

    (a) Effective date of suspension. We will suspend your SVB payments 
effective with the month following the month in which we determine in 
accordance with Sec. 408.714(b) that you may no longer receive SVB 
payments because you failed to comply with our request for necessary 
information.
    (b) Resumption of payments. When we have information to establish 
that SVB is again payable, your benefit payments will be reinstated for 
any previous month for which you continue to meet the requirements of 
Sec. 408.202.

[[Page 733]]

    (c) When we will not suspend your payments. We will not suspend your 
payments for failing to comply with our request for information for any 
month we can determine your eligibility for or the amount of your 
payment based on information on record. If we cannot determine your 
eligibility or the amount of your payment based on the information on 
record, we will send you a notice of suspension of payment because you 
failed to comply with our request for information in accordance with 
Secs. 408.820 and 408.1005.



Sec. 408.806  What happens to your SVB payments if you are no longer
residing outside the United States?

    (a) Suspension effective date. We will suspend your SVB payments 
effective the first full calendar month you are no longer residing 
outside the United States.
    (b) Resumption of payments. If otherwise payable, we will resume 
your SVB payments effective with the first full calendar month you are 
again residing outside the United States.



Sec. 408.808  What happens to your SVB payments if you begin receiving 
additional benefit income?

    (a) Suspension effective date. We will suspend your SVB payments for 
any month your other benefit income (as described in Sec. 408.220(a)) 
exceeds the maximum SVB amount payable for a month (see 
Sec. 408.505(a)).
    (b) Resumption of payments. If otherwise payable, we will resume 
your SVB payments effective with the first month your other benefit 
income is less than the maximum SVB amount payable for a month.



Sec. 408.809  What happens to your SVB payments if you are removed
(including deported) from the United States?

    (a) Suspension effective date. We will suspend your SVB payments 
effective with the month after the month in which we receive notice from 
the United States Citizenship and Immigration Service that you have been 
removed (including deported) from the United States under section 237(a) 
or 212(a)(6)(A) of the Immigration and Nationality Act.
    (b) Resumption of payments. If otherwise payable, we will resume 
your SVB effective with the first month after the month of your removal 
that you were granted the status of a lawful permanent resident of the 
United States.



Sec. 408.810  What happens to your SVB payments if you are fleeing to 
avoid criminal prosecution or custody or confinement after conviction,
or because you violate a condition of probation or parole?

    (a) Basis for suspension. You may not receive SVB for any month 
during which you are--
    (1) Fleeing to avoid prosecution under the laws of the United States 
or the jurisdiction within the United States from which you flee for a 
crime, or attempt to commit a crime, that is a felony under the laws of 
the place from which you flee (or that, in the case of the State of New 
Jersey, is a high misdemeanor under the laws of that State); or
    (2) Fleeing to avoid custody or confinement after conviction under 
the laws of the United States or the jurisdiction within the United 
States from which you flee, for a crime, or an attempt to commit a 
crime, that is a felony under the laws of the place from which you flee 
(or that, in the case of the State of New Jersey, is a high misdemeanor 
under the laws of that State); or
    (3) Violating a condition of probation or parole imposed under 
Federal or State law.
    (b) Suspension effective date. Suspension of SVB payments because 
you are a fugitive as described in paragraph (a)(1) or (a)(2) of this 
section or a probation or parole violator as described in paragraph 
(a)(3) of this section is effective with the first day of whichever of 
the following months is earlier--
    (1) The month in which a warrant or order for your arrest or 
apprehension, an order requiring your appearance before a court or other 
appropriate tribunal (e.g., a parole board), or similar order is issued 
by a court or other duly authorized tribunal in the United States on the 
basis of an appropriate finding that you--
    (i) Are fleeing, or have fled, to avoid prosecution as described in 
paragraph (a)(1) of this section;

[[Page 734]]

    (ii) Are fleeing, or have fled, to avoid custody or confinement 
after conviction as described in paragraph (a)(2) of this section;
    (iii) Are violating, or have violated, a condition of your probation 
or parole as described in paragraph (a)(3) of this section; or
    (2) The first month during which you fled to avoid such prosecution, 
fled to avoid such custody or confinement after conviction, or violated 
a condition of your probation or parole, if indicated in such warrant or 
order, or in a decision by a court or other appropriate tribunal in the 
United States.
    (c) Resumption of payments. If otherwise payable, we will resume 
your SVB payments beginning with the first month throughout which you 
are determined to be no longer fleeing to avoid prosecution, fleeing to 
avoid custody or confinement after conviction, or violating a condition 
of your probation or parole.



Sec. 408.812  What happens to your SVB payments if you are not a citizen
or national of the United States and you begin residing in a Treasury-
restricted country?

    (a) Suspension effective date. If you are not a citizen or national 
of the United States, we will suspend your SVB payments effective with 
the first full calendar month you are residing in a country to which the 
Treasury Department restricts payments under 31 U.S.C. 3329.
    (b) Resumption of payments. If benefits are otherwise payable, they 
will be resumed effective with the first day of the first month in which 
you are not residing in a Treasury-restricted country.

                               Termination



Sec. 408.814  Can you request termination of your SVB entitlement?

    You, your legal guardian, or your representative payee, may 
voluntarily terminate your SVB entitlement by filing a written request 
for termination. If your representative payee requests termination, it 
must be shown that no hardship would result to you if the request is 
processed. When a termination request is filed, your SVB entitlement 
ends effective with the month following the month you file your request 
with us unless you specify some other month. However, we will not 
terminate your entitlement for any month for which payment has been or 
will be made unless you repay (or there is an assurance you will repay) 
any amounts paid for those months. When we process a voluntary request 
for termination of your SVB entitlement, we will send you a notice of 
our determination in accordance with Sec. 408.1005. Once terminated, 
your entitlement can be reestablished only if you file a new 
application, except as provided by Sec. 408.1009.



Sec. 408.816  When does SVB entitlement end due to death?

    Your SVB entitlement ends with the month in which you die. Payments 
are terminated effective with the month after the month of death.



Sec. 408.818  When does SVB entitlement terminate if your benefit
payments have been in suspense for 12 consecutive months?

    We will terminate your SVB entitlement following 12 consecutive 
months of benefit suspension for any reason beginning with the first 
month you were no longer entitled to SVB. We will count the 12-month 
suspension period from the start of the first month that you are no 
longer entitled to SVB (see Sec. 408.802(a)). This termination is 
effective with the first day of the 13th month after the suspension 
began.



Sec. 408.820  Will we send you a notice of intended action affecting
your SVB payment status?

    (a) Advance written notice requirement. Before we suspend, reduce 
(see subpart E of this part), or terminate your SVB payments, we will 
send you a written notice explaining our intention to do so, except 
where we have factual information confirming your death, e.g., as 
specified in Sec. 404.704(b) of this chapter, or a report by a surviving 
spouse, a legal guardian, a parent or other close relative, or a 
landlord.
    (b) Continuation of payment pending an appeal. The written notice of 
our intent to suspend, reduce, or terminate payments will give you 60 
days after the date you receive the notice to request the appropriate 
appellate review. If your benefit payments are reduced or

[[Page 735]]

suspended and you file an appeal within 10 days after you receive the 
notice, payments will be continued or reinstated at the previously 
established payment level (subject to the effects of intervening events 
on the payment which are not appealed within 10 days of receipt of a 
required advance notice or which do not require advance notice, e.g., an 
increase in the benefit amount) until a decision on your initial appeal 
is issued, unless you specifically waive in writing your right to 
continuation of payment at the previously established level in 
accordance with paragraph (c) of this section. Where the request for the 
appropriate appellate review is filed more than 10 days after the notice 
is received but within the 60-day period specified in Sec. 408.1009 of 
this part, you have no right to continuation or reinstatement of payment 
at the previously established level unless you establish good cause 
under the criteria specified in Sec. 408.1011 of this part for failure 
to appeal within 10 days after receipt of the notice. For purposes of 
this paragraph, we will presume you received our notice of intent to 
suspend, reduce, or terminate payments 5 days after the date on the face 
of the notice, unless there is a reasonable showing to the contrary.
    (c) Waiver of right to continued payment. In order to avoid the 
possibility of an overpayment of benefits, you may waive continuation of 
payment at the previously established level (subject to intervening 
events which would have increased the benefit for the month in which the 
incorrect payment was made, in which case the higher amount shall be 
paid), after you receive a full explanation of your rights. Your request 
for waiver of continuation of payment must be in writing, state that 
waiver action is being initiated solely at your request, and state that 
you understand your right to receive continued payment at the previously 
established level.



                Subpart I_Underpayments and Overpayments

    Authority: Secs. 702(a)(5), 808, and 1147 of the Social Security Act 
(42 U.S.C. 902(a)(5), 1008, and 1320b-17); 31 U.S.C. 3716; 31 U.S.C. 
3720A.

    Source: 69 FR 25955, May 10, 2004, unless otherwise noted.

                              General Rules



Sec. 408.900  What is this subpart about?

    This subpart explains what happens when you receive less or more 
than the correct amount of SVB than you are entitled to receive. 
Sections 408.901 through 408.903 define overpayment and underpayment and 
describe how we determine the amount of the overpayment or underpayment. 
When you receive less than the correct amount of SVB (which we refer to 
as an underpayment), we will take the actions described in Secs. 408.904 
and 408.905. Waiver of recovery of overpayments (payments of more than 
the correct amount) is discussed in Secs. 408.910 through 408.914, and 
the methods we use to recover overpayments are discussed in 
Secs. 408.920 through 408.946. In Sec. 408.950, we explain when we will 
accept a compromise settlement of an overpayment or suspend or terminate 
collection of an overpayment.



Sec. 408.901  What is an underpayment?

    (a) An underpayment can occur only with respect to a period for 
which you filed an application for benefits and met all conditions of 
eligibility for benefits.
    (b) An underpayment is:
    (1) Nonpayment, where payment was due but was not made; or
    (2) Payment of less than the amount due for a period.
    (c) For purposes of this section, payment has been made when 
certified by the Social Security Administration to the Department of the 
Treasury. Payment is not considered to have been made where payment has 
not been received by the designated payee, or where payment was 
returned.



Sec. 408.902  What is an overpayment?

    As used in this subpart, the term overpayment means payment of more 
than the amount due for any period. For purposes of this section, 
payment has been made when certified by the Social Security 
Administration to the Department of the Treasury. Payment is not 
considered to have been made where payment has not been received

[[Page 736]]

by the designated payee, or where payment was returned.



Sec. 408.903  How do we determine the amount of an underpayment
or overpayment?

    (a) General. The amount of an underpayment or overpayment is the 
difference between the amount you are paid and the amount you are due 
for a given period. An underpayment or overpayment period begins with 
the first month for which there is a difference between the amount paid 
and the amount actually due for that month. The period ends with the 
month in which we make the initial determination of the overpayment or 
underpayment. With respect to the period established, there can be no 
underpayment to you if we paid you more than the correct amount of SVB, 
even though we waived recovery of any overpayment to you for that period 
under the provisions of Secs. 408.910 through 408.914. A later initial 
determination of an overpayment will require no change with respect to a 
prior determination of overpayment or to the period relating to such 
prior determination to the extent that the basis of the prior 
overpayment remains the same.
    (b) Limited delay in payment of an underpayment. Where we have 
detected a potential overpayment but we have not made a determination of 
the overpayment (see Sec. 408.918(a)), we will not delay making a 
determination of underpayment and paying you unless we can make an 
overpayment determination before the close of the month following the 
month in which we discovered the potential underpayment.
    (c) Delay in payment of underpayment to ineligible individual. If 
you are no longer entitled to SVB, we will delay a determination and 
payment of an underpayment that is otherwise due you so that we can 
resolve all overpayments, incorrect payments, and adjustments.



Sec. 408.904  How will you receive an underpayment?

    We will pay you the amount of any underpayment due you in a separate 
payment or by increasing the amount of your monthly payment. If you die 
before we pay you all or any part of an underpayment, the balance of the 
underpayment reverts to the general fund of the U.S. Treasury.



Sec. 408.905  Will we withhold or adjust an underpayment to reduce an
overpayment if that overpayment occurred in a different period?

    We will withhold or adjust any underpayment due you to reduce any 
overpayment to you that we determine for a different period, unless we 
have waived recovery of the overpayment under the provisions of 
Secs. 408.910 through 408.914.

                 Waiver of Recovery of SVB Overpayments



Sec. 408.910  When will we waive recovery of an SVB overpayment?

    We will waive recovery of an overpayment when:
    (a) You are without fault in connection with the overpayment, and
    (b) Recovery of such overpayment would either:
    (1) Defeat the purpose of the title VIII program, or
    (2) Be against equity and good conscience.



Sec. 408.911  What happens when we waive recovery of an SVB 
overpayment?

    Waiver of recovery of an overpayment from you (or, after your death, 
from your estate) frees you and your estate from the obligation to repay 
the amount of the overpayment covered by the waiver. Example: You filed 
for waiver of recovery of a $600 overpayment. We found that you are 
eligible for waiver of recovery of $260 of that amount. Only $340 of the 
overpayment would be recoverable from you or your estate.



Sec. 408.912  When are you without fault regarding an overpayment?

    (a) General--when fault is relevant. If you request waiver of 
recovery of an overpayment, we must determine whether you were without 
fault. You are not relieved of liability and are not without fault 
solely because we may have been at fault in making the overpayment.
    (b) The factors we consider to determine whether you were without 
fault. When

[[Page 737]]

we determine whether you were without fault, we consider all the 
pertinent circumstances relating to the overpayment. We consider your 
understanding of your obligation to give us information affecting your 
payments, your agreement to report events, your knowledge of the 
occurrence of events that should have been reported, the efforts you 
made to comply with the reporting requirements, the opportunities you 
had to comply with the reporting requirements, your ability to comply 
with the reporting requirements (e.g., your age, comprehension, memory, 
physical and mental condition), and your understanding of the obligation 
to return payments that were not due. In determining whether you are 
without fault based on these factors, we will take into account any 
physical, mental, educational, or language limitations (including any 
lack of facility with the English language) you may have. We will 
determine that you were at fault if, after considering all of the 
circumstances, we find that the overpayment resulted from one of the 
following:
    (1) Your failure to furnish information which you knew or should 
have known was material;
    (2) An incorrect statement you made which you knew or should have 
known was incorrect (this includes furnishing your opinion or conclusion 
when you were asked for facts), or
    (3) You did not return a payment, which you knew, or could have been 
expected to know, was incorrect.



Sec. 408.913  When would overpayment recovery defeat the purpose
of the title VIII program?

    We will waive recovery of an overpayment when you are without fault 
(as defined in Sec. 408.912) and recovery of the overpayment would 
defeat the purpose of the title VIII program. Recovery of an overpayment 
would defeat the purpose of the title VIII program to the extent that 
our recovery action would deprive you of income and resources you need 
to meet your ordinary and necessary living expenses as described in 
Sec. 404.508(a) of this chapter.



Sec. 408.914  When would overpayment recovery be against equity 
and good conscience?

    We will waive recovery of an overpayment when you are without fault 
(as defined in Sec. 408.912) and recovery would be against equity and 
good conscience. Recovery would be against equity and good conscience if 
you changed your position for the worse or gave up a valuable right in 
reliance on our notice that payment would be made or because of the 
incorrect payment itself. Example: Upon our notice that you are eligible 
for SVB payments, you signed a lease on an apartment renting for $15 a 
month more than the one you previously occupied. You were subsequently 
found ineligible for SVB and no benefits are payable. In this case, 
recovery of the overpayment would be considered ``against equity and 
good conscience.''

                                 Notices



Sec. 408.918  What notices will you receive if you are overpaid
or underpaid?

    (a) Notice of overpayment or underpayment determination. Whenever we 
determine that you were overpaid or underpaid for a given period, as 
defined in Sec. 408.903, we will send you a written notice of the 
correct and incorrect amounts you received for each month in the period, 
even if part or all of the underpayment must be withheld in accordance 
with Sec. 408.905. The notice of overpayment will advise you about 
recovery of the overpayment, as explained in Secs. 408.920-408.923, and 
your rights to appeal the determination and to request waiver of 
recovery of the overpayment under the provisions of Sec. 408.910.
    (b) Notice of waiver determination. Written notice of an initial 
determination regarding waiver of recovery will be mailed to you in 
accordance with Sec. 408.1005 unless you were not given notice of the 
overpayment in accordance with paragraph (a) of this section.

                         Refund of Overpayments



Sec. 408.920  When will we seek refund of an SVB overpayment?

    We will seek refund of an SVB overpayment in every case in which we

[[Page 738]]

have not waived recovery. An overpayment may be refunded by you or by 
anyone on your behalf. If you are receiving SVB currently and you have 
not refunded the overpayment, adjustment as set forth in Sec. 408.922 
will be proposed. If you die before we recover the full overpayment, we 
will seek refund of the balance from your estate.

                            Adjustment of SVB



Sec. 408.922  When will we adjust your SVB payments to recover an
overpayment?

    If you do not refund your overpayment to us, and waiver of recovery 
is not applicable, we will adjust any SVB payments due you to recover 
the overpayment. Adjustment will generally be accomplished by 
withholding each month the amount set forth in Sec. 408.923 from the 
benefit payable to you.



Sec. 408.923  Is there a limit on the amount we will withhold from 
your SVB payments to recover an overpayment?

    (a) Amount of the withholding limit. Except as provided in 
paragraphs (b) and (c) of this section, the amount we will withhold from 
your monthly SVB payment to recover an overpayment is limited to the 
lesser of (1) the amount of your Federal SVB payment or (2) an amount 
equal to 10 percent of the maximum SVB monthly payment amount as defined 
in Sec. 408.505(a).
    (b) Your right to request a different rate of withholding. When we 
notify you of the rate we propose to withhold from your monthly SVB 
payment, we will give you the opportunity to request a higher or lower 
rate of withholding than that proposed. If you request a rate of 
withholding that is lower than the one established under paragraph (a) 
of this section, we will set a rate that is appropriate to your 
financial condition after we evaluate all the pertinent facts. An 
appropriate rate is one that will not deprive you of income required for 
ordinary and necessary living expenses. We will evaluate your income, 
resources, and expenses as described in Sec. 404.508 of this chapter.
    (c) Fraud, misrepresentation or concealment of material information. 
If we determine that there was fraud, willful misrepresentation, or 
concealment of material information by you in connection with the 
overpayment, the limits in paragraph (a)(2) of this section do not apply 
and we will not lower the rate of withholding under paragraph (b) of 
this section. Concealment of material information means an intentional, 
knowing, and purposeful delay in making or in failing to make a report 
that will affect your SVB payment amount and/or eligibility. It does not 
include a mere omission on your part; it is an affirmative act to 
conceal.

                     Adjustment of Title II Benefits



Sec. 408.930  Are title II and title XVI benefits subject to adjustment
to recover title VIII overpayments?

    (a) Definitions--(1) Cross-program recovery. Cross-program recovery 
is the process that we will use to collect title VIII overpayments from 
benefits payable to you under title II or title XVI of the Social 
Security Act.
    (2) Benefits payable. For purposes of this section, benefits payable 
means the amount of title II or title XVI benefits you actually would 
receive. For title II benefits, it includes your monthly benefit and 
your past-due benefits after any reductions or deductions listed in 
Sec. 404.401(a) and (b) of this chapter. For title XVI benefits, it 
includes your monthly benefit and your past-due benefits as described in 
Sec. 416.420 of this chapter.
    (b) When may we collect title VIII overpayments using cross-program 
recovery? We may use cross-program recovery to collect a title VIII 
overpayment you owe when benefits are payable to you under title II, 
title XVI, or both.

[70 FR 15, Jan. 3, 2004]



Sec. 408.931  How much will we withhold from your title II and title
XVI benefits to recover a title VIII overpayment?

    (a) If past-due benefits are payable to you, we will withhold the 
lesser of the entire overpayment balance or the entire amount of past-
due benefits.
    (b)(1) We will collect the overpayment from current monthly benefits 
due in a month under title II and title XVI by withholding the lesser of 
the amount of the entire overpayment balance or:

[[Page 739]]

    (i) 10 percent of the monthly title II benefits payable for that 
month and
    (ii) in the case of title XVI benefits, an amount no greater than 
the lesser of the benefit payable for that month or an amount equal to 
10 percent of your income for that month (including such monthly benefit 
but excluding payments under title II when recovery is also made from 
title II benefits and excluding income excluded pursuant to 
Secs. 416.1112 and 416.1124 of this chapter).
    (2) Paragraph (b)(1) of this section does not apply if:
    (i) You request and we approve a different rate of withholding, or
    (ii) You or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment.
    (c) In determining whether to grant your request that we withhold 
less than the amount described in paragraph (b)(1) of this section, we 
will use the criteria applied under Sec. 408.923 to similar requests 
about withholding from title VIII benefits.
    (d) If you or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment, we will collect 
the overpayment by withholding the lesser of the overpayment balance or 
the entire amount of title II benefits and title XVI benefits payable to 
you. We will not collect at a lesser rate. (See Sec. 408.923 for what we 
mean by concealment of material information.)

[70 FR 16, Jan. 3, 2005]



Sec. 408.932  Will you receive notice of our intention to apply
cross-program recovery?

    Before we collect an overpayment from you using cross-program 
recovery, we will send you a written notice that tells you the following 
information:
    (a) We have determined that you owe a specific overpayment balance 
that can be collected by cross-program recovery;
    (b) We will withhold a specific amount from the title II or title 
XVI benefits (see Sec. 408.931(b));
    (c) You may ask us to review this determination that you still owe 
this overpayment balance;
    (d) You may request that we withhold a different amount from your 
current monthly benefits (the notice will not include this information 
if Sec. 408.931(d) applies); and
    (e) You may ask us to waive collection of this overpayment balance.

[70 FR 16, Jan. 3, 2005]



Sec. 408.933  When will we begin cross-program recovery from your
current monthly benefits?

    (a) We will begin collecting the overpayment balance by cross-
program recovery from your title II and title XVI current monthly 
benefits no sooner than 30 calendar days after the date of the notice 
described in Sec. 408.932. If within that 30-day period you pay us the 
full overpayment balance stated in the notice, we will not begin cross-
program recovery from your current monthly benefits.
    (b) If within that 30-day period you ask us to review our 
determination that you still owe us this overpayment balance, we will 
not begin cross-program recovery from your current monthly benefits 
before we review the matter and notify you of our decision in writing.
    (c) If within that 30-day period you ask us to withhold a different 
amount than the amount stated in the notice, we will not begin cross-
program recovery from your current monthly benefits until we determine 
the amount we will withhold. This paragraph does not apply when 
Sec. 408.931(d) applies.
    (d) If within that 30-day period you ask us to waive recovery of the 
overpayment balance, we will not begin cross-program recovery from your 
current monthly benefits before we review the matter and notify you of 
our decision in writing. See Secs. 408.910 through 408.914.

[70 FR 16, Jan. 3, 2005]

                            Tax Refund Offset



Sec. 408.940  When will we refer an SVB overpayment to the Department
of the Treasury for tax refund offset?

    (a) General. The standards we will apply and the procedures we will 
follow before requesting the Department of the Treasury to offset income 
tax refunds due you to recover outstanding

[[Page 740]]

overpayments are set forth in Secs. 408.940 through 408.946 of this 
subpart. These standards and procedures are authorized by 31 U.S.C. 
3720A, as implemented through Department of the Treasury regulations at 
31 CFR 285.2.
    (b) We will use the Department of the Treasury tax refund offset 
procedure to collect overpayments that are certain in amount, past due 
and legally enforceable and eligible for tax refund offset under 
regulations issued by the Secretary of the Treasury. We will use these 
procedures to collect overpayments from you only when you are not 
currently entitled to monthly SVB under title VIII of the Act, and we 
are not recovering your SVB overpayment from your monthly benefits 
payable under title II of the Act. We refer overpayments to the 
Department of the Treasury for offset against Federal tax refunds 
regardless of the amount of time the debts have been outstanding.

[69 FR 25955, May 10, 2004, as amended at 76 FR 65108, Oct. 20, 2011]



Sec. 408.941  Will we notify you before we refer an SVB overpayment
for tax refund offset?

    Before we request that an overpayment be collected by reduction of 
Federal and State income tax refunds, we will send a written notice of 
our action to the overpaid person. In our notice of intent to collect an 
overpayment through tax refund offset, we will state:
    (a) The amount of the overpayment; and
    (b) That we will collect the overpayment by requesting that the 
Department of the Treasury reduce any amounts payable to the overpaid 
person as refunds of Federal and State income taxes by an amount equal 
to the amount of the overpayment unless, within 60 calendar days from 
the date of our notice, the overpaid person:
    (1) Repays the overpayment in full; or
    (2) Provides evidence to us at the address given in our notice that 
the overpayment is not past due or legally enforceable; or
    (3) Asks us to waive collection of the overpayment under section 
204(b) of the Act.
    (c) The conditions under which we will waive recovery of an 
overpayment under section 808(c) of the Act;
    (d) That we will review any evidence presented that the overpayment 
is not past due or not legally enforceable;
    (e) That you have the right to inspect and copy our records related 
to the overpayment as determined by us and you will be informed as to 
where and when the inspection and copying can be done after we receive 
notice from you requesting inspection and copying.

[69 FR 25955, May 10, 2004, as amended at 76 FR 65108, Oct. 20, 2011]



Sec. 408.942  Will you have a chance to present evidence showing
that the overpayment is not past due or is not legally enforceable?

    (a) Notification. If you receive a notice as described in 
Sec. 408.941 of this subpart, you have the right to present evidence 
that all or part of the overpayment is not past due or not legally 
enforceable. To exercise this right, you must notify us and present 
evidence regarding the overpayment within 60 calendar days from the date 
of our notice.
    (b) Submission of evidence. You may submit evidence showing that all 
or part of the debt is not past due or not legally enforceable as 
provided in paragraph (a) of this section. Failure to submit the 
notification and evidence within 60 calendar days will result in 
referral of the overpayment to the Department of the Treasury, unless, 
within this 60-day time period, you ask us to waive collection of the 
overpayment under Sec. 408.910 and we have not yet determined whether we 
can grant the waiver request. If you ask us to waive collection of the 
overpayment, we may ask you to submit evidence to support your request.
    (c) Review of the evidence. If you submit evidence on a timely 
basis, we will consider all available evidence related to the 
overpayment. We will make findings based on a review of the written 
record, unless we determine that the question of indebtedness cannot be 
resolved by a review of the documentary evidence.
    (d) Written findings. We will issue our written findings including 
supporting rationale to you, your attorney or other representative. The 
findings will

[[Page 741]]

be our final action with respect to the past-due status and 
enforceability of the overpayment.



Sec. 408.943  What happens after we make our determination on your
request for review or your request for waiver?

    (a) If we make a determination that all or part of the overpayment 
is past due and legally enforceable and/or your waiver request cannot be 
granted, we will refer the overpayment to the Department of the Treasury 
for recovery from any Federal income tax refund due you. We will not 
suspend our referral of the overpayment to the Department of the 
Treasury under Sec. 408.945 of this subpart pending any further 
administrative review of the waiver determination that you may seek.
    (b) We will not refer the overpayment to the Department of the 
Treasury if we reverse our prior finding that the overpayment is past 
due and legally enforceable or, upon consideration of a waiver request, 
we determine that waiver of recovery of the overpayment is appropriate.



Sec. 408.944  How can you review our records related to an SVB
overpayment?

    (a) What you must do. If you intend to inspect or copy our records 
related to the overpayment, you must notify us stating your intention to 
inspect or copy.
    (b) What we will do. If you notify us that you intend to inspect or 
copy our records related to the overpayment as described in paragraph 
(a) of this section, we will notify you of the location and time when 
you may do so. We may also, at our discretion, mail copies of the 
overpayment-related records to you.



Sec. 408.945  When will we suspend tax refund offset?

    If, within 60 days of the date of the notice described in 
Sec. 408.941 of this subpart, you notify us that you are exercising a 
right described in Sec. 408.942(a) of this subpart and submit evidence 
pursuant to Sec. 408.942(b) of this subpart or request a waiver under 
Sec. 408.910 of this subpart, we will suspend any notice to the 
Department of the Treasury until we have issued written findings that 
affirm that an overpayment is past due and legally enforceable and, if 
applicable, make a determination that a waiver request cannot be 
granted.



Sec. 408.946  What happens if your tax refund is insufficient to
cover the amount of your SVB overpayment?

    If your tax refund is insufficient to recover an overpayment in a 
given year, the case will remain with the Department of the Treasury for 
succeeding years, assuming that all criteria for certification are met 
at that time.

   Compromise Settlements, or Suspensions or Termination of Collection



Sec. 408.950  Will we accept a compromise settlement of an overpayment
debt or suspend or terminate collection of an overpayment?

    (a) General. If we find that you do not, or your estate does not, 
have the present or future ability to pay the full amount of the 
overpayment within a reasonable time or the cost of collection is likely 
to exceed the amount of recovery, we may take any of the following 
actions, as appropriate.
    (1) We may accept a compromise settlement (payment of less than the 
full amount of the overpayment) to discharge the entire overpayment 
debt.
    (2) We may suspend our efforts to collect the overpayment.
    (3) We may terminate our efforts to collect the overpayment.
    (b) Rules we apply. In deciding whether to take any of the actions 
described in paragraph (a) of this section, we will apply the rules in 
Sec. 404.515(b), (c), (d), (e), and (f) of this chapter and other 
applicable rules, including the Federal Claims Collection Standards (31 
CFR 900.3 and parts 902 and 903).
    (c) Effect of compromise, suspension or termination. When we suspend 
or terminate collection of the overpayment debt, we may take collection 
action in the future in accordance with provisions of the Social 
Security Act, other laws, and the standards set forth in 31 CFR chapter 
IX. A compromise settlement satisfies the obligation to repay the 
overpayment if you or your estate comply with the terms of the 
settlement. Failure to make payment in the

[[Page 742]]

manner and within the time that we require in the settlement will result 
in reinstatement of our claim for the full amount of the overpayment 
less any amounts paid.



     Subpart J_Determinations and the Administrative Review Process

    Authority: Secs. 702(a)(5) and 809 of the Social Security Act (42 
U.S.C. 902(a)(5) and 1009).

    Source: 69 FR 25955, May 10, 2004, unless otherwise noted.

          Introduction, Definitions, and Initial Determinations



Sec. 408.1000  What is this subpart about?

    (a) Explanation of the administrative review process. This subpart 
explains the procedures we follow in determining your appeal rights 
under title VIII of the Social Security Act. The regulations describe 
the process of administrative review and explain your right to judicial 
review after you have taken all the necessary administrative steps. The 
administrative review process consists of several steps, which usually 
must be requested within certain time periods and in the following 
order:
    (1) Initial determination. This is a determination we make about 
whether you qualify for and can become entitled to SVB or whether your 
SVB entitlement can continue. It can also be about any other matter, as 
discussed in Sec. 408.1003, that gives you a right to further review.
    (2) Reconsideration. If you are dissatisfied with an initial 
determination, you may ask us to reconsider it.
    (3) Hearing before an administrative law judge. If you are 
dissatisfied with the reconsideration determination, you may request a 
hearing before an administrative law judge.
    (4) Appeals Council review. If you are dissatisfied with the 
decision of the administrative law judge, you may request that the 
Appeals Council review the decision.
    (5) Federal court review. When you have completed the steps of the 
administrative review process listed in paragraphs (a)(1) through (a)(4) 
of this section, we will have made our final decision. If you are 
dissatisfied with our final decision, you may request judicial review by 
filing an action in a Federal district court.
    (6) Expedited appeals process. At some time after your initial 
determination has been reviewed, if you have no dispute with our 
findings of fact and our application and interpretation of the 
controlling laws, but you believe that a part of the law is 
unconstitutional, you may use the expedited appeals process. This 
process permits you to go directly to a Federal district court so that 
the constitutional issue may be resolved.
    (b) Nature of the administrative review process. In making a 
determination or decision in your case, we conduct the administrative 
review process in an informal, nonadversary manner. In each step of the 
review process, you may present any information you feel is helpful to 
your case. Subject to the limitations on Appeals Council consideration 
of additional evidence, we will consider at each step of the review 
process any information you present as well as all the information in 
our records. You may present the information yourself or have someone 
represent you, including an attorney. If you are dissatisfied with our 
decision in the review process, but do not take the next step within the 
stated time period, you will lose your right to further administrative 
review and your right to judicial review, unless you can show us that 
there was good cause for your failure to make a timely request for 
review.



Sec. 408.1001  Definitions.

    As used in this subpart:
    Date you receive notice means 5 days after the date on the notice, 
unless you show us that you did not receive it within the 5-day period.
    Decision means the decision made by an administrative law judge or 
the Appeals Council.
    Determination means the initial determination or the reconsidered 
determination.
    Mass change means a State-initiated change in the level(s) of 
federally administered State recognition payments applicable to all 
recipients of such payments due, for example, to State legislative or 
executive action.

[[Page 743]]

    Preponderance of the evidence means such relevant evidence that as a 
whole shows that the existence of the fact to be proven is more likely 
than not.
    Remand means to return a case for further review.
    SVB, for purposes of this subpart, includes qualification for SVB, 
entitlement to SVB and payments of SVB.
    Vacate means to set aside a previous action.
    Waive means to give up a right knowingly and voluntarily.
    We, us, or our refers to the Social Security Administration.
    You or your refers to any person claiming or receiving SVB.

[69 FR 25955, May 10, 2004, as amended at 73 FR 76944, Dec. 18, 2008]



Sec. 408.1002  What is an initial determination?

    Initial determinations are the determinations we make that are 
subject to administrative and judicial review. The initial determination 
will state the important facts and give the reasons for our conclusions. 
We will base our initial determination on the preponderance of the 
evidence.

[69 FR 25955, May 10, 2004, as amended at 73 FR 76944, Dec. 18, 2008]



Sec. 408.1003  Which administrative actions are initial determinations?

    Initial determinations regarding SVB include, but are not limited 
to, determinations about--
    (a) Whether you qualify for SVB;
    (b) Whether you are entitled to receive SVB payments on the basis of 
your residence outside the United States;
    (c) The amount of your SVB payments;
    (d) Suspension or reduction of your SVB payments;
    (e) Termination of your SVB entitlement;
    (f) Whether an overpayment of benefits must be repaid to us;
    (g) Whether payments will be made, on your behalf, to a 
representative payee, unless you are legally incompetent;
    (h) Who will act as your payee if we determine that representative 
payment will be made;
    (i) A claim for benefits under Sec. 408.351 based on alleged 
misinformation; and
    (j) Our calculation of the amount of change in your federally 
administered State recognition payment amount (i.e., a reduction, 
suspension, or termination) which results from a mass change as defined 
in Sec. 408.1001.

[69 FR 25955, May 10, 2004; 69 FR 45586, July 30, 2004]



Sec. 408.1004  Which administrative actions are not initial
determinations?

    Administrative actions that are not initial determinations may be 
reviewed by us, but they are not subject to the administrative review 
process provided by this subpart and they are not subject to judicial 
review. These actions include, but are not limited to, an action about--
    (a) Denial of a request to be made your representative payee;
    (b) Denial of your request to use the expedited appeals process;
    (c) Denial of your request to reopen a determination or a decision;
    (d) Disqualifying or suspending a person from acting as your 
representative in a proceeding before us;
    (e) Denial of your request to extend the time period for requesting 
review of a determination or a decision;
    (f) Denial of your request to readjudicate your claim and apply an 
Acquiescence Ruling;
    (g) Declining under Sec. 408.351(f) to make a determination on a 
claim for benefits based on alleged misinformation because one or more 
of the conditions specified in Sec. 408.351(f) are not met;
    (h) Findings on whether we can collect an overpayment by using the 
Federal income tax refund offset procedure. (See Sec. 408.943).
    (i) The determination to reduce, suspend, or terminate your 
federally administered State recognition payments due to a State-
initiated mass change, as defined in Sec. 408.1001, in the levels of 
such payments, except as provided in Sec. 408.1003(h).



Sec. 408.1005  Will we mail you a notice of the initial determination?

    (a) We will mail a written notice of the initial determination to 
you at your last known address. Generally, we

[[Page 744]]

will not send a notice if your benefits are stopped because of your 
death, or if the initial determination is a redetermination that your 
eligibility for benefits and the amount of your benefits have not 
changed.
    (b) The notice that we send will tell you--
    (1) What our initial determination is;
    (2) The reasons for our determination; and
    (3) What rights you have to a reconsideration of the determination.
    (c) If our initial determination is that we must suspend, reduce 
your SVB payments or terminate your SVB entitlement, the notice will 
also tell you that you have a right to a reconsideration before the 
determination takes effect (see Sec. 408.820).



Sec. 408.1006  What is the effect of an initial determination?

    An initial determination is binding unless you request a 
reconsideration within the stated time period, or we revise the initial 
determination.

                             Reconsideration



Sec. 408.1007  What is reconsideration?

    Reconsideration is the first step in the administrative review 
process that we provide if you are dissatisfied with the initial 
determination. If you are dissatisfied with our reconsideration 
determination, you may request a hearing before an administrative law 
judge.



Sec. 408.1009  How do you request reconsideration?

    (a) When you must file your request. We will reconsider an initial 
determination if you file a written request within 60 days after the 
date you receive notice of the initial determination (or within the 
extended time period if we extend the time as provided in paragraph (c) 
of this section).
    (b) Where to file your request. You can file your request for 
reconsideration at:
    (1) Any of our offices;
    (2) The Veterans Affairs Regional Office in the Philippines;
    (3) An office of the Railroad Retirement Board if you have 10 or 
more years of service in the railroad industry; or
    (4) A competent authority or agency of a country with which the 
United States has a totalization agreement (see Sec. 404.1927 of this 
chapter).
    (c) When we will extend the time period to request a 
reconsideration. If you want a reconsideration of the initial 
determination but do not request one within 60 days after the date you 
receive notice of the initial determination, you may ask us for more 
time to request a reconsideration. You must make your request in writing 
and explain why it was not filed within the stated time period. If you 
show us that you had good cause for missing the deadline, we will extend 
the time period. To determine whether good cause exists, we use the 
standards explained in Sec. 408.1011.



Sec. 408.1011  How do we determine whether you had good cause for
missing the deadline to request review?

    (a) In determining whether you have shown that you have good cause 
for missing a deadline to request review we consider--
    (1) What circumstances kept you from making the request on time;
    (2) Whether our action misled you;
    (3) Whether you did not understand the requirements of the Act 
resulting from amendments to the Act, other legislation, or court 
decisions; and
    (4) Whether you had any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
which prevented you from filing a timely request or from understanding 
or knowing about the need to file a timely request for review.
    (b) Examples of circumstances where good cause may exist include, 
but are not limited to, the following situations:
    (1) You were seriously ill and were prevented from contacting us in 
person, in writing, or through a friend, relative, or other person.
    (2) There was a death or serious illness in your immediate family.
    (3) Important records were destroyed or damaged by fire or other 
accidental cause.
    (4) You were trying very hard to find necessary information to 
support your claim but did not find the information within the stated 
time periods.

[[Page 745]]

    (5) You asked us for additional information explaining our action 
within the time limit, and within 60 days of receiving the explanation 
you requested reconsideration or a hearing, or within 30 days of 
receiving the explanation you requested Appeals Council review or filed 
a civil suit.
    (6) We gave you incorrect or incomplete information about when and 
how to request administrative review or to file a civil suit.
    (7) You did not receive notice of the initial determination or 
decision.
    (8) You sent the request to another Government agency in good faith 
within the time limit and the request did not reach us until after the 
time period had expired.
    (9) Unusual or unavoidable circumstances exist, including the 
circumstances described in paragraph (a)(4) of this section, which show 
that you could not have known of the need to file timely, or which 
prevented you from filing timely.



Sec. 408.1013  What are the methods for reconsideration?

    If you request reconsideration, we will give you a chance to present 
your case. How you can present your case depends upon the issue involved 
and whether you are asking us to reconsider an initial determination on 
an application or an initial determination on an SVB suspension, 
reduction or termination action. The methods of reconsideration include 
the following:
    (a) Case review. We will give you an opportunity to review the 
evidence in our files and then to present oral and written evidence to 
us. We will then make a decision based on all of this evidence. The 
official who reviews the case will make the reconsidered determination.
    (b) Informal conference. In addition to following the procedures of 
a case review, an informal conference allows you an opportunity to 
present witnesses. A summary record of this proceeding will become part 
of the case record. The official who conducts the informal conference 
will make the reconsidered determination.
    (c) Formal conference. In addition to following the procedures of an 
informal conference, a formal conference allows you an opportunity to 
request us to subpoena adverse witnesses and relevant documents and to 
cross-examine adverse witnesses. A summary record of this proceeding 
will become a part of the case record. The official who conducts the 
formal conference will make the reconsidered determination.



Sec. 408.1014  What procedures apply if you request reconsideration
of an initial determination on your application for SVB?

    When you appeal an initial determination on your application for 
benefits, we will offer you a case review, and will make our 
determination on the basis of that review.



Sec. 408.1015  What procedures apply if you request reconsideration
of an initial determination that results in suspension, reduction,
or termination of your SVB?

    If you have been entitled to SVB and we notify you that we are going 
to suspend, reduce or terminate your benefit payments, you can appeal 
our determination within 60 days of the date you receive our notice. The 
60-day period may be extended if you have good cause for an extension of 
time under the conditions stated in Sec. 408.1011(b). If you appeal, you 
have the choice of a case review, informal conference or formal 
conference.



Sec. 408.1016  What happens if you request a conference?

    (a) As soon as we receive a request for a formal or informal 
conference, we will set the time, date and place for the conference. 
Formal and informal conferences are held only in the United States.
    (b) We will send you a written notice about the conference (either 
by mailing it to your last known address or by personally serving you 
with it) at least 10 days before the conference. However, we may hold 
the conference sooner if we all agree. We will not send written notice 
of the time, date, and place of the conference if you waive your right 
to receive it.
    (c) We will schedule the conference within 15 days after you request 
it, but, at our discretion or at your request, we will delay the 
conference if we think

[[Page 746]]

the delay will ensure that the conference is conducted efficiently and 
properly.
    (d) We will hold the conference at one of our offices in the United 
States, by telephone or in person, whichever you prefer. However, if you 
are outside the United States, we will hold the conference by telephone 
only if you request that we do so and time and language differences 
permit. We will hold the conference in person elsewhere in the United 
States if you show circumstances that make this arrangement reasonably 
necessary.



Sec. 408.1020  How do we make our reconsidered determination?

    After you request a reconsideration, we will review the evidence 
considered in making the initial determination and any other evidence we 
receive. We will make our determination based on the preponderance of 
the evidence in the record. The person who makes the reconsidered 
determination will have had no prior involvement with the initial 
determination.

[69 FR 25955, May 10, 2004, as amended at 73 FR 76944, Dec. 18, 2008]



Sec. 408.1021  How does the reconsidered determination affect you?

    The reconsidered determination is binding unless--
    (a) You request a hearing before an administrative law judge within 
the stated time period and a decision is made;
    (b) The expedited appeals process is used; or
    (c) The reconsidered determination is revised.



Sec. 408.1022  How will we notify you of our reconsidered
determination?

    We will mail a written notice of the reconsidered determination to 
you at your last known address. We will state the specific reasons for 
the determination and tell you about your right to a hearing. If it is 
appropriate, we will also tell you how to use the expedited appeals 
process.

                        Expedited Appeals Process



Sec. 408.1030  When can you use the expedited appeals process?

    (a) General rules. Under the expedited appeals process (EAP), you 
may go directly to a Federal District Court without first completing the 
administrative review process. For purposes of this part, we use the 
same EAP rules we use in the title XVI program (see Secs. 416.1423-
416.1428 of this chapter) except as noted in paragraph (b) of this 
section.
    (b) Exceptions. In Sec. 416.1425, the words ``one of our offices'' 
in paragraph (b) are deemed to read ``any of the offices listed in 
Sec. 408.1009(b)'' and the reference in the last sentence of paragraph 
(c) to ``Sec. 416.1411'' is deemed to read ``Sec. 408.1011.''

               Hearing Before an Administrative Law Judge



Sec. 408.1040  When can you request a hearing before an administrative
law judge (ALJ)?

    (a) General rules. For purposes of this part, we use the same rules 
on hearings before an administrative law judge (ALJ) that we use in the 
title XVI program (see Secs. 416.1429-1416.1440 of this chapter), except 
as noted in paragraph (b) of this section.
    (b) Exceptions. In Sec. 416.1433, the words ``one of our offices'' 
in paragraph (b) are deemed to read ``any of the offices listed in 
Sec. 408.1009(b)'' and the reference in the last sentence of 
Sec. 416.1433(c) to ``Sec. 416.1411'' is deemed to read 
``Sec. 408.1011.''

               Administrative Law Judge Hearing Procedures



Sec. 408.1045  What procedures apply if you request an ALJ hearing?

    (a) General rules. For purposes of this part, we use the same rules 
on ALJ hearing procedures that we use in the title XVI program (see 
Secs. 416.1444-416.1461 of this chapter), except as noted in paragraph 
(b) of this section.
    (b) Exceptions. (1) In Sec. 416.1446(b)(1), the last sentence does 
not apply under this part.
    (2) In Sec. 416.1452(a)(1)(i), the words ``supplemental security 
income'' are deemed to read ``SVB.''

[[Page 747]]

    (3) In Sec. 416.1457, the provisions of paragraph (c)(4) do not 
apply under this part.

                         Appeals Council Review



Sec. 408.1050  When can you request Appeals Council review of an ALJ
hearing decision or dismissal of a hearing request?

    (a) General rules. For purposes of this part, we use the same rules 
on Appeals Council review that we use in the title XVI program (see 
Secs. 416.1467-416.1482 of this chapter), except as noted in paragraph 
(b) of this section.
    (b) Exceptions. (1) In Sec. 416.1468(b), the words ``one of our 
offices'' in the third sentence are deemed to read ``any of the offices 
listed in Sec. 408.1009(b).''
    (2) In Sec. 416.1469(d), the last sentence does not apply under this 
part.
    (3) In Sec. 416.1471, paragraph (b) does not apply under this part.
    (4) In Sec. 416.1482, the reference to ``Sec. 416.1411'' in the last 
sentence is deemed to read ``Sec. 408.1011.''

                           Court Remand Cases



Sec. 408.1060  What happens if a Federal Court remands your case 
to the Commissioner?

    For purposes of this part, we use the same rules on court remand 
cases that we use in the title XVI program (see Secs. 416.1483-416.1485 
of this chapter).

           Reopening and Revising Determinations and Decisions



Sec. 408.1070  When will we reopen a final determination?

    (a) General rules. For purposes of this part, we use the same rules 
on reopening and revising determinations and decisions that we use in 
the title XVI program (see Secs. 416.1487-416.1494 of this chapter), 
except as noted in paragraph (b) of this section.
    (b) Exceptions. (1) In addition to the rule stated in Sec. 416.1488, 
a determination, revised determination, or revised decision may be 
reopened at any time if it was fully or partially unfavorable to you, 
but only to correct--
    (i) A clerical error; or
    (ii) An error that appears on the face of the evidence that we 
considered when we made the determination or decision.
    (2) In Sec. 416.1492(b), the parenthetical clause is deemed to read 
``(see Sec. 408.820),'' and paragraph (d) does not apply to this part.
    (3) In Sec. 416.1494, the words ``one of our offices'' in the first 
sentence are deemed to read ``any of the offices listed in 
Sec. 408.1009(b).''

[69 FR 25955, May 10, 2004, as amended at 75 FR 44138, July 28, 2010]



                   Subpart K_Representation of Parties

    Authority: Secs. 702(a)(5) and 810(a) of the Social Security Act (42 
U.S.C. 902(a)(5) and 1010(a)).

    Source: 69 FR 25955, May 10, 2004, unless otherwise noted.



Sec. 408.1101  Can you appoint someone to represent you?

    (a) General rules. You may appoint someone to represent you in any 
of your dealings with us. For purposes of this part, the rules on 
representation of parties in Secs. 416.1500-416.1505, 416.1507-416.1515 
and 416.1540-416.1599 of this chapter apply except as noted in paragraph 
(b) of this section.
    (b) Exceptions. For purposes of this part:
    (1) In Sec. 416.1500, paragraph (c) does not apply.
    (2) The last sentence of Sec. 416.1503 is deemed to read: ``You 
refers to any person claiming or receiving SVB.''
    (3) In Sec. 416.1507(c), the words ``one of our offices'' are deemed 
to read ``any of the offices listed in Sec. 408.1009(b).''
    (4) In Sec. 416.1510(b), the reference to ``title XVI of the Act'' 
is deemed to read ``title VIII of the Act,'' and the reference to 
``Sec. 416.315'' is deemed to read ``Sec. 408.315.''
    (5) In Sec. 416.1540, the parenthetical clause in paragraph (b), the 
second sentences in paragraphs (b)(1) and (b)(2), and paragraph (c)(2) 
do not apply, and the references to ``Sec. 416.1411(b)'' in paragraphs 
(c)(4) and (c)(7)(i) are deemed to read ``Sec. 408.1011(b).''
    (6) In Sec. 416.1545, paragraph (c) does not apply.
    (7) In Sec. 416.1599, paragraph (d) is deemed to read: ``The Appeals 
Council

[[Page 748]]

will not grant the request unless it is reasonably satisfied that the 
person will in the future act according to the provisions of our 
regulations.''



     Subpart L_Federal Administration of State Recognition Payments

    Authority: Secs. 702(a)(5) and 810A of the Social Security Act (42 
U.S.C. 902(a)(5) and 1010a).

    Source: 69 FR 25955, May 10, 2004, unless otherwise noted.



Sec. 408.1201  What are State recognition payments?

    (a) State recognition payments; defined. State recognition payments 
are any payments made by a State or one of its political subdivisions to 
an individual who is entitled to SVB, if the payments are made:
    (1) As a supplement to monthly SVB payments; and
    (2) Regularly, on a periodic recurring, or routine basis of at least 
once a quarter; and
    (3) In cash, which may be actual currency, or any negotiable 
instrument convertible into cash upon demand.
    (b) State; defined. For purposes of this subpart, State means a 
State of the United States or the District of Columbia.



Sec. 408.1205  How can a State have SSA administer its State
recognition payment program?

    A State (or political subdivision) may enter into a written 
agreement with SSA, under which SSA will make recognition payments on 
behalf of the State (or political subdivision). The regulations in 
effect for the SVB program also apply in the Federal administration of 
State recognition payments except as necessary for the effective and 
efficient administration of both the SVB program and the State's 
recognition payment program.



Sec. 408.1210  What are the essential elements of an administration 
agreement?

    (a) Payments. The agreement must provide that recognition payments 
can only be made to individuals who are receiving SVB payments.
    (b) Administrative costs--(1) General rule. SSA will assess each 
State that elects Federal administration of its recognition payments an 
administration fee for administering those payments.
    (2) Determining the administration fee. The administration fee is 
assessed and paid monthly and is derived by multiplying the number of 
State recognition payments we make on behalf of a State for any month in 
a fiscal year by the applicable dollar rate for the fiscal year. The 
number of recognition payments we make in a month is the total number of 
checks we issue, and direct deposits we make, to recipients in that 
month, that are composed in whole or in part of State recognition funds. 
The dollar amounts are as follows:
    (i) For fiscal year 2001, $8.10;
    (ii) For fiscal year 2002, $8.50; and
    (iii) For fiscal year 2003 and each succeeding fiscal year--
    (A) The applicable rate in the preceding fiscal year, increased by 
the percentage, if any, by which the Consumer Price Index for the month 
of June of the calendar year of the increase exceeds the Consumer Price 
Index for the month of June of the calendar year preceding the calendar 
year of the increase, and rounded to the nearest whole cent; or
    (B) A different rate if the Commissioner determines the different 
rate is appropriate for the State considering the complexity of 
administering the State's recognition payment program.
    (c) Agreement period. The agreement period for a State that has 
elected Federal administration of its recognition payments extends for 
one year from the date the agreement was signed unless otherwise 
designated in the agreement. The agreement will be automatically renewed 
for a period of one year unless either the State or SSA gives written 
notice not to renew, at least 90 days before the beginning of the new 
period. For a State to elect Federal administration of its recognition 
payment program, it must notify SSA of its intent to enter into an 
agreement, furnishing the necessary payment specifications, at least 120 
days before the first day of the month for which it wishes Federal 
administration to

[[Page 749]]

begin, and have executed such agreement at least 30 days before such 
day.
    (d) Modification or termination. The agreement may be modified at 
any time by mutual consent. The State or SSA may terminate the agreement 
upon 90 days' written notice to the other party, provided the effective 
date of the termination is the last day of a quarter. However, the State 
may terminate the agreement upon 45 days written notice to SSA if: (1) 
The State does not wish to comply with a regulation promulgated by SSA 
after the execution of the agreement; and (2) the State provides its 
written notice within 30 days of the effective date of the regulation. 
The Commissioner is not precluded from terminating the agreement in less 
than 90 days if the State has failed to materially comply with the 
provisions of Sec. 408.1235 on State transfer of funds to SSA.



Sec. 408.1215  How do you establish eligibility for Federally 
administered State recognition payments?

    (a) Applications. When you file an application for SVB under subpart 
C of this part, you are deemed to have filed an application for any 
Federally administered State recognition payments for which you may be 
eligible unless you waive your right to such payments as provided for in 
Sec. 408.1230. However, you will be required to give us a supplemental 
statement if additional information is necessary to establish your 
eligibility or to determine the correct amount of your State recognition 
payment.
    (b) Evidence requirements. The evidence requirements and 
developmental procedures of this part also apply with respect to 
Federally administered State recognition payments.
    (c) Determination. Where not inconsistent with the provisions of 
this subpart, we determine your eligibility for and the amount of your 
State recognition payment using the rules in subparts A through K of 
this part.



Sec. 408.1220  How do we pay Federally administered State recognition
payments?

    (a) Payment procedures. We make Federally administered State 
recognition payments on a monthly basis and we include them in the same 
check as your SVB payment. The State recognition payment is for the same 
month as your SVB payment.
    (b) Maximum amount. Except as specified in paragraph (c) of this 
section, there is no restriction on the amount of a State recognition 
payment that SSA will administer on behalf of a State.
    (c) Minimum amount. SSA will not administer State recognition 
payments in amounts less than $1 per month. Hence, recognition payment 
amounts of less than $1 will be raised to a dollar.



Sec. 408.1225  What happens if you receive an overpayment?

    If we determine that you received an overpayment, we will adjust 
future Federally administered State recognition payments you are 
entitled to. Our rules and requirements (see Secs. 408.910 through 
408.941) that apply to recovery (or waiver) of SVB overpayments also 
apply to the recovery (or waiver) of Federally administered State 
recognition overpayments. If your entitlement to State recognition 
payments ends before you have repaid the overpayment, we will annotate 
your record (specifying the amount of the overpayment) to permit us to 
recoup the overpaid amount if you become reentitled to recognition 
payments from the same State.



Sec. 408.1226  What happens if you are underpaid?

    If we determine that you are due an underpayment of State 
recognition payments, we will pay the amount you were underpaid directly 
to you, or to your representative.



Sec. 408.1230  Can you waive State recognition payments?

    (a) Waiver request in writing. You may waive your right to receive 
State recognition payments if you make a written request. If you make 
your request before you become entitled to SVB, you will not be entitled 
to State recognition payments. If you make your request after you become 
entitled to SVB, your request will be effective with the month we 
receive your request, or with an earlier month if you

[[Page 750]]

refund to us the amount of any recognition payment(s) we made to you for 
the earlier period.
    (b) Cancelling your waiver. You may cancel your waiver of State 
recognition payments at any time by making a written request with us. 
The cancellation will be effective the month in which it is filed. The 
date your request is received in a Social Security office or the 
postmarked date, if the written request was mailed, will be the filing 
date, whichever is earlier.



Sec. 408.1235  How does the State transfer funds to SSA to administer
its recognition payment program?

    (a) Payment transfer and adjustment. (1) Any State that has entered 
into an agreement with SSA which provides for Federal administration of 
such State's recognition payments will transfer to SSA:
    (i) An amount of funds equal to SSA's estimate of State recognition 
payments for any month which will be made by SSA on behalf of such 
State; and
    (ii) An amount of funds equal to SSA's estimate of administration 
fees for any such month determined in the manner described in 
Sec. 408.1210(b).
    (3) In order for SSA to make State recognition payments on behalf of 
a State for any month as provided by the agreement, the estimated amount 
of State funds referred to in paragraph (a)(1)(i) of this section 
together with the estimated amount of administration fees referred to in 
paragraph (a)(1)(ii) of this section, for that month, must be on deposit 
with SSA on the State recognition payment transfer date, which is:
    (i) the business day preceding the date that the Commissioner pays 
such monthly recognition payments; or
    (ii) with respect to such monthly payments paid for the month that 
is the last month of the State's fiscal year, the fifth business day 
following such date.
    (b) Accounting of State funds. (1) As soon as feasible after the end 
of each calendar month, SSA will provide the State with a statement 
showing, cumulatively, the total amounts paid by SSA on behalf of the 
State during the current Federal fiscal year; the fees charged by SSA to 
administer such recognition payments; the State's total liability; and 
the end-of-month balance of the State's cash on deposit with SSA.
    (2) SSA will provide the State with an accounting of State funds 
received as State recognition payments and administration fees within 
three calendar months following the termination of an agreement under 
Sec. 408.1210(d).
    (3) Adjustments will be made because of State funds due and payable 
or amounts of State funds recovered for calendar months for which the 
agreement was in effect. Interest will be incurred by SSA and the States 
with respect to the adjustment and accounting of State recognition 
payments funds in accordance with applicable laws and regulations of the 
United States Department of the Treasury.
    (c) State audit. Any State entering into an agreement with SSA which 
provides for Federal administration of the State's recognition payments 
has the right to an audit (at State expense) of the payments made by SSA 
on behalf of such State. The Commissioner and the State shall mutually 
agree upon a satisfactory audit arrangement to verify that recognition 
payments paid by SSA on behalf of the State were made in accordance with 
the terms of the administration agreement under Sec. 408.1205. Audit 
findings will be resolved in accordance with the provisions of the 
State's agreement with SSA.



PART 411_THE TICKET TO WORK AND SELF-SUFFICIENCY PROGRAM--
Table of Contents



                         Subpart A_Introduction

Sec.
411.100  Scope.
411.105  What is the purpose of the Ticket to Work program?
411.115  Definitions of terms used in this part.

           Subpart B_Tickets Under the Ticket to Work Program

411.120  What is a ticket under the Ticket to Work program?
411.125  Who is eligible to receive a ticket under the Ticket to Work 
          program?
411.130  How will we distribute tickets under the Ticket to Work 
          program?

[[Page 751]]

411.135  What do I do when I receive a ticket?
411.140  When may I assign my ticket and how?
411.145  When can my ticket be taken out of assignment?
411.150  Can I reassign my ticket?
411.155  When does my ticket terminate?

Subpart C_Suspension of Continuing Disability Reviews for Beneficiaries 
                         Who are Using a Ticket

                              Introduction

411.160  What does this subpart do?
411.165  How does using a ticket under the Ticket to Work program affect 
          my continuing disability reviews?
411.166  Glossary of terms used in this subpart.
411.167  What is an educational institution or a technical, trade or 
          vocational school?
411.170  When does the period of using a ticket begin?
411.171  When does the period of using a ticket end?
411.175  What if a continuing disability review is begun before my 
          ticket is in use?
411.180  What is timely progress toward self-supporting employment?
411.192  What choices do I have if I am unable to make timely progress 
          toward self-supporting employment?
411.200  How will the PM conduct my progress reviews?
411.205  What if I disagree with the PM's decision about whether I am 
          making timely progress toward self-supporting employment?

                     Failure To Make Timely Progress

411.210  What happens if I do not make timely progress toward self-
          supporting employment?

                          The Extension Period

411.220  What if my ticket is no longer assigned to an EN or State VR 
          agency?
411.225  What if I reassign my ticket after the end of the extension 
          period?
411.226  How will SSA determine if I am meeting the timely progress 
          guidelines if I assign my ticket prior to July 21, 2008?

       Subpart D_Use of One or More Program Managers To Assist in 
              Administration of the Ticket to Work Program

411.230  What is a PM?
411.235  What qualifications are required of a PM?
411.240  What limitations are placed on a PM?
411.245  What are a PM's responsibilities under the Ticket to Work 
          program?

                Evaluation of Program Manager Performance

411.250  How will SSA evaluate a PM?

                      Subpart E_Employment Networks

411.300  What is an EN?
411.305  Who is eligible to be an EN?
411.310  How does an entity other than a State VR agency apply to be an 
          EN and who will determine whether an entity qualifies as an 
          EN?
411.315  What are the minimum qualifications necessary to be an EN?
411.320  What are an EN's responsibilities as a participant in the 
          Ticket to Work program?
411.321  Under what conditions will SSA terminate an agreement with an 
          EN due to inadequate performance?
411.325  What reporting requirements are placed on an EN as a 
          participant in the Ticket to Work program?
411.330  How will SSA evaluate an EN's performance?

    Subpart F_State Vocational Rehabilitation Agencies' Participation

               Participation in the Ticket to Work Program

411.350  Must a State VR agency participate in the Ticket to Work 
          program?
411.355  What payment options does a State VR agency have?
411.365  How does a State VR agency notify us about its choice of a 
          payment system for use when functioning as an EN?
411.375  Does a State VR agency continue to provide services under the 
          requirements of the State plan approved under title I of the 
          Rehabilitation Act of 1973, as amended (29 U.S.C. 720 et 
          seq.), when functioning as an EN?

                              Ticket Status

411.380  What does a State VR agency do if the State VR agency wants to 
          determine whether a person seeking services has a ticket?
411.385  What does a State VR agency do if a beneficiary who is eligible 
          for VR services has a ticket that is available for assignment 
          or reassignment?
411.390  What does a State VR agency do if a beneficiary to whom it is 
          already providing services has a ticket that is available for 
          assignment?
411.395  Is a State VR agency required to provide periodic reports?

          Referrals by Employment Networks to State VR Agencies

411.400  Can an EN to which a beneficiary's ticket is assigned refer the 
          beneficiary to a State VR agency for services?

[[Page 752]]

      Agreements Between Employment Networks and State VR Agencies

411.405  When does an agreement between an EN and the State VR agency 
          have to be in place?
411.410  Does each referral from an EN to a State VR agency require its 
          own agreement?
411.415  Who will verify the establishment of agreements between ENs and 
          State VR agencies?
411.420  What information should be included in an agreement between an 
          EN and a State VR agency?
411.425  What should a State VR agency do if it gets an attempted 
          referral from an EN and no agreement has been established 
          between the EN and the State VR agency?
411.430  What should the PM do when it is informed that an EN has 
          attempted to make a referral to a State VR agency without an 
          agreement being in place?

Resolving Disputes Arising Under Agreements Between Employment Networks 
                          and State VR Agencies

411.435  How will disputes arising under the agreements between ENs and 
          State VR agencies be resolved?

            Subpart G_Requirements for Individual Work Plans

411.450  What is an Individual Work Plan?
411.455  What is the purpose of an IWP?
411.460  Who is responsible for determining what information is 
          contained in the IWP?
411.465  What are the minimum requirements for an IWP?
411.470  When does an IWP become effective?

              Subpart H_Employment Network Payment Systems

411.500  Definitions of terms used in this subpart.
411.505  How is an EN paid?
411.510  How is the State VR agency paid under the Ticket to Work 
          program?
411.515  Can the EN change its elected payment system?
411.520  How are beneficiaries whose tickets are assigned to an EN 
          affected by a change in that EN's elected payment system?
411.525  What payments are available under each of the EN payment 
          systems?
411.535  Under what circumstances will milestones be paid?
411.536  Under what circumstances can we make a reconciliation payment 
          under the outcome-milestone payment system?
411.540  How are the payment amounts calculated for each of the 
          milestones?
411.545  How are the outcome payments calculated under the outcome-
          milestone payment system?
411.550  How are the outcome payments calculated under the outcome 
          payment system?
411.551  How are EN payments calculated for transition cases pending on 
          July 21, 2008?
411.552  What effect will the subsequent entitlement to title II 
          benefits have on EN payments for title XVI beneficiaries after 
          they assign their ticket?
411.555  Can the EN keep the milestone and outcome payments even if the 
          beneficiary does not achieve all outcome months?
411.560  Is it possible to pay a milestone or outcome payment to more 
          than one EN?
411.565  What happens if two or more ENs qualify for payment on the same 
          ticket but have elected different EN payment systems?
411.566  May an EN use outcome or milestone payments to make payments to 
          the beneficiary?
411.570  Can an EN request payment from the beneficiary who assigned a 
          ticket to the EN?
411.575  How does the EN request payment for milestones or outcome 
          payment months achieved by a beneficiary who assigned a ticket 
          to the EN?
411.580  Can an EN receive payments for milestones or outcome payment 
          months that occur before the beneficiary assigns a ticket to 
          the EN?
411.581  Can an EN receive milestone and outcome payments for months 
          after a beneficiary takes his or her ticket out of assignment?
411.582  Can a State VR agency receive payment under the cost 
          reimbursement payment system if a continuous 9-month period of 
          substantial gainful activity is completed after the ticket is 
          assigned to an EN?
411.585  Can a State VR agency and an EN both receive payment for 
          serving the same beneficiary?
411.590  What can an EN do if the EN disagrees with our decision on a 
          payment request?
411.595  What oversight procedures are planned for the EN payment 
          systems?
411.597  Will SSA periodically review the outcome payment system and the 
          outcome-milestone payment system for possible modifications?

           Subpart I_Ticket to Work Program Dispute Resolution

         Disputes Between Beneficiaries and Employment Networks

411.600  Is there a process for resolving disputes between beneficiaries 
          and ENs that are not State VR agencies?

[[Page 753]]

411.605  What are the responsibilities of the EN that is not a State VR 
          agency regarding the dispute resolution process?
411.610  When should a beneficiary receive information on the procedures 
          for resolving disputes?
411.615  How will a disputed issue be referred to the PM?
411.620  How long does the PM have to recommend a resolution to the 
          dispute?
411.625  Can the beneficiary or the EN that is not a State VR agency 
          request a review of the PM's recommendation?
411.630  Is SSA's decision final?
411.635  Can a beneficiary be represented in the dispute resolution 
          process under the Ticket to Work program?

          Disputes Between Beneficiaries and State VR Agencies

411.640  Do the dispute resolution procedures of the Rehabilitation Act 
          of 1973, as amended (29 U.S.C. 720 et seq.), apply to 
          beneficiaries seeking services from the State VR agency?

        Disputes Between Employment Networks and Program Managers

411.650  Is there a process for resolving disputes between ENs that are 
          not State VR agencies and PMs, other than disputes on a 
          payment request?
411.655  How will the PM refer the dispute to us?
411.660  Is SSA's decision final?

 Subpart J_The Ticket to Work Program and Alternate Participants Under 
    the Programs for Payments for Vocational Rehabilitation Services

411.700  What is an alternate participant?
411.705  Can an alternate participant become an EN?
411.710  How will an alternate participant choose to participate as an 
          EN in the Ticket to Work program?
411.715  If an alternate participant becomes an EN, will beneficiaries 
          for whom an employment plan was signed prior to implementation 
          be covered under the Ticket to Work program payment 
          provisions?
411.720  If an alternate participant chooses not to become an EN, can it 
          continue to function under the programs for payments for VR 
          services?
411.725  If an alternate participant becomes an EN and it has signed 
          employment plans, both as an alternate participant and an EN, 
          how will SSA pay for services provided under each employment 
          plan?
411.730  What happens if an alternate participant signed an employment 
          plan with a beneficiary before Ticket to Work program 
          implementation in the State and the required period of 
          substantial gainful activity is not completed by January 1, 
          2004?

    Authority: Secs. 702(a)(5) and 1148 of the Social Security Act (42 
U.S.C. 902(a)(5) and 1320b-19); sec. 101(b)-(e), Public Law 106-170, 113 
Stat. 1860, 1873 (42 U.S.C. 1320b-19 note).

    Source: 66 FR 67420, Dec. 28, 2001, unless otherwise noted.



                         Subpart A_Introduction



Sec. 411.100  Scope.

    The regulations in this part 411 relate to the provisions of section 
1148 of the Social Security Act which establishes the Ticket to Work and 
Self-Sufficiency Program (hereafter referred to as the ``Ticket to Work 
program''). The regulations in this part are divided into ten subparts:
    (a) Subpart A explains the scope of this part, explains the purpose 
and manner of implementation of the Ticket to Work program, and provides 
definitions of terms used in this part.
    (b) Subpart B contains provisions relating to the ticket under the 
Ticket to Work program.
    (c) Subpart C contains provisions relating to the suspension of 
continuing disability reviews for disabled beneficiaries who are 
considered to be using a ticket.
    (d) Subpart D contains provisions relating to the use of one or more 
program managers to assist us in the administration of the Ticket to 
Work program.
    (e) Subpart E contains provisions relating to employment networks in 
the Ticket to Work program.
    (f) Subpart F contains provisions relating to State vocational 
rehabilitation agencies' participation in the Ticket to Work program.
    (g) Subpart G contains provisions relating to individual work plans 
in the Ticket to Work program.
    (h) Subpart H contains provisions establishing employment network 
payment systems.
    (i) Subpart I contains provisions that establish a procedure for 
resolving disputes under the Ticket to Work program.
    (j) Subpart J contains provisions explaining how the implementation 
of

[[Page 754]]

the Ticket to Work program affects alternate participants under the 
programs for payments for vocational rehabilitation services under 
subpart V of part 404 and subpart V of part 416 of this chapter.



Sec. 411.105  What is the purpose of the Ticket to Work program?

    The purpose of the Ticket to Work program is to expand the universe 
of service providers available to individuals who are entitled to Social 
Security benefits based on disability or eligible for Supplemental 
Security Income (SSI) benefits based on disability or blindness in 
obtaining the services necessary to find, enter and retain employment. 
Expanded employment opportunities for these individuals also will 
increase the likelihood that these individuals will reduce their 
dependency on Social Security and SSI cash benefits.



Sec. 411.115  Definitions of terms used in this part.

    As used in this part:
    (a) The Act means the Social Security Act, as amended.
    (b) Commissioner means the Commissioner of Social Security.
    (c) Cost reimbursement payment system means the provisions for 
payment for vocational rehabilitation services under subpart V of part 
404 and subpart V of part 416 of this chapter.
    (d) Disabled beneficiary means a title II disability beneficiary or 
a title XVI disability beneficiary.
    (e) Employment network or EN means a qualified public or private 
entity that has entered into an agreement with us to serve under the 
Ticket to Work program and that assumes responsibility for the 
coordination and delivery of employment services, vocational 
rehabilitation services, or other support services to beneficiaries 
assigning tickets to it. The rules on employment networks are described 
in subpart E of this part (Secs. 411.300-411.330). A State vocational 
rehabilitation agency may choose, on a case-by-case basis, to function 
as an employment network with respect to a beneficiary under the Ticket 
to Work program. The rules on State vocational rehabilitation agencies' 
participation in the Ticket to Work program are described in subpart F 
of this part (Secs. 411.350-411.435).
    (f) Employment plan means an individual work plan described in 
paragraph (i) of this section, or an individualized plan for employment 
described in paragraph (j) of this section. When used in subpart J of 
this part, ``employment plan'' also means a ``similar document'' 
referred to in Secs. 404.2114(a)(2) and 416.2214(a)(2) of this chapter 
under which an alternate participant under the programs for payments for 
vocational rehabilitation services (described in subpart V of part 404 
and subpart V of part 416 of this chapter) provides services to a 
disabled beneficiary under those programs.
    (g) Federal SSI cash benefits means a ``Supplemental Security Income 
benefit under title XVI'' based on blindness or disability as described 
in paragraphs (n) and (r) of this section.
    (h) I, my, you, or your means the disabled beneficiary.
    (i) Individual work plan or IWP means an employment plan under which 
an employment network (other than a State vocational rehabilitation 
agency) provides services to a disabled beneficiary under the Ticket to 
Work program. An individual work plan must be developed under, and meet 
the requirements of, the rules in subpart G of this part (Secs. 411.450-
411.470).
    (j) Individualized plan for employment or IPE means an employment 
plan under which a State vocational rehabilitation agency provides 
services to individuals with disabilities (including beneficiaries 
assigning tickets to it under the Ticket to Work program) under a State 
plan approved under title I of the Rehabilitation Act of 1973, as 
amended (29 U.S.C. 720 et seq.). An individualized plan for employment 
must be developed under, and meet the requirements of, 34 CFR 361.45 and 
361.46.
    (k) Program manager or PM means an organization in the private or 
public sector that has entered into a contract with us to assist us in 
administering the Ticket to Work program. The rules on the use of one or 
more program managers to assist us in administering the program are 
described in subpart D of this part (Secs. 411.230-411.250).

[[Page 755]]

    (l) Social Security disability benefits means the benefits described 
in paragraph (q) of this section.
    (m) State vocational rehabilitation agency or State VR agency means 
a State agency administering or supervising the administration of the 
State plan approved under title I of the Rehabilitation Act of 1973, as 
amended (29 U.S.C. 720 et seq.). In those States that have one agency 
that provides VR services to non-blind individuals and another agency 
that provides services to blind individuals, this term refers to either 
State agency.
    (n) Supplemental Security Income benefit under title XVI means a 
cash benefit under section 1611 or 1619(a) of the Act, and does not 
include a State supplementary payment, administered Federally or 
otherwise.
    (o) Ticket means a document described in Sec. 411.120 which the 
Commissioner may issue to disabled beneficiaries for participation in 
the Ticket to Work program.
    (p) Ticket to Work program or program means the Ticket to Work and 
Self-Sufficiency Program under section 1148 of the Act.
    (q) Title II disability beneficiary means an individual entitled to 
disability insurance benefits under section 223 or to monthly insurance 
benefits under section 202 of the Act based on such individual's 
disability as defined in section 223(d) of the Act. (See Sec. 404.1505 
of this chapter.) An individual is a title II disability beneficiary for 
each month for which such individual is entitled to such benefits.
    (r) Title XVI disability beneficiary means an individual eligible 
for Supplemental Security Income benefits under title XVI on the basis 
of blindness (within the meaning of section 1614(a)(2) of the Act) (see 
Secs. 416.981 and 416.982 of this chapter) or disability (within the 
meaning of section 1614(a)(3) of the Act) (see Sec. 416.905 of this 
chapter). An individual is a title XVI disability beneficiary for each 
month for which such individual is eligible for such benefits.
    (s) VR cost reimbursement option means an arrangement under which 
your ticket is not assigned to the State VR agency but you do receive 
services pursuant to an individualized plan for employment where the 
State VR agency has chosen to receive payment under the cost 
reimbursement payment system.
    (t) We or us means the Social Security Administration.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29338, May 20, 2008]



           Subpart B_Tickets Under the Ticket to Work Program



Sec. 411.120  What is a ticket under the Ticket to Work program?

    (a) A ticket under the Ticket to Work program is a document which 
provides evidence of the Commissioner's agreement to pay, under the 
rules in subpart H of this part, an employment network (EN) or a State 
VR agency to which a disabled beneficiary's ticket is assigned, for 
providing employment services, vocational rehabilitation services, and 
other support services to the beneficiary.
    (b) The left side of the ticket includes the beneficiary's name, 
ticket number, claim account number, and the date we issued the ticket. 
The ticket number is 12 characters and comprises the beneficiary's own 
social security number, the letters ``TW,'' and a number (1, 2, etc.) in 
the last position signifying that this is the first ticket, second 
ticket, etc., that the beneficiary has received.
    (c) The right side of the ticket includes the signature of the 
Commissioner of Social Security and provides a description of the Ticket 
to Work program. The description of the program will tell you how you 
may offer the ticket to an EN or State VR agency. The description will 
also tell you how the EN provides services to you.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29339, May 20, 2008]



Sec. 411.125  Who is eligible to receive a ticket under the Ticket
to Work program?

    (a) You will be eligible to receive a Ticket to Work in a month in 
which--
    (1) You are age 18 or older and have not attained age 65; and
    (2)(i)(A) You are a title II disability beneficiary (other than a 
beneficiary

[[Page 756]]

receiving benefit payments under Sec. 404.316(c), Sec. 404.337(c), 
Sec. 404.352(d), or Sec. 404.1597a of this chapter); and
    (B) You are in current pay status for monthly title II cash benefits 
based on disability (see subpart E of part 404 of this chapter for our 
rules on nonpayment of title II benefits); or
    (ii)(A) You are a title XVI disability beneficiary (other than a 
beneficiary receiving disability or blindness benefit payments under 
Sec. 416.996 or Sec. 416.1338 of this chapter);
    (B) If you are an individual described in Sec. 416.987(a)(1) of this 
chapter, you are eligible for benefits under title XVI based on 
disability under the standard for evaluating disability for adults 
following a redetermination of your eligibility under Sec. 416.987 of 
this chapter; and
    (C) Your monthly Federal cash benefits based on disability or 
blindness under title XVI are not suspended (see subpart M of part 416 
of this chapter for our rules on suspension of title XVI benefit 
payments).
    (b) You will not be eligible to receive more than one ticket during 
any period during which you are either--
    (1) Entitled to title II benefits based on disability (see 
Secs. 404.316(b), 404.337(b) and 404.352(b) of this chapter for when 
entitlement to title II disability benefits ends); or
    (2) Eligible for title XVI benefits based on disability or blindness 
and your eligibility has not terminated (see subpart M of part 416 of 
this chapter for our rules on when eligibility for title XVI benefits 
terminates).
    (c) If your entitlement to title II benefits based on disability 
ends and/or your eligibility for title XVI benefits based on disability 
or blindness terminates as described in Sec. 411.155(b)(1) or (2), you 
will be eligible to receive a new ticket in a month in which--
    (1) Your entitlement to title II benefits based on disability is 
reinstated under section 223(i) of the Act, or your eligibility for 
title XVI benefits based on disability or blindness is reinstated under 
section 1631(p) of the Act; and
    (2) You meet the requirements of paragraphs (a)(1) and (2) of this 
section.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29339, May 20, 2008]



Sec. 411.130  How will we distribute tickets under the Ticket
to Work program?

    We may send you a ticket if you are eligible to receive one under 
Sec. 411.125. All Ticket-eligible beneficiaries may receive a Ticket 
upon request.

[77 FR 1864, Jan. 12, 2012]



Sec. 411.135  What do I do when I receive a ticket?

    Your participation in the Ticket to Work program is voluntary. When 
you receive your ticket, you are free to choose when and whether to 
assign it (see Sec. 411.140 for information on assigning your ticket). 
If you want to participate in the program, you can take your ticket to 
any EN you choose or to your State VR agency. You may choose either to 
assign your ticket to an EN by signing an individual work plan (see 
Secs. 411.450 through 411.470) or receive services from your State VR 
agency by entering into and signing an individualized plan for 
employment. If the State VR agency provides services to you, it will 
decide whether to accept your ticket. If it accepts your ticket, you 
will have assigned your ticket to the State VR agency and it will 
receive payment as an EN. If the State VR agency decides to be paid 
under the cost reimbursement payment system, you have not assigned your 
ticket and you may assign your ticket after the State VR agency has 
closed your case.

[73 FR 29339, May 20, 2008]



Sec. 411.140  When may I assign my ticket and how?

    (a) You may assign your ticket during a month in which you meet the 
requirements of Sec. 411.125(a)(1) and (a)(2). You may assign your 
ticket during the 90-day period after your case is closed by a State VR 
agency that elected the VR cost reimbursement option (see 
Sec. 411.171(d)), without meeting the requirements of 
Sec. 411.125(a)(2). You may assign your ticket to any EN which is 
serving under the program and is willing to provide you with services, 
or you may assign your ticket to a State VR agency acting as an EN if 
you are eligible to receive VR services under 34 CFR 361.42. You may not 
assign your ticket to more than one provider of services

[[Page 757]]

(i.e., an EN or a State VR agency) at a time. You may not assign your 
ticket until after the State VR agency has closed your case if you are 
receiving VR services pursuant to an individualized plan for employment 
from a State VR agency which has elected the VR cost reimbursement 
option. You also may not assign your ticket to a State VR agency if that 
VR agency previously served you and elected the VR cost reimbursement 
option and closed your case.
    (b)(1) In determining which EN you want to work with, you may 
discuss your rehabilitation and employment plans with as many ENs in 
your area as you wish. You also may discuss your rehabilitation and 
employment plans with the State VR agency.
    (2) You can obtain a list of the approved ENs in your area from the 
program manager (PM) we have enlisted to assist in the administration of 
the Ticket to Work program. (See Sec. 411.115(k) for a definition of the 
PM.)
    (c) If you choose to work with an EN serving under the program, both 
you and the EN of your choice need to agree upon an individual work plan 
(IWP) (see Sec. 411.115(i) for a definition of an IWP). If you choose to 
work with a State VR agency, you must develop an individualized plan for 
employment (IPE) and your State VR counselor must agree to the terms of 
the IPE, according to the requirements established in 34 CFR 361.45 and 
361.46. (See Sec. 411.115(j) for a definition of an IPE.) The IWP or IPE 
outlines the services necessary to assist you in achieving your chosen 
employment goal.
    (d) In order for you to assign your ticket to an EN or State VR 
agency acting as an EN, all of the following requirements must be met:
    (1)(i) If you decide to work with an EN, you and a representative of 
the EN must agree to and sign an IWP; or
    (ii) If you decide to work with a State VR agency, you and a 
representative of the State VR agency must agree to and sign both an IPE 
and a form that provides the information described in 
Sec. 411.385(a)(1), (2) and (3).
    (2) You must be eligible to assign your ticket under the rules in 
paragraph (a) of this section.
    (3) A representative of the EN must submit a copy of the signed IWP 
to the PM, or a representative of the State VR agency, acting as an EN, 
must submit the completed and signed form (as described in 
Sec. 411.385(a) and (b)) to the PM.
    (4) The PM must receive the copy of the IWP or receive the required 
form, as appropriate.
    (e) If all of the requirements in paragraph (d) of this section are 
met, we will consider your ticket assigned to the EN or State VR agency 
acting as an EN. The effective date of the assignment of your ticket 
will be the first day on which the requirements of paragraphs (d)(1) and 
(2) of this section are met. See Secs. 411.160 through 411.225 for an 
explanation of how assigning your ticket may affect medical reviews that 
we conduct to determine if you are still disabled under our rules.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29339, May 20, 2008]



Sec. 411.145  When can my ticket be taken out of assignment?

    (a) If you assigned your ticket to an EN or a State VR agency acting 
as an EN, you may take your ticket out of assignment for any reason. You 
must notify the PM in writing that you wish to take your ticket out of 
assignment. The ticket will be no longer assigned to that EN or State VR 
agency acting as an EN, effective with the first day of the month 
following the month in which you notify the PM in writing that you wish 
to take your ticket out of assignment. You will be sent a notice 
informing you that your ticket is no longer assigned to that EN or State 
VR agency. You may reassign your ticket under the rules in Sec. 411.150.
    (b) If your EN goes out of business or is no longer approved to 
participate as an EN in the Ticket to Work program, the PM will take 
your ticket out of assignment with that EN. The ticket will no longer be 
assigned to that EN effective on the first day of the month following 
the month in which the EN goes out of business or is no longer approved 
to participate in the Ticket to Work program. You will be sent a notice 
informing you that your ticket is no longer assigned to that EN. In 
addition, if your EN is no longer willing or

[[Page 758]]

able to provide you with services, or if your State VR agency acting as 
an EN stops providing services to you because you have been determined 
to be ineligible for VR services under 34 CFR 361.42, the EN or State VR 
agency acting as an EN may ask the PM to take your ticket out of 
assignment with that EN or State VR agency. The ticket will no longer be 
assigned to that EN or State VR agency acting as an EN effective on the 
first day of the month following the month in which the EN or State VR 
agency acting as an EN makes a request to the PM that the ticket be 
taken out of assignment. You will be sent a notice informing you that 
your ticket is no longer assigned to that EN or State VR agency acting 
as an EN. You may reassign your ticket under the rules in Sec. 411.150.
    (c) For information about how taking a ticket out of assignment may 
affect medical reviews that we conduct to determine if you are still 
disabled under our rules, see Secs. 411.171(c) and 411.220.

[73 FR 29339, May 20, 2008]



Sec. 411.150  Can I reassign my ticket?

    (a) If you previously assigned your ticket and your ticket is no 
longer assigned (see Sec. 411.145), you may reassign your ticket, unless 
you are receiving benefit payments under Sec. 404.316(c), 
Sec. 404.337(c), Sec. 404.352(d) or Sec. 404.1597a of this chapter, or 
you are receiving disability or blindness benefit payments under 
Sec. 416.996 or Sec. 416.1338 of this chapter (the provisions of 
paragraph (b)(3) of this section notwithstanding). If you previously 
assigned your ticket to an EN, you may reassign your ticket to a 
different EN which is serving under the program and is willing to 
provide you with services, or you may reassign your ticket to a State VR 
agency acting as an EN if you are eligible to receive VR services under 
34 CFR 361.42. If you previously assigned your ticket to a State VR 
agency acting as an EN, you may reassign your ticket to an EN which is 
serving under the program and is willing to provide you with services, 
or to another State VR agency acting as an EN if you are eligible to 
receive VR services under 34 CFR 361.42.
    (b) In order for you to reassign your ticket to an EN or State VR 
agency, all of the following requirements must be met:
    (1) Your ticket must be unassigned. If your ticket is assigned to an 
EN or a State VR agency, you must first tell the PM in writing that you 
want to take your ticket out of assignment (see Sec. 411.145).
    (2)(i) You and a representative of the new EN must agree to and sign 
a new IWP; or
    (ii) If you wish to reassign your ticket to a State VR agency, you 
and a representative of the State VR agency must agree to and sign both 
an IPE and a form that provides the information described in 
Sec. 411.385(a)(1), (2) and (3).
    (3) You must meet the requirements of Sec. 411.125(a)(1) and (2) on 
or after the day you and a representative of the new EN sign your IWP or 
you and a representative of the State VR agency sign your IPE and the 
required form. You may reassign your ticket within 90 days of the 
effective date your ticket was no longer assigned, without meeting the 
requirements of Sec. 411.125(a)(2).
    (4) A representative of the EN must submit a copy of the signed IWP 
to the PM or a representative of the State VR agency must submit the 
completed and signed form (as described in Sec. 411.385(a) and (b)) to 
the PM.
    (5) The PM must receive the copy of the IWP or received the required 
form, as appropriate.
    (c) If all of the requirements in paragraphs (a) and (b) of this 
section are met, we will consider your ticket reassigned to the new EN 
or State VR agency. The effective date of the reassignment of your 
ticket will be the first day on which the requirements of paragraphs (a) 
and (b)(1), (2) and (3) of this section are met. See Secs. 411.160 
through 411.225 for an explanation of how reassigning your ticket may 
affect medical reviews that we conduct to determine if you are still 
disabled under our rules.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29340, May 20, 2008]



Sec. 411.155  When does my ticket terminate?

    (a) Your ticket will terminate if and when you are no longer 
eligible to participate in the Ticket to Work program. If your ticket 
terminates, you

[[Page 759]]

may not assign or reassign it to an EN or State VR agency. We will not 
pay an EN (including a State VR agency) for milestones or outcomes 
achieved in or after the month in which your ticket terminates (see 
Sec. 411.525(c)). Your eligibility to participate in the Ticket to Work 
program will end, and your ticket will terminate, in the earliest of the 
following months:
    (1) The month in which your entitlement to title II benefits based 
on disability ends for reasons other than your work activity or 
earnings, or the month in which your eligibility for benefits under 
title XVI based on disability or blindness terminates for reasons other 
than your work activity or earnings, whichever is later;
    (2) If you are entitled to widow's or widower's insurance benefits 
based on disability (see Secs. 404.335 and 404.336 of this chapter), the 
month in which you attain full retirement age;
    (3) If you are eligible for benefits under title XVI based on 
disability or blindness, the month following the month in which you 
attain age 65; or
    (4) The month after the month in which your outcome payment period 
ends (see Sec. 411.500(b)).
    (b) The rules in paragraph (c) of this section apply in determining 
when your eligibility to participate in the Ticket to Work program will 
end and your ticket will terminate if--
    (1) You were not a concurrent title II/title XVI disability 
beneficiary, and your entitlement to title II benefits based on 
disability ends or your eligibility for title XVI benefits based on 
disability or blindness terminates because of your work activity or 
earnings; or
    (2) You were a concurrent title II/title XVI disability beneficiary 
and--
    (i) Your entitlement to title II benefits based on disability ends 
because of work activity or earnings and your eligibility for title XVI 
benefits based on disability or blindness terminates for any reason; or
    (ii) Your eligibility for title XVI benefits based on disability or 
blindness terminates because of your work activity or earnings and your 
entitlement to title II benefits based on disability ends for any 
reason.
    (c) For purposes of paragraph (b) of this section, the ticket which 
you received in connection with the previous period during which you 
were either entitled to title II benefits based on disability or 
eligible for title XVI benefits based on disability or blindness (as 
described in Sec. 411.125(b)) will terminate, and your eligibility to 
participate in the Ticket to Work program based on that ticket will end, 
in the earliest of the following months:
    (1) If we make a final determination or decision that you are not 
entitled to have title II benefits based on disability reinstated under 
section 223(i) of the Act or eligible to have title XVI benefits based 
on disability or blindness reinstated under section 1631(p) of the Act, 
the month in which we make that determination or decision;
    (2) If we make a final determination or decision that you are not 
entitled to title II benefits based on disability or eligible for title 
XVI benefits based on disability or blindness after you file an 
application for benefits, the month in which we make that determination 
or decision;
    (3) The month you attain retirement age (as defined in section 
216(l) of the Act);
    (4) The month in which you die;
    (5) The month in which you become entitled to a title II benefit 
that is not based on disability or eligible for a title XVI benefit that 
is not based on disability or blindness;
    (6) The month in which you again become entitled to title II 
benefits based on disability, or eligible for title XVI benefits based 
on disability or blindness, based on the filing of an application for 
such benefits;
    (7) If your entitlement to title II benefits based on disability is 
reinstated under section 223(i) of the Act, or your eligibility for 
title XVI benefits based on disability or blindness is reinstated under 
section 1631(p) of the Act, the month in which you are eligible to 
receive a new ticket under Sec. 411.125(c); or
    (8) The month after the month in which your outcome payment period 
ends (see Sec. 411.500(b)).

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29340, May 20, 2008]

[[Page 760]]



Subpart C_Suspension of Continuing Disability Reviews for Beneficiaries 
                         Who Are Using a Ticket

                              Introduction



Sec. 411.160  What does this subpart do?

    (a) This subpart explains our rules about continuing disability 
reviews for disability beneficiaries who are participating in the Ticket 
to Work program.
    (b) Continuing disability reviews are reviews that we conduct to 
determine if you are still disabled under our rules (see Secs. 404.1589, 
416.989 and 416.989a of this chapter for the rules on when we may 
conduct continuing disability reviews). For the purposes of this 
subpart, continuing disability reviews include the medical reviews we 
conduct to determine if your medical condition has improved (see 
Secs. 404.1594 and 416.994 of this chapter), but not any review to 
determine if your disability has ended under Sec. 404.1594(d)(5) of this 
chapter because you have demonstrated your ability to engage in 
substantial gainful activity (SGA), as defined in Secs. 404.1571-
404.1576 of this chapter.



Sec. 411.165  How does using a ticket under the Ticket to Work
program affect my continuing disability reviews?

    We periodically review your case to determine if you are still 
disabled under our rules. However, we will not begin a continuing 
disability review during the period in which you are using a ticket. 
Sections 411.170 and 411.171 describe when the period of using a ticket 
begins and ends. You must meet certain requirements for us to consider 
you to be using a ticket.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29340, May 20, 2008]



Sec. 411.166  Glossary of terms used in this subpart.

    (a) Using a ticket means you have assigned a ticket to an Employment 
Network (EN) or a State VR agency that has elected to serve you as an 
EN, and you are making timely progress toward self-supporting employment 
as defined in Sec. 411.180; or you have a ticket that would otherwise be 
available for assignment and are receiving VR services pursuant to an 
individualized plan for employment (IPE) and the State VR agency has 
chosen to be paid for these services under the cost reimbursement 
payment system, and you are making timely progress toward self-
supporting employment as defined in Sec. 411.180. (See Sec. 411.171 for 
when the period of using a ticket ends.)
    (b) Timely progress toward self-supporting employment means you have 
completed the specified goals of work and earnings, or completed the 
specified post-secondary education credits at an educational institution 
(see Sec. 411.167) in pursuit of a degree or certificate, or completed 
specified course requirements for a vocational or technical training 
program at an educational institution consisting of a technical, trade 
or vocational school (see Sec. 411.167), or completed a certain 
percentage of the work requirement and a certain percentage of the post-
secondary education requirement or vocational or technical training 
requirement and the sum of the two percentages equals 100 or more (see 
Sec. 411.180(c)), or obtained a high school diploma or General Education 
Development (GED) certificate in the applicable progress certification 
period as described in Sec. 411.180.
    (c) Timely progress guidelines mean the guidelines we use to 
determine if you are making timely progress toward self-supporting 
employment (see Sec. 411.180).
    (d) Progress certification period means any 12-month progress 
certification period described in Sec. 411.180(b).
    (e) Progress review means the reviews the PM conducts to determine 
if you are meeting the timely progress guidelines described in 
Sec. 411.180. We explain the method for conducting progress reviews in 
Sec. 411.200.
    (f) Extension period is a period of up to 90 days during which you 
may reassign a ticket without being subject to continuing disability 
reviews. You may be eligible for an extension period if the ticket is in 
use and no longer assigned to an EN or State VR agency acting as an EN 
(see Sec. 411.220).
    (g) Inactive status is a status in which you may place your ticket 
if you are temporarily or otherwise unable to

[[Page 761]]

make timely progress toward self-supporting employment during a progress 
certification period. See Sec. 411.192 for the rules on placing your 
ticket in inactive status and on reactivating your ticket.
    (h) Variance tolerance means the margin of flexibility whereby we 
will consider you to have met the requirement for completing a specified 
amount of post-secondary credit hours in an educational degree or 
certification program or the course requirements in a vocational or 
technical training program under Sec. 411.180 in the applicable progress 
certification period if your completion of credit hours or course 
requirements in this period is within 10% of the goal. Figures 
representing the number of credit hours required for the first and 
second progress certification periods as described in Sec. 411.180 will 
be rounded by dropping any fractions. Under the variance tolerance, we 
also will consider you to have met the requirements in an applicable 
progress certification period if you complete a certain percentage of 
the work requirement and a certain percentage of the post-secondary 
education requirement or vocational or technical training requirement in 
the period and the sum of the two percentages is within 10% of the goal. 
See Sec. 411.180(a) and (c).
    (i) VR cost reimbursement option means an arrangement under which 
your ticket is not assigned to the State VR agency but you do receive 
services pursuant to an individualized plan for employment where the 
State VR agency has chosen to receive payment under the cost 
reimbursement payment system.
    (j) VR cost reimbursement status means the status of your ticket 
under the arrangement described in paragraph (i) of this section. The 
period during which your ticket is in VR cost reimbursement status 
begins on the date described in Sec. 411.170(b) and ends on the date 
your case is closed by the State VR agency.

[73 FR 29340, May 20, 2008]



Sec. 411.167  What is an educational institution or a technical,
trade or vocational school?

    (a) Educational institution means a school (including a technical, 
trade, or vocational school), junior college, college or university that 
is: operated or directly supported by the United States; operated or 
directly supported by any State or local government or by a political 
subdivision of any State or local government; or approved by a State 
agency or subdivision of the State, or accredited by a State-recognized 
or nationally recognized accrediting body.
    (b) Technical, trade or vocational school is an educational 
institution that is approved by a State agency or subdivision of the 
State or accredited by a State-recognized or nationally recognized 
accrediting body to provide technical, trade or vocational training.
    (c) State-recognized accrediting body means an entity designated or 
recognized by a State as the proper authority for accrediting schools, 
colleges or universities.
    (d) Nationally recognized accrediting body means an entity 
determined to be such by the U.S. Department of Education.
    (e) Approval by a State agency or subdivision of the State includes 
approval of a school, college or university as an educational 
institution, or approval of one or more of the courses offered by a 
school, college or university.

[73 FR 29341, May 20, 2008]



Sec. 411.170  When does the period of using a ticket begin?

    (a) The period of using a ticket begins on the effective date of the 
assignment of your ticket to an EN or State VR agency under 
Sec. 411.140.
    (b) If you have a ticket that would otherwise be available for 
assignment and are receiving VR services pursuant to an individualized 
plan for employment (IPE) and the State VR agency has elected the VR 
cost reimbursement option, the period of using a ticket begins on the 
later of--
    (1) The effective date of your IPE; or
    (2) The first day your ticket would otherwise have been assignable 
if you had not been receiving services from a State VR agency that 
elected the VR cost reimbursement option.

[73 FR 29341, May 20, 2008]

[[Page 762]]



Sec. 411.171  When does the period of using a ticket end?

    The period of using a ticket ends with the earliest of the 
following--
    (a) The last day of the month before the month in which the ticket 
terminates as a result of one of the events listed in Sec. 411.155 (see 
Sec. 411.155(a)(4) and (c)(8) for when your ticket terminates if your 
outcome payment period ends);
    (b) The day before the effective date of a decision under 
Sec. 411.200 or Sec. 411.205 that you are no longer making timely 
progress toward self-supporting employment;
    (c) The last day of the 90-day extension period which begins with 
the first day of the first month in which your ticket is no longer 
assigned to an EN or State VR agency acting as an EN (see Sec. 411.145), 
unless you reassign your ticket within the 90-day extension period (see 
Sec. 411.220 for an explanation of the 90-day extension period); or
    (d) If your ticket was in VR cost reimbursement status as described 
in Sec. 411.166(j), the 90th day following the date the State VR agency 
closes your case, unless you assign your ticket during this 90-day 
period.

[73 FR 29341, May 20, 2008]



Sec. 411.175  What if a continuing disability review is begun before
my ticket is in use?

    (a) If we begin a continuing disability review before the date on 
which your ticket is in use, you may still assign the ticket and receive 
services from an EN or a State VR agency acting as an EN under the 
Ticket to Work program, or you may still receive services from a State 
VR agency that elects the VR cost reimbursement option. However, we will 
complete the continuing disability review. If in this review we 
determine that you are no longer disabled, in most cases you will no 
longer be eligible to receive benefit payments. However, if your ticket 
was in use before we determined that you are no longer disabled, in 
certain circumstances you may continue to receive benefit payments (see 
Secs. 404.316(c), 404.337(c), 404.352(d), and 416.1338 of this chapter). 
If you appeal the decision that you are no longer disabled, you may also 
choose to have your benefits continued pending reconsideration and/or a 
hearing before an administrative law judge on the cessation 
determination (see Secs. 404.1597a and 416.996 of this chapter).
    (b) The date on which we begin the continuing disability review is 
the date on the notice we send you that tells you that we are beginning 
to review your disability case.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29341, May 20, 2008]



Sec. 411.180  What is timely progress toward self-supporting
employment?

    (a) General. We consider you to be making timely progress toward 
self-supporting employment when you show progress as described below 
toward the ability to work at levels which will reduce your dependence 
on Social Security disability benefits or SSI benefits. We will also 
consider you to be making timely progress when you obtain a high school 
diploma or GED certificate in the first 12-month progress certification 
period, or if you show progress as described below toward obtaining an 
educational degree or certificate or vocational or technical training 
that will enhance your ability to return to work. In addition, if you 
complete a certain percentage of the work requirement and a certain 
percentage of the post-secondary education requirement or vocational or 
technical training requirement in the applicable progress certification 
period under the guidelines below, and the sum of the two percentages 
equals 100 or more, we will consider you to have met the timely progress 
requirements for purposes of the progress review conducted at the end of 
the 12-month progress certification period. For example, if you complete 
33.3 percent of the work requirement during the first 12-month progress 
certification period as described in paragraph (c)(1)(i) of this section 
(i.e., one month of work with earnings equal to or greater than the 
amount representing a trial work service month), and complete 66.7 
percent of the requisite credit hours in an educational program during 
this period as described in paragraph (c)(1)(iii) of this section (i.e., 
40 percent of the post-secondary credit hours that are considered to 
represent an academic year of full-time study), we will consider you to

[[Page 763]]

have met the timely progress requirements for purposes of the progress 
review conducted at the end of the first 12-month progress certification 
period. In addition, we will apply the variance tolerance described in 
Sec. 411.166(h) in determining whether you have met the requirements in 
paragraph (c)(1)(iii), (iv) or (v), paragraph (c)(2)(ii), (iii) or (iv), 
paragraph (c)(3)(iii) or (v), paragraph (c)(4)(ii) or (iii), or 
paragraph (c)(5)(ii) or (iii) of this section.
    (b) 12-month progress certification periods. The first 12-month 
progress certification period begins with the month following the month 
in which you first assigned your ticket, or with the month beginning 
after the date described in Sec. 411.170(b) if you have a ticket that 
would otherwise be available for assignment and are receiving VR 
services under an IPE from a State VR agency which has chosen the VR 
cost reimbursement option. Any subsequent 12-month progress 
certification period will begin with the month following the end of the 
previous 12-month progress certification period. In computing any 12-
month progress certification period, we do not count any month during 
which--
    (1) Your ticket is not assigned to an EN or State VR agency acting 
as an EN and is not in VR cost reimbursement status (as described in 
Sec. 411.166(j)); or
    (2) Your ticket is in inactive status (see Sec. 411.192).
    (c) Guidelines. We will determine if you are making timely progress 
toward self-supporting employment by using the following guidelines:
    (1) During the first 12-month progress certification period, you 
must be making timely progress as follows:
    (i) You must have worked in at least three months within this 12-
month period and have earnings in each of those three months that are 
equal to or greater than the amount representing a trial work service 
month (see Sec. 404.1592(b) of this chapter); or
    (ii) You must have obtained a high school diploma or GED certificate 
within this 12-month period; or
    (iii) You must have been enrolled in a two- or four-year degree or 
certification program at an educational institution and have completed 
60 percent of the post-secondary credit hours that are considered to 
represent an academic year of full-time study in the program by the end 
of this 12-month period; or
    (iv) You must have been enrolled in a vocational or technical 
training program at an educational institution consisting of a 
technical, trade or vocational school and have completed 60 percent of 
the course requirements that are considered to represent a year of full-
time study in the program by the end of this 12-month period; or
    (v) You must have completed a percentage of the required number of 
months of work and earnings described in paragraph (c)(1)(i) of this 
section and a percentage of the specified amount of post-secondary 
credit hours or course requirements required under paragraph (c)(1)(iii) 
or (iv) of this section within this 12-month period so that the sum of 
the two percentages equals 100 or more.
    (2) During the second 12-month progress certification period, at the 
conclusion of 24 months of ticket use, you must be making timely 
progress as follows:
    (i) You must have worked in at least six months within this 12-month 
period and have earnings in each of those six months that are equal to 
or greater than the amount representing a trial work service month (see 
Sec. 404.1592(b) of this chapter); or
    (ii) You must have been enrolled in a two- or four-year degree or 
certification program at an educational institution and have completed 
an additional 75 percent of the post-secondary credit hours that are 
considered to represent an academic year of full-time study in the 
program by the end of this 12-month period; or
    (iii) You must have been enrolled in a vocational or technical 
training program at an educational institution consisting of a 
technical, trade or vocational school and have completed an additional 
75 percent of the course requirements that are considered to represent a 
year of full-time study in the program by the end of this 12-month 
period; or
    (iv) You must have completed a percentage of the required number of 
months of work and earnings described in paragraph (c)(2)(i) of this 
section

[[Page 764]]

and a percentage of the specified amount of post-secondary credit hours 
or course requirements required under paragraph (c)(2)(ii) or (iii) of 
this section within this 12-month period so that the sum of the two 
percentages equals 100 or more.
    (3) During the third 12-month progress certification period, at the 
conclusion of 36 months of ticket use, you must be making timely 
progress as follows:
    (i) You must have worked in at least nine months within this 12-
month period and have gross earnings from employment (or net earnings 
from self-employment as defined in Sec. 404.1080 of this chapter) in 
each of those nine months that are more than the SGA threshold amount 
specified in Sec. 404.1574(b)(2) of this chapter; or
    (ii) You must have completed the course work and earned a degree or 
certificate from a two-year degree or certification program at an 
educational institution by the end of this 12-month period; or
    (iii) You must have been enrolled in a four-year degree or 
certification program at an educational institution and completed 
additional post-secondary credit hours that are considered to represent 
an academic year of full-time study in the program by the end of this 
12-month period; or
    (iv) You must have been enrolled in a vocational or technical 
training program at an educational institution consisting of a 
technical, trade or vocational school and have completed the course 
requirements of the program by the end of this 12-month period; or
    (v) You must have completed a percentage of the required number of 
months of work and earnings described in paragraph (c)(3)(i) of this 
section and a percentage of the specified amount of post-secondary 
credit hours required under paragraph (c)(3)(iii) of this section within 
this 12-month period so that the sum of the two percentages equals 100 
or more.
    (4) During the fourth 12-month progress certification period, at the 
conclusion of 48 months of ticket use, you must be making timely 
progress as follows:
    (i) You must have worked in at least nine months within this 12-
month period and have gross earnings from employment (or net earnings 
from self-employment as defined in Sec. 404.1080 of this chapter) in 
each of those nine months that are more than the SGA threshold amount 
specified in Sec. 404.1574(b)(2) of this chapter; or
    (ii) You must have been enrolled in a four-year degree or 
certification program at an educational institution and completed 
additional post-secondary credit hours that are considered to represent 
an academic year of full-time study in the program by the end of this 
12-month period; or
    (iii) You must have completed a percentage of the required number of 
months of work and earnings described in paragraph (c)(4)(i) of this 
section and a percentage of the specified amount of post-secondary 
credit hours required under paragraph (c)(4)(ii) of this section within 
this 12-month period so that the sum of the two percentages equals 100 
or more.
    (5) During the fifth 12-month progress certification period, at the 
conclusion of 60 months of ticket use, you must be making timely 
progress as follows:
    (i) You must have worked in at least six months within this 12-month 
period and have earnings in each of those six months that preclude 
payment of Social Security disability benefits and Federal SSI cash 
benefits; or
    (ii) You must have been enrolled in a four-year degree or 
certification program at an educational institution and either completed 
additional post-secondary credit hours that are considered to represent 
an academic year of full-time study in the program or completed the 
course work and earned a degree or certificate from the program by the 
end of this 12-month period; or
    (iii) You must have completed a percentage of the required number of 
months of work and earnings described in paragraph (c)(5)(i) of this 
section and a percentage of the specified amount of post-secondary 
credit hours required under paragraph (c)(5)(ii) of this section within 
this 12-month period so that the sum of the two percentages equals 100 
or more.
    (6) During the sixth 12-month progress certification period, at the 
conclusion of 72 months of ticket use,

[[Page 765]]

you must be making timely progress as follows:
    (i) You must have worked in at least six months within this 12-month 
period and have earnings in each of those six months that preclude 
payment of Social Security disability benefits and Federal SSI cash 
benefits; or
    (ii) You must have completed the course work and earned a degree or 
certificate from a four-year degree or certification program at an 
educational institution by the end of this 12-month period.
    (7) During all subsequent 12-month progress certification periods, 
you must have worked in at least six months within the 12-month period 
and have earnings in each of those six months that preclude payment of 
Social Security disability benefits and Federal SSI cash benefits.

[73 FR 29341, May 20, 2008]



Sec. 411.192  What choices do I have if I am unable to make timely 
progress toward self-supporting employment?

    (a) If you report to the PM that you are temporarily or otherwise 
unable to make timely progress toward self-supporting employment during 
a progress certification period, the PM will give you the choice of 
placing your ticket in inactive status or, if applicable, taking your 
ticket out of assignment with the EN or State VR agency acting as an EN. 
The choice of placing your ticket in inactive status applies whether 
your ticket is assigned or in VR cost reimbursement status (as described 
in Sec. 411.166(j)).
    (b) You may place your ticket in inactive status at any time by 
submitting a written request to the PM asking that your ticket be placed 
in inactive status. Your ticket will be placed in inactive status 
beginning with the first day of the month following the month in which 
you make your request. You are not considered to be using a ticket 
during months in which your ticket is in inactive status. Therefore, you 
will be subject to continuing disability reviews during those months. 
The months in which your ticket is in inactive status do not count 
toward the time limitations for making timely progress toward self-
supporting employment.
    (c) You may reactivate your ticket and return to in-use status if 
your ticket is still assigned to an EN or State VR agency acting as an 
EN. You may also reactivate your ticket and return to in-use status if 
you have a ticket which would otherwise be available for assignment, you 
were receiving services under an IPE from a State VR agency which chose 
the VR cost reimbursement option, and your VR case has not been closed 
by the State VR agency. You may reactivate your ticket by submitting a 
written request to the PM. Your ticket will be reactivated beginning 
with the first day of the month following the month in which the PM 
receives your request. The progress certification period will resume 
counting from the last month of in-use status, and the next progress 
review will be due when the progress certification period has been 
completed. Earnings from work, obtaining a high school diploma or GED 
certificate, or completion of post-secondary education credits in a two- 
or four-year degree or certification program or course requirements in a 
vocational or technical training program, as described in Sec. 411.180, 
during the period your ticket is in inactive status may be counted 
toward meeting the requirements for the next progress review.
    (d) You may take your ticket out of assignment under Sec. 411.145(a) 
at any time.

[73 FR 29343, May 20, 2008]



Sec. 411.200  How will the PM conduct my progress reviews?

    The PM will conduct a progress review at the end of each 12-month 
progress certification period.
    (a) The PM will first review the available administrative records to 
determine if you completed the work requirements as specified in 
Sec. 411.180 in the applicable progress certification period.
    (b) If the administrative records do not indicate that you met the 
work requirements, the PM will contact either you or your EN or State VR 
agency to

[[Page 766]]

request additional information to determine if you completed the work 
requirements or have met the educational or training requirements as 
specified in Sec. 411.180 in the applicable progress certification 
period.
    (c) If the PM finds that you completed the work requirements or met 
the educational or training requirements as specified in Sec. 411.180 in 
the applicable progress certification period, the PM will find that you 
are making timely progress toward self-supporting employment. On the 
basis of that finding, we will consider you to be making timely progress 
toward self-supporting employment until your next scheduled progress 
review.
    (d) If the PM finds that you did not complete the work requirements 
or meet the educational or training requirements as specified in 
Sec. 411.180 in the applicable progress certification period, the PM 
will find that you are not making timely progress toward self-supporting 
employment. If the PM makes such a finding, the PM will send a written 
notice of the decision to you at your last known address. This notice 
will explain the reasons for the decision and inform you of the right to 
ask us to review the decision. This decision will be effective 30 days 
after the date on which the PM sends the notice of the decision to you, 
unless you request that we review the decision under Sec. 411.205.

[73 FR 29343, May 20, 2008]



Sec. 411.205  What if I disagree with the PM's decision about whether
I am making timely progress toward self-supporting employment?

    If you disagree with the PM's decision, you may request that we 
review the decision. You must make the request before the 30th day after 
the date on which the PM sends the notice of its decision to you. We 
will consider you to be making timely progress toward self-supporting 
employment until we make a decision. We will send a written notice of 
our decision to you at your last known address. If we decide that you 
are no longer making timely progress toward self-supporting employment, 
our decision will be effective on the date on which we send the notice 
of the decision to you.

                     Failure To Make Timely Progress



Sec. 411.210  What happens if I do not make timely progress toward 
self-supporting employment?

    (a) General. If it is determined that you are not making timely 
progress toward self-supporting employment, we will find that you are no 
longer using a ticket. If this happens, you will once again be subject 
to continuing disability reviews. However, you may continue 
participating in the Ticket to Work program. Your EN (including a State 
VR agency which is serving you as an EN) also may receive any milestone 
or outcome payments for which it is eligible under Sec. 411.500 et seq. 
If you are working with a State VR agency which elected payment under 
the cost reimbursement payment system, your State VR agency may receive 
payment for which it is eligible under the cost reimbursement payment 
system (see subparts F and H of this part).
    (b) Re-entering in-use status. If you failed to meet the timely 
progress guidelines for a 12-month progress certification period and you 
believe that you have now met the applicable requirements for that 
progress certification period as described in Sec. 411.180, you may 
request that you be reinstated to in-use status. In order to do so, you 
must submit a written request to the PM asking that you be reinstated to 
in-use status and you must provide evidence showing that you have met 
the applicable requirements for the progress certification period. The 
PM will decide whether you have satisfied the applicable requirements 
for the progress certification period and may be reinstated to in-use 
status. If the PM determines you have met the applicable requirements 
for the progress certification period, you will be reinstated to in-use 
status, provided that your ticket is assigned to an EN or State VR 
agency acting as an EN or in VR cost reimbursement status (as described 
in Sec. 411.166(j)). See paragraph (c) of this section for when your 
reinstatement to in-use status will be effective. The month after you 
are reinstated to in-use status, your next 12-month progress 
certification period will begin.
    (c) Decisions on re-entering in-use status. (1) After you have 
submitted a

[[Page 767]]

written request to the PM asking that you be reinstated to in-use 
status, the PM will decide whether you have satisfied the applicable 
requirements in this section for re-entering in-use status. The PM will 
send a written notice of the decision to you at your last known address. 
The notice will explain the reasons for the decision and inform you of 
the right to ask us to review the decision. If the PM decides that you 
have satisfied the requirements for re-entering in-use status (including 
the requirement that your ticket be assigned to an EN or State VR agency 
acting as an EN or in VR cost reimbursement status), you will be 
reinstated to in-use status effective with the date on which the PM 
sends the notice of the decision to you. If the PM decides that you have 
not satisfied the requirements for re-entering in-use status, you may 
request that we review the decision under paragraph (c)(2) of this 
section.
    (2) If you disagree with the PM's decision, you may request that we 
review the decision. You must make the request before the 30th day after 
the date on which the PM sends the notice of its decision to you. We 
will send you a written notice of our decision at your last known 
address. If we decide that you have satisfied the requirements for re-
entering in-use status (including the requirement that your ticket be 
assigned to an EN or State VR agency acting as an EN or in VR cost 
reimbursement status), you will be reinstated to in-use status effective 
with the date on which we send the notice of the decision to you.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29343, May 20, 2008]

                          The Extension Period



Sec. 411.220  What if my ticket is no longer assigned to an EN or 
State VR agency?

    (a) If your ticket was once assigned to an EN or State VR agency 
acting as an EN and is no longer assigned, you are eligible for an 
extension period of up to 90 days to reassign your ticket. You are 
eligible for an extension period if your ticket is in use and no longer 
assigned because--
    (1) You retrieved your ticket because you were dissatisfied with the 
services being provided (see Sec. 411.145(a)) or because you relocated 
to an area not served by your previous EN or State VR agency; or
    (2) Your EN went out of business, is no longer approved to 
participate as an EN in the Ticket to Work program, or is no longer 
willing or able to provide you with services as described in 
Sec. 411.145(b), or your State VR agency stopped providing services to 
you as described in Sec. 411.145(b).
    (b) During the extension period, the ticket will still be considered 
to be in use. This means that you will not be subject to continuing 
disability reviews during this period.
    (c) Time spent in the extension period will not count toward the 
time limitations for the timely progress guidelines.
    (d) The extension period--
    (1) Begins on the first day on which the ticket is no longer 
assigned (see Sec. 411.145); and
    (2) Ends 90 days after it begins or when you assign your ticket to a 
new EN or State VR agency, whichever is sooner.
    (e) If you do not assign your ticket by the end of the extension 
period, the ticket will no longer be in use and you will once again be 
subject to continuing disability reviews.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29344, May 20, 2008]



Sec. 411.225  What if I reassign my ticket after the end of the
extension period?

    (a) General. You may reassign your ticket after the end of the 
extension period under the conditions described in Sec. 411.150. If you 
reassign your ticket after the end of the extension period, you will be 
reinstated to in-use status beginning on the day on which the 
reassignment of your ticket is effective under Sec. 411.150(c).
    (b) Time limitations for the timely progress guidelines. Any month 
during which your ticket is not assigned and not in VR cost 
reimbursement status (as described in Sec. 411.166(j)), either during or 
after the extension period, will not count toward the time limitations 
for the timely progress guidelines.

[[Page 768]]

    (c) If you reassign your ticket after the end of the extension 
period. If you reassign your ticket after the end of the extension 
period, the period comprising the remaining months in the applicable 12-
month progress certification period will begin with the first month 
beginning after the day on which the reassignment of your ticket is 
effective under Sec. 411.150(c).

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29344, May 20, 2008]



Sec. 411.226  How will SSA determine if I am meeting the timely
progress guidelines if I assign my ticket prior to July 21, 2008?

    (a) If you assigned your ticket to an EN or State VR agency prior to 
July 21, 2008, we will determine which 12-month progress certification 
period in Sec. 411.180 you are in as of July 21, 2008 using the rules in 
paragraph (a)(1) of this section. We will not conduct a progress review 
at the end of that progress certification period. We will conduct a 
progress review at the end of your next progress certification period as 
explained in paragraph (a)(2) of this section.
    (1) We will consider you to be in the first or a subsequent 12-month 
progress certification period under Sec. 411.180 as of July 21, 2008. We 
will determine your applicable 12-month progress certification period 
and the number of months remaining in that period as of July 21, 2008 by 
counting all months during which your ticket was assigned and in use 
during the period--
    (i) Beginning with the month following the month in which you first 
assigned your ticket under the rules in effect prior to July 21, 2008; 
and
    (ii) Ending with the close of June 2008.
    (2) We will use the timely progress guidelines in Sec. 411.180(c) 
beginning with your next 12-month progress certification period. At the 
conclusion of that progress certification period, we will conduct a 
progress review to determine whether you are making timely progress 
toward self-supporting employment using the guidelines in 
Sec. 411.180(c) that apply in that period.
    (b) Prior to the conclusion of your applicable 12-month progress 
certification period determined under paragraph (a)(1) of this section, 
we will send you a notice telling you that we will not conduct a 
progress review at the end of that progress certification period, and 
that we will conduct a progress review at the conclusion of your next 
12-month progress certification period using the guidelines in 
Sec. 411.180(c). We will tell you in the notice when this next 12-month 
progress certification period will begin and will describe the specific 
timely progress guidelines you must meet in this 12-month period.
    (c) Subsequent 12-month progress certification periods will follow 
the rules in Sec. 411.180.
    (d) If, on June 30, 2008, your ticket is in use and assigned to a 
State VR agency which chose to be paid for services it provides to you 
under the cost reimbursement payment system, your period of using a 
ticket may continue under the rules in this subpart, including the rules 
in paragraphs (a), (b) and (c) of this section. While your ticket may 
still be considered in-use for the purpose of the suspension of 
continuing disability reviews, it will no longer be considered assigned 
to that State VR agency effective July 21, 2008. You may assign your 
ticket after the State VR agency has closed your case.

[73 FR 29344, May 20, 2008]



       Subpart D_Use of One or More Program Managers To Assist in 
              Administration of the Ticket to Work Program



Sec. 411.230  What is a PM?

    A program manager (PM) is an organization in the private or public 
sector that has entered into a contract to assist us in administering 
the Ticket to Work program. We will use a competitive bidding process to 
select one or more PMs.



Sec. 411.235  What qualifications are required of a PM?

    A PM must have expertise and experience in the field of vocational 
rehabilitation or employment services.

[[Page 769]]



Sec. 411.240  What limitations are placed on a PM?

    A PM is prohibited from directly participating in the delivery of 
employment services, vocational rehabilitation services, or other 
support services to beneficiaries with tickets in the PM's designated 
service delivery area. A PM is also prohibited from holding a financial 
interest in an employment network (EN) or service provider that provides 
services under the Ticket to Work program in the PM's designated service 
delivery area.



Sec. 411.245  What are a PM's responsibilities under the Ticket to
Work program?

    A PM will assist us in administering the Ticket to Work program by 
conducting the following activities:
    (a) Recruiting, recommending, and monitoring ENs. A PM must recruit 
and recommend for selection by us public and private entities to 
function as ENs under the program. A PM is also responsible for 
monitoring the ENs operating in its service delivery area. Such 
monitoring must be done to the extent necessary and appropriate to 
ensure that adequate choices of services are made available to 
beneficiaries with tickets. A PM may not limit the number of public or 
private entities being recommended to function as ENs.
    (b) Facilitating access by beneficiaries to ENs. A PM must assist 
beneficiaries with tickets in accessing ENs.
    (1) A PM must establish and maintain lists of the ENs available to 
beneficiaries with tickets in its service delivery area and make these 
lists generally available to the public.
    (2) A PM must ensure that all information provided to beneficiaries 
with tickets about ENs is in accessible formats. For purposes of this 
section, accessible format means by media that is appropriate to a 
particular beneficiary's impairment(s).
    (3) A PM must take necessary measures to ensure that sufficient ENs 
are available and that each beneficiary under the Ticket to Work program 
has reasonable access to employment services, vocational rehabilitation 
services, and other support services. The PM shall ensure that services 
such as the following are available in each service area, including 
rural areas: case management, work incentives planning, supported 
employment, career planning, career plan development, vocational 
assessment, job training, placement, follow-up services, and other 
services that we may require in an agreement with a PM.
    (4) A PM must ensure that each beneficiary with a ticket is allowed 
to change ENs. When a change in the EN occurs, the PM must reassign the 
ticket based on the choice of the beneficiary.
    (c) Facilitating payments to ENs. A PM must facilitate payments to 
the ENs in its service delivery area. Subpart H explains the EN payment 
systems and the PM's role in administering these systems.
    (1) A PM must maintain documentation and provide regular assurances 
to us that payments to an EN are warranted. The PM shall ensure that an 
EN is complying with the terms of its agreement and applicable 
regulations.
    (2) Upon the request of an EN, the PM shall make a determination of 
the allocation of the outcome or milestone payments due to an EN based 
on the services provided by the EN when a beneficiary has been served by 
more than one EN.
    (d) Administrative requirements. A PM will perform such 
administrative tasks as are required to assist us in administering and 
implementing the Ticket to Work program. Administrative tasks required 
for the implementation of the Program may include, but are not limited 
to:
    (1) Reviewing individual work plans (IWPs) submitted by ENs for 
ticket assignment. These reviews will be conducted to ensure that the 
IWPs meet the requirements of Sec. 411.465. (The PM will not review 
individualized plans for employment developed by State VR agencies and 
beneficiaries.)
    (2) Reviewing amendments to IWPs to ensure that the amendments meet 
the requirements in Sec. 411.465.
    (3) Ensuring that ENs only refer an individual to a State VR agency 
for services pursuant to an agreement regarding the conditions under 
which such services will be provided.
    (4) Resolving a dispute between an EN and a State VR agency with 
respect

[[Page 770]]

to agreements regarding the conditions under which services will be 
provided when an individual is referred by an EN to a State VR agency 
for services.

                Evaluation of Program Manager Performance



Sec. 411.250  How will SSA evaluate a PM?

    (a) We will periodically conduct a formal evaluation of the PM. The 
evaluation will include, but not be limited to, an assessment examining 
the following areas:
    (1) Quality of services;
    (2) Cost control;
    (3) Timeliness of performance;
    (4) Business relations; and
    (5) Customer satisfaction.
    (b) Our Project Officer will perform the evaluation. The PM will 
have an opportunity to comment on the evaluation, and then the 
Contracting Officer will determine the PM's final rating.
    (c) These performance evaluations will be made part of our database 
on contractor past performance to which any Federal agency may have 
access.
    (d) Failure to comply with the standards used in the evaluation may 
result in early termination of our agreement with the PM.



                      Subpart E_Employment Networks



Sec. 411.300  What is an EN?

    An employment network (EN) is any qualified entity that has entered 
into an agreement with us to function as an EN under the Ticket to Work 
program and assume responsibility for the coordination and delivery of 
employment services, vocational rehabilitation services, or other 
support services to beneficiaries who have assigned their tickets to 
that EN.



Sec. 411.305  Who is eligible to be an EN?

    Any qualified agency or instrumentality of a State (or political 
subdivision thereof) or a private entity that assumes responsibility for 
the coordination and delivery of services under the Ticket to Work 
program to disabled beneficiaries is eligible to be an EN. A single 
entity or an association of or consortium of entities combining their 
resources is eligible to be an EN. The entity may provide these services 
directly or by entering into an agreement with other organizations or 
individuals to provide the appropriate services or other assistance that 
a beneficiary with a ticket may need to find and maintain employment 
that reduces dependency on disability benefits. ENs may include, but are 
not limited to:
    (a) Any public or private entity, including charitable and religious 
organizations, that can provide directly, or arrange for other 
organizations or entities to provide, employment services, vocational 
rehabilitation services, or other support services.
    (b) State agencies administering or supervising the administration 
of the State plan approved under title I of the Rehabilitation Act of 
1973, as amended (29 U.S.C. 720 et seq.) may choose, on a case-by-case 
basis, to be paid as an EN under the payment systems described in 
subpart H of this part. For the rules on State VR agencies' 
participation in the Ticket to Work program, see subpart F of this part. 
The rules in this subpart E apply to entities other than State VR 
agencies.
    (c) One-stop delivery systems established under subtitle B of title 
I of the Workforce Investment Act of 1998 (29 U.S.C. 2841 et seq.).
    (d) Alternate participants currently operating under the authority 
of section 222(d)(2) of the Social Security Act.
    (e) Organizations administering Vocational Rehabilitation Services 
Projects for American Indians with Disabilities authorized under section 
121 of part C of title I of the Rehabilitation Act of 1973, as amended 
(29 U.S.C. 750 et seq.).
    (f) Public or private schools that provide VR or employment 
services, conduct job training programs, or make services or programs 
available that can assist students with disabilities in acquiring 
specific job skills that lead to employment. This includes transition 
programs that can help students acquire work skills.
    (g) Employers that offer job training or other support services or 
assistance to help individuals with disabilities obtain and retain 
employment or arrange for individuals with disabilities to receive 
relevant services or assistance.

[[Page 771]]



Sec. 411.310  How does an entity other than a State VR agency apply
to be an EN and who will determine whether an entity qualifies as
an EN?

    (a) An entity other than a State VR agency applies by responding to 
our Request for Proposal (RFP), which we published in the Commerce 
Business Daily and which is available online through the Federal 
government's electronic posting system (http://www.eps.gov). This RFP 
also is available through SSA's website, http://www.ssa.gov/work. Since 
recruitment of ENs will be an ongoing process, the RFP is open and 
continuous. The entity must respond in a format prescribed in the RFP 
announcement. In its response, the entity must assure SSA that it is 
qualified to provide employment services, vocational rehabilitation 
services, or other support services to disabled beneficiaries, either 
directly or through arrangements with other entities.
    (b) The PM will solicit service providers and other qualified 
entities to respond to the RFP on an ongoing basis. (See Sec. 411.115(k) 
for a definition of the PM.) The PM will conduct a preliminary review of 
responses to the RFP from applicants located in the PM's service 
delivery area and make recommendations to the Commissioner regarding 
selection. The Commissioner will decide which applicants will be 
approved to serve as ENs under the program.
    (c) State VR agencies must comply with the requirements in subpart F 
of this part to participate as an EN in the Ticket to Work program. (See 
Secs. 411.360ff).
    (d) One-stop delivery systems established under subtitle B of title 
I of the Workforce Investment Act of 1998 (29 U.S.C. 2811 et seq.) may 
participate in the Ticket to Work program as ENs and do not need to 
respond to the RFP. However, in order to participate in the Ticket to 
Work program, the one-stop delivery system must enter into an agreement 
with the Commissioner to be an EN and must maintain compliance with 
general and specific selection criteria as described in Sec. 411.315 in 
order to remain an EN.
    (e) Organizations administering Vocational Rehabilitation Services 
Projects for American Indians with Disabilities authorized under section 
121 of part C of title I of the Rehabilitation Act of 1973, as amended 
(29 U.S.C. 741), may participate in the Ticket to Work program as ENs 
and do not need to respond to the RFP. However, in order to participate 
in the Ticket to Work program, the organization administering the 
project must enter into an agreement with the Commissioner to be an EN 
and must maintain compliance with general and specific selection 
criteria as described in Sec. 411.315 in order to remain an EN.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29344, May 20, 2008]



Sec. 411.315  What are the minimum qualifications necessary to be an EN?

    To serve as an EN under the Ticket to Work program, an entity must 
meet and maintain compliance with both general selection criteria and 
specific selection criteria.
    (a) The general criteria include:
    (1) having systems in place to protect the confidentiality of 
personal information about beneficiaries seeking or receiving services;
    (2) being accessible, both physically and programmatically, to 
beneficiaries seeking or receiving services (examples of being 
programmatically accessible include the capability of making documents 
and literature available in alternate media including Braille, recorded 
formats, enlarged print, and electronic media; and insuring that data 
systems available to clients are fully accessible for independent use by 
persons with disabilities);
    (3) not discriminating in the provision of services based on a 
beneficiary's age, gender, race, color, creed, or national origin;
    (4) having adequate resources to perform the activities required 
under the agreement with us or the ability to obtain them;
    (5) complying with the terms and conditions in the agreement with 
us, including delivering or coordinating the delivery of employment 
services, vocational rehabilitation services, and other support 
services; and

[[Page 772]]

    (6) implementing accounting procedures and control operations 
necessary to carry out the Ticket to Work program.
    (b) The specific criteria that an entity must meet to qualify as an 
EN include:
    (1)(i) Using staff who are qualified under applicable certification, 
licensing, or registration standards that apply to their profession 
including certification or accreditation by national accrediting or 
certifying organizations; or
    (ii) Using staff that are otherwise qualified based on education or 
experience, such as by using staff with experience or a college degree 
in a field related to the services the EN wants to provide, such as 
vocational counseling, human relations, teaching, or psychology; and
    (2) Taking reasonable steps to assure that if any medical and 
related health services are provided, such medical and health related 
services are provided under the formal supervision of persons licensed 
to prescribe or supervise the provision of these services in the State 
in which the services are performed.
    (c) Any entity must have applicable certificates, licenses or other 
credentials if such documentation is required by State law to provide 
vocational rehabilitation services, employment services or other support 
services.
    (d) We will not use the following as an EN:
    (1) any entity that has had its license, accreditation, 
certification, or registration suspended or revoked for reasons 
concerning professional competence or conduct or financial integrity;
    (2) any entity that has surrendered a license, accreditation, 
certification, or registration with a disciplinary proceeding pending; 
or
    (3) any entity that is precluded from Federal procurement or non-
procurement programs.
    (e) One-stop delivery systems established under subtitle B of title 
I of the Workforce Investment Act of 1998 (29 U.S.C. 2811 et seq.) are 
qualified to be ENs. A one-stop delivery system must enter into an 
agreement with the Commissioner to be an EN and must maintain compliance 
with general and specific selection criteria of this section and 
Sec. 411.305 in order to remain an EN.
    (f) Organizations administering Vocational Rehabilitation Services 
Projects for American Indians with Disabilities authorized under section 
121 of part C of title I of the Rehabilitation Act of 1973, as amended 
(29 U.S.C. 741), are qualified to be ENs. An organization administering 
such a project must enter into an agreement with the Commissioner to be 
an EN and must maintain compliance with general and specific selection 
criteria of this section and Sec. 411.305 in order to remain an EN.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29344, May 20, 2008]



Sec. 411.320  What are an EN's responsibilities as a participant in
the Ticket to Work program?

    An EN must--
    (a) Enter into an agreement with us.
    (b) Serve a prescribed service area. The EN must designate the 
geographic area in which it will provide services. This will be 
designated in the EN's agreement with us.
    (c) Provide services directly, or enter into agreements with other 
entities to provide employment services, vocational rehabilitation 
services, or other support services to beneficiaries with tickets.
    (d) Ensure that employment services, vocational rehabilitation 
services, and other support services provided under the Ticket to Work 
program are provided under appropriate individual work plans (IWPs).
    (e) Elect a payment system at the time of signing an agreement with 
us (see Sec. 411.505).
    (f) Develop and implement each IWP in partnership with each 
beneficiary receiving services in a manner that affords the beneficiary 
the opportunity to exercise informed choice in selecting an employment 
goal and specific services needed to achieve that employment goal. Each 
IWP must meet the requirements described in Sec. 411.465.

[[Page 773]]



Sec. 411.321  Under what conditions will SSA terminate an agreement
with an EN due to inadequate performance?

    We will terminate our agreement with an EN if it does not comply 
with the requirements under Secs. 411.320, Sec. 411.325, or the 
conditions in the agreement between SSA and the EN, including minimum 
performance standards relating to beneficiaries achieving self-
supporting employment and leaving the benefit rolls.



Sec. 411.325  What reporting requirements are placed on an EN as
a participant in the Ticket to Work program?

    An EN must:
    (a) Report to the PM in writing each time the EN accepts a ticket 
for assignment or the EN no longer wants a ticket assigned to it;
    (b) Submit a copy of each signed IWP to the PM;
    (c) Submit to the PM copies of amendments to a beneficiary's IWP;
    (d) Submit to the PM a copy of any agreement the EN has established 
with a State VR agency regarding the conditions under which the State VR 
agency will provide services to beneficiaries who are referred by the EN 
under the Ticket to Work program;
    (e) Submit information to assist the PM conducting the reviews 
necessary to assess a beneficiary's timely progress towards self-
supporting employment to determine if a beneficiary is using a ticket 
for purposes of suspending continuing disability reviews (see subpart C 
of this part);
    (f) Report to the PM the specific outcomes achieved with respect to 
specific services the EN provided or secured on behalf of beneficiaries 
whose tickets it accepted for assignment. Such reports shall conform to 
a national model prescribed by us and shall be submitted to the PM at 
least annually;
    (g) Provide a copy of its most recent annual report on outcomes to 
each beneficiary considering assigning a ticket to it and assure that a 
copy of its most recent report is available to the public while ensuring 
that personal information on beneficiaries is kept confidential;
    (h) Meet our financial reporting requirements. These requirements 
will be described in the agreements between ENs and the Commissioner, 
and will include submitting a financial report to the program manager on 
an annual basis;
    (i) Collect and record such data as we shall require, in a form 
prescribed by us; and
    (j) Adhere to all requirements specified in the agreement with the 
Commissioner and all regulatory requirements in this part 411.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29345, May 20, 2008]



Sec. 411.330  How will SSA evaluate an EN's performance?

    (a) We will periodically review the results of the work of each EN 
to ensure effective quality assurance in the provision of services by 
ENs.
    (b) In conducting such a review, we will solicit and consider the 
views of the individuals the EN serves and the PM which monitors the EN.
    (c) ENs must make the results of these periodic reviews available to 
disabled beneficiaries to assist them in choosing among available ENs.



    Subpart F_State Vocational Rehabilitation Agencies' Participation

               Participation in the Ticket to Work Program



Sec. 411.350  Must a State VR agency participate in the Ticket to 
Work program?

    A State VR agency may elect, but is not required, to participate in 
the Ticket to Work program as an EN. The State VR agency may elect on a 
case-by-case basis to participate in the Ticket to Work program as an 
EN, or it may elect to provide services to beneficiaries under the VR 
cost reimbursement option. (See Sec. 411.115(s) for a definition of the 
VR cost reimbursement option.)

[73 FR 29345, May 20, 2008]

[[Page 774]]



Sec. 411.355  What payment options does a State VR agency have?

    (a) The Ticket to Work program provides different payment options 
that are available to a State VR agency for providing services to 
disabled beneficiaries who have a ticket. A State VR agency participates 
in the program in one of two ways when providing services to a 
particular disabled beneficiary under the program. On a case-by-case 
basis, the State VR agency may participate either--
    (1) As an employment network (EN); or
    (2) Under the cost reimbursement payment system (see subpart V of 
part 404 and subpart V of part 416 of this chapter).
    (b) When the State VR agency serves a beneficiary with a ticket as 
an EN, the State VR agency will use the EN payment system it has elected 
for this purpose, either the outcome payment system or the outcome-
milestone payment system (described in subpart H of this part). The 
State VR agency will have periodic opportunities to change the payment 
system it uses when serving as an EN.
    (c) The State VR agency may seek payment only under its elected EN 
payment system whenever it serves as an EN. When serving a beneficiary 
who does not have a ticket that can be assigned pursuant to 
Sec. 411.140, the State VR agency may seek payment only under the cost 
reimbursement payment system.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29345, May 20, 2008]



Sec. 411.365  How does a State VR agency notify us about its choice
of a payment system for use when functioning as an EN?

    (a) The State VR agency must send us a letter telling us which EN 
payment system it will use when it functions as an EN with respect to a 
beneficiary who has a ticket.
    (b) The director of the State agency administering or supervising 
the administration of the State plan approved under title I of the 
Rehabilitation Act of 1973, as amended (29 U.S.C. 720 et seq.), or the 
director's designee must sign the State VR agency's letter described in 
paragraph (a) of this section.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29345, May 20, 2008]



Sec. 411.375  Does a State VR agency continue to provide services 
under the requirements of the State plan approved under title I of
the Rehabilitation Act of 1973, as amended (29 U.S.C. 720 et seq.), 
when functioning as an EN?

    Yes. The State VR agency must continue to provide services under the 
requirements of the State plan approved under title I of the 
Rehabilitation Act of 1973, as amended (29 U.S.C. 720 et seq.), even 
when functioning as an EN.

                              Ticket Status



Sec. 411.380  What does a State VR agency do if the State VR agency 
wants to determine whether a person seeking services has a ticket?

    A State VR agency can contact the Program Manager (PM) to determine 
if a person seeking VR services has a ticket and, if so, whether the 
ticket may be assigned to the State VR agency (see Sec. 411.140) or 
reassigned to the State VR agency (see Sec. 411.150). (See 
Sec. 411.115(k) for a definition of the PM.)



Sec. 411.385  What does a State VR agency do if a beneficiary who is 
eligible for VR services has a ticket that is available for assignment
or reassignment?

    (a) Once the State VR agency determines that a beneficiary is 
eligible for VR services, the beneficiary and a representative of the 
State VR agency must agree to and sign the individualized plan for 
employment (IPE) required under section 102(b) of the Rehabilitation Act 
of 1973, as amended (29 U.S.C. 722(b)). The State VR agency must submit 
the following information to the PM in order for the beneficiary's 
ticket to be considered in use:
    (1) A statement that an IPE has been agreed to and signed by both 
the beneficiary and a representative of the State VR agency;
    (2) A statement of the vocational goal outlined in the beneficiary's 
IPE; and

[[Page 775]]

    (3) A statement of the State VR agency's selection of the payment 
system (either the cost reimbursement payment system or the previously 
elected EN payment system) under which the State VR agency will seek 
payment for providing services to the beneficiary.
    (b) This information must be submitted to the PM in a format 
prescribed by us and must include the signatures of both the 
beneficiary, or a representative of the beneficiary, and a 
representative of the State VR agency.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29345, May 20, 2008]



Sec. 411.390  What does a State VR agency do if a beneficiary to whom
it is already providing services has a ticket that is available 
for assignment?

    If a beneficiary who is receiving services from the State VR agency 
under an existing IPE becomes eligible for a ticket that is available 
for assignment, the State VR agency must submit the information required 
in Sec. 411.385(a) to the PM. We require this information in order for 
the beneficiary's ticket to be considered in use. If a beneficiary who 
is receiving services from the State VR agency under an existing IPE 
becomes eligible for a ticket that is available for assignment, the 
State VR agency is limited to the cost reimbursement payment system, 
unless both the beneficiary and the State VR agency agree to have the 
ticket assigned to the State VR agency.

[73 FR 29345, May 20, 2008]



Sec. 411.395  Is a State VR agency required to provide periodic reports?

    (a) For cases where a State VR agency provided services functioning 
as an EN, the State VR agency will be required to prepare periodic 
reports on the specific outcomes achieved with respect to the specific 
services the State VR agency provided to or secured for disabled 
beneficiaries whose tickets it accepted for assignment. These reports 
must be submitted to the PM at least annually.
    (b) Regardless of the payment method selected, a State VR agency 
must submit information to assist the PM conducting the reviews 
necessary to assess a beneficiary's timely progress toward self-
supporting employment to determine if a beneficiary is using a ticket 
for purposes of suspending continuing disability reviews (see 
Secs. 411.190, 411.195 and 411.200).

          Referrals by Employment Networks to State VR Agencies



Sec. 411.400  Can an EN to which a beneficiary's ticket is assigned 
refer the beneficiary to a State VR agency for services?

    Yes. An EN may refer a beneficiary it is serving under the Ticket to 
Work program to a State VR agency for services. However, a referral can 
be made only if the State VR agency and the EN have an agreement that 
specifies the conditions under which services will be provided by the 
State VR agency. This agreement must be in writing and signed by the 
State VR agency and the EN prior to the EN referring any beneficiary to 
the State VR agency for services.

      Agreements Between Employment Networks and State VR Agencies



Sec. 411.405  When does an agreement between an EN and the State VR 
agency have to be in place?

    Each EN must have an agreement with the State VR agency prior to 
referring a beneficiary it is serving under the Ticket to Work program 
to the State VR agency for specific services.



Sec. 411.410  Does each referral from an EN to a State VR agency
require its own agreement?

    No. The agreements between ENs and State VR agencies should be 
broad-based and apply to all beneficiaries who may be referred by the EN 
to the State VR agency for services, although an EN and a State VR 
agency may want to enter into an individualized agreement to meet the 
needs of a single beneficiary.



Sec. 411.415  Who will verify the establishment of agreements between
ENs and State VR agencies?

    The PM will verify the establishment of these agreements. Each EN is 
required to submit a copy of the agreement it has established with the 
State VR agency to the PM.

[[Page 776]]



Sec. 411.420  What information should be included in an agreement
between an EN and a State VR agency?

    The agreement between an EN and a State VR agency should state the 
conditions under which the State VR agency will provide services to a 
beneficiary when the beneficiary is referred by the EN to the State VR 
agency for services. Examples of this information include-
    (a) Procedures for making referrals and sharing information that 
will assist in providing services;
    (b) A description of the financial responsibilities of each party to 
the agreement;
    (c) The terms and procedures under which the EN will pay the State 
VR agency for providing services; and
    (d) Procedures for resolving disputes under the agreement.



Sec. 411.425  What should a State VR agency do if it gets an attempted
referral from an EN and no agreement has been established between the
EN and the State VR agency?

    The State VR agency should contact the EN to discuss the need to 
establish an agreement. If the State VR agency and the EN are not able 
to negotiate acceptable terms for an agreement, the State VR agency 
should notify the PM that an attempted referral has been made without an 
agreement.



Sec. 411.430  What should the PM do when it is informed that an EN has
attempted to make a referral to a State VR agency without an agreement
being in place?

    The PM will contact the EN to explain that a referral cannot be made 
to the State VR agency unless an agreement has been established that 
sets out the conditions under which services will be provided when a 
beneficiary's ticket is assigned to the EN and the EN is referring the 
beneficiary to the State VR agency for specific services.

Resolving Disputes Arising Under Agreements Between Employment Networks 
                          and State VR Agencies



Sec. 411.435  How will disputes arising under the agreements between
ENs and State VR agencies be resolved?

    Disputes arising under agreements between ENs and State VR agencies 
must be resolved using the following steps:
    (a) When procedures for resolving disputes are spelled out in the 
agreement between the EN and the State VR agency, those procedures must 
be used.
    (b) If procedures for resolving disputes are not included in the 
agreement between the EN and the State VR agency and procedures for 
resolving disputes under contracts and interagency agreements are 
provided for in State law or administrative procedures, the State 
procedures must be used to resolve disputes under agreements between ENs 
and State VR agencies.
    (c) If procedures for resolving disputes are not spelled out in the 
agreement or in State law or administrative procedures, the EN or the 
State VR agency may request that the PM recommend a resolution to the 
dispute.
    (1) The request must be in writing and include:
    (i) a copy of the agreement;
    (ii) information on the issue(s) in dispute; and
    (iii) information on the position of both the EN and the State VR 
agency regarding the dispute.
    (2) The PM has 20 calendar days after receiving a written request to 
recommend a resolution to the dispute. If either the EN or the State VR 
agency does not agree with the PM's recommended resolution to the 
dispute, the EN or the State VR agency has 30 calendar days after 
receiving the PM's recommendation to request a decision by us on the 
matter in dispute.



            Subpart G_Requirements For Individual Work Plans



Sec. 411.450  What is an Individual Work Plan?

    An individual work plan (IWP) is a required written document signed 
by an employment network (EN) (other

[[Page 777]]

than a State VR agency) and a beneficiary, or a representative of a 
beneficiary, with a ticket. It is developed and implemented in 
partnership when a beneficiary and an EN have come to a mutual 
understanding to work together to pursue the beneficiary's employment 
goal under the Ticket to Work program.



Sec. 411.455  What is the purpose of an IWP?

    The purpose of an IWP is to outline the specific employment 
services, vocational rehabilitation services and other support services 
that the EN and beneficiary have determined are necessary to achieve the 
beneficiary's stated employment goal. An IWP provides written 
documentation for both the EN and beneficiary. Both parties should 
develop and implement the IWP in partnership. The EN shall develop and 
implement the plan in a manner that gives the beneficiary the 
opportunity to exercise informed choice in selecting an employment goal. 
Specific services needed to achieve the designated employment goal are 
discussed and agreed to by both parties.



Sec. 411.460  Who is responsible for determining what information 
is contained in the IWP?

    The beneficiary and the EN share the responsibility for determining 
the employment goal and the specific services needed to achieve that 
employment goal. The EN will present information and options in a way 
that affords the beneficiary the opportunity to exercise informed choice 
in selecting an employment goal and specific services needed to achieve 
that employment goal.



Sec. 411.465  What are the minimum requirements for an IWP?

    (a) An IWP must include at least--
    (1) A statement of the vocational goal developed with the 
beneficiary, including, as appropriate, goals for earnings and job 
advancement;
    (2) A statement of the services and supports necessary for the 
beneficiary to accomplish that goal;
    (3) A statement of any terms and conditions related to the provision 
of these services and supports;
    (4) A statement that the EN may not request or receive any 
compensation for the costs of services and supports from the 
beneficiary;
    (5) A statement of the conditions under which an EN may amend the 
IWP or terminate the relationship;
    (6) A statement of the beneficiary's rights under the Ticket to Work 
program, including the right to retrieve the ticket at any time if the 
beneficiary is dissatisfied with the services being provided by the EN;
    (7) A statement of the remedies available to the beneficiary, 
including information on the availability of advocacy services and 
assistance in resolving disputes through the State Protection and 
Advocacy (P&A) System;
    (8) A statement of the beneficiary's rights to privacy and 
confidentiality regarding personal information, including information 
about the beneficiary's disability;
    (9) A statement of the beneficiary's right to seek to amend the IWP 
(the IWP can be amended if both the beneficiary and the EN agree to the 
change); and
    (10) A statement of the beneficiary's right to have a copy of the 
IWP made available to the beneficiary, including in an accessible format 
chosen by the beneficiary.
    (b) The EN will be responsible for ensuring that each IWP contains 
this information.



Sec. 411.470  When does an IWP become effective?

    (a) An IWP becomes effective if the following requirements are met--
    (1) It has been signed by the beneficiary or the beneficiary's 
representative, and by a representative of the EN;
    (2)(i) The beneficiary is eligible to assign his or her ticket under 
Sec. 411.140(a); or
    (ii) The beneficiary is eligible to reassign his or her ticket under 
Sec. 411.150(a) and (b); and
    (3) A representative of the EN submits a copy of the signed IWP to 
the PM and the PM receives the copy of the IWP.
    (b) If all of the requirements in paragraph (a) of this section are 
met, the IWP will be effective on the first day

[[Page 778]]

on which the requirements of paragraphs (a)(1) and (a)(2) of this 
section are met.



              Subpart H_Employment Network Payment Systems



Sec. 411.500  Definitions of terms used in this subpart.

    (a) Payment calculation base means for any calendar year--
    (1) In connection with a title II disability beneficiary (including 
a concurrent title II/title XVI disability beneficiary), the average 
monthly disability insurance benefit payable under section 223 of the 
Act for months during the preceding calendar year to all beneficiaries 
who are in current pay status for the month for which the benefit is 
payable; and
    (2) In connection with a title XVI disability beneficiary (who is 
not concurrently a title II disability beneficiary), the average monthly 
payment of Supplemental Security Income (SSI) benefits based on 
disability payable under title XVI (excluding State supplementation) for 
months during the preceding calendar year to all beneficiaries who--
    (i) Have attained age 18 but have not attained age 65;
    (ii) Are not concurrent title II/title XVI beneficiaries; and
    (iii) Are in current pay status for the month for which the payment 
is made.
    (b) Outcome payment period means a period of 36 months for a title 
II disability beneficiary or a period of 60 months for a title XVI 
disability beneficiary who is not concurrently a title II disability 
beneficiary, not necessarily consecutive, for which Social Security 
disability benefits and Federal SSI cash benefits are not payable to the 
beneficiary because of the performance of substantial gainful activity 
(SGA) or by reason of earnings from work activity. The outcome payment 
period begins with the first month, ending after the date on which the 
ticket was first assigned to an EN (or to a State VR agency acting as an 
EN), for which such benefits are not payable to the beneficiary because 
of SGA or by reason of earnings from work activity. The outcome payment 
period ends as follows:
    (1) For a title II disability beneficiary (including a concurrent 
title II/title XVI disability beneficiary), the outcome payment period 
ends with the 36th month, consecutive or otherwise, ending after the 
date on which the ticket was first assigned to an EN (or to a State VR 
agency acting as an EN), for which Social Security disability benefits 
and Federal SSI cash benefits are not payable to the beneficiary because 
of earnings from work activity (except as provided for in Sec. 411.551).
    (2) For a title XVI disability beneficiary who is not concurrently a 
title II disability beneficiary, the outcome payment period ends with 
the 60th month, consecutive or otherwise, ending after the date on which 
the ticket was first assigned to an EN (or to a State VR agency acting 
as an EN), for which Federal SSI cash benefits are not payable to the 
beneficiary by reason of earnings from work activity (except as provided 
for in Sec. 411.551).
    (c) Outcome payment system is a system providing a schedule of 
payments to an EN (or a State VR agency acting as an EN) for each month, 
during an individual's outcome payment period, for which Social Security 
disability benefits and Federal SSI cash benefits are not payable to the 
individual because of work or earnings.
    (d) Outcome payment means the payment for an outcome payment month.
    (e) Outcome payment month means a month, during the beneficiary's 
outcome payment period, for which Social Security disability benefits 
and Federal SSI cash benefits are not payable to the beneficiary because 
of work or earnings.
    (f) Outcome-milestone payment system is a system providing a 
schedule of payments to an EN (or State VR agency acting as an EN) that 
includes, in addition to any outcome payments which may be made during 
the individual's outcome payment period, payments for completion by a 
title II or title XVI disability beneficiary of up to four Phase 1 
milestones; and up to eleven Phase 2 milestones for a title II 
disability beneficiary or a concurrent beneficiary or up to eighteen 
Phase 2 milestones for a title XVI disability beneficiary who is not a 
concurrent title II disability beneficiary.

[[Page 779]]

    (1) Phase 1 milestones are based on the beneficiary achieving a 
level of earnings that reflects initial efforts at self-supporting 
employment. They are based on the earnings threshold that we use to 
establish a trial work period service month as defined in 
Sec. 404.1592(b) of this chapter. We use this threshold amount as 
defined in Sec. 404.1592(b) of this chapter in order to measure whether 
the beneficiary's earnings level meets the milestone objective.
    (2) Phase 2 milestones are based on the beneficiary achieving a 
level of earnings that reflects substantial efforts at self-supporting 
employment. They are based on the earnings threshold that we use to 
determine if work activity is SGA. We use the SGA earnings threshold 
amount in Sec. 404.1574(b)(2) of this chapter. We use the SGA threshold 
amounts in order to measure whether the beneficiary's gross earnings 
level meets the milestone objective.
    (g) Transition case is a case where milestones or outcomes had been 
attained before July 21, 2008 (that is, the work required to meet such a 
milestone or outcome had been completed by that date). Section 411.551 
explains how subsequent payments will be made to the EN (or State VR 
agency acting as an EN) on a transition case.
    (h) Reconciliation payment is a final payment equal to the milestone 
payments that are unpaid when the beneficiary enters the outcome payment 
period before all the milestone payments are paid (see Secs. 411.525(c) 
and 411.536).

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29345, May 20, 2008]



Sec. 411.505  How is an EN paid?

    An EN (including a State VR agency acting as an EN) can elect to be 
paid under either the outcome payment system or the outcome-milestone 
payment system. The EN will elect a payment system at the time the EN 
enters into an agreement with us. (For State VR agencies, see 
Sec. 411.365.) The EN (or State VR agency) may periodically change its 
elected EN payment system as described in Sec. 411.515.

[73 FR 29346, May 20, 2008]



Sec. 411.510  How is the State VR agency paid under the Ticket
to Work program?

    (a) The State VR agency's payment choices are described in 
Sec. 411.355.
    (b) The State VR agency's decision to serve the beneficiary must be 
communicated to the program manager (PM). (See Sec. 411.115(k) for a 
definition of the PM.) At the same time, the State VR agency must notify 
the PM of its selected payment system for that beneficiary.
    (c) If a beneficiary who is receiving services from the State VR 
agency under an existing IPE becomes eligible for a ticket that is 
available for assignment, the State VR agency is limited to the cost 
reimbursement payment system, unless both the beneficiary and the State 
VR agency agree to have the ticket assigned to the State VR agency (see 
Sec. 411.390).

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29346, May 20, 2008]



Sec. 411.515  Can the EN change its elected payment system?

    (a) Yes. Any change by an EN in its elected EN payment system will 
apply to beneficiaries who assign their ticket to the EN after the EN's 
change in election becomes effective. A change in the EN's election will 
become effective with the first day of the month following the month in 
which the EN notifies us of the change. For beneficiaries who already 
assigned their ticket to the EN under the EN's earlier elected payment 
system, the EN's earlier elected payment system will continue to apply. 
These rules also apply to a change by a State VR agency in its elected 
EN payment system for cases in which the State VR agency serves a 
beneficiary as an EN.
    (b) After an EN (or a State VR agency) first elects an EN payment 
system, the EN (or State VR agency) can choose to make one change in its 
elected payment system in each calendar year (January-December) 
thereafter. The first EN payment system election constitutes the only 
election an EN may make for that calendar year.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29346, May 20, 2008]

[[Page 780]]



Sec. 411.520  How are beneficiaries whose tickets are assigned to
an EN affected by a change in that EN's elected payment system?

    A change in an EN's (or State VR agency's) elected payment system 
has no effect upon the beneficiaries who have assigned their ticket to 
the EN (or State VR agency).



Sec. 411.525  What payments are available under each of the EN
payment systems?

    (a) For payments for outcome payment months, both EN payment systems 
use the payment calculation base as defined in Sec. 411.500(a)(1) or 
(a)(2), as appropriate.
    (1)(i) Under the outcome payment system, we can pay up to 36 outcome 
payments to the EN (or State VR agency acting as an EN) for a title II 
disability beneficiary (including a concurrent title II/title XVI 
disability beneficiary). We can pay up to 60 outcome payments to the EN 
(or State VR agency acting as an EN) for a title XVI disability 
beneficiary who is not concurrently a title II disability beneficiary. 
For each month during the beneficiary's outcome payment period for which 
Social Security disability benefits and Federal SSI cash benefits are 
not payable to the beneficiary because of the performance of SGA or by 
reason of earnings from work activity, the EN (or the State VR agency 
acting as an EN) is eligible for a monthly outcome payment. Payment for 
an outcome payment month under the outcome payment system is equal to 
67% of the payment calculation base for the calendar year in which such 
month occurs, rounded to the nearest whole dollar (see Sec. 411.550).
    (ii) If a disabled beneficiary's entitlement to Social Security 
disability benefits ends (see Secs. 404.316(b), 404.337(b) and 
404.352(b) of this chapter) or eligibility for SSI benefits based on 
disability or blindness terminates (see Sec. 416.1335 of this chapter) 
because of the performance of SGA or by reason of earnings from work 
activity, we will consider any month after the month with which such 
entitlement ends or eligibility terminates to be a month for which 
Social Security disability benefits and Federal SSI cash benefits are 
not payable to the individual because of work or earnings if--
    (A) The individual has gross earnings from employment (or net 
earnings from self-employment as defined in Sec. 416.1110(b) of this 
chapter) in that month that are more than the SGA threshold amount in 
Sec. 404.1574(b)(2) of this chapter (or in Sec. 404.1584(d) of this 
chapter for an individual who is statutorily blind); and
    (B) The individual is not entitled to any monthly benefits under 
title II or eligible for any benefits under title XVI for that month.
    (2) Under the outcome-milestone payment system:
    (i) We can pay the EN (or State VR agency acting as an EN) for up to 
four Phase 1 milestones attained within the required earnings period for 
a title II or title XVI disability beneficiary who has assigned his or 
her ticket to the EN (or State VR agency acting as an EN). The first 
Phase 1 milestone is met when a beneficiary has worked in a month and 
earned at least 50% of the amount of earnings considered to represent a 
trial work period service month as defined in Sec. 404.1592(b) of this 
chapter. The second Phase 1 milestone is met after a beneficiary has 
worked for three months within a six-month period and has gross earnings 
in each of those three months equal to or greater than a trial work 
period service amount as defined in Sec. 404.1592(b) of this chapter. 
The third Phase 1 milestone is met after a beneficiary has worked for a 
total of six months within a twelve-month period and had gross earnings 
in each of those six months equal to a trial work period service amount 
as defined in Sec. 404.1592(b) of this chapter. The fourth Phase 1 
milestone is met after a beneficiary has worked a total of nine months 
within an 18-month period and had gross earnings in each of those nine 
months equal to a trial work period service amount as defined in 
Sec. 404.1592(b) of this chapter and the EN has substantially completed 
the services agreed to in the IWP/IPE, including any amendments. 
Earnings used to meet the first, second or third Phase 1 milestone may 
be counted again when

[[Page 781]]

determining if a later Phase 1 milestone is met, provided the earlier 
earnings fall within the relevant time period for meeting the later 
milestone.
    (ii) We can also pay the EN (or State VR agency acting as an EN) up 
to eleven Phase 2 milestones achieved by a title II disability 
beneficiary (including a concurrent title II/title XVI disability 
beneficiary) or up to eighteen Phase 2 milestones achieved by a title 
XVI disability beneficiary (who is not concurrently a title II 
disability beneficiary) who has assigned his or her ticket to the EN (or 
State VR agency acting as an EN). A Phase 2 milestone is met for each 
calendar month in which the beneficiary has worked and has gross 
earnings from employment (or net earnings from self-employment as 
defined in Sec. 404.1080 of this chapter) in that month that are more 
than the SGA threshold amount as defined in Sec. 404.1574 of this 
chapter.
    (iii) We pay available milestone payments in sequence except when 
the beneficiary's outcome period begins before the beneficiary has 
achieved all Phase 1 and Phase 2 milestones. Example: The individual, in 
the first month of employment after assigning the ticket, earns above 
the SGA level. Despite having exceeded trial work period level earnings 
and earned above the SGA level as required for Phase 2 payments in 
paragraph (a)(2)(ii) of this section, based on the individual's earning 
we would pay the EN the sequentially available milestone, which in this 
case would be Phase 1, milestone 1.
    (iv) In addition to the milestone payments, monthly outcome payments 
can be paid to the EN (or State VR agency acting as an EN) during the 
outcome payment period.
    (b) The outcome-milestone payment system is designed so that the 
total payments to the EN (or the State VR agency acting as an EN) for a 
beneficiary are less than the total amount that would have been paid if 
the EN were paid under the outcome payment system. Under the outcome-
milestone payment system, the total payment to the EN (or the State VR 
agency acting as an EN) is about 90% of the total that would have been 
potentially payable under the outcome payment system for the same 
beneficiary.
    (c) Except as provided in Sec. 411.536 (reconciliation payments) the 
milestones for which payments may be made must occur prior to the 
beginning of the beneficiary's outcome payment period.
    (d) We will pay an EN (or State VR agency acting as an EN) to which 
the beneficiary has assigned a ticket for milestones or outcomes 
achieved only in months prior to the month in which the ticket 
terminates (see Sec. 411.155). We will not pay a milestone or outcome 
payment to an EN (or State VR agency acting as an EN) based on a 
beneficiary's work or earnings activity in or after the month in which 
the ticket terminates.
    (e) If a title XVI disability beneficiary becomes entitled to title 
II benefits after we authorize the first milestone or outcome payment, 
we will continue to calculate the EN payments using title XVI payment 
calculation base under the outcome payment system on the basis of 
paragraph (a)(1)(i) and under the outcome-milestone payment system on 
the basis of paragraph (a)(2). This applies even if the title XVI 
eligibility is subsequently terminated and the person becomes only a 
title II beneficiary.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29346, May 20, 2008]



Sec. 411.535  Under what circumstances will milestones be paid?

    (a)(1)(i) Under the outcome-milestone payment system, an EN (or a 
State VR agency acting as an EN) can earn up to four Phase 1 milestone 
payments for serving beneficiaries whose gross earnings were less than 
the trial work level in each of the 18 months before the ticket was 
first assigned to an EN. All work and earnings counted toward reaching 
the four Phase 1 milestones must occur after the ticket is assigned and 
before the beginning of the beneficiary's outcome payment period (see 
Sec. 411.500(f)) except as provided in Sec. 411.536 (reconciliation 
payments).
    (ii) Significant work activity prior to ticket assignment will limit 
the availability of Phase 1 milestone payments. The PM will make this 
assessment of work activity prior to the first ticket assignment on each 
ticket, irrespective of the EN's chosen payment system, in

[[Page 782]]

order to determine how many milestone payments may be available for 
serving an individual in the Ticket to Work program. The first Phase 1 
milestone payment is not available to be made to an EN if the 
beneficiary has worked above the trial work level in the calendar month 
prior to the first ticket assignment on each ticket in the Ticket to 
Work program. The second Phase 1 milestone payment is not available if 
the beneficiary has worked above the trial work level in three of the 
six months prior to the first ticket assignment on each ticket in the 
Ticket to Work program. The third Phase 1 milestone is not available if 
the beneficiary has worked above the trial work level in six of the 
twelve months prior to the first ticket assignment on each ticket in the 
Ticket to Work program. The fourth Phase 1 milestone is not available if 
the beneficiary has worked above the trial work level in nine of the 18 
months prior to the first ticket assignment on each ticket in the Ticket 
to Work program.
    (iii) If a beneficiary had a ticket that otherwise was available for 
assignment and chose to receive services under an IPE from a State VR 
agency that elected the VR cost reimbursement option, payment of Phase 1 
milestones to an EN or a different VR agency acting as an EN with 
respect to the same ticket is precluded if the State VR Agency that 
elected the VR cost reimbursement option achieved an employment outcome 
(as described in 34 CFR 361.56) before case closure. An EN or a 
different VR agency acting as an EN can be paid Phase 2 milestones as 
described in paragraph (2) of this section with respect to this ticket.
    (2) Under the outcome-milestone payment system, an EN can receive up 
to eleven Phase 2 milestone payments for work by a title II disability 
beneficiary (including a concurrent title II/title XVI disability 
beneficiary), or up to eighteen Phase 2 milestone payments for work by a 
title XVI disability beneficiary. Earnings prior to the first assignment 
of the ticket in the Ticket to Work program are not taken into account 
when determining whether sufficient earnings exist for payment of Phase 
2 milestones.
    (3) If the beneficiary's outcome payment period begins before the 
beneficiary has achieved all Phase 1 and Phase 2 milestones, then we 
will pay the EN a final payment in accordance with Sec. 411.536 
(reconciliation payments) to account for unpaid milestone payments that 
had been available when the ticket was first assigned.
    (b) An EN can be paid for a milestone only if the milestone is 
attained after a beneficiary has assigned his or her ticket to the EN. 
See Sec. 411.575 for other milestone payment criteria.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29347, May 20, 2008]



Sec. 411.536  Under what circumstances can we make a reconciliation
payment under the outcome-milestone payment system?

    When the beneficiary's outcome payment period begins before the 
beneficiary has attained all Phase 1 and Phase 2 milestones, we will pay 
the EN (or a State VR agency acting as an EN) a reconciliation payment. 
The reconciliation payment will equal the total amount of the milestone 
payments that were available with respect to that ticket, when the 
ticket was first assigned, but that have not yet been paid. The 
reconciliation payment will be based on the payment calculation base for 
the calendar year in which the first month of the beneficiary's outcome 
period occurs, rounded to the nearest whole dollar. The payment will be 
made after an EN has qualified for 12 outcome payments. Where multiple 
ENs had the ticket assigned at some time, the PM will apply the rule 
under Sec. 411.560 to determine the allocation of the reconciliation 
payment.

[73 FR 29347, May 20, 2008]



Sec. 411.540  How are the payment amounts calculated for each 
of the milestones?

    (a) For both title II disability beneficiaries and title XVI 
disability beneficiaries, the payment amount for each of the Phase 1 
milestone payments is equal to 120% of the payment calculation base for 
title II (as defined in Sec. 411.500(a)(1)) for the calendar year in 
which the month of attainment of the

[[Page 783]]

milestone occurs, rounded to the nearest whole dollar.
    (b) The payment amount for each of the Phase 2 milestones:
    (1) For title II disability beneficiaries (including concurrent 
title II/title XVI disability beneficiaries) is equal to 36% of the 
payment calculation base as defined in Sec. 411.500(a)(1) for the 
calendar year in which the month of attainment of the milestone occurs, 
rounded to the nearest whole dollar;
    (2) For title XVI beneficiaries (who are not concurrently title II 
disability beneficiaries) is equal to 36% of the payment calculation 
base as defined in Sec. 411.500(a)(2) for the calendar year in which the 
month of attainment of the milestone occurs, rounded to the nearest 
whole dollar.

[73 FR 29347, May 20, 2008]



Sec. 411.545  How are the outcome payments calculated under the 
outcome-milestone payment system?

    The amount of each monthly outcome payment under the outcome-
milestone payment system is calculated as follows:
    (a) For title II disability beneficiaries (including concurrent 
title II/title XVI disability beneficiaries), an outcome payment is 
equal to 36 percent of the payment calculation base as defined in 
Sec. 411.500(a)(1) for the calendar year in which the month occurs, 
rounded to the nearest whole dollar;
    (b) For title XVI disability beneficiaries (who are not concurrently 
title II/title XVI disability beneficiaries), an outcome payment is 
equal to 36% of the payment calculation base as defined in 
Sec. 411.500(a)(2) for the calendar year in which the month occurs, 
rounded to the nearest whole dollar.
    (c) The following chart provides an example of how an EN could 
receive milestone and outcome payments:

                                         Outcome-Milestone Payment Table
                                  Chart I--New Outcome-Milestone Payment Table
                                      [2008 figures for illustration only]
----------------------------------------------------------------------------------------------------------------
                                     Beneficiary
          Payment type                earnings         Title II amount of payment    Title XVI amount of payment
----------------------------------------------------------------------------------------------------------------
Phase 1 (120% of Title II PCB)
    Milestone 1................  $335/mo. $670/mo.   $1,177.......................  $1,177
                                  x  3 mo. work in
                                  a 6-month period.
    Milestone 2................  $1,177............  $1,177.......................
    Milestone 3................  $670/mo.  x  6 mo.  $1,177.......................  $1,177
                                  work in a 12-
                                  month period.
    Milestone 4................  $670/mo.  x  9 mo.  $1,177.......................  $1,177
                                  work in an 18-
                                  month period.
\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
        Total Phase 1            ..................  $4,708.......................  $4,708
         milestones.
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Phase 2 (36% of PCB)...........  Gross EarningsSGA
Title II milestones 1-11.......  $353  x  11 =
                                  $3,883
Title XVI milestones 1-18......  $203  x  18 =
                                  $3,654.
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total Phase 1 + 2..........  $8,591............  $8,362.......................
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
                                 Outcome payments
                                  (36% of PCB).
    Title II = 1-36............  Monthly cash        $353  x  36 = $12,708
                                  benefit not
                                  payable due to
                                  SGA.
    Title XVI = 1-60...........  Sufficient          203  x  60 = $12,180.........
                                  earnings for
                                  federal cash
                                  benefits = ``0''.
                                --------------------------------------------------------------------------------
        Total milestone and      $21,299...........  $20,542......................
         outcome payments.
----------------------------------------------------------------------------------------------------------------

    Definitions and amounts: Payment Calculation Base (PCB)--The average 
title II disability insurance benefit payable under section 223 of the 
Social Security Act for all beneficiaries for months during the 
preceding calendar

[[Page 784]]

year; and the average payment of supplemental security income benefits 
based on disability payable under title XVI (excluding State 
supplementation) for months during the preceding calendar year to all 
beneficiaries who have attained 18 years of age but have not attained 65 
years of age. (2008 title II = $981.17, title XVI = $563.35).
    Gross earnings requirements for Phase 1 are based on Trial Work 
level amounts.
    For Phase 1 milestones only, the payments are calculated for both 
title XVI and title II beneficiaries using the higher title II payment 
calculation base. All other payments are based on a percentage of the 
Payment Calculation Base (PCB) for the respective program (title XVI or 
title II). See Sec. 411.535 for a discussion of the circumstances under 
which we will pay milestones.
    Phase 1 milestones = 120% of PCB.
    Phase 2 milestones = 36% of PCB.
    Outcome payments (under the outcome-milestone payment system) = 36% 
of PCB Earnings used to meet the first, second, or third Phase 1 
milestone may be counted again when determining if a later milestone is 
met, provided the earlier earnings fall within the relevant time period 
for meeting the later Phase 1 milestone (see 411.525(a)(2) for the 
relevant time period for each milestone).

[73 FR 29348, May 20, 2008]



Sec. 411.550  How are the outcome payments calculated under the 
outcome payment system?

    The amount of each monthly outcome payment under the outcome payment 
system is calculated as follows:
    (1) For title II disability beneficiaries (including concurrent 
title II/title XVI disability beneficiaries), an outcome payment is 
equal to 67% of the payment calculation base as defined in 
Sec. 411.500(a)(1) for the calendar year in which the month occurs, 
rounded to the nearest whole dollar;
    (2) For title XVI disability beneficiaries (who are not concurrently 
title II/title XVI disability beneficiaries), an outcome payment is 
equal to 67% of the payment calculation base as defined in 
Sec. 411.500(a)(2) for the calendar year in which the month occurs, 
rounded to the nearest whole dollar.

                       Chart II--New Outcome Payment System Table--Title II and Concurrent
                                      [2008 figures for illustration only]
----------------------------------------------------------------------------------------------------------------
                                                                                Title II amount   Title II total
                 Payment type                        Beneficiary earnings          of monthly        outcome
                                                                                outcome payment      payments
----------------------------------------------------------------------------------------------------------------
Outcome payments 1-36 (67% of PCB)...........  Monthly cash benefit not                $657.00          $23,652
                                                payable due to SGA.
----------------------------------------------------------------------------------------------------------------


                           Chart III--New Outcome Payment System Table--Title XVI Only
                                      [2008 figures for illustration only]
----------------------------------------------------------------------------------------------------------------
                                                                                   Title XVI
                                                                                   amount of     Title XVI total
                 Payment type                        Beneficiary earnings       monthly outcome      outcome
                                                                                    payment          payments
----------------------------------------------------------------------------------------------------------------
Outcome payments 1-60 (67% of PCB)...........  Earnings sufficient to ``0''            $377.00          $22,620
                                                out Federal SSI cash benefits.
----------------------------------------------------------------------------------------------------------------

    Note: Outcome payment (outcome payment system) = 67% of PCB 
Individual payments are rounded to the nearest dollar amount.
    2008 non-blind SGA level = $940.
    2008 Blind SGA = $1570.
    2008 TWP service amount = $670.

[73 FR 29348, May 20, 2008]



Sec. 411.551  How are EN payments calculated for transition cases
pending on July 21, 2008?

    A Transition case is a case where a ticket had been assigned and 
milestones or outcomes had been attained as of June 30, 2008 (that is, 
the individual has completed the necessary work to trigger a milestone 
or outcome payment before July 21, 2008 regardless

[[Page 785]]

of whether the payment has actually been made). We will pay outcome and 
milestone payments at the rate in effect when the work leading to such 
outcome or milestone is attained. Since milestone and outcome payments 
are numbered and attained in sequence, the EN must request the final 
payment for which it expects payment under the prior rules before we can 
determine the number of the milestone or outcome payment that represents 
the first payment after July 21, 2008. In addition, for cases on which 
an EN has attained an outcome payment before July 21, 2008 we must know 
the sum of the amount paid on the ticket before we can determine the 
remaining amount that can be paid in outcome payments on the ticket. 
Therefore, with respect to a ticket, we will only accept payment 
requests for milestones or outcomes attained under the prior rules until 
March 31, 2009 or until we make the first payment on the ticket under 
Sec. 411.525. Payments to an EN (or State VR agency acting as an EN) 
after July 21, 2008 on a transition case will be made as follows:
    (a) The four milestones under the prior rules will be equated with 
the four Phase 1 milestones available under the rules after July 21, 
2008. For example, if a beneficiary had attained milestone 1 under our 
prior rules (1 month above the gross SGA level, e.g., $940 in 2008), 
then the next milestone to be achieved would be Phase 1 milestone 2 
under these rules (work in three months with gross earnings in each of 
these months equal to a trial work period service month, e.g., $670 in 
2008).
    (b) If the beneficiary had attained all four of the milestones under 
the prior rules, the next milestone to be achieved would be the first 
Phase 2 milestone (a calendar month in which the beneficiary has worked 
and has gross earnings from employment or net earnings from self-
employment that are more than the substantial gainful activity threshold 
level, e.g., $900 in 2007).
    (c) The maximum number of outcome payments available to an EN with 
respect to a ticket for a transition case will be computed as follows:
    (1) First, we will compute the total dollar amount already paid or 
payable with respect to a ticket, including all outcome and milestone 
payments.
    (2) Then, we will subtract the total dollar amount already paid from 
the total value of the ticket under the new rules for the year when 
these rules take effect. The total value of the ticket will be 
calculated based on the elected payment system for the beneficiary, 
i.e., the outcome or the outcome-milestone payment system, and on the 
appropriate payment calculation base for either a title II disability 
beneficiary (including a concurrent title II and title XVI disability) 
or a title XVI disability beneficiary (see Secs. 411.500 and 411.505). 
For accounting purposes, we will use the payment calculation base for 
2008 and assume that all payments could be earned in that year in 
calculating the total value of the ticket.
    (3) We then will divide this amount by the applicable outcome 
payment amount (whether title II or title XVI) payable for 2008 and 
round the result in accordance with customary rounding principles. The 
resulting number represents the number of outcome payments available to 
be paid with respect to the ticket. In no case can this number exceed 
60.

[73 FR 29349, May 20, 2008]



Sec. 411.552  What effect will the subsequent entitlement to title II
benefits have on EN payments for title XVI beneficiaries after they 
assign their ticket?

    If a beneficiary is only eligible for title XVI benefits when we 
authorize the first milestone or outcome for which an EN can be paid, 
but the beneficiary later becomes entitled to title II benefits, we will 
continue to make payments as though the beneficiary were only a title 
XVI beneficiary, up to the maximum number of milestone and outcome 
payments payable for that ticket for title XVI beneficiaries. If a 
beneficiary who is eligible for title XVI disability benefits becomes 
entitled to title II disability benefits before we authorize the first 
milestone or outcome payment, we will make payments to the EN pursuant 
to the rate, payment calculation base and number of payments available 
for title II beneficiaries, as described in this subpart.

[73 FR 29349, May 20, 2008]

[[Page 786]]



Sec. 411.555  Can the EN keep the milestone and outcome payments even 
if the beneficiary does not achieve all outcome months?

    (a) Yes. The EN (or State VR agency acting as an EN) can keep each 
milestone and outcome payment for which the EN (or State VR agency 
acting as an EN) is eligible, even though the title II beneficiary does 
not achieve all 36 outcome months or the title XVI beneficiary does not 
achieve all 60 outcome months.
    (b) Except as provided in paragraph (c) of this section, payments 
which we make or deny to an EN (or a State VR agency acting as an EN) 
may be subject to adjustment (including recovery, as appropriate) if we 
determine that more or less than the correct amount was paid. This may 
happen, for example, because we determine that the payment determination 
was in error or because of an allocation of payment under Sec. 411.560.
    (c) If we determine that an overpayment or underpayment to an EN has 
occurred, we will notify the EN (or State VR agency acting as an EN) of 
the adjustment. We will not seek an adjustment if a determination or 
decision about a beneficiary's right to benefits causes an overpayment 
to the EN. Any dispute which the EN (or State VR agency) has regarding 
the adjustment may be resolved under the rules in Sec. 411.590(a) and 
(b).

[73 FR 29349, May 20, 2008]



Sec. 411.560  Is it possible to pay a milestone or outcome payment 
to more than one EN?

    It is possible for more than one EN (including a State VR agency 
acting as an EN) to receive payment based on the same milestone or 
outcome. If the beneficiary has assigned the ticket to more than one EN 
(or State VR agency acting as an EN) at different times, and more than 
one EN (or State VR agency) requests payment for the same milestone, 
outcome or reconciliation payment under its elected payment system, the 
PM will make a determination of the allocation of payment to each EN (or 
State VR agency acting as an EN). The PM will make this determination 
based upon the contribution of the services provided by each EN (or 
State VR agency acting as an EN) toward the achievement of the outcomes 
or milestones. Outcome and milestone payments will not be increased 
because the payments are shared between two or more ENs (including a 
State VR agency acting as an EN).

[73 FR 29350, May 20, 2008]



Sec. 411.565  What happens if two or more ENs qualify for payment on 
the same ticket but have elected different EN payment systems?

    We will pay each EN (or State VR agency acting as an EN) according 
to its elected EN payment system in effect at the time the beneficiary 
assigned the ticket to the EN (or the State VR agency acting as an EN).

[73 FR 29350, May 20, 2008]



Sec. 411.566  May an EN use outcome or milestone payments to make
payments to the beneficiary?

    Yes, an EN may use milestone or outcome payments to make payments to 
a beneficiary.

[73 FR 29350, May 20, 2008]



Sec. 411.570  Can an EN request payment from the beneficiary who
assigned a ticket to the EN?

    No. Section 1148(b)(4) of the Act prohibits an EN from requesting or 
receiving compensation from the beneficiary for the services of the EN.



Sec. 411.575  How does the EN request payment for milestones or outcome
payment months achieved by a beneficiary who assigned a ticket to the 
EN?

    The EN (or State VR agency acting as an EN) will send its request 
for payment, evidence of the beneficiary's work or earnings, and other 
information to the PM. In addition, we or the PM may require a summary 
of the services provided as described in the IWP/IPE.
    (a) Milestone payments. (1) We will pay the EN (or State VR agency 
acting as an EN) for milestones only if--
    (i) The outcome-milestone payment system was the EN's (or State VR 
agency's) elected payment system in effect at the time the beneficiary 
assigned a ticket to the EN (or the State VR agency acting as an EN);

[[Page 787]]

    (ii) The milestones occur prior to the outcome payment period (see 
Sec. 411.500(b));
    (iii) The requirements in Sec. 411.535 are met; and
    (iv) The ticket has not terminated for any of the reasons listed in 
Sec. 411.155.
    (2) The EN (or State VR agency acting as an EN) must request payment 
for each milestone attained by a beneficiary who has assigned a ticket 
to the EN (or State VR agency acting as an EN). The request must include 
evidence that the milestone was attained after ticket assignment and 
other information as we may require to evaluate the EN's (or State VR 
agency's) request. If the EN is requesting payment for months after the 
ticket is no longer assigned to it, the payment request shall include 
evidence that the services agreed to in the IWP/IPE were provided and 
those services contributed to the employment milestones or outcomes that 
the beneficiary attained in months after the ticket had been assigned to 
the EN. We do not have to stop monthly benefit payments to the 
beneficiary before we can pay the EN (or State VR agency acting as an 
EN) for milestones attained by the beneficiary.
    (b) Outcome payments. (1) We will pay an EN (or State VR agency 
acting as an EN) an outcome payment for a month if--
    (i)(A) Social Security disability benefits and Federal SSI cash 
benefits are not payable to the individual for that month due to work or 
earnings; or
    (B) The requirements of Sec. 411.525(a)(1)(ii) are met in a case 
where the beneficiary's entitlement to Social Security disability 
benefits has ended or eligibility for SSI benefits based on disability 
or blindness has terminated because of work activity or earnings; and
    (ii) We have not already paid for 36 outcome payment months for a 
title II disability beneficiary (or a concurrent title II/title XVI 
disability beneficiary), or paid for 60 outcome payment months for a 
title XVI disability beneficiary who is not concurrently a title II 
disability beneficiary, on the same ticket; and
    (iii) The ticket has not terminated for any of the other reasons 
listed in Sec. 411.155.
    (2) The EN (or State VR agency acting as an EN) must request payment 
for outcome payment months. In its initial request, the EN (or State VR 
agency acting as an EN) must submit evidence of the beneficiary's work 
or earnings (e.g., a statement of monthly earnings from the employer or 
the employer's designated payroll preparer, or an unaltered copy of the 
beneficiary's pay stub). After we have started paying outcome payments 
to an EN (or State VR agency acting as an EN) based on evidence of the 
beneficiary's earnings, the EN (or State VR agency) must provide 
documentation of the beneficiary's continued work or earnings in such a 
manner or form and at such time or times as we may require. Exception: 
If the EN (or State VR agency) does not currently hold the ticket 
because it is assigned to another EN (or State VR agency), the EN (or 
State VR agency) must request payment, but is not required to submit 
evidence of the beneficiary's work or earnings. However, if the payment 
request is for work the beneficiary attained in a month in which the EN 
no longer held the ticket, the payment request should include evidence 
that the services agreed to in the IWP/IPE were provided and those 
services contributed to the beneficiary's work.
    (c) Evidence requirements for payment. As primary evidence, we 
require original pay slips, or oral or written statements from an 
employer or the employer's designated payroll preparer. In lieu of 
primary evidence, we accept two sources of secondary evidence, such as 
photocopies of pay slips, a signed beneficiary statement, State 
unemployment records or federal/state tax returns. The evidence must be 
clear and legible and include the beneficiary's name, gross earnings or 
net earnings from self employment, pay date and pay period of wages or 
monthly net earnings of self-employment earnings.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29350, May 20, 2008]

[[Page 788]]



Sec. 411.580  Can an EN receive payments for milestones or outcome
payment months that occur before the beneficiary assigns a ticket
to the EN?

    No. An EN (or State VR agency acting as an EN) may be paid only for 
milestones or outcome payment months that are achieved after the month 
in which the ticket is assigned to the EN or State VR agency acting as 
an EN (except as provided for in Sec. 411.536).

[73 FR 29351, May 20, 2008]



Sec. 411.581  Can an EN receive milestone and outcome payments for 
months after a beneficiary takes his or her ticket out of assignment?

    Yes. If an individual whose ticket is assigned to an EN (or State VR 
agency acting as an EN) takes his or her ticket out of assignment (see 
Sec. 411.145), the EN (or State VR agency) can receive payments under 
its elected payment system for milestones or outcome payment months that 
occur after the ticket is taken out of assignment, provided the ticket 
has not terminated for any of the reasons listed in Sec. 411.155. The PM 
will make a determination about eligibility for a payment based upon the 
contribution of services provided by an EN toward the achievement of the 
outcome or milestones. See Sec. 411.560 for situations in which payment 
may be made to more than one EN or State VR agency based on the same 
milestone or outcome.

[73 FR 29351, May 20, 2008]



Sec. 411.582  Can a State VR agency receive payment under the cost
reimbursement payment system if a continuous 9-month period of 
substantial gainful activity is completed after the ticket is 
assigned to an EN?

    Yes. If a State VR agency provides services to a beneficiary under 
34 CFR part 361, and elects payment under the cost reimbursement payment 
system under subpart V of part 404 (or subpart V of part 416) of this 
chapter, the State VR agency can receive payment under the cost 
reimbursement payment system for services provided to the beneficiary if 
all the requirements under subpart V of part 404 (or subpart V of part 
416) of this chapter and Sec. 411.585 are met even when these 
requirements are met after the ticket has been assigned to the EN. The 
EN can be paid during this period in accordance with Secs. 411.525 and 
411.535.

[73 FR 29351, May 20, 2008]



Sec. 411.585  Can a State VR agency and an EN both receive
payment for serving the same beneficiary?

    Yes. A State VR agency and an EN can both receive payment for 
serving the same beneficiary, but the ticket can only be assigned to one 
EN, including a State VR agency acting as an EN, at a time. It also 
cannot be assigned to an EN and placed in the VR cost reimbursement 
status at the same time.
    (a) A State VR agency may act as an EN and serve a beneficiary. In 
this case, both the State VR agency acting as an EN and another EN may 
be eligible for payment based on the same ticket (see Sec. 411.560).
    (b) If a State VR agency is paid by us under the VR cost 
reimbursement option, such payment does not preclude payment by us to an 
EN or to another State VR agency acting as an EN under its elected EN 
payment system. A subsequent VR agency also may choose to be paid under 
the VR cost reimbursement option.
    (c) If an EN or a State VR agency acting as an EN is paid by us 
under one of the EN payment systems, that does not preclude payment by 
us to a different State VR agency under the VR cost reimbursement 
option. The subsequent State VR agency also may choose to be paid under 
its elected EN payment system.

[73 FR 29351, May 20, 2008]



Sec. 411.590  What can an EN do if the EN disagrees with our 
decision on a payment request?

    (a) If an EN other than a State VR agency has a payment dispute with 
us, the dispute shall be resolved under the dispute resolution 
procedures contained in the EN's agreement with us.
    (b) If a State VR agency serving a beneficiary as an EN has a 
dispute with us regarding payment under an EN payment system, the State 
VR agency may, within 60 days of receiving notice of our decision, 
request reconsideration in writing. The State VR agency must

[[Page 789]]

send the request for reconsideration to the PM. The PM will forward to 
us the request for reconsideration and a recommendation. We will notify 
the State VR agency of our reconsidered decision in writing.
    (c) An EN (including a State VR agency) cannot appeal determinations 
we make about an individual's right to benefits (e.g. determinations 
that disability benefits should be suspended, terminated, continued, 
denied, or stopped or started on a different date than alleged). Only 
the beneficiary or applicant or his or her representative can appeal 
these determinations. See Secs. 404.900 et seq. and 416.1400 et seq. of 
this chapter.
    (d) Determinations or decisions we make about a beneficiary's right 
to benefits may cause payments we have already made to an EN (or denial 
of payment to an EN) to be incorrect, resulting in an underpayment or 
overpayment to the EN. If this happens, we will make any necessary 
adjustments to future payments (see Sec. 411.555). See Sec. 411.555(c) 
for when we will not make an adjustment in a case in which an 
overpayment results from a determination or decision we make about a 
beneficiary's right to benefits.) While an EN cannot appeal our 
determination about an individual's right to benefits, the EN may 
furnish any evidence the EN has which relates to the issue(s) to be 
decided on appeal if the individual appeals our determination.

[66 FR 67420, Dec. 28, 2001, as amended at 73 FR 29351, May 20, 2008]



Sec. 411.595  What oversight procedures are planned for the EN 
payment systems?

    We use audits, reviews, studies and observation of daily activities 
to identify areas for improvement. Internal reviews of our systems 
security controls are regularly performed. These reviews provide an 
overall assurance that our business processes are functioning as 
intended. The reviews also ensure that our management controls and 
financial management systems comply with the standards established by 
the Federal Managers' Financial Integrity Act and the Federal Financial 
Management Improvement Act. These reviews operate in accordance with the 
Office of Management and Budget Circulars A-123, A-127 and Appendix III 
to A-130. Additionally, our Executive Internal Control Committee meets 
periodically and provides further oversight of program and management 
control issues.



Sec. 411.597  Will SSA periodically review the outcome payment system
and the outcome-milestone payment system for possible modifications?

    (a) Yes. We will periodically review the system of payments and 
their programmatic results to determine if they provide an adequate 
incentive for ENs to assist beneficiaries to enter the work force, while 
providing for appropriate economies.
    (b) We will specifically review the limitation on monthly outcome 
payments as a percentage of the payment calculation base, the difference 
in total payments between the outcome-milestone payment system and the 
outcome payment system, the length of the outcome payment period, and 
the number and amount of milestone payments, as well as the benefit 
savings and numbers of beneficiaries going to work. We will consider 
altering the payment system conditions based upon the information 
gathered and our determination that an alteration would better provide 
for the incentives and economies noted above.



           Subpart I_Ticket to Work Program Dispute Resolution

         Disputes Between Beneficiaries and Employment Networks



Sec. 411.600  Is there a process for resolving disputes between 
beneficiaries and ENs that are not State VR agencies?

    Yes. After an IWP is signed, a process is available which will 
assure each party a full, fair and timely review of a disputed matter. 
This process has three steps.
    (a) The beneficiary can seek a solution through the EN's internal 
grievance procedures.
    (b) If the EN's internal grievance procedures do not result in an 
agreeable solution, either the beneficiary or the EN may seek a 
resolution from the PM. (See Sec. 411.115(k) for a definition of the 
PM.)

[[Page 790]]

    (c) If either the beneficiary or the EN is dissatisfied with the 
resolution proposed by the PM, either party may request a decision from 
us.



Sec. 411.605  What are the responsibilities of the EN that is not
a State VR agency regarding the dispute resolution process?

    The EN must:
    (a) Have grievance procedures that a beneficiary can use to seek a 
resolution to a dispute under the Ticket to Work program;
    (b) Give each beneficiary seeking services a copy of its internal 
grievance procedures;
    (c) Inform each beneficiary seeking services of the right to refer a 
dispute first to the PM for review, and then to us for a decision; and
    (d) Inform each beneficiary of the availability of assistance from 
the State P&A system.



Sec. 411.610  When should a beneficiary receive information on the 
procedures for resolving disputes?

    Each EN that is not a State VR agency must inform each beneficiary 
seeking services under the Ticket to Work program of the procedures for 
resolving disputes when--
    (a) The EN and the beneficiary complete and sign the IWP;
    (b) Services in the beneficiary's IWP are reduced, suspended or 
terminated; and
    (c) A dispute arises related to the services spelled out in the 
beneficiary's IWP or to the beneficiary's participation in the program.



Sec. 411.615  How will a disputed issue be referred to the PM?

    The beneficiary or the EN that is not a State VR agency may ask the 
PM to review a disputed issue. The PM will contact the EN to submit all 
relevant information within 10 working days. The information should 
include:
    (a) A description of the disputed issue(s);
    (b) A summary of the beneficiary's position, prepared by the 
beneficiary or a representative of the beneficiary, related to each 
disputed issue;
    (c) A summary of the EN's position related to each disputed issue; 
and
    (d) A description of any solutions proposed by the EN when the 
beneficiary sought resolution through the EN's grievance procedures, 
including the reasons the beneficiary rejected each proposed solution.



Sec. 411.620  How long does the PM have to recommend a resolution to
the dispute?

    The PM has 20 working days to provide a written recommendation. The 
recommendation should explain the reasoning for the proposed resolution.



Sec. 411.625  Can the beneficiary or the EN that is not a State VR 
agency request a review of the PM's recommendation?

    (a) Yes. After receiving the PM's recommendation, either the 
beneficiary or the EN may request a review by us. The request must be in 
writing and received by the PM within 15 working days of the receipt of 
the PM's recommendation for resolving the dispute.
    (b) The PM has 10 working days to refer the request for a review to 
us. The request for a review must include:
    (1) A copy of the beneficiary's IWP;
    (2) Information and evidence related to the disputed issue(s); and
    (3) The PM's conclusion(s) and recommendation(s).



Sec. 411.630  Is SSA's decision final?

    Yes. Our decision is final. If either the beneficiary or the EN that 
is not a State VR agency is unwilling to accept our decision, either has 
the right to terminate its relationship with the other.



Sec. 411.635  Can a beneficiary be represented in the dispute
resolution process under the Ticket to Work program?

    Yes. Both the beneficiary and the EN that is not a State VR agency 
may use an attorney or other individual of their choice to represent 
them at any step in the dispute resolution process. The P&A system in 
each State and U.S. Territory is available to provide assistance and 
advocacy services to beneficiaries seeking or receiving services under 
the Ticket to Work program, including assistance in resolving issues at 
any stage in the dispute resolution process.

[[Page 791]]

          Disputes Between Beneficiaries and State VR Agencies



Sec. 411.640  Do the dispute resolution procedures of the Rehabilitation
Act of 1973, as amended (29 U.S.C. 720 et seq.), apply to beneficiaries
seeking  services from the State VR agency?

    Yes. The procedures in the Rehabilitation Act of 1973, as amended 
(29 U.S.C. 720 et seq.) apply to any beneficiary who has assigned a 
ticket to a State VR agency. ENs that are State VR agencies are subject 
to the provisions of the Rehabilitation Act. The Rehabilitation Act 
requires the State VR agency to provide each person seeking or receiving 
services with a description of the services available through the Client 
Assistance Program authorized under section 112 of the Rehabilitation 
Act of 1973, as amended (29 U.S.C. 732). It also provides the 
opportunity to resolve disputes using formal mediation services or the 
impartial hearing process in section 102(c) of the Rehabilitation Act of 
1973, as amended (29 U.S.C. 722(c)). ENs that are not State VR agencies 
are not subject to the provisions of Title I of the Rehabilitation Act 
of 1973, as amended (29 U.S.C. 720 et seq.).

        Disputes Between Employment Networks and Program Managers



Sec. 411.650  Is there a process for resolving disputes between ENs that
are not State VR agencies and PMs, other than disputes on a payment 
request?

    Yes. Under the agreement to assist us in administering the Ticket to 
Work program, a PM is required to have procedures to resolve disputes 
with ENs that do not involve an EN's payment request. (See Sec. 411.590 
for the process for resolving disputes on EN payment requests.) This 
process must ensure that:
    (a) The EN can seek a solution through the PM's internal grievance 
procedures; and
    (b) If the PM's internal grievance procedures do not result in a 
mutually agreeable solution, the PM shall refer the dispute to us for a 
decision.



Sec. 411.655  How will the PM refer the dispute to us?

    The PM has 20 working days from the failure to come to a mutually 
agreeable solution with an EN to refer the dispute to us with all 
relevant information. The information should include:
    (a) A description of the disputed issue(s);
    (b) A summary of the EN's and PM's position related to each disputed 
issue; and
    (c) A description of any solutions proposed by the EN and PM when 
the EN sought resolution through the PM's grievance procedures, 
including the reasons each party rejected each proposed solution.



Sec. 411.660  Is SSA's decision final?

    Yes. Our decision is final.



 Subpart J_The Ticket to Work Program and Alternate Participants Under 
    the Programs For Payments For Vocational Rehabilitation Services



Sec. 411.700  What is an alternate participant?

    An alternate participant is any public or private agency (other than 
a participating State VR agency described in Secs. 404.2104 and 416.2204 
of this chapter), organization, institution, or individual with whom the 
Commissioner has entered into an agreement or contract to provide VR 
services to disabled beneficiaries under the programs described in 
subpart V of part 404 and subpart V of part 416 of this chapter. In this 
subpart J, we refer to these programs as the programs for payments for 
VR services.



Sec. 411.705  Can an alternate participant become an EN?

    In any State where the Ticket to Work program is implemented, each 
alternate participant whose service area is in that State will be asked 
to choose if it wants to participate in the program as an EN.

[[Page 792]]



Sec. 411.710  How will an alternate participant choose to participate
as an EN in the Ticket to Work program?

    (a) When the Ticket to Work program is implemented in a State, each 
alternate participant whose service area is in that State will be 
notified of its right to choose to participate as an EN in the program 
in that State. The notification to the alternate participant will 
provide instructions on how to become an EN and the requirements that an 
EN must meet to participate in the Ticket to Work program.
    (b) An alternate participant who chooses to become an EN must meet 
the requirements to be an EN, including--
    (1) Enter into an agreement with SSA to participate as an EN under 
the Ticket to Work program (see Sec. 411.320);
    (2) Agree to serve a prescribed service area (see Sec. 411.320);
    (3) Agree to the EN reporting requirements (see Sec. 411.325); and
    (4) Elect a payment option under one of the two EN payment systems 
(see Sec. 411.505).



Sec. 411.715  If an alternate participant becomes an EN, will
beneficiaries for whom an employment plan was signed prior to
implementation be covered under the Ticket to Work program payment
provisions?

    No. When an alternate participant becomes an EN in a State in which 
the Ticket to Work program is implemented, those beneficiaries for whom 
an employment plan was signed prior to the date of implementation of the 
program in the State, will continue to be covered for a limited time 
under the programs for payments for VR services (see Sec. 411.730).



Sec. 411.720  If an alternate participant chooses not to become an EN,
can it continue to function under the programs for payments for VR
services?

    Once the Ticket to Work program has been implemented in a State, the 
alternate participant programs for payments for VR services begin to be 
phased-out in that State. We will not pay any alternate participant 
under these programs for any services that are provided under an 
employment plan that is signed on or after the date of implementation of 
the Ticket to Work program in that State. If an employment plan was 
signed before that date, we will pay the alternate participant, under 
the programs for payments for VR services, for services provided prior 
to January 1, 2004 if all other requirements for payment under these 
programs are met. We will not pay an alternate participant under these 
programs for any services provided on or after January 1, 2004.



Sec. 411.725  If an alternate participant becomes an EN and it has
signed employment plans, both as an alternate participant and an
EN, how will SSA pay for services provided under each employment
plan?

    We will continue to abide by the programs for payments for VR 
services in cases where services are provided to a beneficiary under an 
employment plan signed prior to the date of implementation of the Ticket 
to Work program in the State. However, we will not pay an alternate 
participant under these programs for services provided on or after 
January 1, 2004. For those employment plans signed by a beneficiary and 
the EN after implementation of the program in the State, the EN's 
elected EN payment system under the Ticket to Work program applies.



Sec. 411.730  What happens if an alternate participant signed an 
employment plan with a beneficiary before Ticket to Work program 
implementation in the State and the required period of substantial
gainful activity is not completed by January 1, 2004?

    The beneficiary does not have to complete the nine-month continuous 
period of substantial gainful activity (SGA) prior to January 1, 2004, 
in order for the costs of the services to be payable under the programs 
for payments for VR services. The nine-month SGA period can be completed 
after January 1, 2004. However, SSA will not pay an alternate 
participant under these programs for the costs of any services provided 
after December 31, 2003.

[[Page 793]]



PART 416_SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND,
AND DISABLED--Table of Contents



       Subpart A_Introduction, General Provisions and Definitions

Sec.
416.101  Introduction.
416.105  Administration.
416.110  Purpose of program.
416.120  General definitions and use of terms.
416.121  Receipt of aid or assistance for December 1973 under an 
          approved State plan under title I, X, XIV, or XVI of the 
          Social Security Act.

                          Subpart B_Eligibility

                                 General

416.200  Introduction.
416.201  General definitions and terms used in this subpart.
416.202  Who may get SSI benefits.
416.203  Initial determinations of SSI eligibility.
416.204  Redeterminations of SSI eligibility.

  Reasons Why You May Not Get SSI Benefits for Which You Are Otherwise 
                                Eligible

416.207  You do not give us permission to contact financial 
          institutions.
416.210  You do not apply for other benefits.
416.211  You are a resident of a public institution.
416.212  Continuation of full benefits in certain cases of medical 
          confinement.
416.214  You are disabled and drug addiction or alcoholism is a 
          contributing factor material to the determination of 
          disability.
416.215  You leave the United States.
416.216  You are a child of armed forces personnel living overseas.

     Eligibility for Increased Benefits Because of Essential Persons

416.220  General.
416.221  Who is a qualified individual.
416.222  Who is an essential person.
416.223  What happens if you are a qualified individual.
416.250  Experimental, pilot, and demonstration projects in the SSI 
          program.

  Special Provisions for People Who Work Despite a Disabling Impairment

416.260  General.
416.261  What are special SSI cash benefits and when are they payable.
416.262  Eligibility requirements for special SSI cash benefits.
416.263  No additional application needed.
416.264  When does the special SSI eligibility status apply.
416.265  Requirements for the special SSI eligibility status.
416.266  Continuation of SSI status for Medicaid.
416.267  General.
416.268  What is done to determine if you must have Medicaid in order to 
          work.
416.269  What is done to determine whether your earnings are too low to 
          provide comparable benefits and services you would receive in 
          the absence of those earnings.

                    Subpart C_Filing of Applications

                           General Provisions

416.301  Introduction.
416.302  Definitions.
416.305  You must file an application to receive supplemental security 
          income benefits.

                              Applications

416.310  What makes an application a claim for benefits.
416.315  Who may sign an application.
416.320  Evidence of authority to sign an application for another.
416.325  When an application is considered filed.
416.327  Pilot program for photographic identification of disability 
          benefit applicants in designated geographic areas.

                 Effective Filing Period of Application

416.330  Filing before the first month you meet the requirements for 
          eligibility.
416.335  Filing in or after the month you meet the requirements for 
          eligibility.

       Filing Date Based Upon a Written Statement or Oral Inquiry

416.340  Use of date of written statement as application filing date.
416.345  Use of date of oral inquiry as application filing date.
416.350  Treating a title II application as an oral inquiry about SSI 
          benefits.

               Deemed Filing Date Based on Misinformation

416.351  Deemed filing date in a case of misinformation.

                        Withdrawal of Application

416.355  Withdrawal of an application.
416.360  Cancellation of a request to withdraw.

                      Subpart D_Amount of Benefits

416.401  Scope of subpart.
416.405  Cost-of-living adjustments in benefits.

[[Page 794]]

416.410  Amount of benefits; eligible individual.
416.412  Amount of benefits; eligible couple.
416.413  Amount of benefits; qualified individual.
416.414  Amount of benefits; eligible individual or eligible couple in a 
          medical treatment facility.
416.415  Amount of benefits; eligible individual is disabled child under 
          age 18.
416.420  Determination of benefits; general.
416.421  Determination of benefits; computation of prorated benefits.
416.426  Change in status involving an individual; ineligibility occurs.
416.428  Eligible individual without an eligible spouse has an essential 
          person in his home.
416.430  Eligible individual with eligible spouse; essential person(s) 
          present.
416.432  Change in status involving a couple; eligibility continues.
416.435  Change in status involving a couple; ineligibility occurs.

     Subpart E_Payment of Benefits, Overpayments, and Underpayments

416.501  Payment of benefits: General.
416.502  Manner of payment.
416.503  Minimum monthly benefit amount.
416.520  Emergency advance payments.
416.525  Reimbursement to States for interim assistance payments.
416.532  Method of payment when the essential person resides with more 
          than one eligible person.
416.533  Transfer or assignment of benefits.
416.534  Garnishment of payments after disbursement.
416.535  Underpayments and overpayments.
416.536  Underpayments--defined.
416.537  Overpayments--defined.
416.538  Amount of underpayment or overpayment.
416.542  Underpayments--to whom underpaid amount is payable.
416.543  Underpayments--applied to reduce overpayments.
416.544  Paying benefits in installments: Drug addiction or alcoholism.
416.545  Paying large past-due benefits in installments.
416.546  Payment into dedicated accounts of past-due benefits for 
          eligible individuals under age 18 who have a representative 
          payee.
416.550  Waiver of adjustment or recovery--when applicable.
416.551  Waiver of adjustment or recovery--effect of.
416.552  Waiver of adjustment or recovery--without fault.
416.553  Waiver of adjustment or recovery--defeat the purpose of the 
          supplemental security income program.
416.554  Waiver of adjustment or recovery--against equity and good 
          conscience.
416.555  Waiver of adjustment or recovery--impede administration.
416.556  Waiver of adjustment or recovery--countable resources in excess 
          of the limits prescribed in Sec. 416.1205 by $50 or less.
416.557  Personal conference.
416.558  Notice relating to overpayments and underpayments.
416.560  Recovery--refund.
416.570  Adjustment.
416.571  10-percent limitation of recoupment rate--overpayment.
416.572  Are title II and title VIII benefits subject to adjustment to 
          recover title XVI overpayments?
416.573  How much will we withhold from your title II and title VIII 
          benefits to recover a title XVI overpayment?
416.574  Will you receive notice of our intention to apply cross-program 
          recovery?
416.575  When will we begin cross-program recovery from your current 
          monthly benefits?
416.580  Referral of overpayments to the Department of the Treasury for 
          tax refund offset--General.
416.581  Notice to overpaid person.
416.582  Review within SSA that an overpayment is past due and legally 
          enforceable.
416.583  Findings by SSA.
416.584  Review of our records related to the overpayment.
416.585  Suspension of offset.
416.586  Tax refund insufficient to cover amount of overpayment.
416.590  Are there additional methods for recovery of title XVI benefit 
          overpayments?

                    Subpart F_Representative Payment

416.601  Introduction.
416.610  When payment will be made to a representative payee.
416.611  What happens to your monthly benefits while we are finding a 
          suitable representative payee for you?
416.615  Information considered in determining whether to make 
          representative payment.
416.620  Information considered in selecting a representative payee.
416.621  What is our order of preference in selecting a representative 
          payee for you?
416.622  Who may not serve as a representative payee?
416.624  How do we investigate a representative payee applicant?
416.625  What information must a representative payee report to us?
416.630  How will we notify you when we decide you need a representative 
          payee?
416.635  What are the responsibilities of your representative payee?
416.640  Use of benefit payments.

[[Page 795]]

416.640a  Compensation for qualified organizations serving as 
          representative payees.
416.641  Who is liable if your representative payee misuses your 
          benefits?
416.645  Conservation and investment of benefit payments.
416.650  When will we select a new representative payee for you?
416.655  When representative payment will be stopped.
416.660  Transfer of accumulated benefit payments.
416.665  How does your representative payee account for the use of 
          benefits?

                       Subpart G_Reports Required

                              Introduction

416.701  Scope of subpart.
416.702  Definitions.

                            Report Provisions

416.704  Who must make reports.
416.708  What you must report.
416.710  What reports must include.
416.712  Form of the report.
416.714  When reports are due.

                           Penalty Deductions

416.722  Circumstances under which we make a penalty deduction.
416.724  Amounts of penalty deductions.
416.726  Penalty period: First failure to report.
416.728  Penalty period: Second failure to report.
416.730  Penalty period: Three or more failures to report.
416.732  No penalty deduction if you have good cause for failure to 
          report timely.

                     Subpart H_Determination of Age

416.801  Evidence as to age--when required.
416.802  Type of evidence to be submitted.
416.803  Evaluation of evidence.
416.804  Certified copy in lieu of original.
416.805  When additional evidence may be required.
416.806  Expedited adjudication based on documentary evidence of age.

             Subpart I_Determining Disability and Blindness

                                 General

416.901  Scope of subpart.
416.902  Definitions for this subpart.

                             Determinations

416.903  Who makes disability and blindness determinations.
416.903a  Program integrity.
416.903b  Evidence from excluded medical sources of evidence.
416.904  Decisions by other governmental agencies and nongovernmental 
          entities.

                        Definition of Disability

416.905  Basic definition of disability for adults.
416.906  Basic definition of disability for children.
416.907  Disability under a State plan.
416.908  [Reserved]
416.909  How long the impairment must last.
416.910  Meaning of substantial gainful activity.
416.911  Definition of disabling impairment.

                                Evidence

416.912  Responsibility for evidence.
416.913  Categories of evidence.
416.913a  Evidence from our Federal or State agency medical or 
          psychological consultants.
416.914  When we will purchase existing evidence.
416.915  Where and how to submit evidence.
416.916  If you fail to submit medical and other evidence.
416.917  Consultative examination at our expense.
416.918  If you do not appear at a consultative examination.

Standards To Be Used in Determining When a Consultative Examination Will 
        Be Obtained in Connection With Disability Determinations

416.919  The consultative examination.
416.919a  When we will purchase a consultative examination and how we 
          will use it.
416.919b  When we will not purchase a consultative examination.

        Standards for the Type of Referral and for Report Content

416.919f  Type of purchased examinations.
416.919g  Who we will select to perform a consultative examination.
416.919h  Your medical source.
416.919i  Other sources for consultative examinations.
416.919j  Objections to the medical source designated to perform the 
          consultative examination.
416.919k  Purchase of medical examinations, laboratory tests, and other 
          services.
416.919m  Diagnostic tests or procedures.
416.919n  Informing the medical source of examination scheduling, report 
          content, and signature requirements.
416.919o  When a properly signed consultative examination report has not 
          been received.
416.919p  Reviewing reports of consultative examinations.
416.919q  Conflict of interest.

[[Page 796]]

             Authorizing and Monitoring the Referral Process

416.919s  Authorizing and monitoring the consultative examination.

           Procedures To Monitor the Consultative Examination

416.919t  Consultative examination oversight.

                        Evaluation of Disability

416.920  Evaluation of disability of adults, in general.
416.920a  Evaluation of mental impairments.
416.920b  How we consider evidence.
416.920c  How we consider and articulate medical opinions and prior 
          administrative medical findings for claims filed on or after 
          March 27, 2017.
416.921  Establishing that you have a medically determinable 
          impairment(s).
416.922  What we mean by an impairment(s) that is not severe in an 
          adult.
416.923  Multiple impairments.
416.924  How we determine disability for children.
416.924a  Considerations in determining disability for children.
416.924b  Age as a factor of evaluation in the sequential evaluation 
          process for children.

                         Medical Considerations

416.925  Listing of Impairments in appendix 1 of subpart P of part 404 
          of this chapter.
416.926  Medical equivalence for adults and children.
416.926a  Functional equivalence for children.
416.927  Evaluating opinion evidence for claims filed before March 27, 
          2017.
416.928  [Reserved]
416.929  How we evaluate symptoms, including pain.
416.930  Need to follow prescribed treatment.

                  Presumptive Disability and Blindness

416.931  The meaning of presumptive disability or presumptive blindness.
416.932  When presumptive payments begin and end.
416.933  How we make a finding of presumptive disability or presumptive 
          blindness.
416.934  Impairments that may warrant a finding of presumptive 
          disability or presumptive blindness.

                      Drug Addiction and Alcoholism

416.935  How we will determine whether your drug addiction or alcoholism 
          is a contributing factor material to the determination of 
          disability.
416.936  Treatment required for individuals whose drug addiction or 
          alcoholism is a contributing factor material to the 
          determination of disability.
416.937  What we mean by appropriate treatment.
416.938  What we mean by approved institutions or facilities.
416.939  How we consider whether treatment is available.
416.940  Evaluating compliance with the treatment requirements.
416.941  Establishment and use of referral and monitoring agencies.

                      Residual Functional Capacity

416.945  Your residual functional capacity.
416.946  Responsibility for assessing your residual functional capacity.

                        Vocational Considerations

416.960  When we will consider your vocational background.
416.962  Medical-vocational profiles showing an inability to make an 
          adjustment to other work.
416.963  Your age as a vocational factor.
416.964  Your education as a vocational factor.
416.965  Your work experience as a vocational factor.
416.966  Work which exists in the national economy.
416.967  Physical exertion requirements.
416.968  Skill requirements.
416.969  Listing of Medical-Vocational Guidelines in appendix 2 of 
          subpart P of part 404 of this chapter.
416.969a  Exertional and nonexertional limitations.

                      Substantial Gainful Activity

416.971  General.
416.972  What we mean by substantial gainful activity.
416.973  General information about work activity.
416.974  Evaluation guides if you are an employee.
416.974a  When and how we will average your earnings.
416.975  Evaluation guides if you are self-employed.
416.976  Impairment-related work expenses.

                                Blindness

416.981  Meaning of blindness as defined in the law.
416.982  Blindness under a State plan.
416.983  How we evaluate statutory blindness.
416.984  If you are statutorily blind and still working.
416.985  How we evaluate other visual impairments.
416.986  Why and when we will find that you are no longer entitled to 
          benefits based on statutory blindness.

[[Page 797]]

      Disability Redeterminations for Individuals Who Attain Age 18

416.987  Disability redeterminations for individuals who attain age 18.

             Continuing or Stopping Disability or Blindness

416.988  Your responsibility to tell us of events that may change your 
          disability or blindness status.
416.989  We may conduct a review to find out whether you continue to be 
          disabled.
416.989a  We may conduct a review to find out whether you continue to be 
          blind.
416.990  When and how often we will conduct a continuing disability 
          review.
416.991  If your medical recovery was expected and you returned to work.
416.992  What happens if you fail to comply with our request for 
          information.
416.992a  [Reserved]
416.993  Medical evidence in continuing disability review cases.
416.994  How we will decide whether your disability continues or ends, 
          disabled adults.
416.994a  How we will determine whether your disability continues or 
          ends, and whether you are and have been receiving treatment 
          that is medically necessary and available, disabled children.
416.995  If we make a determination that your physical or mental 
          impairment(s) has ceased, did not exist or is no longer 
          disabling (Medical Cessation Determination).
416.996  Continued disability or blindness benefits pending appeal of a 
          medical cessation determination.
416.998  If you become disabled by another impairment(s).
416.999  What is expedited reinstatement?
416.999a  Who is eligible for expedited reinstatement?
416.999b  How do I request reinstatement?
416.999c  How do we determine provisional benefits?
416.999d  How do we determine reinstated benefits?

                 Subpart J_Determinations of Disability

                           General Provisions

416.1001  Purpose and scope.
416.1002  Definitions.
416.1003  Basic responsibilities for us and the State.

  Responsibilities for Performing the Disability Determination Function

416.1010  How a State notifies us that it wishes to perform the 
          disability determination function.
416.1011  How we notify a State whether it may perform the disability 
          determination function.
416.1013  Disability determinations the State makes.
416.1014  Responsibilities for obtaining evidence to make disability 
          determinations.
416.1015  Making disability determinations.
416.1016  Medical consultants and psychological consultants.
416.1017  Reasonable efforts to obtain review by a physician, 
          psychiatrist, and psychologist.
416.1018  Notifying claimant of the disability determination.

                     Quick Disability Determinations

416.1019  Quick disability determination process.

            Administrative Responsibilities and Requirements

416.1020  General administrative requirements.
416.1021  Personnel.
416.1022  Training.
416.1023  Facilities.
416.1024  Medical and other purchased services.
416.1025  Records and reports.
416.1026  Fiscal.
416.1027  Audits.
416.1028  Property.
416.1029  Participation in research and demonstration projects.
416.1030  Coordination with other agencies.
416.1031  Confidentiality of information and records.
416.1032  Other Federal laws and regulations.
416.1033  Policies and operating instructions.

                          Performance Standards

416.1040  General.
416.1041  Standards of performance.
416.1042  Processing time standards.
416.1043  Performance accuracy standard.
416.1044  How and when we determine whether the processing time 
          standards are met.
416.1045  How and when we determine whether the performance accuracy 
          standard is met.
416.1050  Action we will take if a State agency does not meet the 
          standards.

                   Performance Monitoring and Support

416.1060  How we will monitor.
416.1061  When we will provide performance support.
416.1062  What support we will provide.

                           Substantial Failure

416.1070  General.
416.1071  Good cause for not following the Act, our regulations, or 
          other written guidelines.
416.1075  Finding of substantial failure.

[[Page 798]]

                          Hearings and Appeals

416.1080  Notice of right to hearing on proposed finding of substantial 
          failure.
416.1081  Disputes on matters other than substantial failure.
416.1082  Who conducts the hearings.
416.1083  Hearings and appeals process.

             Assumption of Disability Determination Function

416.1090  Assumption when we make a finding of substantial failure.
416.1091  Assumption when State no longer wishes to perform the 
          disability determination function.
416.1092  Protection of State employees.
416.1093  Limitation on State expenditures after notice.
416.1094  Final accounting by the State.

                            Subpart K_Income

                                 General

416.1100  Income and SSI eligibility.
416.1101  Definition of terms.
416.1102  What is income?
416.1103  What is not income?
416.1104  Income we count.

                              Earned Income

416.1110  What is earned income.
416.1111  How we count earned income.
416.1112  Earned income we do not count.

                             Unearned Income

416.1120  What is unearned income.
416.1121  Types of unearned income.
416.1123  How we count unearned income.
416.1124  Unearned income we do not count.

                     In-Kind Support and Maintenance

416.1130  Introduction.
416.1131  The one-third reduction rule.
416.1132  What we mean by ``living in another person's household''.
416.1133  What is a pro rata share of household operating expenses.
416.1140  The presumed value rule.
416.1141  When the presumed value rule applies.
416.1142  If you live in a public assistance household.
416.1143  If you live in a noninstitutional care situation.
416.1144  If you live in a nonprofit retirement home or similar 
          institution.
416.1145  How the presumed value rule applies in a nonmedical for-profit 
          institution.

        In-Kind Support and Maintenance in Special Circumstances

416.1147  How we value in-kind support and maintenance for a couple.
416.1147a  Income rules in change-of-status situations involving in-kind 
          support and maintenance.
416.1148  If you have both in-kind support and maintenance and income 
          that is deemed to you.

                            Temporary Absence

416.1149  What is a temporary absence from your living arrangement.

                                Disasters

416.1150  How we treat income received because of a major disaster.
416.1151  How we treat the repair or replacement of lost, damaged, or 
          stolen resources.

                         Home Energy Assistance

416.1157  Support and maintenance assistance.

                            Deeming of Income

416.1160  What is deeming of income?
416.1161  Income of an ineligible spouse, ineligible parent, and 
          essential person for deeming purposes.
416.1161a  Income for deeming purposes where Medicaid eligibility is 
          affected.
416.1163  How we deem income to you from your ineligible spouse.
416.1165  How we deem income to you from your ineligible parent(s).
416.1166  How we deem income to you and your eligible child from your 
          ineligible spouse.
416.1166a  How we deem income to you from your sponsor if you are an 
          alien.
416.1167  Temporary absences and deeming rules.
416.1168  How we deem income to you from your essential person.
416.1169  When we stop deeming income from an essential person.

     Alternative Income Counting Rules for Certain Blind Individuals

416.1170  General.
416.1171  When the alternative rules apply.

  Rules for Helping Blind and Disabled Individuals Achieve Self-Support

416.1180  General.
416.1181  What is a plan to achieve self-support (PASS)?
416.1182  When we begin to count the income excluded under the plan.

Appendix to Subpart K of Part 416--List of Types of Income Excluded 
          Under the SSI Program as Provided by Federal Laws Other Than 
          the Social Security Act

[[Page 799]]

                   Subpart L_Resources and Exclusions

416.1201  Resources; general.
416.1202  Deeming of resources.
416.1203  Deeming of resources of an essential person.
416.1204  Deeming of resources of the sponsor of an alien.
416.1204a  Deeming of resources where Medicaid eligibility is affected.
416.1205  Limitation on resources.
416.1207  Resources determinations.
416.1208  How funds held in financial institution accounts are counted.
416.1210  Exclusions from resources; general.
416.1212  Exclusion of the home.
416.1216  Exclusion of household goods and personal effects.
416.1218  Exclusion of the automobile.
416.1220  Property essential to self-support; general.
416.1222  How income-producing property essential to self-support is 
          counted.
416.1224  How nonbusiness property used to produce goods or services 
          essential to self-support is counted.
416.1225  An approved plan to achieve self-support; general.
416.1226  What is a plan to achieve self-support(PASS)?
416.1227  When the resources excluded under a plan to achieve self-
          support begin to count.
416.1228  Exclusion of Alaskan natives' stock in regional or village 
          corporations.
416.1229  Exclusion of payments received as compensation for expenses 
          incurred or losses suffered as a result of a crime.
416.1230  Exclusion of life insurance.
416.1231  Burial spaces and certain funds set aside for burial expenses.
416.1232  Replacement of lost, damaged, or stolen excluded resources.
416.1233  Exclusion of certain underpayments from resources.
416.1234  Exclusion of Indian lands.
416.1235  Exclusion of certain payments related to tax credits.
416.1236  Exclusions from resources; provided by other statutes.
416.1237  Assistance received on account of major disaster.
416.1238  Exclusion of certain housing assistance.
416.1239  Exclusion of State or local relocation assistance payments.
416.1240  Disposition of resources.
416.1242  Time limits for disposing of resources.
416.1244  Treatment of proceeds from disposition of resources.
416.1245  Exceptions to required disposition of real property.
416.1246  Disposal of resources at less than fair market value.
416.1247  Exclusion of a dedicated account in a financial institution.
416.1248  Exclusion of gifts to children with life-threatening 
          conditions.
416.1249  Exclusion of payments received as restitution for misuse of 
          benefits by a representative payee.
416.1250  How we count grants, scholarships, fellowships or gifts.
416.1260  Special resource provision for recipients under a State plan.
416.1261  Application of special resource provision.
416.1262  Special resource provision applicable in cases involving 
          essential persons.
416.1264  Spouse ineligible under a State plan in December 1973.
416.1266  Individual under special resource provision dies after 
          December 1973.

                 Subpart M_Suspensions and Terminations

416.1320  Suspensions; general.
416.1321  Suspension for not giving us permission to contact financial 
          institutions.
416.1322  Suspension due to failure to comply with request for 
          information.
416.1323  Suspension due to excess income.
416.1324  Suspension due to excess resources.
416.1325  Suspension due to status as a resident of a public 
          institution.
416.1326  Suspension for failure to comply with treatment for drug 
          addiction or alcoholism.
416.1327  Suspension due to absence from the United States.
416.1329  Suspension due to loss of United States residency, United 
          States citizenship, or status as an alien lawfully admitted 
          for permanent residence or otherwise permanently residing in 
          the United States under color of law.
416.1330  Suspension due to failure to apply for and obtain other 
          benefits.
416.1331  Termination of your disability or blindness payments.
416.1332  Termination of benefit for disabled individual: Exception.
416.1333  Termination at the request of the recipient.
416.1334  Termination due to death of recipient.
416.1335  Termination due to continuous suspension.
416.1336  Notice of intended action affecting recipient's payment 
          status.
416.1337  Exceptions to the continuation of previously established 
          payment level.
416.1338  If you are participating in an appropriate program of 
          vocational rehabilitation services, employment services, or 
          other support services.
416.1339  Suspension due to flight to avoid criminal prosecution or 
          custody or confinement after conviction, or due to violation 
          of probation or parole.

[[Page 800]]

416.1340  Penalty for making false or misleading statements or 
          withholding information.

 Subpart N_Determinations, Administrative Review Process, and Reopening 
                     of Determinations and Decisions

          Introduction, Definitions, and Initial Determinations

416.1400  Introduction.
416.1401  Definitions.
416.1402  Administrative actions that are initial determinations.
416.1403  Administrative actions that are not initial determinations.
416.1404  Notice of the initial determination.
416.1405  Effect of an initial determination.
416.1406  Testing modifications to the disability determination 
          procedures.

                             Reconsideration

416.1407  Reconsideration--general.
416.1408  Parties to a reconsideration.
416.1409  How to request reconsideration.
416.1411  Good cause for missing the deadline to request review.
416.1413  Reconsideration procedures.
416.1413a  Reconsiderations of initial determinations on applications.
416.1413b  Reconsideration procedures for post-eligibility claims.
416.1413c  Arrangement for conferences.
416.1414  Disability hearing--general.
416.1415  Disability hearing--disability hearing officers.
416.1416  Disability hearing--procedures.
416.1417  Disability hearing--disability hearing officer's reconsidered 
          determination.
416.1418  Disability hearing--review of the disability hearing officer's 
          reconsidered determination before it is issued.
416.1419  Notice of another person's request for reconsideration.
416.1420  Reconsidered determination.
416.1421  Effect of a reconsidered determination.
416.1422  Notice of a reconsidered determination.

                        Expedited Appeals Process

416.1423  Expedited appeals process--general.
416.1424  When the expedited appeals process may be used.
416.1425  How to request expedited appeals process.
416.1426  Agreement in expedited appeals process.
416.1427  Effect of expedited appeals process agreement.
416.1428  Expedited appeals process request that does not result in 
          agreement.

               Hearing Before an Administrative Law Judge

416.1429  Hearing before an administrative law judge--general.
416.1430  Availability of a hearing before an administrative law judge.
416.1432  Parties to a hearing before an administrative law judge.
416.1433  How to request a hearing before an administrative law judge.
416.1435  Submitting evidence prior to a hearing before an 
          administrative law judge.
416.1436  Time and place for a hearing before an administrative law 
          judge.
416.1437  Protecting the safety of the public and our employees in our 
          hearing process.
416.1438  Notice of a hearing before an administrative law judge.
416.1439  Objections to the issues.
416.1440  Disqualification of the administrative law judge.
416.1441  Prehearing case review.
416.1442  Prehearing proceedings and decisions by attorney advisors.
416.1443  Responsibilities of the adjudication officer.

               Administrative Law Judge Hearing Procedures

416.1444  Administrative law judge hearing procedures--general.
416.1446  Issues before an administrative law judge.
416.1448  Deciding a case without an oral hearing before an 
          administrative law judge.
416.1449  Presenting written statements and oral arguments.
416.1450  Presenting evidence at a hearing before an administrative law 
          judge.
416.1451  When a record of a hearing before an administrative law judge 
          is made.
416.1452  Consolidated hearings before an administrative law judge.
416.1453  The decision of an administrative law judge.
416.1455  The effect of an administrative law judge's decision.
416.1456  Removal of a hearing request from an administrative law judge 
          to the Appeals Council.
416.1457  Dismissal of a request for a hearing before an administrative 
          law judge.
416.1458  Notice of dismissal of a request for a hearing before an 
          administrative law judge.
416.1459  Effect of dismissal of a request for a hearing before an 
          administrative law judge.
416.1460  Vacating a dismissal of a request for a hearing before an 
          administrative law judge.
416.1461  Prehearing and posthearing conferences.

[[Page 801]]

416.1465  [Reserved]

                         Appeals Council Review

416.1466  Testing elimination of the request for Appeals Council review.
416.1467  Appeals Council review--general.
416.1468  How to request Appeals Council review.
416.1469  Appeals Council initiates review.
416.1470  Cases the Appeals Council will review.
416.1471  Dismissal by Appeals Council.
416.1472  Effect of dismissal of request for Appeals Council review.
416.1473  Notice of Appeals Council review.
416.1474  Obtaining evidence from Appeals Council.
416.1475  Filing briefs with the Appeals Council.
416.1476  Procedures before Appeals Council on review.
416.1477  Case remanded by Appeals Council.
416.1479  Decision of Appeals Council.
416.1481  Effect of Appeals Council's decision or denial of review.
416.1482  Extension of time to file action in Federal district court.

                           Court Remand Cases

416.1483  Case remanded by a Federal court.
416.1484  Appeals Council review of administrative law judge decision in 
          a case remanded by a Federal court.
416.1485  Application of circuit court law.

           Reopening and Revising Determinations and Decisions

416.1487  Reopening and revising determinations and decisions.
416.1488  Conditions for reopening.
416.1489  Good cause for reopening.
416.1491  Late completion of timely investigation.
416.1492  Notice of revised determination or decision.
416.1493  Effect of revised determination or decision.
416.1494  Time and place to request further review or a hearing on 
          revised determination or decision.

                   Payment of Certain Travel Expenses

416.1495  Payment of certain travel expenses--general.
416.1496  Who may be reimbursed.
416.1498  What travel expenses are reimbursable.
416.1499  When and how to claim reimbursement.

                   Subpart O_Representation of Parties

416.1500  Introduction.
416.1503  Definitions.
416.1505  Who may be your representative.
416.1506  Notification of options for obtaining attorney representation.
416.1507  Appointing a representative.
416.1510  Authority of a representative.
416.1513  Mandatory use of electronic services.
416.1515  Notice or request to a representative.
416.1517  Direct payment of fees to eligible non-attorney 
          representatives.
416.1520  Fee for a representative's services.
416.1525  Request for approval of a fee.
416.1528  Proceedings before a State or Federal court.
416.1530  Payment of fees.
416.1535  [Reserved]
416.1540  Rules of conduct and standards of responsibility for 
          representatives.
416.1545  Violations of our requirements, rules, or standards.
416.1550  Notice of charges against a representative.
416.1555  Withdrawing charges against a representative.
416.1565  Hearing on charges.
416.1570  Decision by hearing officer.
416.1575  Requesting review of the hearing officer's decision.
416.1576  Assignment of request for review of the hearing officer's 
          decision.
416.1580  Appeals Council's review of hearing officer's decision.
416.1585  Evidence permitted on review.
416.1590  Appeals Council's decision.
416.1595  When the Appeals Council will dismiss a request for review.
416.1597  Reinstatement after suspension--period of suspension expired.
416.1599  Reinstatement after suspension or disqualification--period of 
          suspension not expired.

                   Subpart P_Residence and Citizenship

416.1600  Introduction.
416.1601  Definitions and terms used in this subpart.
416.1603  How to prove you are a resident of the United States.
416.1610  How to prove you are a citizen or a national of the United 
          States.
416.1615  How to prove you are lawfully admitted for permanent residence 
          in the United States.
416.1618  When you are considered permanently residing in the United 
          States under color of law.
416.1619  When you cannot be considered permanently residing in the 
          United States under color of law.

Subpart Q_Referral of Persons Eligible for Supplemental Security Income 
                            to Other Agencies

                                 General

416.1701  Scope of subpart.

[[Page 802]]

416.1705  Definitions.

             Referral for Vocational Rehabilitation Services

416.1710  Whom we refer and when.

         Referral for Treatment of Alcoholism or Drug Addiction

416.1720  Whom we refer.
416.1725  Effect of your failure to comply with treatment requirements 
          for your drug addiction or alcoholism.

                         Subpart R_Relationship

416.1801  Introduction.

                      Who Is Considered Your Spouse

416.1802  Effects of marriage on eligibility and amount of benefits.
416.1806  Whether you are married and who is your spouse.
416.1816  Information we need concerning marriage when you apply for 
          SSI.
416.1821  Showing that you are married when you apply for SSI.
416.1826  Showing that you are not married when you apply for SSI.
416.1830  When we stop considering you and your spouse an eligible 
          couple.
416.1832  When we consider your marriage ended.
416.1835  Information we need about separation or end of marriage after 
          you become eligible for SSI.

                        Who Is Considered a Child

416.1851  Effects of being considered a child.
416.1856  Who is considered a child.
416.1861  Deciding whether you are a child: Are you a student?
416.1866  Deciding whether you are a child: Are you the head of a 
          household?

 Who Is Considered a Student for Purposes of the Student Earned Income 
                                Exclusion

416.1870  Effect of being considered a student.
416.1872  Who is considered a student.
416.1874  When we need evidence that you are a student.

                      Who Is Considered Your Parent

416.1876  Effects a parent (or parents) can have on the child's 
          benefits.
416.1881  Deciding whether someone is your parent or stepparent.

                 Subpart S_Interim Assistance Provisions

                              Introduction

416.1901  Scope of subpart S.
416.1902  Definitions.

                             Authorizations

416.1904  Authorization to withhold SSI benefits.
416.1906  When your authorization is in effect.
416.1908  When we need another authorization.

                      Interim Assistance Agreements

416.1910  Requirements for interim assistance agreement.

                                 Appeals

416.1920  Your appeal rights in the State.
416.1922  Your appeal rights in SSA.

     Subpart T_State Supplementation Provisions; Agreement; Payments

416.2001  State supplementary payments; general.
416.2005  Administration agreements with SSA.
416.2010  Essentials of the administration agreements.
416.2015  Establishing eligibility.
416.2020  Federally administered supplementary payments.
416.2025  Optional supplementation: Countable income.
416.2030  Optional supplementation: Variations in payments.
416.2035  Optional supplementation: Additional State options.
416.2040  Limitations on eligibility.
416.2045  Overpayments and underpayments; federally administered 
          supplementation.
416.2047  Waiver of State supplementary payments.
416.2050  Mandatory minimum State supplementation.
416.2055  Mandatory minimum supplementation reduced.
416.2060  Mandatory minimum supplementary payments not applicable.
416.2065  Mandatory minimum State supplementation: Agreement deemed.
416.2070  Mandatory supplementation: State compliance not applicable.
416.2075  Monitoring of mandatory minimum supplementary payments.
416.2090  State funds transferred for supplementary payments.
416.2095  Pass-along of Federal benefit increases.
416.2096  Basic pass-along rules.
416.2097  Combined supplementary/SSI payment levels.
416.2098  Supplementary payment levels.
416.2099  Compliance with pass-along.

              Subpart U_Medicaid Eligibility Determinations

416.2101  Introduction.

[[Page 803]]

416.2111  Conditions for our agreeing to make Medicaid eligibility 
          determinations.
416.2116  Medicaid eligibility determinations.
416.2130  Effect of the agreement and responsibilities of States.
416.2140  Liability for erroneous Medicaid eligibility determinations.
416.2145  Services other than Medicaid determinations.
416.2161  Charges to States.
416.2166  Changing the agreement.
416.2171  Duration of agreement.
416.2176  Disagreements between a State and us.

        Subpart V_Payments for Vocational Rehabilitation Services

                           General Provisions

416.2201  General.
416.2202  Purpose and scope.
416.2203  Definitions.
416.2204  Participation by State VR agencies or alternate participants.
416.2206  Basic qualifications for alternate participants.

                           Payment Provisions

416.2208  Requirements for payment.
416.2209  Responsibility for making payment decisions.
416.2210  What we mean by ``SGA'' and by ``a continuous period of 9 
          months''.
416.2211  Criteria for determining when VR services will be considered 
          to have contributed to a continuous period of 9 months.
416.2212  Payment for VR services in a case where an individual 
          continues to receive disability or blindness benefits based on 
          participation in an approved VR program.
416.2214  Services for which payment may be made.
416.2215  When services must have been provided.
416.2216  When claims for payment for VR services must be made (filing 
          deadlines).
416.2217  What costs will be paid.

                        Administrative Provisions

416.2218  Applicability of these provisions to alternate participants.
416.2219  Method of payment.
416.2220  Audits.
416.2221  Validation reviews.
416.2222  Confidentiality of information and records.
416.2223  Other Federal laws and regulations.
416.2227  Resolution of disputes.

    Editorial Note: Nomenclature changes to part 416 appear at 68 FR 
53509, Sept. 11, 2003.



       Subpart A_Introduction, General Provisions and Definitions

    Authority: Secs. 702(a)(5) and 1601-1635 of the Social Security Act 
(42 U.S.C. 902(a)(5) and 1381-133d); sec. 212, Pub. L. 93-66, 87 Stat. 
155 (42 U.S.C. 1382 note); sec. 502(a), Pub. L. 94-241, 90 Stat. 268 (48 
U.S.C. 1681 note).

    Source: 39 FR 28625, Aug. 9, 1974, unless otherwise noted.



Sec. 416.101  Introduction.

    The regulations in this part 416 (Regulations No. 16 of the Social 
Security Administration) relate to the provisions of title XVI of the 
Social Security Act as amended by section 301 of Pub. L. 92-603 enacted 
October 30, 1972, and as may thereafter be amended. Title XVI 
(Supplemental Security Income For The Aged, Blind, and Disabled) of the 
Social Security Act, as amended, established a national program, 
effective January 1, 1974, for the purpose of providing supplemental 
security income to individuals who have attained age 65 or are blind or 
disabled. The regulations in this part are divided into the following 
subparts according to subject content:
    (a) This subpart A contains this introduction, a statement of the 
general purpose underlying the supplemental security income program, 
general provisions applicable to the program and its administration, and 
definitions and use of terms occurring throughout this part.
    (b) Subpart B of this part covers in general the eligibility 
requirements which must be met for benefits under the supplemental 
security income program. It sets forth the requirements regarding 
residence, citizenship, age, disability, or blindness, and describes the 
conditions which bar eligibility and generally points up other 
conditions of eligibility taken up in greater detail elsewhere in the 
regulations (e.g., limitations on income and resources, receipt of 
support and maintenance, etc.).
    (c) Subpart C of this part sets forth the rules with respect to the 
filing of applications, requests for withdrawal of applications, 
cancellation of withdrawal requests and other similar requests.

[[Page 804]]

    (d) Subpart D of this part sets forth the rules for computing the 
amount of benefits payable to an eligible individual and eligible 
spouse.
    (e) Subpart E of this part covers provisions with respect to 
periodic payment of benefits, joint payments, payment of emergency cash 
advances, payment of benefits prior to a determination of disability, 
prohibition against transfer or assignment of benefits, adjustment and 
waiver of overpayments, and payment of underpayments.
    (f) Subpart F of this part contains provisions with respect to the 
selection of representative payees to receive benefits on behalf of and 
for the use of recipients and to the duties and responsibilities of 
representative payees.
    (g) Subpart G of this part sets forth rules with respect to the 
reporting of events and circumstances affecting eligibility or the 
amount of benefits payable.
    (h) Subpart H of this part sets forth rules and guidelines for the 
submittal and evaluation of evidence of age where age is pertinent to 
establishing eligibility or the amount of benefits payable.
    (i) Subpart I of this part sets forth the rules for establishing 
disability or blindness where the establishment of disability or 
blindness is pertinent to eligibility.
    (j) Subpart J of this part sets forth the standards, requirements 
and procedures for States making determinations of disability for the 
Commissioner. It also sets out the Commissioner's responsibilities in 
carrying out the disability determination function.
    (k) Subpart K of this part defines income, earned income, and 
unearned income and sets forth the statutory exclusions applicable to 
earned and unearned income for the purpose of establishing eligibility 
for and the amount of benefits payable.
    (l) Subpart L of this part defines the term resources and sets forth 
the statutory exclusions applicable to resources for the purpose of 
determining eligibility.
    (m) Subpart M of this part deals with events or circumstances 
requiring suspension or termination of benefits.
    (n) Subpart N of this part contains provisions with respect to 
procedures for making determinations with respect to eligibility, amount 
of benefits, representative payment, etc., notices of determinations, 
rights of appeal and procedures applicable thereto, and other procedural 
due process provisions.
    (o) Subpart O of this part contains provisions applicable to 
attorneys and other individuals who represent applicants in connection 
with claims for benefits.
    (p) Subpart P of this part sets forth the residence and citizenship 
requirements that are pertinent to eligibility.
    (q) Subpart Q of this part contains provisions with respect to the 
referral of individuals for vocational rehabilitation, treatment for 
alcoholism and drug addiction, and application for other benefits to 
which an applicant may be potentially entitled.
    (r) Subpart R of this part sets forth the rules for determining 
marital and other family relationships where pertinent to the 
establishment of eligibility for or the amount of benefits payable.
    (s) Subpart S of this part explains interim assistance and how 
benefits may be withheld to repay such assistance given by the State.
    (t) Subpart T of this part contains provisions with respect to the 
supplementation of Federal supplemental security income payments by 
States, agreements for Federal administration of State supplementation 
programs, and payment of State supplementary payments.
    (u) Subpart U of this part contains provisions with respect to 
agreements with States for Federal determination of Medicaid eligibility 
of applicants for supplemental security income.
    (v) Subpart V of this part explains when payments are made to State 
vocational rehabilitation agencies (or alternate participants) for 
vocational rehabilitation services.

[39 FR 28625, Aug. 9, 1974, as amended at 51 FR 11718, Apr. 7, 1986; 62 
FR 38454, July 18, 1997]

[[Page 805]]



Sec. 416.105  Administration.

    The Supplemental Security Income for the Aged, Blind, and Disabled 
program is administered by the Social Security Administration.

[51 FR 11718, Apr. 7, 1986, as amended at 62 FR 38454, July 18, 1997]



Sec. 416.110  Purpose of program.

    The basic purpose underlying the supplemental security income 
program is to assure a minimum level of income for people who are age 65 
or over, or who are blind or disabled and who do not have sufficient 
income and resources to maintain a standard of living at the established 
Federal minimum income level. The supplemental security income program 
replaces the financial assistance programs for the aged, blind, and 
disabled in the 50 States and the District of Columbia for which grants 
were made under the Social Security Act. Payments are financed from the 
general funds of the United States Treasury. Several basic principles 
underlie the program:
    (a) Objective tests. The law provides that payments are to be made 
to aged, blind, and disabled people who have income and resources below 
specified amounts. This provides objective measurable standards for 
determining each person's benefits.
    (b) Legal right to payments. A person's rights to supplemental 
security income payments--how much he gets and under what conditions--
are clearly defined in the law. The area of administrative discretion is 
thus limited. If an applicant disagrees with the decision on his claim, 
he can obtain an administrative review of the decision and if still not 
satisfied, he may initiate court action.
    (c) Protection of personal dignity. Under the Federal program, 
payments are made under conditions that are as protective of people's 
dignity as possible. No restrictions, implied or otherwise, are placed 
on how recipients spend the Federal payments.
    (d) Nationwide uniformity of standards. The eligibility requirements 
and the Federal minimum income level are identical throughout the 50 
States and the District of Columbia. This provides assurance of a 
minimum income base on which States may build supplementary payments.
    (e) Incentives to work and opportunities for rehabilitation. Payment 
amounts are not reduced dollar-for-dollar for work income but some of an 
applicant's income is counted toward the eligibility limit. Thus, 
recipients are encouraged to work if they can. Blind and disabled 
recipients with vocational rehabilitation potential are referred to the 
appropriate State vocational rehabilitation agencies that offer 
rehabilitation services to enable them to enter the labor market.
    (f) State supplementation and Medicaid determinations. (1) Federal 
supplemental security income payments lessen the variations in levels of 
assistance and provide a basic level of assistance throughout the 
nation. States are required to provide mandatory minimum State 
supplementary payments beginning January 1, 1974, to aged, blind, or 
disabled recipients of assistance for the month of December 1973 under 
such State's plan approved under title I, X, XIV, or XVI of the Act in 
order for the State to be eligible to receive title XIX funds (see 
subpart T of this part). These payments must be in an amount sufficient 
to ensure that individuals who are converted to the new program will not 
have their income reduced below what it was under the State program for 
December 1973. In addition, each State may choose to provide more than 
the Federal supplemental security income and/or mandatory minimum State 
supplementary payment to whatever extent it finds appropriate in view of 
the needs and resources of its citizens or it may choose to provide no 
more than the mandatory minimum payment where applicable. States which 
provide State supplementary payments can enter into agreements for 
Federal administration of the mandatory and optional State supplementary 
payments with the Federal Government paying the administrative costs. A 
State which elects Federal administration of its supplementation program 
must apply the same eligibility criteria (other than those pertaining to 
income) applied to determine eligibility for the Federal portion of the 
supplemental security income payment, except as provided in sec.

[[Page 806]]

1616(c) of the Act (see subpart T of this part). There is a limitation 
on the amount payable to the Commissioner by a State for the amount of 
the supplementary payments made on its behalf for any fiscal year 
pursuant to the State's agreement with the Secretary. Such limitation on 
the amount of reimbursement is related to the State's payment levels for 
January 1972 and its total expenditures for calendar year 1972 for aid 
and assistance under the appropriate State plan(s) (see subpart T of 
this part).
    (2) States with Medicaid eligibility requirements for the aged, 
blind, and disabled that are identical (except as permitted by 
Sec. 416.2111) to the supplemental security income eligibility 
requirements may elect to have the Social Security Administration 
determine Medicaid eligibility under the State's program for recipients 
of supplemental security income and recipients of a federally 
administered State supplementary payment. The State would pay half of 
Social Security Administration's incremental administrative costs 
arising from carrying out the agreement.

[39 FR 28625, Aug. 9, 1974, as amended at 53 FR 12941, Apr. 20, 1988; 62 
FR 38454, July 18, 1997]



Sec. 416.120  General definitions and use of terms.

    (a) Terms relating to acts and regulations. As used in this part:
    (1) The Act means the Social Security Act as amended (42 U.S.C. 
Chap. 7).
    (2) Wherever a title is referred to, it means such title of the Act.
    (3) Vocational Rehabilitation Act means the act approved June 2, 
1920 (41 Stat. 735), 29 U.S.C. 31-42, as amended, and as may be amended 
from time to time hereafter.
    (b) Commissioner; Appeals Council; defined. As used in this part:
    (1) Commissioner means the Commissioner of Social Security.
    (2) Appeals Council means the Appeals Council of the Office of 
Hearings and Appeals in the Social Security Administration or such 
member or members thereof as may be designated by the Chairman.
    (c) Miscellaneous. As used in this part unless otherwise indicated:
    (1) Supplemental security income benefit means the amount to be paid 
to an eligible individual (or eligible individual and his eligible 
spouse) under title XVI of the Act.
    (2) Income means the receipt by an individual of any property or 
service which he can apply, either directly or by sale or conversion, to 
meeting his basic needs (see subpart K of this part).
    (3) Resources means cash or other liquid assets or any real or 
personal property that an individual owns and could convert to cash to 
be used for support and maintenance (see Sec. 416.1201(a)).
    (4) Attainment of age. An individual attains a given age on the 
first moment of the day preceding the anniversary of his birth 
corresponding to such age.
    (5) Couple means an eligible individual and his eligible spouse.
    (6) Institution (see Sec. 416.201).
    (7) Public institution (see Sec. 416.201).
    (8) Resident of a public institution (see Sec. 416.201).
    (9) State, unless otherwise indicated, means a State of the United 
States, the District of Columbia, or effective January 9, 1978, the 
Northern Mariana Islands.
    (10) The term United States when used in a geographical sense means 
the 50 States, the District of Columbia, and effective January 9, 1978, 
the Northern Mariana Islands.
    (11) Masculine gender includes the feminine, unless otherwise 
indicated.
    (12) Section means a section of the regulations in part 416 of this 
chapter unless the context indicates otherwise.
    (13) Eligible individual means an aged, blind, or disabled 
individual who meets all the requirements for eligibility for benefits 
under the supplemental security income program.
    (14) Eligible spouse means an aged, blind, or disabled individual 
who is the husband or wife of another aged, blind, or disabled 
individual and who is living with that individual (see 
Sec. 416.1801(c)).
    (d) Periods of limitation ending on nonwork days. Pursuant to the 
Act, where any provision of title XVI, or any provision of another law 
of the United States (other than the Internal Revenue Code of 1954) 
relating to or changing the effect of title XVI, or any regulation of 
the Commissioner issued

[[Page 807]]

under title XVI, provides for a period within which an act is required 
to be done which affects eligibility for or the amount of any benefit or 
payment under title XVI or is necessary to establish or protect any 
rights under title XVI and such period ends on a Saturday, Sunday, or 
Federal legal holiday or on any other day all or part of which is 
declared to be a nonworkday for Federal employees by statute or 
Executive Order, then such act shall be considered as done within such 
period if it is done on the first day thereafter which is not a 
Saturday, Sunday, or legal holiday or any other day all or part of which 
is declared to be a nonworkday for Federal employees either by statute 
or Executive Order. For purposes of this paragraph, the day on which a 
period ends shall include the final day of any extended period where 
such extension is authorized by law or by the Commissioner pursuant to 
law. Such extension of any period of limitation does not apply to 
periods during which an application for benefits or payments may be 
accepted as such an application pursuant to subpart C of this part.

[39 FR 28625, Aug. 9, 1974, as amended at 43 FR 25091, June 9, 1978; 51 
FR 11719, Apr. 7, 1986; 60 FR 16374, Mar. 30, 1995; 62 FR 38454, July 
18, 1997]



Sec. 416.121  Receipt of aid or assistance for December 1973 under an
approved State plan under title I, X, XIV, or XVI of the Social
Security Act.

    (a) Recipient of aid or assistance defined. As used in this part 
416, the term individual who was a recipient of aid or assistance for 
December 1973 under a State plan approved under title I, X, XIV, or XVI 
of the Social Security Act means an individual who correctly received 
aid or assistance under such plan for December 1973 even though such aid 
or assistance may have been received subsequent to December 1973. It 
also includes an individual who filed an application prior to January 
1974 and was otherwise eligible for aid or assistance for December 1973 
under the provisions of such State plan but did not in fact receive such 
aid or assistance. It does not include an individual who received aid or 
assistance because of the provisions of 45 CFR 205.10(a) (pertaining to 
continuation of assistance until a fair hearing decision is rendered), 
as in effect in December 1973, and with respect to whom it is 
subsequently determined that such aid or assistance would not have been 
received without application of the provisions of such 45 CFR 205.10(a).
    (b) Aid or assistance defined. As used in this part 416, the term 
aid or assistance means aid or assistance as defined in titles I, X, 
XIV, and XVI of the Social Security Act, as in effect in December 1973, 
and such aid or assistance is eligible for Federal financial 
participation in accordance with those titles and the provisions of 45 
CFR chapter II as in effect in December 1973.
    (c) Determinations of receipt of aid or assistance for December 
1973. For the purpose of application of the provisions of this part 416, 
the determination as to whether an individual was a recipient of aid or 
assistance for December 1973 under a State plan approved under title I, 
X, XIV, or XVI of the Social Security Act will be made by the Social 
Security Administration. In making such determination, the Social 
Security Administration may take into consideration a prior 
determination by the appropriate State agency as to whether the 
individual was eligible for aid or assistance for December 1973 under 
such State plan. Such prior determination, however, shall not be 
considered as conclusive in determining whether an individual was a 
recipient of aid or assistance for December 1973 under a State plan 
approved under title I, X, XIV, or XVI of the Social Security Act for 
purposes of application of the provisions of this part 416.
    (d) Special provision for disabled recipients. For purposes of 
Sec. 416.907, the criteria and definitions enumerated in paragraphs (a) 
through (c) of this section are applicable in determining whether an 
individual was a recipient of aid or assistance (on the basis of 
disability) under a State plan approved under title XIV or XVI of the 
Act for a month prior to July 1973. It is not necessary that the aid or 
assistance for December 1973 and for a month prior to

[[Page 808]]

July 1973 have been paid under the State plan of the same State.

[39 FR 32024, Sept. 4, 1974; 39 FR 33207, Sept. 16, 1974, as amended at 
51 FR 11719, Apr. 7, 1986]



                          Subpart B_Eligibility

    Authority: Secs. 702(a)(5), 1110(b), 1602, 1611, 1614, 1619(a), 
1631, and 1634 of the Social Security Act (42 U.S.C. 902(a)(5), 1310(b), 
1381a, 1382, 1382c, 1382h(a), 1383, and 1383c); secs. 211 and 212, Pub. 
L. 93-66, 87 Stat. 154 and 155 (42 U.S.C. 1382 note); sec. 502(a), Pub. 
L. 94-241, 90 Stat. 268 (48 U.S.C. 1681 note); sec. 2, Pub. L. 99-643, 
100 Stat. 3574 (42 U.S.C. 1382h note).

    Source: 47 FR 3103, Jan. 22, 1982, unless otherwise noted.

                                 General



Sec. 416.200  Introduction.

    You are eligible for SSI benefits if you meet all the basic 
requirements listed in Sec. 416.202. However, the first month for which 
you may receive SSI benefits is the month after the month in which you 
meet these eligibility requirements. (See Sec. 416.501.) You must give 
us any information we request and show us necessary documents or other 
evidence to prove that you meet these requirements. We determine your 
eligibility for each month on the basis of your countable income in that 
month. You continue to be eligible unless you lose your eligibility 
because you no longer meet the basic requirements or because of one of 
the reasons given in Secs. 416.207 through 416.216.

[64 FR 31972, June 15, 1999, as amended at 68 FR 53508, Sept. 11, 2003]



Sec. 416.201  General definitions and terms used in this subpart.

    Any 9-month period means any period of 9 full calendar months ending 
with any full calendar month throughout which (as defined in 
Sec. 416.211) an individual is residing in a public emergency shelter 
for the homeless (as defined in this section) and including the 
immediately preceding 8 consecutive full calendar months. January 1988 
is the earliest possible month in any 9-month period.
    Educational or vocational training means a recognized program for 
the acquisition of knowledge or skills to prepare an individual for 
gainful employment. For purposes of these regulations, educational or 
vocational training does not include programs limited to the acquisition 
of basic life skills including but not limited to eating and dressing.
    Emergency shelter means a shelter for individuals whose homelessness 
poses a threat to their lives or health.
    Homeless individual is one who is not in the custody of any public 
institution and has no currently usable place to live. By custody we 
mean the care and control of an individual in a mandatory residency 
where the individual's freedom to come and go as he or she chooses is 
restricted. An individual in a public institution awaiting discharge and 
placement in the community is in the custody of that institution until 
discharged and is not homeless for purposes of this provision.
    Institution means an establishment that makes available some 
treatment or services in addition to food and shelter to four or more 
persons who are not related to the proprietor.
    Medical treatment facility means an institution or that part of an 
institution that is licensed or otherwise approved by a Federal, State, 
or local government to provide inpatient medical care and services.
    Public emergency shelter for the homeless means a public institution 
or that part of a public institution used as an emergency shelter by the 
Federal government, a State, or a political subdivision of a State, 
primarily for making available on a temporary basis a place to sleep, 
food, and some services or treatment to homeless individuals. A medical 
treatment facility (as defined in Sec. 416.201) or any holding facility, 
detoxification center, foster care facility, or the like that has 
custody of the individual is not a public emergency shelter for the 
homeless. Similarly, transitional living arrangements such as a halfway 
house that are part of an insitution's plan to facilitate the 
individual's adjustment to community living are not public emergency 
shelters for the homeless.
    Public institution means an institution that is operated by or 
controlled by the Federal government, a State, or

[[Page 809]]

a political subdivision of a State such as a city or county. The term 
public institution does not include a publicly operated community 
residence which serves 16 or fewer residents.
    Resident of a public institution means a person who can receive 
substantially all of his or her food and shelter while living in a 
public institution. The person need not be receiving treatment and 
services available in the institution and is a resident regardless of 
whether the resident or anyone else pays for all food, shelter, and 
other services in the institution. A person is not a resident of a 
public institution if he or she is living in a public educational 
institution for the primary purpose of receiving educational or 
vocational training as defined in this section. A resident of a public 
institution means the same thing as an inmate of a public institution as 
used in section 1611(e)(1)(A) of the Social Security Act. (See 
Sec. 416.211(b), (c), and (d) of this subpart for exceptions to the 
general limitation on the eligibility for Supplemental Security Income 
benefits of individuals who are residents of a public institution.)
    SSI means supplemental security income.
    State assistance means payments made by a State to an aged, blind, 
or disabled person under a State plan approved under title I, X, XIV, or 
XVI (AABD) of the Social Security Act which was in effect before the SSI 
Program.
    We or Us means the Social Security Administration.
    You or Your means the person who applies for or receives SSI 
benefits or the person for whom an application is filed.

[47 FR 3103, Jan. 22, 1982, as amended at 49 FR 19639, May 19, 1984; 50 
FR 48570, Nov. 26, 1985; 50 FR 51517, Dec. 18, 1985; 54 FR 19164, May 4, 
1989; 72 FR 50874, Sept. 5, 2007]



Sec. 416.202  Who may get SSI benefits.

    You are eligible for SSI benefits if you meet all of the following 
requirements:
    (a) You are--
    (1) Aged 65 or older (subpart H);
    (2) Blind (subpart I); or
    (3) Disabled (subpart I).
    (b) You are a resident of the United States (Sec. 416.1603), and--
    (1) A citizen or a national of the United States (Sec. 416.1610);
    (2) An alien lawfully admitted for permanent residence in the United 
States (Sec. 416.1615);
    (3) An alien permanently residing in the United States under color 
of law (Sec. 416.1618); or
    (4) A child of armed forces personnel living overseas as described 
in Sec. 416.216.
    (c) You do not have more income than is permitted (subparts K and 
D).
    (d) You do not have more resources than are permitted (subpart L).
    (e) You are disabled, drug addiction or alcoholism is a contributing 
factor material to the determination of disability (see Sec. 416.935), 
and you have not previously received a total of 36 months of Social 
Security benefit payments when appropriate treatment was available or 36 
months of SSI benefits on the basis of disability where drug addiction 
or alcoholism was a contributing factor material to the determination of 
disability.
    (f) You are not--
    (1) Fleeing to avoid prosecution for a crime, or an attempt to 
commit a crime, which is a felony under the laws of the place from which 
you flee (or which, in the case of the State of New Jersey, is a high 
misdemeanor under the laws of that State);
    (2) Fleeing to avoid custody or confinement after conviction for a 
crime, or an attempt to commit a crime, which is a felony under the laws 
of the place from which you flee (or which, in the case of the State of 
New Jersey, is a high misdemeanor under the laws of that State); or
    (3) Violating a condition of probation or parole imposed under 
Federal or State law.
    (g) You file an application for SSI benefits (subpart C).

[47 FR 3103, Jan. 22, 1982, as amended at 58 FR 4897, Jan. 19, 1993; 60 
FR 8149, Feb. 10, 1995; 61 FR 10277, Mar. 13, 1996; 65 FR 40495, June 
30, 2000]



Sec. 416.203  Initial determinations of SSI eligibility.

    (a) What happens when you apply for SSI benefits. When you apply for 
SSI benefits we will ask you for documents

[[Page 810]]

and any other information we need to make sure you meet all the 
requirements. We will ask for information about your income and 
resources and about other eligibility requirements and you must answer 
completely. We will help you get any documents you need but do not have.
    (b) How we determine your eligibility for SSI benefits. We determine 
that you are eligible for SSI benefits for a given month if you meet the 
requirements in Sec. 416.202 in that month. However, you cannot become 
eligible for payment of SSI benefits until the month after the month in 
which you first become eligible for SSI benefits (see Sec. 416.501). In 
addition, we usually determine the amount of your SSI benefits for a 
month based on your income in an earlier month (see Sec. 416.420). Thus, 
it is possible for you to meet the eligibility requirements in a given 
month but receive no benefit payment for that month.

[47 FR 3103, Jan. 22, 1982, as amended at 50 FR 48570, Nov. 26, 1985; 64 
FR 31972, June 15, 1999]



Sec. 416.204  Redeterminations of SSI eligibility.

    (a) Redeterminations defined. A redetermination is a review of your 
eligibility to make sure that you are still eligible and that you are 
receiving the right amount of SSI benefits. This review deals with the 
requirements for eligibility other than whether you are still disabled 
or blind. Continuation of disability or blindness reviews are discussed 
in Secs. 416.989 and 416.990.
    (b) When we make redeterminations. (1) We redetermine your 
eligibility on a scheduled basis at periodic intervals. The length of 
time between scheduled redeterminations varies depending on the 
likelihood that your situation may change in a way that affects your 
benefits.
    (2) We may also redetermine your eligibility when you tell us (or we 
otherwise learn) of a change in your situation which affects your 
eligibility or the amount of your benefit.
    (c) The period for which a redetermination applies: (1) The first 
redetermination applies to--
    (i) The month in which we make the redetermination;
    (ii) All months beginning with the first day of the latest of the 
following:
    (A) The month of first eligibility or re-eligibility; or
    (B) The month of application; or
    (C) The month of deferred or updated development; and
    (iii) Future months until the second redetermination.
    (2) All other redeterminations apply to--
    (i) The month in which we make the redetermination;
    (ii) All months beginning with the first day of the month the last 
redetermination was initiated; and
    (iii) Future months until the next redetermination.
    (3) If we made two redeterminations which cover the same month, the 
later redetermination is the one we apply to that month.

[47 FR 3103, Jan. 22, 1982, as amended at 50 FR 48570, Nov. 26, 1985; 58 
FR 64893, Dec. 10, 1993]

  Reasons Why You May Not Get SSI Benefits for Which You Are Otherwise 
                                Eligible



Sec. 416.207  You do not give us permission to contact financial
institutions.

    (a) To be eligible for SSI payments you must give us permission to 
contact any financial institution and request any financial records that 
financial institution may have about you. You must give us this 
permission when you apply for SSI payments or when we ask for it at a 
later time. You must also provide us with permission from anyone whose 
income and resources we consider as being available to you, i.e., 
deemors (see Secs. 416.1160, 416.1202, 416.1203, and 416.1204).
    (b) Financial institution means any:
    (1) Bank,
    (2) Savings bank,
    (3) Credit card issuer,
    (4) Industrial loan company,
    (5) Trust company,
    (6) Savings association,
    (7) Building and loan,
    (8) Homestead association,
    (9) Credit union,
    (10) Consumer finance institution, or
    (11) Any other financial institution as defined in section 1101(1) 
of the Right to Financial Privacy Act.

[[Page 811]]

    (c) Financial record means an original of, a copy of, or information 
known to have been derived from any record held by the financial 
institution pertaining to your relationship with the financial 
institution.
    (d) We may ask any financial institution for information on any 
financial account concerning you. We may also ask for information on any 
financial accounts for anyone whose income and resources we consider as 
being available to you (see Secs. 416.1160, 416.1202, 416.1203, and 
416.1204).
    (e) We ask financial institutions for this information when we think 
that it is necessary to determine your SSI eligibility or payment 
amount.
    (f) Your permission to contact financial institutions, and the 
permission of anyone whose income and resources we consider as being 
available to you, i.e., a deemor (see Secs. 416.1160, 416.1202, 
416.1203, and 416.1204), remains in effect until a terminating event 
occurs. The following terminating events only apply prospectively and do 
not invalidate the permission for past periods.
    (1) You cancel your permission in writing and provide the writing to 
us.
    (2) The deemor cancels their permission in writing and provides the 
writing to us.
    (3) The basis on which we consider a deemor's income and resources 
available to you ends, e.g. when spouses separate or divorce or a child 
attains age 18.
    (4) Your application for SSI is denied, and the denial is final. A 
denial is final when made, unless you appeal the denial timely as 
described in Secs. 416.1400 through 416.1499.
    (5) You are no longer eligible for SSI as described in 
Secs. 416.1331 through 416.1335.
    (g) If you don't give us permission to contact any financial 
institution and request any financial records about you when we think it 
is necessary to determine your SSI eligibility or payment amount, or if 
you cancel the permission, you cannot be eligible for SSI payments. 
Also, except as noted in paragraph (h), if anyone whose income and 
resources we consider as being available to you (see Secs. 416.1160, 
416.1202, 416.1203, and 416.1204) doesn't give us permission to contact 
any financial institution and request any financial records about that 
person when we think it is necessary to determine your eligibility or 
payment amount, or if that person cancels the permission, you cannot be 
eligible for SSI payments. This means that if you are applying for SSI 
payments, you cannot receive them. If you are receiving SSI payments, we 
will stop your payments.
    (h) You may be eligible for SSI payments if there is good cause for 
your being unable to obtain permission for us to contact any financial 
institution and request any financial records about someone whose income 
and resources we consider as being available to you (see Secs. 416.1160, 
416.1202, 416.1203, and 416.1204).
    (1) Good cause exists if permission cannot be obtained from the 
individual and there is evidence that the individual is harassing you, 
abusing you, or endangering your life.
    (2) Good cause may exist if an individual other than one listed in 
paragraph (h)(3) of this section refuses to provide permission and: you 
acted in good faith to obtain permission from the individual but were 
unable to do so through no fault of your own, or you cooperated with us 
in our efforts to obtain permission.
    (3) Good cause does not apply if the individual is your 
representative payee and your legal guardian, if you are a minor child 
and the individual is your representative payee and your custodial 
parent, or if you are an alien and the individual is your sponsor or the 
sponsor's living-with spouse.

[68 FR 53508, Sept. 11, 2003]



Sec. 416.210  You do not apply for other benefits.

    (a) General rule. You are not eligible for SSI benefits if you do 
not apply for all other benefits for which you may be eligible.
    (b) What ``other benefits'' includes. ``Other benefits'' includes 
any payments for which you can apply that are available to you on an 
ongoing or one-time basis of a type that includes annuities, pensions, 
retirement benefits, or disability benefits. For example, ``other 
benefits'' includes veterans' compensation and pensions, workers'

[[Page 812]]

compensation payments, Social Security insurance benefits and 
unemployment insurance benefits. ``Other benefits'' for which you are 
required to apply do not include payments that you may be eligible to 
receive from a fund established by a State to aid victims of crime. (See 
Sec. 416.1124(c)(17).)
    (c) Our notice to you. We will give you a dated, written notice that 
will tell you about any other benefits that we think you are likely to 
be eligible for. In addition, the notice will explain that your 
eligibility for SSI benefits will be affected if you do not apply for 
those other benefits.
    (d) What you must do to apply for other benefits. In order to apply 
for other benefits, you must file any required applications and do 
whatever else is needed so that your eligibility for the other benefits 
can be determined. For example, if any documents (such as a copy of a 
birth certificate) are required in addition to the application, you must 
submit them.
    (e) What happens if you do not apply for the other benefits. (1) If 
you do not apply for the other benefits within 30 days from the day that 
you receive our written notice, you are not eligible for SSI benefits. 
This means that if you are applying for SSI benefits, you cannot receive 
them. If you are receiving SSI benefits, your SSI benefits will stop. In 
addition, you will have to repay us for any SSI benefits that you 
received beginning with the month that you received our written notice. 
We assume (unless you prove otherwise) that you received our written 
notice 5 days after the date shown on the notice. We will also find that 
you are not eligible for SSI benefits if you file the required 
application for other benefits but do not take other necessary steps to 
obtain them.
    (2) We will not find you ineligible for SSI benefits if you have a 
good reason for not applying for the other benefits within the 30-day 
period or taking other necessary steps to obtain them. In determining 
whether a good reason exists, we will take into account any physical, 
mental, educational, or linguistic limitations (including any lack of 
facility with the English language) which may have caused you to fail to 
apply for other benefits. You may have a good reason if, for example--
    (i) You are incapacitated (because of illness you were not able to 
apply); or
    (ii) It would be useless for you to apply (you once applied for the 
benefits and the reasons why you were turned down have not changed).

[47 FR 3103, Jan. 22, 1982, as amended at 50 FR 5573, Feb. 11, 1985; 50 
FR 14211, Apr. 11, 1985; 59 FR 1635, Jan. 12, 1994; 61 FR 1712, Jan. 23, 
1996]



Sec. 416.211  You are a resident of a public institution.

    (a) General rule. (1) Subject to the exceptions described in 
paragraphs (b), (c), and (d) of this section and Sec. 416.212, you are 
not eligible for SSI benefits for any month throughout which you are a 
resident of a public institution as defined in Sec. 416.201. In 
addition, if you are a resident of a public institution when you apply 
for SSI benefits and meet all other eligibility requirements, you cannot 
be eligible for payment of benefits until the first day of the month 
following the day of your release from the institution.
    (2) By throughout a month we mean that you reside in an institution 
as of the beginning of a month and stay the entire month. If you have 
been a resident of a public institution, you remain a resident if you 
are transferred from one public institution to another or if you are 
temporarily absent for a period of not more than 14 consecutive days. A 
person also is a resident of an institution throughout a month if he or 
she is born in the institution during the month and resides in the 
institution the rest of the month or resides in the institution as of 
the beginning of a month and dies in the institution during the month.
    (b) Exception--SSI benefits payable at a reduced rate. You may be 
eligible for SSI benefits at a reduced rate described in Sec. 416.414, 
if--
    (1)(i) You reside throughout a month in a public institution that is 
a medical treatment facility where Medicaid (title XIX of the Social 
Security Act) pays a substantial part (more than 50 percent) of the cost 
of your care; you are a child under the age of 18 residing

[[Page 813]]

throughout a month in a public institution that is a medical treatment 
facility where a substantial part (more than 50 percent) of the cost of 
your care is paid under a health insurance policy issued by a private 
provider of such insurance; or, you are a child under the age of 18 
residing throughout a month in a public institution that is a medical 
treatment facility where a substantial part (more than 50 percent) of 
the cost of your care is paid by a combination of Medicaid payments and 
payments made under a health insurance policy issued by a private 
provider of such insurance; or
    (ii) You reside for part of a month in a public institution and the 
rest of the month in a public institution or private medical treatment 
facility where Medicaid pays a substantial part (more than 50 percent) 
of the cost of your care; you are a child under the age of 18 residing 
for part of a month in a public institution and the rest of the month in 
a public institution or private medical treatment facility where a 
substantial part (more than 50 percent) of the cost of your care is paid 
under a health insurance policy issued by a private provider of such 
insurance; or you are a child under the age of 18 residing for part of a 
month in a public institution and the rest of the month in a public 
institution or private medical treatment facility where a substantial 
part (more than 50 percent) of the cost of your care is paid by a 
combination of Medicaid payments and payments made under a health 
insurance policy issued by a private provider; and
    (2) You are ineligible in that month for a benefit described in 
Sec. 416.212 that is payable to a person temporarily confined in a 
medical treatment facility.
    (c) Exception for publicly operated community residences which serve 
no more than 16 residents--(1) General rule. If you are a resident of a 
publicly operated community residence which serves no more than 16 
residents, you may be eligible for SSI benefits.
    (2) Services that a facility must provide in order to be a community 
residence. To be a community residence, a facility must provide food and 
shelter. In addition, it must make available some other services. For 
example, the other services could be--
    (i) Social services;
    (ii) Help with personal living activities;
    (iii) Training in socialization and life skills; or
    (iv) Providing occasional or incidental medical or remedial care.
    (3) Serving no more than 16 residents. A community residence serves 
no more than 16 residents if--
    (i) It is designed and planned to serve no more than 16 residents, 
or the design and plan were changed to serve no more than 16 residents; 
and
    (ii) It is in fact serving 16 or fewer residents.
    (4) Publicly operated. A community residence is publicly operated if 
it is operated or controlled by the Federal government, a State, or a 
political subdivision of a State such as a city or county.
    (5) Facilities which are not a publicly operated community 
residence. If you live in any of the following facilities, you are not a 
resident of a publicly operated community residence:
    (i) A residential facility which is on the grounds of or next to a 
large institution or multipurpose complex;
    (ii) An educational or vocational training institution whose main 
function is to provide an approved, accredited, or recognized program to 
some or all of those who live there;
    (iii) A jail or other facility where the personal freedom of anyone 
who lives there is restricted because that person is a prisoner, is 
being held under court order, or is being held until charges against 
that person are disposed of; or
    (iv) A medical treatment facility (defined in Sec. 416.201).
    (d) Exception for residents of public emergency shelters for the 
homeless. For months after December 1987, if you are a resident of a 
public emergency shelter for the homeless (defined in Sec. 416.201) you 
may be eligible for SSI benefits for any 6 months throughout which you 
reside in a shelter in any 9-month period (defined in Sec. 416.201). The 
6 months do not need to be consecutive and we will not count as part of 
the 6 months any prior months throughout which you lived in the shelter 
but did not receive SSI benefits. We will also not count any months 
throughout

[[Page 814]]

which you lived in the shelter and received SSI benefits prior to 
January 1988.

    Example: You are receiving SSI benefits when you lose your home and 
enter a public emergency shelter for the homeless on March 10, 1988. You 
remain a resident of a shelter until October 10, 1988. Since you were 
not in the shelter throughout the month of March, you are eligible to 
receive your benefit for March without having this month count towards 
the 6-month period. The last full month throughout which you reside in 
the shelter is September 1988. Therefore, if you meet all eligibility 
requirements, you will also be paid benefits for April through September 
(6 months during the 9-month period September 1988 back through January 
1988). If you are otherwise eligible, you will receive your SSI benefit 
for October when you left the shelter, since you were not a resident of 
the shelter throughout that month.

[47 FR 3103, Jan. 22, 1982, as amended at 50 FR 51518, Dec. 18, 1985; 51 
FR 13492, Apr. 21, 1986; 51 FR 17332, May 12, 1986; 51 FR 34464, Sept. 
29, 1986; 54 FR 19164, May 4, 1989; 61 FR 10277, Mar. 13, 1996; 62 FR 
1055, Jan. 8, 1997; 64 FR 31972, June 15, 1999; 72 FR 50874, Sept. 5, 
2007]



Sec. 416.212  Continuation of full benefits in certain cases of
medical confinement.

    (a) Benefits payable under section 1611(e)(1)(E) of the Social 
Security Act. Subject to eligibility and regular computation rules (see 
subparts B and D of this part), you are eligible for the benefits 
payable under section 1611(e)(1)(E) of the Social Security Act for up to 
2 full months of medical confinement during which your benefits would 
otherwise be suspended because of residence in a public institution or 
reduced because of residence in a public or private institution where 
Medicaid pays a substantial part (more than 50 percent) of the cost of 
your care or, if you are a child under age 18, reduced because of 
residence in a public or private institution which receives payments 
under a health insurance policy issued by a private provider, or a 
combination of Medicaid and a health insurance policy issued by a 
private provider, pay a substantial part (more than 50 percent) of the 
cost of your care if--
    (1) You were eligible under either section 1619(a) or section 
1619(b) of the Social Security Act in the month before the first full 
month of residence in an institution;
    (2) The institution agrees that no portion of these benefits will be 
paid to or retained by the institution excepting nominal sums for 
reimbursement of the institution for any outlay for a recipient's 
personal needs (e.g., personal hygiene items, snacks, candy); and
    (3) The month of your institutionalization is one of the first 2 
full months of a continuous period of confinement.
    (b) Benefits payable under section 1611(e)(1)(G) of the Social 
Security Act. (1) Subject to eligibility and regular computation rules 
(see subparts B and D of this part), you are eligible for the benefits 
payable under section 1611(e)(1)(G) of the Social Security Act for up to 
3 full months of medical confinement during which your benefits would 
otherwise be suspended because of residence in a public institution or 
reduced because of residence in a public or private institution where 
Medicaid pays a substantial part (more than 50 percent) of the cost of 
your care or, if you are a child under age 18, reduced because of 
residence in a public or private institution which receives payments 
under a health insurance policy issued by a private provider, or a 
combination of Medicaid and a health insurance policy issued by a 
private provider, pay a substantial part (more than 50 percent) of the 
cost of your care if--
    (i) You were eligible for SSI cash benefits and/or federally 
administered State supplementary payments for the month immediately 
prior to the first full month you were a resident in such institution;
    (ii) The month of your institutionalization is one of the first 3 
full months of a continuous period of confinement;
    (iii) A physician certifies, in writing, that you are not likely to 
be confined for longer than 90 full consecutive days following the day 
you entered the institution, and the certification is submitted to SSA 
no later than the day of discharge or the 90th full day of confinement, 
whichever is earlier; and
    (iv) You need to pay expenses to maintain the home or living 
arrangement to which you intend to return after institutionalization and 
evidence regarding your need to pay these expenses is submitted to SSA 
no later

[[Page 815]]

than the day of discharge or the 90th full day of confinement, whichever 
is earlier.
    (2) We will determine the date of submission of the evidence 
required in paragraphs (b)(1) (iii) and (iv) of this section to be the 
date we receive it or, if mailed, the date of the postmark.
    (c) Prohibition against using benefits for current maintenance. If 
the recipient is a resident in an institution, the recipient or his or 
her representative payee will not be permitted to pay the institution 
any portion of benefits payable under section 1611(e)(1)(G) excepting 
nominal sums for reimbursement of the institution for any outlay for the 
recipient's personal needs (e.g., personal hygiene items, snacks, 
candy). If the institution is the representative payee, it will not be 
permitted to retain any portion of these benefits for the cost of the 
recipient's current maintenance excepting nominal sums for reimbursement 
for outlays for the recipient's personal needs.

[61 FR 10277, Mar. 13, 1996, as amended at 62 FR 1055, Jan. 8, 1997; 72 
FR 50874, Sept. 5, 2007]



Sec. 416.214  You are disabled and drug addiction or alcoholism is a 
contributing factor material to the determination of disability.

    (a) If you do not comply with treatment requirements. If you receive 
benefits because you are disabled and drug addiction or alcoholism is a 
contributing factor material to the determination of disability (see 
Sec. 416.935), you must avail yourself of any appropriate treatment for 
your drug addiction or alcoholism at an approved institution or facility 
when this treatment is available and make progress in your treatment. 
You are not eligible for SSI benefits beginning with the month after the 
month you are notified in writing that we determined that you have 
failed to comply with the treatment requirements. If your benefits are 
suspended because you failed to comply with treatment requirements, you 
will not be eligible to receive benefits until you have demonstrated 
compliance with treatment for a period of time, as specified in 
Sec. 416.1326. The rules regarding treatment for drug addiction and 
alcoholism are in subpart I of this part.
    (b) If you previously received 36 months of SSI or Social Security 
benefits. You are not eligible for SSI benefits by reason of disability 
on the basis of drug addiction or alcoholism as described in 
Sec. 416.935 if--
    (1) You previously received a total of 36 months of SSI benefits on 
the basis of disability and drug addiction or alcoholism was a 
contributing factor material to the determination of disability for 
months beginning March 1995, as described in Sec. 416.935. Not included 
in these 36 months are months before March 1995 and months for which 
your benefits were suspended for any reason. The 36-month limit is no 
longer effective for months beginning after September 2004; or
    (2) You previously received a total of 36 months of Social Security 
benefits counted in accordance with the provisions of Secs. 404.316, 
404.337, and 404.352 by reason of disability on the basis of drug 
addiction or alcoholism as described in Sec. 404.1535.

[60 FR 8149, Feb. 10, 1995. Redesignated at 61 FR 10277, Mar. 13, 1996]



Sec. 416.215  You leave the United States.

    You lose your eligibility for SSI benefits for any month during all 
of which you are outside of the United States. If you are outside of the 
United States for 30 days or more in a row, you are not considered to be 
back in the United States until you are back for 30 days in a row. You 
may again be eligible for SSI benefits in the month in which the 30 days 
end if you continue to meet all other eligibility requirements.

By United States, we mean the 50 States, the District of Columbia, and 
the Northern Mariana Islands.

[47 FR 3103, Jan. 22, 1982. Redesignated at 61 FR 10277, Mar. 13, 1996]



Sec. 416.216  You are a child of armed forces personnel living overseas.

    (a) General rule. For purposes of this part, overseas means any 
location outside the United States as defined in Sec. 416.215; i.e., the 
50 States, the District of Columbia and the Northern Mariana Islands. 
You may be eligible for SSI benefits if you live overseas and if--
    (1) You are a child as described in Sec. 416.1856;

[[Page 816]]

    (2) You are a citizen of the United States; and
    (3) You are living with a parent as described in Sec. 416.1881 who 
is a member of the armed forces of the United States assigned to 
permanent duty ashore overseas.
    (b) Living with. You are considered to be living with your parent 
who is a member of the armed forces if--
    (1) You physically live with the parent who is a member of the armed 
forces overseas; or
    (2) You are not living in the same household as the military parent 
but your presence overseas is due to his or her permanent duty 
assignment.

[58 FR 4897, Jan. 19, 1993; 58 FR 9597, Feb. 22, 1993, as amended at 59 
FR 41400, Aug. 12, 1994. Redesignated at 61 FR 10277, Mar. 13, 1996; 70 
FR 61366, Oct. 24, 2005]

     Eligibility for Increased Benefits Because of Essential Persons



Sec. 416.220  General.

    If you are a qualified individual and have an essential person you 
may be eligible for increased benefits. You may be a qualified 
individual and have an essential person only if you received benefits 
under a State assistance plan approved under title I, X, XIV, or XVI 
(AABD) of the Act for December 1973. Definitions and rules that apply to 
qualified individuals and essential persons are discussed in 
Secs. 416.221 through 416.223.



Sec. 416.221  Who is a qualified individual.

    You are a qualified individual if--
    (a) You received aid or assistance for the month of December 1973 
under a State plan approved under title I, X, XIV, or XVI (AABD) of the 
Act;
    (b) The State took into account the needs of another person in 
deciding your need for the State assistance for December 1973;
    (c) That other person was living in your home in December 1973; and
    (d) That other person was not eligible for State assistance for 
December 1973.



Sec. 416.222  Who is an essential person.

    (a) General rule. A person is an essential person if--
    (1) That person has continuously lived in the home of the same 
qualified individual since December 1973;
    (2) That person was not eligible for State assistance for December 
1973;
    (3) That person was never eligible for SSI benefits in his or her 
own right or as an eligible spouse; and
    (4) There are State records which show that under a State plan in 
effect for June 1973, the State took that person's needs into account in 
determining the qualified individual's need for State assistance for 
December 1973.

Any person who meets these requirements is an essential person. This 
means that the qualified individual can have more than one essential 
person.
    (b) Absence of an essential person from the home of a qualified 
individual. An essential person may be temporarily absent from the house 
of a qualified individual and still be an essential person. For example, 
the essential person could be hospitalized. We consider an absence to 
temporary if--
    (1) The essential person intends to return;
    (2) The facts support this intention;
    (3) It is likely that he or she will return; and
    (4) The absence is not longer than 90 days.
    (c) Absence of a qualified individual from his or her home. You may 
be temporarily absent from your home and still have an essential person. 
For example, you could be hospitalized. We consider an absence to be 
temporary if--
    (1) You intend to return;
    (2) The facts support your intention;
    (3) It is likely that you will return; and
    (4) Your absence does not exceed six months.
    (d) Essential person becomes eligible for SSI benefits. If an 
essential person becomes eligible for SSI benefits, he or she will no 
longer be an essential person beginning with the month that he or she 
becomes eligible for the SSI benefits.



Sec. 416.223  What happens if you are a qualified individual.

    (a) Increased SSI benefits. We may increase the amount of your SSI 
benefits if--

[[Page 817]]

    (1) You are a qualified individual; and
    (2) You have one or more essential persons in your home.

In subpart D, we explain how these increased benefits are calculated.
    (b) Income and resource limits. If you are a qualified individual, 
we consider the income and resources of an essential person in your home 
to be yours. You are eligible for increased SSI benefits if--
    (1) Your resources which are counted do not exceed the limit for SSI 
eligibility purposes (see subpart L); and
    (2) Your income which is counted for SSI eligibility purposes (see 
subpart K) does not exceed the sum of--
    (i) The SSI Federal benefit rate (see subpart D); and
    (ii) The proper number of essential person increments (for the value 
of an essential person increment see subpart D). One essential person 
increment is added to the SSI Federal benefit rate for each essential 
person in your home.
    (c) Excluding the income and resources of an essential person. (1) 
While an essential person increment increases your SSI Federal benefit 
rate, that person's income which we consider to be yours may actually 
result in a lower monthly payment to you. We will discuss this with you 
and explain how an essential person affects your benefit. If you choose 
to do so, you may ask us in writing to determine your eligibility 
without your essential person or, if you have more than one essential 
person, without one or more of your essential persons. We will then 
figure the amount of your SSI benefits without counting as your own 
income and resources of the essential persons that you specify and we 
will end the essential person increment for those essential persons. You 
should consider this carefully because once you make the request, you 
cannot withdraw it. We will make the change beginning with the month 
following the month that you make the request.
    (2) We will not include the income and resources of the essential 
person if the person's income or resources would cause you to lose your 
eligibility. The loss of the essential person increment will be 
permanent.



Sec. 416.250  Experimental, pilot, and demonstration projects in the
SSI program.

    (a) Authority and purpose. Section 1110(b) of the Act authorizes the 
Commissioner to develop and conduct experimental, pilot, and 
demonstration projects to promote the objectives or improve the 
administration of the SSI program. These projects will test the 
advantages of altering certain requirements, conditions, or limitations 
for recipients and test different administrative methods that apply to 
title XVI applicants and recipients.
    (b) Altering benefit requirements, limitations or conditions. 
Notwithstanding any other provision of this part, the Commissioner is 
authorized to waive any of the requirements, limitations or conditions 
established under title XVI of the Act and impose additional 
requirements, limitations or conditions for the purpose of conducting 
experimental, pilot, or demonstration projects. The projects will alter 
the provisions that currently apply to applicants and recipients to test 
their effect on the program. If, as a result of participation in a 
project under this section, a project participant becomes ineligible for 
Medicaid benefits, the Commissioner shall make arrangements to extend 
Medicaid coverage to such participant and shall reimburse the States for 
any additional expenses incurred due to such continued participation.
    (c) Applicability and scope--(1) Participants and nonparticipants. 
If you are selected to participate in an experimental, pilot, or 
demonstration project, we may temporarily set aside one or more current 
requirements, limitations or conditions of eligibility and apply 
alternative provisions to you. We may also modify current methods of 
administering title XVI as part of a project and apply alternative 
procedures or policies to you. The alternative provisions or methods of 
administration used in the projects will not substantially reduce your 
total income or resources as a result of your participation or 
disadvantage you in comparison to current provisions, policies, or 
procedures. If you are not selected to participate in the experimental, 
or pilot, or demonstration projects (or if

[[Page 818]]

you are placed in a control group which is not subject to the 
alternative requirements, limitations, or conditions) we will continue 
to apply the current requirements, limitations or conditions of 
eligibility to you.
    (2) Alternative provisions or methods of administration. The 
alternative requirements, limitations or conditions that apply to you in 
an experimental, pilot, or demonstration project may include any of the 
factors needed for aged, blind, or disabled persons to be eligible for 
SSI benefits. Experiments that we conduct will include, to the extent 
feasible, applicants and recipients who are under age 18 as well as 
adults and will include projects to ascertain the feasibility of 
treating drug addicts and alcoholics.
    (d) Selection of participants. Participation in the SSI project will 
be on a voluntary basis. The voluntary written consent necessary in 
order to participate in any experimental, pilot, or demonstration 
project may be revoked by the participant at any time.
    (e) Duration of experimental, pilot, and demonstration projects. A 
notice describing each experimental, pilot, or demonstration project 
will be published in the Federal Register before each project is placed 
in operation. Each experimental, pilot and demonstration project will 
have a termination date (up to 10 years from the start of the project).

[48 FR 7576, Feb. 23, 1983, as amended at 52 FR 37605, Oct. 8, 1987; 62 
FR 38454, July 18, 1997]

  Special Provisions for People Who Work Despite a Disabling Impairment



Sec. 416.260  General.

    The regulations in Secs. 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 impairment. Under these rules an individual who works despite 
a disabling impairment may qualify for special SSI cash benefits and in 
most cases for Medicaid benefits when his or her gross earned income 
exceeds the applicable dollar amount which ordinarily represents SGA 
described in Sec. 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 eligibility for Medicaid benefits, a blind or disabled 
individual (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 Secs. 416.261 and 416.262. We explain 
the rules for the special SSI eligibility status in Secs. 416.264 
through 416.269.

[59 FR 41403, Aug. 12, 1994]



Sec. 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 Sec. 416.974(b)(2). You 
must meet the eligibility requirements in Sec. 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 
established 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 according 
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.

[47 FR 15324, Apr. 9, 1982, as amended at 50 FR 46763, Nov. 13, 1985; 59 
FR 41403, Aug. 12, 1994]



Sec. 416.262  Eligibility requirements for special SSI cash benefits.

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

[[Page 819]]

    (a) You were eligible to receive a regular SSI benefit or a 
federally administered State supplementary payment (see Sec. 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 
Secs. 416.1331 through 416.1335;
    (b) In the month for which we are making the determination, your 
gross earned income exceeds the amount ordinarily considered to 
represent SGA under Sec. 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 Sec. 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 available for a total of 36 months; 
and
    (e) You meet all the nondisability requirements for eligibility for 
SSI benefits (see Sec. 416.202).

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

[47 FR 15324, Apr. 9, 1982, as amended at 59 FR 41404, Aug. 12, 1994; 60 
FR 8149, Feb. 10, 1995; 64 FR 31972, June 15, 1999]



Sec. 416.263  No additional application needed.

    We do not require you to apply for special cash benefits nor is it 
necessary for you to apply to have the special SSI eligibility status 
determined. We will make these determinations automatically.

[47 FR 15324, Apr. 9, 1982]



Sec. 416.264  When does the special SSI eligibility status apply.

    The special SSI eligibility status applies for the purposes of 
establishing or maintaining your eligibility for Medicaid. For these 
purposes we continue to consider you to be a blind or disabled 
individual receiving benefits even though you are in fact no longer 
receiving regular SSI benefits or special SSI cash benefits. You must 
meet the eligibility requirements in Sec. 416.265 in order to qualify 
for the special SSI eligibility status. Special SSI eligibility status 
also applies for purposes of reacquiring status as eligible for regular 
SSI benefits or special SSI cash benefits.

[59 FR 41404, Aug. 12, 1994]



Sec. 416.265  Requirements for the special SSI eligibility status.

    In order to be eligible for the special SSI eligibility status, you 
must have been eligible to receive a regular SSI benefit or a federally 
administered State supplementary payment (see Sec. 416.2001) in a month 
before the month for which we are making the special SSI eligibility 
status determination. The month you were eligible for a regular SSI 
benefit or a federally administered State supplementary payment may not 
be in a prior period of eligibility which has been terminated according 
to Secs. 416.1331 through 416.1335. For periods prior to May 1, 1991, 
you must be under age 65. Also, we must establish that:
    (a) You are blind or you continue to have a disabling impairment 
which, if drug addiction or alcoholism is a contributing factor material 
to the determination of disability as described in Sec. 416.935, has not 
resulted in your receiving 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 available for a total of 36 
months;
    (b) Except for your earnings, you meet all the nondisability 
requirements for eligibility for SSI benefits (see Sec. 416.202);
    (c) The termination of your eligibility for Medicaid would seriously 
inhibit your ability to continue working (see Sec. 416.268); and
    (d) Your earnings after the exclusions in Sec. 416.1112(c) (6), (8), 
and (9) are not sufficient to allow you to provide yourself with a 
reasonable equivalent of the benefits (SSI benefits, federally 
administered State supplementary payments, Medicaid, and publicly-funded 
attendant care services, including personal care assistance under 
Sec. 416.269(d)) which

[[Page 820]]

would be available to you if you did not have those earnings (see 
Sec. 416.269).

[47 FR 15324, Apr. 9, 1982, as amended at 59 FR 41404, Aug. 12, 1994; 59 
FR 49291, Sept. 27, 1994; 60 FR 8149, Feb. 10, 1995]



Sec. 416.266  Continuation of SSI status for Medicaid

    If we stop your benefits because of your earnings and you are 
potentially eligible for the special SSI eligibility status you will 
continue to be considered an SSI recipient for purposes of eligibility 
for Medicaid during the time it takes us to determine whether the 
special eligibility status applies to you.

[47 FR 15324, Apr. 9, 1982]



Sec. 416.267  General.

    We determine whether the special SSI eligibility status applies to 
you by verifying that you continue to be blind or have a disabling 
impairment by applying the rules in subpart I of this part, and by 
following the rules in this subpart to determine whether you meet the 
requirements in Sec. 416.265(b). If you do not meet these requirements 
we determine that the special eligibility status does not apply. If you 
meet these requirements, then we apply special rules to determine if you 
meet the requirements of Sec. 416.265 (c) and (d). If for the period 
being evaluated, you meet all of the requirements in Sec. 416.265 we 
determine that the special status applies to you.

[47 FR 15324, Apr. 9, 1982]



Sec. 416.268  What is done to determine if you must have Medicaid 
in order to work.

    For us to determine that you need Medicaid benefits in order to 
continue to work, you must establish:
    (a) That you are currently using or have received services which 
were paid for by Medicaid during the period which began 12 months before 
our first contact with you to discuss this use; or
    (b) That you expect to use these services within the next 12 months; 
or
    (c) That you would need Medicaid to pay for unexpected medical 
expenses in the next 12 months.

[59 FR 41404, Aug. 12, 1994]



Sec. 416.269  What is done to determine whether your earnings are too
low to provide comparable benefits and services you would receive in
the absence of those earnings.

    (a) What we determine. We must determine whether your earnings are 
too low to provide you with benefits and services comparable to the 
benefits and services you would receive if you did not have those 
earnings (see Sec. 416.265(d)).
    (b) How the determination is made. In determining whether your 
earnings are too low to provide you with benefits and services 
comparable to the benefits and services you would receive if you did not 
have those earnings, we compare your anticipated gross earnings (or a 
combination of anticipated and actual gross earnings, as appropriate) 
for the 12-month period beginning with the month for which your special 
SSI eligibility status is being determined to a threshold amount for 
your State of residence. This threshold amount consists of the sum for a 
12-month period of two items, as follows:
    (1) The amount of gross earnings including amounts excluded under 
Sec. 416.1112(c) (4), (5) and (7) that would reduce to zero the Federal 
SSI benefit and the optional State supplementary payment for an 
individual with no other income living in his or her own household in 
the State where you reside. This amount will vary from State to State 
depending on the amount of the State supplementary payment; and
    (2) The average expenditures for Medicaid benefits for disabled and 
blind SSI cash recipients, including recipients of federally 
administered State supplementary payments only, in your State of 
residence.
    (c) How the eligibility requirements are met. (1) You meet the 
requirements in Sec. 416.265(d) if the comparison shows that your gross 
earnings are equal to or less than the applicable threshold amount for 
your State, as determined under paragraphs (b) (1) and (2) of this 
section. However, if the comparison shows that these earnings exceed the 
applicable threshold amount for your State, we will establish (and use 
in a second comparison) an individualized threshold taking into account 
the total amount of:

[[Page 821]]

    (i) The amount determined under paragraph (b)(1) of this section 
that would reduce to zero the Federal SSI benefit and State 
supplementary payment for your actual living arrangement;
    (ii) The average Medicaid expenditures for your State of residence 
under paragraph (b)(2) of this section or, if higher, your actual 
medical expenditures in the appropriate 12-month period;
    (iii) Any amounts excluded from your income as impairment-related 
work expenses (see Sec. 416.1112(c)(6)), work expenses of the blind (see 
Sec. 416.1112(c)(8)), and income used or set aside for use under an 
approved plan for achieving self support (see Sec. 416.1112(c)(9)); and
    (iv) the value of any publicly-funded attendant care services as 
described in paragraph (d) of this section (including personal care 
assistance).
    (2) If you have already completed the 12-month period for which we 
are determining your eligibility, we will consider only the expenditures 
made in that period.
    (d) Attendant care services. Expenditures for attendant care 
services (including personal care assistance) which would be available 
to you in the absence of earnings that make you ineligible for SSI cash 
benefits will be considered in the individualized threshold (as 
described in paragraph (c)(1) of this section) if we establish that they 
are:
    (1) Provided by a paid attendant;
    (2) Needed to assist with work-related and/or personal functions; 
and
    (3) Paid from Federal, State, or local funds.
    (e) Annual update of information. The threshold amounts used in 
determinations of sufficiency of earnings will be based on information 
and data updated no less frequently than annually.

[59 FR 41404, Aug. 12, 1994; 59 FR 49291, Sept. 27, 1994]



                    Subpart C_Filing of Applications

    Authority: Secs. 702(a)(5), 1611, and 1631 (a), (d), and (e) of the 
Social Security Act (42 U.S.C. 902(a)(5), 1382, and 1383 (a), (d), and 
(e)).

    Source: 45 FR 48120, July 18, 1980, unless otherwise noted.

                           General Provisions



Sec. 416.301  Introduction.

    This subpart contains the rules for filing a claim for supplemental 
security income (SSI) benefits. It tells you what an application is, who 
may sign it, who must file one to be eligible for benefits, the period 
of time it is in effect, and how it may be withdrawn. It also tells you 
when a written statement or an oral inquiry may be considered to 
establish an application filing date.



Sec. 416.302  Definitions.

    For the purpose of this subpart--
    Benefits means any payments made under the SSI program. SSI benefits 
also include any federally administered State supplementary payments.
    Claimant means the person who files an application for himself or 
herself or the person on whose behalf an application is filed.
    We or us means the Social Security Administration (SSA).
    You or your means the person who applies for benefits, the person 
for whom an application is filed or anyone who may consider applying for 
benefits.



Sec. 416.305  You must file an application to receive supplemental 
security income benefits.

    (a) General rule. In addition to meeting other requirements, you 
must file an application to become eligible to receive benefits. If you 
believe you may be eligible, you should file an application as soon as 
possible. Filing an application will--
    (1) Permit us to make a formal determination whether or not you are 
eligible to receive benefits;
    (2) Assure that you receive benefits for any months you are eligible 
to receive payment; and
    (3) Give you the right to appeal if you disagree with the 
determination.
    (b) Exceptions. You need not file a new application if--
    (1) You have been receiving benefits as an eligible spouse and are 
no longer living with your husband or wife;
    (2) You have been receiving benefits as an eligible spouse of an 
eligible individual who has died;

[[Page 822]]

    (3) You have been receiving benefits because you are disabled or 
blind and you are 65 years old before the date we determine that you are 
no longer blind or disabled.
    (4) A redetermination of your eligibility is being made and it is 
found that you were not eligible for benefits during any part of a 
period for which we are making a redetermination but you currently meet 
the requirements for eligibility;
    (5) You are notified that your payments of SSI benefits will be 
stopped because you are no longer eligible and you again meet the 
requirements for eligibility before your appeal rights are exhausted.

[45 FR 48120, July 18, 1980, as amended at 60 FR 16374, Mar. 30, 1995; 
64 FR 31972, June 15, 1999]

                              Applications



Sec. 416.310  What makes an application a claim for benefits.

    An application will be considered a claim for benefits, if the 
following requirements are met:
    (a) An application form prescribed by us must be filled out.
    (b) be filed at a social security office, at another Federal or 
State office we have designated to receive applications for us, or with 
a person we have authorized to receive applications for us. See 
Sec. 416.325.
    (c) The claimant or someone who may sign an application for the 
claimant must sign the application. See Secs. 416.315 and 416.320.
    (d) The claimant must be alive at the time the application is filed. 
See Secs. 416.340, 416.345, and 416.351 for exceptions.

[45 FR 48120, July 18, 1980, as amended at 59 FR 44926, Aug. 31, 1994]



Sec. 416.315  Who may sign an application.

    We will determine who may sign an application according to the 
following rules:
    (a) If you are 18 years old or over, mentally competent, and 
physically able, you must sign your own application. If you are 16 years 
old or older and under age 18, you may sign the application if you are 
mentally competent, have no court appointed representative, and are not 
in the care of any other person or institution.
    (b) If the claimant is under age 18, or is mentally incompetent, or 
is physically unable to sign the application, a court appointed 
representative or a person who is responsible for the care of the 
claimant, including a relative, may sign the application. If the 
claimant is in the care of an institution, the manager or principal 
officer of the institution may sign the application.
    (c) To prevent a claimant from losing benefits because of a delay in 
filing an application when there is a good reason why the claimant 
cannot sign an application, we may accept an application signed by 
someone other than a person described in this section.

    Example: Mr. Smith comes to a Social Security office to file an 
application for SSI disability benefits for Mr. Jones. Mr. Jones, who 
lives alone, just suffered a heart attack and is in the hospital. He 
asked Mr. Smith, whose only relationship is that of a neighbor and 
friend, to file the application for him. We will accept an application 
signed by Mr. Smith since it would not be possible to have Mr. Jones 
sign and file the application at this time. SSI benefits can be paid 
starting with the first day of the month following the month the 
individual first meets all eligibility requirements for such benefits, 
including having filed an application. If Mr. Smith could not sign an 
application for Mr. Jones, a loss of benefits would result if it is 
later determined that Mr. Jones is in fact disabled.

[45 FR 48120, July 18, 1980, as amended at 51 FR 13492, Apr. 21, 1986; 
64 FR 31972, June 15, 1999]



Sec. 416.320  Evidence of authority to sign an application for another.

    (a) A person who signs an application for someone else will be 
required to provide evidence of his or her authority to sign the 
application for the person claiming benefits under the following rules:
    (1) If the person who signs is a court appointed representative, he 
or she must submit a certificate issued by the court showing authority 
to act for the claimant.
    (2) If the person who signs is not a court appointed representative, 
he or she must submit a statement describing his or her relationship to 
the claimant. The statement must also describe the extent to which the 
person is

[[Page 823]]

responsible for the care of the claimant. This latter information will 
not be requested if the application is signed by a parent for a child 
with whom he or she is living. If the person signing is the manager or 
principal officer of an institution he or she should show his or her 
title.
    (b) We may, at any time, require additional evidence to establish 
the authority of a person to sign an application for someone else.

[45 FR 48120, July 18, 1980, as amended at 51 FR 13493, Apr. 21, 1986]



Sec. 416.325  When an application is considered filed.

    (a) General rule. We consider an application for SSI benefits filed 
on the day it is received by an employee at any social security office, 
by someone at another Federal or State office designated to receive 
applications for us, or by a person we have authorized to receive 
applications for us.
    (b) Exceptions. (1) When we receive an application that is mailed, 
we will use the date shown by the United States postmark as the filing 
date if using the date the application is received will result in a loss 
of benefits. If the postmark is unreadable or there is no postmark, we 
will use the date the application is signed (if dated) or 5 days before 
the day we receive the signed application, whichever date is later.
    (2) We consider an application to be filed on the date of the filing 
of a written statement or the making of an oral inquiry under the 
conditions in Secs. 416.340, 416.345 and 416.350.
    (3) We will establish a ``deemed'' filing date of an application in 
a case of misinformation under the conditions described in Sec. 416.351. 
The filing date of the application will be a date determined under 
Sec. 416.351(b).

[45 FR 48120, July 18, 1980, as amended at 51 FR 13493, Apr. 21, 1986; 
59 FR 44926, Aug. 31, 1994]



Sec. 416.327  Pilot program for photographic identification of 
disability benefit applicants in designated geographic areas.

    (a) To be eligible for SSI disability or blindness benefits in the 
designated pilot geographic areas during the time period of the pilot, 
you or a person acting on your behalf must give SSA permission to take 
your photograph and make this photograph a part of the claims folder. 
You must give us this permission when you apply for benefits and/or when 
we ask for it at a later time. Failure to cooperate will result in 
denial of benefits. We will permit an exception to the photograph 
requirement when an individual has a sincere religious objection. This 
pilot will be in effect for a six-month period after these final rules 
become effective.
    (b) Designated pilot geographic areas means:
    (1) All SSA field offices in the State of South Carolina.
    (2) The Augusta, Georgia SSA field office.
    (3) All SSA field offices in the State of Kansas.
    (4) Selected SSA field offices located in New York City.

[68 FR 23195, May 1, 2003]

                 Effective Filing Period of Application



Sec. 416.330  Filing before the first month you meet the requirements 
for eligibility.

    If you file an application for SSI benefits before the first month 
you meet all the other requirements for eligibility, the application 
will remain in effect from the date it is filed until we make a final 
determination on your application, unless there is a hearing decision on 
your application. If there is a hearing decision, your application will 
remain in effect until the hearing decision is issued.
    (a) If you meet all the requirements for eligibility while your 
application is in effect, the earliest month for which we can pay you 
benefits is the month following the month that you first meet all the 
requirements.
    (b) If you first meet all the requirements for eligibility after the 
period for which your application was in effect, you must file a new 
application for benefits. In this case, we can pay you benefits only 
from the first day of the month following the month that you meet all 
the requirements based on the new application.

[64 FR 31973, June 15, 1999]

[[Page 824]]



Sec. 416.335  Filing in or after the month you meet the requirements
for eligibility.

    When you file an application in the month that you meet all the 
other requirements for eligibility, the earliest month for which we can 
pay you benefits is the month following the month you filed the 
application. If you file an application after the month you first meet 
all the other requirements for eligibility, we cannot pay you for the 
month in which your application is filed or any months before that 
month. See Secs. 416.340, 416.345 and 416.350 on how a written statement 
or an oral inquiry made before the filing of the application form may 
affect the filing date of the application.

[64 FR 31973, June 15, 1999]

       Filing Date Based Upon a Written Statement or Oral Inquiry



Sec. 416.340  Use of date of written statement as application filing date.

    We will use the date a written statement, such as a letter, an SSA 
questionnaire or some other writing, is received at a social security 
office, at another Federal or State office designated by us, or by a 
person we have authorized to receive applications for us as the filing 
date of an application for benefits, only if the use of that date will 
result in your eligibility for additional benefits. If the written 
statement is mailed, we will use the date the statement was mailed to us 
as shown by a United States postmark. If the postmark is unreadable or 
there is no postmark, we will use the date the statement is signed (if 
dated) or 5 days before the day we receive the written statement, 
whichever date is later, as the filing date of an application for 
benefits. In order for us to use your written statement to protect your 
filing date, the following requirements must be met:
    (a) The written statement shows an intent to claim benefits for 
yourself or for another person.
    (b) You, your spouse or a person who may sign an application for you 
signs the statement.
    (c) An application form signed by you or by a person who may sign an 
application for you is filed with us within 60 days after the date of a 
notice we will send telling of the need to file an application. The 
notice will say that we will make an initial determination of 
eligibility for SSI benefits if an application form is filed within 60 
days after the date of the notice. (We will send the notice to the 
claimant, or where he or she is a minor or incompetent, to the person 
who gave us the written statement.)
    (d)(1) The claimant is alive when the application is filed on a 
prescribed form, or
    (2) If the claimant dies after the written statement is filed, the 
deceased claimant's surviving spouse or parent(s) who could be paid the 
claimant's benefits under Sec. 416.542(b), or someone on behalf of the 
surviving spouse or parent(s) files an application form. If we learn 
that the claimant has died before the notice is sent or within 60 days 
after the notice but before an application form is filed, we will send a 
notice to such a survivor. The notice will say that we will make an 
initial determination of eligibility for SSI benefits only if an 
application form is filed on behalf of the deceased within 60 days after 
the date of the notice to the survivor.

[45 FR 48120, July 18, 1980, as amended at 51 FR 13493, Apr. 21, 1986; 
58 FR 52912, Oct. 13, 1993]



Sec. 416.345  Use of date of oral inquiry as application filing date.

    We will use the date of an oral inquiry about SSI benefits as the 
filing date of an application for benefits only if the use of that date 
will result in your eligibility for additional benefits and the 
following requirements are met:
    (a) The inquiry asks about the claimant's eligibility for SSI 
benefits.
    (b) The inquiry is made by the claimant, the claimant's spouse, or a 
person who may sign an application on the claimant's behalf as described 
in Sec. 416.315.
    (c) The inquiry, whether in person or by telephone, is directed to 
an office or an official described in Sec. 416.310(b).
    (d) The claimant or a person on his or her behalf as described in 
Sec. 416.315 files an application on a prescribed form

[[Page 825]]

within 60 days after the date of the notice we will send telling of the 
need to file an application. The notice will say that we will make an 
initial determination of eligibility for SSI benefits if an application 
form is filed within 60 days after the date of the notice. (We will send 
the notice to the claimant or, where he or she is a minor or 
incompetent, to the person who made the inquiry.)
    (e)(1) The claimant is alive when the application is filed on a 
prescribed form, or
    (2) If the claimant dies after the oral inquiry is made, the 
deceased claimant's surviving spouse or parent(s) who could be paid the 
claimant's benefits under Sec. 416.542(b), or someone on behalf of the 
surviving spouse or parent(s) files an application form. If we learn 
that the claimant has died before the notice is sent or within 60 days 
after the notice but before an application form is filed, we will send a 
notice to such a survivor. The notice will say that we will make an 
initial determination of eligibility for SSI benefits only if an 
application form is filed on behalf of the deceased within 60 days after 
the date of the notice to the survivor.

[45 FR 48120, July 18, 1980, as amended at 51 FR 13493, Apr. 21, 1986; 
58 FR 52912, Oct. 13, 1993]



Sec. 416.350  Treating a title II application as an oral inquiry about
SSI benefits.

    (a) When a person applies for benefits under title II (retirement, 
survivors, or disability benefits) we will explain the requirements for 
receiving SSI benefits and give the person a chance to file an 
application for them if--
    (1) The person is within 2 months of age 65 or older or it looks as 
if the person might qualify as a blind or disabled person, and
    (2) It is not clear that the person's title II benefits would 
prevent him or her from receiving SSI or any State supplementary 
benefits handled by the Social Security Administration.
    (b) If the person applying for title II benefits does not file an 
application for SSI on a prescribed form when SSI is explained to him or 
her, we will treat his or her filing of an application for title II 
benefits as an oral inquiry about SSI, and the date of the title II 
application form may be used to establish the SSI application date if 
the requirements of Sec. 416.345 (d) and (e) are met.

               Deemed Filing Date Based on Misinformation



Sec. 416.351  Deemed filing date in a case of misinformation.

    (a) General. You may have considered applying for SSI benefits for 
yourself or for another person, and you may have contacted us in 
writing, by telephone or in person to inquire about filing an 
application for these benefits. It is possible that in responding to 
your inquiry, we may have given you misinformation about your 
eligibility for such benefits, or the eligibility of the person on whose 
behalf you were considering applying for benefits, which caused you not 
to file an application at that time. If this happened, and later an 
application for such benefits is filed with us, we may establish an 
earlier filing date under this section.

    Example 1: Ms. Jones calls a Social Security office to inquire about 
filing an application for SSI benefits. During her conversation with an 
SSA employee, she tells the employee about her resources. The SSA 
employee tells Ms. Jones that because her countable resources are above 
the allowable limit, she would be ineligible for SSI benefits. The 
employee fails to consider certain resource exclusions under the SSI 
program which would have reduced Ms. Jones' countable resources below 
the allowable limit, making her eligible for benefits. Because Ms. Jones 
thought that she would be ineligible, she decides not to file an 
application for SSI benefits. Ms. Jones later reads about resource 
exclusions under the SSI program. She recontacts the Social Security 
office to file an SSI application, and alleges that she had been 
previously misinformed about her eligibility for SSI benefits. She files 
an application for SSI benefits, provides the information required under 
paragraph (f) of this section to show that an SSA employee provided 
misinformation, and requests a deemed filing date based upon her receipt 
of misinformation.
    Example 2: Mr. Adams resides in a State which provides State 
supplementary payments that are administered by SSA under the SSI 
program. He telephones a Social Security office and tells an SSA 
employee that he does not have enough income to live on and wants to 
file for SSI benefits. Mr. Adams

[[Page 826]]

states that his only income is his monthly Social Security benefit 
check. The SSA employee checks Mr. Adams' Social Security record and 
advises him that he is ineligible for SSI benefits based on the amount 
of his monthly Social Security benefit. The employee does not consider 
whether Mr. Adams would be eligible for State supplementary payments. 
Because Mr. Adams was told that he would not be eligible for benefits 
under the SSI program, he does not file an application. The employee 
does not make a record of Mr. Adams' oral inquiry or take any other 
action. A year later, Mr. Adams speaks to a neighbor who receives the 
same Social Security benefit amount that Mr. Adams does, but also 
receives payments under the SSI program. Thinking the law may have 
changed, Mr. Adams recontacts a Social Security office and learns from 
an SSA employee that he would be eligible for State supplementary 
payments under the SSI program and that he could have received these 
payments earlier had he filed an application. Mr. Adams explains that he 
did not file an application earlier because he was told by an SSA 
employee that he was not eligible for SSI benefits. Mr. Adams files an 
application for the benefits, provides the information required under 
paragraph (f) of this section to show that an SSA employee provided 
misinformation, and requests a deemed filing date based on the 
misinformation provided to him earlier.

    (b) Deemed filing date of an application based on misinformation. 
Subject to the requirements and conditions in paragraphs (c) through (g) 
of this section, we may establish a deemed filing date of an application 
for SSI benefits under the following provisions.
    (1)(i) If we determine that you failed to apply for SSI benefits for 
yourself because we gave you misinformation about your eligibility for 
such benefits, we will deem an application for such benefits to have 
been filed with us on the later of--
    (A) The date on which the misinformation was provided to you; or
    (B) The date on which you met all of the requirements for 
eligibility for such benefits, other than the requirement of filing an 
application.
    (ii) Before we may establish a deemed filing date of an application 
for benefits for you under paragraph (b)(1)(i) of this section, you or a 
person described in Sec. 416.315 must file an application for such 
benefits. If you die before an application for the benefits is filed 
with us, we will consider establishing a deemed filing date of an 
application for such benefits only if a person who would be qualified 
under Sec. 416.542(b) to receive any benefits due you, or someone on his 
or her behalf, files an application for the benefits.
    (2)(i) If you had authority under Sec. 416.315 to sign an 
application for benefits for another person, and we determine that you 
failed to apply for SSI benefits for that person because we gave you 
misinformation about that person's eligibility for such benefits, we 
will deem an application for such benefits to have been filed with us on 
the later of--
    (A) The date on which the misinformation was provided to you; or
    (B) The date on which the person met all of the requirements for 
eligibility for such benefits, other than the requirement of filing an 
application.
    (ii) Before we may establish a deemed filing date of an application 
for benefits for the person under paragraph (b)(2)(i) of this section, 
you, such person, or another person described in Sec. 416.315 must file 
an application for such benefits. If the person referred to in paragraph 
(b)(2)(i) of this section dies before an application for the benefits is 
filed with us, we will consider establishing a deemed filing date of an 
application for such benefits only if a person who would be qualified 
under Sec. 416.542(b) to receive any benefits due the deceased person, 
or someone on his behalf, files an application for the benefits.
    (c) Requirements concerning the misinformation. We apply the 
following requirements for purposes of paragraph (b) of this section.
    (1) The misinformation must have been provided to you by one of our 
employees while he or she was acting in his or her official capacity as 
our employee. For purposes of this section, an employee includes an 
officer of SSA.
    (2) Misinformation is information which we consider to be incorrect, 
misleading, or incomplete in view of the facts which you gave to the 
employee, or of which the employee was aware or should have been aware, 
regarding your particular circumstances, or the particular circumstances 
of the person referred to in paragraph (b)(2)(i) of this section. In 
addition, for us to find that

[[Page 827]]

the information you received was incomplete, the employee must have 
failed to provide you with the appropriate, additional information which 
he or she would be required to provide in carrying out his or her 
official duties.
    (3) The misinformation may have been provided to you orally or in 
writing.
    (4) The misinformation must have been provided to you in response to 
a specific request by you to us for information about your eligibility 
for benefits or the eligibility for benefits of the person referred to 
in paragraph (b)(2)(i) of this section for which you were considering 
filing an application.
    (d) Evidence that misinformation was provided. We will consider the 
following evidence in making a determination under paragraph (b) of this 
section.
    (1) Preferred evidence. Preferred evidence is written evidence which 
relates directly to your inquiry about your eligibility for benefits or 
the eligibility of another person and which shows that we gave you 
misinformation which caused you not to file an application. Preferred 
evidence includes, but is not limited to, the following--
    (i) A notice, letter, or other document which was issued by us and 
addressed to you; or
    (ii) Our record of your telephone call, letter, or in-person 
contact.
    (2) Other evidence. In the absence of preferred evidence, we will 
consider other evidence, including your statements about the alleged 
misinformation, to determine whether we gave you misinformation which 
caused you not to file an application. We will not find that we gave you 
misinformation, however, based solely on your statements. Other evidence 
which you provide or which we obtain must support your statements. 
Evidence which we will consider includes, but is not limited to, the 
following--
    (i) Your statements about the alleged misinformation, including 
statements about--
    (A) The date and time of the alleged contact(s);
    (B) How the contact was made, e.g., by telephone or in person;
    (C) The reason(s) the contact was made;
    (D) Who gave the misinformation; and
    (E) The questions you asked and the facts you gave us, and the 
questions we asked and the information we gave you at the time of the 
contact;
    (ii) Statements from others who were present when you were given the 
alleged misinformation, e.g., a neighbor who accompanied you to our 
office;
    (iii) If you can identify the employee or the employee can recall 
your inquiry about benefits--
    (A) Statements from the employee concerning the alleged contact, 
including statements about the questions you asked, the facts you gave, 
the questions the employee asked, and the information provided to you at 
the time of the alleged contact; and
    (B) Our assessment of the likelihood that the employee provided the 
alleged misinformation;
    (iv) An evaluation of the credibility and the validity of your 
allegations in conjunction with other relevant information; and
    (v) Any other information regarding your alleged contact.
    (e) Information which does not constitute satisfactory proof that 
misinformation was given. Certain kinds of information will not be 
considered satisfactory proof that we gave you misinformation which 
caused you not to file an application. Examples of such information 
include--
    (1) General informational pamphlets that we issue to provide basic 
program information;
    (2) The SSI Benefit Estimate Letter that is based on an individual's 
reported and projected income and is an estimate which can be requested 
at any time;
    (3) General information which we review or prepare but which is 
disseminated by the media, e.g., radio, television, magazines, and 
newspapers; and
    (4) Information provided by other governmental agencies, e.g., the 
Department of Veterans Affairs, the Department of Defense, State 
unemployment agencies, and State and local governments.
    (f) Claim for benefits based on misinformation. You may make a claim 
for benefits based on misinformation at

[[Page 828]]

any time. Your claim must contain information that will enable us to 
determine if we did provide misinformation to you about your eligibility 
for SSI benefits, or the eligibility of a person on whose behalf you 
were considering applying for benefits, which caused you not to file an 
application for the benefits. Specifically, your claim must be in 
writing and it must explain what information was provided; how, when, 
and where it was provided and by whom; and why the information caused 
you not to file an application. If you give us this information, we will 
make a determination on such a claim for benefits if all of the 
following conditions are also met.
    (1) An application for the benefits described in paragraph (b)(1)(i) 
or (b)(2)(i) of this section is filed with us by someone described in 
paragraph (b)(1)(ii) or (b)(2)(ii) of this section, as appropriate. The 
application must be filed after the alleged misinformation was provided. 
This application may be--
    (i) An application on which we have made a previous final 
determination or decision awarding the benefits, but only if the 
claimant continues to be eligible for benefits (or again could be 
eligible for benefits) based on that application;
    (ii) An application on which we have made a previous final 
determination or decision denying the benefits, but only if such 
determination or decision is reopened under Sec. 416.1488; or
    (iii) A new application on which we have not made a final 
determination or decision.
    (2) The establishment of a deemed filing date of an application for 
benefits based on misinformation could result in the claimant becoming 
eligible for benefits or for additional benefits.
    (3) We have not made a previous final determination or decision to 
which you were a party on a claim for benefits based on alleged 
misinformation involving the same facts and issues. This provision does 
not apply, however, if the final determination or decision may be 
reopened under Sec. 416.1488.
    (g) Effective date. This section applies only to misinformation 
which we provided on or after December 19, 1989. In addition, this 
section is effective only for benefits payable for months after December 
1989.

[59 FR 44926, Aug. 31, 1994]

                        Withdrawal of Application



Sec. 416.355  Withdrawal of an application.

    (a) Request for withdrawal filed before we make a determination. If 
you make a request to withdraw your application before we make a 
determination on your claim, we will approve the request if the 
following requirements are met:
    (1) You or a person who may sign an application for you signs a 
written request to withdraw the application and files it at a place 
described in Sec. 416.325.
    (2) You are alive when the request is filed.
    (b) Request for withdrawal filed after a determination is made. If 
you make a request to withdraw your application after we make a 
determination on your claim, we will approve the request if the 
following requirements are met:
    (1) The conditions in paragraph (a) of this section are met.
    (2) Every other person who may lose benefits because of the 
withdrawal consents in writing (anyone who could sign an application for 
that person may give the consent).
    (3) All benefits already paid based on the application are repaid or 
we are satisfied that they will be repaid.
    (c) Effect of withdrawal. If we approve your request to withdraw an 
application, we will treat the application as though you never filed it. 
If we disapprove your request for withdrawal, we will treat the 
application as though you never requested the withdrawal.



Sec. 416.360  Cancellation of a request to withdraw.

    You may cancel your request to withdraw your application and your 
application will still be good if the following requirements are met:
    (a) You or a person who may sign an application for you signs a 
written request for cancellation and files it at a place described in 
Sec. 416.325.
    (b) You are alive at the time the request for cancellation is filed.
    (c) For a cancellation request received after we have approved the 
withdrawal, the cancellation request is filed no later than 60 days 
after the

[[Page 829]]

date of the notice of approval of the withdrawal request.



                      Subpart D_Amount of Benefits

    Authority: Secs. 702(a)(5), 1611 (a), (b), (c), and (e), 1612, 1617, 
and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 1382 (a), (b), 
(c), and (e), 1382a, 1382f, and 1383).



Sec. 416.401  Scope of subpart.

    This subpart D sets forth basic guidelines for establishing the 
amount of monthly benefits payable to an eligible individual or couple 
(as defined in Sec. 416.120(c)(5)). This subpart does not contain 
provisions with respect to establishing the amount of State 
supplementary payments payable in accordance with an agreement entered 
into between a State and the Administration under the provisions of 
subpart T of this part. Provisions with respect to determination and 
payment of State supplementary payments under such agreements will be 
administered by the Administration in accordance with the terms set 
forth in such agreements.

[39 FR 23053, June 26, 1974]



Sec. 416.405  Cost-of-living adjustments in benefits.

    Whenever benefit amounts under title II of the Act (part 404 of this 
chapter) are increased by any percentage effective with any month as a 
result of a determination made under Section 215(i) of the Act, each of 
the dollar amounts in effect for such month under Secs. 416.410, 
416.412, and 416.413, as specified in such sections or as previously 
increased under this section or under any provision of the Act, will be 
increased. We will increase the unrounded yearly SSI benefit amount by 
the same percentage by which the title II benefits are being increased 
based on the Consumer Price Index, or, if greater, the percentage they 
would be increased if the rise in the Consumer Price Index were 
currently the basis for the title II increase. (See Secs. 404.270-
404.277 for an explanation of how the title II cost-of-living adjustment 
is computed.) If the increased annual SSI benefit amount is not a 
multiple of $12, it will be rounded to the next lower multiple of $12.

[51 FR 12606, Apr. 21, 1986; 51 FR 16016, Apr. 30, 1986]



Sec. 416.410  Amount of benefits; eligible individual.

    The benefit under this part for an eligible individual (including 
the eligible individual receiving benefits payable under the 
Sec. 416.212 provisions) who does not have an eligible spouse, who is 
not subject to either benefit suspension under Sec. 416.1325 or benefit 
reduction under Sec. 416.414, and who is not a qualified individual (as 
defined in Sec. 416.221) shall be payable at the rate of $5,640 per year 
($470 per month) effective for the period beginning January 1, 1996. 
This rate is the result of a 2.6 percent cost-of-living adjustment (see 
Sec. 416.405) to the December 1995 rate. For the period January 1, 
through December 31, 1995, the rate payable, as increased by the 2.8 
percent cost-of-living adjustment, was $5,496 per year ($458 per month). 
For the period January 1, through December 31, 1994, the rate payable, 
as increased by the 2.6 percent cost-of-living adjustment, was $5,352 
per year ($446 per month). The monthly rate is reduced by the amount of 
the individual's income which is not excluded pursuant to subpart K of 
this part.

[61 FR 10278, Mar. 13, 1996]



Sec. 416.412  Amount of benefits; eligible couple.

    The benefit under this part for an eligible couple (including 
couples where one or both members of the couple are receiving benefits 
payable under the Sec. 416.212 provisions), neither of whom is subject 
to suspension of benefits based on Sec. 416.1325 or reduction of 
benefits based on Sec. 416.414 nor is a qualified individual (as defined 
in Sec. 416.221) shall be payable at the rate of $8,460 per year ($705 
per month), effective for the period beginning January 1, 1996. This 
rate is the result of a 2.6 percent cost-of-living adjustment (see 
Sec. 416.405) to the December 1995 rate. For the period January 1, 
through December 31, 1995, the rate payable, as increased by the 2.8 
percent cost-of-living adjustment, was $8,224 per year ($687 per month).

[[Page 830]]

For the period January 1, through December 31, 1994, the rate payable, 
as increased by the 2.6 percent cost-of-living adjustment, was $8,028 
per year ($669 per month). The monthly rate is reduced by the amount of 
the couple's income which is not excluded pursuant to subpart K of this 
part.

[61 FR 10278, Mar. 13, 1996]



Sec. 416.413  Amount of benefits; qualified individual.

    The benefit under this part for a qualified individual (defined in 
Sec. 416.221) is payable at the rate for an eligible individual or 
eligible couple plus an increment for each essential person (defined in 
Sec. 416.222) in the household, reduced by the amount of countable 
income of the eligible individual or eligible couple as explained in 
Sec. 416.420. A qualified individual will receive an increment of $2,820 
per year ($235 per month), effective for the period beginning January 1, 
1996. This rate is the result of the 2.6 percent cost-of-living 
adjustment (see Sec. 416.405) to the December 1995 rate, and is for each 
essential person (as defined in Sec. 416.222) living in the household of 
a qualified individual. (See Sec. 416.532.) For the period January 1, 
through December 31, 1995, the rate payable, as increased by the 2.8 
percent cost-of-living adjustment, was $2,748 per year ($229 per month). 
For the period January 1, through December 31, 1994, the rate payable, 
as increased by the 2.6 percent cost-of-living adjustment, was $2,676 
per year ($223 per month). The total benefit rate, including the 
increment, is reduced by the amount of the individual's or couple's 
income that is not excluded pursuant to subpart K of this part.

[61 FR 10278, Mar. 13, 1996]



Sec. 416.414  Amount of benefits; eligible individual or eligible
couple in a medical treatment facility.

    (a) General rule. Except where the Sec. 416.212 provisions provide 
for payment of benefits at the rates specified under Secs. 416.410 and 
416.412, reduced SSI benefits are payable to persons and couples who are 
in medical treatment facilities where a substantial part (more than 50 
percent) of the cost of their care is paid by a State plan under title 
XIX of the Social Security Act (Medicaid). This reduced SSI benefit rate 
applies to persons who are in medical treatment facilities where a 
substantial part (more than 50 percent) of the cost would have been paid 
by an approved Medicaid State plan but for the application of section 
1917(c) of the Social Security Act due to a transfer of assets for less 
than fair market value. This reduced SSI benefit rate also applies to 
children under age 18 who are in medical treatment facilities where a 
substantial part (more than 50 percent) of the cost of their care is 
paid by a health insurance policy issued by a private provider of such 
insurance, or where a substantial part (more than 50 percent) of the 
cost of their care is paid for by a combination of Medicaid payments and 
payments made under a health insurance policy issued by a private 
provider of such insurance. Persons and couples to whom these reduced 
benefits apply are--
    (1) Those who are otherwise eligible and who are in the medical 
treatment facility throughout a month. (By throughout a month we mean 
that you are in the medical treatment facility as of the beginning of 
the month and stay the entire month. If you are in a medical treatment 
facility you will be considered to have continuously been staying there 
if you are transferred from one medical treatment facility to another or 
if you are temporarily absent for a period of not more than 14 
consecutive days.); and
    (2) Those who reside for part of a month in a public institution and 
for the rest of the month are in a public or private medical treatment 
facility where Medicaid pays or would have paid (but for the application 
of section 1917(c) of the Act) a substantial part (more than 50 percent) 
of the cost of their care; and
    (3) Children under age 18 who reside for part of a month in a public 
institution and for the rest of the month are in a public or private 
medical treatment facility where a substantial part (more than 50 
percent) of the cost of their care is being paid under a health 
insurance policy issued by a private

[[Page 831]]

provider or by a combination of Medicaid and payments under a health 
insurance policy issued by a private provider.
    (b) The benefit rates are--(1) Eligible individual. For months after 
June 1988, the benefit rate for an eligible individual with no eligible 
spouse is $30 per month. The benefit payment is figured by subtracting 
the eligible individual's countable income (see subpart K) from the 
benefit rate as explained in Sec. 416.420.
    (2) Eligible couple both of whom are temporarily absent from home in 
medical treatment facilities as described in Sec. 416.1149(c)(1). For 
months after June 1988, the benefit rate for a couple is $60 a month. 
The benefit payment is figured by subtracting the couple's countable 
income (see subpart K) from the benefit rate as explained in 
Sec. 416.420.
    (3) Eligible couple with one spouse who is temporarily absent from 
home as described in Sec. 416.1149(c)(1). The couple's benefit rate 
equals:
    (i) For months after June 1988, $30 per month for the spouse in the 
medical treatment facility; plus
    (ii) The benefit rate for an eligible individual (see Sec. 416.410) 
for the spouse who is not in the medical treatment facility. The benefit 
payment for each spouse is figured by subtracting each individual's own 
countable income in the appropriate month (see Sec. 416.420) from his or 
her portion of the benefit rate shown in paragraphs (b)(3) (i) and (ii).
    (c) Definition. For purposes of this section, a medical treatment 
facility means an institution or that part of an institution that is 
licensed or otherwise approved by a Federal, State, or local government 
to provide inpatient medical care and services.

[47 FR 3106, Jan. 22, 1982, as amended at 50 FR 48571, Nov. 26, 1985; 50 
FR 51514, Dec. 18, 1985; 54 FR 19164, May 4, 1989; 58 FR 64894, Dec. 10, 
1993; 60 FR 16374, Mar. 30, 1995; 61 FR 10278, Mar. 13, 1996; 62 FR 
1056, Jan. 8, 1997; 72 FR 50874, Sept. 5, 2007; 72 FR 54350, Sept. 25, 
2007]



Sec. 416.415  Amount of benefits; eligible individual is disabled 
child under age 18.

    (a) If you are a disabled child under age 18 and meet the conditions 
in Sec. 416.1165(i) for waiver of deeming, your parents' income will not 
be deemed to you and your benefit rate will be $30 a month.
    (b) If you are a disabled child under age 18 and do not meet the 
conditions in Sec. 416.1165(i) only because your parents' income is not 
high enough to make you ineligible for SSI but deeming of your parents' 
income would result in an SSI benefit less than the amount payable if 
you received benefits as a child under Sec. 416.1165(i), your benefit 
will be the amount payable if you received benefits as a child under 
Sec. 416.1165(i).

[60 FR 361, Jan. 4, 1995]



Sec. 416.420  Determination of benefits; general.

    Benefits shall be determined for each month. The amount of the 
monthly payment will be computed by reducing the benefit rate (see 
Secs. 416.410, 416.412, 416.413, and 416.414) by the amount of countable 
income as figured under the rules in subpart K of this part. The 
appropriate month's countable income to be used to determine how much 
your benefit payment will be for the current month (the month for which 
a benefit is payable) will be determined as follows:
    (a) General rule. We generally use the amount of your countable 
income in the second month prior to the current month to determine how 
much your benefit amount will be for the current month. We will use the 
benefit rate (see Secs. 416.410 through 416.414), as increased by a 
cost-of-living adjustment, in determining the value of the one-third 
reduction or the presumed maximum value, to compute your SSI benefit 
amount for the first 2 months in which the cost-of-living adjustment is 
in effect. If you have been receiving an SSI benefit and a Social 
Security insurance benefit and the latter is increased on the basis of 
the cost-of-living adjustment or because your benefit is recomputed, we 
will compute the amount of your SSI benefit for January, the month of an 
SSI benefit increase, by including in your income the amount by which 
your Social Security benefit in January exceeds the amount of your 
Social Security benefit in November. Similarly, we will compute the

[[Page 832]]

amount of your SSI benefit for February by including in your income the 
amount by which your Social Security benefit in February exceeds the 
amount of your Social Security benefit in December.

    Example 1. Mrs. X's benefit amount is being determined for September 
(the current month). Mrs. X's countable income in July is used to 
determine the benefit amount for September.
    Example 2. Mr. Z's SSI benefit amount is being determined for 
January (the current month). There has been a cost-of-living increase in 
SSI benefits effective January. Mr. Z's countable income in November is 
used to determine the benefit amount for January. In November, Mr. Z had 
in-kind support and maintenance valued at the presumed maximum value as 
described in Sec. 416.1140(a). We will use the January benefit rate, as 
increased by the COLA, to determine the value of the in-kind support and 
maintenance Mr. Z received in November when we determine Mr. Z's SSI 
benefit amount for January.
    Example 3. Mr. Y's SSI benefit amount is being determined for 
January (the current month). Mr. Y has Social Security income of $100 in 
November, $100 in December, and $105 in January. We find the amount by 
which his Social Security income in January exceeds his Social Security 
income in November ($5) and add that to his income in November to 
determine the SSI benefit amount for January.

    (b) Exceptions to the general rule--(1) First month of initial 
eligibility for payment or the first month of eligibility after a month 
of ineligibility. We use your countable income in the current month to 
determine your benefit amount for the first month you are initially 
eligible for payment of SSI benefits (see Sec. 416.501) or for the first 
month you again become eligible for SSI benefits after at least a month 
of ineligibility. Your payment for a first month of reeligibility after 
at least one-month of ineligibility will be prorated according to the 
number of days in the month that you are eligible beginning with the 
date on which you reattain eligibility.

    Example: Mrs. Y applies for SSI benefits in September and meets the 
requirements for eligibility in that month. (We use Mrs. Y's countable 
income in September to determine if she is eligible for SSI in 
September.) The first month for which she can receive payment is October 
(see Sec. 416.501). We use Mrs. Y's countable income in October to 
determine the amount of her benefit for October. If Mrs. Y had been 
receiving SSI benefits through July, became ineligible for SSI benefits 
in August, and again became eligible for such benefits in September, we 
would use Mrs. Y's countable income in September to determine the amount 
of her benefit for September. In addition, the proration rules discussed 
above would also apply to determine the amount of benefits in September 
in this second situation.

    (2) Second month of initial eligibility for payment or second month 
of eligibility after a month of ineligibility. We use your countable 
income in the first month prior to the current month to determine how 
much your benefit amount will be for the current month when the current 
month is the second month of initial eligibility for payment or the 
second month of reeligibility following at least a month of 
ineligibility. However, if you have been receiving both an SSI benefit 
and a Social Security insurance benefit and the latter is increased on 
the basis of the cost-of-living adjustment or because your benefit is 
recomputed, we will compute the amount of your SSI benefit for January, 
the month of an SSI benefit increase, by including in your income the 
amount by which your Social Security benefit in January exceeds the 
amount of your Social Security benefit in December.

    Example: Mrs. Y was initially eligible for payment of SSI benefits 
in October. Her benefit amount for November will be based on her 
countable income in October (first prior month).

    (3) Third month of initial eligibility for payment or third month of 
eligibility after a month of ineligibility. We use your countable income 
according to the rule set out in paragraph (a) of this section to 
determine how much your benefit amount will be for the third month of 
initial eligibility for payment or the third month of reeligibility 
after at least a month of ineligibility.

    Example: Mrs. Y was initially eligible for payment of SSI benefits 
in October. Her benefit amount for December will be based on her 
countable income in October (second prior month).

    (4) Income derived from certain assistance payments. We use your 
income in the current month from the programs listed below to determine 
your benefit

[[Page 833]]

amount for that same month. The assistance programs are as follows:
    (i) Aid to Families with Dependent Children under title IV-A of the 
Social Security Act (the Act);
    (ii) Foster Care under title IV-E of the Act;
    (iii) Refugee Cash Assistance pursuant to section 412(e) of the 
Immigration and Nationality Act;
    (iv) Cuban and Haitian Entrant Assistance pursuant to section 501(a) 
of Pub. L. 96-422; and
    (v) Bureau of Indian Affairs general assistance and child welfare 
assistance pursuant to 42 Stat. 208 as amended.
    (c) Reliable information which is currently available for 
determining benefits. The Commissioner has determined that no reliable 
information exists which is currently available to use in determining 
benefit amounts.
    (1) Reliable information. For purposes of this section reliable 
information means payment information that is maintained on a computer 
system of records by the government agency determining the payments 
(e.g., Department of Veterans Affairs, Office of Personnel Management 
for Federal civil service information and the Railroad Retirement 
Board).
    (2) Currently available information. For purposes of this section 
currently available information means information that is available at 
such time that it permits us to compute and issue a correct benefit for 
the month the information is pertinent.
    (d) Payment of benefits. See subpart E of this part for the rules on 
payments and the minimum monthly benefit (as explained in Sec. 416.503).

[50 FR 48571, Nov. 26, 1985; 50 FR 51514, Dec. 18, 1985, as amended at 
54 FR 31657, Aug. 1, 1989; 62 FR 30751, June 5, 1997; 63 FR 33546, June 
19, 1998; 64 FR 31973, June 15, 1999]



Sec. 416.421  Determination of benefits; computation of prorated
benefits.

    (a) In the month that you reacquire eligibility after a month or 
more of ineligibility (see Sec. 416.1320(b)), your benefit will be 
prorated according to the number of days in the month that you are 
eligible beginning with the date on which you meet all eligibility 
requirements.
    (b) In determining the amount of your benefit for a month in which 
benefits are to be prorated, we first compute the amount of the benefit 
that you would receive for the month as if proration did not apply. We 
then determine the date on which you meet all factors of eligibility. 
(The income limits must be met based on the entire month and the 
resource limit must be as of the first day of the month.) We then count 
the number of days in the month beginning with the day on which you 
first meet all factors of eligibility through the end of the month. We 
then multiply the amount of your unprorated benefit for the month by the 
number of days for which you are eligible for benefits and divide that 
figure by the number of days in the month for which your benefit is 
being determined. The result is the amount of the benefit that you are 
due for the month in which benefits are to be prorated.

[51 FR 13493, Apr. 14, 1986, as amended at 64 FR 31973, June 15, 1999]



Sec. 416.426  Change in status involving an individual; ineligibility 
occurs.

    Whenever benefits are suspended or terminated for an individual 
because of ineligibility, no benefit is payable for that month.

[50 FR 48571, Nov. 26, 1985]



Sec. 416.428  Eligible individual without an eligible spouse has an
essential person in his home.

    When an eligible individual without an eligible spouse has an 
essential person (as defined in Sec. 416.222 of this part) in his home, 
the amount by which his rate of payment is increased is determined in 
accordance with Secs. 416.220 through 416.223 and with 416.413 of this 
part. The essential person's income is deemed to be that of the eligible 
individual, and the provisions of Secs. 416.401 through 416.426 will 
apply in determining the benefit of such eligible individual.

[39 FR 23053, June 26, 1974, as amended at 51 FR 10616, Mar. 28, 1986; 
65 FR 16814, Mar. 30, 2000]

[[Page 834]]



Sec. 416.430  Eligible individual with eligible spouse; essential 
person(s) present.

    (a) When an eligible individual with an eligible spouse has an 
essential person (Sec. 416.222) living in his or her home, or when both 
such persons each has an essential person, the increase in the rate of 
payment is determined in accordance with Secs. 416.413 and 416.532. The 
income of the essential person(s) is included in the income of the 
couple and the payment due will be equally divided between each member 
of the eligible couple.
    (b) When one member of an eligible couple is temporarily absent in 
accordance with Sec. 416.1149(c)(1) and Sec. 416.222(c) and either one 
or both individuals has an essential person, add the essential person 
increment to the benefit rate for the member of the couple who is 
actually residing with the essential person and include the income of 
the essential person in that member's income. See Sec. 416.414(b)(3).

[60 FR 16375, Mar. 30, 1995]



Sec. 416.432  Change in status involving a couple; eligibility continues.

    When there is a change in status which involves the formation or 
dissolution of an eligible couple (for example, marriage, divorce), a 
redetermination of the benefit amount shall be made for the months 
subsequent to the month of such formation or dissolution of the couple 
in accordance with the following rules:
    (a) When there is a dissolution of an eligible couple and each 
member of the couple becomes an eligible individual, the benefit amount 
for each person shall be determined individually for each month 
beginning with the first month after the month in which the dissolution 
occurs. This shall be done by determining the applicable benefit rate 
for an eligible individual with no eligible spouse according to 
Secs. 416.410 or 416.413 and 416.414 and applying Sec. 416.420(a). See 
Sec. 416.1147a for the applicable income rules when in-kind support and 
maintenance is involved.
    (b) When two eligible individuals become an eligible couple, the 
benefit amount will be determined for the couple beginning with the 
first month following the month of the change. This shall be done by 
determining which benefit rate to use for an eligible couple according 
to Secs. 416.412 or 416.413 and 416.414 and applying the requirements in 
Sec. 416.420(a).

[60 FR 16375, Mar. 30, 1995]



Sec. 416.435  Change in status involving a couple; ineligibility occurs.

    Whenever benefits are suspended or terminated for both members of a 
couple because of ineligibility, no benefits are payable for that month. 
However, when benefits are suspended or terminated for one member of a 
couple because of ineligibility for a month, the member who remains 
eligible assumes the eligibility status of an eligible individual 
without an eligible spouse for such month and the benefit rate and 
payment amount will be determined as an eligible individual for the 
month.

[50 FR 48572, Nov. 26, 1985]



     Subpart E_Payment of Benefits, Overpayments, and Underpayments

    Authority: Secs. 702(a)(5), 1147, 1601, 1602, 1611(c) and (e), and 
1631(a)-(d) and (g) of the Social Security Act (42 U.S.C. 902(a)(5), 
1320b-17, 1381, 1381a, 1382(c) and (e), and 1383(a)-(d) and (g)); 31 
U.S.C. 3716; 31 U.S.C. 3720A.



Sec. 416.501  Payment of benefits: General.

    Payment of SSI benefits will be made for the month after the month 
of initial eligibility and for each subsequent month provided all 
requirements for eligibility (see Sec. 416.202) and payment (see 
Sec. 416.420) are met. In the month the individual re-establishes 
eligibility after at least a month of ineligibility, benefits are paid 
for such a month beginning with the date in the month on which the 
individual meets all eligibility requirements. In some months, while the 
factors of eligibility based on the current month may be established, it 
is possible to receive no payment for that month if the factors of 
eligibility for payment are not met. Payment of benefits may not be made 
for any period that precedes the first month following the date on which 
an application is filed or, if later, the first month

[[Page 835]]

following the date all conditions for eligibility are met.

[64 FR 31973, June 15, 1999]



Sec. 416.502  Manner of payment.

    For the month an individual reestablishes eligibility after a month 
of ineligibility, an SSI payment will be made on or after the day of the 
month on which the individual becomes reeligible to receive benefits. In 
all other months, a payment will be made on the first day of each month 
and represents payment for that month. If the first day of the month 
falls on a Saturday, Sunday, or legal holiday, payments will be made on 
the first day preceding such day which is not a Saturday, Sunday, or 
legal holiday. Unless otherwise indicated, the monthly amount for an 
eligible couple will be divided equally and paid separately to each 
individual. Section 416.520 explains emergency advance payments.

[55 FR 4422, Feb. 8, 1990, as amended at 64 FR 31974, June 15, 1999]



Sec. 416.503  Minimum monthly benefit amount.

    If you receive an SSI benefit that does not include a State 
supplement the minimum monthly SSI benefit amount payable is $1. When an 
SSI benefit amount of less than $1 is payable, the benefit amount will 
be increased to $1. If you receive an SSI benefit that does include a 
State supplement and the SSI benefit amount is less than $1 but when 
added to the State supplement exceeds $1, the SSI benefit amount will 
not be increased to $1. Rather, we pay the actual amount of the SSI 
benefit plus the State supplement.

[50 FR 48572, Nov. 26, 1985]



Sec. 416.520  Emergency advance payments.

    (a) General. We may pay a one-time emergency advance payment to an 
individual initially applying for benefits who is presumptively eligible 
for SSI benefits and who has a financial emergency. The amount of this 
payment cannot exceed the Federal benefit rate (see Secs. 416.410 
through 416.414) plus the federally administered State supplementary 
payment, if any (see Sec. 416.2020), which apply for the month for which 
the payment is made. Emergency advance payment is defined in paragraph 
(b)(1) of this section. The actual payment amount is computed as 
explained in paragraph (c) of this section. An emergency advance payment 
is an advance of benefits expected to be due that is recoverable as 
explained in paragraphs (d) and (e) of this section.
    (b) Definition of terms. For purposes of this subpart--
    (1) Emergency advance payment means a direct, expedited payment by a 
Social Security Administration field office to an individual or spouse 
who is initially applying (see paragraph (b)(3) of this section), who is 
at least presumptively eligible (see paragraph (b)(4) of this section), 
and who has a financial emergency (see paragraph (b)(2) of this 
section).
    (2) Financial emergency is the financial status of an individual who 
has insufficient income or resources to meet an immediate threat to 
health or safety, such as the lack of food, clothing, shelter, or 
medical care.
    (3) Initially applying means the filing of an application (see 
Sec. 416.310) which requires an initial determination of eligibility, 
such as the first application for SSI benefits or an application filed 
subsequent to a prior denial or termination of a prior period of 
eligibility for payment. An individual or spouse who previously received 
an emergency advance payment in a prior period of eligibility which 
terminated may again receive such a payment if he or she reapplies for 
SSI and meets the other conditions for an emergency advance payment 
under this section.
    (4) Presumptively eligible is the status of an individual or spouse 
who presents strong evidence of the likelihood of meeting all of the 
requirements for eligibility including the income and resources tests of 
eligibility (see subparts K and L of this part), categorical eligibility 
(age, disability, or blindness), and technical eligibility (United 
States residency and citizenship or alien status--see subpart P of this 
part).
    (c) Computation of payment amount. To compute the emergency advance 
payment amount, the maximum amount described in paragraph (a) of

[[Page 836]]

this section is compared to both the expected amount payable for the 
month for which the payment is made (see paragraph (c)(1) of this 
section) and the amount the applicant requested to meet the emergency. 
The actual payment amount is no more than the least of these three 
amounts.
    (1) In computing the emergency advance payment amount, we apply the 
monthly income counting rules appropriate for the month for which the 
advance is paid, as explained in Sec. 416.420. Generally, the month for 
which the advance is paid is the month in which it is paid. However, if 
the advance is paid in the month the application is filed, the month for 
which the advance is paid is considered to be the first month of 
expected eligibility for payment of benefits.
    (2) For a couple, we separately compute each member's emergency 
advance payment amount.
    (d) Recovery of emergency advance payment where eligibility is 
established. When an individual or spouse is determined to be eligible 
and retroactive payments are due, any emergency advance payment amounts 
are recovered in full from the first payment(s) certified to the United 
States Treasury. However, if no retroactive payments are due and 
benefits are only due in future months, any emergency advance payment 
amounts are recovered through proportionate reductions in those benefits 
over a period of not more than 6 months. (See paragraph (e) of this 
section if the individual or spouse is determined to be ineligible.)
    (e) Disposition of emergency advance payments where eligibility is 
not established. If a presumptively eligible individual (or spouse) or 
couple is determined to be ineligible, the emergency advance payment 
constitutes a recoverable overpayment. (See the exception in 
Sec. 416.537(b)(1) when payment is made on the basis of presumptive 
disability or presumptive blindness.)

[55 FR 4422, Feb. 8, 1990; 55 FR 7411, Mar. 1, 1990, as amended at 64 FR 
31974, June 15, 1999]



Sec. 416.525  Reimbursement to States for interim assistance payments.

    Notwithstanding Sec. 416.542, the Social Security Administration 
may, in accordance with the provisions of subpart S of this part, 
withhold supplemental security income benefits due with respect to an 
individual and may pay to a State (or political subdivision thereof, if 
agreed to by the Social Security Administration and the State) from the 
benefits withheld, an amount sufficient to reimburse the State (or 
political subdivision) for interim assistance furnished on behalf of the 
individual.

[41 FR 20872, May 21, 1976]



Sec. 416.532  Method of payment when the essential person resides
with more than one eligible person.

    (a) When an essential person lives with an eligible individual and 
an eligible spouse, the State may report that the person is essential to 
one or both members of the couple. In either event, the income and 
resources of the essential person will be considered to be available to 
the family unit. The payment increment attributable to the essential 
person will be added to the rate of payment for the couple, the 
countable income subtracted, and the resulting total benefit divided 
equally between the eligible individual and the eligible spouse.
    (b) Where the essential person lives with two eligible individuals 
(as opposed to an eligible individual and eligible spouse), one of whom 
has been designated the qualified individual, the income and resources 
of the essential person will be considered to be available only to the 
qualified individual (as defined in Sec. 416.221) and any increase in 
payment will be made to such qualified individual.
    (c) In those instances where the State has designated the essential 
person as essential to two or more eligible individuals so that both are 
qualified individuals, the payment increment attributable to the 
essential person must be shared equally, and the income and resources of 
the essential person divided and counted equally against each qualified 
individual.
    (d) When an essential person lives with an eligible individual and 
an eligible spouse (or two or more eligible individuals) only one of 
whom is the qualified individual, essential person status is not 
automatically retained upon the death of the qualified individual or 
upon the separation from the

[[Page 837]]

qualified individual. A review of the State records established on or 
before December 31, 1973, will provide the basis for a determination as 
to whether the remaining eligible individual or eligible spouse meets 
the definition of qualified individual. Payment in consideration of the 
essential person will be dependent on whether the essential person 
continues to live with a qualified individual. If the essential person 
does reside with a qualified individual, status as an essential person 
is retained.

[39 FR 33796, Sept. 20, 1974, as amended at 50 FR 48572, Nov. 26, 1985; 
51 FR 10616, Mar. 28, 1986; 60 FR 16375, Mar. 30, 1995]



Sec. 416.533  Transfer or assignment of benefits.

    Except as provided in Sec. 416.525 and subpart S of this part, the 
Social Security Administration will not certify payment of supplemental 
security income benefits to a transferee or assignee of a person 
eligible for such benefits under the Act or of a person qualified for 
payment under Sec. 416.542. The Social Security Administration shall not 
certify payment of supplemental security income benefits to any person 
claiming such payment by virtue of an execution, levy, attachment, 
garnishment, or other legal process or by virtue of any bankruptcy or 
insolvency proceeding against or affecting the person eligible for 
benefits under the Act.

[41 FR 20873, May 21, 1976, as amended at 58 FR 52912, Oct. 13, 1993]



Sec. 416.534  Garnishment of payments after disbursement.

    (a) Payments that are covered by section 1631(d)(1) of the Social 
Security Act and made by direct deposit are subject to 31 CFR part 212, 
Garnishment of Accounts Containing Federal Benefit Payments.
    (b) This section may be amended only by a rulemaking issued jointly 
by the Department of Treasury and the agencies defined as a ``benefit 
agency'' in 31 CFR 212.3.

[76 FR 9961, Feb. 23, 2011]



Sec. 416.535  Underpayments and overpayments.

    (a) General. When an individual receives SSI benefits of less than 
the correct amount, adjustment is effected as described in Secs. 416.542 
and 416.543, and the additional rules in Sec. 416.545 may apply. When an 
individual receives more than the correct amount of SSI benefits, 
adjustment is effected as described in Sec. 416.570. Refund of 
overpayments is discussed in Sec. 416.560 and waiver of recovery of 
overpayments is discussed in Secs. 416.550 through 416.555.
    (b) Additional rules for individuals whose drug addiction or 
alcoholism is a contributing factor material to the determination of 
disability. When an individual whose drug addiction or alcoholism is a 
contributing factor material to the determination of disability, as 
described in Sec. 416.935, receives less than the correct amount of SSI 
benefits, adjustment is effected as described in Secs. 416.542 and 
416.543 and the additional rule described in Sec. 416.544 applies.
    (c) Additional rules for eligible individuals under age 18 who have 
a representative payee. When an eligible individual under age 18 has a 
representative payee and receives less than the correct amount of SSI 
benefits, the additional rules in Sec. 416.546 may apply.
    (d) Additional rules for eligible aliens and for their sponsors. 
When an individual who is an alien is overpaid SSI benefits during the 
3-year period in which deeming from a sponsor applies (see 
Sec. 416.1160(a)(3)), the sponsor and the alien may be jointly and 
individually liable for repayment of the overpayment. The sponsor is 
liable for the overpayment if he or she failed to report correct 
information that affected the alien's eligibility or payment amount. 
This means information about the income and resources of the sponsor 
and, if they live together, of the sponsor's spouse. However, the 
sponsor is not liable for repayment if the sponsor was without fault or 
had good cause for failing to report correctly. A special rule that 
applies to adjustment of other benefits due the alien and the sponsor to 
recover an overpayment is described in Sec. 416.570(b).
    (e) Sponsor without fault or good cause exists for failure to 
report. Without fault or good cause will be found to exist if

[[Page 838]]

the failure to report was not willful. To establish willful failure, the 
evidence must show that the sponsor knowingly failed to supply pertinent 
information regarding his or her income and resources.

[52 FR 8881, Mar. 20, 1987, as amended at 60 FR 8149, Feb. 10, 1995; 61 
FR 67205, Dec. 20, 1996]



Sec. 416.536  Underpayments--defined.

    An underpayment can occur only with respect to a period for which a 
recipient filed an application, if required, for benefits and met all 
conditions of eligibility for benefits. An underpayment, including any 
amounts of State supplementary payments which are due and administered 
by the Social Security Administration, is:
    (a) Nonpayment, where payment was due but was not made; or
    (b) Payment of less than the amount due. For purposes of this 
section, payment has been made when certified by the Social Security 
Administration to the Department of the Treasury, except that payment 
has not been made where payment has not been received by the designated 
payee, or where payment was returned.

[58 FR 52912, Oct. 13, 1993]



Sec. 416.537  Overpayments--defined.

    (a) Overpayments. As used in this subpart, the term overpayment 
means payment of more than the amount due for any period, including any 
amounts of State supplementary payments which are due and administered 
by the Social Security Administration. For purposes of this section, 
payment has been made when certified by the Social Security 
Administration to the Department of the Treasury, except that payment 
has not been made where payment has not been received by the designated 
payee, or where payment was returned. When a payment of more than the 
amount due is made by direct deposit to a financial institution to or on 
behalf of an individual who has died, and the financial institution 
credits the payment to a joint account of the deceased individual and 
another person who is the surviving spouse of the deceased individual 
and was eligible for a payment under title XVI of the Act (including any 
State supplementation payment paid by the Commissioner) as an eligible 
spouse (or as either member of an eligible couple) for the month in 
which the deceased individual died, the amount of the payment in excess 
of the correct amount will be an overpayment to the surviving spouse.
    (b) Actions which are not overpayments--(1) Presumptive disability 
and presumptive blindness. Any payment made for any month, including an 
advance payment of benefits under Sec. 416.520, is not an overpayment to 
the extent it meets the criteria for payment under Sec. 416.931. 
Payments made on the basis of presumptive disability or presumptive 
blindness will not be considered overpayments where ineligibility is 
determined because the individual or eligible spouse is not disabled or 
blind. However, where it is determined that all or a portion of the 
presumptive payments made are incorrect for reasons other than 
disability or blindness, these incorrect payments are considered 
overpayments (as defined in paragraph (a) of this section). Overpayments 
may occur, for example, when the person who received payments on the 
basis of presumptive disability or presumptive blindness is determined 
to be ineligible for all or any part of the payments because of excess 
resources or is determined to have received excess payment for those 
months based on an incorrect estimate of income.
    (2) Penalty. The imposition of a penalty pursuant to Sec. 416.724 is 
not an adjustment of an overpayment and is imposed only against any 
amount due the penalized recipient, or, after death, any amount due the 
deceased which otherwise would be paid to a survivor as defined in 
Sec. 416.542.

[40 FR 47763, Oct. 10, 1975, as amended at 43 FR 17354, Apr. 24, 1978; 
50 FR 48572, Nov. 26, 1985; 55 FR 7313, Mar. 1, 1990; 58 FR 52912, Oct. 
13, 1993; 62 FR 38454, July 18, 1997]



Sec. 416.538  Amount of underpayment or overpayment.

    (a) General. The amount of an underpayment or overpayment is the 
difference between the amount paid to a recipient and the amount of 
payment actually due such recipient for a given period. An underpayment 
or overpayment period begins with the first

[[Page 839]]

month for which there is a difference between the amount paid and the 
amount actually due for that month. The period ends with the month the 
initial determination of overpayment or underpayment is made. With 
respect to the period established, there can be no underpayment to a 
recipient or his or her eligible spouse if more than the correct amount 
payable under title XVI of the Act has been paid, whether or not 
adjustment or recovery of any overpayment for that period to the 
recipient or his or her eligible spouse has been waived under the 
provisions of Secs. 416.550 through 416.556. A subsequent initial 
determination of overpayment will require no change with respect to a 
prior determination of overpayment or to the period relating to such 
determination to the extent that the basis of the prior overpayment 
remains the same.
    (b) Limited delay in payment of underpaid amount to recipient or 
eligible surviving spouse. Where an apparent overpayment has been 
detected but determination of the overpayment has not been made (see 
Sec. 416.558(a)), a determination of an underpayment and payment of an 
underpaid amount which is otherwise due cannot be delayed to a recipient 
or eligible surviving spouse unless a determination with respect to the 
apparent overpayment can be made before the close of the month following 
the month in which the underpaid amount was discovered.
    (c) Delay in payment of underpaid amount to ineligible individual or 
survivor. A determination of an underpayment and payment of an underpaid 
amount which is otherwise due an individual who is no longer eligible 
for SSI or is payable to a survivor pursuant to Sec. 416.542(b) will be 
delayed for the resolution of all overpayments, incorrect payments, 
adjustments, and penalties.
    (d) Limited delay in payment of underpaid amount to eligible 
individual under age 18 who has a representative payee. When the 
representative payee of an eligible individual under age 18 is required 
to establish a dedicated account pursuant to Secs. 416.546 and 
416.640(e), payment of past-due benefits which are otherwise due will be 
delayed until the representative payee has established the dedicated 
account as described in Sec. 416.640(e). Once the account is 
established, SSA will deposit the past-due benefits payable directly to 
the account.
    (e) Reduction of underpaid amount. Any underpayment amount otherwise 
payable to a survivor on account of a deceased recipient is reduced by 
the amount of any outstanding penalty imposed against the benefits 
payable to such deceased recipient or survivor under section 1631(e) of 
the Act (see Sec. 416.537(b)(2)).

[58 FR 52912, Oct. 13, 1993, as amended at 61 FR 67205, Dec. 20, 1996]



Sec. 416.542  Underpayments--to whom underpaid amount is payable.

    (a) Underpaid recipient alive--underpayment payable. (1) If an 
underpaid recipient is alive, the amount of any underpayment due him or 
her will be paid to him or her in a separate payment or by increasing 
the amount of his or her monthly payment. If the underpaid amount meets 
the formula in Sec. 416.545 and one of the exceptions does not apply, 
the amount of any past-due benefits will be paid in installments.
    (2) If an underpaid recipient whose drug addiction or alcoholism is 
a contributing factor material to the determination of disability (as 
described in Sec. 416.935) is alive, the amount of any underpayment due 
the recipient will be paid through his or her representative payee in 
installment payments. No underpayment may be paid directly to the 
recipient. If the recipient dies before we have paid all benefits due 
through his or her representative payee, we will follow the rules which 
apply to underpayments for the payment of any remaining amounts due to 
any eligible survivor of a deceased recipient as described in paragraph 
(b) of this section.
    (3) If an underpaid individual under age 18 is alive and has a 
representative payee and is due past-due benefits which meet the formula 
in Sec. 416.546, SSA will pay the past-due benefits into the dedicated 
account described in Sec. 416.640(e). If the underpaid individual dies 
before the benefits have been deposited into the account, we will follow 
the rules which apply to underpayments for the payment of any unpaid 
amount due to any eligible survivor of

[[Page 840]]

a deceased individual as described in paragraph (b) of this section.
    (b) Underpaid recipient deceased--underpaid amount payable to 
survivor. (1) If a recipient dies before we have paid all benefits due 
or before the recipient endorses the check for the correct payment, we 
may pay the amount due to the deceased recipient's surviving eligible 
spouse or to his or her surviving spouse who was living with the 
underpaid recipient within the meaning of section 202(i) of the Act (see 
Sec. 404.347) in the month he or she died or within 6 months immediately 
preceding the month of death.
    (2) If the deceased underpaid recipient was a disabled or blind 
child when the underpayment occurred, the underpaid amount may be paid 
to the natural or adoptive parent(s) of the underpaid recipient who 
lived with the underpaid recipient in the month he or she died or within 
the 6 months preceding death. We consider the underpaid recipient to 
have been living with the natural or adoptive parent(s) in the period if 
the underpaid recipient satisfies the ``living with'' criteria we use 
when applying Sec. 416.1165 or would have satisfied the criteria had his 
or her death not precluded the application of such criteria throughout a 
month.
    (3) If the deceased individual was living with his or her spouse 
within the meaning of section 202(i) of the Act in the month of death or 
within 6 months immediately preceding the month of death, and was also 
living with his or her natural or adoptive parent(s) in the month of 
death or within 6 months preceding the month of death, we will pay the 
parent(s) any SSI underpayment due the deceased individual for months he 
or she was a blind or disabled child and we will pay the spouse any SSI 
underpayment due the deceased individual for months he or she no longer 
met the definition of ``child'' as set forth at Sec. 416.1856. If no 
parent(s) can be paid in such cases due to death or other reason, then 
we will pay the SSI underpayment due the deceased individual for months 
he or she was a blind or disabled child to the spouse.
    (4) No benefits may be paid to the estate of any underpaid 
recipient, the estate of the surviving spouse, the estate of a parent, 
or to any survivor other than those listed in paragraph (b) (1) through 
(3) of this section. Payment of an underpaid amount to an ineligible 
spouse or surviving parent(s) may only be made for benefits payable for 
months after May 1986. Payment to surviving parent(s) may be made only 
for months of eligibility during which the deceased underpaid recipient 
was a child. We will not pay benefits to a survivor other than the 
eligible spouse who requests payment of an underpaid amount more than 24 
months after the month of the individual's death.
    (c) Underpaid recipient's death caused by an intentional act. No 
benefits due the deceased individual may be paid to a survivor found 
guilty by a court of competent jurisdiction of intentionally causing the 
underpaid recipient's death.

[40 FR 47763, Oct. 10, 1975, as amended at 58 FR 52913, Oct. 13, 1993; 
60 FR 8149, Feb. 10, 1995; 61 FR 67206, Dec. 20, 1996]



Sec. 416.543  Underpayments--applied to reduce overpayments.

    We apply any underpayment due an individual to reduce any 
overpayment to that individual that we determine to exist (see 
Sec. 416.558) for a different period, unless we have waived recovery of 
the overpayment under the provisions of Secs. 416.550 through 416.556. 
Similarly, when an underpaid recipient dies, we first apply any amounts 
due the deceased recipient that would be payable to a survivor under 
Sec. 416.542(b) against any overpayment to the survivor unless we have 
waived recovery of such overpayment under the provisions of 
Secs. 416.550 through 416.556.

    Example: A disabled child, eligible for payments under title XVI, 
and his parent, also an eligible individual receiving payments under 
title XVI, were living together. The disabled child dies at a time when 
he was underpaid $100. The deceased child's underpaid benefit is payable 
to the surviving parent. However, since the parent must repay an SSI 
overpayment of $225 on his own record, the $100 underpayment will be 
applied to reduce the parent's own overpayment to $125.

[58 FR 52913, Oct. 13, 1993]

[[Page 841]]



Sec. 416.544  Paying benefits in installments: Drug addiction 
or alcoholism.

    (a) General. For disabled recipients who receive benefit payments 
through a representative payee because drug addiction or alcoholism is a 
contributing factor material to the determination of disability, certain 
amounts due the recipient for a past period will be paid in 
installments. The amounts subject to payment in installments include:
    (1) Benefits due but unpaid which accrued prior to the month payment 
was effectuated;
    (2) Benefits due but unpaid which accrued during a period of 
suspension for which the recipient was subsequently determined to have 
been eligible; and
    (3) Any adjustment to benefits which results in an accrual of unpaid 
benefits.
    (b) Installment formula. Except as provided in paragraph (c) of this 
section, the amount of the installment payment in any month is limited 
so that the sum of (1) the amount due for a past period (and payable 
under paragraph (a) of this section) paid in such month and (2) the 
amount of any current benefit due cannot exceed twice the Federal 
Benefit Rate plus any federally-administered State supplementation 
payable to an eligible individual for the preceding month.
    (c) Exception to installment limitation. An exception to the 
installment payment limitation in paragraph (b) of this section can be 
granted for the first month in which a recipient accrues benefit amounts 
subject to payment in installments if the recipient has unpaid housing 
expenses which result in a high risk of homelessness for the recipient. 
In that case, the benefit payment may be increased by the amount of the 
unpaid housing expenses so long as that increase does not exceed the 
amount of benefits which accrued during the most recent period of 
nonpayment. We consider a person to be at risk of homelessness if 
continued nonpayment of the outstanding housing expenses is likely to 
result in the person losing his or her place to live or if past 
nonpayment of housing expenses has resulted in the person having no 
appropriate personal place to live. In determining whether this 
exception applies, we will ask for evidence of outstanding housing 
expenses that shows that the person is likely to lose or has already 
lost his or her place to live. For purposes of this section, 
homelessness is the state of not being under the control of any public 
institution and having no appropriate personal place to live. Housing 
expenses include charges for all items required to maintain shelter (for 
example, mortgage payments, rent, heating fuel, and electricity).
    (d) Payment through a representative payee. If the recipient does 
not have a representative payee, payment of amounts subject to 
installments cannot be made until a representative payee is selected.
    (e) Underpaid recipient no longer eligible. In the case of a 
recipient who is no longer currently eligible for monthly payments, but 
to whom amounts defined in paragraph (a) of this section are still 
owing, we will continue to make installment payments of such benefits 
through a representative payee.
    (f) Recipient currently not receiving SSI benefits because of 
suspension for noncompliance with treatment. If a recipient is currently 
not receiving SSI benefits because his or her benefits have been 
suspended for noncompliance with treatment (as defined in Sec. 416.936), 
the payment of amounts under paragraph (a) of this section will stop 
until the recipient has demonstrated compliance with treatment as 
described in Sec. 416.1326 and will again commence with the first month 
the recipient begins to receive benefits.
    (g) Underpaid recipient deceased. Upon the death of a recipient, any 
remaining unpaid amounts as defined in paragraph (a) of this section 
will be treated as underpayments in accordance with Sec. 416.542(b).

[60 FR 8150, Feb. 10, 1995]



Sec. 416.545  Paying large past-due benefits in installments.

    (a) General. Except as described in paragraph (c) of this section, 
when an individual is eligible for past-due benefits in an amount which 
meets the formula in paragraph (b) of this section, payment of these 
benefits must be made in installments. If an individual becomes eligible 
for past-due benefits

[[Page 842]]

for a different period while installments are being made, we will notify 
the individual of the amount due and issue these benefits in the last 
installment payment. The amounts subject to payment in installments 
include:
    (1) Benefits due but unpaid which accrued prior to the month payment 
was effectuated;
    (2) Benefits due but unpaid which accrued during a period of 
suspension for which the recipient was subsequently determined to have 
been eligible; and
    (3) Any adjustment to benefits which results in an accrual of unpaid 
benefits.
    (b) Installment formula. Installment payments must be made if the 
amount of the past-due benefits, including any federally administered 
State supplementation, after applying Sec. 416.525 (reimbursement to 
States for interim assistance) and applying Sec. 416.1520 (payment of 
attorney fees), equals or exceeds 3 times the Federal Benefit Rate plus 
any federally administered State supplementation payable in a month to 
an eligible individual (or eligible individual and eligible spouse). 
These installment payments will be paid in not more than 3 installments 
and made at 6-month intervals. Except as described in paragraph (d) of 
this section, the amount of each of the first and second installment 
payments may not exceed the threshold amount of 3 times the maximum 
monthly benefit payable as described in this paragraph.
    (c) Exception--When installments payments are not required. 
Installment payments are not required and the rules in this section do 
not apply if, when the determination of an underpayment is made, the 
individual is (1) afflicted with a medically determinable impairment 
which is expected to result in death within 12 months, or (2) ineligible 
for benefits and we determine that he or she is likely to remain 
ineligible for the next 12 months.
    (d) Exception--Increased first and second installment payments. (1) 
The amount of the first and second installment payments may be increased 
by the total amount of the following debts and expenses:
    (i) Outstanding debt for food, clothing, shelter, or medically 
necessary services, supplies or equipment, or medicine; or
    (ii) Current or anticipated expenses in the near future for 
medically necessary services, supplies or equipment, or medicine, or for 
the purchase of a home.
    (2) The increase described in paragraph (d)(1) of this section only 
applies to debts or expenses that are not subject to reimbursement by a 
public assistance program, the Secretary of Health and Human Services 
under title XVIII of the Act, a State plan approved under title XIX of 
the Act, or any private entity that is legally liable for payment in 
accordance with an insurance policy, pre-paid plan, or other 
arrangement.

[61 FR 67206, Dec. 20, 1996, as amended at 76 FR 453, Jan. 5, 2011; 79 
FR 33685, June 12, 2014]



Sec. 416.546  Payment into dedicated accounts of past-due benefits 
for eligible individuals under age 18 who have a representative
payee.

    For purposes of this section, amounts subject to payment into 
dedicated accounts (see Sec. 416.640(e)) include the amounts described 
in Sec. 416.545(a) (1), (2), and (3).
    (a) For an eligible individual under age 18 who has a representative 
payee and who is determined to be eligible for past-due benefits 
(including any federally administered State supplementation) in an 
amount which, after applying Sec. 416.525 (reimbursement to States for 
interim assistance) and Sec. 416.1520 (payment of attorney fee), exceeds 
six times the Federal Benefit Rate plus any federally administered State 
supplementation payable in a month, this unpaid amount must be paid into 
the dedicated account established and maintained as described in 
Sec. 416.640(e).
    (b) After the account is established, the representative payee may 
(but is not required to) deposit into the account any subsequent funds 
representing past-due benefits under this title to the individual which 
are equal to or exceed the maximum Federal Benefit Rate (including any 
federally administered State supplementation).
    (c) If the underpaid individual dies before all the benefits due 
have been deposited into the dedicated account, we will follow the rules 
which apply to underpayments for the payment of any

[[Page 843]]

unpaid amount due to any eligible survivor as described in 
Sec. 416.542(b).

[61 FR 67206, Dec. 20, 1996, as amended at 76 FR 453, Jan. 5, 2011]



Sec. 416.550  Waiver of adjustment or recovery--when applicable.

    Waiver of adjustment or recovery of an overpayment of SSI benefits 
may be granted when (EXCEPTION: This section does not apply to a sponsor 
of an alien):
    (a) The overpaid individual was without fault in connection with an 
overpayment, and
    (b) Adjustment or recovery of such overpayment would either:
    (1) Defeat the purpose of title XVI, or
    (2) Be against equity and good conscience, or
    (3) Impede efficient or effective administration of title XVI due to 
the small amount involved.

[52 FR 8882, Mar. 20, 1987, as amended at 53 FR 16543, May 10, 1988]



Sec. 416.551  Waiver of adjustment or recovery--effect of.

    Waiver of adjustment or recovery of an overpayment from the overpaid 
person himself (or, after his death, from his estate) frees him and his 
eligible spouse from the obligation to repay the amount of the 
overpayment covered by the waiver. Waiver of adjustment or recovery of 
an overpayment from anyone other than the overpaid person himself or his 
estate (e.g., a surviving eligible spouse) does not preclude adjustment 
or recovery against the overpaid person or his estate.

    Example: The recipient was overpaid $390. It was found that the 
overpaid recipient was eligible for waiver of adjustment or recovery of 
$260 of that amount, and such action was taken. Only $130 of the 
overpayment remained to be recovered by adjustment, refund, or the like.

[40 FR 47763, Oct. 10, 1975]



Sec. 416.552  Waiver of adjustment or recovery--without fault.

    Without fault relates only to the situation of the individual 
seeking relief from adjustment or recovery of an overpayment. The 
overpaid individual (and any other individual from whom the Social 
Security Administration seeks to recover the overpayment) is not 
relieved of liability and is not without fault solely because the Social 
Security Administration may have been at fault in making the 
overpayment. In determining whether an individual is without fault, the 
fault of the overpaid person and the fault of the individual seeking 
relief under the waiver provision are considered. Whether an individual 
is without fault depends on all the pertinent circumstances surrounding 
the overpayment in the particular case. The Social Security 
Administration considers the individual's understanding of the reporting 
requirements, the agreement to report events affecting payments, 
knowledge of the occurrence of events that should have been reported, 
efforts to comply with the reporting requirements, opportunities to 
comply with the reporting requirements, understanding of the obligation 
to return checks which were not due, and ability to comply with the 
reporting requirements (e.g., age, comprehension, memory, physical and 
mental condition). In determining whether an individual is without fault 
based on a consideration of these factors, the Social Security 
Administration will take into account any physical, mental, educational, 
or linguistic limitations (including any lack of facility with the 
English language) the individual may have. Although the finding depends 
on all of the circumstances in the particular case, an individual will 
be found to have been at fault in connection with an overpayment when an 
incorrect payment resulted from one of the following:
    (a) Failure to furnish information which the individual knew or 
should have known was material;
    (b) An incorrect statement made by the individual which he knew or 
should have known was incorrect (this includes the individual's 
furnishing his opinion or conclusion when he was asked for facts), or
    (c) The individual did not return a payment which he knew or could 
have been expected to know was incorrect.

[40 FR 47763, Oct. 10, 1975, as amended at 59 FR 1636, Jan. 12, 1994]

[[Page 844]]



Sec. 416.553  Waiver of adjustment or recovery--defeat the purpose
of the supplemental security income program.

    We will waive adjustment or recovery of an overpayment when an 
individual on whose behalf waiver is being considered is without fault 
(as defined in Sec. 416.552) and adjustment or recovery of the 
overpayment would defeat the purpose of the supplemental security income 
program.
    (a) General rule. We consider adjustment or recovery of an 
overpayment to defeat the purpose of the supplemental security income 
(SSI) program if the individual's income and resources are needed for 
ordinary and necessary living expenses under the criteria set out in 
Sec. 404.508(a) of this chapter
    (b) Alternative criteria for individuals currently eligible for SSI 
benefits. We consider an individual or couple currently eligible for SSI 
benefits to have met the test in paragraph (a) of this section if the 
individual's or couple's current monthly income (that is, the income 
upon which the individual's or couple's eligibility for the current 
month is determined) does not exceed--
    (1) The applicable Federal monthly benefit rate for the month in 
which the determination of waiver is made (see subpart D of this part); 
plus
    (2) The $20 monthly general income exclusion described in 
Secs. 416.1112(c)(3) and 416.1124(c)(10); plus
    (3) The monthly earned income exclusion described in 
Sec. 416.1112(c)(4); plus
    (4) The applicable State supplementary payment, if any (see subpart 
T of this part) for the month in which determination of waiver is made.

For those SSI recipients whose income exceeds these criteria, we follow 
the general rule in paragraph (a) of this section.

[45 FR 72649, Nov. 3, 1980, as amended at 50 FR 48573, Nov. 26, 1985]



Sec. 416.554  Waiver of adjustment or recovery--against equity
and good conscience.

    We will waive adjustment or recovery of an overpayment when an 
individual on whose behalf waiver is being considered is without fault 
(as defined in Sec. 416.552) and adjustment or recovery would be against 
equity and good conscience. Adjustment or recovery is considered to be 
against equity and good conscience if an individual changed his or her 
position for the worse or relinquished a valuable right because of 
reliance upon a notice that payment would be made or because of the 
incorrect payment itself. In addition, adjustment or recovery is 
considered to be against equity and good conscience for an individual 
who is a member of an eligible couple that is legally separated and/or 
living apart for that part of an overpayment not received, but subject 
to recovery under Sec. 416.570.

    Example 1: Upon being notified that he was eligible for supplemental 
security income payments, an individual signed a lease on an apartment 
renting for $15 a month more than the room he had previously occupied. 
It was subsequently found that eligibility for the payment should not 
have been established. In such a case, recovery would be considered 
``against equity and good conscience.''
    Example 2: An individual fails to take advantage of a private or 
organization charity, relying instead on the award of supplemental 
security income payments to support himself. It was subsequently found 
that the money was improperly paid. Recovery would be considered 
``against equity and good conscience.''
    Example 3: Mr. and Mrs. Smith--members of an eligible couple--
separate in July. Later in July, Mr. Smith receives earned income 
resulting in an overpayment to both. Mrs. Smith is found to be without 
fault in causing the overpayment. Recovery from Mrs. Smith of Mr. 
Smith's part of the couple's overpayment is waived as being against 
equity and good conscience. Whether recovery of Mr. Smith's portion of 
the couple's overpayment can be waived will be evaluated separately.

[60 FR 16375, Mar. 30, 1995]



Sec. 416.555  Waiver of adjustment or recovery--impede administration.

    Waiver of adjustment or recovery is proper when the overpaid person 
on whose behalf waiver is being considered is without fault, as defined 
in Sec. 416.552, and adjustment or recovery would impede efficient or 
effective administration of title XVI due to the small amount involved. 
The amount of overpayment determined to meet such criteria is measured 
by the current average administrative cost of handling such overpayment 
case through such adjustment or recovery processes. In determining 
whether the criterion is

[[Page 845]]

met, the overpaid person's financial circumstances are not considered.

[40 FR 47764, Oct. 10, 1975]



Sec. 416.556  Waiver of adjustment or recovery--countable resources
in excess of the limits prescribed in Sec. 416.1205 by $50 or less.

    (a) If any overpayment with respect to an individual (or an 
individual and his or her spouse if any) is attributable solely to the 
ownership or possession by the individual (and spouse if any) of 
countable resources having a value which exceeds the applicable dollar 
figure specified in Sec. 416.1205 by an amount of $50.00 or less, 
including those resources deemed to an individual in accordance with 
Sec. 416.1202, such individual (and spouse if any) shall be deemed to 
have been without fault in connection with the overpayment, and waiver 
of adjustment or recovery will be made, unless the failure to report the 
value of the excess resources correctly and in a timely manner was 
willful and knowing.
    (b) Failure to report the excess resources correctly and in a timely 
manner will be considered to be willful and knowing and the individual 
will be found to be at fault when the evidence clearly shows the 
individual (and spouse if any) was fully aware of the requirements of 
the law and of the excess resources and chose to conceal these 
resources. When an individual incurred a similar overpayment in the past 
and received an explanation and instructions at the time of the previous 
overpayment, we will generally find the individual to be at fault. 
However, in determining whether the individual is at fault, we will 
consider all aspects of the current and prior overpayment situations, 
and where we determine the individual is not at fault, we will waive 
adjustment or recovery of the subsequent overpayment. In making any 
determination or decision under this section concerning whether an 
individual is at fault, including a determination or decision of whether 
the failure to report the excess resources correctly and in a timely 
manner was willful and knowing, we will take into account any physical, 
mental, educational, or linguistic limitations (including any lack of 
facility with the English language) of the individual (and spouse if 
any).

[53 FR 16544, May 10, 1988, as amended at 59 FR 1636, Jan. 12, 1994]



Sec. 416.557  Personal conference.

    (a) If waiver cannot be approved (i.e., the requirements in 
Sec. 416.550 (a) and (b) are not met), the individual is notified in 
writing and given the dates, times and place of the file review and 
personal conference; the procedure for reviewing the claims file prior 
to the personal conference; the procedure for seeking a change in the 
scheduled date, time and/or place; and all other information necessary 
to fully inform the individual about the personal conference. The file 
review is always scheduled at least 5 days before the personal 
conference. We will offer to the individual the option of conducting the 
personal conference face-to-face at a place we designate, by telephone, 
or by video teleconference. The notice will advise the individual of the 
date and time of the personal conference.
    (b) At the file review, the individual and the individual's 
representative have the right to review the claims file and applicable 
law and regulations with the decisionmaker or another of our 
representatives who is prepared to answer questions. We will provide 
copies of material related to the overpayment and/or waiver from the 
claims file or pertinent sections of the law or regulations that are 
requested by the individual or the individual's representative.
    (c) At the personal conference, the individual is given the 
opportunity to:
    (1) Appear personally, testify, cross-examine any witnesses, and 
make arguments;
    (2) Be represented by an attorney or other representative (see 
Sec. 416.1500), although the individual must be present at the 
conference; and
    (3) Submit documents for consideration by the decisionmaker.
    (d) At the personal conference, the decisionmaker:
    (1) Tells the individual that the decisionmaker was not previously 
involved in the issue under review, that the waiver decision is solely 
the decisionmaker's, and that the waiver decision

[[Page 846]]

is based only on the evidence or information presented or reviewed at 
the conference;
    (2) Ascertains the role and identity of everyone present;
    (3) Indicates whether or not the individual reviewed the claims 
file;
    (4) Explains the provisions of law and regulations applicable to the 
issue;
    (5) Briefly summarizes the evidence already in file which will be 
considered;
    (6) Ascertains from the individual whether the information presented 
is correct and whether he/she fully understands it;
    (7) Allows the individual and the individual's representative, if 
any, to present the individual's case;
    (8) Secures updated financial information and verification, if 
necessary;
    (9) Allows each witness to present information and allows the 
individual and the individual's representative to question each witness;
    (10) Ascertains whether there is any further evidence to be 
presented;
    (11) Reminds the individual of any evidence promised by the 
individual which has not been presented;
    (12) Lets the individual and the individual's representative, if 
any, present any proposed summary or closing statement;
    (13) Explains that a decision will be made and the individual will 
be notified in writing; and
    (14) Explains repayment options and further appeal rights in the 
event the decision is adverse to the individual.
    (e) SSA issues a written decision to the individual (and his or her 
representative, if any) specifying the findings of fact and conclusions 
in support of the decision to approve or deny waiver and advising of the 
individual's right to appeal the decision. If waiver is denied, 
adjustment or recovery of the overpayment begins even if the individual 
appeals.
    (f) If it appears that the waiver cannot be approved, and the 
individual declines a personal conference or fails to appear for a 
second scheduled personal conference, a decision regarding the waiver 
will be made based on the written evidence of record. Reconsideration is 
the next step in the appeals process.

[73 FR 1973, Jan. 11, 2008]



Sec. 416.558  Notice relating to overpayments and underpayments.

    (a) Notice of overpayment and underpayment determination. Whenever a 
determination concerning the amount paid and payable for any period is 
made and it is found that, with respect to any month in the period, more 
or less than the correct amount was paid, written notice of the correct 
and incorrect amounts for each such month in the period will be sent to 
the individual against whom adjustment or recovery of the overpayment as 
defined in Sec. 416.537(a) may be effected or to whom the underpayment 
as defined in Secs. 416.536 and any amounts subject to installment 
payments as defined in Sec. 416.544 would be payable, notwithstanding 
the fact that part or all of the underpayment must be withheld in 
accordance with Sec. 416.543. When notifying an individual of a 
determination of overpayment, the Social Security Administration will, 
in the notice, also advise the individual that adjustment or recovery is 
required, as set forth in Sec. 416.571, except under certain specified 
conditions, and of his or her right to request waiver of adjustment or 
recovery of the overpayment under the provisions of Sec. 416.550.
    (b) Notice of waiver determination. Written notice of an initial 
determination of waiver shall be given the individual in accordance with 
Sec. 416.1404 unless the individual was not given notice of the 
overpayment in accordance with paragraph (a) of this section.
    (c) Notice relating to installment payments to individuals whose 
drug addiction or alcoholism is a contributing factor material to the 
determination of disability. Whenever a determination is made concerning 
the amount of any benefits due for a period that must be paid in 
installments, the written notice will also explain the amount of the 
installment payment and when an increased initial installment payment 
may be made (as described in Sec. 416.544). This written notice will be 
sent to the individual and his or her representative payee.

[40 FR 47764, Oct. 10, 1975, as amended at 55 FR 33668, Aug. 17, 1990; 
60 FR 8150, Feb. 10, 1995]

[[Page 847]]



Sec. 416.560  Recovery--refund.

    An overpayment may be refunded by the overpaid recipient or by 
anyone on his or her behalf. Refund should be made in every case where 
the overpaid individual is not currently eligible for SSI benefits. If 
the individual is currently eligible for SSI benefits and has not 
refunded the overpayment, adjustment as set forth in Sec. 416.570 will 
be proposed.

[55 FR 33669, Aug. 17, 1990]



Sec. 416.570  Adjustment.

    (a) General. When a recipient has been overpaid, the overpayment has 
not been refunded, and waiver of adjustment or recovery is not 
applicable, any payment due the overpaid recipient or his or her 
eligible spouse (or recovery from the estate of either or both when 
either or both die before adjustment is completed) is adjusted for 
recovery of the overpayment. Adjustment will generally be accomplished 
by withholding each month the amount set forth in Sec. 416.571 from the 
benefit payable to the individual except that, when the overpayment 
results from the disposition of resources as provided by 
Secs. 416.1240(b) and 416.1244, the overpayment will be recovered by 
withholding any payments due the overpaid recipient or his or her 
eligible spouse before any further payment is made. Absent a specific 
request from the person from whom recovery is sought, no overpayment 
made under title XVIII of the Act will be recovered by adjusting SSI 
benefits. In no case shall an overpayment of SSI benefits be adjusted 
against title XVIII benefits. No funds properly deposited into a 
dedicated account (see Secs. 416.546 and 416.640(e)) can be used to 
repay an overpayment while the overpaid individual remains subject to 
the provisions of those sections.
    (b) Overpayment made to representative payee after the recipient's 
death. A representative payee or his estate is solely liable for 
repaying an overpayment made to the representative payee on behalf of a 
recipient after the recipient's death. In such case, we will recover the 
overpayment according to paragraph (a) of this section, except that:
    (1) We will not adjust any other payment due to the eligible spouse 
of the overpaid representative payee to recover the overpayment, and
    (2) If the overpaid representative payee dies before we complete 
adjustment, we will not seek to recover the overpayment from the 
eligible spouse or the estate of the eligible spouse.

[70 FR 16, Jan. 3, 2005, as amended at 73 FR 65543, Nov. 4, 2008]



Sec. 416.571  10-percent limitation of recoupment rate--overpayment.

    Any adjustment or recovery of an overpayment for an individual in 
current payment status is limited in amount in any month to the lesser 
of (1) the amount of the individual's benefit payment for that month or 
(2) an amount equal to 10 percent of the individual's total income 
(countable income plus SSI and State supplementary payments) for that 
month. The countable income used is the countable income used in 
determining the SSI and State supplementary payments for that month 
under Sec. 416.420. When the overpaid individual is notified of the 
proposed SSI and/or federally administered State supplementary 
overpayment adjustment or recovery, the individual will be given the 
opportunity to request that such adjustment or recovery be made at a 
higher or lower rate than that proposed. If a lower rate is requested, a 
rate of withholding that is appropriate to the financial condition of 
the overpaid individual will be set after an evaluation of all the 
pertinent facts. An appropriate rate is one that will not deprive the 
individual of income required for ordinary and necessary living 
expenses. This will include an evaluation of the individual's income, 
resources, and other financial obligations. The 10-percent limitation 
does not apply where it is determined that the overpayment occurred 
because of fraud, willful misrepresentation, or concealment of material 
information committed by the individual or his or her spouse. 
Concealment of material information means an intentional, knowing, and 
purposeful delay in making or failure to make a report that will affect 
payment amount and/or eligibility. It does not include a mere omission 
on the

[[Page 848]]

part of the recipient; it is an affirmative act to conceal. The 10-
percent limitation does not apply to the recovery of overpayments 
incurred under agreements to dispose of resources pursuant to 
Sec. 416.1240. In addition, the 10-percent limitation does not apply to 
the reduction of any future SSI benefits as a consequence of the misuse 
of funds set aside in accordance with Sec. 416.1231(b) to meet burial 
expenses. Adjustment or recovery will be suspended if the recipient is 
subject to a reduced benefit rate under Sec. 416.414 because of residing 
in a medical treatment facility in which Medicaid is paying a 
substantial portion of the recipient's cost of care.

[55 FR 33669, Aug. 17, 1990, as amended at 72 FR 50874, Sept. 5, 2007]



Sec. 416.572  Are title II and title VIII benefits subject to 
adjustment to recover title XVI overpayments?

    (a) Definitions--(1) Cross-program recovery. Cross-program recovery 
is the process that we will use to collect title XVI overpayments from 
benefits payable to you under title II or title VIII of the Social 
Security Act.
    (2) Benefits payable. For purposes of this section, benefits payable 
means the amount of title II or title VIII benefits you actually would 
receive. For title II benefits, it includes your monthly benefit and 
your past-due benefits after any reductions or deductions listed in 
Sec. 404.401(a) and (b) of this chapter. For title VIII benefits, it 
includes your monthly benefit and any past-due benefits after any 
reduction by the amount of income for the month as described in 
Secs. 408.505 through 408.510 of this chapter.
    (b) When may we collect title XVI overpayments using cross-program 
recovery? We may use cross-program recovery to collect a title XVI 
overpayment you owe when benefits are payable to you under title II, 
title VIII, or both.

[70 FR 16, Jan. 3, 2005]



Sec. 416.573  How much will we withhold from your title II and title
VIII benefits to recover a title XVI overpayment?

    (a) If past-due benefits are payable to you, we will withhold the 
lesser of the entire overpayment balance or the entire amount of past-
due benefits.
    (b)(1) We will collect the overpayment from current monthly benefits 
due in a month by withholding the lesser of the amount of the entire 
overpayment balance or 10 percent of the monthly title II benefits and 
monthly title VIII benefits payable to you in the month.
    (2) If we are already recovering a title II, title VIII or title XVI 
overpayment from your monthly title II benefit, we will figure your 
monthly withholding from title XVI payments (as described in 
Sec. 416.571) without including your title II benefits in your total 
countable income.
    (3) Paragraph (b)(1) of this section does not apply if:
    (i) You request and we approve a different rate of withholding, or
    (ii) You or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment.
    (c) In determining whether to grant your request that we withhold 
less than the amount described in paragraph (b)(1) of this section, we 
will use the criteria applied under Sec. 416.571 to similar requests 
about withholding from title XVI benefits.
    (d) If you or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment, we will collect 
the overpayment by withholding the lesser of the overpayment balance or 
the entire amount of title II benefits and title VIII benefits payable 
to you. We will not collect at a lesser rate. (See Sec. 416.571 for what 
we mean by concealment of material information.)

[70 FR 16, Jan. 3, 2005]



Sec. 416.574  Will you receive notice of our intention to apply cross-
program recovery?

    Before we collect an overpayment from you using cross-program 
recovery, we will send you a written notice that tells you the following 
information:
    (a) We have determined that you owe a specific overpayment balance 
that can be collected by cross-program recovery;
    (b) We will withhold a specific amount from the title II or title 
VIII benefits (see Sec. 416.573);

[[Page 849]]

    (c) You may ask us to review this determination that you still owe 
this overpayment balance;
    (d) You may request that we withhold a different amount from your 
current monthly benefits (the notice will not include this information 
if Sec. 416.573(d) applies); and
    (e) You may ask us to waive collection of this overpayment balance.

[70 FR 16, Jan. 3, 2005]



Sec. 416.575  When will we begin cross-program recovery from your 
current monthly benefits?

    (a) We will begin collecting the overpayment balance by cross-
program recovery from your current monthly title II and title VIII 
benefits no sooner than 30 calendar days after the date of the notice 
described in Sec. 416.574. If within that 30-day period you pay us the 
full overpayment balance stated in the notice, we will not begin cross-
program recovery.
    (b) If within that 30-day period you ask us to review our 
determination that you still owe us this overpayment balance, we will 
not begin cross-program recovery from your current monthly benefits 
before we review the matter and notify you of our decision in writing.
    (c) If within that 30-day period you ask us to withhold a different 
amount from your current monthly benefits than the amount stated in the 
notice, we will not begin cross-program recovery until we determine the 
amount we will withhold. This paragraph does not apply when 
Sec. 416.573(d) applies.
    (d) If within that 30-day period you ask us to waive recovery of the 
overpayment balance, we will not begin cross-program recovery from your 
current monthly benefits before we review the matter and notify you of 
our decision in writing. See Secs. 416.550 through 416.556.

[70 FR 16, Jan. 3, 2005]



Sec. 416.580  Referral of overpayments to the Department of the 
Treasury for tax refund offset--General.

    (a) The standards we will apply and the procedures we will follow 
before requesting the Department of the Treasury to offset income tax 
refunds due taxpayers who have an outstanding overpayment are set forth 
in Secs. 416.580 through 416.586 of this subpart. These standards and 
procedures are authorized by the Deficit Reduction Act of 1984 [31 
U.S.C. Sec. 3720A], as implemented through Department of the Treasury 
regulations at 31 CFR 285.2.
    (b) We will use the Department of the Treasury tax refund offset 
procedure to collect overpayments that are certain in amount, past due 
and legally enforceable, and eligible for tax refund offset under 
regulations issued by the Secretary of the Treasury. We will use these 
procedures to collect overpayments only from persons who are not 
currently entitled to monthly supplemental security income benefits 
under title XVI of the Act. We refer overpayments to the Department of 
the Treasury for offset against Federal tax refunds regardless of the 
amount of time the debts have been outstanding.

[62 FR 49439, Sept. 22, 1997, as amended at 76 FR 65108, Oct. 20, 2011]



Sec. 416.581  Notice to overpaid person.

    We will make a request for collection by reduction of Federal and 
State income tax refunds only after we determine that a person owes an 
overpayment that is past due and provide the overpaid person with 
written notice. Our notice of intent to collect an overpayment through 
tax refund offset will state:
    (a) The amount of the overpayment; and
    (b) That we will collect the overpayment by requesting that the 
Department of the Treasury reduce any amounts payable to the overpaid 
person as refunds of Federal and State income taxes by an amount equal 
to the amount of the overpayment unless, within 60 calendar days from 
the date of our notice, the overpaid person:
    (1) Repays the overpayment in full; or
    (2) Provides evidence to us at the address given in our notice that 
the overpayment is not past due or legally enforceable; or
    (3) Asks us to waive collection of the overpayment under section 
204(b) of the Act.
    (c) The conditions under which we will waive recovery of an 
overpayment under section 1631(b)(1)(B) of the Act;

[[Page 850]]

    (d) That we will review any evidence presented that the overpayment 
is not past due or not legally enforceable;
    (e) That the overpaid person has the right to inspect and copy our 
records related to the overpayment as determined by us and will be 
informed as to where and when the inspection and copying can be done 
after we receive notice from the overpaid person that inspection and 
copying are requested.

[62 FR 49439, Sept. 22, 1997, as amended at 76 FR 65109, Oct. 20, 2011]



Sec. 416.582  Review within SSA that an overpayment is past due and 
legally enforceable.

    (a) Notification by overpaid individual. An overpaid individual who 
receives a notice as described in Sec. 416.581 of this subpart has the 
right to present evidence that all or part of the overpayment is not 
past due or not legally enforceable. To exercise this right, the 
individual must notify us and present evidence regarding the overpayment 
within 60 calendar days from the date of our notice.
    (b) Submission of evidence. The overpaid individual may submit 
evidence showing that all or part of the debt is not past due or not 
legally enforceable as provided in paragraph (a) of this section. 
Failure to submit the notification and evidence within 60 calendar days 
will result in referral of the overpayment to the Department of the 
Treasury, unless the overpaid individual, within this 60-day time 
period, has asked us to waive collection of the overpayment under 
section 1631(b)(1)(B) of the Act and we have not yet determined whether 
we can grant the waiver request. If the overpaid individual asks us to 
waive collection of the overpayment, we may ask that evidence to support 
the request be submitted to us.
    (c) Review of the evidence. After a timely submission of evidence by 
the overpaid individual, we will consider all available evidence related 
to the overpayment. We will make findings based on a review of the 
written record, unless we determine that the question of indebtedness 
cannot be resolved by a review of the documentary evidence.

[62 FR 49439, Sept. 22, 1997]



Sec. 416.583  Findings by SSA.

    (a) Following the review of the record, we will issue written 
findings which include supporting rationale for the findings. Issuance 
of these findings concerning whether the overpayment or part of the 
overpayment is past due and legally enforceable is the final Agency 
action with respect to the past-due status and enforceability of the 
overpayment. If we make a determination that a waiver request cannot be 
granted, we will issue a written notice of this determination in 
accordance with the regulations in subpart E of this part. Our referral 
of the overpayment to the Department of the Treasury will not be 
suspended under Sec. 416.585 of this subpart pending any further 
administrative review of the waiver request that the individual may 
seek.
    (b) Copies of the findings described in paragraph (a) of this 
section will be distributed to the overpaid individual and the overpaid 
individual's attorney or other representative, if any.
    (c) If the findings referred to in paragraph (a) of this section 
affirm that all or part of the overpayment is past due and legally 
enforceable and, if waiver is requested and we determine that the 
request cannot be granted, we will refer the overpayment to the 
Department of the Treasury. However, no referral will be made if, based 
on our review of the overpayment, we reverse our prior finding that the 
overpayment is past due and legally enforceable or, upon consideration 
of a waiver request, we determine that waiver of our collection of the 
overpayment is appropriate.

[62 FR 49439, Sept. 22, 1997]



Sec. 416.584  Review of our records related to the overpayment.

    (a) Notification by the overpaid individual. An overpaid individual 
who intends to inspect or copy our records related to the overpayment as 
determined by us must notify us stating his or her intention to inspect 
or copy.
    (b) Our response. In response to a notification by the overpaid 
individual as described in paragraph (a) of this section, we will notify 
the overpaid individual of the location and time when the overpaid 
individual may inspect or

[[Page 851]]

copy our records related to the overpayment. We may also, at our 
discretion, mail copies of the overpayment-related records to the 
overpaid individual.

[62 FR 49439, Sept. 22, 1997]



Sec. 416.585  Suspension of offset.

    If, within 60 days of the date of the notice described in 
Sec. 416.581 of this subpart, the overpaid individual notifies us that 
he or she is exercising a right described in Sec. 416.582(a) of this 
subpart and submits evidence pursuant to Sec. 416.582(b) of this subpart 
or requests a waiver under Sec. 416.550 of this subpart, we will suspend 
any notice to the Department of the Treasury until we have issued 
written findings that affirm that an overpayment is past due and legally 
enforceable and, if applicable, make a determination that a waiver 
request cannot be granted.

[62 FR 49440, Sept. 22, 1997]



Sec. 416.586  Tax refund insufficient to cover amount of overpayment.

    If a tax refund is insufficient to recover an overpayment in a given 
year, the case will remain with the Department of the Treasury for 
succeeding years, assuming that all criteria for certification are met 
at that time.

[62 FR 49440, Sept. 22, 1997]



Sec. 416.590  Are there additional methods for recovery of title XVI
benefit overpayments?

    (a) General. In addition to the methods specified in Secs. 416.560, 
416.570, 416.572 and 416.580, we may recover an overpayment under title 
XVI of the Act from you under the rules in subparts D and E of part 422 
of this chapter. Subpart D of part 422 of this chapter applies only 
under the following conditions:
    (1) The overpayment occurred after you attained age 18;
    (2) You are no longer entitled to benefits under title XVI of the 
Act; and
    (3) Pursuant to paragraph (b) of this section, we have determined 
that the overpayment is otherwise unrecoverable under section 1631(b) of 
the Act.
    (b) When we consider an overpayment to be otherwise unrecoverable. 
We consider an overpayment under title XVI of the Act to be otherwise 
unrecoverable under section 1631(b) of the Act if all of the following 
conditions are met:
    (1) We have completed our billing system sequence (i.e., we have 
sent you an initial notice of the overpayment, a reminder notice, and a 
past-due notice) or we have suspended or terminated collection activity 
under applicable rules, such as, the Federal Claims Collection Standards 
in 31 CFR 903.2 or 903.3.
    (2) We have not entered into an installment payment arrangement with 
you or, if we have entered into such an arrangement, you have failed to 
make any payment for two consecutive months.
    (3) You have not requested waiver pursuant to Sec. 416.550 or 
Sec. 416.582 or, after a review conducted pursuant to those sections, we 
have determined that we will not waive collection of the overpayment.
    (4) You have not requested reconsideration of the initial 
overpayment determination pursuant to Secs. 416.1407 and 416.1409 or, 
after a review conducted pursuant to Sec. 416.1413, we have affirmed all 
or part of the initial overpayment determination.
    (5) We cannot recover your overpayment pursuant to Sec. 416.570 by 
adjustment of benefits payable to any individual other than you. For 
purposes of this paragraph, if you are a member of an eligible couple 
that is legally separated and/or living apart, we will deem 
unrecoverable from the other person that part of your overpayment which 
he or she did not receive.

[66 FR 67081, Dec. 28, 2001, as amended at 68 FR 74184, Dec. 23, 2003]



                    Subpart F_Representative Payment

    Authority: Secs. 702(a)(5), 1631(a)(2) and (d)(1) of the Social 
Security Act (42 U.S.C. 902(a)(5) and 1383(a)(2) and (d)(1)).

    Source: 47 FR 30475, July 14, 1982, unless otherwise noted.



Sec. 416.601  Introduction.

    (a) Explanation of representative payment. This subpart explains the 
principles and procedures that we follow in

[[Page 852]]

determining whether to make representative payment and in selecting a 
representative payee. It also explains the responsibilities that a 
representative payee has concerning the use of the funds he or she 
receives on behalf of a beneficiary. A representative payee may be 
either a person or an organization selected by us to receive benefits on 
behalf of a beneficiary. A representative payee will be selected if we 
believe that the interest of a beneficiary will be served by 
representative payment rather than direct payment of benefits. 
Generally, we appoint a representative payee if we have determined that 
the beneficiary is not able to manage or direct the management of 
benefit payments in his or her own interest.
    (b) Policy used to determine whether to make representative payment. 
(1) Our policy is that every beneficiary has the right to manage his or 
her own benefits. However, some beneficiaries due to a mental or 
physical condition or due to their youth may be unable to do so. Under 
these circumstances, we may determine that the interests of the 
beneficiary would be better served if we certified benefit payments to 
another person as a representative payee. However, we must select a 
representative payee for an individual who is eligible for benefits 
solely on the basis of disability if drug addiction or alcoholism is a 
contributing factor material to the determination of disability.
    (2) If we determine that representative payment is in the interest 
of a beneficiary, we will appoint a representative payee. We may appoint 
a representative payee even if the beneficiary is a legally competent 
individual. If the beneficiary is a legally incompetent individual, we 
may appoint the legal guardian or some other person as a representative 
payee.
    (3) If payment is being made directly to a beneficiary and a 
question arises concerning his or her ability to manage or direct the 
management of benefit payments, we will, if the beneficiary is 18 years 
old or older and has not been adjudged legally incompetent, continue to 
pay the beneficiary until we make a determination about his or her 
ability to manage or direct the management of benefit payments and the 
selection of a representative payee.

[47 FR 30475, July 14, 1982, as amended at 60 FR 8150, Feb. 10, 1995]



Sec. 416.610  When payment will be made to a representative payee.

    (a) We pay benefits to a representative payee on behalf of a 
beneficiary 18 years old or older when it appears to us that this method 
of payment will be in the interest of the beneficiary. We do this if we 
have information that the beneficiary is--
    (1) Legally incompetent or mentally incapable of managing benefit 
payments; or
    (2) Physically incapable of managing or directing the management of 
his or her benefit payments; or
    (3) Eligible for benefits solely on the basis of disability and drug 
addiction or alcoholism is a contributing factor material to the 
determination of disability.
    (b) Generally, if a beneficiary is under age 18, we will pay 
benefits to a representative payee. However, in certain situations, we 
will make direct payments to a beneficiary under age 18 who shows the 
ability to manage the benefits. For example, we make direct payment to a 
beneficiary under age 18 if the beneficiary is--
    (1) A parent and files for himself or herself and/or his or her 
child and he or she has experience in handling his or her own finances; 
or
    (2) Capable of using the benefits to provide for his or her current 
needs and no qualified payee is available; or
    (3) Within 7 months of attaining age 18 and is initially filing an 
application for benefits.

[47 FR 30475, July 14, 1982, as amended at 54 FR 35483, Aug. 28, 1989; 
60 FR 8150, Feb. 10, 1995]



Sec. 416.611  What happens to your monthly benefits while we are 
finding a suitable representative payee for you?

    (a) We may pay you directly. We will pay current monthly benefits 
directly to you while finding a suitable representative payee unless we 
determine that paying you directly would cause substantial harm to you. 
We determine substantial harm as follows:

[[Page 853]]

    (1) If you are receiving disability payments and we have determined 
that you have a drug addiction or alcoholism condition, or you are 
legally incompetent, or you are under age 15, we will presume that 
substantial harm exists. However, we will allow you to rebut this 
presumption by presenting evidence that direct payment would not cause 
you substantial harm.
    (2) If you do not fit any of these categories, we make findings of 
substantial harm on a case-by-case basis. We consider all matters that 
may affect your ability to manage your benefits in your own best 
interest. We decide that substantial harm exists if both of the 
following conditions exist:
    (i) Directly receiving benefits can be expected to cause you serious 
physical or mental injury.
    (ii) The possible effect of the injury would outweigh the effect of 
having no income to meet your basic needs.
    (b) We may delay or suspend your payments. If we find that direct 
payment will cause substantial harm to you, we may delay (in the case of 
initial eligibility for benefits) or suspend (in the case of existing 
eligibility for benefits) payments for as long as one month while we try 
to find a suitable representative payee. If we do not find a payee 
within one month, we will pay you directly. If you are receiving 
disability payments and we have determined that you have a drug 
addiction or alcoholism condition, or you are legally incompetent, or 
you are under age 15, we will withhold payment until a representative 
payee is appointed even if it takes longer than one month. We will, 
however, as noted in paragraph (a)(1) of this section, allow you to 
present evidence to rebut the presumption that direct payment would 
cause you substantial harm. See Sec. 416.601(b)(3) for our policy on 
suspending the benefits if you are currently receiving benefits 
directly.

    Example 1: Substantial Harm Exists. We are unable to find a 
representative payee for Mr. X, a 67 year old claimant receiving title 
XVI benefits based on age who is an alcoholic. Based on contacts with 
the doctor and beneficiary, we determine that Mr. X was hospitalized 
recently for his drinking. Paying him directly will cause serious 
injury, so we may delay payment for as long as one month based on 
substantial harm while we locate a suitable representative payee.
    Example 2: Substantial Harm Does Not Exist. We approve a claim for 
Mr. Y, a title XVI claimant who suffers from a combination of mental 
impairments but who is not legally incompetent. We determine that Mr. Y 
needs assistance in managing benefits, but we have not found a 
representative payee. Although we believe that Mr. Y may not use the 
money wisely, there is no indication that receiving funds directly would 
cause him substantial harm (i.e., serious physical or mental injury). We 
must pay current benefits directly to Mr. Y while we locate a suitable 
representative payee.

    (c) How we pay delayed or suspended benefits. Payment of benefits, 
which were delayed or suspended pending appointment of a representative 
payee, can be made to you or your representative payee as a single sum 
or in installments when we determine that installments are in your best 
interest.

[69 FR 60236, Oct. 7, 2004]



Sec. 416.615  Information considered in determining whether to make 
representative payment.

    In determining whether to make representative payment we consider 
the following information:
    (a) Court determinations. If we learn that a beneficiary has been 
found to be legally incompetent, a certified copy of the court's 
determination will be the basis of our determination to make 
representative payment.
    (b) Medical evidence. When available, we will use medical evidence 
to determine if a beneficiary is capable of managing or directing the 
management of benefit payments. For example, a statement by a physician 
or other medical professional based upon his or her recent examination 
of the beneficiary and his or her knowledge of the beneficiary's present 
condition will be used in our determination, if it includes information 
concerning the nature of the beneficiary's illness, the beneficiary's 
chances for recovery and the opinion of the physician or other medical 
professional as to whether the beneficiary is able to manage or direct 
the management of benefit payments.
    (c) Other evidence. We will also consider any statements of 
relatives, friends and other people in a position to know and observe 
the beneficiary,

[[Page 854]]

which contain information helpful to us in deciding whether the 
beneficiary is able to manage or direct the management of benefit 
payments.



Sec. 416.620  Information considered in selecting a representative payee.

    In selecting a payee we try to select the person, agency, 
organization or institution that will best serve the interest of the 
beneficiary. In making our selection we consider--
    (a) The relationship of the person to the beneficiary;
    (b) The amount of interest that the person shows in the beneficiary;
    (c) Any legal authority the person, agency, organization or 
institution has to act on behalf of the beneficiary;
    (d) Whether the potential payee has custody of the beneficiary; and
    (e) Whether the potential payee is in a position to know of and look 
after the needs of the beneficiary.



Sec. 416.621  What is our order of preference in selecting a 
representative payee for you?

    As a guide in selecting a representative payee, categories of 
preferred payees have been established. These preferences are flexible. 
Our primary concern is to select the payee who will best serve the 
beneficiary's interests. The preferences are:
    (a) For beneficiaries 18 years old or older (except those described 
in paragraph (b) of this section), our preference is--
    (1) A legal guardian, spouse (or other relative) who has custody of 
the beneficiary or who demonstrates strong concern for the personal 
welfare of the beneficiary;
    (2) A friend who has custody of the beneficiary or demonstrates 
strong concern for the personal welfare of the beneficiary;
    (3) A public or nonprofit agency or institution having custody of 
the beneficiary;
    (4) A private institution operated for profit and licensed under 
State law, which has custody of the beneficiary; and
    (5) Persons other than above who are qualified to carry out the 
responsibilities of a payee and who are able and willing to serve as a 
payee for the beneficiary; e.g., members of community groups or 
organizations who volunteer to serve as payee for a beneficiary.
    (b) For individuals who are disabled and who have a drug addiction 
or alcoholism condition our preference is--
    (1) A community-based nonprofit social service agency licensed by 
the State, or bonded;
    (2) A Federal, State or local government agency whose mission is to 
carry out income maintenance, social service, or health care-related 
activities;
    (3) A State or local government agency with fiduciary 
responsibilities;
    (4) A designee of an agency (other than a Federal agency) referred 
to in paragraphs (b)(1), (2), and (3) of this section, if appropriate; 
or
    (5) A family member.
    (c) For beneficiaries under age 18, our preference is--
    (1) A natural or adoptive parent who has custody of the beneficiary, 
or a guardian;
    (2) A natural or adoptive parent who does not have custody of the 
beneficiary, but is contributing toward the beneficiary's support and is 
demonstrating strong concern for the beneficiary's well being;
    (3) A natural or adoptive parent who does not have custody of the 
beneficiary and is not contributing toward his or her support but is 
demonstrating strong concern for the beneficiary's well being;
    (4) A relative or stepparent who has custody of the beneficiary;
    (5) A relative who does not have custody of the beneficiary but is 
contributing toward the beneficiary's support and is demonstrating 
concern for the beneficiary's well being;
    (6) A relative or close friend who does not have custody of the 
beneficiary but is demonstrating concern for the beneficiary's well 
being; and
    (7) An authorized social agency or custodial institution.

[47 FR 30475, July 14, 1982, as amended at 69 FR 60237, Oct. 7, 2004]



Sec. 416.622  Who may not serve as a representative payee?

    A representative payee applicant may not serve if he/she:

[[Page 855]]

    (a) Has been convicted of a violation under section 208, 811 or 1632 
of the Social Security Act.
    (b) Has been convicted of an offense resulting in imprisonment for 
more than 1 year. However, we may make an exception to this prohibition, 
if the nature of the conviction is such that selection of the applicant 
poses no risk to the beneficiary and the exception is in the 
beneficiary's best interest.
    (c) Receives title II, VIII, or XVI benefits through a 
representative payee.
    (d) Previously served as a representative payee and was found by us, 
or a court of competent jurisdiction, to have misused title II, VIII or 
XVI benefits. However, if we decide to make an exception to the 
prohibition, we must evaluate the payee's performance at least every 3 
months until we are satisfied that the payee poses no risk to the 
beneficiary's best interest. Exceptions are made on a case-by-case basis 
if all of the following are true:
    (1) Direct payment of benefits to the beneficiary is not in the 
beneficiary's best interest.
    (2) No suitable alternative payee is available.
    (3) Selecting the payee applicant as representative payee would be 
in the best interest of the beneficiary.
    (4) The information we have indicates the applicant is now suitable 
to serve as a representative payee.
    (5) The payee applicant has repaid the misused benefits or has a 
plan to repay them.
    (e) Is a creditor. A creditor is someone who provides you with goods 
or services for consideration. This restriction does not apply to the 
creditor who poses no risk to you and whose financial relationship with 
you presents no substantial conflict of interest, and is any of the 
following:
    (1) A relative living in the same household as you do.
    (2) Your legal guardian or legal representative.
    (3) A facility that is licensed or certified as a care facility 
under the law of a State or a political subdivision of a State.
    (4) A qualified organization authorized to collect a monthly fee 
from you for expenses incurred in providing representative payee 
services for you, under Sec. 416.640a.
    (5) An administrator, owner, or employee of the facility in which 
you live and we are unable to locate an alternative representative 
payee.
    (6) Any other individual we deem appropriate based on a written 
determination.

    Example 1: Sharon applies to be representative payee for Ron who we 
have determined needs assistance in managing his benefits. Sharon has 
been renting a room to Ron for several years and assists Ron in handling 
his other financial obligations, as needed. She charges Ron a reasonable 
amount of rent. Ron has no other family or friends willing to help 
manage his benefits or to act as representative payee. Sharon has 
demonstrated that her interest in and concern for Ron goes beyond her 
desire to collect the rent each month. In this instance, we may select 
Sharon as Ron's representative payee because a more suitable payee is 
not available, she appears to pose no risk to Ron and there is minimal 
conflict of interest. We will document this decision.
    Example 2: In a situation similar to the one above, Ron's landlord 
indicates that she is applying to be payee only to ensure receipt of her 
rent. If there is money left after payment of the rent, she will give it 
directly to Ron to manage on his own. In this situation, we would not 
select the landlord as Ron's representative payee because of the 
substantial conflict of interest and lack of interest in his well being.

[69 FR 60237, Oct. 7, 2004, as amended at 71 FR 61408, Oct. 18, 2006]



Sec. 416.624  How do we investigate a representative payee applicant?

    Before selecting an individual or organization to act as your 
representative payee, we will perform an investigation.
    (a) Nature of the investigation. As part of the investigation, we do 
the following:
    (1) Conduct a face-to-face interview with the payee applicant unless 
it is impracticable as explained in paragraph (c) of this section.
    (2) Require the payee applicant to submit documented proof of 
identity, unless information establishing identity has recently been 
submitted with an application for title II, VIII or XVI benefits.
    (3) Verify the payee applicant's Social Security account number or 
employer identification number.

[[Page 856]]

    (4) Determine whether the payee applicant has been convicted of a 
violation of section 208, 811 or 1632 of the Social Security Act.
    (5) Determine whether the payee applicant has previously served as a 
representative payee and if any previous appointment as payee was 
revoked or terminated for misusing title II, VIII or XVI benefits.
    (6) Use our records to verify the payee applicant's employment and/
or direct receipt of title II, VIII, or XVI benefits.
    (7) Verify the payee applicant's concern for the beneficiary with 
the beneficiary's custodian or other interested person.
    (8) Require the payee applicant to provide adequate information 
showing his or her relationship to the beneficiary and to describe his 
or her responsibility for the care of the beneficiary.
    (9) Determine whether the payee applicant is a creditor of the 
beneficiary (see Sec. 416.622(d)).
    (b) Subsequent face-to-face interviews. After holding a face-to-face 
interview with a payee applicant, subsequent face-to-face interviews are 
not required if that applicant continues to be qualified and currently 
is acting as a payee, unless we determine, within our discretion, that a 
new face-to-face interview is necessary. We base this decision on the 
payee's past performance and knowledge of and compliance with our 
reporting requirements.
    (c) Impracticable. We may consider a face-to-face interview 
impracticable if it would cause the payee applicant undue hardship. For 
example, the payee applicant would have to travel a great distance to 
the field office. In this situation, we may conduct the investigation to 
determine the payee applicant's suitability to serve as a representative 
payee without a face-to-face interview.

[69 FR 60237, Oct. 7, 2004, as amended at 73 FR 66521, Nov. 10, 2008]



Sec. 416.625  What information must a representative payee report to 
us?

    Anytime after we select a representative payee for you, we may ask 
your payee to give us information showing a continuing relationship with 
you, a continuing responsibility for your care, and how he/she used the 
payments on your behalf. If your representative payee does not give us 
the requested information within a reasonable period of time, we may 
stop sending your benefit payment to him/her--unless we determine that 
he/she had a satisfactory reason for not meeting our request and we 
subsequently receive the requested information. If we decide to stop 
sending your benefit payment to your representative payee, we will 
consider paying you directly (in accordance with Sec. 416.611) while we 
look for a new payee.

[69 FR 60238, Oct. 7, 2004]



Sec. 416.630  How will we notify you when we decide you need a 
representative payee?

    (a) We notify you in writing of our determination to make 
representative payment. This advance notice explains that we have 
determined that representative payment is in your interest, and it 
provides the name of the representative payee we have selected. We 
provide this notice before we actually appoint the payee. If you are 
under age 15, an unemancipated minor under the age of 18, or legally 
incompetent, our written notice goes to your legal guardian or legal 
representative. The advance notice:
    (1) Contains language that is easily understandable to the reader.
    (2) Identifies the person designated as your representative payee.
    (3) Explains that you, your legal guardian, or your legal 
representative can appeal our determination that you need a 
representative payee.
    (4) Explains that you, your legal guardian, or your legal 
representative can appeal our designation of a particular person to 
serve as your representative payee.
    (5) Explains that you, your legal guardian, or your legal 
representative can review the evidence upon which our designation of a 
particular representative payee is based and submit additional evidence.
    (b) If you, your legal guardian, or your legal representative 
objects to representative payment or to the designated payee, we will 
handle the objection as follows:

[[Page 857]]

    (1) If you disagree with the decision and wish to file an appeal, we 
will process it under subpart N of this part.
    (2) If you received your advance notice by mail and you protest or 
file your appeal within 10 days after you receive the notice, we will 
delay the action until we make a decision on your protest or appeal. (If 
you received and signed your notice while you were in the local field 
office, our decision will be effective immediately.)

[69 FR 60238, Oct. 7, 2004]



Sec. 416.635  What are the responsibilities of your representative
payee?

    A representative payee has a responsibility to--
    (a) Use the benefits received on your behalf only for your use and 
benefit in a manner and for the purposes he or she determines under the 
guidelines in this subpart, to be in your best interests;
    (b) Keep any benefits received on your behalf separate from his or 
her own funds and show your ownership of these benefits unless he or she 
is your spouse or natural or adoptive parent or stepparent and lives in 
the same household with you or is a State or local government agency for 
whom we have granted an exception to this requirement;
    (c) Treat any interest earned on the benefits as your property;
    (d) Notify us of any event or change in your circumstances that will 
affect the amount of benefits you receive, your right to receive 
benefits, or how you receive them;
    (e) Submit to us, upon our request, a written report accounting for 
the benefits received on your behalf, and make all supporting records 
available for review if requested by us;
    (f) Notify us of any change in his or her circumstances that would 
affect performance of his/her payee responsibilities; and
    (g) Ensure that you are receiving treatment to the extent considered 
medically necessary and available for the condition that was the basis 
for providing benefits (see Sec. 416.994a(i)) if you are under age 18 
(including cases in which your low birth weight is a contributing factor 
material to our determination that you are disabled).

[71 FR 61408, Oct. 18, 2006]



Sec. 416.640  Use of benefit payments.

    (a) Current maintenance. We will consider that payments we certify 
to a representive payee have been used for the use and benefit of the 
beneficiary if they are used for the beneficiary's current maintenance. 
Current maintenance includes costs incurred in obtaining food, shelter, 
clothing, medical care and personal comfort items.

    Example: A Supplemental Security Income beneficiary is entitled to a 
monthly benefit of $264. The beneficiary's son, who is the 
representative payee, disburses the benefits in the following manner:

Rent and Utilities...............................................   $166
Medical..........................................................     20
Food.............................................................     60
Clothing.........................................................     10
Miscellaneous....................................................      8
 

    The above expenditures would represent proper disbursements on 
behalf of the beneficiary.

    (b) Institution not receiving Medicaid funds on beneficiary's 
behalf. If a beneficiary is receiving care in a Federal, State, or 
private institution because of mental or physical incapacity, current 
maintenance will include the customary charges for the care and services 
provided by an institution, expenditures for those items which will aid 
in the beneficiary's recovery or release from the institution, and 
nominal expenses for personal needs (e.g., personal hygiene items, 
snacks, candy) which will improve the beneficiary's condition. Except as 
provided under Sec. 416.212, there is no restriction in using SSI 
benefits for a beneficiary's current maintenance in an institution. Any 
payments remaining from SSI benefits may be used for a temporary period 
to maintain the beneficiary's residence outside of the institution 
unless a physician has certified that the beneficiary is not likely to 
return home.

    Example: A hospitalized disabled beneficiary is entitled to a 
monthly benefit of $264. The beneficiary, who resides in a boarding 
home, has resided there for over 6 years. It is doubtful that the 
beneficiary will leave the boarding home in the near future. The 
boarding home charges $215 per month for the beneficiary's room and 
board.

[[Page 858]]

    The beneficiary's representative payee pays the boarding home $215 
(assuming an unsuccessful effort was made to negotiate a lower rate 
during the beneficiary's absence) and uses the balance to purchase 
miscellaneous personal items for the beneficiary. There are no benefits 
remaining which can be conserved on behalf of the beneficiary. The 
payee's use of the benefits is consistent with our guidelines.

    (c) Institution receiving Medicaid funds on beneficiary's behalf. 
Except in the case of a beneficiary receiving benefits payable under 
Sec. 416.212, if a beneficiary resides throughout a month in an 
institution that receives more than 50 percent of the cost of care on 
behalf of the beneficiary from Medicaid, any payments due shall be used 
only for the personal needs of the beneficiary and not for other items 
of current maintenance.

    Example: A disabled beneficiary resides in a hospital. The 
superintendent of the hospital receives $30 per month as the 
beneficiary's payee. The benefit payment is disbursed in the following 
manner, which would be consistent with our guidelines:

Miscellaneous canteen items........................................  $10
Clothing...........................................................   15
Conserved for future needs of the beneficiary......................    5
 

    (d) Claims of creditors. A payee may not be required to use benefit 
payments to satisfy a debt of the beneficiary, if the debt arose prior 
to the first month for which payments are certified to a payee. If the 
debt arose prior to this time, a payee may satisfy it only if the 
current and reasonably foreseeable needs of the beneficiary are met.

    Example: A disabled beneficiary was determined to be eligible for a 
monthly benefit payment of $208 effective April 1981. The benefits were 
certified to the beneficiary's brother who was appointed as the 
representative payee. The payee conserved $27 of the benefits received. 
In June 1981 the payee received a bill from a doctor who had treated the 
beneficiary in February and March 1981. The bill was for $175.
    After reviewing the beneficiary's current needs and resources, the 
payee decided not to use any of the benefits to pay the doctor's bill. 
(Approximately $180 a month is required for the beneficiary's current 
monthly living expenses--rent, utilities, food, and insurance--and the 
beneficiary will need new shoes and a coat within the next few months.)
    Based upon the above, the payee's decision not to pay the doctor's 
bill is consistent with our guidelines.

    (e) Dedicated accounts for eligible individuals under age 18. (1) 
When past-due benefit payments are required to be paid into a separate 
dedicated account (see Sec. 416.546), the representative payee is 
required to establish in a financial institution an account dedicated to 
the purposes described in paragraph (e)(2) of this section. This 
dedicated account may be a checking, savings or money market account 
subject to the titling requirements set forth in Sec. 416.645. Dedicated 
accounts may not be in the form of certificates of deposit, mutual 
funds, stocks, bonds or trusts.
    (2) A representative payee shall use dedicated account funds, 
whether deposited on a mandatory or permissive basis (as described in 
Sec. 416.546), for the benefit of the child and only for the following 
allowable expenses--
    (i) Medical treatment and education or job skills training;
    (ii) If related to the child's impairment(s), personal needs 
assistance; special equipment; housing modification; and therapy or 
rehabilitation; or
    (iii) Other items and services related to the child's impairment(s) 
that we determine to be appropriate. The representative payee must 
explain why or how the other item or service relates to the 
impairment(s) of the child. Attorney fees related to the pursuit of the 
child's disability claim and use of funds to prevent malnourishment or 
homelessness could be considered appropriate expenditures.
    (3) Representative payees must keep records and receipts of all 
deposits to and expenditures from dedicated accounts, and must submit 
these records to us upon our request, as explained in Secs. 416.635 and 
416.665.
    (4) The use of funds from a dedicated account in any manner not 
authorized by this section constitutes a misapplication of benefits. 
These misapplied benefits are not an overpayment as defined in 
Sec. 416.537; however, if we determine that a representative payee 
knowingly misapplied funds in a dedicated account, that representative 
payee shall be liable to us in an amount equal to the total amount of 
the misapplied funds. In addition, if a

[[Page 859]]

recipient who is his or her own payee knowingly misapplies benefits in a 
dedicated account, we will reduce future benefits payable to that 
recipient (or to that recipient and his or her spouse) by an amount 
equal to the total amount of the misapplied funds.
    (5) The restrictions described in this section and the income and 
resource exclusions described in Secs. 416.1124(c)(20) and 416.1247 
shall continue to apply until all funds in the dedicated account are 
depleted or eligibility for benefits terminates, whichever comes first. 
This continuation of the restrictions and exclusions applies in 
situations where funds remain in the account in any of the following 
situations--
    (i) A child attains age 18, continues to be eligible and receives 
payments directly;
    (ii) A new representative payee is appointed. When funds remaining 
in a dedicated account are returned to us by the former representative 
payee, the new representative payee must establish an account in a 
financial institution into which we will deposit these funds, even if 
the amount is less than that prescribed in Sec. 416.546; or
    (iii) During a period of suspension due to ineligibility as 
described in Sec. 416.1320, administrative suspension, or a period of 
eligibility for which no payment is due.

[47 FR 30475, July 14, 1982, as amended at 61 FR 10278, Mar. 13, 1996; 
61 FR 67206, Dec. 20, 1996; 76 FR 453, Jan. 5, 2011]



Sec. 416.640a  Compensation for qualified organizations serving as 
representative payees.

    (a) Organizations that can request compensation. A qualified 
organization can request us to authorize it to collect a monthly fee 
from your benefit payment. A qualified organization is:
    (1) Any State or local government agency with fiduciary 
responsibilities or whose mission is to carry out income maintenance, 
social service, or health care-related activities; or
    (2) Any community-based nonprofit social service organization 
founded for religious, charitable or social welfare purposes, which is 
tax exempt under section 501(c) of the Internal Revenue Code and which 
is bonded/insured to cover misuse and embezzlement by officers and 
employees and which is licensed in each State in which it serves as 
representative payee (if licensing is available in the State). The 
minimum amount of bonding or insurance coverage must equal the average 
monthly amount of supplemental security income payments received by the 
organization plus the amount of the beneficiaries' conserved funds 
(i.e., beneficiaries' saved supplemental security income payments) plus 
interest on hand. For example, an organization that has conserved funds 
of $5,000 and receives an average of $12,000 a month in supplemental 
security income payments must be bonded/insured for a minimum of 
$17,000. The license must be appropriate under the laws of the State for 
the type of services the organization provides. An example of an 
appropriately licensed organization is a community mental health center 
holding a State license to provide community mental health services.
    (b) Requirements qualified organizations must meet. Organizations 
that are qualified under paragraphs (a)(1) or (a)(2) of this section 
must also meet the following requirements before we can authorize them 
to collect a monthly fee.
    (1) A qualified organization must regularly provide representative 
payee services concurrently to at least five beneficiaries. An 
organization which has received our authorization to collect a fee for 
representative payee services, but is temporarily (not more than 6 
months) not a payee for at least five beneficiaries, may request our 
approval to continue to collect fees.
    (2) A qualified organization must demonstrate that it is not a 
creditor of the beneficiary. See paragraph (c) of this section for 
exceptions to the requirement regarding creditors.
    (c) Creditor relationship. On a case-by-case basis, we may authorize 
an organization to collect a fee for payee services despite the creditor 
relationship. (For example, the creditor is the beneficiary's landlord.) 
To provide this authorization, we will review all of the evidence 
submitted by the organization and authorize collection of a fee when:

[[Page 860]]

    (1) The creditor services (e.g., providing housing) provided by the 
organization help to meet the current needs of the beneficiary; and
    (2) The amount the organization charges the beneficiary for these 
services is commensurate with the beneficiary's ability to pay.
    (d) Authorization process. (1) An organization must request in 
writing and receive an authorization from us before it may collect a 
fee.
    (2) An organization seeking authorization to collect a fee must also 
give us evidence to show that it is qualified, pursuant to paragraphs 
(a), (b), and (c) of this section, to collect a fee.
    (3) If the evidence provided to us by the organization shows that it 
meets the requirements of this section, and additional investigation by 
us proves it suitable to serve, we will notify the organization in 
writing that it is authorized to collect a fee. If we need more 
evidence, or if we are not able to authorize the collection of a fee, we 
will also notify the organization in writing that we have not authorized 
the collection of a fee.
    (e) Revocation and cancellation of the authorization. (1) We will 
revoke an authorization to collect a fee if we have evidence which 
establishes that an organization no longer meets the requirements of 
this section. We will issue a written notice to the organization 
explaining the reason(s) for the revocation.
    (2) An organization may cancel its authorization at any time upon 
written notice to us.
    (f) Notices. The written notice we will send to an organization 
authorizing the collection of a fee will contain an effective date for 
the collection of a fee pursuant to paragraphs (a), (b) and (c) of this 
section. The effective date will be no earlier than the month in which 
the organization asked for authorization to collect a fee. The notice 
will be applicable to all beneficiaries for whom the organization was 
payee at the time of our authorization and all beneficiaries for whom 
the organization becomes payee while the authorization is in effect.
    (g) Limitation on fees. (1) An organization authorized to collect a 
fee under this section may collect from a beneficiary a monthly fee for 
expenses (including overhead) it has incurred in providing payee 
services to a beneficiary. The limit on the fee a qualified organization 
may collect for providing payee services increases by the same 
percentage as the annual cost of living adjustment (COLA). The increased 
fee amount (rounded to the nearest dollar) is taken beginning with the 
payment for January.
    (2) Any agreement providing for a fee in excess of the amount 
permitted shall be void and treated as misuse of your benefits by the 
organization under Sec. 416.641.
    (3) A fee may be collected for any month during which the 
organization--
    (i) Provides representative payee services;
    (ii) Receives a benefit payment for the beneficiary; and
    (iii) Is authorized to receive a fee for representative payee 
services.
    (4) Fees for services may not be taken from any funds conserved for 
the beneficiary by a payee in accordance with Sec. 416.645.
    (5) Generally, an organization may not collect a fee for months in 
which it does not receive a benefit payment. However, an organization 
will be allowed to collect a fee for months in which it did not receive 
a payment if we later issue payment for these months and the 
organization:
    (i) Received our approval to collect a fee for the months for which 
payment is made;
    (ii) Provided payee services in the months for which payment is 
made; and
    (iii) Was the payee when the retroactive payment was paid by us.
    (6) Fees for services may not be taken from beneficiary benefits for 
the months for which we or a court of competent jurisdiction 
determine(s) that the representative payee misused benefits. Any fees 
collected for such months will be treated as a part of the beneficiary's 
misused benefits.
    (7) An authorized organization can collect a fee for providing 
representative payee services from another source if the total amount of 
the fee collected from both the beneficiary and the

[[Page 861]]

other source does not exceed the amount authorized by us.

[69 FR 60238, Oct. 7, 2004, as amended at 71 FR 61408, Oct. 18, 2006]



Sec. 416.641  Who is liable if your representative payee misuses your
benefits?

    (a) A representative payee who misuses your benefits is responsible 
for paying back misused benefits. We will make every reasonable effort 
to obtain restitution of misused benefits so that we can repay these 
benefits to you.
    (b) Whether or not we have obtained restitution from the misuser, we 
will repay benefits in cases when we determine that a representative 
payee misused benefits and the representative payee is an organization 
or an individual payee serving 15 or more beneficiaries. When we make 
restitution, we will pay you or your alternative representative payee an 
amount equal to the misused benefits less any amount we collected from 
the misuser and repaid to you.
    (c) Whether or not we have obtained restitution form the misuser, we 
will repay benefits in cases when we determine that an individual 
representative payee serving 14 or fewer beneficiaries misused benefits 
and our negligent failure in the investigation or monitoring of that 
representative payee results in the misuse. When we make restitution, we 
will pay you or your alternative representative payee an amount equal to 
the misused benefits less any amount we collected from the misuser and 
repaid to you.
    (d) The term ``negligent failure'' used in this subpart means that 
we failed to investigate or monitor a representative payee or that we 
did investigate or monitor a representative payee but did not follow 
established procedures in our investigation or monitoring. Examples of 
our negligent failure include, but are not limited to, the following:
    (1) We did not follow our established procedures in this subpart 
when investigating, appointing, or monitoring a representative payee;
    (2) We did not investigate timely a reported allegation of misuse; 
or
    (3) We did not take the steps necessary to prevent the issuance of 
payments to the representative payee after it was determined that the 
payee misused benefits.
    (e) Our repayment of misused benefits under these provisions does 
not alter the representative payee's liability and responsibility as 
described in paragraph (a) of this section.
    (f) Any amounts that the representative payee misuses and does not 
refund will be treated as an overpayment to that representative payee. 
See subpart E of this part.

[69 FR 60239, Oct. 7, 2004, as amended at 71 FR 61409, Oct. 18, 2006]



Sec. 416.645  Conservation and investment of benefit payments.

    (a) General. If payments are not needed for the beneficiary's 
current maintenance or reasonably foreseeable needs, they shall be 
conserved or invested on behalf of the beneficiary. Conserved funds 
should be invested in accordance with the rules followed by trustees. 
Any investment must show clearly that the payee holds the property in 
trust for the beneficiary.

    Example: A State institution for children with intellectual 
disability, which is receiving Medicaid funds, is representative payee 
for several beneficiaries. The checks the payee receives are deposited 
into one account which shows that the benefits are held in trust for the 
beneficiaries. The institution has supporting records which show the 
share each individual has in the account. Funds from this account are 
disbursed fairly quickly after receipt for the personal needs of the 
beneficiaries. However, not all those funds were disbursed for this 
purpose. As a result, several of the beneficiaries have significant 
accumulated resources in this account. For those beneficiaries whose 
benefits have accumulated over $150, the funds should be deposited in an 
interest-bearing account or invested relatively free of risk on behalf 
of the beneficiaries.

    (b) Preferred investments. Preferred investments for excess funds 
are U.S. Savings Bonds and deposits in an interest or dividend paying 
account in a bank, trust company, credit union, or savings and loan 
association which is insured under either Federal or State law. The 
account must be in a form which shows clearly that the representative 
payee has only a fiduciary and not a personal interest in the funds. If 
the payee is the legally appointed

[[Page 862]]

guardian or fiduciary of the beneficiary, the account may be established 
to indicate this relationship. If the payee is not the legally appointed 
guardian or fiduciary, the accounts may be established as follows:
    (1) For U.S. Savings Bonds--

    ______ (Name of beneficiary) ___ (Social Security Number), for whom 
______ (Name of payee) is representative payee for Supplemental Security 
Income benefits;

    (2) For interest or dividend paying accounts--

    ______ (Name of beneficiary) by ______ (Name of payee), 
representative payee.

    (c) Interest and dividend payments. The interest and dividends which 
result from an investment are the property of the beneficiary and may 
not be considered to be the property of the payee.

[47 FR 30475, July 14, 1982, as amended at 78 FR 46501, Aug. 1, 2013]



Sec. 416.650  When will we select a new representative payee for
you?

    When we learn that your interest is not served by sending your 
benefit payment to your present representative payee or that your 
present payee is no longer able or willing to carry out payee 
responsibilities, we will promptly stop sending your payment to the 
payee. We will then send your benefit payment to an alternative payee or 
directly to you, until we find a suitable payee. We may suspend payment 
as explained in Sec. 416.611(c) if we find that paying you directly 
would cause substantial harm and we cannot find a suitable alternative 
representative payee before your next payment is due. We will terminate 
payment of benefits to your representative payee and find a new payee or 
pay you directly if the present payee:
    (a) Has been found by us or a court of competent jurisdiction to 
have misused your benefits;
    (b) Has not used the benefit payments on your behalf in accordance 
with the guidelines in this subpart;
    (c) Has not carried out the other responsibilities described in this 
subpart;
    (d) Dies;
    (e) No longer wishes to be your payee;
    (f) Is unable to manage your benefit payments; or
    (g) Fails to cooperate, within a reasonable time, in providing 
evidence, accounting, or other information we request.

[69 FR 60239, Oct. 7, 2004]



Sec. 416.655  When representative payment will be stopped.

    If a beneficiary receiving representative payment shows us that he 
or she is mentally and physically able to manage or direct the 
management of benefit payments, we will make direct payment. Information 
which the beneficiary may give us to support his or her request for 
direct payment include the following--
    (a) A physician's statement regarding the beneficiary's condition, 
or a statement by a medical officer of the institution where the 
beneficiary is or was confined, showing that the beneficiary is able to 
manage or direct the management of his or her funds; or
    (b) A certified copy of a court order restoring the beneficiary's 
rights in a case where a beneficiary was adjudged legally incompetent; 
or
    (c) Other evidence which establishes the beneficiary's ability to 
manage or direct the management of benefits.



Sec. 416.660  Transfer of accumulated benefit payments.

    A representative payee who has conserved or invested benefit 
payments shall transfer these funds and the interest earned from the 
invested funds to either a successor payee, to the beneficiary, or to 
us, as we will specify. If the funds and the earned interest are 
returned to us, we will recertify them to a successor representative 
payee or to the beneficiary.

[47 FR 30475, July 14, 1982, as amended at 75 FR 7552, Feb. 22, 2010]



Sec. 416.665  How does your representative payee account for the use
of benefits?

    Your representative payee must account for the use of your benefits. 
We require written reports from your representative payee at least once 
a year (except for certain State institutions that participate in a 
separate onsite review program). We may verify how

[[Page 863]]

your representative payee used your benefits. Your representative payee 
should keep records of how benefits were used in order to make 
accounting reports and must make those records available upon our 
request. If your representative payee fails to provide an annual 
accounting of benefits or other required reports, we may require your 
payee to receive your benefits in person at the local Social Security 
field office or a United States Government facility that we designate 
serving the area in which you reside. The decision to have your 
representative payee receive your benefits in person may be based on a 
variety of reasons. Some of these reasons may include the payee's 
history of past performance or our past difficulty in contacting the 
payee. We may ask your representative payee to give us the following 
information:
    (a) Where you lived during the accounting period;
    (b) Who made the decisions on how your benefits were spent or saved;
    (c) How your benefit payments were used; and
    (d) How much of your benefit payments were saved and how the savings 
were invested.

[69 FR 60239, Oct. 7, 2004, as amended at 71 FR 61409, Oct. 18, 2006]



                       Subpart G_Reports Required

    Authority: Secs. 702(a)(5), 1611, 1612, 1613, 1614, and 1631 of the 
Social Security Act (42 U.S.C. 902(a)(5), 1382, 1382a, 1382b, 1382c, and 
1383); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note); sec. 
202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note).

    Source: 46 FR 5873, Jan. 21, 1981, unless otherwise noted.

                              Introduction



Sec. 416.701  Scope of subpart.

    (a) Report provisions. The Social Security Administration, to 
achieve efficient administration of the Supplemental Security Income 
(SSI) program for the Aged, Blind, and Disabled, requires that you (or 
your representative) must report certain events to us. It is important 
for us to know about these events because they may affect your continued 
eligibility for SSI benefits or the amount of your benefits. This 
subpart tells you what events you must report; what your reports must 
include; and when reports are due. The rules regarding reports are in 
Secs. 416.704 through 416.714.
    (b) Penalty deductions. If you fail to make a required report when 
it is due, you may suffer a penalty. This subpart describes the 
penalties; discusses when we may impose them; and explains that we will 
not impose a penalty if you have good cause for failing to report 
timely. The rules regarding penalties are in Secs. 416.722 through 
416.732.



Sec. 416.702  Definitions.

    For purposes of this subpart--
    Essential person means someone whose presence was believed to be 
necessary for your welfare under the State program that preceded the SSI 
program. (See Secs. 416.220 through 416.223 of this part.)
    Parent means a natural parent, an adoptive parent, or the spouse of 
a natural or adoptive parent.
    Representative payee means an individual, an agency, or an 
institution selected by us to receive and manage SSI benefits on your 
behalf. (See subpart F of this part for details describing when a 
representative payee is selected and a representative payee's 
responsibilities.)
    Residence in the United States means that your permanent home is in 
the United States.
    United States or U.S. means the 50 States, the District of Columbia, 
and the Northern Mariana Islands.
    We, Us, or Our means the Social Security Administration.
    You or Your means an applicant, an eligible individual, an eligible 
spouse, or an eligible child.

[46 FR 5873, Jan. 21, 1981, as amended at 65 FR 16814, Mar. 30, 2000]

                            Report Provisions



Sec. 416.704  Who must make reports.

    (a) You are responsible for making required reports to us if you 
are--
    (1) An eligible individual (see Sec. 416.120(c)(13));
    (2) An eligible spouse (see Sec. 416.120(c)(14));
    (3) An eligible child (see Secs. 416.120(c)(13) and 416.1856); or

[[Page 864]]

    (4) An applicant awaiting a final determination upon an application.
    (b) If you have a representative payee, and you have not been 
legally adjudged incompetent, either you or your representative payee 
must make the required reports.
    (c) If you have a representative payee and you have been legally 
adjudged incompetent, you are not responsible for making reports to us; 
however, your representative payee is responsible for making required 
reports to us.

[46 FR 5873, Jan. 21, 1981, as amended at 51 FR 10616, Mar. 28, 1986]



Sec. 416.708  What you must report.

    This section describes the events that you must report to us. They 
are--
    (a) A change of address. You must report to us any change in your 
mailing address and any change in the address where you live.
    (b) A change in living arrangements. You must report to us any 
change in the make-up of your household: That is, any person who comes 
to live in your household and any person who moves out of your 
household.
    (c) A change in income. You must report to us any increase or 
decrease in your income, and any increase or decrease in the income of--
    (1) Your ineligible spouse who lives with you;
    (2) Your essential person;
    (3) Your parent, if you are an eligible child and your parent lives 
with you; or
    (4) An ineligible child who lives with you.

However, you need not report an increase in your Social Security 
benefits if the increase is only a cost-of-living adjustment. (For a 
complete discussion of what we consider income, see subpart K. See 
subpart M, Sec. 416.1323 regarding suspension because of excess income.) 
If you receive benefits based on disability, when you or your 
representative report changes in your earned income, we will issue a 
receipt to you or your representative until we establish a centralized 
computer file to record the information that you give us and the date 
that you make your report. Once the centralized computer file is in 
place, we will continue to issue receipts to you or your representative 
if you request us to do so.
    (d) A change in resources. You must report to us any resources you 
receive or part with, and any resources received or parted with by--
    (1) Your ineligible spouse who lives with you;
    (2) Your essential person; or
    (3) Your parent, if you are an eligible child and your parent lives 
with you. (For a complete discussion of what we consider a resource, see 
subpart L. See subpart M, Sec. 416.1324 regarding suspension because of 
excess resources.)
    (e) Eligibility for other benefits. You must report to us your 
eligibility for benefits other than SSI benefits. See Secs. 416.210 and 
416.1330 regarding your responsibility to apply for any other benefits 
for which you may be eligible.
    (f) Certain deaths. (1) If you are an eligible individual, you must 
report the death of your eligible spouse, the death of your ineligible 
spouse who was living with you, and the death of any other person who 
was living with you.
    (2) If you are an eligible spouse, you must report the death of your 
spouse, and the death of any other person who was living with you.
    (3) If you are an eligible child, you must report the death of a 
parent who was living with you, and the death of any other person who 
was living with you.
    (4) If you are a representative payee, you must report the death of 
an eligible individual, eligible spouse, or eligible child whom you 
represent; and the death of any other person who was living in the 
household of the individual you represent.
    (5) If you have a representative payee, you must report the death of 
your representative payee.
    (g) A change in marital status. You must report to us--
    (1) Your marriage, your divorce, or the annulment of your marriage;
    (2) The marriage, divorce, or annulment of marriage of your parent 
who lives with you, if you are an eligible child;
    (3) The marriage of an ineligible child who lives with you, if you 
are an eligible child; and
    (4) The marriage of an ineligible child who lives with you if you 
are an

[[Page 865]]

eligible individual living with an ineligible spouse.
    (h) Medical improvements. If you are eligible for SSI benefits 
because of disability or blindness, you must report any improvement in 
your medical condition to us.
    (i) [Reserved]
    (j) Refusal to accept treatment for drug addiction or alcoholism; 
discontinuance of treatment. If you have been medically determined to be 
a drug addict or an alcoholic, and you refuse to accept treatment for 
drug addiction or alcoholism at an approved facility or institution, or 
if you discontinue treatment, you must report your refusal or 
discontinuance to us.
    (k) Admission to or discharge from a medical treatment facility, 
public institution, or private institution. You must report to us your 
admission to or discharge from--
    (1) A medical treatment facility; or
    (2) A public institution (defined in Sec. 416.201); or
    (3) A private institution. Private institution means an institution 
as defined in Sec. 416.201 which is not administered by or the 
responsibility of a governmental unit.
    (l) A change in school attendance. You must report to us--
    (1) A change in your school attendance if you are an eligible child;
    (2) A change in school attendance of an ineligible child who is at 
least age 18 but less than 21 and who lives with you if you are an 
eligible child; and
    (3) A change in school attendance of an ineligible child who is at 
least age 18 but less than 21 and who lives with you if you are an 
eligible individual living with an ineligible spouse.
    (m) A termination of residence in the U.S. You must report to us if 
you leave the United States voluntarily with the intention of abandoning 
your residence in the United States or you leave the United States 
involuntarily (for example, you are deported).
    (n) Leaving the U.S. temporarily. You must report to us if you leave 
the United States for 30 or more consecutive days or for a full calendar 
month (without the intention of abandoning your residence in the U.S.).
    (o) Fleeing to avoid criminal prosecution or custody or confinement 
after conviction, or violating probation or parole. You must report to 
us that you are--
    (1) Fleeing to avoid prosecution for a crime, or an attempt to 
commit a crime, which is a felony under the laws of the place from which 
you flee (or which, in the case of the State of New Jersey, is a high 
misdemeanor under the laws of that State);
    (2) Fleeing to avoid custody or confinement after conviction for a 
crime, or an attempt to commit a crime, which is a felony under the laws 
of the place from which you flee (or which, in the case of the State of 
New Jersey, is a high misdemeanor under the laws of that State); or
    (3) Violating a condition of probation or parole imposed under 
Federal or State law.

[46 FR 5873, Jan. 21, 1981, as amended at 51 FR 10616, Mar. 14, 1986; 65 
FR 40495, June 30, 2000; 68 FR 40124, July 7, 2003; 71 FR 66866, Nov. 
17, 2006; 72 FR 50874, Sept. 5, 2007]



Sec. 416.710  What reports must include.

    When you make a report you must tell us--
    (a) The name and social security number under which benefits are 
paid;
    (b) The name of the person about whom you are reporting;
    (c) The event you are reporting and the date it happened; and
    (d) Your name.



Sec. 416.712  Form of the report.

    You may make a report in any of the ways described in this section.
    (a) Written reports. You may write a report on your own paper or on 
a printed form supplied by us. You may mail a written report or bring it 
to one of our offices.
    (b) Oral reports. You may report to us by telephone, or you may come 
to one of our offices and tell one of our employees what you are 
reporting.
    (c) Other forms. You may use any other suitable method of 
reporting--for example, a telegram or a cable.



Sec. 416.714  When reports are due.

    (a) A reportable event happens. You should report to us as soon as 
an event listed in Sec. 416.708 happens. If you do not report within 10 
days after the close of the month in which the event happens,

[[Page 866]]

your report will be late. We may impose a penalty deduction from your 
benefits for a late report (see Secs. 416.722 through 416.732).
    (b) We request a report. We may request a report from you if we need 
information to determine continuing eligibility or the correct amount of 
your SSI benefit payments. If you do not report within 30 days of our 
written request, we may determine that you are ineligible to receive SSI 
benefits. We will suspend your benefits effective with the month 
following the month in which we determine that you are ineligible to 
receive SSI benefits because of your failure to give us necessary 
information.

[46 FR 5873, Jan. 21, 1981, as amended at 50 FR 48573, Nov. 26, 1985]

                           Penalty Deductions



Sec. 416.722  Circumstances under which we make a penalty deduction.

    A penalty deduction is made from your benefits if--
    (a) You fail to make a required report on time (see Secs. 416.708 
and 416.714);
    (b) We must reduce, suspend, or terminate your benefits because of 
the event you have not reported;
    (c) You received and accepted an SSI benefit for the penalty period 
(see Secs. 416.724 through 416.728 for penalty period definitions); and
    (d) You do not have good cause for not reporting on time (see 
Sec. 416.732).



Sec. 416.724  Amounts of penalty deductions.

    (a) Amounts deducted. If we find that we must impose a penalty 
deduction, you will lose from your SSI benefits a total amount of--
    (1) $25 for a report overdue in the first penalty period;
    (2) $50 for a report overdue in the second penalty period; and
    (3) $100 for a report overdue in the third (or any following) 
penalty period.
    (b) Limit on number of penalties. Even though more than one required 
report is overdue from you at the end of a penalty period, we will limit 
the number of penalty deductions imposed to one penalty deduction for 
any one penalty period.



Sec. 416.726  Penalty period: First failure to report.

    (a) First penalty period. The first penalty period begins on the 
first day of the month you apply for SSI benefits and ends on the day we 
first learn that you should have made a required report, but did not do 
so within 10 days after the close of the month in which the event 
happened. There may be more than one required report overdue at the end 
of the first penalty period, but we will impose no more than one penalty 
deduction for the period.
    (b) Extension of first penalty period. If you have good cause for 
not making a report on time (see Sec. 416.732), we will extend the first 
penalty period to the day when we learn that you should have made 
another required report, but did not do so within 10 days after the 
close of the month in which the event happened. There may be more than 
one required report overdue at the end of the extended first penalty 
period, but we will impose no more than one penalty deduction for the 
extended period.

[46 FR 5873, Jan. 21, 1981, as amended at 50 FR 48573, Nov. 26, 1985]



Sec. 416.728  Penalty period: Second failure to report.

    (a) Second penalty period. The second penalty period begins on the 
day after the first penalty period ends. The second penalty period ends 
on the day we first learn that you should have made a required report, 
but did not do so within 10 days after the close of the month in which 
the event happened. (The event may have happened during the first 
penalty period, with the reporting due date in the second penalty 
period. The due date and the failure to report on time are the important 
factors in establishing a penalty period.) There may be more than one 
required report overdue at the end of the second penalty period, but we 
will impose no more than one penalty deduction for the period.
    (b) Extension of second penalty period. If you have good cause for 
not making a report on time (see Sec. 416.732), we will extend the 
second penalty period to the day when we learn that you should have made 
another required report, but did not do so within 10 days after the 
close of the month in which the event

[[Page 867]]

happened. There may be more than one required report overdue at the end 
of the extended second penalty period, but we will impose no more than 
one penalty deduction for the extended period.

[46 FR 5873, Jan. 21, 1981, as amended at 50 FR 48573, Nov. 26, 1985]



Sec. 416.730  Penalty period: Three or more failures to report.

    (a) Third (or a following) penalty period. A third (or a following) 
penalty period begins the day after the last penalty period ends. This 
penalty period ends on the day we first learn that you should have made 
a required report during the penalty period, but did not do so within 10 
days after the close of the month in which the event happened. (The 
event may have happened during an earlier penalty period, with the 
reporting due date in the third (or a following) penalty period. The due 
date and the failure to report on time are the important factors in 
establishing a penalty period.) There may be more than one required 
report overdue at the end of a penalty period, but we will impose no 
more than one penalty deduction for any one penalty period.
    (b) Extension of third (or a following) penalty period. Just as with 
the first and second penalty periods, if you have good cause for not 
making a report on time during the third (or a following) penalty period 
(see Sec. 416.732), we will extend the penalty period to the day when we 
learn that you should have made another required report, but did not do 
so within 10 days after the close of the month in which the event 
happened. There may be more than one required report overdue at the end 
of an extended penalty period, but we will impose no more than one 
penalty deduction for any one extended penalty period.

[46 FR 5873, Jan. 21, 1981, as amended at 50 FR 48573, Nov. 26, 1985]



Sec. 416.732  No penalty deduction if you have good cause for
failure to report timely.

    (a) We will find that you have good cause for failure to report 
timely and we will not impose a penalty deduction, if--
    (1) You are ``without fault'' as defined in Sec. 416.552; or
    (2) Your failure or delay in reporting is not willful. ``Not 
willful'' means that--
    (i) You did not have full knowledge of the existence of your 
obligation to make a required report; or
    (ii) You did not intentionally, knowingly, and purposely fail to 
make a required report.


However, in either case we may require that you refund an overpayment 
caused by your failure to report. See subpart E of this part for waiver 
of recovery of overpayments.
    (b) In determining whether you have good cause for failure to report 
timely, we will take into account any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) you may have.

[59 FR 1636, Jan. 12, 1994]



                     Subpart H_Determination of Age

    Authority: Secs. 702(a)(5), 1601, 1614(a)(1) and 1631 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1381, 1382c(a)(1), and 1383).

    Source: 39 FR 12731, Apr. 8, 1974, unless otherwise noted.



Sec. 416.801  Evidence as to age--when required.

    An applicant for benefits under title XVI of the Act shall file 
supporting evidence showing the date of his birth if his age is a 
condition of eligibility for benefits or is otherwise relevant to the 
payment of benefits pursuant to such title XVI. Such evidence may also 
be required by the Administration as to the age of any other individual 
when such other individual's age is relevant to the determination of the 
applicant's eligibility or benefit amount. In the absence of evidence to 
the contrary, if the applicant alleges that he is at least 68 years of 
age and submits any documentary evidence at least 3 years old which 
supports his allegation, no further evidence of his age is required. In 
the absence of evidence to the contrary, if a State required reasonably 
acceptable evidence of age and provides a statement as to an applicant's 
age,

[[Page 868]]

no further evidence of his age is required unless a statistically valid 
quality control sample has shown that a State's determination of age 
procedures do not yield an acceptable low rate of error.



Sec. 416.802  Type of evidence to be submitted.

    Where an individual is required to submit evidence of date of birth 
as indicated in Sec. 416.801, he shall submit a public record of birth 
or a religious record of birth or baptism established or recorded before 
his fifth birthday, if available. Where no such document recorded or 
established before age 5 is available the individual shall submit as 
evidence of age another document or documents which may serve as the 
basis for a determination of the individual's date of birth provided 
such evidence is corroborated by other evidence or by information in the 
records of the Administration.



Sec. 416.803  Evaluation of evidence.

    Generally, the highest probative value will be accorded to a public 
record of birth or a religious record of birth or baptism established or 
recorded before age 5. Where such record is not available, and other 
documents are submitted as evidence of age, in determining their 
probative value, consideration will be given to when such other 
documents were established or recorded, and the circumstances attending 
their establishment or recordation. Among the documents which may be 
submitted for such purpose are: school record, census record, Bible or 
other family record, church record of baptism or confirmation in youth 
or early adult life, insurance policy, marriage record, employment 
record, labor union record, fraternal organization record, military 
record, voting record, vaccination record, delayed birth certificate, 
birth certificate of child of applicant, physician's or midwife's record 
of birth, immigration record, naturalization record, or passport.



Sec. 416.804  Certified copy in lieu of original.

    In lieu of the original of any record, except a Bible or other 
family record, there may be submitted as evidence of age a copy of such 
record or a statement as to the date of birth shown by such record, 
which has been duly certified (see Sec. 404.701(g) of this chapter).



Sec. 416.805  When additional evidence may be required.

    If the evidence submitted is not convincing, additional evidence may 
be required.



Sec. 416.806  Expedited adjudication based on documentary evidence of age.

    Where documentary evidence of age recorded at least 3 years before 
the application is filed, which reasonably supports an aged applicant's 
allegation as to his age, is submitted, payment of benefits may be 
initiated even though additional evidence of age may be required by 
Secs. 416.801 through 416.805. The applicant will be advised that 
additional evidence is required and that, if it is subsequently 
established that the prior finding of age is incorrect, the applicant 
will be liable for refund of any overpayment he has received. If any of 
the evidence initially submitted tends to show that the age of the 
applicant or such other person does not correspond with the alleged age, 
no benefits will be paid until the evidence required by Secs. 416.801 
through 416.805 is submitted.



             Subpart I_Determining Disability and Blindness

    Authority: Secs. 221(m), 702(a)(5), 1611, 1614, 1619, 1631(a), (c), 
(d)(1), and (p), and 1633 of the Social Security Act (42 U.S.C. 421(m), 
902(a)(5), 1382, 1382c, 1382h, 1383(a), (c), (d)(1), and (p), and 
1383b); secs. 4(c) and 5, 6(c)-(e), 14(a), and 15, Pub. L. 98-460, 98 
Stat. 1794, 1801, 1802, and 1808 (42 U.S.C. 421 note, 423 note, and 
1382h note).

    Source: 45 FR 55621, Aug. 20, 1980, unless otherwise noted.

                                 General



Sec. 416.901  Scope of subpart.

    In order for you to become entitled to any benefits based upon 
disability or blindness you must be disabled or blind as defined in 
title XVI of the Social Security Act. This subpart explains how we 
determine whether you are disabled

[[Page 869]]

or blind. We have organized the rules in the following way.
    (a) We define general terms, then discuss who makes our disability 
or blindness determinations and state that disability and blindness 
determinations made under other programs are not binding on our 
determinations.
    (b) We explain the term disability and note some of the major 
factors that are considered in determining whether you are disabled in 
Secs. 416.905 through 416.910.
    (c) Sections 416.912 through 416.918 contain our rules on evidence. 
We explain your responsibilities for submitting evidence of your 
impairment, state what we consider to be acceptable sources of medical 
evidence, and describe what information should be included in medical 
reports.
    (d) Our general rules on evaluating disability for adults filing new 
applications are stated in Secs. 416.920 through 416.923. We describe 
the steps that we go through and the order in which they are considered.
    (e) Our general rules on evaluating disability for children filing 
new applications are stated in Sec. 416.924.
    (f) Our rules on medical considerations are found in Secs. 416.925 
through 416.930. We explain in these rules--
    (1) The purpose and use of the Listing of Impairments found in 
appendix 1 of subpart P of part 404 of this chapter;
    (2) What we mean by the terms medical equivalence and functional 
equivalence and how we make those findings;
    (3) The effect of a conclusion by your physician that you are 
disabled;
    (4) What we mean by symptoms, signs, and laboratory findings;
    (5) How we evaluate pain and other symptoms; and
    (6) The effect on your benefits if you fail to follow treatment that 
is expected to restore your ability to work or, if you are a child, to 
reduce your functional limitations to the point that they are no longer 
marked and severe, and how we apply the rule in Sec. 416.930.
    (g) In Secs. 416.931 through 416.934 we explain that we may make 
payments on the basis of presumptive disability or presumptive 
blindness.
    (h) In Secs. 416.935 through 416.939 we explain the rules which 
apply in cases of drug addiction and alcoholism.
    (i) In Secs. 416.945 through 416.946 we explain what we mean by the 
term residual functional capacity, state when an assessment of residual 
functional capacity is required, and who may make it.
    (j) Our rules on vocational considerations are in Secs. 416.960 
through 416.969a. We explain in these rules--
    (1) When we must consider vocational factors along with the medical 
evidence;
    (2) How we use our residual functional capacity assessment to 
determine if you can still do your past relevant work or other work;
    (3) How we consider the vocational factors of age, education, and 
work experience;
    (4) What we mean by ``work which exists in the national economy'';
    (5) How we consider the exertional, nonexertional, and skill 
requirements of work, and when we will consider the limitations or 
restrictions that result from your impairment(s) and related symptoms to 
be exertional, nonexertional, or a combination of both; and
    (6) How we use the Medical-Vocational Guidelines in appendix 2 of 
subpart P of part 404 of this chapter.
    (k) Our rules on substantial gainful activity are found in 
Secs. 416.971 through 416.974. These explain what we mean by substantial 
gainful activity and how we evaluate your work activity.
    (l) In Secs. 416.981 through 416.985 we discuss blindness.
    (m) Our rules on when disability or blindness continues and stops 
are contained in Secs. 416.986 and 416.988 through 416.998. We explain 
what your responsibilities are in telling us of any events that may 
cause a change in your disability or blindness status and when we will 
review to see if you are still disabled. We also explain how we consider 
the issue of medical improvement (and the exceptions to medical 
improvement) in determining whether you are still disabled.

[45 FR 55621, Aug. 20, 1980, as amended at 50 FR 50136, Dec. 6, 1985; 56 
FR 5553, Feb. 11, 1991; 56 FR 57944, Nov. 14, 1991; 62 FR 6420, Feb. 11, 
1997; 65 FR 42788, July 11, 2000; 65 FR 54777, Sept. 11, 2000; 68 FR 
51164, Aug. 26, 2003]

[[Page 870]]



Sec. 416.902  Definitions for this subpart.

    As used in the subpart--
    (a) Acceptable medical source means a medical source who is a:
    (1) Licensed physician (medical or osteopathic doctor);
    (2) Licensed psychologist, which includes:
    (i) A licensed or certified psychologist at the independent practice 
level; or
    (ii) A licensed or certified school psychologist, or other licensed 
or certified individual with another title who performs the same 
function as a school psychologist in a school setting, for impairments 
of intellectual disability, learning disabilities, and borderline 
intellectual functioning only;
    (3) Licensed optometrist for impairments of visual disorders, or 
measurement of visual acuity and visual fields only, depending on the 
scope of practice in the State in which the optometrist practices;
    (4) Licensed podiatrist for impairments of the foot, or foot and 
ankle only, depending on whether the State in which the podiatrist 
practices permits the practice of podiatry on the foot only, or the foot 
and ankle;
    (5) Qualified speech-language pathologist for speech or language 
impairments only. For this source, qualified means that the speech-
language pathologist must be licensed by the State professional 
licensing agency, or be fully certified by the State education agency in 
the State in which he or she practices, or hold a Certificate of 
Clinical Competence in Speech-Language Pathology from the American 
Speech-Language-Hearing Association;
    (6) Licensed audiologist for impairments of for impairments of 
hearing loss, auditory processing disorders, and balance disorders 
within the licensed scope of practice only (with respect to claims filed 
(see Sec. 416.325) on or after March 27, 2017);
    (7) Licensed Advanced Practice Registered Nurse, or other licensed 
advanced practice nurse with another title, for impairments within his 
or her licensed scope of practice (only with respect to claims filed 
(see Sec. 416.325) on or after March 27, 2017); or
    (8) Licensed Physician Assistant for impairments within his or her 
licensed scope of practice (only with respect to claims filed (see 
Sec. 416.325) on or after March 27, 2017).
    (b) Adult means a person who is age 18 or older.
    (c) Child means a person who has not attained age 18.
    (d) Commissioner means the Commissioner of Social Security or his or 
her authorized designee.
    (e) Disability redetermination means a redetermination of your 
eligibility based on disability using the rules for new applicants 
appropriate to your age, except the rules pertaining to performance of 
substantial gainful activity. For individuals who are working and for 
whom a disability redetermination is required, we will apply the rules 
in Secs. 416.260 through 416.269. In conducting a disability 
redetermination, we will not use the rules for determining whether 
disability continues set forth in Sec. 416.994 or Sec. 416.994a. (See 
Sec. 416.987.)
    (f) Impairment(s) means a medically determinable physical or mental 
impairment or a combination of medically determinable physical or mental 
impairments.
    (g) Laboratory findings means one or more anatomical, physiological, 
or psychological phenomena that can be shown by the use of medically 
acceptable laboratory diagnostic techniques. Diagnostic techniques 
include chemical tests (such as blood tests), electrophysiological 
studies (such as electrocardiograms and electroencephalograms), medical 
imaging (such as X-rays), and psychological tests.
    (h) Marked and severe functional limitations, when used as a phrase, 
means the standard of disability in the Social Security Act for children 
claiming SSI benefits based on disability. It is a level of severity 
that meets, medically equals, or functionally equals the listings. (See 
Secs. 416.906, 416.924, and 416.926a.) The words ``marked'' and 
``severe'' are also separate terms used throughout this subpart to 
describe measures of functional limitations; the term ``marked'' is also 
used in the listings. (See Secs. 416.924 and 416.926a.) The meaning of 
the words ``marked'' and ``severe'' when used as part of the phrase 
marked and severe functional

[[Page 871]]

limitations is not the same as the meaning of the separate terms 
``marked'' and ``severe'' used elsewhere in 404 and 416. (See 
Secs. 416.924(c) and 416.926a(e).)
    (i) Medical source means an individual who is licensed as a 
healthcare worker by a State and working within the scope of practice 
permitted under State or Federal law, or an individual who is certified 
by a State as a speech-language pathologist or a school psychologist and 
acting within the scope of practice permitted under State or Federal 
law.
    (j) Nonmedical source means a source of evidence who is not a 
medical source. This includes, but is not limited to:
    (1) You;
    (2) Educational personnel (for example, school teachers, counselors, 
early intervention team members, developmental center workers, and 
daycare center workers);
    (3) Public and private social welfare agency personnel; and
    (4) Family members, caregivers, friends, neighbors, employers, and 
clergy.
    (k) Objective medical evidence means signs, laboratory findings, or 
both.
    (l) Signs means one or more anatomical, physiological, or 
psychological abnormalities that can be observed, apart from your 
statements (symptoms). Signs must be shown by medically acceptable 
clinical diagnostic techniques. Psychiatric signs are medically 
demonstrable phenomena that indicate specific psychological 
abnormalities, e.g., abnormalities of behavior, mood, thought, memory, 
orientation, development, or perception and must also be shown by 
observable facts that can be medically described and evaluated.
    (m) State agency means an agency of a State designated by that State 
to carry out the disability or blindness determination function.
    (n) Symptoms means your own description of your physical or mental 
impairment.
    (o) The listings means the Listing of Impairments in appendix 1 of 
subpart P of part 404 of this chapter. When we refer to an impairment(s) 
that ``meets, medically equals, or functionally equals the listings,'' 
we mean that the impairment(s) meets or medically equals the severity of 
any listing in appendix 1 of subpart P of part 404 of this chapter, as 
explained in Secs. 416.925 and 416.926, or that it functionally equals 
the severity of the listings, as explained in Sec. 416.926a.
    (p) We or us means, as appropriate, either the Social Security 
Administration or the State agency making the disability or blindness 
determination.
    (q) You, your, me, my and I mean, as appropriate, the person who 
applies for benefits, the person for whom an application is filed, or 
the person who is receiving benefits based on disability or blindness.

[82 FR 5873, Jan. 18, 2017]

                             Determinations



Sec. 416.903  Who makes disability and blindness determinations.

    (a) State agencies. State agencies make disability and blindness 
determinations for the Commissioner for most persons living in the 
State. State agencies make these disability and blindness determinations 
under regulations containing performance standards and other 
administrative requirements relating to the disability and blindness 
determination function. States have the option of turning the function 
over to the Federal Government if they no longer want to make disability 
determinations. Also, the Commissioner may take the function away from 
any State which has substantially failed to make disability and 
blindness determinations in accordance with these regulations. Subpart J 
of this part contains the rules the States must follow in making 
disability and blindness determinations.
    (b) Social Security Administration. The Social Security 
Administration will make disability and blindness determinations for--
    (1) Any person living in a State which is not making for the 
Commissioner any disability and blindness determinations or which is not 
making those determinations for the class of claimants to which that 
person belongs; and
    (2) Any person living outside the United States.

[[Page 872]]

    (c) What determinations are authorized. The Commissioner has 
authorized the State agencies and the Social Security Administration to 
make determinations about--
    (1) Whether you are disabled or blind;
    (2) The date your disability or blindness began; and
    (3) The date your disability or blindness stopped.
    (d) Review of State agency determinations. On review of a State 
agency determination or redetermination of disability or blindness we 
may find that--
    (1) You are, or are not, disabled or blind, regardless of what the 
State agency found;
    (2) Your disability or blindness began earlier or later than the 
date found by the State agency; and
    (3) Your disability or blindness stopped earlier or later than the 
date found by the State agency.
    (e) Determinations for childhood impairments. In making a 
determination under title XVI with respect to the disability of a child, 
we will make reasonable efforts to ensure that a qualified pediatrician 
or other individual who specializes in a field of medicine appropriate 
to the child's impairment(s) evaluates the case of the child.

[46 FR 29211, May 29, 1981, as amended at 52 FR 33927, Sept. 9, 1987; 58 
FR 47577, Sept. 9, 1993; 62 FR 38454, July 18, 1997; 65 FR 34958, June 
1, 2000; 71 FR 16458, Mar. 31, 2006; 72 FR 51178, Sept. 6, 2007; 82 FR 
5874, Jan. 18, 2017]



Sec. 416.903a  Program integrity.

    We will not use in our program any individual or entity, except to 
provide existing medical evidence, who is currently excluded, suspended, 
or otherwise barred from participation in the Medicare or Medicaid 
programs, or any other Federal or Federally-assisted program; whose 
license to provide health care services is currently revoked or 
suspended by any State licensing authority pursuant to adequate due 
process procedures for reasons bearing on professional competence, 
professional conduct, or financial integrity; or who until a final 
determination is made has surrendered such a license while formal 
disciplinary proceedings involving professional conduct are pending. By 
individual or entity we mean a medical or psychological consultant, 
consultative examination provider, or diagnostic test facility. Also see 
Secs. 416.919 and 416.919g(b).

[56 FR 36963, Aug. 1, 1991]



Sec. 416.903b  Evidence from excluded medical sources of evidence.

    (a) General. We will not consider evidence from the following 
medical sources excluded under section 223(d)(5)(C)(i) of the Social 
Security Act (Act), as amended, unless we find good cause under 
paragraph (b) of this section:
    (1) Any medical source that has been convicted of a felony under 
section 208 or under section 1632 of the Act;
    (2) Any medical source that has been excluded from participation in 
any Federal health care program under section 1128 of the Act; or
    (3) Any medical source that has received a final decision imposing a 
civil monetary penalty or assessment, or both, for submitting false 
evidence under section 1129 of the Act.
    (b) Good cause. We may find good cause to consider evidence from an 
excluded medical source of evidence under section 223(d)(5)(C)(i) of the 
Act, as amended, if:
    (1) The evidence from the medical source consists of evidence of 
treatment that occurred before the date the source was convicted of a 
felony under section 208 or under section 1632 of the Act;
    (2) The evidence from the medical source consists of evidence of 
treatment that occurred during a period in which the source was not 
excluded from participation in any Federal health care program under 
section 1128 of the Act;
    (3) The evidence from the medical source consists of evidence of 
treatment that occurred before the date the source received a final 
decision imposing a civil monetary penalty or assessment, or both, for 
submitting false evidence under section 1129 of the Act;
    (4) The sole basis for the medical source's exclusion under section 
223(d)(5)(C)(i) of the Act, as amended, is that the source cannot 
participate in any Federal health care program under section 1128 of the 
Act, but the Office of Inspector General of the Department

[[Page 873]]

of Health and Human Services granted a waiver of the section 1128 
exclusion; or
    (5) The evidence is a laboratory finding about a physical impairment 
and there is no indication that the finding is unreliable.
    (c) Reporting requirements for excluded medical sources of evidence. 
Excluded medical sources of evidence (as described in paragraph (a) of 
this section) must inform us in writing that they are excluded under 
section 223(d)(5)(C)(i) of the Act, as amended, each time they submit 
evidence related to a claim for initial or continuing benefits under 
titles II or XVI of the Act. This reporting requirement applies to 
evidence that excluded medical sources of evidence submit to us either 
directly or through a representative, claimant, or other individual or 
entity.
    (1) Excluded medical sources of evidence must provide a written 
statement, which contains the following information:
    (i) A heading stating: ``WRITTEN STATEMENT REGARDING SECTION 
223(d)(5)(C) OF THE SOCIAL SECURITY ACT--DO NOT REMOVE''
    (ii) The name and title of the medical source;
    (iii) The applicable excluding event(s) stated in paragraph (a)(1)-
(a)(3) of this section;
    (iv) The date of the medical source's felony conviction under 
sections 208 or 1632 of the Act, if applicable;
    (v) The date of the imposition of a civil monetary penalty or 
assessment, or both, for the submission of false evidence, under section 
1129 of the Act, if applicable; and
    (vi) The basis, effective date, anticipated length of the exclusion, 
and whether the Office of the Inspector General of the Department of 
Health and Human Services waived the exclusion, if the excluding event 
was the medical source's exclusion from participation in any Federal 
health care program under section 1128 of the Act.
    (2) The written statement provided by an excluded medical source of 
evidence may not be removed by any individual or entity prior to 
submitting evidence to us.
    (3) We may request that the excluded medical source of evidence 
provide us with additional information or clarify any information 
submitted that bears on the medical source's exclusion(s) under section 
223(d)(5)(C)(i) of the Act, as amended.

[81 FR 65540, Sept. 23, 2016]



Sec. 416.904  Decisions by other governmental agencies and 
nongovernmental entities.

    Other governmental agencies and nongovernmental entities--such as 
the Department of Veterans Affairs, the Department of Defense, the 
Department of Labor, the Office of Personnel Management, State agencies, 
and private insurers--make disability, blindness, employability, 
Medicaid, workers' compensation, and other benefits decisions for their 
own programs using their own rules. Because a decision by any other 
governmental agency or a nongovernmental entity about whether you are 
disabled, blind, employable, or entitled to any benefits is based on its 
rules, it is not binding on us and is not our decision about whether you 
are disabled or blind under our rules. Therefore, in claims filed (see 
Sec. 416.325) on or after March 27, 2017, we will not provide any 
analysis in our determination or decision about a decision made by any 
other governmental agency or a nongovernmental entity about whether you 
are disabled, blind, employable, or entitled to any benefits. However, 
we will consider all of the supporting evidence underlying the other 
governmental agency or nongovernmental entity's decision that we receive 
as evidence in your claim in accordance with Sec. 416.913(a)(1) through 
(4).

[82 FR 5874, Jan. 18, 2017, as amended at 82 FR 15132, Mar. 27, 2017]

                        Definition of Disability



Sec. 416.905  Basic definition of disability for adults.

    (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 must have a 
severe impairment(s) that makes you unable

[[Page 874]]

to do your past relevant work (see Sec. 416.960(b)) or any other 
substantial gainful work that exists in the national economy. If your 
severe impairment(s) does not meet or medically equal a listing in 
appendix 1 to subpart P of part 404 of this chapter, we will assess your 
residual functional capacity as provided in Secs. 416.920(e) and 
416.945. (See Sec. 416.920(g)(2) and 416.962 for an exception to this 
rule.) We will use this residual functional capacity assessment to 
determine if you can do your past relevant work. If we find that you 
cannot do your past relevant work, we will use the same residual 
functional capacity assessment and your vocational factors of age, 
education, and work experience to determine if you can do other work. 
(See Sec. 416.920(h) for an exception to this rule.)
    (b) There are different rules for determining disability for 
individuals who are statutorily blind. We discuss these in Secs. 416.981 
through 416.985.

[45 FR 55621, Aug. 20, 1980, as amended at 56 FR 5553, Feb. 11, 1991; 68 
FR 51164, Aug. 26, 2003; 77 FR 43495, July 25, 2012]



Sec. 416.906  Basic definition of disability for children.

    If you are under age 18, we will consider you disabled if you have a 
medically determinable physical or mental impairment or combination of 
impairments that causes marked and severe functional limitations, and 
that can be expected to cause death or that has lasted or can be 
expected to last for a continuous period of not less than 12 months. 
Notwithstanding the preceding sentence, if you file a new application 
for benefits and you are engaging in substantial gainful activity, we 
will not consider you disabled. We discuss our rules for determining 
disability in children who file new applications in Secs. 416.924 
through 416.924b and Secs. 416.925 through 416.926a.

[62 FR 6421, Feb. 11, 1997, as amended at 65 FR 54777, Sept. 11, 2000]



Sec. 416.907  Disability under a State plan.

    You will also be considered disabled for payment of supplemental 
security income benefits if--
    (a) You were found to be permanently and totally disabled as defined 
under a State plan approved under title XIV or XVI of the Social 
Security Act, as in effect for October 1972;
    (b) You received aid under the State plan because of your disability 
for the month of December 1973 and for at least one month before July 
1973; and
    (c) You continue to be disabled as defined under the State plan.



Sec. 416.908  [Reserved]



Sec. 416.909  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.



Sec. 416.910  Meaning of substantial gainful activity.

    Substantial gainful activity means work that--
    (a) Involves doing significant and productive physical or mental 
duties; and
    (b) Is done (or intended) for pay or profit.

(See Sec. 416.972 for further details about what we mean by substantial 
gainful activity.)



Sec. 416.911  Definition of disabling impairment.

    (a) If you are an adult:
    (1) A disabling impairment is an impairment (or combination of 
impairments) which, of itself, is so severe that it meets or equals a 
set of criteria in the Listing of Impairments in appendix 1 of subpart P 
of part 404 of this chapter or which, when considered with your age, 
education and work experience, would result in a finding that you are 
disabled under Sec. 416.994, unless the disability redetermination rules 
in Sec. 416.987(b) apply to you.
    (2) If the disability redetermination rules in Sec. 416.987 apply to 
you, a disabling impairment is an impairment or combination of 
impairments that meets the requirements in Secs. 416.920 (c) through 
(f).
    (b) If you are a child, a disabling impairment is an impairment (or 
combination of impairments) that causes marked and severe functional 
limitations. This means that the impairment or combination of 
impairments:

[[Page 875]]

    (1) Must meet, medically equal, or functionally equal the listings, 
or
    (2) Would result in a finding that you are disabled under 
Sec. 416.994a.
    (c) In determining whether you have a disabling impairment, earnings 
are not considered.

[62 FR 6421, Feb. 11, 1997, as amended at 65 FR 54777, Sept. 11, 2000]

                                Evidence



Sec. 416.912  Responsibility for evidence.

    (a) Your responsibility--(1) General. In general, you have to prove 
to us that you are blind or disabled. You must inform us about or submit 
all evidence known to you that relates to whether or not you are blind 
or disabled (see Sec. 416.913). This duty is ongoing and requires you to 
disclose any additional related evidence about which you become aware. 
This duty applies at each level of the administrative review process, 
including the Appeals Council level if the evidence relates to the 
period on or before the date of the administrative law judge hearing 
decision. We will consider only impairment(s) you say you have or about 
which we receive evidence. When you submit evidence received from 
another source, you must submit that evidence in its entirety, unless 
you previously submitted the same evidence to us or we instruct you 
otherwise. If we ask you, you must inform us about:
    (i) Your medical source(s);
    (ii) Your age;
    (iii) Your education and training;
    (iv) Your work experience;
    (v) Your daily activities both before and after the date you say 
that you became disabled;
    (vi) Your efforts to work; and
    (vii) Any other factors showing how your impairment(s) affects your 
ability to work, or, if you are a child, your functioning. In 
Secs. 416.960 through 416.969, we discuss in more detail the evidence we 
need when we consider vocational factors.
    (2) Completeness. The evidence in your case record must be complete 
and detailed enough to allow us to make a determination or decision 
about whether you are disabled or blind. It must allow us to determine--
    (i) The nature and severity of your impairment(s) for any period in 
question;
    (ii) Whether the duration requirement described in Sec. 416.909 is 
met; and
    (iii) Your residual functional capacity to do work-related physical 
and mental activities, when the evaluation steps described in 
Secs. 416.920(e) or (f)(1) apply, or, if you are a child, how you 
typically function compared to children your age who do not have 
impairments.
    (3) Statutory blindness. If you are applying for benefits on the 
basis of statutory blindness, we will require an examination by a 
physician skilled in diseases of the eye or by an optometrist, whichever 
you may select.
    (b) Our responsibility--(1) Development. Before we make a 
determination that you are not disabled, we will develop your complete 
medical history for at least the 12 months preceding the month in which 
you file your application unless there is a reason to believe that 
development of an earlier period is necessary or unless you say that 
your disability began less than 12 months before you filed your 
application. We will make every reasonable effort to help you get 
medical evidence from your own medical sources and entities that 
maintain your medical sources' evidence when you give us permission to 
request the reports.
    (i) Every reasonable effort means that we will make an initial 
request for evidence from your medical source or entity that maintains 
your medical source's evidence, and, at any time between 10 and 20 
calendar days after the initial request, if the evidence has not been 
received, we will make one follow-up request to obtain the medical 
evidence necessary to make a determination. The medical source or entity 
that maintains your medical source's evidence will have a minimum of 10 
calendar days from the date of our follow-up request to reply, unless 
our experience with that source indicates that a longer period is 
advisable in a particular case.
    (ii) Complete medical history means the records of your medical 
source(s) covering at least the 12 months preceding the month in which 
you file your application. If you say that your disability

[[Page 876]]

began less than 12 months before you filed your application, we will 
develop your complete medical history beginning with the month you say 
your disability began unless we have reason to believe your disability 
began earlier.
    (2) Obtaining a consultative examination. We may ask you to attend 
one or more consultative examinations at our expense. See Secs. 416.917 
through 416.919t for the rules governing the consultative examination 
process. Generally, we will not request a consultative examination until 
we have made every reasonable effort to obtain evidence from your own 
medical sources. We may order a consultative examination while awaiting 
receipt of medical source evidence in some instances, such as when we 
know a source is not productive, is uncooperative, or is unable to 
provide certain tests or procedures. We will not evaluate this evidence 
until we have made every reasonable effort to obtain evidence from your 
medical sources.
    (3) Other work. In order to determine under Sec. 416.920(g) that you 
are able to adjust to other work, we must provide evidence about the 
existence of work in the national economy that you can do (see 
Secs. 416.960 through 416.969a), given your residual functional capacity 
(which we have already assessed, as described in Sec. 416.920(e)), age, 
education, and work experience.

[82 FR 5874, Jan. 18, 2017]



Sec. 416.913  Categories of evidence.

    (a) What we mean by evidence. Subject to the provisions of paragraph 
(b), evidence is anything you or anyone else submits to us or that we 
obtain that relates to your claim. We consider evidence under 
Secs. 416.920b, 416.920c (or under Sec. 416.927 for claims filed (see 
Sec. 416.325) before March 27, 2017). We evaluate evidence we receive 
according to the rules pertaining to the relevant category of evidence. 
The categories of evidence are:
    (1) Objective medical evidence. Objective medical evidence is 
medical signs, laboratory findings, or both, as defined in 
Sec. 416.902(k).
    (2) Medical opinion. A medical opinion is a statement from a medical 
source about what you can still do despite your impairment(s) and 
whether you have one or more impairment-related limitations or 
restrictions in the abilities listed in paragraphs (a)(2)(i)(A) through 
(D) and (a)(2)(ii)(A) through (F) of this section. (For claims filed 
(see Sec. 416.325) before March 27, 2017, see Sec. 416.927(a) for the 
definition of medical opinion.)
    (i) Medical opinions in adult claims are about impairment-related 
limitations and restrictions in:
    (A) Your ability to perform physical demands of work activities, 
such as sitting, standing, walking, lifting, carrying, pushing, pulling, 
or other physical functions (including manipulative or postural 
functions, such as reaching, handling, stooping, or crouching);
    (B) Your ability to perform mental demands of work activities, such 
as understanding; remembering; maintaining concentration, persistence, 
or pace; carrying out instructions; or responding appropriately to 
supervision, co-workers, or work pressures in a work setting;
    (C) Your ability to perform other demands of work, such as seeing, 
hearing, or using other senses; and
    (D) Your ability to adapt to environmental conditions, such as 
temperature extremes or fumes.
    (ii) Medical opinions in child claims are about impairment-related 
limitations and restrictions in your abilities in the six domains of 
functioning:
    (A) Acquiring and using information (see Sec. 416.926a(g));
    (B) Attending and completing tasks (see Sec. 416.926a(h));
    (C) Interacting and relating with others (see Sec. 416.926a(i));
    (D) Moving about and manipulating objects (see Sec. 416.926a(j));
    (E) Caring for yourself (see Sec. 416.926a(k)); and
    (F) Health and physical well-being (see Sec. 416.926a(l)).
    (3) Other medical evidence. Other medical evidence is evidence from 
a medical source that is not objective medical evidence or a medical 
opinion, including judgments about the nature and severity of your 
impairments, your medical history, clinical findings, diagnosis, 
treatment prescribed with response, or prognosis. (For claims filed (see 
Sec. 416.325) before March 27, 2017, other medical evidence does not 
include

[[Page 877]]

a diagnosis, prognosis, or a statement that reflects a judgment(s) about 
the nature and severity of your impairment(s)).
    (4) Evidence from nonmedical sources. Evidence from nonmedical 
sources is any information or statement(s) from a nonmedical source 
(including you) about any issue in your claim. We may receive evidence 
from nonmedical sources either directly from the nonmedical source or 
indirectly, such as from forms we receive and our administrative 
records.
    (5) Prior administrative medical finding. A prior administrative 
medical finding is a finding, other than the ultimate determination 
about whether you are disabled, about a medical issue made by our 
Federal and State agency medical and psychological consultants at a 
prior level of review (see Sec. 416.1400) in your current claim based on 
their review of the evidence in your case record, such as:
    (i) The existence and severity of your impairment(s);
    (ii) The existence and severity of your symptoms;
    (iii) Statements about whether your impairment(s) meets or medically 
equals any listing in the Listing of Impairments in Part 404, Subpart P, 
Appendix 1;
    (iv) If you are a child, statements about whether your impairment(s) 
functionally equals the listings in Part 404, Subpart P, Appendix 1;
    (v) If you are an adult, your residual functional capacity;
    (vi) Whether your impairment(s) meets the duration requirement; and
    (vii) How failure to follow prescribed treatment (see Sec. 416.930) 
and drug addiction and alcoholism (see Sec. 416.935) relate to your 
claim.
    (b) Exceptions for privileged communications.
    (1) The privileged communications listed in paragraphs (b)(1)(i) and 
(b)(1)(ii) of this section are not evidence, and we will neither 
consider nor provide any analysis about them in your determination or 
decision. This exception for privileged communications applies equally 
whether your representative is an attorney or a non-attorney.
    (i) Oral or written communications between you and your 
representative that are subject to the attorney-client privilege, unless 
you voluntarily disclose the communication to us.
    (ii) Your representative's analysis of your claim, unless he or she 
voluntarily discloses it to us. This analysis means information that is 
subject to the attorney work product doctrine, but it does not include 
medical evidence, medical opinions, or any other factual matter that we 
may consider in determining whether or not you are entitled to benefits 
(see paragraph (b)(2) of this section).
    (2) The attorney-client privilege generally protects confidential 
communications between an attorney and his or her client that are 
related to providing or obtaining legal advice. The attorney work 
product doctrine generally protects an attorney's analyses, theories, 
mental impressions, and notes. In the context of your disability claim, 
neither the attorney-client privilege nor the attorney work product 
doctrine allow you to withhold factual information, medical opinions, or 
other medical evidence that we may consider in determining whether or 
not you are entitled to benefits. For example, if you tell your 
representative about the medical sources you have seen, your 
representative cannot refuse to disclose the identity of those medical 
sources to us based on the attorney-client privilege. As another 
example, if your representative asks a medical source to complete an 
opinion form related to your impairment(s), symptoms, or limitations, 
your representative cannot withhold the completed opinion form from us 
based on the attorney work product doctrine. The attorney work product 
doctrine would not protect the source's opinions on the completed form, 
regardless of whether or not your representative used the form in his or 
her analysis of your claim or made handwritten notes on the face of the 
report.

[82 FR 5875, Jan. 18, 2017]

[[Page 878]]



Sec. 416.913a  Evidence from our Federal or State agency medical
or psychological consultants.

    The following rules apply to our Federal or State agency medical or 
psychological consultants that we consult in connection with 
administrative law judge hearings and Appeals Council reviews:
    (a) In claims adjudicated by the State agency, a State agency 
medical or psychological consultant may make the determination of 
disability together with a State agency disability examiner or provide 
medical evidence to a State agency disability examiner when the 
disability examiner makes the initial or reconsideration determination 
alone (see Sec. 416.1015(c) of this part). The following rules apply:
    (1) When a State agency medical or psychological consultant makes 
the determination together with a State agency disability examiner at 
the initial or reconsideration level of the administrative review 
process as provided in Sec. 416.1015(c)(1), he or she will consider the 
evidence in your case record and make administrative findings about the 
medical issues, including, but not limited to, the existence and 
severity of your impairment(s), the existence and severity of your 
symptoms, whether your impairment(s) meets or medically equals the 
requirements for any impairment listed in appendix 1 to this subpart, 
and your residual functional capacity. These administrative medical 
findings are based on the evidence in your case but are not in 
themselves evidence at the level of the administrative review process at 
which they are made. See Sec. 416.913(a)(5).
    (2) When a State agency disability examiner makes the initial 
determination alone as provided in Sec. 416.1015(c)(3), he or she may 
obtain medical evidence from a State agency medical or psychological 
consultant about one or more of the medical issues listed in paragraph 
(a)(1) of this section. In these cases, the State agency disability 
examiner will consider the medical evidence of the State agency medical 
or psychological consultant under Secs. 416.920b, 416.920c, and 416.927.
    (3) When a State agency disability examiner makes a reconsideration 
determination alone as provided in Sec. 416.1015(c)(3), he or she will 
consider prior administrative medical findings made by a State agency 
medical or psychological consultant at the initial level of the 
administrative review process, and any medical evidence provided by such 
consultants at the initial and reconsideration levels, about one or more 
of the medical issues listed in paragraph (a)(1)(i) of this section 
under Secs. 416.920b, 416.920c, and 416.927.
    (b) Administrative law judges are responsible for reviewing the 
evidence and making administrative findings of fact and conclusions of 
law. They will consider prior administrative medical findings and 
medical evidence from our Federal or State agency medical or 
psychological consultants as follows:
    (1) Administrative law judges are not required to adopt any prior 
administrative medical findings, but they must consider this evidence 
according to Secs. 416.920b, 416.920c, and 416.927, as appropriate, 
because our Federal or State agency medical or psychological consultants 
are highly qualified and experts in Social Security disability 
evaluation.
    (2) Administrative law judges may also ask for medical evidence from 
expert medical sources. Administrative law judges will consider this 
evidence under Secs. 416.920b, 416.920c, and 416.927, as appropriate.
    (c) When the Appeals Council makes a decision, it will consider 
prior administrative medical findings according to the same rules for 
considering prior administrative medical findings as administrative law 
judges follow under paragraph (b) of this section.

[82 FR 5876, Jan. 18, 2017]



Sec. 416.914  When we will purchase existing evidence.

    We need specific medical evidence to determine whether you are 
disabled or blind. We will pay for the medical evidence we request, if 
there is a charge. We will also be responsible for the cost of medical 
evidence we ask you to get.



Sec. 416.915  Where and how to submit evidence.

    You may give us evidence about your impairment at any of our offices 
or at

[[Page 879]]

the office of any State agency authorized to make disability or 
blindness determinations. You may also give evidence to one of our 
employees authorized to accept evidence at another place. For more 
information about this, see subpart C of this part.



Sec. 416.916  If you fail to submit medical and other evidence.

    You (and if you are a child, your parent, guardian, relative, or 
other person acting on your behalf) must co-operate in furnishing us 
with, or in helping us to obtain or identify, available medical or other 
evidence about your impairment(s). When you fail to cooperate with us in 
obtaining evidence, we will have to make a decision based on information 
available in your case. We will not excuse you from giving us evidence 
because you have religious or personal reasons against medical 
examinations, tests, or treatment.

[58 FR 47577, Sept. 9, 1993]



Sec. 416.917  Consultative examination at our expense.

    If your medical sources cannot or will not give us sufficient 
medical evidence about your impairment for us to determine whether you 
are disabled or blind, we may ask you to have one or more physical or 
mental examinations or tests. We will pay for these examinations. 
However, we will not pay for any medical examination arranged by you or 
your representative without our advance approval. If we arrange for the 
examination or test, we will give you reasonable notice of the date, 
time, and place the examination or test will be given, and the name of 
the person or facility who will do it. We will also give the examiner 
any necessary background information about your condition.

[56 FR 36964, Aug. 1, 1991]



Sec. 416.918  If you do not appear at a consultative examination.

    (a) General. If you are applying for benefits and do not have a good 
reason for failing or refusing to take part in a consultative 
examination or test which we arrange for you to get information we need 
to determine your disability or blindness, we may find that you are not 
disabled or blind. If you are already receiving benefits and do not have 
a good reason for failing or refusing to take part in a consultative 
examination or test which we arranged for you, we may determine that 
your disability or blindness has stopped because of your failure or 
refusal. Therefore, if you have any reason why you cannot go for the 
scheduled appointment, you should tell us about this as soon as possible 
before the examination date. If you have a good reason, we will schedule 
another examination. We will consider your physical, mental, 
educational, and linguistic limitations (including any lack of facility 
with the English language) when determining if you have a good reason 
for failing to attend a consultative examination.
    (b) Examples of good reasons for failure to appear. Some examples of 
what we consider good reasons for not going to a scheduled examination 
include--
    (1) Illness on the date of the scheduled examination or test;
    (2) Not receiving timely notice of the scheduled examination or 
test, or receiving no notice at all;
    (3) Being furnished incorrect or incomplete information, or being 
given incorrect information about the physician involved or the time or 
place of the examination or test, or;
    (4) Having had death or serious illness occur in your immediate 
family.
    (c) Objections by your medical source(s). If any of your medical 
sources tell you that you should not take the examination or test, you 
should tell us at once. In many cases, we may be able to get the 
information we need in another way. Your medical source(s) may agree to 
another type of examination for the same purpose.

[45 FR 55621, Aug. 20, 1980, as amended at 59 FR 1636, Jan. 12, 1994; 82 
FR 5877, Jan. 18, 2017]

Standards To Be Used in Determining When a Consultative Examination Will 
        Be Obtained in Connection With Disability Determinations



Sec. 416.919  The consultative examination.

    A consultative examination is a physical or mental examination or 
test

[[Page 880]]

purchased for you at our request and expense from a treating source or 
another medical source, including a pediatrician when appropriate. The 
decision to purchase a consultative examination will be made on an 
individual case basis in accordance with the provisions of Sec. 416.919a 
through Sec. 416.919f. Selection of the source for the examination will 
be consistent with the provisions of Sec. 416.903a and Secs. 416.919g 
through 416.919j. The rules and procedures for requesting consultative 
examinations set forth in Secs. 416.919a and 416.919b are applicable at 
the reconsideration and hearing levels of review, as well as the initial 
level of determination.

[56 FR 36964, Aug. 1, 1991, as amended at 65 FR 11879, Mar. 7, 2000]



Sec. 416.919a  When we will purchase a consultative examination and how we will use it.

    (a) General. If we cannot get the information we need from your 
medical sources, we may decide to purchase a consultative examination. 
See Sec. 416.912 for the procedures we will follow to obtain evidence 
from your medical sources and Sec. 416.920b for how we consider 
evidence. Before purchasing a consultative examination, we will consider 
not only existing medical reports, but also the disability interview 
form containing your allegations as well as other pertinent evidence in 
your file.
    (b) Situations that may require a consultative examination. We may 
purchase a consultative examination to try to resolve an inconsistency 
in the evidence or when the evidence as a whole is insufficient to 
support a determination or decision on your claim. Some examples of when 
we might purchase a consultative examination to secure needed medical 
evidence, such as clinical findings, laboratory tests, a diagnosis, or 
prognosis, include but are not limited to:
    (1) The additional evidence needed is not contained in the records 
of your medical sources;
    (2) The evidence that may have been available from your treating or 
other medical sources cannot be obtained for reasons beyond your 
control, such as death or noncooperation of a medical source;
    (3) Highly technical or specialized medical evidence that we need is 
not available from your treating or other medical sources; or
    (4) There is an indication of a change in your condition that is 
likely to affect your ability to work, or, if you are a child, your 
functioning, but the current severity of your impairment is not 
established.

[56 FR 36964, Aug. 1, 1991, as amended at 62 FR 6421, Feb. 11, 1997; 77 
FR 10656, Feb. 23, 2012]



Sec. 416.919b  When we will not purchase a consultative examination.

    We will not purchase a consultative examination in situations 
including, but not limited to, the following situations:
    (a) When any issues about your actual performance of substantial 
gainful activity have not been resolved;
    (b) When you do not meet all of the nondisability requirements.

[56 FR 36965, Aug. 1, 1991]

        Standards for the Type of Referral and for Report Content



Sec. 416.919f  Type of purchased examinations.

    We will purchase only the specific examinations and tests we need to 
make a determination in your claim. For example, we will not authorize a 
comprehensive medical examination when the only evidence we need is a 
special test, such as an X-ray, blood studies, or an electrocardiogram.

[56 FR 36965, Aug. 1, 1991]



Sec. 416.919g  Who we will select to perform a consultative examination.

    (a) We will purchase a consultative examination only from a 
qualified medical source. The medical source may be your own medical 
source or another medical source. If you are a child, the medical source 
we choose may be a pediatrician.
    (b) By ``qualified,'' we mean that the medical source must be 
currently licensed in the State and have the training and experience to 
perform the type of examination or test we will request; the medical 
source must not be barred from participation in our programs

[[Page 881]]

under the provisions of Sec. 416.903a. The medical source must also have 
the equipment required to provide an adequate assessment and record of 
the existence and level of severity of your alleged impairments.
    (c) The medical source we choose may use support staff to help 
perform the consultative examination. Any such support staff (e.g., X-
ray technician, nurse) must meet appropriate licensing or certification 
requirements of the State. See Sec. 416.903a.

[56 FR 36965, Aug. 1, 1991, as amended at 65 FR 11879, Mar. 7, 2000; 82 
FR 5877, Jan. 18, 2017]



Sec. 416.919h  Your medical source.

    When, in our judgment, your medical source is qualified, equipped, 
and willing to perform the additional examination or test(s) for the fee 
schedule payment, and generally furnishes complete and timely reports, 
your medical source will be the preferred source for the purchased 
examination or test(s).

[82 FR 5877, Jan. 18, 2017]



Sec. 416.919i  Other sources for consultative examinations.

    We will use a different medical source than your medical source for 
a purchased examination or test in situations including, but not limited 
to, the following:
    (a) Your medical source prefers not to perform such an examination 
or does not have the equipment to provide the specific data needed;
    (b) There are conflicts or inconsistencies in your file that cannot 
be resolved by going back to your medical source;
    (c) You prefer a source other than your medical source and have a 
good reason for your preference;
    (d) We know from prior experience that your medical source may not 
be a productive source, such as when he or she has consistently failed 
to provide complete or timely reports; or
    (e) Your medical source is not a qualified medical source as defined 
in Sec. 416.919g.

[82 FR 5877, Jan, 18, 2017]



Sec. 416.919j  Objections to the medical source designated to perform 
the consultative examination.

    You or your representative may object to your being examined by a 
medical source we have designated to perform a consultative examination. 
If there is a good reason for the objection, we will schedule the 
examination with another medical source. A good reason may be that the 
medical source we designated had previously represented an interest 
adverse to you. For example, the medical source may have represented 
your employer in a workers' compensation case or may have been involved 
in an insurance claim or legal action adverse to you. Other things we 
will consider include: The presence of a language barrier, the medical 
source's office location (e.g., 2nd floor, no elevator), travel 
restrictions, and whether the medical source had examined you in 
connection with a previous disability determination or decision that was 
unfavorable to you. If your objection is that a medical source allegedly 
``lacks objectivity'' in general, but not in relation to you personally, 
we will review the allegations. See Sec. 416.919s. To avoid a delay in 
processing your claim, the consultative examination in your case will be 
changed to another medical source while a review is being conducted. We 
will handle any objection to use of the substitute medical source in the 
same manner. However, if we had previously conducted such a review and 
found that the reports of the medical source in question conformed to 
our guidelines, we will not change your examination.

[65 FR 11879, Mar. 7, 2000]



Sec. 416.919k  Purchase of medical examinations, laboratory tests,
and other services.

    We may purchase medical examinations, including psychiatric and 
psychological examinations, X-rays and laboratory tests (including 
specialized tests, such as pulmonary function studies, 
electrocardiograms, and stress tests) from a medical source.
    (a) The rate of payment for purchasing medical or other services 
necessary to make determinations of disability may not exceed the 
highest rate paid by Federal or public agencies in

[[Page 882]]

the State for the same or similar types of service. See Secs. 416.1024 
and 416.1026 of this part.
    (b) If a physician's bill, or a request for payment for a 
physician's services, includes a charge for a laboratory test for which 
payment may be made under this part, the amount payable with respect to 
the test shall be determined as follows:
    (1) If the bill or request for payment indicates that the test was 
personally performed or supervised by the physician who submitted the 
bill (or for whose services the request for payment was made) or by 
another physician with whom that physician shares his or her practice, 
the payment will be based on the physician's usual and customary charge 
for the test or the rates of payment which the State uses for purchasing 
such services, whichever is the lesser amount.
    (2) If the bill or request for payment indicates that the test was 
performed by an independent laboratory, the amount of reimbursement will 
not exceed the billed cost of the independent laboratory or the rate of 
payment which the State uses for purchasing such services, whichever is 
the lesser amount. A nominal payment may be made to the physician for 
collecting, handling and shipping a specimen to the laboratory if the 
physician bills for such a service. The total reimbursement may not 
exceed the rate of payment which the State uses for purchasing such 
services.
    (c) The State will assure that it can support the rate of payment it 
uses. The State shall also be responsible for monitoring and overseeing 
the rate of payment it uses to ensure compliance with paragraphs (a) and 
(b) of this section.

[56 FR 36965, Aug. 1, 1991, as amended at 65 FR 11879, Mar. 7, 2000; 71 
FR 16459, Mar. 31, 2006; 76 FR 24810, May 3, 2011]



Sec. 416.919m  Diagnostic tests or procedures.

    We will request the results of any diagnostic tests or procedures 
that have been performed as part of a workup by your treating source or 
other medical source and will use the results to help us evaluate 
impairment severity or prognosis. However, we will not order diagnostic 
tests or procedures that involve significant risk to you, such as 
myelograms, arteriograms, or cardiac catheterizations for the evaluation 
of disability under the Supplemental Security Income program. A State 
agency medical consultant must approve the ordering of any diagnostic 
test or procedure when there is a chance it may involve significant 
risk. The responsibility for deciding whether to perform the examination 
rests with the medical source designated to perform the consultative 
examination.

[56 FR 36966, Aug. 1, 1991, as amended at 65 FR 11879, Mar. 7, 2000; 71 
FR 16459, Mar. 31, 2006; 76 FR 24810, May 3, 2011]



Sec. 416.919n  Informing the medical source of examination scheduling, 
report content, and signature requirements.

    The medical sources who perform consultative examinations will have 
a good understanding of our disability programs and their evidentiary 
requirements. They will be made fully aware of their responsibilities 
and obligations regarding confidentiality as described in 
Sec. 401.105(e). We will fully inform medical sources who perform 
consultative examinations at the time we first contact them, and at 
subsequent appropriate intervals, of the following obligations:
    (a) Scheduling. In scheduling full consultative examinations, 
sufficient time should be allowed to permit the medical source to take a 
case history and perform the examination, including any needed tests. 
The following minimum scheduling intervals (i.e., time set aside for the 
individual, not the actual duration of the consultative examination) 
should be used.
    (1) Comprehensive general medical examination--at least 30 minutes;
    (2) Comprehensive musculoskeletal or neurological examination--at 
least 20 minutes;
    (3) Comprehensive psychiatric examination--at least 40 minutes;
    (4) Psychological examination--at least 60 minutes (Additional time 
may be required depending on types of psychological tests administered); 
and
    (5) All others--at least 30 minutes, or in accordance with accepted 
medical practices.

[[Page 883]]


We recognize that actual practice will dictate that some examinations 
may require longer scheduling intervals depending on the circumstances 
in a particular situation. We also recognize that these minimum 
intervals may have to be adjusted to allow for those claimants that do 
not attend their scheduled examination. The purpose of these minimum 
scheduling timeframes is to ensure that such examinations are complete 
and that sufficient time is made available to obtain the information 
needed to make an accurate determination in your case. State agencies 
will monitor the scheduling of examinations (through their normal 
consultative examination oversight activities) to ensure that any 
overscheduling is avoided, as overscheduling may lead to examinations 
that are not thorough.
    (b) Report content. The reported results of your medical history, 
examination, requested laboratory findings, discussions and conclusions 
must conform to accepted professional standards and practices in the 
medical field for a complete and competent examination. The facts in a 
particular case and the information and findings already reported in the 
medical and other evidence of record will dictate the extent of detail 
needed in the consultative examination report for that case. Thus, the 
detail and format for reporting the results of a purchased examination 
will vary depending upon the type of examination or testing requested. 
The reporting of information will differ from one type of examination to 
another when the requested examination relates to the performance of 
tests such as ventilatory function tests, treadmill exercise tests, or 
audiological tests. The medical report must be complete enough to help 
us determine the nature, severity, and duration of the impairment, and 
your residual functional capacity (if you are an adult) or your 
functioning (if you are a child). The report should reflect your 
statement of your symptoms, not simply the medical source's statements 
or conclusions. The medical source's report of the consultative 
examination should include the objective medical facts as well as 
observations and opinions.
    (c) Elements of a complete consultative examination. A complete 
consultative examination is one which involves all the elements of a 
standard examination in the applicable medical specialty. When the 
report of a complete consultative examination is involved, the report 
should include the following elements:
    (1) Your major or chief complaint(s);
    (2) A detailed description, within the area of specialty of the 
examination, of the history of your major complaint(s);
    (3) A description, and disposition, of pertinent ``positive'' and 
``negative'' detailed findings based on the history, examination and 
laboratory tests related to the major complaint(s), and any other 
abnormalities or lack thereof reported or found during examination or 
laboratory testing;
    (4) The results of laboratory and other tests (e.g., X-rays) 
performed according to the requirements stated in the Listing of 
Impairments (see appendix 1 of subpart P of part 404 of this chapter);
    (5) The diagnosis and prognosis for your impairment(s);
    (6) A medical opinion. Although we will ordinarily request a medical 
opinion as part of the consultative examination process, the absence of 
a medical opinion in a consultative examination report will not make the 
report incomplete. See Sec. 416.913(a)(3); and
    (7) In addition, the medical source will consider, and provide some 
explanation or comment on, your major complaint(s) and any other 
abnormalities found during the history and examination or reported from 
the laboratory tests. The history, examination, evaluation of laboratory 
test results, and the conclusions will represent the information 
provided by the medical source who signs the report.
    (d) When a complete consultative examination is not required. When 
the evidence we need does not require a complete consultative 
examination (for example, we need only a specific laboratory test result 
to complete the record), we may not require a report containing all of 
the elements in paragraph (c).
    (e) Signature requirements. All consultative examination reports 
will be personally reviewed and signed by the medical source who 
actually performed the examination. This attests to the

[[Page 884]]

fact that the medical source doing the examination or testing is solely 
responsible for the report contents and for the conclusions, 
explanations or comments provided with respect to the history, 
examination and evaluation of laboratory test results. The signature of 
the medical source on a report annotated ``not proofed'' or ``dictated 
but not read'' is not acceptable. A rubber stamp signature of a medical 
source or the medical source's signature entered by any other person is 
not acceptable.

[56 FR 36966, Aug. 1, 1991, as amended at 62 FR 6421, Feb. 11, 1997; 62 
FR 13733, Mar. 21, 1997; 65 FR 11879, Mar. 7, 2000; 65 FR 54778, Sept. 
11, 2000; 82 FR 5877, Jan. 18, 2017]



Sec. 416.919o  When a properly signed consultative examination report
has not been received.

    If a consultative examination report is received unsigned or 
improperly signed we will take the following action.
    (a) When we will make determinations and decisions without a 
properly signed report. We will make a determination or decision in the 
circumstances specified in paragraphs (a)(1) and (a)(2) of this section 
without waiting for a properly signed consultative examination report. 
After we have made the determination or decision, we will obtain a 
properly signed report and include it in the file unless the medical 
source who performed the original consultative examination has died:
    (1) Continuous period of disability allowance with an onset date as 
alleged or earlier than alleged; or
    (2) Continuance of disability.
    (b) When we will not make determinations and decisions without a 
properly signed report. We will not use an unsigned or improperly signed 
consultative examination report to make the determinations or decisions 
specified in paragraphs (b)(1), (b)(2), (b)(3), and (b)(4) of this 
section. When we need a properly signed consultative examination report 
to make these determinations or decisions, we must obtain such a report. 
If the signature of the medical source who performed the original 
examination cannot be obtained because the medical source is out of the 
country for an extended period of time, or on an extended vacation, 
seriously ill, deceased, or for any other reason, the consultative 
examination will be rescheduled with another medical source:
    (1) Denial; or
    (2) Cessation; or
    (3) Allowance of disability which has ended; or
    (4) Allowance with an onset date later than the filing date.

[56 FR 36967, Aug. 1, 1991, as amended at 65 FR 11880, Mar. 7, 2000]



Sec. 416.919p  Reviewing reports of consultative examinations.

    (a) We will review the report of the consultative examination to 
determine whether the specific information requested has been furnished. 
We will consider the following factors in reviewing the report:
    (1) Whether the report provides evidence which serves as an adequate 
basis for decisionmaking in terms of the impairment it assesses;
    (2) Whether the report is internally consistent; Whether all the 
diseases, impairments and complaints described in the history are 
adequately assessed and reported in the clinical findings; Whether the 
conclusions correlate the findings from your medical history, clinical 
examination and laboratory tests and explain all abnormalities;
    (3) Whether the report is consistent with the other information 
available to us within the specialty of the examination requested; 
Whether the report fails to mention an important or relevant complaint 
within that specialty that is noted in other evidence in the file (e.g., 
your blindness in one eye, amputations, pain, alcoholism, depression);
    (4) Whether this is an adequate report of examination as compared to 
standards set out in the course of a medical education; and
    (5) Whether the report is properly signed.
    (b) If the report is inadequate or incomplete, we will contact the 
medical source who performed the consultative examination, give an 
explanation of our evidentiary needs, and ask that the medical source 
furnish the missing information or prepare a revised report.

[[Page 885]]

    (c) With your permission, or when the examination discloses new 
diagnostic information or test results that reveal a potentially life-
threatening situation, we will refer the consultative examination report 
to your treating source. When we refer the consultative examination 
report to your treating source without your permission, we will notify 
you that we have done so.
    (d) We will perform ongoing special management studies on the 
quality of consultative examinations purchased from major medical 
sources and the appropriateness of the examinations authorized.
    (e) We will take steps to ensure that consultative examinations are 
scheduled only with medical sources who have access to the equipment 
required to provide an adequate assessment and record of the existence 
and level of severity of your alleged impairments.

[56 FR 36967, Aug. 1, 1991, as amended at 65 FR 11880, Mar. 7, 2000]



Sec. 416.919q  Conflict of interest.

    All implications of possible conflict of interest between medical or 
psychological consultants and their medical or psychological practices 
will be avoided. Such consultants are not only those physicians and 
psychologists who work for us directly but are also those who do review 
and adjudication work in the State agencies. Physicians and 
psychologists who work for us directly as employees or under contract 
will not work concurrently for a State agency. Physicians and 
psychologists who do review work for us will not perform consultative 
examinations for us without our prior approval. In such situations, the 
physician or psychologist will disassociate himself or herself from 
further involvement in the case and will not participate in the 
evaluation, decision, or appeal actions. In addition, neither they, nor 
any member of their families, will acquire or maintain, either directly 
or indirectly, any financial interest in a medical partnership, 
corporation, or similar relationship in which consultative examinations 
are provided. Sometimes physicians and psychologists who do review work 
for us will have prior knowledge of a case; for example, when the 
claimant was a patient. Where this is so, the physician or psychologist 
will not participate in the review or determination of the case. This 
does not preclude the physician or psychologist from submitting medical 
evidence based on treatment or examination of the claimant.

[56 FR 36967, Aug. 1, 1991]

             Authorizing and Monitoring the Referral Process



Sec. 416.919s  Authorizing and monitoring the consultative examination.

    (a) Day-to-day responsibility for the consultative examination 
process rests with the State agencies that make disability 
determinations for us.
    (b) The State agency will maintain a good working relationship with 
the medical community in order to recruit sufficient numbers of 
physicians and other providers of medical services to ensure ready 
availability of consultative examination providers.
    (c) Consistent with Federal and State laws, the State agency 
administrator will work to achieve appropriate rates of payment for 
purchased medical services.
    (d) Each State agency will be responsible for comprehensive 
oversight management of its consultative examination program, with 
special emphasis on key providers.
    (e) A key consultative examination provider is a provider that meets 
at least one of the following conditions:
    (1) Any consultative examination provider with an estimated annual 
billing to the disability programs we administer of at least $150,000; 
or
    (2) Any consultative examination provider with a practice directed 
primarily towards evaluation examinations rather than the treatment of 
patients; or
    (3) Any consultative examination provider that does not meet the 
above criteria, but is one of the top five consultative examination 
providers in the State by dollar volume, as evidenced by prior year 
data.
    (f) State agencies have flexibility in managing their consultative 
examination programs, but at a minimum will provide:
    (1) An ongoing active recruitment program for consultative 
examination providers;

[[Page 886]]

    (2) A process for orientation, training, and review of new 
consultative examination providers, with respect to SSA's program 
requirements involving consultative examination report content and not 
with respect to medical techniques;
    (3) Procedures for control of scheduling consultative examinations;
    (4) Procedures to ensure that close attention is given to specific 
evaluation issues involved in each case;
    (5) Procedures to ensure that only required examinations and tests 
are authorized in accordance with the standards set forth in this 
subpart;
    (6) Procedures for providing medical or supervisory approval for the 
authorization or purchase of consultative examinations and for 
additional tests or studies requested by consulting medical sources. 
This includes physician approval for the ordering of any diagnostic test 
or procedure where the question of significant risk to the claimant/
beneficiary might be raised. See Sec. 416.919m.
    (7) procedures for the ongoing review of consultative examination 
results to ensure compliance with written guidelines;
    (8) Procedures to encourage active participation by physicians and 
psychologists in the consultative examination oversight program;
    (9) Procedures for handling complaints;
    (10) Procedures for evaluating claimant reactions to key providers; 
and
    (11) A program of systematic, onsite reviews of key providers that 
will include annual onsite reviews of such providers when claimants are 
present for examinations. This provision does not contemplate that such 
reviews will involve participation in the actual examinations but, 
rather, offer an opportunity to talk with claimants at the provider's 
site before and after the examination and to review the provider's 
overall operation.
    (g) The State agencies will cooperate with us when we conduct 
monitoring activities in connection with their oversight management of 
their consultative examination programs.

[56 FR 36967, Aug. 1, 1991, as amended at 65 FR 11880, Mar. 7, 2000; 71 
FR 16459, Mar. 31, 2006; 75 FR 32846, June 10, 2010; 76 FR 24810, May 3, 
2011]

           Procedures To Monitor the Consultative Examination



Sec. 416.919t  Consultative examination oversight.

    (a) We will ensure that referrals for consultative examinations and 
purchases of consultative examinations are made in accordance with our 
policies. We will also monitor both the referral processes and the 
product of the consultative examinations obtained. This monitoring may 
include reviews by independent medical specialists under direct contract 
with SSA.
    (b) Through our regional offices, we will undertake periodic 
comprehensive reviews of each State agency to evaluate each State's 
management of the consultative examination process. The review will 
involve visits to key providers, with State staff participating, 
including a program physician when the visit will deal with medical 
techniques or judgment, or factors that go to the core of medical 
professionalism.
    (c) We will also perform ongoing special management studies of the 
quality of consultative examinations purchased from key providers and 
other sources and the appropriateness of the examinations authorized.

[56 FR 36968, Aug. 1, 1991]

                        Evaluation of Disability



Sec. 416.920  Evaluation of disability of adults, in general.

    (a) General--(1) Purpose of this section. This section explains the 
five-step sequential evaluation process we use to decide whether you are 
disabled, as defined in Sec. 416.905.
    (2) Applicability of these rules. These rules apply to you if you 
are age 18 or older and you file an application for Supplemental 
Security Income disability benefits.
    (3) Evidence considered. We will consider all evidence in your case 
record

[[Page 887]]

when we make a determination or decision whether you are disabled. See 
Sec. 416.920b.
    (4) The five-step sequential evaluation process. The sequential 
evaluation process is a series of five ``steps'' that we follow in a set 
order. See paragraph (h) of this section for an exception to this rule. 
If we can find that you are disabled or not disabled at a step, we make 
our determination or decision and we do not go on to the next step. If 
we cannot find that you are disabled or not disabled at a step, we go on 
to the next step. Before we go from step three to step four, we assess 
your residual functional capacity. (See paragraph (e) of this section.) 
We use this residual functional capacity assessment at both step four 
and at step five when we evaluate your claim at these steps. These are 
the five steps we follow:
    (i) At the first step, we consider your work activity, if any. If 
you are doing substantial gainful activity, we will find that you are 
not disabled. (See paragraph (b) of this section.)
    (ii) At the second step, we consider the medical severity of your 
impairment(s). If you do not have a severe medically determinable 
physical or mental impairment that meets the duration requirement in 
Sec. 416.909, or a combination of impairments that is severe and meets 
the duration requirement, we will find that you are not disabled. (See 
paragraph (c) of this section.)
    (iii) At the third step, we also consider the medical severity of 
your impairment(s). If you have an impairment(s) that meets or equals 
one of our listings in appendix 1 to subpart P of part 404 of this 
chapter and meets the duration requirement, we will find that you are 
disabled. (See paragraph (d) of this section.)
    (iv) At the fourth step, we consider our assessment of your residual 
functional capacity and your past relevant work. If you can still do 
your past relevant work, we will find that you are not disabled. See 
paragraphs (f) and (h) of this section and Sec. 416.960(b).
    (v) At the fifth and last step, we consider our assessment of your 
residual functional capacity and your age, education, and work 
experience to see if you can make an adjustment to other work. If you 
can make an adjustment to other work, we will find that you are not 
disabled. If you cannot make an adjustment to other work, we will find 
that you are disabled. See paragraphs (g) and (h) of this section and 
Sec. 416.960(c).
    (5) When you are already receiving disability benefits. If you are 
already receiving disability benefits, we will use a different 
sequential evaluation process to decide whether you continue to be 
disabled. We explain this process in Sec. 416.994(b)(5).
    (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 impairments 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.
    (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 
impairment(s), we will find you disabled without considering your age, 
education, and work experience.
    (e) When your impairment(s) does not meet or equal a listed 
impairment. If your impairment(s) does not meet or equal a listed 
impairment, we will assess and make a finding about your residual 
functional capacity based on all the relevant medical and other evidence 
in your case record, as explained in Sec. 416.945. (See paragraph (g)(2) 
of this section and Sec. 416.962 for an exception to this rule.) We use 
our residual functional capacity assessment at the fourth step of the 
sequential evaluation process to determine if you can do your past 
relevant work (paragraph (f) of this section) and at the fifth step of 
the sequential evaluation process (if the evaluation proceeds to this 
step) to determine if you can adjust to other work (paragraph (g) of 
this section).
    (f) Your impairment(s) must prevent you from doing your past 
relevant work. If we

[[Page 888]]

cannot make a determination or decision at the first three steps of the 
sequential evaluation process, we will compare our residual functional 
capacity assessment, which we made under paragraph (e) of this section, 
with the physical and mental demands of your past relevant work. See 
paragraph (h) of this section and Sec. 416.960(b). If you can still do 
this kind of work, we will find that you are not disabled.
    (g) Your impairment(s) must prevent you from making an adjustment to 
any other work. (1) If we find that you cannot do your past relevant 
work because you have a severe impairment(s) (or you do not have any 
past relevant work), we will consider the same residual functional 
capacity assessment we made under paragraph (e) of this section, 
together with your vocational factors (your age, education, and work 
experience) to determine if you can make an adjustment to other work. 
(See Sec. 416.960(c).) If you can make an adjustment to other work, we 
will find you not disabled. If you cannot, we will find you disabled.
    (2) We use different rules if you meet one of the two special 
medical-vocational profiles described in Sec. 416.962. If you meet one 
of those profiles, we will find that you cannot make an adjustment to 
other work, and that you are disabled.
    (h) Expedited process. If we do not find you disabled at the third 
step, and we do not have sufficient evidence about your past relevant 
work to make a finding at the fourth step, we may proceed to the fifth 
step of the sequential evaluation process. If we find that you can 
adjust to other work based solely on your age, education, and the same 
residual functional capacity assessment we made under paragraph (e) of 
this section, we will find that you are not disabled and will not make a 
finding about whether you can do your past relevant work at the fourth 
step. If we find that you may be unable to adjust to other work or if 
Sec. 416.962 may apply, we will assess your claim at the fourth step and 
make a finding about whether you can perform your past relevant work. 
See paragraph (g) of this section and Sec. 416.960(c).

[50 FR 8728, Mar. 5, 1985; 50 FR 19164, May 7, 1985, as amended at 56 FR 
5554, Feb. 11, 1991; 56 FR 36968, Aug. 1, 1991; 65 FR 80308, Dec. 21, 
2000; 68 FR 51164, Aug. 26, 2003; 77 FR 10656, Feb. 23, 2012; 77 FR 
43495, July 25, 2012]



Sec. 416.920a  Evaluation of mental impairments.

    (a) General. The steps outlined in Secs. 416.920 and 416.924 apply 
to the evaluation of physical and mental impairments. In addition, when 
we evaluate the severity of mental impairments for adults (persons age 
18 and over) and in persons under age 18 when Part A of the Listing of 
Impairments is used, we must follow a special technique at each level in 
the administrative review process. We describe this special technique in 
paragraphs (b) through (e) of this section. Using this technique helps 
us:
    (1) Identify the need for additional evidence to determine 
impairment severity;
    (2) Consider and evaluate functional consequences of the mental 
disorder(s) relevant to your ability to work; and
    (3) Organize and present our findings in a clear, concise, and 
consistent manner.
    (b) Use of the technique. (1) Under the special technique, we must 
first evaluate your pertinent symptoms, signs, and laboratory findings 
to determine whether you have a medically determinable mental 
impairment(s). See Sec. 416.921 for more information about what is 
needed to show a medically determinable impairment. If we determine that 
you have a medically determinable mental impairment(s), we must specify 
the symptoms, signs, and laboratory findings that substantiate the 
presence of the impairment(s) and document our findings in accordance 
with paragraph (e) of this section.
    (2) We must then rate the degree of functional limitation resulting 
from the impairment(s) in accordance with paragraph (c) of this section 
and record our findings as set out in paragraph (e) of this section.
    (c) Rating the degree of functional limitation. (1) Assessment of 
functional limitations is a complex and highly individualized process 
that requires us to

[[Page 889]]

consider multiple issues and all relevant evidence to obtain a 
longitudinal picture of your overall degree of functional limitation. We 
will consider all relevant and available clinical signs and laboratory 
findings, the effects of your symptoms, and how your functioning may be 
affected by factors including, but not limited to, chronic mental 
disorders, structured settings, medication, and other treatment.
    (2) We will rate the degree of your functional limitation based on 
the extent to which your impairment(s) interferes with your ability to 
function independently, appropriately, effectively, and on a sustained 
basis. Thus, we will consider such factors as the quality and level of 
your overall functional performance, any episodic limitations, the 
amount of supervision or assistance you require, and the settings in 
which you are able to function. See 12.00C through 12.00H of the Listing 
of Impairments in appendix 1 to subpart P of part 404 of this chapter 
for more information about the factors we consider when we rate the 
degree of your functional limitation.
    (3) We have identified four broad functional areas in which we will 
rate the degree of your functional limitation: Understand, remember, or 
apply information; interact with others; concentrate, persist, or 
maintain pace; and adapt or manage oneself. See 12.00E of the Listing of 
Impairments in appendix 1 to subpart P of part 404 of this chapter.
    (4) When we rate your degree of limitation in these areas 
(understand, remember, or apply information; interact with others; 
concentrate, persist, or maintain pace; and adapt or manage oneself), we 
will use the following five-point scale: None, mild, moderate, marked, 
and extreme. The last point on the scale represents a degree of 
limitation that is incompatible with the ability to do any gainful 
activity.
    (d) Use of the technique to evaluate mental impairments. After we 
rate the degree of functional limitation resulting from your 
impairment(s), we will determine the severity of your mental 
impairment(s).
    (1) If we rate the degrees of your limitation as ``none'' or 
``mild,'' we will generally conclude that your impairment(s) is not 
severe, unless the evidence otherwise indicates that there is more than 
a minimal limitation in your ability to do basic work activities (see 
Sec. 416.922).
    (2) If your mental impairment(s) is severe, we must then determine 
if it meets or is equivalent in severity to a listed mental disorder. We 
do this by comparing the medical findings about your impairment(s) and 
the rating of the degree of functional limitation to the criteria of the 
appropriate listed mental disorder. We will record the presence or 
absence of the criteria and the rating of the degree of functional 
limitation on a standard document at the initial and reconsideration 
levels of the administrative review process, or in the decision at the 
administrative law judge hearing and Appeals Council levels (in cases in 
which the Appeals Council issues a decision). See paragraph (e) of this 
section.
    (3) If we find that you have a severe mental impairment(s) that 
neither meets nor is equivalent in severity to any listing, we will then 
assess your residual functional capacity.
    (e) Documenting application of the technique. At the initial and 
reconsideration levels of the administrative review process, we will 
complete a standard document to record how we applied the technique. At 
the administrative law judge hearing and Appeals Council levels (in 
cases in which the Appeals Council issues a decision), we will document 
application of the technique in the decision. The following rules apply:
    (1) When a State agency medical or psychological consultant makes 
the determination together with a State agency disability examiner at 
the initial or reconsideration level of the administrative review 
process as provided in Sec. 416.1015(c)(1) of this part, the State 
agency medical or psychological consultant has overall responsibility 
for assessing medical severity. A State agency disability examiner may 
assist in preparing the standard document. However, our medical or 
psychological consultant must review and sign the document to attest 
that it is complete and that he or she is responsible for its content, 
including the findings of fact and any discussion of supporting 
evidence.

[[Page 890]]

    (2) When a State agency disability examiner makes the determination 
alone as provided in Sec. 416.1015(c)(3), the State agency disability 
examiner has overall responsibility for assessing medical severity and 
for completing and signing the standard document.
    (3) When a disability hearing officer makes a reconsideration 
determination as provided in Sec. 416.1015(c)(4), the determination must 
document application of the technique, incorporating the disability 
hearing officer's pertinent findings and conclusions based on this 
technique.
    (4) At the administrative law judge hearing and Appeals Council 
levels, the written decision must incorporate the pertinent findings and 
conclusions based on the technique. The decision must show the 
significant history, including examination and laboratory findings, and 
the functional limitations that were considered in reaching a conclusion 
about the severity of the mental impairment(s). The decision must 
include a specific finding as to the degree of limitation in each of the 
functional areas described in paragraph (c) of this section.
    (5) If the administrative law judge requires the services of a 
medical expert to assist in applying the technique but such services are 
unavailable, the administrative law judge may return the case to the 
State agency or the appropriate Federal component, using the rules in 
Sec. 416.1441 of this part, for completion of the standard document. If, 
after reviewing the case file and completing the standard document, the 
State agency or Federal component concludes that a determination 
favorable to you is warranted, it will process the case using the rules 
found in Sec. 416.1441(d) or (e) of this part. If, after reviewing the 
case file and completing the standard document, the State agency or 
Federal component concludes that a determination favorable to you is not 
warranted, it will send the completed standard document and the case to 
the administrative law judge for further proceedings and a decision.

[65 FR 50782, Aug. 21, 2000; 65 FR 60584, Oct. 12, 2000, as amended at 
71 FR 16459, Mar. 31, 2006; 75 FR 62682, Oct. 13, 2010; 76 FR 24810, May 
3, 2011; 81 FR 66178, Sept. 26, 2016; 82 FR 5877, Jan. 18, 2017]



Sec. 416.920b  How we consider evidence.

    After we review all of the evidence relevant to your claim, we make 
findings about what the evidence shows.
    (a) Complete and consistent evidence. If all of the evidence we 
receive, including all medical opinion(s), is consistent and there is 
sufficient evidence for us to determine whether you are disabled, we 
will make our determination or decision based on that evidence.
    (b) Incomplete or inconsistent evidence. In some situations, we may 
not be able to make our determination or decision because the evidence 
in your case record is insufficient or inconsistent. We consider 
evidence to be insufficient when it does not contain all the information 
we need to make our determination or decision. We consider evidence to 
be inconsistent when it conflicts with other evidence, contains an 
internal conflict, is ambiguous, or when the medical evidence does not 
appear to be based on medically acceptable clinical or laboratory 
diagnostic techniques. If the evidence in your case record is 
insufficient or inconsistent, we may need to take the additional actions 
in paragraphs (b)(1) through (4) of this section.
    (1) If any of the evidence in your case record, including any 
medical opinion(s) and prior administrative medical findings, is 
inconsistent, we will consider the relevant evidence and see if we can 
determine whether you are disabled based on the evidence we have.
    (2) If the evidence is consistent but we have insufficient evidence 
to determine whether you are disabled, or if after considering the 
evidence we determine we cannot reach a conclusion about whether you are 
disabled, we will determine the best way to resolve the inconsistency or 
insufficiency. The action(s) we take will depend on the nature of the 
inconsistency or insufficiency. We will try to resolve the inconsistency 
or insufficiency by taking any one or more of the actions listed in

[[Page 891]]

paragraphs (b)(2)(i) through (b)(2)(iv) of this section. We might not 
take all of the actions listed below. We will consider any additional 
evidence we receive together with the evidence we already have.
    (i) We may recontact your medical source. We may choose not to seek 
additional evidence or clarification from a medical source if we know 
from experience that the source either cannot or will not provide the 
necessary evidence. If we obtain medical evidence over the telephone, we 
will send the telephone report to the source for review, signature, and 
return;
    (ii) We may request additional existing evidence;
    (iii) We may ask you to undergo a consultative examination at our 
expense (see Secs. 416.917 through 416.919t); or
    (iv) We may ask you or others for more information.
    (3) When there are inconsistencies in the evidence that we cannot 
resolve or when, despite efforts to obtain additional evidence, the 
evidence is insufficient to determine whether you are disabled, we will 
make a determination or decision based on the evidence we have.
    (c) Evidence that is inherently neither valuable nor persuasive. 
Paragraphs (c)(1) through (c)(3) apply in claims filed (see 
Sec. 416.325) on or after March 27, 2017. Because the evidence listed in 
paragraphs ((c)(1)-(c)(3) of this section is inherently neither valuable 
nor persuasive to the issue of whether you are disabled or blind under 
the Act, we will not provide any analysis about how we considered such 
evidence in our determination or decision, even under Sec. 416.920c:
    (1) Decisions by other governmental agencies and nongovernmental 
entities. See Sec. 416.904.
    (2) Disability examiner findings. Findings made by a State agency 
disability examiner made at a previous level of adjudication about a 
medical issue, vocational issue, or the ultimate determination about 
whether you are disabled.
    (3) Statements on issues reserved to the Commissioner. The 
statements listed in paragraphs (c)(3)(i) through (c)(3)(ix) of this 
section would direct our determination or decision that you are or are 
not disabled or blind within the meaning of the Act, but we are 
responsible for making the determination or decision about whether you 
are disabled or blind:
    (i) Statements that you are or are not disabled, blind, able to 
work, or able to perform regular or continuing work;
    (ii) Statements about whether or not you have a severe 
impairment(s);
    (iii) Statements about whether or not your impairment(s) meets the 
duration requirement (see Sec. 416.909);
    (iv) Statements about whether or not your impairment(s) meets or 
medically equals any listing in the Listing of Impairments in Part 404, 
Subpart P, Appendix 1;
    (v) If you are a child, statements about whether or not your 
impairment(s) functionally equals the listings in Part 404 Subpart P 
Appendix 1 (see Sec. 416.926a);
    (vi) If you are an adult, statements about what your residual 
functional capacity is using our programmatic terms about the functional 
exertional levels in Part 404, Subpart P, Appendix 2, Rule 200.00 
instead of descriptions about your functional abilities and limitations 
(see Sec. 416.945);
    (vii) If you are an adult, statements about whether or not your 
residual functional capacity prevents you from doing past relevant work 
(see Sec. 416.960);
    (viii) If you are an adult, statements that you do or do not meet 
the requirements of a medical-vocational rule in Part 404, Subpart P, 
Appendix 2; and
    (ix) Statements about whether or not your disability continues or 
ends when we conduct a continuing disability review (see Sec. 416.994).

[82 FR 5877, Jan. 18, 2017]



Sec. 416.920c  How we consider and articulate medical opinions and 
prior administrative medical findings for claims filed on or after 
March 27, 2017.

    For claims filed (see Sec. 416.325) on or after March 27, 2017, the 
rules in this section apply. For claims filed before March 27, 2017, the 
rules in Sec. 416.927 apply.
    (a) How we consider medical opinions and prior administrative 
medical findings. We will not defer or give any specific

[[Page 892]]

evidentiary weight, including controlling weight, to any medical 
opinion(s) or prior administrative medical finding(s), including those 
from your medical sources. When a medical source provides one or more 
medical opinions or prior administrative medical findings, we will 
consider those medical opinions or prior administrative medical findings 
from that medical source together using the factors listed in paragraphs 
(c)(1) through (c)(5) of this section, as appropriate. The most 
important factors we consider when we evaluate the persuasiveness of 
medical opinions and prior administrative medical findings are 
supportability (paragraph (c)(1) of this section) and consistency 
(paragraph (c)(2) of this section). We will articulate how we considered 
the medical opinions and prior administrative medical findings in your 
claim according to paragraph (b) of this section.
    (b) How we articulate our consideration of medical opinions and 
prior administrative medical findings. We will articulate in our 
determination or decision how persuasive we find all of the medical 
opinions and all of the prior administrative medical findings in your 
case record. Our articulation requirements are as follows:
    (1) Source-level articulation. Because many claims have voluminous 
case records containing many types of evidence from different sources, 
it is not administratively feasible for us to articulate in each 
determination or decision how we considered all of the factors for all 
of the medical opinions and prior administrative medical findings in 
your case record. Instead, when a medical source provides multiple 
medical opinion(s) or prior administrative medical finding(s), we will 
articulate how we considered the medical opinions or prior 
administrative medical findings from that medical source together in a 
single analysis using the factors listed in paragraphs (c)(1) through 
(c)(5) of this section, as appropriate. We are not required to 
articulate how we considered each medical opinion or prior 
administrative medical finding from one medical source individually.
    (2) Most important factors. The factors of supportability (paragraph 
(c)(1) of this section) and consistency (paragraph (c)(2) of this 
section) are the most important factors we consider when we determine 
how persuasive we find a medical source's medical opinions or prior 
administrative medical findings to be. Therefore, we will explain how we 
considered the supportability and consistency factors for a medical 
source's medical opinions or prior administrative medical findings in 
your determination or decision. We may, but are not required to, explain 
how we considered the factors in paragraphs (c)(3) through (c)(5) of 
this section, as appropriate, when we articulate how we consider medical 
opinions and prior administrative medical findings in your case record.
    (3) Equally persuasive medical opinions or prior administrative 
medical findings about the same issue. When we find that two or more 
medical opinions or prior administrative medical findings about the same 
issue are both equally well-supported (paragraph (c)(1) of this section) 
and consistent with the record (paragraph (c)(2) of this section) but 
are not exactly the same, we will articulate how we considered the other 
most persuasive factors in paragraphs (c)(3) through (c)(5) of this 
section for those medical opinions or prior administrative medical 
findings in your determination or decision.
    (c) Factors. We will consider the following factors when we consider 
the medical opinion(s) and prior administrative medical finding(s) in 
your case:
    (1) Supportability. The more relevant the objective medical evidence 
and supporting explanations presented by a medical source are to support 
his or her medical opinion(s) or prior administrative medical 
finding(s), the more persuasive the medical opinions or prior 
administrative medical finding(s) will be.
    (2) Consistency. The more consistent a medical opinion(s) or prior 
administrative medical finding(s) is with the evidence from other 
medical sources and nonmedical sources in the claim, the more persuasive 
the medical opinion(s) or prior administrative medical finding(s) will 
be.
    (3) Relationship with the claimant. This factor combines 
consideration of the

[[Page 893]]

issues in paragraphs (c)(3)(i)-(v) of this section.
    (i) Length of the treatment relationship. The length of time a 
medical source has treated you may help demonstrate whether the medical 
source has a longitudinal understanding of your impairment(s).
    (ii) Frequency of examinations. The frequency of your visits with 
the medical source may help demonstrate whether the medical source has a 
longitudinal understanding of your impairment(s).
    (iii) Purpose of the treatment relationship. The purpose for 
treatment you received from the medical source may help demonstrate the 
level of knowledge the medical source has of your impairment(s).
    (iv) Extent of the treatment relationship. The kinds and extent of 
examinations and testing the medical source has performed or ordered 
from specialists or independent laboratories may help demonstrate the 
level of knowledge the medical source has of your impairment(s).
    (v) Examining relationship. A medical source may have a better 
understanding of your impairment(s) if he or she examines you than if 
the medical source only reviews evidence in your folder.
    (4) Specialization. The medical opinion or prior administrative 
medical finding of a medical source who has received advanced education 
and training to become a specialist may be more persuasive about medical 
issues related to his or her area of specialty than the medical opinion 
or prior administrative medical finding of a medical source who is not a 
specialist in the relevant area of specialty.
    (5) Other factors. We will consider other factors that tend to 
support or contradict a medical opinion or prior administrative medical 
finding. This includes, but is not limited to, evidence showing a 
medical source has familiarity with the other evidence in the claim or 
an understanding of our disability program's policies and evidentiary 
requirements. When we consider a medical source's familiarity with the 
other evidence in a claim, we will also consider whether new evidence we 
receive after the medical source made his or her medical opinion or 
prior administrative medical finding makes the medical opinion or prior 
administrative medical finding more or less persuasive.
    (d) Evidence from nonmedical sources. We are not required to 
articulate how we considered evidence from nonmedical sources using the 
requirements in paragraphs (a) through (c) in this section.

[82 FR 5878, Jan. 18, 2017]



Sec. 416.921  Establishing that you have a medically determinable
impairment(s).

    If you are not doing substantial gainful activity, we will then 
determine whether you have a medically determinable physical or mental 
impairment(s) (see Sec. 416.920(a)(4)(ii)). Your impairment(s) must 
result from anatomical, physiological, or psychological abnormalities 
that can be shown by medically acceptable clinical and laboratory 
diagnostic techniques. Therefore, a physical or mental impairment must 
be established by objective medical evidence from an acceptable medical 
source. We will not use your statement of symptoms, a diagnosis, or a 
medical opinion to establish the existence of an impairment(s). After we 
establish that you have a medically determinable impairment(s), then we 
determine whether your impairment(s) is severe.

[82 FR 5879, Jan. 18, 2017]



Sec. 416.922  What we mean by an impairment(s) that is not severe in 
an adult.

    (a) Non-severe impairment(s). An impairment or combination of 
impairments is not severe if it does not significantly limit your 
physical or mental ability to do basic work activities.
    (b) Basic work activities. When we talk about basic work activities, 
we mean the abilities and aptitudes necessary to do most jobs. Examples 
of these include--
    (1) Physical functions such as walking, standing, sitting, lifting, 
pushing, pulling, reaching, carrying, or handling;
    (2) Capacities for seeing, hearing, and speaking;
    (3) Understanding, carrying out, and remembering simple 
instructions;

[[Page 894]]

    (4) Use of judgment;
    (5) Responding appropriately to supervision, co-workers and usual 
work situations; and
    (6) Dealing with changes in a routine work setting.

[82 FR 5879, Jan. 18, 2017]



Sec. 416.923  Multiple impairments.

    (a) Unrelated severe impairments. We cannot combine two or more 
unrelated severe impairments to meet the 12-month duration test. If you 
have a severe impairment(s) and then develop another unrelated severe 
impairment(s) but neither one is expected to last for 12 months, we 
cannot find you disabled, even though the two impairments in combination 
last for 12 months.
    (b) Concurrent impairments. If you have two or more concurrent 
impairments that, when considered in combination, are severe, we must 
determine whether the combined effect of your impairments can be 
expected to continue to be severe for 12 months. If one or more of your 
impairments improves or is expected to improve within 12 months, so that 
the combined effect of your remaining impairments is no longer severe, 
we will find that you do not meet the 12-month duration test.
    (c) Combined effect. In determining whether your physical or mental 
impairment or impairments are of a sufficient medical severity that such 
impairment or impairments could be the basis of eligibility under the 
law, we will consider the combined effect of all of your impairments 
without regard to whether any such impairment, if considered separately, 
would be of sufficient severity. If we do find a medically severe 
combination of impairments, we will consider the combined impact of the 
impairments throughout the disability determination process. If we do 
not find that you have a medically severe combination of impairments, we 
will determine that you are not disabled (see Secs. 416.920 and 
416.924).

[82 FR 5879, Jan. 18, 2017]



Sec. 416.924  How we determine disability for children.

    (a) Steps in evaluating disability. We consider all relevant 
evidence in your case record when we make a determination or decision 
whether you are disabled. If you allege more than one impairment, we 
will evaluate all the impairments for which we have evidence. Thus, we 
will consider the combined effects of all your impairments upon your 
overall health and functioning. We will also evaluate any limitations in 
your functioning that result from your symptoms, including pain (see 
Sec. 416.929). We will also consider all of the relevant factors in 
Secs. 416.924a and 416.924b whenever we assess your functioning at any 
step of this process. We follow a set order to determine whether you are 
disabled. If you are doing substantial gainful activity, we will 
determine that you are not disabled and not review your claim further. 
If you are not doing substantial gainful activity, we will consider your 
physical or mental impairment(s) first to see if you have an impairment 
or combination of impairments that is severe. If your impairment(s) is 
not severe, we will determine that you are not disabled and not review 
your claim further. If your impairment(s) is severe, we will review your 
claim further to see if you have an impairment(s) that meets, medically 
equals, or functionally equals the listings. If you have such an 
impairment(s), and it meets the duration requirement, we will find that 
you are disabled. If you do not have such an impairment(s), or if it 
does not meet the duration requirement, we will find that you are not 
disabled.
    (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 age, education, or work 
experience. (For our rules on how we decide whether you are engaging in 
substantial gainful activity, see Secs. 416.971 through 416.976.)
    (c) You must have a medically determinable impairment(s) that is 
severe. If you do not have a medically determinable impairment, or your 
impairment(s) is a slight abnormality or a combination of slight 
abnormalities that causes no more than minimal functional limitations, 
we will find that you do not have a severe impairment(s) and are, 
therefore, not disabled.

[[Page 895]]

    (d) Your impairment(s) must meet, medically equal, or functionally 
equal the listings. An impairment(s) causes marked and severe functional 
limitations if it meets or medically equals the severity of a set of 
criteria for an impairment in the listings, or if it functionally equals 
the listings.
    (1) Therefore, if you have an impairment(s) that meets or medically 
equals the requirements of a listing or that functionally equals the 
listings, and that meets the duration requirement, we will find you 
disabled.
    (2) If your impairment(s) does not meet the duration requirement, or 
does not meet, medically equal, or functionally equal the listings, we 
will find that you are not disabled.
    (e) Other rules. We explain other rules for evaluating impairments 
at all steps of this process in Secs. 416.924a, 416.924b, and 416.929. 
We explain our rules for deciding whether an impairment(s) meets a 
listing in Sec. 416.925. Our rules for how we decide whether an 
impairment(s) medically equals a listing are in Sec. 416.926. Our rules 
for deciding whether an impairment(s) functionally equals the listings 
are in Sec. 416.926a.
    (f) If you attain age 18 after you file your disability application 
but before we make a determination or decision. For the period during 
which you are under age 18, we will use the rules in this section. For 
the period starting with the day you attain age 18, we will use the 
disability rules we use for adults who file new claims, in Sec. 416.920.
    (g) How we will explain our findings. When we make a determination 
or decision whether you are disabled under this section or whether your 
disability continues under Sec. 416.994a, we will indicate our findings 
at each step of the sequential evaluation process as we explain in this 
paragraph. At the initial and reconsideration levels of the 
administrative review process, State agency medical and psychological 
consultants will indicate their findings in writing in a manner that we 
prescribe. The State agency medical or psychological consultant (see 
Sec. 416.1016) or other designee of the Commissioner has overall 
responsibility for completing the prescribed writing and must sign the 
prescribed writing to attest that it is complete, including the findings 
of fact and any discussion of supporting evidence. Disability hearing 
officers, administrative law judges and the administrative appeals 
judges on the Appeals Council (when the Appeals Council makes a 
decision) will indicate their findings at each step of the sequential 
evaluation process in their determinations or decisions. In claims 
adjudicated under the procedures in part 405 of this chapter, 
administrative law judges will also indicate their findings at each step 
of the sequential evaluation process in their decisions.

[58 FR 47577, Sept. 9, 1993, as amended at 62 FR 6421, Feb. 11, 1997; 65 
FR 54778, Sept. 11, 2000; 71 FR 16460, Mar. 31, 2006; 76 FR 24811, May 
3, 2011; 76 FR 41687, July 15, 2011]



Sec. 416.924a  Considerations in determining disability for children.

    (a) Basic considerations. We consider all evidence in your case 
record (see Sec. 416.913). The evidence in your case record may include 
information from medical sources (such as your pediatrician or other 
physician; psychologist; qualified speech-language pathologist; and 
physical, occupational, and rehabilitation therapists) and nonmedical 
sources (such as your parents, teachers, and other people who know you).
    (1) Medical evidence--(i) General. Medical evidence of your 
impairment(s) must describe symptoms, signs, and laboratory findings. 
The medical evidence may include, but is not limited to, formal testing 
that provides information about your development or functioning in terms 
of standard deviations, percentiles, percentages of delay, or age or 
grade equivalents. It may also include opinions from medical sources 
about the nature and severity of your impairments. (See Sec. 416.920c.)
    (ii) Test scores. We consider all of the relevant information in 
your case record and will not consider any single piece of evidence in 
isolation. Therefore, we will not rely on test scores alone when we 
decide whether you are disabled. (See Sec. 416.926a(e) for more 
information about how we consider test scores.)
    (iii) Medical sources. Medical sources will report their findings 
and observations on clinical examination and the

[[Page 896]]

results of any formal testing. A medical source's report should note and 
resolve any material inconsistencies between formal test results, other 
medical findings, and your usual functioning. Whenever possible and 
appropriate, the interpretation of findings by the medical source should 
reflect consideration of information from your parents or other people 
who know you, including your teachers and therapists. When a medical 
source has accepted and relied on such information to reach a diagnosis, 
we may consider this information to be a sign, as defined in 
Sec. 416.902(l).
    (2) Statements from nonmedical sources. Every child is unique, so 
the effects of your impairment(s) on your functioning may be very 
different from the effects the same impairment(s) might have on another 
child. Therefore, whenever possible and appropriate, we will try to get 
information from people who can tell us about the effects of your 
impairment(s) on your activities and how you function on a day-to-day 
basis. These other people may include, but are not limited to:
    (i) Your parents and other caregivers. Your parents and other 
caregivers can be important sources of information because they usually 
see you every day. In addition to your parents, other caregivers may 
include a childcare provider who takes care of you while your parent(s) 
works or an adult who looks after you in a before-or after-school 
program.
    (ii) Early intervention and preschool programs. If you have been 
identified for early intervention services (in your home or elsewhere) 
because of your impairment(s), or if you attend a preschool program 
(e.g., Headstart or a public school kindergarten for children with 
special needs), these programs are also important sources of information 
about your functioning. We will ask for reports from the agency and 
individuals who provide you with services or from your teachers about 
how you typically function compared to other children your age who do 
not have impairments.
    (iii) School. If you go to school, we will ask for information from 
your teachers and other school personnel about how you are functioning 
there on a day-to-day basis compared to other children your age who do 
not have impairments. We will ask for any reports that the school may 
have that show the results of formal testing or that describe any 
special education instruction or services, including home-based 
instruction, or any accommodations provided in a regular classroom.
    (b) Factors we consider when we evaluate the effects of your 
impairment(s) on your functioning--(1) General. We must consider your 
functioning when we decide whether your impairment(s) is ``severe'' and 
when we decide whether your impairment(s) functionally equals the 
listings. We will also consider your functioning when we decide whether 
your impairment(s) meets or medically equals a listing if the listing we 
are considering includes functioning among its criteria.
    (2) Factors we consider when we evaluate your functioning. Your 
limitations in functioning must result from your medically determinable 
impairment(s). The information we get from your medical and nonmedical 
sources can help us understand how your impairment(s) affects your 
functioning. We will also consider any factors that are relevant to how 
you function when we evaluate your impairment or combination of 
impairments. For example, your symptoms (such as pain, fatigue, 
decreased energy, or anxiety) may limit your functioning. (See 
Sec. 416.929.) We explain some other factors we may consider when we 
evaluate your functioning in paragraphs (b)(3)-(b)(9) of this section.
    (3) How your functioning compares to the functioning of children 
your age who do not have impairments--(i) General. When we evaluate your 
functioning, we will look at whether you do the things that other 
children your age typically do or whether you have limitations and 
restrictions because of your medically determinable impairment(s). We 
will also look at how well you do the activities and how much help you 
need from your family, teachers, or others. Information about what you 
can and cannot do, and how you function on a day-to-day basis at home, 
school, and in the community, allows us to compare your activities to 
the activities of children your age who do not have impairments.

[[Page 897]]

    (ii) How we will consider reports of your functioning. When we 
consider the evidence in your case record about the quality of your 
activities, we will consider the standards used by the person who gave 
us the information. We will also consider the characteristics of the 
group to whom you are being compared. For example, if the way you do 
your classwork is compared to other children in a special education 
class, we will consider that you are being compared to children who do 
have impairments.
    (4) Combined effects of multiple impairments. If you have more than 
one impairment, we will sometimes be able to decide that you have a 
``severe'' impairment or an impairment that meets, medically equals, or 
functionally equals the listings by looking at each of your impairments 
separately. When we cannot, we will look comprehensively at the combined 
effects of your impairments on your day-to-day functioning instead of 
considering the limitations resulting from each impairment separately. 
(See Secs. 416.923 and 416.926a(c) for more information about how we 
will consider the interactive and cumulative effects of your impairments 
on your functioning.)
    (5) How well you can initiate, sustain, and complete your 
activities, including the amount of help or adaptations you need, and 
the effects of structured or supportive settings--(i) Initiating, 
sustaining, and completing activities. We will consider how effectively 
you function by examining how independently you are able to initiate, 
sustain, and complete your activities despite your impairment(s), 
compared to other children your age who do not have impairments. We will 
consider:
    (A) The range of activities you do;
    (B) Your ability to do them independently, including any prompting 
you may need to begin, carry through, and complete your activities;
    (C) The pace at which you do your activities;
    (D) How much effort you need to make to do your activities; and
    (E) How long you are able to sustain your activities.
    (ii) Extra help. We will consider how independently you are able to 
function compared to other children your age who do not have 
impairments. We will consider whether you need help from other people, 
or whether you need special equipment, devices, or medications to 
perform your day-to-day activities. For example, we may consider how 
much supervision you need to keep from hurting yourself, how much help 
you need every day to get dressed or, if you are an infant, how long it 
takes for your parents or other caregivers to feed you. We recognize 
that children are often able to do things and complete tasks when given 
help, but may not be able to do these same things by themselves. 
Therefore, we will consider how much extra help you need, what special 
equipment or devices you use, and the medications you take that enable 
you to participate in activities like other children your age who do not 
have impairments.
    (iii) Adaptations. We will consider the nature and extent of any 
adaptations that you use to enable you to function. Such adaptations may 
include assistive devices or appliances. Some adaptations may enable you 
to function normally or almost normally (e.g., eyeglasses). Others may 
increase your functioning, even though you may still have functional 
limitations (e.g., ankle-foot orthoses, hand or foot splints, and 
specially adapted or custom-made tools, utensils, or devices for self-
care activities such as bathing, feeding, toileting, and dressing). When 
we evaluate your functioning with an adaptation, we will consider the 
degree to which the adaptation enables you to function compared to other 
children your age who do not have impairments, your ability to use the 
adaptation effectively on a sustained basis, and any functional 
limitations that nevertheless persist.
    (iv) Structured or supportive settings. (A) If you have a serious 
impairment(s), you may spend some or all of your time in a structured or 
supportive setting, beyond what a child who does not have an impairment 
typically needs.
    (B) A structured or supportive setting may be your own home in which 
family members or other people (e.g., visiting nurses or home health 
workers) make adjustments to accommodate your impairment(s). A 
structured

[[Page 898]]

or supportive setting may also be your classroom at school, whether it 
is a regular classroom in which you are accommodated or a special 
classroom. It may also be a residential facility or school where you 
live for a period of time.
    (C) A structured or supportive setting may minimize signs and 
symptoms of your impairment(s) and help to improve your functioning 
while you are in it, but your signs, symptoms, and functional 
limitations may worsen outside this type of setting. Therefore, we will 
consider your need for a structured setting and the degree of limitation 
in functioning you have or would have outside the structured setting. 
Even if you are able to function adequately in the structured or 
supportive setting, we must consider how you function in other settings 
and whether you would continue to function at an adequate level without 
the structured or supportive setting.
    (D) If you have a chronic impairment(s), you may have your 
activities structured in such a way as to minimize stress and reduce the 
symptoms or signs of your impairment(s). You may continue to have 
persistent pain, fatigue, decreased energy, or other symptoms or signs, 
although at a lesser level of severity. We will consider whether you are 
more limited in your functioning than your symptoms and signs would 
indicate.
    (E) Therefore, if your symptoms or signs are controlled or reduced 
in a structured setting, we will consider how well you are functioning 
in the setting and the nature of the setting in which you are 
functioning (e.g., home or a special class); the amount of help you need 
from your parents, teachers, or others to function as well as you do; 
adjustments you make to structure your environment; and how you would 
function without the structured or supportive setting.
    (6) Unusual settings. Children may function differently in 
unfamiliar or one-to-one settings than they do in their usual settings 
at home, at school, in childcare or in the community. You may appear 
more or less impaired on a single examination (such as a consultative 
examination) than indicated by the information covering a longer period. 
Therefore, we will apply the guidance in paragraph (b)(5) of this 
section when we consider how you function in an unusual or one-to-one 
situation. We will look at your performance in a special situation and 
at your typical day-to-day functioning in routine situations. We will 
not draw inferences about your functioning in other situations based 
only on how you function in a one-to-one, new, or unusual situation.
    (7) Early intervention and school programs--(i) General. If you are 
a very young child who has been identified for early intervention 
services, or if you attend school (including preschool), the records of 
people who know you or who have examined you are important sources of 
information about your impairment(s) and its effects on your 
functioning. Records from physicians, teachers and school psychologists, 
or physical, occupational, or speech-language therapists are examples of 
what we will consider. If you receive early intervention services or go 
to school or preschool, we will consider this information when it is 
relevant and available to us.
    (ii) School evidence. If you go to school or preschool, we will ask 
your teacher(s) about your performance in your activities throughout 
your school day. We will consider all the evidence we receive from your 
school, including teacher questionnaires, teacher checklists, group 
achievement testing, and report cards.
    (iii) Early intervention and special education programs. If you have 
received a comprehensive assessment for early intervention services or 
special education services, we will consider information used by the 
assessment team to make its recommendations. We will consider the 
information in your Individualized Family Service Plan, your 
Individualized Education Program, or your plan for transition services 
to help us understand your functioning. We will examine the goals and 
objectives of your plan or program as further indicators of your 
functioning, as well as statements regarding related services, 
supplementary aids, program

[[Page 899]]

modifications, and other accommodations recommended to help you 
function, together with the other relevant information in your case 
record.
    (iv) Special education or accommodations. We will consider the fact 
that you attend school, that you may be placed in a special education 
setting, or that you receive accommodations because of your impairments 
along with the other information in your case record. The fact that you 
attend school does not mean that you are not disabled. The fact that you 
do or do not receive special education services does not, in itself, 
establish your actual limitations or abilities. Children are placed in 
special education settings, or are included in regular classrooms (with 
or without accommodation), for many reasons that may or may not be 
related to the level of their impairments. For example, you may receive 
one-to-one assistance from an aide throughout the day in a regular 
classroom, or be placed in a special classroom. We will consider the 
circumstances of your school attendance, such as your ability to 
function in a regular classroom or preschool setting with children your 
age who do not have impairments. Similarly, we will consider that good 
performance in a special education setting does not mean that you are 
functioning at the same level as other children your age who do not have 
impairments.
    (v) Attendance and participation. We will also consider factors 
affecting your ability to participate in your education program. You may 
be unable to participate on a regular basis because of the chronic or 
episodic nature of your impairment(s) or your need for therapy or 
treatment. If you have more than one impairment, we will look at whether 
the effects of your impairments taken together make you unable to 
participate on a regular basis. We will consider how your temporary 
removal or absence from the program affects your ability to function 
compared to other children your age who do not have impairments.
    (8) The impact of chronic illness and limitations that interfere 
with your activities over time. If you have a chronic impairment(s) that 
is characterized by episodes of exacerbation (worsening) and remission 
(improvement), we will consider the frequency and severity of your 
episodes of exacerbation as factors that may be limiting your 
functioning. Your level of functioning may vary considerably over time. 
Proper evaluation of your ability to function in any domain requires us 
to take into account any variations in your level of functioning to 
determine the impact of your chronic illness on your ability to function 
over time. If you require frequent treatment, we will consider it as 
explained in paragraph (b)(9)(ii) of this section.
    (9) The effects of treatment (including medications and other 
treatment). We will evaluate the effects of your treatment to determine 
its effect on your functioning in your particular case.
    (i) Effects of medications. We will consider the effects of 
medication on your symptoms, signs, laboratory findings, and 
functioning. Although medications may control the most obvious 
manifestations of your impairment(s), they may or may not affect the 
functional limitations imposed by your impairment(s). If your symptoms 
or signs are reduced by medications, we will consider:
    (A) Any of your functional limitations that may nevertheless 
persist, even if there is improvement from the medications;
    (B) Whether your medications create any side effects that cause or 
contribute to your functional limitations;
    (C) The frequency of your need for medication;
    (D) Changes in your medication or the way your medication is 
prescribed; and
    (E) Any evidence over time of how medication helps or does not help 
you to function compared to other children your age who do not have 
impairments.
    (ii) Other treatment. We will also consider the level and frequency 
of treatment other than medications that you get for your impairment(s). 
You may need frequent and ongoing therapy from one or more medical 
sources to maintain or improve your functional status. (Examples of 
therapy include occupational, physical, or speech and language therapy, 
nursing or home

[[Page 900]]

health services, psychotherapy, or psychosocial counseling.) Frequent 
therapy, although intended to improve your functioning in some ways, may 
also interfere with your functioning in other ways. Therefore, we will 
consider the frequency of any therapy you must have, and how long you 
have received or will need it. We will also consider whether the therapy 
interferes with your participation in activities typical of other 
children your age who do not have impairments, such as attending school 
or classes and socializing with your peers. If you must frequently 
interrupt your activities at school or at home for therapy, we will 
consider whether these interruptions interfere with your functioning. We 
will also consider the length and frequency of your hospitalizations.
    (iii) Treatment and intervention, in general. With treatment or 
intervention, you may not only have your symptoms or signs reduced, but 
may also maintain, return to, or achieve a level of functioning that is 
not disabling. Treatment or intervention may prevent, eliminate, or 
reduce functional limitations.

[65 FR 54779, Sept. 11, 2000, as amended at 82 FR 5879, Jan. 18, 2017]



Sec. 416.924b  Age as a factor of evaluation in the sequential 
evaluation process for children.

    (a) General. In this section, we explain how we consider age when we 
decide whether you are disabled. Your age may or may not be a factor in 
our determination whether your impairment(s) meets or medically equals a 
listing, depending on the listing we use for comparison. However, your 
age is an important factor when we decide whether your impairment(s) is 
severe (see Sec. 416.924(c)) and whether it functionally equals the 
listings (see Sec. 416.926a). Except in the case of certain premature 
infants, as described in paragraph (b) of this section, age means 
chronological age.
    (1) When we determine whether you have an impairment or combination 
of impairments that is severe, we will compare your functioning to that 
of children your age who do not have impairments.
    (2) When we determine whether your impairment(s) meets a listing, we 
may or may not need to consider your age. The listings describe 
impairments that we consider of such significance that they are presumed 
to cause marked and severe functional limitations.
    (i) If the listing appropriate for evaluating your impairment is 
divided into specific age categories, we will evaluate your impairment 
according to your age when we decide whether your impairment meets that 
listing.
    (ii) If the listing appropriate for evaluating your impairment does 
not include specific age categories, we will decide whether your 
impairment meets the listing without giving consideration to your age.
    (3) When we compare an unlisted impairment or a combination of 
impairments with the listings to determine whether it medically equals 
the severity of a listing, the way we consider your age will depend on 
the listing we use for comparison. We will use the same principles for 
considering your age as in paragraphs (a)(2)(i) and (a)(2)(ii) of this 
section; that is, we will consider your age only if we are comparing 
your impairment(s) to a listing that includes specific age categories.
    (4) We will also consider your age and whether it affects your 
ability to be tested. If your impairment(s) is not amenable to formal 
testing because of your age, we will consider all information in your 
case record that helps us decide whether you are disabled. We will 
consider other generally acceptable methods consistent with the 
prevailing state of medical knowledge and clinical practice that will 
help us evaluate the existence and severity of your impairment(s).
    (b) Correcting chronological age of premature infants. We generally 
use chronological age (a child's age based on birth date) when we decide 
whether, or the extent to which, a physical or mental impairment or 
combination of impairments causes functional limitations. However, if 
you were born prematurely, we may consider you younger than your 
chronological age when we evaluate your development. We may use a 
``corrected'' chronological age (CCA); that is, your chronological age

[[Page 901]]

adjusted by a period of gestational prematurity. We consider an infant 
born at less than 37 weeks' gestation to be born prematurely.
    (1) We compute your CCA by subtracting the number of weeks of 
prematurity (the difference between 40 weeks of full-term gestation and 
the number of actual weeks of gestation) from your chronological age. 
For example, if your chronological age is 20 weeks but you were born at 
32 weeks gestation (8 weeks premature), then your CCA is 12 weeks.
    (2) We evaluate developmental delay in a premature child until the 
child's prematurity is no longer a relevant factor, generally no later 
than about chronological age 2.
    (i) If you have not attained age 1 and were born prematurely, we 
will assess your development using your CCA.
    (ii) If you are over age 1 and have a developmental delay, and 
prematurity is still a relevant factor, we will decide whether to 
correct your chronological age. We will base our decision on our 
judgment and all the facts in your case. If we decide to correct your 
chronological age, we may correct it by subtracting the full number of 
weeks of prematurity or a lesser number of weeks. If your developmental 
delay is the result of your medically determinable impairment(s) and is 
not attributable to your prematurity, we will decide not to correct your 
chronological age.
    (3) Notwithstanding the provisions in paragraph (b)(1) of this 
section, we will not compute a corrected chronological age if the 
medical evidence shows that your medical source has already considered 
your prematurity in his or her assessment of your development. We will 
not compute a CCA when we find you disabled under listing 100.04 of the 
Listing of Impairments.

[65 FR 54778, Sept. 11, 2000, as amended at 72 FR 59431, Oct. 19, 2007; 
80 FR 19529, Apr. 13, 2015; 82 FR 5880, Jan. 18, 2017]

                         Medical Considerations



Sec. 416.925  Listing of Impairments in appendix 1 of subpart 
P of part 404 of this chapter.

    (a) What is the purpose of the Listing of Impairments? The Listing 
of Impairments (the listings) is in appendix 1 of subpart P of part 404 
of this chapter. For adults, it describes for each of the major body 
systems impairments that we consider to be severe enough to prevent an 
individual from doing any gainful activity, regardless of his or her 
age, education, or work experience. For children, it describes 
impairments that cause marked and severe functional limitations.
    (b) How is appendix 1 organized? There are two parts in appendix 1:
    (1) Part A contains criteria that apply to individuals age 18 and 
over. We may also use part A for individuals who are under age 18 if the 
disease processes have a similar effect on adults and children.
    (2)(i) Part B contains criteria that apply only to individuals who 
are under age 18; we never use the listings in part B to evaluate 
individuals who are age 18 or older. In evaluating disability for a 
person under age 18, we use part B first. If the criteria in part B do 
not apply, we may use the criteria in part A when those criteria give 
appropriate consideration to the effects of the impairment(s) in 
children. To the extent possible, we number the provisions in part B to 
maintain a relationship with their counterparts in part A.
    (ii) Although the severity criteria in part B of the listings are 
expressed in different ways for different impairments, ``listing-level 
severity'' generally means the level of severity described in 
Sec. 416.926a(a); that is, ``marked'' limitations in two domains of 
functioning or an ``extreme'' limitation in one domain. (See 
Sec. 416.926a(e) for the definitions of the terms marked and extreme as 
they apply to children.) Therefore, in general, a child's impairment(s) 
is of ``listing-level severity'' if it causes marked limitations in two 
domains of functioning or an extreme limitation in one. However, when we 
decide whether your impairment(s) meets the requirements of a listing, 
we will decide that your impairment is of ``listing-level severity'' 
even if it does not result in marked limitations in two domains of 
functioning, or an extreme limitation in one, if the listing that we 
apply does not require such limitations

[[Page 902]]

to establish that an impairment(s) is disabling.
    (c) How do we use the listings? (1) Most body system sections in 
parts A and B of appendix 1 are in two parts: an introduction, followed 
by the specific listings.
    (2) The introduction to each body system contains information 
relevant to the use of the listings in that body system; for example, 
examples of common impairments in the body system and definitions used 
in the listings for that body system. We may also include specific 
criteria for establishing a diagnosis, confirming the existence of an 
impairment, or establishing that your impairment(s) satisfies the 
criteria of a particular listing in the body system. Even if we do not 
include specific criteria for establishing a diagnosis or confirming the 
existence of your impairment, you must still show that you have a severe 
medically determinable impairment(s), as defined in Secs. 416.921 and 
416.924(c).
    (3) In most cases, the specific listings follow the introduction in 
each body system, after the heading, Category of Impairments. Within 
each listing, we specify the objective medical and other findings needed 
to satisfy the criteria of that listing. We will find that your 
impairment(s) meets the requirements of a listing when it satisfies all 
of the criteria of that listing, including any relevant criteria in the 
introduction, and meets the duration requirement (see Sec. 416.909).
    (4) Most of the listed impairments are permanent or expected to 
result in death. For some listings, we state a specific period of time 
for which your impairment(s) will meet the listing. For all others, the 
evidence must show that your impairment(s) has lasted or can be expected 
to last for a continuous period of at least 12 months.
    (5) If your impairment(s) does not meet the criteria of a listing, 
it can medically equal the criteria of a listing. We explain our rules 
for medical equivalence in Sec. 416.926. We use the listings only to 
find that you are disabled or still disabled. If your impairment(s) does 
not meet or medically equal the criteria of a listing, we may find that 
you are disabled or still disabled at a later step in the sequential 
evaluation process.
    (d) Can your impairment(s) meet a listing based only on a diagnosis? 
No. Your impairment(s) cannot meet the criteria of a listing based only 
on a diagnosis. To meet the requirements of a listing, you must have a 
medically determinable impairment(s) that satisfies all of the criteria 
of the listing.
    (e) How do we consider your symptoms when we determine whether your 
impairment(s) meets a listing? Some listed impairments include symptoms, 
such as pain, as criteria. Section 416.929(d)(2) explains how we 
consider your symptoms when your symptoms are included as criteria in a 
listing.

[71 FR 10430, Mar. 1, 2006, as amended at 76 FR 19698, Apr. 8, 2011; 82 
FR 5880, Jan. 18, 2017]



Sec. 416.926  Medical equivalence for adults and children.

    (a) What is medical equivalence? Your impairment(s) is medically 
equivalent to a listed impairment in appendix 1 of subpart P of part 404 
of this chapter if it is at least equal in severity and duration to the 
criteria of any listed impairment.
    (b) How do we determine medical equivalence? We can find medical 
equivalence in three ways.
    (1)(i) If you have an impairment that is described in the Listing of 
Impairments in appendix 1 of subpart P of part 404 of this chapter, 
but--
    (A) You do not exhibit one or more of the findings specified in the 
particular listing, or
    (B) You exhibit all of the findings, but one or more of the findings 
is not as severe as specified in the particular listing,
    (ii) We will find that your impairment is medically equivalent to 
that listing if you have other findings related to your impairment that 
are at least of equal medical significance to the required criteria.
    (2) If you have an impairment(s) that is not described in the 
Listing of Impairments in appendix 1 of subpart P of part 404 of this 
chapter, we will compare your findings with those for closely analogous 
listed impairments. If the findings related to your impairment(s)

[[Page 903]]

are at least of equal medical significance to those of a listed 
impairment, we will find that your impairment(s) is medically equivalent 
to the analogous listing.
    (3) If you have a combination of impairments, no one of which meets 
a listing described in the Listing of Impairments in appendix 1 of 
subpart P of part 404 of this chapter (see Sec. 416.925(c)(3)), we will 
compare your findings with those for closely analogous listed 
impairments. If the findings related to your impairments are at least of 
equal medical significance to those of a listed impairment, we will find 
that your combination of impairments is medically equivalent to that 
listing.
    (4) Section 416.929(d)(3) explains how we consider your symptoms, 
such as pain, when we make findings about medical equivalence.
    (c) What evidence do we consider when we determine if your 
impairment(s) medically equals a listing? When we determine if your 
impairment medically equals a listing, we consider all evidence in your 
case record about your impairment(s) and its effects on you that is 
relevant to this finding. We do not consider your vocational factors of 
age, education, and work experience (see, for example, 
Sec. 416.960(c)(1)). We also consider the opinion given by one or more 
medical or psychological consultants designated by the Commissioner. 
(See Sec. 416.1016.)
    (d) Who is a designated medical or psychological consultant? A 
medical or psychological consultant designated by the Commissioner 
includes any medical or psychological consultant employed or engaged to 
make medical judgments by the Social Security Administration, the 
Railroad Retirement Board, or a State agency authorized to make 
disability determinations. See Sec. 416.1016 for the necessary 
qualifications for medical consultants and psychological consultants.
    (e) Who is responsible for determining medical equivalence?
    (1) In cases where the State agency or other designee of the 
Commissioner makes the initial or reconsideration disability 
determination, a State agency medical or psychological consultant or 
other designee of the Commissioner (see Sec. 416.1016 of this part) has 
the overall responsibility for determining medical equivalence.
    (2) For cases in the disability hearing process or otherwise decided 
by a disability hearing officer, the responsibility for determining 
medical equivalence rests with either the disability hearing officer or, 
if the disability hearing officer's reconsideration determination is 
changed under Sec. 416.1418 of this part, with the Associate 
Commissioner for Disability Policy or his or her delegate.
    (3) For cases at the administrative law judge or Appeals Council 
level, the responsibility for deciding medical equivalence rests with 
the administrative law judge or Appeals Council.

[45 FR 55621, Aug. 20, 1980, as amended at 52 FR 33928, Sept. 9, 1987; 
56 FR 5561, Feb. 11, 1991; 62 FR 6424, Feb. 11, 1997; 62 FR 13538, Mar. 
21, 1997; 65 FR 34959, June 1, 2000; 71 FR 10431, Mar. 1, 2006; 71 FR 
16460, Mar. 31, 2006; 76 FR 24811, May 3, 2011; 82 FR 5880, Jan. 18, 
2017; 82 FR 15132, Mar. 27, 2017]



Sec. 416.926a  Functional equivalence for children.

    (a) General. If you have a severe impairment or combination of 
impairments that does not meet or medically equal any listing, we will 
decide whether it results in limitations that functionally equal the 
listings. By ``functionally equal the listings,'' we mean that your 
impairment(s) must be of listing-level severity; i.e., it must result in 
``marked'' limitations in two domains of functioning or an ``extreme'' 
limitation in one domain, as explained in this section. We will assess 
the functional limitations caused by your impairment(s); i.e., what you 
cannot do, have difficulty doing, need help doing, or are restricted 
from doing because of your impairment(s). When we make a finding 
regarding functional equivalence, we will assess the interactive and 
cumulative effects of all of the impairments for which we have evidence, 
including any impairments you have that are not ``severe.'' (See 
Sec. 416.924(c).) When we assess your functional limitations, we will 
consider all the relevant factors in Secs. 416.924a, 416.924b, and 
416.929 including, but not limited to:

[[Page 904]]

    (1) How well you can initiate and sustain activities, how much extra 
help you need, and the effects of structured or supportive settings (see 
Sec. 416.924a(b)(5));
    (2) How you function in school (see Sec. 416.924a(b)(7)); and
    (3) The effects of your medications or other treatment (see 
Sec. 416.924a(b)(9)).
    (b) How we will consider your functioning. We will look at the 
information we have in your case record about how your functioning is 
affected during all of your activities when we decide whether your 
impairment or combination of impairments functionally equals the 
listings. Your activities are everything you do at home, at school, and 
in your community. We will look at how appropriately, effectively, and 
independently you perform your activities compared to the performance of 
other children your age who do not have impairments.
    (1) We will consider how you function in your activities in terms of 
six domains. These domains are broad areas of functioning intended to 
capture all of what a child can or cannot do. In paragraphs (g) through 
(l), we describe each domain in general terms. For most of the domains, 
we also provide examples of activities that illustrate the typical 
functioning of children in different age groups. For all of the domains, 
we also provide examples of limitations within the domains. However, we 
recognize that there is a range of development and functioning, and that 
not all children within an age category are expected to be able to do 
all of the activities in the examples of typical functioning. We also 
recognize that limitations of any of the activities in the examples do 
not necessarily mean that a child has a ``marked'' or ``extreme'' 
limitation, as defined in paragraph (e) of this section. The domains we 
use are:
    (i) Acquiring and using information;
    (ii) Attending and completing tasks;
    (iii) Interacting and relating with others;
    (iv) Moving about and manipulating objects;
    (v) Caring for yourself; and,
    (vi) Health and physical well-being.
    (2) When we evaluate your ability to function in each domain, we 
will ask for and consider information that will help us answer the 
following questions about whether your impairment(s) affects your 
functioning and whether your activities are typical of other children 
your age who do not have impairments.
    (i) What activities are you able to perform?
    (ii) What activities are you not able to perform?
    (iii) Which of your activities are limited or restricted compared to 
other children your age who do not have impairments?
    (iv) Where do you have difficulty with your activities-at home, in 
childcare, at school, or in the community?
    (v) Do you have difficulty independently initiating, sustaining, or 
completing activities?
    (vi) What kind of help do you need to do your activities, how much 
help do you need, and how often do you need it?
    (3) We will try to get information from sources who can tell us 
about the effects of your impairment(s) and how you function. We will 
ask for information from your medical sources who can give us medical 
evidence, including medical opinions, about your limitations and 
restrictions. We will also ask for information from your parents and 
teachers, and may ask for information from others who see you often and 
can describe your functioning at home, in childcare, at school, and in 
your community. We may also ask you to go to a consultative 
examination(s) at our expense. (See Secs. 416.912-416.919a regarding 
medical evidence and when we will purchase a consultative examination.)
    (c) The interactive and cumulative effects of an impairment or 
multiple impairments. When we evaluate your functioning and decide which 
domains may be affected by your impairment(s), we will look first at 
your activities and your limitations and restrictions. Any given 
activity may involve the integrated use of many abilities and skills; 
therefore, any single limitation may be the result of the interactive 
and cumulative effects of one or more impairments. And any given 
impairment may have effects in more than one domain;

[[Page 905]]

therefore, we will evaluate the limitations from your impairment(s) in 
any affected domain(s).
    (d) How we will decide that your impairment(s) functionally equals 
the listings. We will decide that your impairment(s) functionally equals 
the listings if it is of listing-level severity. Your impairment(s) is 
of listing-level severity if you have ``marked'' limitations in two of 
the domains in paragraph (b)(1) of this section, or an ``extreme'' 
limitation in one domain. We will not compare your functioning to the 
requirements of any specific listing. We explain what the terms 
``marked'' and ``extreme'' mean in paragraph (e) of this section. We 
explain how we use the domains in paragraph (f) of this section, and 
describe each domain in paragraphs (g)-(l). You must also meet the 
duration requirement. (See Sec. 416.909.)
    (e) How we define ``marked'' and ``extreme'' limitations--(1) 
General. (i) When we decide whether you have a ``marked'' or an 
``extreme'' limitation, we will consider your functional limitations 
resulting from all of your impairments, including their interactive and 
cumulative effects. We will consider all the relevant information in 
your case record that helps us determine your functioning, including 
your signs, symptoms, and laboratory findings, the descriptions we have 
about your functioning from your parents, teachers, and other people who 
know you, and the relevant factors explained in Secs. 416.924a, 
416.924b, and 416.929.
    (ii) The medical evidence may include formal testing that provides 
information about your development or functioning in terms of 
percentiles, percentages of delay, or age or grade equivalents. Standard 
scores (e.g., percentiles) can be converted to standard deviations. When 
you have such scores, we will consider them together with the 
information we have about your functioning to determine whether you have 
a ``marked'' or ``extreme'' limitation in a domain.
    (2) Marked limitation. (i) We will find that you have a ``marked'' 
limitation in a domain when your impairment(s) interferes seriously with 
your ability to independently initiate, sustain, or complete activities. 
Your day-to-day functioning may be seriously limited when your 
impairment(s) limits only one activity or when the interactive and 
cumulative effects of your impairment(s) limit several activities. 
``Marked'' limitation also means a limitation that is ``more than 
moderate'' but ``less than extreme.'' It is the equivalent of the 
functioning we would expect to find on standardized testing with scores 
that are at least two, but less than three, standard deviations below 
the mean.
    (ii) If you have not attained age 3, we will generally find that you 
have a ``marked'' limitation if you are functioning at a level that is 
more than one-half but not more than two-thirds of your chronological 
age when there are no standard scores from standardized tests in your 
case record.
    (iii) If you are a child of any age (birth to the attainment of age 
18), we will find that you have a ``marked'' limitation when you have a 
valid score that is two standard deviations or more below the mean, but 
less than three standard deviations, on a comprehensive standardized 
test designed to measure ability or functioning in that domain, and your 
day-to-day functioning in domain-related activities is consistent with 
that score. (See paragraph (e)(4) of this section.)
    (iv) For the sixth domain of functioning, ``Health and physical 
well-being,'' we may also consider you to have a ``marked'' limitation 
if you are frequently ill because of your impairment(s) or have frequent 
exacerbations of your impairment(s) that result in significant, 
documented symptoms or signs. For purposes of this domain, ``frequent 
means that you have episodes of illness or exacerbations that occur on 
an average of 3 times a year, or once every 4 months, each lasting 2 
weeks or more. We may also find that you have a ``marked'' limitation if 
you have episodes that occur more often than 3 times in a year or once 
every 4 months but do not last for 2 weeks, or occur less often than an 
average of 3 times a year or once every 4 months but last longer than 2 
weeks, if the overall effect (based on the length of the episode(s) or 
its frequency) is equivalent in severity.
    (3) Extreme limitation. (i) We will find that you have an 
``extreme'' limitation

[[Page 906]]

in a domain when your impairment(s) interferes very seriously with your 
ability to independently initiate, sustain, or complete activities. Your 
day-to-day functioning may be very seriously limited when your 
impairment(s) limits only one activity or when the interactive and 
cumulative effects of your impairment(s) limit several activities. 
``Extreme'' limitation also means a limitation that is ``more than 
marked.'' ``Extreme'' limitation is the rating we give to the worst 
limitations. However, ``extreme limitation'' does not necessarily mean a 
total lack or loss of ability to function. It is the equivalent of the 
functioning we would expect to find on standardized testing with scores 
that are at least three standard deviations below the mean.
    (ii) If you have not attained age 3, we will generally find that you 
have an ``extreme'' limitation if you are functioning at a level that is 
one-half of your chronological age or less when there are no standard 
scores from standardized tests in your case record.
    (iii) If you are a child of any age (birth to the attainment of age 
18), we will find that you have an ``extreme'' limitation when you have 
a valid score that is three standard deviations or more below the mean 
on a comprehensive standardized test designed to measure ability or 
functioning in that domain, and your day-to-day functioning in domain-
related activities is consistent with that score. (See paragraph (e)(4) 
of this section.)
    (iv) For the sixth domain of functioning, ``Health and physical 
well-being,'' we may also consider you to have an ``extreme'' limitation 
if you are frequently ill because of your impairment(s) or have frequent 
exacerbations of your impairment(s) that result in significant, 
documented symptoms or signs substantially in excess of the requirements 
for showing a ``marked'' limitation in paragraph (e)(2)(iv) of this 
section. However, if you have episodes of illness or exacerbations of 
your impairment(s) that we would rate as ``extreme'' under this 
definition, your impairment(s) should meet or medically equal the 
requirements of a listing in most cases. See Secs. 416.925 and 416.926.
    (4) How we will consider your test scores. (i) As indicated in 
Sec. 416.924a(a)(1)(ii), we will not rely on any test score alone. No 
single piece of information taken in isolation can establish whether you 
have a ``marked'' or an ``extreme'' limitation in a domain.
    (ii) We will consider your test scores together with the other 
information we have about your functioning, including reports of 
classroom performance and the observations of school personnel and 
others.
    (A) We may find that you have a ``marked'' or ``extreme'' limitation 
when you have a test score that is slightly higher than the level 
provided in paragraph (e)(2) or (e)(3) of this section, if other 
information in your case record shows that your functioning in day-to-
day activities is seriously or very seriously limited because of your 
impairment(s). For example, you may have IQ scores above the level in 
paragraph (e)(2), but other evidence shows that your impairment(s) 
causes you to function in school, home, and the community far below your 
expected level of functioning based on this score.
    (B) On the other hand, we may find that you do not have a ``marked'' 
or ``extreme'' limitation, even if your test scores are at the level 
provided in paragraph (e)(2) or (e)(3) of this section, if other 
information in your case record shows that your functioning in day-to-
day activities is not seriously or very seriously limited by your 
impairment(s). For example, you may have a valid IQ score below the 
level in paragraph (e)(2), but other evidence shows that you have 
learned to drive a car, shop independently, and read books near your 
expected grade level.
    (iii) If there is a material inconsistency between your test scores 
and other information in your case record, we will try to resolve it. 
The interpretation of the test is primarily the responsibility of the 
psychologist or other professional who administered the test. But it is 
also our responsibility to ensure that the evidence in your case is 
complete and consistent or that any material inconsistencies have been 
resolved. Therefore, we will use the following guidelines when we 
resolve concerns about your test scores:

[[Page 907]]

    (A) We may be able to resolve the inconsistency with the information 
we have. We may need to obtain additional information; e.g., by 
recontact with your medical source(s), by purchase of a consultative 
examination to provide further medical information, by recontact with a 
medical source who provided a consultative examination, or by 
questioning individuals familiar with your day-to-day functioning.
    (B) Generally, we will not rely on a test score as a measurement of 
your functioning within a domain when the information we have about your 
functioning is the kind of information typically used by medical 
professionals to determine that the test results are not the best 
measure of your day-to-day functioning. When we do not rely on test 
scores, we will explain our reasons for doing so in your case record or 
in our decision.
    (f) How we will use the domains to help us evaluate your 
functioning. (1) When we consider whether you have ``marked'' or 
``extreme'' limitations in any domain, we examine all the information we 
have in your case record about how your functioning is limited because 
of your impairment(s), and we compare your functioning to the typical 
functioning of children your age who do not have impairments.
    (2) The general descriptions of each domain in paragraphs (g)-(l) 
help us decide whether you have limitations in any given domain and 
whether these limitations are ``marked'' or ``extreme.''
    (3) The domain descriptions also include examples of some activities 
typical of children in each age group and some functional limitations 
that we may consider. These examples also help us decide whether you 
have limitations in a domain because of your impairment(s). The examples 
are not all-inclusive, and we will not require our adjudicators to 
develop evidence about each specific example. When you have limitations 
in a given activity or activities in the examples, we may or may not 
decide that you have a ``marked'' or ``extreme'' limitation in the 
domain. We will consider the activities in which you are limited because 
of your impairment(s) and the extent of your limitations under the rules 
in paragraph (e) of this section. We will also consider all of the 
relevant provisions of Secs. 416.924a, 416.924b, and 416.929.
    (g) Acquiring and using information. In this domain, we consider how 
well you acquire or learn information, and how well you use the 
information you have learned.
    (1) General. (i) Learning and thinking begin at birth. You learn as 
you explore the world through sight, sound, taste, touch, and smell. As 
you play, you acquire concepts and learn that people, things, and 
activities have names. This lets you understand symbols, which prepares 
you to use language for learning. Using the concepts and symbols you 
have acquired through play and learning experiences, you should be able 
to learn to read, write, do arithmetic, and understand and use new 
information.
    (ii) Thinking is the application or use of information you have 
learned. It involves being able to perceive relationships, reason, and 
make logical choices. People think in different ways. When you think in 
pictures, you may solve a problem by watching and imitating what another 
person does. When you think in words, you may solve a problem by using 
language to talk your way through it. You must also be able to use 
language to think about the world and to understand others and express 
yourself; e.g., to follow directions, ask for information, or explain 
something.
    (2) Age group descriptors--(i) Newborns and young infants (birth to 
attainment of age 1). At this age, you should show interest in, and 
explore, your environment. At first, your actions are random; for 
example, when you accidentally touch the mobile over your crib. 
Eventually, your actions should become deliberate and purposeful, as 
when you shake noisemaking toys like a bell or rattle. You should begin 
to recognize, and then anticipate, routine situations and events, as 
when you grin with expectation at the sight of your stroller. You should 
also recognize and gradually attach meaning to everyday sounds, as when 
you hear the telephone or your name. Eventually, you should recognize 
and respond to familiar words, including family names and

[[Page 908]]

what your favorite toys and activities are called.
    (ii) Older infants and toddlers (age 1 to attainment of age 3). At 
this age, you are learning about the world around you. When you play, 
you should learn how objects go together in different ways. You should 
learn that by pretending, your actions can represent real things. This 
helps you understand that words represent things, and that words are 
simply symbols or names for toys, people, places, and activities. You 
should refer to yourself and things around you by pointing and 
eventually by naming. You should form concepts and solve simple problems 
through purposeful experimentation (e.g., taking toys apart), imitation, 
constructive play (e.g., building with blocks), and pretend play 
activities. You should begin to respond to increasingly complex 
instructions and questions, and to produce an increasing number of words 
and grammatically correct simple sentences and questions.
    (iii) Preschool children (age 3 to attainment of age 6). When you 
are old enough to go to preschool or kindergarten, you should begin to 
learn and use the skills that will help you to read and write and do 
arithmetic when you are older. For example, listening to stories, 
rhyming words, and matching letters are skills needed for learning to 
read. Counting, sorting shapes, and building with blocks are skills 
needed to learn math. Painting, coloring, copying shapes, and using 
scissors are some of the skills needed in learning to write. Using words 
to ask questions, give answers, follow directions, describe things, 
explain what you mean, and tell stories allows you to acquire and share 
knowledge and experience of the world around you. All of these are 
called ``readiness skills,'' and you should have them by the time you 
begin first grade.
    (iv) School-age children (age 6 to attainment of age 12). When you 
are old enough to go to elementary and middle school, you should be able 
to learn to read, write, and do math, and discuss history and science. 
You will need to use these skills in academic situations to demonstrate 
what you have learned; e.g., by reading about various subjects and 
producing oral and written projects, solving mathematical problems, 
taking achievement tests, doing group work, and entering into class 
discussions. You will also need to use these skills in daily living 
situations at home and in the community (e.g., reading street signs, 
telling time, and making change). You should be able to use increasingly 
complex language (vocabulary and grammar) to share information and ideas 
with individuals or groups, by asking questions and expressing your own 
ideas, and by understanding and responding to the opinions of others.
    (v) Adolescents (age 12 to attainment of age 18). In middle and high 
school, you should continue to demonstrate what you have learned in 
academic assignments (e.g., composition, classroom discussion, and 
laboratory experiments). You should also be able to use what you have 
learned in daily living situations without assistance (e.g., going to 
the store, using the library, and using public transportation). You 
should be able to comprehend and express both simple and complex ideas, 
using increasingly complex language (vocabulary and grammar) in learning 
and daily living situations (e.g., to obtain and convey information and 
ideas). You should also learn to apply these skills in practical ways 
that will help you enter the workplace after you finish school (e.g., 
carrying out instructions, preparing a job application, or being 
interviewed by a potential employer).
    (3) Examples of limited functioning in acquiring and using 
information. The following examples describe some limitations we may 
consider in this domain. Your limitations may be different from the ones 
listed here. Also, the examples do not necessarily describe a ``marked'' 
or ``extreme'' limitation. Whether an example applies in your case may 
depend on your age and developmental stage; e.g., an example below may 
describe a limitation in an older child, but not a limitation in a 
younger one. As in any case, your limitations must result from your 
medically determinable impairment(s). However, we will consider all of 
the relevant information in your case record when we decide whether your 
medically determinable impairment(s) results in a

[[Page 909]]

``marked'' or ``extreme'' limitation in this domain.
    (i) You do not demonstrate understanding of words about space, size, 
or time; e.g., in/under, big/little, morning/night.
    (ii) You cannot rhyme words or the sounds in words.
    (iii) You have difficulty recalling important things you learnedin 
school yesterday.
    (iv) You have difficulty solving mathematics questions or computing 
arithmetic answers.
    (v) You talk only in short, simple sentences and have difficulty 
explaining what you mean.
    (h) Attending and completing tasks. In this domain, we consider how 
well you are able to focus and maintain your attention, and how well you 
begin, carry through, and finish your activities, including the pace at 
which you perform activities and the ease with which you change them.
    (1) General. (i) Attention involves regulating your levels of 
alertness and initiating and maintaining concentration. It involves the 
ability to filter out distractions and to remain focused on an activity 
or task at a consistent level of performance. This means focusing long 
enough to initiate and complete an activity or task, and changing focus 
once it is completed. It also means that if you lose or change your 
focus in the middle of a task, you are able to return to the task 
without other people having to remind you frequently to finish it.
    (ii) Adequate attention is needed to maintain physical and mental 
effort and concentration on an activity or task. Adequate attention 
permits you to think and reflect before starting or deciding to stop an 
activity. In other words, you are able to look ahead and predict the 
possible outcomes of your actions before you act. Focusing your 
attention allows you to attempt tasks at an appropriate pace. It also 
helps you determine the time needed to finish a task within an 
appropriate timeframe.
    (2) Age group descriptors--(i) Newborns and young infants (birth to 
attainment of age 1). You should begin at birth to show sensitivity to 
your environment by responding to various stimuli (e.g., light, touch, 
temperature, movement). Very soon, you should be able to fix your gaze 
on a human face. You should stop your activity when you hear voices or 
sounds around you. Next, you should begin to attend to and follow 
various moving objects with your gaze, including people or toys. You 
should be listening to your family's conversations for longer and longer 
periods of time. Eventually, as you are able to move around and explore 
your environment, you should begin to play with people and toys for 
longer periods of time. You will still want to change activities 
frequently, but your interest in continuing interaction or a game should 
gradually expand.
    (ii) Older infants and toddlers (age 1 to attainment of age 3). At 
this age, you should be able to attend to things that interest you and 
have adequate attention to complete some tasks by yourself. As a 
toddler, you should demonstrate sustained attention, such as when 
looking at picture books, listening to stories, or building with blocks, 
and when helping to put on your clothes.
    (iii) Preschool children (age 3 to attainment of age 6). As a 
preschooler, you should be able to pay attention when you are spoken to 
directly, sustain attention to your play and learning activities, and 
concentrate on activities like putting puzzles together or completing 
art projects. You should also be able to focus long enough to do many 
more things by yourself, such as getting your clothes together and 
dressing yourself, feeding yourself, or putting away your toys. You 
should usually be able to wait your turn and to change your activity 
when a caregiver or teacher says it is time to do something else.
    (iv) School-age children (age 6 to attainment of age 12). When you 
are of school age, you should be able to focus your attention in a 
variety of situations in order to follow directions, remember and 
organize your school materials, and complete classroom and homework 
assignments. You should be able to concentrate on details and not make 
careless mistakes in your work (beyond what would be expected in other 
children your age who do not have impairments). You should be able

[[Page 910]]

to change your activities or routines without distracting yourself or 
others, and stay on task and in place when appropriate. You should be 
able to sustain your attention well enough to participate in group 
sports, read by yourself, and complete family chores. You should also be 
able to complete a transition task (e.g., be ready for the school bus, 
change clothes after gym, change classrooms) without extra reminders and 
accommodation.
    (v) Adolescents (age 12 to attainment of age 18). In your later 
years of school, you should be able to pay attention to increasingly 
longer presentations and discussions, maintain your concentration while 
reading textbooks, and independently plan and complete long-range 
academic projects. You should also be able to organize your materials 
and to plan your time in order to complete school tasks and assignments. 
In anticipation of entering the workplace, you should be able to 
maintain your attention on a task for extended periods of time, and not 
be unduly distracted by your peers or unduly distracting to them in a 
school or work setting.
    (3) Examples of limited functioning in attending and completing 
tasks. The following examples describe some limitations we may consider 
in this domain. Your limitations may be different from the ones listed 
here. Also, the examples do not necessarily describe a ``marked'' or 
``extreme'' limitation. Whether an example applies in your case may 
depend on your age and developmental stage; e.g., an example below may 
describe a limitation in an older child, but not a limitation in a 
younger one. As in any case, your limitations must result from your 
medically determinable impairment(s). However, we will consider all of 
the relevant information in your case record when we decide whether your 
medically determinable impairment(s) results in a ``marked'' or 
``extreme'' limitation in this domain.
    (i) You are easily startled, distracted, or overreactive to sounds, 
sights, movements, or touch.
    (ii) You are slow to focus on, or fail to complete activities of 
interest to you, e.g., games or art projects.
    (iii) You repeatedly become sidetracked from your activities or you 
frequently interrupt others.
    (iv) You are easily frustrated and give up on tasks, including ones 
you are capable of completing.
    (v) You require extra supervision to keep you engaged in an 
activity.
    (i) Interacting and relating with others. In this domain, we 
consider how well you initiate and sustain emotional connections with 
others, develop and use the language of your community, cooperate with 
others, comply with rules, respond to criticism, and respect and take 
care of the possessions of others.
    (1) General. (i) Interacting means initiating and responding to 
exchanges with other people, for practical or social purposes. You 
interact with others by using facial expressions, gestures, actions, or 
words. You may interact with another person only once, as when asking a 
stranger for directions, or many times, as when describing your day at 
school to your parents. You may interact with people one-at-a-time, as 
when you are listening to another student in the hallway at school, or 
in groups, as when you are playing with others.
    (ii) Relating to other people means forming intimate relationships 
with family members and with friends who are your age, and sustaining 
them over time. You may relate to individuals, such as your siblings, 
parents or best friend, or to groups, such as other children in 
childcare, your friends in school, teammates in sports activities, or 
people in your neighborhood.
    (iii) Interacting and relating require you to respond appropriately 
to a variety of emotional and behavioral cues. You must be able to speak 
intelligibly and fluently so that others can understand you; participate 
in verbal turntaking and nonverbal exchanges; consider others' feelings 
and points of view; follow social rules for interaction and 
conversation; and respond to others appropriately and meaningfully.
    (iv) Your activities at home or school or in your community may 
involve playing, learning, and working cooperatively with other 
children, one-at-a-time or in groups; joining voluntarily in activities 
with the other children in

[[Page 911]]

your school or community; and responding to persons in authority (e.g., 
your parent, teacher, bus driver, coach, or employer).
    (2) Age group descriptors--(i) Newborns and young infants (birth to 
attainment of age 1). You should begin to form intimate relationships at 
birth by gradually responding visually and vocally to your caregiver(s), 
through mutual gaze and vocal exchanges, and by physically molding your 
body to the caregiver's while being held. You should eventually initiate 
give-and-take games (such as pat-a-cake, peek-a-boo) with your 
caregivers, and begin to affect others through your own purposeful 
behavior (e.g., gestures and vocalizations). You should be able to 
respond to a variety of emotions (e.g., facial expressions and vocal 
tone changes). You should begin to develop speech by using vowel sounds 
and later consonants, first alone, and then in babbling.
    (ii) Older infants and toddlers (age 1 to attainment of age 3). At 
this age, you are dependent upon your caregivers, but should begin to 
separate from them. You should be able to express emotions and respond 
to the feelings of others. You should begin initiating and maintaining 
interactions with adults, but also show interest in, then play 
alongside, and eventually interact with other children your age. You 
should be able to spontaneously communicate your wishes or needs, first 
by using gestures, and eventually by speaking words clearly enough that 
people who know you can understand what you say most of the time.
    (iii) Preschool children (age 3 to attainment of age 6). At this 
age, you should be able to socialize with children as well as adults. 
You should begin to prefer playmates your own age and start to develop 
friendships with children who are your age. You should be able to use 
words instead of actions to express yourself, and also be better able to 
share, show affection, and offer to help. You should be able to relate 
to caregivers with increasing independence, choose your own friends, and 
play cooperatively with other children, one-at-a-time or in a group, 
without continual adult supervision. You should be able to initiate and 
participate in conversations, using increasingly complex vocabulary and 
grammar, and speaking clearly enough that both familiar and unfamiliar 
listeners can understand what you say most of the time.
    (iv) School-age children (age 6 to attainment of age 12). When you 
enter school, you should be able to develop more lasting friendships 
with children who are your age. You should begin to understand how to 
work in groups to create projects and solve problems. You should have an 
increasing ability to understand another's point of view and to tolerate 
differences. You should be well able to talk to people of all ages, to 
share ideas, tell stories, and to speak in a manner that both familiar 
and unfamiliar listeners readily understand.
    (v) Adolescents (age 12 to attainment of age 18). By the time you 
reach adolescence, you should be able to initiate and develop 
friendships with children who are your age and to relate appropriately 
to other children and adults, both individually and in groups. You 
should begin to be able to solve conflicts between yourself and peers or 
family members or adults outside your family. You should recognize that 
there are different social rules for you and your friends and for 
acquaintances or adults. You should be able to intelligibly express your 
feelings, ask for assistance in getting your needs met, seek 
information, describe events, and tell stories, in all kinds of 
environments (e.g., home, classroom, sports, extra-curricular 
activities, or part-time job), and with all types of people (e.g., 
parents, siblings, friends, classmates, teachers, employers, and 
strangers).
    (3) Examples of limited functioning in interacting and relating with 
others. The following examples describe some limitations we may consider 
in this domain. Your limitations may be different from the ones listed 
here. Also, the examples do not necessarily describe a ``marked'' or 
``extreme'' limitation. Whether an example applies in your case may 
depend on your age and developmental stage; e.g., an example below may 
describe a limitation in an older child, but not a limitation in a 
younger one. As in any case, your limitations must result from your 
medically determinable impairment(s).

[[Page 912]]

However, we will consider all of the relevant information in your case 
record when we decide whether your medically determinable impairment(s) 
results in a ``marked'' or ``extreme'' limitation in this domain.
    (i) You do not reach out to be picked up and held by your caregiver.
    (ii) You have no close friends, or your friends are all older or 
younger than you.
    (iii) You avoid or withdraw from people you know, or you are overly 
anxious or fearful of meeting new people or trying new experiences.
    (iv) You have difficulty playing games or sports with rules.
    (v) You have difficulty communicating with others; e.g., in using 
verbal and nonverbal skills to express yourself, carrying on a 
conversation, or in asking others for assistance.
    (vi) You have difficulty speaking intelligibly or with adequate 
fluency.
    (j) Moving about and manipulating objects. In this domain, we 
consider how you move your body from one place to another and how you 
move and manipulate things. These are called gross and fine motor 
skills.
    (1) General. (i) Moving your body involves several different kinds 
of actions: Rolling your body; rising or pulling yourself from a sitting 
to a standing position; pushing yourself up; raising your head, arms, 
and legs, and twisting your hands and feet; balancing your weight on 
your legs and feet; shifting your weight while sitting or standing; 
transferring yourself from one surface to another; lowering yourself to 
or toward the floor as when bending, kneeling, stooping, or crouching; 
moving yourself forward and backward in space as when crawling, walking, 
or running, and negotiating different terrains (e.g., curbs, steps, and 
hills).
    (ii) Moving and manipulating things involves several different kinds 
of actions: Engaging your upper and lower body to push, pull, lift, or 
carry objects from one place to another; controlling your shoulders, 
arms, and hands to hold or transfer objects; coordinating your eyes and 
hands to manipulate small objects or parts of objects.
    (iii) These actions require varying degrees of strength, 
coordination, dexterity, pace, and physical ability to persist at the 
task. They also require a sense of where your body is and how it moves 
in space; the integration of sensory input with motor output; and the 
capacity to plan, remember, and execute controlled motor movements.
    (2) Age group descriptors--(i) Newborns and infants (birth to 
attainment of age 1). At birth, you should begin to explore your world 
by moving your body and by using your limbs. You should learn to hold 
your head up, sit, crawl, and stand, and sometimes hold onto a stable 
object and stand actively for brief periods. You should begin to 
practice your developing eye-hand control by reaching for objects or 
picking up small objects and dropping them into containers.
    (ii) Older infants and toddlers (age 1 to attainment of age 3). At 
this age, you should begin to explore actively a wide area of your 
physical environment, using your body with steadily increasing control 
and independence from others. You should begin to walk and run without 
assistance, and climb with increasing skill. You should frequently try 
to manipulate small objects and to use your hands to do or get something 
that you want or need. Your improved motor skills should enable you to 
play with small blocks, scribble with crayons, and feed yourself.
    (iii) Preschool children (age 3 to attainment of age 6). As a 
preschooler, you should be able to walk and run with ease. Your gross 
motor skills should let you climb stairs and playground equipment with 
little supervision, and let you play more independently; e.g., you 
should be able to swing by yourself and may start learning to ride a 
tricycle. Your fine motor skills should also be developing. You should 
be able to complete puzzles easily, string beads, and build with an 
assortment of blocks. You should be showing increasing control of 
crayons, markers, and small pieces in board games, and should be able to 
cut with scissors independently and manipulate buttons and other 
fasteners.
    (iv) School-age children (age 6 to attainment of age 12). As a 
school-age child, your developing gross motor skills should let you move 
at an efficient pace about your school, home,

[[Page 913]]

and neighborhood. Your increasing strength and coordination should 
expand your ability to enjoy a variety of physical activities, such as 
running and jumping, and throwing, kicking, catching and hitting balls 
in informal play or organized sports. Your developing fine motor skills 
should enable you to do things like use many kitchen and household tools 
independently, use scissors, and write.
    (v) Adolescents (age 12 to attainment of age 18). As an adolescent, 
you should be able to use your motor skills freely and easily to get 
about your school, the neighborhood, and the community. You should be 
able to participate in a full range of individual and group physical 
fitness activities. You should show mature skills in activities 
requiring eye-hand coordination, and should have the fine motor skills 
needed to write efficiently or type on a keyboard.
    (3) Examples of limited functioning in moving about and manipulating 
objects. The following examples describe some limitations we may 
consider in this domain. Your limitations may be different from the ones 
listed here. Also, the examples do not necessarily describe a ``marked'' 
or ``extreme'' limitation. Whether an example applies in your case may 
depend on your age and developmental stage; e.g., an example below may 
describe a limitation in an older child, but not a limitation in a 
younger one. As in any case, your limitations must result from your 
medically determinable impairment(s). However, we will consider all of 
the relevant information in your case record when we decide whether your 
medically determinable impairment(s) results in a ``marked'' or 
``extreme'' limitation in this domain.
    (i) You experience muscle weakness, joint stiffness, or sensory loss 
(e.g., spasticity, hypotonia, neuropathy, or paresthesia) that 
interferes with your motor activities (e.g., you unintentionally drop 
things).
    (ii) You have trouble climbing up and down stairs, or have jerky or 
disorganized locomotion or difficulty with your balance.
    (iii) You have difficulty coordinating gross motor movements (e.g., 
bending, kneeling, crawling, running, jumping rope, or riding a bike).
    (iv) You have difficulty with sequencing hand or finger movements.
    (v) You have difficulty with fine motor movement (e.g., gripping or 
grasping objects).
    (vi) You have poor eye-hand coordination when using a pencil or 
scissors.
    (k) Caring for yourself. In this domain, we consider how well you 
maintain a healthy emotional and physical state, including how well you 
get your physical and emotional wants and needs met in appropriate ways; 
how you cope with stress and changes in your environment; and whether 
you take care of your own health, possessions, and living area.
    (1) General. (i) Caring for yourself effectively, which includes 
regulating yourself, depends upon your ability to respond to changes in 
your emotions and the daily demands of your environment to help yourself 
and cooperate with others in taking care of your personal needs, health 
and safety. It is characterized by a sense of independence and 
competence. The effort to become independent and competent should be 
observable throughout your childhood.
    (ii) Caring for yourself effectively means becoming increasingly 
independent in making and following your own decisions. This entails 
relying on your own abilities and skills, and displaying consistent 
judgment about the consequences of caring for yourself. As you mature, 
using and testing your own judgment helps you develop confidence in your 
independence and competence. Caring for yourself includes using your 
independence and competence to meet your physical needs, such as 
feeding, dressing, toileting, and bathing, appropriately for your age.
    (iii) Caring for yourself effectively requires you to have a basic 
understanding of your body, including its normal functioning, and of 
your physical and emotional needs. To meet these needs successfully, you 
must employ effective coping strategies, appropriate to your age, to 
identify and regulate your feelings, thoughts, urges, and intentions. 
Such strategies are based on taking responsibility for getting your 
needs met in an appropriate and satisfactory manner.

[[Page 914]]

    (iv) Caring for yourself means recognizing when you are ill, 
following recommended treatment, taking medication as prescribed, 
following safety rules, responding to your circumstances in safe and 
appropriate ways, making decisions that do not endanger yourself, and 
knowing when to ask for help from others.
    (2) Age group descriptors--(i) Newborns and infants (birth to 
attainment of age 1. Your sense of independence and competence begins in 
being able to recognize your body's signals (e.g., hunger, pain, 
discomfort), to alert your caregiver to your needs (e.g., by crying), 
and to console yourself (e.g., by sucking on your hand) until help 
comes. As you mature, your capacity for self-consolation should expand 
to include rhythmic behaviors (e.g., rocking). Your need for a sense of 
competence also emerges in things you try to do for yourself, perhaps 
before you are ready to do them, as when insisting on putting food in 
your mouth and refusing your caregiver's help.
    (ii) Older infants and toddlers (age 1 to attainment of age 3). As 
you grow, you should be trying to do more things for yourself that 
increase your sense of independence and competence in your environment. 
You might console yourself by carrying a favorite blanket with you 
everywhere. You should be learning to cooperate with your caregivers 
when they take care of your physical needs, but you should also want to 
show what you can do; e.g., pointing to the bathroom, pulling off your 
coat. You should be experimenting with your independence by showing some 
degree of contrariness (e.g., ``No! No!'') and identity (e.g., hoarding 
your toys).
    (iii) Preschool children (age 3 to attainment of age 6). You should 
want to take care of many of your physical needs by yourself (e.g., 
putting on your shoes, getting a snack), and also want to try doing some 
things that you cannot do fully (e.g., tying your shoes, climbing on a 
chair to reach something up high, taking a bath). Early in this age 
range, it may be easy for you to agree to do what your caregiver asks. 
Later, that may be difficult for you because you want to do things your 
way or not at all. These changes usually mean that you are more 
confident about your ideas and what you are able to do. You should also 
begin to understand how to control behaviors that are not good for you 
(e.g., crossing the street without an adult).
    (iv) School-age children (age 6 to attainment of age 12). You should 
be independent in most day-to-day activities (e.g., dressing yourself, 
bathing yourself), although you may still need to be reminded sometimes 
to do these routinely. You should begin to recognize that you are 
competent in doing some activities and that you have difficulty with 
others. You should be able to identify those circumstances when you feel 
good about yourself and when you feel bad. You should begin to develop 
understanding of what is right and wrong, and what is acceptable and 
unacceptable behavior. You should begin to demonstrate consistent 
control over your behavior, and you should be able to avoid behaviors 
that are unsafe or otherwise not good for you. You should begin to 
imitate more of the behavior of adults you know.
    (v) Adolescents (age 12 to attainment of age 18). You should feel 
more independent from others and should be increasingly independent in 
all of your day-to-day activities. You may sometimes experience 
confusion in the way you feel about yourself. You should begin to notice 
significant changes in your body's development, and this can result in 
anxiety or worrying about yourself and your body. Sometimes these 
worries can make you feel angry or frustrated. You should begin to 
discover appropriate ways to express your feelings, both good and bad 
(e.g., keeping a diary to sort out angry feelings or listening to music 
to calm yourself down). You should begin to think seriously about your 
future plans, and what you will do when you finish school.
    (3) Examples of limited functioning in caring for yourself. The 
following examples describe some limitations we may consider in this 
domain. Your limitations may be different from the ones listed here. 
Also, the examples do not necessarily describe a ``marked'' or 
``extreme'' limitation. Whether an example applies in your case may 
depend on your age and developmental stage; e.g., an example below may 
describe a

[[Page 915]]

limitation in an older child, but not a limitation in a younger one. As 
in any case, your limitations must result from your medically 
determinable impairment(s). However, we will consider all of the 
relevant information in your case record when we decide whether your 
medically determinable impairment(s) results in a ``marked'' or 
``extreme'' limitation in this domain.
    (i) You continue to place non-nutritive or inedible objects in your 
mouth.
    (ii) You often use self-soothing activities showing developmental 
regression (e.g., thumbsucking, re-chewing food), or you have 
restrictive or stereotyped mannerisms (e.g., body rocking, headbanging).
    (iii) You do not dress or bathe yourself appropriately for your age 
because you have an impairment(s) that affects this domain.
    (iv) You engage in self-injurious behavior (e.g., suicidal thoughts 
or actions, self-inflicted injury, or refusal to take your medication), 
or you ignore safety rules.
    (v) You do not spontaneously pursue enjoyable activities or 
interests.
    (vi) You have disturbance in eating or sleeping patterns.
    (l) Health and physical well-being. In this domain, we consider the 
cumulative physical effects of physical or mental impairments and their 
associated treatments or therapies on your functioning that we did not 
consider in paragraph (j) of this section. When your physical 
impairment(s), your mental impairment(s), or your combination of 
physical and mental impairments has physical effects that cause 
``extreme'' limitation in your functioning, you will generally have an 
impairment(s) that ``meets'' or ``medically equals'' a listing.
    (1) A physical or mental disorder may have physical effects that 
vary in kind and intensity, and may make it difficult for you to perform 
your activities independently or effectively. You may experience 
problems such as generalized weakness, dizziness, shortness of breath, 
reduced stamina, fatigue, psychomotor retardation, allergic reactions, 
recurrent infection, poor growth, bladder or bowel incontinence, or 
local or generalized pain.
    (2) In addition, the medications you take (e.g., for asthma or 
depression) or the treatments you receive (e.g., chemotherapy or 
multiple surgeries) may have physical effects that also limit your 
performance of activities.
    (3) Your illness may be chronic with stable symptoms, or episodic 
with periods of worsening and improvement. We will consider how you 
function during periods of worsening and how often and for how long 
these periods occur. You may be medically fragile and need intensive 
medical care to maintain your level of health and physical well-being. 
In any case, as a result of the illness itself, the medications or 
treatment you receive, or both, you may experience physical effects that 
interfere with your functioning in any or all of your activities.
    (4) Examples of limitations in health and physical well-being. The 
following examples describe some limitations we may consider in this 
domain. Your limitations may be different from the ones listed here. 
Also, the examples do not necessarily describe a ``marked'' or 
``extreme'' limitation. Whether an example applies in your case may 
depend on your age and developmental stage; e.g., an example below may 
describe a limitation in an older child, but not a limitation in a 
younger one. As in any case, your limitations must result from your 
medically determinable impairment(s). However, we will consider all of 
the relevant information in your case record when we decide whether your 
medically determinable impairment(s) results in a ``marked'' or 
``extreme'' limitation in this domain.
    (i) You have generalized symptoms, such as weakness, dizziness, 
agitation (e.g., excitability), lethargy (e.g., fatigue or loss of 
energy or stamina), or psychomotor retardation because of your 
impairment(s).
    (ii) You have somatic complaints related to your impairments (e.g., 
seizure or convulsive activity, headaches, incontinence, recurrent 
infections, allergies, changes in weight or eating habits, stomach 
discomfort, nausea, headaches, or insomnia).
    (iii) You have limitations in your physical functioning because of 
your

[[Page 916]]

treatment (e.g., chemotherapy, multiple surgeries, chelation, pulmonary 
cleansing, or nebulizer treatments).
    (iv) You have exacerbations from one impairment or a combination of 
impairments that interfere with your physical functioning.
    (v) You are medically fragile and need intensive medical care to 
maintain your level of health and physical well-being.
    (m) Examples of impairments that functionally equal the listings. 
The following are some examples of impairments and limitations that 
functionally equal the listings. Findings of equivalence based on the 
disabling functional limitations of a child's impairment(s) are not 
limited to the examples in this paragraph, because these examples do not 
describe all possible effects of impairments that might be found to 
functionally equal the listings. As with any disabling impairment, the 
duration requirement must also be met (see Secs. 416.909 and 
416.924(a)).
    (1) Any condition that is disabling at the time of onset, requiring 
continuing surgical management within 12 months after onset as a life-
saving measure or for salvage or restoration of function, and such major 
function is not restored or is not expected to be restored within 12 
months after onset of this condition.
    (2) Effective ambulation possible only with obligatory bilateral 
upper limb assistance.
    (3) Any physical impairment(s) or combination of physical and mental 
impairments causing complete inability to function independently outside 
the area of one's home within age-appropriate norms.
    (4) Requirement for 24-hour-a-day supervision for medical (including 
psychological) reasons.
    (5) Major congenital organ dysfunction which could be expected to 
result in death within the first year of life without surgical 
correction, and the impairment is expected to be disabling (because of 
residual impairment following surgery, or the recovery time required, or 
both) until attainment of 1 year of age.
    (n) Responsibility for determining functional equivalence. In cases 
where the State agency or other designee of the Commissioner makes the 
initial or reconsideration disability determination, a State agency 
medical or psychological consultant or other designee of the 
Commissioner (see Sec. 416.1016 of this part) has the overall 
responsibility for determining functional equivalence. For cases in the 
disability hearing process or otherwise decided by a disability hearing 
officer, the responsibility for determining functional equivalence rests 
with either the disability hearing officer or, if the disability hearing 
officer's reconsideration determination is changed under Sec. 416.1418 
of this part, with the Associate Commissioner for Disability Programs or 
his or her delegate. For cases at the administrative law judge or 
Appeals Council level, the responsibility for deciding functional 
equivalence rests with the administrative law judge or Appeals Council.

[62 FR 6424, Feb. 11, 1997; 62 FR 13538, 13733, Mar. 21, 1997, as 
amended at 65 FR 54782, Sept. 11, 2000; 65 FR 80308, Dec. 21, 2000; 66 
FR 58045, Nov. 19, 2001; 71 FR 16460, Mar. 31, 2006; 72 FR 59431, Oct. 
19, 2007; 76 FR 24811, May 3, 2011; 80 FR 19530, Apr. 13, 2015; 81 FR 
37153, June 9, 2016; 82 FR 5880, Jan. 18, 2017]



Sec. 416.927  Evaluating opinion evidence for claims filed before
March 27, 2017.

    For claims filed (see Sec. 416.325) before March 27, 2017, the rules 
in this section apply. For claims filed on or after March 27, 2017, the 
rules in Sec. 416.920c apply.
    (a) Definitions.
    (1) Medical opinions. Medical opinions are statements from 
acceptable medical sources that reflect judgments about the nature and 
severity of your impairment(s), including your symptoms, diagnosis and 
prognosis, what you can still do despite impairment(s), and your 
physical or mental restrictions.
    (2) Treating source. Treating source means your own acceptable 
medical source who provides you, or has provided you, with medical 
treatment or evaluation and who has, or has had, an ongoing treatment 
relationship with you. Generally, we will consider that you have an 
ongoing treatment relationship with an acceptable medical source when 
the medical evidence establishes that you see, or have seen, the source 
with a frequency consistent

[[Page 917]]

with accepted medical practice for the type of treatment and/or 
evaluation required for your medical condition(s). We may consider an 
acceptable medical source who has treated or evaluated you only a few 
times or only after long intervals (e.g., twice a year) to be your 
treating source if the nature and frequency of the treatment or 
evaluation is typical for your condition(s). We will not consider an 
acceptable medical source to be your treating source if your 
relationship with the source is not based on your medical need for 
treatment or evaluation, but solely on your need to obtain a report in 
support of your claim for disability. In such a case, we will consider 
the acceptable medical source to be a nontreating source.
    (b) How we consider medical opinions. In determining whether you are 
disabled, we will always consider the medical opinions in your case 
record together with the rest of the relevant evidence we receive. See 
Sec. 416.920b.
    (c) How we weigh medical opinions. Regardless of its source, we will 
evaluate every medical opinion we receive. Unless we give a treating 
source's medical opinion controlling weight under paragraph (c)(2) of 
this section, we consider all of the following factors in deciding the 
weight we give to any medical opinion.
    (1) Examining relationship. Generally, we give more weight to the 
medical opinion of a source who has examined you than to the medical 
opinion of a medical source who has not examined you.
    (2) Treatment relationship. Generally, we give more weight to 
medical opinions from your treating sources, since these sources are 
likely to be the medical professionals most able to provide a detailed, 
longitudinal picture of your medical impairment(s) and may bring a 
unique perspective to the medical evidence that cannot be obtained from 
the objective medical findings alone or from reports of individual 
examinations, such as consultative examinations or brief 
hospitalizations. If we find that a treating source's medical opinion on 
the issue(s) of the nature and severity of your impairment(s) is well-
supported by medically acceptable clinical and laboratory diagnostic 
techniques and is not inconsistent with the other substantial evidence 
in your case record, we will give it controlling weight. When we do not 
give the treating source's medical opinion controlling weight, we apply 
the factors listed in paragraphs (c)(2)(i) and (c)(2)(ii) of this 
section, as well as the factors in paragraphs (c)(3) through (c)(6) of 
this section in determining the weight to give the medical opinion. We 
will always give good reasons in our notice of determination or decision 
for the weight we give your treating source's medical opinion.
    (i) Length of the treatment relationship and the frequency of 
examination. Generally, the longer a treating source has treated you and 
the more times you have been seen by a treating source, the more weight 
we will give to the source's medical opinion. When the treating source 
has seen you a number of times and long enough to have obtained a 
longitudinal picture of your impairment, we will give the medical 
source's medical opinion more weight than we would give it if it were 
from a nontreating source.
    (ii) Nature and extent of the treatment relationship. Generally, the 
more knowledge a treating source has about your impairment(s) the more 
weight we will give to the source's medical opinion. We will look at the 
treatment the source has provided and at the kinds and extent of 
examinations and testing the source has performed or ordered from 
specialists and independent laboratories. For example, if your 
ophthalmologist notices that you have complained of neck pain during 
your eye examinations, we will consider his or her medical opinion with 
respect to your neck pain, but we will give it less weight than that of 
another physician who has treated you for the neck pain. When the 
treating source has reasonable knowledge of your impairment(s), we will 
give the source's medical opinion more weight than we would give it if 
it were from a nontreating source.
    (3) Supportability. The more a medical source presents relevant 
evidence to support a medical opinion, particularly medical signs and 
laboratory findings, the more weight we will give that medical opinion. 
The better an explanation

[[Page 918]]

a source provides for a medical opinion, the more weight we will give 
that medical opinion. Furthermore, because nonexamining sources have no 
examining or treating relationship with you, the weight we will give 
their medical opinions will depend on the degree to which they provide 
supporting explanations for their medical opinions. We will evaluate the 
degree to which these medical opinions consider all of the pertinent 
evidence in your claim, including medical opinions of treating and other 
examining sources.
    (4) Consistency. Generally, the more consistent a medical opinion is 
with the record as a whole, the more weight we will give to that medical 
opinion.
    (5) Specialization. We generally give more weight to the medical 
opinion of a specialist about medical issues related to his or her area 
of specialty than to the medical opinion of a source who is not a 
specialist.
    (6) Other factors. When we consider how much weight to give to a 
medical opinion, we will also consider any factors you or others bring 
to our attention, or of which we are aware, which tend to support or 
contradict the medical opinion. For example, the amount of understanding 
of our disability programs and their evidentiary requirements that a 
medical source has, regardless of the source of that understanding, and 
the extent to which a medical source is familiar with the other 
information in your case record are relevant factors that we will 
consider in deciding the weight to give to a medical opinion.
    (d) Medical source opinions on issues reserved to the Commissioner. 
Opinions on some issues, such as the examples that follow, are not 
medical opinions, as described in paragraph (a)(1) of this section, but 
are, instead, opinions on issues reserved to the Commissioner because 
they are administrative findings that are dispositive of a case; i.e., 
that would direct the determination or decision of disability.
    (1) Opinions that you are disabled. We are responsible for making 
the determination or decision about whether you meet the statutory 
definition of disability. In so doing, we review all of the medical 
findings and other evidence that support a medical source's statement 
that you are disabled. A statement by a medical source that you are 
``disabled'' or ``unable to work'' does not mean that we will determine 
that you are disabled.
    (2) Other opinions on issues reserved to the Commissioner. We use 
medical sources, including your treating source, to provide evidence, 
including opinions, on the nature and severity of your impairment(s). 
Although we consider opinions from medical sources on issues such as 
whether your impairment(s) meets or equals the requirements of any 
impairment(s) in the Listing of Impairments in appendix 1 to subpart P 
of part 404 of this chapter, your residual functional capacity (see 
Secs. 416.945 and 416.946), or the application of vocational factors, 
the final responsibility for deciding these issues is reserved to the 
Commissioner.
    (3) We will not give any special significance to the source of an 
opinion on issues reserved to the Commissioner described in paragraphs 
(d)(1) and (d)(2) of this section.
    (e) Evidence from our Federal or State agency medical or 
psychological consultants. The rules in Sec. 416.913a apply except that 
when an administrative law judge gives controlling weight to a treating 
source's medical opinion, the administrative law judge is not required 
to explain in the decision the weight he or she gave to the prior 
administrative medical findings in the claim.
    (f) Opinions from medical sources who are not acceptable medical 
sources and from nonmedical sources.
    (1) Consideration. Opinions from medical sources who are not 
acceptable medical sources and from nonmedical sources may reflect the 
source's judgment about some of the same issues addressed in medical 
opinions from acceptable medical sources. Although we will consider 
these opinions using the same factors as listed in paragraph (c)(1) 
through (c)(6) in this section, not every factor for weighing opinion 
evidence will apply in every case because the evaluation of an opinion 
from a medical source who is not an acceptable medical source or from a 
nonmedical source depends on the particular facts in each case. 
Depending on the

[[Page 919]]

particular facts in a case, and after applying the factors for weighing 
opinion evidence, an opinion from a medical source who is not an 
acceptable medical source or from a nonmedical source may outweigh the 
medical opinion of an acceptable medical source, including the medical 
opinion of a treating source. For example, it may be appropriate to give 
more weight to the opinion of a medical source who is not an acceptable 
medical source if he or she has seen the individual more often than the 
treating source, has provided better supporting evidence and a better 
explanation for the opinion, and the opinion is more consistent with the 
evidence as a whole.
    (2) Articulation. The adjudicator generally should explain the 
weight given to opinions from these sources or otherwise ensure that the 
discussion of the evidence in the determination or decision allows a 
claimant or subsequent reviewer to follow the adjudicator's reasoning, 
when such opinions may have an effect on the outcome of the case. In 
addition, when an adjudicator determines that an opinion from such a 
source is entitled to greater weight than a medical opinion from a 
treating source, the adjudicator must explain the reasons in the notice 
of decision in hearing cases and in the notice of determination (that 
is, in the personalized disability notice) at the initial and 
reconsideration levels, if the determination is less than fully 
favorable.

[82 FR 5880, Jan. 18, 2017; 82 FR 15133, Mar. 27, 2017]



Sec. 416.928  [Reserved]



Sec. 416.929  How we evaluate symptoms, including pain.

    (a) General. In determining whether you are disabled, we consider 
all your symptoms, including pain, and the extent to which your symptoms 
can reasonably be accepted as consistent with the objective medical 
evidence and other evidence. We will consider all of your statements 
about your symptoms, such as pain, and any description your medical 
sources or nonmedical sources may provide about how the symptoms affect 
your activities of daily living and your ability to work (or, if you are 
a child, your functioning). However, statements about your pain or other 
symptoms will not alone establish that you are disabled. There must be 
objective medical evidence from an acceptable medical source that shows 
you have a medical impairment(s) which could reasonably be expected to 
produce the pain or other symptoms alleged and that, when considered 
with all of the other evidence (including statements about the intensity 
and persistence of your pain or other symptoms which may reasonably be 
accepted as consistent with the medical signs and laboratory findings), 
would lead to a conclusion that you are disabled. In evaluating the 
intensity and persistence of your symptoms, including pain, we will 
consider all of the available evidence, including your medical history, 
the medical signs and laboratory findings, and statements about how your 
symptoms affect you. We will then determine the extent to which your 
alleged functional limitations and restrictions due to pain or other 
symptoms can reasonably be accepted as consistent with the medical signs 
and laboratory findings and other evidence to decide how your symptoms 
affect your ability to work (or if you are a child, your functioning).
    (b) Need for medically determinable impairment that could reasonably 
be expected to produce your symptoms, such as pain. Your symptoms, such 
as pain, fatigue, shortness of breath, weakness, or nervousness, will 
not be found to affect your ability to do basic work activities unless 
medical signs or laboratory findings show that a medically determinable 
impairment(s) is present. Medical signs and laboratory findings, 
established by medically acceptable clinical or laboratory diagnostic 
techniques, must show the existence of a medical impairment(s) which 
results from anatomical, physiological, or psychological abnormalities 
and which could reasonably be expected to produce the pain or other 
symptoms alleged. In cases decided by a State agency (except in 
disability hearings under Secs. 416.1414 through 416.1418 of this part 
and in fully favorable determinations made by State agency disability 
examiners alone under Sec. 416.1015(c)(3) of this part), a State agency 
medical or psychological consultant or other medical

[[Page 920]]

or psychological consultant designated by the Commissioner directly 
participates in determining whether your medically determinable 
impairment(s) could reasonably be expected to produce your alleged 
symptoms. In the disability hearing process, a medical or psychological 
consultant may provide an advisory assessment to assist a disability 
hearing officer in determining whether your impairment(s) could 
reasonably be expected to produce your alleged symptoms. At the 
administrative law judge hearing or Appeals Council level of the 
administrative review process, the adjudicator(s) may ask for and 
consider the opinion of a medical or psychological expert concerning 
whether your impairment(s) could reasonably be expected to produce your 
alleged symptoms. The finding that your impairment(s) could reasonably 
be expected to produce your pain or other symptoms does not involve a 
determination as to the intensity, persistence, or functionally limiting 
effects of your symptoms. We will develop evidence regarding the 
possibility of a medically determinable mental impairment when we have 
information to suggest that such an impairment exists, and you allege 
pain or other symptoms but the medical signs and laboratory findings do 
not substantiate any physical impairment(s) capable of producing the 
pain or other symptoms.
    (c) Evaluating the intensity and persistence of your symptoms, such 
as pain, and determining the extent to which your symptoms limit your 
capacity for work or, if you are a child, your functioning--(1) General. 
When the medical signs or laboratory findings show that you have a 
medically determinable impairment(s) that could reasonably be expected 
to produce your symptoms, such as pain, we must then evaluate the 
intensity and persistence of your symptoms so that we can determine how 
your symptoms limit your capacity for work or, if you are a child, your 
functioning. In evaluating the intensity and persistence of your 
symptoms, we consider all of the available evidence from your medical 
sources and nonmedical sources about how your symptoms affect you. We 
also consider the medical opinions as explained in Sec. 416.920c. 
Paragraphs (c)(2) through (c)(4) of this section explain further how we 
evaluate the intensity and persistence of your symptoms and how we 
determine the extent to which your symptoms limit your capacity for work 
(or, if you are a child, your functioning) when the medical signs or 
laboratory findings show that you have a medically determinable 
impairment(s) that could reasonably be expected to produce your 
symptoms, such as pain.
    (2) Consideration of objective medical evidence. Objective medical 
evidence is evidence obtained from the application of medically 
acceptable clinical and laboratory diagnostic techniques, such as 
evidence of reduced joint motion, muscle spasm, sensory deficit or motor 
disruption. Objective medical evidence of this type is a useful 
indicator to assist us in making reasonable conclusions about the 
intensity and persistence of your symptoms and the effect those 
symptoms, such as pain, may have on your ability to work or, if you are 
a child, your functioning. We must always attempt to obtain objective 
medical evidence and, when it is obtained, we will consider it in 
reaching a conclusion as to whether you are disabled. However, we will 
not reject your statements about the intensity and persistence of your 
pain or other symptoms or about the effect your symptoms have on your 
ability to work (or if you are a child, to function independently, 
appropriately, and effectively in an age-appropriate manner) solely 
because the available objective medical evidence does not substantiate 
your statements.
    (3) Consideration of other evidence. Because symptoms sometimes 
suggest a greater severity of impairment than can be shown by objective 
medical evidence alone, we will carefully consider any other information 
you may submit about your symptoms. The information that your medical 
sources or nonmedical sources provide about your pain or other symptoms 
(e.g., what may precipitate or aggravate your symptoms, what 
medications, treatments or other methods you use to alleviate them, and 
how the symptoms may affect your pattern of daily living) is also an 
important indicator of the intensity and persistence of your symptoms. 
Because symptoms, such as pain, are subjective

[[Page 921]]

and difficult to quantify, any symptom-related functional limitations 
and restrictions that your medical sources or nonmedical sources report, 
which can reasonably be accepted as consistent with the objective 
medical evidence and other evidence, will be taken into account as 
explained in paragraph (c)(4) of this section in reaching a conclusion 
as to whether you are disabled. We will consider all of the evidence 
presented, including information about your prior work record, your 
statements about your symptoms, evidence submitted by your medical 
sources, and observations by our employees and other persons. If you are 
a child, we will also consider all of the evidence presented, including 
evidence submitted by your medical sources (such as physicians, 
psychologists, and therapists) and nonmedical sources (such as 
educational agencies and personnel, parents and other relatives, and 
social welfare agencies). Section 416.920c explains in detail how we 
consider medical opinions and prior administrative medical findings 
about the nature and severity of your impairment(s) and any related 
symptoms, such as pain. Factors relevant to your symptoms, such as pain, 
which we will consider include:
    (i) Your daily activities;
    (ii) The location, duration, frequency, and intensity of your pain 
or other symptoms;
    (iii) Precipitating and aggravating factors;
    (iv) The type, dosage, effectiveness, and side effects of any 
medication you take or have taken to alleviate your pain or other 
symptoms;
    (v) Treatment, other than medication, you receive or have received 
for relief of your pain or other symptoms;
    (vi) Any measures you use or have used to relieve your pain or other 
symptoms (e.g., lying flat on your back, standing for 15 to 20 minutes 
every hour, sleeping on a board, etc.); and
    (vii) Other factors concerning your functional limitations and 
restrictions due to pain or other symptoms.
    (4) How we determine the extent to which symptoms, such as pain, 
affect your capacity to perform basic work activities, or, if you are a 
child, your functioning). In determining the extent to which your 
symptoms, such as pain, affect your capacity to perform basic work 
activities (or if you are a child, your functioning), we consider all of 
the available evidence described in paragraphs (c)(1) through (c)(3) of 
this section. We will consider your statements about the intensity, 
persistence, and limiting effects of your symptoms, and we will evaluate 
your statements in relation to the objective medical evidence and other 
evidence, in reaching a conclusion as to whether you are disabled. We 
will consider whether there are any inconsistencies in the evidence and 
the extent to which there are any conflicts between your statements and 
the rest of the evidence, including your history, the signs and 
laboratory findings, and statements by your medical sources or other 
persons about how your symptoms affect you. Your symptoms, including 
pain, will be determined to diminish your capacity for basic work 
activities (or, if you are a child, your functioning) to the extent that 
your alleged functional limitations and restrictions due to symptoms, 
such as pain, can reasonably be accepted as consistent with the 
objective medical evidence and other evidence.
    (d) Consideration of symptoms in the disability determination 
process. We follow a set order of steps to determine whether you are 
disabled. If you are not doing substantial gainful activity, we consider 
your symptoms, such as pain, to evaluate whether you have a severe 
physical or mental impairment(s), and at each of the remaining steps in 
the process. Sections 416.920 and 416.920a (for adults) and 416.924 (for 
children) explain this process in detail. We also consider your 
symptoms, such as pain, at the appropriate steps in our review when we 
consider whether your disability continues. The procedure we follow in 
reviewing whether your disability continues is explained in Sec. 416.994 
(for adults) and Sec. 416.994a (for children).
    (1) Need to establish a severe medically determinable impairment(s). 
Your symptoms, such as pain, fatigue, shortness of breath, weakness, or 
nervousness, are considered in making a determination as to whether your 
impairment or

[[Page 922]]

combination of impairment(s) is severe.(See Sec. 416.920(c) for adults 
and Sec. 416.924(c) for children.)
    (2) Decision whether the Listing of Impairments is met. Some listed 
impairments include symptoms usually associated with those impairments 
as criteria. Generally, when a symptom is one of the criteria in a 
listing, it is only necessary that the symptom be present in combination 
with the other criteria. It is not necessary, unless the listing 
specifically states otherwise, to provide information about the 
intensity, persistence, or limiting effects of the symptom as long as 
all other findings required by the specific listing are present.
    (3) Decision whether the Listing of Impairments is equaled. If your 
impairment is not the same as a listed impairment, we must determine 
whether your impairment(s) is medically equivalent to a listed 
impairment. Section 416.926 explains how we make this determination. 
Under Sec. 416.926(b), we will consider medical equivalence based on all 
evidence in your case record about your impairment(s) and its effects on 
you that is relevant to this finding. In considering whether your 
symptoms, signs, and laboratory findings are medically equal to the 
symptoms, signs, and laboratory findings of a listed impairment, we will 
look to see whether your symptoms, signs, and laboratory findings are at 
least equal in severity to the listed criteria. However, we will not 
substitute your allegations of pain or other symptoms for a missing or 
deficient sign or laboratory finding to raise the severity of your 
impairment(s) to that of a listed impairment. (If you are a child and we 
cannot find equivalence based on medical evidence only, we will consider 
pain and other symptoms under Secs. 416.924a and 416.926a in determining 
whether you have an impairment(s) that functionally equals the 
listings.) Regardless of whether you are an adult or a child, if the 
symptoms, signs, and laboratory findings of your impairment(s) are 
equivalent in severity to those of a listed impairment, we will find you 
disabled. (If you are a child and your impairment(s) functionally equals 
the listings under the rules in Sec. 416.926a, we will also find you 
disabled.) If they are not, we will consider the impact of your symptoms 
on your residual functional capacity if you are an adult. If they are 
not, we will consider the impact of your symptoms on your residual 
functional capacity if you are an adult. (See paragraph (d)(4) of this 
section.)
    (4) Impact of symptoms (including pain) on residual functional 
capacity or, if you are a child, on your functioning. If you have a 
medically determinable severe physical or mental impairment(s), but your 
impairment(s) does not meet or equal an impairment listed in appendix 1 
of subpart P of part 404 of this chapter, we will consider the impact of 
your impairment(s) and any related symptoms, including pain, or your 
residual functional capacity, if you are an adult, or, on your 
functioning if you are a child. (See Secs. 416.945 and 416.924a-
416.924b.)

[56 FR 57944, Nov. 14, 1991, as amended at 62 FR 6429, Feb. 11, 1997; 62 
FR 13538, Mar. 21, 1997; 62 FR 38454, July 18, 1997; 65 FR 16814, Mar. 
30, 2000; 65 FR 54789, Sept. 11, 2000; 71 FR 10431, Mar. 1, 2006; 71 FR 
16461, Mar. 31, 2006; 75 FR 62683, Oct. 13, 2010; 76 FR 24811, May 3, 
2011; 82 FR 5882, Jan. 18, 2017]



Sec. 416.930  Need to follow prescribed treatment.

    (a) What treatment you must follow. In order to get benefits, you 
must follow treatment prescribed by your medical source(s) if this 
treatment is expected to restore your ability to work.
    (b) When you do not follow prescribed treatment. If you do not 
follow the prescribed treatment without a good reason, we will not find 
you disabled or blind or, if you are already receiving benefits, we will 
stop paying you benefits.
    (c) Acceptable reasons for failure to follow prescribed treatment. 
We will consider your physical, mental, educational, and linguistic 
limitations (including any lack of facility with the English language) 
when determining if you have an acceptable reason for failure to follow 
prescribed treatment. The following are examples of a good reason for 
not following treatment:
    (1) The specific medical treatment is contrary to the established 
teaching and tenets of your religion.

[[Page 923]]

    (2) The prescribed treatment would be cataract surgery for one eye 
when there is an impairment of the other eye resulting in a severe loss 
of vision and is not subject to improvement through treatment.
    (3) Surgery was previously performed with unsuccessful results and 
the same surgery is again being recommended for the same impairment.
    (4) The treatment because of its enormity (e.g., open heart 
surgery), unusual nature (e.g., organ transplant), or other reason is 
very risky for you; or
    (5) The treatment involves amputation of an extremity, or a major 
part of an extremity.

[45 FR 55621, Aug. 20, 1980, as amended at 59 FR 1636, Jan. 12, 1994; 62 
FR 6429, Feb. 11, 1997; 82 FR 5882, Jan. 18, 2017]

                  Presumptive Disability and Blindness



Sec. 416.931  The meaning of presumptive disability or presumptive
blindness.

    If you are applying for supplemental security income benefits on the 
basis of disability or blindness, we may pay you benefits before we make 
a formal finding of whether or not you are disabled or blind. In order 
to receive these payments, we must find that you are presumptively 
disabled or presumptively blind. You must also meet all other 
eligibility requirements for supplemental security income benefits. We 
may make these payments to you for a period not longer than 6 months. 
These payments will not be considered overpayments if we later find that 
you are not disabled or blind.

[45 FR 55621, Aug. 20, 1980, as amended at 57 FR 53853, Nov. 13, 1992]



Sec. 416.932  When presumptive payments begin and end.

    We may make payments to you on the basis of presumptive disability 
or presumptive blindness before we make a formal determination about 
your disability or blindness. The payments can not be made for more than 
6 months. They start for a period of not more than 6 months beginning in 
the month we make the presumptive disability or presumptive blindness 
finding. The payments end the earliest of--
    (a) The month in which we make a formal finding on whether or not 
you are disabled or blind;
    (b) The month for which we make the sixth monthly payment based on 
presumptive disability or presumptive blindness to you; or
    (c) The month in which you no longer meet one of the other 
eligibility requirements (e.g., your income exceeds the limits).

[45 FR 55621, Aug. 20, 1980, as amended at 57 FR 53853, Nov. 13, 1992]



Sec. 416.933  How we make a finding of presumptive disability or 
presumptive blindness.

    We may make a finding of presumptive disability or presumptive 
blindness if the evidence available at the time we make the presumptive 
disability or presumptive blindness finding reflects a high degree of 
probability that you are disabled or blind. In the case of readily 
observable impairments (e.g., total blindness), we will find that you 
are disabled or blind for purposes of this section without medical or 
other evidence. For other impairments, a finding of disability or 
blindness must be based on medical evidence or other information that, 
though not sufficient for a formal determination of disability or 
blindness, is sufficient for us to find that there is a high degree of 
probability that you are disabled or blind. For example, for claims 
involving the human immunodeficiency virus (HIV), the Social Security 
Field Office may make a finding of presumptive disability if your 
medical source provides us with information that confirms that your 
disease manifestations meet the severity of listing-level criteria for 
HIV. Of course, regardless of the specific HIV manifestations, the State 
agency may make a finding of presumptive disability if the medical 
evidence or other information reflects a high degree of probability that 
you are disabled.

[58 FR 36063, July 2, 1993, as amended at 66 FR 58046, Nov. 19, 2001]

[[Page 924]]



Sec. 416.934  Impairments that may warrant a finding of presumptive
disability or presumptive blindness.

    We may make findings of presumptive disability and presumptive 
blindness in specific impairment categories without obtaining any 
medical evidence. These specific impairment categories are--
    (a) Amputation of a leg at the hip;
    (b) Allegation of total deafness;
    (c) Allegation of total blindness;
    (d) Allegation of bed confinement or immobility without a 
wheelchair, walker, or crutches, due to a longstanding condition, 
excluding recent accident and recent surgery;
    (e) Allegation of a stroke (cerebral vascular accident) more than 3 
months in the past and continued marked difficulty in walking or using a 
hand or arm;
    (f) Allegation of cerebral palsy, muscular dystrophy or muscle 
atrophy and marked difficulty in walking (e.g., use of braces), 
speaking, or coordination of the hands or arms.
    (g) Allegation of Down syndrome.
    (h) Allegation of intellectual disability or another 
neurodevelopmental impairment (for example, autism spectrum disorder) 
with complete inability to independently perform basic self-care 
activities (such as toileting, eating, dressing, or bathing) made by 
another person who files on behalf of a claimant who is at least 4 years 
old.
    (i) Allegation of amyotrophic lateral sclerosis (ALS, Lou Gehrig's 
disease).
    (j) Infants weighing less than 1200 grams at birth, until attainment 
of 1 year of age.
    (k) Infants weighing at least 1200 but less than 2000 grams at 
birth, and who are small for gestational age, until attainment of 1 year 
of age. (Small for gestational age means a birth weight that is at or 
more than 2 standard deviations below the mean or that is less than the 
third growth percentile for the gestational age of the infant.)

[45 FR 55621, Aug. 20, 1980, as amended at 50 FR 5574, Feb. 11, 1985; 53 
FR 3741, Feb. 9, 1988; 56 FR 65684, Dec. 18, 1991; 67 FR 58046, Nov. 19, 
2001; 68 FR 51693, Aug. 28, 2003; 80 FR 19530, Apr. 13, 2015; 81 FR 
66178, Sept. 26, 2016]

                      Drug Addiction and Alcoholism



Sec. 416.935  How we will determine whether your drug addiction or
alcoholism is a contributing factor material to the determination 
of disability.

    (a) General. If we find that you are disabled and have medical 
evidence of your drug addiction or alcoholism, we must determine whether 
your drug addiction or alcoholism is a contributing factor material to 
the determination of disability, unless we find that you are eligible 
for benefits because of your age or blindness.
    (b) Process we will follow when we have medical evidence of your 
drug addiction or alcoholism. (1) The key factor we will examine in 
determining whether drug addiction or alcoholism is a contributing 
factor material to the determination of disability is whether we would 
still find you disabled if you stopped using drugs or alcohol.
    (2) In making this determination, we will evaluate which of your 
current physical and mental limitations, upon which we based our current 
disability determination, would remain if you stopped using drugs or 
alcohol and then determine whether any or all of your remaining 
limitations would be disabling.
    (i) If we determine that your remaining limitations would not be 
disabling, we will find that your drug addiction or alcoholism is a 
contributing factor material to the determination of disability.
    (ii) If we determine that your remaining limitations are disabling, 
you are disabled independent of your drug addiction or alcoholism and we 
will find that your drug addiction or alcoholism is not a contributing 
factor material to the determination of disability.

[60 FR 8151, Feb. 10, 1995]



Sec. 416.936  Treatment required for individuals whose drug addiction
or alcoholism is a contributing factor material to the determination
of disability.

    (a) If we determine that you are disabled and drug addiction or 
alcoholism is a contributing factor material to the determination of 
disability, you must

[[Page 925]]

avail yourself of appropriate treatment for your drug addiction or 
alcoholism at an institution or facility approved by us when this 
treatment is available and make progress in your treatment. Generally, 
you are not expected to pay for this treatment. You will not be paid 
benefits for any month after the month we have notified you in writing 
that--
    (1) You did not comply with the terms, conditions and requirements 
of the treatment which has been made available to you; or
    (2) You did not avail yourself of the treatment after you had been 
notified that it is available to you.
    (b) If your benefits are suspended for failure to comply with 
treatment requirements, your benefits can be reinstated in accordance 
with the rules in Sec. 416.1326.

[60 FR 8151, Feb. 10, 1995]



Sec. 416.937  What we mean by appropriate treatment.

    By appropriate treatment, we mean treatment for drug addiction or 
alcoholism that serves the needs of the individual in the least 
restrictive setting possible consistent with your treatment plan. These 
settings range from outpatient counseling services through a variety of 
residential treatment settings including acute detoxification, short-
term intensive residential treatment, long-term therapeutic residential 
treatment, and long-term recovery houses. Appropriate treatment is 
determined with the involvement of a State licensed or certified 
addiction professional on the basis of a detailed assessment of the 
individual's presenting symptomatology, psychosocial profile, and other 
relevant factors. This assessment may lead to a determination that more 
than one treatment modality is appropriate for the individual. The 
treatment will be provided or overseen by an approved institution or 
facility. This treatment may include (but is not limited to)--
    (a) Medical examination and medical management;
    (b) Detoxification;
    (c) Medication management to include substitution therapy (e.g., 
methadone);
    (d) Psychiatric, psychological, psychosocial, vocational, or other 
substance abuse counseling in a residential or outpatient treatment 
setting; or
    (e) Relapse prevention.

[60 FR 8151, Feb. 10, 1995]



Sec. 416.938  What we mean by approved institutions or facilities.

    Institutions or facilities that we may approve include--
    (a) An institution or facility that furnishes medically recognized 
treatment for drug addiction or alcoholism in conformity with applicable 
Federal or State laws and regulations;
    (b) An institution or facility used by or licensed by an appropriate 
State agency which is authorized to refer persons for treatment of drug 
addiction or alcoholism;
    (c) State licensed or certified care providers;
    (d) Programs accredited by the Commission on Accreditation for 
Rehabilitation Facilities (CARF) and/or the Joint Commission for the 
Accreditation of Healthcare Organizations (JCAHO) for the treatment of 
drug addiction or alcoholism;
    (e) Medicare or Medicaid certified care providers; or
    (f) Nationally recognized self-help drug addiction or alcoholism 
recovery programs (e.g., Alcoholics Anonymous or Narcotics Anonymous) 
when participation in these programs is specifically prescribed by a 
treatment professional at an institution or facility described in 
paragraphs (a) through (e) of this section as part of an individual's 
treatment plan.

[60 FR 8151, Feb. 10, 1995]



Sec. 416.939  How we consider whether treatment is available.

    Our determination about whether treatment is available to you for 
your drug addiction or your alcoholism will depend upon--
    (a) The capacity of an approved institution or facility to admit you 
for appropriate treatment;
    (b) The location of the approved institution or facility, or the 
place where treatment, services or resources could be provided to you;
    (c) The availability and cost of transportation for you to the place 
of treatment;

[[Page 926]]

    (d) Your general health, including your ability to travel and 
capacity to understand and follow the prescribed treatment;
    (e) Your particular condition and circumstances; and
    (f) The treatment that is prescribed for your drug addiction or 
alcoholism.

[60 FR 8151, Feb. 10, 1995]



Sec. 416.940  Evaluating compliance with the treatment requirements.

    (a) General. Generally, we will consider information from the 
treatment institution or facility to evaluate your compliance with your 
treatment plan. The treatment institution or facility will--
    (1) Monitor your attendance at and participation in treatment 
sessions;
    (2) Provide reports of the results of any clinical testing (such as, 
hematological or urinalysis studies for individuals with drug addiction 
and hematological studies and breath analysis for individuals with 
alcoholism) when such tests are likely to yield important information;
    (3) Provide observational reports from the treatment professionals 
familiar with your individual case (subject to verification and Federal 
confidentiality requirements); or
    (4) Provide their assessment or views on your noncompliance with 
treatment requirements.
    (b) Measuring progress. Generally, we will consider information from 
the treatment institution or facility to evaluate your progress in 
completing your treatment plan. Examples of milestones for measuring 
your progress with the treatment which has been prescribed for your drug 
addiction or alcoholism may include (but are not limited to)--
    (1) Abstinence from drug or alcohol use (initial progress may 
include significant reduction in use);
    (2) Consistent attendance at and participation in treatment 
sessions;
    (3) Improved social functioning and levels of gainful activity;
    (4) Participation in vocational rehabilitation activities; or
    (5) Avoidance of criminal activity.

[60 FR 8151, Feb. 10, 1995]



Sec. 416.941  Establishment and use of referral and monitoring agencies.

    We will contract with one or more agencies in each of the States and 
the District of Columbia to provide services to individuals whose 
disabilities are based on a determination that drug addiction or 
alcoholism is a contributing factor material to the determination of 
disability (as described in Sec. 416.935) and to submit information to 
us which we will use to make decisions about these individuals' 
benefits. These agencies will be known as referral and monitoring 
agencies. Their duties and responsibilities include (but are not limited 
to)--
    (a) Identifying appropriate treatment placements for individuals we 
refer to them;
    (b) Referring these individuals for treatment;
    (c) Monitoring the compliance and progress with the appropriate 
treatment of these individuals; and
    (d) Promptly reporting to us any individual's failure to comply with 
treatment requirements as well as failure to achieve progress through 
the treatment.

[60 FR 8152, Feb. 10, 1995]

                      Residual Functional Capacity



Sec. 416.945  Your residual functional capacity.

    (a) General--(1) Residual functional capacity assessment. Your 
impairment(s), and any related symptoms, such as pain, may cause 
physical and mental limitations that affect what you can do in a work 
setting. Your residual functional capacity is the most you can still do 
despite your limitations. We will assess your residual functional 
capacity based on all the relevant evidence in your case record. (See 
Sec. 416.946.)
    (2) If you have more than one impairment. We will consider all of 
your medically determinable impairments of which we are aware, including 
your medically determinable impairments that are not ``severe,'' as 
explained in Secs. 416.920(c), 416.921, and 416.923, when we assess your 
residual functional capacity. (See paragraph (e) of this section.)

[[Page 927]]

    (3) Evidence we use to assess your residual functional capacity. We 
will assess your residual functional capacity based on all of the 
relevant medical and other evidence. In general, you are responsible for 
providing the evidence we will use to make a finding about your residual 
functional capacity. (See Sec. 416.912(c).) However, before we make a 
determination that you are not disabled, we are responsible for 
developing your complete medical history, including arranging for a 
consultative examination(s) if necessary, and making every reasonable 
effort to help you get medical reports from your own medical sources. 
(See Secs. 416.912(d) through (e).) We will consider any statements 
about what you can still do that have been provided by medical sources, 
whether or not they are based on formal medical examinations. (See 
Sec. 416.913.) We will also consider descriptions and observations of 
your limitations from your impairment(s), including limitations that 
result from your symptoms, such as pain, provided by you, your family, 
neighbors, friends, or other persons. (See paragraph (e) of this section 
and Sec. 416.929.)
    (4) What we will consider in assessing residual functional capacity. 
When we assess your residual functional capacity, we will consider your 
ability to meet the physical, mental, sensory, and other requirements of 
work, as described in paragraphs (b), (c), and (d) of this section.
    (5) How we will use our residual functional capacity assessment. (i) 
We will first use our residual functional capacity assessment at step 
four of the sequential evaluation process to decide if you can do your 
past relevant work. (See Secs. 416.920(f) and 416.960(b).)
    (ii) If we find that you cannot do your past relevant work, you do 
not have any past relevant work, or if we use the procedures in 
Sec. 416.920(h) and Sec. 416.962 does not apply, we will use the same 
assessment of your residual functional capacity at step five of the 
sequential evaluation process to decide if you can adjust to any other 
work that exists in the national economy. (See Secs. 416.920(g) and 
416.966.) At this step, we will not use our assessment of your residual 
functional capacity alone to decide if you are disabled. We will use the 
guidelines in Secs. 416.960 through 416.969a, and consider our residual 
functional capacity assessment together with the information about your 
vocational background to make our disability determination or decision. 
For our rules on residual functional capacity assessment in deciding 
whether your disability continues or ends, see Sec. 416.994.
    (b) Physical abilities. When we assess your physical abilities, we 
first assess the nature and extent of your physical limitations and then 
determine your residual functional capacity for work activity on a 
regular and continuing basis. A limited ability to perform certain 
physical demands of work activity, such as sitting, standing, walking, 
lifting, carrying, pushing, pulling, or other physical functions 
(including manipulative or postural functions, such as reaching, 
handling, stooping or crouching), may reduce your ability to do past 
work and other work.
    (c) Mental abilities. When we assess your mental abilities, we first 
assess the nature and extent of your mental limitations and restrictions 
and then determine your residual functional capacity for work activity 
on a regular and continuing basis. A limited ability to carry out 
certain mental activities, such as limitations in understanding, 
remembering, and carrying out instructions, and in responding 
appropriately to supervision, coworkers, and work pressures in a work 
setting, may reduce your ability to do past work and other work.
    (d) Other abilities affected by impairment(s). Some medically 
determinable impairment(s), such as skin impairment(s), epilepsy, 
impairment(s) of vision, hearing or other senses, and impairment(s) 
which impose environmental restrictions, may cause limitations and 
restrictions which affect other work-related abilities. If you have this 
type of impairment(s), we consider any resulting limitations and 
restrictions which may reduce your ability to do past work and other 
work in deciding your residual functional capacity.
    (e) Total limiting effects. When you have a severe impairment(s), 
but your symptoms, signs, and laboratory findings do not meet or equal 
those of a

[[Page 928]]

listed impairment in appendix 1 of subpart P of part 404 of this 
chapter, we will consider the limiting effects of all your 
impairment(s), even those that are not severe, in determining your 
residual functional capacity. Pain or other symptoms may cause a 
limitation of function beyond that which can be determined on the basis 
of the anatomical, physiological or psychological abnormalities 
considered alone; e.g., someone with a low back disorder may be fully 
capable of the physical demands consistent with those of sustained 
medium work activity, but another person with the same disorder, because 
of pain, may not be capable of more than the physical demands consistent 
with those of light work activity on a sustained basis. In assessing the 
total limiting effects of your impairment(s) and any related symptoms, 
we will consider all of the medical and nonmedical evidence, including 
the information described in Sec. 416.929(c).

[56 FR 57947, Nov. 14, 1991, as amended at 68 FR 51165, Aug. 26, 2003; 
77 FR 10657, Feb. 23, 2012; 77 FR 43495, July 25, 2012]



Sec. 416.946  Responsibility for assessing your residual functional 
capacity.

    (a) Responsibility for assessing residual functional capacity at the 
State agency. When a State agency medical or psychological consultant 
and a State agency disability examiner make the disability determination 
as provided in Sec. 416.1015(c)(1) of this part, a State agency medical 
or psychological consultant(s) is responsible for assessing your 
residual functional capacity. When a State agency disability examiner 
makes a disability determination alone as provided in 
Sec. 416.1015(c)(3), the disability examiner is responsible for 
assessing your residual functional capacity.
    (b) Responsibility for assessing residual functional capacity in the 
disability hearings process. If your case involves a disability hearing 
under Sec. 416.1414, a disability hearing officer is responsible for 
assessing your residual functional capacity. However, if the disability 
hearing officer's reconsidered determination is changed under 
Sec. 416.1418, the Associate Commissioner for the Office of Disability 
Determinations or his or her delegate is responsible for assessing your 
residual functional capacity.
    (c) Responsibility for assessing residual functional capacity at the 
administrative law judge hearing or Appeals Council level. If your case 
is at the administrative law judge hearing level or at the Appeals 
Council review level, the administrative law judge or the administrative 
appeals judge at the Appeals Council (when the Appeals Council makes a 
decision) is responsible for assessing your residual functional 
capacity.

[68 FR 51165, Aug. 26, 2003, as amended at 71 FR 16461, Mar. 31, 2006; 
75 FR 62683, Oct. 13, 2010; 76 FR 24812, May 3, 2011]

                        Vocational Considerations



Sec. 416.960  When we will consider your vocational background.

    (a) General. If you are age 18 or older and applying for 
supplemental security income benefits based on disability, and we cannot 
decide whether you are disabled at one of the first three steps of the 
sequential evaluation process (see Sec. 416.920), we will consider your 
residual functional capacity together with your vocational background, 
as discussed in paragraphs (b) and (c) of this section.
    (b) Past relevant work. We will first compare our assessment of your 
residual functional capacity with the physical and mental demands of 
your past relevant work. See Sec. 416.920(h) for an exception to this 
rule.
    (1) Definition of past relevant work. Past relevant work is work 
that you have done within the past 15 years, that was substantial 
gainful activity, and that lasted long enough for you to learn to do it. 
(See Sec. 416.965(a).)
    (2) Determining whether you can do your past relevant work. We will 
ask you for information about work you have done in the past. We may 
also ask other people who know about your work. (See Sec. 416.965(b).) 
We may use the services of vocational experts or vocational specialists, 
or other resources, such as the ``Dictionary of Occupational Titles'' 
and its companion volumes and supplements, published by the Department 
of Labor, to obtain evidence we need to help us determine whether you 
can do your past relevant

[[Page 929]]

work, given your residual functional capacity. A vocational expert or 
specialist may offer relevant evidence within his or her expertise or 
knowledge concerning the physical and mental demands of a claimant's 
past relevant work, either as the claimant actually performed it or as 
generally performed in the national economy. Such evidence may be 
helpful in supplementing or evaluating the accuracy of the claimant's 
description of his past work. In addition, a vocational expert or 
specialist may offer expert opinion testimony in response to a 
hypothetical question about whether a person with the physical and 
mental limitations imposed by the claimant's medical impairment(s) can 
meet the demands of the claimant's previous work, either as the claimant 
actually performed it or as generally performed in the national economy.
    (3) If you can do your past relevant work. If we find that you have 
the residual functional capacity to do your past relevant work, we will 
determine that you can still do your past work and are not disabled. We 
will not consider your vocational factors of age, education, and work 
experience or whether your past relevant work exists in significant 
numbers in the national economy.
    (c) Other work. (1) If we find that your residual functional 
capacity does not enable you to do any of your past relevant work or if 
we use the procedures in Sec. 416.920(h), we will use the same residual 
functional capacity assessment when we decide if you can adjust to any 
other work. We will look at your ability to adjust to other work by 
considering your residual functional capacity and the vocational factors 
of age, education, and work experience, as appropriate in your case. 
(See Sec. 416.920(h) for an exception to this rule.) Any other work 
(jobs) that you can adjust to must exist in significant numbers in the 
national economy (either in the region where you live or in several 
regions in the country).
    (2) In order to support a finding that you are not disabled at this 
fifth step of the sequential evaluation process, we are responsible for 
providing evidence that demonstrates that other work exists in 
significant numbers in the national economy that you can do, given your 
residual functional capacity and vocational factors. We are not 
responsible for providing additional evidence about your residual 
functional capacity because we will use the same residual functional 
capacity assessment that we used to determine if you can do your past 
relevant work.

[68 FR 51166, Aug. 26, 2003, as amended at 77 FR 43495, July 25, 2012]



Sec. 416.962  Medical-vocational profiles showing an inability to 
make an adjustment to other work.

    (a) If you have done only arduous unskilled physical labor. If you 
have no more than a marginal education (see Sec. 416.964) and work 
experience of 35 years or more during which you did only arduous 
unskilled physical labor, and you are not working and are no longer able 
to do this kind of work because of a severe impairment(s) (see 
Secs. 416.920(c), 416.921, and 416.923), we will consider you unable to 
do lighter work, and therefore, disabled.

    Example to paragraph (a): B is a 58-year-old miner's helper with a 
fourth grade education who has a lifelong history of unskilled arduous 
physical labor. B says that he is disabled because of arthritis of the 
spine, hips, and knees, and other impairments. Medical evidence shows a 
``severe'' combination of impairments that prevents B from performing 
his past relevant work. Under these circumstances, we will find that B 
is disabled.

    (b) If you are at least 55 years old, have no more than a limited 
education, and have no past relevant work experience. If you have a 
severe, medically determinable impairment(s) (see Secs. 416.920(c), 
416.921, and 416.923), are of advanced age (age 55 or older, see 
Sec. 416.963), have a limited education or less (see Sec. 416.964), and 
have no past relevant work experience (see Sec. 416.965), we will find 
you disabled. If the evidence shows that you meet this profile, we will 
not need to assess your residual functional capacity or consider the 
rules in appendix 2 to subpart P of part 404 of this chapter.

[68 FR 51166, Aug. 26, 2003]



Sec. 416.963  Your age as a vocational factor.

    (a) General. ``Age'' means your chronological age. When we decide 
whether you are disabled under Sec. 416.920(g)(1), we

[[Page 930]]

will consider your chronological age in combination with your residual 
functional capacity, education, and work experience. We will not 
consider your ability to adjust to other work on the basis of your age 
alone. In determining the extent to which age affects a person's ability 
to adjust to other work, we consider advancing age to be an increasingly 
limiting factor in the person's ability to make such an adjustment, as 
we explain in paragraphs (c) through (e) of this section. If you are 
unemployed but you still have the ability to adjust to other work, we 
will find that you are not disabled. In paragraphs (b) through (e) of 
this section and in appendix 2 of subpart P of part 404 of this chapter, 
we explain in more detail how we consider your age as a vocational 
factor.
    (b) How we apply the age categories. When we make a finding about 
your ability to do other work under Sec. 416.920(f)(1), we will use the 
age categories in paragraphs (c) through (e) of this section. We will 
use each of the age categories that applies to you during the period for 
which we must determine if you are disabled. We will not apply the age 
categories mechanically in a borderline situation. If you are within a 
few days to a few months of reaching an older age category, and using 
the older age category would result in a determination or decision that 
you are disabled, we will consider whether to use the older age category 
after evaluating the overall impact of all the factors of your case.
    (c) Younger person. If you are a younger person (under age 50), we 
generally do not consider that your age will seriously affect your 
ability to adjust to other work. However, in some circumstances, we 
consider that persons age 45-49 are more limited in their ability to 
adjust to other work than persons who have not attained age 45. See Rule 
201.17 in appendix 2 of subpart P of part 404 of this chapter.
    (d) Person closely approaching advanced age. If you are closely 
approaching advanced age (age 50-54), we will consider that your age 
along with a severe impairment(s) and limited work experience may 
seriously affect your ability to adjust to other work.
    (e) Person of advanced age. We consider that at advanced age (age 55 
or older), age significantly affects a person's ability to adjust to 
other work. We have special rules for persons of advanced age and for 
persons in this category who are closely approaching retirement age (age 
60 or older). See Sec. 416.968(d)(4).
    (f) Information about your age. We will usually not ask you to prove 
your age. However, if we need to know your exact age to determine 
whether you get disability benefits, we will ask you for evidence of 
your age.

[45 FR 55621, Aug. 20, 1980, as amended at 65 FR 18001, Apr. 6, 2000; 68 
FR 51166, Aug. 26, 2003; 73 FR 64197, Oct. 29, 2008]



Sec. 416.964  Your education as a vocational factor.

    (a) General. Education is primarily used to mean formal schooling or 
other training which contributes to your ability to meet vocational 
requirements, for example, reasoning ability, communication skills, and 
arithmetical ability. However, if you do not have formal schooling, this 
does not necessarily mean that you are uneducated or lack these 
abilities. Past work experience and the kinds of responsibilities you 
had when you were working may show that you have intellectual abilities, 
although you may have little formal education. Your daily activities, 
hobbies, or the results of testing may also show that you have 
significant intellectual ability that can be used to work.
    (b) How we evaluate your education. The importance of your 
educational background may depend upon how much time has passed between 
the completion of your formal education and the beginning of your 
physical or mental impairment(s) and by what you have done with your 
education in a work or other setting. Formal education that you 
completed many years before your impairment began, or unused skills and 
knowledge that were a part of your formal education, may no longer be 
useful or meaningful in terms of your ability to work. Therefore, the 
numerical grade level that you completed in school may not represent 
your actual educational abilities.

[[Page 931]]

These may be higher or lower. However, if there is no other evidence to 
contradict it, we will use your numerical grade level to determine your 
educational abilities. The term education also includes how well you are 
able to communicate in English since this ability is often acquired or 
improved by education. In evaluating your educational level, we use the 
following categories:
    (1) Illiteracy. Illiteracy means the inability to read or write. We 
consider someone illiterate if the person cannot read or write a simple 
message such as instructions or inventory lists even though the person 
can sign his or her name. Generally, an illiterate person has had little 
or no formal schooling.
    (2) Marginal education. Marginal education means ability in 
reasoning, arithmetic, and language skills which are needed to do 
simple, unskilled types of jobs. We generally consider that formal 
schooling at a 6th grade level or less is a marginal education.
    (3) Limited education. Limited education means ability in reasoning, 
arithmetic, and language skills, but not enough to allow a person with 
these educational qualifications to do most of the more complex job 
duties needed in semi-skilled or skilled jobs. We generally consider 
that a 7th grade through the 11th grade level of formal education is a 
limited education.
    (4) High school education and above. High school education and above 
means abilities in reasoning, arithmetic, and language skills acquired 
through formal schooling at a 12th grade level or above. We generally 
consider that someone with these educational abilities can do semi-
skilled through skilled work.
    (5) Inability to communicate in English. Since the ability to speak, 
read and understand English is generally learned or increased at school, 
we may consider this an educational factor. Because English is the 
dominant language of the country, it may be difficult for someone who 
doesn't speak and understand English to do a job, regardless of the 
amount of education the person may have in another language. Therefore, 
we consider a person's ability to communicate in English when we 
evaluate what work, if any, he or she can do. It generally doesn't 
matter what other language a person may be fluent in.
    (6) Information about your education. We will ask you how long you 
attended school and whether you are able to speak, understand, read and 
write in English and do at least simple calculations in arithmetic. We 
will also consider other information about how much formal or informal 
education you may have had through your previous work, community 
projects, hobbies, and any other activities which might help you to 
work.



Sec. 416.965  Your work experience as a vocational factor.

    (a) General. Work experience means skills and abilities you have 
acquired through work you have done which show the type of work you may 
be expected to do. Work you have already been able to do shows the kind 
of work that you may be expected to do. We consider that your work 
experience applies when it was done within the last 15 years, lasted 
long enough for you to learn to do it, and was substantial gainful 
activity. We do not usually consider that work you did 15 years or more 
before the time we are deciding whether you are disabled applies. A 
gradual change occurs in most jobs so that after 15 years it is no 
longer realistic to expect that skills and abilities acquired in a job 
done then continue to apply. The 15-year guide is intended to insure 
that remote work experience is not currently applied. If you have no 
work experience or worked only off-and-on or for brief periods of time 
during the 15-year period, we generally consider that these do not 
apply. If you have acquired skills through your past work, we consider 
you to have these work skills unless you cannot use them in other 
skilled or semi-skilled work that you can now do. If you cannot use your 
skills in other skilled or semi-skilled work, we will consider your work 
background the same as unskilled. However, even if you have no work 
experience, we may consider that you are able to do unskilled work 
because it requires little or no judgment and can be learned in a short 
period of time.

[[Page 932]]

    (b) Information about your work. Under certain circumstances, we 
will ask you about the work you have done in the past. If you cannot 
give us all of the information we need, we may try, with your 
permission, to get it from your employer or other person who knows about 
your work, such as a member of your family or a co-worker. When we need 
to consider your work experience to decide whether you are able to do 
work that is different from what you have done in the past, we will ask 
you to tell us about all of the jobs you have had in the last 15 years. 
You must tell us the dates you worked, all of the duties you did, and 
any tools, machinery, and equipment you used. We will need to know about 
the amount of walking, standing, sitting, lifting and carrying you did 
during the work day, as well as any other physical or mental duties of 
your job. If all of your work in the past 15 years has been arduous and 
unskilled, and you have very little education, we will ask you to tell 
us about all of your work from the time you first began working. This 
information could help you to get disability benefits.

[45 FR 55584, Aug. 20, 1980, as amended at 77 FR 43495, July 25, 2012]



Sec. 416.966  Work which exists in the national economy.

    (a) General. We consider that work exists in the national economy 
when it exists in significant numbers either in the region where you 
live or in several other regions of the country. It does not matter 
whether--
    (1) Work exists in the immediate area in which you live;
    (2) A specific job vacancy exists for you; or
    (3) You would be hired if you applied for work.
    (b) How we determine the existence of work. Work exists in the 
national economy when there is a significant number of jobs (in one or 
more occupations) having requirements which you are able to meet with 
your physical or mental abilities and vocational qualifications. 
Isolated jobs that exist only in very limited numbers in relatively few 
locations outside of the region where you live are not considered work 
which exists in the national economy. We will not deny you disability 
benefits on the basis of the existence of these kinds of jobs. If work 
that you can do does not exist in the national economy, we will 
determine that you are disabled. However, if work that you can do does 
exist in the national economy, we will determine that you are not 
disabled.
    (c) Inability to obtain work. We will determine that you are not 
disabled if your residual functional capacity and vocational abilities 
make it possible for you to do work which exists in the national 
economy, but you remain unemployed because of--
    (1) Your inability to get work;
    (2) Lack of work in your local area;
    (3) The hiring practices of employers;
    (4) Technological changes in the industry in which you have worked;
    (5) Cyclical economic conditions;
    (6) No job openings for you;
    (7) You would not actually be hired to do work you could otherwise 
do, or;
    (8) You do not wish to do a particular type of work.
    (d) Administrative notice of job data. When we determine that 
unskilled, sedentary, light, and medium jobs exist in the national 
economy (in significant numbers either in the region where you live or 
in several regions of the country), we will take administrative notice 
of reliable job information available from various governmental and 
other publications. For example, we will take notice of--
    (1) Dictionary of Occupational Titles, published by the Department 
of Labor;
    (2) County Business Patterns, published by the Bureau of the Census;
    (3) Census Reports, also published by the Bureau of the Census;
    (4) Occupational Analyses prepared for the Social Security 
Administration by various State employment agencies; and
    (5) Occupational Outlook Handbook, published by the Bureau of Labor 
Statistics.
    (e) Use of vocational experts and other specialists. If the issue in 
determining whether you are disabled is whether your work skills can be 
used in other work and the specific occupations in which they can be 
used, or there is a similarly complex issue, we may use the services of 
a vocational expert or

[[Page 933]]

other specialist. We will decide whether to use a vocational expert or 
other specialist.



Sec. 416.967  Physical exertion requirements.

    To determine the physical exertion requirments of work in the 
national economy, we classify jobs as sedentary, light, medium, heavy, 
and very heavy. These terms have the same meaning as they have in the 
Dictionary of Occupational Titles, published by the Department of Labor. 
In making disability determinations under this subpart, we use the 
following definitions:
    (a) Sedentary work. Sedentary work involves lifting no more than 10 
pounds at a time and occasionally lifting or carrying articles like 
docket files, ledgers, and small tools. Although a sedentary job is 
defined as one which involves sitting, a certain amount of walking and 
standing is often necessary in carrying out job duties. Jobs are 
sedentary if walking and standing are required occasionally and other 
sedentary criteria are met.
    (b) Light work. Light work involves lifting no more than 20 pounds 
at a time with frequent lifting or carrying of objects weighing up to 10 
pounds. Even though the weight lifted may be very little, a job is in 
this category when it requires a good deal of walking or standing, or 
when it involves sitting most of the time with some pushing and pulling 
of arm or leg controls. To be considered capable of performing a full or 
wide range of light work, you must have the ability to do substantially 
all of these activities. If someone can do light work, we determine that 
he or she can also do sedentary work, unless there are additional 
limiting factors such as loss of fine dexterity or inability to sit for 
long periods of time.
    (c) Medium work. Medium work involves lifting no more than 50 pounds 
at a time with frequent lifting or carrying of objects weighing up to 25 
pounds. If someone can do medium work, we determine that he or she can 
also do sedentary and light work.
    (d) Heavy work. Heavy work involves lifting no more than 100 pounds 
at a time with frequent lifting or carrying of objects weighing up to 50 
pounds. If someone can do heavy work, we determine that he or she can 
also do medium, light, and sedentary work.
    (e) Very heavy work. Very heavy work involves lifting objects 
weighing more than 100 pounds at a time with frequent lifting or 
carrying of objects weighing 50 pounds or more. If someone can do very 
heavy work, we determine that he or she can also do heavy, medium, 
light, and sedentary work.



Sec. 416.968  Skill requirements.

    In order to evaluate your skills and to help determine the existence 
in the national economy of work you are able to do, occupations are 
classified as unskilled, semi-skilled, and skilled. In classifying these 
occupations, we use materials published by the Department of Labor. When 
we make disability determinations under this subpart, we use the 
following definitions:
    (a) Unskilled work. Unskilled work is work which needs little or no 
judgment to do simple duties that can be learned on the job in a short 
period of time. The job may or may not require considerable strength. 
For example, we consider jobs unskilled if the primary work duties are 
handling, feeding and offbearing (that is, placing or removing materials 
from machines which are automatic or operated by others), or machine 
tending, and a person can usually learn to do the job in 30 days, and 
little specific vocational preparation and judgment are needed. A person 
does not gain work skills by doing unskilled jobs.
    (b) Semi-skilled work. Semi-skilled work is work which needs some 
skills but does not require doing the more complex work duties. Semi-
skilled jobs may require alertness and close attention to watching 
machine processes; or inspecting, testing or otherwise looking for 
irregularities; or tending or guarding equipment, property, materials, 
or persons against loss, damage or injury; or other types of activities 
which are similarly less complex than skilled work, but more complex 
than unskilled work. A job may be classified as semi-skilled where 
coordination and dexterity are necessary, as when hands or feet must be 
moved quickly to do repetitive tasks.
    (c) Skilled work. Skilled work requires qualifications in which a 
person uses

[[Page 934]]

judgment to determine the machine and manual operations to be performed 
in order to obtain the proper form, quality, or quantity of material to 
be produced. Skilled work may require laying out work, estimating 
quality, determining the suitability and needed quantities of materials, 
making precise measurements, reading blueprints or other specifications, 
or making necessary computations or mechanical adjustments to control or 
regulate the work. Other skilled jobs may require dealing with people, 
facts, or figures or abstract ideas at a high level of complexity.
    (d) Skills that can be used in other work (transferability)--(1) 
What we mean by transferable skills. We consider you to have skills that 
can be used in other jobs, when the skilled or semi-skilled work 
activities you did in past work can be used to meet the requirements of 
skilled or semi-skilled work activities of other jobs or kinds of work. 
This depends largely on the similarity of occupationally significant 
work activities among different jobs.
    (2) How we determine skills that can be transferred to other jobs. 
Transferability is most probable and meaningful among jobs in which--
    (i) The same or a lesser degree of skill is required;
    (ii) The same or similar tools and machines are used; and
    (iii) The same or similar raw materials, products, processes, or 
services are involved.
    (3) Degrees of transferability. There are degrees of transferability 
of skills ranging from very close similarities to remote and incidental 
similarities among jobs. A complete similarity of all three factors is 
not necessary for transferability. However, when skills are so 
specialized or have been acquired in such an isolated vocational setting 
(like many jobs in mining, agriculture, or fishing) that they are not 
readily usable in other industries, jobs, and work settings, we consider 
that they are not transferable.
    (4) Transferability of skills for persons of advanced age. If you 
are of advanced age (age 55 or older), and you have a severe 
impairment(s) that limits you to sedentary or light work, we will find 
that you cannot make an adjustment to other work unless you have skills 
that you can transfer to other skilled or semiskilled work (or you have 
recently completed education which provides for direct entry into 
skilled work) that you can do despite your impairment(s). We will decide 
if you have transferable skills as follows. If you are of advanced age 
and you have a severe impairment(s) that limits you to no more than 
sedentary work, we will find that you have skills that are transferable 
to skilled or semiskilled sedentary work only if the sedentary work is 
so similar to your previous work that you would need to make very 
little, if any, vocational adjustment in terms of tools, work processes, 
work settings, or the industry. (See Sec. 416.967(a) and Rule 201.00(f) 
of appendix 2 of subpart P of part 404 of this chapter.) If you are of 
advanced age but have not attained age 60, and you have a severe 
impairment(s) that limits you to no more than light work, we will apply 
the rules in paragraphs (d)(1) through (d)(3) of this section to decide 
if you have skills that are transferable to skilled or semiskilled light 
work (see Sec. 416.967(b)). If you are closely approaching retirement 
age (age 60 or older) and you have a severe impairment(s) that limits 
you to no more than light work, we will find that you have skills that 
are transferable to skilled or semiskilled light work only if the light 
work is so similar to your previous work that you would need to make 
very little, if any, vocational adjustment in terms of tools, work 
processes, work settings, or the industry. (See Sec. 416.967(b) and Rule 
202.00(f) of appendix 2 of subpart P of part 404 of this chapter.)

[45 FR 55621, Aug. 20, 1980, as amended at 65 FR 18001, Apr. 6, 2000; 73 
FR 64197, Oct. 29, 2008]



Sec. 416.969  Listing of Medical-Vocational Guidelines in appendix 2 
of subpart P of part 404 of this chapter.

    The Dictionary of Occupational Titles includes information about 
jobs (classified by their exertional and skill requirements) that exist 
in the national economy. Appendix 2 provides rules using this data 
reflecting major functional and vocational patterns. We

[[Page 935]]

apply these rules in cases where a person is not doing substantial 
gainful activity and is prevented by a severe medically determinable 
impairment from doing vocationally relevant past work. (See 
Sec. 416.920(h) for an exception to this rule.) The rules in appendix 2 
do not cover all possible variations of factors. Also, as we explain in 
Sec. 200.00 of appendix 2, we do not apply these rules if one of the 
findings of fact about the person's vocational factors and residual 
functional capacity is not the same as the corresponding criterion of a 
rule. In these instances, we give full consideration to all relevant 
facts in accordance with the definitions and discussions under 
vocational considerations. However, if the findings of fact made about 
all factors are the same as the rule, we use that rule to decide whether 
a person is disabled.

[45 FR 55584, Aug. 20, 1980, as amended at 77 FR 43495, July 25, 2012]



Sec. 416.969a  Exertional and nonexertional limitations.

    (a) General. Your impairment(s) and related symptoms, such as pain, 
may cause limitations of function or restrictions which limit your 
ability to meet certain demands of jobs. These limitations may be 
exertional, nonexertional, or a combination of both. Limitations are 
classified as exertional if they affect your ability to meet the 
strength demands of jobs. The classification of a limitation as 
exertional is related to the United States Department of Labor's 
classification of jobs by various exertional levels (sedentary, light, 
medium, heavy, and very heavy) in terms of the strength demands for 
sitting, standing, walking, lifting, carrying, pushing, and pulling. 
Sections 416.967 and 416.969 explain how we use the classification of 
jobs by exertional levels (strength demands) which is contained in the 
Dictionary of Occupational Titles published by the Department of Labor, 
to determine the exertional requirements of work which exists in the 
national economy. Limitations or restrictions which affect your ability 
to meet the demands of jobs other than the strength demands, that is, 
demands other than sitting, standing, walking, lifting, carrying, 
pushing or pulling, are considered nonexertional. When we decide whether 
you can do your past relevant work (see Secs. 416.920(f) and 
416.994(b)(5)(vi)), we will compare our assessment of your residual 
functional capacity with the demands of your past relevant work. If you 
cannot do your past relevant work, we will use the same residual 
functional capacity assessment along with your age, education, and work 
experience to decide if you can adjust to any other work which exists in 
the national economy. (See Secs. 416.920(g) and 416.994(b)(5)(vii).) 
Paragraphs (b), (c), and (d) of this section explain how we apply the 
medical-vocational guidelines in appendix 2 of subpart P of part 404 of 
this chapter in making this determination, depending on whether the 
limitations or restrictions imposed by your impairment(s) and related 
symptoms, such as pain, are exertional, nonexertional, or a combination 
of both.
    (b) Exertional limitations. When the limitations and restrictions 
imposed by your impairment(s) and related symptoms, such as pain, affect 
only your ability to meet the strength demands of jobs (sitting, 
standing, walking, lifting, carrying, pushing, and pulling), we consider 
that you have only exertional limitations. When your impairment(s) and 
related symptoms only impose exertional limitations and your specific 
vocational profile is listed in a rule contained in appendix 2, we will 
directly apply that rule to decide whether you are disabled.
    (c) Nonexertional limitations. (1) When the limitations and 
restrictions imposed by your impairment(s) and related symptoms, such as 
pain, affect only your ability to meet the demands of jobs other than 
the strength demands, we consider that you have only nonexertional 
limitations or restrictions. Some examples of nonexertional limitations 
or restrictions include the following:
    (i) You have difficulty functioning because you are nervous, 
anxious, or depressed;
    (ii) You have difficulty maintaining attention or concentrating;
    (iii) You have difficulty understanding or remembering detailed 
instructions;
    (iv) You have difficulty in seeing or hearing;

[[Page 936]]

    (v) You have difficulty tolerating some physical feature(s) of 
certain work settings, e.g., you cannot tolerate dust or fumes; or
    (vi) You have difficulty performing the manipulative or postural 
functions of some work such as reaching, handling, stooping, climbing, 
crawling, or crouching.
    (2) If your impairment(s) and related symptoms, such as pain, only 
affect your ability to perform the nonexertional aspects of work-related 
activities, the rules in appendix 2 do not direct factual conclusions of 
disabled or not disabled. The determination as to whether disability 
exists will be based on the principles in the appropriate sections of 
the regulations, giving consideration to the rules for specific case 
situations in appendix 2.
    (d) Combined exertional and nonexertional limitations. When the 
limitations and restrictions imposed by your impairment(s) and related 
symptoms, such as pain, affect your ability to meet both the strength 
and demands of jobs other than the strength demands, we consider that 
you have a combination of exertional and nonexertional limitations or 
restrictions. If your impairment(s) and related symptoms, such as pain, 
affect your ability to meet both the strength and demands of jobs other 
than the strength demands, we will not directly apply the rules in 
appendix 2 unless there is a rule that directs a conclusion that you are 
disabled based upon your strength limitations; otherwise the rules 
provide a framework to guide our decision.

[56 FR 57947, Nov. 14, 1991, as amended at 68 FR 51166, Aug. 26, 2003]

                      Substantial Gainful Activity



Sec. 416.971  General.

    The work, without regard to legality, that you have done during any 
period in which you believe you are disabled may show that you are able 
to work at the substantial gainful activity level. If you are able to 
engage in substantial gainful activity, we will find that you are not 
disabled. (We explain the rules for persons who are statutorily blind in 
Sec. 416.984.) Even if the work you have done was not substantial 
gainful activity, it may show that you are able to do more work than you 
actually did. We will consider all of the medical and vocational 
evidence in your file to decide whether or not you have the ability to 
engage in substantial gainful activity.

[45 FR 55621, Aug. 20, 1980, as amended at 65 FR 42788, July 11, 2000]



Sec. 416.972  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.



Sec. 416.973  General information about work activity.

    (a) The nature of your work. If your duties require use of your 
experience, skills, supervision and responsibilities, or contribute 
substantially to the operation of a business, this tends to show that 
you have the ability to work at the substantial gainful activity level.
    (b) How well you perform. We consider how well you do your work when 
we determine whether or not you are doing substantial gainful activity. 
If you do your work satisfactorily, this may show that you are working 
at the substantial gainful activity level. If you are unable, because of 
your impairments, to do ordinary or simple tasks satisfactorily without 
more supervision or assistance than is usually given other people doing 
similar work, this may show that you are not working at the substantial 
gainful activity

[[Page 937]]

level. If you are doing work that involves minimal duties that make 
little or no demands on you and that are of little or no use to your 
employer, or to the operation of a business if you are self-employed, 
this does not show that you are working at the substantial gainful 
activity level.
    (c) If your work is done under special conditions. The work you are 
doing may be done under special conditions that take into account your 
impairment, such as work done in a sheltered workshop or as a patient in 
a hospital. If your work is done under special conditions, we may find 
that it does not show that you have the ability to do substantial 
gainful activity. Also, if you are forced to stop or reduce your work 
because of the removal of special conditions that were related to your 
impairment and essential to your work, we may find that your work does 
not show that you are able to do substantial gainful activity. However, 
work done under special conditions may show that you have the necessary 
skills and ability to work at the substantial gainful activity level. 
Examples of the special conditions that may relate to your impairment 
include, but are not limited to, situations in which--
    (1) You required and received special assistance from other 
employees in performing your work;
    (2) You were allowed to work irregular hours or take frequent rest 
periods;
    (3) You were provided with special equipment or were assigned work 
especially suited to your impairment;
    (4) You were able to work only because of specially arranged 
circumstances, for example, other persons helped you prepare for or get 
to and from your work;
    (5) You were permitted to work at a lower standard of productivity 
or efficiency than other employees; or
    (6) You were given the opportunity to work, despite your impairment, 
because of family relationship, past association with your employer, or 
your employer's concern for your welfare.
    (d) If you are self-employed. Supervisory, managerial, advisory or 
other significant personal services that you perform as a self-employed 
individual may show that you are able to do substantial gainful 
activity.
    (e) Time spent in work. While the time you spend in work is 
important, we will not decide whether or not you are doing substantial 
gainful activity only on that basis. We will still evaluate the work to 
decide whether it is substantial and gainful regardless of whether you 
spend more time or less time at the job than workers who are not 
impaired and who are doing similar work as a regular means of their 
livelihood.

[45 FR 55621, Aug. 20, 1980, as amended at 65 FR 42788, July 11, 2000]



Sec. 416.974  Evaluation guides if you are an employee.

    (a) We use several guides to decide whether the work you have done 
shows that you are able to do substantial gainful activity. If you are 
working or have worked as an employee, we will use the provisions in 
paragraphs (a) through (d) of this section that are relevant to your 
work activity. We will use these provisions whenever they are 
appropriate in connection with your application for supplemental 
security income benefits (when we make an initial determination on your 
application and throughout any appeals you may request) to determine if 
you are eligible.
    (1) Your earnings may show you have done substantial gainful 
activity. Generally, in evaluating your work activity for substantial 
gainful activity purposes, our primary consideration will be the 
earnings you derive from the work activity. We will use your earnings to 
determine whether you have done substantial gainful activity unless we 
have information from you, your employer, or others that shows that we 
should not count all of your earnings. The amount of your earnings from 
work you have done (regardless of whether it is unsheltered or sheltered 
work) may show that you have engaged in substantial gainful activity. 
Generally, if you worked for substantial earnings, we will find that you 
are able to do substantial gainful activity. However, the fact that your 
earnings were not substantial will not necessarily show that you are not 
able to do substantial gainful activity. We generally consider work that 
you are forced to

[[Page 938]]

stop or to reduce below the substantial gainful activity level after a 
short time because of your impairment to be an unsuccessful work 
attempt. Your earnings from an unsuccessful work attempt will not show 
that you are able to do substantial gainful activity. We will use the 
criteria in paragraph (c) of this section to determine if the work you 
did was an unsuccessful work attempt.
    (2) We consider only the amounts you earn. When we decide whether 
your earnings show that you have done substantial gainful activity, we 
do not consider any income that is not directly related to your 
productivity. When your earnings exceed the reasonable value of the work 
you perform, we consider only that part of your pay which you actually 
earn. If your earnings are being subsidized, we do not consider the 
amount of the subsidy when we determine if your earnings show that you 
have done substantial gainful activity. We consider your work to be 
subsidized if the true value of your work, when compared with the same 
or similar work done by unimpaired persons, is less than the actual 
amount of earnings paid to you for your work. For example, when a person 
with a serious impairment does simple tasks under close and continuous 
supervision, our determination of whether that person has done 
substantial gainful activity will not be based only on the amount of the 
wages paid. We will first determine whether the person received a 
subsidy; that is, we will determine whether the person was being paid 
more than the reasonable value of the actual services performed. We will 
then subtract the value of the subsidy from the person's gross earnings 
to determine the earnings we will use to determine if he or she has done 
substantial gainful activity.
    (3) If you are working in a sheltered or special environment. If you 
are working in a sheltered workshop, you may or may not be earning the 
amounts you are being paid. The fact that the sheltered workshop or 
similar facility is operating at a loss or is receiving some charitable 
contributions or governmental aid does not establish that you are not 
earning all you are being paid. Since persons in military service being 
treated for severe impairments usually continue to receive full pay, we 
evaluate work activity in a therapy program or while on limited duty by 
comparing it with similar work in the civilian work force or on the 
basis of reasonable worth of the work, rather than on the actual amount 
of the earnings.
    (b) Earnings guidelines. (1) General. If you are an employee, we 
first consider the criteria in paragraph (a) of this section and 
Sec. 416.976, and then the guides in paragraphs (b)(2) and (3) of this 
section. When we review your earnings to determine if you have been 
performing substantial gainful activity, we will subtract the value of 
any subsidized earnings (see paragraph (a)(2) of this section) and the 
reasonable cost of any impairment-related work expenses from your gross 
earnings (see Sec. 416.976). The resulting amount is the amount we use 
to determine if you have done substantial gainful activity. We will 
generally average your earnings for comparison with the earnings 
guidelines in paragraphs (b)(2) and (3) of this section. See 
Sec. 416.974a for our rules on averaging earnings.
    (2) Earnings that will ordinarily show that you have engaged in 
substantial gainful activity. We will consider that your earnings from 
your work activity as an employee (including earnings from work in a 
sheltered workshop or a comparable facility especially set up for 
severely impaired persons) show that you have engaged in substantial 
gainful activity if:
    (i) Before January 1, 2001, they averaged more than the amount(s) in 
Table 1 of this section for the time(s) in which you worked.
    (ii) Beginning January 1, 2001, and each year thereafter, they 
average more than the larger of:
    (A) The amount for the previous year, or
    (B) An amount adjusted for national wage growth, calculated by 
multiplying $700 by the ratio of the national average wage index for the 
year 2 calendar years before the year for which the amount is being 
calculated to the national average wage index for the year 1998. We will 
then round the resulting amount to the next higher multiple of $10 where 
such amount is a multiple of $5 but not of $10 and to the

[[Page 939]]

nearest multiple of $10 in any other case.

                                 Table 1
------------------------------------------------------------------------
                                                           Your monthly
                                                             earnings
                       For months:                         averaged more
                                                               than:
------------------------------------------------------------------------
In calendar years before 1976...........................            $200
In calendar year 1976...................................             230
In calendar year 1977...................................             240
In calendar year 1978...................................             260
In calendar year 1979...................................             280
In calendar years 1980-1989.............................             300
January 1990-June 1999..................................             500
July 1999-December 2000.................................             700
------------------------------------------------------------------------

    (3) Earnings that will ordinarily show that you have not engaged in 
substantial gainful activity--(i) General. If your average monthly 
earnings are equal to or less than the amount(s) determined under 
paragraph (b)(2) of this section for the year(s) in which you work, we 
will generally consider that the earnings from your work as an employee 
(including earnings from work in a sheltered workshop or comparable 
facility) will show that you have not engaged in substantial gainful 
activity. We will generally not consider other information in addition 
to your earnings except in the circumstances described in paragraph 
(b)(3)(ii) of this section.
    (ii) When we will consider other information in addition to your 
earnings. Unless you meet the criteria set forth in section 416.990 (h) 
and (i), we will generally consider other information in addition to 
your earnings if there is evidence indicating that you may be engaging 
in substantial gainful activity or that you are in a position to control 
when earnings are paid to you or the amount of wages paid to you (for 
example, if you are working for a small corporation owned by a 
relative). Examples of other information we may consider include, 
whether--
    (A) Your work is comparable to that of unimpaired people in your 
community who are doing the same or similar occupations as their means 
of livelihood, taking into account the time, energy, skill, and 
responsibility involved in the work; and
    (B) Your work, although significantly less than that done by 
unimpaired people, is clearly worth the amounts shown in paragraph 
(b)(2) of this section, according to pay scales in your community.
    (c) The unsuccessful work attempt--(1) General. Ordinarily, work you 
have done will not show that you are able to do substantial gainful 
activity if, after working for a period of 6 months or less, you were 
forced by your impairment to stop working or to reduce the amount of 
work you do so that your earnings from such work fall below the 
substantial gainful activity earnings level in paragraph (b)(2) of this 
section and you meet the conditions described in paragraphs (c)(2), (3), 
(4), and (5) of this section.
    (2) Event that must precede an unsuccessful work attempt. There must 
be a significant break in the continuity of your work before we will 
consider you to have begun a work attempt that later proved 
unsuccessful. You must have stopped working or reduced your work and 
earnings below the substantial gainful activity earnings level because 
of your impairment or because of the removal of special conditions that 
were essential to the further performance of your work. We explain what 
we mean by special conditions in Sec. 416.973(c). We will consider your 
prior work to be ``discontinued'' for a significant period if you were 
out of work at least 30 consecutive days. We will also consider your 
prior work to be ``discontinued'' if, because of your impairment, you 
were forced to change to another type of work or another employer.
    (3) If you worked 6 months or less. We will consider work of 6 
months or less to be an unsuccessful work attempt if you stopped working 
or you reduced your work and earnings below the substantial gainful 
activity earnings level because of your impairment or because of the 
removal of special conditions that took into account your impairment and 
permitted you to work.
    (4) If you worked more than 6 months. We will not consider work you 
performed at the substantial gainful activity earnings level for more 
than 6 months to be an unsuccessful work attempt regardless of why it 
ended or was reduced below the substantial gainful activity earnings 
level.
    (d) Work activity in certain volunteer programs. If you work as a 
volunteer in

[[Page 940]]

certain programs administered by the Federal government under the 
Domestic Volunteer Service Act of 1973 or the Small Business Act, we 
will not count any payments you receive from these programs as earnings 
when we determine whether you are engaging in substantial gainful 
activity. These payments may include a minimal stipend, payments for 
supportive services such as housing, supplies and equipment, an expense 
allowance, or reimbursement of out-of-pocket expenses. We will also 
disregard the services you perform as a volunteer in applying any of the 
substantial gainful activity tests discussed in paragraph (b)(6) of this 
section. This exclusion from the substantial gainful activity provisions 
will apply only if you are a volunteer in a program explicitly mentioned 
in the Domestic Volunteer Service Act of 1973 or the Small Business Act. 
Programs explicitly mentioned in those Acts include Volunteers in 
Service to America, University Year for ACTION, Special Volunteer 
Programs, Retired Senior Volunteer Program, Foster Grandparent Program, 
Service Corps of Retired Executives, and Active Corps of Executives. We 
will not exclude under this paragraph volunteer work you perform in 
other programs or any nonvolunteer work you may perform, including 
nonvolunteer work under one of the specified programs. For civilians in 
certain government-sponsored job training and employment programs, we 
evaluate the work activity on a case-by-case basis under the substantial 
gainful activity earnings test. In programs such as these, subsidies 
often occur. We will subtract the value of any subsidy and use the 
remainder to determine if you have done substantial gainful activity. 
See paragraphs (a)(2)-(3) of this section.
    (e) Work activity as a member or consultant of an advisory committee 
established under the Federal Advisory Committee Act (FACA), 5 U.S.C. 
App. 2. If you are serving as a member or consultant of an advisory 
committee, board, commission, council, or similar group established 
under FACA, we will not count any payments you receive from serving on 
such committees as earnings when we determine whether you are engaging 
in substantial gainful activity. These payments may include 
compensation, travel expenses, and special assistance. We also will 
exclude the services you perform as a member or consultant of an 
advisory committee established under FACA in applying any of the 
substantial gainful activity tests discussed in paragraph (b)(6) of this 
section. This exclusion from the substantial gainful activity provision 
will apply only if you are a member or consultant of an advisory 
committee specifically authorized by statute, or by the President, or 
determined as a matter of formal record by the head of a federal 
government agency. This exclusion from the substantial gainful activity 
provisions will not apply if your service as a member or consultant of 
an advisory committee is part of your duties or is required as an 
employee of any governmental or non-governmental organization, agency, 
or business.

[46 FR 4871, Jan. 19, 1981, as amended at 48 FR 21939, May 16, 1983; 49 
FR 22274, May 29, 1984; 54 FR 53605, Dec. 29, 1989; 64 FR 18570, Apr. 
15, 1999; 64 FR 22903, Apr. 28, 1999; 65 FR 42789, July 11, 2000; 65 FR 
82911, Dec. 29, 2000; 71 FR 3219, Jan. 20, 2006; 71 FR 66857, Nov. 17, 
2006; 81 FR 71369, Oct. 17, 2016]



Sec. 416.974a  When and how we will average your earnings.

    (a) To determine your initial eligibility for benefits, we will 
average any earnings you make during the month you file for benefits and 
any succeeding months to determine if you are doing substantial gainful 
activity. If your work as an employee or as a self-employed person was 
continuous without significant change in work patterns or earnings, and 
there has been no change in the substantial gainful activity earnings 
levels, your earnings will be averaged over the entire period of work 
requiring evaluation to determine if you have done substantial gainful 
activity.
    (b) If you work over a period of time during which the substantial 
gainful activity earnings levels change, we will average your earnings 
separately for each period in which a different substantial gainful 
activity earnings level applies.
    (c) If there is a significant change in your work pattern or 
earnings during

[[Page 941]]

the period of work requiring evaluation, we will average your earnings 
over each separate period of work to determine if any of your work 
efforts were substantial gainful activity.

[65 FR 42790, July 11, 2000]



Sec. 416.975  Evaluation guides if you are self-employed.

    (a) If you are a self-employed person. If you are working or have 
worked as a self-employed person, we will use the provisions in 
paragraphs (a) through (d) of this section that are relevant to your 
work activity. We will use these provisions whenever they are 
appropriate in connection with your application for supplemental 
security income benefits (when we make an initial determination on your 
application and throughout any appeals you may request). We will 
consider your activities and their value to your business to decide 
whether you have engaged in substantial gainful activity if you are 
self-employed. We will not consider your income alone because the amount 
of income you actually receive may depend on a number of different 
factors, such as capital investment and profit-sharing agreements. We 
will generally consider work that you were forced to stop or reduce to 
below substantial gainful activity after 6 months or less because of 
your impairment as an unsuccessful work attempt. See paragraph (d) of 
this section. We will evaluate your work activity based on the value of 
your services to the business regardless of whether you receive an 
immediate income for your services. We determine whether you have 
engaged in substantial gainful activity by applying three tests. If you 
have not engaged in substantial gainful activity under test one, then we 
will consider tests two and three. The tests are as follows:
    (1) Test One: You have engaged in substantial gainful activity if 
you render services that are significant to the operation of the 
business and receive a substantial income from the business. Paragraphs 
(b) and (c) of this section explain what we mean by significant services 
and substantial income for purposes of this test.
    (2) Test Two: You have engaged in substantial gainful activity if 
your work activity, in terms of factors such as hours, skills, energy 
output, efficiency, duties, and responsibilities, is comparable to that 
of unimpaired individuals in your community who are in the same or 
similar businesses as their means of livelihood.
    (3) Test Three: You have engaged in substantial gainful activity if 
your work activity, although not comparable to that of unimpaired 
individuals, is clearly worth the amount shown in Sec. 416.974(b)(2) 
when considered in terms of its value to the business, or when compared 
to the salary that an owner would pay to an employee to do the work you 
are doing.
    (b) What we mean by significant services. (1) If you are not a farm 
landlord and you operate a business entirely by yourself, any services 
that you render are significant to the business. If your business 
involves the services of more than one person, we will consider you to 
be rendering significant services if you contribute more than half the 
total time required for the management of the business, or you render 
management services for more than 45 hours a month regardless of the 
total management time required by the business.
    (2) If you are a farm landlord, that is, you rent farm land to 
another, we will consider you to be rendering significant services if 
you materially participate in the production or the management of the 
production of the things raised on the rented farm. (See Sec. 404.1082 
of this chapter for an explanation of ``material participation''.) If 
you were given social security earnings credits because you materially 
participated in the activities of the farm and you continue these same 
activities, we will consider you to be rendering significant services.
    (c) What we mean by substantial income. We deduct your normal 
business expenses from your gross income to determine net income. Once 
net income is determined, we deduct the reasonable value of any 
significant amount of unpaid help furnished by your spouse, children, or 
others. Miscellaneous duties that ordinarily would not have commercial 
value would not be considered significant. We deduct impairment-related 
work expenses that have

[[Page 942]]

not already been deducted in determining your net income. Impairment-
related work expenses are explained in Sec. 416.976. We deduct 
unincurred business expenses paid for you by another individual or 
agency. An unincurred business expense occurs when a sponsoring agency 
or another person incurs responsibility for the payment of certain 
business expenses, e.g., rent, utilities, or purchases and repair of 
equipment, or provides you with equipment, stock, or other material for 
the operation of your business. We deduct soil bank payments if they 
were included as farm income. That part of your income remaining after 
we have made all applicable deductions represents the actual value of 
work performed. The resulting amount is the amount we use to determine 
if you have done substantial gainful activity. We will generally average 
your income for comparison with the earnings guidelines in 
Secs. 416.974(b)(2) and 416.974(b)(3). See Sec. 416.974a for our rules 
on averaging of earnings. We will consider this amount to be substantial 
if--
    (1) It averages more than the amounts described in 
Sec. 416.974(b)(2); or
    (2) It averages less than the amounts described in 
Sec. 416.974(b)(2) but it is either comparable to what it was before you 
became seriously impaired if we had not considered your earnings or is 
comparable to that of unimpaired self-employed persons in your community 
who are in the same or a similar business as their means of livelihood.
    (d) The unsuccessful work attempt--(1) General. Ordinarily, work you 
have done will not show that you are able to do substantial gainful 
activity if, after working for a period of 6 months or less, you were 
forced by your impairment to stop working or to reduce the amount of 
work you do so that you are no longer performing substantial gainful 
activity and you meet the conditions described in paragraphs (d)(2), 
(3), and (4) of this section.
    (2) Event that must precede an unsuccessful work attempt. There must 
be a significant break in the continuity of your work before we will 
consider you to have begun a work attempt that later proved 
unsuccessful. You must have stopped working or reduced your work and 
earnings below substantial gainful activity because of your impairment 
or because of the removal of special conditions which took into account 
your impairment and permitted you to work. Examples of such special 
conditions may include any significant amount of unpaid help furnished 
by your spouse, children, or others, or unincurred business expenses, as 
described in paragraph (c) of this section, paid for you by another 
individual or agency. We will consider your prior work to be 
``discontinued'' for a significant period if you were out of work at 
least 30 consecutive days. We will also consider your prior work to be 
``discontinued'' if, because of your impairment, you were forced to 
change to another type of work.
    (3) If you worked 6 months or less. We will consider work of 6 
months or less to be an unsuccessful work attempt if you stopped working 
or you reduced your work and earnings below the substantial gainful 
activity earnings level because of your impairment or because of the 
removal of special conditions that took into account your impairment and 
permitted you to work.
    (4) If you worked more than 6 months. We will not consider work you 
performed at the substantial gainful activity level for more than 6 
months to be an unsuccessful work attempt regardless of why it ended or 
was reduced below the substantial gainful activity level.

[46 FR 4872, Jan. 19, 1981, as amended at 48 FR 21940, May 16, 1983; 49 
FR 22274, May 29, 1984; 65 FR 42790, July 11, 2000; 81 FR 71369, Oct. 
17, 2016]



Sec. 416.976  Impairment-related work expenses.

    (a) General. When we figure your earnings in deciding if you have 
done substantial gainful activity, and in determining your countable 
earned income (see Sec. 416.1112(c)(5)), we will subtract the reasonable 
costs to you of certain items and services which, because of your 
impairment(s), you need and use to enable you to work. The costs are 
deductible even though you also need or use the items and services to 
carry out daily living functions unrelated to your work. Paragraph (b) 
of this section explains the conditions for deducting work expenses. 
Paragraph (c)

[[Page 943]]

of this section describes the expenses we will deduct. Paragraph (d) of 
this section explains when expenses may be deducted. Paragraph (e) of 
this section describes how expenses may be allocated. Paragraph (f) of 
this section explains the limitations on deducting expenses. Paragraph 
(g) of this section explains our verification procedures.
    (b) Conditions for deducting impairment-related work expenses. We 
will deduct impairment-related work expenses if--
    (1) You are otherwise disabled as defined in Secs. 416.905 through 
416.907;
    (2) The severity of your impairment(s) requires you to purchase (or 
rent) certain items and services in order to work;
    (3) You pay the cost of the item or service. No deduction will be 
allowed to the extent that payment has been or will be made by another 
source. No deduction will be allowed to the extent that you have been, 
could be, or will be reimbursed for such cost by any other source (such 
as through a private insurance plan, Medicare or Medicaid, or other plan 
or agency). For example, if you purchase crutches for $80 but you were, 
could be, or will be reimbursed $64 by some agency, plan, or program, we 
will deduct only $16;
    (4) You pay for the item or service in accordance with paragraph (d) 
of this section; and
    (5) Your payment is in cash (including checks or other forms of 
money). Payment in kind is not deductible.
    (c) What expenses may be deducted--(1) Payments for attendant care 
services. (i) If because of your impairment(s) you need assistance in 
traveling to and from work, or while at work you need assistance with 
personal functions (e.g., eating, toileting) or with work-related 
functions (e.g., reading, communicating), the payments you make for 
those services may be deducted.
    (ii) If because of your impairment(s) you need assistance with 
personal functions (e.g., dressing, administering medications) at home 
in preparation for going to and assistance in returning from work, the 
payments you make for those services may be deducted.
    (iii)(A) We will deduct payments you make to a family member for 
attendant care services only if such person, in order to perform the 
services, suffers an economic loss by terminating his or her employment 
or by reducing the number of hours he or she worked.
    (B) We consider a family member to be anyone who is related to you 
by blood, marriage or adoption, whether or not that person lives with 
you.
    (iv) If only part of your payment to a person is for services that 
come under the provisions of paragraph (c)(1) of this section, we will 
only deduct that part of the payment which is attributable to those 
services. For example, an attendant gets you ready for work and helps 
you in returning from work, which takes about 2 hours a day. The rest of 
his or her 8 hour day is spent cleaning your house and doing your 
laundry, etc. We would only deduct one-fourth of the attendant's daily 
wages as an impairment-related work expense.
    (2) Payments for medical devices. If your impairment(s) requires 
that you utilize medical devices in order to work, the payments you make 
for those devices may be deducted. As used in this subparagraph, medical 
devices include durable medical equipment which can withstand repeated 
use, is customarily used for medical purposes, and is generally not 
useful to a person in the absence of an illness or injury. Examples of 
durable medical equipment are wheelchairs, hemodialysis equipment, 
canes, crutches, inhalators and pacemakers.
    (3) Payments for prosthetic devices. If your impairment(s) requires 
that you utilize a prosthetic device in order to work, the payments you 
make for that device may be deducted. A prosthetic device is that which 
replaces an internal body organ or external body part. Examples of 
prosthetic devices are artificial replacements of arms, legs and other 
parts of the body.
    (4) Payments for equipment--(i) Work-related equipment. If your 
impairment(s) requires that you utilize special equipment in order to do 
your job, the payments you make for that equipment may be deducted. 
Examples of work-related equipment are one-hand typewriters, 
telecommunication devices for the deaf and tools specifically designed 
to accommodate a person's impairment(s).

[[Page 944]]

    (ii) Residential modifications. If your impairment(s) requires that 
you make modifications to your residence, the location of your place of 
work will determine if the cost of these modifications will be deducted. 
If you are employed away from home, only the cost of changes made 
outside of your home to permit you to get to your means of 
transportation (e.g., the installation of an exterior ramp for a wheel-
chair confined person or special exterior railings or pathways for 
someone who requires crutches) will be deducted. Costs relating to 
modifications of the inside of your home will not be deducted. If you 
work at home, the costs of modifying the inside of your home in order to 
create a working space to accommodate your impairment(s) will be 
deducted to the extent that the changes pertain specifically to the 
space in which you work. Examples of such changes are the enlargement of 
a doorway leading into the work space or modification of the work space 
to accommodate problems in dexterity. However, if you are self-employed 
at home, any cost deducted as a business expense cannot be deducted as 
an impairment-related work expense.
    (iii) Nonmedical appliances and equipment. Expenses for appliances 
and equipment which you do not ordinarily use for medical purposes are 
generally not deductible. Examples of these items are portable room 
heaters, air conditioners, humidifiers, dehumidifiers, and electric air 
cleaners. However, expenses for such items may be deductible when 
unusual circumstances clearly establish an impairment-related and 
medically verified need for such an item because it is essential for the 
control of your disabling condition, thus enabling you to work. To be 
considered essential, the item must be of such a nature that if it were 
not available to you there would be an immediate adverse impact on your 
ability to function in your work activity. In this situation, the 
expense is deductible whether the item is used at home or in the working 
place. An example would be the need for an electric air cleaner by an 
individual with severe respiratory disease who cannot function in a non-
purified air environment. An item such as an exercycle is not deductible 
if used for general physical fitness. If it is prescribed and used as 
necessary treatment of your impairment and necessary to enable you to 
work, we will deduct payments you make toward its cost.
    (5) Payments for drugs and medical services. (i) If you must use 
drugs or medical services (including diagnostic procedures) to control 
your impairment(s), the payments you make for them may be deducted. The 
drugs or services must be prescribed (or utilized) to reduce or 
eliminate symptoms of your impairment(s) or to slow down its 
progression. The diagnostic procedures must be performed to ascertain 
how the impairment(s) is progressing or to determine what type of 
treatment should be provided for the impairment(s).
    (ii) Examples of deductible drugs and medical services are 
anticonvulsant drugs to control epilepsy or anticonvulsant blood level 
monitoring; antidepressant medication for mental disorders; medication 
used to allay the side effects of certain treatments; radiation 
treatment or chemotherapy for cancer patients; corrective surgery for 
spinal disorders; electroencephalograms and brain scans related to a 
disabling epileptic condition; tests to determine the efficacy of 
medication on a diabetic condition; and immunosuppressive medications 
that kidney transplant patients regularly take to protect against graft 
rejection.
    (iii) We will only deduct the costs of drugs or services that are 
directly related to your impairment(s). Examples of non-deductible items 
are routine annual physical examinations, optician services (unrelated 
to a disabling visual impairment) and dental examinations.
    (6) Payments for similar items and services--(i) General. If you are 
required to utilize items and services not specified in paragraph (c) 
(1) through (5) of this section but which are directly related to your 
impairment(s) and which you need to work, their costs are deductible. 
Examples of such items and services are medical supplies and services 
not discussed above, and transportation.

[[Page 945]]

    (ii) Medical supplies and services not described above. We will 
deduct payments you make for expendable medical supplies, such as 
incontinence pads, catheters, bandages, elastic stockings, face masks, 
irrigating kits, and disposable sheets and bags. We will also deduct 
payments you make for physical therapy which you require because of your 
impairment(s) and which you need in order to work.
    (iii) Payments for transportation costs. We will deduct 
transportation costs in these situations:
    (A) Your impairment(s) requires that in order to get to work you 
need a vehicle that has structural or operational modifications. The 
modifications must be critical to your operation or use of the vehicle 
and directly related to your impairment(s). We will deduct the costs of 
the modifications, but not the cost of the vehicle. We will also deduct 
a mileage allowance for the trip to and from work. The allowance will be 
based on data compiled by the Federal Highway Administration relating to 
vehicle operating costs.
    (B) Your impairment(s) requires you to use driver assistance, 
taxicabs or other hired vehicles in order to work. We will deduct 
amounts paid to the driver and, if your own vehicle is used, we will 
also deduct a mileage allowance, as provided in paragraph (c)(6)(iii)(A) 
of this section, for the trip to and from work.
    (C) Your impairment(s) prevents your taking available public 
transportation to and from work and you must drive your (unmodified) 
vehicle to work. If we can verify through your physician or other 
sources that the need to drive is caused by your impairment(s) (and not 
due to the unavailability of public transportation), we will deduct a 
mileage allowance as provided in paragraph (c)(6)(iii)(A) of this 
section, for the trip to and from work.
    (7) Payments for installing, maintaining, and repairing deductible 
items. If the device, equipment, appliance, etc., that you utilize 
qualifies as a deductible item as described in paragraphs (c)(2), (3), 
(4), and (6) of this section, the costs directly related to installing, 
maintaining and repairing these items are also deductible. (The costs 
which are associated with modifications to a vehicle are deductible. 
Except for a mileage allowance, as provided for in paragraph (c)(6)(iii) 
of this section, the costs which are associated with the vehicle itself 
are not deductible.)
    (d) When expenses may be deducted--(1) Effective date. To be 
deductible an expense must be incurred after November 30, 1980. An 
expense may be considered incurred after that date if it is paid 
thereafter even though pursuant to a contract or other arrangement 
entered into before December 1, 1980.
    (2) Payments for services. For the purpose of determining SGA, a 
payment you make for services may be deducted if the services are 
received while you are working and the payment is made in a month you 
are working. We consider you to be working even though you must leave 
work temporarily to receive the services. For the purpose of determining 
your SSI monthly payment amount, a payment you make for services may be 
deducted if the payment is made in the month your earned income is 
received and the earned income is for work done in the month you 
received the services. If you begin working and make a payment before 
the month earned income is received, the payment is also deductible. If 
you make a payment after you stop working, and the payment is made in 
the month you received earned income for work done in the month you 
received the services, the payment is also deductible.
    (3) Payment for items. For the purpose of determining SGA, a payment 
you make toward the cost of a deductible item (regardless of when it is 
acquired) may be deducted if payment is made in a month you are working. 
For the purpose of determining your SSI monthly payment amount, a 
payment you make toward the cost of a deductible item (regardless of 
when it is acquired) may be deducted if the payment is made in the month 
your earned income is received and the earned income is for work done in 
the month you used the item. If you begin working and make a payment 
before the month earned income is received, the payment is also 
deductible. If you make a payment after you stop working, and the 
payment is made in the month you received earned income for work done in

[[Page 946]]

the month you used the item, the payment is also deductible. See 
paragraph (e)(4) of this section when purchases are made in anticipation 
of work.
    (e) How expenses are allocated--(1) Recurring expenses. You may pay 
for services on a regular periodic basis, or you may purchase an item on 
credit and pay for it in regular periodic installments or you may rent 
an item. If so, each payment you make for the services and each payment 
you make toward the purchase or rental (including interest) is 
deductible as described in paragraph (d) of this section.

    Example: B starts work in October 1981 at which time she purchases a 
medical device at a cost of $4,800 plus interest charges of $720. Her 
monthly payments begin in October. She earns and receives $400 a month. 
The term of the installment contract is 48 months. No downpayment is 
made. The monthly allowable deduction for the item would be $115 ($5520 
divided by 48) for each month of work (for SGA purposes) and for each 
month earned income is received (for SSI payment purposes) during the 48 
months.

    (2) Nonrecurring expenses. Part or all of your expenses may not be 
recurring. For example, you may make a one-time payment in full for an 
item or service or make a downpayment. For the purpose of determining 
SGA, if you are working when you make the payment we will either deduct 
the entire amount in the month you pay it or allocate the amount over a 
12 consecutive month period beginning with the month of payment, 
whichever you select. For the purpose of determining your SSI monthly 
payment amount, if you are working in the month you make the payment and 
the payment is made in a month earned income is received, we will either 
deduct the entire amount in that month, or we will allocate the amount 
over a 12 consecutive month period, beginning with that month, whichever 
you select. If you begin working and do not receive earned income in the 
month you make the payment, we will either deduct or begin allocating 
the payment amount in the first month you do receive earned income. If 
you make a payment for services or items after you stopped working, we 
will deduct the payment if it was made in the month you received earned 
income for work done in the month you received the services or used the 
item.

    Example: A begins working in October 1981 and earns and receives 
$525 a month. In the same month he purchases and pays for a deductible 
item at a cost of $250. In this situation we could allow a $250 
deduction for both SGA and SSI payment purposes for October 1981, 
reducing A's earnings below the SGA level for that month.
    If A's earnings had been $15 above the SGA earnings amount, A 
probably would select the option of projecting the $250 payment over the 
12-month period, October 1981-September 1982, giving A an allowable 
deduction of $20.83 a month for each month of work (for SGA purposes) 
and for each month earned income is received (for SSI payment purposes) 
during that period. This deduction would reduce A's earnings below the 
SGA level for 12 months.

    (3) Allocating downpayments. If you make a downpayment we will, if 
you choose, make a separate calculation for the downpayment in order to 
provide for uniform monthly deductions. In these situations we will 
determine the total payment that you will make over a 12 consecutive 
month period beginning with the month of the downpayment and allocate 
that amount over the 12 months. Beginning with the 13th month, the 
regular monthly payment will be deductible. This allocation process will 
be for a shorter period if your regular monthly payments will extend 
over a period of less than 12 months.

    Example 1. C starts working in October 1981, at which time he 
purchases special equipment at a cost of $4,800, paying $1,200 down. The 
balance of $3,600, plus interest of $540, is to be repaid in 36 
installments of $115 a month beginning November 1981. C earns and 
receives $500 a month. He chooses to have the downpayment allocated. In 
this situation we would allow a deduction of $205.42 a month for each 
month of work (for SGA purposes) and for each month earned income is 
received (for SSI payment purposes) during the period October 1981 
through September 1982. After September 1982, the deduction amount would 
be the regular monthly payment of $115 for each month of work (for SGA 
purposes) and for each month earned income is received (for SSI payment 
purposes) during the remaining installment period.

Explanation:
  Downpayment in 10/81..........................      $1,200
  Monthly payments 11/81 through 09/82..........       1,265
                                                 ------------

[[Page 947]]

 
                                                   12) 2,465           =
                                                                $205.42.
 

    Example 2. D, while working, buys a deductible item in July 1981, 
paying $1,450 down. (D earns and receives $500 a month.) However, his 
first monthly payment of $125 is not due until September 1981. D chooses 
to have the downpayment allocated. In this situation we would allow a 
deduction of $225 a month for each month of work (for SGA purposes) and 
for each month earned income is received (for SSI payment purposes) 
during the period July 1981 through June 1982. After June 1982, the 
deduction amount would be the regular monthly payment of $125 for each 
month of work (for SGA purposes) and for each month earned income is 
received (for SSI payment purposes).

Explanation:
  Downpayment in 07/81..........................      $1,450
  Monthly payments 09/81 through 06/82..........       1,250
                                                 ------------
                                                   12) 2,700      = 225.
 

    (4) Payments made in anticipation of work. A payment toward the cost 
of a deductible item that you made in any of the 11 months preceding the 
month you started working will be taken into account in determining your 
impairment-related work expenses. When an item is paid for in full 
during the 11 months preceding the month you started working the payment 
will be allocated over the 12-consecutive month period beginning with 
the month of the payment. However, the only portion of the payment which 
may be deductible is the portion allocated to the month work begins and 
the following months. For example, if an item is purchased 3 months 
before the month work began and is paid for with a one-time payment of 
$600, the deductible amount would be $450 ($600 divided by 12, 
multiplied by 9). Installment payments (including a downpayment) that 
you made for a particular item during the 11 months preceding the month 
you started working will be totaled and considered to have been made in 
the month of your first payment for that item within this 11 month 
period. The sum of these payments will be allocated over the 12-
consecutive month period beginning with the month of your first payment 
(but never earlier than 11 months before the month work began). However, 
the only portion of the total which may be deductible is the portion 
allocated to the month work begins and the following months. For 
example, if an item is purchased 3 months before the month work began 
and is paid for in 3 monthly installments of $200 each, the total 
payment of $600 will be considered to have been made in the month of the 
first payment, that is, 3 months before the month work began. The 
deductible amount would be $450 ($600 divided by 12, multiplied by 9). 
The amount, as determined by these formulas, will then be considered to 
have been paid in the first month of work for the purpose of determining 
SGA and in the first month earned income is received for the purpose of 
determining the SSI monthly payment amount. For the purpose of 
determining SGA, we will deduct either the entire amount in the first 
month of work or allocate it over a 12 consecutive month period 
beginning with the first month of work, whichever you select. In the 
above examples, the individual would have the choice of having the 
entire $450 deducted in the first month of work or of having $37.50 a 
month ($450 divided by 12) deducted for each month that he works over a 
12-consecutive month period, beginning with the first month of work. For 
the purpose of determining the SSI payment amount, we will either deduct 
the entire amount in the first month earned income is received or 
allocate it over a 12-consecutive month period beginning with the first 
month earned income is received, whichever you select. In the above 
examples, the individual would have the choice of having the entire $450 
deducted in the first month earned income is received or of having 
$37.50 a month ($450 divided by 12) deducted for each month he receives 
earned income (for work) over a 12-consecutive month period, beginning 
with the first month earned income is received. To be deductible the 
payments must be for durable items such as medical devices, prostheses, 
work-related equipment, residential modifications, nonmedical appliances 
and vehicle modifications. Payments for services and expendable items 
such as drugs, oxygen, diagnostic procedures, medical supplies and 
vehicle operating costs are not deductible for purposes of this 
paragraph.

[[Page 948]]

    (f) Limits on deductions. (1) We will deduct the actual amounts you 
pay toward your impairment-related work expenses unless the amounts are 
unreasonable. With respect to durable medical equipment, prosthetic 
devices, medical services, and similar medically related items and 
services, we will apply the prevailing charges under Medicare (part B of 
title XVIII, Health Insurance for the Aged and Disabled) to the extent 
that this information is readily available. Where the Medicare guides 
are used, we will consider the amount that you pay to be reasonable if 
it is no more than the prevailing charge for the same item or service 
under the Medicare guidelines. If the amount you actually pay is more 
than the prevailing charge for the same item under the Medicare 
guidelines, we will deduct from your earnings the amount you paid to the 
extent you establish that the amount is consistent with the standard or 
normal charge for the same or similar item or service in your community. 
For items and services that are not listed in the Medicare guidelines, 
and for items and services that are listed in the Medicare guidelines 
but for which such guides cannot be used because the information is not 
readily available, we will consider the amount you pay to be reasonable 
if it does not exceed the standard or normal charge for the same or 
similar item(s) or service(s) in your community.
    (2) The decision as to whether you performed substantial gainful 
activity in a case involving impairment-related work expenses for items 
or services necessary for you to work generally will be based upon your 
``earnings'' and not on the value of ``services'' you rendered. (See 
Secs. 416.974(b)(6) (i) and (ii), and 416.975(a)). This is not 
necessarily so, however, if you are in a position to control or 
manipulate your earnings.
    (3) The amount of the expenses to be deducted must be determined in 
a uniform manner in both the disability insurance and SSI programs. The 
amount of deductions must, therefore, be the same for determinations as 
to substantial gainful activity under both programs. The deductions that 
apply in determining the SSI payment amounts, though determined in the 
same manner as for SGA determinations, are applied so that they 
correspond to the timing of the receipt of the earned income to be 
excluded.
    (4) No deduction will be allowed to the extent that any other source 
has paid or will pay for an item or service. No deduction will be 
allowed to the extent that you have been, could be, or will be, 
reimbursed for payments you made. (See paragraph (b)(3) of this 
section.)
    (5) The provisions described in the foregoing paragraphs of this 
section are effective with respect to expenses incurred on and after 
December 1, 1980, although expenses incurred after November 1980 as a 
result of contractual or other arrangements entered into before December 
1980, are deductible. For months before December 1980 we will deduct 
impairment-related work expenses from your earnings only to the extent 
they exceeded the normal work-related expenses you would have had if you 
did not have your impairment(s). We will not deduct expenses, however, 
for those things which you needed even when you were not working.
    (g) Verification. We will verify your need for items or services for 
which deductions are claimed, and the amount of the charges for those 
items or services. You will also be asked to provide proof that you paid 
for the items or services.

[48 FR 21940, May 16, 1983, as amended at 65 FR 42791, July 11, 2000]

                                Blindness



Sec. 416.981  Meaning of blindness as defined in the law.

    We will consider you blind under the law for payment of supplemental 
security income benefits if we determine that you are statutorily blind. 
Statutory blindness is central visual acuity of 20/200 or less in the 
better eye with the use of a correcting lens. An eye which has a 
limitation in the field of vision so that the widest diameter of the 
visual field subtends an angle no greater than 20 degrees is considered 
to have a central visual acuity of 20/200 or less.

[[Page 949]]



Sec. 416.982  Blindness under a State plan.

    We shall also consider you blind for the purposes of payment of 
supplemental security income benefits if--
    (a) You were found to be blind as defined under a State plan 
approved under title X or title XVI of the Social Security Act, as in 
effect for October 1972;
    (b) You received aid under the State plan because of your blindness 
for the month of December 1973; and
    (c) You continue to be blind as defined under the State plan.



Sec. 416.983  How we evaluate statutory blindness.

    We will find that you are blind if you are statutorily blind within 
the meaning of Sec. 416.981. For us to find that you are statutorily 
blind, it is not necessary--
    (a) That your blindness meet the duration requirement; or
    (b) That you be unable to do any substantial gainful activity.



Sec. 416.984  If you are statutorily blind and still working.

    There is no requirement that you be unable to work in order for us 
to find that you are blind. However, if you are working, your earnings 
will be considered under the income and resources rules in subparts K 
and L of this part. This means that if your income or resources exceed 
the limitations, you will not be eligible for benefits, even though you 
are blind.



Sec. 416.985  How we evaluate other visual impairments.

    If you are not blind as defined in the law, we will evaluate a 
visual impairment the same as we evaluate other impairments in 
determining disability. Although you will not qualify for benefits on 
the basis of blindness, you may still be eligible for benefits if we 
find that you are disabled as defined in Secs. 416.905 through 416.907.



Sec. 416.986  Why and when we will find that you are no longer entitled
to benefits based on statutory blindness.

    (a) If your vision does not meet the definition of blindness. If you 
become entitled to payments as a statutorily blind person and your 
statutory blindness ends, your eligibility for payments generally will 
end 2 months after your blindness ends. We will find that your statutory 
blindness has ended beginning with the earliest of the following 
months--
    (1) The month your vision, based on current medical evidence, does 
not meet the definition of blindness and you were disabled only for a 
specified period of time in the past;
    (2) The month your vision based on current medical evidence, does 
not meet the definition of blindness, but not earlier than the month in 
which we mail you a notice saying that the information we have shows 
that you are not now blind; or
    (3) The first month in which you fail to follow prescribed treatment 
that can restore your ability to work (see Sec. 416.930).
    (b) If you were found blind as defined in a State plan. If you 
become eligible for payments because you were blind as defined in a 
State plan, we will find that your blindness has ended beginning with 
the first month in which your vision, as shown by medical or other 
evidence, does not meet the criteria of the appropriate State plan or 
the first month in which your vision does not meet the definition of 
statutory blindness (Sec. 416.981), whichever is later, and in neither 
event earlier than the month in which we mail you a notice saying that 
we have determined that you are not now blind under a State plan or not 
now statutorily blind, as appropriate.
    (c) If you do not cooperate with us. If you are asked to give us 
medical or other evidence or to go for a physical or mental examination 
by a certain date, we will find that your blindness ended if you fail, 
without good cause, to do what we ask. Section 416.1411 explains the 
factors we consider and how we will determine generally whether you have 
good cause for failure to cooperate. In addition, Sec. 416.918 discusses 
how we determine whether you have good cause for failing to attend a 
consultative examination. The month in which your blindness ends will be 
the month in which you fail to do what we asked.
    (d) Before we stop your payments. Before we stop payment of your 
benefits

[[Page 950]]

we will give you a chance to give us your reasons why we should not stop 
payment. Subpart M of this part describes your rights and the procedures 
we will follow.

[45 FR 55621, Aug. 20, 1980, as amended at 50 FR 50137, Dec. 6, 1985; 51 
FR 7603, Feb. 28, 1986; 59 FR 1636, Jan. 12, 1994]

      Disability Redeterminations for Individuals Who Attain Age 18



Sec. 416.987  Disability redeterminations for individuals who attain 
age 18.

    (a) Who is affected by this section? (1) We must redetermine your 
eligibility if you are eligible for SSI disability benefits and:
    (i) You are at least 18 years old; and
    (ii) You became eligible for SSI disability benefits as a child 
(i.e., before you attained age 18); and
    (iii) You were eligible for such benefits for the month before the 
month in which you attained age 18.
    (2) We may find that you are not now disabled even though we 
previously found that you were disabled.
    (b) What are the rules for age-18 redeterminations? When we 
redetermine your eligibility, we will use the rules for adults 
(individuals age 18 or older) who file new applications explained in 
Sec. 416.920(c) through (h). We will not use the rule in Sec. 416.920(b) 
for people who are doing substantial gainful activity, and we will not 
use the rules in Sec. 416.994 for determining whether disability 
continues. If you are working and we find that you are disabled under 
Sec. 416.920(d) or (g), we will apply the rules in Secs. 416.260ff.
    (c) When will my eligibility be redetermined? We will redetermine 
your eligibility either during the 1-year period beginning on your 18th 
birthday or, in lieu of a continuing disability review, whenever we 
determine that your case is subject to redetermination under the Act.
    (d) Will I be notified?--(1) We will notify you in writing before we 
begin your disability redetermination. We will tell you:
    (i) That we are redetermining your eligibility for payments;
    (ii) Why we are redetermining your eligibility;
    (iii) Which disability rules we will apply;
    (iv) That our review could result in a finding that your SSI 
payments based on disability could be terminated;
    (v) That you have the right to submit medical and other evidence for 
our consideration during the redetermination; and
    (vi) That we will notify you of our determination, your right to 
appeal the determination, and your right to request continuation of 
benefits during appeal.
    (2) We will notify you in writing of the results of the disability 
redetermination. The notice will tell you what our determination is, the 
reasons for our determination, and your right to request reconsideration 
of the determination. If our determination shows that we should stop 
your SSI payments based on disability, the notice will also tell you of 
your right to request that your benefits continue during any appeal. Our 
initial disability redetermination will be binding unless you request a 
reconsideration within the stated time period or we revise the initial 
determination.
    (e) When will we find that your disability ended? If we find that 
you are not disabled, we will find that your disability ended in the 
earliest of:
    (1) The month the evidence shows that you are not disabled under the 
rules in this section, but not earlier than the month in which we mail 
you a notice saying that you are not disabled.
    (2) The first month in which you failed without good cause to follow 
prescribed treatment under the rules in Sec. 416.930.
    (3) The first month in which you failed without good cause to do 
what we asked. Section 416.1411 explains the factors we will consider 
and how we will determine generally whether you have good cause for 
failure to cooperate. In addition, Sec. 416.918 discusses how we 
determine whether you have good cause for failing to attend a 
consultative examination.

[65 FR 54789, Sept. 11, 2000, as amended at 70 FR 36508, June 24, 2005; 
77 FR 43495, July 25, 2012]

[[Page 951]]

             Continuing or Stopping Disability or Blindness



Sec. 416.988  Your responsibility to tell us of events that may change 
your disability or blindness status.

    If you are entitled to payments because you are disabled or blind, 
you should promptly tell us if--
    (a) Your condition improves;
    (b) Your return to work;
    (c) You increase the amount of your work; or
    (d) Your earnings increase.



Sec. 416.989  We may conduct a review to find out whether you continue 
to be disabled.

    After we find that you are disabled, we must evaluate your 
impairment(s) from time to time to determine if you are still eligible 
for payments based on disability. We call this evaluation a continuing 
disability review. We may begin a continuing disability review for any 
number of reasons including your failure to follow the provisions of the 
Social Security Act or these regulations. When we begin such a review, 
we will notify you that we are reviewing your eligibility for payments, 
why we are reviewing your eligibility, that in medical reviews the 
medical improvement review standard will apply, that our review could 
result in the termination of your payments, and that you have the right 
to submit medical and other evidence for our consideration during the 
continuing disability review. In doing a medical review, we will develop 
a complete medical history of at least the preceding 12 months in any 
case in which a determination is made that you are no longer under a 
disability. If this review shows that we should stop your payments, we 
will notify you in writing and give you an opportunity to appeal. In 
Sec. 416.990 we describe those events that may prompt us to review 
whether you continue to be disabled.

[51 FR 16826, May 7, 1986]



Sec. 416.989a  We may conduct a review to find out whether you
continue to be blind.

    After we find that you are blind, we must evaluate your 
impairment(s) from time to time to determine if you are still eligible 
for payments based on blindness. We call this evaluation a continuing 
disability review. We may begin a continuing disability review for any 
number of reasons including your failure to follow the provisions of the 
Social Security Act or these regulations. When we begin such a review, 
we will notify you that we are reviewing your eligibility for payments, 
why we are reviewing your eligibility, that our review could result in 
the termination of your payments, and that you have the right to submit 
medical and other evidence for our consideration during the continuing 
disability review. In doing a medical review, we will develop a complete 
medical history of at least the preceding 12 months in any case in which 
a determination is made that you are no longer blind. If this review 
shows that we should stop your payments, we will notify you in writing 
and give you an opportunity to appeal. In Sec. 416.990 we describe those 
events that may prompt us to review whether you continue to be blind.

[51 FR 16826, May 7, 1986]



Sec. 416.990  When and how often we will conduct a continuing 
disability review.

    (a) General. We conduct continuing disability reviews to determine 
whether or not you continue to meet the disability or blindness 
requirements of the law. Payment ends if the medical or other evidence 
shows that you are not disabled or blind as determined under the 
standards set out in section 1614(a) of the Social Security Act if you 
receive benefits based on disability or Sec. 416.986 of this subpart if 
you receive benefits based on blindness. In paragraphs (b) through (g) 
of this section, we explain when and how often we conduct continuing 
disability reviews for most individuals. In paragraph (h) of this 
section, we explain special rules for some individuals who are 
participating in the Ticket to Work program. In paragraph (i) of this 
section, we explain special rules for some individuals who work and have 
received social security benefits as well as supplemental security 
income payments.
    (b) When we will conduct a continuing disability review. Except as 
provided in paragraphs (h) and (i) of this section,

[[Page 952]]

we will start a continuing disability review if--
    (1) You have been scheduled for a medical improvement expected diary 
review;
    (2) You have been scheduled for a periodic review (medical 
improvement possible or medical improvement not expected) in accordance 
with the provisions of paragraph (d) of this section;
    (3) We need a current medical or other report to see if your 
disability continues. (This could happen when, for example, an advance 
in medical technology, such as improved treatment for Alzheimer's 
disease, or a change in vocational therapy or technology raises a 
disability issue);
    (4) You return to work;
    (5) Substantial earnings are reported to your wage record;
    (6) You tell us that--
    (i) You have recovered from your disability; or
    (ii) You have returned to work;
    (7) Your State Vocational Rehabilitation Agency tells us that--
    (i) The services have been completed; or
    (ii) You are now working; or
    (iii) You are able to work;
    (8) Someone in a position to know of your physical or mental 
condition tells us any of the following, and it appears that the report 
could be substantially correct:
    (i) You are not disabled or blind; or
    (ii) You are not following prescribed treatment; or
    (iii) You have returned to work; or
    (iv) You are failing to follow the provisions of the Social Security 
Act or these regulations;
    (9) Evidence we receive raises a question whether your disability or 
blindness continues;
    (10) You have been scheduled for a vocational reexamination diary 
review; or
    (11) By your first birthday, if you are a child whose low birth 
weight was a contributing factor material to our determination that you 
were disabled; i.e., whether we would have found you disabled if we had 
not considered your low birth weight. However, we will conduct your 
continuing disability review later if at the time of our initial 
determination that you were disabled:
    (i) We determine that you have an impairment that is not expected to 
improve by your first birthday; and
    (ii) We schedule you for a continuing disability review after your 
first birthday.
    (c) Definitions. As used in this section--
    Medical improvement expected diary--refers to a case which is 
scheduled for review at a later date because the individual's 
impairment(s) is expected to improve. Generally, the diary period is set 
for not less than 6 months or for not more than 18 months. Examples of 
cases likely to be scheduled for medical improvement expected diary are 
fractures and cases in which corrective surgery is planned and recovery 
can be anticipated.
    Permanent impairment--medical improvement not expected--refers to a 
case in which any medical improvement in a person's impairment(s) is not 
expected. This means an extremely severe condition determined on the 
basis of our experience in administering the disability programs to be 
at least static, but more likely to be progressively disabling either by 
itself or by reason of impairment complications, and unlikely to improve 
so as to permit the individual to engage in substantial gainful activity 
or, if you are a child, unlikely to improve to the point that you will 
no longer have marked and severe functional limitations. The interaction 
of the individual's age, impairment consequences and the lack of recent 
attachment to the labor market may also be considered in determining 
whether an impairment is permanent. Improvement which is considered 
temporary under Sec. 416.994(b)(2)(iv)(D) or Sec. 416.994(c)(2)(iv), as 
appropriate, will not be considered in deciding if an impairment is 
permanent. Examples of permanent impairments taken from the list 
contained in our other written guidelines which are available for public 
review are as follows and are not intended to be all inclusive:
    (1) Parkinsonian Syndrome which has reached the level of severity 
necessary to meet the Listing in appendix 1 of subpart P or part 404 of 
this chapter.
    (2) Amyotrophic Lateral Sclerosis which has reached the level of 
severity

[[Page 953]]

necessary to meet the Listing in appendix 1 of subpart P of part 404 of 
this chapter.
    (3) Diffuse pulmonary fibrosis in an individual age 55 or over which 
has reached the level of severity necessary to meet the Listing in 
appendix 1 of subpart P of part 404 of this chapter.
    (4) Amputation of leg at hip.
    Nonpermanent impairment--refers to a case in which any medical 
improvement in the person's impairment(s) is possible. This means an 
impairment for which improvement cannot be predicted based on current 
experience and the facts of the particular case but which is not at the 
level of severity of an impairment that is considered permanent. 
Examples of nonpermanent impairments are: Regional enteritis, 
hyperthyroidism, and chronic ulcerative colitis.
    Vocational reexamination diary--refers to a case which is scheduled 
for review at a later date because the individual is undergoing 
vocational therapy, training or an educational program which may improve 
his or her ability to work so that the disability or blindness 
requirement of the law is no longer met. Generally, the diary period 
will be set for the length of the training, therapy, or program of 
education.
    (d) Frequency of review. If your impairment is expected to improve, 
generally we will review your continuing eligibility for payments based 
on disability or blindness at intervals from 6 months to 18 months 
following our most recent decision. Our notice to you about the review 
of your case will tell you more precisely when the review will be 
conducted. If your disability is not considered permanent but is such 
that any medical improvement in your impairment(s) cannot be accurately 
predicted, we will review your continuing eligibility for payments at 
least once every 3 years. If your disability is considered permanent, we 
will review your continuing eligibility for payments no less frequently 
than once every 7 years but no more frequently than once every 5 years. 
Regardless of your classification we will conduct an immediate 
continuing disability review if a question of continuing disability is 
raised pursuant to paragraph (b) of this section.
    (e) Change in classification of impairment. If the evidence 
developed during a continuing disability review demonstrates that your 
impairment has improved, is expected to improve, or has worsened since 
the last review, we may reclassify your impairment to reflect this 
change in severity. A change in the classification of your impairment 
will change the frequency with which we will review your case. We may 
also reclassify certain impairments because of improved tests, 
treatment, and other technical advances concerning those impairments.
    (f) Review after administrative appeal. If you were found eligible 
to receive or to continue to receive, payments on the basis of a 
decision by an administrative law judge, the Appeals Council or a 
Federal court, we will not conduct a continuing disability review 
earlier than 3 years after that decision unless your case should be 
scheduled for a medical improvement expected or vocational reexamination 
diary review or a question of continuing disability is raised pursuant 
to paragraph (b) of this section.
    (g) Waiver of timeframes. All cases involving a nonpermanent 
impairment will be reviewed by us at least once every 3 years unless we, 
after consultation with the State agency, determine that the requirement 
should be waived to ensure that only the appropriate number of cases are 
reviewed. The appropriate number of cases to be reviewed is to be based 
on such considerations as the backlog of pending reviews, the projected 
number of new applications, and projected staffing levels. Such waiver 
shall be given only after good faith effort on the part of the State to 
meet staffing requirements and to process the reviews on a timely basis. 
Availability of independent medical resources may also be a factor. A 
waiver in this context refers to our administrative discretion to 
determine the appropriate number of cases to be reviewed on a State by 
State basis. Therefore, your continuing disability review may be delayed 
longer than 3 years following our original decision or other review 
under certain circumstances. Such a delay would be based on our need to 
ensure that

[[Page 954]]

backlogs, reviews required to be performed by the Social Security 
Disability Benefits Reform Act (Pub. L. 98-460), and new disability 
claims workloads are accomplished within available medical and other 
resources in the State agency and that such reviews are done carefully 
and accurately.
    (h) If you are participating in the Ticket to Work program. If you 
are participating in the Ticket to Work program, we will not start a 
continuing disability review during the period in which you are using a 
ticket. See subpart C of part 411 of this chapter.
    (i) If you are working and have received social security disability 
benefits for at least 24 months--(1) General. Notwithstanding the 
provisions in paragraphs (b)(4), (b)(5), (b)(6)(ii), (b)(7)(ii), and 
(b)(8)(iii) of this section, we will not start a continuing disability 
review based solely on your work activity if--
    (i) You are currently entitled to disability insurance benefits as a 
disabled worker, child's insurance benefits based on disability, or 
widow's or widower's insurance benefits based on disability under title 
II of the Social Security Act (see subpart D of part 404 of this 
chapter); and
    (ii) You have received such benefits for at least 24 months (see 
paragraph (i)(2) of this section).
    (2) The 24-month requirement. (i) The months for which you have 
actually received disability insurance benefits as a disabled worker, 
child's insurance benefits based on disability, or widow's or widower's 
insurance benefits based on disability that you were due under title II 
of the Social Security Act, or for which you have constructively 
received such benefits, will count for the 24-month requirement under 
paragraph (i)(1)(ii) of this section, regardless of whether the months 
were consecutive. We will consider you to have constructively received a 
benefit for a month for purposes of the 24-month requirement if you were 
otherwise due a social security disability benefit for that month and 
your monthly benefit was withheld to recover an overpayment. Any month 
for which you were entitled to social security disability benefits but 
for which you did not actually or constructively receive a benefit 
payment will not be counted for the 24-month requirement. Months for 
which your social security disability benefits are continued under 
Sec. 404.1597a pending reconsideration and/or a hearing before an 
administrative law judge on a medical cessation determination will not 
be counted for the 24-month requirement. Months for which you received 
only supplemental security income payments will not be counted for the 
24-month requirement.
    (ii) In determining whether paragraph (i)(1) of this section 
applies, we consider whether you have received disability insurance 
benefits as a disabled worker, child's insurance benefits based on 
disability, or widow's or widower's insurance benefits based on 
disability under title II of the Social Security Act for at least 24 
months as of the date on which we start a continuing disability review. 
For purposes of this provision, the date on which we start a continuing 
disability review is the date on the notice we send you that tells you 
that we are beginning to review your disability case.
    (3) When we may start a continuing disability review even if you 
have received social security disability benefits for at least 24 
months. Even if you meet the requirements of paragraph (i)(1) of this 
section, we may still start a continuing disability review for a 
reason(s) other than your work activity. We may start a continuing 
disability review if we have scheduled you for a periodic review of your 
continuing disability, we need a current medical or other report to see 
if your disability continues, we receive evidence which raises a 
question as to whether your disability or blindness continues, or you 
fail to follow the provisions of the Social Security Act or these 
regulations. For example, we will start a continuing disability review 
when you have been scheduled for a medical improvement expected diary 
review, and we may start a continuing disability review if you failed to 
report your work to us.
    (4) Erroneous start of the continuing disability review. If we start 
a continuing disability review based solely on your work activity that 
results in a medical cessation determination, we will vacate the medical 
cessation determination if--

[[Page 955]]

    (i) You provide us evidence that establishes that you met the 
requirements of paragraph (i)(1) of this section as of the date of the 
start of your continuing disability review and that the start of the 
review was erroneous; and
    (ii) We receive the evidence within 12 months of the date of the 
notice of the initial determination of medical cessation.

[51 FR 16826, May 7, 1986, as amended at 62 FR 6430, Feb. 11, 1997; 65 
FR 54790, Sept. 11, 2000; 71 FR 66858, Nov. 17, 2006]



Sec. 416.991  If your medical recovery was expected and you returned
to work.

    If your impairment was expected to improve and you returned to full-
time work with no significant medical limitations and acknowledge that 
medical improvement has occurred, we may find that your disability ended 
in the month you returned to work. Unless there is evidence showing that 
your disability has not ended, we will use the medical and other 
evidence already in your file and the fact that you returned to full-
time work without significant limitations to determine that you are no 
longer disabled.

    Example: Evidence obtained during the processing of your claim 
showed that you had an impairment that was expected to improve about 18 
months after your disability began. We, therefore, told you that your 
claim would be reviewed again at that time. However, before the time 
arrived for your scheduled medical re-examination, you told us that you 
had returned to work and your impairment had improved. We reviewed your 
claim immediately and found that, in the 16th month after your 
disability began, you returned to full-time work without any significant 
medical restrictions. Therefore, we would find that your disability 
ended in the first month you returned to full-time work.

[50 FR 50137, Dec. 6, 1985, as amended at 65 FR 42791, July 11, 2000]



Sec. 416.992  What happens if you fail to comply with our request
for information.

    We will suspend your payments before we make a determination 
regarding your continued eligibility for disability payments if you fail 
to comply, without good cause (see Sec. 416.1411), with our request for 
information for your continuing disability review or age-18 
redetermination. The suspension is effective with the month in which it 
is determined in accordance with Sec. 416.1322 that your eligibility for 
disability payments has ended due to your failure to comply with our 
request for necessary information. When we have received the 
information, we will reinstate your payments for any previous month for 
which they are otherwise payable, and continue with the CDR or age-18 
redetermination process. We will terminate your eligibility for payments 
following 12 consecutive months of payment suspension as discussed in 
Sec. 416.1335.

[71 FR 60823, Oct. 17, 2006]



Sec. 416.992a  [Reserved]



Sec. 416.993  Medical evidence in continuing disability review cases.

    (a) General. If you are entitled to benefits because you are 
disabled, we will have your case file with the supporting medical 
evidence previously used to establish or continue your entitlement. 
Generally, therefore, the medical evidence we will need for a continuing 
disability review will be that required to make a current determination 
or decision as to whether you are still disabled, as defined under the 
medical improvement review standard. See Secs. 416.987 and 416.994.
    (b) Obtaining evidence from your medical sources. You must provide 
us with reports from your physician, psychologist, or others who have 
treated or evaluated you, as well as any other evidence that will help 
us determine if you are still disabled. See Sec. 416.912. You must have 
a good reason for not giving us this information or we may find that 
your disability has ended. See Sec. 416.994(e)(2). lf we ask you, you 
must contact your medical sources to help us get the medical reports. We 
will make every reasonable effort to help you in getting medical reports 
when you give us permission to request them from your physician, 
psychologist, or other medical sources. See Sec. 416.912(b)(1)(i) 
concerning what we mean by every reasonable effort. In some instances, 
such as when a source is known to be unable to provide certain tests or 
procedures or is known to be nonproductive or uncooperative, we may 
order a consultative examination

[[Page 956]]

while awaiting receipt of medical source evidence. See 
Sec. 416.912(b)(1)(ii). See Sec. 416.912(c).
    (c) When we will purchase a consultative examination. A consultative 
examination may be purchased when we need additional evidence to 
determine whether or not your disability continues. As a result, we may 
ask you, upon our request and reasonable notice, to undergo consultative 
examinations and tests to help us determine if you are still disabled. 
See Sec. 416.917. We will decide whether or not to purchase a 
consultative examination in accordance with the standards in 
Secs. 416.919a through 416.919b.

[56 FR 36970, Aug. 1, 1991, as amended at 65 FR 16815, Mar. 30, 2000; 82 
FR 5882, Jan. 18, 2017]



Sec. 416.994  How we will determine whether your disability continues
or ends, disabled adults.

    (a) General. There is a statutory requirement that, if you are 
entitled to disability benefits, your continued entitlement to such 
benefits must be reviewed periodically. Our rules for deciding whether 
your disability continues are set forth in paragraph (b) of this 
section. Additional rules apply if you were found disabled under a State 
plan, as set forth in paragraph (c) of this section.
    (b) Disabled persons age 18 or over (adults). If you are entitled to 
disability benefits as a disabled person age 18 or over (adult) there 
are a number of factors we consider in deciding whether your disability 
continues. We must determine if there has been any medical improvement 
in your impairment(s) and, if so, whether this medical improvement is 
related to your ability to work. If your impairment(s) has not so 
medically improved, we must consider whether one or more of the 
exceptions to medical improvement applies. If medical improvement 
related to your ability to work has not occurred and no exception 
applies, your benefits will continue. Even where medical improvement 
related to your ability to work has occurred or an exception applies, in 
most cases, (see paragraph (b)(4) of this section for exceptions) we 
must also show that you are currently able to engage in substantial 
gainful activity before we can find that you are no longer disabled.
    (1) Terms and definitions. There are several terms and definitions 
which are important to know in order to understand how we review whether 
your disability continues. In addition, see paragraph (b)(8) of this 
section if you work during your current period of eligibility based on 
disability or during certain other periods.
    (i) Medical improvement. Medical improvement is any decrease in the 
medical severity of your impairment(s) which was present at the time of 
the most recent favorable medical decision that you were disabled or 
continued to be disabled. A determination that there has been a decrease 
in medical severity must be based on changes (improvement) in the 
symptoms, signs, or laboratory findings associated with your 
impairment(s).

    Example 1: You were awarded disability benefits due to a herniated 
nucleus pulposus. At the time of our prior decision granting you 
benefits you had had a laminectomy. Postoperatively, a myelogram still 
shows evidence of a persistent deficit in your lumbar spine. You had 
pain in your back, and pain and a burning sensation in your right foot 
and leg. There were no muscle weakness or neurological changes and a 
modest decrease in motion in your back and leg. When we reviewed your 
claim your medical source who has treated you reported that he or she 
had seen you regularly every 2 to 3 months for the past 2 years. No 
further myelograms had been done, complaints of pain in the back and 
right leg continued especially on sitting or standing for more than a 
short period of time. Your doctor further reported a moderately 
decreased range of motion in your back and right leg, but again no 
muscle atrophy or neurological changes were reported. Medical 
improvement has not occurred because there has been no decrease in the 
severity of your back impairment as shown by changes in symptoms, signs 
or laboratory findings.
    Example 2: You were awarded disability benefits due to rheumatoid 
arthritis. At the time, laboratory findings were positive for this 
condition. Your doctor reported persistent swelling and tenderness of 
your fingers and wrists and that you complained of joint pain. Current 
medical evidence shows that while laboratory tests are still positive 
for rheumatoid arthritis, your impairment has responded favorably to 
therapy so that for the last year your fingers and wrists have not been 
significantly swollen or painful. Medical improvement has occurred 
because

[[Page 957]]

there has been a decrease in the severity of your impairment as 
documented by the current symptoms and signs reported by your physician. 
Although your impairment is subject to temporary remissions and 
exacerbations, the improvement that has occurred has been sustained long 
enough to permit a finding of medical improvement. We would then 
determine if this medical improvement is related to your ability to 
work.

    (ii) Medical improvement not related to ability to do work. Medical 
improvement is not related to your ability to work if there has been a 
decrease in the severity of the impairment(s) as defined in paragraph 
(b)(1)(i) of this section, present at the time of the most recent 
favorable medical decision, but no increase in your functional capacity 
to do basic work activities as defined in paragraph (b)(1)(iv) of this 
section. If there has been any medical improvement in your 
impairment(s), but it is not related to your ability to do work and none 
of the exceptions applies, your benefits will be continued.

    Example: You are 65 inches tall and weighed 246 pounds at the time 
your disability was established. You had venous insufficiency and 
persistent edema in your legs. At the time, your ability to do basic 
work activities was affected because you were able to sit for 6 hours, 
but were able to stand or walk only occasionally. At the time of our 
continuing disability review, you had undergone a vein stripping 
operation. You now weigh 220 pounds and have intermittent edema. You are 
still able to sit for 6 hours at a time and to stand or work only 
occasionally although you report less discomfort on walking. Medical 
improvement has occurred because there has been a decrease in the 
severity of the existing impairment as shown by your weight loss and the 
improvement in your edema. This medical improvement is not related to 
your ability to work, however, because your functional capacity to do 
basic work activities (i.e., the ability to sit, stand and walk) has not 
increased.

    (iii) Medical improvement that is related to ability to do work. 
Medical improvement is related to your ability to work if there has been 
a decrease in the severity, as defined in paragraph (b)(1)(i) of this 
section, of the impairment(s) present at the time of the most recent 
favorable medical decision and an increase in your functional capacity 
to do basic work activities as discussed in paragraph (b)(1)(iv) of this 
section. A determination that medical improvement related to your 
ability to do work has occurred does not, necessarily, mean that your 
disability will be found to have ended unless it is also shown that you 
are currently able to engage in substantial gainful activity as 
discussed in paragraph (b)(1)(v) of this section.

    Example 1: You have a back impairment and had a laminectomy to 
relieve the nerve root impingement and weakness in your left leg. At the 
time of our prior decision, basic work activities were affected because 
you were able to stand less than 6 hours, and sit no more than \1/2\ 
hour at a time. You had a successful fusion operation on your back about 
1 year before our review of your entitlement. At the time of our review, 
the weakness in your leg has decreased. Your functional capacity to 
perform basic work activities now is unimpaired because you now have no 
limitation on your ability to sit, walk, or stand. Medical improvement 
has occurred because there has been a decrease in the severity of your 
impairment as demonstrated by the decreased weakness in your leg. This 
medical improvement is related to your ability to work because there has 
also been an increase in your functional capacity to perform basic work 
activities (or residual functional capacity) as shown by the absence of 
limitation on your ability to sit, walk, or stand. Whether or not your 
disability is found to have ended, however, will depend on our 
determination as to whether you can currently engage in substantial 
gainful activity.
    Example 2: You were injured in an automobile accident receiving a 
compound fracture to your right femur and a fractured pelvis. When you 
applied for disability benefits 10 months after the accident your doctor 
reported that neither fracture had yet achieved solid union based on his 
clinical examination. X-rays supported this finding. Your doctor 
estimated that solid union and a subsequent return to full weight 
bearing would not occur for at least 3 more months. At the time of our 
review 6 months later, solid union had occurred and you had been 
returned to weight-bearing for over a month. Your doctor reported this 
and the fact that your prior fractures no longer placed any limitation 
on your ability to walk, stand, lift, etc., and, that in fact, you could 
return to fulltime work if you so desired.
    Medical improvement has occurred because there has been a decrease 
in the severity of your impairments as shown by X-ray and clinical 
evidence of solid union and your return to full weight-bearing. This 
medical improvement is related to your ability to work because you no 
longer meet the same listed impairment in appendix 1 of subpart P of 
part 404 of this chapter (see paragraph

[[Page 958]]

(b)(2)(iii)(A) of this section). In fact, you no longer have an 
impairment which is severe (see Sec. 416.921) and your disability will 
be found to have ended.

    (iv) Functional capacity to do basic work activities. Under the law, 
disability is defined, in part, as the inability to do any substantial 
gainful activity by reason of any medically determinable physical or 
mental impairment(s). In determining whether you are disabled under the 
law, we must measure, therefore, how and to what extent your 
impairment(s) has affected your ability to do work. We do this by 
looking at how your functional capacity for doing basic work activities 
has been affected. Basic work activities means the abilities and 
aptitudes necessary to do most jobs. Included are exertional abilities 
such as walking, standing, pushing, pulling, reaching and carrying, and 
nonexertional abilities and aptitudes such as seeing, hearing, speaking, 
remembering, using judgment, dealing with changes and dealing with both 
supervisors and fellow workers. A person who has no impairment(s) would 
be able to do all basic work activities at normal levels; he or she 
would have an unlimited functional capacity to do basic work activities. 
Depending on its nature and severity, an impairment will result in some 
limitation to the functional capacity to do one or more of these basic 
work activities. Diabetes, for example, can result in circulatory 
problems which could limit the length of time a person could stand or 
walk and damage to his or her eyes as well, so that the person also had 
limited vision. What a person can still do despite an impairment, is 
called his or her residual functional capacity. How the residual 
functional capacity is assessed is discussed in more detail in 
Sec. 416.945. Unless an impairment is so severe that it is deemed to 
prevent you from doing substantial gainful activity (see Secs. 416.925 
and 416.926) it is this residual functional capacity that is used to 
determine whether you can still do your past work or, in conjunction 
with your age, education and work experience, any other work.
    (A) A decrease in the severity of an impairment as measured by 
changes (improvement) in symptoms, signs or laboratory findings can, if 
great enough, result in an increase in the functional capacity to do 
work activities. Vascular surgery (e.g., femoropopliteal bypass) may 
sometimes reduce the severity of the circulatory complications of 
diabetes so that better circulation results and the person can stand or 
walk for longer periods. When new evidence showing a change in symptoms, 
signs and laboratory findings establishes that both medical improvement 
has occurred and your functional capacity to perform basic work 
activities, or residual functional capacity, has increased, we say that 
medical improvement which is related to your ability to do work has 
occurred. A residual functional capacity assessment is also used to 
determine whether you can engage in substantial gainful activity and, 
thus, whether you continue to be disabled (see paragraph (b)(1)(vi) of 
this section).
    (B) Many impairment-related factors must be considered in assessing 
your functional capacity for basic work activities. Age is one key 
factor. Medical literature shows that there is a gradual decrease in 
organ function with age; that major losses and deficits become 
irreversible over time and that maximum exercise performance diminishes 
with age. Other changes related to sustained periods of inactivity and 
the aging process include muscle atrophy, degenerative joint changes, 
decrease in range of motion, and changes in the cardiac and respiratory 
systems which limit the exertional range.
    (C) Studies have also shown that the longer an individual is away 
from the workplace and is inactive, the more difficult it becomes to 
return to ongoing gainful employment. In addition, a gradual change 
occurs in most jobs so that after about 15 years, it is no longer 
realistic to expect that skills and abilities acquired in these jobs 
will continue to apply to the current workplace. Thus, if you are age 50 
or over and have been receiving disability benefits for a considerable 
period of time, we will consider this factor along with your age in 
assessing your residual functional capacity. This will ensure that the 
disadvantages resulting from inactivity and the aging process during

[[Page 959]]

a long period of disability will be considered. In some instances where 
available evidence does not resolve what you can or cannot do on a 
sustained basis, we will provide special work evaluations or other 
appropriate testing.
    (v) Ability to engage in substantial gainful activity. In most 
instances, we must show that you are able to engage in substantial 
gainful activity before your benefits are stopped. When doing this, we 
will consider all your current impairments not just that impairment(s) 
present at the time of the most recent favorable determination. If we 
cannot determine that you are still disabled based on medical 
consideration alone (as discussed in Secs. 416.925 and 416.926), we will 
use the new symptoms, signs and laboratory findings to make an objective 
assessment of your functional capacity to do basic work activities or 
residual functional capacity and we will consider your vocational 
factors. See Secs. 416.945 through 416.969.
    (vi) Evidence and basis for our decision. Our decisions under this 
section will be made on a neutral basis without any initial inference as 
to the presence or absence of disability being drawn from the fact that 
you have previously been determined to be disabled. We will consider all 
evidence you submit and that we obtain from your medical sources and 
nonmedical sources. What constitutes ``evidence'' and our procedures for 
obtaining it are set out in Secs. 416.912 through 416.918. Our 
determination regarding whether your disability continues will be made 
on the basis of the weight of the evidence.
    (vii) Point of comparison. For purpose of determining whether 
medical improvement has occurred, we will compare the current medical 
severity of that impairment(s) which was present at the time of the most 
recent favorable medical decision that you were disabled or continued to 
be disabled to the medical severity of that impairment(s) at that time. 
If medical improvement has occurred, we will compare your current 
functional capacity to do basic work activities (i.e., your residual 
functional capacity) based on the previously existing impairments with 
your prior residual functional capacity in order to determine whether 
the medical improvement is related to your ability to do work. The most 
recent favorable medical decision is the latest decision involving a 
consideration of the medical evidence and the issue of whether you were 
disabled or continued to be disabled which became final.
    (2) Determining medical improvement and its relationship to your 
abilities to do work. Paragraphs (b)(1)(i) through (b)(1)(iii) of this 
section discuss what we mean by medical improvement, medical improvement 
not related to your ability to work, and medical improvement that is 
related to your ability to work. (In addition, see paragraph (b)(8) of 
this section if you work during your current period of eligibility based 
on disability or during certain other periods.) How we will arrive at 
the decision that medical improvement has occurred and its relationship 
to the ability to do work, is discussed below.
    (i) Medical improvement. Medical improvement is any decrease in the 
medical severity of impairment(s) present at the time of the most recent 
favorable medical decision that you were disabled or continued to be 
disabled and is determined by a comparison of prior and current medical 
evidence which must show that there have been changes (improvement) in 
the symptoms, signs or laboratory findings associated with that 
impairment(s).
    (ii) Determining if medical improvement is related to ability to 
work. If there is a decrease in medical severity as shown by the 
symptoms, signs and laboratory findings, we then must determine if it is 
related to your ability to do work. In paragraph (b)(1)(iv) of this 
section, we explain the relationship between medical severity and 
limitation on functional capacity to do basic work activities (or 
residual functional capacity) and how changes in medical severity can 
affect your residual functional capacity. In determining whether medical 
improvement that has occurred is related to your ability to do work, we 
will assess your residual functional capacity (in accordance with 
paragraph (b)(1)(iv) of this section) based on the current severity of 
the impairment(s) which was present at your last favorable medical 
decision.

[[Page 960]]

    (iii) Your new residual functional capacity will then be compared to 
your residual functional capacity at the time of our most recent 
favorable medical decision. Unless an increase in the current residual 
functional capacity is based on actual changes in the signs, symptoms, 
or laboratory findings any medical improvement that has occurred will 
not be considered to be related to your ability to do work.
    (iv) Following are some additional factors and considerations which 
we will apply in making these determinations.
    (A) Previous impairment met or equaled listings. If our most recent 
favorable decision was based on the fact that your impairment(s) at the 
time met or equaled the severity contemplated by the Listing of 
Impairments in appendix 1 of subpart P of part 404 of this chapter, an 
assessment of your residual functional capacity would not have been 
made. If medical improvement has occurred and the severity of the prior 
impairment(s) no longer meets or equals the same listing section used to 
make our most recent favorable decision, we will find that the medical 
improvement was related to your ability to work. Appendix 1 of subpart P 
of part 404 of this chapter describes impairments which, if severe 
enough, affect a person's ability to work. If the appendix level 
severity is met or equaled the individual is deemed, in the absence of 
evidence to the contrary, to be unable to engage in gainful activity. If 
there has been medical improvement to the degree that the requirement of 
the listing section is no longer met or equaled, then the medical 
improvement is related to your ability to work. We must, of course, also 
establish that you can currently engage in substantial gainful activity 
before finding that your disability has ended.
    (B) Prior residual functional capacity assessment made. The residual 
functional capacity assessment used in making the most recent favorable 
medical decision will be compared to the residual functional capacity 
assessment based on current evidence in order to determine if your 
functional capacity for basic work activities has increased. There will 
be no attempt made to reassess the prior residual functional capacity.
    (C) Prior residual functional capacity assessment should have been 
made, but was not. If the most recent favorable medical decision should 
have contained an assessment of your residual functional capacity (i.e., 
your impairments did not meet or equal the level of severity 
contemplated by the Listing of Impairments in appendix 1 of subpart P of 
part 404 of this chapter) but does not, either because this assessment 
is missing from your file or because it was not done, we will 
reconstruct the residual functional capacity. This reconstructed 
residual functional capacity will accurately and objectively assess your 
functional capacity to do basic work activities. We will assign the 
maximum functional capacity consistent with a decision of allowance.

    Example: You were previously found to be disabled on the basis that 
``while your impairment did not meet or equal a listing, it did prevent 
you from doing your past or any other work.'' The prior adjudicator did 
not, however, include a residual functional capacity assessment in the 
rationale of this decision and a review of the prior evidence does not 
show that such an assessment was ever made. If a decrease in medical 
severity, i.e., medical improvement, has occurred, the residual 
functional capacity based on the current level of severity of your 
impairment will have to be compared with your residual functional 
capacity based on its prior severity in order to determine if the 
medical improvement is related to your ability to do work. In order to 
make this comparison, we will review the prior evidence and make an 
objective assessment of your residual functional capacity at the time of 
our most recent favorable medical determination, based on the symptoms, 
signs and laboratory findings as they then existed.

    (D) Impairment subject to temporary remission. In some cases the 
evidence shows that an individual's impairments are subject to temporary 
remission. In assessing whether medical improvement has occurred in 
persons with this type of impairment, we will be careful to consider the 
longitudinal history of the impairment, including the occurrence of 
prior remission, and prospects for future worsenings. Improvement in 
such impairments that is only temporary will not warrant a finding of 
medical improvement.

[[Page 961]]

    (E) Prior file cannot be located. If the prior file cannot be 
located, we will first determine whether you are able to now engage in 
substantial gainful activity based on all your current impairments. (In 
this way, we will be able to determine that your disability continues at 
the earliest point without addressing the often lengthy process of 
reconstructing prior evidence.) If you cannot engage in substantial 
gainful activity currently, your benefits will continue unless one of 
the second group of exceptions applies (see paragraph (b)(4) of this 
section). If you are able to engage in substantial gainful activity, we 
will determine whether an attempt should be made to reconstruct those 
portions of the missing file that were relevant to our most recent 
favorable medical decision (e.g., work history, medical evidence, and 
the results of consultative examinations). This determination will 
consider the potential availability of old records in light of their 
age, whether the source of the evidence is still in operation , and 
whether reconstruction efforts will yield a complete record of the basis 
for the most recent favorable medical decision. If relevant parts of the 
prior record are not reconstructed either because it is determined not 
to attempt reconstruction or because such efforts fail, medical 
improvement cannot be found. The documentation of your current 
impairments will provide a basis for any future reviews. If the missing 
file is later found, it may serve as a basis for reopening any decision 
under this section in accordance with Sec. 416.988.
    (3) First group of exceptions to medical improvement. The law 
provides for certain limited situations when your disability can be 
found to have ended even though medical improvement has not occurred, if 
you can engage in substantial gainful activity. These exceptions to 
medical improvement are intended to provide a way of finding that a 
person is no longer disabled in those limited situations where, even 
though there has been no decrease in severity of the impairment(s), 
evidence shows that the person should no longer be considered disabled 
or never should have been considered disabled. If one of these 
exceptions applies, we must also show that, taking all your current 
impairment(s) into account, not just those that existed at the time of 
our most recent favorable medical decision, you are now able to engage 
in substantial gainful activity before your disability can be found to 
have ended. As part of the review process, you will be asked about any 
medical or vocational therapy you received or are receiving. Your 
answers and the evidence gathered as a result as well as all other 
evidence, will serve as the basis for the finding that an exception 
applies.
    (i) Substantial evidence shows that you are the beneficiary of 
advances in medical or vocational therapy or technology (related to your 
ability to work). Advances in medical or vocational therapy or 
technology are improvements in treatment or rehabilitative methods which 
have increased your ability to do basic work activities. We will apply 
this exception when substantial evidence shows that you have been the 
beneficiary of services which reflect these advances and they have 
favorably affected the severity of your impairment or your ability to do 
basic work activities. This decision will be based on new medical 
evidence and a new residual functional capacity assessment. (See 
Sec. 416.945.) This exception does not apply if you are eligible to 
receive special Supplemental Security Income cash benefits as explained 
in Sec. 416.261. In many instances, an advanced medical therapy or 
technology will result in a decrease in severity as shown by symptoms, 
signs and laboratory findings which will meet the definition of medical 
improvement. This exception will, therefore, see very limited 
application.
    (ii) Substantial evidence shows that you have undergone vocational 
therapy (related to your ability to work). Vocational therapy (related 
to your ability to work) may include, but is not limited to, additional 
education, training, or work experience that improves your ability to 
meet the vocational requirements of more jobs. This decision will be 
based on substantial evidence which includes new medical evidence and a 
new residual functional capacity assessment. (See Sec. 416.945.) This 
exception does not apply if you are eligible to receive special 
Supplemental Security Income cash benefits as explained in

[[Page 962]]

Sec. 416.261. If, at the time of our review, you have not completed 
vocational therapy which could affect the continuance of your 
disability, we will review your claim upon completion of the therapy.

    Example 1: You were found to be disabled because the limitations 
imposed on you by your impairment allowed you to only do work that was 
at a sedentary level of exertion. Your prior work experience was work 
that required a medium level of exertion. Your age and education at the 
time would not have qualified you for work that was below this medium 
level of exertion. You enrolled in and completed a specialized training 
course which qualifies you for a job in data processing as a computer 
programmer in the period since you were awarded benefits. On review of 
your claim, current evidence shows that there is no medical improvement 
and that you can still do only sedentary work. As the work of a computer 
programmer is sedentary in nature, you are now able to engage in 
substantial gainful activity when your new skills are considered.
    Example 2: You were previously entitled to benefits because the 
medical evidence and assessment of your residual functional capacity 
showed you could only do light work. Your prior work was considered to 
be heavy in nature and your age, education and the nature of your prior 
work qualified you for work which was no less than medium in exertion. 
The current evidence and residual functional capacity show there has 
been no medical improvement and that you can still do only light work. 
Since you were originally entitled to benefits, your vocational 
rehabilitation agency enrolled you in and you successfully completed a 
trade school course so that you are now qualified to do small appliance 
repair. This work is light in nature, so when your new skills are 
considered, you are now able to engage in substantial gainful activity 
even though there has been no change in your residual functional 
capacity.

    (iii) Substantial evidence shows that based on new or improved 
diagnostic or evaluative techniques your impairment(s) is not as 
disabling as it was considered to be at the time of the most recent 
favorable decision. Changing methodologies and advances in medical and 
other diagnostic or evaluative techniques have given, and will continue 
to give, rise to improved methods for measuring and documenting the 
effect of various impairments on the ability to do work. Where, by such 
new or improved methods, substantial evidence shows that your 
impairment(s) is not as severe as was determined at the time of our most 
recent favorable medical decision, such evidence may serve as a basis 
for finding that you are no longer disabled, if you can currently engage 
in substantial gainful activity. In order to be used under this 
exception, however, the new or improved techniques must have become 
generally available after the date of our most recent favorable medical 
decision.
    (A) How we will determine which methods are new or improved 
techniques and when they become generally available. New or improved 
diagnostic techniques or evaluations will come to our attention by 
several methods. In reviewing cases, we often become aware of new 
techniques when their results are presented as evidence. Such techniques 
and evaluations are also discussed and acknowledged in medical 
literature by medical professional groups and other governmental 
entities. Through these sources, we develop listings of new techniques 
and when they become generally available. For example, we will consult 
the Health Care Financing Administration for its experience regarding 
when a technique is recognized for payment under Medicare and when they 
began paying for the technique.
    (B) How you will know which methods are new or improved techniques 
and when they become generally available. We will let you know which 
methods we consider to be new or improved techniques and when they 
become available through two vehicles.
    (1) Some of the future changes in the Listing of Impairments in 
appendix 1 of subpart P of part 404 of this chapter will be based on new 
or improved diagnostic or evaluation techniques. Such listings changes 
will clearly state this fact as they are published as Notices of 
Proposed Rulemaking and the new or improved techniques will be 
considered generally available as of the date of the final publication 
of that particular listing in the Federal Register.
    (2) A cumulative list since 1970 of new or approved diagnostic 
techniques or evaluations, how they changed the evaluation of the 
applicable impairment and the month and year they became generally 
available, will be published in the Notices section of the Federal 
Register. Included will be any

[[Page 963]]

changes in the Listing of Impairments published in the Code of Federal 
Regulations since 1970 which are reflective of new or improved 
techniques. No cases will be processed under this exception until this 
cumulative listing is so published. Subsequent changes to the list will 
be published periodically. The period will be determined by the volume 
of changes needed.

    Example: The electrocardiographic exercise test has replaced the 
Master's 2-step test as a measurement of heart function since the time 
of your last favorable medical decision. Current evidence could show 
that your condition, which was previously evaluated based on the 
Master's 2-step test, is not now as disabling as was previously thought. 
If, taking all your current impairments into account, you are now able 
to engage in substantial gainful activity, this exception would be used 
to find that you are no longer disabled even if medical improvement has 
not occurred.

    (iv) Substantial evidence demonstrates that any prior disability 
decision was in error. We will apply the exception to medical 
improvement based on error if substantial evidence (which may be 
evidence on the record at the time any prior determination of the 
entitlement to benefits based on disability was made, or newly obtained 
evidence which relates to that determination) demonstrates that a prior 
determination was in error. A prior determination will be found in error 
only if:
    (A) Substantial evidence shows on its face that the decision in 
question should not have been made (e.g., the evidence in your file such 
as pulmonary function study values was misread or an adjudicative 
standard such as a listing in appendix 1 of subpart P of part 404 of 
this chapter or a medical/vocational rule in appendix 2 of subpart P of 
part 404 of this chapter was misapplied).

    Example 1: You were granted benefits when it was determined that 
your epilepsy met Listing 11.02. This listing calls for a finding of 
major motor seizures more frequently than once a month as documented by 
electroencephalogram evidence and by a detailed description of a typical 
seizure pattern. A history of either diurnal episodes or nocturnal 
episodes with residuals interfering with daily activities is also 
required. On review, it is found that a history of the frequency of your 
seizures showed that they occurred only once or twice a year. The prior 
decision would be found to be in error, and whether you were still 
considered to be disabled would be based on whether you could currently 
engage in substantial gainful activity.
    Example 2: Your prior award of benefits was based on vocational rule 
201.12 in appendix 2 of subpart P of part 404 of this chapter. This rule 
applies to a person age 50-54 who has at least a high school education, 
whose previous work was entirely at a semiskilled level, and who can do 
only sedentary work. On review, it is found that at the time of the 
prior determination you were actually only age 46 and vocational rule 
201.21 should have been used. This rule would have called for a denial 
of your claim and the prior decision is found to have been in error. 
Continuation of your disability would depend on a finding of your 
current ability to engage in substantial gainful activity.

    (B) At the time of the prior evaluation, required and material 
evidence of the severity of your impairment(s) was missing. That 
evidence becomes available upon review, and substantial evidence 
demonstrates that had such evidence been present at the time of the 
prior determination, disability would not have been found.

    Example: You were found disabled on the basis of chronic obstructive 
pulmonary disease. The severity of your impairment was documented 
primarily by pulmonary function testing results. The evidence showed 
that you could do only light work. Spirometric tracings of this testing, 
although required, were not obtained, however. On review, the original 
report is resubmitted by the consultative examining physician along with 
the corresponding spirometric tracings. A review of the tracings shows 
that the test was invalid. Current pulmonary function testing supported 
by spirometric tracings reveals that your impairment does not limit your 
ability to perform basic work activities in any way. Error is found 
based on the fact that required, material evidence which was originally 
missing now becomes available and shows that if it had been available at 
the time of the prior determination, disability would not have been 
found.

    (C) Substantial evidence which is new evidence which relates to the 
prior determination (of allowance or continuance) refutes the 
conclusions that were based upon the prior evidence (e.g., a tumor 
thought to be malignant was later shown to have actually been benign). 
Substantial evidence must show that had the new evidence, (which relates 
to the prior determination) been

[[Page 964]]

considered at the time of the prior decision, the claim would not have 
been allowed or continued. A substitution of current judgment for that 
used in the prior favorable decision will not be the basis for applying 
this exception.

    Example: You were previously found entitled to benefits on the basis 
of diabetes mellitus which the prior adjudicator believed was equivalent 
to the level of severity contemplated in the Listing of Impairments. The 
prior record shows that you had ``brittle'' diabetes for which you were 
taking insulin. Your urine was 3 + for sugar, and you alleged occasional 
hypoglycemic attacks caused by exertion. On review, symptoms, signs and 
laboratory findings are unchanged. The current adjudicator feels, 
however, that your impairment clearly does not equal the severity 
contemplated by the listings. Error cannot be found because it would 
represent a substitution of current judgment for that of the prior 
adjudicator that your impairment equaled a listing.

    (D) The exception for error will not be applied retroactively under 
the conditions set out above unless the conditions for reopening the 
prior decision (see Secs. 416.1488 through 416.1489) are met.
    (4) Second group of exceptions to medical improvement. In addition 
to the first group of exceptions to medical improvement, the following 
exceptions may result in a determination that you are no longer 
disabled. In these situations the decision will be made without a 
determination that you have medically improved or can engage in 
substantial gainful activity.
    (i) A prior determination or decision was fraudulently obtained. If 
we find that any prior favorable determination or decision was obtained 
by fraud, we may find that you are not disabled. In addition, we may 
reopen your claim under the rules in Sec. 416.1488. In determining 
whether a prior favorable determination or decision was fraudulently 
obtained, we will take into account any physical, mental, educational, 
or linguistic limitations (including any lack of facility with the 
English language) which you may have had at the time.
    (ii) You do not cooperate with us. If there is a question about 
whether you continue to be disabled and we ask you to give us medical or 
other evidence or to go for a physical or mental examination by a 
certain date, we will find that your disability has ended if you fail, 
without good cause, to do what we ask. Section 416.1411 explains the 
factors we consider and how we will determine generally whether you have 
good cause for failure to cooperate. In addition, Sec. 416.918 discusses 
how we determine whether you have good cause for failing to attend a 
consultative examination. The month in which your disability ends will 
be the first month in which you failed to do what we asked.
    (iii) We are unable to find you. If there is a question about 
whether you continue to be disabled and we are unable to find you to 
resolve the question, we will suspend your payments. The month your 
payments are suspended will be the first month in which the question 
arose and we could not find you.
    (iv) You fail to follow prescribed treatment which would be expected 
to restore your ability to engage in substantial gainful activity. If 
treatment has been prescribed for you which would be expected to restore 
your ability to work, you must follow that treatment in order to be paid 
benefits. If you are not following that treatment and you do not have 
good cause for failing to follow that treatment, we will find that your 
disability has ended (see Sec. 416.930(c)). The month your disability 
ends will be the first month in which you failed to follow the 
prescribed treatment.
    (5) Evaluation steps. To assure that disability reviews are carried 
out in a uniform manner, that a decision of continuing disability can be 
made in the most expeditious and administratively efficient way, and 
that any decisions to stop disability benefits are made objectively, 
neutrally, and are fully documented, we will follow specific steps in 
reviewing the question of whether your disability continues. Our review 
may cease and benefits may be continued at any point if we determine 
there is sufficient evidence to find that you are still unable to engage 
in substantial gainful activity. The steps are as follows. (See 
paragraph (b)(8) of this section if you work during your current period 
of eligibility based on disability or during certain other periods.)

[[Page 965]]

    (i) Step 1. Do you have an impairment or combination of impairments 
which meets or equals the severity of an impairment listed in appendix 1 
of subpart P of part 404 of this chapter? If you do, your disability 
will be found to continue.
    (ii) Step 2. If you do not, has there been medical improvement as 
defined in paragraph (b)(1)(i) of this section? If there has been 
medical improvement as shown by a decrease in medical severity, see step 
3 in paragraph (b)(5)(iii) of this section. If there has been no 
decrease in medical severity, there has been no medical improvement. 
(See step 4 in paragraph (b)(5)(iv) of this section.)
    (iii) Step 3. If there has been medical improvement, we must 
determine whether it is related to your ability to do work in accordance 
with paragraphs (b)(1)(i) through (b)(1)(iv) of this section; i.e., 
whether or not there has been an increase in the residual functional 
capacity based on the impairment(s) that was present at the time of the 
most recent favorable medical determination. If medical improvement is 
not related to your ability to do work, see step 4 in paragraph 
(b)(5)(iv) of this section. If medical improvement is related to your 
ability to do work, see step 5 in paragraph (b)(5)(v) of this section.
    (iv) Step 4. If we found at step 2 in paragraph (b)(5)(ii) of this 
section that there has been no medical improvement or if we found at 
step 3 in paragraph (b)(5)(iii) of this section that the medical 
improvement is not related to your ability to work, we consider whether 
any of the exceptions in paragraphs (b)(3) and (b)(4) of this section 
apply. If none of them apply, your disability will be found to continue. 
If one of the first group of exceptions to medical improvement applies, 
see step 5 in paragraph (b)(5)(v) of this section. If an exception from 
the second group of exceptions to medical improvement applies, your 
disability will be found to have ended. The second group of exceptions 
to medical improvement may be considered at any point in this process.
    (v) Step 5. If medical improvement is shown to be related to your 
ability to do work or if one of the first group of exceptions to medical 
improvement applies, we will determine whether all your current 
impairments in combination are severe (see Sec. 416.921). This 
determination will consider all your current impairments and the impact 
of the combination of these impairments on your ability to function. If 
the residual functional capacity assessment in step 3 in paragraph 
(b)(5)(iii) of this section shows significant limitation of your ability 
to do basic work activities, see step 6 in paragraph (b)(5)(vi) of this 
section. When the evidence shows that all your current impairments in 
combination do not significantly limit your physical or mental abilities 
to do basic work activities, these impairments will not be considered 
severe in nature. If so, you will no longer be considered to be 
disabled.
    (vi) Step 6. If your impairment(s) is severe, we will assess your 
current ability to do substantial gainful activity in accordance with 
Sec. 416.960. That is, we will assess your residual functional capacity 
based on all your current impairments and consider whether you can still 
do work you have done in the past. If you can do such work, disability 
will be found to have ended.
    (vii) Step 7. If you are not able to do work you have done in the 
past, we will consider whether you can do other work given the residual 
functional capacity assessment made under paragraph (b)(5)(vi) of this 
section and your age, education, and past work experience (see paragraph 
(b)(5)(viii) of this section for an exception to this rule). If you can, 
we will find that your disability has ended. If you cannot, we will find 
that your disability continues.
    (viii) Step 8. We may proceed to the final step, described in 
paragraph (b)(5)(vii) of this section, if the evidence in your file 
about your past relevant work is not sufficient for us to make a finding 
under paragraph (b)(5)(vi) of this section about whether you can perform 
your past relevant work. If we find that you can adjust to other work 
based solely on your age, education, and residual functional capacity, 
we will find that you are no longer disabled, and we will not make a 
finding about whether you can do your past relevant work under paragraph 
(b)(5)(vi) of this section. If we find that

[[Page 966]]

you may be unable to adjust to other work or if Sec. 416.962 may apply, 
we will assess your claim under paragraph (b)(5)(vi) of this section and 
make a finding about whether you can perform your past relevant work.
    (6) The month in which we will find you are no longer disabled. If 
the evidence shows that you are no longer disabled, we will find that 
your disability ended in the earliest of the following months.
    (i) The month the evidence shows that you are no longer disabled 
under the rules set out in this section, and you were disabled only for 
a specified period of time in the past;
    (ii) The month the evidence shows that you are no longer disabled 
under the rules set out in this section, but not earlier than the month 
in which we mail you a notice saying that the information we have shows 
that you are not disabled;
    (iii) The month in which you return to full-time work, with no 
significant medical restrictions and acknowledge that medical 
improvement has occurred, and we expected your impairment(s) to improve 
(see Sec. 416.991);
    (iv) The first month in which you fail without good cause to follow 
prescribed treatment, when the rule set out in paragraph (b)(4)(iv) of 
this section applies;
    (v) The first month you were told by your physician that you could 
return to work, provided there is no substantial conflict between your 
physician's and your statements regarding your awareness of your 
capacity for work and the earlier date is supported by substantial 
evidence; or
    (vi) The first month in which you failed without good cause to do 
what we asked, when the rule set out in paragraph (b)(4)(ii) of this 
section applies.
    (7) Before we stop your benefits. If we find you are no longer 
disabled, before we stop your benefits, we will give you a chance to 
explain why we should not do so. Subparts M and N of this part describe 
your rights and the procedures we will follow.
    (8) If you work during your current period of eligibility based on 
disability or during certain other periods. (i) We will not consider the 
work you are doing or have done during your current period of 
eligibility based on disability (or, when determining whether you are 
eligible for expedited reinstatement of benefits under section 1631(p) 
of the Act, the work you are doing or have done during or after the 
previously terminated period of eligibility referred to in section 
1631(p)(1)(B) of the Act) to be past relevant work under paragraph 
(b)(5)(vi) of this section or past work experience under paragraph 
(b)(5)(vii) of this section. In addition, if you are currently entitled 
to disability benefits under title II of the Social Security Act, we may 
or may not consider the physical and mental activities that you perform 
in the work you are doing or have done during your current period of 
entitlement based on disability, as explained in paragraphs (b)(8)(ii) 
and (iii) of this section.
    (ii) If you are currently entitled to disability insurance benefits 
as a disabled worker, child's insurance benefits based on disability, or 
widow's or widower's insurance benefits based on disability under title 
II of the Social Security Act, and at the time we are making a 
determination on your case you have received such benefits for at least 
24 months, we will not consider the activities you perform in the work 
you are doing or have done during your current period of entitlement 
based on disability if they support a finding that your disability has 
ended. (We will use the rules in Sec. 416.990(i)(2) to determine whether 
the 24-month requirement is met.) However, we will consider the 
activities you do in that work if they support a finding that your 
disability continues or they do not conflict with a finding that your 
disability continues. We will not presume that you are still disabled if 
you stop working.
    (iii) If you are not a person described in paragraph (b)(8)(ii) of 
this section, we will consider the activities you perform in your work 
at any of the evaluation steps in paragraph (b)(5) of this section at 
which we need to assess your ability to function. However, we will not 
consider the work you are doing or have done during your current period 
of eligibility based on disability (or, when determining whether you are 
eligible for expedited reinstatement of benefits under section 1631(p) 
of the Act, the work you are doing or have

[[Page 967]]

done during or after the previously terminated period of eligibility 
referred to in section 1631(p)(1)(B) of the Act) to be past relevant 
work under paragraph (b)(5)(vi) of this section or past work experience 
under paragraph (b)(5)(vii) of this section.
    (c) Persons who were found disabled under a State plan. If you 
became entitled to benefits because you were found to be disabled under 
a State plan, we will first evaluate your impairment(s) under the rules 
explained in paragraph (b) of this section. We will apply the same steps 
as described in paragraph (b) of this section to the last decision 
granting or affirming entitlement to benefits under the State plan. If 
we are not able to find that your disability continues on the basis of 
these rules, we will then evaluate your impairment(s) under the 
appropriate State plan. If we are not able to find that your disability 
continues under these State plan criteria, we will find that your 
disability ends. Disability will be found to end the month the evidence 
shows that you are no longer disabled under the criteria in paragraph 
(b) of this section (or appropriate State plan criteria), subject to the 
rules set out in paragraph (b)(6) of this section.

[50 FR 50137, Dec. 6, 1985; 51 FR 7063, Feb. 28, 1986; 51 FR 16015, Apr. 
30, 1986, as amended at 52 FR 44971, Nov. 24, 1987; 56 FR 5562, Feb. 11, 
1991; 59 FR 1636, Jan. 12, 1994; 65 FR 42791, July 11, 2000; 68 FR 
51167, Aug. 26, 2003; 68 FR 53219, Sept. 9, 2003; 71 FR 66859, Nov. 17, 
2006; 77 FR 43496, July 25, 2012; 82 FR 5882, Jan. 18, 2017]



Sec. 416.994a  How we will determine whether your disability continues
or ends, and whether you are and have been receiving treatment that
is medically necessary and available, disabled children.

    (a) Evaluation of continuing disability, in general. There is a 
statutory requirement that, if you are eligible for disability benefits 
as a disabled child, your continued eligibility for such benefits must 
be reviewed periodically. There are a number of factors we consider when 
we decide whether your disability continues.
    (1) We will first consider whether there has been medical 
improvement in your impairment(s). We define ``medical improvement'' in 
paragraph (c) of this section. If there has been no medical improvement, 
we will find you are still disabled unless one of the exceptions in 
paragraphs (e) or (f) of this section applies. If there has been medical 
improvement, we will consider whether the impairments(s) you had at the 
time of our most recent favorable determination or decision now meets or 
medically or functionally equals the severity of the listing it met or 
equalled at that time. If so, we will find you are still disabled, 
unless one of the exceptions in paragraphs (e) or (f) of this section 
applies. If not, we will consider whether your current impairment(s) are 
disabling under the rules in Sec. 416.924. These steps are described in 
more detail in paragraph (b) of this section. Even where medical 
improvement or an exception applies, in most cases, we will find that 
your disability has ended only if we also find that you are not 
currently disabled.
    (2) Our determinations and decisions under this section will be made 
on a neutral basis, without any initial inference as to the presence or 
absence of disability being drawn from the fact that you have been 
previously found disabled. We will consider all evidence you submit and 
that we obtain from your medical and nonmedical sources. What 
constitutes ``evidence'' and our procedures for obtaining it are set out 
in Secs. 416.912 through 416.918. Our determination regarding whether 
your disability continues will be made on the basis of the weight of the 
evidence.
    (b) Sequence of evaluation. To ensure that disability reviews are 
carried out in a uniform manner, that decisions of continuing disability 
can be made in the most expeditious and administratively efficient way, 
and that any decisions to stop disability benefits are made objectively, 
neutrally, and are fully documented, we follow specific steps in 
determining whether your disability continues. However, we may skip 
steps in the sequence if it is clear this would lead to a more prompt 
finding that your disability continues. For example, we might not 
consider the issue of medical improvement if it is obvious on the face 
of the evidence that a current impairment meets the severity of a listed 
impairment. If we can make a favorable determination or

[[Page 968]]

decision at any point in the sequence, we do not review further. The 
steps are:
    (1) Has there been medical improvement in your condition(s)? We will 
determine whether there has been medical improvement in the 
impairment(s) you had at the time of our most recent favorable 
determination or decision. (The term medical improvement is defined in 
paragraph (c) of this section.) If there has been no medical 
improvement, we will find that your disability continues, unless one of 
the exceptions to medical improvement described in paragraph (e) or (f) 
of this section applies.
    (i) If one of the first group of exceptions to medical improvement 
applies, we will proceed to step 3.
    (ii) If one of the second group of exceptions to medical improvement 
applies, we may find that your disability has ended.
    (2) Does your impairment(s) still meet or equal the severity of the 
listed impairment that it met or equaled before? If there has been 
medical improvement, we will consider whether the impairment(s) that we 
considered at the time of our most recent favorable determination or 
decision still meets or equals the severity of the listed impairment it 
met or equaled at that time. In making this decision, we will consider 
the current severity of the impairment(s) present and documented at the 
time of our most recent favorable determination or decision, and the 
same listing section used to make that determination or decision as it 
was written at that time, even if it has since been revised or removed 
from the Listing of Impairments. If that impairment(s) does not still 
meet or equal the severity of that listed impairment, we will proceed to 
the next step. If that impairment(s) still meets or equals the severity 
of that listed impairment as it was written at that time, we will find 
that you are still disabled, unless one of the exceptions to medical 
improvement described in paragraphs (e) or (f) of this section applies.
    (i) If one of the first group of exceptions to medical improvement 
applies, we will proceed to step 3.
    (ii) If one of the second group of exceptions to medical improvement 
applies, we may find that your disability has ended.
    (3) Are you currently disabled? If there has been medical 
improvement in the impairment(s) that we considered at the time of our 
most recent favorable determination or decision, and if that 
impairment(s) no longer meets or equals the severity of the listed 
impairment that it met or equaled at that time, we will consider whether 
you are disabled under the rules in Secs. 416.924(c) and (d). In 
determining whether you are currently disabled, we will consider all 
impairments you now have, including any you did not have at the time of 
our most recent favorable determination or decision, or that we did not 
consider at that time. The steps in determining current disability are 
summarized as follows:
    (i) Do you have a severe impairment or combination of impairment? If 
there has been medical improvement in your impairment(s), or if one of 
the first group of exceptions applies, we will determine whether your 
current impairment(s) is severe, as defined in Sec. 416.924(c). If your 
impairment(s) is not severe, we will find that your disability has 
ended. If your impairment(s) is severe, we will then consider whether it 
meets or medically equals the severity of a listed impairment.
    (ii) Does your impairment(s) meet or medically equal the severity of 
any impairment listed in appendix 1 of subpart P of part 404 of this 
chapter? If your current impairment(s) meets or medically equals the 
severity of any listed impairment, as described in Secs. 416.925 and 
416.926, we will find that your disability continues. If not, we will 
consider whether it functionally equals the listings.
    (iii) Does your impairment(s) functionally equal the listings? If 
your current impairment(s) functionally equals the listings, as 
described in Sec. 416.926a, we will find that your disability continues. 
If not, we will find that your disability has ended.
    (c) What we mean by medical improvement. Medical improvement is any 
decrease in the medical severity of your impairment(s) which was present 
at the time of the most recent favorable

[[Page 969]]

decision that you were disabled or continued to be disabled. Although 
the decrease in severity may be of any quantity or degree, we will 
disregard minor changes in your signs, symptoms, and laboratory findings 
that obviously do not represent medical improvement and could not result 
in a finding that your disability has ended. A determination that there 
has been a decrease in medical severity must be based on changes 
(improvement) in the symptoms, signs, or laboratory findings associated 
with your impairment(s).
    (1) The most recent favorable decision is the latest final 
determination or decision involving a consideration of the medical 
evidence and whether you were disabled or continued to be disabled.
    (2) The terms symptoms, signs, and laboratory findings are defined 
in Sec. 416.902. For children, our definitions of the terms symptoms, 
signs, and laboratory findings may include any abnormalities of physical 
and mental functioning that we used in making our most recent favorable 
decision.
    (3) Some impairments are subject to temporary remissions, which can 
give the appearance of medical improvement when in fact there has been 
none. If you have the kind of impairment that is subject to temporary 
remissions, we will be careful to consider the longitudinal history of 
the impairment, including the occurrence of prior remissions and 
prospects for future worsenings, when we decide whether there has been 
medical improvement. Improvements that are only temporary will not 
warrant a finding of medical improvement.
    (d) Prior file cannot be located. If we cannot locate your prior 
file, we will first determine whether you are currently disabled under 
the sequence set forth in Sec. 416.924. (In this way, we will determine 
that your benefits continue at the earliest time without reconstructing 
prior evidence.) If so, your benefits will continue unless one of the 
second group of exceptions applies (see paragraph (f) of this section). 
If not, we will determine whether an attempt should be made to 
reconstruct those portions of the missing file that were relevant to our 
most recent favorable determination or decision (e.g., school records, 
medical evidence, and the results of consultative examinations). This 
determination will consider the potential availability of old records in 
light of their age, whether the source of the evidence is still in 
operation, and whether reconstruction efforts will yield a complete 
record of the basis for the most recent favorable decision. If relevant 
parts of the prior record are not reconstructed, either because we 
decide not to attempt reconstruction or because our efforts failed, we 
will not find that you have medically improved. The documentation of 
your current impairment(s) will provide a basis for any future reviews. 
If the missing file is later found, it may serve as a basis for 
reopening any determination or decision under this section, in 
accordance with Sec. 416.1488.
    (e) First group of exceptions to medical improvement. The law 
provides certain limited situations when your disability can be found to 
have ended even though medical improvement has not occurred, if your 
impairment(s) no longer results in marked and severe functional 
limitations. These exceptions to medical improvement are intended to 
provide a way of finding that a person is no longer disabled in those 
situations where, even though there has been no decrease in severity of 
the impairment(s), evidence shows that the person should no longer be 
considered disabled or never should have been considered disabled. If 
one of these exceptions applies, we must also show that your 
impairment(s) does not now result in marked and severe functional 
limitations, before we can find you are no longer disabled, taking all 
your current impairments into account, not just those that existed at 
the time of our most recent favorable determination or decision. The 
evidence we gather will serve as the basis for the finding that an 
exception applies.
    (1) Substantial evidence shows that, based on new or improved 
diagnostic techniques or evaluations, your impairment(s) is not as 
disabling as it was considered to be at the time of the most recent 
favorable decision. Changing methodologies and advances in medical and 
other diagnostic techniques or evaluations have given rise to, and will 
continue to give

[[Page 970]]

rise to, improved methods for determining the causes of (i.e., 
diagnosing) and measuring and documenting the effects of various 
impairments on children and their functioning. Where, by such new or 
improved methods, substantial evidence shows that your impairment(s) is 
not as severe as was determined at the time of our most recent favorable 
decision, such evidence may serve as a basis for a finding that you are 
no longer disabled, provided that you do not currently have an 
impairment(s) that meets, medically equals, or functionally equals the 
listings, and therefore results in marked and severe functional 
limitations. In order to be used under this exception, however, the new 
or improved techniques must have become generally available after the 
date of our most recent favorable decision.
    (i) How we will determine which methods are new or improved 
techniques and when they become generally available. New or improved 
diagnostic techniques or evaluations will come to our attention by 
several methods. In reviewing cases, we often become aware of new 
techniques when their results are presented as evidence. Such techniques 
and evaluations are also discussed and acknowledged in medical 
literature by medical professional groups and other governmental 
entities. Through these sources, we develop listings of new techniques 
and when they become generally available. For example, we will consult 
the Health Care Financing Administration for its experience regarding 
when a technique is recognized for payment under Medicare and when they 
began paying for the technique.
    (ii) How you will know which methods are new or improved techniques 
and when they become generally available. We will let you know which 
methods we consider to be new or improved techniques and when they 
become available through two vehicles.
    (A) Some of the future changes in the Listing of Impairments in 
appendix 1 of subpart P of part 404 of this chapter will be based on new 
or improved diagnostic or evaluative techniques. Such listings changes 
will clearly state this fact as they are published as Notices of 
Proposed Rulemaking and the new or improved technique will be considered 
generally available as of the date of the final publication of that 
particular listing in the Federal Register.
    (B) From time to time, we will publish in the Federal Register 
cumulative lists of new or approved diagnostic techniques or evaluations 
that have been in use since 1970, how they changed the evaluation of the 
applicable impairment and the month and year they became generally 
available. We will include any changes in the Listing of Impairments 
published in the Code of Federal Regulations since 1970 that are 
reflective of new or improved techniques. We will not process any cases 
under this exception using a new or improved diagnostic technique that 
we have not included in a published notice until we have published an 
updated cumulative list. The period between publications will be 
determined by the volume of changes needed.
    (2) Substantial evidence demonstrates that any prior disability 
decision was in error. We will apply the exception to medical 
improvement based on error if substantial evidence (which may be 
evidence on the record at the time any prior determination or decision 
of the entitlement to benefits based on disability was made, or newly 
obtained evidence which relates to that determination or decision) 
demonstrates that a prior determination or decision (of allowance or 
continuance) was in error. A prior determination or decision will be 
found in error only if:
    (i) Substantial evidence shows on its face that the determination or 
decision in question should not have been made (e.g., the evidence in 
your file, such as pulmonary function study values, was misread, or an 
adjudicative standard, such as a listing in appendix 1 of subpart P of 
part 404 of this chapter, was misapplied).
    (ii) At the time of the prior evaluation, required and material 
evidence of the severity of your impairment(s) was missing. That 
evidence becomes available upon review, and substantial evidence 
demonstrates that, had such evidence been present at the time of the 
prior determination or decision, disability would not have been found.
    (iii) New substantial evidence that relates to the prior 
determination or

[[Page 971]]

decision refutes the conclusions that were based upon the prior evidence 
at the time of that determination or decision (e.g., a tumor thought to 
be malignant was later shown to have actually been benign). Substantial 
evidence must show that, had the new evidence (which relates to the 
prior determination or decision) been considered at the time of the 
prior determination or decision, the claim would not have been allowed 
or continued. A substitution of current judgment for that used in the 
prior favorable determination or decision will not be the basis for 
applying this exception.
    (iv) The exception for error will not be applied retroactively under 
the conditions set out above unless the conditions for reopening the 
prior decision (see Secs. 416.1488 and 416.1489) are met.
    (f) Second group of exceptions to medical improvement. In addition 
to the first group of exceptions to medical improvement, the following 
exceptions may result in a determination or decision that you are no 
longer disabled. In these situations, the determination or decision will 
be made without a finding that you have demonstrated medical improvement 
or that you are currently not disabled under the rules in Sec. 416.924. 
There is no set point in the continuing disability review sequence 
described in paragraph (b) of this section at which we must consider 
these exceptions; exceptions in the second group may be considered at 
any point in the process.
    (1) A prior determination or decision was fraudulently obtained. If 
we find that any prior favorable determination or decision was obtained 
by fraud, we may find that you are not disabled. In addition, we may 
reopen your claim under the rules in Sec. 416.1488. In determining 
whether a prior favorable determination or decision was fraudulently 
obtained, we will take into account any physical, mental, educational, 
or linguistic limitations (including any lack of facility with the 
English language) which you may have had at the time.
    (2) You do not cooperate with us. If there is a question about 
whether you continue to be disabled and we ask you to give us medical or 
other evidence or to go for a physical or mental examination by a 
certain date, we will find that your disability has ended if you fail, 
without good cause, to do what we ask. Section 416.1411 explains the 
factors we consider and how we will determine generally whether you have 
good cause for failure to cooperate. In addition, Sec. 416.918 discusses 
how we determine whether you have good cause for failing to attend a 
consultative examination. The month in which your disability ends will 
be the first month in which you failed to do what we asked.
    (3) We are unable to find you. If there is a question about whether 
you continue to be disabled and we are unable to find you to resolve the 
question, we will suspend your payments. The month your payments are 
suspended will be the first month in which the question arose and we 
could not find you.
    (4) You fail to follow prescribed treatment which would be expected 
to improve your impairment(s) so that it no longer results in marked and 
severe functional limitations. If treatment has been prescribed for you 
which would be expected to improve your impairment(s) so that it no 
longer results in marked and severe functional limitations, you must 
follow that treatment in order to be paid benefits. If you are not 
following that treatment and you do not have good cause for failing to 
follow that treatment, we will find that your disability has ended (see 
Sec. 416.930(c)). The month your disability ends will be the first month 
in which you failed to follow the prescribed treatment.
    (g) The month in which we will find you are no longer disabled. If 
the evidence shows that you are no longer disabled, we will find that 
your disability ended in the following month--
    (1) The month the evidence shows that you are no longer disabled 
under the rules set out in this section, and you were disabled only for 
a specified period of time in the past;
    (2) The month the evidence shows that you are no longer disabled 
under the rules set out in this section, but not earlier than the month 
in which we mail you a notice saying that the information we have shows 
that you are not disabled;
    (3) The month in which you return to, or begin, full-time work with 
no significant medical restrictions, and

[[Page 972]]

acknowledge that medical improvement has occurred, and we expected your 
impairment(s) to improve (see Sec. 416.991);
    (4) The first month in which you fail without good cause to follow 
prescribed treatment, when the rule set out in paragraph (f)(4) of this 
section applies;
    (5) The first month in which you were told by your physician that 
you could return to normal activities, provided there is no substantial 
conflict between your physician's and your statements regarding your 
awareness of your capacity, and the earlier date is supported by 
substantial evidence; or
    (6) The first month in which you failed without good cause to do 
what we asked, when the rule set out in paragraph (f)(2) of this section 
applies.
    (h) Before we stop your benefits. If we find you are no longer 
disabled, before we stop your benefits, we will give you a chance to 
explain why we should not do so. Subparts M and N of this part describe 
your rights and the procedures we will follow.
    (i) Requirement for treatment that is medically necessary and 
available. If you have a representative payee, the representative payee 
must, at the time of the continuing disability review, present evidence 
demonstrating that you are and have been receiving treatment, to the 
extent considered medically necessary and available, for the 
condition(s) that was the basis for providing you with SSI benefits, 
unless we determine that requiring your representative payee to provide 
such evidence would be inappropriate or unnecessary considering the 
nature of your impairment(s). If your representative payee refuses 
without good cause to comply with this requirement, and if we decide 
that it is in your best interests, we may pay your benefits to another 
representative payee or to you directly.
    (1) What we mean by treatment that is medically necessary. Treatment 
that is medically necessary means treatment that is expected to improve 
or restore your functioning and that was prescribed by your medical 
source. If you do not have a medical source, we will decide whether 
there is treatment that is medically necessary that could have been 
prescribed by a medical source. The treatment may include (but is not 
limited to)--
    (i) Medical management;
    (ii) Psychological or psychosocial counseling;
    (iii) Physical therapy; and
    (iv) Home therapy, such as administering oxygen or giving 
injections.
    (2) How we will consider whether medically necessary treatment is 
available. When we decide whether medically necessary treatment is 
available, we will consider such things as (but not limited to)--
    (i) The location of an institution or facility or place where 
treatment, services, or resources could be provided to you in 
relationship to where you reside;
    (ii) The availability and cost of transportation for you and your 
payee to the place of treatment;
    (iii) Your general health, including your ability to travel for the 
treatment;
    (iv) The capacity of an institution or facility to accept you for 
appropriate treatment;
    (v) The cost of any necessary medications or treatments that are not 
paid for by Medicaid or another insurer or source; and
    (vi) The availability of local community resources (e.g., clinics, 
charitable organizations, public assistance agencies) that would provide 
free treatment or funds to cover treatment.
    (3) When we will not require evidence of treatment that is medically 
necessary and available. We will not require your representative payee 
to present evidence that you are and have been receiving treatment if we 
find that the condition(s) that was the basis for providing you benefits 
is not amenable to treatment.
    (4) Removal of a payee who does not provide evidence that a child is 
and has been receiving treatment that is medically necessary and 
available. If your representative payee refuses without good cause to 
provide evidence that you are and have been receiving treatment that is 
medically necessary and available, we may, if it is in your best 
interests, suspend payment of benefits to the representative payee, and 
pay benefits to another payee or to you. When we decide whether your 
representative payee

[[Page 973]]

had good cause, we will consider factors such as the acceptable reasons 
for failure to follow prescribed treatment in Sec. 416.930(c) and other 
factors similar to those describing good cause for missing deadlines in 
Sec. 416.1411.
    (5) If you do not have a representative payee. If you do not have a 
representative payee and we make your payments directly to you, the 
provisions of this paragraph do not apply to you. However, we may still 
decide that you are failing to follow prescribed treatment under the 
provisions of Sec. 416.930, if the requirements of that section are met.

[56 FR 5562, Feb. 11, 1991; 56 FR 13266, 13365, Apr. 1, 1991, as amended 
at 58 FR 47586, Sept. 9, 1993; 59 FR 1637, Jan. 12, 1994; 62 FR 6430, 
Feb. 11, 1997; 62 FR 13538, 13733, Mar. 21, 1997; 65 FR 16815, Mar. 30, 
2000; 65 FR 54790, Sept. 11, 2000; 82 FR 5882, Jan. 18, 2017]



Sec. 416.995  If we make a determination that your physical or mental 
impairment(s) has ceased, did not exist or is no longer disabling 
(Medical Cessation Determination).

    If we make a determination that the physical or mental impairment(s) 
on the basis of which disability or blindness benefits were payable has 
ceased, did not exist or is no longer disabling (a medical cessation 
determination), your benefits will stop. You will receive a written 
notice explaining this determination and the month your benefits will 
stop. The written notice will also explain your right to appeal if you 
disagree with our determination and your right to request that your 
disability or blindness benefits be continued under Sec. 416.996. The 
continued benefit provisions of this section do not apply to an initial 
determination on an application for disability or blindness benefits or 
to a determination that you were disabled or blind only for a specified 
period of time.

[53 FR 29023, Aug. 2, 1988]



Sec. 416.996  Continued disability or blindness benefits pending
appeal of a medical cessation determination.

    (a) General. If we determine that you are not eligible for 
disability or blindness benefits because the physical or mental 
impairment(s) on the basis of which such benefits were payable is found 
to have ceased, not to have existed, or to no longer be disabling, and 
you appeal that determination, you may choose to have your disability or 
blindness benefits, including special cash benefits or special SSI 
eligibility status under Secs. 416.261 and 416.264, continued pending 
reconsideration and/or a hearing before an administrative law judge on 
the disability/blindness cessation determination. If you appeal a 
medical cessation under both title II and title XVI (a concurrent case), 
the title II claim will be handled in accordance with title II 
regulations while the title XVI claim will be handled in accordance with 
the title XVI regulations.
    (1) Benefits may be continued under this section only if the 
determination that your physical or mental impairment(s) has ceased, has 
never existed, or is no longer disabling is made after October 1984.
    (2) Continued benefits under this section will stop effective with 
the earlier of: (i) The month before the month in which an 
administrative law judge's hearing decision finds that your physical or 
mental impairment(s) has ceased, has never existed, or is no longer 
disabling or the month before the month of a new administrative law 
judge decision (or final action is taken by the Appeals Council on the 
administrative law judge's recommended decision) if your case was sent 
back to an administrative law judge for further action; or (ii) the 
month before the month in which no timely request for reconsideration or 
administrative law judge hearing is pending after notification of our 
initial or reconsideration cessation determination. These benefits may 
be stopped or adjusted because of certain events (such as, change in 
income or resources or your living arrangements) which may occur while 
you are receiving these continued benefits, in accordance with 
Sec. 416.1336(b).
    (b) Statement of choice. If you or another party (see 
Sec. 416.1432(a)) request reconsideration under Sec. 416.1409 or a 
hearing before an administrative law judge in accordance with 
Sec. 416.1433 on our determination that your physical or mental 
impairment(s) has ceased, has never existed, or is no longer disabling, 
or if your case is sent back (remanded) to an administrative law

[[Page 974]]

judge for further action, we will explain your right to receive 
continued benefits and ask you to complete a statement indicating that 
you wish to have benefits continued pending the outcome of the 
reconsideration or administrative law judge hearing. If you request 
reconsideration and/or hearing but you do not want to receive continued 
benefits, we will ask you to complete a statement declining continued 
benefits indicating that you do not want to have your benefits continued 
during the appeal. A separate election must be made at each level of 
appeal.
    (c) What you must do to receive continued benefits pending notice of 
our reconsideration determination. (1) If you want to receive continued 
benefits pending the outcome of your request for reconsideration, you 
must request reconsideration and continuation of benefits no later than 
10 days after the date you receive the notice of our initial 
determination that your physical or mental impairment(s) has ceased, has 
never existed, or is no longer disabling. Reconsideration must be 
requested as provided in Sec. 416.1409, and you must request continued 
benefits using a statement in accordance with paragraph (b) of this 
section.
    (2) If you fail to request reconsideration and continued benefits 
within the 10-day period required by paragraph (c)(1) of this section, 
but later ask that we continue your benefits pending a reconsidered 
determination, we will use the rules in Sec. 416.1411 to determine 
whether good cause exists for your failing to request benefit 
continuation within 10 days after receipt of the notice of the initial 
cessation determination. If you request continued benefits after the 10-
day period, we will consider the request to be timely and will pay 
continued benefits only if good cause for delay is established.
    (d) What you must do to receive continued benefits pending an 
administrative law judge's decision. (1) To receive continued benefits 
pending an administrative law judge's decision on our reconsideration 
determination, you must request a hearing and continuation of benefits 
no later than 10 days after the date you receive the notice of our 
reconsideration determination that your physical or mental impairment(s) 
has ceased, has never existed, or is no longer disabling. A hearing must 
be requested as provided in Sec. 416.1433, and you must request 
continued benefits using a statement in accordance with paragraph (b) of 
this section.
    (2) If you fail to request a hearing and continued benefits within 
the 10-day period required under paragraph (d)(1) of this section, but 
you later ask that we continue your benefits pending an administrative 
law judge's decision, we will use the rules as provided in Sec. 416.1411 
to determine whether good cause exists for your failing to request 
benefit continuation within 10 days after receipt of the reconsideration 
determination. If you request continued benefits after the 10-day 
period, we will consider the delayed request to be timely and will pay 
continued benefits only if good cause for delay is established.
    (e) What you must do when your case is remanded to an administrative 
law judge. If we send back (remand) your case to an administrative law 
judge for further action under the rules provided in Sec. 416.1477, and 
the administrative law judge's decision or dismissal order issued on 
your medical cessation appeal is vacated and is no longer in effect, you 
may be eligible for continued benefits pending a new decision by the 
administrative law judge or final action by the Appeals Council on the 
administrative law judge's recommended decision.
    (1) When your case is remanded to an administrative law judge, and 
you have elected to receive continued benefits, we will contact you to 
update our file to verify that you continue to meet the nonmedical 
requirements to receive benefits based on disability or blindness. To 
determine your correct payment amount, we will ask you to provide 
information about events such as changes in living arrangements, income, 
or resources since our last contact with you. If you have returned to 
work, we will request additional information about this work activity. 
Unless your earnings cause your income to be too much to receive 
benefits, your continued benefits will be paid while your appeal of the 
medical cessation of your disability/blindness is

[[Page 975]]

still pending, unless you have completed a trial work period and are 
engaging in substantial gainful activity. If you have completed a trial 
work period and previously received continued benefits you may still be 
eligible for special cash benefits under Sec. 416.261 or special SSI 
eligibility status under Sec. 416.264. (Effective July 1, 1987, a title 
XVI individual is no longer subject to a trial work period or cessation 
based on engaging in substantial gainful activity in order to be 
eligible for special benefits under Sec. 416.261 or special status under 
Sec. 416.264.) If we determine that you no longer meet a requirement to 
receive benefits, we will send you a written notice. The written notice 
will explain why your continued benefits will not be reinstated or will 
be for an amount less than you received before the prior administrative 
law judge's decision. The notice will also explain your right to 
reconsideration under Sec. 416.1407, if you disagree. If you request a 
reconsideration, you will have the chance to explain why you believe 
your benefits should be reinstated or should be at a higher amount. If 
the final decision on your appeal of your medical cessation is a 
favorable one, we will send you a written notice in which we will advise 
you of any right to reentitlement to benefits including special benefits 
under Sec. 416.261 or special status under Sec. 416.264. If you disagree 
with our determination on your appeal, you will have the right to appeal 
this decision.
    (2) After we verify that you meet all the nonmedical requirements to 
receive benefits as stated in paragraph (e)(1) of this section, and if 
you previously elected to receive continued benefits pending the 
administrative law judge's decision, we will start continued benefits 
again. We will send you a notice telling you this. You do not have to 
complete a request to have these same benefits continued through the 
month before the month the new decision or order of dismissal is issued 
by the administrative law judge or through the month before the month 
the Appeals Council takes final action on the administrative law judge's 
recommended decision. These continued benefits will begin again with the 
first month of nonpayment based on the prior administrative law judge 
hearing decision or dismissal order. Our notice explaining continued 
benefits will also tell you to report to us any changes or events that 
affect your receipt of benefits.
    (3) When your case is remanded to an administrative law judge, and 
if you did not previously elect to have benefits continued pending an 
administrative law judge decision, we will send you a notice telling you 
that if you want to change that election, you must request to do so no 
later than 10 days after you receive our notice. If you do make this new 
election, and after we verify that you meet all the nonmedical 
requirements as explained in paragraph (e)(1) of this section, benefits 
will begin with the month of the Appeals Council remand order and will 
continue as stated in paragraph (e)(2) of this section.
    (4) If a court orders that your case be sent back to us (remanded) 
and your case is sent to an administrative law judge for further action 
under the rules provided in Sec. 416.1483, the administrative law 
judge's decision or dismissal order on your medical cessation appeal is 
vacated and is no longer in effect. You may be eligible for continued 
benefits pending a new decision by the administrative law judge or final 
action by the Appeals Council on the administrative law judge's 
recommended decision. In these court-remanded cases reaching the 
administrative law judge, we will follow the same rules provided in 
paragraph (e) (1), (2), and (3) of this section.
    (f) What if your benefits are suspended, reduced or terminated for 
other reasons. If we determine that your payments should be reduced, 
suspended or terminated for reasons not connected with your medical 
condition (see subpart M of Regulations No. 16) benefits may be 
continued under the procedure described in Sec. 416.1336.
    (g) Responsibility to pay back continued benefits. (1) If the final 
decision of the Secretary affirms the determination that you are not 
entitled to benefits, you will be asked to pay back any continued 
benefits you receive. However, you will have the right to ask that you

[[Page 976]]

not be required to pay back the benefits as described in the overpayment 
recovery and waiver provisions of subpart E of this part.
    (2) Waiver of recovery of an overpayment resulting from continued 
benefits to you may be considered as long as the cessation determination 
was appealed in good faith. We will assume that your appeal was made in 
good faith and, therefore, you have the right to waiver consideration 
unless you fail to cooperate in connection with the appeal, e.g., if you 
fail (without good reason) to give us medical or other evidence we 
request, or to go for a physical or mental examination when requested, 
in connection with the appeal. In determining whether you have good 
cause for failure to cooperate and, thus, whether an appeal was made in 
good faith, we will take into account any physical, mental, educational, 
or linguistic limitations (including any lack of facility with the 
English language) you may have which may have caused your failure to 
cooperate.

[53 FR 29023, Aug. 2, 1988; 53 FR 39015, Oct. 4, 1988, as amended at 59 
FR 1637, Jan. 12, 1994]



Sec. 416.998  If you become disabled by another impairment(s).

    If a new severe impairment(s) begins in or before the month in which 
your last impairment(s) ends, we will find that your disability is 
continuing. The new impairment(s) need not be expected to last 12 months 
or to result in death, but it must be severe enough to keep you from 
doing substantial gainful activity, or severe enough so that you are 
still disabled under Sec. 416.994, or, if you are a child, to result in 
marked and severe functional limitations.

[62 FR 6432, Feb. 11, 1997]



Sec. 416.999  What is expedited reinstatement?

    The expedited reinstatement provision provides you another option 
for regaining eligibility for benefits when we previously terminated 
your eligibility for disability benefits due to your work activity. The 
expedited reinstatement provision provides you the option of requesting 
that your prior eligibility for disability benefits be reinstated, 
rather than filing a new application for a new period of eligibility. 
Since January 1, 2001, you can request to be reinstated to benefits if 
you stop doing substantial gainful activity within 60 months of your 
prior termination. You must not be able to do substantial gainful 
activity because of your medical condition. Your current impairment must 
be the same as or related to your prior impairment and you must be 
disabled. To determine if you are disabled, we will use our medical 
improvement review standard that we use in our continuing disability 
review process. The advantage of using the medical improvement review 
standard is that we will generally find that you are disabled unless 
your impairment has improved so that you are able to work or unless an 
exception under the medical improvement review standard process applies. 
We explain the rules for expedited reinstatement in Secs. 416.999a 
through 416.999d.

[70 FR 57144, Sept. 30, 2005]



Sec. 416.999a  Who is eligible for expedited reinstatement?

    (a) You can have your eligibility to benefits reinstated under 
expedited reinstatement if--
    (1) You were previously eligible for a benefit based on disability 
or blindness as explained in Sec. 416.202;
    (2) Your disability or blindness eligibility referred to in 
paragraph (a)(1) of this section was terminated because of earned income 
or a combination of earned and unearned income;
    (3) You file your request for reinstatement timely under 
Sec. 416.999b; and
    (4) In the month you file your request for reinstatement--
    (i) You are not able to do substantial gainful activity because of 
your medical condition, as determined under paragraph (c) of this 
section,
    (ii) Your current impairment is the same as or related to the 
impairment that we used as the basis for your previous eligibility 
referred to in paragraph (a)(2) of this section,
    (iii) You are disabled or blind, as determined under the medical 
improvement review standard in Secs. 416.994 or 416.994a, and
    (iv) You meet the non-medical requirements for eligibility as 
explained in Sec. 416.202.

[[Page 977]]

    (b) You are eligible for reinstatement if you are the spouse of an 
individual who can be reinstated under Sec. 416.999a if--
    (1) You were previously an eligible spouse of the individual;
    (2) You meet the requirements for eligibility as explained in 
Sec. 416.202 except the requirement that you must file an application; 
and
    (3) You request reinstatement.
    (c) We will determine that you are not able to do substantial 
gainful activity because of your medical condition, under paragraph 
(a)(4)(i) of this section, when:
    (1) You certify under Sec. 416.999b(e) that you are unable to do 
substantial gainful activity because of your medical condition;
    (2) You do not do substantial gainful activity in the month you file 
your request for reinstatement; and
    (3) We determine that you are disabled under paragraph (a)(4)(iii) 
of this section.

[70 FR 57144, Sept. 30, 2005]

    Effective Date Note: At 81 FR 71370, Oct. 17, 2016, Sec. 416.9991 
was amended by revising paragraphs (a)(4)(i) and (c)(2), effective Apr. 
17, 2017. For the convenience of the user, the revised text is set forth 
as follows:



Sec. 416.999a  Who is eligible for expedited reinstatement?

    (a) * * *
    (4) * * *
    (i) You are not able or become unable to do substantial gainful 
activity because of your medical condition as determined under paragraph 
(c) of this section.

                                * * * * *

    (c) * * *
    (2) You are not able or become unable to do substantial gainful 
activity in the month you file your request for reinstatement; and

                                * * * * *



Sec. 416.999b  How do I request reinstatement?

    (a) You must make your request for reinstatement in writing.
    (b) You must have filed your request on or after January 1, 2001.
    (c) You must provide the information we request so that we can 
determine whether you meet the eligibility requirements listed in 
Sec. 416.999a.
    (d) We must receive your request within the consecutive 60-month 
period that begins with the month in which your eligibility terminated 
due to earned income, or a combination of earned and unearned income. If 
we receive your request after the 60-month period, we can grant you an 
extension if we determine you had good cause, under the standards 
explained in Sec. 416.1411, for not filing the request timely.
    (e) You must certify that you are disabled, that your current 
impairment(s) is the same as or related to the impairment(s) that we 
used as the basis for the eligibility you are requesting to be 
reinstated, that you are unable to do substantial gainful activity 
because of your medical condition, and that you meet the non-medical 
requirements for eligibility for benefits.

[70 FR 57144, Sept. 30, 2005]



Sec. 416.999c  How do we determine provisional benefits?

    (a) You may receive up to six consecutive months of provisional cash 
benefits and Medicaid during the provisional benefit period, while we 
determine whether we can reinstate your disability benefit eligibility 
under Sec. 416.999a--
    (1) We will pay you provisional benefits beginning with the month 
after you file your request for reinstatement under Sec. 416.999a(a).
    (2) If you are an eligible spouse, you can receive provisional 
benefits with the month your spouse's provisional benefits begin.
    (3) If you do not have an eligible spouse, we will pay you a monthly 
provisional benefit amount equal to the monthly amount that would be 
payable to an eligible individual under Secs. 416.401 through 416.435 
with the same kind and amount of income as you have.
    (4) If you have an eligible spouse, we will pay you and your spouse 
a monthly provisional benefit amount equal to the monthly amount that 
would be payable to an eligible individual and eligible spouse under 
Sec. 416.401 through 416.435 with the same kind and amount of income as 
you and your spouse have.
    (5) Your provisional benefits will not include state supplementary 
payments

[[Page 978]]

payable under Secs. 416.2001 through 416.2176.
    (b) You cannot receive provisional cash benefits or Medicaid a 
second time under this section when--
    (1) You request reinstatement under Sec. 416.999a;
    (2) You previously received provisional cash benefits or Medicaid 
under this section based upon a prior request for reinstatement filed 
under Sec. 416.999a(a); and
    (3) Your requests under paragraphs (b)(1) and (b)(2) are for the 
same previous disability eligibility referred to in Sec. 416.999a(a)(2) 
of this section.
    (4) Examples:

    Example 1: Mr. K files a request for reinstatement in April 2004. 
His disability benefit had previously terminated in January 2003. Since 
Mr. K meets the other factors for possible reinstatement (i.e., his 
prior eligibility was terminated within the last 60 months because of 
his work activity) we start paying him provisional benefits beginning 
May 2004 while we determine whether he is disabled and whether his 
current impairment(s) is the same as or related to the impairment(s) 
that we used as the basis for the benefit that was terminated in January 
2003. In July 2004 we determine that Mr. K cannot be reinstated because 
he is not disabled under the medical improvement review standard; 
therefore we stop his provisional benefits. Mr. K does not request 
review of the determination. In January 2005 Mr. K again requests 
reinstatement on the eligibility that terminated in January 2003. Since 
this request again meets all the other factors for possible 
reinstatement mentioned above, and his request is still within 60 months 
from January 2003, we will make a new determination on whether he is 
disabled and whether his current impairment(s) is the same as or related 
to the impairment(s) that we used as the basis for the benefit that was 
terminated in January 2003. Since the January 2005 request and the April 
2004 request both request reinstatement on the same benefit that 
terminated in January 2003, and since we already paid Mr. K provisional 
benefits based upon the April 2004 request, we will not pay additional 
provisional benefits on the January 2005 request for reinstatement.
    Example 2: Assume the same facts as shown in Example 1 of this 
section, with the addition of these facts. We approve Mr. K's January 
2005 request for reinstatement and start his reinstated benefits 
beginning February 2005. Mr. K subsequently returns to work and his 
benefits are again terminated due to his work activity in January 2008. 
Mr. K again stops work and requests reinstatement in January 2010. Since 
Mr. K meets the other factors for possible reinstatement (i.e., his 
prior eligibility was terminated within the last 60 months because of 
his work activity) we start paying him provisional benefits beginning 
February 2010 while we determine whether he is disabled and whether his 
current impairment(s) is the same as or related to the impairment(s) 
that we used as the basis for the benefit that was terminated in January 
2008.

    (c) We will not pay you a provisional benefit for a month where you 
are not eligible for a payment under Secs. 416.1322, 416.1323, 416.1325, 
416.1327, 416.1329, 416.1330, 416.1334, and 416.1339.
    (d) We will not pay you a provisional benefit for any month that is 
after the earliest of either: the month we send you notice of our 
determination on your request for reinstatement; or, the sixth month 
following the month you requested expedited reinstatement.
    (e) You are not eligible for provisional benefits if--
    (1) Prior to starting your provisional benefits we determine that 
you do not meet the requirements for reinstatement under 
Secs. 416.999a(a); or
    (2) We determine that your statements on your request for 
reinstatement, made under Sec. 416.999b(d)(2), are false.
    (f) Determinations we make regarding your provisional benefits under 
paragraphs (a) through (e) of this section are final and are not subject 
to administrative and judicial review under subpart N of part 416.
    (g) If you were previously overpaid benefits under title II or title 
XVI of the Act, we will not recover the overpayment from your 
provisional benefits unless you give us permission.
    (h) If we determine you are not eligible to receive reinstated 
benefits, provisional benefits we have already paid you under this 
section that were made prior to the termination month under paragraph 
(d) of this section will not be subject to recovery as an overpayment 
unless we determine that you knew, or should have known, you did not 
meet the requirements for reinstatement in Sec. 416.999a. If we 
inadvertently pay you provisional benefits when you are not entitled to 
them because we have already made a determination described in paragraph 
(e) of this section, they

[[Page 979]]

will be subject to recover as an overpayment under subpart E of part 
416.

[70 FR 57144, Sept. 30, 2005]



Sec. 416.999d  How do we determine reinstated benefits?

    (a) If you meet the requirements for reinstatement under 
Sec. 416.999a(a), we will reinstate your benefits with the month after 
the month you filed your request for reinstatement. We cannot reinstate 
your eligibility for any month prior to February 2001.
    (b) We will compute your reinstated benefit amount and determine 
benefits payable under the applicable paragraphs in Secs. 416.401 
through 416.435. We will reduce your reinstated benefit due in a month 
by a provisional benefit we already paid you for that month. If your 
provisional benefit paid for a month equals or exceeds the reinstated 
benefit due, we will treat the difference as an overpayment under 
Sec. 416.536.
    (c) Once you have been reinstated under Sec. 416.999a you cannot be 
reinstated again until you have completed a 24-month initial 
reinstatement period. Your initial reinstatement period begins with the 
month your reinstated benefits begin under paragraph (a) of this section 
and ends when you have had 24 payable months of reinstated benefits. We 
consider you to have a payable month for the purposes of this paragraph 
when you are due a cash benefit of any amount for the month based upon 
our normal computation and payment rules in Sec. 416.401 through 
Sec. 416.435 or if you are considered to be receiving SSI benefits in a 
month under section 1619(b) of the Social Security Act. If your entire 
benefit payment due you for a month is adjusted for recovery of an 
overpayment under Secs. 416.570 and 416.571 or if the amount of the 
provisional benefit already paid you for a month exceeds the amount of 
the reinstated benefit payable for that month so that no additional 
payment is due, we will consider the month a payable month.
    (d) Your eligibility for reinstated benefits ends with the month 
preceding the earliest of the following months--
    (1) The month an applicable terminating event in Secs. 416.1331 
through 416.1339 occurs;
    (2) The third month following the month in which your disability 
ceases; or
    (3) The month in which you die.
    (e) Determinations we make under this section are initial 
determinations under Sec. 416.1402 and are subject to review under 
subpart N of part 416.
    (f) If we determine you are not eligible for reinstated benefits, we 
will consider your request filed under Sec. 416.999a(a) your intent to 
claim benefits under Sec. 416.340.

[70 FR 57144, Sept. 30, 2005]



                 Subpart J_Determinations of Disability

    Authority: Secs. 702(a)(5), 1614, 1631, and 1633 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1382c, 1383, and 1383b).

    Source: 46 FR 29211, May 29, 1981, unless otherwise noted.

                           General Provisions



Sec. 416.1001  Purpose and scope.

    This subpart describes the standards of performance and 
administrative requirements and procedures for States making 
determinations of disability for the Commissioner under title XVI of the 
Act. It also establishes the Commissioner's responsibilities in carrying 
out the disability determination function.
    (a) Sections 416.1001 through 416.1003 describe the purpose of the 
regulations and the meaning of terms frequently used in the regulations. 
They also briefly set forth the responsibilities of the Commissioner and 
the States covered in detail in other sections.
    (b) Sections 416.1010 through 416.1018 describe the Commissioner's 
and the State's responsibilities in performing the disability 
determination function.
    (c) Sections 416.1020 through 416.1033 describe the administrative 
responsibilities and requirements of the States. The corresponding role 
of the Commissioner is also set out.
    (d) Sections 416.1040 through 416.1050 describe the performance 
accuracy and processing time standards for measuring State agency 
performance.

[[Page 980]]

    (e) Sections 416.1060 through 416.1061 describe when and what kind 
of assistance the Commissioner will provide State agencies to help them 
improve performance.
    (f) Sections 416.1070 through 416.1075 describe the level of 
performance below which the Commissioner will consider a State agency to 
be substantially failing to make disability determinations consistent 
with the regulations and other written guidelines and the resulting 
action the Commissioner will take.
    (g) Sections 416.1080 through 416.1083 describe the rules for 
resolving disputes concerning fiscal issues and providing hearings when 
we propose to find that a State is in substantial failure.
    (h) Sections 416.1090 through 416.1094 describe when and what action 
the Commissioner will take and what action the State will be expected to 
take if the Commissioner assumes the disability determination function 
from a State agency.

[46 FR 29211, May 29, 1981, as amended at 62 FR 38454, July 18, 1997; 71 
FR 16461, Mar. 31, 2006; 76 FR 24812, May 3, 2011]



Sec. 416.1002  Definitions.

    For purposes of this subpart:
    Act means the Social Security Act, as amended.
    Class or classes of cases means the categories into which disability 
claims are divided according to their characteristics.
    Commissioner means the Commissioner of Social Security or his or her 
authorized designee.
    Compassionate allowance means a determination or decision we make 
under a process that identifies for expedited handling claims that 
involve impairments that invariably qualify under the Listing of 
Impairments in appendix 1 to subpart P of part 404 of this chapter based 
on minimal, but sufficient, objective medical evidence.
    Determination of disability or disability determination means one or 
more of the following decisions:
    (a) Whether or not a person is under a disability;
    (b) The date a person's disability began; or
    (c) The date a person's disability ended.
    Disability means disability or blindness as defined in sections 
1614(a) (2) and (3) of the Act.
    Disability determination function means making determinations as to 
disability or blindness and carrying out related administrative and 
other responsibilities.
    Disability program means the Federal program for providing 
supplemental security income benefits for the blind and disabled under 
title XVI of the Act, as amended.
    Initial means the first level of disability or blindness 
adjudication.
    Other written guidelines means written issuances such as Social 
Security Rulings and memoranda by the Commissioner of Social Security, 
the Deputy Commissioner for Programs and Policy, or the Associate 
Commissioner for Disability and the procedures, guides, and operating 
instructions in the Disability Insurance sections of the Program 
Operations Manual System that are instructive, interpretive, clarifying, 
and/or administrative and not designated as advisory or discretionary. 
The purpose of including the foregoing material in the definition is to 
assure uniform national application of program standards and service 
delivery to the public.
    Quick disability determination means an initial determination on a 
claim that we have identified as one that reflects a high degree of 
probability that you will be found disabled and where we expect that 
your allegations will be easily and quickly verified.
    Regulations means regulations in this subpart issued under sections 
1102, 1631(c) and 1633(a) of the Act, unless otherwise indicated.
    State means any of the 50 States of the United States and the 
District of Columbia. It includes the State agency.
    State agency means that agency of a State which has been designated 
by the State to carry out the disability determination function.
    We, us, and our refers to the Social Security Administration (SSA).

[46 FR 29211, May 29, 1981, as amended at 56 FR 11021, Mar. 14, 1991; 62 
FR 38454, July 18, 1997; 72 FR 51178, Sept. 6, 2007; 75 FR 62683, Oct. 
13, 2010]

[[Page 981]]



Sec. 416.1003  Basic responsibilities for us and the State.

    (a) General. We will work with the State to provide and maintain an 
effective system for processing claims of those who apply for and who 
are receiving benefits under the disability program. We will provide 
program standards, leadership, and oversight. We do not intend to become 
involved in the State's ongoing management of the program except as is 
necessary and in accordance with these regulations. The State will 
comply with our regulations and other written guidelines.
    (b) Our responsibilities. We will:
    (1) Periodically review the regulations and other written guidelines 
to determine whether they insure effective and uniform administration of 
the disability program. To the extent feasible, we will consult with and 
take into consideration the experience of the States in issuing 
regulations and guidelines necessary to insure effective and uniform 
administration of the disability program;
    (2) Provide training materials or in some instances conduct or 
specify training (see Sec. 416.1022);
    (3) Provide funds to the State agency for the necessary cost of 
performing the disability determination function (see Sec. 416.1026);
    (4) Monitor and evaluate the performance of the State agency under 
the established standards (see Secs. 416.1044 and 416.1045); and
    (5) Maintain liaison with the medical profession nationally and with 
national organizations and agencies whose interests or activities may 
affect the disability program.
    (c) Responsibilities of the State. The State will:
    (1) Provide management needed to insure that the State agency 
carries out the disability determination function so that disability 
determinations are made accurately and promptly;
    (2) Provide an organizational structure, adequate facilities, 
qualified personnel, medical consultant services, designated quick 
disability determination examiners (Secs. 416.1019 and 416.1020(c)), and 
a quality assurance function (Secs. 416.1020 through 416.1024);
    (3) Furnish reports and records relating to the administration of 
the disability program (Sec. 416.1025);
    (4) Submit budgets (Sec. 416.1026);
    (5) Cooperate with audits (Sec. 416.1027);
    (6) Insure that all applicants for and recipients of disability 
benefits are treated equally and courteously;
    (7) Be responsible for property used for disability program purposes 
(Sec. 416.1028);
    (8) Take part in the research and demonstration projects 
(Sec. 416.1029);
    (9) Coordinate with other agencies (Sec. 416.1030);
    (10) Safeguard the records created by the State in performing the 
disability determination function (Sec. 416.1031);
    (11) Comply with other provisions of the Federal law and regulations 
that apply to the State in performing the disability determination 
function;
    (12) Comply with other written guidelines (Sec. 416.1033);
    (13) Maintain liaison with the medical profession and organizations 
that may facilitate performing the disability determination function; 
and
    (14) Assist us in other ways that we determine may promote the 
objectives of effective and uniform administration.

[46 FR 29211, May 29, 1981, as amended at 72 FR 51178, Sept. 6, 2007]

  Responsibilities for Performing the Disability Determination Function



Sec. 416.1010  How a State notifies us that it wishes to perform the
disability determination function.

    (a) Deemed notice. Any State that has in effect as of June 1, 1981, 
an agreement with us to make disability determinations will be deemed to 
have given us notice that it wishes to perform the disability 
determination function, in lieu of continuing the agreement in effect 
after June 1, 1981.
    (b) Written notice. After June 1, 1981, a State not making 
disability determinations that wishes to perform the disability 
determination function under these regulations must notify us in 
writing. The notice must be from an official authorized to act for the 
State for this purpose. The State will provide an opinion from the 
State's Attorney General verifying the authority of the

[[Page 982]]

official who sent the notice to act for the State.



Sec. 416.1011  How we notify a State whether it may perform the 
disability determination function.

    (a) If a State notifies us in writing that it wishes to perform the 
disability determination function, we will notify the State in writing 
whether or not it may perform the function. The State will begin 
performing the disability determination function beginning with the 
month we and the State agree upon.
    (b) If we have previously found that a State agency has 
substantially failed to make disability determinations in accordance 
with the law or these regulations and other written guidelines or if the 
State has previously notified us in writing that it does not wish to 
make disability determinations, the notice will advise the State whether 
the State agency may again make the disability determinations and, if 
so, the date and the conditions under which the State may again make 
them.



Sec. 416.1013  Disability determinations the State makes.

    (a) General rule. A State agency will make determinations of 
disability with respect to all persons in the State except those 
individuals whose cases are in a class specifically excluded by our 
written guidelines. A determination of disability made by the State is 
the determination of the Commissioner, except as described in 
Sec. 416.903(d)(1).
    (b) New classes of cases. Where any new class or classes of cases 
arise requiring determinations of disability, we will determine the 
conditions under which a State may choose not to make the disability 
determinations. We will provide the State with the necessary funding to 
do the additional work.
    (c) Temporary transfer of classes of cases. We will make disability 
determinations for classes of cases temporarily transferred to us by the 
State agency if the State agency asks us to do so and we agree. The 
State agency will make written arrangements with us which will specify 
the period of time and the class or classes of cases we will do.

[46 FR 29211, May 29, 1981, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.1014  Responsibilities for obtaining evidence to make 
disability determinations.

    (a) We or the State agency will secure from the claimant or other 
sources any evidence the State agency needs to make a disability 
determination. When we secure the evidence, we will furnish it to the 
State agency for use in making the disability determination.
    (b) At our request, the State agency will obtain and furnish medical 
or other evidence and provide assistance as may be necessary for us to 
carry out our responsibility for making disability determinations in 
those classes of cases described in the written guidelines for which the 
State agency does not make the determination.

[46 FR 29211, May 29, 1981, as amended at 79 FR 33683, June 12, 2014]



Sec. 416.1015  Making disability determinations.

    (a) When making a disability determination, the State agency will 
apply subpart I, part 416, of our regulations.
    (b) The State agency will make disability determinations based only 
on the medical and nonmedical evidence in its files.
    (c) Disability determinations will be made by:
    (1) A State agency medical or psychological consultant and a State 
agency disability examiner;
    (2) A State agency disability examiner alone when there is no 
medical evidence to be evaluated (i.e., no medical evidence exists or we 
are unable, despite making every reasonable effort, to obtain any 
medical evidence that may exist) and the individual fails or refuses, 
without a good reason, to attend a consultative examination (see 
Sec. 416.918);
    (3) A State agency disability examiner alone if you are not a child 
(a person who has not attained age 18), and the claim is adjudicated 
under the quick disability determination process (see Sec. 416.1019) or 
the compassionate allowance process (see Sec. 416.1002), and the

[[Page 983]]

initial or reconsidered determination is fully favorable to you. This 
paragraph (c)(3) will no longer be effective on December 28, 2018 unless 
we terminate it earlier by publication of a final rule in the Federal 
Register; or
    (4) A State agency disability hearing officer.

See Sec. 416.1016 for the definition of medical or psychological 
consultant and Sec. 416.1415 for the definition of disability hearing 
officer. The State agency disability examiner and disability hearing 
officer must be qualified to interpret and evaluate medical reports and 
other evidence relating to the claimant's physical or mental impairments 
and as necessary to determine the capacities of the claimant to perform 
substantial gainful activity. See Sec. 416.972 for what we mean by 
substantial gainful activity.

    (d) In making a determination under title XVI with respect to the 
disability of a child to whom paragraph (d) of this section does not 
apply, we will make reasonable efforts to ensure that a qualified 
pediatrician or other individual who specializes in a field of medicine 
appropriate to the child's impairment(s) evaluates the case of the 
child.
    (e) The State agency will certify each determination of disability 
to us on forms we provide.
    (f) The State agency will furnish us with all the evidence it 
considered in making its determination.
    (g) The State agency will not be responsible for defending in court 
any determination made, or any procedure for making determinations, 
under these regulations.

[52 FR 23928, Sept. 9, 1987, as amended at 56 FR 11021, Mar. 14, 1991; 
58 FR 47587, Sept. 9, 1993; 61 FR 11136, Mar. 19, 1996; 62 FR 38455, 
July 18, 1997; 65 FR 34959, June 1, 2000; 75 FR 62684, Oct. 13, 2010; 78 
FR 66639, Nov. 6, 2013; 79 FR 51243, Aug. 28, 2014; 80 FR 63093, Oct. 
19, 2015; 81 FR 73028, Oct. 24, 2016; 82 FR 5883, Jan. 18, 2017]



Sec. 416.1016  Medical consultants and psychological consultants.

    (a) What is a medical consultant? A medical consultant is a member 
of a team that makes disability determinations in a State agency (see 
Sec. 416.1015), or who is a member of a team that makes disability 
determinations for us when we make disability determinations ourselves. 
The medical consultant completes the medical portion of the case review 
and any applicable residual functional capacity assessment about all 
physical impairment(s) in a claim.
    (b) What qualifications must a medical consultant have? A medical 
consultant is a licensed physician, as defined in Sec. 416.902(a)(1).
    (c) What is a psychological consultant? A psychological consultant 
is a member of a team that makes disability determinations in a State 
agency (see Sec. 416.1015), or who is a member of a team that makes 
disability determinations for us when we make disability determinations 
ourselves. The psychological consultant completes the medical portion of 
the case review and any applicable residual functional capacity 
assessment about all mental impairment(s) in a claim. When we are unable 
to obtain the services of a qualified psychiatrist or psychologist 
despite making every reasonable effort (see Sec. 416.1017) in a claim 
involving a mental impairment(s), a medical consultant will evaluate the 
mental impairment(s).
    (d) What qualifications must a psychological consultant have? A 
psychological consultant can be either a licensed psychiatrist or 
psychologist. We will only consider a psychologist qualified to be a 
psychological consultant if he or she:
    (1) Is licensed or certified as a psychologist at the independent 
practice level of psychology by the State in which he or she practices; 
and
    (2)(i) Possesses a doctorate degree in psychology from a program in 
clinical psychology of an educational institution accredited by an 
organization recognized by the Council on Post-Secondary Accreditation; 
or
    (ii) Is listed in a national register of health service providers in 
psychology which the Commissioner of Social Security deems appropriate; 
and
    (3) Possesses 2 years of supervised clinical experience as a 
psychologist in health service, at least 1 year of which is post-masters 
degree.
    (e) Cases involving both physical and mental impairments. In a case 
where there is evidence of both physical and

[[Page 984]]

mental impairments, the medical consultant will evaluate the physical 
impairments in accordance with paragraph (a) of this section, and the 
psychological consultant will evaluate the mental impairment(s) in 
accordance with paragraph (c) of this section.

[82 FR 5883, Jan. 18, 2017]



Sec. 416.1017  Reasonable efforts to obtain review by a physician, 
psychiatrist, and psychologist.

    (a) When the evidence of record indicates the existence of a 
physical impairment, the State agency must make every reasonable effort 
to ensure that a medical consultant completes the medical portion of the 
case review and any applicable residual functional capacity assessment. 
When the evidence of record indicates the existence of a mental 
impairment, the State agency must make every reasonable effort to ensure 
that a psychological consultant completes the medical portion of the 
case review and any applicable residual functional capacity assessment. 
The State agency must determine if additional physicians, psychiatrists, 
and psychologists are needed to make the necessary reviews. When it does 
not have sufficient resources to make the necessary reviews, the State 
agency must attempt to obtain the resources needed. If the State agency 
is unable to obtain additional physicians, psychiatrists, and 
psychologists because of low salary rates or fee schedules, it should 
attempt to raise the State agency's levels of compensation to meet the 
prevailing rates for these services. If these efforts are unsuccessful, 
the State agency will seek assistance from us. We will assist the State 
agency as necessary. We will also monitor the State agency's efforts and 
where the State agency is unable to obtain the necessary services, we 
will make every reasonable effort to provide the services using Federal 
resources.
    (b) Federal resources may include the use of Federal contracts for 
the services of qualified psychiatrists and psychologists to review 
mental impairment cases. Where Federal resources are required to perform 
these reviews, which are a basic State agency responsibility, and where 
appropriate, the State agency's budget will be reduced accordingly.
    (c) Where every reasonable effort is made to obtain the services of 
a qualified psychiatrist or psychologist to review a mental impairment 
case, but the professional services are not obtained, a physician who is 
not a psychiatrist will review the mental impairment case. For these 
purposes, every reasonable effort to ensure that a qualified 
psychiatrist or psychologist review mental impairment cases will be 
considered to have been made only after efforts by both State and 
Federal agencies as set forth in paragraphs (a) and (b) of this section 
are made.

[52 FR 23928, Sept. 9, 1987, as amended at 82 FR 5883, Jan. 18, 2017]



Sec. 416.1018  Notifying claimant of the disability determination.

    The State agency will prepare denial notices in accordance with 
subpart N of this part whenever it makes a disability determination 
which is fully or partially unfavorable to the claimant.

[46 FR 29211, May 29, 1981, as amended at 75 FR 33169, June 11, 2010]

                     Quick Disability Determinations



Sec. 416.1019  Quick disability determination process.

    (a) If we identify a claim as one involving a high degree of 
probability that the individual is disabled, and we expect that the 
individual's allegations will be easily and quickly verified, we will 
refer the claim to the State agency for consideration under the quick 
disability determination process pursuant to this section and 
Sec. 416.1020(c).
    (b) If we refer a claim to the State agency for a quick disability 
determination, a designated quick disability determination examiner must 
do all of the following:
    (1) Subject to the provisions in paragraph (c) of this section, make 
the disability determination after consulting with a State agency 
medical or psychological consultant if the State agency disability 
examiner determines consultation is appropriate or if consultation is 
required under Sec. 416.926(c). The State agency may certify the 
disability determination forms to us without the

[[Page 985]]

signature of the medical or psychological consultant.
    (2) Make the quick disability determination based only on the 
medical and nonmedical evidence in the file.
    (3) Subject to the provisions in paragraph (c) of this section, make 
the quick disability determination by applying the rules in subpart I of 
this part.
    (c) If the quick disability determination examiner cannot make a 
determination that is fully favorable, or if there is an unresolved 
disagreement between the disability examiner and the medical or 
psychological consultant (except when a disability examiner makes the 
determination alone under Sec. 416.1015(c)(3)), the State agency will 
adjudicate the claim using the regularly applicable procedures in this 
subpart.

[72 FR 51178, Sept. 6, 2007, as amended at 75 FR 62684, Oct. 13, 2010]

            Administrative Responsibilities and Requirements



Sec. 416.1020  General administrative requirements.

    (a) The State will provide the organizational structure, qualified 
personnel, medical consultant services, and a quality assurance function 
sufficient to ensure that disability determinations are made accurately 
and promptly. We may impose specific administrative requirements in 
these areas and in those under ``Administrative Responsibilities and 
Requirements'' in order to establish uniform, national administrative 
practices or to correct the areas of deficiencies which may later cause 
the State to be substantially failing to comply with our regulations or 
other written guidelines. We will notify the State, in writing, of the 
administrative requirements being imposed and of any administrative 
deficiencies it is required to correct. We will allow the State 90 days 
from the date of this notice to make appropriate corrections. Once 
corrected, we will monitor the State's administrative practices for 180 
days. If the State does not meet the requirements or correct all of the 
deficiencies, or, if some of the deficiencies recur, we may initiate 
procedures to determine if the State is substantially failing to follow 
our regulations or other written guidelines.
    (b) The State is responsible for making accurate and prompt 
disability determinations.
    (c) Each State agency will designate experienced disability 
examiners to handle claims we refer to it under Sec. 416.1019(a).

[46 FR 29211, May 29, 1981, as amended at 56 FR 11021, Mar. 14, 1991; 56 
FR 13365, Apr. 1, 1991; 72 FR 51178, Sept. 6, 2007]



Sec. 416.1021  Personnel.

    (a) Equal Employment Opportunity. The State will comply with all 
applicable Federal statutes, executive orders and regulations concerned 
with equal employment opportunities.
    (b) Selection, tenure, and compensation. The State agency will, 
except as may be inconsistent with paragraph (a) of this section, adhere 
to applicable State approved personnel standards in the selection, 
tenure, and compensation of any individual employed in the disability 
program.
    (c) Travel. The State will make personnel available to attend 
meetings or workshops as may be sponsored or approved by us for 
furthering the purposes of the disability program.
    (d) Restrictions. Subject to appropriate Federal funding, the State 
will, to the best of its ability, facilitate the processing of 
disability claims by avoiding personnel freezes, restrictions against 
overtime work, or curtailment of facilities or activities.



Sec. 416.1022  Training.

    The State will insure that all employees have an acceptable level of 
competence. We will provide training and other instructional materials 
to facilitate basic and advanced technical proficiency of disability 
staff in order to insure uniformity and effectiveness in the 
administration of the disability program. We will conduct or specify 
training, as appropriate but only if:
    (a) A State agency's performance approaches unacceptable levels or
    (b) The material required for the training is complex or the 
capacity of the State to deliver the training is in doubt and uniformity 
of the training is essential.

[[Page 986]]



Sec. 416.1023  Facilities.

    (a) Space, equipment, supplies, and other services. Subject to 
appropriate Federal funding, the State will provide adequate space, 
equipment, supplies, and other services to facilitate making accurate 
and prompt disability determinations.
    (b) Location of facilities. Subject to appropriate Federal funding, 
the State will determine the location where the disability determination 
function is to be performed so that disability determinations are made 
accurately and promptly.
    (c) Access. The State will permit us access to the premises where 
the disability determination function is performed and also where it is 
managed for the purposes of inspecting and obtaining information about 
the work and activities required by our regulations and assuring 
compliance with pertinent Federal statutes and regulations. Access 
includes personal onsite visits and other means, such as 
telecommunications, of contacting the State agency to obtain information 
about its functions. We will contact the State agency and give 
reasonable prior notice of the times and purposes of any visits.

[46 FR 29211, May 29, 1981, as amended at 56 FR 11022, Mar. 14, 1991]



Sec. 416.1024  Medical and other purchased services.

    The State will determine the rates of payment for purchasing medical 
or other services necessary to make determinations of disability. The 
rates may not exceed the highest rate paid by Federal or other agencies 
in the State for the same or similar type of service. The State will 
maintain documentation to support the rates of payment it uses.

[46 FR 29211, May 29, 1981, as amended at 71 FR 16461, Mar. 31, 2006; 76 
FR 24812, May 3, 2011]



Sec. 416.1025  Records and reports.

    (a) The State will establish and maintain the records and furnish 
the schedules, financial, cost, and other reports relating to the 
administration of the disability programs as we may require.
    (b) The State will permit us and the Comptroller General of the 
United States (including duly authorized representatives) access to and 
the right to examine records relating to the work which the State 
performs under these regulations. These records will be retained by the 
State for the periods of time specified for retention of records in the 
Federal Procurement Regulations (41 CFR parts 1-20).



Sec. 416.1026  Fiscal.

    (a) We will give the State funds, in advance or by way of 
reimbursement, for necessary costs in making disability determinations 
under these regulations. Necessary costs are direct as well as indirect 
costs as defined in 41 CFR part 1-15, subpart 1-15.7 of the Federal 
Procurement Regulations System for costs incurred before April 1, 1984; 
and 48 CFR part 31, subpart 31.6 of the Federal Acquisition Regulations 
System and Federal Management Circular A-74-4 \1\ as amended or 
superseded for costs incurred after March 31, 1984.
---------------------------------------------------------------------------

    \1\ The circular is available from the Office of Administration, 
Publications Unit, Rm. G-236, New Executive Office Bldg., Washington, DC 
20503.
---------------------------------------------------------------------------

    (b) The State will submit estimates of anticipated costs in the form 
of a budget at the time and in the manner we require.
    (c) We will notify the State of the amount which will be made 
available to it as well as what anticipated costs are being approved.
    (d) The State may not incur or make expenditures for items of cost 
not approved by us or in excess of the amount we make available to the 
State.
    (e) After the close of a period for which funds have been made 
available to the State, the State will submit a report of its 
expenditures. Based on an audit arranged by the State under Pub. L. 98-
502, the Single Audit Act of 1984, or by the Inspector General of the 
Social Security Administration or based on an audit or review by the 
Social Security Administration (see Sec. 416.1027), we will determine 
whether the expenditures were consistent with cost principles described 
in 41 CFR part 1-15, subpart 1-15.7 for costs incurred before

[[Page 987]]

April 1, 1984; and 48 CFR part 31, subpart 31.6 and Federal Management 
Circular A-74-4 for costs incurred after March 31, 1984; and in other 
applicable written guidelines in effect at the time the expenditures 
were made or incurred.
    (f) Any monies paid to the State which are used for purposes not 
within the scope of these regulations will be paid back to the Treasury 
of the United States.

[46 FR 29211, May 29, 1981, as amended at 56 FR 11022, Mar. 14, 1991; 62 
FR 38455, July 18, 1997]



Sec. 416.1027  Audits.

    (a) Audits performed by the State--(1) Generally. Audits of account 
and records pertaining to the administration of the disability program 
under the Act, will be performed by the States in accordance with the 
Single Audit Act of 1984 (Pub. L. 98-502) which establishes audit 
requirements for States receiving Federal assistance. If the audit 
performed by the State meets our program requirements, we will accept 
the findings and recommendations of the audit. The State will make every 
effort to act upon and resolve any items questioned in the audit.
    (2) Questioned items. Items questioned as a result of an audit under 
the Single Audit Act of 1984 of a cross-cutting nature will be resolved 
by the Department of Health and Human Services, Office of Grant and 
Contract Financial Management. A cross-cutting issue is one that 
involves more than one Federal awarding agency. Questioned items 
affecting only the disability program will be resolved by SSA in accord 
with paragraph (b)(2) of this section.
    (3) State appeal of audit determinations. The Office of Grant and 
Contract Financial Management will notify the State of its determination 
on questioned cross-cutting items. If the State disagrees with that 
determination, it may appeal in writing within 60 days of receiving the 
determination. State appeals of a cross-cutting issue as a result of an 
audit under the Single Audit Act of 1984 will be made to the Department 
of Health and Human Services' Departmental Appeals Board. The rules for 
hearings and appeals are provided in 45 CFR part 16.
    (b) Audits performed by the Commissioner--(1) Generally. If the 
State does not perform an audit under the Single Audit Act of 1984 or 
the audit performed is not satisfactory for disability program purposes, 
the books of account and records in the State pertaining to the 
administration of the disability programs under the Act will be audited 
by the SSA's Inspector General or audited or reviewed by SSA as 
appropriate. These audits or reviews will be conducted to determine 
whether the expenditures were made for the intended purposes and in 
amounts necessary for the proper and efficient administration of the 
disability programs. Audits or reviews will also be made to inspect the 
work and activities required by the regulations to ensure compliance 
with pertinent Federal statutes and regulations. The State will make 
every effort to act upon and resolve any items questioned in an audit or 
review.
    (2) Questioned items. Expenditures of State agencies will be audited 
or reviewed, as appropriate, on the basis of cost principles and written 
guidelines in effect at the time the expenditures were made or incurred. 
Both the State and the State agency will be informed and given a full 
explanation of any items questioned. They will be given reasonable time 
to explain items questioned. Any explanation furnished by the State or 
State agency will be given full consideration before a final 
determination is made on the audit or review report.
    (3) State appeal of audit determinations. The appropriate Social 
Security Administration Regional Commissioner will notify the State of 
his or her determination on the audit or review report. If the State 
disagrees with that determination, the State may request reconsideration 
in writing within 60 days of the date of the Regional Commissioner's 
notice of the determination. The written request may be made, through 
the Associate Commissioner, Office of Disability, to the Commissioner of 
Social Security, Room 900, Altmeyer Building, 6401 Security Boulevard, 
Baltimore, MD 21235. The Commissioner will make a determination and 
notify the State of the decision in writing no later than 90 days from 
the

[[Page 988]]

date the Social Security Administration receives the State's appeal and 
all supporting documents. The decision by the Commissioner on other than 
monetary disallowances will be final and binding upon the State. The 
decision by the Commissioner on monetary disallowances will be final and 
binding upon the State unless the State appeals the decision in writing 
to the Department of Health and Human Services' Departmental Appeals 
Board within 30 days after receiving the Commissioner's decision. See 
Sec. 416.1083.

[56 FR 11022, Mar. 14, 1991, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.1028  Property.

    The State will have title to equipment purchased for disability 
program purposes. The State will be responsible for maintaining all 
property it acquires or which we furnish to it for performing the 
disability determination function. The State will identify the equipment 
by labeling and by inventory and will credit the SSA account with the 
fair market value of disposed property. In the event we assume the 
disability determination function from a State, ownership of all 
property and equipment acquired with SSA funds will be transferred to us 
effective on the date the State is notified that we are assuming the 
disability determination function or we are notified that the State is 
terminating the relationship.



Sec. 416.1029  Participation in research and demonstration projects.

    We will invite State participation in federally funded research and 
demonstration projects to assess the effectiveness of the disability 
program and to ascertain the effect of program policy changes. Where we 
determine that State participation is necessary for the project to be 
complete, for example, to provide national uniformity in a claims 
process, State participation is mandatory.



Sec. 416.1030  Coordination with other agencies.

    (a) The State will establish cooperative working relationships with 
other agencies concerned with serving the disabled and, insofar as 
practicable, use their services, facilities, and records to:
    (1) Assist the State in developing evidence and making 
determinations of disability; and
    (2) Insure that referral of disabled or blind persons for 
rehabilitation services will be carried out effectively.
    (b) The State may pay these agencies for the services, facilities, 
or records they provide. The State will include these costs in its 
estimates of anticipated costs and reports of actual expenditures.



Sec. 416.1031  Confidentiality of information and records.

    The State will comply with the confidentiality of information, 
including the security of systems, and records requirements described in 
20 CFR part 401 and pertinent written guidelines (see Sec. 416.1033).



Sec. 416.1032  Other Federal laws and regulations.

    The State will comply with the provisions of other Federal laws and 
regulations that directly affect its responsibilities in carrying out 
the disability determination function; for example, Treasury Department 
regulations on letters of credit (31 CFR part 205).



Sec. 416.1033  Policies and operating instructions.

    (a) We will provide the State agency with written guidelines 
necessary for it to carry out its responsibilities in performing the 
disability determination function.
    (b) The State agency making determinations of disability will comply 
with our written guidelines that are not designated as advisory or 
discretionary. (See Sec. 416.1002 for what we mean by written 
guidelines.)
    (c) A representative group of State agencies will be given an 
opportunity to participate in formulating disability program policies 
that have an effect on their role in carrying out the disability 
determination function. State agencies will also be given an opportunity 
to comment before changes are made in written guidelines unless delay in

[[Page 989]]

issuing a change may impair service to the public.

[46 FR 29211, May 29, 1981, as amended at 56 FR 11023, Mar. 14, 1991]

                          Performance Standards



Sec. 416.1040  General.

    The following sections provide the procedures and guidelines we use 
to determine whether the State agency is substantially complying with 
our regulations and other written guidelines, including meeting 
established national performance standards. We use performance standards 
to help assure effective and uniform administration of our disability 
program and to measure whether the performance of the disability 
determination function by each State agency is acceptable. Also, the 
standards are designed to improve overall State agency performance in 
the disability determination process and to ensure that benefits are 
made available to all eligible persons in an accurate and efficient 
manner. We measure the performance of a State agency in two areas--
processing time and quality of documentation and decisions on claims. 
State agency compliance is also judged by State agency adherence to 
other program requirements.

[56 FR 11023, Mar. 14, 1991]



Sec. 416.1041  Standards of performance.

    (a) General. The performance standards include both a target level 
of performance and a threshold level of performance for the State 
agency. The target level represents a level of performance that we and 
the States will work to attain in the future. The threshold level is the 
minimum acceptable level of performance. Performance below the threshold 
level will be the basis for the Commissioner's taking from the State 
agency partial or complete responsibility for performing the disability 
determination function. Intermediate State agency goals are designed to 
help each State agency move from its current performance levels to the 
target levels.
    (b) The target level. The target level is the optimum level of 
performance. There are three targets--one for combined title II and 
title XVI initial performance accuracy, one for title II initial 
processing time, and one for title XVI initial processing time.
    (c) The threshold level. The threshold level is the minimum 
acceptable level of performance. There are three thresholds--one for 
combined title II and title XVI initial performance accuracy, one for 
title II initial processing time, and one for title XVI initial 
processing time.
    (d) Intermediate goals. Intermediate goals are levels of performance 
between the threshold levels and the target levels established by our 
appropriate Regional Commissioner after negotiation with each State 
agency. The intermediate goals are designed to help the State agencies 
reach the target levels. Failure to meet these goals is not a cause for 
considering the State agency to be substantially failing to comply with 
the performance standards. However, failure to meet the intermediate 
goals may result in consultation and an offer of optional performance 
support depending on the availability of our resources.

[46 FR 29211, May 29, 1981, as amended at 56 FR 11023, Mar. 14, 1991; 62 
FR 38455, July 18, 1997]



Sec. 416.1042  Processing time standards.

    (a) General. Title II processing time refers to the average number 
of days (including Saturdays, Sundays, and holidays) it takes a State 
agency to process an initial disability claim from the day the case 
folder is received in the State agency until the day it is released to 
us by the State agency. Title XVI processing time refers to the average 
number of days, including Saturdays, Sundays, and holidays, from the day 
of receipt of the initial disability claim in the State agency until 
systems input of a presumptive disability decision or the day the case 
folder is released to us by the State agency, whichever is earlier.
    (b) Target levels. The processing time target levels are:
    (1) 37 days for title II initial claims.
    (2) 43 days for title XVI initial claims.
    (c) Threshold levels. The processing time threshold levels are:
    (1) 49.5 days for title II initial claims.

[[Page 990]]

    (2) 57.9 days for title XVI initial claims.

[46 FR 29211, May 29, 1981, as amended at 56 FR 11023, Mar. 14, 1991]



Sec. 416.1043  Performance accuracy standard.

    (a) General. Performance accuracy refers to the percentage of cases 
that do not have to be returned to State agencies for further 
development or correction of decisions based on evidence in the files 
and as such represents the reliability of State agency adjudication. The 
definition of performance accuracy includes the measurement of factors 
that have a potential for affecting a decision, as well as the 
correctness of the decision. For example, if a particular item of 
medical evidence should have been in the file but was not included, even 
though its inclusion does not change the result in the case, that is a 
performance error. Performance accuracy, therefore, is a higher standard 
than decisional accuracy. As a result, the percentage of correct 
decisions is significantly higher than what is reflected in the error 
rate established by SSA's quality assurance system.
    (b) Target level. The State agency initial performance accuracy 
target level for combined title II and title XVI cases is 97 percent 
with a corresponding decision accuracy rate of 99 percent.
    (c) Intermediate goals. These goals will be established annually by 
SSA's regional commissioner after negotiation with the State and should 
be used as stepping stones to progress towards our targeted level of 
performance.
    (d) Threshold levels. The State agency initial performance accuracy 
threshold level for combined title II and title XVI cases is 90.6 
percent.



Sec. 416.1044  How and when we determine whether the processing
time standards are met.

    (a) How we determine processing times. For all initial title II 
cases, we calculate the mean number of days, including Saturdays, 
Sundays, and holidays, from the day the case folder is received in the 
State agency until the day it is released to us by the State agency. For 
initial title XVI cases, we calculate the mean number of days, including 
Saturdays, Sundays, and holidays, from the day the case folder is 
received in the State agency until the day there is systems input of a 
presumptive disability decision or the day the case folder is released 
to us by the State agency, whichever is earlier.
    (b) Frequency of review. Title II processing times and title XVI 
processing times are monitored separately on a quarterly basis. The 
determination as to whether or not the processing time thresholds have 
been met is made at the end of each quarter each year. Quarterly State-
by-State mean processing times are compared with the threshold levels 
for both title II and title XVI.

[46 FR 29211, May 29, 1981, as amended at 56 FR 11023, Mar. 14, 1991]



Sec. 416.1045  How and when we determine whether the performance 
accuracy standard is met.

    (a) How we determine performance accuracy. We determine a State 
agency's performance accuracy rate on the basis of decision and 
documentation errors identified in our review of the sample cases.
    (b) Frequency of review. Title II and title XVI initial performance 
accuracy are monitored together on a quarterly basis. The determinations 
as to whether the performance accuracy threshold has been met is made at 
the end of each quarter each year. Quarterly State-by-State combined 
initial performance accuracy rates are compared to the established 
threshold level.



Sec. 416.1050  Action we will take if a State agency does not 
meet the standards.

    If a State agency does not meet two of the three established 
threshold levels (one of which must be performance accuracy) for two or 
more consecutive calendar quarters, we will notify the State agency in 
writing that it is not meeting the standards. Following our 
notification, we will provide the State agency appropriate performance 
support described in Secs. 416.1060, 416.1061 and 416.1062 for a period 
of up to 12 months.

[56 FR 11023, Mar. 14, 1991]

[[Page 991]]

                   Performance Monitoring and Support



Sec. 416.1060  How we will monitor.

    We will regularly analyze State agency combined title II and title 
XVI initial performance accuracy rate, title II initial processing time, 
and title XVI initial processing time. Within budgeted resources, we 
will also routinely conduct fiscal and administrative management reviews 
and special onsite reviews. A fiscal and administrative management 
review is a fact-finding mission to review particular aspects of State 
agency operations. During these reviews we will also review the quality 
assurance function. This regular monitoring and review program will 
allow us to determine the progress each State is making and the type and 
extent of performance support we will provide to help the State progress 
toward threshold, intermediate, and/or target levels.

[56 FR 11023, Mar. 14, 1991]



Sec. 416.1061  When we will provide performance support.

    (a) Optional support. We may offer, or a State may request, 
performance support at any time that the regular monitoring and review 
process reveals that support could enhance performance. The State does 
not have to be below the initial performance accuracy rate of 90.6 
percent to receive performance support. Support will be offered, or 
granted upon request, based on available resources.
    (b) Mandatory support. (1) We will provide a State agency with 
performance support if regular monitoring and review reveal that two of 
three threshold levels (one of which must be performance accuracy) are 
not met for two consecutive calendar quarters.
    (2) We may also decide to provide a State agency with mandatory 
performance support if regular monitoring and review reveal that any one 
of the three threshold levels is not met for two consecutive calendar 
quarters. Support will be provided based on available resources.
    (3) The threshold levels are:
    (i) Combined title II and title XVI initial performance accuracy 
rate--90.6 percent,
    (ii) Title II initial processing time--49.5 days, and
    (iii) Title XVI initial processing time--57.9 days.

[56 FR 11023, Mar. 14, 1991]



Sec. 416.1062  What support we will provide.

    Performance support may include, but is not limited to, any or all 
of the following:
    (a) An onsite review of cases processed by the State agency 
emphasizing adherence to written guidelines.
    (b) A request that necessary administrative measures be implemented 
(e.g., filling staffing vacancies, using overtime, assisting with 
training activities, etc.).
    (c) Provisions for Federal personnel to perform onsite reviews, 
conduct training, or perform other functions needed to improve 
performance.
    (d) Provisions for fiscal aid to allow for overtime, temporary 
hiring of additional staff, etc., above the authorized budget.

[56 FR 11024, Mar. 14, 1991]

                           Substantial Failure



Sec. 416.1070  General.

    After a State agency falls below two of three established threshold 
levels, one being performance accuracy, for two consecutive quarters, 
and after the mandatory performance support period, we will give the 
State agency a 3-month adjustment period. During this 3-month period we 
will not require the State agency to meet the threshold levels. 
Following the adjustment period, if the State agency again falls below 
two of three threshold levels, one being performance accuracy, in two 
consecutive quarters during the next 12 months, we will notify the State 
that we propose to find that the State agency has substantially failed 
to comply with our standards and advise it that it may request a hearing 
on that issue. After giving the State notice and an opportunity for a 
hearing, if it is found that a State agency has substantially failed to 
make disability determinations consistent with the Act, our regulations, 
or other written guidelines, we

[[Page 992]]

will assume partial or complete responsibility for performing the 
disability determination function after we have complied with 
Secs. 416.1090 and 416.1092.

[56 FR 11024, Mar. 14, 1991]



Sec. 416.1071  Good cause for not following the Act, our regulations, 
or other written guidelines.

    If a State has good cause for not following the Act, our 
regulations, or other written guidelines, we will not find that the 
State agency has substantially failed to meet our standards. We will 
determine if good cause exists. Some of the factors relevant to good 
cause are:
    (a) Disasters such as fire, flood, or civil disorder, that--
    (1) Require the diversion of significant personnel normally assigned 
to the disability determination function, or
    (2) Destroyed or delayed access to significant records needed to 
make accurate disability determinations;
    (b) Strikes of State agency staff or other government or private 
personnel necessary to the performance of the disability determination 
function;
    (c) Sudden and unanticipated workload changes which result from 
changes in Federal law, regulations, or written guidelines, systems 
modification or systems malfunctions, or rapid, unpredictable caseload 
growth for a 6-month period or longer.

[56 FR 11024, Mar. 14, 1991]



Sec. 416.1075  Finding of substantial failure.

    A finding of substantial failure with respect to a State may not be 
made unless and until the State is afforded an opportunity for a 
hearing.

                          Hearings and Appeals



Sec. 416.1080  Notice of right to hearing on proposed finding of
substantial failure.

    If, following the mandatory performance support period and the 3-
month adjustment period, a State agency again falls below two of three 
threshold levels (one being performance accuracy) in two consecutive 
quarters in the succeeding 12 months, we will notify the State in 
writing that we will find that the State agency has substantially failed 
to meet our standards unless the State submits a written request for a 
hearing with the Department of Health and Human Services' Departmental 
Appeals Board within 30 days after receiving the notice. The notice will 
identify the threshold levels that were not met by the State agency, the 
period during which the thresholds were not met, and the accuracy and 
processing time levels attained by the State agency during this period. 
If a hearing is not requested, the State agency will be found to have 
substantially failed to meet our standards, and we will implement our 
plans to assume the disability determination function.

[56 FR 11024, Mar. 14, 1991]



Sec. 416.1081  Disputes on matters other than substantial failure.

    Disputes concerning monetary disallowances will be resolved in 
proceedings before the Department of Health and Human Services, 
Departmental Appeals Board if the issue cannot be resolved between us 
and the State. Disputes other than monetary disallowances will be 
resolved through an appeal to the Commissioner of Social Security, who 
will make the final decision. (See Sec. 416.1027.)

[56 FR 11024, Mar. 14, 1991]



Sec. 416.1082  Who conducts the hearings.

    If a hearing is required, it will be conducted by the Department of 
Health and Human Services' Departmental Appeals Board (the Board).

[46 FR 29211, May 29, 1981, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.1083  Hearings and appeals process.

    The rules for hearings and appeals before the Board are provided in 
45 CFR part 16. A notice under Sec. 416.1080 of this subpart will be 
considered a ``final written decision'' for purposes of Board review.

[[Page 993]]

             Assumption of Disability Determination Function



Sec. 416.1090  Assumption when we make a finding of substantial
failure.

    (a) Notice to State. When we find that substantial failure exists, 
we will notify the State in writing that we will assume responsibility 
for performing the disability determination function from the State 
agency, whether the assumption will be partial or complete, and the date 
on which the assumption will be effective.
    (b) Effective date of assumption. The date of any partial or 
complete assumption of the disability determination function from a 
State agency may not be earlier than 180 days after our finding of 
substantial failure, and not before compliance with the requirements of 
Sec. 416.1092.



Sec. 416.1091  Assumption when State no longer wishes to perform the 
disability determination function.

    (a) Notice to the Commissioner. If a State no longer wishes to 
perform the disability determination function, it will notify us in 
writing. The notice must be from an official authorized to act for the 
State for this purpose. The State will provide an opinion from the 
State's Attorney General verifying the authority of the official who 
gave the notice.
    (b) Effective date of assumption. The State agency will continue to 
perform whatever activities of the disability determination function it 
is performing at the time the notice referred to in paragraph (a) of 
this section is given for not less than 180 days or, if later, until we 
have complied with the requirements of Sec. 416.1092. For example, if 
the State is not making disability determinations (because we previously 
assumed responsibility for making them) but is performing other 
activities related to the disability determination function at the time 
it gives notice, the State will continue to do these activities until 
the requirements of this paragraph are met. Thereafter, we will assume 
complete responsibility for performing the disability determination 
function.

[46 FR 29211, May 29, 1981, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.1092  Protection of State employees.

    (a) Hiring preference. We will develop and initiate procedures to 
implement a plan to partially or completely assume the disability 
determination function from the State agency under Sec. 416.1090 or 
Sec. 416.1091, as appropriate. Except for the State agency's 
administrator, deputy administrator, or assistant administrator (or his 
equivalent), we will give employees of the State agency who are capable 
of performing duties in the disability determination function preference 
over any other persons in filling positions with us for which they are 
qualified. We may also give a preference in hiring to the State agency's 
administrator, deputy administrator, or assistant administrator (or his 
equivalent). We will establish a system for determining the hiring 
priority among the affected State agency employees in those instances 
where we are not hiring all of them.
    (b) Determination by Secretary of Labor. We will not assume 
responsibility for performing the disability determination function from 
a State until the Secretary of Labor determines that the State has made 
fair and equitable arrangements under applicable Federal, State and 
local law to protect the interests of employees who will be displaced 
from their employment because of the assumption and who we will not 
hire.



Sec. 416.1093  Limitation on State expenditures after notice.

    The State agency may not, after it receives the notice referred to 
in Sec. 416.1090, or gives the notice referred to in Sec. 416.1091, make 
any new commitments to spend funds allocated to it for performing the 
disability determination function without the approval of the 
appropriate SSA regional commissioner. The State will make every effort 
to close out as soon as possible all existing commitments that relate to 
performing the disability determination function.



Sec. 416.1094  Final accounting by the State.

    The State will submit its final claims to us as soon as possible, 
but in no

[[Page 994]]

event later than 1 year from the effective date of our assumption of the 
disability determination function unless we grant an extension of time. 
When the final claim(s) is submitted, a final accounting will be made by 
the State of any funds paid to the State under Sec. 416.1026 which have 
not been spent or committed prior to the effective date of our 
assumption of the disability determination function. Disputes concerning 
final accounting issues which cannot be resolved between the State and 
us will be resolved in proceedings before the Grant Appeals Board as 
described in 45 CFR part 416.



                            Subpart K_Income

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 1621, 
1631, and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 1381a, 
1382, 1382a, 1382b, 1382c(f), 1382j, 1383, and 1383b); sec. 211, Pub. L. 
93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    Source: 45 FR 65547, Oct. 3, 1980, unless otherwise noted.

                                 General



Sec. 416.1100  Income and SSI eligibility.

    You are eligible for supplemental security income (SSI) benefits if 
you are an aged, blind, or disabled person who meets the requirements 
described in subpart B and who has limited income and resources. Thus, 
the amount of income you have is a major factor in deciding whether you 
are eligible for SSI benefits and the amount of your benefit. We count 
income on a monthly basis. Generally, the more income you have the less 
your benefit will be. If you have too much income, you are not eligible 
for a benefit. However, we do not count all of your income to determine 
your eligibility and benefit amount. We explain in the following 
sections how we treat your income for the SSI program. These rules apply 
to the Federal benefit and to any optional State supplement paid by us 
on behalf of a State (Sec. 416.2025) except as noted in subpart T and in 
the Federal-State agreements with individual States. While this subpart 
explains how we count income, subpart D of these regulations explains 
how we determine your benefits, including the provision that we 
generally use countable income in a prior month to determine how much 
your benefit amount will be for a month in which you are eligible 
(Sec. 416.420).

[50 FR 48573, Nov. 26, 1985]



Sec. 416.1101  Definition of terms.

    As used in this subpart--
    Calendar quarter means a period of three full calendar months 
beginning with January, April, July, or October.
    Child means someone who is not married, is not the head of a 
household, and is either under age 18 or is under age 22 and a student. 
(See Sec. 416.1856)
    Couple means an eligible individual and his or her eligible spouse.
    Current market value means the price of an item on the open market 
in your locality.
    Federal benefit rate means the monthly payment rate for an eligible 
individual or couple. It is the figure from which we substract countable 
income to find out how much your Federal SSI benefit should be. The 
Federal benefit rate does not include the rate for any State supplement 
paid by us on behalf of a State.
    Institution means an establishment which makes available some 
treatment or services beyond food and shelter to four or more persons 
who are not related to the proprietor. (See Sec. 416.201)
    Spouse means someone who lives with another person as that person's 
husband or wife. (See Sec. 416.1806)
    We, Us, or Our means the Social Security Administration.
    You or Your means a person who is applying for, or already 
receiving, SSI benefits.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48573, Nov. 26, 1985; 51 
FR 10616, Mar. 28, 1986; 60 FR 16375, Mar. 30, 1995]



Sec. 416.1102  What is income?

    Income is anything you receive in cash or in kind that you can use 
to meet your needs for food and shelter. Sometimes income also includes 
more or less than you actually receive (see Sec. 416.1110 and 
Sec. 416.1123(b)). In-kind income is not cash, but is actually food or 
shelter, or something you can use to get one of these.

[70 FR 6344, Feb. 7, 2005]

[[Page 995]]



Sec. 416.1103  What is not income?

    Some things you receive are not income because you cannot use them 
as food or shelter, or use them to obtain food or shelter. In addition, 
what you receive from the sale or exchange of your own property is not 
income; it remains a resource. The following are some items that are not 
income:
    (a) Medical care and services. Medical care and services are not 
income if they are any of the following:
    (1) Given to you free of charge or paid for directly to the provider 
by someone else;
    (2) Room and board you receive during a medical confinement;
    (3) Assistance provided in cash or in kind (including food or 
shelter) under a Federal, State, or local government program whose 
purpose is to provide medical care or medical services (including 
vocational rehabilitation);
    (4) In-kind assistance (except food or shelter) provided under a 
nongovernmental program whose purpose is to provide medical care or 
medical services;
    (5) Cash provided by any nongovernmental medical care or medical 
services program or under a health insurance policy (except cash to 
cover food or shelter) if the cash is either:
    (i) Repayment for program-approved services you have already paid 
for; or
    (ii) A payment restricted to the future purchase of a program-
approved service.

    Example: If you have paid for prescription drugs and get the money 
back from your health insurance, the money is not income.

    (6) Direct payment of your medical insurance premiums by anyone on 
your behalf.
    (7) Payments from the Department of Veterans Affairs resulting from 
unusual medical expenses.
    (b) Social services. Social services are not income if they are any 
of the following:
    (1) Assistance provided in cash or in kind (but not received in 
return for a service you perform) under any Federal, State, or local 
government program whose purpose is to provide social services including 
vocational rehabilitation (Example: Cash given you by the Department of 
Veterans Affairs to purchase aid and attendance);
    (2) In-kind assistance (except food or shelter) provided under a 
nongovernmental program whose purpose is to provide social services; or
    (3) Cash provided by a nongovernmental social services program 
(except cash to cover food or shelter) if the cash is either:
    (i) Repayment for program-approved services you already have paid 
for; or
    (ii) A payment restricted to the future purchase of a program-
approved service.

    Example: If you are unable to do your own household chores and a 
private social services agency provides you with cash to pay a homemaker 
the cash is not income.

    (c) Receipts from the sale, exchange, or replacement of a resource. 
Receipts from the sale, exchange, or replacement of a resource are not 
income but are resources that have changed their form. This includes any 
cash or in-kind item that is provided to replace or repair a resource 
(see subpart L) that has been lost, damaged, or stolen. Sections 
416.1150 and 416.1151 discuss treatment of receipts to replace or repair 
a resource following a major disaster or following some other event 
causing damage or loss of a resource.

    Example: If you sell your automobile, the money you receive is not 
income; it is another form of a resource.

    (d) Income tax refunds. Any amount refunded on income taxes you have 
already paid is not income.
    (e) Payments by credit life or credit disability insurance. Payments 
made under a credit life or credit disability insurance policy on your 
behalf are not income.

    Example: If a credit disability policy pays off the mortgage on your 
home after you become disabled in an accident, we do not consider either 
the payment or your increased equity in the home to be income.

    (f) Proceeds of a loan. Money you borrow or money you receive as 
repayment of a loan is not income. However, interest you receive on 
money you have lent is income. Buying on credit is treated as though you 
were borrowing money and what you purchase this way is not income.

[[Page 996]]

    (g) Bills paid for you. Payment of your bills by someone else 
directly to the supplier is not income. However, we count the value of 
anything you receive because of the payment if it is in-kind income as 
defined in Sec. 416.1102.

    Examples: If your daughter uses her own money to pay the grocer to 
provide you with food, the payment itself is not your income because you 
do not receive it. However, because of your daughter's payment, the 
grocer provides you with food; the food is in-kind income to you. 
Similarly, if you buy food on credit and your son later pays the bill, 
the payment to the store is not income to you, but the food is in-kind 
income to you. In this example, if your son pays for the food in a month 
after the month of purchase, we will count the in-kind income to you in 
the month in which he pays the bill. On the other hand, if your brother 
pays a lawn service to mow your grass, the payment is not income to you 
because the mowing cannot be used to meet your needs for food or 
shelter. Therefore, it is not in-kind income as defined in 
Sec. 416.1102.

    (h) Replacement of income you have already received. If income is 
lost, destroyed, or stolen and you receive a replacement, the 
replacement is not income.

    Example: If your paycheck is stolen and you get a replacement check, 
we count the first check as income. The replacement check is not income.

    (i) Weatherization assistance. Weatherization assistance (Examples: 
Insulation, storm doors and windows) is not income.
    (j) Receipt of certain noncash items. Any item you receive (except 
shelter as defined in Sec. 416.1130 or food) which would be an excluded 
nonliquid resource (as described in subpart L of this part) if you kept 
it, is not income.

    Example 1: A community takes up a collection to buy you a specially 
equipped van, which is your only vehicle. The value of this gift is not 
income because the van does not provide you with food or shelter and 
will become an excluded nonliquid resource under Sec. 416.1218 in the 
month following the month of receipt.
    Example 2: You inherit a house which is your principal place of 
residence. The value of this inheritance is income because the house 
provides you with shelter and shelter is income. However, we value the 
house under the rule in Sec. 416.1140.

[45 FR 65547, Oct. 3, 1980, as amended at 49 FR 48038, Dec. 10, 1984; 57 
FR 53850, Nov. 13, 1992; 59 FR 33907, July 1, 1994; 70 FR 6344, Feb. 7, 
2005]



Sec. 416.1104  Income we count.

    We have described generally what income is and is not for SSI 
purposes (Sec. 416.1103). There are different types of income, earned 
and unearned, and we have rules for counting each. The earned income 
rules are described in Secs. 416.1110 through 416.1112 and the unearned 
income rules are described in Secs. 416.1120 through 416.1124. One type 
of unearned income is in-kind support and maintenance (food or shelter). 
The way we value it depends on your living arrangement. These rules are 
described in Secs. 416.1130 through 416.1148 of this part. In some 
situations we must consider the income of certain people with whom you 
live as available to you and part of your income. These rules are 
described in Secs. 416.1160 through 416.1169. We use all of these rules 
to determine the amount of your countable income--the amount that is 
left after we subtract what is not income or is not counted.

[45 FR 65547, Oct. 3, 1980, as amended at 65 FR 16815, Mar. 30, 2000; 70 
FR 6345, Feb. 7, 2005]

                              Earned Income



Sec. 416.1110  What is earned income.

    Earned income may be in cash or in kind. We may include more of your 
earned income than you actually receive. We include more than you 
actually receive if amounts are withheld from earned income because of a 
garnishment or to pay a debt or other legal obligation, or to make any 
other payments. Earned income consists of the following types of 
payments:
    (a) Wages--(1) Wages paid in cash--general. Wages are what you 
receive (before any deductions) for working as someone else's employee. 
Wages are the same for SSI purposes as for the social security 
retirement program's earnings test. (See Sec. 404.429(c) of this 
chapter.) Wages include salaries, commissions, bonuses, severance pay, 
and any other special payments received because of your employment.

[[Page 997]]

    (2) Wages paid in cash to uniformed service members. Wages paid in 
cash to uniformed service members include basic pay, some types of 
special pay, and some types of allowances. Allowances for on-base 
housing or privatized military housing are unearned income in the form 
of in-kind support and maintenance. Cash allowances paid to uniformed 
service members for private housing are wages.
    (3) Wages paid in kind. Wages may also include the value of food, 
clothing, shelter, or other items provided instead of cash. We refer to 
this type of income as in-kind earned income. However, if you are a 
domestic or agricultural worker, the law requires us to treat your in-
kind pay as unearned income.
    (b) Net earnings from self-employment. Net earnings from self-
employment are your gross income from any trade or business that you 
operate, less allowable deductions for that trade or business. Net 
earnings also include your share of profit or loss in any partnership to 
which you belong. For taxable years beginning before January 1, 2001, 
net earnings from self-employment under the SSI program are the same net 
earnings that we would count under the social security retirement 
insurance program and that you would report on your Federal income tax 
return. (See Sec. 404.1080 of this chapter.) For taxable years beginning 
on or after January 1, 2001, net earnings from self-employment under the 
SSI program will also include the earnings of statutory employees. In 
addition, for SSI purposes only, we consider statutory employees to be 
self-employed individuals. Statutory employees are agent or commission 
drivers, certain full-time life insurance salespersons, home workers, 
and traveling or city salespersons. (See Sec. 404.1008 of this chapter 
for a more detailed description of these types of employees).
    (c) Refunds of Federal income taxes and advance payments by 
employers made in accordance with the earned income credit provisions of 
the Internal Revenue Code. Refunds on account of earned income credits 
are payments made to you under the provisions of section 32 of the 
Internal Revenue Code of 1986, as amended. These refunds may be greater 
than taxes you have paid. You may receive earned income tax credit 
payments along with any other Federal income tax refund you receive 
because of overpayment of your income tax, (Federal income tax refunds 
made on the basis of taxes you have already paid are not income to you 
as stated in Sec. 416.1103(d).) Advance payments of earned income tax 
credits are made by your employer under the provisions of section 3507 
of the same code. You can receive earned income tax credit payments only 
if you meet certain requirements of family composition and income 
limits.
    (d) Payments for services performed in a sheltered workshop or work 
activities center. Payments for services performed in a sheltered 
workshop or work activities center are what you receive for 
participating in a program designed to help you become self-supporting.
    (e) Certain royalties and honoraria. Royalties that are earned 
income are payments to an individual in connection with any publication 
of the work of the individual. (See Sec. 416.1110(b) if you receive a 
royalty as part of your trade or business. See Sec. 416.1121(c) if you 
receive another type of royalty.) Honoraria that are earned income are 
those portions of payments, such as an honorary payment, reward, or 
donation, received in consideration of services rendered for which no 
payment can be enforced by law. (See Sec. 416.1120 if you receive 
another type of honorarium.)

[45 FR 65547, Oct. 3, 1980, as amended at 48 FR 23179, May 24, 1983; 50 
FR 48574, Nov. 26, 1985; 56 FR 3212, Jan. 29, 1991; 59 FR 43471, Aug. 
24, 1994; 75 FR 1273, Jan. 11, 2010; 75 FR 54287, Sept. 7, 2010]



Sec. 416.1111  How we count earned income.

    (a) Wages. We count wages at the earliest of the following points: 
when you receive them or when they are credited to your account or set 
aside for your use. We determine wages for each month. We count wages 
for services performed as a member of a uniformed service (as defined in 
Sec. 404.1330 of this chapter) as received in the month in which they 
are earned.

[[Page 998]]

    (b) Net earnings from self-employment. We count net earnings from 
self-employment on a taxable year basis. However, we divide the total of 
these earnings equally among the months in the taxable year to get your 
earnings for each month. For example, if your net earnings for a taxable 
year are $2,400, we consider that you received $200 in each month. If 
you have net losses from self-employment, we divide them over the 
taxable year in the same way, and we deduct them only from your other 
earned income.
    (c) Payments for services in a sheltered workshop or activities 
center. We count payments you receive for services performed in a 
sheltered workshop or work activities center when you receive them or 
when they are set aside for your use. We determine the amount of the 
payments for each calendar quarter.
    (d) In-kind earned income. We use the current market value of in-
kind earned income for SSI purposes. (See Sec. 416.1101 for a definition 
of current market value.) If you receive an item that is not fully paid 
for and are responsible for the unpaid balance, only the paid-up value 
is income to you. (See the example in Sec. 416.1123(c)).
    (e) Royalties and honoraria. We count payments of royalties to you 
in connection with any publication of your work, and honoraria, to the 
extent received for services rendered, at the earliest of the following 
points: when you receive them, when they are credited to your account, 
or when they are set aside for your use. (See Sec. 416.1111(b) if you 
receive royalties as part of your trade or business.)

[45 FR 65547, Oct. 3, 1980, as amended at 48 FR 23179, May 24, 1983; 48 
FR 30357, July 1, 1983; 50 FR 48574, Nov. 26, 1985; 58 FR 63889, Dec. 3, 
1993; 59 FR 43471, Aug. 24, 1994; 71 FR 45378, Aug. 9, 2006]



Sec. 416.1112  Earned income we do not count.

    (a) General. While we must know the source and amount of all of your 
earned income for SSI, we do not count all of it to determine your 
eligibility and benefit amount. We first exclude income as authorized by 
other Federal laws (see paragraph (b) of this section). Then we apply 
the other exclusions in the order listed in paragraph (c) of this 
section to the rest of your income in the month. We never reduce your 
earned income below zero or apply any unused earned income exclusion to 
unearned income.
    (b) Other Federal laws. Some Federal laws other than the Social 
Security Act provide that we cannot count some of your earned income for 
SSI purposes. We list the laws and exclusions in the appendix to this 
subpart which we update periodically.
    (c) Other earned income we do not count. We do not count as earned 
income--
    (1) Any refund of Federal income taxes you receive under section 32 
of the Internal Revenue Code (relating to earned income tax credit) and 
any payment you receive from an employer under section 3507 of the 
Internal Revenue Code (relating to advance payment of earned income tax 
credit);
    (2) The first $30 of earned income received in a calendar quarter if 
you receive it infrequently or irregularly. We consider income to be 
received infrequently if you receive it only once during a calendar 
quarter from a single source and you did not receive it in the month 
immediately preceding that month or in the month immediately subsequent 
to that month. We consider income to be received irregularly if you 
cannot reasonably expect to receive it.
    (3) If you are under age 22 and a student who is regularly attending 
school as described in Sec. 416.1861:
    (i) For earned income beginning January 1, 2002, monthly and yearly 
maximum amounts that are the larger of:
    (A) The monthly and yearly amounts for the previous year, or
    (B) Monthly and yearly maximum amounts increased for changes in the 
cost-of-living, calculated in the same manner as the Federal benefit 
rates described in Sec. 416.405, except that we will use the calendar 
year 2001 amounts as the base amounts and will round the resulting 
amount to the next higher multiple of $10 where such amount is a 
multiple of $5 but not of $10 and to the nearest multiple of $10 in any 
other case.

[[Page 999]]

    (ii) For earned income before January 1, 2002, the amounts indicated 
in Table 1 of this section.

                                 Table 1
------------------------------------------------------------------------
                                                               But not
                                                              more than
                  For months                     Up to per       in a
                                                   month       calendar
                                                                 year
------------------------------------------------------------------------
In calendar years before 2001.................         $400       $1,620
In calendar year 2001.........................        1,290        5,200
------------------------------------------------------------------------

    (4) Any portion of the $20 monthly exclusion in Sec. 416.1124(c)(10) 
which has not been excluded from your unearned income in that same 
month;
    (5) $65 of earned income in a month;
    (6) Earned income you use to pay impairment-related work expenses 
described in Sec. 416.976, if you are disabled (but not blind) and under 
age 65 or you are disabled (but not blind) and received SSI as a 
disabled individual (or received disability payments under a former 
State plan) for the month before you reached age 65.
    (i) For periods prior to December 1, 1990, you must be able, 
however, to establish your initial eligibility for Federal benefits 
without the use of the impairment-related work expense exclusion. Once 
you establish your initial eligibility without the use of the 
impairment-related work expense exclusion, the exclusion applies for 
determining your eligibility for all subsequent consecutive months for 
which you are eligible for regular SSI benefits, federally administered 
optional State supplementary payments, special SSI cash benefits or 
special SSI eligibility status. If, in a subsequent month, you are not 
eligible for any of these benefits, you cannot reestablish your 
eligibility for Federal SSI benefits or federally administered optional 
State supplementary payments before December 1, 1990, using the 
impairment-related work expense exclusion.
    (ii) For periods after November 30, 1990, you may also use the 
impairment-related work expense exclusion to establish initial 
eligibility and reeligibility following a month in which you were not 
eligible for regular SSI benefits, a federally administered optional 
State supplementary payment, special SSI cash benefits or special SSI 
eligibility status.
    (7) One-half of remaining earned income in a month;
    (8) Earned income used to meet any expenses reasonably attributable 
to the earning of the income if you are blind and under age 65 or if you 
receive SSI as a blind person for the month before you reach age 65. (We 
consider that you ``reach'' a certain age on the day before that 
particular birthday.);
    (9) Any earned income you receive and use to fulfill an approved 
plan to achieve self-support if you are blind or disabled and under age 
65 or blind or disabled and received SSI as a blind or disabled person 
for the month before you reached age 65. See Secs. 416.1180 through 
416.1182 for an explanation of plans to achieve self-support and for the 
rules on when this exclusion applies; and
    (10) Payments made to participants in AmeriCorps State and National 
and AmeriCorps National Civilian Community Corps (NCCC). Payments to 
participants in AmeriCorps State and National and AmeriCorps NCCC may be 
made in cash or in-kind and may be made directly to the AmeriCorps 
participant or on the AmeriCorps participant's behalf. These payments 
include, but are not limited to: Living allowance payments, stipends, 
educational awards, and payments in lieu of educational awards.

[45 FR 65547, Oct. 3, 1980, as amended at 48 FR 21943, May 16, 1983; 50 
FR 48574, Nov. 26, 1985; 58 FR 63889, Dec. 3, 1993; 59 FR 41405, Aug. 
12, 1994; 65 FR 82912, Dec. 29, 2000; 71 FR 45378, Aug. 9, 2006; 71 FR 
66866, Nov. 17, 2006; 75 FR 54287, Sept. 7, 2010]

                             Unearned Income



Sec. 416.1120  What is unearned income.

    Unearned income is all income that is not earned income. We describe 
some of the types of unearned income in Sec. 416.1121. We consider all 
of these items as unearned income, whether you receive them in cash or 
in kind.



Sec. 416.1121  Types of unearned income.

    Some types of unearned income are--
    (a) Annuities, pensions, and other periodic payments. This unearned 
income is usually related to prior work or service. It includes, for 
example, private

[[Page 1000]]

pensions, social security benefits, disability benefits, veterans 
benefits, worker's compensation, railroad retirement annuities and 
unemployment insurance benefits.
    (b) Alimony and support payments. For SSI purposes, alimony and 
support payments are cash or in-kind contributions to meet some or all 
of a person's needs for food or shelter. Support payments may be made 
voluntarily or because of a court order. Alimony (sometimes called 
maintenance) is an allowance made by a court from the funds of one 
spouse to the other spouse in connection with a suit for separation or 
divorce.
    (c) Dividends, interest, and certain royalties. Dividends and 
interest are returns on capital investments, such as stocks, bonds, or 
savings accounts. Royalties are compensation paid to the owner for the 
use of property, usually copyrighted material or natural resources such 
as mines, oil wells, or timber tracts. Royalty compensation may be 
expressed as a percentage of receipts from using the property or as an 
amount per unit produced. (See Sec. 416.1110(b) if you receive royalties 
as part of your trade or business and Sec. 416.1110(e) if you receive 
royalties in connection with the publication of your work.)
    (d) Rents. Rents are payments you receive for the use of real or 
personal property such as land, housing, or machinery. We deduct from 
rental payments your ordinary and necessary expenses in the same taxable 
year. These include only those expenses necessary for the production or 
collection of the rental income and they must be deducted when paid, not 
when they are incurred. Some examples of deductible expenses are 
interest on debts, State and local taxes on real and personal property 
and on motor fuels, general sales taxes, and expenses of managing or 
maintaining the property. (Sections 163, 164, and 212 of the Internal 
Revenue Code of 1954 and related regulations explain this in more 
detail.) We do not consider depreciation or depletion of property a 
deductible expense. (See Sec. 416.1110(b) for rules on rental income 
that is earned from self-employment. For example, you may be in the 
business of renting properties.)
    (e) Death benefits. We count payments you get which were occasioned 
by the death of another person except for the amount of such payments 
that you spend on the deceased person's last illness and burial 
expenses. Last illness and burial expenses include related hospital and 
medical expenses, funeral, burial plot and interment expenses, and other 
related costs.

    Example: If you receive $2,000 from your uncle's life insurance 
policy and you spend $900 on his last illness and burial expenses, the 
balance, $1,100, is unearned income. If you spend the entire $2,000 for 
the last illness and burial, there is no unearned income.

    (f) Prizes and awards. A prize is generally something you win in a 
contest, lottery or game of chance. An award is usually something you 
receive as the result of a decision by a court, board of arbitration, or 
the like.
    (g) Gifts and inheritances. A gift is something you receive which is 
not repayment to you for goods or services you provided and which is not 
given to you because of a legal obligation on the giver's part. An 
inheritance is something that comes to you as a result of someone's 
death. It can be in cash or in kind, including any right in real or 
personal property. Gifts and inheritances occasioned by the death of 
another person, to the extent that they are used to pay the expenses of 
the deceased's last illness and burial, as defined in paragraph (e) of 
this section, are not considered income.
    (h) Support and maintenance in kind. This is food, or shelter 
furnished to you. Our rules for valuing this income depend on your 
living arrangement. We use one rule if you are living in the household 
of a person who provides you with both food and shelter. We use 
different rules for other situations where you receive food or shelter. 
We discuss all of the rules in Secs. 416.1130 through 416.1147.

[45 FR 65547, Oct. 3, 1980, as amended at 56 FR 36000, July 30, 1991; 59 
FR 43471, Aug. 24, 1994; 70 FR 6345, Feb. 7, 2005]



Sec. 416.1123  How we count unearned income.

    (a) When we count unearned income. We count unearned income at the 
earliest of the following points: when you receive it or when it is 
credited to your

[[Page 1001]]

account or set aside for your use. We determine your unearned income for 
each month. We describe exceptions to the rule on how we count unearned 
income in paragraphs (d), (e) and (f) of this section.
    (b) Amount considered as income. We may include more or less of your 
unearned income than you actually receive.
    (1) We include more than you actually receive where another benefit 
payment (such as a social security insurance benefit) (see 
Sec. 416.1121) has been reduced to recover a previous overpayment. You 
are repaying a legal obligation through the withholding of portions of 
your benefit amount, and the amount of the debt reduction is also part 
of your unearned income. Exception: We do not include more than you 
actually receive if you received both SSI benefits and the other benefit 
at the time the overpayment of the other benefit occurred and the 
overpaid amount was included in figuring your SSI benefit at that time.

    Example: Joe, an SSI beneficiary, is also entitled to social 
security insurance benefits in the amount of $200 per month. However, 
because of a prior overpayment of his social security insurance 
benefits, $20 per month is being withheld to recover the overpayment. In 
figuring the amount of his SSI benefits, the full monthly social 
security insurance benefit of $200 is included in Joe's unearned income. 
However, if Joe was receiving both benefits when the overpayment of the 
social security insurance benefit occurred and we then included the 
overpaid amount as income, we will compute his SSI benefit on the basis 
of receiving $180 as a social security insurance benefit. This is 
because we recognize that we computed his SSI benefit on the basis of 
the higher amount when he was overpaid.

    (2) We also include more than you actually receive if amounts are 
withheld from unearned income because of a garnishment, or to pay a debt 
or other legal obligation, or to make any other payment such as payment 
of your Medicare premiums.
    (3) We include less than you actually receive if part of the payment 
is for an expense you had in getting the payment. For example, if you 
are paid for damages you receive in an accident, we subtract from the 
amount of the payment your medical, legal, or other expenses connected 
with the accident. If you receive a retroactive check from a benefit 
program other than SSI, legal fees connected with the claim are 
subtracted. We do not subtract from any taxable unearned income the part 
you have to use to pay personal income taxes. The payment of taxes is 
not an expense you have in getting income.
    (4) In certain situations, we may consider someone else's income to 
be available to you, whether or not it actually is. (For the rules on 
this process, called deeming, see Secs. 416.1160 through 416.1169.)
    (c) In-kind income. We use the current market value (defined in 
Sec. 416.1101) of in-kind unearned income to determine its value for SSI 
purposes. We describe some exceptions to this rule in Secs. 416.1131 
through 416.1147. If you receive an item that is not fully paid for and 
are responsible for the balance, only the paid-up value is income to 
you.

    Example: You are given a $1500 automobile but must pay the $1000 due 
on it. You are receiving income of $500.

    (d) Retroactive monthly social security benefits. We count 
retroactive monthly social security benefits according to the rule in 
paragraph (d)(1) of this section, unless the exception in paragraph 
(d)(2) of this section applies:
    (1) Periods for which SSI payments have been made. When you file an 
application for social security benefits and retroactive monthly social 
security benefits are payable on that application for a period for which 
you also received SSI payments (including federally-administered State 
supplementary payments), we count your retroactive monthly social 
security benefits as unearned income received in that period. Rather 
than reducing your SSI payments in months prior to your receipt of a 
retroactive monthly social security benefit, we will reduce the 
retroactive social security benefits by an amount equal to the amount of 
SSI payments (including federally-administered State supplementary 
payments) that we would not have paid to you if your social security 
benefits had been paid when regularly due rather than retroactively (see 
Sec. 404.408b(b)). If a balance is due you from your retroactive

[[Page 1002]]

social security benefits after this reduction, for SSI purposes we will 
not count the balance as unearned income in a subsequent month in which 
you receive it. This is because your social security benefits were used 
to determine the amount of the reduction. This exception to the unearned 
income counting rule does not apply to any monthly social security 
benefits for a period for which you did not receive SSI.
    (2) Social security disability benefits where drug addiction or 
alcoholism is a contributing factor material to the determination of 
disability. If your retroactive social security benefits must be paid in 
installments because of the limitations on paying lump sum retroactive 
benefits to disabled recipients whose drug addiction or alcoholism is a 
contributing factor material to the determination of disability as 
described in Sec. 404.480, we will count the total of such retroactive 
social security benefits as unearned income in the first month such 
installments are paid, except to the extent the rule in paragraph (d)(1) 
of this section would provide that such benefits not be counted.
    (e) Certain veterans benefits. (1) If you receive a veterans benefit 
that includes an amount paid to you because of a dependent, we do not 
count as your unearned income the amount paid to you because of the 
dependent.
    (2) If you are a dependent of an individual who receives a veterans 
benefit and a portion of the benefit is attributable to you as a 
dependent, we count the amount attributable to you as your unearned cash 
income if--
    (i) You reside with the individual who receives the veterans 
benefit, or
    (ii) You receive your own separate payment from the Department of 
Veterans Affairs.
    (f) Uniformed service compensation. We count compensation for 
services performed as a member of a uniformed service (as defined in 
Sec. 404.1330 of this chapter) as received in the month in which it is 
earned.

(Reporting and recordkeeping requirements in paragraph (b) have been 
approved by the Office of Management and Budget under control number 
0960-0128)

[45 FR 65547, Oct. 3, 1980, as amended at 47 FR 4988, Feb. 3, 1982; 47 
FR 13794, Apr. 1, 1982; 50 FR 48574, Nov. 26, 1985; 55 FR 20599, May 18, 
1990; 56 FR 3212, Jan. 29, 1991; 59 FR 59364, Nov. 17, 1994; 60 FR 8152, 
Feb. 10, 1995; 71 FR 45378, Aug. 9, 2006]



Sec. 416.1124  Unearned income we do not count.

    (a) General. While we must know the source and amount of all of your 
unearned income for SSI, we do not count all of it to determine your 
eligibility and benefit amount. We first exclude income as authorized by 
other Federal laws (see paragraph (b) of this section). Then we apply 
the other exclusions in the order listed in paragraph (c) of this 
section to the rest of your unearned income in the month. We never 
reduce your unearned income below zero or apply any unused unearned 
income exclusion to earned income except for the $20 general exclusion 
described in paragraph (c)(12) of this section.
    (b) Other Federal laws. Some Federal laws other than the Social 
Security Act provide that we cannot count some of your unearned income 
for SSI purposes. We list the laws and the exclusions in the appendix to 
this subpart which we update periodically.
    (c) Other unearned income we do not count. We do not count as 
unearned income--
    (1) Any public agency's refund of taxes on real property or food;
    (2) Assistance based on need which is wholly funded by a State or 
one of its political subdivisions. (For purposes of this rule, an Indian 
tribe is considered a political subdivision of a State.) Assistance is 
based on need when it is provided under a program which uses the amount 
of your income as one factor to determine your eligibility. Assistance 
based on need includes State supplementation of Federal SSI benefits as 
defined in subpart T of this part but does not include payments under a 
Federal/State grant program such as

[[Page 1003]]

Temporary Assistance for Needy Families under title IV-A of the Social 
Security Act;
    (3) Any portion of a grant, scholarship, fellowship, or gift used or 
set aside for paying tuition, fees, or other necessary educational 
expenses. However, we do count any portion set aside or actually used 
for food or shelter;
    (4) Food which you or your spouse raise if it is consumed by you or 
your household;
    (5) Assistance received under the Disaster Relief and Emergency 
Assistance Act and assistance provided under any Federal statute because 
of a catastrophe which the President of the United States declares to be 
a major disaster. See Sec. 416.1150 for a more detailed discussion of 
this assistance, particularly the treatment of in-kind support and 
maintenance received as the result of a major disaster;
    (6) The first $60 of unearned income received in a calendar quarter 
if you receive it infrequently or irregularly. We consider income to be 
received infrequently if you receive it only once during a calendar 
quarter from a single source and you did not receive it in the month 
immediately preceding that month or in the month immediately subsequent 
to that month. We consider income to be received irregularly if you 
cannot reasonably expect to receive it.
    (7) Alaska Longevity Bonus payments made to an individual who is a 
resident of Alaska and who, prior to October 1, 1985: met the 25-year 
residency requirement for receipt of such payments in effect prior to 
January 1, 1983; and was eligible for SSI;
    (8) Payments for providing foster care to an ineligible child who 
was placed in your home by a public or private nonprofit child placement 
or child care agency;
    (9) Any interest earned on excluded burial funds and any 
appreciation in the value of an excluded burial arrangement which are 
left to accumulate and become a part of the separate burial fund. (See 
Sec. 416.1231 for an explanation of the exclusion of burial assets.) 
This exclusion from income applies to interest earned on burial funds or 
appreciation in the value of excluded burial arrangements which occur 
beginning November 1, 1982, or the date you first become eligible for 
SSI benefits, if later;
    (10) Certain support and maintenance assistance as described in 
Sec. 416.1157;
    (11) One-third of support payments made to or for you by an absent 
parent if you are a child;
    (12) The first $20 of any unearned income in a month other than 
income in the form of in-kind support and maintenance received in the 
household of another (see Sec. 416.1131) and income based on need. 
Income based on need is a benefit that uses financial need as measured 
by your income as a factor to determine your eligibility. The $20 
exclusion does not apply to a benefit based on need that is totally or 
partially funded by the Federal government or by a nongovernmental 
agency. However, assistance which is based on need and funded wholly by 
a State or one of its political subdivisions is excluded totally from 
income as described in Sec. 416.1124(c)(2). If you have less than $20 of 
unearned income in a month and you have earned income in that month, we 
will use the rest of the $20 exclusion to reduce the amount of your 
countable earned income;
    (13) Any unearned income you receive and use to fulfill an approved 
plan to achieve self-support if you are blind or disabled and under age 
65 or blind or disabled and received SSI as a blind or disabled person 
for the month before you reached age 65. See Secs. 416.1180 through 
416.1182 for an explanation of plans to achieve self-support and for the 
rules on when this exclusion applies;
    (14) The value of any assistance paid with respect to a dwelling 
unit under--
    (i) The United States Housing Act of 1937;
    (ii) The National Housing Act;
    (iii) Section 101 of the Housing and Urban Development Act of 1965;
    (iv) Title V of the Housing Act of 1949; or
    (v) Section 202(h) of the Housing Act of 1959;
    (15) Any interest accrued on and left to accumulate as part of the 
value of an excluded burial space purchase agreement. This exclusion 
from income applies to interest accrued on or after April 1, 1990;

[[Page 1004]]

    (16) The value of any commercial transportation ticket, for travel 
by you or your spouse among the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands, which is received as a gift by you or 
your spouse and is not converted to cash. If such a ticket is converted 
to cash, the cash you receive is income in the month you receive the 
cash;
    (17) Payments received by you from a fund established by a State to 
aid victims of crime;
    (18) Relocation assistance provided you by a State or local 
government that is comparable to assistance provided under title II of 
the Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970 that is subject to the treatment required by section 216 of 
that Act;
    (19) Special pay received from one of the uniformed services 
pursuant to 37 U.S.C. 310;
    (20) Interest or other earnings on a dedicated account which is 
excluded from resources. (See Sec. 416.1247);
    (21) Gifts from an organization as described in section 501(c)(3) of 
the Internal Revenue Code of 1986 which is exempt from taxation under 
section 501(a) of such Code, to, or for the benefit of, an individual 
who has not attained 18 years of age and who has a life-threatening 
condition. We will exclude any in-kind gift that is not converted to 
cash and cash gifts to the extent that the total gifts excluded pursuant 
to this paragraph do not exceed $2000 in any calendar year. In-kind 
gifts converted to cash are considered under income counting rules in 
the month of conversion;
    (22) Interest and dividend income from a countable resource or from 
a resource excluded under a Federal statute other than section 1613(a) 
of the Social Security Act; and
    (23) AmeriCorps State and National and AmeriCorps National Civilian 
Community Corps cash or in-kind payments to AmeriCorps participants or 
on AmeriCorps participants' behalf. These include, but are not limited 
to: Food and shelter, and clothing allowances;
    (24) Any annuity paid by a State to a person (or his or her spouse) 
based on the State's determination that the person is:
    (i) A veteran (as defined in 38 U.S.C. 101); and
    (ii) Blind, disabled, or aged.

[45 FR 65547, Oct. 3, 1980, as amended at 47 FR 55213, Dec. 8, 1982; 48 
FR 21943, May 16, 1983; 48 FR 33258, July 21, 1983; 48 FR 57127, Dec. 
28, 1983; 50 FR 48574, Nov. 26, 1985; 51 FR 39523, Oct. 29, 1986; 54 FR 
19164, May 4, 1989; 55 FR 28378, July 11, 1990; 57 FR 1384, Jan. 14, 
1992; 57 FR 53850, Nov. 13, 1992; 58 FR 63888, Dec. 3, 1993; 61 FR 1712, 
Jan. 23, 1996; 61 FR 49964, Sept. 24, 1996; 61 FR 67207, Dec. 20, 1996; 
70 FR 6345, Feb. 7, 2005; 70 FR 41137, July 18, 2005; 71 FR 45378, Aug. 
9, 2006; 75 FR 7554, Feb. 22, 2010; 75 FR 54287, Sept. 7, 2010]

                     In-Kind Support and Maintenance



Sec. 416.1130  Introduction.

    (a) General. Both earned income and unearned income include items 
received in kind (Sec. 416.1102). Generally, we value in-kind items at 
their current market value and we apply the various exclusions for both 
earned and unearned income. However, we have special rules for valuing 
food or shelter that is received as unearned income (in-kind support and 
maintenance). This section and the ones that follow discuss these rules. 
In these sections (Secs. 416.1130 through 416.1148) we use the in-kind 
support and maintenance you receive in the month as described in 
Sec. 416.420 to determine your SSI benefit. We value the in-kind support 
and maintenance using the Federal benefit rate for the month in which 
you receive it. Exception: For the first 2 months for which a cost-of-
living adjustment applies, we value in-kind support and maintenance you 
receive using the VTR or PMV based on the Federal benefit rate as 
increased by the cost-of-living adjustment.

    Example: Mr. Jones receives an SSI benefit which is computed by 
subtracting one-third from the Federal benefit rate. This one-third 
represents the value of the income he receives because he lives in the 
household of a son who provides both food and shelter (in-kind support 
and maintenance). In January, we increase his SSI benefit because of a 
cost-of-living adjustment. We base his SSI payment for that month on the 
food and shelter he received from his son two months earlier in 
November. In determining the value of

[[Page 1005]]

that food and shelter he received in November, we use the Federal 
benefit rate for January.

    (b) How we define in-kind support and maintenance. In-kind support 
and maintenance means any food or shelter that is given to you or that 
you receive because someone else pays for it. Shelter includes room, 
rent, mortgage payments, real property taxes, heating fuel, gas, 
electricity, water, sewerage, and garbage collection services. You are 
not receiving in-kind support and maintenance in the form of room or 
rent if you are paying the amount charged under a business arrangement. 
A business arrangement exists when the amount of monthly rent required 
to be paid equals the current market rental value (see Sec. 416.1101). 
Exception: In the States in the Seventh Circuit (Illinois, Indiana, and 
Wisconsin), a business arrangement exists when the amount of monthly 
rent required to be paid equals or exceeds the presumed maximum value 
described in Sec. 416.1140(a)(1). In those States, if the required 
amount of rent is less than the presumed maximum value, we will impute 
as in-kind support and maintenance, the difference between the required 
amount of rent and either the presumed maximum value or the current 
market value, whichever is less. In addition, cash payments to uniformed 
service members as allowances for on-base housing or privatized military 
housing are in-kind support and maintenance.
    (c) How we value in-kind support and maintenance. Essentially, we 
have two rules for valuing the in-kind support and maintenance which we 
must count. The one-third reduction rule applies if you are living in 
the household of a person who provides you with both food and shelter 
(Secs. 416.1131 through 416.1133). The presumed value rule applies in 
all other situations where you are receiving countable in-kind support 
and maintenance (Secs. 416.1140 through 416.1145). If certain conditions 
exist, we do not count in-kind support and maintenance. These are 
discussed in Secs. 416.1141 through 416.1145.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48574, Nov. 26, 1985; 51 
FR 13488, Apr. 21, 1986; 60 FR 16375, Mar. 30, 1995; 63 FR 33546, June 
19, 1998; 70 FR 6345, Feb. 7, 2005; 75 FR 54287, Sept. 7, 2010]



Sec. 416.1131  The one-third reduction rule.

    (a) What the rule is. Instead of determining the actual dollar value 
of in-kind support and maintenance, we count one-third of the Federal 
benefit rate as additional income if you (or you and your eligible 
spouse)--
    (1) Live in another person's household (see Sec. 416.1132) for a 
full calendar month except for temporary absences (see Sec. 416.1149), 
and
    (2) Receive both food and shelter from the person in whose household 
you are living. (If you do not receive both food and shelter from this 
person, see Sec. 416.1140.)
    (b) How we apply the one-third reduction rule. The one-third 
reduction applies in full or not at all. When you are living in another 
person's household, and the one-third reduction rule applies, we do not 
apply any income exclusions to the reduction amount. However, we do 
apply appropriate exclusions to any other earned or unearned income you 
receive. If you have an eligible spouse we apply the rules described in 
Sec. 416.1147.
    (c) If you receive other support and maintenance. If the one-third 
reduction rule applies to you, we do not count any other in-kind support 
and maintenance you receive.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48574, Nov. 26, 1985]



Sec. 416.1132  What we mean by ``living in another person's household''.

    (a) Household. For purposes of this subpart, we consider a household 
to be a personal place of residence. A commercial establishment such as 
a hotel or boarding house is not a household but a household can exist 
within a commercial establishment. If you live in a commercial 
establishment, we do not automatically consider you to be a member of 
the household of the proprietor. You may, however, live in the

[[Page 1006]]

household of a roomer or boarder within the hotel or boarding house. An 
institution is not a household and a household cannot exist within an 
institution. (Institution is defined in Sec. 416.1101.)
    (b) Another person's household. You live in another person's 
household if paragraph (c) of this section does not apply and if the 
person who supplies the support and maintenance lives in the same 
household and is not--
    (1) Your spouse (as defined in Sec. 416.1806);
    (2) A minor child; or
    (3) An ineligible person (your spouse, parent, or essential person) 
whose income may be deemed to you as described in Secs. 416.1160 through 
416.1169.
    (c) Your own household--not another person's household. You are not 
living in another person's household (you live in your own household) 
if--
    (1) You (or your spouse who lives with you or any person whose 
income is deemed to you) have an ownership interest or a life estate 
interest in the home;
    (2) You (or your spouse who lives with you or any person whose 
income is deemed to you) are liable to the landlord for payment of any 
part of the rental charges;
    (3) You live in a noninstitutional care situation as described in 
Sec. 416.1143;
    (4) You pay at least a pro rata share of household and operating 
expenses (see Sec. 416.1133); or
    (5) All members of the household receive public income--maintenance 
payments (Sec. 416.1142).

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48574, Nov. 26, 1985]



Sec. 416.1133  What is a pro rata share of household operating expenses.

    (a) General. If you pay your pro rata share toward monthly household 
operating expenses, you are living in your own household and are not 
receiving in-kind support and maintenance from anyone else in the 
household. The one-third reduction, therefore, does not apply to you. 
(If you are receiving food or shelter from someone outside the 
household, we value it under the rule in Sec. 416.1140.)
    (b) How we determine a pro rata share. Your pro rata share of 
household operating expenses is the average monthly household operating 
expenses (based on a reasonable estimate if exact figures are not 
available) divided by the number of people in the household, regardless 
of age.
    (c) Average household operating expenses. Household operating 
expenses are the household's total monthly expenditures for food, rent, 
mortgage, property taxes, heating fuel, gas, electricity, water, 
sewerage, and garbage collection service. (The term does not include the 
cost of these items if someone outside the household pays for them.) 
Generally, we average household operating expenses over the past 12 
months to determine a pro rata share.

[45 FR 65547, Oct. 3, 1980, as amended at 70 FR 6345, Feb. 7, 2005]



Sec. 416.1140  The presumed value rule.

    (a) How we apply the presumed value rule. (1) When you receive in-
kind support and maintenance and the one-third reduction rule does not 
apply, we use the presumed value rule. Instead of determining the actual 
dollar value of any food or shelter you receive, we presume that it is 
worth a maximum value. This maximum value is one-third of your Federal 
benefit rate plus the amount of the general income exclusion described 
in Sec. 416.1124(c)(12).
    (2) The presumed value rule allows you to show that your in-kind 
support and maintenance is not equal to the presumed value. We will not 
use the presumed value if you show us that--
    (i) The current market value of any food or shelter you receive, 
minus any payment you make for them, is lower than the presumed value; 
or
    (ii) The actual amount someone else pays for your food or shelter is 
lower than the presumed value.
    (b) How we determine the amount of your unearned income under the 
presumed value rule. (1) If you choose not to question the use of the 
presumed value, or if the presumed value is less than the actual value 
of the food or shelter you receive, we use the presumed value to figure 
your unearned income.
    (2) If you show us, as provided in paragraph (a)(2) of this section, 
that the presumed value is higher than the

[[Page 1007]]

actual value of the food or shelter you receive, we use the actual 
amount to figure your unearned income.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48575, Nov. 26, 1985; 58 
FR 63888, Dec. 3, 1993; 70 FR 6345, Feb. 7, 2005]



Sec. 416.1141  When the presumed value rule applies.

    The presumed value rule applies whenever we must count in-kind 
support and maintenance as unearned income and the one-third reduction 
rule does not apply. This means that the presumed value rule applies if 
you are living--
    (a) In another person's household (as described in Sec. 416.1132(b)) 
but not receiving both food and shelter from that person;
    (b) In your own household (as described in Sec. 416.1132(c)). For 
exceptions, see Sec. 416.1142 if you are in a public assistance 
household and Sec. 416.1143 if you are in a noninstitutional care 
situation;
    (c) In a nonmedical institution including any--
    (1) Public nonmedical institution if you are there for less than a 
full calendar month;
    (2) Public or private nonprofit educational or vocational training 
insitution;
    (3) Private nonprofit retirement home or similar institution where 
there is an express obligation to provide your full support and 
maintenance or where someone else pays for your support and maintenance. 
For exceptions, see Sec. 416.1144; and
    (4) For-profit institution where someone else pays for your support 
and maintenance. If you or the institution pay for it, see 
Sec. 416.1145.



Sec. 416.1142  If you live in a public assistance household.

    (a) Definition. A public assistance household is one in which every 
member receives some kind of public income-maintenance payments. These 
are payments made under--
    (1) Title IV-A of the Social Security Act (Temporary Assistance for 
Needy Families);
    (2) Title XVI of the Social Security Act (SSI, including federally 
administered State supplements and State administered mandatory 
supplements);
    (3) The Refugee Act of 1980 (Those payments based on need);
    (4) The Disaster Relief and Emergency Assistance Act;
    (5) General assistance programs of the Bureau of Indian Affairs;
    (6) State or local government assistance programs based on need (tax 
credits or refunds are not assistance based on need); and
    (7) U.S. Department of Veterans Affairs programs (those payments 
based on need).
    (b) How the presumed value rule applies. If you live in a public 
assistance household, we consider that you are not receiving in-kind 
support and maintenance from members of the household. In this 
situation, we use the presumed value rule only if you receive food or 
shelter from someone outside the household.

[45 FR 65547, Oct. 3, 1980, as amended at 57 FR 53850, Nov. 13, 1992; 70 
FR 6345, Feb. 7, 2005; 70 FR 41137, July 18, 2005]



Sec. 416.1143  If you live in a noninstitutional care situation.

    (a) Definitions. For purposes of this subpart you live in a 
noninstitutional care situation if all the following conditions exist:
    (1) You are placed by a public or private agency under a specific 
program such as foster or family care;
    (2) The placing agency is responsible for your care;
    (3) You are in a private household (not an institution) which is 
licensed or approved by the placing agency to provide care; and
    (4) You, a public agency, or someone else pays for your care.
    (b) How the presumed value rule applies. You are not receiving in-
kind support and maintenance and the presumed value rule does not apply 
if you pay the rate the placing agency establishes. We consider this 
established rate to be the current market value for the in-kind support 
and maintenance you are receiving. The presumed value rule applies if 
you pay less than the established rate and the difference is paid by 
someone else other than a public or private agency providing social

[[Page 1008]]

services described in Sec. 416.1103(b) or assistance based on need 
described in Sec. 416.1124(c)(2).



Sec. 416.1144  If you live in a nonprofit retirement home or similar
institution.

    (a) Definitions. For purposes of this section the following 
definitions apply:
    (1) Nonprofit retirement home or similar institution means a 
nongovernmental institution as defined under Sec. 416.1101, which is, or 
is controlled by, a private nonprofit organization and which does not 
provide you with--
    (i) Services which are (or could be) covered under Medicaid, or
    (ii) Education or vocational training.
    (2) Nonprofit organization means a private organization which is tax 
exempt under section 501(a) of the Internal Revenue Code of 1954 and is 
of the kind described in section 501 (c) or (d) of that code.
    (3) An express obligation to provide your full support and 
maintenance means there is either a legally enforceable written contract 
or set of membership rules providing that the home, institution, or 
organization--
    (i) Will provide at least all of your food and shelter needs; and
    (ii) Does not require any current or future payment for that food 
and shelter. (For purposes of this paragraph, a lump sum prepayment for 
lifetime care is not a current payment.)
    (b) How the presumed value rule applies. The presumed value rule 
applies if you are living in a nonprofit retirement home or similar 
institution where there is an express obligation to provide your full 
support and maintenance or where someone else pays for your support and 
maintenance. The rule does not apply to the extent that--
    (1) The home, institution, or nonprofit organization does not have 
an express obligation to provide your full support and maintenance; and
    (2) The home, institution, or nonprofit organization receives no 
payment for your food or shelter, or receives payment from another 
nonprofit organization.

[45 FR 65547, Oct. 3, 1980, as amended at 51 FR 34464, Sept. 29, 1986; 
70 FR 6345, Feb. 7, 2005]



Sec. 416.1145  How the presumed value rule applies in a nonmedical 




for-profit institution.

    If you live in a nonmedical for-profit institution, we consider the 
amount accepted by that institution as payment in full to be the current 
market value of whatever food or shelter the institution provides. If 
you are paying or are legally indebted for that amount, you are not 
receiving in-kind support and maintenance. We do not use the presumed 
value rule unless someone else pays for you.

[45 FR 65547, Oct. 3, 1980, as amended at 70 FR 6345, Feb. 7, 2005]

        In-Kind Support and Maintenance in Special Circumstances



Sec. 416.1147  How we value in-kind support and maintenance for a couple.

    (a) Both members of a couple live in another person's household and 
receive food and shelter from that person. When both of you live in 
another person's household throughout a month and receive food and 
shelter from that person, we apply the one-third reduction to the 
Federal benefit rate for a couple (Sec. 416.1131).
    (b) One member of a couple lives in another person's household and 
receives food and shelter from that person and the other member of the 
couple is in a medical institution. (1) If one of you is living in the 
household of another person who provides you with both food and shelter, 
and the other is temporarily absent from the household as provided in 
Sec. 416.1149(c)(1) (in a medical institution that receives substantial 
Medicaid payments for his or her care (Sec. 416.211(b))), and is 
ineligible in the month for either benefit payable under Sec. 416.212, 
we compute your benefits as if you were separately eligible individuals 
(see Sec. 416.414(b)(3)). This begins with the first full calendar month 
that one of you is in the medical institution. The one living in another 
person's household is eligible at an eligible individual's Federal 
benefit rate and one-third of that rate is counted as income not subject 
to any income exclusions. The one in the medical institution cannot 
receive more than the reduced benefit described in 
Sec. 416.414(b)(3)(i).

[[Page 1009]]

    (2) If the one member of the couple in the institution is eligible 
for one of the benefits payable under the Sec. 416.212 provisions, we 
compute benefits as a couple at the rate specified under Sec. 416.412. 
However, if that one member remains in the institution for a full month 
after expiration of the period benefits based on Sec. 416.212 can be 
paid, benefits will be computed as if each person were separately 
eligible as described under paragraph (c)(1) of this section. This 
begins with the first calendar month after expiration of the period 
benefits based on Sec. 416.212 can be paid.
    (c) Both members of a couple are subject to the presumed value rule. 
If the presumed value rule applies to both of you, we value any food or 
shelter you and your spouse receive at one-third of the Federal benefit 
rate for a couple plus the amount of the general income exclusion 
(Sec. 416.1124(c)(12)), unless you can show that their value is less as 
described in Sec. 416.1140(a)(2).
    (d) One member of a couple is subject to the presumed value rule and 
the other member is in a medical institution. (1) If one of you is 
subject to the presumed value rule and the other is temporarily absent 
from the household as provided in Sec. 416.1149(c)(1) (in a medical 
institution that receives substantial Medicaid payments for his or her 
care (Sec. 416.211(b))), and is ineligible in that month for either 
benefit payable under Sec. 416.212, we compute your benefits as if both 
members of the couple are separately eligible individuals (see 
Sec. 416.414(b)(3)). This begins with the first full calendar month that 
one of you is in the medical institution (see Sec. 416.211(b)). We value 
any food or shelter received by the one outside of the medical 
institution at one-third of an eligible individual's Federal benefit 
rate, plus the amount of the general income exclusion 
(Sec. 416.1124(c)(12)), unless you can show that their value is less as 
described in Sec. 416.1140(a)(2). The member of the couple in the 
medical institution cannot receive more than the reduced benefit 
described in Sec. 416.414(b)(3)(i).
    (2) If one of you is subject to the presumed value rule and the 
other in the institution is eligible for one of the benefits payable 
under Sec. 416.212, we compute the benefits as a couple at the rate 
specified under Sec. 416.412. However, if the one in the institution 
remains in the institution after the period benefits based on 
Sec. 416.212 can be paid, we will compute benefits as if each member of 
the couple were separately eligible as described in paragraph (d)(1) of 
this section.

[60 FR 16375, Mar. 30, 1995, as amended at 61 FR 10279, Mar. 13, 1996; 
70 FR 6345, Feb. 7, 2005]



Sec. 416.1147a  Income rules in change-of-status situations involving 
in-kind support and maintenance.

    (a) General. This section explains the rules for determining 
countable income, including in-kind support and maintenance, when 
eligible individuals become an eligible couple or when an eligible 
couple becomes eligible individuals. Generally, under retrospective 
monthly accounting, income in a prior month, including in-kind support 
and maintenance, affects benefit amounts for a current month. The prior 
month may be the first or second month prior to the current month (as 
explained in Sec. 416.420(a)) and the rules in this section apply when a 
change-of-status becomes effective between the prior month and the 
current month.
    (b) Eligible individuals become an eligible couple. If you and your 
spouse have been eligible individuals and become an eligible couple, we 
combine the earned and unearned income each of you had as an eligible 
individual in the prior month. If either or both of you received in-kind 
support and maintenance, we include its value as income. This may be 
one-third of the Federal benefit rate that applied in the prior month 
for one or both of you who lived in the household of another. It may be 
the presumed maximum value (one-third of the Federal benefit rate plus 
$20 as explained in Sec. 416.1140) for one or both of you as 
appropriate. It may also be a combination of the two if each of you 
received income in one of these forms. We also include income deemed to 
either or both of you in the prior month.
    (c) Eligible couple becomes one or two eligible individuals. If you 
are an eligible individual in the current month but were a member of an 
eligible couple in the prior month, we determine your countable income 
in the prior month

[[Page 1010]]

separately from that of your spouse. We determine the value of any in-
kind support and maintenance you and your spouse received in the prior 
month using the rules contained in Sec. 416.1147. For example, if both 
of you lived in the household of another and the one-third reduction 
applied, each of you would have income equal to one-sixth of the Federal 
benefit rate fov a couple. Also, for example, if you received in-kind 
support and maintenance and the presumed maximum value applied, you 
would have income equal to one-sixth of the Federal benefit rate for a 
couple, plus $10. We divide any other income you had as an eligible 
couple according to who owned the income. If ownership of jointly owned 
income cannot be determined, we allocate one-half of it to you.

[50 FR 48575, Nov. 26, 1985]



Sec. 416.1148  If you have both in-kind support and maintenance and
income that is deemed to you.

    (a) The one-third reduction and deeming of income. If you live in 
the household of your spouse, parent, essential person, or sponsor whose 
income can be deemed to you, or the household of a parent whose income 
is not deemed to you because of the provisions of Sec. 416.1165(i), the 
one-third reduction does not apply to you. The rules on deeming income 
are in Secs. 416.1160 through 416.1169. However, if you live in another 
person's household as described in Sec. 416.1131, and someone whose 
income can be deemed to you lives in the same household, we must apply 
both the one-third reduction and the deeming rules to you.
    (b) The presumed value rule and deeming of income. (1) If you live 
in the same household with someone whose income can be deemed to you 
(Secs. 416.1160 through 416.1169), or with a parent whose income is not 
deemed to you because of the provisions of Sec. 416.1165(i), any food or 
shelter that person provides is not income to you. However, if you 
receive any food or shelter from another source, it is income and we 
value it under the presumed value rule (Sec. 416.1140). We also apply 
the deeming rules.
    (2) If you are a child under age 18 who lives in the same household 
with an ineligible parent whose income may be deemed to you, and you are 
temporarily absent from the household to attend school 
(Sec. 416.1167(b)), any food or shelter you receive at school is income 
to you unless your parent purchases it. Unless otherwise excluded, we 
value this income under the presumed value rule (Sec. 416.1140). We also 
apply the deeming rules to you (Sec. 416.1165).

[60 FR 361, Jan. 4, 1995, as amended at 70 FR 6345, Feb. 7, 2005]

                            Temporary Absence



Sec. 416.1149  What is a temporary absence from your living arrangement.

    (a) General. A temporary absence may be due to employment, 
hospitalization, vacations, or visits. The length of time an absence can 
be temporary varies depending on the reason for your absence. For 
purposes of valuing in-kind support and maintenance under Secs. 416.1130 
through 416.1148, we apply the rules in this section. In general, we 
will find a temporary absence from your permanent living arrangement if 
you (or you and your eligible spouse)--
    (1) Become a resident of a public institution, or a public or 
private medical treatment facility where you otherwise would be subject 
to the reduced benefit rate described in Sec. 416.414, and you are 
eligible for the benefits payable under Sec. 416.212; or
    (2) Were in your permanent living arrangement for at least 1 full 
calendar month prior to the absence and intend to, and do, return to 
your permanent living arrangement in the same calendar month in which 
you (or you and your spouse) leave, or in the next month.
    (b) Rules we apply during a temporary absence. During a temporary 
absence, we continue to value your support and maintenance the same way 
that we did in your permanent living arrangement. For example, if the 
one-third reduction applies in your permanent living arrangement, we 
continue to apply the same rule during a temporary absence. However, if 
you receive in-kind support and maintenance only during a temporary 
absence we do not count it since

[[Page 1011]]

you are still responsible for maintaining your permanent quarters during 
the absence.
    (c) Rules for temporary absence in certain circumstances. (1)(i) If 
you enter a medical treatment facility where you are eligible for the 
reduced benefits payable under Sec. 416.414 for full months in the 
facility, and you are not eligible for either benefit payable under 
Sec. 416.212 (and you have not received such benefits during your 
current period of confinement) and you intend to return to your prior 
living arrangement, we consider this a temporary absence regardless of 
the length of your stay in the facility. We use the rules that apply to 
your permanent living arrangement to value any food or shelter you 
receive during the month (for which reduced benefits under Sec. 416.414 
are not payable) you enter or leave the facility. During any full 
calendar month you are in the medical treatment facility, you cannot 
receive more than the Federal benefit rate described in 
Sec. 416.414(b)(1). We do not consider food or shelter provided during a 
medical confinement to be income.
    (ii) If you enter a medical treatment facility and you are eligible 
for either benefit payable under Sec. 416.212, we also consider this a 
temporary absence from your permanent living arrangement. We use the 
rules that apply to your permanent living arrangement to value any food 
or shelter you receive during the month you enter the facility and 
throughout the period you are eligible for these benefits. We consider 
your absence to be temporary through the last month benefits under 
Sec. 416.212 are paid unless you are discharged from the facility in the 
following month. In that case, we consider your absence to be temporary 
through the date of discharge.
    (2)(i) Generally, if you are a child under age 22, you are 
temporarily absent while you are away at school, regardless of how long 
you are away, if you come home on some weekends, lengthy holidays, and 
vacations (or for extended visits as provided in school regulations).
    (ii) However, if you are a child under age 18, and your permanent 
living arrangement is with an ineligible parent or essential person 
(Sec. 416.222), we follow the rules in Sec. 416.1148(b)(2). When you 
reach age 18, or if you are under age 18 and deeming does not apply, we 
consider the circumstances of your permanent living arrangement to value 
any in-kind support and maintenance you receive.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48575, Nov. 26, 1985; 52 
FR 8882, Mar. 20, 1987; 61 FR 10279, Mar. 13, 1996; 62 FR 1056, Jan. 8, 
1997; 70 FR 6345, Feb. 7, 2005; 72 FR 50874, Sept. 5, 2007]

                                Disasters



Sec. 416.1150  How we treat income received because of a major 
disaster.

    (a) General. The Disaster Relief and Emergency Assistance Act and 
other Federal statutes provide assistance to victims of major disasters. 
In this section we describe when we do not count certain kinds of 
assistance you receive under these statutes.
    (b) Support and maintenance. (1) We do not count the value of 
support and maintenance (in cash or in kind) received from a Federal, 
State, or local government source, or from a disaster assistance 
organization, and the one-third reduction rule does not apply if--
    (i) You live in a household which you or you and another person 
maintain as your home when a catastrophe occurs in the area;
    (ii) The President of the United States declares the catastrophe to 
be a major disaster for purposes of the Disaster Relief and Emergency 
Assistance Act;
    (iii) You stop living in the home because of the catastrophe and 
within 30 days after the catastrophe you begin to receive support and 
maintenance; and
    (iv) You receive the support and maintenance while living in a 
residential facility maintained by another person.
    (2) We do not count the value of support and maintenance (in cash or 
in kind) received from any other source, such as from a private 
household, and the one-third reduction rule does not apply for up to 18 
months after you begin to receive it if--
    (i) You live in a household which you or you and another person 
maintain as your home when a catastrophe occurs in the area;

[[Page 1012]]

    (ii) The President of the United States declares the catastrophe to 
be a major disaster for purposes of the Disaster Relief and Emergency 
Assistance Act;
    (iii) You stop living in the home because of the catastrophe and 
within 30 days after the catastrophe you begin to receive support and 
maintenance; and
    (iv) You receive the support and maintenance while living in a 
residential facility (including a private household) maintained by 
another person.
    (c) Other assistance you receive. We do not consider other 
assistance to be income if you receive it under the Disaster Relief and 
Emergency Assistance Act or under another Federal statute because of a 
catastrophe which the President declares to be a major disaster or if 
you receive it from a State or local government or from a disaster 
assistance organization. For example, you may receive payments to repair 
or replace your home or other property.
    (d) Interest payments. We do not count any interest earned on the 
assistance payments described in paragraph (c) of this section.

[57 FR 53850, Nov. 13, 1992]



Sec. 416.1151  How we treat the repair or replacement of lost,
damaged, or stolen resources.

    (a) General rule. If a resource is lost, damaged, or stolen, you may 
receive cash to repair or replace it or the resource may be repaired or 
replaced for you. We do not count the cash or the repair or replacement 
of the resource as your income.
    (b) Interest on cash for repair or replacement of a noncash 
resource. We do not count any interest earned on the cash you receive 
for repair or replacement of a noncash resource if the interest is 
earned within 9 months of the date you receive the cash. We can extend 
the 9-month period for up to an additional 9 months if we find you have 
good cause for not repairing or replacing the resource within the 
initial period. Good cause exists, for example, if you show that 
circumstances beyond your control prevent the repair or replacement, or 
contracting for the repair or replacement, of the resource within the 
first 9-month period.
    (c) Temporary replacement of a damaged or destroyed home. In 
determining the amount of in-kind support and maintenance you receive 
(Secs. 416.1130 through 416.1140), we do not count temporary housing 
if--
    (1) Your excluded home is damaged or destroyed, and
    (2) You receive the temporary housing only until your home is 
repaired or replaced.

                         Home Energy Assistance



Sec. 416.1157  Support and maintenance assistance.

    (a) General. Section 2639 of Pub. L. 98-369, effective October 1, 
1984, amended section 1612(b)(13) to provide that certain support and 
maintenance assistance, which includes home energy assistance, be 
excluded from countable income for SSI purposes. This section discusses 
how we apply section 1612(b)(13).
    (b) Definitions. For support and maintenance assistance purposes--
    Appropriate State agency means the agency designated by the chief 
executive officer of the State to handle the State's responsibilities as 
set out in paragraph (c) of this section.
    Based on need means that the provider of the assistance:
    (1) Does not have an express obligation to provide the assistance;
    (2) States that the aid is given for the purpose of support or 
maintenance assistance or for home energy assistance (e.g., vouchers for 
heating or cooling bills, storm doors); and
    (3) Provides the aid for an SSI claimant, a member of the household 
in which an SSI claimant lives or an SSI claimant's ineligible spouse, 
parent, sponsor (or the sponsor's spouse) of an alien, or essential 
person.
    Private nonprofit agency means a religious, charitable, educational, 
or other organization such as described in section 501(c) of the 
Internal Revenue Code of 1954. (Actual tax exempt certification by IRS 
is not necessary.)
    Rate-of-return entity means an entity whose revenues are primarily 
received from the entity's charges to the public for goods or services 
and such charges are based on rates regulated by a State or Federal 
governmental body.

[[Page 1013]]

    Support and maintenance assistance means cash provided for the 
purpose of meeting food or shelter needs or in-kind support and 
maintenance as defined in Sec. 416.1121(h). Support and maintenance 
assistance includes home energy assistance. Home energy assistance means 
any assistance related to meeting the costs of heating or cooling a 
home. Home energy assistance includes such items as payments for utility 
service or bulk fuels; assistance in kind such as portable heaters, 
fans, blankets, storm doors, or other items which help reduce the costs 
of heating and cooling such as conservation or weatherization materials 
and services; etc.
    (c) What assistance we do not count as income. We do not count as 
income certain support and maintenance assistance received on or after 
October 1, 1984, by you or your ineligible spouse, parent, sponsor (or 
your sponsor's spouse) if you are an alien, or an essential person. We 
also do not consider certain support and maintenance assistance in 
determining a pro rata share of household operating expenses under 
Sec. 416.1133. We do not count that assistance which is certified in 
writing by the appropriate State agency to be both based on need and--
    (1) Provided in kind by a private nonprofit agency; or
    (2) Provided in cash or in kind by--
    (i) A supplier of home heating oil or gas;
    (ii) A rate-of-return entity providing home energy; or
    (iii) A municipal utility providing home energy.

[51 FR 39523, Oct. 29, 1986; 51 FR 43709, Dec. 3, 1986, as amended at 53 
FR 35808, Sept. 15, 1988; 70 FR 6345, Feb. 7, 2005]

                            Deeming of Income



Sec. 416.1160  What is deeming of income?

    (a) General. We use the term deeming to identify the process of 
considering another person's income to be your own. When the deeming 
rules apply, it does not matter whether the income of the other person 
is actually available to you. We must apply these rules anyway. There 
are four categories of individuals whose income may be deemed to you.
    (1) Ineligible spouse. If you live in the same household with your 
ineligible spouse, we look at your spouse's income to decide whether we 
must deem some of it to you. We do this because we expect your spouse to 
use some of his or her income to take care of some of your needs.
    (2) Ineligible parent. If you are a child to whom deeming rules 
apply (see Sec. 416.1165), we look at your ineligible parent's income to 
decide whether we must deem some of it to be yours. If you live with 
both your parent and your parent's spouse (i.e., your stepparent), we 
also look at your stepparent's income to decide whether we must deem 
some of it to be yours. We do this because we expect your parent (and 
your stepparent, if living with you and your parent) to use some of his 
or her income to take care of your needs.
    (3) Sponsor of an alien. If you are an alien who has a sponsor and 
you first apply for SSI benefits after September 30, 1980, we look at 
your sponsor's income to decide whether we must deem some of it to be 
yours. This rule applies for 3 years after you are admitted to the 
United States for permanent residence and regardless of whether you live 
in the same household as your sponsor. We deem your sponsor's income to 
you because your sponsor agreed to support you (signed an affidavit of 
support) as a condition of your admission to the United States. If two 
deeming rules could apply to you because your sponsor is also your 
ineligible spouse or parent who lives with you, we use the appropriate 
spouse-to-spouse or parent-to-child deeming rules instead of the 
sponsor-to-alien rules. If you have a sponsor and also have an 
ineligible spouse or parent who is not your sponsor and whose income can 
be deemed to you, both rules apply. If your sponsor is not your parent 
or spouse but is the ineligible spouse or parent of another SSI 
beneficiary, we use the sponsor-to-alien deeming rules for you and the 
appropriate spouse-to-spouse or parent-to-child deeming rules for the 
other SSI beneficiary.
    (4) Essential person. If you live in the same household with your 
essential person (as defined in Sec. 416.222), we must look at that 
person's income to decide whether we must deem some of it to

[[Page 1014]]

you. We do this because we have increased your benefit to help meet the 
needs of your essential person.
    (b) When we deem. We deem income to determine whether you are 
eligible for a benefit and to determine the amount of your benefit. 
However, we may consider this income in different months for each 
purpose.
    (1) Eligibility. We consider the income of your ineligible spouse, 
ineligible parent, sponsor or essential person in the current month to 
determine whether you are eligible for SSI benefits for that month.
    (2) Amount of benefit. We consider the income of your ineligible 
spouse, ineligible parent, sponsor, or essential person in the second 
month prior to the current month to determine your benefit amount for 
the current month. Exceptions:
    (i) We use the income from the first month you are initially 
eligible for payment of SSI benefits (see Sec. 416.501) to determine 
your benefit amount for that month. In the following month (the second 
month you are eligible for payment), we use the same countable income 
that we used in the preceding month to determine your benefit amount.
    (ii) To determine your benefit amount for the first month you again 
become eligible after you have been ineligible for at least a month, we 
use the same countable income that we use to determine your eligibility 
for that month. In the following month (the second month of 
reeligibility), we use the same countable income that we used in the 
preceding month to determine your benefit amount.
    (iii) To determine the amount of your benefit in the current month, 
if there are certain changes in your situation which we list below, we 
use only your own countable income in a prior month, excluding any 
income deemed to you in that month from an ineligible spouse or parent. 
These changes are the death of your spouse or parent, your attainment of 
age 18, or your becoming subject to the $30 Federal benefit rate 
(Sec. 416.211(b)).
    (iv) To determine the amount of your benefit for the current month, 
we do not use income deemed from your essential person beginning with 
the month you can no longer qualify for the essential person increment 
(Sec. 416.413). We use only your own countable income in a prior month 
to determine the amount of your benefit for the current month.
    (c) Steps in deeming. Although the way we deem income varies 
depending upon whether you are an eligible individual, an eligible 
child, an alien with a sponsor, or an individual with an essential 
person, we follow several general steps to determine how much income to 
deem.
    (1) We determine how much earned and unearned income your ineligible 
spouse, ineligible parent, sponsor, or essential person has, and we 
apply the appropriate exclusions. (See Sec. 416.1161(a) for exclusions 
that apply to an ineligible parent or spouse, and Sec. 416.1161(b) for 
those that apply to an essential person or to a sponsor.)
    (2) Before we deem income to you from either your ineligible spouse 
or ineligible parent, we allocate an amount for each ineligible child in 
the household. (Allocations for ineligible children are explained in 
Secs. 416.1163(b) and 416.1165(b).) We also allocate an amount for each 
eligible alien who is subject to deeming from your ineligible spouse or 
parent as a sponsor. (Allocations for eligible aliens are explained in 
Sec. 416.1163(c).)
    (3) We then follow the deeming rules which apply to you.
    (i) For deeming income from your ineligible spouse, see 
Sec. 416.1163.
    (ii) For deeming income from your ineligible parent, see 
Sec. 416.1165.
    (iii) For deeming income from your ineligible spouse when you also 
have an eligible child, see Sec. 416.1166.
    (iv) For deeming income from your sponsor if you are an alien, see 
Sec. 416.1166a.
    (v) For deeming income from your essential person, see 
Sec. 416.1168. The rules on when we stop deeming income from your 
essential person are in Sec. 416.1169.
    (vi) For provisions on change in status involving couples see 
Sec. 416.1163(f) and for those involving parents see Sec. 416.1165(g).
    (d) Definitions for deeming purposes. For deeming purposes--
    Combat zone means

[[Page 1015]]

    (i) Any area the President of the United States designates by 
Executive Order under 26 U.S.C. 112 as an area in which Armed Forces of 
the United States are or have engaged in combat;
    (ii) A qualified hazardous duty area (QHDA) Congress designates be 
treated in the same manner as an area designated by the President under 
26 U.S.C. 112, provided the member of the uniformed services serving in 
this area is entitled to special pay under 37 U.S.C. 310; or
    (iii) An area where the Secretary of Defense or his or her 
designated representative has certified that Armed Forces members 
provide direct support for military operations in an area designated by 
the President under 26 U.S.C. 112 or a QHDA, provided the member of the 
uniformed services serving in the area certified by the Secretary of 
Defense or his or her designated representative is entitled to special 
pay under 37 U.S.C. 310.
    Date of admission to or date of entry into the United States means 
the date established by the U.S. Citizenship and Immigration Services as 
the date the alien is admitted for permanent residence.
    Dependent means the same thing as it does for Federal income tax 
purposes--we mean someone for whom you are entitled to take a deduction 
on your personal income tax return. Exception: An alien and an alien's 
spouse are not considered to be dependents of the alien's sponsor for 
the purposes of these rules.
    Essential person means someone who was identified as essential to 
your welfare under a State program that preceded the SSI program. (See 
Secs. 416.220 through 416.223 for the rules on essential persons.)
    Ineligible child means your natural child or adopted child, or the 
natural or adopted child of your spouse, or the natural or adopted child 
of your parent or of your parent's spouse (as the term child is defined 
in Sec. 416.1101 and the term spouse is defined in Sec. 416.1806), who 
lives in the same household with you, and is not eligible for SSI 
benefits.
    Ineligible parent means a natural or adoptive parent, or the spouse 
(as defined in Sec. 416.1101) of a natural or adoptive parent, who lives 
with you and is not eligible for SSI benefits. The income of ineligible 
parents affects your benefit only if you are a child under age 18.
    Ineligible spouse means someone who lives with you as your husband 
or wife and is not eligible for SSI benefits.
    Sponsor means an individual (but not an organization such as the 
congregation of a church or a service club, or an employer who only 
guarantees employment for an alien upon entry but does not sign an 
affadavit of support) who signs an affidavit of support agreeing to 
support you as a condition of your admission as an alien for permanent 
residence in the United States.

[52 FR 8882, Mar. 20, 1987, as amended at 54 FR 19164, May 4, 1989; 64 
FR 31974, June 15, 1999; 73 FR 28035, May 15, 2008; 75 FR 7554, Feb. 22, 
2010]



Sec. 416.1161  Income of an ineligible spouse, ineligible parent,
and essential person for deeming purposes.

    The first step in deeming is determining how much income your 
ineligible spouse, ineligible parent (if you are a child), your sponsor 
(if you are an alien), or your essential person, has. We do not always 
include all of their income when we determine how much income to deem. 
In this section we explain the rules for determining how much of their 
income is subject to deeming. As part of the process of deeming income 
from your ineligible spouse or parent, we must determine the amount of 
income of any ineligible children in the household.
    (a) For an ineligible spouse or parent. We do not include any of the 
following types of income (see Sec. 416.1102) of an ineligible spouse or 
parent:
    (1) Income excluded by Federal laws other than the Social Security 
Act (See the appendix to this subpart.)
    (2) Any public income-maintenance payments (Sec. 416.1142(a)) your 
ineligible spouse or parent receives, and any income which was counted 
or excluded in figuring the amount of that payment;
    (3) Any of the income of your ineligible spouse or parent that is 
used by a public income-maintenance program (Sec. 416.1142(a)) to 
determine the amount of that program's benefit to someone else;
    (4) Any portion of a grant, scholarship, fellowship, or gift used or 
set

[[Page 1016]]

aside to pay tuition, fees or other necessary educational expenses;
    (5) Money received for providing foster care to an ineligible child;
    (6) The value of food stamps and the value of Department of 
Agriculture donated foods;
    (7) Food raised by your parent or spouse and consumed by members of 
the household in which you live;
    (8) Tax refunds on income, real property, or food purchased by the 
family;
    (9) Income used to fulfill an approved plan for achieving self-
support (see Secs. 416.1180 through 416.1182);
    (10) Income used to comply with the terms of court-ordered support, 
or support payments enforced under title IV-D of the Act;
    (11) The value of in-kind support and maintenance;
    (12) Alaska Longevity Bonus payments made to an individual who is a 
resident of Alaska and who, prior to October 1, 1985: met the 25-year 
residency requirement for receipt of such payments in effect prior to 
January 1, 1983; and was eligible for SSI;
    (13) Disaster assistance as described in Secs. 416.1150 and 
416.1151;
    (14) Income received infrequently or irregularly (see 
Secs. 416.1112(c)(1) and 416.1124(c)(6));
    (15) Work expenses if the ineligible spouse or parent is blind;
    (16) Income of your ineligible spouse or ineligible parent which was 
paid under a Federal, State, or local government program (For example, 
payments under title XX of the Social Security Act) to provide you with 
chore, attendant or homemaker services;
    (17) Certain support and maintenance assistance as described in 
Sec. 416.1157(c);
    (18) Housing assistance as provided in Sec. 416.1124(c)(14);
    (19) The value of a commercial transportation ticket as described in 
Sec. 416.1124(c)(16). However, if such a ticket is converted to cash, 
the cash is income in the month your spouse or parent receives the cash;
    (20) Refunds of Federal income taxes and advances made by an 
employer relating to an earned income tax credit, as provided in 
Sec. 416.1112(c);
    (21) Payments from a fund established by a State to aid victims of 
crime (see Sec. 416.1124(c)(17));
    (22) Relocation assistance, as described in Sec. 416.1124(c)(18);
    (23) Special pay received from one of the uniformed services 
pursuant to 37 U.S.C. 310;
    (24) Impairment-related work expenses, as described in 20 CFR 
404.1576, incurred and paid by an ineligible spouse or parent, if the 
ineligible spouse or parent receives disability benefits under title II 
of the Act;
    (25) Interest earned on excluded burial funds and appreciation in 
the value of excluded burial arrangements which are left to accumulate 
and become part of separate burial funds, and interest accrued on and 
left to accumulate as part of the value of agreements representing the 
purchase of excluded burial spaces (see Sec. 416.1124(c) (9) and (15));
    (26) Interest and dividend income from a countable resource or from 
a resource excluded under a Federal statute other than section 1613(a) 
of the Social Security Act;
    (27) Earned income of a student as described in Sec. 416.1112(c)(3); 
and
    (28) Any additional increment in pay, other than any increase in 
basic pay, received while serving as a member of the uniformed services, 
if--
    (i) Your ineligible spouse or parent received the pay as a result of 
deployment to or service in a combat zone; and
    (ii) Your ineligible spouse or parent was not receiving the 
additional pay immediately prior to deployment to or service in a combat 
zone.
    (b) For an essential person or for a sponsor of an alien. We include 
all the income (as defined in Sec. 416.1102) of an essential person or 
of a sponsor of an alien and of the spouse of the sponsor (if the 
sponsor and spouse live in the same household) except for support and 
maintenance assistance described in Sec. 416.1157(c), and income 
excluded under Federal laws other than the Social Security Act. For 
information on these laws see the appendix to this subpart.
    (c) For an ineligible child. Although we do not deem any income to 
you from an ineligible child, we reduce his or her allocation if the 
ineligible child has income (see Sec. 416.1163(b)(2)). For this purpose, 
we do not include any of the child's income listed in paragraph (a)

[[Page 1017]]

of this section. In addition, if the ineligible child is a student (see 
Sec. 416.1861), we exclude his/her earned income subject to the amounts 
set in Sec. 416.1112(c)(3).
    (d) For an eligible alien. Although we do not deem any income to you 
from an eligible alien, if your ineligible spouse or ineligible parent 
is also a sponsor of an eligible alien, we reduce the alien's allocation 
if he or she has income (see Sec. 416.1163(c)(2)). For this purpose 
exclude any of the alien's income listed in paragraph (a) of this 
section.

[45 FR 65547, Oct. 3, 1980, as amended at 46 FR 57276, Nov. 23, 1981; 48 
FR 33259, July 21, 1983; 50 FR 48576, Nov. 26, 1985; 51 FR 39523, Oct. 
29, 1986; 52 FR 8883, Mar. 20, 1987; 52 FR 44971, Nov. 24, 1987; 55 FR 
28378, July 11, 1990; 58 FR 63888, 63890, Dec. 3, 1993; 61 FR 1712, Jan. 
23, 1996; 61 FR 49964, Sept. 24, 1996; 67 FR 11034, Mar. 12, 2002; 71 FR 
45378, Aug. 9, 2006; 71 FR 66866, Nov. 17, 2006; 75 FR 7554, Feb. 22, 
2010]



Sec. 416.1161a  Income for deeming purposes where Medicaid eligibility
is affected.

    (a) General. In many States, an individual who is eligible for SSI 
or a Federally administered State optional supplementary payment is in 
turn eligible for Medicaid. Also, several other States use SSI deeming 
rules in determining eligibility for Medicaid. In all of these States, 
in extraordinary cases, the Department will not apply the usual rules on 
deeming of income where those rules would result in an individual's 
being ineligible for SSI (or a Federally administered State optional 
supplementary payment) and Medicaid. Any determination made under this 
section may at any time be revised based on new information or changed 
circumstances.
    (b) When special deeming rules apply:
    (1) The Department will consider not applying the usual deeming 
rules only upon application by a State Medicaid agency (requirement 
approved under OMB No. 0960-0304) and on condition that the agency must 
show:
    (i) Deeming would result in lack of Medicaid eligibility for the 
individual.
    (ii) Medicaid eligibility would, prospectively, result in savings to 
the Medicaid program; and
    (iii) The quality of medical care necessary for the individual would 
be maintained under the arrangements contemplated.
    (2) The Department may also in particular cases require that 
additional facts be demonstrated, or that other criteria or standards be 
met, before it determines not to apply the usual deeming rules.
    (c) Amount of income to be deemed. If the usual rules of deeming do 
not apply, the Department will determine an amount, if any, to be 
deemed.
    (d) Temporary effect of special deeming rules. This provision is 
temporary and will be continued only through December 31, 1984. 
Determinations made under this section will nevertheless remain in 
effect unless they are revised based on changed circumstances (including 
establishment in the State of a Medicaid program of home and community-
based services or eligibility under a State plan provision) or new 
information.

[49 FR 5747, Feb. 15, 1984]



Sec. 416.1163  How we deem income to you from your ineligible spouse.

    If you have an ineligible spouse who lives in the same household, we 
apply the deeming rules to your ineligible spouse's income in the 
following order.
    (a) Determining your ineligible spouse's income. We first determine 
how much earned and unearned income your ineligible spouse has, using 
the appropriate exclusions in Sec. 416.1161(a).
    (b) Allocations for ineligible children. We then deduct an 
allocation for ineligible children in the household to help meet their 
needs. Exception: We do not allocate for ineligible children who are 
receiving public income-maintenance payments (see Sec. 416.1142(a)).
    (1) The allocation for each ineligible child is the difference 
between the Federal benefit rate for an eligible couple and the Federal 
benefit rate for an eligible individual. The amount of the allocation 
automatically increases whenever the Federal benefit rate increases. The 
amount of the allocation that we use to determine the amount of a 
benefit for a current month is based on the Federal benefit rate that 
applied in the second prior month unless one of the exceptions in 
Sec. 416.1160(b)(2) applies.

[[Page 1018]]

    (2) Each ineligible child's allocation is reduced by the amount of 
his or her own income as described in Sec. 416.1161(c).
    (3) We first deduct the allocations from your ineligible spouse's 
unearned income. If your ineligible spouse does not have enough unearned 
income to cover the allocations we deduct the balance from your 
ineligible spouse's earned income.
    (c) Allocations for aliens sponsored by your ineligible spouse. We 
also deduct an allocation for eligible aliens who have been sponsored by 
and who have income deemed from your ineligible spouse.
    (1) The allocation for each alien who is sponsored by and who has 
income deemed from your ineligible spouse is the difference between the 
Federal benefit rate for an eligible couple and the Federal benefit rate 
for an eligible individual. The amount of the allocation automatically 
increases whenever the Federal benefit rate increases. The amount of the 
allocation that we use to compute your benefit for a current month is 
based on the Federal benefit rate that applied in the second prior month 
(unless the current month is the first or second month of eligibility or 
re-eligibility as explained in Sec. 416.420(a) and (b) (2) and (3)).
    (2) Each alien's allocation is reduced by the amount of his or her 
own income as described in Sec. 416.1161(d).
    (3) We first deduct the allocations from your ineligible spouse's 
unearned income. If your ineligible spouse does not have enough unearned 
income to cover the allocations, we deduct the balance from your 
ineligible spouse's earned income.
    (d) Determining your eligibility for SSI. (1) If the amount of your 
ineligible spouse's income that remains after appropriate allocations is 
not more than the difference between the Federal benefit rate for an 
eligible couple and the Federal benefit rate for an eligible individual, 
there is no income to deem to you from your spouse. In this situation, 
we subtract only your own countable income from the Federal benefit rate 
for an individual to determine whether you are eligible for SSI 
benefits.
    (2) If the amount of your ineligible spouse's income that remains 
after appropriate allocations is more than the difference between the 
Federal benefit rate for an eligible couple and the Federal benefit rate 
for an eligible individual, we treat you and your ineligible spouse as 
an eligible couple. We do this by:
    (i) Combining the remainder of your spouse's unearned income with 
your own unearned income and the remainder of your spouse's earned 
income with your earned income;
    (ii) Applying all appropriate income exclusions in Secs. 416.1112 
and 416.1124; and
    (iii) Subtracting the couple's countable income from the Federal 
benefit rate for an eligible couple. (See Sec. 416.2025(b) for 
determination of the State supplementary payment amount.)
    (e) Determining your SSI benefit. (1) In determining your SSI 
benefit amount, we follow the procedure in paragraphs (a) through (d) of 
this section. However, we use your ineligible spouse's income in the 
second month prior to the current month. We vary this rule if any of the 
exceptions in Sec. 416.1160(b)(2) applies (for example, if this is the 
first month you are eligible for payment of an SSI benefit or if you are 
again eligible after at least a month of being ineligible). In the first 
month of your eligibility for payment (or re-eligibility), we deem your 
ineligible spouse's income in the current month to determine both 
whether you are eligible for a benefit and the amount of your benefit. 
In the second month, we deem your ineligible spouse's income in that 
month to determine whether you are eligible for a benefit but we deem 
your ineligible spouse's income in the first month to determine the 
amount of your benefit.
    (2) Your SSI benefit under the deeming rules cannot be higher than 
it would be if deeming did not apply. Therefore, your benefit is the 
lesser of the amount computed under the rules in paragraph (d)(2) of 
this section or the amount remaining after we subtract only your own 
countable income from an individual's Federal benefit rate.
    (f) Special rules for couples when a change in status occurs. We 
have special rules to determine how to deem your

[[Page 1019]]

spouse's income to you when there is a change in your situation.
    (1) Ineligible spouse becomes eligible. If your ineligible spouse 
becomes eligible for SSI benefits, we treat both of you as newly 
eligible. Therefore, your eligibility and benefit amount for the first 
month you are an eligible couple will be based on your income in that 
month. In the second month, your benefit amount will also be based on 
your income in the first month.
    (2) Spouses separate or divorce. If you separate from your 
ineligible spouse or your marriage to an ineligible spouse ends by 
divorce, we do not deem your ineligible spouse's income to you to 
determine your eligibility for benefits beginning with the first month 
following the event. If you remain eligible, we determine your benefit 
amount by following the rule in paragraph (e) of this section provided 
deeming from your spouse applied in the prior month.
    (3) Eligible individual begins living with an ineligible spouse. If 
you begin to live with your ineligible spouse, we deem your ineligible 
spouse's income to you in the first month thereafter to determine 
whether you continue to be eligible for SSI benefits. If you continue to 
be eligible, we follow the rule in Sec. 416.420(a) to determine your 
benefit amount.
    (4) Ineligible spouse dies. If your ineligible spouse dies, we do 
not deem your spouse's income to you to determine your eligibility for 
SSI benefits beginning with the month following the month of death. In 
determining your benefit amount beginning with the month following the 
month of death, we use only your own countable income in a prior month, 
excluding any income deemed to you in that month from your ineligible 
spouse.
    (5) You become subject to the $30 Federal benefit rate. If you 
become a resident of a medical care facility and the $30 Federal benefit 
rate applies, we do not deem your ineligible spouse's income to you to 
determine your eligibility for SSI benefits beginning with the first 
month for which the $30 Federal benefit rate applies. In determining 
your benefit amount beginning with the first month for which the $30 
Federal benefit rate applies, we use only your own countable income in a 
prior month, excluding any income deemed to you in that month from your 
ineligible spouse.
    (g) Examples. These examples show how we deem income from an 
ineligible spouse to an eligible individual in cases which do not 
involve any of the exceptions in Sec. 416.1160(b)(2). The income, the 
income exclusions, and the allocations are monthly amounts. The Federal 
benefit rates used are those effective January 1, 1986.

    Example 1. In September 1986, Mr. Todd, an aged individual, lives 
with his ineligible spouse, Mrs. Todd, and their ineligible child, Mike. 
Mr. Todd has a Federal benefit rate of $336 per month. Mrs. Todd 
receives $252 unearned income per month. She has no earned income and 
Mike has no income at all. Before we deem any income, we allocate to 
Mike $168 (the difference between the September Federal benefit rate for 
an eligible couple and the September Federal benefit rate for an 
eligible individual). We subtract the $168 allocation from Mrs. Todd's 
$252 unearned income, leaving $84. Since Mrs. Todd's $84 remaining 
income is not more than $168, which is the difference between the 
September Federal benefit rate for an eligible couple and the September 
Federal benefit rate for an eligible individual, we do not deem any 
income to Mr. Todd. Instead, we compare only Mr. Todd's own countable 
income with the Federal benefit rate for an eligible individual to 
determine whether he is eligible. If Mr. Todd's own countable income is 
less than his Federal benefit rate, he is eligible. To determine the 
amount of his benefit, we determine his countable income, including any 
income deemed from Mrs. Todd, in July and subtract this income from the 
appropriate Federal benefit rate for September.
    Example 2. In September 1986, Mr. Jones, a disabled individual, 
lives with his ineligible spouse, Mrs. Jones, and ineligible child, 
Christine. Mr. Jones and Christine have no income. Mrs. Jones has earned 
income of $401 a month and unearned income of $252 a month. Before we 
deem any income, we allocate $168 to Christine. We take the $168 
allocation from Mrs. Jones' $252 unearned income, leaving $84 in 
unearned income. Since Mrs. Jones' total remaining income ($84 unearned 
plus $401 earned) is more than $168, which is the difference between the 
September Federal benefit rate for an eligible couple and the September 
Federal benefit rate for an eligible individual, we compute the combined 
countable income as we do for a couple. We apply the $20 general income 
exclusion to the unearned income, reducing it further to $64. We then 
apply the earned income exclusion ($65 plus one-half the remainder) to 
Mrs. Jones' earned income of $401,

[[Page 1020]]

leaving $168. We combine the $64 countable unearned income and $168 
countable earned income, and compare it ($232) with the $504 September 
Federal benefit rate for a couple, and determine that Mr. Jones is 
eligible. Since Mr. Jones is eligible, we determine the amount of his 
benefit by subtracting his countable income in July (including any 
deemed from Mrs. Jones) from September's Federal benefit rate for a 
couple.
    Example 3. In September 1986, Mr. Smith, a disabled individual, 
lives with his ineligible spouse, Mrs. Smith, who earns $201 per month. 
Mr. Smith receives a pension (unearned income) of $100 a month. Since 
Mrs. Smith's income is greater than $168, which is the difference 
between the September Federal benefit rate for an eligible couple and 
the September Federal benefit rate for an eligible individual, we deem 
all of her income to be available to both Mr. and Mrs. Smith and compute 
the combined countable income for the couple. We apply the $20 general 
income exclusion to Mr. Smith's $100 unearned income, leaving $80. Then 
we apply the earned income exclusion ($65 plus one-half of the 
remainder) to Mrs. Smith's $201, leaving $68. This gives the couple 
total countable income of $148. This is less than the $504 September 
Federal benefit rate for a couple, so Mr. Smith is eligible based on 
deeming. Since he is eligible, we determine the amount of his benefit 
based on his income (including any deemed from Mrs. Smith) in July.
    Example 4. In September 1986, Mr. Simon has a disabled spouse, Mrs. 
Simon, and has sponsored an eligible alien, Mr. Ollie. Mrs. Simon has 
monthly unearned income of $100 and Mr. Simon has earned income of $405. 
From Mr. Simon's earned income we allocate to Mr. Ollie $168, which is 
the difference between the Federal benefit rate for an eligible couple 
and the rate for an eligible individual. Mr. Ollie has no other income. 
This reduces Mr. Simon's earned income from $405 to $237. Since $237 is 
more than $168 (the difference between the Federal benefit rate for an 
eligible couple and the rate for an eligible individual), we deem all of 
Mr. Simon's remaining income to be available to Mr. and Mrs. Simon and 
compute the combined countable income for the couple. We apply the $20 
general income exclusion to Mrs. Simon's unearned income, leaving $80. 
Then we apply the general earned income exclusion ($65 plus one-half the 
remainder) to Mr. Simon's $237 earned income, leaving $86. This gives 
the couple total income of $166 ($80 + $86.). The $166 is less than the 
$504 Federal benefit rate for a couple so Mrs. Simon would be eligible 
based on deeming. Since she is eligible, we determine the amount of her 
benefit based on her income (including any deemed from Mr. Simon) in 
July. For the way we deem Mr. Simon's income to Mr. Ollie, see the rules 
in Sec. 416.1166a.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48576, Nov. 26, 1985; 52 
FR 8883, Mar. 20, 1987; 53 FR 25151, July 5, 1988; 54 FR 19164, May 4, 
1989; 64 FR 31974, June 15, 1999]



Sec. 416.1165  How we deem income to you from your ineligible parent(s).

    If you are a child living with your parents, we apply the deeming 
rules to you through the month in which you reach age 18. We follow the 
rules in paragraphs (a) through (e) of this section to determine your 
eligibility. To determine your benefit amount, we follow the rules in 
paragraph (f) of this section. The rules in paragraph (g) of this 
section apply to changes in your family situation. Paragraph (i) of this 
section discusses the conditions under which we will not deem your 
ineligible parents' income to you if you are a disabled child living 
with your parents.
    (a) Determining your ineligible parent's income. We first determine 
how much current monthly earned and unearned income your ineligible 
parents have, using the appropriate exclusions in Sec. 416.1161(a).
    (b) Allocations for ineligible children. We next deduct an 
allocation for each ineligible child in the household as described in 
Sec. 416.1163(b).
    (c) Allocations for aliens who are sponsored by and have income 
deemed from your ineligible parent. We also deduct an allocation for 
eligible aliens who have been sponsored by and have income deemed from 
your ineligible parent as described in Sec. 416.1163(c).
    (d) Allocations for your ineligible parent(s). We next deduct 
allocations for your parent(s). We do not deduct an allocation for a 
parent who is receiving public income-maintenance payments (see 
Sec. 416.1142(a)). The allocations are calculated as follows:
    (1) We first deduct $20 from the parents' combined unearned income, 
if any. If they have less than $20 in unearned income, we subtract the 
balance of the $20 from their combined earned income.
    (2) Next, we subtract $65 plus one-half the remainder of their 
earned income.
    (3) We total the remaining earned and unearned income and subtract--

[[Page 1021]]

    (i) The Federal benefit rate for the month for a couple if both 
parents live with you; or
    (ii) The Federal benefit rate for the month for an individual if 
only one parent lives with you.
    (e)(1) When you are the only eligible child. If you are the only 
eligible child in the household, we deem any of your parents' current 
monthly income that remains to be your unearned income. We combine it 
with your own unearned income and apply the exclusions in Sec. 416.1124 
to determine your countable unearned income in the month. We add this to 
any countable earned income you may have and subtract the total from the 
Federal benefit rate for an individual to determine whether you are 
eligible for benefits.
    (2) When you are not the only eligible child. If your parents have 
more than one eligible child under age 18 in the household, we divide 
the parental income to be deemed equally among those eligible children.
    (3) When one child's income makes that child ineligible. We do not 
deem more income to an eligible child than the amount which, when 
combined with the child's own income, reduces his or her SSI benefit to 
zero. (For purposes of this paragraph, an SSI benefit includes any 
federally administered State supplement). If the share of parental 
income that would be deemed to a child makes that child ineligible 
(reduces the amount to zero) because that child has other countable 
income, we deem any remaining parental income to other eligible children 
under age 18 in the household in the manner described in paragraph 
(e)(2) of this section.
    (f) Determining your SSI benefit. In determining your SSI benefit 
amount, we follow the procedure in paragraphs (a) through (d) of this 
section. However, we use your ineligible parents' income in the second 
month prior to the current month. We vary this rule if any of the 
exceptions in Sec. 416.1160(b)(2) applies (for example, if this is the 
first month you are eligible for payment of an SSI benefit or if you are 
again eligible after at least a month of being ineligible). In the first 
month of your eligibility for payment (or re-eligibility) we deem your 
ineligible parents' income in the current month to determine both 
whether you are eligible for a benefit and the amount of your benefit. 
In the second month we deem your ineligible parents' income in that 
month to determine whether you are eligible for a benefit but we again 
use your countable income (including any that was deemed to you) in the 
first month to determine the amount of your benefit.
    (g) Special rules for a change in status. We have special rules to 
begin or stop deeming your ineligible parents' income to you when a 
change in your family situation occurs.
    (1) Ineligible parent becomes eligible. If your ineligible parent 
becomes eligible for SSI benefits, there will be no income to deem from 
that parent to you to determine your eligibility for SSI benefits 
beginning with the month your parent becomes eligible. However, to 
determine your benefit amount, we follow the rule in Sec. 416.420.
    (2) Eligible parent becomes ineligible. If your eligible parent 
becomes ineligible, we deem your parents' income to you in the first 
month of the parents' ineligibility to determine whether you continue to 
be eligible for SSI benefits. However, if you continue to be eligible, 
in order to determine your benefit amount, we follow the regular rule of 
counting your income in the second month prior to the current month.
    (3) Ineligible parent dies. If your ineligible parent dies, we do 
not deem that parent's income to you to determine your eligibility for 
SSI benefits beginning with the month following the month of death. In 
determining your benefit amount beginning with the month following the 
month of death, we use only your own countable income in a prior month, 
excluding any income deemed to you in that month from your deceased 
ineligible parent (see Sec. 416.1160(b)(2)(iii)). If you live with two 
ineligible parents and one dies, we continue to deem income from the 
surviving ineligible parent who is also your natural or adoptive parent. 
If you live with a stepparent following the death of your natural or 
adoptive parent, we do not deem income from the stepparent.
    (4) Ineligible parent and you no longer live in the same household. 
If your ineligible parent and you no longer live in

[[Page 1022]]

the same household, we do not deem that parent's income to you to 
determine your eligibility for SSI benefits beginning with the first 
month following the month in which one of you leaves the household. We 
also will not deem income to you from your parent's spouse (i.e., your 
stepparent) who remains in the household with you if your natural or 
adoptive parent has permanently left the household. To determine your 
benefit amount if you continue to be eligible, we follow the rule in 
Sec. 416.420 of counting your income including deemed income from your 
parent and your parent's spouse (i.e., your stepparent) (if the 
stepparent and parent lived in the household with you) in the second 
month prior to the current month.
    (5) Ineligible parent and you begin living in the same household. If 
your ineligible parent and you begin living in the same household, we 
consider that parent's income to determine whether you continue to be 
eligible for SSI benefits beginning with the month following the month 
of change. However (if you continue to be eligible), to determine your 
benefit amount, we follow the rule in Sec. 416.420 of counting your 
income in the second month prior to the current month.
    (6) You become subject to the $30 Federal benefit rate. If you 
become a resident of a medical treatment facility and the $30 Federal 
benefit rate applies, we do not deem your ineligible parent's income to 
you to determine your eligibility for SSI benefits beginning with the 
first month for which the $30 Federal benefit rate applies. In 
determining your benefit amount beginning with the first month for which 
the $30 Federal benefit rate applies, we only use your own countable 
income in a prior month, excluding any income deemed to you in that 
month from your ineligible parent.
    (7) You attain age 18. In the month following the month in which you 
attain age 18 and thereafter, we do not deem your ineligible parent's 
income to you to determine your eligibility for SSI benefits. In 
determining your benefit amount beginning with the month following your 
attainment of age 18, we only use your own countable income in a prior 
month, excluding any income deemed to you in that month from your 
ineligible parent (see Sec. 416.1160(b)(2)(B)). Your income for the 
current and subsequent months must include any income in the form of 
cash or in-kind support and maintenance provided by your parents. If you 
attain age 18 and stop living in the same household with your ineligible 
parent, these rules take precedence over paragraph (g)(4) of this 
section which requires continued use of deemed income in the benefit 
computation for 2 months following the month you no longer live in the 
same household.
    (h) Examples. These examples show how we deem an ineligible parent's 
income to an eligible child when none of the exceptions in 
Sec. 416.1160(b)(2) applies. The Federal benefit rates are those 
effective January 1, 1992.

    Example 1. Henry, a disabled child, lives with his mother and father 
and a 12-year-old ineligible brother. His mother receives a pension 
(unearned income) of $365 per month and his father earns $1,165 per 
month. Henry and his brother have no income. First we deduct an 
allocation of $211 for Henry's brother from the unearned income. This 
leaves $154 in unearned income. We reduce the remaining unearned income 
further by the $20 general income exclusion, leaving $134. We then 
reduce the earned income of $1,165 by $65 leaving $1,100. Then we 
subtract one-half of the remainder, leaving $550. To this we add the 
remaining unearned income of $134 resulting in $684. From this, we 
subtract the parent allocation of $633 (the Federal benefit rate for a 
couple) leaving $51 to be deemed as Henry's unearned income. Henry has 
no other income. We apply Henry's $20 general income exclusion which 
reduces his countable income to $31. Since that amount is less than the 
$422 Federal benefit rate for an individual, Henry is eligible. We 
determine his benefit amount by subtracting his countable income 
(including deemed income) in a prior month from the Federal benefit rate 
for an individual for the current month. See Sec. 416.420.
    Example 2. James and Tony are disabled children who live with their 
mother. The children have no income but their mother receives $542 a 
month in unearned income. We reduce the unearned income by the $20 
general income exclusion, leaving $522. We then subtract the amount we 
allocate for the mother's needs, $422 (the Federal benefit rate for an 
individual). The amount remaining to be deemed to James and Tony is 
$100, which we divide equally between them resulting in $50 deemed 
unearned income to each child.

[[Page 1023]]

We then apply the $20 general income exclusion, leaving each child with 
$30 countable income. The $30 of unearned income is less than the $422 
Federal benefit rate for an individual, so the children are eligible. We 
then determine each child's benefit by subtracting his countable income 
(including deemed income) in a prior month from the Federal benefit rate 
for an individual for the current month. See Sec. 416.420.
    Example 3. Mrs. Jones is the ineligible mother of two disabled 
children, Beth and Linda, and has sponsored an eligible alien, Mr. Sean. 
Beth, Linda, and Mr. Sean have no income; Mrs. Jones has unearned income 
of $924 per month. We reduce the mother's unearned income by the $211 
allocation for Mr. Sean, leaving $713. We further reduce her income by 
the $20 general income exclusion, which leaves a balance of $693. Next, 
we subtract the amount we allocate for the mother's needs, $422 (the 
amount of the Federal benefit rate for an individual). The balance of 
$271 to be deemed is divided equally between Beth and Linda. Each now 
has unearned income of $135.50 from which we deduct the $20 general 
income exclusion, leaving each child with $115.50 countable income. 
Since this is less than the $422 Federal benefit rate for an individual, 
the girls are eligible. We then determine each child's benefit by 
subtracting her countable income (including deemed income) in a prior 
month from the Federal benefit rate for an individual for the current 
month. See Sec. 416.420. (For the way we deem the mother's income to Mr. 
Sean, see examples No. 3 and No. 4 in Sec. 416.1166a.)
    Example 4. Jack, a disabled child, lives with his mother, father, 
and two brothers, none of whom are eligible for SSI. Jack's mother 
receives a private pension of $350 per month and his father works and 
earns $1,525 per month. We allocate a total of $422 for Jack's 
ineligible brothers and subtract this from the parents' total unearned 
income of $350; the parents' unearned income is completely offset by the 
allocations for the ineligible children with an excess allocation of $72 
remaining. We subtract the excess of $72 from the parents' total earned 
income leaving $1,453. We next subtract the combined general income and 
earned income exclusions of $85 leaving a remainder of $1,368. We 
subtract one-half the remainder, leaving $684 from which we subtract the 
parents' allocation of $633. This results in $51 deemed to Jack. Jack 
has no other income, so we subtract the general income exclusion of $20 
from the deemed income leaving $31 as Jack's countable income. Since 
this is below the $422 Federal benefit rate for an individual, Jack is 
eligible. We determine his payment amount by subtracting his countable 
income (including deemed income) in a prior month from the Federal 
benefit rate for an individual for the current month. See Sec. 416.420.

    (i) Disabled child under age 18. If you are a disabled child under 
the age of 18 living with your parents, we will not deem your parents' 
income to you if--
    (1) You previously received a reduced SSI benefit while a resident 
of a medical treatment facility, as described in Sec. 416.414;
    (2) You are eligible for medical assistance under a Medicaid State 
home care plan approved by the Secretary under the provisions of section 
1915(c) or authorized under section 1902(e)(3) of the Act; and
    (3) You would otherwise be ineligible for a Federal SSI benefit 
because of the deeming of your parents' income or resources.

[52 FR 8885, Mar. 20, 1987, as amended at 54 FR 19164, May 4, 1989; 57 
FR 48562, Oct. 27, 1992; 60 FR 361, Jan. 4, 1995; 62 FR 1056, Jan. 8, 
1997; 64 FR 31974, June 15, 1999; 72 FR 50874, Sept. 5, 2007; 73 FR 
28036, May 15, 2008]



Sec. 416.1166  How we deem income to you and your eligible child from
your ineligible spouse.

    If you and your eligible child live in the same household with your 
ineligible spouse, we deem your ineligible spouse's income first to you, 
and then we deem any remainder to your eligible child. For the purpose 
of this section, SSI benefits include any federally administered State 
supplement. We then follow the rules in Sec. 416.1165(e) to determine 
the child's eligibility for SSI benefits and in Sec. 416.1165(f) to 
determine the benefit amount.
    (a) Determining your ineligible spouse's income. We first determine 
how much earned and unearned income your ineligible spouse has, using 
the appropriate exclusions in Sec. 416.1161(a).
    (b) Allocations for ineligible children. We next deduct an 
allocation for each ineligible child in the household as described in 
Sec. 416.1163(b).
    (c) Allocations for aliens who are sponsored by and have income 
deemed from your ineligible spouse. We also deduct an allocation for 
eligible aliens who have been sponsored by and have income deemed from 
your ineligible spouse as described in Sec. 416.1163(c).
    (d) Determining your eligibility for SSI benefits and benefit 
amount. We then follow the rules in Sec. 416.1163(c) to find out

[[Page 1024]]

if any of your ineligible spouse's current monthly income is deemed to 
you and, if so, to determine countable income for a couple. Next, we 
follow paragraph (e) of this section to determine your child's 
eligibility. However, if none of your spouse's income is deemed to you, 
none is deemed to your child. Whether or not your spouse's income is 
deemed to you in determining your eligibility, we determine your benefit 
amount as explained in Sec. 416.1163(e).
    (e) Determining your child's eligibility and amount of benefits. (1) 
If you are eligible for SSI benefits after your spouse's income has been 
deemed to you, we do not deem any income to your child. To determine the 
child's eligibility, we subtract the child's own countable income 
without deeming from the benefit rate for an individual.
    (2) If you are not eligible for SSI benefits after your ineligible 
spouse's income has been deemed to you, we deem to your eligible child 
any of your spouse's income which was not used to reduce your SSI 
benefits to zero.
    (f) Examples. These examples show how we deem income to an eligible 
individual and an eligible child in the same household. The Federal 
benefit rates used are those effective January 1, 1984.

    Example 1. Mary, a blind individual, lives with her husband, John, 
and their disabled child, Peter. Mary and Peter have no income, but John 
is employed and earns $605 per month. We determine Mary's eligibility 
first. Since John's income is more than $157, which is one-half of the 
Federal benefit rate for an eligible individual, we treat the entire 
$605 as earned income available to John and Mary as a couple. Because 
they have no unearned income, we reduce the $605 by the $20 general 
income exclusion, and then by the earned income exclusion of $65 plus 
one-half the remainder. This leaves John and Mary with $260 in countable 
income. The $260 countable income is less than the $472 Federal benefit 
rate for a couple, so Mary is eligible; therefore, there is no income to 
be deemed to Peter.
    Example 2. Al, a disabled individual, resides with his ineligible 
spouse, Dora, and their disabled son, Jeff. Al and Jeff have no income, 
but Dora is employed and earns $1,065 a month. Since Dora's income is 
more than $157, which is one-half of the Federal benefit rate for an 
eligible individual, we treat the entire $1,065 as earned income 
available to Al and Dora as a couple. We reduce this income by the $20 
general income exclusion and then by $65 plus one-half the remainder 
(earned income exclusion), leaving $490 in countable income. Al is 
ineligible because the couple's $490 countable income exceeds the $472 
Federal benefit rate for a couple. Since Al is ineligible, we deem to 
Jeff $18, the amount of income over and above the amount which causes Al 
to be ineligible (the difference between the countable income and the 
Federal benefit rate for a couple). We treat the $18 deemed to Jeff as 
unearned income, and we apply the $20 general income exclusion, reducing 
Jeff's countable income to zero. Jeff is eligible.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48578, Nov. 26, 1985; 52 
FR 8887, Mar. 20, 1987; 64 FR 31975, June 15, 1999]



Sec. 416.1166a  How we deem income to you from your sponsor if you
are an alien.

    Before we deem your sponsor's income to you if you are an alien, we 
determine how much earned and unearned income your sponsor has under 
Sec. 416.1161(b). We then deduct allocations for the sponsor and the 
sponsor's dependents. This is an amount equal to the Federal benefit 
rate for an individual for the sponsor (or for each sponsor even if two 
sponsors are married to each other and living together) plus an amount 
equal to one-half the Federal benefit rate for an eligible individual 
for each dependent of the sponsor. An ineligible dependent's income is 
not subtracted from the sponsor's dependent's allocation. We deem the 
balance of the income to be your unearned income.
    (a) If you are the only alien applying for or already eligible for 
SSI benefits who has income deemed to you from your sponsor. If you are 
the only alien who is applying for or already eligible for SSI benefits 
and who is sponsored by your sponsor, all the deemed income is your 
unearned income.
    (b) If you are not the only alien who is applying for or already 
eligible for SSI benefits and who has income deemed from your sponsor. 
If you and other aliens applying for or already eligible for SSI 
benefits are sponsored by the same sponsor, we deem the income to each 
of you as though you were the only alien sponsored by that person. The 
income deemed to you becomes your unearned income.

[[Page 1025]]

    (c) When you are an alien and income is no longer deemed from your 
sponsor. If you are an alien and have had your sponsor's income deemed 
to you, we stop deeming the income with the month in which the third 
anniversary of your admission into the United States occurs.
    (d) When sponsor deeming rules do not apply to you if you are an 
alien. If you are an alien, we do not apply the sponsor deeming rules to 
you if--
    (1) You are a refugee. You are a refugee admitted to the United 
States as the result of application of one of three sections of the 
Immigration and Nationality Act: (1) Section 203(a)(7), effective before 
April 1, 1980; (2) Section 207(c)(1), effective after March 31, 1980; or 
(3) Section 212(d)(5);
    (2) You have been granted asylum. You have been granted political 
asylum by the Attorney General of the United States; or
    (3) You become blind or disabled. If you become blind or disabled as 
defined in Sec. 416.901 (at any age) after your admission to the United 
States, we do not deem your sponsor's income to you to determine your 
eligibility for SSI benefits beginning with the month in which your 
disability or blindness begins. However, to determine your benefit 
payment, we follow the rule in Sec. 416.420 of counting your income in 
the second month prior to the current month.
    (e) Examples. These examples show how we deem a sponsor's income to 
an eligible individual who is an alien when none of the exceptions in 
Sec. 416.1160(b)(2) applies. The income, income exclusions, and the 
benefit rates are in monthly amounts. The Federal benefit rates are 
those effective January 1, 1986.

    Example 1. Mr. John, an alien who has no income, has been sponsored 
by Mr. Herbert who has monthly earned income of $1,300 and unearned 
income of $70. Mr. Herbert's wife and three children have no income. We 
add Mr. Herbert's earned and unearned income for a total of $1,370 and 
apply the allocations for the sponsor and his dependents. Allocations 
total $1,008. These are made up of $336 (the Federal benefit rate for an 
eligible individual) for the sponsor, plus $672 (one-half the Federal 
benefit rate for an eligible individual, $168 each) for Mr. Herbert's 
wife and three children. The $1,008 is subtracted from Mr. Herbert's 
total income of $1,370 which leaves $362 to be deemed to Mr. John as his 
unearned income. Mr. John's only exclusion is the $20 general income 
exclusion. Since the $342 balance exceeds the $336 Federal benefit rate, 
Mr. John is ineligible.
    Example 2. Mr. and Mrs. Smith are an alien couple who have no income 
and who have been sponsored by Mr. Hart. Mr. Hart has earned income of 
$1,350 and his wife, Mrs. Hart, who lives with him, has earned income of 
$150. Their two children have no income. We combine Mr. and Mrs. Hart's 
income ($1,350 + $150 = $1,500). We deduct the allocations of $336 for 
Mr. Hart (the Federal benefit rate for an individual) and $504 for Mrs. 
Hart and the two children ($168 or one-half the Federal benefit rate for 
an eligible individual for each), a total of $840. The allocations 
($840) are deducted from the total $1,500 income which leaves $660. This 
amount must be deemed independently to Mr. and Mrs. Smith. Mr. and Mrs. 
Smith would qualify for SSI benefits as a couple in the amount of $504 
if no income had been deemed to them. The $1,320 ($660 each to Mr. and 
Mrs. Smith) deemed income is unearned income to Mr. and Mrs. Smith and 
is subject to the $20 general income exclusion, leaving $1,300. This 
exceeds the couple's rate of $504 so Mr. and Mrs. Smith are ineligible 
for SSI benefits.
    Example 3. Mr. Bert and Mr. Davis are aliens sponsored by their 
sister Mrs. Jean, who has earned income of $800. She also receives $250 
as survivors' benefits for her two minor children. We do not consider 
the $250 survivors' benefits to be Mrs. Jean's income because it is the 
children's income. We exclude $336 for Mrs. Jean (the Federal benefit 
rate for an individual) plus $336 ($168, one-half the Federal benefit 
rate for an eligible individual for each child), a total of $672. We 
subtract the $672 from Mrs. Jean's income of $800, which leaves $128 to 
be deemed to Mr. Bert and Mr. Davis. Each of the brothers is liable for 
rent in the boarding house (a commercial establishment) where they live. 
Each lives in his own household, receives no in-kind support and 
maintenance, and is eligible for the Federal benefit rate of $336. The 
$128 deemed income is deemed both to Mr. Bert and to Mr. Davis. As a 
result, each has countable income of $108 ($128 minus the $20 general 
income exclusion). This is less than $336, the Federal benefit rate for 
an individual, so that both are eligible for SSI. We use their income in 
a prior month to determine their benefit payments.
    Example 4. The same situation applies as in example 3 except that 
one of Mrs. Jean's children is disabled and eligible for SSI benefits. 
The eligibility of the disabled child does not affect the amount of 
income deemed to Mr. Bert and Mr. Davis since the sponsor-to-alien and 
parent-to-child rules are applied

[[Page 1026]]

independently. The child's countable income is computed under the rules 
in Sec. 416.1165.

[52 FR 8887, Mar. 20, 1987]



Sec. 416.1167  Temporary absences and deeming rules.

    (a) General. During a temporary absence, we continue to consider the 
absent person a member of the household. A temporary absence occurs 
when--
    (1) You, your ineligible spouse, parent, or an ineligible child 
leaves the household but intends to and does return in the same month or 
the month immediately following; or
    (2) You enter a medical treatment facility and are eligible for 
either benefit payable under Sec. 416.212. We consider your absence to 
be temporary through the last month benefits under Sec. 416.212 were 
paid unless you were discharged from the facility in the following 
month. In that case, we consider your absence to be temporary through 
the date of discharge.
    (b) Child away at school. If you are an eligible child who is away 
at school but comes home on some weekends or lengthy holidays and if you 
are subject to the control of your parents, we consider you temporarily 
absent from your parents' household. However, if you are not subject to 
parental control, we do not consider your absence temporary and we do 
not deem parental income (or resources) to you. Being subject to 
parental control affects deeming to you only if you are away at school.
    (c) Active duty military service. If your ineligible spouse or 
parent is absent from the household due solely to a duty assignment as a 
member of the Armed Forces on active duty, we continue to consider that 
person to be living in the same household as you, absent evidence to the 
contrary. If we determine that during such an absence, evidence 
indicates that your spouse or parent should no longer be considered to 
be living in the same household as you, then deeming will cease. When 
such evidence exists, we determine the month in which your spouse or 
parent should no longer be considered to be living in the same household 
as you and stop deeming his or her income and resources beginning with 
the month following that month.

    Example: Tom is a child who receives SSI. In January 1996, Tom's 
father leaves the household due solely to an active duty assignment as a 
member of the Armed Forces. Five months later in June 1996, while Tom's 
father is still on an active duty assignment, Tom's parents file for 
divorce. As a result, Tom's father will not be returning to live in 
Tom's household. Therefore, Tom's father should no longer be considered 
to be living in the same household with Tom. Beginning July 1, 1996, 
deeming from Tom's father will cease.

[50 FR 48579, Nov. 26, 1985, as amended at 61 FR 10280, Mar. 13, 1996; 
62 FR 42411, Aug. 7, 1997; 72 FR 50874, Sept. 5, 2007]



Sec. 416.1168  How we deem income to you from your essential person.

    (a) Essential person's income. If you have an essential person, we 
deem all of that person's income (except any not counted because of 
other Federal statutes as described in Sec. 416.1161(b)) to be your own 
unearned income. If your essential person is also your ineligible 
spouse, or if you are a child whose essential person is your ineligible 
parent, we apply the essential person deeming rules in this section. See 
Sec. 416.1169 for the rules that apply when an ineligible spouse or 
parent ceases to be your essential person.
    (b) Determining your eligibility for an SSI benefit. We apply the 
exclusions to which you are entitled under Secs. 416.1112 and 416.1124 
to your earned income and to your unearned income which includes any 
income deemed from your essential person. After combining the remaining 
amounts of countable income, we compare the total with the Federal 
benefit rate for a qualified individual (see Sec. 416.413) to determine 
whether you are eligible for an SSI benefit.
    (c) Determining your SSI benefit amount. We determine your SSI 
benefit amount in the same way that we determine your eligibility. 
However, in following the procedure in paragraphs (a) and (b) of this 
section we use your essential person's income that we deemed to you in 
the second month prior to the current month. Exception: Beginning with 
the month in which you no longer have your essential person, we do not 
use any of the income deemed to you from that essential person in a 
prior month to determine the amount of your benefit (see 
Sec. 416.1160(a)(3)(ii)(C)).

[[Page 1027]]

We use only your own countable income in a prior month.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48579, Nov. 26, 1985]



Sec. 416.1169  When we stop deeming income from an essential person.

    If including the income deemed to you from your essential person 
causes you to be ineligible for an SSI benefit, you are no longer 
considered to have that essential person whose income makes you 
ineligible. To determine your eligibility for that month we deduct only 
your own countable income from your Federal benefit rate. However, other 
deeming rules may then apply as follows:
    (a) Essential person is your spouse. If the person who was your 
essential person is your ineligible spouse, we apply the deeming rules 
in Sec. 416.1163 beginning with the month that the income of your 
essential person is no longer deemed to you.
    (b) Essential person is your parent. If you are a child under age 
18, and the person who was your essential person is your ineligible 
parent, we apply the deeming rules in Sec. 416.1165 beginning with the 
month that the income of your essential person is no longer deemed to 
you.

[50 FR 48579, Nov. 26, 1985]

     Alternative Income Counting Rules for Certain Blind Individuals



Sec. 416.1170  General.

    (a) What the alternative is. If you are blind and meet the 
requirements in Sec. 416.1171, we use one of two rules to see how much 
countable income you have. We use whichever of the following rules 
results in the lower amount of countable income:
    (1) The SSI income exclusions in Secs. 416.1112 and 416.1124; or
    (2) The disregards that would have applied under the State plan for 
October 1972.
    (b) State plan. As used in this subpart, State plan for October 1972 
means a State plan for providing assistance to the blind under title X 
or XVI (AABD) of the Social Security Act. That plan must have been 
approved under the provisions of 45 CFR chapter II as in effect for 
October 1972.



Sec. 416.1171  When the alternative rules apply.

    (a) Eligibility for the alternative. We use the alternative income 
counting rules for you if you meet all the following conditions:
    (1) You were eligible for, and received, assistance for December 
1973 under a State plan for October 1972;
    (2) You have continued to live in that same State since December 
1973;
    (3) You were transferred to the SSI rolls and received a benefit for 
January 1974; and
    (4) You have not been ineligible for an SSI benefit for any period 
of more than 6 consecutive months. (For purposes of this section, an SSI 
benefit means a Federal benefit; it does not include any State 
supplementation.)
    (b) Living in the same State. For purposes of this section, you have 
continued to live in the same State since December 1973 unless you have 
left it at any time with the intention of moving to another State. If 
there is no evidence to the contrary, we assume that--
    (1) If you leave the State for 90 calendar days or less, the absence 
is temporary and you still live in that State; and
    (2) If you leave the State for more than 90 calendar days, you are 
no longer living there.

  Rules for Helping Blind and Disabled Individuals Achieve Self-Support



Sec. 416.1180  General.

    One of the objectives of the SSI program is to help blind or 
disabled persons become self-supporting. If you are blind or disabled, 
we will pay you SSI benefits and will not count the part of your income 
(for example, your or a family member's wages, title II benefits, or 
pension income) that you use or set aside to use for expenses that we 
determine to be reasonable and necessary to fulfill an approved plan to 
achieve self-support. (See Secs. 416.1112(c)(9) and 1124(c)(13).) You 
may develop a plan to achieve self-support on your own or with our help. 
As appropriate, we will refer you to a State rehabilitation agency or 
agency

[[Page 1028]]

for the blind for additional assistance in developing a plan.

[45 FR 65547, Oct. 3, 1980, as amended at 51 FR 10616, Mar. 28, 1986; 62 
FR 59813, Nov. 5, 1997; 71 FR 28264, May 16, 2006]



Sec. 416.1181  What is a plan to achieve self-support (PASS)?

    (a) A PASS must--
    (1) Be designed especially for you;
    (2) Be in writing;
    (3) Be approved by us (a change of plan must also be approved by 
us);
    (4) Have a specific employment goal that is feasible for you, that 
is, a goal that you have a reasonable likelihood of achieving;
    (5) Have a plan to reach your employment goal that is viable and 
financially sustainable, that is, the plan--
    (i) Sets forth steps that are attainable in order to reach your 
goal, and
    (ii) Shows that you will have enough money to meet your living 
expenses while setting aside income or resources to reach your goal;
    (6) Be limited to one employment goal; however, the employment goal 
may be modified and any changes related to the modification must be made 
to the plan;
    (7) Show how the employment goal will generate sufficient earnings 
to substantially reduce or eliminate your dependence on SSI or eliminate 
your need for title II disability benefits;

    Example 1: A Substantial Reduction Exists. Your SSI monthly payment 
amount is $101 and your PASS employment goal earnings will reduce your 
SSI payment by $90. We may consider that to be a substantial reduction.
    Example 2: A Substantial Reduction Exists. You receive a title II 
benefit of $550 and an SSI payment of $73. Your PASS employment goal 
will result in work over the SGA level that eliminates your title II 
benefit but increases your SSI payment by $90. We may consider that a 
substantial reduction because your work will eliminate your title II 
payment while only slightly increasing your SSI payment.
    Example 3: A Substantial Reduction Does Not Exist. Your SSI monthly 
payment amount is $603 and your PASS employment goal earnings will 
reduce your SSI payment by $90. We may not consider that to be a 
substantial reduction.

    (8) Contain a beginning date and an ending date to meet your 
employment goal;
    (9) Give target dates for meeting milestones towards your employment 
goal;
    (10) Show what expenses you will have and how they are reasonable 
and necessary to meet your employment goal;
    (11) Show what money you have and will receive, how you will use or 
spend it to attain your employment goal, and how you will meet your 
living expenses; and
    (12) Show how the money you set aside under the plan will be kept 
separate from your other funds.
    (b) You must propose a reasonable ending date for your PASS. If 
necessary, we can help you establish an ending date, which may be 
different than the ending date you propose. Once the ending date is set 
and you begin your PASS, we may adjust or extend the ending date of your 
PASS based on progress towards your goal and earnings level reached.
    (c) If your employment goal is self-employment, you must include a 
business plan that defines the business, provides a marketing strategy, 
details financial data, outlines the operational procedures, and 
describes the management plan.
    (d) Your progress will be reviewed at least annually to determine if 
you are following the provisions of your plan.

[71 FR 28264, May 16, 2006]



Sec. 416.1182  When we begin to count the income excluded under the
plan.

    We will begin to count the earned and unearned income that would 
have been excluded under your plan in the month in which any of the 
following circumstances first exist:
    (a) You fail to follow the conditions of your plan;
    (b) You abandon your plan;
    (c) You complete the time schedule outlined in the plan; or
    (d) You reach your goal as outlined in the plan.

[45 FR 65547, Oct. 3, 1980, as amended at 50 FR 48579, Nov. 26, 1985]

[[Page 1029]]



Sec. Appendix to Subpart K of Part 416--List of Types of Income Excluded 
Under the SSI Program as Provided by Federal Laws Other Than the Social 
                              Security Act

    Many Federal statutes in addition to the Social Security Act provide 
assistance or benefits for individuals and specify that the assistance 
or benefit will not be considered in deciding eligibility for SSI. We 
have listed these statutes in this appendix and have placed them in 
categories according to the kind of income or assistance they provide. 
The list gives the name of the Federal statute (where possible), the 
public law number, and the citation. Each item briefly describes what 
the statute provides that will not reduce or eliminate an SSI payment. 
More detailed information is available from a social security office or 
by reference to the statutes.
    We update this list periodically. However, when new Federal statutes 
of this kind are enacted, or existing statutes are changed, we apply the 
law currently in effect, even before this appendix is updated.

                                 I. Food

    (a) Value of food coupons under the Food Stamp Act of 1977, section 
1301 of Pub. L. 95-113 (91 Stat. 968, 7 U.S.C. 2017(b)).
    (b) Value of federally donated foods distributed under section 32 of 
Pub. L. 74-320 (49 Stat. 774) or section 416 of the Agriculture Act of 
1949 (63 Stat. 1058, 7 CFR 250.6(e)(9)).
    (c) Value of free or reduced price food for women and children under 
the--
    (1) Child Nutrition Act of 1966, section 11(b) of Pub. L. 89-642 (80 
Stat. 889, 42 U.S.C. 1780(b)) and section 17 of that Act as added by 
Pub. L. 92-433 (86 Stat. 729, 42 U.S.C. 1786); and
    (2) National School Lunch Act, section 13(h)(3), as amended by 
section 3 of Pub. L. 90-302 (82 Stat. 119, 42 U.S.C. 1761(h)(3)).
    (d) Services, except for wages paid to residents who assist in 
providing congregate services such as meals and personal care, provided 
a resident of an eligible housing project under a congregate services 
program under section 802 of the Cranston-Gonzales National Affordable 
Housing Act, Public Law 101-625 (104 Stat. 4313, 42 U.S.C. 8011).

                        II. Housing and Utilities

    (a) Assistance to prevent fuel cut-offs and to promote energy 
efficiency under the Emergency Energy Conservation Services Program or 
the Energy Crisis Assistance Program as authorized by section 222(a)(5) 
of the Economic Opportunity Act of 1964, as amended by section 5(d)(1) 
of Pub. L. No. 93-644 and section 5(a)(2) of Pub. L. 95-568 (88 Stat. 
2294 as amended, 42 U.S.C. 2809(a)(5)).
    (b) Home energy assistance payments or allowances under title XXVI 
of the Omnibus Budget Reconciliation Act of 1981, Public Law 97-35, as 
amended (42 U.S.C. 8624(f)).

    Note: This exclusion applies to a sponsor's income only if the alien 
is living in the housing unit for which the sponsor receives the home 
energy assistance payments or allowances.

    (c) Value of any assistance paid with respect to a dwelling unit 
under--
    (1) The United States Housing Act of 1937;
    (2) The National Housing Act;
    (3) Section 101 of the Housing and Urban Development Act of 1965; or
    (4) Title V of the Housing Act of 1949.

    Note: This exclusion applies to a sponsor's income only if the alien 
is living in the housing unit for which the sponsor receives the housing 
assistance.

    (d) Payments for relocating, made to persons displaced by Federal or 
federally assisted programs which acquire real property, under section 
216 of Pub. L. 91-646, the Uniform Relocation Assistance and Real 
Property Acquisition Policies Act of 1970 (84 Stat. 1902, 42 U.S.C. 
4636).

                      III. Education and Employment

    (a) Grants or loans to undergraduate students made or insured under 
programs administered by the Secretary of Education under section 507 of 
the Higher Education Amendments of 1968, Pub. L. 90-575 (82 Stat. 1063).
    (b) Any wages, allowances, or reimbursement for transportation and 
attendant care costs, unless excepted on a case-by-case basis, when 
received by an eligible handicapped individual employed in a project 
under title VI of the Rehabilitation Act of 1973 as added by title II of 
Pub. L. 95-602 (92 Stat. 2992, 29 U.S.C. 795(b)(c)).
    (c) Student financial assistance for attendance costs received from 
a program funded in whole or in part under title IV of the Higher 
Education Act of 1965, as amended, or under Bureau of Indian Affairs 
student assistance programs if it is made available for tuition and fees 
normally assessed a student carrying the same academic workload, as 
determined by the institution, including costs for rental or purchase of 
any equipment, materials, or supplies required of all students in the 
same course of study and an allowance for books, supplies, 
transportation, and miscellaneous personal expenses for a student 
attending the institution on at least a half-time basis, as determined 
by the institution, under section 14(27) of Public Law 100-50, the 
Higher Education Technical Amendments Act of 1987 (20 U.S.C. 1087uu).

[[Page 1030]]

                          IV. Native Americans

    (a) Types of Payments Excluded Without Regard to Specific Tribes or 
Groups--
    (1) Indian judgment funds that are held in trust by the Secretary of 
the Interior or distributed per capita pursuant to a plan prepared by 
the Secretary of the Interior and not disapproved by a joint resolution 
of the Congress under Public Law 93-134 as amended by section 4 of 
Public Law 97-458 (96 Stat. 2513, 25 U.S.C. 1408). Indian judgment funds 
include interest and investment income accrued while such funds are so 
held in trust. This exclusion extends to initial purchases made with 
Indian judgment funds. This exclusion does not apply to sales or 
conversions of initial purchases or to subsequent purchases.

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (2) All funds held in trust by the Secretary of the Interior for an 
Indian tribe and distributed per capita to a member of that tribe are 
excluded from income under Public Law 98-64 (97 Stat. 365, 25 U.S.C. 
117b). Funds held by Alaska Native Regional and Village Corporations 
(ANRVC) are not held in trust by the Secretary of the Interior and 
therefore ANRVC dividend distributions are not excluded from countable 
income under this exclusion. For ANRVC dividend distributions, see 
paragraph IV.(a)(3) of this appendix.

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (3) Distributions received by an individual Alaska Native or 
descendant of an Alaska Native from an Alaska Native Regional and 
Village Corporation pursuant to the Alaska Native Claims Settlement Act, 
as follows: cash, including cash dividends on stock received from a 
Native Corporation, to the extent that it does not, in the aggregate, 
exceed $2,000 per individual each year; stock, including stock issued or 
distributed by a Native Corporation as a dividend or distribution on 
stock; a partnership interest; land or an interest in land, including 
land or an interest in land received from a Native Corporation as a 
dividend or distribution on stock; and an interest in a settlement 
trust. This exclusion is pursuant to section 15 of the Alaska Native 
Claims Settlement Act Amendments of 1987, Public Law 100-241 (101 Stat. 
1812, 43 U.S.C. 1626(c)), effective February 3, 1988.

    Note: This exclusion does not apply in deeming income from sponsors 
to aliens.

    (4) Up to $2,000 per year received by Indians that is derived from 
individual interests in trust or restricted lands under section 13736 of 
Public Law 103-66 (107 Stat. 663, 25 U.S.C. 1408, as amended).
    (b) Payments to Members of Specific Indian Tribes and Groups--
    (1) Per capita payments to members of the Red Lake Band of Chippewa 
Indians from the proceeds of the sale of timber and lumber on the Red 
Lake Reservation under section 3 of Public Law 85-794 (72 Stat. 958).
    (2) Per capita distribution payments by the Blackfeet and Gros 
Ventre tribal governments to members which resulted from judgment funds 
to the tribes under section 4 of Public Law 92-254 (86 Stat. 65) and 
under section 6 of Public Law 97-408 (96 Stat. 2036).
    (3) Settlement fund payments and the availability of such funds to 
members of the Hopi and Navajo Tribes under section 22 of Public Law 93-
531 (88 Stat. 1722) as amended by Public Law 96-305 (94 Stat. 929).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (4) Judgment funds distributed per capita to, or held in trust for, 
members of the Sac and Fox Indian Nation, and the availability of such 
funds under section 6 of Public Law 94-189 (89 Stat. 1094).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (5) Judgment funds distributed per capita to, or held in trust for, 
members of the Grand River Band of Ottawa Indians, and the availability 
of such funds under section 6 of Public Law 94-540 (90 Stat. 2504).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (6) Any judgment funds distributed per capita to members of the 
Confederated Tribes and Bands of the Yakima Indian Nation or the Apache 
Tribe of the Mescalero Reservation under section 2 of Public Law 95-433 
(92 Stat. 1047, 25 U.S.C. 609c-1).
    (7) Any judgment funds distributed per capita or made available for 
programs for members of the Delaware Tribe of Indians and the absentee 
Delaware Tribe of Western Oklahoma under section 8 of Public Law 96-318 
(94 Stat. 971).
    (8) All funds and distributions to members of the Passamaquoddy 
Tribe, the Penobscot Nation, and the Houlton Band of Maliseet Indians 
under the Maine Indian Claims Settlement Act, and the availability of 
such funds under section 9 of Public Law 96-420 (94 Stat. 1795, 25 
U.S.C. 1728(c)).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (9) Any distributions of judgment funds to members of the San Carlos 
Apache Indian

[[Page 1031]]

Tribe of Arizona under section 7 of Public Law 93-134 (87 Stat. 468) and 
Public Law 97-95 (95 Stat. 1206).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (10) Any distribution of judgment funds to members of the Wyandot 
Tribe of Indians of Oklahoma under section 6 of Public Law 97-371 (96 
Stat. 1814).
    (11) Distributions of judgment funds to members of the Shawnee Tribe 
of Indians (Absentee Shawnee Tribe of Oklahoma, the Eastern Shawnee 
Tribe of Oklahoma and the Cherokee Band of Shawnee descendants) under 
section 7 of Public Law 97-372 (96 Stat. 1816).
    (12) Judgment funds distributed per capita or made available for 
programs for members of the Miami Tribe of Oklahoma and the Miami 
Indians of Indiana under section 7 of Public Law 97-376 (96 Stat. 1829).
    (13) Distributions of judgment funds to members of the Clallam Tribe 
of Indians of the State of Washington (Port Gamble Indian Community, 
Lower Elwha Tribal Community and the Jamestown Band of Clallam Indians) 
under section 6 of Public Law 97-402 (96 Stat. 2021).
    (14) Judgment funds distributed per capita or made available for 
programs for members of the Pembina Chippewa Indians (Turtle Mountain 
Band of Chippewa Indians, Chippewa Cree Tribe of Rocky Boy's 
Reservation, Minnesota Chippewa Tribe, Little Shell Band of the Chippewa 
Indians of Montana, and the nonmember Pembina descendants) under section 
9 of Public Law 97-403 (96 Stat. 2025).
    (15) Per capita distributions of judgment funds to members of the 
Assiniboine Tribe of Fort Belknap Indian Community and the Papago Tribe 
of Arizona under sections 6 and 8(d) of Public Law 97-408 (96 Stat. 
2036, 2038).
    (16) Up to $2,000 of per capita distributions of judgment funds to 
members of the Confederated Tribes of the Warm Springs Reservation under 
section 4 of Public Law 97-436 (96 Stat. 2284).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (17) Judgment funds distributed to the Red Lake Band of Chippewa 
Indians under section 3 of Public Law 98-123 (97 Stat. 816).
    (18) Funds distributed per capita or family interest payments for 
members of the Assiniboine Tribe of Fort Belknap Indian Community of 
Montana and the Assiniboine Tribe of the Fort Peck Indian Reservation of 
Montana under section 5 of Public Law 98-124 (97 Stat. 818).
    (19) Distributions of judgment funds and income derived therefrom to 
members of the Shoalwater Bay Indian Tribe under section 5 of Public Law 
98-432 (98 Stat. 1672).
    (20) All distributions to heirs of certain deceased Indians under 
section 8 of the Old Age Assistance Claims Settlement Act, Public Law 
98-500 (98 Stat. 2319).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (21) Judgment funds distributed per capita or made available for any 
tribal program for members of the Wyandotte Tribe of Oklahoma and the 
Absentee Wyandottes under section 106 of Public Law 98-602 (98 Stat. 
3151).
    (22) Per capita and dividend payment distributions of judgment funds 
to members of the Santee Sioux Tribe of Nebraska, the Flandreau Santee 
Sioux Tribe, the Prairie Island Sioux, Lower Sioux, and Shakopee 
Mdewakanton Sioux Communities of Minnesota under section 8 of Public Law 
99-130 (99 Stat. 552) and section 7 of Public Law 93-134 (87 Stat. 468), 
as amended by Public Law 97-458 (96 Stat. 2513; 25 U.S.C. 1407).
    (23) Funds distributed per capita or held in trust for members of 
the Chippewas of Lake Superior and the Chippewas of the Mississippi 
under section 6 of Public Law 99-146 (99 Stat. 782).
    (24) Distributions of claims settlement funds to members of the 
White Earth Band of Chippewa Indians as allottees, or their heirs, under 
section 16 of Public Law 99-264 (100 Stat. 70).
    (25) Payments or distributions of judgment funds, and the 
availability of any amount for such payments or distributions, to 
members of the Saginaw Chippewa Indian Tribe of Michigan under section 6 
of Public Law 99-346 (100 Stat. 677).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (26) Judgment funds distributed per capita or held in trust for 
members of the Chippewas of Lake Superior and the Chippewas of the 
Mississippi under section 4 of Public Law 99-377 (100 Stat. 805).
    (27) Judgment funds distributed to members of the Cow Creek Band of 
Umpqua Tribe of Indians under section 4 of Public Law 100-139 (101 Stat. 
822).
    (28) Per capita payments of claims settlement funds to members of 
the Coushatta Tribe of Louisiana under section 2 of Public Law 100-411 
(102 Stat. 1097) and section 7 of Public Law 93-134 (87 Stat. 468), as 
amended by Public Law 97-458 (96 Stat. 2513; 25 U.S.C. 1407).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (29) Funds distributed per capita for members of the Hoopa Valley 
Indian Tribe and the Yurok Indian Tribe under sections 4, 6

[[Page 1032]]

and 7 of Public Law 100-580 (102 Stat. 2929, 2930, 2931) and section 3 
of Public Law 98-64 (97 Stat. 365; 25 U.S.C. 117b).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (30) Judgment funds held in trust by the United States, including 
interest and investment income accruing on such funds, and judgment 
funds made available for programs or distributed to members of the 
Wisconsin Band of Potawatomi (Hannahville Indian Community and Forest 
County Potawatomi) under section 503 of Public Law 100-581 (102 Stat. 
2945).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (31) All funds, assets, and income from the trust fund transferred 
to the members of the Puyallup Tribe under section 10 of the Puyallup 
Tribe of Indians Settlement Act of 1989, Public Law 101-41 (103 Stat. 
88, 25 U.S.C. 1773h(c)).

    Note: This exclusion does not apply in deeming income from sponsors 
to aliens.

    (32) Judgment funds distributed per capita, or held in trust, or 
made available for programs, for members of the Seminole Nation of 
Oklahoma, the Seminole Tribe of Florida, the Miccosukee Tribe of Indians 
of Florida and the independent Seminole Indians of Florida under section 
8 of Public Law 101-277 (104 Stat. 145).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (33) Payments, funds, distributions, or income derived from them to 
members of the Seneca Nation of New York under section 8(b) of the 
Seneca Nation Settlement Act of 1990, Public Law 101-503 (104 Stat. 
1297, 25 U.S.C. 1774f).

    Note: This exclusion does not apply in deeming income from sponsors 
to aliens.

    (34) Per capita distributions of settlement funds under section 102 
of the Fallon Paiute Shoshone Indian Tribes Water Rights Settlement Act 
of 1990, Public Law 101-618 (104 Stat. 3289) and section 7 of Public Law 
93-134 (87 Stat. 468), as amended by Public Law 97-458 (96 Stat. 2513; 
25 U.S.C. 1407).
    (35) Settlement funds, assets, income, payments, or distributions 
from Trust Funds to members of the Catawba Indian Tribe of South 
Carolina under section 11(m) of Public Law 103-116 (107 Stat. 1133).
    (36) Settlement funds held in trust (including interest and 
investment income accruing on such funds) for, and payments made to, 
members of the Confederated Tribes of the Colville Reservation under 
section 7(b) of Public Law 103-436 (108 Stat. 4579).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (37) Judgment funds distributed under section 111 of the Michigan 
Indian Land Claims Settlement Act, (Pub. L. 105-143, 111 Stat. 2665).
    (38) Judgment funds distributed under section 4 of the Cowlitz 
Indian Tribe Distribution of Judgment Funds Act, (Pub. L. 108-222, 118 
Stat. 624).
    (c) Receipts from Lands Held in Trust for Certain Tribes or Groups--
    (1) Receipts from land held in trust by the Federal government and 
distributed to members of certain Indian tribes under section 6 of 
Public Law 94-114 (89 Stat. 579, 25 U.S.C. 459e).

    Note: This exclusion applies to the income of sponsors of aliens 
only if the alien lives in the sponsor's household.

    (2) Receipts derived from trust lands awarded to the Pueblo of Santa 
Ana and distributed to members of that tribe under section 6 of Public 
Law 95-498 (92 Stat. 1677).
    (3) Receipts derived from trust lands awarded to the Pueblo of Zia 
of New Mexico and distributed to members of that tribe under section 6 
of Public Law 95-499 (92 Stat. 1680).

                                V. Other

    (a) Compensation provided to volunteers by the Corporation for 
National and Community Service (CNCS), unless determined by the CNCS to 
constitute the minimum wage in effect under the Fair Labor Standards Act 
of 1938 (29 U.S.C. 201 et seq.), or applicable State law, pursuant to 42 
U.S.C. 5044(f)(1).

    Note: This exclusion does not apply to the income of sponsors of 
aliens.

    (b) Any assistance to an individual (other than wages or salaries) 
under the Older Americans Act of 1965, as amended by section 102(h)(1) 
of Pub. L. 95-478 (92 Stat. 1515, 42 U.S.C. 3020a).
    (c) Amounts paid as restitution to certain individuals of Japanese 
ancestry and Aleuts for losses suffered as a result of evacuation, 
relocation, and internment during World War II, under the Civil 
Liberties Act of 1988 and the Aleutian and Pribilof Islands Restitution 
Act, sections 105(f) and 206(d) of Public Law 100-383 (50 U.S.C. App. 
1989 b and c).
    (d) Payments made on or after January 1, 1989, from the Agent Orange 
Settlement Fund or any other fund established pursuant to the settlement 
in the In Re Agent Orange product liability litigation, M.D.L. No. 381 
(E.D.N.Y.) under Public Law 101-201 (103

[[Page 1033]]

Stat. 1795) and section 10405 of Public Law 101-239 (103 Stat. 2489).
    (e) Payments made under section 6 of the Radiation Exposure 
Compensation Act, Public Law 101-426 (104 Stat. 925, 42 U.S.C. 2210).
    (f) The value of any child care provided or arranged (or any payment 
for such care or reimbursement for costs incurred for such care) under 
the Child Care and Development Block Grant Act, as amended by section 
8(b) of Public Law 102-586 (106 Stat. 5035).
    (g) Payments made to individuals because of their status as victims 
of Nazi persecution excluded pursuant to section 1(a) of the Victims of 
Nazi Persecution Act of 1994, Public Law 103-286 (108 Stat. 1450).
    (h) Any matching funds from a demonstration project authorized by 
the Community Opportunities, Accountability, and Training and 
Educational Services Act of 1998 (Pub. L. 105-285) and any interest 
earned on these matching funds in an Individual Development Account, 
pursuant to section 415 of Pub. L. 105-285 (112 Stat. 2771).
    (i) Any earnings, Temporary Assistance for Needy Families matching 
funds, and interest in an Individual Development Account, pursuant to 
section 103 of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (Pub. L. 104-193, 42 U.S.C. 604(h)(4)).
    (j) Payments made to individuals who were captured and interned by 
the Democratic Republic of Vietnam as a result of participation in 
certain military operations, pursuant to section 606 of the Departments 
of Labor, Health and Human Services and Education and Related Agencies 
Appropriations Act of 1996 (Pub. L. 105-78).
    (k) Payments made to certain Vietnam veterans' children with spina 
bifida, pursuant to section 421 of the Departments of Veterans Affairs 
and Housing and Urban Development, and Independent Agencies 
Appropriations Act of 1997 (Pub. L. 104-204, 38 U.S.C. 1805(a)).
    (l) Payments made to the children of women Vietnam veterans who 
suffer from certain birth defects, pursuant to section 401 of the 
Veterans Benefits and Health Care Improvement Act of 2000 (Pub. L. 106-
419 (38 U.S.C. 1833(c)).
    (m) Payments of the refundable child tax credit made under section 
24 of the Internal Revenue Code of 1986, pursuant to section 203 of the 
Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 
107-16 (115 Stat. 49, 26 U.S.C. 24 note).
    (n) Assistance provided for flood mitigation activities as provided 
under section 1324 of the National Flood Insurance Act of 1968, pursuant 
to section 1 of Public Law 109-64 (119 Stat. 1997, 42 U.S.C. 4031).
    (o) Payments made to individuals under the Energy Employees 
Occupational Illness Compensation Program Act of 2000, pursuant to 
section 1 [Div. C, Title XXXVI section 3646] of Public Law 106-398 (114 
Stat. 1654A-510, 42 U.S.C. 7385e).

[45 FR 65547, Oct. 3, 1980, as amended at 52 FR 8888, Mar. 20, 1987; 57 
FR 53851, Nov. 13, 1992; 57 FR 55088, Nov. 24, 1992; 59 FR 8538, Feb. 
23, 1994; 62 FR 30982, June 6, 1997; 70 FR 41137, July 18, 2005; 75 FR 
1273, Jan. 11, 2010]



                   Subpart L_Resources and Exclusions

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 1621, 
1631, and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 1381a, 
1382, 1382a, 1382b, 1382c(f), 1382j, 1383, and 1383b); sec. 211, Pub. L. 
93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    Source: 40 FR 48915, Oct. 20, 1975, unless otherwise noted.



Sec. 416.1201  Resources; general.

    (a) Resources; defined. For purposes of this subpart L, resources 
means cash or other liquid assets or any real or personal property that 
an individual (or spouse, if any) owns and could convert to cash to be 
used for his or her support and maintenance.
    (1) If the individual has the right, authority or power to liquidate 
the property or his or her share of the property, it is considered a 
resource. If a property right cannot be liquidated, the property will 
not be considered a resource of the individual (or spouse).
    (2) Support and maintenance assistance not counted as income under 
Sec. 416.1157(c) will not be considered a resource.
    (3) Except for cash reimbursement of medical or social services 
expenses already paid for by the individual, cash received for medical 
or social services that is not income under Sec. 416.1103 (a) or (b), or 
a retroactive cash payment which is income that is excluded from deeming 
under Sec. 416.1161(a)(16), is not a resource for the calendar month 
following the month of its receipt. However, cash retained until the 
first moment of the second calendar month following its receipt is a 
resource at that time.
    (i) For purposes of this provision, a retroactive cash payment is 
one that is paid after the month in which it was due.

[[Page 1034]]

    (ii) This provision applies only to the unspent portion of those 
cash payments identified in this paragraph (a)(3). Once the cash from 
such payments is spent, this provision does not apply to items purchased 
with the money, even if the period described above has not expired.
    (iii) Unspent money from those cash payments identified in this 
paragraph (a)(3) must be identifiable from other resources for this 
provision to apply. The money may be commingled with other funds, but if 
this is done in such a fashion that an amount from such payments can no 
longer be separately identified, that amount will count toward the 
resource limit described in Sec. 416.1205.
    (4) Death benefits, including gifts and inheritances, received by an 
individual, to the extent that they are not income in accordance with 
paragraphs (e) and (g) of Sec. 416.1121 because they are to be spent on 
costs resulting from the last illness and burial of the deceased, are 
not resources for the calendar month following the month of receipt. 
However, such death benefits retained until the first moment of the 
second calendar month following their receipt are resources at that 
time.
    (b) Liquid resources. Liquid resources are cash or other property 
which can be converted to cash within 20 days, excluding certain nonwork 
days as explained in Sec. 416.120(d). Examples of resources that are 
ordinarily liquid are stocks, bonds, mutual fund shares, promissory 
notes, mortgages, life insurance policies, financial institution 
accounts (including savings, checking, and time deposits, also known as 
certificates of deposit) and similar items. Liquid resources, other than 
cash, are evaluated according to the individual's equity in the 
resources. (See Sec. 416.1208 for the treatment of funds held in 
individual and joint financial institution accounts.)
    (c) Nonliquid resources. (1) Nonliquid resources are property which 
is not cash and which cannot be converted to cash within 20 days 
excluding certain nonwork days as explained in Sec. 416.120(d). Examples 
of resources that are ordinarily nonliquid are loan agreements, 
household goods, automobiles, trucks, tractors, boats, machinery, 
livestock, buildings and land. Nonliquid resources are evaluated 
according to their equity value except as otherwise provided. (See 
Sec. 416.1218 for treatment of automobiles.)
    (2) For purposes of this subpart L, the equity value of an item is 
defined as:
    (i) The price that item can reasonably be expected to sell for on 
the open market in the particular geographic area involved; minus
    (ii) Any encumbrances.

[40 FR 48915, Oct. 20, 1975, as amended at 44 FR 43266, July 24, 1979; 
48 FR 33259, July 21, 1983; 52 FR 4283, Feb. 11, 1987; 52 FR 16845, May 
6, 1987; 53 FR 23231, June 21, 1988; 56 FR 36001, July 30, 1991; 57 FR 
35461, Aug. 10, 1992; 57 FR 55089, Nov. 24, 1992; 59 FR 27988, May 31, 
1994]



Sec. 416.1202  Deeming of resources.

    (a) Married individual. In the case of an individual who is living 
with a person not eligible under this part and who is considered to be 
the husband or wife of such individual under the criteria in 
Secs. 416.1802 through 416.1835 of this part, such individual's 
resources shall be deemed to include any resources, not otherwise 
excluded under this subpart, of such spouse whether or not such 
resources are available to such individual. In addition to the 
exclusions listed in Sec. 416.1210, we also exclude the following items:
    (1) Pension funds that the ineligible spouse may have. Pension funds 
are defined as funds held in individual retirement accounts (IRA), as 
described by the Internal Revenue Code, or in work-related pension plans 
(including such plans for self-employed persons, sometimes referred to 
as Keogh plans);
    (2) For 9 months beginning with the month following the month of 
receipt, the unspent portion of any retroactive payment of special pay 
an ineligible spouse received from one of the uniformed services 
pursuant to 37 U.S.C. 310; and
    (3) For 9 months beginning with the month following the month of 
receipt, the unspent portion of any retroactive payment of family 
separation allowance an ineligible spouse received from one of the 
uniformed services pursuant to 37 U.S.C. 427 as a result of deployment 
to or service in a combat zone (as defined in Sec. 416.1160(d)).

[[Page 1035]]

    (b) Child--(1) General. In the case of a child (as defined in 
Sec. 416.1856) who is under age 18, we will deem to that child any 
resources, not otherwise excluded under this subpart, of his or her 
ineligible parent who is living in the same household with him or her 
(as described in Sec. 416.1851). We also will deem to the child the 
resources of his or her ineligible stepparent. As used in this section, 
the term ``parent'' means the natural or adoptive parent of a child, and 
the term ``stepparent'' means the spouse (as defined in Sec. 416.1806) 
of such natural or adoptive parent who is living in the same household 
with the child and parent. We will deem to a child the resources of his 
or her parent and stepparent whether or not those resources are 
available to him or her. We will deem to a child the resources of his or 
her parent and stepparent only to the extent that those resources exceed 
the resource limits described in Sec. 416.1205. (If the child is living 
with only one parent, we apply the resource limit for an individual. If 
the child is living with both parents, or the child is living with one 
parent and a stepparent, we apply the resource limit for an individual 
and spouse.) We will not deem to a child the resources of his or her 
parent or stepparent if the child is excepted from deeming under 
paragraph (b)(2) of this section. In addition to the exclusions listed 
in Sec. 416.1210, we also exclude the following items:
    (i) Pension funds of an ineligible parent (or stepparent). Pension 
funds are defined as funds held in IRAs, as described by the Internal 
Revenue Code, or in work-related pension plans (including such plans for 
self-employed persons, sometimes referred to as Keogh plans);
    (ii) For 9 months beginning with the month following the month of 
receipt, the unspent portion of any retroactive payment of special pay 
an ineligible parent (or stepparent) received from one of the uniformed 
services pursuant to 37 U.S.C. 310; and
    (iii) For 9 months beginning with the month following the month of 
receipt, the unspent portion of any retroactive payment of family 
separation allowance an ineligible parent (or stepparent) received from 
one of the uniformed services pursuant to 37 U.S.C. 427 as a result of 
deployment to or service in a combat zone (as defined in 
Sec. 416.1160(d)).
    (2) Disabled child under age 18. In the case of a disabled child 
under age 18 who is living in the same household with his or her 
parents, the deeming provisions of paragraph (b)(1) of this section 
shall not apply if such child--
    (i) Previously received a reduced SSI benefit while a resident of a 
medical treatment facility, as described in Sec. 416.414;
    (ii) Is eligible for medical assistance under a Medicaid State home 
care plan approved by the Secretary under the provisions of section 
1915(c) or authorized under section 1902(e)(3) of the Act; and
    (iii) Would otherwise be ineligible because of the deeming of his or 
her parents' resources or income.
    (c) Applicability. When used in this subpart L, the term individual 
refers to an eligible aged, blind, or disabled person, and also includes 
a person whose resources are deemed to be the resources of such 
individual (as provided in paragraphs (a) and (b) of this section).

[40 FR 48915, Oct. 20, 1975, as amended at 50 FR 38982, Sept. 26, 1985; 
52 FR 8888, Mar. 20, 1987; 52 FR 29841, Aug. 12, 1987; 52 FR 32240, Aug. 
26, 1987; 60 FR 361, Jan. 4, 1995; 62 FR 1056, Jan. 8, 1997; 65 FR 
16815, Mar. 30, 2000; 72 FR 50875, Sept. 5, 2007; 73 FR 28036, May 15, 
2008; 75 FR 7554, Feb. 22, 2010]



Sec. 416.1203  Deeming of resources of an essential person.

    In the case of a qualified individual (as defined in Sec. 416.221) 
whose payment standard has been increased because of the presence of an 
essential person (as defined in Sec. 416.222), the resources of such 
qualified individual shall be deemed to include all the resources of 
such essential person with the exception of the resources explained in 
Secs. 416.1210(t) and 416.1249. If such qualified individual would not 
meet the resource criteria for eligibility (as defined in Secs. 416.1205 
and 416.1260) because of the deemed resources, then the payment standard 
increase because of the essential person will be nullified and the 
provision of this section will not apply; essential person status is 
lost

[[Page 1036]]

permanently. However, if such essential person is an ineligible spouse 
of a qualified individual or a parent (or spouse of a parent) of a 
qualified individual who is a child under age 21, then the resources of 
such person will be deemed to such qualified individual in accordance 
with the provision in Sec. 416.1202.

[39 FR 33797, Sept. 20, 1974, as amended at 51 FR 10616, Mar. 28, 1986; 
70 FR 41138, July 18, 2005]



Sec. 416.1204  Deeming of resources of the sponsor of an alien.

    The resources of an alien who first applies for SSI benefits after 
September 30, 1980, are deemed to include the resources of the alien's 
sponsor for 3 years after the alien's date of admission into the United 
States. The date of admission is the date established by the U.S. 
Citizenship and Immigration Services as the date the alien is admitted 
for permanent residence. The resources of the sponsor's spouse are 
included if the sponsor and spouse live in the same household. Deeming 
of these resources applies regardless of whether the alien and sponsor 
live in the same household and regardless of whether the resources are 
actually available to the alien. For rules that apply in specific 
situations, see Sec. 416.1166a(d).
    (a) Exclusions from the sponsor's resources. Before we deem a 
sponsor's resources to an alien, we exclude the same kinds of resources 
that are excluded from the resources of an individual eligible for SSI 
benefits. The applicable exclusions from resources are explained in 
Secs. 416.1210 (paragraphs (a) through (i), (k), and (m) through (t)) 
through 416.1239 and Secs. 416.1247 through 416.1249. For resources 
excluded by Federal statutes other than the Social Security Act, as 
applicable to the resources of sponsors deemed to aliens, see the 
appendix to subpart K of part 416. We next allocate for the sponsor or 
for the sponsor and spouse (if living together). (The amount of the 
allocation is the applicable resource limit described in Sec. 416.1205 
for an eligible individual and an individual and spouse.)
    (b) An alien sponsored by more than one sponsor. The resources of an 
alien who has been sponsored by more than one person are deemed to 
include the resources of each sponsor.
    (c) More than one alien sponsored by one individual. If more than 
one alien is sponsored by one individual the deemed resources are deemed 
to each alien as if he or she were the only one sponsored by the 
individual.
    (d) Alien has a sponsor and a parent or a spouse with deemable 
resources. Resources may be deemed to an alien from both a sponsor and a 
spouse or parent (if the alien is a child) provided that the sponsor and 
the spouse or parent are not the same person and the conditions for each 
rule are met.
    (e) Alien's sponsor is also the alien's ineligible spouse or parent. 
If the sponsor is also the alien's ineligible spouse or parent who lives 
in the same household, the spouse-to-spouse or parent-to-child deeming 
rules apply instead of the sponsor-to-alien deeming rules. If the spouse 
or parent deeming rules cease to apply, the sponsor deeming rules will 
begin to apply. The spouse or parent rules may cease to apply if an 
alien child reaches age 18 or if either the sponsor who is the 
ineligible spouse or parent, or the alien moves to a separate household.
    (f) Alien's sponsor also is the ineligible spouse or parent of 
another SSI beneficiary. If the sponsor is also the ineligible spouse or 
ineligible parent of an SSI beneficiary other than the alien, the 
sponsor's resources are deemed to the alien under the rules in paragraph 
(a), and to the eligible spouse or child under the rules in 
Secs. 416.1202, 1205, 1234, 1236, and 1237.

[52 FR 8888, Mar. 20, 1987, as amended at 61 FR 1712, Jan. 23, 1996; 70 
FR 41138, July 18, 2005; 73 FR 28036, May 15, 2008]



Sec. 416.1204a  Deeming of resources where Medicaid eligibility 
is affected.

    Section 416.1161a of this part describes certain circumstances 
affecting Medicaid eligibility in which the Department will not deem 
family income to an individual. The Department will follow the same 
standards, procedures, and limitations set forth in that section with 
respect to deeming of resources.

[49 FR 5747, Feb. 15, 1984]

[[Page 1037]]



Sec. 416.1205  Limitation on resources.

    (a) Individual with no eligible spouse. An aged, blind, or disabled 
individual with no spouse is eligible for benefits under title XVI of 
the Act if his or her nonexcludable resources do not exceed $1,500 prior 
to January 1, 1985, and all other eligibility requirements are met. An 
individual who is living with an ineligible spouse is eligible for 
benefits under title XVI of the Act if his or her nonexcludable 
resources, including the resources of the spouse, do not exceed $2,250 
prior to January 1, 1985, and all other eligibility requirements are 
met.
    (b) Individual with an eligible spouse. An aged, blind, or disabled 
individual who has an eligible spouse is eligible for benefits under 
title XVI of the Act if their nonexcludable resources do not exceed 
$2,250 prior to January 1, 1985, and all other eligibility requirements 
are met.
    (c) Effective January 1, 1985 and later. The resources limits and 
effective dates for January 1, 1985 and later are as follows:

------------------------------------------------------------------------
                                                              Individual
                Effective date                   Individual   and spouse
------------------------------------------------------------------------
Jan. 1, 1985..................................       $1,600       $2,400
Jan. 1, 1986..................................        1,700       $2,550
Jan. 1, 1987..................................        1,800       $2,700
Jan. 1, 1988..................................        1,900       $2,850
Jan. 1, 1989..................................        2,000       $3,000
------------------------------------------------------------------------


[50 FR 38982, Sept. 26, 1985]



Sec. 416.1207  Resources determinations.

    (a) General. Resources determinations are made as of the first 
moment of the month. A resource determination is based on what assets an 
individual has, what their values are, and whether or not they are 
excluded as of the first moment of the month.
    (b) Increase in value of resources. If, during a month, a resource 
increases in value or an individual acquires an additional resource or 
replaces an excluded resource with one that is not excluded, the 
increase in the value of the resources is counted as of the first moment 
of the next month
    (c) Decrease in value of resources. If, during a month, a resource 
decreases in value or an individual spends a resource or replaces a 
resource that is not excluded with one that is excluded, the decrease in 
the value of the resources is counted as of the first moment of the next 
month.
    (d) Treatment of items under income and resource counting rules. 
Items received in cash or in kind during a month are evaluated first 
under the income counting rules and, if retained until the first moment 
of the following month, are subject to the rules for counting resources 
at that time.
    (e) Receipts from the sale, exchange, or replacement of a resource. 
If an individual sells, exchanges or replaces a resource, the receipts 
are not income. They are still considered to be a resource. This rule 
includes resources that have never been counted as such because they 
were sold, exchanged or replaced in the month in which they were 
received. See Sec. 416.1246 for the rule on resources disposed of for 
less than fair market value (including those disposed of during the 
month of receipt).

    Example: Miss L., a disabled individual, receives a $350 
unemployment insurance benefit on January 10, 1986. The benefit is 
unearned income to Miss L. when she receives it. On January 14, Miss L. 
uses the $350 payment to purchase shares of stock. Miss L. has exchanged 
one item (cash) for another item (stock). The $350 payment is never 
counted as a resource to Miss L. because she exchanged it in the same 
month she received it. The stock is not income; it is a different form 
of a resource exchanged for the cash. Since a resource is not countable 
until the first moment of the month following its receipt, the stock is 
not a countable resource to Miss L. until February 1.

[52 FR 4283, Feb. 11, 1987]



Sec. 416.1208  How funds held in financial institution accounts are
counted.

    (a) General. Funds held in a financial institution account 
(including savings, checking, and time deposits, also known as 
certificates of deposit) are an individual's resource if the individual 
owns the account and can use the funds for his or her support and 
maintenance. We determine whether an individual owns the account and can 
use the funds for his or her support and maintenance by looking at how 
the individual holds the account. This is reflected in the way the 
account is titled.
    (b) Individually-held account. If an individual is designated as 
sole owner by the account title and can withdraw

[[Page 1038]]

funds and use them for his or her support and maintenance, all of the 
funds, regardless of their source, are that individual's resource. For 
as long as these conditions are met, we presume that the individual owns 
100 percent of the funds in the account. This presumption is non-
rebuttable.
    (c) Jointly-held account--(1) Account holders include one or more 
SSI claimants or recipients. If there is only one SSI claimant or 
recipient account holder on a jointly held account, we presume that all 
of the funds in the account belong to that individual. If there is more 
than one claimant or recipient account holder, we presume that all the 
funds in the account belong to those individuals in equal shares.
    (2) Account holders include one or more deemors. If none of the 
account holders is a claimant or recipient, we presume that all of the 
funds in a jointly-held account belong to the deemor(s), in equal shares 
if there is more than one deemor. A deemor is a person whose income and 
resources are required to be considered when determining eligibility and 
computing the SSI benefit for an eligible individual (see Secs. 416.1160 
and 416.1202).
    (3) Right to rebut presumption of ownership. If the claimant, 
recipient, or deemor objects or disagrees with an ownership presumption 
as described in paragraph (c)(1) or (c)(2) of this section, we give the 
individual the opportunity to rebut the presumption. Rebuttal is a 
procedure as described in paragraph (c)(4) of this section, which 
permits an individual to furnish evidence and establish that some or all 
of the funds in a jointly-held account do not belong to him or her. 
Successful rebuttal establishes that the individual does not own some or 
all of the funds. The effect of successful rebuttal may be retroactive 
as well as prospective.

    Example: The recipient's first month of eligibility is January 1993. 
In May 1993 the recipient successfully establishes that none of the 
funds in a 5-year-old jointly-held account belong to her. We do not 
count any of the funds as resources for the months of January 1993 and 
continuing.

    (4) Procedure for rebuttal. To rebut an ownership presumption as 
described in paragraph (c)(1) or (c)(2) of this section, the individual 
must:
    (i) Submit his/her statement, along with corroborating statements 
from other account holders, regarding who owns the funds in the joint 
account, why there is a joint account, who has made deposits to and 
withdrawals from the account, and how withdrawals have been spent;
    (ii) Submit account records showing deposits, withdrawals, and 
interest (if any) in the months for which ownership of funds is at 
issue; and
    (iii) Correct the account title to show that the individual is no 
longer a co-owner if the individual owns none of the funds; or, if the 
individual owns only a portion of the funds, separate the funds owned by 
the other account holder(s) from his/her own funds and correct the 
account title on the individual's own funds to show they are solely-
owned by the individual.

[59 FR 27989, May 31, 1994]



Sec. 416.1210  Exclusions from resources; general.

    In determining the resources of an individual (and spouse, if any), 
the following items shall be excluded:
    (a) The home (including the land appertaining thereto) to the extent 
its value does not exceed the amount set forth in Sec. 416.1212;
    (b) Household goods and personal effects as defined in 
Sec. 416.1216;
    (c) An automobile, if used for transportation, as provided in 
Sec. 416.1218;
    (d) Property of a trade or business which is essential to the means 
of self-support as provided in Sec. 416.1222;
    (e) Nonbusiness property which is essential to the means of self-
support as provided in Sec. 416.1224;
    (f) Resources of a blind or disabled individual which are necessary 
to fulfill an approved plan for achieving self-support as provided in 
Sec. 416.1226;
    (g) Stock in regional or village corporations held by natives of 
Alaska during the twenty-year period in which the stock is inalienable 
pursuant to the Alaska Native Claims Settlement Act (see Sec. 416.1228);
    (h) Life insurance owned by an individual (and spouse, if any) to 
the extent provided in Sec. 416.1230;
    (i) Restricted allotted Indian lands as provided in Sec. 416.1234;

[[Page 1039]]

    (j) Payments or benefits provided under a Federal statute other than 
title XVI of the Social Security Act where exclusion is required by such 
statute;
    (k) Disaster relief assistance as provided in Sec. 416.1237;
    (l) Burial spaces and certain funds up to $1,500 for burial expenses 
as provided in Sec. 416.1231;
    (m) Title XVI or title II retroactive payments as provided in 
Sec. 416.1233;
    (n) Housing assistance as provided in Sec. 416.1238;
    (o) Refunds of Federal income taxes and advances made by an employer 
relating to an earned income tax credit, as provided in Sec. 416.1235;
    (p) Payments received as compensation for expenses incurred or 
losses suffered as a result of a crime as provided in Sec. 416.1229;
    (q) Relocation assistance from a State or local government as 
provided in Sec. 416.1239;
    (r) Dedicated financial institution accounts as provided in 
Sec. 416.1247;
    (s) Gifts to children under age 18 with life-threatening conditions 
as provided in Sec. 416.1248;
    (t) Restitution of title II, title VIII or title XVI benefits 
because of misuse by certain representative payees as provided in 
Sec. 416.1249;
    (u) Any portion of a grant, scholarship, fellowship, or gift used or 
set aside for paying tuition, fees, or other necessary educational 
expenses as provided in Sec. 416.1250;
    (v) Payment of a refundable child tax credit, as provided in 
Sec. 416.1235; and
    (w) Any annuity paid by a State to a person (or his or her spouse) 
based on the State's determination that the person is:
    (1) A veteran (as defined in 38 U.S.C. 101); and
    (2) Blind, disabled, or aged.

[40 FR 48915, Oct. 20, 1975, as amended at 41 FR 13338, Mar. 30, 1976; 
44 FR 15664, Mar. 15, 1979; 48 FR 57127, Dec. 28, 1983; 51 FR 34464, 
Sept. 29, 1986; 55 FR 28378, July 11, 1990; 58 FR 63890, Dec. 3, 1993; 
59 FR 8538, Feb. 23, 1994; 61 FR 1712, Jan. 23, 1996; 61 FR 67207, Dec. 
20, 1996; 70 FR 6345, Feb. 7, 2005; 70 FR 41138, July 18, 2005; 71 FR 
45378, Aug. 9, 2006; 75 FR 1273, Jan. 11, 2010; 75 FR 54287, Sept. 7, 
2010]



Sec. 416.1212  Exclusion of the home.

    (a) Defined. A home is any property in which an individual (and 
spouse, if any) has an ownership interest and which serves as the 
individual's principal place of residence. This property includes the 
shelter in which an individual resides, the land on which the shelter is 
located and related outbuildings.
    (b) Home not counted. We do not count a home regardless of its 
value. However, see Secs. 416.1220 through 416.1224 when there is an 
income-producing property located on the home property that does not 
qualify under the home exclusion.
    (c) If an individual changes principal place of residence. If an 
individual (and spouse, if any) moves out of his or her home without the 
intent to return, the home becomes a countable resource because it is no 
longer the individual's principal place of residence. If an individual 
leaves his or her home to live in an institution, we still consider the 
home to be the individual's principal place of residence, irrespective 
of the individual's intent to return, as long as a spouse or dependent 
relative of the eligible individual continues to live there. The 
individual's equity in the former home becomes a countable resource 
effective with the first day of the month following the month it is no 
longer his or her principal place of residence.
    (d) If an individual leaves the principal place of residence due to 
domestic abuse. If an individual moves out of his or her home without 
the intent to return, but is fleeing the home as a victim of domestic 
abuse, we will not count the home as a resource in determining the 
individual's eligibility to receive, or continue to receive, SSI 
payments. In that situation, we will consider the home to be the 
individual's principal place of residence until such time as the 
individual establishes a new principal place of residence or otherwise 
takes action rendering the home no longer excludable.
    (e) Proceeds from the sale of an excluded home. (1) The proceeds 
from the sale of a home which is excluded from the individual's 
resources will also be excluded from resources to the extent they are 
intended to be used and are, in

[[Page 1040]]

fact, used to purchase another home, which is similarly excluded, within 
3 months of the date of receipt of the proceeds.
    (2) The value of a promissory note or similar installment sales 
contract constitutes a ``proceed'' which can be excluded from resources 
if--
    (i) The note results from the sale of an individual's home as 
described in Sec. 416.1212(a);
    (ii) Within 3 months of receipt (execution) of the note, the 
individual purchases a replacement home as described in Sec. 416.1212(a) 
(see paragraph (f) of this section for an exception); and
    (iii) All note-generated proceeds are reinvested in the replacement 
home within 3 months of receipt (see paragraph (g) of this section for 
an exception).
    (3) In addition to excluding the value of the note itself, other 
proceeds from the sale of the former home are excluded resources if they 
are used within 3 months of receipt to make payment on the replacement 
home. Such proceeds, which consist of the downpayment and that portion 
of any installment amount constituting payment against the principal, 
represent a conversion of a resource.
    (f) Failure to purchase another excluded home timely. If the 
individual does not purchase a replacement home within the 3-month 
period specified in paragraph (e)(2)(ii) of this section, the value of a 
promissory note or similar installment sales contract received from the 
sale of an excluded home is a countable resource effective with the 
first moment of the month following the month the note is executed. If 
the individual purchases a replacement home after the expiration of the 
3-month period, the note becomes an excluded resource the month 
following the month of purchase of the replacement home provided that 
all other proceeds are fully and timely reinvested as explained in 
paragraph (g) of this section.
    (g) Failure to reinvest proceeds timely. (1) If the proceeds (e.g., 
installment amounts constituting payment against the principal) from the 
sale of an excluded home under a promissory note or similar installment 
sales contract are not reinvested fully and timely (within 3 months of 
receipt) in a replacement home, as of the first moment of the month 
following receipt of the payment, the individual's countable resources 
will include:
    (i) The value of the note; and
    (ii) That portion of the proceeds, retained by the individual, which 
was not timely reinvested
    (2) The note remains a countable resource until the first moment of 
the month following the receipt of proceeds that are fully and timely 
reinvested in the replacement home. Failure to reinvest proceeds for a 
period of time does not permanently preclude exclusion of the promissory 
note or installment sales contract. However, previously received 
proceeds that were not timely reinvested remain countable resources to 
the extent they are retained.

    Example 1. On July 10, an SSI recipient received his quarterly 
payment of $200 from the buyer of his former home under an installment 
sales contract. As of October 31, the recipient has used only $150 of 
the July payment in connection with the purchase of a new home. The 
exclusion of the unused $50 (and of the installment contract itself) is 
revoked back to July 10. As a result, the $50 and the value of the 
contract as of August 1, are included in a revised determination of 
resources for August and subsequent months.
    Example 2. On April 10, an SSI recipient received a payment of $250 
from the buyer of his former home under an installment sales contract. 
On May 3, he reinvested $200 of the payment in the purchase of a new 
home. On May 10, the recipient received another $250 payment, and 
reinvested the full amount on June 3. As of July 31, since the recipient 
has used only $200 of the April payment in connection with the purchase 
of the new home, the exclusion of the unused $50 (and of the installment 
contract itself) is revoked back to April 10. As a result, the $50 and 
the value of the contract as of May 1 are includable resources. Since 
the recipient fully and timely reinvested the May payment, the 
installment contract and the payment are again excludable resources as 
of June 1. However, the $50 left over from the previous payment remains 
a countable resource.

    (h) Interest payments. If interest is received as part of an 
installment payment resulting from the sale of an excluded home under a 
promissory note or similar installment sales contract, the interest 
payments do not represent conversion of a resource. The interest

[[Page 1041]]

is income under the provisions of Secs. 416.1102, 416.1120, and 
416.1121(c).

[50 FR 42686, Oct. 22, 1985, as amended at 51 FR 7437, Mar. 4, 1986; 59 
FR 43285, Aug. 23, 1994; 75 FR 1273, Jan. 11, 2010]



Sec. 416.1216  Exclusion of household goods and personal effects.

    (a) Household goods. (1) We do not count household goods as a 
resource to an individual (and spouse, if any) if they are:
    (i) Items of personal property, found in or near the home, that are 
used on a regular basis; or
    (ii) Items needed by the householder for maintenance, use and 
occupancy of the premises as a home.
    (2) Such items include but are not limited to: Furniture, 
appliances, electronic equipment such as personal computers and 
television sets, carpets, cooking and eating utensils, and dishes.
    (b) Personal effects. (1) We do not count personal effects as 
resources to an individual (and spouse, if any) if they are:
    (i) Items of personal property ordinarily worn or carried by the 
individual; or
    (ii) Articles otherwise having an intimate relation to the 
individual.
    (2) Such items include but are not limited to: Personal jewelry 
including wedding and engagement rings, personal care items, prosthetic 
devices, and educational or recreational items such as books or musical 
instruments. We also do not count as resources items of cultural or 
religious significance to an individual and items required because of an 
individual's impairment. However, we do count items that were acquired 
or are held for their value or as an investment because we do not 
consider these to be personal effects. Such items can include but are 
not limited to: Gems, jewelry that is not worn or held for family 
significance, or collectibles. Such items will be subject to the limits 
in Sec. 416.1205.

[70 FR 6345, Feb. 7, 2005]



Sec. 416.1218  Exclusion of the automobile.

    (a) Automobile; defined. As used in this section, the term 
automobile includes, in addition to passenger cars, other vehicles used 
to provide necessary transportation.
    (b) Limitation on automobiles. In determining the resources of an 
individual (and spouse, if any), automobiles are excluded or counted as 
follows:
    (1) Total exclusion. One automobile is totally excluded regardless 
of value if it is used for transportation for the individual or a member 
of the individual's household.
    (2) Other automobiles. Any other automobiles are considered to be 
nonliquid resources. Your equity in the other automobiles is counted as 
a resource. (See Sec. 416.1201(c).)

[40 FR 48915, Oct. 20, 1975, as amended at 44 FR 43266, July 24, 1979; 
50 FR 42687, Oct. 22, 1985; 70 FR 6345, Feb. 7, 2005]



Sec. 416.1220  Property essential to self-support; general.

    When counting the value of resources an individual (and spouse, if 
any) has, the value of property essential to self-support is not 
counted, within certain limits. There are different rules for 
considering this property depending on whether it is income-producing or 
not. Property essential to self-support can include real and personal 
property (for example, land, buildings, equipment and supplies, motor 
vehicles, and tools, etc.) used in a trade or business (as defined in 
Sec. 404.1066 of part 404), nonbusiness income-producing property 
(houses or apartments for rent, land other than home property, etc.) and 
property used to produce goods or services essential to an individual's 
daily activities. Liquid resources other than those used as part of a 
trade or business are not property essential to self-support. If the 
individual's principal place of residence qualifies under the home 
exclusion, it is not considered in evaluating property essential to 
self-support.

[50 FR 42687, Oct. 22, 1985]



Sec. 416.1222  How income-producing property essential to self-support
is counted.

    (a) General. When deciding the value of property used in a trade or 
business or nonbusiness income-producing activity, only the individual's 
equity in the property is counted. We will exclude as essential to self-
support up to

[[Page 1042]]

$6,000 of an individual's equity in income-producing property if it 
produces a net annual income to the individual of at least 6 percent of 
the excluded equity. If the individual's equity is greater than $6,000, 
we count only the amount that exceeds $6,000 toward the allowable 
resource limit specified in Sec. 416.1205 if the net annual income 
requirement of 6 percent is met on the excluded equity. If the activity 
produces less than a 6-percent return due to circumstances beyond the 
individual's control (for example, crop failure, illness, etc.), and 
there is a reasonable expectation that the individual's activity will 
again produce a 6-percent return, the property is also excluded. If the 
individual owns more than one piece of property and each produces 
income, each is looked at to see if the 6-percent rule is met and then 
the amounts of the individual's equity in all of those properties 
producing 6 percent are totaled to see if the total equity is $6,000 or 
less. The equity in those properties that do not meet the 6-percent rule 
is counted toward the allowable resource limit specified in 
Sec. 416.1205. If the individual's total equity in the properties 
producing 6-percent income is over the $6,000 equity limit, the amount 
of equity exceeding $6,000 is counted as a resource toward the allowable 
resource limit.

    Example 1. Sharon has a small business in her home making hand-woven 
rugs. The looms and other equipment used in the business have a current 
market value of $7,000. The value of her equity is $5,500 since she owes 
$1,500 on the looms. Sharon's net earnings from self-employment is $400. 
Since Sharon's equity in the looms and other equipment ($5,500) is under 
the $6,000 limit for property essential to self-support and her net 
income after expenses ($400) is greater than 6 percent of her equity, 
her income-producing property is excluded from countable resources. The 
home is not considered in any way in valuing property essential to self-
support.
    Example 2. Charlotte operates a farm. She owns 3 acres of land on 
which her home is located. She also owns 10 acres of farm land not 
connected to her home. There are 2 tool sheds and 2 animal shelters 
located on the 10 acres. She has various pieces of farm equipment that 
are necessary for her farming activities. We exclude the house and the 3 
acres under the home exclusion (see Sec. 416.1212). However, we look at 
the other 10 acres of land, the buildings and equipment separately to 
see if her total equity in them is no more than $6,000 and if the annual 
rate of return is 6 percent of her equity. In this case, the 10 acres 
and buildings are valued at $4,000 and the few items of farm equipment 
and other inventory are valued at $1,500. Charlotte sells produce which 
nets her more than 6 percent for this year. The 10 acres and other items 
are excluded as essential to her self-support and they continue to be 
excluded as long as she meets the 6-percent annual return requirement 
and the equity value of the 10 acres and other items remains less than 
$6,000.
    Example 3. Henry has an automobile repair business valued at $5,000. 
There are no debts on the property and bills are paid monthly. For the 
past 4 years the business has just broken even. Since Henry's income 
from the business is less then 6 percent of his equity, the entire 
$5,000 is counted as his resources. Since this exceeds the resources 
limit as described in Sec. 416.1205, he is not eligible for SSI 
benefits.

    (b) Exception. Property that represents the authority granted by a 
governmental agency to engage in an income-producing activity is 
excluded as property essential to self-support if it is:
    (1) Used in a trade or business or nonbusiness income-producing 
activity; or
    (2) Not used due to circumstances beyond the individual's control, 
e.g., illness, and there is a reasonable expectation that the use will 
resume.

    Example: John owns a commercial fishing permit granted by the State 
Commerce Commission, a boat, and fishing tackle. The boat and tackle 
have an equity value of $6,500. Last year, John earned $2,000 from his 
fishing business. The value of the fishing permit is not detemined 
because the permit is excluded under the exception. The boat and tackle 
are producing in excess of a 6 percent return on the excluded equity 
value, so they are excluded under the general rule (see paragraph (a) of 
this section) up to $6,000. The $500 excess value is counted toward the 
resource limit as described in Sec. 416.1205.

[50 FR 42687, Oct. 22, 1985]



Sec. 416.1224  How nonbusiness property used to produce goods or
services essential to self-support is counted.

    Nonbusiness property is considered to be essential for an 
individual's (and spouse, if any) self-support if it is used to produce 
goods or services necessary for his or her daily activities. This type 
of property includes real property such

[[Page 1043]]

as land which is used to produce vegetables or livestock only for 
personal consumption in the individual's household (for example, corn, 
tomatoes, chicken, cattle). This type of property also includes personal 
property necessary to perform daily functions exclusive of passenger 
cars, trucks, boats, or other special vehicles. (See Sec. 416.1218 for a 
discussion on how automobiles are counted.) Property used to produce 
goods or services or property necessary to perform daily functions is 
excluded if the individual's equity in the property does not exceed 
$6,000. Personal property which is required by the individual's employer 
for work is not counted, regardless of value, while the individual is 
employed. Examples of this type of personal property include tools, 
safety equipment, uniforms and similar items.

    Example: Bill owns a small unimproved lot several blocks from his 
home. He uses the lot, which is valued at $4,800, to grow vegetables and 
fruit only for his own consumption. Since his equity in the property is 
less than $6,000, the property is excluded as necessary to self-support.

[50 FR 42687, Oct. 22, 1985]



Sec. 416.1225  An approved plan to achieve self-support; general.

    If you are blind or disabled, we will pay you SSI benefits and will 
not count resources that you use or set aside to use for expenses that 
we determine to be reasonable and necessary to fulfill an approved plan 
to achieve self-support.

[71 FR 28265, May 16, 2006]



Sec. 416.1226  What is a plan to achieve self-support (PASS)?

    (a) A PASS must--
    (1) Be designed especially for you;
    (2) Be in writing;
    (3) Be approved by us (a change of plan must also be approved by 
us);
    (4) Have a specific employment goal that is feasible for you, that 
is, a goal that you have a reasonable likelihood of achieving;
    (5) Have a plan to reach your employment goal that is viable and 
financially sustainable, that is, the plan--
    (i) Sets forth steps that are attainable in order to reach your 
goal, and
    (ii) Shows that you will have enough money to meet your living 
expenses while setting aside income or resources to reach your goal;
    (6) Be limited to one employment goal; however, the employment goal 
may be modified and any changes related to the modification must be made 
to the plan;
    (7) Show how the employment goal will generate sufficient earnings 
to substantially reduce your dependence on SSI or eliminate your need 
for title II disability benefits;

    Example 1: A Substantial Reduction Exists. Your SSI monthly payment 
amount is $101 and your PASS employment goal earnings will reduce your 
SSI payment by $90. We may consider that to be a substantial reduction.
    Example 2: A Substantial Reduction Exists. You receive a title II 
benefit of $550 and an SSI payment of $73. Your PASS employment goal 
will result in work over the SGA level that eliminates your title II 
benefit but increases your SSI payment by $90. We may consider that a 
substantial reduction because your work will eliminate your title II 
payment while only slightly increasing your SSI payment.
    Example 3: A Substantial Reduction Does Not Exist. Your SSI monthly 
payment amount is $603 and your PASS employment goal earnings will 
reduce your SSI payment by $90. We may not consider that to be a 
substantial reduction.

    (8) Contain a beginning date and an ending date to meet your 
employment goal;
    (9) Give target dates for meeting milestones towards your employment 
goal;
    (10) Show what expenses you will have and how they are reasonable 
and necessary to meet your employment goal;
    (11) Show what resources you have and will receive, how you will use 
them to attain your employment goal, and how you will meet your living 
expenses; and
    (12) Show how the resources you set aside under the plan will be 
kept separate from your other resources.
    (b) You must propose a reasonable ending date for your PASS. If 
necessary, we can help you establish an ending date, which may be 
different than the ending date you propose. Once the ending date is set 
and you begin your PASS, we may adjust or extend

[[Page 1044]]

the ending date of your PASS based on progress towards your goal and 
earnings level reached.
    (c) If your employment goal is self-employment, you must include a 
business plan that defines the business, provides a marketing strategy, 
details financial data, outlines the operational procedures, and 
describes the management plan.
    (d) Your progress will be reviewed at least annually to determine if 
you are following the provisions of your plan.

[71 FR 28265, May 16, 2006]



Sec. 416.1227  When the resources excluded under a plan to achieve 
self-support begin to count.

    The resources that were excluded under the individual's plan will 
begin to be counted as of the first day of the month following the month 
in which any of these circumstances occur:
    (a) Failing to follow the conditions of the plan:
    (b) Abandoning the plan;
    (c) Completing the time schedule outlined in the plan; or
    (d) Reaching the goal as outlined in the plan.

[50 FR 42688, Oct. 22, 1985]



Sec. 416.1228  Exclusion of Alaskan natives' stock in regional or
village corporations.

    (a) In determining the resources of a native of Alaska (and spouse, 
if any) there will be excluded from resources, shares of stock held in a 
regional or village corporation during the period of 20 years in which 
such stock is inalienable, as provided by sections 7(h) and 8(c) of the 
Alaska Native Claims Settlement Act (43 U.S.C. 1606, 1607). The 20-year 
period of inalienability terminates on January 1, 1992.
    (b) As used in this section, native of Alaska has the same meaning 
as that contained in section 3(b) of the Alaska Native Claims Settlement 
Act (43 U.S.C. 1602(b)).



Sec. 416.1229  Exclusion of payments received as compensation for 
expenses incurred or losses suffered as a result of a crime.

    (a) In determining the resources of an individual (and spouse, if 
any), any amount received from a fund established by a State to aid 
victims of crime is excluded from resources for a period of 9 months 
beginning with the month following the month of receipt.
    (b) To be excluded from resources under this section, the individual 
(or spouse) must demonstrate that any amount received was compensation 
for expenses incurred or losses suffered as the result of a crime.

[61 FR 1712, Jan. 23, 1996]



Sec. 416.1230  Exclusion of life insurance.

    (a) General. In determining the resources of an individual (and 
spouse, if any), life insurance owned by the individual (and spouse, if 
any) will be considered to the extent of its cash surrender value. If, 
however, the total face value of all life insurance policies on any 
person does not exceed $1,500, no part of the cash surrender value of 
such life insurance will be taken into account in determining the 
resources of the individual (and spouse, if any). In determining the 
face value of life insurance on the individual (and spouse, if any), 
term insurance and burial insurance will not be taken into account.
    (b) Definitions--(1) Life insurance. Life insurance is a contract 
under which the insurer agrees to pay a specified amount upon the death 
of the insured.
    (2) Insurer. The insurer is the company or association which 
contracts with the owner of the insurance.
    (3) Insured. The insured is the person upon whose life insurance is 
effected.
    (4) Owner. The owner is the person who has the right to change the 
policy. This is normally the person who pays the premiums.
    (5) Term insurance. Term insurance is a form of life insurance 
having no cash surrender value and generally furnishing insurance 
protection for only a specified or limited period of time.
    (6) Face value. Face value is the basic death benefit of the policy 
exclusive of dividend additions or additional amounts payable because of 
accidental death or under other special provisions.
    (7) Cash surrender value. Cash surrender value is the amount which 
the insurer will pay (usually to the owner) upon cancellation of the 
policy before death of the insured or before maturity of the policy.

[[Page 1045]]

    (8) Burial insurance. Burial insurance is insurance whose terms 
specifically provide that the proceeds can be used only to pay the 
burial expenses of the insured.



Sec. 416.1231  Burial spaces and certain funds set aside for burial 
expenses.

    (a) Burial spaces--(1) General. In determining the resources of an 
individual, the value of burial spaces for the individual, the 
individual's spouse or any member of the individual's immediate family 
will be excluded from resources.
    (2) Burial spaces defined. For purposes of this section ``burial 
spaces'' include burial plots, gravesites, crypts, mausoleums, urns, 
niches and other customary and traditional repositories for the 
deceased's bodily remains provided such spaces are owned by the 
individual or are held for his or her use. Additionally, the term 
includes necessary and reasonable improvements or additions to or upon 
such burial spaces including, but not limited to, vaults, headstones, 
markers, plaques, or burial containers and arrangements for opening and 
closing the gravesite for burial of the deceased.
    (3) An agreement representing the purchase of a burial space. The 
value of an agreement representing the purchase of a burial space, 
including any accumulated interest, will be excluded from resources. We 
do not consider a burial space ``held for'' an individual under an 
agreement unless the individual currently owns and is currently entitled 
to the use of the space under that agreement. For example, we will not 
consider a burial space ``held for'' an individual under an installment 
sales agreement or other similar device under which the individual does 
not currently own nor currently have the right to use the space, nor is 
the seller currently obligated to provide the space, until the purchase 
amount is paid in full.
    (4) Immediate family defined. For purposes of this section immediate 
family means an individual's minor and adult children, including adopted 
children and step-children; an individual's brothers, sisters, parents, 
adoptive parents, and the spouses of those individuals. Neither 
dependency nor living-in-the-same-household will be a factor in 
determining whether a person is an immediate family member.
    (b) Funds set aside for burial expenses--(1) Exclusion. In 
determining the resources of an individual (and spouse, if any) there 
shall be excluded an amount not in excess of $1,500 each of funds 
specifically set aside for the burial expenses of the individual or the 
individual's spouse. This exclusion applies only if the funds set aside 
for burial expenses are kept separate from all other resources not 
intended for burial of the individual (or spouse) and are clearly 
designated as set aside for the individual's (or spouse's) burial 
expenses. If excluded burial funds are mixed with resources not intended 
for burial, the exclusion will not apply to any portion of the funds. 
This exclusion is in addition to the burial space exclusion.
    (2) Exception for parental deeming situations. If an individual is 
an eligible child, the burial funds (up to $1,500) that are set aside 
for the burial arrangements of the eligible child's ineligible parent or 
parent's spouse will not be counted in determining the resources of such 
eligible child.
    (3) Burial funds defined. For purposes of this section ``burial 
funds'' are revocable burial contracts, burial trusts, other burial 
arrangements (including amounts paid on installment sales contracts for 
burial spaces), cash, accounts, or other financial instruments with a 
definite cash value clearly designated for the individual's (or 
spouse's, if any) burial expenses and kept separate from nonburial-
related assets. Property other than listed in this definition will not 
be considered ``burial funds.''
    (4) Recipients currently receiving SSI benefits. Recipients 
currently eligible as of July 11, 1990, who have had burial funds 
excluded which do not meet all of the requirements of paragraphs (b) (1) 
and (3) of this section must convert or separate such funds to meet 
these requirements unless there is an impediment to such conversion or 
separation; i.e., a circumstance beyond an individual's control which 
makes conversion/separation impossible or impracticable. For so long as 
such an impediment or circumstance exists, the burial funds

[[Page 1046]]

will be excluded if the individual remains otherwise continuously 
eligible for the exclusion.
    (5) Reductions. Each person's (as described in Secs. 416.1231(b)(1) 
and 416.1231(b)(2)) $1,500 exclusion must be reduced by:
    (i) The face value of insurance policies on the life of an 
individual owned by the individual or spouse (if any) if the cash 
surrender value of those policies has been excluded from resources as 
provided in Sec. 416.1230; and
    (ii) Amounts in an irrevocable trust (or other irrevocable 
arrangement) available to meet the burial expenses.
    (6) Irrevocable trust or other irrevocable arrangement. Funds in an 
irrevocable trust or other irrevocable arrangement which are available 
for burial are funds which are held in an irrevocable burial contract, 
an irrevocable burial trust, or an amount in an irrevocable trust which 
is specifically identified as available for burial expenses.
    (7) Increase in value of burial funds. Interest earned on excluded 
burial funds and appreciation in the value of excluded burial 
arrangements which occur beginning November 1, 1982, or the date of 
first SSI eligibility, whichever is later, are excluded from resources 
if left to accumulate and become part of the separate burial fund.
    (8) Burial funds used for some other purpose. (i) Excluded burial 
funds must be used solely for that purpose.
    (ii) If any excluded funds are used for a purpose other than the 
burial arrangements of the individual or the individual's spouse for 
whom the funds were set aside, future SSI benefits of the individual (or 
the individual and eligible spouse) will be reduced by an amount equal 
to the amount of excluded burial funds used for another purpose. This 
penalty for use of excluded burial funds for a purpose other than the 
burial arrangements of the individual (or spouse) will apply only if, as 
of the first moment of the month of use, the individual would have had 
resources in excess of the limit specified in Sec. 416.1205 without 
application of the exclusion.
    (9) Extension of burial fund exclusion during suspension. The 
exclusion of burial funds and accumulated interest and appreciation will 
continue to apply throughout a period of suspension as described in 
Sec. 416.1320, so long as the individual's eligibility has not been 
terminated as described in Secs. 416.1331 through 416.1335.

[48 FR 57127, Dec. 28, 1983, as amended at 55 FR 28377, July 11, 1990; 
57 FR 1384, Jan. 14, 1992]



Sec. 416.1232  Replacement of lost, damaged, or stolen excluded
resources.

    (a) Cash (including any interest earned on the cash) or in-kind 
replacement received from any source for purposes of repairing or 
replacing an excluded resource (as defined in Sec. 416.1210) that is 
lost, damaged, or stolen is excluded as a resource. This exclusion 
applies if the cash (and the interest) is used to repair or replace the 
excluded resource within 9 months of the date the individual received 
the cash. Any of the cash (and interest) that is not used to repair or 
replace the excluded resource will be counted as a resource beginning 
with the month after the 9-month period expires.
    (b) The initial 9-month time period will be extended for a 
reasonable period up to an additional 9 months where we find the 
individual had good cause for not replacing or repairing the resource. 
An individual will be found to have good cause when circumstances beyond 
his or her control prevented the repair or replacement or the 
contracting for the repair or replacement of the resource. The 9-month 
extension can only be granted if the individual intends to use the cash 
or in-kind replacement items to repair or replace the lost, stolen, or 
damaged excluded resource in addition to having good cause for not 
having done so. If good cause is found for an individual, any unused 
cash (and interest) is counted as a resource beginning with the month 
after the good cause extension period expires. Exception: For victims of 
Hurricane Andrew only, the extension period for good cause may be 
extended for up to an additional 12 months beyond the 9-month extension 
when we find that the individual had good cause for not replacing or 
repairing an excluded resource within the 9-month extension.
    (c) The time period described in paragraph (b) of this section 
(except the time period for individuals granted an

[[Page 1047]]

additional extension under the Hurricane Andrew provision) may be 
extended for a reasonable period up to an additional 12 months in the 
case of a catastrophe which is declared to be a major disaster by the 
President of the United States if the excluded resource is 
geographically located within the disaster area as defined by the 
Presidential order; the individual intends to repair or replace the 
excluded resource; and, the individual demonstrates good cause why he or 
she has not been able to repair or replace the excluded resource within 
the 18-month period.
    (d) Where an extension of the time period is made for good cause and 
the individual changes his or her intent to repair or replace the 
excluded resource, funds previously held for replacement or repair will 
be counted as a resource effective with the month that the individual 
reports this change of intent.

[44 FR 15662, Mar. 15, 1979, as amended at 50 FR 48579, Nov. 26, 1985; 
61 FR 5944, Feb. 15, 1996]



Sec. 416.1233  Exclusion of certain underpayments from resources.

    (a) General. In determining the resources of an eligible individual 
(and spouse, if any), we will exclude, for 9 months following the month 
of receipt, the unspent portion of any title II or title XVI retroactive 
payment received on or after March 2, 2004. Exception: We will exclude 
for 6 months following the month of receipt the unspent portion of any 
title II or title XVI retroactive payment received before March 2, 2004. 
This exclusion also applies to such payments received by any other 
person whose resources are subject to deeming under this subpart.
    (b) Retroactive payments. For purposes of this exclusion, a 
retroactive payment is one that is paid after the month in which it was 
due. A title XVI retroactive payment includes any retroactive amount of 
federally administered State supplementation.
    (c) Limitation on exclusion. This exclusion applies only to any 
unspent portion of retroactive payments made under title II or XVI. Once 
the money from the retroactive payment is spent, this exclusion does not 
apply to items purchased with the money, even if the 6-month or 9-month 
period, whichever is applicable (see paragraph (a) of this section), has 
not expired. However, other exclusions may be applicable. As long as the 
funds from the retroactive payment are not spent, they are excluded for 
the full 6-month or 9-month period, whichever is applicable.
    (d) Funds must be identifiable. Unspent money from a retroactive 
payment must be identifiable from other resources for this exclusion to 
apply. The money may be commingled with other funds but, if this is done 
in such a fashion that the retroactive amount can no longer be 
separately identified, that amount will count toward the resource limit 
described in Sec. 416.1205.
    (e) Written notice. We will give each recipient a written notice of 
the exclusion limitation when we make the retroactive payment.

[51 FR 34464, Sept. 29, 1986, as amended at 54 FR 19164, May 4, 1989; 70 
FR 41138, July 18, 2005]



Sec. 416.1234  Exclusion of Indian lands.

    In determining the resources of an individual (and spouse, if any) 
who is of Indian descent from a federally recognized Indian tribe, we 
will exclude any interest of the individual (or spouse, if any) in land 
which is held in trust by the United States for an individual Indian or 
tribe, or which is held by an individual Indian or tribe and which can 
only be sold, transferred, or otherwise disposed of with the approval of 
other individuals, his or her tribe, or an agency of the Federal 
Government.

[59 FR 8538, Feb. 23, 1994]



Sec. 416.1235  Exclusion of certain payments related to tax credits.

    (a) In determining the resources of an individual (and spouse, if 
any), we exclude for the 9 months following the month of receipt the 
following funds received on or after March 2, 2004, the unspent portion 
of:
    (1) Any payment of a refundable credit pursuant to section 32 of the 
Internal Revenue Code (relating to the earned income tax credit);
    (2) Any payment from an employer under section 3507 of the Internal 
Revenue Code (relating to advance payment of the earned income tax 
credit); or

[[Page 1048]]

    (3) Any payment of a refundable credit pursuant to section 24 of the 
Internal Revenue Code (relating to the child tax credit).
    (b) Any unspent funds described in paragraph (a) of this section 
that are retained until the first moment of the tenth month following 
their receipt are countable as resources at that time.
    (c) Exception: For any payments described in paragraph (a) of this 
section received before March 2, 2004, we will exclude for the month 
following the month of receipt the unspent portion of any such payment.

[75 FR 1273, Jan. 11, 2010]



Sec. 416.1236  Exclusions from resources; provided by other statutes.

    (a) For the purpose of Sec. 416.1210(j), payments or benefits 
provided under a Federal statute other than title XVI of the Social 
Security Act where exclusion from resources is required by such statute 
include:
    (1) Payments made under title II of the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act of 1970 (84 Stat. 
1902, 42 U.S.C. 4636).
    (2) Payments made to Native Americans as listed in paragraphs (b) 
and (c) of section IV of the appendix to subpart K of part 416, as 
provided by Federal statutes other than the Social Security Act.
    (3) Indian judgment funds held in trust by the Secretary of the 
Interior or distributed per capita pursuant to a plan prepared by the 
Secretary of the Interior and not disapproved by a joint resolution of 
the Congress under Public Law 93-134, as amended by Public Law 97-458 
(25 U.S.C. 1407). Indian judgment funds include interest and investment 
income accrued while the funds are so held in trust. This exclusion 
extends to initial purchases made with Indian judgment funds. This 
exclusion will not apply to proceeds from sales or conversions of 
initial purchases or to subsequent purchases.
    (4) The value of the coupon allotment in excess of the amount paid 
for the coupons under the Food Stamp Act of 1964 (78 Stat. 705, as 
amended, 7 U.S.C. 2016(c)).
    (5) The value of assistance to children under the National School 
Lunch Act (60 Stat. 230, 42 U.S.C. 1751 et seq.) as amended by Pub. L. 
90-302 (82 Stat. 117, 42 U.S.C. 1761(h)(3)).
    (6) The value of assistance to children under the Child Nutrition 
Act of 1966 (80 Stat. 889, 42 U.S.C. 1780(b)).
    (7) Any grant or loan to any undergraduate student for educational 
purposes made or insured under any program administered by the 
Commissioner of Education as provided by section 507 of the Higher 
Education Amendments of 1968, Pub. L. 90-575 (82 Stat. 1063).
    (8) Incentive allowances received under title I of the Comprehensive 
Employment and Training Act of 1973 (87 Stat. 849, 29 U.S.C. 821(a)).
    (9) Compensation provided to volunteers by the Corporation for 
National and Community Service (CNCS), unless determined by the CNCS to 
constitute the minimum wage in effect under the Fair Labor Standards Act 
of 1938 (29 U.S.C. 201 et seq.), or applicable State law, pursuant to 42 
U.S.C. 5044(f)(1).
    (10) Distributions received by an individual Alaska Native or 
descendant of an Alaska Native from an Alaska Native Regional and 
Village Corporation pursuant to the Alaska Native Claims Settlement Act, 
as follows: cash, including cash dividends on stock received from a 
Native Corporation, is disregarded to the extent that it does not, in 
the aggregate, exceed $2,000 per individual each year (the $2,000 limit 
is applied separately each year, and cash distributions up to $2,000 
which an individual received in a prior year and retained into 
subsequent years will not be counted as resources in those years); 
stock, including stock issued or distributed by a Native Corporation as 
a dividend or distribution on stock; a partnership interest; land or an 
interest in land, including land or an interest in land received from a 
Native Corporation as a dividend or distribution on stock; and an 
interest in a settlement trust. This exclusion is pursuant to the 
exclusion under section 15 of the Alaska Native Claims Settlement Act 
Amendments of 1987, Public Law 100-241 (43 U.S.C. 1626(c)), effective 
February 3, 1988.
    (11) Value of Federally donated foods distributed pursuant to 
section 32 of

[[Page 1049]]

Pub. L. 74-320 or section 416 of the Agriculture Act of 1949 (7 CFR 
250.6(e)(9) as authorized by 5 U.S.C. 301).
    (12) All funds held in trust by the Secretary of the Interior for an 
Indian tribe and distributed per capita to a member of that tribe under 
Public Law 98-64. Funds held by Alaska Native Regional and Village 
Corporations (ANRVC) are not held in trust by the Secretary of the 
Interior and therefore ANRVC dividend distributions are not excluded 
from resources under this exclusion. For the treatment of ANRVC dividend 
distributions, see paragraph (a)(10) of this section.
    (13) Home energy assistance payments or allowances under the Low-
Income Home Energy Assistance Act of 1981, as added by title XXVI of the 
Omnibus Budget Reconciliation Act of 1981, Public Law 97-35 (42 U.S.C. 
8624(f)).
    (14) Student financial assistance for attendance costs received from 
a program funded in whole or in part under title IV of the Higher 
Education Act of 1965, as amended, or under Bureau of Indian Affairs 
student assistance programs if it is made available for tuition and fees 
normally assessed a student carrying the same academic workload, as 
determined by the institution, including costs for rental or purchase of 
any equipment, materials, or supplies required of all students in the 
same course of study; and an allowance for books, supplies, 
transportation, and miscellaneous personal expenses for a student 
attending the institution on at least a half-time basis, as determined 
by the institution, under section 14(27) of Public Law 100-50, the 
Higher Education Technical Amendments Act of 1987 (20 U.S.C. 1087uu), or 
under Bureau of Indian Affairs student assistance programs.
    (15) Amounts paid as restitution to certain individuals of Japanese 
ancestry and Aleuts under the Civil Liberties Act of 1988 and the 
Aleutian and Pribilof Islands Restitution Act, sections 105(f) and 
206(d) of Public Law 100-383 (50 U.S.C. app. 1989 b and c).
    (16) Payments made on or after January 1, 1989, from the Agent 
Orange Settlement Fund or any other fund established pursuant to the 
settlement in the In Re Agent Orange product liability litigation, 
M.D.L. No. 381 (E.D.N.Y.) under Public Law 101-201 (103 Stat. 1795) and 
section 10405 of Public Law 101-239 (103 Stat. 2489).
    (17) Payments made under section 6 of the Radiation Exposure 
Compensation Act, Public Law 101-426 (104 Stat. 925, 42 U.S.C. 2210).
    (18) Payments made to individuals because of their status as victims 
of Nazi persecution excluded pursuant to section 1(a) of the Victims of 
Nazi Persecution Act of 1994, Public Law 103-286 (108 Stat. 1450).
    (19) Any matching funds and interest earned on matching funds from a 
demonstration project authorized by Public Law 105-285 that are retained 
in an Individual Development Account, pursuant to section 415 of Public 
Law 105-285 (112 Stat. 2771).
    (20) Any earnings, Temporary Assistance for Needy Families matching 
funds, and accrued interest retained in an Individual Development 
Account, pursuant to section 103 of Public Law 104-193 (42 U.S.C. 
604(h)(4)).
    (21) Payments made to individuals who were captured and interned by 
the Democratic Republic of Vietnam as a result of participation in 
certain military operations, pursuant to section 606 of Public Law 105-
78 and section 657 of Public Law 104-201 (110 Stat. 2584).
    (22) Payments made to certain Vietnam veterans' children with spina 
bifida, pursuant to section 421 of Public Law 104-204 (38 U.S.C. 
1805(d)).
    (23) Payments made to the children of women Vietnam veterans who 
suffer from certain birth defects, pursuant to section 401 of Public Law 
106-419, (38 U.S.C. 1833(c)).
    (24) Assistance provided for flood mitigation activities under 
section 1324 of the National Flood Insurance Act of 1968, pursuant to 
section 1 of Public Law 109-64 (119 Stat. 1997, 42 U.S.C. 4031).
    (25) Payments made to individuals under the Energy Employees 
Occupational Illness Compensation Program Act of 2000, pursuant to 
section 1, app. [Div. C. Title XXXVI section 3646] of Public Law 106-398 
(114 Stat. 1654A-510, 42 U.S.C. 7385e).
    (b) In order for payments and benefits listed in paragraph (a) to be 
excluded from resources, such funds must

[[Page 1050]]

be segregated and not commingled with other countable resources so that 
the excludable funds are identifiable.

[41 FR 13338, Mar. 30, 1976, as amended at 42 FR 44221, Sept. 2, 1977; 
42 FR 54945, Oct. 12, 1977; 43 FR 45555, Oct. 3, 1978; 57 FR 53851, Nov. 
13, 1992; 57 FR 55089, Nov. 24, 1992; 59 FR 8538, Feb. 23, 1994; 62 FR 
30983, June 6, 1997; 70 FR 41138, July 18, 2005; 75 FR 1274, Jan. 11, 
2010]



Sec. 416.1237  Assistance received on account of major disaster.

    (a) Assistance received under the Disaster Relief and Emergency 
Assistance Act or other assistance provided under a Federal statute 
because of a catastrophe which is declared to be a major disaster by the 
President of the United States or comparable assistance received from a 
State or local government, or from a disaster assistance organization, 
is excluded in determining countable resources under Sec. 416.1210.
    (b) Interest earned on the assistance is excluded from resources.

[57 FR 53852, Nov. 13, 1992]



Sec. 416.1238  Exclusion of certain housing assistance.

    The value of any assistance paid with respect to a dwelling under 
the statutes listed in Sec. 416.1124(c)(14) is excluded from resources.

[55 FR 28378, July 11, 1990]



Sec. 416.1239  Exclusion of State or local relocation assistance
payments.

    In determining the resources of an individual (or spouse, if any), 
relocation assistance provided by a State or local government (as 
described in Sec. 416.1124(c)(18)) is excluded from resources for a 
period of 9 months beginning with the month following the month of 
receipt.

[61 FR 1712, Jan. 23, 1996]



Sec. 416.1240  Disposition of resources.

    (a) Where the resources of an individual (and spouse, if any) are 
determined to exceed the limitations prescribed in Sec. 416.1205, such 
individual (and spouse, if any) shall not be eligible for payment except 
under the conditions provided in this section. Payment will be made to 
an individual (and spouse, if any) if the individual agrees in writing 
to:
    (1) Dispose of, at current market value, the nonliquid resources (as 
defined in Sec. 416.1201(c)) in excess of the limitations prescribed in 
Sec. 416.1205 within the time period specified in Sec. 416.1242; and
    (2) Repay any overpayments (as defined in Sec. 416.1244) with the 
proceeds of such disposition.
    (b) Payment made for the period during which the resources are being 
disposed of will be conditioned upon the disposition of those resources 
as prescribed in paragraphs (a)(1) and (a)(2) of this section. Any 
payments so made are (at the time of disposition) considered 
overpayments to the extent they would not have been paid had the 
disposition occurred at the beginning of the period for which such 
payments were made.
    (c) If an individual fails to dispose of the resources as prescribed 
in paragraphs (a)(1) and (a)(2) of this section, regardless of the 
efforts he or she makes to dispose of them, the resources will be 
counted at their current market value and the individual will be 
ineligible due to excess resources. We will use the original estimate of 
current market value unless the individual submits evidence establishing 
a lower value (e.g., an estimate from a disinterested knowledgeable 
source).

[75 FR 1274, Jan. 11, 2010]



Sec. 416.1242  Time limits for disposing of resources.

    (a) In order for payment conditioned on the disposition of nonliquid 
resources to be made, the individual must agree in writing to dispose of 
real property within 9 months and personal property within 3 months. The 
time period for disposal of property begins on the date we accept the 
individual's signed written agreement to dispose of the property. If we 
receive a signed agreement on or after the date we have determined that 
the individual meets the eligibility requirements described in 
Sec. 416.202 of this part, with the exception of the resource 
requirements described in this subpart, our acceptance of the written 
agreement will occur on the date the individual receives our written 
notice that the agreement is in

[[Page 1051]]

effect. If we receive a signed agreement prior to the date we determine 
that all nonresource requirements are met, our acceptance of the written 
agreement will not occur until the date the individual receives our 
written notice that all nonresource requirements are met and that the 
agreement is in effect. When the written notice is mailed to the 
individual, we assume that the notice was received 5 days after the date 
shown on the notice unless the individual shows us that he or she did 
not receive it within the 5-day period.
    (b) The 3-month time period for disposition of personal property 
will be extended an additional 3 months where it is found that the 
individual had ``good cause'' for failing to dispose of the resources 
within the original time period. The rules on the valuation of real 
property not disposed of within 9 months are described in 
Sec. 416.1245(b).
    (c) An individual will be found to have ``good cause'' for failing 
to dispose of a resource if, despite reasonable and diligent effort on 
his part, he was prevented by circumstances beyond his control from 
disposing of the resource.
    (d) In determining whether the appropriate time limits discussed in 
paragraphs (a) and (b) of this section have elapsed, no month will be 
counted for which an individual's benefits have been suspended as 
described in Sec. 416.1320, provided that the reason for the suspension 
is unrelated to the requirements in Sec. 416.1245(b) and that the 
individual's eligibility has not been terminated as defined in 
Secs. 416.1331 through 416.1335.

[40 FR 48915, Oct. 20, 1975, as amended at 53 FR 13257, Apr. 22, 1988; 
55 FR 10419, Mar. 21, 1990; 58 FR 60105, Nov. 15, 1993]



Sec. 416.1244  Treatment of proceeds from disposition of resources.

    (a) Upon disposition of the resources, the net proceeds to the 
individual from the sale are considered available to repay that portion 
of the payments that would not have been made had the disposition 
occurred at the beginning of the period for which payment was made.
    (b) The net proceeds from disposition will normally be the sales 
price less any encumbrance on the resource and the expenses of sale such 
as transfer taxes, fees, advertising costs, etc. where, however, a 
resource has been sold (or otherwise transferred) by an individual to a 
friend or relative for less than its current market value, the net 
proceeds will be the current market value less costs of sale and 
encumbrance.
    (c) After deducting any amount necessary to raise the individual's 
(and spouse's, if any) resources to the applicable limits described in 
Sec. 416.1205, as of the beginning of the disposition period, the 
balance of the net proceeds will be used to recover the payments made to 
the individual (and spouse, if any). Any remaining proceeds are 
considered liquid resources.
    (d) The overpayment to be recovered is equal to the balance of the 
net proceeds (as described in paragraph (c) of this section) or the 
total payments made to the individual (and spouse, if any) for the 
period of disposition, whichever is less.

[40 FR 48915, Oct. 20, 1975, as amended at 50 FR 38982, Sept. 28, 1985]



Sec. 416.1245  Exceptions to required disposition of real property.

    (a) Loss of housing for joint owner. Excess real property which 
would be a resource under Sec. 416.1201 is not a countable resource for 
conditional benefit purposes when: it is jointly owned; and sale of the 
property by an individual would cause the other owner undue hardship due 
to loss of housing. Undue hardship would result when the property serves 
as the principal place of residence for one (or more) of the other 
owners, sale of the property would result in loss of that residence, and 
no other housing would be readily available for the displaced other 
owner (e.g., the other owner does not own another house that is legally 
available for occupancy). However, if undue hardship ceases to exist, 
its value will be included in countable resources as described in 
Sec. 416.1207.
    (b) Reasonable efforts to sell. (1) Excess real property is not 
included in countable resources for so long as the individual's 
reasonable efforts to sell it have been unsuccessful. The basis for 
determining whether efforts to sell are reasonable, as well as 
unsuccessful,

[[Page 1052]]

will be a 9-month disposal period described in Sec. 416.1242. If it is 
determined that reasonable efforts to sell have been unsuccessful, 
further SSI payments will not be conditioned on the disposition of the 
property and only the benefits paid during the 9-month disposal period 
will be subject to recovery. In order to be eligible for payments after 
the conditional benefits period, the individual must continue to make 
reasonable efforts to sell.
    (2) A conditional benefits period involving excess real property 
begins as described at Sec. 416.1242(a). The conditional benefits period 
ends at the earliest of the following times:
    (i) Sale of the property;
    (ii) Lack of continued reasonable efforts to sell;
    (iii) The individual's written request for cancellation of the 
agreement;
    (iv) Countable resources, even without the conditional exclusion, 
fall below the applicable limit (e.g., liquid resources have been 
depleted); or
    (v) The 9-month disposal period has expired.
    (3) Reasonable efforts to sell property consist of taking all 
necessary steps to sell it in the geographic area covered by the media 
serving the area in which the property is located, unless the individual 
has good cause for not taking these steps. More specifically, making a 
reasonable effort to sell means that:
    (i) Except for gaps of no more than 1 week, an individual must 
attempt to sell the property by listing it with a real estate agent or 
by undertaking to sell it himself;
    (ii) Within 30 days of receiving notice that we have accepted the 
individual's signed written agreement to dispose of the property, and 
absent good cause for not doing so, the individual must:
    (A) List the property with an agent; or
    (B) Begin to advertise it in at least one of the appropriate local 
media, place a ``For Sale'' sign on the property (if permitted), begin 
to conduct ``open houses'' or otherwise show the property to interested 
parties on a continuous basis, and attempt any other appropriate methods 
of sale; and
    (iii) The individual accepts any reasonable offer to buy and has the 
burden of demonstrating that an offer was rejected because it was not 
reasonable. If the individual receives an offer that is at least two-
thirds of the latest estimate of current market value, the individual 
must present evidence to establish that the offer was unreasonable and 
was rejected.
    (4) An individual will be found to have ``good cause'' for failing 
to make reasonable efforts to sell under paragraph (b)(3) of this 
section if he or she was prevented by circumstances beyond his or her 
control from taking the steps specified in paragraph (b)(3) (i) through 
(ii) of this section.
    (5) An individual who has received conditional benefits through the 
expiration of the 9 month disposal period and whose benefits have been 
suspended as described at Sec. 416.1320 for reasons unrelated to the 
property excluded under the conditional benefits agreement, but whose 
eligibility has not been terminated as defined at Secs. 416.1331 through 
416.1335, can continue to have the excess real property not included in 
countable resources upon reinstatement of SSI payments if reasonable 
efforts to sell the property resume within 1 week of reinstatement. Such 
an individual will not have to go through a subsequent conditional 
benefits period. However, the individual whose eligibility has been 
terminated as defined at Secs. 416.1331 through 416.1335 and who 
subsequently reapplies would be subject to a new conditional benefits 
period if there is still excess real property.

[55 FR 10419, Mar. 21, 1990, as amended at 62 FR 30983, June 6, 1997; 64 
FR 31975, June 15, 1999]



Sec. 416.1246  Disposal of resources at less than fair market value.

    (a) General. (1) An individual (or eligible spouse) who gives away 
or sells a nonexcluded resource for less than fair market value for the 
purpose of establishing SSI or Medicaid eligibility will be charged with 
the difference between the fair market value of the resource and the 
amount of compensation received. The difference is referred to as 
uncompensated value and is counted toward the resource limit (see 
Sec. 416.1205) for a period of 24 months from the date of transfer.

[[Page 1053]]

    (2) If the transferred resource (asset) is returned to the 
individual, the uncompensated value is no longer counted as of the date 
of return. If the transferred asset is cash, the uncompensated value is 
reduced as of the date of return by the amount of cash that is returned. 
No income will be charged as a result of such returns. The returned 
asset will be evaluated as a resource according to the rules described 
in Secs. 416.1201 through 416.1230 as of the first day of the following 
month.
    (3) If the individual receives additional compensation in the form 
of cash for the transferred asset the uncompensated value is reduced, as 
of the date the additional cash compensation is received, by the amount 
of that additional compensation.
    (b) Fair market value. Fair market value is equal to the current 
market value of a resource at the time of transfer or contract of sale, 
if earlier. See Sec. 416.1101 for definition of current market value.
    (c) Compensation. The compensation for a resource includes all 
money, real or personal property, food, shelter, or services received by 
the individual (or eligible spouse) at or after the time of transfer in 
exchange for the resource if the compensation was provided pursuant to a 
binding (legally enforceable) agreement in effect at the time of 
transfer. Compensation also includes all money, real or personal 
property, food, shelter, or services received prior to the actual 
transfer if they were provided pursuant to a binding (legally 
enforceable) agreement whereby the eligible individual would transfer 
the resource or otherwise pay for such items. In addition, payment or 
assumption of a legal debt owed by the eligible individual in exchange 
for the asset is considered compensation.
    (d)(1) Uncompensated value--General. The uncompensated value is the 
fair market value of a resource at the time of transfer minus the amount 
of compensation received by the individual (or eligible spouse) in 
exchange for the resource. However, if the transferred resource was 
partially excluded, we will not count uncompensated value in an amount 
greater than the countable value of the resources at the time of 
transfer.
    (2) Suspension of counting as a resource the uncompensated value 
where necessary to avoid undue hardship. We will suspend counting as a 
resource the uncompensated value of the transferred asset for any month 
in the 24-month period if such counting will result in undue hardship. 
We will resume counting the uncompensated value as a resource for any 
month of the 24-month period in which counting will not result in undue 
hardship. We will treat as part of the 24-month period any months during 
which we suspend the counting of uncompensated value.
    (3) When undue hardship exists. Undue hardship exists when:
    (i) An individual alleges that failure to receive SSI benefits would 
deprive the individual of food or shelter; and
    (ii) The applicable Federal benefit rate (plus the federally-
administered State supplementary payment level) exceeds the sum of: The 
individual's monthly countable and excludable income and monthly 
countable and excludable liquid resources.
    (e) Presumption that resource was transferred to establish SSI or 
Medicaid eligibility. Transfer of a resource for less than fair market 
value is presumed to have been made for the purpose of establishing SSI 
or Medicaid eligibility unless the individual (or eligible spouse) 
furnishes convincing evidence that the resource was transferred 
exclusively for some other reason. Convincing evidence may be pertinent 
documentary or non-documentary evidence which shows, for example, that 
the transfer was ordered by a court, or that at the time of transfer the 
individual could not have anticipated becoming eligible due to the 
existence of other circumstances which would have precluded eligibility. 
The burden of rebutting the presumption that a resource was transferred 
to establish SSI or Medicaid eligibility rests with the individual (or 
eligible spouse).
    (f) Applicability. This section applies only to transfers of 
resources that occurred before July 1, 1988. Paragraphs (d)(2) and 
(d)(3) of this section, regarding undue hardship, are effective for such 
transfers on or after April 1, 1988.

[48 FR 40885, Sept. 12, 1983, as amended at 50 FR 38982, Sept. 26, 1985; 
53 FR 13257, Apr. 22, 1988; 55 FR 10419, Mar. 21, 1990]

[[Page 1054]]



Sec. 416.1247  Exclusion of a dedicated account in a financial 
institution.

    (a) General. In determining the resources of an individual (or 
spouse, if any), the funds in a dedicated account in a financial 
institution established and maintained in accordance with 
Sec. 416.640(e) will be excluded from resources. This exclusion applies 
only to benefits which must or may be deposited in such an account, as 
specified in Sec. 416.546, and accrued interest or other earnings on 
these benefits. If these funds are commingled with any other funds 
(other than accumulated earnings or interest) this exclusion will not 
apply to any portion of the funds in the dedicated account.
    (b) Exclusion during a period of suspension or termination--(1) 
Suspension. The exclusion of funds in a dedicated account and interest 
and other earnings thereon continues to apply during a period of 
suspension due to ineligibility as described in Sec. 416.1320, 
administrative suspension, or a period of eligibility for which no 
payment is due, so long as the individual's eligibility has not been 
terminated as described in Secs. 416.1331 through 416.1335.
    (2) Termination. Once an individual's eligibility has been 
terminated, any funds previously excluded under paragraph (a) of this 
section may not be excluded if the individual establishes a subsequent 
period of eligibility by filing a new application.

[61 FR 67207, Dec. 20, 1996]



Sec. 416.1248  Exclusion of gifts to children with life-threatening
conditions.

    In determining the resources of an individual who has not attained 
18 years of age and who has a life-threatening condition, we will 
exclude any gifts from an organization described in section 501(c)(3) of 
the Internal Revenue Code of 1986 which is exempt from taxation under 
section 501(a) of such Code. We will exclude any in-kind gift that is 
not converted to cash and cash gifts to the extent that the total gifts 
excluded pursuant to this paragraph do not exceed $2000 in any calendar 
year. In-kind gifts converted to cash are considered under income 
counting rules in the month of conversion.

[70 FR 41139, July 18, 2005]



Sec. 416.1249  Exclusion of payments received as restitution for
misuse of benefits by a representative payee.

    In determining the resources of an individual (and spouse, if any), 
the unspent portion of any payment received by the individual as 
restitution for title II, title VIII or title XVI benefits misused by a 
representative payee under Sec. 404.2041, Sec. 408.641 or Sec. 416.641, 
respectively, is excluded for 9 months following the month of receipt.

[70 FR 41139, July 18, 2005]



Sec. 416.1250  How we count grants, scholarships, fellowships or gifts.

    (a) When we determine your resources (or your spouse's, if any), we 
will exclude for 9 months any portion of any grant, scholarship, 
fellowship, or gift that you use or set aside to pay the cost of 
tuition, fees, or other necessary educational expenses at any 
educational institution, including vocational or technical institutions. 
The 9 months begin the month after the month you receive the educational 
assistance.
    (b)(1) We will count as a resource any portion of a grant, 
scholarship, fellowship, or gift you (or your spouse, if any) did not 
use or set aside to pay tuition, fees, or other necessary educational 
expenses. We will count such portion of a grant, scholarship, fellowship 
or gift as a resource in the month following the month of receipt.
    (2) If you use any of the funds that were set aside for tuition, 
fees, or other necessary educational expenses for another purpose within 
the 9-month exclusion period, we will count such portion of the funds 
used for another purpose as income in the month you use them.
    (3) If any portion of the funds are no longer set aside for paying 
tuition, fees, or other necessary educational expenses within the 9-
month exclusion period, we will count the portion of the funds no longer 
set aside as income in the month when they are no longer set aside for 
paying tuition, fees, or other necessary educational expenses. We

[[Page 1055]]

will consider any remaining funds that are no longer set aside or used 
to pay tuition, fees, or other educational expenses as a resource in the 
month following the month we count them as income.
    (4) We will count any portion of grants, scholarships, fellowships, 
or gifts remaining unspent after the 9-month exclusion period as a 
resource beginning with the 10th month after you received the 
educational assistance.

[71 FR 45378, Aug. 9, 2006]



Sec. 416.1260  Special resource provision for recipients under
a State plan.

    (a) General. In the case of any individual (or individual and 
spouse, as the case may be) who for the month of December 1973 was a 
recipient of aid or assistance under a State plan approved under title 
I, X, XIV, or XVI, of the Act (see Sec. 416.121), the resources of such 
individual (or individual and spouse, as the case may be) shall be 
deemed not to exceed the amount specified in Sec. 416.1205 during any 
period that the resources of such individual (or individual and spouse, 
as the case may be) do not exceed the maximum amount of resources 
specified in such State plan as in effect in October 1972, provided that 
such individual:
    (1) Has, since December 1973, resided continuously in the State 
under whose plan he was eligible for the month of December 1973; and
    (2) Has not, since December 1973, been ineligible for an SSI benefit 
for a period exceeding 6 consecutive months. An SSI benefit means a 
Federal benefit only; it does not include any State supplementation.
    (b) For purposes of this section, an individual will cease to reside 
continuously in a State if he leaves the State with the present 
intention to abandon his home there. In the absence of evidence to the 
contrary,
    (1) If an individual leaves the State for a period of 90 calendar 
days or less, his absence from the State will be considered temporary 
and he will be considered to continue to reside in such State; and
    (2) If an individual leaves the State for a period in excess of 90 
calendar days, he will no longer be considered to reside continuously in 
such State.
    (c) State plan; defined. As used in this subpart, an approved State 
plan as in effect in October 1972 and State plan for October 1972 means 
a State plan as approved under the provisions of 45 CFR Ch. II as in 
effect in October 1972.

[41 FR 47424, Oct. 29, 1976, as amended at 52 FR 29841, Aug. 12, 1987]



Sec. 416.1261  Application of special resource provision.

    In determining the resources of an individual (and spouse, if any) 
who meets the conditions specified in Sec. 416.1260(a), either the State 
plan resource limit and exclusions (as specified in Sec. 416.1260) or 
the resource limit (as specified in Sec. 416.1205) and exclusions (as 
specified in Sec. 416.1210), whichever is most advantageous to the 
individual (and spouse, if any) will be used.



Sec. 416.1262  Special resource provision applicable in cases 
involving essential persons.

    (a) Essential persons continuously meet criteria of eligibility. In 
determining the resources of an individual (and spouse, if any) who meet 
the conditions specified in Sec. 416.1260 and whose payment standard is 
increased because such individual has in his home an essential person 
(as defined in Sec. 416.222), either the State plan resource limit and 
exclusions (as specified in Sec. 416.1260) applicable to cases in which 
the needs of an essential person are taken into account in determining 
the individual's needs, or the resource limit as specified in 
Sec. 416.1205 and exclusions as specified in Sec. 416.1210, whichever is 
most advantageous to the individual (and spouse), will be used.
    (b) Essential person fails to meet criteria of eligibility. If for 
any month after December 1973 a person fails to meet the criteria for an 
essential person as specified in Sec. 416.222, in determining the 
resources of an individual (and spouse, if any) either the State plan 
resource limit and criteria as specified in Sec. 416.1260 applicable to 
the individual or individual and spouse, as the case may be, or the 
resource limit as specified in Sec. 416.1205 and exclusions as specified 
in

[[Page 1056]]

Sec. 416.1210, whichever is most advantageous to the individual (and 
spouse), will be used.

[39 FR 33797, Sept. 20, 1974, as amended at 51 FR 10616, Mar. 28, 1986]



Sec. 416.1264  Spouse ineligible under a State plan in December 1973.

    In the case of an individual who meets the conditions specified in 
Sec. 416.1260 but whose spouse does not meet such conditions, whichever 
of the following is most advantageous for the individual (and spouse, if 
any) will be applied:
    (a) The resource limitation and exclusions for an individual as in 
effect under the approved State plan for October 1972, or
    (b) The resource limitation (as specified in Sec. 416.1205) and 
exclusions (as specified in Sec. 416.1210) for an individual and 
eligible spouse or an individual living with an ineligible spouse.



Sec. 416.1266  Individual under special resource provision dies
after December 1973.

    Where only one person, either the eligible individual or the 
eligible spouse, meets the conditions specified in Sec. 416.1260 and 
that person dies after December 1973, the State plan resource limitation 
and exclusions will not be applied to determine the amount of resources 
of the surviving individual. The resource limitation (as specified in 
Sec. 416.1205) and exclusions (as specified in Sec. 416.1210) will be 
applied for the now eligible individual beginning with the month such 
person is considered the eligible individual as defined in subpart A of 
this part.



                 Subpart M_Suspensions and Terminations

    Authority: Secs. 702(a)(5), 1129A, 1611-1614, 1619, and 1631 of the 
Social Security Act (42 U.S.C. 902(a)(5), 1320a-8a, 1382-1382c, 1382h, 
and 1383).

    Source: 40 FR 1510, Jan. 8, 1975, unless otherwise noted.



Sec. 416.1320  Suspensions; general.

    (a) When suspension is proper. Suspension of benefit payments is 
required when a recipient is alive but no longer meets the requirements 
of eligibility under title XVI of the Act (see subpart B of this part) 
and termination in accordance with Secs. 416.1331 through 416.1335 does 
not apply. (This subpart does not cover suspension of payments for 
administrative reasons, as, for example, when mail is returned as 
undeliverable by the Postal Service and the Administration does not have 
a valid mailing address for a recipient or when the representative payee 
dies and a search is underway for a substitute representative payee.)
    (b) Effect of suspension. (1) When payments are correctly suspended 
due to the ineligibility of a recipient, payments shall not be resumed 
until the individual again meets all requirements for eligibility except 
the filing of a new application. Such recipient, upon requesting 
reinstatement, shall be required to submit such evidence as may be 
necessary (except evidence of age, disability, or blindness) to 
establish that he or she again meets all requirements for eligibility 
under this part. Payments to such recipient shall be reinstated 
effective with the first day such recipient meets all requirements for 
eligibility except the filing of a new application.
    (2) A month of ineligibility for purposes of determining when to 
prorate the SSI benefit payment for a subsequent month, is a month for 
which the individual is ineligible for any Federal SSI benefit and any 
federally administered State supplementation.
    (c) Actions which are not suspensions. Payments are not 
``suspended,'' but the claim is disallowed, when it is found that:
    (1) The claimant was notified in accordance with Sec. 416.210(c) at 
or about the time he filed application and before he received payment of 
a benefit that he should file a claim for a payment of the type 
discussed in Sec. 416.1330 and such claimant has failed, without good 
cause (see Sec. 416.210(e)(2)), to take all appropriate steps within 30 
days after receipt of such notice to file and prosecute an application 
for such payment;
    (2) Upon initial application, payment of benefits was conditioned 
upon disposal of specified resources which exceeded the permitted amount 
and the

[[Page 1057]]

claimant did not comply with the agreed-upon conditions;
    (3) Payment was made to an individual faced with a financial 
emergency who was later found to have been not eligible for payment; or
    (4) Payment was made to an individual presumed to be disabled and 
such disability is not established.
    (d) Exception. Even though conditions described in paragraph (a) of 
this section apply because your impairment is no longer disabling or you 
are no longer blind under Sec. 416.986(a)(1), (a)(2) or (b), we will not 
suspend your benefits for this reason if--
    (1) You are participating in an appropriate program of vocational 
rehabilitation services, employment services, or other support services, 
as described in Sec. 416.1338(c) and (d);
    (2) You began participating in the program before the date your 
disability or blindness ended; and
    (3) We have determined under Sec. 416.1338(e) that your completion 
of the program, or your continuation in the program for a specified 
period of time, will increase the likelihood that you will not have to 
return to the disability or blindness benefit rolls.

[40 FR 1510, Jan. 8, 1975, and 47 FR 31544, July 21, 1982; 47 FR 52693, 
Nov. 23, 1982, as amended at 51 FR 13494, Apr. 21, 1986; 51 FR 17618, 
May 14, 1986; 56 FR 55453, Oct. 28, 1991. Redesignated at 68 FR 53509, 
Sept. 11, 2003; 70 FR 36508, June 24, 2005]



Sec. 416.1321  Suspension for not giving us permission to contact
financial institutions.

    (a) If you don't give us permission to contact any financial 
institution and request any financial records about you when we think it 
is necessary to determine your SSI eligibility or payment amount, or if 
you cancel the permission, you cannot be eligible for SSI payments (see 
Sec. 416.207) and we will stop your payments. Also, if anyone whose 
income and resources we consider as being available to you (see 
Secs. 416.1160, 416.1202, 416.1203 and 416.1204) doesn't give us 
permission to contact any financial institution and request any 
financial records about that person when we think it is necessary to 
determine your SSI eligibility or payment amount, or that person cancels 
the permission, you cannot be eligible for SSI payments and we will stop 
your payments. We will not find you ineligible and/or stop your payments 
if the person whose income and resources we consider as being available 
to you fails to give or continue permission and good cause, as discussed 
in Sec. 416.207(h), exists.
    (b) We will suspend your payments starting with the month after the 
month in which we notify you in writing that:
    (1) You failed to give us permission to contact any financial 
institution and request any financial records about you, or
    (2) The person(s) whose income and resources we consider as being 
available to you failed to give us such permission.
    (c) If you are otherwise eligible, we will start your benefits in 
the month following the month in which:
    (1) You give us permission to contact any financial institution and 
request any financial records about you, or
    (2) The person(s) whose income and resources we consider as being 
available to you gives us such permission.

[68 FR 53509, Sept. 11, 2003]



Sec. 416.1322  Suspension due to failure to comply with request 
for information.

    (a) Suspension of benefit payments is required effective with the 
month following the month in which it is determined in accordance with 
Sec. 416.714(b) that the individual is ineligible for payment due to his 
or her failure to comply with our request for necessary information. 
When we have information to establish that benefit payments are again 
payable, the benefit payments will be reinstated for any previous month 
for which the individual continued to meet the eligibility requirements 
of Sec. 416.202. If the reason that an individual's benefits were 
suspended was failure to comply with our request for information, the 
payments for the months that benefits are reinstated will not be 
prorated under Sec. 416.421.
    (b) A suspension of payment for failure to comply with our request 
for information will not apply with respect

[[Page 1058]]

to any month for which a determination as to eligibility for or amount 
of payment can be made based on information on record, whether or not 
furnished by an individual specified in Sec. 416.704(a). Where it is 
determined that the information of record does not permit a 
determination with respect to eligibility for or amount of payment, 
notice of a suspension of payment due to a recipient's failure to comply 
with a request for information will be sent in accordance with 
Secs. 416.1336 and 416.1404.

[51 FR 13494, Apr. 21, 1986]



Sec. 416.1323  Suspension due to excess income.

    (a) Effective date. Suspension of payments due to ineligibility for 
benefits because of excess income is effective with the first month in 
which ``countable income'' (see Secs. 416.1100 through 416.1124 of this 
part) equals or exceeds the amount of benefits otherwise payable for 
such month (see subpart D of this part). This rule applies regardless of 
the month in which the income is received.
    (b) Resumption of payments. If benefits are otherwise payable, they 
will be resumed effective with the first month in which a recipient's 
monthly countable income becomes less than the applicable Federal 
benefit rate (or the sum of that rate and the level for any federally 
administered State supplementary payment) for that month. If the reason 
that a recipient's benefits were suspended was excess income, the 
payment for the first month that benefits are reinstated will not be 
prorated under Sec. 416.421.

[40 FR 1510, Jan. 8, 1975, as amended at 51 FR 13494, Apr. 21, 1986; 65 
FR 16815, Mar. 30, 2000]



Sec. 416.1324  Suspension due to excess resources.

    (a) Effective date. Except as specified in Secs. 416.1240 through 
416.1242, suspension of benefit payments because of excess resources is 
required effective with the month in which:
    (1) Ineligibility exists because countable resources are in excess 
of:
    (i) The resource limits prescribed in Sec. 416.1205 for an 
individual and an individual and spouse, or
    (ii) In the case of an eligible individual (and eligible spouse, if 
any) who for the month of December 1973 was a recipient of aid or 
assistance under a State plan approved under title I, X, XIV, or XVI of 
the Act, the maximum amount of resources specified in such State plan as 
in effect for October 1972, if greater than the amounts specified in 
Sec. 416.1205, as applicable; or
    (2) After eligibility has been established, payment of benefits was 
conditioned upon disposal of specified resources, which exceeded the 
permitted amount and the claimant did not comply with the agreed upon 
conditions.
    (3) The amount of an individual's or couple's countable resources is 
determined as of the first moment of each calendar quarter.
    (b) Resumption of payments. If benefits are otherwise payable, they 
will be resumed effective with the start of the month after the month in 
which a recipient's countable resources no longer exceed the limit that 
applies. If the reason that a recipient's benefits were suspended was 
excess resources, the payment for the first month that benefits are 
reinstated will not be prorated under Sec. 416.421.

[40 FR 1510, Jan. 8, 1975, as amended at 50 FR 38982, Sept. 26, 1985; 51 
FR 13494, Apr. 21, 1986]



Sec. 416.1325  Suspension due to status as a resident of a public
institution.

    (a) Except as provided in Sec. 416.211 (b) and (c), a recipient is 
ineligible for benefits for the first full calendar month in which he or 
she is a resident of a public institution (as defined in Sec. 416.201) 
throughout the calendar month (as defined in Sec. 416.211(a)), and 
payments are suspended effective with such first full month. Such 
ineligibility continues for so long as such individual remains a 
resident of a public institution.
    (b) Resumption of payments. If benefits are otherwise payable, they 
will be resumed effective with the earliest day of the month in which a 
recipient is no longer a resident of a public institution. See 
Sec. 416.421. A transfer from one public institution to another or a 
temporary absence from the institution lasting 14 days or less, however, 
will

[[Page 1059]]

not change his or her status as a resident, and the suspension will 
continue.

[51 FR 13494, Apr. 21, 1986]



Sec. 416.1326  Suspension for failure to comply with treatment for
drug addiction or alcoholism.

    (a) Basis for suspension. If you are disabled and drug addiction or 
alcoholism is a contributing factor material to the determination of 
disability as described in Sec. 416.935, we will refer you to 
appropriate treatment as defined in Sec. 416.937. You will not be an 
eligible individual and we will suspend your benefits if you do not 
comply with the terms, conditions and requirements of treatment 
prescribed by the institution or facility. (See Sec. 416.940 which 
explains how we evaluate compliance with treatment.)
    (b) Date of suspension. We will suspend your benefits for a period 
starting with the first month after we notify you in writing that you 
failed to comply with prescribed treatment.
    (c) Resumption of benefits. If you are complying with prescribed 
treatment and are otherwise eligible for benefits, we will resume 
benefits effective with the first day of the month after you demonstrate 
and maintain compliance with appropriate treatment for these periods--
    (1) 2 consecutive months for the first determination of 
noncompliance;
    (2) 3 consecutive months for the second determination of 
noncompliance; and
    (3) 6 consecutive months for the third and all subsequent 
determinations of noncompliance.

[60 FR 8152, Feb. 10, 1995]



Sec. 416.1327  Suspension due to absence from the United States.

    (a) Suspension effective date. A recipient is not eligible for SSI 
benefits if he is outside the United States for a full calendar month. 
For purposes of this paragraph--
    (1) United States means the 50 States, the District of Columbia, and 
the Northern Mariana Islands:
    (2) Day means a full 24-hour day; and
    (3) In determining whether a recipient has been outside the United 
States for a full calendar month, it must be established whether the 
recipient is outside the United States for 30 consecutive days or more. 
If yes, he or she will be treated as remaining outside the United States 
until he or she has returned to and remained in the United States for a 
period of 30 consecutive days. When a recipient has been outside the 
United States, the first period of 30 consecutive days of absence is 
counted beginning with the day after the day the recipient departs from 
the United States and ending with the day before the day on which he or 
she returns to the United States. When a recipient has returned to the 
United States, the second period of 30 consecutive days starts on the 
day the individual returned and ends on the 30th day of continuous 
presence in the United States. Benefits will be suspended effective with 
the first full calendar month in which a recipient is outside the United 
States.
    (b) Resumption of payments after absence from the United States. If 
benefits are otherwise payable they will be resumed--
    (1) Effective with the day following the 30th day of continuous 
presence in the United States after the recipient's return if the 
absence was for 30 consecutive days or more.
    (2) Effective with the day the recipient returned to the United 
States, if the absence from the United States was for a full calendar 
month, but for less than 30 consecutive days (this can occur only for 
the calendar month of February).

    Example 1: Mike left the United States on March 1 and returned on 
April 1. Counting March 2 through March 31, he was outside the United 
States for 30 consecutive days; thus he is also deemed to be outside the 
United States for 30 additional consecutive days. Therefore, for April 1 
through April 30, he is deemed to be outside the United States and not 
eligible for the calendar month of April. Payments start effective May 
1.
    Example 2: Mary left the United States on April 15 and returned on 
July 1. Counting April 16 through June 30, she was actually outside the 
United States and not eligible for the calendar months of May and June. 
Since she was absent for more than 30 consecutive days, she is deemed to 
be outside the United States for 30 additional consecutive days. 
Therefore, for July 1 through July 30, she is

[[Page 1060]]

deemed to be outside the United States and not eligible for payment 
until July 31.

[51 FR 13494, Apr. 21, 1986; 51 FR 17332, May 12, 1986]



Sec. 416.1329  Suspension due to loss of United States residency, 
United States citizenship, or status as an alien lawfully admitted
for permanent residence or otherwise permanently residing in the
United States under color of law.

    (a) A recipient ceases to be an eligible individual or eligible 
spouse, under section 1614(a)(1)(B) of the Act, when he or she ceases to 
meet the requirement of Sec. 416.202(b) with respect to United States 
residency, United States citizenship, or status as an alien lawfully 
admitted for permanent residence or otherwise permanently residing in 
the United States under color of law. Payments are suspended effective 
with the first month after the last month in which a recipient meets the 
requirements of Sec. 416.202(b).
    (b) Resumption of payments. If benefits are otherwise payable, they 
will be resumed effective with the earliest day of the month on which 
the recipient again meets both the residence and citizenship or lawfully 
admitted alien or color of law requirements. See Sec. 416.421.

[51 FR 13495, Apr. 21, 1986]



Sec. 416.1330  Suspension due to failure to apply for and obtain other
benefits.

    (a) Suspension effective date. A recipient ceases to be an eligible 
individual or eligible spouse when, in the absence of a showing of 
incapacity to do so, or other good cause, he or she fails within 30 days 
after notice from the Social Security Administration of probable 
eligibility, to take all appropriate steps to apply for and, if 
eligible, to obtain payments such as an annuity, pension, retirement, or 
disability benefit, including veterans' compensation, old-age, 
survivors, and disability insurance benefit, railroad retirement annuity 
or pension, or unemployment insurance benefit. Benefit payments are 
suspended due to such ineligibility effective with the month in which 
the recipient was notified in writing of the requirement that he or she 
file and take all appropriate steps to receive the other benefits. See 
Sec. 416.210(e).
    (b) Resumption of payment. If benefits are otherwise payable, they 
will be resumed effective with the earliest day of the month on which 
the recipient takes the necessary steps to obtain the other benefits. 
See Sec. 416.421.

[51 FR 13495, Apr. 21, 1986]



Sec. 416.1331  Termination of your disability or blindness payments.

    (a) General. The last month for which we can pay you benefits based 
on disability or blindness is the second month after the month in which 
your disability or blindness ends. (See Secs. 416.987(e), 416.994(b)(6) 
and 416.994a(g) for when disability ends, and Sec. 416.986 for when 
blindness ends.) See Sec. 416.1338 for an exception to this rule if you 
are participating in an appropriate program of vocational rehabilitation 
services, employment services, or other support services. You must meet 
the income, resources, and other eligibility requirements to receive any 
of the benefits referred to in this paragraph. We will also stop payment 
of your benefits if you have not cooperated with us in getting 
information about your disability or blindness.
    (b) After we make a determination that you are not now disabled or 
blind. If we determine that you do not meet the disability or blindness 
requirements of the law, we will send you an advance written notice 
telling you why we believe you are not disabled or blind and when your 
benefits should stop. The notice will explain your right to appeal if 
you disagree with our determination. You may still appeal our 
determination that you are not now disabled or blind even though your 
payments are continuing because of your participation in an appropriate 
program of vocational rehabilitation services, employment services, or 
other support services. You may also appeal a determination that your 
completion of, or continuation for a specified period of time in, an 
appropriate program of vocational rehabilitation services, employment 
services, or other support services will not increase the likelihood 
that you will not have to return to the disability or blindness benefit 
rolls and, therefore, you are not eligible to continue to receive 
benefits.

[[Page 1061]]

    (c) When benefits terminate due to 12 consecutive suspension months 
for failure to comply with treatment for drug addiction or alcoholism. 
If you are disabled and drug addiction or alcoholism is a contributing 
factor material to the determination of disability as described in 
Sec. 416.935, your benefits will terminate after 12 consecutive months 
of suspension for noncompliance with treatment requirements as described 
in Sec. 416.1326.
    (d) When benefits terminate due to payment of 36 months of benefits 
based on disability when drug addiction or alcoholism is a contributing 
factor material to the determination of disability. If you are disabled 
and drug addiction or alcoholism is a contributing factor material to 
the determination of disability as described in Sec. 416.935, your 
benefits will terminate after you receive a total of 36 months of SSI 
benefits. The 36-month limit is no longer effective for benefits for 
months beginning after September 2004.
    (e) Months we count in determining the 36 months of benefits when 
drug addiction or alcoholism is a contributing factor material to the 
determination of disability. Beginning March 1995, we will count all 
months for which you were paid an SSI benefit, a federally-administered 
State supplement, a special SSI cash benefit, or you were in special SSI 
eligibility status, toward the 36 months described in paragraph (d) of 
this section. Months for which you were not eligible for benefits will 
not count toward the 36 months.

[49 FR 22274, May 29, 1984, as amended at 60 FR 8152, Feb. 10, 1995; 65 
FR 42792, July 11, 2000; 70 FR 36508, June 24, 2005]



Sec. 416.1332  Termination of benefit for disabled individual:
Exception.

    Special SSI cash benefits (see Sec. 416.261) will be payable for the 
period beginning January 1, 1981, and ending June 30, 1987 if you meet 
eligibility requirements in Sec. 416.262. These requirements apply if 
you, as a disabled recipient, are no longer eligible for regular SSI 
benefits because you demonstrate that you are able to engage in SGA.

[47 FR 15325, Apr. 9, 1982, as amended at 50 FR 46763, Nov. 13, 1985]



Sec. 416.1333  Termination at the request of the recipient.

    A recipient, his legal guardian, or his representative payee, may 
terminate his eligibility for benefits under this part by filing a 
written request for termination which shows an understanding that such 
termination may extend to other benefits resulting from eligibility 
under this part. In the case of a representative payee there must also 
be a showing which establishes that no hardship would result if an 
eligible recipient were not covered by the supplemental security income 
program. When such a request is filed, the recipient ceases to be an 
eligible individual, or eligible spouse, effective with the month 
following the month the request is filed with the Social Security 
Administration unless the recipient specifies some other month. However, 
the Social Security Administration will not effectuate the request for 
any month for which payment has been or will be made unless there is 
repayment, or assurance of repayment, of any amounts paid for those 
months (e.g., from special payments which would be payable for such 
months under section 228 of the Act). When the Social Security 
Administration effectuates a termination of eligibility at the request 
of the recipient, his legal guardian, or his representative payee, 
notice of the determination will be sent in accordance with 
Sec. 416.1404, and eligibility, once terminated, can be reestablished, 
except as provided by Sec. 416.1408, only upon the filing of a new 
application.

[42 FR 39100, Aug. 2, 1977]



Sec. 416.1334  Termination due to death of recipient.

    Eligibility for benefits ends with the month in which the recipient 
dies. Payments are terminated effective with the month after the month 
of death.



Sec. 416.1335  Termination due to continuous suspension.

    We will terminate your eligibility for benefits following 12 
consecutive months of benefit suspension for any reason beginning with 
the first month you were no longer eligible for regular

[[Page 1062]]

SSI cash benefits, federally-administered State supplementation, special 
SSI cash benefits described in Sec. 416.262, or special SSI eligibility 
status described in Sec. 416.265. We will count the 12-month suspension 
period from the start of the first month that you are no longer eligible 
for SSI benefits (see Sec. 416.1320(a)) or the start of the month after 
the month your special SSI eligibility status described in Sec. 416.265 
ended. This termination is effective with the start of the 13th month 
after the suspension began.

[60 FR 8153, Feb. 10, 1995, as amended at 64 FR 31975, June 15, 1999]



Sec. 416.1336  Notice of intended action affecting recipient's payment
status.

    (a) Advance written notice requirement. Advance written notice of 
intent to discontinue payment because of an event requiring suspension, 
reduction (see subpart D of this part), or termination of payments shall 
be given in all cases, prior to effectuation of the action, except where 
the Social Security Administration has factual information confirming 
the death of the recipient, e.g., as enumerated in Sec. 404.704(b) of 
this chapter, or a report by a surviving spouse, a legal guardian, a 
parent or other close relative, or a landlord.
    (b) Continuation of payment pending an appeal. The written notice of 
intent to suspend, reduce, or terminate payments shall allow 60 days 
after the date of receipt of the notice for the recipient to request the 
appropriate appellate review (see subpart N of this part). If appeal is 
filed within 10 days after the individual's receipt of the notice, the 
payment shall be continued or reinstated at the previously established 
payment level (subject to the effects of intervening events on the 
payment which are not appealed within 10 days of receipt of a required 
advance notice or which do not require advance notice, e.g., an increase 
in the benefit amount) until a decision on such initial appeal is 
issued, unless the individual specifically waives in writing his right 
to continuation of payment at the previously established level in 
accordance with paragraph (c) of this section. (See Sec. 416.1337 for 
exceptions to the continuation of payment level.) Where the request for 
the appropriate appellate review is filed more than 10 days after the 
notice is received but within the 60-day period specified in 
Sec. 416.1413 or Sec. 416.1425 of this part, there shall be no right to 
continuation or reinstatement of payment at the previously established 
level unless good cause is established under the criteria specified in 
Sec. 416.1411 of this part for failure to appeal within 10 days after 
receipt of the notice. For purposes of this paragraph, the date of 
receipt of the notice of intent to suspend, reduce, or terminate 
payments shall be presumed to be 5 days after the date on the face of 
such notice, unless there is a reasonable showing to the contrary.
    (c) Waiver of right to continued payment. Notwithstanding any other 
provisions of this section, the recipient, in order to avoid the 
possibility of an overpayment of benefits, may waive continuation of 
payment at the previously established level (subject to intervening 
events which would have increased the benefit for the month in which the 
incorrect payment was made, in which case the higher amount shall be 
paid), after having received a full explanation of his rights. The 
request for waiver of continuation of payment shall be in writing, state 
that waiver action is being initiated solely at the recipient's request, 
and state that the recipient understands his right to receive continued 
payment at the previously established level.

[43 FR 18170, Apr. 28, 1978, as amended at 65 FR 16815, Mar. 30, 2000]



Sec. 416.1337  Exceptions to the continuation of previously 
established payment level.

    (a) Multiple payments exception. (1) Where it is determined that a 
recipient is receiving two or more regular monthly payments in one 
month, the Social Security Administration shall determine the correct 
payment amount and, as soon as practicable thereafter, send the 
recipient an advance written notice of intent to make subsequent payment 
in that amount. Payment for the following month shall be made in the 
correct amount, except as provided in paragraph (a)(3) of this section.
    (2) The advance notice shall explain:

[[Page 1063]]

    (i) That multiple payments were made in the one or more months 
identified in the notice;
    (ii) The correct amount of monthly benefits that the recipient is 
eligible to receive; and
    (iii) The recipient's appeal rights.
    (3) If an appeal is filed within 10 days after receipt of the 
written notice of intent, the highest of the two or more check amounts, 
or the correct amount if higher (subject to the dollar limitation 
provisions), shall be continued until a decision on such initial level 
of appeal is issued. See Sec. 416.1474 for criteria as to good cause for 
failure to file a timely appeal. For purposes of this paragraph, the 
date of receipt of the notice of intent shall be presumed to be 5 days 
after the date on the face of such notice, unless there is a reasonable 
showing to the contrary.
    (4) The fact that a recipient is receiving multiple payments is 
established if the records of the Social Security Administration show 
that:
    (i) Two or more checks are being sent to an individual under the 
same name or a common logical spelling variation of the name;
    (ii) The social security number is the same or a pseudo number 
appears;
    (iii) The checks are being sent to the same address;
    (iv) The sex code for such individual is the same; and
    (v) The date of birth for such individual is the same.
    (b) Dollar limitation exception. (1) Where it is determined that a 
recipient is receiving an erroneous monthly payment which exceeds the 
dollar limitation applicable to the recipient's payment category, as set 
forth in paragraph (b)(4) of this section, the Social Security 
Administration shall determine the correct payment amount and, as soon 
as practicable thereafter, send the recipient an advance written notice 
of intent to make subsequent payment in that amount. Payment for the 
following month shall be made in the correct amount, except as provided 
in paragraph (b)(3) of this section.
    (2) The advance notice shall explain:
    (i) That an erroneous monthly payment which exceeds the dollar 
limitation applicable to the recipient's payment category was made in 
the one or more months identified in the notice;
    (ii) The correct amount of monthly benefits that the recipient is 
eligible to receive; and
    (iii) The recipient's appeal rights.
    (3) If an appeal is filed within 10 days after receipt of the 
written notice of the intent (see Sec. 416.1474 for criteria as to good 
cause for failure to file a timely appeal), the amount of payment to be 
continued, pending decision on appeal, shall be determined as follows:
    (i) Recipient in payment status. Where the recipient is in payment 
status, the payment shall be in the amount the recipient received in the 
month immediately preceding the month the dollar limitation was first 
exceeded (subject to intervening events which would have increased the 
benefit for the month in which the incorrect payment was made, in which 
case the higher amount shall be paid).
    (ii) Recipient in nonpayment status. If the recipient's benefits 
were suspended in the month immediately preceding the month the dollar 
limitation was first exceeded, the payment shall be based on that amount 
which should have been paid in the month in which the incorrect payment 
was made. However, if the individual's benefits had been correctly 
suspended as provided in Secs. 416.1320 through 416.1330 or 
Sec. 416.1339 and they should have remained suspended but a benefit that 
exceeded the dollar limitation was paid, no further payment shall be 
made to him or her at this time and notice of the planned action shall 
not contain any provision regarding continuation of payment pending 
appeal.


For purposes of this paragraph, the date of receipt of the notice of 
planned action shall be presumed to be 5 days after the date on the face 
of such notice, unless there is a reasonable showing to the contrary.
    (4) The payment categories and dollar limitations are as follows:

                 Payment Category and Dollar Limitation

    (i) Federal supplemental security income benefit only--$200.
    Recipients whose records indicate eligibility for Federal 
supplemental security income benefits for the month before the

[[Page 1064]]

month the dollar limitation was first exceeded.
    (ii) Federal supplemental security income benefit and optional 
supplementation, or optional supplementation only--$700
    Recipients whose records indicate they were eligible for Federal 
supplemental security income benefits plus federally-administered 
optional supplementation, or eligible for federally-administered 
optional supplementation only, for the month before the month the dollar 
limitation was first exceeded.
    (iii) Federal supplemental security income benefit and mandatory or 
other supplementation, or mandatory supplementation only--$2,000
    Recipients whose records show eligibility for Federal supplemental 
security income benefits and federally-administered mandatory 
supplementation or essential person increment for the month before the 
month the dollar limitation was first exceeded. This category also 
includes those eligible for federally-administered mandatory 
supplementation only and those eligible for Federal supplemental 
security income benefits plus an essential person increment and 
federally-administered optional supplementation.

[43 FR 18170, Apr. 28, 1978, as amended at 65 FR 40495, June 30, 2000]



Sec. 416.1338  If you are participating in an appropriate program
of vocational rehabilitation services, employment services, or
other support services.

    (a) When may your benefits based on disability or blindness be 
continued? Your benefits based on disability or blindness may be 
continued after your impairment is no longer disabling, you are no 
longer blind as determined under Sec. 416.986(a)(1), (a)(2) or (b), or 
your disability has ended as determined under Sec. 416.987(b) and (e)(1) 
in an age-18 redetermination, if--
    (1) You are participating in an appropriate program of vocational 
rehabilitation services, employment services, or other support services, 
as described in paragraphs (c) and (d) of this section;
    (2) You began participating in the program before the date your 
disability or blindness ended; and
    (3) We have determined under paragraph (e) of this section that your 
completion of the program, or your continuation in the program for a 
specified period of time, will increase the likelihood that you will not 
have to return to the disability or blindness benefit rolls.
    (b) When will we stop your benefits? We generally will stop your 
benefits with the earliest of these months--
    (1) The month in which you complete the program; or
    (2) The month in which you stop participating in the program for any 
reason (see paragraph (d) of this section for what we mean by 
``participating'' in the program); or
    (3) The month in which we determine under paragraph (e) of this 
section that your continuing participation in the program will no longer 
increase the likelihood that you will not have to return to the 
disability or blindness benefit rolls.
    Exception to paragraph (b): In no case will we stop your benefits 
with a month earlier than the second month after the month your 
disability or blindness ends, provided that you are otherwise eligible 
for benefits through such month.
    (c) What is an appropriate program of vocational rehabilitation 
services, employment services, or other support services? An appropriate 
program of vocational rehabilitation services, employment services, or 
other support services means--
    (1) A program that is carried out under an individual work plan with 
an employment network under the Ticket to Work and Self-Sufficiency 
Program under part 411 of this chapter;
    (2) A program that is carried out under an individualized plan for 
employment with--
    (i) A State vocational rehabilitation agency (i.e., a State agency 
administering or supervising the administration of a State plan approved 
under title I of the Rehabilitation Act of 1973, as amended (29 U.S.C. 
720-751)) under 34 CFR part 361; or
    (ii) An organization administering a Vocational Rehabilitation 
Services Project for American Indians with Disabilities authorized under 
section 121 of part C of title I of the Rehabilitation Act of 1973, as 
amended (29 U.S.C. 741);
    (3) A program of vocational rehabilitation services, employment 
services, or other support services that is carried out under a similar, 
individualized written employment plan with--

[[Page 1065]]

    (i) An agency of the Federal government (for example, the Department 
of Veterans Affairs);
    (ii) A one-stop delivery system or specialized one-stop center 
described in section 134(c) of the Workforce Investment Act of 1998 (29 
U.S.C. 2864(c)); or
    (iii) Another provider of services approved by us; providers we may 
approve include, but are not limited to--
    (A) A public or private organizations with expertise in the delivery 
or coordination of vocational rehabilitation services, employment 
services, or other support services; or
    (B) A public, private or parochial school that provides or 
coordinates a program of vocational rehabilitation services, employment 
services, or other support services carried out under an individualized 
program or plan;
    (4) An individualized education program developed under policies and 
procedures approved by the Secretary of Education for assistance to 
States for the education of individuals with disabilities under the 
Individuals with Disabilities Education Act, as amended (20 U.S.C. 1400 
et seq.); you must be age 18 through age 21 for this provision to apply.
    (d) When are you participating in the program? (1) You are 
participating in a program described in paragraph (c)(1), (c)(2) or 
(c)(3) of this section when you are taking part in the activities and 
services outlined in your individual work plan, your individualized plan 
for employment, or your similar individualized written employment plan, 
as appropriate.
    (2) If you are a student age 18 through 21 receiving services under 
an individualized education program described in paragraph (c)(4) of 
this section, you are participating in your program when you are taking 
part in the activities and services outlined in your program or plan.
    (3) You are participating in your program under paragraph (d)(1) or 
(2) of this section during temporary interruptions in your program. For 
an interruption to be considered temporary, you must resume taking part 
in the activities and services outlined in your plan or program, as 
appropriate, no more than three months after the month the interruption 
occurred.
    (e) How will we determine whether or not your completion of the 
program, or your continuation in the program for a specified period of 
time, will increase the likelihood that you will not have to return to 
the disability or blindness benefit rolls? (1) We will determine that 
your completion of the program, or your continuation in the program for 
a specified period of time, will increase the likelihood that you will 
not have to return to the disability or blindness benefit rolls if your 
completion of or your continuation in the program will provide you 
with--
    (i) Work experience (see Sec. 416.965) so that you would more likely 
be able to do past relevant work (see Sec. 416.960(b)), despite a 
possible future reduction in your residual functional capacity (see 
Sec. 416.945); or
    (ii) Education (see Sec. 416.964) and/or skilled or semi-skilled 
work experience (see Sec. 416.968) so that you would more likely be able 
to adjust to other work that exists in the national economy (see 
Sec. 416.960(c)), despite a possible future reduction in your residual 
functional capacity (see Sec. 416.945).
    (2) If you are a student age 18 through age 21 participating in an 
individualized education program described in paragraph (c)(4) of this 
section, we will find that your completion of or continuation in the 
program will increase the likelihood that you will not have to return to 
the disability or blindness benefit rolls.
    (3) If you are receiving transition services after having completed 
an individualized education program as described in paragraph (e)(2) of 
this section, we will determine that the transition services will 
increase the likelihood that you will not have to return to the 
disability benefit rolls if they meet the requirements in paragraph 
(e)(1) of this section.

[70 FR 36508, June 24, 2005]



Sec. 416.1339  Suspension due to flight to avoid criminal prosecution
or custody or confinement after conviction, or due to violation of
probation or parole.

    (a) Basis for suspension. An individual is ineligible for SSI 
benefits for any month during which he or she is--

[[Page 1066]]

    (1) Fleeing to avoid prosecution for a crime, or an attempt to 
commit a crime, which is a felony under the laws of the place from which 
the individual flees (or which, in the case of the State of New Jersey, 
is a high misdemeanor under the laws of that State); or
    (2) Fleeing to avoid custody or confinement after conviction for a 
crime, or an attempt to commit a crime, which is a felony under the laws 
of the place from which the individual flees (or which, in the case of 
the State of New Jersey, is a high misdemeanor under the laws of that 
State); or
    (3) Violating a condition of probation or parole imposed under 
Federal or State law.
    (b) Suspension effective date. (1) Suspension of benefit payments 
because an individual is a fugitive as described in paragraph (a)(1) or 
(a)(2) of this section or a probation or parole violator as described in 
paragraph (a)(3) of this section is effective with the first day of 
whichever of the following months is earlier--
    (i) The month in which a warrant or order for the individual's 
arrest or apprehension, an order requiring the individual's appearance 
before a court or other appropriate tribunal (e.g., a parole board), or 
similar order is issued by a court or other duly authorized tribunal on 
the basis of an appropriate finding that the individual--
    (A) Is fleeing, or has fled, to avoid prosecution as described in 
paragraph (a)(1) of this section;
    (B) Is fleeing, or has fled, to avoid custody or confinement after 
conviction as described in paragraph (a)(2) of this section;
    (C) Is violating, or has violated, a condition of his or her 
probation or parole as described in paragraph (a)(3) of this section; or
    (ii) The first month during which the individual fled to avoid such 
prosecution, fled to avoid such custody or confinement after conviction, 
or violated a condition of his or her probation or parole, if indicated 
in such warrant or order, or in a decision by a court or other 
appropriate tribunal.
    (2) An individual will not be considered to be ineligible for SSI 
benefits and benefit payments will not be suspended under this section 
for any month prior to August 1996.
    (c) Resumption of payments. If benefits are otherwise payable, they 
will be resumed effective with the first month throughout which the 
individual is determined to be no longer fleeing to avoid such 
prosecution, fleeing to avoid such custody or confinement after 
conviction, or violating a condition of his or her probation or parole.

[65 FR 40495, June 30, 2000]



Sec. 416.1340  Penalty for making false or misleading statements
or withholding information.

    (a) Why would SSA penalize me? You will be subject to a penalty if:
    (1) You make, or cause to be made, a statement or representation of 
a material fact, for use in determining any initial or continuing right 
to, or the amount of, monthly insurance benefits under title II or 
benefits or payments under title XVI, that you know or should know is 
false or misleading; or
    (2) You make a statement or representation of a material fact for 
use as described in paragraph (a)(1) of this section with knowing 
disregard for the truth; or
    (3) You omit from a statement or representation made for use as 
described in paragraph (a)(1) of this section, or otherwise withhold 
disclosure (for example, fail to come forward to notify us) of, a fact 
which you know or should know is material to the determination of any 
initial or continuing right to, or the amount of, monthly insurance 
benefits under title II or benefits or payments under title XVI, if you 
know, or should know, that the statement or representation with such 
omission is false or misleading or that the withholding of such 
disclosure is misleading.
    (b) What is the penalty? The penalty is ineligibility for cash 
benefits under title XVI (including State supplementary payments made by 
SSA according to Sec. 416.2005) and nonpayment of any benefits under 
title II that we would otherwise pay you.
    (c) How long will the penalty last? The penalty will last--
    (1) Six consecutive months the first time we penalize you;

[[Page 1067]]

    (2) Twelve consecutive months the second time we penalize you; and
    (3) Twenty-four consecutive months the third or subsequent time we 
penalize you.
    (d) Will this penalty affect any of my other government benefits? If 
we penalize you, the penalty will apply only to your eligibility for 
benefits under titles II and XVI (including State supplementary payments 
made by us according to Sec. 416.2005). The penalty will not affect--
    (1) Your eligibility for benefits that you would otherwise be 
eligible for under titles XVIII and XIX but for the imposition of the 
penalty; and
    (2) The eligibility or amount of benefits payable under titles II or 
XVI to another person. For example, if you and your spouse are receiving 
title XVI benefits, those benefit payments to your spouse based on the 
benefit rate for a couple will not be affected because of the penalty. 
Your spouse will receive one half of the couple rate.
    (e) How will SSA make its decision to penalize me? In order to 
impose a penalty on you, we must find that you knowingly (knew or should 
have known or acted with knowing disregard for the truth) made a false 
or misleading statement or omitted or failed to report a material fact 
if you knew, or should have known, that the omission or failure to 
disclose was misleading. We will base our decision to penalize you on 
the evidence and the reasonable inferences that can be drawn from that 
evidence, not on speculation or suspicion. Our decision to penalize you 
will be documented with the basis and rationale for that decision. In 
determining whether you knowingly made a false or misleading statement 
or omitted or failed to report a material fact so as to justify 
imposition of the penalty, we will consider all evidence in the record, 
including any physical, mental, educational, or linguistic limitations 
(including any lack of facility with the English language) which you may 
have had at the time. In determining whether you acted knowingly, we 
will also consider the significance of the false or misleading statement 
or omission or failure to disclose in terms of its likely impact on your 
benefits.
    (f) What should I do if I disagree with SSA's initial determination 
to penalize me? If you disagree with our initial determination to impose 
a penalty, you have the right to request reconsideration of the penalty 
decision as explained in Sec. 416.1407. We will give you a chance to 
present your case, including the opportunity for a face-to-face 
conference. If you request reconsideration of our initial determination 
to penalize you, you have the choice of a case review, informal 
conference, or formal conference, as described in Sec. 416.1413(a) 
through (c). If you disagree with our reconsidered determination you 
have the right to follow the normal administrative and judicial review 
process by requesting a hearing before an administrative law judge, 
Appeals Council review and Federal court, review as explained in 
Sec. 416.1400.
    (g) When will the penalty period begin and end? Subject to the 
additional limitations noted in paragraphs (g)(1) and (g)(2) of this 
section, the penalty period will begin the first day of the month for 
which you would otherwise receive payment of benefits under title II or 
title XVI were it not for imposition of the penalty. Once a sanction 
begins, it will run continuously even if payments are intermittent. If 
more than one penalty has been imposed, but they have not yet run, the 
penalties will not run concurrently.
    (1) If you do not request reconsideration of our initial 
determination to penalize you, the penalty period will begin no earlier 
than the first day of the second month following the month in which the 
time limit for requesting reconsideration ends. The penalty period will 
end on the last day of the final month of the penalty period. For 
example, if the time period for requesting reconsideration ends on 
January 10, a 6-month period of nonpayment begins on March 1 if you 
would otherwise be eligible to receive benefits for that month, and ends 
on August 31.
    (2) If you request reconsideration of our initial determination to 
penalize you and the reconsidered determination does not change our 
original decision to penalize you, the penalty period will begin no 
earlier than the first day of the second month following the

[[Page 1068]]

month we notify you of our reconsidered determination. The penalty 
period will end on the last day of the final month of the penalty 
period. For example, if we notify you of our reconsidered determination 
on August 31, 2001, and you are not otherwise eligible for payment of 
benefits at that time, but would again be eligible to receive payment of 
benefits on October 1, 2003, a 6-month period of nonpayment would begin 
on October 1, 2003 and end on March 31, 2004.

[65 FR 42286, July 10, 2000, as amended at 71 FR 61409, Oct. 18, 2006]



 Subpart N_Determinations, Administrative Review Process, and Reopening 
                     of Determinations and Decisions

    Authority: Secs. 702(a)(5), 1631, and 1633 of the Social Security 
Act (42 U.S.C. 902(a)(5), 1383, and 1383b); sec. 202, Pub. L. 108-203, 
118 Stat. 509 (42 U.S.C. 902 note).

    Source: 45 FR 52096, Aug. 5, 1980, unless otherwise noted.

          Introduction, Definitions, and Initial Determinations



Sec. 416.1400  Introduction.

    (a) Explanation of the administrative review process. This subpart 
explains the procedures we follow in determining your rights under title 
XVI of the Social Security Act. The regulations describe the process of 
administrative review and explain your right to judicial review after 
you have taken all the necessary administrative steps. The 
administrative review process consists of several steps, which usually 
must be requested within certain time periods and in the following 
order:
    (1) Initial determination. This is a determination we make about 
your eligibility or your continuing eligibility for benefits or about 
any other matter, as discussed in Sec. 416.1402, that gives you a right 
to further review.
    (2) Reconsideration. If you are dissatisfied with an initial 
determination, you may ask us to reconsider it.
    (3) Hearing before an administrative law judge. If you are 
dissatisfied with the reconsideration determination, you may request a 
hearing before an administrative law judge.
    (4) Appeals Council review. If you are dissatisfied with the 
decision of the administrative law judge, you may request that the 
Appeals Council review the decision.
    (5) Federal court review. When you have completed the steps of the 
administrative review process listed in paragraphs (a)(1) through (a)(4) 
of this section, we will have made our final decision. If you are 
dissatisfied with our final decision, you may request judicial review by 
filing an action in a Federal district court.
    (6) Expedited appeals process. At some time after your initial 
determination has been reviewed, if you have no dispute with our 
findings of fact and our application and interpretation of the 
controlling laws, but you believe that a part of the law is 
unconstitutional, you may use the expedited appeals process. This 
process permits you to go directly to a Federal district court so that 
the constitutional issue may be resolved.
    (b) Nature of the administrative review process. In making a 
determination or decision in your case, we conduct the administrative 
review process in an informal, non-adversarial manner. Subject to 
certain timeframes at the hearing level (see Sec. 416.1435) and the 
limitations on Appeals Council consideration of additional evidence (see 
Sec. 416.1470), we will consider at each step of the review process any 
information you present as well as all the information in our records. 
You may present the information yourself or have someone represent you, 
including an attorney. If you are dissatisfied with our decision in the 
review process, but do not take the next step within the stated time 
period, you will lose your right to further administrative review and 
your right to judicial review, unless you can show us that there was 
good cause for your failure to make a timely request for review.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 305, Jan. 3, 1986; 52 FR 
4004, Feb. 9, 1987; 80 FR 14838, Mar. 20, 2015; 81 FR 90995, Dec. 16, 
2016]



Sec. 416.1401  Definitions.

    As used in this subpart:

[[Page 1069]]

    Date you receive notice means 5 days after the date on the notice, 
unless you show us that you did not receive it within the 5-day period.
    Decision means the decision made by an administrative law judge or 
the Appeals Council.
    Determination means the initial determination or the reconsidered 
determination.
    Mass change means a State-initiated change in the level(s) of 
federally administered State supplementary payments applicable to all 
recipients of such payments, or to categories of such recipients, due, 
for example, to State legislative or executive action.
    Preponderance of the evidence means such relevant evidence that as a 
whole shows that the existence of the fact to be proven is more likely 
than not.
    Remand means to return a case for further review.
    Substantial evidence means such relevant evidence as a reasonable 
mind might accept as adequate to support a conclusion.
    Vacate means to set aside a previous action.
    Waive means to give up a right knowingly and voluntarily.
    We, us, or our refers to the Social Security Administration.
    You or your refers to any person or the eligible spouse of any 
person claiming or receiving supplemental security income benefits.

[45 FR 52096, Aug. 5, 1980, as amended at 59 FR 43038, Aug. 22, 1994; 73 
FR 76944, Dec. 18, 2008]



Sec. 416.1402  Administrative actions that are initial determinations.

    Initial determinations are the determinations we make that are 
subject to administrative and judicial review. We will base our initial 
determination on the preponderance of the evidence. We will state the 
important facts and give the reasons for our conclusions in the initial 
determination. Initial determinations regarding supplemental security 
income benefits include, but are not limited to, determinations about--
    (a) Your eligibility for, or the amount of, your supplemental 
security income benefits or your special SSI cash benefits under 
Sec. 416.262, except actions solely involving transitions to eligibility 
between these types of benefits (see Secs. 416.1403 (a)(13) and 
(a)(14)).
    (b) Suspension, reduction, or termination of your SSI benefits or 
special SSI cash benefits (see Secs. 416.261 and 416.262) or suspension 
or termination of your special SSI eligibility status (see Secs. 416.264 
through 416.269);
    (c) Whether an overpayment of benefits must be repaid to us;
    (d) Whether the payment of your benefits will be made, on your 
behalf, to a representative payee;
    (e) Who will act as your payee if we determine that representative 
payment will be made;
    (f) Imposing penalties for failing to report important information;
    (g) Your drug addiction or alcoholism;
    (h) Whether you are eligible for special SSI eligibility status 
under Sec. 416.265;
    (i) Your disability;
    (j) Whether your completion of, or continuation for a specified 
period of time in, an appropriate program of vocational rehabilitation 
services, employment services, or other support services will increase 
the likelihood that you will not have to return to the disability or 
blindness benefit rolls, and thus, whether your benefits may be 
continued even though you are not disabled or blind;
    (k) Whether or not you have a disabling impairment as defined in 
Sec. 416.911;
    (l) How much and to whom benefits due a deceased individual will be 
paid;
    (m) A claim for benefits under Sec. 416.351 based on alleged 
misinformation;
    (n) Our calculation of the amount of change in your federally 
administered State supplementary payment amount (i.e., a reduction, 
suspension, or termination) which results from a mass change, as defined 
in Sec. 416.1401; and
    (o) Whether we were negligent in investigating or monitoring or 
failing to

[[Page 1070]]

investigate or monitor your representative payee, which resulted in the 
misuse of benefits by your representative payee.

[45 FR 52096, Aug. 5, 1980, as amended at 47 FR 15325, Apr. 9, 1982; 49 
FR 22275, May 29, 1984; 58 FR 52913, Oct. 13, 1993; 59 FR 41405, Aug. 
12, 1994; 59 FR 43039, Aug. 22, 1994; 59 FR 44928, Aug. 31, 1994; 60 FR 
8153, Feb. 10, 1995; 60 FR 14215, Mar. 15, 1995; 69 FR 60240, Oct. 7, 
2004; 70 FR 36509, June 24, 2005; 73 FR 76944, Dec. 18, 2008]



Sec. 416.1403  Administrative actions that are not initial 
determinations.

    (a) Administrative actions that are not initial determinations may 
be reviewed by us, but they are not subject to the administrative review 
process provided by this subpart and they are not subject to judicial 
review. These actions include, but are not limited to, an action about--
    (1) Presumptive disability or presumptive blindness;
    (2) An emergency advance payment (as defined in Sec. 416.520(b));
    (3) Denial of a request to be made a representative payee;
    (4) Denial of a request to use the expedited appeals process;
    (5) Denial of a request to reopen a determination or a decision;
    (6) The fee that may be charged or received by a person who has 
represented you in connection with a proceeding before us;
    (7) Refusing to recognize, disqualifying, or suspending a person 
from acting as your representative in a proceeding before us (see 
Secs. 416.1505 and 416.1545);
    (8) Denying your request to extend the time period for requesting 
review of a determination or a decision;
    (9) Determining whether (and the amount of) travel expenses incurred 
are reimbursable in connection with proceedings before us;
    (10) Denying your request to readjudicate your claim and apply an 
Acquiescence Ruling;
    (11) Determining whether an organization may collect a fee from you 
for expenses it incurs in serving as your representative payee (see 
Sec. 416.640a);
    (12) Declining under Sec. 416.351(f) to make a determination on a 
claim for benefits based on alleged misinformation because one or more 
of the conditions specified in Sec. 416.351(f) are not met;
    (13) Transition to eligibility for special SSI cash benefits 
(Sec. 416.262) in a month immediately following a month for which you 
were eligible for regular SSI benefits;
    (14) Transition to eligibility for regular SSI benefits in a month 
immediately following a month for which you were eligible for special 
SSI cash benefits (Sec. 416.262);
    (15) The determination to reduce, suspend, or terminate your 
federally administered State supplementary payments due to a State-
initiated mass change, as defined in Sec. 416.1401, in the levels of 
such payments, except as provided in Sec. 416.1402(n);
    (16) Termination of Federal administration of State supplementary 
payments;
    (17) Findings on whether we can collect an overpayment by using the 
Federal income tax refund offset procedure. (see Sec. 416.583);
    (18) Determining whether we will refer information about your 
overpayment to a consumer reporting agency (see Secs. 416.590 and 
422.305 of this chapter);
    (19) Determining whether we will refer your overpayment to the 
Department of the Treasury for collection by offset against Federal 
payments due you (see Secs. 416.590 and 422.310 of this chapter);
    (20) Determining whether we will order your employer to withhold 
from your disposable pay to collect an overpayment you received under 
title XVI of the Social Security Act (see part 422, subpart E, of this 
chapter);
    (21) Determining when provisional benefits are payable, the amount 
of the provisional benefit payable, and when provisional benefits 
terminate (see Sec. 416.999c);
    (22) Determining whether to select your claim for the quick 
disability determination process under Sec. 416.1019;
    (23) The removal of your claim from the quick disability 
determination process under Sec. 416.1019;
    (24) Starting or discontinuing a continuing disability review;
    (25) Issuing a receipt in response to your report of a change in 
your earned income; and

[[Page 1071]]

    (26) Determining whether a non-attorney representative is eligible 
to receive direct fee payment as described in Sec. 416.1517 of this 
part.
    (b) We send some notices of actions that are not initial 
determinations:
    (1) If you receive an emergency advance payment; presumptive 
disability or presumptive blindness payment, or provisional payment, we 
will provide a notice explaining the nature and conditions of the 
payments.
    (2) If you receive presumptive disability or presumptive blindness 
payments, or provisional payments, we shall send you a notice when those 
payments are exhausted.
    (3) If there is a termination of Federal administration of State 
supplementary payments.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 8809, Mar. 14, 1986; 55 
FR 1020, Jan. 11, 1990; 55 FR 4423, Feb. 8, 1990; 57 FR 23058, June 1, 
1992; 59 FR 41405, Aug. 12, 1994; 59 FR 43039, Aug. 22, 1994; 59 FR 
44928, Aug. 31, 1994; 62 FR 49440, Sept. 22, 1997; 66 FR 67081, Dec. 28, 
2001; 68 FR 74184, Dec. 23, 2003; 70 FR 57146, Sept. 30, 2005; 71 FR 
16461, Mar. 31, 2006; 71 FR 66859, 66867, Nov. 17, 2006; 72 FR 51178, 
Sept. 6, 2007; 76 FR 45194, July 28, 2011; 76 FR 80247, Dec. 23, 2011; 
80 FR 400, Jan. 6, 2015]



Sec. 416.1404  Notice of the initial determination.

    (a) We will mail a written notice of our initial determination to 
you at your last known address. The written notice will explain in 
simple and clear language what we have determined and the reasons for 
and the effect of our determination. If our determination involves a 
determination of disability that is in whole or in part unfavorable to 
you, our written notice also will contain in understandable language a 
statement of the case setting forth the evidence on which our 
determination is based. The notice also will inform you of your right to 
reconsideration. We will not mail a notice if the beneficiary's 
entitlement to benefits has ended because of his or her death.
    (b) If our initial determination is that we must suspend, reduce or 
terminate your benefits, the notice will also tell you that you have a 
right to a reconsideration before the determination takes effect (see 
Sec. 416.1336).

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 305, Jan. 3, 1986; 72 FR 
51179, Sept. 6, 2007]



Sec. 416.1405  Effect of an initial determination.

    An initial determination is binding unless you request a 
reconsideration within the stated time period, or we revise the initial 
determination.

[51 FR 305, Jan. 3, 1986]



Sec. 416.1406  Testing modifications to the disability determination 
procedures.

    (a) Applicability and scope. Notwithstanding any other provision in 
this part or part 422 of this chapter, we are establishing the 
procedures set out in this section to test modifications to our 
disability determination process. These modifications will enable us to 
test, either individually or in one or more combinations, the effect of: 
having disability claim managers assume primary responsibility for 
processing an application for SSI payments based on disability; 
providing persons who have applied for benefits based on disability with 
the opportunity for an interview with a decisionmaker when the 
decisionmaker finds that the evidence in the file is insufficient to 
make a fully favorable determination or requires an initial 
determination denying the claim; having a single decisionmaker make the 
initial determination with assistance from medical consultants, where 
appropriate; and eliminating the reconsideration step in the 
administrative review process and having a claimant who is dissatisfied 
with the initial determination request a hearing before an 
administrative law judge. The model procedures we test will be designed 
to provide us with information regarding the effect of these procedural 
modifications and enable us to decide whether and to what degree the 
disability determination process would be improved if they were 
implemented on a national level.
    (b) Procedures for cases included in the tests. Prior to commencing 
each test or group of tests in selected site(s), we will publish a 
notice in the Federal Register. The notice will describe which model or 
combinations of models we intend to test, where the specific test 
site(s) will be, and the duration of the test(s). The individuals who 
participate in the test(s) will be randomly assigned to a test group in 
each site

[[Page 1072]]

where the tests are conducted. Paragraph (b) (1) through (4) of this 
section lists descriptions of each model.
    (1) In the disability claim manager model, when you file an 
application for SSI payments based on disability, a disability claim 
manager will assume primary responsibility for the processing of your 
claim. The disability claim manager will be the focal point for your 
contacts with us during the claims intake process and until an initial 
determination on your claim is made. The disability claim manager will 
explain the SSI disability program to you, including the definition of 
disability and how we determine whether you meet all the requirements 
for SSI payments based on disability. The disability claim manager will 
explain what you will be asked to do throughout the claims process and 
how you can obtain information or assistance through him or her. The 
disability claim manager will also provide you with information 
regarding your right to representation, and he or she will provide you 
with appropriate referral sources for representation. The disability 
claim manager may be either a State agency employee or a Federal 
employee. In some instances, the disability claim manager may be 
assisted by other individuals.
    (2) In the single decisionmaker model, the decisionmaker will make 
the disability determination and may also determine whether the other 
conditions of eligibility for SSI payments based on disability are met. 
The decisionmaker will make the disability determination after any 
appropriate consultation with a medical or psychological consultant. The 
medical or psychological consultant will not be required to sign the 
disability determination forms we use to have the State agency certify 
the determination of disability to us (see Sec. 416.1015). However, 
before an initial determination is made in any case where there is 
evidence which indicates the existence of a mental impairment, the 
decisionmaker will make every reasonable effort to ensure that a 
qualified psychiatrist or psychologist has completed the medical portion 
of the case review and any applicable residual functional capacity 
assessment pursuant to our existing procedures (see Sec. 416.1017). 
Similarly, in making an initial determination with respect to the 
disability of a child under age 18 claiming SSI payments based on 
disability, the decisionmaker will make reasonable efforts to ensure 
that a qualified pediatrician, or other individual who specializes in a 
field of medicine appropriate to the child's impairment(s), evaluates 
the claim of such child (see Sec. 416.903(f)). In some instances the 
decisionmaker may be the disability claim manager described in paragraph 
(b)(1) of this section. When the decisionmaker is a State agency 
employee, a team of individuals that includes a Federal employee will 
determine whether the other conditions of eligibility for SSI payments 
are met.
    (3) In the predecision interview model, if the decisionmaker(s) 
finds that the evidence in your file is insufficient to make a fully 
favorable determination or requires an initial determination denying 
your claim, a predecision notice will be mailed to you. The notice will 
tell you that, before the decisionmaker(s) makes an initial 
determination about whether you are disabled, you may request a 
predecision interview with the decisionmaker(s). The notice will also 
tell you that you may also submit additional evidence. You must request 
a predecision interview within 10 days after the date you receive the 
predecision notice. You must also submit any additional evidence within 
10 days after the date you receive the predecision notice. If you 
request a predecision interview, the decisionmaker(s) will conduct the 
predecision interview in person, by videoconference, or by telephone as 
the decisionmaker(s) determines is appropriate under the circumstances. 
If you make a late request for a predecision interview, or submit 
additional evidence late, but show in writing that you had good cause 
under the standards in Sec. 416.1411 for missing the deadline, the 
decisionmaker(s) will extend the deadline. If you do not request the 
predecision interview or if you do not appear for a scheduled 
predecision interview and do not submit additional evidence, or if you 
do not respond to our attempts to communicate with

[[Page 1073]]

you, the decisionmaker(s) will make an initial determination based upon 
the evidence in your file. If you identify additional evidence during 
the predecision interview, which was previously not available, the 
decisionmaker(s) will advise you to submit the evidence. If you are 
unable to do so, the decisionmaker(s) may assist you in obtaining it. 
The decisionmaker(s) also will advise you of the specific timeframes you 
have for submitting any additional evidence identified during the 
predecision interview. If you have no treating source(s) (see 
Sec. 416.902), or your treating source(s) is unable or unwilling to 
provide the necessary evidence, or there is a conflict in the evidence 
that cannot be resolved through evidence from your treating source(s), 
the decisionmaker(s) may arrange a consultative examination or resolve 
conflicts according to existing procedures (see Sec. 416.919a). If you 
attend the predecision interview, or do not attend the predecision 
interview but you submit additional evidence, the decisionmaker(s) will 
make an initial determination based on the evidence in your file, 
including the additional evidence you submit or the evidence obtained as 
a result of the predecision notice or interview, or both.
    (4) In the reconsideration elimination model, we will modify the 
disability determination process by eliminating the reconsideration step 
of the administrative review process. If you receive an initial 
determination on your claim for SSI payments based on disability, and 
you are dissatisfied with the determination, we will notify you that you 
may request a hearing before an administrative law judge.

[60 FR 20028, Apr. 24, 1995, as amended at 73 FR 2416, Jan. 15, 2008; 76 
FR 24812, May 3, 2011; 82 FR 5883, Jan. 18, 2017]

                             Reconsideration



Sec. 416.1407  Reconsideration--general.

    Reconsideration is the first step in the administrative review 
process that we provide if you are dissatisfied with the initial 
determination. If you are dissatisfied with our reconsideration 
determination, you may request a hearing before an administrative law 
judge.

[51 FR 305, Jan. 3, 1986]



Sec. 416.1408  Parties to a reconsideration.

    (a) Who may request a reconsideration. If you are dissatisfied with 
the initial determination, you may request that we reconsider it. In 
addition, a person who shows in writing that his or her rights may be 
adversely affected by the initial determination may request a 
reconsideration.
    (b) Who are parties to a reconsideration. After a request for the 
reconsideration, you and any person who shows in writing that his or her 
rights are adversely affected by the initial determination will be 
parties to the reconsideration.



Sec. 416.1409  How to request reconsideration.

    (a) We shall reconsider an initial determination if you or any other 
party to the reconsideration files a written request at one of our 
offices within 60 days after the date you receive notice of the initial 
determination (or within the extended time period if we extend the time 
as provided in paragraph (b) of this section).
    (b) Extension of time to request a reconsideration. If you want a 
reconsideration of the initial determination but do not request one in 
time, you may ask us for more time to request a reconsideration. Your 
request for an extension of time must be in writing and it must give the 
reasons why the request for reconsideration was not filed within the 
stated time period. If you show us that you had good cause for missing 
the deadline, we will extend the time period. To determine whether good 
cause exists, we use the standards explained in Sec. 416.1411.



Sec. 416.1411  Good cause for missing the deadline to request review.

    (a) In determining whether you have shown that you have good cause 
for missing a deadline to request review we consider--
    (1) What circumstances kept you from making the request on time;
    (2) Whether our action misled you;
    (3) Whether you did not understand the requirements of the Act 
resulting

[[Page 1074]]

from amendments to the Act, other legislation, or court decisions; and
    (4) Whether you had any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
which prevented you from filing a timely request or from understanding 
or knowing about the need to file a timely request for review.
    (b) Examples of circumstances where good cause may exist include, 
but are not limited to, the following situations:
    (1) You were seriously ill and were prevented from contacting us in 
person, in writing, or through a friend, relative, or other person.
    (2) There was a death or serious illness in your immediate family.
    (3) Important records were destroyed or damaged by fire or other 
accidental cause.
    (4) You were trying very hard to find necessary information to 
support your claim but did not find the information within the stated 
time periods.
    (5) You asked us for additional information explaining our action 
within the time limit, and within 60 days of receiving the explanation 
you requested reconsideration or a hearing, or within 30 days of 
receiving the explanation you requested Appeals Council review or filed 
a civil suit.
    (6) We gave you incorrect or incomplete information about when and 
how to request administrative review or to file a civil suit.
    (7) You did not receive notice of the initial determination or 
decision.
    (8) You sent the request to another Government agency in good faith 
within the time limit and the request did not reach us until after the 
time period had expired.
    (9) Unusual or unavoidable circumstances exist, including the 
circumstances described in paragraph (a)(4) of this section, which show 
that you could not have known of the need to file timely, or which 
prevented you from filing timely.

[45 FR 52096, Aug. 5, 1980, as amended at 59 FR 1637, Jan. 12, 1994]



Sec. 416.1413  Reconsideration procedures.

    If you request reconsideration, we will give you a chance to present 
your case. How you can present your case depends upon the issue involved 
and whether you are asking us to reconsider an initial determination on 
an application or an initial determination on a suspension, reduction or 
termination of benefits. The methods of reconsideration include the 
following:
    (a) Case review. We will give you and the other parties to the 
reconsideration an opportunity to review the evidence in our files and 
then to present oral and written evidence to us. We will then make a 
decision based on all of this evidence. The official who reviews the 
case will make the reconsidered determination.
    (b) Informal conference. In addition to following the procedures of 
a case review, an informal conference allows you and the other parties 
to the reconsideration an opportunity to present witnesses. A summary 
record of this proceeding will become part of the case record. The 
official who conducts the informal conference will make the reconsidered 
determination.
    (c) Formal conference. In addition to following the procedures of an 
informal conference, a formal conference allows you and the other 
parties to a reconsideration an opportunity to request us to subpoena 
adverse witnesses and relevant documents and to cross-examine adverse 
witnesses. A summary record of this proceeding will become a part of the 
case record. The official who conducts the formal conference will make 
the reconsidered determination.
    (d) Disability hearing. If you have been receiving supplemental 
security income benefits because you are blind or disabled and you 
request reconsideration of an initial or revised determination that, 
based on medical factors, you are not now blind or disabled, we will 
give you and the other parties to the reconsideration an opportunity for 
a disability hearing. (See Secs. 416.1414 through 416.1418.)

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 305, Jan. 3, 1986]

[[Page 1075]]



Sec. 416.1413a  Reconsiderations of initial determinations on 
applications.

    The method of reconsideration we will use when you appeal an initial 
determination on your application for benefits depends on the issue 
involved in your case.
    (a) Nonmedical issues. If you challenge our finding on a nonmedical 
issue, we shall offer you a case review or an informal conference, and 
will reach our reconsidered determination on the basis of the review you 
select.
    (b) Medical issues. If you challenge our finding on a medical issue 
(even if you received payments because we presumed you were blind or 
disabled), we shall reach our reconsidered determination on the basis of 
a case review.

[45 FR 52096, Aug. 5, 1980. Redesignated at 51 FR 305, Jan. 3, 1986]



Sec. 416.1413b  Reconsideration procedures for post-eligiblity claims.

    If you are eligible for supplemental security income benefits and we 
notify you that we are going to suspend, reduce or terminate your 
benefits, you can appeal our determination within 60 days of the date 
you receive our notice. The 60-day period may be extended if you have 
good cause for an extension of time under the conditions stated in 
Sec. 416.1411(b). If you appeal a suspension, reduction, or termination 
of benefits, the method of reconsideration we will use depends on the 
issue in your case. If the issue in your case is that you are no longer 
blind or disabled for medical reasons, you will receive an opportunity 
for a disability hearing. If any other issue is involved, you have the 
choice of a case review, informal conference or formal conference.

[51 FR 305, Jan. 3, 1986]



Sec. 416.1413c  Arrangement for conferences.

    (a) As soon as we receive a request for a formal or informal 
conference, we shall set the time, date and place for the conference.
    (b) We shall send you and any other parties to the reconsideration a 
written notice about the conference (either by mailing it to your last 
known address or by personally serving you with it) at least 10 days 
before the conference. However, we may hold the conference sooner if we 
all agree. We will not send written notice of the time, date, and place 
of the conference if you waive your right to receive it.
    (c) We shall schedule the conference within 15 days after you 
request it, but, at our discretion or at your request, we will delay the 
conference if we think the delay will ensure that the conference is 
conducted efficiently and properly.
    (d) We shall hold the conference at one of our offices, by telephone 
or in person, whichever you prefer. We will hold the conference 
elsewhere in person if you show circumstances that make this arrangement 
reasonably necessary.

[45 FR 52096, Aug. 5, 1980. Redesignated at 51 FR 305, Jan. 3, 1986]



Sec. 416.1414  Disability hearing--general.

    (a) Availability. We will provide you with an opportunity for a 
disability hearing if:
    (1) You have been receiving supplemental security income benefits 
based on a medical impairment that renders you blind or disabled;
    (2) We have made an initial or revised determination based on 
medical factors that you are not blind or disabled because your 
impairment:
    (i) Has ceased;
    (ii) Did not exist; or
    (iii) Is no longer disabling; and
    (3) You make a timely request for reconsideration of the initial or 
revised determination.
    (b) Scope. The disability hearing will address only the initial or 
revised determination, based on medical factors, that you are not now 
blind or disabled. Any other issues you raise in connection with your 
request for reconsideration will be reviewed in accordance with the 
reconsideration procedures described in Sec. 416.1413 (a) through (c).
    (c) Time and place--(1) General. Either the State agency or the 
Associate Commissioner for Disability Determinations or his or her 
delegate, as appropriate, will set the time and place of your disability 
hearing. We will send you a notice of the time and place of your 
disability hearing at least 20 days before the date of the hearing. You

[[Page 1076]]

may be expected to travel to your disability hearing. (See 
Secs. 416.1495-416.1499 regarding reimbursement for travel expenses.)
    (2) Change of time or place. If you are unable to travel or have 
some other reason why you cannot attend your disability hearing at the 
scheduled time or place, you should request at the earliest possible 
date that the time or place of your hearing be changed. We will change 
the time or place if there is good cause for doing so under the 
standards in Sec. 416.1436 (c) and (d).
    (d) Combined issues. If a disability hearing is available to you 
under paragraph (a) of this section, and you file a new application for 
benefits while your request for reconsideration is still pending, we may 
combine the issues on both claims for the purpose of the disability 
hearing and issue a combined initial/reconsidered determination which is 
binding with respect to the common issues on both claims.
    (e) Definition. For purposes of the provisions regarding disability 
hearings (Secs. 416.1414 through 416.1418) we, us, or our means the 
Social Security Administration or the State agency.

[51 FR 305, Jan. 3, 1986, as amended at 51 FR 8809, Mar. 14, 1986; 71 FR 
10432, Mar. 1, 2006]



Sec. 416.1415  Disability hearing--disability hearing officers.

    (a) General. Your disability hearing will be conducted by a 
disability hearing officer who was not involved in making the 
determination you are appealing. The disability hearing officer will be 
an experienced disability examiner, regardless of whether he or she is 
appointed by a State agency or by the Associate Commissioner for 
Disability Determinations or his or her delegate, as described in 
paragraphs (b) and (c) of this section.
    (b) State agency hearing officers--(1) Appointment of State agency 
hearing officers. If a State agency made the initial or revised 
determination that you are appealing, the disability hearing officer who 
conducts your disability hearing may be appointed by a State agency. If 
the disability hearing officer is appointed by a State agency, that 
individual will be employed by an adjudicatory unit of the State agency 
other than the adjudicatory unit which made the determination you are 
appealing.
    (2) State agency defined. For purposes of this subpart, State agency 
means the adjudicatory component in the State which issues disability 
determinations.
    (c) Federal hearing officers. The disability hearing officer who 
conducts your disability hearing will be appointed by the Associate 
Commissioner for Disability Determinations or his or her delegate if:
    (1) A component of our office other than a State agency made the 
determination you are appealing; or
    (2) The State agency does not appoint a disability hearing officer 
to conduct your disability hearing under paragraph (b) of this section.

[51 FR 305, Jan. 3, 1986, as amended at 71 FR 10432, Mar. 1, 2006]



Sec. 416.1416  Disability hearing--procedures.

    (a) General. The disability hearing will enable you to introduce 
evidence and present your views to a disability hearing officer if you 
are dissatisfied with an initial or revised determination, based on 
medical factors, that you are not now blind or disabled, as described in 
Sec. 416.1414(a)(2).
    (b) Your procedural rights. We will advise you that you have the 
following procedural rights in connection with the disability hearing 
process:
    (1) You may request that we assist you in obtaining pertinent 
evidence for your disability hearing and, if necessary, that we issue a 
subpoena to compel the production of certain evidence or testimony. We 
will follow subpoena procedures similar to those described in 
Sec. 416.1450(d) for the administrative law judge hearing process;
    (2) You may have a representative at the hearing appointed under 
subpart O of this part, or you may represent yourself;
    (3) You or your representative may review the evidence in your case 
file, either on the date of your hearing or at an earlier time at your 
request, and present additional evidence;
    (4) You may present witnesses and question any witnesses at the 
hearing; and

[[Page 1077]]

    (5) You may waive your right to appear at the hearing. If you do not 
appear at the hearing, the disability hearing officer will prepare and 
issue a written reconsidered determination based on the information in 
your case file.
    (c) Case preparation. After you request reconsideration, your case 
file will be reviewed and prepared for the hearing. This review will be 
conducted in the component of our office (including a State agency) that 
made the initial or revised determination, by personnel who were not 
involved in making the initial or revised determination. Any new 
evidence you submit in connection with your request for reconsideration 
will be included in this review. If necessary, further development of 
evidence, including arrangements for medical examinations, will be 
undertaken by this component. After the case file is prepared for the 
hearing, it will be forwarded by this component to the disability 
hearing officer for a hearing. If necessary, the case file may be sent 
back to this component at any time prior to the issuance of the 
reconsidered determination for additional development. Under paragraph 
(d) of this section, this component has the authority to issue a 
favorable reconsidered determination at any time in its development 
process.
    (d) Favorable reconsidered determination without a hearing. If the 
evidence in your case file supports a finding that you are now blind or 
disabled, either the component that prepares your case for hearing under 
paragraph (c) or the disability hearing officer will issue a written 
favorable reconsidered determination, even if a disability hearing has 
not yet been held.
    (e) Opportunity to submit additional evidence after the hearing. At 
your request, the disability hearing officer may allow up to 15 days 
after your disability hearing for receipt of evidence which is not 
available at the hearing, if:
    (1) The disability hearing officer determines that the evidence has 
a direct bearing on the outcome of the hearing; and
    (2) The evidence could not have been obtained before the hearing.
    (f) Opportunity to review and comment on evidence obtained or 
developed by us after the hearing. If, for any reason, additional 
evidence is obtained or developed by us after your disability hearing, 
and all evidence taken together can be used to support a reconsidered 
determination that is unfavorable to you with regard to the medical 
factors of eligibility, we will notify you, in writing, and give you an 
opportunity to review and comment on the additional evidence. You will 
be given 10 days from the date you receive our notice to submit your 
comments (in writing or, in appropriate cases, by telephone), unless 
there is good cause for granting you additional time, as illustrated by 
the examples in Sec. 416.1411(b). Your comments will be considered 
before a reconsidered determination is issued. If you believe that it is 
necessary to have further opportunity for a hearing with respect to the 
additional evidence, a supplementary hearing may be scheduled at your 
request. Otherwise, we will ask for your written comments on the 
additional evidence, or, in appropriate cases, for your telephone 
comments.

[51 FR 306, Jan. 3, 1986]



Sec. 416.1417  Disability hearing--disability hearing officer's 
reconsidered determination.

    (a) General. The disability hearing officer who conducts your 
disability hearing will prepare and will issue a written reconsidered 
determination, unless:
    (1) The disability hearing officer sends the case back for 
additional development by the component that prepared the case for the 
hearing, and that component issues a favorable determination, as 
permitted by Sec. 416.1416(c);
    (2) It is determined that you are engaging in substantial gainful 
activity and that you are therefore not disabled; or
    (3) The reconsidered determination prepared by the disability 
hearing officer is reviewed under Sec. 416.1418.
    (b) Content. The disability hearing officer's reconsidered 
determination will give the findings of fact and the reasons for the 
reconsidered determination. The disability hearing officer

[[Page 1078]]

must base the reconsidered determination on the preponderance of the 
evidence offered at the disability hearing or otherwise included in your 
case file.
    (c) Notice. We will mail you and the other parties a notice of 
reconsidered determination in accordance with Sec. 416.1422.
    (d) Effect. The disability hearing officer's reconsidered 
determination, or, if it is changed under Sec. 416.1418, the 
reconsidered determination that is issued by the Associate Commissioner 
for Disability Determinations or his or her delegate, is binding in 
accordance with Sec. 416.1421, subject to the exceptions specified in 
that section.

[51 FR 306, Jan. 3, 1986, as amended at 71 FR 10432, Mar. 1, 2006; 73 FR 
76944, Dec. 18, 2008]



Sec. 416.1418  Disability hearing--review of the disability hearing
officer's reconsidered determination before it is issued.

    (a) General. The Associate Commissioner for Disability 
Determinations or his or her delegate may select a sample of disability 
hearing officers' reconsidered determinations, before they are issued, 
and review any such case to determine its correctness on any grounds he 
or she deems appropriate. The Associate Commissioner or his or her 
delegate shall review any case within the sample if:
    (1) There appears to be an abuse of discretion by the hearing 
officer;
    (2) There is an error of law; or
    (3) The action, findings or conclusions of the disability hearing 
officer are not supported by substantial evidence.

    Note to paragraph (a): If the review indicates that the reconsidered 
determination prepared by the disability hearing officer is correct, it 
will be dated and issued immediately upon completion of the review. If 
the reconsidered determination prepared by the disability hearing 
officer is found by the Associate Commissioner or his or her delegate to 
be deficient, it will be changed as described in paragraph (b) of this 
section.

    (b) Methods of correcting deficiencies in the disability hearing 
officer's reconsidered determination. If the reconsidered determination 
prepared by the disability hearing officer is found by the Associate 
Commissioner for Disability Determinations or his or her delegate to be 
deficient, the Associate Commissioner or his or her delegate will take 
appropriate action to assure that the deficiency is corrected before a 
reconsidered determination is issued. The action taken by the Associate 
Commissioner or his or her delegate will take one of two forms:
    (1) The Associate Commissioner or his or her delegate may return the 
case file either to the component responsible for preparing the case for 
hearing or to the disability hearing officer, for appropriate further 
action; or
    (2) The Associate Commissioner or his or her delegate may issue a 
written reconsidered determination which corrects the deficiency.
    (c) Further action on your case if it is sent back by the Associate 
Commissioner for Disability Determinations or his or her delegate either 
to the component that prepared your case for hearing or to the 
disability hearing officer. If the Associate Commissioner for Disability 
Determinations or his or her delegate sends your case back either to the 
component responsible for preparing the case for hearing or to the 
disability hearing officer for appropriate further action, as provided 
in paragraph (b)(1) of this section, any additional proceedings in your 
case will be governed by the disability hearing procedures described in 
Sec. 416.1416(f) or if your case is returned to the disability hearing 
officer and an unfavorable determination is indicated, a supplementary 
hearing may be scheduled for you before a reconsidered determination is 
reached in your case.
    (d) Opportunity to comment before the Associate Commissioner for 
Disability Determinations or his or her delegate issues a reconsidered 
determination that is unfavorable to you. If the Associate Commissioner 
for Disability Determinations or his or her delegate proposes to issue a 
reconsidered determination as described in paragraph (b)(2) of this 
section, and that reconsidered determination is unfavorable to you, he 
or she will send you a copy of the proposed reconsidered determination 
with an explanation of the reasons for it, and will give you an 
opportunity to submit written comments before it is issued. At your 
request, you will also be given an opportunity to inspect the pertinent 
materials in your case file,

[[Page 1079]]

including the reconsidered determination prepared by the disability 
hearing officer, before submitting your comments. You will be given 10 
days from the date you receive the Associate Commissioner's notice of 
proposed action to submit your written comments, unless additional time 
is necessary to provide access to the pertinent file materials or there 
is good cause for providing more time, as illustrated by the examples in 
Sec. 416.1411(b). The Associate Commissioner or his or her delegate will 
consider your comments before taking any further action on your case.

[71 FR 10432, Mar. 1, 2006]



Sec. 416.1419  Notice of another person's request for reconsideration.

    If any other person files a request for reconsideration of the 
initial determination in your case, we shall notify you at your last 
known address before we reconsider the initial determination. We shall 
also give you an opportunity to present any evidence you think helpful 
to the reconsidered determination.

[45 FR 52096, Aug. 5, 1980. Redesignated at 51 FR 306, Jan. 3, 1986]



Sec. 416.1420  Reconsidered determination.

    After you or another person requests a reconsideration, we will 
review the evidence we considered in making the initial determination 
and any other evidence we receive. We will make our determination based 
on the preponderance of the evidence. The person who makes the 
reconsidered determination will have had no prior involvement with the 
initial determination.

[73 FR 76945, Dec. 18, 2008]



Sec. 416.1421  Effect of a reconsidered determination.

    The reconsidered determination is binding unless--
    (a) You or any other party to the reconsideration requests a hearing 
before an administrative law judge within the stated time period and a 
decision is made;
    (b) The expedited appeals process is used; or
    (c) The reconsidered determination is revised.

[51 FR 307, Jan. 3, 1986]



Sec. 416.1422  Notice of a reconsidered determination.

    We shall mail a written notice of the reconsidered determination to 
the parties at their last known address. We shall state the specific 
reasons for the determination and tell you and any other parties of the 
right to a hearing. If it is appropriate, we will also tell you and any 
other parties how to use the expedited appeals process.

[45 FR 52096, Aug. 5, 1980. Redesignated at 51 FR 306, Jan. 3, 1986]

                        Expedited Appeals Process



Sec. 416.1423  Expedited appeals process--general.

    By using the expedited appeals process you may go directly to a 
Federal district court without first completing the administrative 
review process that is generally required before the court will hear 
your case.



Sec. 416.1424  When the expedited appeals process may be used.

    You may use the expedited appeals process if all of the following 
requirements are met:
    (a) We have made an initial and a reconsidered determination; an 
administrative law judge has made a hearing decision; or Appeals Council 
review has been requested, but a final decision has not been issued.
    (b) You are a party to the reconsidered determination or the hearing 
decision.
    (c) You have submitted a written request for the expedited appeals 
process.
    (d) You have claimed, and we agree, that the only factor preventing 
a favorable determination or decision is a provision in the law that you 
believe is unconstitutional.
    (e) If you are not the only party, all parties to the determination 
or decision agree to request the expedited appeals process.



Sec. 416.1425  How to request expedited appeals process.

    (a) Time of filing request. You may request the expedited appeals 
process--

[[Page 1080]]

    (1) Within 60 days after the date you receive notice of the 
reconsidered determination (or within the extended time period if we 
extend the time as provided in paragraph (c) of this section);
    (2) At any time after you have filed a timely request for a hearing 
but before you receive notice of the administrative law judge's 
decision;
    (3) Within 60 days after the date you receive a notice of the 
administrative law judge's decision or dismissal (or within the extended 
time period if we extend the time as provided in paragraph (c) of this 
section); or
    (4) At any time after you have filed a timely request for Appeals 
Council review, but before you receive notice of the Appeals Council's 
action.
    (b) Place of filing request. You may file a written request for the 
expedited appeals process at one of our offices.
    (c) Extension of time to request expedited appeals process. If you 
want to use the expedited appeals process but do not request it within 
the stated time period, you may ask for more time to submit your 
request. Your request for an extension of time must be in writing and it 
must give the reasons why the request for the expedited appeals process 
was not filed within the stated time period. If you show that you had 
good cause for missing the deadline, the time period will be extended. 
To determine whether good cause exists, we use the standards explained 
in Sec. 416.1411.



Sec. 416.1426  Agreement in expedited appeals process.

    If you meet all the requirements necessary for the use of the 
expedited appeals process, our authorized representative shall prepare 
an agreement. The agreement must be signed by you, by every other party 
to the determination or decision, and by our authorized representative. 
The agreement must provide that--
    (a) The facts in your claim are not in dispute;
    (b) The sole issue in dispute is whether a provision of the Act that 
applies to your case is unconstitutional;
    (c) Except for your belief that a provision of the Act is 
unconstitutional, you agree with our interpretation of the law;
    (d) If the provision of the Act that you believe is unconstitutional 
were not applied to your case, your claim would be allowed; and
    (e) Our determination or the decision is final for the purpose of 
seeking judicial review.



Sec. 416.1427  Effect of expedited appeals process agreement.

    After an expedited appeals process agreement is signed, you will not 
need to complete the remaining steps of the administrative review 
process. Instead, you may file an action in a Federal district court 
within 60 days after the date you receive notice (a signed copy of the 
agreement will be mailed to you and will constitute notice) that the 
agreement has been signed by our authorized representative.

[45 FR 52096, Aug. 5, 1980, as amended at 49 FR 46370, Nov. 26, 1984]



Sec. 416.1428  Expedited appeals process request that does not result
in agreement.

    If you do not meet all of the requirements necessary to use the 
expedited appeals process, we shall tell you that your request to use 
this process is denied and that your request will be considered as a 
request for a hearing, or Appeals Council review, whichever is 
appropriate.

               Hearing Before an Administrative Law Judge



Sec. 416.1429  Hearing before an administrative law judge--general.

    If you are dissatisfied with one of the determinations or decisions 
listed in Sec. 416.1430, you may request a hearing. The Deputy 
Commissioner for Disability Adjudication and Review, or his or her 
delegate, will appoint an administrative law judge to conduct the 
hearing. If circumstances warrant, the Deputy Commissioner, or his or 
her delegate, may assign your case to another administrative law judge. 
At the hearing, you may appear in person, by video teleconferencing, or, 
under certain extraordinary circumstances, by telephone. You may submit 
new evidence (subject to the provisions of Sec. 416.1435), examine the 
evidence used in making the determination or decision

[[Page 1081]]

under review, and present and question witnesses. The administrative law 
judge who conducts the hearing may ask you questions. He or she will 
issue a decision based on the preponderance of the evidence in the 
hearing record. If you waive your right to appear at the hearing, in 
person, by video teleconferencing, or by telephone, the administrative 
law judge will make a decision based on the preponderance of the 
evidence that is in the file and, subject to the provisions of 
Sec. 416.1435, any new evidence that may have been submitted for 
consideration.

[79 FR 35933, June 25, 2014, as amended at 81 FR 90995, Dec. 16, 2016]



Sec. 416.1430  Availability of a hearing before an administrative 
law judge.

    (a) You or another party may request a hearing before an 
administrative law judge if we have made--
    (1) A reconsidered determination;
    (2) A reconsideration of a revised determination of an initial or 
reconsidered determination that involves a suspension, reduction or 
termination of benefits;
    (3) A revised initial determination or revised reconsidered 
determination that does not involve a suspension, reduction or 
termination of benefits; or
    (4) A revised decision based on evidence not included in the record 
on which the prior decision was based.
    (b) We will hold a hearing only if you or another party to the 
hearing file a written request for a hearing.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 307, Jan. 3, 1986; 73 FR 
2416, Jan. 15, 2008; 76 FR 24812, May 3, 2011]



Sec. 416.1432  Parties to a hearing before an administrative
law judge.

    (a) Who may request a hearing. You may request a hearing if a 
hearing is available under Sec. 416.1430. In addition, a person who 
shows in writing that his or her rights may be adversely affected by the 
decision may request a hearing.
    (b) Who are parties to a hearing. After a request for a hearing is 
made, you, the other parties to the initial, reconsidered, or revised 
determination, and any other person who shows in writing that his or her 
rights may be adversely affected by the hearing, are parties to the 
hearing. In addition, any other person may be made a party to the 
hearing if his or her rights may be adversely affected by the decision, 
and we notify the person to appear at the hearing or to present evidence 
supporting his or her interest.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 307, Jan. 3, 1986; 75 FR 
39160, July 8, 2010]



Sec. 416.1433  How to request a hearing before an administrative 
law judge.

    (a) Written request. You may request a hearing by filing a written 
request. You should include in your request--
    (1) Your name and social security number;
    (2) The name and social security number of your spouse, if any;
    (3) The reasons you disagree with the previous determination or 
decision;
    (4) A statement of additional evidence to be submitted and the date 
you will submit it; and
    (5) The name and address of any designated representative.
    (b) When and where to file. The request must be filed at one of our 
offices within 60 days after the date you receive notice of the previous 
determination or decision (or within the extended time period if we 
extend the time as provided in paragraph (c) of this section).
    (c) Extension of time to request a hearing. If you have a right to a 
hearing but do not request one in time, you may ask for more time to 
make your request. The request for an extension of time must be in 
writing and it must give the reasons why the request for a hearing was 
not filed within the stated time period. You may file your request for 
an extension of time at one of our offices. If you show that you had 
good cause for missing the deadline, the time period will be extended. 
To determine whether good cause exists, we use the standards explained 
in Sec. 416.1411.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 307, Jan. 3, 1986]



Sec. 416.1435  Submitting written evidence to an administrative 
law judge.

    (a) When you submit your request for hearing, you should also submit 
information or evidence as required by Sec. 416.912 or any summary of 
the evidence to the administrative law judge. Each party must make every 
effort to

[[Page 1082]]

ensure that the administrative law judge receives all of the evidence 
and must inform us about or submit any written evidence, as required in 
Sec. 416.912, no later than 5 business days before the date of the 
scheduled hearing. If you do not comply with this requirement, the 
administrative law judge may decline to consider or obtain the evidence 
unless the circumstances described in paragraph (b) of this section 
apply.
    (b) If you have evidence required under Sec. 416.912 but you have 
missed the deadline described in paragraph (a) of this section, the 
administrative law judge will accept the evidence if he or she has not 
yet issued a decision and you did not inform us about or submit the 
evidence before the deadline because:
    (1) Our action misled you;
    (2) You had a physical, mental, educational, or linguistic 
limitation(s) that prevented you from informing us about or submitting 
the evidence earlier; or
    (3) Some other unusual, unexpected, or unavoidable circumstance 
beyond your control prevented you from informing us about or submitting 
the evidence earlier. Examples include, but are not limited to:
    (i) You were seriously ill, and your illness prevented you from 
contacting us in person, in writing, or through a friend, relative, or 
other person;
    (ii) There was a death or serious illness in your immediate family;
    (iii) Important records were destroyed or damaged by fire or other 
accidental cause; or
    (iv) You actively and diligently sought evidence from a source and 
the evidence was not received or was received less than 5 business days 
prior to the hearing.
    (c) Claims Not Based on an Application For Benefits. Notwithstanding 
the requirements in paragraphs (a)-(b) of this section, for claims that 
are not based on an application for benefits, the evidentiary 
requirement to inform us about or submit evidence no later than 5 
business days before the date of the scheduled hearing will not apply if 
our other regulations allow you to submit evidence after the date of an 
administrative law judge decision.

[81 FR 90994, Dec. 16, 2016



Sec. 416.1436  Time and place for a hearing before an administrative 
law judge.

    (a) General. We may set the time and place for any hearing. We may 
change the time and place, if it is necessary. After sending you 
reasonable notice of the proposed action, the administrative law judge 
may adjourn or postpone the hearing or reopen it to receive additional 
evidence any time before he or she notifies you of a hearing decision.
    (b) Where we hold hearings. We hold hearings in the 50 States, the 
District of Columbia, American Samoa, Guam, the Northern Mariana 
Islands, the Commonwealth of Puerto Rico, and the United States Virgin 
Islands. The ``place'' of the hearing is the hearing office or other 
site(s) at which you and any other parties to the hearing are located 
when you make your appearance(s) before the administrative law judge, 
whether in person, by video teleconferencing, or by telephone.
    (c) Determination how appearances will be made. In setting the time 
and place of the hearing, we will consider the following:
    (1) We will consult with the administrative law judge to determine 
the status of case preparation and to determine whether your appearance, 
or the appearance of any other party to the hearing, will be made in 
person, by video teleconferencing or, under extraordinary circumstances, 
by telephone. The administrative law judge will determine that your 
appearance, or the appearance of any other party to the hearing, be 
conducted by video teleconferencing if video teleconferencing equipment 
is available to conduct the appearance, use of video teleconferencing to 
conduct the appearance would be more efficient than conducting the 
appearance in person, and the administrative law judge determines there 
is no circumstance in the particular case that prevents the use of video 
teleconferencing to conduct the appearance. The administrative law judge 
will direct you or another party to the hearing to appear by telephone 
when:

[[Page 1083]]

    (i) An appearance in person is not possible, such as if you are 
incarcerated, the facility will not allow a hearing to be held at the 
facility, and video teleconferencing is not available; or
    (ii) The administrative law judge determines, either on his or her 
own, or at your request or at the request of any other party to the 
hearing, that extraordinary circumstances prevent you or another party 
to the hearing from appearing at the hearing in person or by video 
teleconferencing.
    (2) The administrative law judge will determine whether any person, 
other than you or any other party to the hearing, including a medical 
expert or a vocational expert, will appear at the hearing in person, by 
video teleconferencing, or by telephone. If you or any other party to 
the hearing objects to any other person appearing by video 
teleconferencing or by telephone, the administrative law judge will 
decide, either in writing or at the hearing, whether to have that person 
appear in person, by video teleconferencing, or by telephone. The 
administrative law judge will direct a person, other than you or any 
other party to the hearing if we are notified as provided in paragraph 
(e) of this section that you or any other party to the hearing objects 
to appearing by video teleconferencing, to appear by video 
teleconferencing or telephone when the administrative law judge 
determines:
    (i) Video teleconferencing or telephone equipment is available,
    (ii) Use of video teleconferencing or telephone equipment would be 
more efficient than conducting an examination of a witness in person, 
and
    (iii) The administrative law judge determines there is no other 
reason why video teleconferencing or telephone should not be used.
    (d) Objecting to appearing by video teleconferencing. Prior to 
scheduling your hearing, we will notify you that we may schedule you to 
appear by video teleconferencing. If you object to appearing by video 
teleconferencing, you must notify us in writing within 30 days after the 
date you receive the notice. If you notify us within that time period 
and your residence does not change while your request for hearing is 
pending, we will set your hearing for a time and place at which you may 
make your appearance before the administrative law judge in person.
    (1) Notwithstanding any objections you may have to appearing by 
video teleconferencing, if you change your residence while your request 
for hearing is pending, we may determine how you will appear, including 
by video teleconferencing, as provided in paragraph (c)(1) of this 
section. For us to consider your change of residence when we schedule 
your hearing, you must submit evidence verifying your new residence.
    (2) If you notify us that you object to appearing by video 
teleconferencing more than 30 days after the date you receive our 
notice, we will extend the time period if you show you had good cause 
for missing the deadline. To determine whether good cause exists for 
extending the deadline, we use the standards explained in Sec. 416.1411.
    (e) Objecting to the time or place of the hearing. If you object to 
the time or place of your hearing, you must:
    (1) Notify us in writing at the earliest possible opportunity, but 
not later than 5 days before the date set for the hearing or 30 days 
after receiving notice of the hearing, whichever is earlier (or within 
the extended time period if we extend the time as provided in paragraph 
(e)(3) of this section); and
    (2) State the reason(s) for your objection and state the time and 
place you want the hearing to be held. We will change the time or place 
of the hearing if the administrative law judge finds you have good 
cause, as determined under paragraph (f) of this section. Section 
416.1438 provides procedures we will follow when you do not respond to a 
notice of hearing.
    (3) If you notify us that you object to the time or place of hearing 
less than 5 days before the date set for the hearing or, if earlier, 
more than 30 days after receiving notice of the hearing, we will extend 
the time period if you show you had good cause for missing the deadline. 
To determine whether good cause exists for extending the deadline, we 
use the standards explained in Sec. 416.1411.
    (f) Good cause for changing the time or place. The administrative 
law judge

[[Page 1084]]

will determine whether good cause exists for changing the time or place 
of your scheduled hearing. However, a finding that good cause exists to 
reschedule the time or place of your hearing will not change the 
assignment of the administrative law judge for your case, unless we 
determine reassignment will promote more efficient administration of the 
hearing process.
    (1) We will reschedule your hearing, if your reason is one of the 
following circumstances and is supported by the evidence:
    (i) A serious physical or mental condition or incapacitating injury 
makes it impossible for you or your representative to travel to the 
hearing, or a death in the family occurs; or
    (ii) Severe weather conditions make it impossible for you or your 
representative to travel to the hearing.
    (2) In determining whether good cause exists in circumstances other 
than those set out in paragraph (f)(1) of this section, the 
administrative law judge will consider your reason(s) for requesting the 
change, the facts supporting it, and the impact of the proposed change 
on the efficient administration of the hearing process. Factors 
affecting the impact of the change include, but are not limited to, the 
effect on the processing of other scheduled hearings, delays that might 
occur in rescheduling your hearing, and whether we previously granted 
you any changes in the time or place of your hearing. Examples of such 
other circumstances that you might give for requesting a change in the 
time or place of the hearing include, but are not limited to, the 
following:
    (i) You unsuccessfully attempted to obtain a representative and need 
additional time to secure representation;
    (ii) Your representative was appointed within 30 days of the 
scheduled hearing and needs additional time to prepare for the hearing;
    (iii) Your representative has a prior commitment to be in court or 
at another administrative hearing on the date scheduled for the hearing;
    (iv) A witness who will testify to facts material to your case would 
be unavailable to attend the scheduled hearing and the evidence cannot 
be otherwise obtained;
    (v) Transportation is not readily available for you to travel to the 
hearing; or
    (vi) You are unrepresented, and you are unable to respond to the 
notice of hearing because of any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) which you may have.
    (g) Good cause in other circumstances. In determining whether good 
cause exists in circumstances other than those set out in paragraph (e) 
of this section, the administrative law judge will consider your reason 
for requesting the change, the facts supporting it, and the impact of 
the proposed change on the efficient administration of the hearing 
process. Factors affecting the impact of the change include, but are not 
limited to, the effect on the processing of other scheduled hearings, 
delays which might occur in rescheduling your hearing, and whether any 
prior changes were granted to you. Examples of such other circumstances, 
which you might give for requesting a change in the time or place of the 
hearing, include, but are not limited to, the following:
    (1) You have attempted to obtain a representative but need 
additional time;
    (2) Your representative was appointed within 30 days of the 
scheduled hearing and needs additional time to prepare for the hearing;
    (3) Your representative has a prior commitment to be in court or at 
another administrative hearing on the date scheduled for the hearing;
    (4) A witness who will testify to facts material to your case would 
be unavailable to attend the scheduled hearing and the evidence cannot 
be otherwise obtained;
    (5) Transportation is not readily available for you to travel to the 
hearing;
    (6) You live closer to another hearing site; or
    (7) You are unrepresented, and you are unable to respond to the 
notice of hearing because of any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) which you may have.

[[Page 1085]]

    (h) Consultation procedures. Before we exercise the authority to set 
the time and place for an administrative law judge's hearings, we will 
consult with the appropriate hearing office chief administrative law 
judge to determine if there are any reasons why we should not set the 
time and place of the administrative law judge's hearings. If the 
hearing office chief administrative law judge does not state a reason 
that we believe justifies the limited number of hearings scheduled by 
the administrative law judge, we will then consult with the 
administrative law judge before deciding whether to begin to exercise 
our authority to set the time and place for the administrative law 
judge's hearings. If the hearing office chief administrative law judge 
states a reason that we believe justifies the limited number of hearings 
scheduled by the administrative law judge, we will not exercise our 
authority to set the time and place for the administrative law judge's 
hearings. We will work with the hearing office chief administrative law 
judge to identify those circumstances where we can assist the 
administrative law judge and address any impediment that may affect the 
scheduling of hearings.
    (i) Pilot program. The provisions of the first and second sentences 
of paragraph (a), the first sentence of paragraph (c)(1), and paragraph 
(g) of this section are a pilot program. These provisions will no longer 
be effective on August 11, 2017, unless we terminate them earlier or 
extend them beyond that date by notice of a final rule in the Federal 
Register.

[68 FR 5220, Feb. 3, 2003, as amended at 75 FR 39161, July 8, 2010; 78 
FR 29628, May 21, 2013; 78 FR 45452, July 29, 2013; 79 FR 35933, June 
25, 2014; 79 FR 41883, July 18, 2014; 80 FR 37971, July 2, 2015; 81 FR 
41214, June 24, 3016]



Sec. 416.1437  Protecting the safety of the public and our employees
in our hearing process.

    (a) Notwithstanding any other provision in this part or part 422 of 
this chapter, we are establishing the procedures set out in this section 
to ensure the safety of the public and our employees in our hearing 
process.
    (b)(1) At the request of any hearing office employee, the Hearing 
Office Chief Administrative Law Judge will determine, after consultation 
with the presiding administrative law judge, whether a claimant or other 
individual poses a reasonable threat to the safety of our employees or 
other participants in the hearing. The Hearing Office Chief 
Administrative Law Judge will find that a claimant or other individual 
poses a threat to the safety of our employees or other participants in 
the hearing when he or she determines that the individual has made a 
threat and there is a reasonable likelihood that the claimant or other 
individual could act on the threat or when evidence suggests that a 
claimant or other individual poses a threat. In making a finding under 
this paragraph, the Hearing Office Chief Administrative Law Judge will 
consider all relevant evidence, including any information we have in the 
claimant's record and any information we have regarding the claimant's 
or other individual's past conduct.
    (2) If the Hearing Office Chief Administrative Law Judge determines 
that the claimant or other individual poses a reasonable threat to the 
safety of our employees or other participants in the hearing, the 
Hearing Office Chief Administrative Law Judge will either:
    (i) Require the presence of a security guard at the hearing; or
    (ii) Require that the hearing be conducted by video teleconference 
or by telephone.
    (c) If we have banned a claimant from any of our facilities, we will 
provide the claimant with the opportunity for a hearing that will be 
conducted by telephone.
    (d) The actions of the Hearing Office Chief Administrative Law Judge 
taken under this section are final and not subject to further review.

[76 FR 13508, Mar. 14, 2011, as amended at 77 FR 10658, Feb. 23, 2012]



Sec. 416.1438  Notice of a hearing before an administrative law judge.

    (a) Issuing the notice. After we set the time and place of the 
hearing, we will mail notice of the hearing to you at your last known 
address, or give the notice to you by personal service, unless you have 
indicated in writing that you do not wish to receive this notice.

[[Page 1086]]

We will mail or serve the notice at least 75 days before the date of the 
hearing.
    (b) Notice information. The notice of hearing will tell you:
    (1) The specific issues to be decided in your case;
    (2) That you may designate a person to represent you during the 
proceedings;
    (3) How to request that we change the time or place of your hearing;
    (4) That your hearing may be dismissed if neither you nor the person 
you designate to act as your representative appears at your scheduled 
hearing without good reason under Sec. 416.1457;
    (5) Whether your appearance or that of any other party or witness is 
scheduled to be made in person, by video teleconferencing, or by 
telephone. If we have scheduled you to appear at the hearing by video 
teleconferencing, the notice of hearing will tell you that the scheduled 
place for the hearing is a video teleconferencing site and explain what 
it means to appear at your hearing by video teleconferencing;
    (6) That you must make every effort to inform us about or submit all 
written evidence that is not already in the record no later than 5 
business days before the date of the scheduled hearing, unless you show 
that your circumstances meet the conditions described in 
Sec. 416.1435(b); and
    (7) Any other information about the scheduling and conduct of your 
hearing.
    (c) Acknowledging the notice of hearing. The notice of hearing will 
ask you to return a form to let us know that you received the notice. If 
you or your representative do not acknowledge receipt of the notice of 
hearing, we will attempt to contact you for an explanation. If you tell 
us that you did not receive the notice of hearing, an amended notice 
will be sent to you by certified mail. See Sec. 416.1436 for the 
procedures we will follow in deciding whether the time or place of your 
scheduled hearing will be changed if you do not respond to the notice of 
hearing.

[68 FR 5220, Feb. 3, 2003, as amended at 75 FR 39161, July 8, 2010; 78 
FR 29628, May 21, 2013; 79 FR 35934, June 25, 2014; 81 FR 90995, Dec. 
16, 2016]



Sec. 416.1439  Objections to the issues.

    If you object to the issues to be decided at the hearing, you must 
notify the administrative law judge in writing at the earliest possible 
opportunity, but no later than 5 business days before the date set for 
the hearing, unless you show that your circumstances meet the conditions 
described in Sec. 416.1435(b). You must state the reason(s) for your 
objection(s). The administrative law judge will make a decision on your 
objection(s) either at the hearing or in writing before the hearing.

[81 FR 90995, Dec. 16, 2016



Sec. 416.1440  Disqualification of the administrative law judge.

    An administrative law judge shall not conduct a hearing if he or she 
is prejudiced or partial with respect to any party or has any interest 
in the matter pending for decision. If you object to the administrative 
law judge who will conduct the hearing, you must notify the 
administrative law judge at your earliest opportunity. The 
administrative law judge shall consider your objections and shall decide 
whether to proceed with the hearing or withdraw. If he or she withdraws, 
the Associate Commissioner for Hearings and Appeals, or his or her 
delegate, will appoint another administrative law judge to conduct the 
hearing. If the administrative law judge does not withdraw, you may, 
after the hearing, present your objections to the Appeals Council as 
reasons why the hearing decision should be revised or a new hearing held 
before another administrative law judge.



Sec. 416.1441  Prehearing case review.

    (a) General. After a hearing is requested but before it is held, we 
may, for the purposes of a prehearing case review, forward the case to 
the component of our office (including a State agency) that issued the 
determination being reviewed. That component will

[[Page 1087]]

decide whether it should revise the determination based on the 
preponderance of the evidence. A revised determination may be fully or 
partially favorable to you. A prehearing case review will not delay the 
scheduling of a hearing unless you agree to continue the review and 
delay the hearing. If the prehearing case review is not completed before 
the date of the hearing, the case will be sent to the administrative law 
judge unless a favorable revised determination is in process or you and 
the other parties to the hearing agree in writing to delay the hearing 
until the review is completed.
    (b) When a prehearing case review may be conducted. We may conduct a 
prehearing case review if--
    (1) Additional evidence is submitted;
    (2) There is an indication that additional evidence is available;
    (3) There is a change in the law or regulation; or
    (4) There is an error in the file or some other indication that the 
prior determination may be revised.
    (c) Notice of a prehearing revised determination. If we revise the 
determination in a prehearing case review, we will mail a written notice 
of the revised determination to all parties at their last known 
addresses. We will state the basis for the revised determination and 
advise all parties of the effect of the revised determination on the 
request for a hearing.
    (d) Effect of a fully favorable revised determination. If the 
revised determination is fully favorable to you, we will tell you in the 
notice that an administrative law judge will dismiss the request for a 
hearing. We will also tell you that you or another party to the hearing 
may request that the administrative law judge vacate the dismissal and 
reinstate the request for a hearing if you or another party to the 
hearing disagrees with the revised determination for any reason. If you 
wish to make this request, you must do so in writing and send it to us 
within 60 days of the date you receive notice of the dismissal. If the 
request is timely, an administrative law judge will vacate the 
dismissal, reinstate the request for a hearing, and offer you and all 
parties an opportunity for a hearing. The administrative law judge will 
extend the time limit if you show that you had good cause for missing 
the deadline. The administrative law judge will use the standards in 
Sec. 416.1411 to determine whether you had good cause.
    (e) Effect of a partially favorable revised determination. If the 
revised determination is partially favorable to you, we will tell you in 
the notice what was not favorable. We will also tell you that an 
administrative law judge will hold the hearing you requested unless you 
and all other parties to the hearing agree in writing to dismiss the 
request for a hearing. An administrative law judge will dismiss the 
request for a hearing if we receive the written statement(s) agreeing to 
dismiss the request for a hearing before an administrative law judge 
mails a notice of his or her hearing decision.

[45 FR 52096, Aug. 5, 1980, as amended at 73 FR 76945, Dec. 18, 2008; 75 
FR 33169, June 11, 2010; 76 FR 65370, Oct. 21, 2011]



Sec. 416.1442  Prehearing proceedings and decisions by attorney advisors.

    (a) General. After a hearing is requested but before it is held, an 
attorney advisor may conduct prehearing proceedings as set out in 
paragraph (c) of this section. If after the completion of these 
proceedings we can make a decision that is fully favorable to you and 
all other parties based on the preponderance of the evidence, an 
attorney advisor, instead of an administrative law judge, may issue the 
decision. The conduct of the prehearing proceedings by the attorney 
advisor will not delay the scheduling of a hearing. If the prehearing 
proceedings are not completed before the date of the hearing, the case 
will be sent to the administrative law judge unless a fully favorable 
decision is in process or you and all other parties to the hearing agree 
in writing to delay the hearing until the proceedings are completed.
    (b) When prehearing proceedings may be conducted by an attorney 
advisor. An attorney advisor may conduct prehearing proceedings if you 
have filed a claim for SSI benefits based on disability and--
    (1) New and material evidence is submitted;
    (2) There is an indication that additional evidence is available;

[[Page 1088]]

    (3) There is a change in the law or regulations; or
    (4) There is an error in the file or some other indication that a 
fully favorable decision may be issued.
    (c) Nature of the prehearing proceedings that may be conducted by an 
attorney advisor. As part of the prehearing proceedings, the attorney 
advisor, in addition to reviewing the existing record, may--
    (1) Request additional evidence that may be relevant to the claim, 
including medical evidence; and
    (2) If necessary to clarify the record for the purpose of 
determining if a fully favorable decision is warranted, schedule a 
conference with the parties.
    (d) Notice of a decision by an attorney advisor. If an attorney 
advisor issues a fully favorable decision under this section, we will 
mail a written notice of the decision to all parties at their last known 
addresses. We will state the basis for the decision and advise all 
parties that they may request that an administrative law judge reinstate 
the request for a hearing if they disagree with the decision for any 
reason. Any party who wants to make this request must do so in writing 
and send it to us within 60 days of the date he or she receives notice 
of the decision. The administrative law judge will extend the time limit 
if the requestor shows good cause for missing the deadline. The 
administrative law judge will use the standards in Sec. 416.1411 to 
determine whether there is good cause. If the request is timely, an 
administrative law judge will reinstate the request for a hearing and 
offer all parties an opportunity for a hearing.
    (e) Effect of an attorney advisor's decision. An attorney advisor's 
decision under this section is binding unless--
    (1) You or another party to the hearing submits a timely request 
that an administrative law judge reinstate the request for a hearing 
under paragraph (d) of this section;
    (2) The Appeals Council reviews the decision on its own motion 
pursuant to Sec. 416.1469 as explained in paragraph (f)(3) of this 
section; or
    (3) The decision of the attorney advisor is revised under the 
procedures explained in Sec. 416.1487.
    (f) Ancillary provisions. For the purposes of the procedures 
authorized by this section, the regulations of part 416 shall apply to--
    (1) Authorize an attorney advisor to exercise the functions 
performed by an administrative law judge under Secs. 416.913a, 416.920a, 
416.926, and 416.946.
    (2) Define the term ``decision'' to include a decision made by an 
attorney advisor, as well as the decisions identified in Sec. 416.1401; 
and
    (3) Make the decision of an attorney advisor under paragraph (d) of 
this section subject to review by the Appeals Council if the Appeals 
Council decides to review the decision of the attorney advisor anytime 
within 60 days after the date of the decision under Sec. 416.1469.
    (g) Sunset provision. The provisions of this section will no longer 
be effective on August 4, 2017, unless we terminate them earlier or 
extend them beyond that date by notice of a final rule in the Federal 
Register.

[60 FR 34132, June 30, 1995, as amended at 63 FR 35516, June 30, 1998; 
64 FR 13678, Mar. 22, 1999; 64 FR 51894, Sept. 27, 1999; 65 FR 16815, 
Mar. 30, 2000; 72 FR 44765, Aug. 9, 2007; 73 FR 76945, Dec. 18, 2008; 74 
FR 33328, July 13, 2009; 76 FR 18384, Apr. 4, 2011; 76 FR 65371, Oct. 
21, 2011; 78 FR 45460, July 29, 2013; 80 FR 31991, June 5, 2015; 82 FR 
5884, Jan. 18, 2017]



Sec. 416.1443  Responsibilities of the adjudication officer.

    (a)(1) General. Under the procedures set out in this section we will 
test modifications to the procedures we follow when you file a request 
for a hearing before an administrative law judge in connection with a 
claim for benefits based on disability where the question of whether you 
are under a disability as defined in Secs. 416.905 and 416.906 is at 
issue. These modifications will enable us to test the effect of having 
an adjudication officer be your primary point of contact after you file 
a hearing request and before you have a hearing with an administrative 
law judge. The tests may be conducted alone, or in combination with the 
tests of the modifications to the disability determination procedures 
which we conduct under Sec. 416.1406. The adjudication officer, working 
with you and your representative, if any, will identify issues in 
dispute, develop evidence, conduct informal conferences, and conduct any

[[Page 1089]]

other prehearing proceeding as may be necessary. The adjudication 
officer has the authority to make a decision fully favorable to you if 
the evidence so warrants. If the adjudication officer does not make a 
decision on your claim, your hearing request will be assigned to an 
administrative law judge for further proceedings.
    (2) Procedures for cases included in the tests. Prior to commencing 
tests of the adjudication officer position in selected site(s), we will 
publish a notice in the Federal Register. The notice will describe where 
the specific test site(s) will be and the duration of the test(s). We 
will also state whether the tests of the adjudication officer position 
in each site will be conducted alone, or in combination with the tests 
of the modifications to the disability determination procedures which we 
conduct under Sec. 416.1406. The individuals who participate in the 
test(s) will be assigned randomly to a test group in each site where the 
tests are conducted.
    (b)(1) Prehearing procedures conducted by an Adjudication Officer. 
When you file a request for a hearing before an administrative law judge 
in connection with a claim for benefits based on disability where the 
question of whether you are under a disability as defined in 
Secs. 416.905 and 416.906 is at issue, the adjudication officer will 
conduct an interview with you. The interview may take place in person, 
by telephone, or by videoconference, as the adjudication officer 
determines is appropriate under the circumstances of your case. If you 
file a request for an extension of time to request a hearing in 
accordance with Sec. 416.1433(c), the adjudication officer may develop 
information on, and may decide where the adjudication officer issues a 
fully favorable decision to you that you had good cause for missing the 
deadline for requesting a hearing. To determine whether you had good 
cause for missing the deadline, the adjudication officer will use the 
standards contained in Sec. 416.1411.
    (2) Representation. The adjudication officer will provide you with 
information regarding the hearing process, including your right to 
representation. As may be appropriate, the adjudication officer will 
provide you with referral sources for representation, and give you 
copies of necessary documents to facilitate the appointment of a 
representative. If you have a representative, the adjudication officer 
will conduct an informal conference with the representative, in person 
or by telephone, to identify the issues in dispute and prepare proposed 
written agreements for the approval of the administrative law judge 
regarding those issues which are not in dispute and those issues 
proposed for the hearing. If you decide to proceed without 
representation, the adjudication officer may hold an informal conference 
with you. If you obtain representation after the adjudication officer 
has concluded that your case is ready for a hearing, the administrative 
law judge will return your case to the adjudication officer who will 
conduct an informal conference with you and your representative.
    (3) Evidence. You, or your representative, may submit, or may be 
asked to obtain and submit, additional evidence to the adjudication 
officer. As the adjudication officer determines is appropriate under the 
circumstances of your case, the adjudication officer may refer the claim 
for further medical or vocational evidence.
    (4) Referral for a hearing. The adjudication officer will refer the 
claim to the administrative law judge for further proceedings when the 
development of evidence is complete, and you or your representative 
agree that a hearing is ready to be held. If you or your representative 
are unable to agree with the adjudication officer that the development 
of evidence is complete, the adjudication officer will note your 
disagreement and refer the claim to the administrative law judge for 
further proceedings. At this point, the administrative law judge 
conducts all further hearing proceedings, including scheduling and 
holding a hearing, (Sec. 416.1436), considering any additional evidence 
or arguments submitted (Secs. 416.1435, 416.1444, 416.1449, 416.1450), 
and issuing a decision or dismissal of your request for a hearing, as 
may be appropriate (Secs. 416.1448, 416.1453, 416.1457). In addition, if 
the administrative law judge determines on or before the date of your 
hearing that the development of

[[Page 1090]]

evidence is not complete, the administrative law judge may return the 
claim to the adjudication officer to complete the development of the 
evidence and for such other action as necessary.
    (c)(1) Fully favorable decisions issued by an adjudication officer. 
If, after a hearing is requested but before it is held, the adjudication 
officer decides that the evidence in your case warrants a decision which 
is fully favorable to you, the adjudication officer may issue such a 
decision. For purposes of the tests authorized under this section, the 
adjudication officer's decision shall be considered to be a decision as 
defined in Sec. 416.1401. If the adjudication officer issues a decision 
under this section, it will be in writing and will give the findings of 
fact and the reasons for the decision. The adjudication officer will 
evaluate the issues relevant to determining whether or not you are 
disabled in accordance with the provisions of the Social Security Act, 
the rules in this part and part 422 of this chapter and applicable 
Social Security Rulings. For cases in which the adjudication officer 
issues a decision, he or she may determine your residual functional 
capacity in the same manner that an administrative law judge is 
authorized to do so in Sec. 416.946. The adjudication officer may also 
evaluate the severity of your mental impairments in the same manner that 
an administrative law judge is authorized to do so under Sec. 416.920a. 
The adjudication officer's decision will be based on the evidence which 
is included in the record and, subject to paragraph (c)(2) of this 
section, will complete the actions that will be taken on your request 
for hearing. A copy of the decision will be mailed to all parties at 
their last known address. We will tell you in the notice that the 
administrative law judge will not hold a hearing unless a party to the 
hearing requests that the hearing proceed. A request to proceed with the 
hearing must be made in writing within 30 days after the date the notice 
of the decision of the adjudication officer is mailed.
    (2) Effect of a decision by an adjudication officer. A decision by 
an adjudication officer which is fully favorable to you under this 
section, and notification thereof, completes the administrative action 
on your request for hearing and is binding on all parties to the hearing 
and not subject to further review, unless--
    (i) You or another party requests that the hearing continue, as 
provided in paragraph (c)(1) of this section;
    (ii) The Appeals Council decides to review the decision on its own 
motion under the authority provided in Sec. 416.1469;
    (iii) The decision is revised under the procedures explained in 
Secs. 416.1487 through 416.1489; or
    (iv) In a case remanded by a Federal court, the Appeals Council 
assumes jurisdiction under the procedures in Sec. 416.1484.
    (3) Fee for a representative's services. The adjudication officer 
may authorize a fee for your representative's services if the 
adjudication officer makes a decision on your claim that is fully 
favorable to you, and you are represented. The actions of, and any fee 
authorization made by, the adjudication officer with respect to 
representation will be made in accordance with the provisions of subpart 
O of this part.
    (d) Who may be an adjudication officer. The adjudication officer 
described in this section may be an employee of the Social Security 
Administration or a State agency that makes disability determinations 
for us.

[60 FR 47476, Sept. 13, 1995, as amended at 75 FR 33169, June 11, 2010]

               Administrative Law Judge Hearing Procedures



Sec. 416.1444  Administrative law judge hearing procedures--general.

    A hearing is open to the parties and to other persons the 
administrative law judge considers necessary and proper. At the hearing, 
the administrative law judge looks fully into the issues, questions you 
and the other witnesses, and, subject to the provisions of 
Sec. 416.1435: Accepts as evidence any documents that are material to 
the issues; may stop the hearing temporarily and continue it at a later 
date if he or she finds that there is material evidence missing at the 
hearing; and

[[Page 1091]]

may reopen the hearing at any time before he or she mails a notice of 
the decision in order to receive new and material evidence. The 
administrative law judge may decide when the evidence will be presented 
and when the issues will be discussed.

[81 FR 90995, Dec. 16, 2016



Sec. 416.1446  Issues before an administrative law judge.

    (a) General. The issues before the administrative law judge include 
all the issues brought out in the initial, reconsidered or revised 
determination that were not decided entirely in your favor. However, if 
evidence presented before or during the hearing causes the 
administrative law judge to question a fully favorable determination, he 
or she will notify you and will consider it an issue at the hearing.
    (b) New issues--(1) General. The administrative law judge may 
consider a new issue at the hearing if he or she notifies you and all 
the parties about the new issue any time after receiving the hearing 
request and before mailing notice of the hearing decision. The 
administrative law judge or any party may raise a new issue; an issue 
may be raised even though it arose after the request for a hearing and 
even though it has not been considered in an initial or reconsidered 
determination. However, it may not be raised if it involves a claim that 
is within the jurisdiction of a State agency under a Federal-State 
agreement concerning the determination of disability.
    (2) Notice of a new issue. The administrative law judge shall notify 
you and any other party if he or she will consider any new issue. Notice 
of the time and place of the hearing on any new issues will be given in 
the manner described in Sec. 416.1438, unless you have indicated in 
writing that you do not wish to receive the notice.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 307, Jan. 3, 1986]



Sec. 416.1448  Deciding a case without an oral hearing before an
administrative law judge.

    (a) Decision fully favorable. If the evidence in the hearing record 
supports a finding in favor of you and all the parties on every issue, 
the administrative law judge may issue a hearing decision based on a 
preponderance of the evidence without holding an oral hearing. The 
notice of the decision will state that you have the right to an oral 
hearing and to examine the evidence on which the administrative law 
judge based the decision.
    (b) Parties do not wish to appear. (1) The administrative law judge 
may decide a case on the record and not conduct an oral hearing if--
    (i) You and all the parties indicate in writing that you do not wish 
to appear before the administrative law judge at an oral hearing; or
    (ii) You live outside the United States, you do not inform us that 
you wish to appear, and there are no other parties who wish to appear.
    (2) When an oral hearing is not held, the administrative law judge 
shall make a record of the material evidence. The record will include 
the applications, written statements, certificates, reports, affidavits, 
and other documents which were used in making the determination under 
review and any additional evidence you or any other party to the hearing 
present in writing. The decision of the administrative law judge must be 
based on this record.
    (c) Case remanded for a revised determination. (1) The 
administrative law judge may remand a case to the appropriate component 
of our office for a revised determination if there is reason to believe 
that the revised determination would be fully favorable to you. This 
could happen if the administrative law judge receives new and material 
evidence or if there is a change in the law that permits the favorable 
determination.
    (2) Unless you request the remand the administrative law judge shall 
notify you that your case has been remanded and tell you that if you 
object, you must notify him or her of your objections within 10 days of 
the date the case is remanded or we will assume that you agree to the 
remand. If you

[[Page 1092]]

object to the remand, the administrative law judge will consider the 
objection and rule on it in writing.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 307, Jan. 3, 1986; 73 FR 
76945, Dec. 18, 2008; 75 FR 33169, June 11, 2010; 76 FR 65371, Oct. 21, 
2011]



Sec. 416.1449  Presenting written statements and oral arguments.

    You or a person you designate to act as your representative may 
appear before the administrative law judge to state your case, present a 
written summary of your case, or enter written statements about the 
facts and law material to your case in the record. If presenting written 
statements prior to hearing, you must provide a copy of your written 
statements for each party no later than 5 business days before the date 
set for the hearing, unless you show that your circumstances meet the 
conditions described in Sec. 416.1435(b).

[81 FR 90996, Dec. 16, 2016]



Sec. 416.1450  Presenting evidence at a hearing before an 
administrative law judge.

    (a) The right to appear and present evidence. Any party to a hearing 
has a right to appear before the administrative law judge, either in 
person, or, when the conditions in Sec. 416.1436(c)(1) exist, by video 
teleconferencing or telephone, to present evidence and to state his or 
her position. A party may also make his or her appearance by means of a 
designated representative, who may make the appearance in person, or, 
when the conditions in Sec. 416.1436(c)(1) exist, by video 
teleconferencing or telephone.
    (b) Waiver of the right to appear. You may send the administrative 
law judge a waiver or a written statement indicating that you do not 
wish to appear at the hearing. You may withdraw this waiver any time 
before a notice of the hearing decision is mailed to you. Even if all of 
the parties waive their right to appear at a hearing, we may notify them 
of a time and a place for an oral hearing, if the administrative law 
judge believes that a personal appearance and testimony by you or any 
other party is necessary to decide the case.
    (c) Admissible evidence. Subject to the provisions of Sec. 416.1435, 
the administrative law judge may receive any evidence at the hearing 
that he or she believes is material to the issues, even though the 
evidence would not be admissible in court under the rules of evidence 
used by the court.
    (d) Subpoenas. (1) When it is reasonably necessary for the full 
presentation of a case, an administrative law judge or a member of the 
Appeals Council may, on his or her own initiative or at the request of a 
party, issue subpoenas for the appearance and testimony of witnesses and 
for the production of books, records, correspondence, papers, or other 
documents that are material to an issue at the hearing.
    (2) Parties to a hearing who wish to subpoena documents or witnesses 
must file a written request for the issuance of a subpoena with the 
administrative law judge or at one of our offices at least 10 business 
days before the hearing date, unless you show that your circumstances 
meet the conditions described in Sec. 416.1435(b). The written request 
must give the names of the witnesses or documents to be produced; 
describe the address or location of the witnesses or documents with 
sufficient detail to find them; state the important facts that the 
witness or document is expected to prove; and indicate why these facts 
could not be proven without issuing a subpoena.
    (3) We will pay the cost of issuing the subpoena.
    (4) We will pay subpoenaed witnesses the same fees and mileage they 
would receive if they had been subpoenaed by a Federal district court.
    (e) Witnesses at a hearing. Witnesses may appear at a hearing in 
person or, when the conditions in Sec. 416.1436(c)(2) exist, by video 
teleconferencing or telephone. They will testify under oath or 
affirmation unless the administrative law judge finds an important 
reason to excuse them from taking an oath or affirmation. The 
administrative law judge may ask the witness any questions material to 
the issues and will allow the parties or their designated 
representatives to do so.
    (f) Collateral estoppel--issues previously decided. An issue at your 
hearing may be a fact that has already been decided

[[Page 1093]]

in one of our previous determinations or decisions in a claim involving 
the same parties, but arising under a different title of the Act or 
under the Federal Coal Mine Health and Safety Act. If this happens, the 
administrative law judge will not consider the issue again, but will 
accept the factual finding made in the previous determination or 
decision unless there are reasons to believe that it was wrong.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 307, Jan. 3, 1986; 68 FR 
5221, Feb. 3, 2003; 75 FR 39161, July 8, 2010; 78 FR 29628, May 21, 
2013; 81 FR 90996, Dec. 16, 2016]



Sec. 416.1451  Official record.

    (a) Hearing recording. All hearings will be recorded. The hearing 
recording will be prepared as a typed copy of the proceedings if--
    (1) The case is sent to the Appeals Council without a decision or 
with a recommended decision by the administrative law judge;
    (2) You seek judicial review of your case by filing an action in a 
Federal district court within the stated time period, unless we request 
the court to remand the case; or
    (3) An administrative law judge or the Appeals Council asks for a 
written record of the proceedings.
    (b) Contents of the official record. All evidence upon which the 
administrative law judge relies for the decision must be contained in 
the record, either directly or by appropriate reference. The official 
record will include the applications, written statements, certificates, 
reports, affidavits, medical records, and other documents that were used 
in making the decision under review and any additional evidence or 
written statements that the administrative law judge admits into the 
record under Secs. 416.1429 and 416.1435. All exhibits introduced as 
evidence must be marked for identification and incorporated into the 
record. The official record of your claim will contain all of the marked 
exhibits and a verbatim recording of all testimony offered at the 
hearing. It also will include any prior initial determinations or 
decisions on your claim.

[81 FR 90996, Dec. 16, 2016



Sec. 416.1452  Consolidated hearings before an administrative 
law judge.

    (a) General. (1) A consolidated hearing may be held if--
    (i) You have requested a hearing to decide your eligibility for 
supplemental security income benefits and you have also requested a 
hearing to decide your rights under another law we administer; and
    (ii) One or more of the issues to be considered at the hearing you 
requested are the same issues that are involved in another claim you 
have pending before us.
    (2) If the administrative law judge decides to hold the hearing on 
both claims, he or she decides both claims, even if we have not yet made 
an initial or reconsidered determination on the other claim.
    (b) Record, evidence, and decision. There will be a single record at 
a consolidated hearing. This means that the evidence introduced in one 
case becomes evidence in the other(s). The administrative law judge may 
make either a separate or consolidated decision.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 308, Jan. 3, 1986]



Sec. 416.1453  The decision of an administrative law judge.

    (a) General. The administrative law judge shall issue a written 
decision which gives the findings of fact and the reasons for the 
decision. The administrative law judge must base the decision on the 
preponderance of the evidence offered at the hearing or otherwise 
included in the record. The administrative law judge shall mail a copy 
of the decision to all the parties at their last known address. The 
Appeals Council may also receive a copy of the decision.
    (b) Fully favorable oral decision entered into the record at the 
hearing. The administrative law judge may enter a fully favorable oral 
decision based on the preponderance of the evidence into the record of 
the hearing proceedings. If the administrative law judge enters a fully 
favorable oral decision into the record of the hearing proceedings, the 
administrative law judge may issue a written decision that incorporates 
the

[[Page 1094]]

oral decision by reference. The administrative law judge may use this 
procedure only in those categories of cases that we identify in advance. 
The administrative law judge may only use this procedure in those cases 
where the administrative law judge determines that no changes are 
required in the findings of fact or the reasons for the decision as 
stated at the hearing. If a fully favorable decision is entered into the 
record at the hearing, the administrative law judge will also include in 
the record, as an exhibit entered into the record at the hearing, a 
document that sets forth the key data, findings of fact, and narrative 
rationale for the decision. If the decision incorporates by reference 
the findings and the reasons stated in an oral decision at the hearing, 
the parties shall also be provided, upon written request, a record of 
the oral decision.
    (c) Time for the administrative law judge's decision. (1) The 
administrative law judge must issue the hearing decision no later than 
90 days after the request for hearing is filed, unless--
    (i) The matter to be decided is whether you are disabled; or
    (ii) There is good cause for extending the time period because of 
unavoidable circumstances.
    (2) Good cause for extending the time period may be found under the 
following circumstances:
    (i) Delay caused by you or by your representative's action. The time 
period for decision in this instance may be extended by the total number 
of days of the delays. The delays include delays in submitting evidence, 
briefs, or other statements, postponements or adjournments made at your 
request, and any other delays caused by you or your representative.
    (ii) Other delays. The time period for decision may be extended 
where delays occur through no fault of the Commissioner. In this 
instance, the decision will be issued as soon as practicable.
    (d) Recommended decision. Although an administrative law judge will 
usually make a decision, the administrative law judge may send the case 
to the Appeals Council with a recommended decision based on a 
preponderance of the evidence when appropriate. The administrative law 
judge will mail a copy of the recommended decision to the parties at 
their last known addresses and send the recommended decision to the 
Appeals Council.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 308, Jan. 3, 1986; 54 FR 
37793, Sept. 13, 1989; 62 FR 38455, July 18, 1997; 69 FR 61597, Oct. 20, 
2004; 73 FR 76945, Dec. 18, 2008; 75 FR 33169, June 11, 2010]



Sec. 416.1455  The effect of an administrative law judge's decision.

    The decision of the administrative law judge is binding on all 
parties to the hearing unless--
    (a) You or another party request a review of the decision by the 
Appeals Council within the stated time period, and the Appeals Council 
reviews your case;
    (b) You or another party requests a review of the decision by the 
Appeals Council within the stated time period, the Appeals Council 
denies your request for review, and you seek judicial review of your 
case by filing an action in a Federal district court;
    (c) The decision is revised by an administrative law judge or the 
Appeals Council under the procedures explained in Sec. 416.1487;
    (d) The expedited appeals process is used;
    (e) The decision is a recommended decision directed to the Appeals 
Council; or
    (f) In a case remanded by a Federal court, the Appeals Council 
assumes jurisdiction under the procedures in Sec. 416.1484.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 308, Jan. 3, 1986; 54 FR 
37793, Sept. 13, 1989]



Sec. 416.1456  Removal of a hearing request from an administrative 
law judge to the Appeals Council.

    If you have requested a hearing and the request is pending before an 
administrative law judge, the Appeals Council may assume responsibility 
for holding a hearing by requesting that the administrative law judge 
send the hearing request to it. If the Appeals Council holds a hearing, 
it shall conduct the hearing according to the rules for hearings before 
an administrative law judge. Notice shall be mailed to all parties at 
their last known address

[[Page 1095]]

telling them that the Appeals Council has assumed responsibility for the 
case.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 308, Jan. 3, 1986]



Sec. 416.1457  Dismissal of a request for a hearing before an administrative law judge.

    An administrative law judge may dismiss a request for a hearing 
under any of the following conditions:
    (a) At any time before notice of the hearing decision is mailed, you 
or the party or parties that requested the hearing ask to withdraw the 
request. This request may be submitted in writing to the administrative 
law judge or made orally at the hearing.
    (b)(1)(i) Neither you nor the person you designate to act as your 
representative appears at the time and place set for the hearing and you 
have been notified before the time set for the hearing that your request 
for a hearing may be dismissed without further notice if you did not 
appear at the time and place of hearing, and good cause has not been 
found by the administrative law judge for your failure to appear; or
    (ii) Neither you nor the person you designate to act as your 
representative appears at the time and place set for the hearing and 
within 10 days after the administrative law judge mails you a notice 
asking why you did not appear, you do not give a good reason for the 
failure to appear.
    (2) In determining good cause or good reason under this paragraph, 
we will consider any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
which you may have.
    (c) The administrative law judge decides that there is cause to 
dismiss a hearing request entirely or to refuse to consider any one or 
more of the issues because--
    (1) The doctrine of res judicata applies in that we have made a 
previous determination or decision under this subpart about your rights 
on the same facts and on the same issue or issues, and this previous 
determination or decision has become final by either administrative or 
judicial action;
    (2) The person requesting a hearing has no right to it under 
Sec. 416.1430;
    (3) You did not request a hearing within the stated time period and 
we have not extended the time for requesting a hearing under 
Sec. 416.1433(c); or
    (4) You die, there are no other parties, and we have no information 
to show that you may have a survivor who may be paid benefits due to you 
under Sec. 416.542(b) and who wishes to pursue the request for hearing, 
or that you authorized interim assistance reimbursement to a State 
pursuant to section 1631(g) of the Act. The administrative law judge, 
however, will vacate a dismissal of the hearing request if, within 60 
days after the date of the dismissal:
    (i) A person claiming to be your survivor, who may be paid benefits 
due to you under Sec. 416.542(b), submits a written request for a 
hearing, and shows that a decision on the issues that were to be 
considered at the hearing may adversely affect him or her; or
    (ii) We receive information showing that you authorized interim 
assistance reimbursement to a State pursuant to section 1631(g) of the 
Act.

[45 FR 52096, Aug. 5, 1980, as amended at 50 FR 21439, May 24, 1985; 51 
FR 308, Jan. 3, 1986; 58 FR 52913, Oct. 13, 1993; 59 FR 1637, Jan. 12, 
1994]



Sec. 416.1458  Notice of dismissal of a request for a hearing before
an administrative law judge.

    We shall mail a written notice of the dismissal of the hearing 
request to all parties at their last known address. The notice will 
state that there is a right to request that the Appeals Council vacate 
the dismissal action.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 308, Jan. 3, 1986]



Sec. 416.1459  Effect of dismissal of a request for a hearing before
an administrative law judge.

    The dismissal of a request for a hearing is binding, unless it is 
vacated by an administrative law judge or the Appeals Council.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 308, Jan. 3, 1986]

[[Page 1096]]



Sec. 416.1460  Vacating a dismissal of a request for a hearing before 
an administrative law judge.

    (a) Except as provided in paragraph (b) of this section, an 
administrative law judge or the Appeals Council may vacate a dismissal 
of a request for a hearing if you request that we vacate the dismissal. 
If you or another party wish to make this request, you must do so within 
60 days of the date you receive notice of the dismissal, and you must 
state why our dismissal of your request for a hearing was erroneous. The 
administrative law judge or Appeals Council will inform you in writing 
of the action taken on your request. The Appeals Council may also vacate 
a dismissal of a request for a hearing on its own motion. If the Appeals 
Council decides to vacate a dismissal on its own motion, it will do so 
within 60 days of the date we mail the notice of dismissal and will 
inform you in writing that it vacated the dismissal.
    (b) If you wish to proceed with a hearing after you received a fully 
favorable revised determination under the prehearing case review process 
in Sec. 416.1441, you must follow the procedures in Sec. 416.1441(d) to 
request that an administrative law judge vacate his or her order 
dismissing your request for a hearing.

[76 FR 65371, Oct. 21, 2011]



Sec. 416.1461  Prehearing and posthearing conferences.

    The administrative law judge may decide on his or her own, or at the 
request of any party to the hearing, to hold a prehearing or posthearing 
conference to facilitate the hearing or the hearing decision. The 
administrative law judge shall tell the parties of the time, place and 
purpose of the conference at least seven days before the conference 
date, unless the parties have indicated in writing that they do not wish 
to receive a written notice of the conference. At the conference, the 
administrative law judge may consider matters in addition to those 
stated in the notice, if the parties consent in writing. A record of the 
conference will be made. The administrative law judge shall issue an 
order stating all agreements and actions resulting from the conference. 
If the parties do not object, the agreements and actions become part of 
the hearing record and are binding on all parties.



Sec. 416.1465  [Reserved]

                         Appeals Council Review



Sec. 416.1466  Testing elimination of the request for Appeals Council 
review.

    (a) Applicability and scope. Notwithstanding any other provision in 
this part or part 422 of this chapter, we are establishing the 
procedures set out in this section to test elimination of the request 
for review by the Appeals Council. These procedures will apply in 
randomly selected cases in which we have tested a combination of model 
procedures for modifying the disability claim process as authorized 
under Secs. 416.1406 and 416.1443, and in which an administrative law 
judge has issued a decision (not including a recommended decision) that 
is less than fully favorable to you.
    (b) Effect of an administrative law judge's decision. In a case to 
which the procedures of this section apply, the decision of an 
administrative law judge will be binding on all the parties to the 
hearing unless--
    (1) You or another party file an action concerning the decision in 
Federal district court;
    (2) The Appeals Council decides to review the decision on its own 
motion under the authority provided in Sec. 416.1469, and it issues a 
notice announcing its decision to review the case on its own motion no 
later than the day before the filing date of a civil action establishing 
the jurisdiction of a Federal district court; or
    (3) The decision is revised by the administrative law judge or the 
Appeals Council under the procedures explained in Sec. 416.1487.
    (c) Notice of the decision of an administrative law judge. The 
notice of decision the administrative law judge issues in a case 
processed under this section will advise you and any other parties to 
the decision that you may file an action in a Federal district court 
within 60 days after the date you receive notice of the decision.
    (d) Extension of time to file action in Federal district court. Any 
party having

[[Page 1097]]

a right to file a civil action under this section may request that the 
time for filing an action in Federal district court be extended. The 
request must be in writing and it must give the reasons why the action 
was not filed within the stated time period. The request must be filed 
with the Appeals Council. If you show that you had good cause for 
missing the deadline, the time period will be extended. To determine 
whether good cause exists, we will use the standards in Sec. 416.1411.

[62 FR 49603, Sept. 23, 1997, as amended at 75 FR 33169, June 11, 2010]



Sec. 416.1467  Appeals Council review--general.

    If you or any other party is dissatisfied with the hearing decision 
or with the dismissal of a hearing request, you may request that the 
Appeals Council review that action. The Appeals Council may deny or 
dismiss the request for review, or it may grant the request and either 
issue a decision or remand the case to an administrative law judge. The 
Appeals Council shall notify the parties at their last known address of 
the action it takes.



Sec. 416.1468  How to request Appeals Council review.

    (a) Time and place to request Appeals Council review. You may 
request Appeals Council review by filing a written request. You should 
submit any evidence you wish to have considered by the Appeals Council 
with your request for review, and the Appeals Council will consider the 
evidence in accordance with Sec. 416.1470. You may file your request at 
one of our offices within 60 days after the date you receive notice of 
the hearing decision or dismissal (or within the extended time period if 
we extend the time as provided in paragraph (b) of this section).
    (b) Extension of time to request review. You or any party to a 
hearing decision may ask that the time for filing a request for the 
review be extended. The request for an extension of time must be in 
writing. It must be filed with the Appeals Council, and it must give the 
reasons why the request for review was not filed within the stated time 
period. If you show that you had good cause for missing the deadline, 
the time period will be extended. To determine whether good cause 
exists, we use the standards explained in Sec. 416.1411.

[45 FR 52096, Aug. 5, 1980, as amended at 81 FR 90996, Dec. 16, 2016]



Sec. 416.1469  Appeals Council initiates review.

    (a) General. Anytime within 60 days after the date of a decision or 
dismissal that is subject to review under this section, the Appeals 
Council may decide on its own motion to review the action that was taken 
in your case. We may refer your case to the Appeals Council for it to 
consider reviewing under this authority.
    (b) Identification of cases. We will identify a case for referral to 
the Appeals Council for possible review under its own-motion authority 
before we effectuate a decision in the case. We will identify cases for 
referral to the Appeals Council through random and selective sampling 
techniques, which we may use in association with examination of the 
cases identified by sampling. We will also identify cases for referral 
to the Appeals Council through the evaluation of cases we conduct in 
order to effectuate decisions.
    (1) Random and selective sampling and case examinations. We may use 
random and selective sampling to identify cases involving any type of 
action (i.e., fully or partially favorable decisions, unfavorable 
decisions, or dismissals) and any type of benefits (i.e., benefits based 
on disability and benefits not based on disability). We will use 
selective sampling to identify cases that exhibit problematic issues or 
fact patterns that increase the likelihood of error. Neither our random 
sampling procedures nor our selective sampling procedures will identify 
cases based on the identity of the decisionmaker or the identity of the 
office issuing the decision. We may examine cases that have been 
identified through random or selective sampling to refine the 
identification of cases that may meet the criteria for review by the 
Appeals Council.
    (2) Identification as a result of the effectuation process. We may 
refer a case requiring effectuation to the Appeals

[[Page 1098]]

Council if, in the view of the effectuating component, the decision 
cannot be effectuated because it contains a clerical error affecting the 
outcome of the claim; the decision is clearly inconsistent with the 
Social Security Act, the regulations, or a published ruling; or the 
decision is unclear regarding a matter that affects the claim's outcome.
    (c) Referral of cases. We will make referrals that occur as the 
result of a case examination or the effectuation process in writing. The 
written referral based on the results of such a case examination or the 
effectuation process will state the referring component's reasons for 
believing that the Appeals Council should review the case on its own 
motion. Referrals that result from selective sampling without a case 
examination may be accompanied by a written statement identifying the 
issue(s) or fact pattern that caused the referral. Referrals that result 
from random sampling without a case examination will only identify the 
case as a random sample case.
    (d) Appeals Council's action. If the Appeals Council decides to 
review a decision or dismissal on its own motion, it will mail a notice 
of review to all the parties as provided in Sec. 416.1473. The Appeals 
Council will include with that notice a copy of any written referral it 
has received under paragraph (c) of this section. The Appeals Council's 
decision to review a case is established by its issuance of the notice 
of review. If it is unable to decide within the applicable 60-day period 
whether to review a decision or dismissal, the Appeals Council may 
consider the case to determine if the decision or dismissal should be 
reopened pursuant to Secs. 416.1487 and 416.1488. If the Appeals Council 
decides to review a decision on its own motion or to reopen a decision 
as provided in Secs. 416.1487 and 416.1488, the notice of review or the 
notice of reopening issued by the Appeals Council will advise, where 
appropriate, that interim benefits will be payable if a final decision 
has not been issued within 110 days after the date of the decision that 
is reviewed or reopened, and that any interim benefits paid will not be 
considered overpayments unless the benefits are fraudulently obtained.

[63 FR 36571, July 7, 1998, as amended at 75 FR 33169, June 11, 2010]



Sec. 416.1470  Cases the Appeals Council will review.

    (a) The Appeals Council will review a case if--
    (1) There appears to be an abuse of discretion by the administrative 
law judge;
    (2) There is an error of law;
    (3) The action, findings or conclusions of the administrative law 
judge are not supported by substantial evidence;
    (4) There is a broad policy or procedural issue that may affect the 
general public interest; or
    (5) Subject to paragraph (b) of this section, the Appeals Council 
receives additional evidence that is new, material, and relates to the 
period on or before the date of the hearing decision, and there is a 
reasonable probability that the additional evidence would change the 
outcome of the decision.
    (b) In reviewing decisions other than those based on an application 
for benefits, the Appeals Council will consider the evidence in the 
administrative law judge hearing record and any additional evidence it 
believes is material to an issue being considered. However, in reviewing 
decisions based on an application for benefits, the Appeals Council will 
only consider additional evidence under paragraph (a)(5) of this section 
if you show good cause for not informing us about or submitting the 
evidence as described in Sec. 416.1435 because:
    (1) Our action misled you;
    (2) You had a physical, mental, educational, or linguistic 
limitation(s) that prevented you from informing us about or submitting 
the evidence earlier; or
    (3) Some other unusual, unexpected, or unavoidable circumstance 
beyond your control prevented you from informing us about or submitting 
the evidence earlier. Examples include, but are not limited to:
    (i) You were seriously ill, and your illness prevented you from 
contacting us in person, in writing, or through a friend, relative, or 
other person;

[[Page 1099]]

    (ii) There was a death or serious illness in your immediate family;
    (iii) Important records were destroyed or damaged by fire or other 
accidental cause;
    (iv) You actively and diligently sought evidence from a source and 
the evidence was not received or was received less than 5 business days 
prior to the hearing; or
    (v) You received a hearing level decision on the record and the 
Appeals Council reviewed your decision.
    (c) If you submit additional evidence that does not relate to the 
period on or before the date of the administrative law judge hearing 
decision as required in paragraph (a)(5) of this section, or the Appeals 
Council does not find you had good cause for missing the deadline to 
submit the evidence in Sec. 416.1435, the Appeals Council will send you 
a notice that explains why it did not accept the additional evidence and 
advises you of your right to file a new application. The notice will 
also advise you that if you file a new application within 60 days after 
the date of the Appeals Council's notice, your request for review will 
constitute a written statement indicating an intent to claim benefits 
under Sec. 416.340. If you file a new application within 60 days of the 
Appeals Council's notice, we will use the date you requested Appeals 
Council review as the filing date for your new application.

[81 FR 90996, Dec. 16, 2016]



Sec. 416.1471  Dismissal by Appeals Council.

    The Appeals Council will dismiss your request for review if you did 
not file your request within the stated period of time and the time for 
filing has not been extended. The Appeals Council may also dismiss any 
proceedings before it if--
    (a) You and any other party to the proceedings files a written 
request for dismissal; or
    (b) You die, there are no other parties, and we have no information 
to show that you may have a survivor who may be paid benefits due to you 
under Sec. 416.542(b) and who wishes to pursue the request for review, 
or that you authorized interim assistance reimbursement to a State 
pursuant to section 1631(g) of the Act. The Appeals Council, however, 
will vacate a dismissal of the request for review if, within 60 days 
after the date of the dismissal:
    (1) A person claiming to be your survivor, who may be paid benefits 
due to you under Sec. 416.542(b), submits a written request for review, 
and shows that a decision on the issues that were to be considered on 
review may adversely affect him or her; or
    (2) We receive information showing that you authorized interim 
assistance reimbursement to a State pursuant to section 1631(g) of the 
Act.

[45 FR 52096, Aug. 5, 1980, as amended at 58 FR 52914, Oct. 13, 1993]



Sec. 416.1472  Effect of dismissal of request for Appeals Council
review.

    The dismissal of a request for Appeals Council review is binding and 
not subject to further review.



Sec. 416.1473  Notice of Appeals Council review.

    When the Appeals Council decides to review a case, it shall mail a 
notice to all parties at their last known address stating the reasons 
for the review and the issues to be considered.



Sec. 416.1474  Obtaining evidence from Appeals Council.

    You may request and receive copies or a statement of the documents 
or other written evidence upon which the hearing decision or dismissal 
was based and a copy or summary of the transcript of oral evidence. 
However, you will be asked to pay the costs of providing these copies 
unless there is a good reason why you should not pay.



Sec. 416.1475  Filing briefs with the Appeals Council.

    Upon request, the Appeals Council shall give you and all other 
parties a reasonable opportunity to file briefs or other written 
statements about the facts and law relevant to the case. A copy of each 
brief or statement should be filed for each party.

[[Page 1100]]



Sec. 416.1476  Procedures before Appeals Council on review.

    (a) Limitation of issues. The Appeals Council may limit the issues 
it considers if it notifies you and the other parties of the issues it 
will review.
    (b) Oral argument. You may request to appear before the Appeals 
Council to present oral argument. The Appeals Council will grant your 
request if it decides that your case raises an important question of law 
or policy or that oral argument would help to reach a proper decision. 
If your request to appear is granted, the Appeals Council will tell you 
the time and place of the oral argument at least 10 business days before 
the scheduled date. The Appeals Council will determine whether your 
appearance, or the appearance of any other person relevant to the 
proceeding, will be in person, by video teleconferencing, or by 
telephone.

[81 FR 90996, Dec. 16, 2016]



Sec. 416.1477  Case remanded by Appeals Council.

    (a) When the Appeals Council may remand a case. The Appeals Council 
may remand a case to an administrative law judge so that he or she may 
hold a hearing and issue a decision or a recommended decision. The 
Appeals Council may also remand a case in which additional evidence is 
needed or additional action by the administrative law judge is required.
    (b) Action by administrative law judge on remand. The administrative 
law judge shall take any action that is ordered by the Appeals Council 
and may take any additional action that is not inconsistent with the 
Appeals Council's remand order.
    (c) Notice when case is returned with a recommended decision. When 
the administrative law judge sends a case to the Appeals Council with a 
recommended decision, a notice is mailed to the parties at their last 
known address. The notice tells them that the case has been sent to the 
Appeals Council, explains the rules for filing briefs or other written 
statements with the Appeals Council, and includes a copy of the 
recommended decision.
    (d) Filing briefs with and obtaining evidence from the Appeals 
Council. (1) You may file briefs or other written statements about the 
facts and law relevant to your case with the Appeals Council within 20 
days of the date that the recommended decision is mailed to you. Any 
party may ask the Appeals Council for additional time to file briefs or 
statements. The Appeals Council will extend this period, as appropriate, 
if you show that you had good cause for missing the deadline.
    (2) All other rules for filing briefs with and obtaining evidence 
from the Appeals Council follow the procedures explained in this 
subpart.
    (e) Procedures before the Appeals Council. (1) The Appeals Council 
after receiving a recommended decision will conduct its proceedings and 
issue its decision according to the procedures explained in this 
subpart.
    (2) If the Appeals Council believes that more evidence is required, 
it may again remand the case to an administrative law judge for further 
inquiry into the issues, rehearing, receipt of evidence, and another 
decision or recommended decision. However, if the Appeals Council 
decides that it can get the additional evidence more quickly, it will 
take appropriate action.



Sec. 416.1479  Decision of Appeals Council.

    After it has reviewed all the evidence in the administrative law 
judge hearing record and any additional evidence received, subject to 
the limitations on Appeals Council consideration of additional evidence 
in Sec. 416.1470, the Appeals Council will make a decision or remand the 
case to an administrative law judge. The Appeals Council may affirm, 
modify or reverse the administrative law judge hearing decision or it 
may adopt, modify or reject a recommended decision. If the Appeals 
Council issues its own decision, it will base its decision on the 
preponderance of the evidence. A copy of the Appeals Council's decision 
will be mailed to the parties at their last known address.

[52 FR 4005, Feb. 9, 1987, as amended at 73 FR 76945, Dec. 18, 2008; 81 
FR 90994, Dec. 16, 2016]



Sec. 416.1481  Effect of Appeals Council's decision or denial of review.

    The Appeals Council may deny a party's request for review or it may 
decide to review a case and make a decision.

[[Page 1101]]

The Appeals Council's decision, or the decision of the administrative 
law judge if the request for review is denied, is binding unless you or 
another party file an action in Federal district court, or the decision 
is revised. You may file an action in a Federal district court within 60 
days after the date you receive notice of the Appeals Council's action.



Sec. 416.1482  Extension of time to file action in Federal district 
court.

    Any party to the Appeals Council's decision or denial of review, or 
to an expedited appeals process agreement, may request that the time for 
filing an action in a Federal district court be extended. The request 
must be in writing and it must give the reasons why the action was not 
filed within the stated time period. The request must be filed with the 
Appeals Council, or if it concerns an expedited appeals process 
agreement, with one of our offices. If you show that you had good cause 
for missing the deadline, the time period will be extended. To determine 
whether good cause exists, we use the standards explained in 
Sec. 416.1411.

                           Court Remand Cases



Sec. 416.1483  Case remanded by a Federal court.

    When a Federal court remands a case to the Commissioner for further 
consideration, the Appeals Council, acting on behalf of the 
Commissioner, may make a decision, or it may remand the case to an 
administrative law judge with instructions to take action and issue a 
decision or return the case to the Appeals Council with a recommended 
decision. If the case is remanded by the Appeals Council, the procedures 
explained in Sec. 416.1477 will be followed. Any issues relating to your 
claim may be considered by the administrative law judge whether or not 
they were raised in the administrative proceedings leading to the final 
decision in your case.

[54 FR 37793, Sept. 13, 1989, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.1484  Appeals Council review of administrative law judge
decision in a case remanded by a Federal court.

    (a) General. In accordance with Sec. 416.1483, when a case is 
remanded by a Federal court for further consideration, the decision of 
the administrative law judge will become the final decision of the 
Commissioner after remand on your case unless the Appeals Council 
assumes jurisdiction of the case. The Appeals Council may assume 
jurisdiction based on written exceptions to the decision of the 
administrative law judge which you file with the Appeals Council or 
based on its authority pursuant to paragraph (c) of this section. If the 
Appeals Council assumes jurisdiction of your case, any issues relating 
to your claim may be considered by the Appeals Council whether or not 
they were raised in the administrative proceedings leading to the final 
decision in your case or subsequently considered by the administrative 
law judge in the administrative proceedings following the court's remand 
order. The Appeals Council will either make a new, independent decision 
based on the preponderance of the evidence in the record that will be 
the final decision of the Commissioner after remand, or it will remand 
the case to an administrative law judge for further proceedings.
    (b) You file exceptions disagreeing with the decision of the 
administrative law judge. (1) If you disagree with the decision of the 
administrative law judge, in whole or in part, you may file exceptions 
to the decision with the Appeals Council. Exceptions may be filed by 
submitting a written statement to the Appeals Council setting forth your 
reasons for disagreeing with the decision of the administrative law 
judge. The exceptions must be filed within 30 days of the date you 
receive the decision of the administrative law judge or an extension of 
time in which to submit exceptions must be requested in writing within 
the 30-day period. A timely request for a 30-day extension will be 
granted by the Appeals Council. A request for an extension of more than 
30 days should include a statement of reasons as to why you need the 
additional time.

[[Page 1102]]

    (2) If written exceptions are timely filed, the Appeals Council will 
consider your reasons for disagreeing with the decision of the 
administrative law judge and all the issues presented by your case. If 
the Appeals Council concludes that there is no reason to change the 
decision of the administrative law judge, it will issue a notice to you 
addressing your exceptions and explaining why no change in the decision 
of the administrative law judge is warranted. In this instance, the 
decision of the administrative law judge is the final decision of the 
Commissioner after remand.
    (3) When you file written exceptions to the decision of the 
administrative law judge, the Appeals Council may assume jurisdiction at 
any time, even after the 60-day time period which applies when you do 
not file exceptions. If the Appeals Council assumes jurisdiction, it 
will make a new, independent decision based on the preponderance of the 
evidence in the entire record affirming, modifying, or reversing the 
decision of the administrative law judge, or it will remand the case to 
an administrative law judge for further proceedings, including a new 
decision. The new decision of the Appeals Council is the final decision 
of the Commissioner after remand.
    (c) Appeals Council assumes jurisdiction without exceptions being 
filed. Any time within 60 days after the date of the decision of the 
administrative law judge, the Appeals Council may decide to assume 
jurisdiction of your case even though no written exceptions have been 
filed. Notice of this action will be mailed to all parties at their last 
known address. You will be provided with the opportunity to file briefs 
or other written statements with the Appeals Council about the facts and 
law relevant to your case. After the Appeals Council receives the briefs 
or other written statements, or the time allowed (usually 30 days) for 
submitting them has expired, the Appeals Council will either issue a 
final decision of the Commissioner based on the preponderance of the 
evidence affirming, modifying, or reversing the decision of the 
administrative law judge, or remand the case to an administrative law 
judge for further proceedings, including a new decision.
    (d) Exceptions are not filed and the Appeals Council does not 
otherwise assume jurisdiction. If no exceptions are filed and the 
Appeals Council does not assume jurisdiction of your case, the decision 
of the administrative law judge becomes the final decision of the 
Commissioner after remand.

[54 FR 37793, Sept. 13, 1989, as amended at 62 FR 38455, July 18, 1997; 
73 FR 76945, Dec. 18, 2008]



Sec. 416.1485  Application of circuit court law.

    The procedures which follow apply to administrative determinations 
or decisions on claims involving the application of circuit court law.
    (a) General. We will apply a holding in a United States Court of 
Appeals decision that we determine conflicts with our interpretation of 
a provision of the Social Security Act or regulations unless the 
Government seeks further judicial review of that decision or we 
relitigate the issue presented in the decision in accordance with 
paragraphs (c) and (d) of this section. We will apply the holding to 
claims at all levels of the administrative review process within the 
applicable circuit unless the holding, by its nature, applies only at 
certain levels of adjudication.
    (b) Issuance of an Acquiescence Ruling. When we determine that a 
United States Court of Appeals holding conflicts with our interpretation 
of a provision of the Social Security Act or regulations and the 
Government does not seek further judicial review or is unsuccessful on 
further review, we will issue a Social Security Acquiescence Ruling. The 
Acquiescence Ruling will describe the administrative case and the court 
decision, identify the issue(s) involved, and explain how we will apply 
the holding, including, as necessary, how the holding relates to other 
decisions within the applicable circuit. These Acquiescence Rulings will 
generally be effective on the date of their publication in the Federal 
Register and will apply to all determinations, redeterminations, and 
decisions made on or after that date unless an Acquiescence Ruling is 
rescinded as stated in

[[Page 1103]]

paragraph (e) of this section. The process we will use when issuing an 
Acquiescence Ruling follows:
    (1) We will release an Acquiescence Ruling for publication in the 
Federal Register for any precedential circuit court decision that we 
determine contains a holding that conflicts with our interpretation of a 
provision of the Social Security Act or regulations no later than 120 
days from the receipt of the court's decision. This timeframe will not 
apply when we decide to seek further judicial review of the circuit 
court decision or when coordination with the Department of Justice and/
or other Federal agencies makes this timeframe no longer feasible.
    (2) If we make a determination or decision on your claim between the 
date of a circuit court decision and the date we publish an Acquiescence 
Ruling, you may request application of the published Acquiescence Ruling 
to the prior determination or decision. You must demonstrate that 
application of the Acquiescence Ruling could change the prior 
determination or decision in your case. You may demonstrate this by 
submitting a statement that cites the Acquiescence Ruling or the holding 
or portion of a circuit court decision which could change the prior 
determination or decision in your case. If you can so demonstrate, we 
will readjudicate the claim in accordance with the Acquiescence Ruling 
at the level at which it was last adjudicated. Any readjudication will 
be limited to consideration of the issue(s) covered by the Acquiescence 
Ruling and any new determination or decision on readjudication will be 
subject to administrative and judicial review in accordance with this 
subpart. Our denial of a request for readjudication will not be subject 
to further administrative or judicial review. If you file a request for 
readjudication within the 60-day appeal period and we deny that request, 
we shall extend the time to file an appeal on the merits of the claim to 
60 days after the date that we deny the request for readjudication.
    (3) After we receive a precedential circuit court decision and 
determine that an Acquiescence Ruling may be required, we will begin to 
identify those claims that are pending before us within the circuit and 
that might be subject to readjudication if an Acquiescence Ruling is 
subsequently issued. When an Acquiescence Ruling is published, we will 
send a notice to those individuals whose cases we have identified which 
may be affected by the Acquiescence Ruling. The notice will provide 
information about the Acquiescence Ruling and the right to request 
readjudication under that Acquiescence Ruling, as described in paragraph 
(b)(2) of this section. It is not necessary for an individual to receive 
a notice in order to request application of an Acquiescence Ruling to 
his or her claim, as described in paragraph (b)(2) of this section.
    (c) Relitigation of court's holding after publication of an 
Acquiescence Ruling. After we have published an Acquiescence Ruling to 
reflect a holding of a United States Court of Appeals on an issue, we 
may decide under certain conditions to relitigate that issue within the 
same circuit. We may relitigate only when the conditions specified in 
paragraphs (c)(2) and (3) of this section are met, and, in general, one 
of the events specified in paragraph (c)(1) of this section occurs.
    (1) Activating events:
    (i) An action by both Houses of Congress indicates that a circuit 
court decision on which an Acquiescence Ruling was based was decided 
inconsistently with congressional intent, such as may be expressed in a 
joint resolution, an appropriations restriction, or enactment of 
legislation which affects a closely analogous body of law;
    (ii) A statement in a majority opinion of the same circuit indicates 
that the court might no longer follow its previous decision if a 
particular issue were presented again;
    (iii) Subsequent circuit court precedent in other circuits supports 
our interpretation of the Social Security Act or regulations on the 
issue(s) in question; or
    (iv) A subsequent Supreme Court decision presents a reasonable legal 
basis for questioning a circuit court holding upon which we base an 
Acquiescence Ruling.

[[Page 1104]]

    (2) The General Counsel of the Social Security Administration, after 
consulting with the Department of Justice, concurs that relitigation of 
an issue and application of our interpretation of the Social Security 
Act or regulations to selected claims in the administrative review 
process within the circuit would be appropriate.
    (3) We publish a notice in the Federal Register that we intend to 
relitigate an Acquiescence Ruling issue and that we will apply our 
interpretation of the Social Security Act or regulations within the 
circuit to claims in the administrative review process selected for 
relitigation. The notice will explain why we made this decision.
    (d) Notice of relitigation. When we decide to relitigate an issue, 
we will provide a notice explaining our action to all affected 
claimants. In adjudicating claims subject to relitigation, 
decisionmakers throughout the SSA administrative review process will 
apply our interpretation of the Social Security Act and regulations, but 
will also state in written determinations or decisions how the claims 
would have been decided under the circuit standard. Claims not subject 
to relitigation will continue to be decided under the Acquiescence 
Ruling in accordance with the circuit standard. So that affected 
claimants can be readily identified and any subsequent decision of the 
circuit court or the Supreme Court can be implemented quickly and 
efficiently, we will maintain a listing of all claimants who receive 
this notice and will provide them with the relief ordered by the court.
    (e) Rescission of an Acquiescence Ruling. We will rescind as 
obsolete an Acquiescence Ruling and apply our interpretation of the 
Social Security Act or regulations by publishing a notice in the Federal 
Register when any of the following events occurs:
    (1) The Supreme Court overrules or limits a circuit court holding 
that was the basis of an Acquiescence Ruling;
    (2) A circuit court overrules or limits itself on an issue that was 
the basis of an Acquiescence Ruling;
    (3) A Federal law is enacted that removes the basis for the holding 
in a decision of a circuit court that was the subject of an Acquiescence 
Ruling; or
    (4) We subsequently clarify, modify or revoke the regulation or 
ruling that was the subject of a circuit court holding that we 
determined conflicts with our interpretation of the Social Security Act 
or regulations, or we subsequently publish a new regulation(s) 
addressing an issue(s) not previously included in our regulations when 
that issue(s) was the subject of a circuit court holding that conflicted 
with our interpretation of the Social Security Act or regulations and 
that holding was not compelled by the statute or Constitution.

[63 FR 24933, May 6, 1998]

           Reopening and Revising Determinations and Decisions



Sec. 416.1487  Reopening and revising determinations and decisions.

    (a) General. Generally, if you are dissatisfied with a determination 
or decision made in the administrative review process, but do not 
request further review within the stated time period, you lose your 
right to further review and that determination or decision becomes 
final. However, a determination or a decision made in your case which is 
otherwise final and binding may be reopened and revised by us.
    (b) Procedure for reopening and revision. We may reopen a final 
determination or decision on our own initiative, or you may ask that a 
final determination or a decision to which you were a party be reopened. 
In either instance, if we reopen the determination or decision, we may 
revise that determination or decision. The conditions under which we may 
reopen a previous determination or decision, either on our own 
initiative or at your request, are explained in Sec. 416.1488.

[59 FR 8535, Feb. 23, 1994]



Sec. 416.1488  Conditions for reopening.

    A determination, revised determination, decision, or revised 
decision may be reopened--
    (a) Within 12 months of the date of the notice of the initial 
determination, for any reason;
    (b) Within two years of the date of the notice of the initial 
determination

[[Page 1105]]

if we find good cause, as defined in Sec. 416.1489, to reopen the case; 
or
    (c) At any time if it was obtained by fraud or similar fault. In 
determining whether a determination or decision was obtained by fraud or 
similar fault, we will take into account any physical, mental, 
educational, or linguistic limitations (including any lack of facility 
with the English language) which you may have had at the time.

[45 FR 52096, Aug. 5, 1980, as amended at 59 FR 1637, Jan. 12, 1994]



Sec. 416.1489  Good cause for reopening.

    (a) We will find that there is good cause to reopen a determination 
or decision if--
    (1) New and material evidence is furnished;
    (2) A clerical error was made; or
    (3) The evidence that was considered in making the determination or 
decision clearly shows on its face that an error was made.
    (b) We will not find good cause to reopen your case if the only 
reason for reopening is a change of legal interpretation or 
administrative ruling upon which the determination or decision was made.



Sec. 416.1491  Late completion of timely investigation.

    We may revise a determination or decision after the applicable time 
period in Sec. 416.1488(a) or Sec. 416.1488(b) expires if we begin an 
investigation into whether to revise the determination or decision 
before the applicable time period expires. We may begin the 
investigation either based on a request by you or by an action on our 
part. The investigation is a process of gathering facts after a 
determination or decision has been reopened to determine if a revision 
of the determination or decision is applicable.
    (a) If we have diligently pursued the investigation to its 
conclusion, we may revise the determination or decision. The revision 
may be favorable or unfavorable to you. ``Diligently pursued'' means 
that in light of the facts and circumstances of a particular case, the 
necessary action was undertaken and carried out as promptly as the 
circumstances permitted. Diligent pursuit will be presumed to have been 
met if we conclude the investigation and if necessary, revise the 
determination or decision within 6 months from the date we began the 
investigation.
    (b) If we have not diligently pursued the investigation to its 
conclusion, we will revise the determination or decision if a revision 
is applicable and if it will be favorable to you. We will not revise the 
determination or decision if it will be unfavorable to you.

[49 FR 46370, Nov. 26, 1984; 49 FR 48036, Dec. 10, 1984]



Sec. 416.1492  Notice of revised determination or decision.

    (a) When a determination or decision is revised, notice of the 
revision will be mailed to the parties at their last known address. The 
notice will state the basis for the revised determination or decision 
and the effect of the revision. The notice will also inform the parties 
of the right to further review.
    (b) If a determination is revised and the revised determination 
requires that your benefits be suspended, reduced, or terminated, the 
notice will inform you of your right to continued payment (see 
Sec. 416.1336 and the exceptions set out in Sec. 416.1337) and of your 
right of reconsideration.
    (c) If a determination is revised and the revised determination does 
not require that your benefits be suspended, reduced, or terminated, the 
notice will inform you of your right to a hearing before an 
administrative law judge.
    (d) If a reconsidered determination that you are blind or disabled, 
based on medical factors, is reopened for the purpose of being revised, 
you will be notified, in writing, of the proposed revision and of your 
right to request that a disability hearing be held before a revised 
reconsidered determination is issued. If a revised reconsidered 
determination is issued, you may request a hearing before an 
administrative law judge.
    (e) If an administrative law judge or the Appeals Council proposes 
to revise a decision, and the revision would be based on evidence not 
included in the record on which the prior decision was based, you and 
any other parties to the decision will be notified, in writing, of the 
proposed action and of your right to request that a hearing be held 
before

[[Page 1106]]

any further action is taken. If a revised decision is issued by an 
administrative law judge, you and any other party may request that it be 
reviewed by the Appeals Council, or the Appeals Council may review the 
decision on its own initiative.
    (f) If an administrative law judge or the Appeals Council proposes 
to revise a decision, and the revision would be based only on evidence 
included in the record on which the prior decision was based, you and 
any other parties to the decision will be notified, in writing, of the 
proposed action. If a revised decision is issued by an administrative 
law judge, you and any other party may request that it be reviewed by 
the Appeals Council, or the Appeals Council may review the decision on 
its own initiative.
    (g) An administrative law judge may, in connection with a valid 
request for a hearing, propose to reopen an issue other than the issue 
on which the request for a hearing was based. The administrative law 
judge will follow the time limits for reopenings set out in 
Sec. 416.1488. The administrative law judge shall mail to the parties at 
their last known address a notice of the reopening.

[45 FR 52096, Aug. 5, 1980, as amended at 51 FR 308, Jan. 3, 1986]



Sec. 416.1493  Effect of revised determination or decision.

    A revised determination or decision is binding unless--
    (a) You or a party to the revised determination file a written 
request for a reconsideration or a hearing;
    (b) You or another party to the revised decision file, as 
appropriate, a request for review by the Appeals Council or a hearing;
    (c) The Appeals Council reviews the revised decision; or
    (d) The revised determination or decision is further revised.



Sec. 416.1494  Time and place to request further review or a hearing
on revised determination or decision.

    You or another party to the revised determination or decision may 
request, as appropriate, further review or a hearing on the revision by 
filing a request in writing at one of our offices within 60 days after 
the date you receive notice of the revision. Further review or a hearing 
will be held on the revision according to the rules of this subpart.

                   Payment of Certain Travel Expenses



Sec. 416.1495  Payment of certain travel expenses--general.

    When you file a claim for supplemental security income (SSI) 
benefits, you may incur certain travel expenses in pursuing your claim. 
Sections 416.1496 through 416.1499 explain who may be reimbursed for 
travel expenses, the types of travel expenses that are reimbursable, and 
when and how to claim reimbursement. Generally, the agency that requests 
you to travel will be the agency that reimburses you. No later than when 
it notifies you of the examination or hearing described in 
Sec. 416.1496(a), that agency will give you information about the right 
to travel reimbursement, the right to advance payment and how to request 
it, the rules on means of travel and unusual travel costs, and the need 
to submit receipts.

[51 FR 8810, Mar. 14, 1986]



Sec. 416.1496  Who may be reimbursed.

    (a) The following individuals may be reimbursed for certain travel 
expenses--
    (1) You, when you attend medical examinations upon request in 
connection with disability determinations; these are medical 
examinations requested by the State agency or by us when additional 
medical evidence is necessary to make a disability determination (also 
referred to as consultative examinations, see Sec. 416.917);
    (2) You, your representative (see Sec. 416.1505 (a) and (b)), and 
all unsubpoenaed witnesses we or the State agency determines to be 
reasonably necessary who attend disability hearings; and
    (3) You, your representative, and all unsubpoenaed witnesses we 
determine to be reasonably necessary who attend hearings on any claim 
for SSI benefits before an administrative law judge.
    (b) Sections 416.1495 through 416.1499 do not apply to subpoenaed 
witnesses.

[[Page 1107]]

They are reimbursed under Secs. 416.1450(d) and 416.1416(b)(1).

[51 FR 8810, Mar. 14, 1986]



Sec. 416.1498  What travel expenses are reimbursable.

    Reimbursable travel expenses include the ordinary expenses of public 
or private transportation as well as unusual costs due to special 
circumstances.
    (a) Reimbursement for ordinary travel expenses is limited--
    (1) To the cost of travel by the most economical and expeditious 
means of transportation available and appropriate to the individual's 
condition of health as determined by the State agency or by us, 
considering the available means in the following order--
    (i) Common carrier (air, rail, or bus);
    (ii) Privately owned vehicles;
    (iii) Commercially rented vehicles and other special conveyances;
    (2) If air travel is necessary, to the coach fare for air travel 
between the specified travel points involved unless first-class air 
travel is authorized in advance by the State agency or by the Secretary 
in instances when--
    (i) Space is not available in less-than-first-class accommodations 
on any scheduled flights in time to accomplish the purpose of the 
travel;
    (ii) First-class accommodations are necessary because you, your 
representative, or reasonably necessary witness is so handicapped or 
otherwise impaired that other accommodations are not practical and the 
impairment is substantiated by competent medical authority;
    (iii) Less-than-first-class accommodations on foreign carriers do 
not provide adequate sanitation or health standards; or
    (iv) The use of first-class accommodations would result in an 
overall savings to the government based on economic considerations, such 
as the avoidance of additional subsistence costs that would be incurred 
while awaiting availability of less-than-first-class accommodations.
    (b) Unusual travel costs may be reimbursed but must be authorized in 
advance and in writing by us or the appropriate State official, as 
applicable, unless they are unexpected or unavoidable; we or the State 
agency must determine their reasonableness and necessity and must 
approve them before payment can be made. Unusual expenses that may be 
covered in connection with travel include, but are not limited to--
    (1) Ambulance services;
    (2) Attendant services;
    (3) Meals;
    (4) Lodging; and
    (5) Taxicabs.
    (c) If we reimburse you for travel, we apply the rules in 
Secs. 416.1496 through 416.1499 and the same rates and conditions of 
payment that govern travel expenses for Federal employees as authorized 
under 41 CFR chapter 301. If a State agency reimburses you, the 
reimbursement rates shall be determined by the rules in Secs. 416.1496 
through 416.1499 and that agency's rules and regulations and may differ 
from one agency to another and also may differ from the Federal 
reimbursement rates.
    (1) When public transportation is used, reimbursement will be made 
for the actual costs incurred, subject to the restrictions in paragraph 
(a)(2) of this section on reimbursement for first-class air travel.
    (2) When travel is by a privately owned vehicle, reimbursement will 
be made at the current Federal or State mileage rate specified for that 
geographic location plus the actual costs of tolls and parking, if 
travel by a privately owned vehicle is determined appropriate under 
paragraph (a)(1) of this section. Otherwise, the amount of reimbursement 
for travel by privately owned vehicle cannot exceed the total cost of 
the most economical public transportation for travel between the same 
two points. ``Total cost'' includes the cost for all the authorized 
travelers who travel in the same privately owned vehicle. Advance 
approval of travel by privately owned vehicle is not required (but could 
give you assurance of its approval).
    (3) Sometimes your health condition dictates a mode of 
transportation different from most economical and expeditious. In order 
for your health to require a mode of transportation other than common 
carrier or passenger car, you must be so handicapped or otherwise 
impaired as to require special transportation arrangements and the

[[Page 1108]]

condition must be substantiated by competent medical authority.
    (d) For travel to a hearing--
    (1) Reimbursement is limited to travel within the U.S. For this 
purpose, the U.S. includes the U.S. as defined in Sec. 416.120(c)(10).
    (2) When the travel is performed after September 30, 1981, we or the 
State agency will reimburse you, your representative, or an unsubpoenaed 
witness only if the distance from the person's residence or office 
(whichever he or she travels from) to the hearing site exceeds 75 miles.
    (3) For travel expenses incurred on or after April 1, 1991, the 
amount of reimbursement under this section for travel by your 
representative to attend a disability hearing or a hearing before an 
administrative law judge shall not exceed the maximum amount allowable 
under this section for travel to the hearing site from any point within 
the geographic area of the office having jurisdiction over the hearing.
    (i) The geographic area of the office having jurisdiction over the 
hearing means, as appropriate--
    (A) The designated geographic service area of the State agency 
adjudicatory unit having responsibility for providing the disability 
hearing;
    (B) If a Federal disability hearing officer holds the disability 
hearing, the geographic area of the State (as defined in 
Sec. 416.120(c)(9)) in which the claimant resides or, if the claimant is 
not a resident of a State, in which the hearing officer holds the 
disability hearing; or
    (C) The designated geographic service area of the Office of Hearings 
and Appeals hearing office having responsibility for providing the 
hearing before an administrative law judge.
    (ii) We or the State agency determine the maximum amount allowable 
for travel by a representative based on the distance to the hearing site 
from the farthest point within the appropriate geographic area. In 
determining the maximum amount allowable for travel between these two 
points, we or the State agency apply the rules in paragraphs (a) through 
(c) of this section and the limitations in paragraph (d) (1) and (4) of 
this section. If the distance between these two points does not exceed 
75 miles, we or the State agency will not reimburse any of your 
representative's travel expenses.
    (4) If a change in the location of the hearing is made at your 
request from the location we or the State agency selected to one farther 
from your residence or office, neither your additional travel expenses 
nor the additional travel expenses of your representative and witnesses 
will be reimbursed.

[51 FR 8810, Mar. 14, 1986, as amended at 59 FR 8532, Feb. 23, 1994]



Sec. 416.1499  When and how to claim reimbursement.

    (a)(1) Generally, you will be reimbursed for your expenses after 
your trip. However, travel advances may be authorized if you request 
prepayment and show that the requested advance is reasonable and 
necessary.
    (2) You must submit to us or the State agency, as appropriate, an 
itemized list of what you spent and supporting receipts to be 
reimbursed.
    (3) Arrangements for special means of transportation and related 
unusual costs may be made only if we or the State agency authorizes the 
costs in writing in advance of travel, unless the costs are unexpected 
or unavoidable. If they are unexpected or unavoidable we or the State 
agency must determine their reasonableness and necessity and must 
approve them before payment may be made.
    (4) If you receive prepayment, you must, within 20 days after your 
trip, provide to us or the State agency, as appropriate, an itemized 
list of your actual travel costs and submit supporting receipts. We or 
the State agency will require you to pay back any balance of the 
advanced amount that exceeds any approved travel expenses within 20 days 
after you are notified of the amount of that balance. (State agencies 
may have their own time limits in place of the 20-day periods in the 
preceding two sentences.)
    (b) You may claim reimbursable travel expenses incurred by your 
representative for which you have been billed by your representative, 
except that if your representative makes a

[[Page 1109]]

claim for them to us or the State, he or she will be reimbursed 
directly.

(Approved by the Office of Management and Budget under control number 
0960-0434)

[51 FR 8810, Mar. 14, 1986, as amended at 51 FR 44983, Dec. 16, 1986]



                   Subpart O_Representation of Parties

    Authority: Secs. 702(a)(5), 1127, and 1631(d) of the Social Security 
Act (42 U.S.C. 902(a)(5), 1320a-6, and 1383(d)).

    Source: 45 FR 52106, Aug. 5, 1980, unless otherwise noted.



Sec. 416.1500  Introduction.

    You may appoint someone to represent you in any of your dealings 
with us. This subpart explains, among other things--
    (a) Who may be your representative and what his or her 
qualifications must be;
    (b) How you appoint a representative;
    (c) The payment of fees to a representative;
    (d) Our rules that representatives must follow; and
    (e) What happens to a representative who breaks the rules.



Sec. 416.1503  Definitions.

    As used in this subpart:
    Date we notify him or her means 5 days after the date on the notice, 
unless the recipient shows us that he or she did not receive it within 
the 5-day period.
    Eligible non-attorney means a non-attorney representative who we 
determine is qualified to receive direct payment of his or her fee under 
Sec. 416.1517(a).
    Entity means any business, firm, or other association, including but 
not limited to partnerships, corporations, for-profit organizations, and 
not-for-profit organizations.
    Federal agency refers to any authority of the Executive branch of 
the Government of the United States.
    Federal program refers to any program established by an Act of 
Congress or administered in whole or in part by a Federal agency.
    Legal guardian or court-appointed representative means a court-
appointed person, committee, or conservator who is responsible for 
taking care of and managing the property and rights of an individual who 
is considered incapable of managing his or her own affairs.
    Past-due benefits means the total amount of payments under title XVI 
of the Act, the Supplemental Security Income (SSI) program, including 
any Federally administered State payments, that has accumulated to you 
and your spouse because of a favorable administrative or judicial 
determination or decision, up to but not including the month the 
determination or decision is made. For purposes of calculating fees for 
representation, we first determine the SSI past-due benefits before any 
applicable reduction for reimbursement to a State (or political 
subdivision) for interim assistance reimbursement, and before any 
applicable reduction under section 1127 of the Act (for receipt of 
benefits for the same period under title II). We then reduce that figure 
by the amount of any reduction of title II or title XVI benefits that 
was required by section 1127. We do this whether the actual offset, as 
provided under section 1127, reduced the title II or title XVI benefits. 
Past-due benefits do not include:
    (1) Continued benefits paid pursuant to Sec. 416.996 of this part;
    (2) Continued benefits paid pursuant to Sec. 416.1336(b) of this 
part; or
    (3) Interim benefits paid pursuant to section 1631(a)(8) of the Act.
    Representational services means services performed for a claimant in 
connection with any claim the claimant has before us, any asserted right 
the claimant may have for an initial or reconsidered determination, and 
any decision or action by an administrative law judge or the Appeals 
Council.
    Representative means an attorney who meets all of the requirements 
of Sec. 416.1505(a), or a person other than an attorney who meets all of 
the requirements of Sec. 416.1505(b), and whom you appoint to represent 
you in dealings with us.
    We, our, or us refers to the Social Security Administration (SSA).

[[Page 1110]]

    You or your refers to any person or the eligible spouse of any 
person claiming or receiving supplemental security income benefits.

[45 FR 52106, Aug. 5, 1980, as amended at 62 FR 38455, July 18, 1997; 72 
FR 16725, Apr. 5, 2007; 74 FR 48384, Sept. 23, 2009; 76 FR 45194, July 
28, 2011; 76 FR 80247, Dec. 23, 2011]



Sec. 416.1505  Who may be your representative.

    (a) You may appoint as your representative in dealings with us any 
attorney in good standing who--
    (1) Has the right to practice law before a court of a State, 
Territory, District, or island possession of the United States, or 
before the Supreme Court or a lower Federal court of the United States;
    (2) Is not disqualified or suspended from acting as a representative 
in dealings with us; and
    (3) Is not prohibited by any law from acting as a representative.
    (b) You may appoint any person who is not an attorney to be your 
representative in dealings with us if the person--
    (1) Is generally known to have a good character and reputation;
    (2) Is capable of giving valuable help to you in connection with 
your claim;
    (3) Is not disqualified or suspended from acting as a representative 
in dealing with us; and
    (4) Is not prohibited by any law from acting as a representative.
    (c) We may refuse to recognize the person you choose to represent 
you if the person does not meet the requirements in this section. We 
will notify you and the person you attempted to appoint as your 
representative if we do not recognize the person as a representative.

[45 FR 52106, Aug. 5, 1980, as amended at 76 FR 80247, Dec. 23, 2011]



Sec. 416.1506  Notification of options for obtaining attorney 
representation.

    If you are not represented by an attorney and we make a 
determination or decision that is subject to the administrative review 
process provided under subpart N of this part and it does not grant all 
of the benefits or other relief you requested or it adversely affects 
any eligibility to benefits that we have established or may establish 
for you, we will include with the notice of that determination or 
decision information about your options for obtaining an attorney to 
represent you in dealing with us. We will also tell you that a legal 
services organization may provide you with legal representation free of 
charge if you satisfy the qualifying requirements applicable to that 
organization.

[58 FR 64886, Dec. 10, 1993]



Sec. 416.1507  Appointing a representative.

    We will recognize a person as your representative if the following 
things are done:
    (a) You sign a written notice stating that you want the person to be 
your representative in dealings with us.
    (b) That person signs the notice, agreeing to be your 
representative, if the person is not an attorney. An attorney does not 
have to sign a notice of appointment.
    (c) The notice is filed at one of our offices if you have initially 
filed a claim or requested reconsideration; with an administrative law 
judge if you have requested a hearing; or with the Appeals Council if 
you have requested a review of the administrative law judge's decision.



Sec. 416.1510  Authority of a representative.

    (a) What a representative may do. Your representative may, on your 
behalf--
    (1) Obtain information about your claim to the same extent that you 
are able to do;
    (2) Submit evidence;
    (3) Make statements about facts and law; and
    (4) Make any request or give any notice about the proceedings before 
us.
    (b) What a representative may not do. A representative may not sign 
an application on behalf of a claimant for rights or benefits under 
title XVI of the Act unless authorized to do so under Sec. 416.315.



Sec. 416.1513  Mandatory use of electronic services.

    A representative must conduct business with us electronically at the 
times and in the manner we prescribe on matters for which the 
representative

[[Page 1111]]

requests direct fee payment. (See Sec. 416.1540(b)(4)).

[76 FR 56109, Sept. 12, 2011]



Sec. 416.1515  Notice or request to a representative.

    (a) We shall send your representative--
    (1) Notice and a copy of any administrative action, determination, 
or decision; and
    (2) Requests for information or evidence.
    (b) A notice or request sent to your representative will have the 
same force and effect as if it had been sent to you.



Sec. 416.1517  Direct payment of fees to eligible non-attorney
representatives.

    (a) Criteria for eligibility. An individual who is a licensed 
attorney or who is suspended or disbarred from the practice of law in 
any jurisdiction may not be an eligible non-attorney. A non-attorney 
representative is eligible to receive direct payment of his or her fee 
out of your past-due benefits if he or she:
    (1) Completes and submits to us an application as described in 
paragraph (b) of this section;
    (2) Pays the application fee as described in paragraph (c) of this 
section;
    (3) Demonstrates that he or she possesses:
    (i) A bachelor's degree from an accredited institution of higher 
learning; or
    (ii) At least four years of relevant professional experience and 
either a high school diploma or a General Educational Development 
certificate;
    (4) Passes our criminal background investigation (including checks 
of our administrative records), and attests under penalty of perjury 
that he or she:
    (i) Has not been suspended or disqualified from practice before us 
and is not suspended or disbarred from the practice of law in any 
jurisdiction;
    (ii) Has not had a judgment or lien assessed against him or her by a 
civil court for malpractice or fraud;
    (iii) Has not had a felony conviction; and
    (iv) Has not misrepresented information provided on his or her 
application or supporting materials for the application;
    (5) Takes and passes a written examination we administer;
    (6) Provides proof of and maintains continuous liability insurance 
coverage that is underwritten by an entity that is legally permitted to 
provide professional liability insurance in the States in which the 
representative conducts business. The policy must include coverage for 
malpractice claims against the representative and be in an amount we 
prescribe; and
    (7) Completes and provides proof that he or she has completed all 
continuing education courses that we prescribe by the deadline we 
prescribe.
    (b) Application. An applicant must timely submit his or her 
completed application form during an application period that we 
prescribe. The application must be postmarked by the last day of the 
application period. If an applicant timely submits the application fee 
and a defective application, we will give the applicant 10 calendar days 
after the date we notify him or her of the defect to correct the 
application.
    (c) Application fee. An applicant must timely submit his or her 
application fee during the application period. We will set the fee 
annually.
    (1) We will refund the fee if:
    (i) We do not administer an examination, and an applicant was unable 
to take the rescheduled examination; or
    (ii) Circumstances beyond the applicant's control that could not 
have been reasonably anticipated and planned for prevent an applicant 
from taking a scheduled examination.
    (2) We will not refund the fee if:
    (i) An applicant took and failed the examination; or
    (ii) An applicant failed to arrive on time for the examination 
because of circumstances within the applicant's control that could have 
been anticipated and planned for.
    (d) Protest procedures. (1) We may find that a non-attorney 
representative is ineligible to receive direct fee payment at any time 
because he or she fails to meet any of the criteria in paragraph (a) of 
this section. A non-attorney representative whom we find to be 
ineligible for direct fee payment may protest our finding only if we 
based it on the representative's failure to:

[[Page 1112]]

    (i) Attest on the application or provide sufficient documentation 
that he or she possesses the required education or equivalent 
qualifications, as described in paragraph (a)(3) of this section;
    (ii) Meet at all times the criminal background investigation 
criteria, as described in paragraph (a)(4) of this section;
    (iii) Provide proof that he or she has maintained continuous 
liability insurance coverage, as described in paragraph (a)(6) of this 
section, after we previously determined the representative was eligible 
to receive direct fee payment; or
    (iv) Complete continuing education courses or provide documentation 
of the required continuing education courses, as described in paragraph 
(a)(7) of this section.
    (2) A non-attorney representative who wants to protest our finding 
under paragraph (d)(1) of this section must file a protest in writing 
and provide all relevant supporting documentation to us within 10 
calendar days after the date we notify him or her of our finding.
    (3) A representative may not file a protest for reasons other than 
those listed in paragraph (d)(1) of this section. If a representative 
files a protest for reasons other than those listed in paragraph (d)(1) 
of this section, we will not process the protest and will implement our 
finding as if no protest had been filed. Our finding in response to the 
protest is final and not subject to further review.
    (e) Ineligibility and suspension. (1) If an applicant does not 
protest, in accordance with paragraph (d)(2) of this section, our 
finding about the criteria in paragraphs (a)(3) or (a)(4) of this 
section, the applicant will be either ineligible to take the written 
examination for which he or she applied or ineligible to receive direct 
fee payment if the applicant already took and passed the examination 
prior to our finding. If an applicant protests in accordance with 
paragraph (d)(2) of this section and we uphold our finding, the 
applicant will be either ineligible to take the written examination for 
which he or she applied or ineligible to receive direct fee payment if 
the applicant already took and passed the examination prior to our 
finding.
    (2) If an eligible non-attorney representative does not protest, in 
accordance with paragraph (d)(2) of this section, our finding about the 
criteria in paragraphs (a)(3) or (a)(4) of this section, the non-
attorney representative will be ineligible to receive direct fee payment 
beginning with the month after the month the protest period ends. If the 
eligible non-attorney representative protests in accordance with 
paragraph (d)(2) of this section and we uphold our finding, the non-
attorney representative will be ineligible to receive direct fee payment 
beginning with the month after the month we uphold our finding.
    (3) If an eligible non-attorney representative does not protest, in 
accordance with paragraph (d)(2) of this section, our finding about the 
criteria in paragraph (a)(6) of this section, the non-attorney 
representative will be ineligible to receive direct fee payment for 6 
full calendar months beginning with the month after the month the 
protest period ends. If the eligible non-attorney representative 
protests in accordance with paragraph (d)(2) of this section and we 
uphold our finding, the non-attorney representative will be ineligible 
to receive direct fee payment for 6 full calendar months beginning with 
the month after the month we uphold our finding. In either case, the 
non-attorney representative may provide us with documentation that he or 
she has acquired and maintains the required liability insurance coverage 
described in paragraph (a)(6) of this section, no earlier than the sixth 
month of the ineligibility. The non-attorney representative will again 
be eligible to receive direct fee payment beginning in the first month 
after the month we find that we have received sufficient documentation 
that the non-attorney representative meets the requirements of paragraph 
(a)(6) of this section.
    (4) If an eligible non-attorney representative does not protest, in 
accordance with paragraph (d)(2) of this section, our finding about the 
criteria in paragraph (a)(7) of this section, the non-attorney 
representative will be ineligible to receive direct fee payment for 6 
full calendar months beginning

[[Page 1113]]

with the month after the month the protest period ends. If the eligible 
non-attorney representative protests in accordance with paragraph (d)(2) 
of this section and we uphold our finding, the non-attorney will be 
ineligible to receive direct fee payment for 6 full calendar months 
beginning with the month after the month we uphold our finding. In 
either case, the non-attorney representative may provide us with 
documentation that he or she has satisfied the criteria in paragraph 
(a)(7) of this section at any time. The non-attorney representative will 
again be eligible to receive direct fee payment beginning in the first 
month after the month we find that we have received sufficient 
documentation, but not earlier than the month following the end of the 6 
month ineligibility period.
    (f) Reapplying. A representative may reapply to become eligible to 
receive direct fee payment under paragraph (a) of this section during 
any subsequent application period if he or she:
    (1) Did not meet the initial criteria for eligibility in paragraph 
(a)(1), (2), (3), or (5) of this section in a prior application period; 
or
    (2) Failed to timely correct a defective application in a prior 
application period as described in paragraph (b) of this section.

[76 FR 45194, July 28, 2011, as amended at 80 FR 400, Jan. 6, 2015]



Sec. 416.1520  Fee for a representative's services.

    (a) General. A representative may charge and receive a fee for his 
or her services as a representative only as provided in paragraph (b) of 
this section.
    (b) Charging and receiving a fee. (1) The representative must file a 
written request with us before he or she may charge or receive a fee for 
his or her services.
    (2) We decide the amount of the fee, if any, a representative may 
charge or receive.
    (3) Subject to paragraph (e) of this section, a representative must 
not charge or receive any fee unless we have authorized it, and a 
representative must not charge or receive any fee that is more than the 
amount we authorize.
    (4) If your representative is an attorney or an eligible non-
attorney, and you are entitled to past-due benefits, we will pay the 
authorized fee, or a part of the authorized fee, directly to the 
attorney or eligible non-attorney out of the past-due benefits, subject 
to the limitations described in Sec. 416.1530(b)(1). If the 
representative is a non-attorney who is ineligible to receive direct fee 
payment, we assume no responsibility for the payment of any fee that we 
have authorized.
    (c) Notice of fee determination. We shall mail to both you and your 
representative at your last known address a written notice of what we 
decide about the fee. We shall state in the notice--
    (1) The amount of the fee that is authorized;
    (2) How we made that decision;
    (3) Whether we are responsible for paying the fee from past-due 
benefits; and
    (4) That within 30 days of the date of the notice, either you or 
your representative may request us to review the fee determination.
    (d) Review of fee determination--(1) Request filed on time. We will 
review the decision we made about a fee if either you or your 
representative files a written request for the review at one of our 
offices within 30 days after the date of the notice of the fee 
determination. Either you or your representative, whoever requests the 
review, shall mail a copy of the request to the other person. An 
authorized official of the Social Security Administration who did not 
take part in the fee determination being questioned will review the 
determination. This determination is not subject to further review. The 
official shall mail a written notice of the decision made on review both 
to you and to your representative at your last known address.
    (2) Request not filed on time. (i) If you or your representative 
requests a review of the decision we made about a fee, but does so more 
than 30 days after the date of the notice of the fee determination, 
whoever makes the request shall state in writing why it was not filed 
within the 30-day period. We will review the determination if we decide

[[Page 1114]]

that there was good cause for not filing the request on time.
    (ii) Some examples of good cause follow:
    (A) Either you or your representative was seriously ill and the 
illness prevented you or your representative from contacting us in 
person or in writing.
    (B) There was a death or serious illness in your family or in the 
family of your representative.
    (C) Material records were destroyed by fire or other accidental 
cause.
    (D) We gave you or your representative incorrect or incomplete 
information about the right to request review.
    (E) You or your representative did not timely receive notice of the 
fee determination.
    (F) You or your representative sent the request to another 
government agency in good faith within the 30-day period, and the 
request did not reach us until after the period had ended.
    (3) Payment of fees. We assume no responsibility for the payment of 
a fee based on a revised determination if the request for administrative 
review was not filed on time.
    (e) When we do not need to authorize a fee. We do not need to 
authorize a fee when:
    (1) An entity or a Federal, State, county, or city government agency 
pays from its funds the representative fees and expenses and both of the 
following conditions apply:
    (i) You are not liable to pay a fee or any expenses, or any part 
thereof, directly or indirectly, to the representative or someone else; 
and
    (ii) The representative submits to us a writing in the form and 
manner we prescribe waiving the right to charge and collect a fee and 
any expenses from you directly or indirectly, in whole or in part; or
    (2) A court authorizes a fee for your representative based on the 
representative's actions as your legal guardian or a court-appointed 
representative.

[45 FR 52106, Aug. 5, 1980, as amended at 72 FR 16725, Apr. 5, 2007; 74 
FR 48384, Sept. 23, 2009; 76 FR 45195, July 28, 2011]



Sec. 416.1525  Request for approval of a fee.

    (a) Filing a request. In order for your representative to obtain 
approval of a fee for services he or she performed in dealings with us, 
he or she shall file a written request with one of our offices. This 
should be done after the proceedings in which he or she was a 
representative are completed. The request must contain--
    (1) The dates the representative's services began and ended;
    (2) A list of the services he or she gave and the amount of time he 
or she spent on each type of service;
    (3) The amount of the fee he or she wants to charge for the 
services;
    (4) The amount of fee the representative wants to request or charge 
for his or her services in the same matter before any State or Federal 
court;
    (5) The amount of and a list of any expenses the representative 
incurred for which he or she has been paid or expects to be paid;
    (6) A description of the special qualifications which enabled the 
representative, if he or she is not an attorney, to give valuable help 
to you in connection with your claim; and
    (7) A statement showing that the representative sent a copy of the 
request for approval of a fee to you.
    (b) Evaluating a request for approval of a fee. (1) When we evaluate 
a representative's request for approval of a fee, we consider the 
purpose of the supplemental security income program, which is to assure 
a minimum level of income for the beneficiaries of the program, together 
with--
    (i) The extent and type of services the representative performed;
    (ii) The complexity of the case;
    (iii) The level of skill and competence required of the 
representative in giving the services;
    (iv) The amount of time the representative spent on the case;
    (v) The results the representative achieved;
    (vi) The level of review to which the claim was taken and the level 
of the review at which the representative became your representative; 
and
    (vii) The amount of fee the representative requests for his or her 
services, including any amount authorized or requested before, but not 
including the amount of any expenses he or she incurred.

[[Page 1115]]

    (2) Although we consider the amount of benefits, if any, that are 
payable, we do not base the amount of fee we authorize on the amount of 
the benefit alone, but on a consideration of all the factors listed in 
this section. The benefits payable in any claim are determined by 
specific provisions of law and are unrelated to the efforts of the 
representative. We may authorize a fee even if no benefits are payable.



Sec. 416.1528  Proceedings before a State or Federal court.

    (a) Representation of a party in court proceedings. We shall not 
consider any service the representative gave you in any proceeding 
before a State or Federal court to be services as a representative in 
dealings with us. However, if the representative also has given service 
to you in the same connection in any dealings with us, he or she must 
specify what, if any, portion of the fee he or she wants to charge is 
for services performed in dealings with us. If the representative 
charges any fee for those services, he or she must file the request and 
furnish all of the information required by Sec. 416.1525.
    (b) Attorney fee allowed by a Federal court. If a Federal court in 
any proceeding under title XVI of the Act makes a judgment in favor of 
the claimant who was represented before the court by an attorney, and 
the court, under section 1631(d)(2) of the Act, allows to the attorney 
as part of its judgment a fee not in excess of 25 percent of the total 
of past-due benefits to which the claimant is eligible by reason of the 
judgment, we may pay the attorney the amount of the fee out of, but not 
in addition to, the amount of the past-due benefits payable. We will not 
pay directly any other fee your representative may request.

[72 FR 16725, Apr. 5, 2007]



Sec. 416.1530  Payment of fees.

    (a) Fees allowed by a Federal court. We will pay an attorney 
representative out of your past-due benefits the amount of the fee 
allowed by a Federal court in a proceeding under title XVI of the Act. 
The payment we make to the attorney is subject to the limitations 
described in paragraph (b)(1) of this section.
    (b) Fees we may authorize--(1) Attorneys and eligible non-attorneys. 
Except as provided in paragraph (c) of this section, if we make a 
determination or decision in your favor and you were represented by an 
attorney or an eligible non-attorney, and as a result of the 
determination or decision you have past-due benefits, we will pay the 
representative out of the past-due benefits, the smallest of the amounts 
in paragraphs (b)(1)(i) through (iii) of this section, less the amount 
of the assessment described in paragraph (d) of this section.
    (i) Twenty-five percent of the total of the past-due benefits, as 
determined before any payment to a State (or political subdivision) to 
reimburse the State (or political subdivision) for interim assistance 
furnished you, as described in Sec. 416.525 of this part, and reduced by 
the amount of any reduction in benefits under this title or title II 
pursuant to section 1127 of the Act;
    (ii) The amount of past-due benefits remaining after we pay to a 
State (or political subdivision) an amount sufficient to reimburse the 
State (or political subdivision) for interim assistance furnished you, 
as described in Sec. 416.525 of this part, and after any applicable 
reductions under section 1127 of the Act; or
    (iii) The amount of the fee that we set.
    (2) Non-attorneys ineligible for direct payment. If the 
representative is a non-attorney who is ineligible to receive direct 
payment of his or her fee, we assume no responsibility for the payment 
of any fee that we authorized. We will not deduct the fee from your 
past-due benefits.
    (c) Time limit for filing request for approval of fee to obtain 
direct payment. (1) To receive direct fee payment from your past-due 
benefits, a representative who is an attorney or an eligible non-
attorney should file a request for approval of a fee, or written notice 
of the intent to file a request, at one of our offices, or 
electronically at the times and in the manner that we prescribe if we 
give notice that such a method is available, within 60 days of the date 
we mail the notice of the favorable determination or decision.

[[Page 1116]]

    (2)(i) If no request is filed within 60 days of the date the notice 
of the favorable determination is mailed, we will mail a written notice 
to you and your representative at your last known addresses. The notice 
will inform you and the representative that unless the representative 
files, within 20 days from the date of the notice, a written request for 
approval of a fee under Sec. 416.1525, or a written request for an 
extension of time, we will pay all the past-due benefits to you.
    (ii) The representative must send you a copy of any request made to 
us for an extension of time. If the request is not filed within 20 days 
of the date of the notice, or by the last day of any extension we 
approved, we will pay to you all past-due benefits remaining after we 
reimburse the State for any interim assistance you received. We must 
approve any fee the representative charges after that time, but the 
collection of any approved fee is a matter between you and the 
representative.
    (d) Assessment when we pay a fee directly to a representative. (1) 
Whenever we pay a fee directly to a representative from past-due 
benefits, we impose an assessment on the representative.
    (2) The amount of the assessment is equal to the lesser of:
    (i) The product we obtain by multiplying the amount of the fee we 
are paying to the representative by the percentage rate the Commissioner 
of Social Security determines is necessary to achieve full recovery of 
the costs of determining and paying fees directly to representatives, 
but not in excess of 6.3 percent; and
    (ii) The maximum assessment amount. The maximum assessment amount 
was initially set at $75, but by law is adjusted annually to reflect the 
increase in the cost of living. (See Secs. 404.270 through 404.277 for 
an explanation of how the cost-of-living adjustment is computed.) If the 
adjusted amount is not a multiple of $1, we round down the amount to the 
next lower $1, but the amount will not be less than $75. We will 
announce any increase in the maximum assessment amount, and explain how 
that increase was determined in the Federal Register.
    (3) We collect the assessment by subtracting it from the amount of 
the fee to be paid to the representative. The representative who is 
subject to an assessment may not, directly or indirectly, request or 
otherwise obtain reimbursement of the assessment from you.
    (e) Effective dates for extension of direct payment of fee to 
attorneys. The provisions of this subpart authorizing the direct payment 
of fees to attorneys and the withholding of title XVI benefits for that 
purpose, apply in claims for benefits with respect to which the 
agreement for representation is entered into before March 1, 2010.

[72 FR 16726, Apr. 5, 2007, as amended at 76 FR 45195, July 28, 2011]



Sec. 416.1535  [Reserved]



Sec. 416.1540  Rules of conduct and standards of responsibility for 
representatives.

    (a) Purpose and scope. (1) All attorneys or other persons acting on 
behalf of a party seeking a statutory right or benefit must, in their 
dealings with us, faithfully execute their duties as agents and 
fiduciaries of a party. A representative must provide competent 
assistance to the claimant and recognize our authority to lawfully 
administer the process. The following provisions set forth certain 
affirmative duties and prohibited actions that will govern the 
relationship between the representative and us, including matters 
involving our administrative procedures and fee collections.
    (2) All representatives must be forthright in their dealings with us 
and with the claimant and must comport themselves with due regard for 
the nonadversarial nature of the proceedings by complying with our rules 
and standards, which are intended to ensure orderly and fair 
presentation of evidence and argument.
    (b) Affirmative duties. A representative must, in conformity with 
the regulations setting forth our existing duties and responsibilities 
and those of claimants (see Sec. 416.912 in disability and blindness 
claims):
    (1) Act with reasonable promptness to help obtain the information or 
evidence that the claimant must submit

[[Page 1117]]

under our regulations, and forward the information or evidence to us for 
consideration as soon as practicable.
    (2) Assist the claimant in complying, as soon as practicable, with 
our requests for information or evidence at any stage of the 
administrative decisionmaking process in his or her claim. In disability 
and blindness claims, this includes the obligation pursuant to 
Sec. 416.912(c) to assist the claimant in providing, upon our request, 
evidence about:
    (i) The claimant's medical source(s);
    (ii) The claimant's age;
    (iii) The claimant's education and training;
    (iv) The claimant's work experience;
    (v) The claimant's daily activities both before and after the date 
the claimant alleges that he or she became disabled;
    (vi) The claimant's efforts to work; and
    (vii) Any other factors showing how the claimant's impairment(s) 
affects his or her ability to work. In Secs. 416.960 through 416.969a, 
we discuss in more detail the evidence we need when we consider 
vocational factors;
    (3) Conduct his or her dealings in a manner that furthers the 
efficient, fair and orderly conduct of the administrative decisionmaking 
process, including duties to:
    (i) Provide competent representation to a claimant. Competent 
representation requires the knowledge, skill, thoroughness and 
preparation reasonably necessary for the representation. This includes 
knowing the significant issue(s) in a claim and having a working 
knowledge of the applicable provisions of the Social Security Act, as 
amended, the regulations and the Rulings; and
    (ii) Act with reasonable diligence and promptness in representing a 
claimant. This includes providing prompt and responsive answers to our 
requests for information pertinent to processing of the claim; and
    (4) Conduct business with us electronically at the times and in the 
manner we prescribe on matters for which the representative requests 
direct fee payment. (See Sec. 416.1513).
    (c) Prohibited actions. A representative must not:
    (1) In any manner or by any means threaten, coerce, intimidate, 
deceive or knowingly mislead a claimant, or prospective claimant or 
beneficiary, regarding benefits or other rights under the Act;
    (2) Knowingly charge, collect or retain, or make any arrangement to 
charge, collect or retain, from any source, directly or indirectly, any 
fee for representational services in violation of applicable law or 
regulation;
    (3) Knowingly make or present, or participate in the making or 
presentation of, false or misleading oral or written statements, 
assertions or representations about a material fact or law concerning a 
matter within our jurisdiction;
    (4) Through his or her own actions or omissions, unreasonably delay 
or cause to be delayed, without good cause (see Sec. 416.1411(b)), the 
processing of a claim at any stage of the administrative decisionmaking 
process;
    (5) Divulge, without the claimant's consent, except as may be 
authorized by regulations prescribed by us or as otherwise provided by 
Federal law, any information we furnish or disclose about a claim or 
prospective claim;
    (6) Attempt to influence, directly or indirectly, the outcome of a 
decision, determination, or other administrative action by offering or 
granting a loan, gift, entertainment, or anything of value to a 
presiding official, agency employee, or witness who is or may reasonably 
be expected to be involved in the administrative decisionmaking process, 
except as reimbursement for legitimately incurred expenses or lawful 
compensation for the services of an expert witness retained on a non-
contingency basis to provide evidence;
    (7) Engage in actions or behavior prejudicial to the fair and 
orderly conduct of administrative proceedings, including but not limited 
to:
    (i) Repeated absences from or persistent tardiness at scheduled 
proceedings without good cause (see Sec. 416.1411(b));
    (ii) Willful behavior which has the effect of improperly disrupting 
proceedings or obstructing the adjudicative process; and
    (iii) Threatening or intimidating language, gestures, or actions 
directed at

[[Page 1118]]

a presiding official, witness, or agency employee that result in a 
disruption of the orderly presentation and reception of evidence;
    (8) Violate any section of the Act for which a criminal or civil 
monetary penalty is prescribed;
    (9) Refuse to comply with any of our rules or regulations;
    (10) Suggest, assist, or direct another person to violate our rules 
or regulations;
    (11) Advise any claimant or beneficiary not to comply with any of 
our rules and regulations;
    (12) Knowingly assist a person whom we suspended or disqualified to 
provide representational services in a proceeding under title XVI of the 
Act, or to exercise the authority of a representative described in 
Sec. 416.1510; or
    (13) Fail to comply with our sanction(s) decision.

[63 FR 41417, Aug. 4, 1998, as amended at 76 FR 56109, Sept. 12, 2011; 
76 FR 80247, Dec. 23, 2011; 80 FR 14838, Mar. 20, 2015]



Sec. 416.1545  Violations of our requirements, rules, or standards.

    When we have evidence that a representative fails to meet our 
qualification requirements or has violated the rules governing dealings 
with us, we may begin proceedings to suspend or disqualify that 
individual from acting in a representational capacity before us. We may 
file charges seeking such sanctions when we have evidence that a 
representative:
    (a) Does not meet the qualifying requirements described in 
Sec. 416.1505;
    (b) Has violated the affirmative duties or engaged in the prohibited 
actions set forth in Sec. 416.1540;
    (c) Has been convicted of a violation under section 1631(d) of the 
Act;
    (d) Has been, by reason of misconduct, disbarred or suspended from 
any bar or court to which he or she was previously admitted to practice 
(see Sec. 416.1570(a)); or
    (e) Has been, by reason of misconduct, disqualified from 
participating in or appearing before any Federal program or agency (see 
Sec. 416.1570(a)).

[63 FR 41418, Aug. 4, 1998, as amended at 71 FR 2877, Jan. 18, 2006]



Sec. 416.1550  Notice of charges against a representative.

    (a) The General Counsel or other delegated official will prepare a 
notice containing a statement of charges that constitutes the basis for 
the proceeding against the representative.
    (b) We will send this notice to the representative either by 
certified or registered mail, to his or her last known address, or by 
personal delivery.
    (c) We will advise the representative to file an answer, within 30 
days from the date of the notice or from the date the notice was 
delivered personally, stating why he or she should not be suspended or 
disqualified from acting as a representative in dealings with us.
    (d) The General Counsel or other delegated official may extend the 
30-day period for good cause in accordance with Sec. 416.1411.
    (e) The representative must--
    (1) Answer the notice in writing under oath (or affirmation); and
    (2) File the answer with the Social Security Administration, at the 
address specified on the notice, within the 30-day time period.
    (f) If the representative does not file an answer within the 30-day 
time period, he or she does not have the right to present evidence, 
except as may be provided in Sec. 416.1565(g).

[45 FR 52106, Aug. 5, 1980, as amended at 56 FR 24132, May 29, 1991; 62 
FR 38455, July 18, 1997; 63 FR 41418, Aug. 4, 1998; 71 FR 2878, Jan. 18, 
2006; 76 FR 80247, Dec. 23, 2011]



Sec. 416.1555  Withdrawing charges against a representative.

    The General Counsel or other delegated official may withdraw charges 
against a representative. We will withdraw charges if the representative 
files an answer, or we obtain evidence, that satisfies us that we should 
not suspend or disqualify the representative from acting as a 
representative. When we consider withdrawing charges brought under 
Sec. 416.1545(d) or (e) based on the representative's assertion that, 
before or after our filing of charges, the representative has been 
reinstated to practice by the court, bar, or Federal program or Federal 
agency that suspended, disbarred, or disqualified the representative, 
the General Counsel or other delegated official will determine

[[Page 1119]]

whether such reinstatement occurred, whether it remains in effect, and 
whether he or she is reasonably satisfied that the representative will 
in the future act in accordance with the provisions of section 206(a) of 
the Act and our rules and regulations. If the representative proves that 
reinstatement occurred and remains in effect and the General Counsel or 
other delegated official is so satisfied, the General Counsel or other 
delegated official will withdraw those charges. The action of the 
General Counsel or other delegated official regarding withdrawal of 
charges is solely that of the General Counsel or other delegated 
official and is not reviewable, or subject to consideration in decisions 
made under Secs. 416.1570 and 416.1590. If we withdraw the charges, we 
will notify the representative by mail at the representative's last 
known address.

[76 FR 80248, Dec. 23, 2011]



Sec. 416.1565  Hearing on charges.

    (a) Holding the hearing. If the General Counsel or other delegated 
official does not take action to withdraw the charges within 15 days 
after the date on which the representative filed an answer, we will hold 
a hearing and make a decision on the charges.
    (b) Hearing officer. (1) The Deputy Commissioner for Disability 
Adjudication and Review or other delegated official will assign an 
administrative law judge, designated to act as a hearing officer, to 
hold a hearing on the charges.
    (2) No hearing officer shall hold a hearing in a case in which he or 
she is prejudiced or partial about any party, or has any interest in the 
matter.
    (3) If the representative or any party to the hearing objects to the 
hearing officer who has been named to hold the hearing, we must be 
notified at the earliest opportunity. The hearing officer shall consider 
the objection(s) and either proceed with the hearing or withdraw from 
it.
    (4) If the hearing officer withdraws from the hearing, another one 
will be named.
    (5) If the hearing officer does not withdraw, the representative or 
any other person objecting may, after the hearing, present his or her 
objections to the Appeals Council explaining why he or she believes the 
hearing officer's decision should be revised or a new hearing held by 
another administrative law judge designated to act as a hearing officer.
    (c) Time and place of hearing. The hearing officer shall mail the 
parties a written notice of the hearing at their last known addresses, 
at least 20 days before the date set for the hearing.
    (d) Change of time and place for hearing. (1) The hearing officer 
may change the time and place for the hearing. This may be done either 
on his or her own initiative, or at the request of the representative or 
the other party to the hearing,
    (2) The hearing officer may adjourn or postpone the hearing.
    (3) The hearing officer may reopen the hearing for the receipt of 
additional evidence at any time before mailing notice of the decision.
    (4) The hearing officer shall give the representative and the other 
party to the hearing reasonable notice of any change in the time or 
place for the hearing, or of an adjournment or reopening of the hearing.
    (e) Parties. The representative against whom charges have been made 
is a party to the hearing. The General Counsel or other delegated 
official will also be a party to the hearing.
    (f) Subpoenas. (1) The representative or the other party to the 
hearing may request the hearing officer to issue a subpoena for the 
attendance and testimony of witnesses and for the production of books, 
records, correspondence, papers, or other documents that are material to 
any matter being considered at the hearing. The hearing officer may, on 
his or her own, initiative, issue subpoenas for the same purposes when 
the action is reasonably necessary for the full presentation of the 
facts.
    (2) The representative or the other party who wants a subpoena 
issued shall file a written request with the hearing officer. This must 
be done at least 5 days before the date set for the hearing. The request 
must name the documents to be produced, and describe the address or 
location in enough detail to permit the witnesses or documents to be 
found.

[[Page 1120]]

    (3) The representative or the other party who wants a subpoena 
issued shall state in the request for a subpoena the material facts that 
he or she expects to establish by the witness or document, and why the 
facts could not be established by the use of other evidence which could 
be obtained without use of a subpoena.
    (4) We will pay the cost of the issuance and the fees and mileage of 
any witness subpoenaed, as provided in section 205(d) of the Act.
    (g) Conduct of the hearing. (1) The hearing officer shall make the 
hearing open to the representative, to the other party, and to any 
persons the hearing officer or the parties consider necessary or proper. 
The hearing officer shall inquire fully into the matters being 
considered, hear the testimony of witnesses, and accept any documents 
that are material.
    (2) If the representative did not file an answer to the charges, he 
or she has no right to present evidence at the hearing. The hearing 
officer may make or recommend a decision on the basis of the record, or 
permit the representative to present a statement about the sufficiency 
of the evidence or the validity of the proceedings upon which the 
suspension or disqualification, if it occurred, would be based.
    (3) If the representative did file an answer to the charges, and if 
the hearing officer believes that there is material evidence available 
that was not presented at the hearing, the hearing officer may at any 
time before mailing notice of the hearing decision reopen the hearing to 
accept the additional evidence.
    (4) The hearing officer has the right to decide the order in which 
the evidence and the allegations will be presented and the conduct of 
the hearing.
    (h) Evidence. The hearing officer may accept evidence at the 
hearing, even though it is not admissible under the rules of evidence 
that apply to Federal court procedure.
    (i) Witnesses. Witnesses who testify at the hearing shall do so 
under oath or affirmation. Either the representative or a person 
representing him or her may question the witnesses. The other party and 
that party's representative must also be allowed to question the 
witnesses. The hearing officer may also ask questions as considered 
necessary, and shall rule upon any objection made by either party about 
whether any question is proper.
    (j) Oral and written summation. (1) The hearing officer shall give 
the representative and the other party a reasonable time to present oral 
summation and to file briefs or other written statements about proposed 
findings of fact and conclusions of law if the parties request it.
    (2) The party that files briefs or other written statements shall 
provide enough copies so that they may be made available to any other 
party to the hearing who requests a copy.
    (k) Record of hearing. In all cases, the hearing officer shall have 
a complete record of the proceedings at the hearing made.
    (l) Representation. The representative, as the person charged, may 
appear in person and may be represented by an attorney or other 
representative. The General Counsel or other delegated official will be 
represented by one or more attorneys from the Office of the General 
Counsel.
    (m) Failure to appear. If the representative or the other party to 
the hearing fails to appear after being notified of the time and place, 
the hearing officer may hold the hearing anyway so that the party 
present may offer evidence to sustain or rebut the charges. The hearing 
officer shall give the party who failed to appear an opportunity to show 
good cause for failure to appear. If the party fails to show good cause, 
he or she is considered to have waived the right to be present at the 
hearing. If the party shows good cause, the hearing officer may hold a 
supplemental hearing.
    (n) Dismissal of charges. The hearing officer may dismiss the 
charges in the event of the death of the representative.
    (o) Cost of transcript. If the representative or the other party to 
a hearing requests a copy of the transcript of the hearing, the hearing 
officer will have it prepared and sent to the party upon

[[Page 1121]]

payment of the cost, unless the payment is waived for good cause.

[45 FR 52106, Aug. 5, 1980, as amended at 56 FR 24132, May 29, 1991; 62 
FR 38455, July 18, 1997; 63 FR 41418, Aug. 4, 1998; 71 FR 2878, Jan. 18, 
2006; 76 FR 80248, Dec. 23, 2011]



Sec. 416.1570  Decision by hearing officer.

    (a) General. (1) After the close of the hearing, the hearing officer 
will issue a decision or certify the case to the Appeals Council. The 
decision must be in writing, will contain findings of fact and 
conclusions of law, and be based upon the evidence of record.
    (2) In deciding whether a person has been, by reason of misconduct, 
disbarred or suspended by a court or bar, or disqualified from 
participating in or appearing before any Federal program or Federal 
agency, the hearing officer will consider the reasons for the 
disbarment, suspension, or disqualification action. If the action was 
taken for solely administrative reasons (e.g., failure to pay dues or to 
complete continuing legal education requirements), that will not 
disqualify the person from acting as a representative before us. 
However, this exception to disqualification does not apply if the 
administrative action was taken in lieu of disciplinary proceedings 
(e.g., acceptance of a voluntary resignation pending disciplinary 
action). Although the hearing officer will consider whether the 
disbarment, suspension, or disqualification action is based on 
misconduct when deciding whether a person should be disqualified from 
acting as a representative before us, the hearing officer will not re-
examine or revise the factual or legal conclusions that led to the 
disbarment, suspension, or disqualification. For purposes of determining 
whether a person has been, by reason of misconduct, disqualified from 
participating in or appearing before any Federal program or Federal 
agency, disqualified refers to any action that prohibits a person from 
participating in or appearing before any Federal program or Federal 
agency, regardless of how long the prohibition lasts or the specific 
terminology used.
    (3) If the hearing officer finds that the charges against the 
representative have been sustained, he or she will either--
    (i) Suspend the representative for a specified period of not less 
than 1 year, nor more than 5 years, from the date of the decision; or
    (ii) Disqualify the representative from acting as a representative 
in dealings with us until he or she may be reinstated under 
Sec. 416.1599. Disqualification is the sole sanction available if the 
charges have been sustained because the representative has been 
disbarred or suspended from any court or bar to which the representative 
was previously admitted to practice or disqualified from participating 
in or appearing before any Federal program or Federal agency, or because 
the representative has collected or received, and retains, a fee for 
representational services in excess of the amount authorized.
    (4) The hearing officer shall mail a copy of the decision to the 
parties at their last known addresses. The notice will inform the 
parties of the right to request the Appeals Council to review the 
decision.
    (b) Effect of hearing officer's decision. (1) The hearing officer's 
decision is final and binding unless reversed or modified by the Appeals 
Council upon review.
    (2) If the final decision is that a person is disqualified from 
being a representative in dealings with us, he or she will not be 
permitted to represent anyone in dealings with us until authorized to do 
so under the provisions of Sec. 416.1599.
    (3) If the final decision is that a person is suspended for a 
specified period of time from being a representative in dealings with 
us, he or she will not be permitted to represent anyone in dealings with 
us during the period of suspension unless authorized to do so under the 
provisions of Sec. 416.1599.

[45 FR 52106, Aug. 5, 1980, as amended at 56 FR 24132, May 29, 1991; 71 
FR 2878, Jan. 18, 2006; 76 FR 80248, Dec. 23, 2011]



Sec. 416.1575  Requesting review of the hearing officer's decision.

    (a) General. After the hearing officer issues a decision, either the 
representative or the other party to the hearing may ask the Appeals 
Council to review the decision.

[[Page 1122]]

    (b) Time and place of filing request for review. The party 
requesting review shall file the request for review in writing with the 
Appeals Council within 30 days from the date the hearing officer mailed 
the notice. The party requesting review shall certify that a copy of the 
request for review and of any documents that are submitted have been 
mailed to the opposing party.



Sec. 416.1576  Assignment of request for review of the hearing
officer's decision.

    Upon receipt of a request for review of the hearing officer's 
decision, the matter will be assigned to a panel consisting of three 
members of the Appeals Council none of whom shall be the Chair of the 
Appeals Council. The panel shall jointly consider and rule by majority 
opinion on the request for review of the hearing officer's decision, 
including a determination to dismiss the request for review. Matters 
other than a final disposition of the request for review may be disposed 
of by the member designated chair of the panel.

[56 FR 24132, May 29, 1991]



Sec. 416.1580  Appeals Council's review of hearing officer's decision.

    (a) Upon request, the Appeals Council shall give the parties a 
reasonable time to file briefs or other written statements as to fact 
and law, and to appear before the Appeals Council to present oral 
argument.
    (b) If a party files a brief or other written statement with the 
Appeals Council, he or she shall send a copy to the opposing party and 
certify that the copy has been sent.



Sec. 416.1585  Evidence permitted on review.

    (a) General. Generally, the Appeals Council will not consider 
evidence in addition to that introduced at the hearing. However, if the 
Appeals Council believes that the evidence offered is material to an 
issue it is considering, the evidence will be considered.
    (b) Individual charged filed an answer. (1) When the Appeals Council 
believes that additional material evidence is available, and the 
representative has filed an answer to the charges, the Appeals Council 
shall require that the evidence be obtained. The Appeals Council may 
name an administrative law judge or a member of the Appeals Council to 
receive the evidence.
    (2) Before additional evidence is admitted into the record, the 
Appeals Council shall mail a notice to the parties telling them that 
evidence about certain issues will be obtained, unless the notice is 
waived. The Appeals Council shall give each party a reasonable 
opportunity to comment on the evidence and to present other evidence 
that is material to an issue it is considering.
    (c) Individual charged did not file an answer. If the representative 
did not file an answer to the charges, the Appeals Council will not 
permit the introduction of evidence that was not considered at the 
hearing.



Sec. 416.1590  Appeals Council's decision.

    (a) The Appeals Council shall base its decision upon the evidence in 
the hearing record and any other evidence it may permit on review. The 
Appeals Council shall either--
    (1) Affirm, reverse, or modify the hearing officer's decision;
    (2) Return a case to the hearing officer when the Appeals Council 
considers it appropriate.
    (b) The Appeals Council, in changing a hearing officer's decision to 
suspend a representative for a specified period, shall in no event 
reduce the period of suspension to less than 1 year. In modifying a 
hearing officer's decision to disqualify a representative, the Appeals 
Council shall in no event impose a period of suspension of less than 1 
year. Further, the Appeals Council shall in no event impose a suspension 
when disqualification is the sole sanction available in accordance with 
Sec. 416.1570(a)(3)(ii).
    (c) If the Appeals Council affirms or changes a hearing officer's 
decision, the period of suspension or the disqualification is effective 
from the date of the Appeals Council's decision.
    (d) If the hearing officer did not impose a period of suspension or 
a disqualification, and the Appeals Council decides to impose one or the 
other, the suspension or disqualification is effective from the date of 
the Appeals Council's decision.

[[Page 1123]]

    (e) The Appeals Council shall make its decision in writing and shall 
mail a copy of the decision to the parties at their last known 
addresses.

[45 FR 52106, Aug. 5, 1980, as amended at 56 FR 24133, May 29, 1991; 71 
FR 2878, Jan. 18, 2006]



Sec. 416.1595  When the Appeals Council will dismiss a request for 
review.

    The Appeals Council may dismiss a request for the review of any 
proceeding to suspend or disqualify a representative in any of the 
following circumstances:
    (a) Upon request of party. The Appeals Council may dismiss a request 
for review upon written request of the party or parties who filed the 
request, if there is no other party who objects to the dismissal.
    (b) Death of party. The Appeals Council may dismiss a request for 
review in the event of the death of the representative.
    (c) Request for review not timely filed. The Appeals Council will 
dismiss a request for review if a party failed to file a request for 
review within the 30-day time period and the Appeals Council does not 
extend the time for good cause.



Sec. 416.1597  Reinstatement after suspension--period of suspension
expired.

    We shall automatically allow a person to serve again as a 
representative in dealings with us at the end of any suspension.



Sec. 416.1599  Reinstatement after suspension or disqualification
--period of suspension not expired.

    (a) After more than one year has passed, a person who has been 
suspended or disqualified may ask the Appeals Council for permission to 
serve as a representative again.
    (b) The suspended or disqualified person must submit any evidence 
the person wishes to have considered along with the request to be 
allowed to serve as a representative again.
    (c) The General Counsel or other delegated official, upon 
notification of receipt of the request, will have 30 days in which to 
present a written report of any experiences with the suspended or 
disqualified person subsequent to that person's suspension or 
disqualification. The Appeals Council will make available to the 
suspended or disqualified person a copy of the report.
    (d)(1) The Appeals Council shall not grant the request unless it is 
reasonably satisfied that the person will in the future act according to 
the provisions of section 206(a) of the Act, and to our rules and 
regulations.
    (2) If a person was disqualified because he or she had been 
disbarred or suspended from a court or bar, the Appeals Council will 
grant a request for reinstatement as a representative only if the 
criterion in paragraph (d)(1) of this section is met and the 
disqualified person shows that he or she has been admitted (or 
readmitted) to and is in good standing with the court or bar from which 
he or she had been disbarred or suspended.
    (3) If a person was disqualified because the person had been 
disqualified from participating in or appearing before a Federal program 
or Federal agency, the Appeals Council will grant the request for 
reinstatement only if the criterion in paragraph (d)(1) of this section 
is met and the disqualified person shows that the person is now 
qualified to participate in or appear before that Federal program or 
Federal agency.
    (4) If the person was disqualified as a result of collecting or 
receiving, and retaining, a fee for representational services in excess 
of the amount authorized, the Appeals Council will grant the request 
only if the criterion in paragraph (d)(1) of this section is met and the 
disqualified person shows that full restitution has been made.
    (e) The Appeals Council will mail a notice of its decision on the 
request for reinstatement to the suspended or disqualified person. It 
will also mail a copy to the General Counsel or other delegated 
official.
    (f) If the Appeals Council decides not to grant the request it shall 
not consider another request before the end of 1 year from the date of 
the notice of the previous denial.

[45 FR 52106, Aug. 5, 1980, as amended at 56 FR 24133, May 29, 1991; 62 
FR 38455, July 18, 1997; 63 FR 41418, Aug. 4, 1998; 71 FR 2878, Jan. 18, 
2006; 76 FR 80248, Dec. 23, 2011]

[[Page 1124]]



                   Subpart P_Residence and Citizenship

    Authority: Secs. 702(a)(5), 1614 (a)(1)(B) and (e), and 1631 of the 
Social Security Act (42 U.S.C. 902(a)(5), 1382c (a)(1)(B) and (e), and 
1383); 8 U.S.C. 1254a; sec. 502, Pub. L. 94-241, 90 Stat. 268 (48 U.S.C. 
1681 note).

    Source: 47 FR 3106, Jan. 22, 1982, unless otherwise noted.



Sec. 416.1600  Introduction.

    You are eligible for supplemental security income (SSI) benefits if 
you meet the requirements in subpart B. Among these are requirements 
that you must be a resident of the United States and either a citizen, a 
national, or an alien with a lawful right to reside permanently in the 
United States. In this subpart, we tell you what kinds of evidence show 
that you are a resident of the United States (see Sec. 416.1603) and--
    (a) A citizen or a national of the United States (see 
Sec. 416.1610);
    (b) An alien lawfully admitted for permanent residence in the United 
States (see Sec. 416.1615); or
    (c) An alien permanently residing in the United States under color 
of law (see Sec. 416.1618).



Sec. 416.1601  Definitions and terms used in this subpart.

    We or Us means the Social Security Administration.
    You or Your means the person who applies for or receives SSI 
benefits or the person for whom an application is filed.



Sec. 416.1603  How to prove you are a resident of the United States.

    (a) What you should give us. Your home address in the United States 
may be sufficient to establish that you are a resident. However, if we 
have any reason to question that you are a resident of the United States 
we will ask for evidence. You can prove you are a resident of the United 
States by giving us papers or documents showing that you live in the 
United States such as--
    (1) Property, income, or other tax forms or receipts;
    (2) Utility bills, leases or rent payment records;
    (3) Documents that show you participate in a social services program 
in the United States; or
    (4) Other records or documents that show you live in the United 
States.
    (b) What ``resident of the United States'' means. We use the term 
resident of the United States to mean a person who has established an 
actual dwelling place within the geographical limits of the United 
States with the intent to continue to live in the United States.
    (c) What ``United States'' means. We use the term United States in 
this section to mean the 50 States, the District of Columbia, and the 
Northern Mariana Islands.

[47 FR 3106, Jan. 22, 1982, as amended at 62 FR 59813, Nov. 5, 1997]



Sec. 416.1610  How to prove you are a citizen or a national of the 
United States.

    (a) What you should give us. You can prove that you are a citizen or 
a national of the United States by giving us--
    (1) A certified copy of your birth certificate which shows that you 
were born in the United States;
    (2) A certified copy of a religious record of your birth or baptism, 
recorded in the United States within 3 months of your birth, which shows 
you were born in the United States;
    (3) Your naturalization certificate;
    (4) Your United States passport;
    (5) Your certificate of citizenship;
    (6) An identification card for use of resident citizens in the 
United States (Immigration and Naturalization Service Form I-197); or
    (7) An identification card for use of resident citizens of the 
United States by both or naturalization of parents (INS Form I-179).
    (b) How to prove you are an interim citizen of the United States if 
you live in the Northern Mariana Islands. As a resident of the Northern 
Mariana Islands you must meet certain conditions to prove you are an 
interim citizen of the United States. You must prove that you were 
domiciled in the Northern Mariana Islands as required by section 8 of 
the Schedule of Transitional Matters of the Constitution of the Northern 
Mariana Islands, or that you were born there after March 6, 1977. By

[[Page 1125]]

``domiciled'' we mean that you maintained a residence with the intention 
of continuing that residence for an unlimited or indefinite period, and 
that you intended to return to that residence whenever absent, even for 
an extended period. You must also give us proof of your citizenship if 
you are a citizen of the Trust Territory of the Pacific Islands of which 
the Marianas are a part.
    (1) You can prove you were domiciled in the Northern Mariana Islands 
by giving us--
    (i) Statements of civil authorities; or
    (ii) Receipts or other evidence that show you were domiciled there.
    (2) You can prove that you are a citizen of the Trust Territory of 
the Pacific Islands by giving us--
    (i) Your identification card issued by the Trust Territory of the 
Pacific Islands and a public or religious record of age which shows you 
were born in this territory;
    (ii) Your voter's registration card;
    (iii) A Chammoro Family Record showing your birth in the Trust 
Territory of the Pacific Islands; or
    (iv) Your naturalization certificate.
    (c) What to do if you cannot give us the information listed in 
paragraph (a) or (b). If you cannot give us any of the documents listed 
in paragraph (a) or (b), we may find you to be a citizen or a national 
of the United States if you--
    (1) Explain why you cannot give us any of the documents; and
    (2) Give us any information you have which shows or results in proof 
that you are a citizen or a national of the United States. The kind of 
information we are most concerned about shows--
    (i) The date and place of your birth in the United States;
    (ii) That you have voted or are otherwise known to be a citizen or 
national of the United States; or
    (iii) The relationship to you and the citizenship of any person 
through whom you obtain citizenship.
    (d) What ``United States'' means. We use the term United States in 
this section to mean the 50 States, the District of Columbia, Puerto 
Rico, Guam, the Virgin Islands of the United States, American Samoa, 
Swain's Island, and the Northern Mariana Islands.

[47 FR 3106, Jan. 22, 1982, as amended at 62 FR 59813, Nov. 5, 1997]



Sec. 416.1615  How to prove you are lawfully admitted for permanent
residence in the United States.

    (a) What you should give us. You can prove that you are lawfully 
admitted for permanent residence in the United States by giving us--
    (1) An Alien Registration Receipt Card issued by the Immigration and 
Naturalization Service (INS) in accordance with that Agency's current 
regulations;
    (2) A reentry permit;
    (3) An alien identification card issued by the government of the 
Northern Mariana Islands showing that you are admitted to the Northern 
Mariana Islands for permanent residence; or
    (4) INS Form I-688 which shows that you have been granted lawful 
temporary resident status under section 210 or section 210A of the 
Immigration and Nationality Act.
    (b) What to do if you cannot give us the information listed in 
paragraph (a). If you cannot give us any of the documents listed in 
paragraph (a), we may find you to be lawfully admitted for permanent 
residence in the United States if you--
    (1) Explain why you cannot give us any of the documents; and
    (2) Give us any information you have which shows or results in proof 
that you are lawfully admitted for permanent residence in the United 
States.
    (c) What ``United States'' means. We use the term United States in 
this section to mean the 50 States, the District of Columbia, and the 
Northern Mariana Islands.

(Approved by the Office of Management and Budget under control number 
0960-0451)

[47 FR 3106, Jan. 22, 1982, as amended at 52 FR 21943, June 10, 1987; 56 
FR 55075, Oct. 24, 1991; 61 FR 56134, Oct. 31, 1996]



Sec. 416.1618  When you are considered permanently residing in the 
United States under color of law.

    (a) General. We will consider you to be permanently residing in the 
United States under color of law and you may be eligible for SSI 
benefits if you are an alien residing in the United States with the 
knowledge and permission of the Immigration and Naturalization Service 
and that agency does not contemplate enforcing your departure. The

[[Page 1126]]

Immigration and Naturalization Service does not contemplate enforcing 
your departure if it is the policy or practice of that agency not to 
enforce the departure of aliens in the same category or if from all the 
facts and circumstances in your case it appears that the Immigration and 
Naturalization Service is otherwise permitting you to reside in the 
United States indefinitely. We make these decisions by verifying your 
status with the Immigration and Naturalization Service following the 
rules contained in paragraphs (b) through (e) of this section.
    (b) Categories of aliens who are permanently residing in the United 
States under color of law. Aliens who are permanently residing in the 
United States under color of law are listed below. None of the 
categories includes applicants for an Immigration and Naturalization 
status other than those applicants listed in paragraph (b)(6) of this 
section or those covered under paragraph (b)(17) of this section. None 
of the categories allows SSI eligibility for nonimmigrants; for example, 
students or visitors. Also listed are the most common documents that the 
Immigration and Naturalization Service provides to aliens in these 
categories:
    (1) Aliens admitted to the United States pursuant to 8 U.S.C. 
1153(a)(7), (section 203(a)(7) of the Immigration and Nationality Act). 
We ask for INS Form I-94 endorsed ``Refugee-Conditional Entry'';
    (2) Aliens paroled into the United States pursuant to 8 U.S.C. 
1182(d)(5) (section 212(d)(5) of the Immigration and Nationality Act) 
including Cuban/Haitian Entrants. We ask for INS Form I-94 with the 
notation that the alien was paroled pursuant to section 212(d)(5) of the 
Immigration and Nationality Act. For Cuban/Haitian Entrants, we ask for 
INS Form I-94 stamped ``Cuban/Haitian Entrant (Status Pending) 
reviewable January 15, 1981. Employment authorized until January 15, 
1981.'' (Although the forms bear this notation, Cuban/Haitian Entrants 
are admitted under section 212(d)(5) of the Immigration and Nationality 
Act.);
    (3) Aliens residing in the United States pursuant to an indefinite 
stay of deportation. We ask for an Immigration and Naturalization 
Service letter with this information or INS Form I-94 with such a 
notation;
    (4) Aliens residing in the United States pursuant to an indefinite 
voluntary departure. We ask for an Immigration and Naturalization 
Service letter or INS Form I-94 showing that a voluntary departure has 
been granted for an indefinite time period;
    (5) Aliens on whose behalf an immediate relative petition has been 
approved and their families covered by the petition, who are entitled to 
voluntary departure (under 8 CFR 242.5(a)(2)(vi)) and whose departure 
the Immigration and Naturalization Service does not contemplate 
enforcing. We ask for a copy of INS Form I-94 or I-210 letter showing 
that status;
    (6) Aliens who have filed applications for adjustment of status 
pursuant to section 245 of the Immigration and Nationality Act (8 U.S.C. 
1255) that the Immigration and Naturalization Service has accepted as 
``properly filed'' (within the meaning of 8 CFR 245.2(a) (1) or (2)) and 
whose departure the Immigration and Naturalization Service does not 
contemplate enforcing. We ask for INS Form I-181 or a passport properly 
endorsed;
    (7) Aliens granted stays of deportation by court order, statute or 
regulation, or by individual determination of the Immigration and 
Naturalization Service pursuant to section 106 of the Immigration and 
Nationality Act (8 U.S.C. 1105a) or relevant Immigration and 
Naturalization Service instructions, whose departure that agency does 
not contemplate enforcing. We ask for INS Form I-94 or a letter from the 
Immigration and Naturalization Service, or copy of a court order 
establishing the alien's status;
    (8) Aliens granted asylum pursuant to section 208 of the Immigration 
and Nationality Act (8 U.S.C. 1158). We ask for INS Form I-94 and a 
letter establishing this status;
    (9) Aliens admitted as refugees pursuant to section 207 of the 
Immigration and Nationality Act (8 U.S.C. 1157) or section 203(a)(7) of 
the Immigration and Nationality Act (8 U.S.C. 1153(a)(7)). We ask for 
INS Form I-94 properly endorsed;

[[Page 1127]]

    (10) Aliens granted voluntary departure pursuant to section 242(b) 
of the Immigration and Nationality Act (8 U.S.C. 1252(b)) or 8 CFR 242.5 
whose departure the Immigration and Naturalization Service does not 
contemplate enforcing. We ask for INS Form I-94 or I-210 bearing a 
departure date;
    (11) Aliens granted deferred action status pursuant to Immigration 
and Naturalization Service Operations Instruction 103.1(a)(ii) prior to 
June 15, 1984 or 242.1(a)(22) issued June 15, 1984 and later. We ask for 
INS Form I-210 or a letter showing that departure has been deferred;
    (12) Aliens residing in the United States under orders of 
supervision pursuant to section 242 of the Immigration and Nationality 
Act (8 U.S.C. 1252(d)). We ask for INS Form I-220B;
    (13) Aliens who have entered and continuously resided in the United 
States since before January 1, 1972 (or any date established by section 
249 of the Immigration and Nationality Act, 8 U.S.C. 1259). We ask for 
any proof establishing this entry and continuous residence;
    (14) Aliens granted suspension of deportation pursuant to section 
244 of the Immigration and Nationality Act (8 U.S.C. 1254) and whose 
departure the Immigration and Naturalization Service does not 
contemplate enforcing. We ask for an order from the immigration judge;
    (15) Aliens whose deportation has been withheld pursuant to section 
243(h) of the Immigration and Nationality Act (8 U.S.C. 1253(h)). We ask 
for an order from an immigration judge showing that deportation has been 
withheld;
    (16) Aliens granted lawful temporary resident status pursuant to 
section 245A of the Immigration and Nationality Act (8 U.S.C. 1255a). We 
ask for INS form I-688 showing that status; or
    (17) Any other aliens living in the United States with the knowledge 
and permission of the Immigration and Naturalization Service and whose 
departure that agency does not contemplate enforcing.
    (c) How to prove you are in a category listed in paragraph (b) of 
this section. You must give us proof that you are in one of the 
categories in paragraph (b) of this section. You may give us--
    (1) Any of the documents listed in paragraph (b) of this section; or
    (2) Other information which shows that you are in one of the 
categories listed in paragraph (b) of this section.
    (d) We must contact the Immigration and Naturalization Service. (1) 
We must contact the Immigration and Naturalization Service to verify the 
information you give us to prove you are permanently residing in the 
United States under color of law.
    (2) If you give us any of the documents listed in paragraphs (b) 
(1), (2), (3), (4), (8), (9), (11), (12), (13), (15), or (16) of this 
section, we will pay you benefits if you meet all other eligibility 
requirements. We will contact the Immigration and Naturalization Service 
to verify that the document you give us is currently valid.
    (3) If you give us any of the documents listed in paragraphs (b) 
(5), (6), (7), (10), or (14) of this section, or documents that indicate 
that you meet paragraph (b)(17) of this section, or any other 
information to prove you are permanently residing in the United States 
under color of law, we will contact the Immigration and Naturalization 
Service to verify that the document or other information is currently 
valid. We must also get information from the Immigration and 
Naturalization Service as to whether that agency contemplates enforcing 
your departure. We will apply the following rules:
    (i) If you have a document that shows that you have an Immigration 
and Naturalization Service status that is valid for an indefinite period 
we will assume that the Immigration and Naturalization Service does not 
contemplate enforcing your departure. Therefore, we will pay you 
benefits if you meet all other eligibility requirements. If, based on 
the information we get from the Immigration and Naturalization Service, 
we find that your document is currently valid, we will consider this 
sufficient proof that the Immigration and Naturalization Service does 
not contemplate enforcing your departure. We will continue your 
benefits. However, if we find that your document is not currently valid, 
we will suspend your benefits under Sec. 416.1320.

[[Page 1128]]

    (ii) If you have a document that appears currently valid and shows 
you have an Immigration and Naturalization Service status for at least 1 
year, or that shows the Immigration and Naturalization Service is 
allowing you to remain in the United States for a specified period due 
to conditions in your home country, we will assume that the Immigration 
and Naturalization Service does not contemplate enforcing your 
departure. Therefore, we will pay you benefits if you meet all other 
eligibility requirements. If, based on the information we get from the 
Immigration and Naturalization Service, we learn that your document is 
currently valid and that agency does not contemplate enforcing your 
departure, we will continue your benefits. However, if we learn that 
your document is not currently valid or that the Immigration and 
Naturalization Service does contemplate enforcing your departure, we 
will suspend your benefits under Sec. 416.1320.
    (iii) If you have a document that shows you have an Immigration and 
Naturalization Service status valid for less than 1 year, or if your 
document has no expiration date, or if you have no document, we will not 
pay you benefits until the Immigration and Naturalization Service 
confirms that your document is currently valid and we get information 
from that agency that indicates whether it contemplates enforcing your 
departure. If that agency does not contemplate enforcing your departure, 
we will pay you benefits if you meet all other eligibility requirements.
    (iv) If at any time after you begin receiving benefits we receive 
information from the Immigration and Naturalization Service which 
indicates that the Immigration and Naturalization Service contemplates 
enforcing your departure, we will suspend your benefits under 
Sec. 416.1320 and any benefits you have received after the date that the 
Immigration and Naturalization Service began contemplating enforcing 
departure will be overpayments under subpart E of this part.
    (e) What ``United States'' means. We use the term United States in 
this section to mean the 50 States, the District of Columbia, and the 
Northern Mariana Islands.

(Approved by the Office of Management and Budget under control number 
0960-0451)

[52 FR 21943, June 10, 1987, as amended at 56 FR 55075, Oct. 24, 1991; 
56 FR 61287, Dec. 2, 1991]



Sec. 416.1619  When you cannot be considered permanently residing
in the United States under color of law.

    We will not consider you to be permanently residing in the United 
States under color of law and you are not eligible for SSI benefits 
during a period in which you have been granted temporary protected 
status by the Immigration and Naturalization Service under section 244A 
of the Immigration and Nationality Act.

[58 FR 41182, Aug. 3, 1993]



Subpart Q_Referral of Persons Eligible for Supplemental Security Income 
                            to Other Agencies

    Authority: Secs. 702(a)(5), 1611(e)(3), 1615, and 1631 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1382(e)(3), 1382d, and 1383).

    Source: 45 FR 70859, Oct. 27, 1980, unless otherwise noted.

                                 General



Sec. 416.1701  Scope of subpart.

    This subpart describes whom we refer to agencies for (a) vocational 
rehabilitation services or (b) treatment for alcoholism or drug 
addiction. The purpose of these services or treatments is to restore 
your ability to work. This subpart also describes the conditions under 
which you can refuse treatment after we have referred you. If these 
conditions are not met, this subpart describes how your benefits are 
affected when you refuse treatment.

[45 FR 70859, Oct. 27, 1980, as amended at 68 FR 40124, July 7, 2003]



Sec. 416.1705  Definitions.

    As used in this subpart--
    Vocational rehabilitation services refers to services provided blind 
or disabled persons under the State plan approved under the 
Rehabilitation Act of 1973

[[Page 1129]]

(see 45 CFR 401.120ff for requirements of these State plans).
    We or us refers to either the Social Security Administration or the 
State agency making the disability or blindness determination.
    You or your refers to the person who applies for or receives 
benefits or the person for whom an application is filed.

             Referral for Vocational Rehabilitation Services



Sec. 416.1710  Whom we refer and when.

    (a) Whom we refer. If you are 16 years of age or older and under 65 
years old, and receiving supplemental security income (SSI) benefits, we 
will refer you to the State agency providing vocational rehabilitation 
services. If you are under age 16, we will refer you to an agency 
administering services under the Maternal and Child Health Services 
(Title V) Block Grant Act.
    (b) When we refer. We will make this referral when we find you 
eligible for benefits or at any other time that we find you might be 
helped by vocational rehabilitation services.

[45 FR 70859, Oct. 27, 1980, as amended at 48 FR 6297, Feb. 23, 1983]

         Referral for Treatment of Alcoholism or Drug Addiction



Sec. 416.1720  Whom we refer.

    We will refer you to an approved facility for treatment of your 
alcoholism or drug addiction if--
    (a) You are disabled;
    (b) You are not blind;
    (c) You are not 65 years old or older; and
    (d) Alcoholism or drug addiction is a contributing factor to your 
disability.



Sec. 416.1725  Effect of your failure to comply with treatment
requirements for your drug addiction or alcoholism.

    (a) Suspension of benefits. Your eligibility for benefits will be 
suspended beginning with the first month after we notify you in writing 
that we have determined that you have failed to comply with the 
treatment requirements for your drug addiction or alcoholism as defined 
in Sec. 416.940. Your benefits will be suspended and reinstated in 
accordance with the provisions in Sec. 416.1326.
    (b) Termination of benefits. If your benefits are suspended for 12 
consecutive months for failure to comply with treatment in accordance 
with Sec. 416.1326, your eligibility for disability benefits will be 
terminated in accordance with Sec. 416.1331.

[60 FR 8153, Feb. 10, 1995]



                         Subpart R_Relationship

    Authority: Secs. 702(a)(5), 1612(b), 1614(b), (c), and (d), and 
1631(d)(1) and (e) of the Social Security Act (42 U.S.C. 902(a)(5), 
1382a(b), 1382c(b), (c), and (d) and 1383(d)(1) and (e)).

    Source: 45 FR 71795, Oct. 30, 1980, unless otherwise noted. 
Redesignated at 46 FR 29211, May 29, 1981; 46 FR 42063, Aug. 19, 1981.



Sec. 416.1801  Introduction.

    (a) What is in this subpart. This subpart contains the basic rules 
for deciding for SSI purposes whether a person is considered married 
and, if so, to whom; whether a person is considered a child; and whether 
a person is considered another person's parent. It tells what 
information and evidence we need to decide these facts.
    (b) Related subparts. Subpart D discusses how to determine the 
amount of a person's benefits; subpart G discusses what changes in a 
person's situation he or she must report to us; subpart K discusses how 
we count income; and subpart L discusses how we count resources (money 
and property). The questions of whether a person is married, to whom a 
person is married, whether a person is a child, and who is a person's 
parent must be answered in order to know which rules in subparts D, G, 
K, and L apply.
    (c) Definitions. In this subpart--
    Eligible spouse means a person--
    (1) Who is eligible for SSI,
    (2) Whom we consider the spouse of another person who is eligible 
for SSI, and
    (3) Who was living in the same household with that person on--
    (i) The first day of the month following the date the application is 
filed (for the initial month of eligibility for payment based on that 
application);

[[Page 1130]]

    (ii) The date a request for reinstatement of eligibility is filed 
(for the month of such request); or
    (iii) The first day of the month, for all other months. An 
individual is considered to be living with an eligible spouse during 
temporary absences as defined in Sec. 416.1149 and while receiving 
continued benefits under section 1611(e)(1) (E) or (G) of the Act.
    Spouse means a person's husband or wife under the rules of 
Secs. 416.1806 through 416.1835 of this part.
    We and us mean the Social Security Administration.
    You means a person who has applied for or has been receiving SSI 
benefits, or a person for whom someone else has applied for or has been 
receiving SSI benefits.

[45 FR 71795, Oct. 30, 1980. Redesignated at 46 FR 29211, May 29, 1981; 
46 FR 42063, Aug. 19, 1981, as amended at 60 FR 16376, Mar. 30, 1995; 64 
FR 31975, June 15, 1999; 65 FR 16815, Mar. 30, 2000]

                      Who Is Considered Your Spouse



Sec. 416.1802  Effects of marriage on eligibility and amount of
benefits.

    (a) If you have an ineligible spouse--(1) Counting income. If you 
apply for or receive SSI benefits, and you are married to someone who is 
not eligible for SSI benefits and are living in the same household as 
that person, we may count part of that person's income as yours. 
Counting part of that person's income as yours may reduce the amount of 
your benefits or even make you ineligible. Section 416.410 discusses the 
amount of benefits and Sec. 416.1163 explains how we count income for an 
individual with an ineligible spouse.
    (2) Counting resources. If you are married to someone who is not 
eligible for SSI benefits and are living in the same household as that 
person, we will count the value of that person's resources (money and 
property), minus certain exclusions, as yours when we determine your 
eligibility. Section 416.1202(a) gives a more detailed statement of how 
we count resources and Sec. 416.1205(a) gives the limit of resources 
allowed for eligibility of a person with an ineligible spouse.
    (b) If you have an eligible spouse--(1) Counting income. If you 
apply for or receive SSI benefits and have an eligible spouse as defined 
in Sec. 416.1801(c), we will count your combined income and calculated 
the benefit amount for you as a couple. Section 416.412 gives a detailed 
statement of the amount of benefits and subpart K of this part explains 
how we count income for an eligible couple.
    (2) Counting resources. If you have an eligible spouse as defined in 
Sec. 416.1801(c), we will count the value of your combined resources 
(money and property), minus certain exclusions, and use the couple's 
resource limit when we determine your eligibility. Section 416.1205(b) 
gives a detailed statement of the resource limit for an eligible couple.
    (c) If you are married, we do not consider you a child. The rules 
for counting income and resources are different for children than for 
adults. (Section 416.1851 discusses the effects of being considered a 
child on eligibility and amount of benefits.) Regardless of your age, if 
you are married we do not consider you to be a child.
    (d)(1) General rule: Benefits depend on whether you are married or 
not married at the beginning of each month. If you get married, even on 
the first day of a month we will treat you as single until the next 
month. If your marriage ends, even on the first day of a month, we will 
treat you as married until the next month.
    (2) Exception: If you both meet eligibility requirements after your 
date of marriage or after your marriage ends. If, in the month that you 
marry, each of you first meets all eligibility requirements after the 
date of your marriage, we will treat you as an eligible couple for that 
month. If, in the month that your marriage ends, each of you first meets 
all eligibility requirements after the date your marriage ends, we will 
treat you as eligible individuals. (See subparts D and E regarding how 
your benefits will be prorated.)

[45 FR 71795, Oct. 30, 1980. Redesignated at 46 FR 29211, May 29, 1981; 
46 FR 42063, Aug. 19, 1981, and amended at 51 FR 13495, Apr. 21, 1986; 
60 FR 16376, Mar. 30, 1995]

[[Page 1131]]



Sec. 416.1806  Whether you are married and who is your spouse.

    (a) We will consider someone to be your spouse (and therefore 
consider you to be married) for SSI purposes if--
    (1) You are legally married under the laws of the State where your 
and his or her permanent home is (or was when you lived together);
    (2) We have decided that either of you is entitled to husband's or 
wife's Social Security insurance benefits as the spouse of the other 
(this decision will not affect your SSI benefits for any month before it 
is made); or
    (3) You and an unrelated person of the opposite sex are living 
together in the same household at or after the time you apply for SSI 
benefits, and you both lead people to believe that you are husband and 
wife.
    (b) if more than one person would qualify as your husband or wife 
under paragraph (a) of this section, we will consider the person you are 
presently living with to be your spouse for SSI purposes.

[60 FR 16376, Mar. 30, 1995]



Sec. 416.1816  Information we need concerning marriage when you apply
for SSI.

    When you apply for SSI benefits, we will ask whether you are 
married. If you are married, we will ask whether you are living with 
your spouse. If you are unmarried or you are married but not living with 
your spouse, we will ask whether you are living in the same household 
with anyone of the opposite sex who is not related to you. If you are, 
we will ask whether you and that person lead other people to believe 
that you are husband and wife.



Sec. 416.1821  Showing that you are married when you apply for SSI.

    (a) General rule: Proof is unnecessary. If you tell us you are 
married we will consider you married unless we have information to the 
contrary. We will also consider you married, on the basis of your 
statement, if you say you are living with an unrelated person of the 
opposite sex and you both lead people to believe you are married. 
However, if we have information contrary to what you tell us, we will 
ask for evidence as described in paragraph (c).
    (b) Exception: If you are a child to whom parental deeming rules 
apply. If you are a child to whom the parental deeming rules apply and 
we receive information from you or others that you are married, we will 
ask for evidence of your marriage. The rules on deeming parental income 
are in Secs. 416.1165 and 416.1166. The rules on deeming of parental 
resources are in Sec. 416.1202.
    (c) Evidence of marriage. If paragraph (a) or (b) of this section 
indicates that you must show us evidence that you are married, you must 
show us your marriage certificate (which can be the original 
certificate, a certified copy of the public record of marriage, or a 
certified copy of the church record) if you can. If you cannot, you must 
tell us why not and give us whatever evidence you can.

[45 FR 71795, Oct. 30, 1980. Redesignated at 46 FR 29211, May 29, 1981; 
46 FR 42063, Aug. 19, 1981, and amended at 52 FR 8889, Mar. 20, 1987]



Sec. 416.1826  Showing that you are not married when you apply for SSI.

    (a) General rule: Proof is unnecessary. If you do not live with an 
unrelated person of the opposite sex and you say that you are not 
married, we will generally accept your statement unless we have 
information to the contrary.
    (b) Exception: If you are under age 22 and have been married. If you 
are under age 22 and have been married, to prove that your marriage has 
ended you must show us the decree of divorce or annulment or the death 
certificate if you can. If you cannot, you must tell us why not and give 
us whatever evidence you can.
    (c) Exception: If you are living with an unrelated person of the 
opposite sex. (1) If you are living with an unrelated person of the 
opposite sex, you and the person you are living with must explain to us 
what your relationship is and answer questions such as the following:
    (i) What names are the two of you known by?
    (ii) Do you introduce yourselves as husband and wife? If not, how 
are you introduced?
    (iii) What names are used on mail for each of you?
    (iv) Who owns or rents the place where you live?

[[Page 1132]]

    (v) Do any deeds, leases, time payment papers, tax papers, or any 
other papers show you as husband and wife?
    (2) We will consider you married to the person you live with unless 
the information we have, including the answers to the questions in 
paragraph (c)(1) of this section, all considered together, show that the 
two of you do not lead people to believe that you are each other's 
husband and wife.



Sec. 416.1830  When we stop considering you and your spouse an 
eligible couple.

    We will stop considering you and your spouse an eligible couple, 
even if you both remain eligible, at the beginning of whichever of these 
months comes first--
    (a) The calendar month after the month you stopped living with your 
eligible spouse, or
    (b) The calendar month after the month in which your marriage ends.

[45 FR 71795, Oct. 30, 1980. Redesignated at 46 FR 29211, May 29, 1981; 
46 FR 42063, Aug. 19, 1981, as amended at 60 FR 16376, Mar. 30, 1995]



Sec. 416.1832  When we consider your marriage ended.

    We consider your marriage ended when--
    (a) Your spouse dies;
    (b) Your divorce or annulment becomes final;
    (c) We decide that either of you is not a spouse of the other for 
purposes of husband's or wife's social security insurance benefits, if 
we considered you married only because of Sec. 416.1806(a)(2); or
    (d) You and your spouse stop living together, if we considered you 
married only because of Sec. 416.1806(a)(3).

[45 FR 71795, Oct. 30, 1980. Redesignated at 46 FR 29211, May 29, 1981; 
46 FR 42063, Aug. 19, 1981, as amended at 60 FR 16376, Mar. 30, 1995]



Sec. 416.1835  Information we need about separation or end of marriage
after you become eligible for SSI.

    (a) If you and your spouse stop living together. If you and your 
spouse stop living together, you must promptly report that fact to us, 
so that we can decide whether there has been a change that affects 
either person's benefits. You must also answer questions such as the 
following. If you cannot answer our questions you must tell us why not 
and give us whatever information you can.
    (1) When did you stop living together?
    (2) Do you expect to live together again?
    (3) If so, when?
    (4) Where is your husband or wife living?
    (5) Is either of you living with someone else as husband and wife?
    (b) Evidence of end of marriage--(1) Death. We will accept your 
statement that your husband or wife died unless we have information to 
the contrary. If we have contrary information, you must show us the 
death certificate if you can. If you cannot, you must tell us why not 
and give us whatever evidence you can.
    (2) Divorce or annulment. If your marriage ends by divorce or 
annulment, you must show us the decree of divorce or annulment if you 
can. If you cannot, you must tell us why not and give us whatever 
evidence you can.
    (3) Other reason. If your marriage ends for reasons other than 
death, divorce, or annulment, you must give us any information we ask 
you to give us about the end of the marriage. If you cannot, you must 
explain why you cannot. We will consider all of the relevant information 
to decide if and when your marriage ends.

                        Who Is Considered a Child



Sec. 416.1851  Effects of being considered a child.

    If we consider you to be a child for SSI purposes, the rules in this 
section apply when we determine your eligibility for SSI and the amount 
of your SSI benefits.
    (a) If we consider you to be a student, we will not count all of 
your earned income when we determine your SSI eligibility and benefit 
amount. Section 416.1110 tells what we mean by earned income. Section 
416.1112(c)(2) tells how much of your earned income we will not count.
    (b) If you have a parent who does not live with you but who pays 
money to help support you, we will not count one-third of that money 
when we count

[[Page 1133]]

your income. Section 416.1124(c)(9) discusses this rule.
    (c) If you are under age 18 and live with your parent(s) who is not 
eligible for SSI benefits, we consider (deem) part of his or her income 
and resources to be your own. If you are under age 18 and live with both 
your parent and your parent's spouse (stepparent) and neither is 
eligible for SSI benefits, we consider (deem) part of their income and 
resources to be your own. Sections 416.1165 and 416.1166 explain the 
rules and the exception to the rules on deeming your parent's income to 
be yours, and Sec. 416.1202 explains the rules and the exception to the 
rules on deeming your parent's resources to be yours.

[45 FR 71795, Oct. 30, 1980. Redesignated at 46 FR 29211, May 29, 1981; 
46 FR 42063, Aug. 19, 1981, and amended at 52 FR 8889, Mar. 20, 1987; 73 
FR 28036, May 15, 2008]



Sec. 416.1856  Who is considered a child.

    We consider you to be a child if--
    (a)(1) You are under 18 years old; or
    (2) You are under 22 years old and you are a student regularly 
attending school or college or training that is designed to prepare you 
for a paying job;
    (b) You are not married; and
    (c) You are not the head of a household.



Sec. 416.1861  Deciding whether you are a child: Are you a student?

    (a) Are you a student? You are a student regularly attending school 
or college or training that is designed to prepare you for a paying job 
if you are enrolled for one or more courses of study and you attend 
class--
    (1) In a college or university for at least 8 hours a week under a 
semester or quarter system;
    (2) In grades 7-12 for at least 12 hours a week;
    (3) In a course of training to prepare you for a paying job, and you 
are attending that training for at least 15 hours a week if the training 
involves shop practice or 12 hours a week if it does not involve shop 
practice (this kind of training includes anti-poverty programs, such as 
the Job Corps, and government-supported courses in self-improvement); or
    (4) Less than the amount of time given in paragraph (a) (1), (2), or 
(3) of this section for reasons you cannot control, such as illness, if 
the circumstances justify your reduced credit load or attendance.
    (b) If you are instructed at home. You may be a student regularly 
attending school if you are instructed at home in grades 7-12 in 
accordance with a home school law of the State or other jurisdiction in 
which you reside and for at least 12 hours a week.
    (c) If you have to stay home. You may be a student regularly 
attending school, college, or training to prepare you for a paying job 
if--
    (1) You have to stay home because of your disability;
    (2) You are studying at home a course or courses given by a school 
(grades 7-12), college, university, or government agency; and
    (3) A home visitor or tutor directs your study or training.
    (d) When you are not in school--(1) When school is out. We will 
consider you to be a student regularly attending school, college, or 
training to prepare you for a paying job even when classes are out if 
you actually attend regularly just before the time classes are out and 
you--
    (i) Tell us that you intend to resume attending regularly when 
school opens again; or
    (ii) Actually do resume attending regularly when school opens again.
    (2) Other times. Your counselor or teacher may believe you need to 
stay out of class for a short time during the course or between courses 
to enable you to continue your study or training. That will not stop us 
from considering you to be a student regularly attending school, 
college, or training to prepare you for a paying job if you are in--
    (i) A course designed to prepare disabled people for work; or
    (ii) A course to prepare you for a job that is specially set up for 
people who cannot work at ordinary jobs.
    (e) Last month of school. We will consider you to be a student 
regularly attending school, college, or training to prepare you for a 
paying job for the month in which you complete or stop your course of 
study or training.
    (f) When we need evidence that you are a student. We need evidence 
that you are a student if you are 18 years old or

[[Page 1134]]

older but under age 22, because we will not consider you to be a child 
unless we consider you to be a student.
    (g) What evidence we need. If we need evidence that you are a 
student, you must--
    (1) Show us any paper you have that shows you are a student in a 
school, college, or training program, such as a student identification 
card or tuition receipt; and
    (2) Tell us--
    (i) What courses you are taking;
    (ii) How many hours a week you spend in classes;
    (iii) The name and address of the school or college you attend or 
the agency training you; and
    (iv) The name and telephone number of someone at the school, 
college, or agency who can tell us more about your courses, in case we 
need information you cannot give us.

[45 FR 71795, Oct. 30, 1980. Redesignated at 46 FR 29211, May 29, 1981; 
46 FR 42063, Aug. 19, 1981, as amended at 71 FR 66867, Nov. 17, 2006]



Sec. 416.1866  Deciding whether you are a child: Are you the head 
of a household?

    (a) Meaning of head of household. You are the head of a household if 
you have left your parental home on a permanent basis and you are 
responsible for the day-to-day decisions on the operation of your own 
household. If you live with your parent(s) or stepparents, we will 
ordinarily assume you are not the head of a household. However, we will 
consider you to be the head of a household if for some reason (such as 
your parent's illness) you are the one who makes the day-to-day 
decisions. You need not have someone living with you to be the head of a 
household.
    (b) If you share decision-making equally. If you live with one or 
more people and everyone has an equal voice in the decision-making (for 
example, a group of students who share off-campus housing), that group 
is not a household. Each person who has left the parental home on a 
permanent basis is the head of his or her own household.

 Who Is Considered a Student for Purposes of the Student Earned Income 
                                Exclusion



Sec. 416.1870  Effect of being considered a student.

    If we consider you to be a student, we will not count all of your 
earned income when we determine your SSI eligibility and benefit amount. 
If you are an ineligible spouse or ineligible parent for deeming 
purposes and we consider you to be a student, we will not count all of 
your income when we determine how much of your income to deem. Section 
416.1110 explains what we mean by earned income. Section 416.1112(c)(3) 
explains how much of your earned income we will not count. Section 
416.1161(a)(27) explains how the student earned income exclusion applies 
to deemors.

[71 FR 66867, Nov. 17, 2006]



Sec. 416.1872  Who is considered a student.

    We consider you to be a student if you are under 22 years old and 
you regularly attend school or college or training that is designed to 
prepare you for a paying job as described in Sec. 416.1861(a) through 
(e).

[71 FR 66867, Nov. 17, 2006]



Sec. 416.1874  When we need evidence that you are a student.

    We need evidence that you are a student if you are under age 22 and 
you expect to earn over $65 in any month. Section 416.1861(g) explains 
what evidence we need.

[71 FR 66867, Nov. 17, 2006]

                      Who Is Considered Your Parent



Sec. 416.1876  Effects a parent (or parents) can have on the child's 
benefits.

    Section 416.1851 (b) and (c) tells what effects a parent's income 
and resources can have on his or her child's benefits.



Sec. 416.1881  Deciding whether someone is your parent or stepparent.

    (a) We consider your parent to be--
    (1) Your natural mother or father; or
    (2) A person who legally adopted you.
    (b) We consider your stepparent to be the present husband or wife of 
your natural or adoptive parent. A person is

[[Page 1135]]

not your stepparent if your natural or adoptive parent, to whom your 
stepparent was married, has died, or if your parent and stepparent have 
been divorced or their marriage has been annulled.
    (c) Necessary evidence. We will accept your statement on whether or 
not someone is your parent or stepparent unless we have information to 
the contrary. If we have contrary information, you must show us, if you 
can, one or more of the following kinds of evidence that would help to 
prove whether or not the person is your parent or stepparent: 
Certificate of birth, baptism, marriage, or death, or decree of 
adoption, divorce, or annulment. If you cannot, you must tell us why not 
and show us any other evidence that would help to show whether or not 
the person is your parent or stepparent.



                 Subpart S_Interim Assistance Provisions

    Authority: Secs. 702(a)(5) and 1631 of the Social Security Act (42 
U.S.C. 902(a)(5) and 1383).

    Source: 46 FR 47449, Sept. 27, 1981, unless otherwise noted.

                              Introduction



Sec. 416.1901  Scope of subpart S.

    (a) General. This subpart explains that we may withhold your SSI 
benefit and/or State supplementary payments and send them to the State 
(or a political subdivision of the State) as repayment for interim 
assistance it gave you while your application for SSI was pending, or 
while your SSI benefits were suspended or terminated if you are 
subsequently found to have been eligible for such benefits. Before we 
will do this, the State must have entered into an interim assistance 
agreement with us authorizing such reimbursement, and you must have 
given written authorization for us to repay the State (or a political 
subdivision of the State).
    (b) Organization of this subpart. We have organized this subpart as 
follows:
    (1) Definitions. Section 416.1902 contains definitions of terms used 
in this subpart.
    (2) Authorizations. Sections 416.1904 through 416.1908 give the 
rules that apply to your written authorization.
    (3) Interim assistance agreements. Section 416.1910 gives the 
requirements for interim assistance agreements between us and the State.
    (4) Appeals. Sections 416.1920 through 416.1922 describe your appeal 
rights in the State and in SSA.

[46 FR 47449, Sept. 27, 1981, as amended at 56 FR 19262, Apr. 26, 1991]



Sec. 416.1902  Definitions.

    For purposes of this subpart--
    Authorization means your written permission, in a form legally 
acceptable to us and to the State from which you received interim 
assistance, for us to withhold the appropriate SSI benefit payment and 
send it to the State.
    Interim assistance means assistance the State gives you, including 
payments made on your behalf to providers of goods or services, to meet 
your basic needs, beginning with the first month for which you are 
eligible for payment of SSI benefits and ending with, and including, the 
month your SSI payments begin, or assistance the State gives you 
beginning with the day for which your eligibility for SSI benefits is 
reinstated after a period of suspension or termination and ending with, 
and including, the month the Commissioner makes the first payment of 
benefits following the suspension or termination if it is determined 
subsequently that you were eligible for benefits during that period. It 
does not include assistance the State gives to or for any other person. 
If the State has prepared and cannot stop delivery of its last 
assistance payment to you when it receives your SSI benefit payment from 
us, that assistance payment is included as interim assistance to be 
reimbursed. Interim assistance does not include assistance payments 
financed wholly or partly with Federal funds.
    SSI benefit payment means your Federal benefit and any State 
supplementary payment made by us to you on behalf of a State (see 
subpart T of this part) which is due you at the time we make the first 
payment of benefits or when your benefits are reinstated

[[Page 1136]]

after suspension or termination. Advance payment, as defined in 
Sec. 416.520, payment based upon presumptive disability or presumptive 
blindness, as defined in Sec. 416.931, or certain payments made under 
the administrative immediate payment procedure, are not considered SSI 
benefit payments for interim assistance purposes.
    State for purposes of an interim assistance agreement, means a State 
of the United States, the District of Columbia, or the Northern Mariana 
Islands. For all other purposes (for example, payment, appeals, notices) 
State also means a political subdivision of any of these.
    We, Us, or Our means the Social Security Administration.
    You or Your means someone who has applied for or is already 
receiving SSI benefits.

[46 FR 47449, Sept. 28, 1981; 46 FR 50947, Oct. 16, 1981, as amended at 
56 FR 19262, Apr. 26, 1991; 56 FR 25446, June 4, 1991; 62 FR 38455, July 
18, 1997; 64 FR 31975, June 15, 1999]

                             Authorizations



Sec. 416.1904  Authorization to withhold SSI benefits.

    We may withhold your SSI benefit payment and send it to the State to 
repay the State for the interim assistance it gave to you, if--
    (a) We have an interim assistance agreement with the State at the 
time your authorization goes into effect; and
    (b) Your authorization is in effect at the time we make the SSI 
benefit payment.



Sec. 416.1906  When your authorization is in effect.

    Your authorization for us to withhold your SSI benefit payment, to 
repay the State for interim assistance the State gives you, is effective 
when we receive it, or (if our agreement with the State allows) when we 
receive notice from the State that it has received your authorization. 
It remains in effect until--
    (a) We make the first SSI benefit payment on your initial 
application for benefits or, in the case of an authorization effective 
for a period of suspense or termination, until the initial payment 
following the termination or suspension of your benefits.
    (b) We make a final determination on your claim (if your SSI claim 
is denied, the denial is the final determination, unless you file a 
timely appeal as described in subpart N of this part);
    (c) You and the State agree to terminate your authorization; or
    (d) If earlier than the event in paragraph (a), (b), or (c) of this 
section, the date (if any) specified in your authorization.

[46 FR 47449, Sept. 27, 1981, as amended at 56 FR 19262, Apr. 26, 1991]



Sec. 416.1908  When we need another authorization.

    Once an event described in Sec. 416.1906 occurs, your authorization 
is no longer effective. If you reapply for SSI benefits, or the 
authorization has expired, the State must obtain a new authorization 
from you in order for us to repay the State for interim assistance it 
gives you.

                      Interim Assistance Agreements



Sec. 416.1910  Requirements for interim assistance agreement.

    An interim assistance agreement must be in effect between us and the 
State if we are to repay the State for interim assistance. The following 
requirements must be part of the agreement:
    (a) SSA to repay the State. We must agree to repay the State for 
interim assistance it gives you. Repayment to the State takes priority 
over any underpayments due you (see Secs. 416.525 and 416.542).
    (b) State to pay any excess repayment to you. The State must agree 
that, if we repay it an amount greater than the amount of interim 
assistance it gave to you, the State will--
    (1) Pay the excess amount to you no later than 10 working days from 
the date the State receives repayment from us; or
    (2) Refund the excess amount to us for disposition under the rules 
in subpart E of the this part on payment of benefits if the State cannot 
pay it to you (for example, you die or you move and the State cannot 
locate you).

[[Page 1137]]

    (c) State to notify you. The State must agree to give you written 
notice explaining--
    (1) How much we have repaid the State for interim assistance it gave 
you;
    (2) The excess amount, if any, due you; and
    (3) That it will give you an opportunity for a hearing if you 
disagree with State's actions regarding repayment of interim assistance.
    (d) Duration of the agreement. We and the State must agree to the 
length of time that the agreement will remain in effect.
    (e) State to comply with other regulations. The State must agree to 
comply with any other regulations that we find necessary to administer 
the interim assistance provisions.

                                 Appeals



Sec. 416.1920  Your appeal rights in the State.

    Under its interim assistance agreement with us, the State must agree 
to give you an opportunity for a hearing if you disagree with the 
State's actions regarding repayment of interim assistance. For example, 
you are entitled to a hearing by the State if you disagree with the 
State regarding the amount of the repayment the State keeps or the 
amount of any excess the State pays to you. You are not entitled to a 
Federal hearing on the State's actions regarding repayment of interim 
assistance.



Sec. 416.1922  Your appeal rights in SSA.

    If you disagree with the total amount of money we have withheld and 
sent to the State for the interim assistance it gave to you, you have a 
right to appeal to us, as described in subpart N of this part.



     Subpart T_State Supplementation Provisions; Agreement; Payments

    Authority: Secs. 702(a)(5), 1616, 1618, and 1631 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1382e, 1382g, and 1383); sec. 212, 
Pub. L. 93-66, 87 Stat. 155 (42 U.S.C. 1382 note); sec. 8(a), (b)(1)-
(b)(3), Pub. L. 93-233, 87 Stat. 956 (7 U.S.C. 612c note, 1431 note and 
42 U.S.C. 1382e note); secs. 1(a)-(c) and 2(a), 2(b)(1), 2(b)(2), Pub. 
L. 93-335, 88 Stat. 291 (42 U.S.C. 1382 note, 1382e note).

    Source: 40 FR 7640, Feb. 21, 1975, unless otherwise noted.



Sec. 416.2001  State supplementary payments; general.

    (a) State supplementary payments; defined. State supplementary 
payments are any payments made by a State or one of its political 
subdivisions (including any such payments for which reimbursement is 
available from the Social Security Administration pursuant to Pub. L. 
94-23, as amended) to a recipient of supplemental security income 
benefits (or to an individual who would be eligible for such benefits 
except for income), if the payments are made:
    (1) In supplementation of the Federal supplemental security income 
benefits; i.e., as a complement to the Federal benefit amount, thereby 
increasing the amount of income available to the recipient to meet his 
needs; and
    (2) Regularly, on a periodic recurring, or routine basis of at least 
once a quarter; and
    (3) In cash, which may be actual currency or any negotiable 
instrument, convertible into cash upon demand; and
    (4) In an amount based on the need or income of an individual or 
couple.
    (b) State; defined. For purposes of this subpart, State means a 
State of the United States or the District of Columbia.
    (c) Mandatory minimum supplementary payments. In order for a State 
to be eligible for payments pursuant to title XIX of the Act with 
respect to expenditures for any quarter beginning after December 1973, 
such State must have in effect an agreement with the Commissioner under 
which such State will provide to aged, blind, and disabled individuals 
(as defined in Sec. 416.202) residing in the State who were recipients 
of aid or assistance for December 1973 as defined in Sec. 416.121, under 
such State's plan approved under title I, X, XIV, or XVI of the Act, 
mandatory minimum supplementary payments beginning in January 1974 in an 
amount determined in accordance with Sec. 416.2050 in order to maintain 
their income levels of December 1973. (See Secs. 416.2065 and 416.2070.)
    (d) Supplementary payments for recipients of special SSI cash 
benefits. A State which makes supplementary payments

[[Page 1138]]

(regardless of whether they are mandatory or optional and whether the 
payments are federally administered), has the option of making those 
payments to individuals who receive cash benefits under section 1619(a) 
of the Act (see Sec. 416.261), or who would be eligible to receive cash 
benefits except for their income.

[40 FR 7640, Feb. 21, 1975, as amended at 43 FR 48995, Oct. 20, 1978; 45 
FR 54748, July 18, 1980; 47 FR 15326, Apr. 9, 1982; 62 FR 38455, July 
18, 1997]



Sec. 416.2005  Administration agreements with SSA.

    (a) Agreement-mandatory only. Subject to the provisions of paragraph 
(d) of this section, any State having an agreement with the Social 
Security Administration (SSA) under Sec. 416.2001(c) may enter into an 
administration agreement with SSA under which SSA will make the 
mandatory minimum supplementary payments on behalf of such State. An 
agreement under Sec. 416.2001(c) and an administration agreement under 
this paragraph may be consolidated into one agreement.
    (b) Agreement--mandatory and optional payments. Subject to the 
provisions of paragraph (d) of this section, any State may enter into an 
agreement with SSA under which the State will provide both mandatory and 
optional State supplementary payments and elect Federal administration 
of such State supplementary payment programs. If SSA agrees to 
administer such State's optional supplementary payments, the State must 
also have SSA administer its mandatory minimum supplementary payments 
unless the State is able to provide sufficient justification for 
exemption from this requirement.
    (c) Administration--combination. Any State may enter into an 
agreement with SSA under which the State will provide mandatory minimum 
supplementary payments and elect Federal administration of such payments 
while providing optional State supplementary payments which it shall 
administer itself. If the State chooses to administer such payment 
itself, it may establish its own criteria for determining eligibility 
requirements as well as the amounts.
    (d) Conditions of administration agreement. The State and SSA may, 
subject to the provisions of this subpart, enter into a written 
agreement, in such form and containing such provisions not inconsistent 
with this part as are found necessary by SSA, under which SSA will 
administer the State supplementary payments on behalf of a State (or 
political subdivision). Under such an agreement between SSA and a State, 
specific Federal and State responsibilities for administration and 
fiscal responsibilities will be stipulated. The regulations in effect 
for the supplemental security income program shall be applicable in the 
Federal administration of State supplementary payments except as may 
otherwise be provided in this subpart as found by SSA to be necessary 
for the effective and efficient administration of both the basic Federal 
benefit and the State supplementary payment. If the State elects options 
available under this subpart (specified in Secs. 416.2015-416.2035), 
such options must be specified in the administration agreement.

[40 FR 7640, Feb. 21, 1975, as amended at 62 FR 312, Jan. 3, 1997]



Sec. 416.2010  Essentials of the administration agreements.

    (a) Payments. Any agreement between SSA and a State made pursuant to 
Sec. 416.2005 must provide that, if for optional supplementation, such 
State supplementary payments are made to all individuals and/or couples 
who are:
    (1) Receiving (or at the option of the State would, but for the 
amount of their income, be eligible to receive) supplemental security 
income benefits under title XVI of the Social Security Act, and
    (2) Within the variations and categories (as defined in 
Sec. 416.2030) for which the State (or political subdivision) wishes to 
provide a supplementary payment, and
    (3) Residing, subject to the provisions of Sec. 416.2035(a), in such 
State (or political subdivision thereof).
    (b) Administrative costs. (1) SSA shall assess each State that had 
elected Federal administration of optional and/or

[[Page 1139]]

mandatory State supplementary payments an administration fee for 
administering those payments. The administration fee is assessed and 
paid monthly and is derived by multiplying the number of State 
supplementary payments made by SSA on behalf of a State for any month in 
a fiscal year by the applicable dollar rate for the fiscal year. The 
number of supplementary payments made by SSA in a month is the total 
number of checks issued, and direct deposits made, to recipients in that 
month, that are composed in whole or in part of State supplementary 
funds. The dollar rates are as follows:
    (i) For fiscal year 1994, $1.67;
    (ii) For fiscal year 1995, $3.33;
    (iii) For fiscal year 1996, $5.00;
    (iv) For fiscal year 1997, $5.00;
    (v) For fiscal year 1998, $6.20;
    (vi) For fiscal year 1999, $7.60;
    (vii) For fiscal year 2000, $7.80;
    (viii) For fiscal year 2001, $8.10;
    (ix) For fiscal year 2002, $8.50; and
    (x) For fiscal year 2003 and each succeeding fiscal year--
    (A) The applicable rate in the preceding fiscal year, increased by 
the percentage, if any, by which the Consumer Price Index for the month 
of June of the calendar year of the increase exceeds the Consumer Price 
Index for the month of June of the calendar year preceding the calendar 
year of the increase, and rounded to the nearest whole cent; or
    (B) Such different rate as the Commissioner determines is 
appropriate for the State taking into account the complexity of 
administering the State's supplementary payment program.
    (2) SSA shall charge a State an additional services fee if, at the 
request of the State, SSA agrees to provide the State with additional 
services beyond the level customarily provided in the administration of 
State supplementary payments. The additional services fee shall be in an 
amount that SSA determines is necessary to cover all costs, including 
indirect costs, incurred by the Federal Government in furnishing the 
additional services. SSA is not required to perform any additional 
services requested by a State and may, at its sole discretion, refuse to 
perform those additional services. An additional services fee charged a 
State may be a one-time charge or, if the furnished services result in 
ongoing costs to the Federal Government, a monthly or less frequent 
charge to the State for providing such services.
    (c) Agreement period. The agreement period for a State which has 
elected Federal administration of its supplementary payments will extend 
for one year from the date the agreement was signed unless otherwise 
designated. The agreement will be automatically renewed for a period of 
one year unless either the State or SSA gives written notice not to 
renew, at least 90 days before the beginning of the new period. For a 
State to elect Federal administration, it must notify SSA of its intent 
to enter into an agreement, furnishing the necessary payment 
specifications, at least 120 days before the first day of the month for 
which it wishes Federal administration to begin, and have executed such 
agreement at least 30 days before such day.
    (d) Modification or termination. The agreement may be modified at 
any time by mutual consent. The State or SSA may terminate the agreement 
upon 90 days written notice to the other party, provided the effective 
date of the termination is the last day of a quarter. However, the State 
may terminate the agreement upon 45 days written notice to SSA where: 
(1) The State does not wish to comply with a regulation promulgated by 
SSA subsequent to the execution of the agreement; and (2) the State 
provides such written notice within 30 days of the effective date of the 
regulation. The Secretary is not precluded from terminating the 
agreement in less than 90 days where he finds that a State has failed to 
materially comply with the provisions of paragraph (f) of this section 
or Sec. 416.2090.
    (e) Mandatory minimum State supplementation. Any administration 
agreement between SSA and a State under which SSA will make such State's 
mandatory minimum State supplementary payments shall provide that the 
State will:

[[Page 1140]]

    (1) Certify income and payment amount. Certify to SSA the names of 
each individual who, for December 1973 was eligible for and a recipient 
of aid or assistance in the form of money payments under a plan of such 
State approved under title I, X, XIV, or XVI of the Act (Sec. 416.121), 
together with the amount of such aid or assistance payable to each such 
individual and the amount of such individual's other income (as defined 
in Sec. 416.2050(b)(2)), and
    (2) Additional data. Provide SSA with such additional data at such 
times as SSA may reasonably require in order to properly, economically, 
and efficiently carry out such administration agreement. This shall 
include required information on changes in countable income as well as 
changes in special needs and circumstances that would result in a 
decrease in the mandatory income level being maintained by the State, 
unless the State has specified in the agreement that the minimum income 
level shall not be lowered by such changes.

[40 FR 7640, Feb. 21, 1975, as amended at 62 FR 313, Jan. 3, 1997; 63 FR 
33849, June 22, 1998]



Sec. 416.2015  Establishing eligibility.

    (a) Applications. Any person who meets the application requirements 
of subpart C of this part is deemed to have filed an application for any 
federally administered State supplementation for which he may be 
eligible unless supplementation has been waived pursuant to 
Sec. 416.2047. However, a supplemental statement will be required where 
additional information is necessary to establish eligibility or to 
determine the correct payment amount.
    (b) Evidentiary requirements. The evidentiary requirements and 
developmental procedures of this part are applicable with respect to 
federally administered State supplementary payments.
    (c) Determination. Where not inconsistent with the provisions of 
this subpart, eligibility for and the amount of the State supplementary 
payment will be determined pursuant to the provisions of subparts A 
through Q of this part.
    (d) Categories; aged, blind, disabled. An applicant will be deemed 
to have filed for the State supplementary payment amount provided for 
the category under which his application for a Federal supplemental 
security income benefit is filed. As in the Federal supplemental 
security income program, an individual who establishes eligibility as a 
blind or disabled individual, and continually remains on the rolls, will 
continue to be considered blind or disabled after he attains age 65.
    (e) Concurrent categories. (1) In States where the supplementary 
payment provided for the aged category is higher than for the blind or 
disabled category aged individuals will be paid the State supplement on 
the basis of age.
    (2) If the administration agreement pursuant to Sec. 416.2005(b) 
provides for higher supplementary payments to the blind or disabled than 
to the aged category, then, at the option of the State, the agreement 
may provide that individuals who are age 65 or over at time of 
application and who are blind or disabled may elect to receive such 
higher supplementary payments.



Sec. 416.2020  Federally administered supplementary payments.

    (a) Payment procedures. A federally administered State supplementary 
payment will be made on a monthly basis and will be included in the same 
check as a Federal benefit that is payable. A State supplementary 
payment shall be for the same month as the Federal benefit.
    (b) Maximum amount. There is no restriction on the amount of a State 
supplementary payment that the Federal Government will administer on 
behalf of a State.
    (c) Minimum amount. The Federal Government will not administer 
optional State supplementary payments in amounts less than $1 per month. 
Hence, optional supplementary payment amounts of less than $1 will be 
raised to a dollar.
    (d) Optional supplementation: nine categories possible. A State may 
elect Federal administration of its supplementary payments for up to 
nine categories, depending on the assistance titles in effect in that 
State in January 1972 (i.e., title I, X, XIV, or XVI). It can have no 
more than two categories (one for individuals and one for couples) for 
each title in effect for January 1972:

[[Page 1141]]

    (1) Since a State with a title XVI program had just the one title in 
effect, it can supplement only to two categories, the individual (aged, 
blind, or disabled), the couple (both of whom are aged, blind, or 
disabled).
    (2) Other States could supplement up to nine categories, depending 
on the plans they had in effect. Six of these categories would be for:
    (i) Aged Individual,
    (ii) Aged Couple,
    (iii) Blind Individual,
    (iv) Blind Couple,
    (v) Disabled Individual,
    (vi) Disabled Couple.
    (3) In addition to those enumerated in paragraph (d)(2) of this 
section, there are three additional couple categories for which a State 
may elect to provide a federally administered supplement. These 
categories are created when one individual in the couple is:
    (i) Aged and the other blind, or
    (ii) Aged and the other disabled, or
    (iii) Blind and the other disabled.

[40 FR 7640, Feb. 21, 1975, as amended at 50 FR 48579, Nov. 26, 1985]



Sec. 416.2025  Optional supplementation: Countable income.

    (a) Earned and unearned income. No less than the amounts of earned 
or unearned income which were excluded in determining eligibility for or 
amount of a title XVI supplemental security income benefit must be 
excludable by a State in the Federal-State agreement for purposes of 
determining eligibility for or amount of the State supplementary 
payment.
    (b) Effect of countable income on payment amounts. Countable income 
of an eligible individual or eligible couple is determined in the same 
manner as such income is determined under the title XVI supplemental 
security income program. Countable income will affect the amount of the 
State supplementary payments as follows:
    (1) As provided in Sec. 416.420, countable income will first be 
deducted from the Federal benefit rate applicable to an eligible 
individual or eligible couple. In the case of an eligible individual 
living with an ineligible spouse with income (the deeming provisions of 
Sec. 416.1163 apply), the Federal benefit rate from which countable 
income will be deducted is the Federal benefit rate applicable to an 
eligible couple, except that an eligible individual's payment amount may 
not exceed the amount he or she would have received if he or she were 
not subject to the deeming provisions (Sec. 416.1163(e)(2)).
    (2) If countable income is equal to or less than the amount of the 
Federal benefit rate, the full amount of the State supplementary payment 
as specified in the Federal agreement will be made.
    (3) If countable income exceeds the amount of the Federal benefit 
rate, the State supplementary benefit will be reduced by the amount of 
such excess. In the case of an eligible individual living with an 
ineligible spouse with income (the deeming methodology of Sec. 416.1163 
applies), the State supplementary payment rate from which the excess 
income will be deducted is the higher of the State supplementary rates 
for an eligible couple or an eligible individual, except that an 
eligible individual's payment amount may not exceed the amount he or she 
would have received if he or she were not subject to the deeming 
provisions (see Sec. 416.1163(e)(2)). For purposes of determining the 
State supplementary couple rate, the ineligible spouse is considered to 
be in the same category as the eligible individual.
    (4) No State supplementary payment will be made where countable 
income is equal to or exceeds the sum of the Federal benefit rate and 
the State supplementary payment rate.
    (c) Effect of additional income exclusions on payment amounts. A 
State has the option of excluding amounts of earned and unearned income 
in addition to the amounts it is required to exclude under paragraph (a) 
of this section in determining a person's eligibility for State 
supplementary payments. Such additional income exclusions affect the 
amount of the State supplementary payments as follows:
    (1) Countable income (as determined under the Federal eligibility 
rules) will first be deducted from the Federal benefit rate applicable 
to an eligible individual or eligible couple.
    (2) Such countable income is then reduced by the amount of the 
additional

[[Page 1142]]

income exclusion specified by the State.
    (3) If the remaining countable income is equal to or less than the 
amount of the Federal benefit rate, the full amount of the State 
supplementary payment will be made.
    (4) If the remaining countable income exceeds the amount of the 
Federal benefit rate, the State supplementary payment will be reduced by 
the amount of such excess.

(Secs. 1102, 1614(f), 1616(a), 1631, Social Security Act, as amended, 49 
Stat. 647, as amended, 86 Stat. 1473, 1474(a), and 1475 (42 U.S.C. 1302, 
1382c(f), 1382e(a), 1383))

[40 FR 7640, Feb. 21, 1975, as amended at 43 FR 39570, Sept. 6, 1978; 53 
FR 25151, July 5, 1988]



Sec. 416.2030  Optional supplementation: Variations in payments.

    (a) Payment level. The level of State supplementary payments may 
vary for each category the State elects to include in its federally 
administered supplement. These categorical variations of payment levels 
must be specified in the agreement between the Commissioner and the 
State. If any State has in effect for July 1974 an agreement which 
provides for variations in addition to those specified in this section, 
the State may, at its option, continue such variations but only for 
periods ending before July 1, 1976.
    (1) Geographical variations. A State may elect to include two 
different geographical variations. A third may be elected if adequate 
justification, e.g., substantial differences in living costs, can be 
demonstrated. All such variations must be readily identifiable by county 
or ZIP code or other readily identifiable factor.
    (2) Living arrangements. In addition, a State may elect up to six 
variations in recognition of the different needs which result from 
various living arrangements. If a State elects six payment level 
variations based on differences in living arrangements, one of these six 
variations must apply only to individuals in Medicaid facilities, that 
is, facilities receiving title XIX payments with respect to such persons 
for the cost of their care (see Sec. 416.211(b)(1)). In any event, 
States are limited to one payment level variation for residents of 
Medicaid facilities. Types of other living arrangements for which 
payment variations may be allowed include arrangements such as:
    (i) Living alone;
    (ii) Living with an ineligible spouse;
    (iii) Personal care facility; or,
    (iv) Domiciliary or congregate care facility.
    (b) Relationship to actual cost differences. Under the agreement, 
variations in State supplementary payment levels will be permitted for 
each living arrangement the State elects. These differences must be 
based on rational distinctions between both the types of living 
arrangements and the costs of those arrangements.
    (c) Effective month of State supplementary payment category. The 
State supplementary payment category which applies in the current month 
will be used to determine the State payment level in that month. This 
rule applies even if the countable income in a prior month is used to 
determine the amount of State supplementary payment.

[40 FR 7640, Feb. 21, 1975, as amended at 50 FR 48579, Nov. 26, 1985; 56 
FR 41455, Aug. 21, 1991; 62 FR 38455, July 18, 1997]



Sec. 416.2035  Optional supplementation: Additional State options.

    (a) Residency requirement. A State or political subdivision may 
impose, as a condition of eligibility, a residency requirement which 
excludes from eligibility for State supplementary payment any individual 
who has resided in such State (or political subdivision thereof) for 
less than a minimum period prescribed by the State. Any such residency 
requirement will be specified in the agreement.
    (b) Lien and relative responsibility. A State which elects Federal 
administration of its supplementary payments may place a lien upon 
property of an individual as a consequence of the receipt of such 
payments or may require that a relative of the individual contribute to 
a reasonable extent to the support of the individual, providing it is 
stated in the agreement that:
    (1) The Commissioner has determined that the specific State laws and 
their enforcement are consistent with the supplemental security income 
program

[[Page 1143]]

purpose of providing unencumbered cash payments to recipients; and
    (2) The Federal Government is not involved in the administration of 
such laws and will not vary the State supplementary payment amount it 
makes to comply with such laws; and
    (3) Neither the basic Federal benefit nor any part of the State 
supplementary payment financed by Federal funds will be subject to the 
liens or encumbrances of such laws.

[40 FR 7640, Feb. 21, 1975, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.2040  Limitations on eligibility.

    Notwithstanding any other provision of this subpart, the eligibility 
of an individual (or couple) for optional State supplementary payments 
administered by the Federal Government in accordance with this subpart 
shall be limited as follows:
    (a) Inmate of public institution. A person who is a resident in a 
public institution for a month, is ineligible for a Federal benefit for 
that month under the provision of Sec. 416.211(a), and does not meet the 
requirements for any of the exceptions in Sec. 416.211 (b), (c), or (d), 
or Sec. 416.212, also shall be ineligible for a federally administered 
State supplementary payment for that month.
    (b) Ineligible persons. No person who is ineligible for a Federal 
benefit for any month under sections 1611(e)(1)(A), (2), (3), or (f) of 
the Act (failure to file; refuses treatment for drug addiction or 
alcoholism; outside the United States) or other reasons (other than the 
amount of income) shall be eligible for such State supplementation for 
such month.
    (c) Recipient eligible for benefits under Sec. 416.212. A recipient 
who is institutionalized and is eligible for either benefit payable 
under Sec. 416.212 for a month or months may also receive federally 
administered State supplementation for that month. Additionally, a 
recipient who would be eligible for benefits under Sec. 416.212 but for 
countable income which reduces his or her Federal SSI benefit to zero, 
may still be eligible to receive federally administered State 
supplementation.

[40 FR 7640, Feb. 21, 1975, as amended at 56 FR 41455, Aug. 21, 1991; 61 
FR 10280, Mar. 13, 1996; 68 FR 40124, July 7, 2003]



Sec. 416.2045  Overpayments and underpayments; federally administered
supplementation.

    (a) Overpayments. Upon determination that an overpayment has been 
made, adjustments will be made against future federally administered 
State supplementary payments for which the person is entitled. Rules and 
requirements (see Secs. 416.550 through 416.586) in effect for recovery 
(or waiver) of supplemental security income benefit overpayments shall 
also apply to the recovery (or waiver) of federally administered State 
supplementary overpaid amounts. If the overpaid person's entitlement to 
the State supplementary payments is terminated prior to recoupment of 
the overpaid State supplementary payment amount, and the overpayment 
cannot be recovered from a Federal benefit payable under this part, the 
person's record will be annotated (specifying the amount of the 
overpayment) to permit recoupment if the person becomes reentitled to 
supplementary payments of such State or to a Federal benefit under this 
part.
    (b) Underpayments. Upon determination that an underpayment of State 
supplementary payments is due and payable, the underpaid amount shall be 
paid to the underpaid claimant directly, or his representative. If the 
underpaid person dies before receiving the underpaid amount of State 
supplementary payment the underpaid amount shall be paid to the 
claimant's eligible spouse. If the deceased claimant has no eligible 
spouse, no payment of the underpaid amount shall be made. (See 
Secs. 416.538 through 416.543.)

[40 FR 7640, Feb. 21, 1975, as amended at 65 FR 16815, Mar. 30, 2000]



Sec. 416.2047  Waiver of State supplementary payments.

    (a) Waiver request in writing. Any person who is eligible to receive 
State supplementary payments or who would be eligible to receive such 
State supplementary payments may waive his right to receive such 
payments if such person makes a written request for waiver of State 
supplementary payments. Any such request made at time of application for 
the Federal benefit shall be effective immediately. Any such request

[[Page 1144]]

filed after the application is filed shall be effective the month the 
request is received in a social security office, or earlier if the 
recipient refunds to the Social Security Administration the amount of 
any supplementary payment(s) made to him for the subject period.
    (b) Revocation of waiver. Any individual who has waived State 
supplementary payments may revoke such waiver at any time by making a 
written request to any social security office. The revocation will be 
effective the month in which it is filed. The date such request is 
received in a social security office or the postmarked date, if the 
written request was mailed, will be the filing date, whichever is 
earlier.



Sec. 416.2050  Mandatory minimum State supplementation.

    (a) Determining the amount. The amount of a mandatory State 
supplementary payment in the case of any eligible individual or couple 
for any month is equal to:
    (1) The amount by which such individual or couple's December 1973 
income (as defined in paragraph (b) of this section) exceeds the amount 
of such individual or couple's title XVI benefit plus other income which 
would have been used by such State in computing the assistance payable 
under the State's approved plan for such month; or
    (2) Such greater amount as the State may specify.
    (b) December 1973 income. ``December 1973 income'' means an amount 
equal to the aggregate of:
    (1) Money payments. The amount of the aid or assistance in the form 
of money payments (as defined in 45 CFR 234.11(a)) which an individual 
would have received (including any part of such amount which is 
attributable to meeting special needs or special circumstances) under a 
State plan approved under title I, X, XIV, or XVI of the Act in 
accordance with the terms and conditions of such plan relating to 
eligibility for and amount of such aid or assistance payable thereunder 
which were in effect for the month of June 1973 together with the bonus 
value of food stamps for January 1972 if for such month such individual 
resides in a State which SSA has determined provides supplementary 
payments the level of which has been found by SSA pursuant to section 8 
of Pub. L. 93-233 (87 Stat. 956) to have been specifically increased so 
as to include the bonus value of food stamps, and
    (2) Income. The amount of the income of such individual other than 
aid or assistance, received by such individual in December 1973, 
remaining after application of all appropriate income exclusions and 
used in computation of the amount of aid or assistance, minus any such 
income which did not result, but which if properly reported, would have 
resulted in a reduction in the amount of such aid or assistance. Income, 
which because a State paid less than 100% of its standard of need, did 
not cause a reduction in the amount of aid or assistance is included.
    (c) Special needs or circumstances. Special needs or circumstances 
include needs of essential persons (as defined in Sec. 416.222), special 
allowances for housing, and such other situations for which money 
payments to or for an eligible individual were made under a State plan 
approved under title I, X, XIV, or XVI of the Act as in effect for June 
1973.
    (d) Optional supplement payable. A recipient meeting the 
requirements of paragraph (a) of this section who would otherwise 
qualify for a payment under a State's program of optional State 
supplementation (provided for by Sec. 416.2010) which is greater than 
the amount required by paragraph (a) of this section, shall be paid such 
greater amount.

[40 FR 7640, Feb. 21, 1975, as amended at 51 FR 10616, Mar. 14, 1986; 62 
FR 313, Jan. 3, 1997]



Sec. 416.2055  Mandatory minimum supplementation reduced.

    If for any month after December 1973 there is a change with respect 
to any special need or special circumstance which, if such change had 
existed in December 1973, would have caused a reduction in the amount of 
such individual's aid or assistance payment, then, for such month and 
for each month thereafter, the amount of the mandatory minimum 
supplement payable to such individual may, at the option of the State, 
be reduced in accordance

[[Page 1145]]

with the terms and conditions of the State's plan approved under title 
I, X, XIV, or XVI of the Act in effect for the month of June 1973.



Sec. 416.2060  Mandatory minimum supplementary payments not applicable.

    An individual eligible for mandatory minimum supplementary payments 
from a State beginning in January 1974 shall not be eligible for such 
payments:
    (a) Month after the month of death. Beginning with the month after 
the month in which the individual dies; or
    (b) Not aged, blind, or disabled. Beginning with the first month 
after the month in which such individual ceases to be an aged, blind, or 
disabled individual (as defined in Sec. 416.202); or
    (c) Not entitled to a Federal payment. During any month in which 
such individual was ineligible to receive supplemental income benefits 
under title XVI of the Social Security Act by reason of the provisions 
of section 1611(e) (1)(A), (2) or (3), 1611(f), or 1615(c) of such Act; 
or
    (d) Month of change in residence. During any full month such 
individual is not a resident of such State.



Sec. 416.2065  Mandatory minimum State supplementation: Agreement
deemed.

    A State shall be deemed to have entered into an agreement with the 
Commissioner under which such State shall provide mandatory minimum 
supplementary payments if such State has entered into an agreement with 
the Commissioner under section 1616 of the Act under which:
    (a) Other eligible individuals. Supplementary payments are made to 
individuals other than those aged, blind, and disabled individuals who 
were eligible to receive aid or assistance in the form of money payments 
for the month of December 1973 under a State plan approved under title 
I, X, XIV, or XVI of the Act, under terms and conditions of such plan in 
effect for June 1973, and
    (b) Minimum requirements. Supplementary payments which meet the 
mandatory minimum requirements of this subpart are payable to all aged, 
blind, or disabled individuals who were eligible to receive aid or 
assistance in the form of money payments for the month of December 1973 
under a State plan approved under title I, X, XIV, or XVI of the Act, 
under terms and conditions of such plan in effect for June 1973.

[40 FR 7640, Feb. 21, 1975, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.2070  Mandatory supplementation: State compliance not 
applicable.

    The requirement that a State must have in effect an agreement with 
the Commissioner whereby such State shall provide individual aged, 
blind, and disabled recipients residing in the State mandatory minimum 
supplementary payments beginning in January 1974 shall not be applicable 
in the case of any State where:
    (a) State constitution. The State constitution limits expenditures 
that may be paid as public assistance to, or on behalf of, any needy 
person to an amount that does not exceed the amount of State public 
assistance payments that are matched by Federal funds under title I, IV, 
X, XIV, XVI or XIX of the Social Security Act making it impossible for 
such State to enter into and commence carrying out (on January 1, 1974) 
such agreement with the Commissioner, and
    (b) Attorney General decision. The Attorney General (or other 
appropriate State official) has, prior to July 1, 1973, made a finding 
that the State constitution of such State contains limitations which 
prevent such State from making supplementary payments of the type 
described in section 1616 of the Act.

[40 FR 7640, Feb. 21, 1975, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.2075  Monitoring of mandatory minimum supplementary payments.

    (a) Access to records. Any State entering into an agreement with the 
Commissioner whereby such State will provide mandatory minimum 
supplementary payments in accordance with Sec. 416.2001(c) shall agree 
that the Commissioner shall have access to and the right to examine any 
directly pertinent books, documents, papers, and records of the State 
involving transactions related to this agreement.

[[Page 1146]]

    (b) Additional data. Any State entering into an agreement in 
accordance with Sec. 416.2005 shall provide the Commissioner with such 
additional data at such times as the Commissioner may reasonably require 
in order to properly, economically, and efficiently be assessed of such 
State's compliance with such State agreements.

[40 FR 7640, Feb. 21, 1975, as amended at 62 FR 38455, July 18, 1997]



Sec. 416.2090  State funds transferred for supplementary payments.

    (a) Payment transfer and adjustment. (1) Any State which has entered 
into an agreement with SSA which provides for Federal administration of 
such State's supplementary payments shall transfer to SSA:
    (i) An amount of funds equal to SSA's estimate of State 
supplementary payments for any month which shall be made by SSA on 
behalf of such State; and
    (ii) An amount of funds equal to SSA's estimate of administration 
fees for any such month determined in the manner described in 
Sec. 416.2010(b)(1); and
    (iii) If applicable, an amount of funds equal to SSA's determination 
of the costs incurred by the Federal government in furnishing additional 
services for the State as described in Sec. 416.2010(b)(2).
    (2) In order for SSA to make State supplementary payments on behalf 
of a State for any month as provided by the agreement, the estimated 
amount of State funds referred to in paragraph (a)(1)(i) of this 
section, necessary to make those payments for the month, together with 
the estimated amount of administration fees referred to in paragraph 
(a)(1)(ii) of this section, for that month, must be on deposit with SSA 
on the State supplementary payment transfer date, which is the fifth 
Federal business day following the day in the month that the regularly 
recurring monthly supplemental security income payments are issued. The 
additional services fee referred to in paragraph (a)(1)(iii) of this 
section shall be on deposit with SSA on the date specified by SSA. The 
amount of State funds paid to SSA for State supplementary payments and 
the amount paid for administration fees will be adjusted as necessary to 
maintain the balance with State supplementary payments paid out by SSA 
on behalf of the State, and administration fees owed to SSA, 
respectively.
    (b) Accounting of State funds. (1) As soon as feasible, after the 
end of each calendar month, SSA will provide the State with a statement 
showing, cumulatively, the total amounts paid by SSA on behalf of the 
State during the current Federal fiscal year; the fees charged by SSA to 
administer such supplementary payments; any additional services fees 
charged the State; the State's total liability therefore; and the end-
of-month balance of the State's cash on deposit with SSA.
    (2) SSA shall provide an accounting of State funds received as State 
supplementary payments, administration fees, and additional services 
fees, within three calendar months following the termination of an 
agreement under Sec. 416.2005.
    (3) Adjustments will be made because of State funds due and payable 
or amounts of State funds recovered for calendar months for which the 
agreement was in effect. Interest will be incurred by SSA and the States 
with respect to the adjustment and accounting of State supplementary 
payments funds in accordance with applicable laws and regulations of the 
United States Department of the Treasury.
    (c) State audit. Any State entering into an agreement with SSA which 
provides for Federal administration of the State's supplementary 
payments has the right to an audit (at State expense) of the payments 
made by SSA on behalf of such State. The Secretary and the State shall 
mutually agree upon a satisfactory audit arrangement to verify that 
supplementary payments paid by SSA on behalf of the State were made in 
accordance with the terms of the administration agreement under 
Sec. 416.2005. Resolution of audit findings shall be made in accordance 
with the provisions of the State's agreement with SSA.
    (d) Advance payment and adjustment not applicable. The provisions of 
paragraphs (a) and (b) of this section shall not apply with respect to 
any State

[[Page 1147]]

supplementary payment for which reimbursement is available from the 
Social and Rehabilitation Service pursuant to the Indochina Migration 
and Refugee Assistance Act of 1975 (Pub. L. 94-23; 89 Stat. 87), as 
amended, since such amounts are not considered to be State supplementary 
payments.

[40 FR 7640, Feb. 21, 1975, as amended at 41 FR 36018, Aug. 26, 1976; 62 
FR 313, Jan. 3, 1997]



Sec. 416.2095  Pass-along of Federal benefit increases.

    (a) General. This section and the four sections that follow describe 
the rules for passing along increases in the Federal SSI benefit to 
recipients of State supplementary payments.
    (1) Section 416.2095(b) indicates when the pass-along rules apply to 
State supplementary payments.
    (2) Section 416.2096 describes the basic pass-along rules. The 
States must have an agreement to ``pass-along'' increases in Federal SSI 
benefits. A State passes along an increase when it maintains (rather 
than decreases) the levels of all its supplementary payments after a 
Federal benefit increase has occurred. Generally, a pass-along of the 
increase permits recipients to receive an additional amount in combined 
benefits equal to the Federal benefit increase. Except for the 
supplementary payment level made to residents of Medicaid facilities 
(see Sec. 416.2096(d)), a State can decrease one or more of its payment 
levels if it meets an annual total expenditures test.
    (3) Section 416.2097 explains the required combined supplementary/
SSI payment level.
    (4) Section 416.2098 explains how to compute the March 1983, 
December 1981, and December 1976 supplementary payment levels.
    (5) Section 416.2099 discusses what information a State must provide 
to the Commissioner concerning its supplementation programs so that the 
Commissioner can determine whether the State is in compliance. That 
section also discusses the basis for findings of noncompliance and what 
will occur if a State is found out of compliance.
    (b) When the pass-along provisions apply. (1) The pass-along 
requirements apply to all States (and the District of Columbia) that 
make supplementary payments on or after June 30, 1977, and wish to 
participate in the Medicaid program.
    (2) The pass-along requirements apply to both optional State 
supplementary payments of the type described in Sec. 416.2001(a) and 
mandatory minimum State supplementary payments as described in 
Sec. 416.2001(c), whether or not these State supplementary payments are 
Federally administered.
    (3) The requirements apply to State supplementary payments both for 
recipients who receive Federal SSI benefits and those who, because of 
countable income, receive only a State supplementary payment.
    (4) The requirements apply to State supplementary payments for 
recipients eligible for a State supplementary payment on or after June 
30, 1977.
    (5) Supplementary payments made by a State include payments made by 
a political subdivision (including Indian tribes) where--
    (i) The payment levels are set by the State; and
    (ii) The payments are funded in whole or in part by the State.

[52 FR 36241, Sept. 28, 1987, as amended at 54 FR 19165, May 4, 1989; 62 
FR 38455, July 18, 1997]



Sec. 416.2096  Basic pass-along rules.

    (a) State agreements to maintain supplementary payment levels. (1) 
In order to be eligible to receive Medicaid reimbursement, any State 
that makes supplementary payments, other than payments to residents of 
Medicaid facilities where Medicaid pays more than 50 percent of the cost 
of their care (see paragraph (d) of this section for definition of 
Medicaid facility and Sec. 416.414 for discussion of the reduced SSI 
benefit amount payable to residents of Medicaid facilities), on or after 
June 30, 1977, must have in effect an agreement with the Commissioner. 
In this agreement--
    (i) The State must agree to continue to make the supplementary 
payments;
    (ii) For months from July 1977 through March 1983, the State must 
agree to maintain the supplementary payments at levels at least equal to 
the

[[Page 1148]]

December 1976 levels (or, if a State first makes supplementary payments 
after December 1976, the levels for the first month the State makes 
supplementary payments). For months in the period July 1, 1982 through 
March 31, 1983, a State may elect to maintain the levels described in 
paragraph (b)(2) of this section; and
    (iii) For months after March 1983, the State must agree to maintain 
supplementary payments at least sufficient to maintain the combined 
supplementary/SSI payment levels in effect in March 1983, increased by 
any subsequent SSI benefit increases, except as provided in 
Sec. 416.2097(b) and Sec. 416.2097(c).
    (2) We will find that the State has met the requirements of 
paragraph (a)(1) of this section if the State has the appropriate 
agreement in effect and complies with the conditions in either paragraph 
(b) or (c) of this section. We will consider a State to have made 
supplementary payments on or after June 30, 1977, unless the State 
furnishes us satisfactory evidence to the contrary.
    (b) Meeting the pass-along requirements--supplementary payment 
levels. The provisions of this paragraph do not apply to the 
supplementary payment level for residents of Medicaid facilities (see 
paragraph (d) of this section).
    (1) We will consider a State to have met the requirements for 
maintaining its supplementary payment levels (described in 
Sec. 416.2098) for a particular month or months after March 1983 if the 
combined supplementary/SSI payment levels have not been reduced below 
the levels in effect in March 1983 (or if a State first made 
supplementary payments after March 1983, the combined supplementary/SSI 
payment levels in effect the first month the State made supplementary 
payments), increased by any subsequent Federal SSI benefit increases, 
except as provided in Sec. 416.2097(b) and Sec. 416.2097(c). We will 
consider a State to have met the requirements for maintaining its 
supplementary payment levels for a particular month or months between 
June 1977 and April 1983 if the supplementary payment levels have not 
been reduced below the levels in effect in December 1976 (or if a State 
first made supplementary payments after December 1976, the levels in 
effect the first month the State made supplementary payments, or in 
certain cases described in paragraph (b)(2) of this section, the levels 
in effect in December 1981.)
    (2) We will also consider a State to have met the requirements for 
maintaining its supplementary payment levels for a particular month or 
months in the period July 1, 1982, through March 31, 1983, if the State 
had met the requirements of paragraph (c) of this section for a 
particular month or months in the 12-month period July 1, 1981 through 
June 30, 1982, and, with respect to any month in the period July 1, 1982 
through March 31, 1983, the State maintained the payment levels in 
effect in December 1981.
    (3) If a State reduced any of its supplementary payment levels for a 
month or months within any 12-month period beginning with the effective 
date of a Federal benefit increase, we will consider the State to have 
met the requirement to maintain its supplementary payment levels if--
    (i) Within 12 months after the relevant 12-month period, the State 
restores the levels retroactively; and
    (ii) The State makes a single retroactive benefit payment to each of 
the beneficiaries eligible for the retroactive payment.
    (c) Meeting the passalong requirement--total expenditures. 
Exception-- The provisions of this paragraph do not apply to the 
supplementary payment level for residents of Medicaid facilities (see 
paragraph (d) of this section).
    (1) If a State does not meet the conditions in paragraph (b) of this 
section, we will consider a State to have met the requirement for 
maintaining supplementary payment levels for a particular month or 
months if total State expenditures for supplementary payments in the 12-
month period within which the month or months fall, beginning on the 
effective date of a Federal SSI benefit increase, are at least equal to 
the total State expenditures for supplementary payments in the 12-month 
period immediately before the Federal SSI benefit increase provided that 
the State was in compliance for such preceding 12-month period. The 
combined Federal/State payment level for those

[[Page 1149]]

persons receiving a mandatory minimum State supplementary payment can be 
no lower than the recipient's total income for December 1973 as defined 
in section 212(a)(3)(B) of Pub. L. 93-66.
    (2) If total State expenditures in the relevant 12-month period are 
less than the total expenditures in the preceding 12-month period (a 
``shortfall''), we also will consider a State to have met the 
requirement for maintaining supplementary payment levels for the 
relevant 12-month period if in the following 12-month period the State 
increases the total expenditures required for that period by an amount 
at least equal to the amount of the shortfall in the relevant 12-month 
period. The increased amount up to the amount needed to correct the 
shortfall shall be deemed to be an expenditure in the relevant 12-month 
period, for pass-along purposes only. (See paragraph (c)(5) of this 
section.)
    (3)(i) Exception for the 6-month period from July 1, 1983 through 
December 31, 1983: We will consider the State to have met the total-
expenditures requirement for the 6-month period July 1, 1983 through 
December 31, 1983, if--
    (A) Total expenditures for State supplementary payments for the 
period July 1, 1983 through December 31, 1983, equal or exceed the total 
of such expenditures for the period July l, 1982 through December 31, 
1982;
    (B) Total expenditures for State supplementary payments for the 
period January 1, 1983 through December 31, 1983, equal or exceed the 
total of such expenditures for the period January 1, 1982 through 
December 31, 1982; or
    (C) Total expenditures for State supplementary payments for the 
period July 1, 1983 through December 31, 1983 equal or exceed one-half 
of the total of such expenditures for the period July 1, 1982 through 
June 30, 1983. The provisions of paragraphs (c)(4) and (c)(5) of this 
section and of Sec. 416.2099 (b), (c), and (d) shall apply to this 6-
month period in the same manner as they apply to the 12-month periods 
referred to therein.
    (ii) Exception for the 12-month period ending June 30, 1981: If a 
State did not meet the conditions in paragraph (b) of this section, we 
will consider a State to have met the maintenance-of-supplementary-
payment-levels requirement for this 12-month period if the State's 
expenditures for supplementary payments in that period were at least 
equal to its expenditures for such payments for the 12-month period 
ending June 30, 1977 (or, if the State made no supplementary payments in 
that period, the expenditures for the first 12-month period ending June 
30 in which the State made such payments); if a State made additional 
State supplementary payments during the period July 1, 1981 through June 
30, 1982, in order to make up a shortfall in the 12-month period ending 
June 30, 1981 (determined by a comparison with the preceding 12-month 
period) which later resulted in an excess payment (determined by 
comparison with the 12-month period July 1, 1976 through June 30, 1977) 
we will credit the State with the amount of the excess payments if the 
State so requests. This credit will be applied to any shortfall(s) in 
total expenditures (should one exist) in any period(s) ending on or 
before December 31, 1986.
    (4) Total State expenditures for supplementary payments are the 
State's total payments for both mandatory minimum and optional State 
supplementary payments in the appropriate 12-month period less any 
amounts deemed to be expenditures for another 12-month period under 
paragraph (c)(2) of this section, less the amount of any payments 
recovered and other adjustments made in that period. Total State 
expenditures do not include State administrative expenses, interim 
assistance payments, vendor payments, or payments made under other 
Federal programs, such as titles IV, XIX, or XX of the Social Security 
Act.
    (5) Adjustments in total State supplementary payments made after the 
expiration of the relevant 12-month period for purposes of meeting total 
State expenditures under paragraph (c) of this section shall be 
considered a State expenditure in the relevant 12-month period only for 
purposes of the pass-along requirement. For purposes of Sec. 416.2090 of 
this part, which discusses

[[Page 1150]]

the rules for limitation on fiscal liability of States (hold harmless), 
these retroactive adjustments are State expenditures when made and shall 
be counted as a State expenditure in the fiscal year in which the 
adjustments are made.
    (6) To determine whether a State's expenditures for supplementary 
payments in the 12-month period beginning on the effective date of any 
increase in the level of SSI benefits are not less than the State's 
expenditures for the payments in the preceding 12-month period, in 
computing the State's expenditures, we disregard, pursuant to a one-time 
election of the State, all expenditures by the State for the retroactive 
supplementary payments that are required to be made under the Sullivan 
v. Zebley, 493 U.S. 521 (1990) class action.
    (d) Payments to residents to Medicaid facilities. A Medicaid 
facility is a medical care facility where Medicaid pays more than 50 
percent of the cost of a person's care. In order to be eligible to 
receive Medicaid reimbursement, any State that has a supplementary 
payment level for residents of Medicaid facilities on or after October 
1, 1987, must have in effect an agreement with the Commissioner to 
maintain such supplementary payment level at least equal to the October 
1987 level (or if a State first makes such supplementary payments after 
October 1, 1987, but before July 1, 1988, the level for the first month 
the State makes such supplementary payments).

[52 FR 36241, Sept. 28, 1987, as amended at 54 FR 19165, May 4, 1989; 56 
FR 55453, Oct. 28, 1991; 62 FR 30984, June 6, 1997; 62 FR 38455, July 
18, 1997; 65 FR 16815, Mar. 30, 2000]



Sec. 416.2097  Combined supplementary/SSI payment levels.

    (a) Other than the level for residents of Medicaid facilities (see 
paragraph (d) of this section), the combined supplementary/SSI payment 
level for each payment category that must be provided in any month after 
March 1983 (or if a State first made supplementary payments after March 
1983, the combined supplementary SSI payment levels in effect the first 
month the State made supplementary payments) in order for a State to 
meet the requirement of the first sentence of Sec. 416.2096(b) is the 
sum of--
    (1) The SSI Federal benefit rate (FBR) for March 1983 for a 
recipient with no countable income;
    (2) That portion of the July 1983 benefit increase computed in 
accordance with paragraph (b) of this section;
    (3) The full amount of all SSI benefit increases after July 1983; 
and
    (4) The State supplementary payment level for March 1983 as 
determined under Sec. 416.2098.
    (b) The monthly FBR's were increased in July 1983 by $20 for an 
eligible individual and $30 for an eligible couple, and the monthly 
increment for essential persons was increased by $10 in lieu of the 
expected cost-of-living adjustment which was delayed until January 1984. 
However, in computing the required combined supplementary/SSI payment 
levels for the purpose of determining pass-along compliance, we use only 
the amounts by which the FBR's and the essential person increment would 
have increased had there been a cost-of-living adjustment in July 1983 
(a 3.5 percent increase would have occurred). These amounts are $9.70 
for an eligible individual, $14.60 for an eligible couple and $4.50 for 
an essential person.
    (c) For the 24-month period January 1, 1984, through December 31, 
1985, a State will not be found out of compliance with respect to its 
payment levels if in the period January 1, 1986, through December 31, 
1986, its supplementary payment levels are not less than its 
supplementary payment levels in effect in December 1976 increased by the 
percentage by which the FBR has increased after December 1976 and before 
February 1986. The FBR for an individual in December 1976 was $167.80. 
The FBR for an individual in effect on January 31, 1986, was $336.00, an 
increase of 100.24 percent over the December 1976 FBR. In order for a 
State to take advantage of this provision for the 24-month period 
January 1, 1984, through December 31, 1985, the State supplementary 
payment levels in effect for calendar year 1986 must be at least 100.24 
percent higher than the State supplementary payment levels in effect in 
December 1976. This provision does

[[Page 1151]]

not apply to State supplementary payments to recipients in Federal 
living arrangement ``D'' (residents of a medical facility where title 
XIX pays more than 50 percent of the costs).
    (d) The combined supplementary/SSI payment level which must be 
maintained for residents of Medicaid facilities is the State supplement 
payable on October 1, 1987, or if no such payments were made on October 
1, 1987, the supplementary payment amount made in the first month that a 
supplementary payment was made after October 1987 but before July 1, 
1988, plus the Federal benefit rate in effect in October 1987 increased 
by $5 for an individual/$10 for a couple effective July 1, 1988.

[52 FR 36242, Sept. 28, 1987, as amended at 54 FR 19165, May 4, 1989; 54 
FR 23018, May 30, 1989]



Sec. 416.2098  Supplementary payment levels.

    (a) General. For the purpose of determining the combined 
supplementary/SSI payment levels described in Sec. 416.2097(a) (i.e., 
the levels that must be provided in any month after March 1983), the 
supplementary payment level, except for the level for residents of 
Medicaid facilities (see Sec. 416.2097(d)), for each payment category 
must be no less than the total State payment for March 1983 for that 
payment category that a State provided an eligible individual (or 
couple) with no countable income in excess of the FBR for March 1983. 
For States that did not make supplementary payments in March 1983, the 
supplementary payment level for each payment category must be no less 
than the total State payment for the first month after March 1983 in 
which a State makes supplementary payments.
    (b) Calculation of the required mandatory minimum State 
supplementary payment level. (1) Except for States described in 
paragraph (b)(2) of this section, the mandatory minimum State 
supplementary payment level for March 1983 is a recipient's December 
1973 income, as defined in section 212(a)(3)(B) of Pub. L. 93-66, plus 
any State increases prior to April 1983, less any reductions made at any 
time after December 1973 due to changes in special needs or 
circumstances, less the March 1983 FBR. The amount determined under the 
previous sentence shall continue for April, May, and June 1983. For July 
1983 and later the amount calculated in the first sentence shall 
continue except that it may be reduced by the amount of the July 1983 
Federal increase that was not related to the cost of living (i.e., 
$10.30), so long as that reduction does not cause the mandatory minimum 
State supplementary level to fall below that required by section 
212(a)(3)(A) of Pub. L. 93-66.
    (2) Section 1618(c) of the Act permitted any State that had 
satisfied the requirements of section 1618 of the Act by the total-
expenditures method for the 12-month period July 1, 1981, through June 
30, 1982, and that elected to change and meet the section 1618 
requirements by the maintenance-of-payment-levels method for the period 
July 1, 1982, through June 30, 1983, to do so by paying benefits at 
levels no lower than the levels of such payments in effect for December 
1981. However, a recipient's December 1981 total income (December 1981 
mandatory minimum State supplement plus the FBR) could not be less than 
the recipient's total income for December 1973 as defined in section 
212(a)(3)(B) of Pub. L. 93-66. For a State that elected the option in 
the preceding two sentences, the mandatory minimum State supplementary 
payment level for March 1983 is a recipient's December 1981 total income 
(but not less than the total income for December 1973 as defined by 
section 212(a)(3)(B) of Pub. L. 93-66) plus any State increases after 
December 1981 and prior to April 1983, less any reductions made at any 
time after December 1981 due to changes in special needs or 
circumstances, less the March 1983 FBR. The amount determined under the 
previous sentence shall continue for April, May, and June 1983. For July 
1983 and later, the amount calculated under the preceding sentence 
defining the required March 1983 mandatory minimum State supplementary 
payment level would continue except that it may be reduced by the amount 
of the July 1983 Federal increase that was not related to the cost of 
living (i.e., $10.30), so long as that reduction does not cause the 
mandatory minimum State supplementary level to fall below that

[[Page 1152]]

required by section 212(a)(3)(A) of Pub. L. 93-66.
    (c) Calculation of the required optional State supplementary payment 
level for flat grant amounts. The optional State supplementary payment 
level for March 1983 for flat grant amounts is the total amount that an 
eligible individual (or couple) with no countable income received for 
March 1983 in excess of the FBR for March 1983. The amount determined 
under the previous sentence shall continue for April, May, and June 
1983. For July 1983 and later the amount calculated in the first 
sentence shall continue except that it may be reduced by the amount of 
the July 1983 Federal increase that was not related to the cost of 
living (i.e., $10.30). If the State varied its payment levels for 
different groups of recipients (e.g., paid recipients different amounts 
based on eligibility categories, geographic areas, living arrangements, 
or marital status), each variation represents a separate supplementary 
payment level.
    (d) Calculation of the required optional State supplementary payment 
level for individually budgeted grant amounts. The optional State 
supplementary payment level for individually budgeted grant amounts for 
March 1983 is the amount that the State budgeted for March 1983 in 
excess of the March 1983 FBR for an eligible individual (or couple) 
having the same needs and no countable income. The amount determined 
under the previous sentence shall continue for April, May, and June 
1983. For July 1983 and later the amount calculated in the first 
sentence shall continue except that it may be reduced by the amount of 
the July 1983 Federal increase that was not related to the cost of 
living (i.e., $10.30).
    (e) Optional State supplementary payment level for per diem based 
grant amounts. (1) The optional State supplementary payment level for 
March 1983 for per diem grant amounts is the total dollar amount that 
the State paid to an eligible individual (or couple) with no countable 
income at rates in effect for March 1983 (number of days in the calendar 
month multiplied by the March 1983 per diem rate plus any March 1983 
personal needs allowance) in excess of the March 1983 FBR.

    Example:   

March 1983:
$15.40....................................  Per diem rate.
  x  31...................................  Days in month.
-------------------------------------------
477.40....................................
 
477.40....................................
 + 42.00..................................  Personal needs allowance.
-------------------------------------------
519.40....................................
 
519.40....................................  Combined State supplementary/
                                             SSI payment.
^284.30...................................  March 1983 FBR.
-------------------------------------------
235.10....................................  State supplementary payment
                                             level.
 

    (2) The optional State supplementary payment level for months 
subsequent to March 1983 for per diem grant amounts is the total dollar 
amount that the State paid to an individual (or couple) with no 
countable income at rates in effect in March 1983 (number of days in the 
calendar month multiplied by the March 1983 per diem rate plus any March 
1983 personal needs allowance) in excess of the March 1983 FBR for an 
individual (or couple) with no countable income increased by all FBR 
increases subsequent to March 1983 with the exception of the July 1, 
1983 increase. For the July 1, 1983 increase to the FBR, a State need 
pass-along only that portion of the increase which represented the 
increase in the cost of living adjustment (3.5 percent).

    Example: Note: Example assumes the State passed along only $9.70 of 
the $20.00 increase in the FBR effective July 1, 1983.
    The March 1983 combined supplementary/SSI payment level for a 31-day 
month was $519.40.

July 1983 level:
$519.40...................................  March 1983 combined payment.
 + 9.70...................................  July 1983 COLA-equivalent.
-------------------------------------------
529.10....................................  Required July 1983 combined
                                             payment level.
529.10....................................  Required July 1983 combined
                                             payment level.
^304.30...................................  July 1983 FBR.
-------------------------------------------
224.80....................................  Required State Supplementary
                                             payment level.
529.10....................................  Required July 1983 combined
                                             payment level.
^42.00....................................  Personal needs allowance.
-------------------------------------------
487.10....................................
487.10....................................

[[Page 1153]]

 
 + 31.....................................  Days in month.
-------------------------------------------
15.71.....................................  Per diem rate.
 

    The required July 1983 combined supplementary/SSI payment level for 
a 31-day month was $529.10. This amount is equal to the March 1983 
combined payment amount for a 31-day month plus the July 1983 COLA-
equivalent ($519.40 + $9.70).

    (f) Required optional State supplementary payment level for months 
prior to April 1983. In determining pass-along compliance under the 
maintenance-of-payment-levels test for months from July 1977 through 
March 1983, we used December 1976 (or December 1981 under the 
circumstances described in paragraph (g) of this section) as the 
standard month for determining the required State supplementary payment 
level. To determine the December 1976 State supplementary payment levels 
for categories described in paragraphs (a) through (e) of this section 
substitute ``December 1976'' for ``March 1983'' and ``January 1977'' for 
``April 1983'' whenever they appear in these paragraphs only.
    (g) Alternative required optional State supplementary payment level 
for July 1982 through March 1983. States which were in compliance solely 
under the total-expenditures test for the 12-month period ending June 
30, 1982, had the option of substituting December 1981 for December 1976 
and switching to the maintenance-of-payment-levels test for July 1982 
through March 1983 (see Sec. 416.2096(b)(2)). If this situation applies, 
determine the December 1981 State supplementary payment levels for 
categories described in paragraphs (a) through (e) of this section by 
substituting ``December 1981'' for ``March 1983'' and ``January 1982'' 
for ``April 1983'' whenever they appear in these paragraphs only.

[52 FR 36243, Sept. 28, 1987; 53 FR 4135, Feb. 12, 1988, as amended at 
54 FR 19165, May 4, 1989; 54 FR 23018, May 30, 1989]



Sec. 416.2099  Compliance with pass-along.

    (a) Information regarding compliance. Any State required to enter 
into a pass-along agreement with the Commissioner shall provide 
appropriate and timely information to demonstrate to the Commissioner's 
satisfaction that the State is meeting the pass-along requirements. The 
information shall include, where relevant--
    (1) The State's December 1976 supplementary payment levels, any 
subsequent supplementary payment levels, and any change in State 
eligibility requirements. If the State made no supplementary payments in 
December 1976, it shall provide such information about the first month 
in which it makes supplementary payments;
    (2) The State's March 1983 supplementary payment levels, any 
subsequent supplementary payment levels, and any changes in State 
eligibility requirements;
    (3) The total State expenditures for supplementary payments in the 
12-month period beginning July 1976 through June 1977, in each 
subsequent 12-month period, and in any other 12-month period beginning 
on the effective date of a Federal SSI benefit increase. The State shall 
also submit advance estimates of its total supplementary payments in 
each 12-month period covered by the agreement;
    (4) The total State expenditures for supplementary payments in the 
6-month periods July 1, 1982 through December 31, 1982 and July 1, 1983 
through December 31, 1983; and
    (5) The State supplementary payment level payable to residents of 
Medicaid facilities (see Sec. 416.2096(d)) on October 1, 1987 (or, if a 
State first makes such supplementary payments after October 1, 1987, but 
before July 1, 1988, the level for the month the State first makes such 
supplementary payments). The State shall also report all changes in such 
payment levels.
    (b) Records. Except where the Commissioner administers the State 
supplementary payments, the State shall maintain records about its 
supplementary payment levels and total 12-month (or 6-month where 
applicable) expenditures for supplementary payments and permit 
inspection and audit by the Commissioner or someone designated by the 
Commissioner.
    (c) Noncompliance by the States. Any State that makes supplementary 
payments on or after June 30, 1977, and does not have a pass-along 
agreement with the Commissioner in effect, shall be determined by the 
Commissioner to be ineligible for payments under title

[[Page 1154]]

XIX of the Act. A State does not have an agreement in effect if it has 
not entered into an agreement or has not complied with the terms of the 
agreement. Ineligibility shall apply to total expenditures for any 
calendar quarter beginning after June 30, 1977, for which a State has 
not entered into an agreement. A State that enters into an agreement but 
does not maintain its payment levels or meet the total-expenditures test 
in a particular 12-month or transitional 6-month period, shall be 
determined by the Commissioner not to have an agreement in effect for 
any month that the State did not meet the pass-along requirements during 
that particular period. The State shall then be ineligible for title XIX 
payments for any calendar quarter containing a month for which an 
agreement was not in effect. If a State first makes supplementary 
payments beginning with a month after June 1977, ineligibility shall 
apply to any calendar quarter beginning after the calendar quarter in 
which the State first makes payments.
    (d) Notices to States about potential noncompliance. Within 90 days 
after the end of the relevant 12-month period, the Commissioner shall 
send a notice to any State that has not maintained its supplementary 
payment levels and that appears not to have maintained its total 
expenditures during the period. The notice will advise the State of the 
available methods of compliance and the time within which corrective 
action must be taken (see Secs. 416.2096(b)(3) and 416.2096(c)(2)) in 
order to avoid a determination of noncompliance. If the State fails to 
take the corrective action, the Commissioner shall make a timely 
determination of noncompliance.

(Approved by the Office of Management and Budget under control number 
0960-0240)

[52 FR 36244, Sept. 28, 1987, as amended at 54 FR 19165, May 4, 1989; 62 
FR 38455, July 18, 1997]



              Subpart U_Medicaid Eligibility Determinations

    Authority: Secs. 702(a)(5), 1106, 1631(d)(1), and 1634 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1306, 1383(d)(1), and 1383c).

    Source: 53 FR 12941, Apr. 20, 1988, unless otherwise noted.



Sec. 416.2101  Introduction.

    (a) What is in this subpart. This subpart describes the agreements 
we make with States under which we determine the Medicaid eligibility of 
individuals who receive Supplemental Security Income (SSI) benefits. It 
includes a general description of the services we will provide under 
these agreements and the costs to the States for the services.
    (b) Related regulations. The comprehensive regulations on 
eligibility for the Medicaid program, administered by the Health Care 
Financing Administration, are in part 435 of title 42 of the Code of 
Federal Regulations.
    (c) Definitions. In this subpart--
    SSI benefits means Federal SSI benefits, including special SSI cash 
benefits under section 1619(a) of the Social Security Act. In addition, 
we consider a person who has special SSI eligibility status under 
section 1619(b) of the Social Security Act to be receiving SSI benefits.
    State Medicaid Plan means a State's medical assistance plan which 
the Secretary has approved under title XIX of the Act for Federal 
payment of a share of the State's medical assistance expenses.
    State supplementary payments means supplementary payments we 
administer for a State under subpart T of this part.
    We, us, or our refers to the Social Security Administration.



Sec. 416.2111  Conditions for our agreeing to make Medicaid 
eligibility determinations.

    We will agree to make Medicaid eligibility determinations for a 
State only if the State's Medicaid eligibility requirements for 
recipients of SSI benefits and for recipients of State supplementary 
payments are the same as the requirements for receiving SSI benefits and 
the requirements for receiving State supplementary payments, 
respectively. Exceptions: We may agree to make Medicaid eligibility 
determinations--
    (a) For one, two, or all of the three categories of people (i.e., 
aged, blind,

[[Page 1155]]

and disabled) who receive SSI benefits or State supplementary payments; 
or
    (b) Even though the State's Medicaid eligibility requirements for 
recipients of SSI benefits or of State supplementary payments, or both, 
differ from the requirements for SSI or State supplementary payments, or 
both, in ways mandated by Federal law.



Sec. 416.2116  Medicaid eligibility determinations.

    If a State requests, we may agree, under the conditions in this 
subpart, to make Medicaid eligibility determinations on behalf of the 
State. Under these agreements, we make the Medicaid determinations when 
determinations or redeterminations are necessary for SSI purposes. Our 
determinations may include non-SSI requirements that are mandated by 
Federal law. When we determine that a person is eligible for Medicaid in 
accordance with Sec. 416.2111 or that we are not making the 
determination, we notify the State of that fact.



Sec. 416.2130  Effect of the agreement and responsibilities of States.

    (a) An agreement under this subpart does not change--
    (1) The provisions of a State's Medicaid plan;
    (2) The conditions under which the Secretary will approve a State's 
Medicaid plan; or
    (3) A State's responsibilities under the State Medicaid plan.
    (b) Following are examples of functions we will not agree to carry 
out for the State:
    (1) Stationing of our employees at hospitals or nursing homes to 
take Medicaid applications;
    (2) Determining whether a person is eligible for Medicaid for any 
period before he or she applied for SSI benefits;
    (3) Giving approval for emergency medical care under Medicaid before 
a determination has been made on whether a person is eligible for SSI 
benefits;
    (4) Setting up or running a State's system for requiring a person to 
pay part of the cost of services he or she receives under Medicaid; or
    (5) Giving identification cards to people to show that they are 
eligible for Medicaid.



Sec. 416.2140  Liability for erroneous Medicaid eligibility 
determinations.

    If the State suffers any financial loss, directly or indirectly, 
through using any information we provide under an agreement described in 
this subpart, we will not be responsible for that loss. However, if we 
erroneously tell a State that a person is eligible for Medicaid and the 
State therefore makes erroneous Medicaid payments, the State will be 
paid the Federal share of those payments under the Medicaid program as 
if they were correct.



Sec. 416.2145  Services other than Medicaid determinations.

    We will agree under authority of section 1106 of the Act and 31 
U.S.C. 6505 to provide services other than Medicaid determinations to 
help the State administer its Medicaid program. We will do this only if 
we determine it is the most efficient and economical way to accomplish 
the State's purpose and does not interfere with administration of the 
SSI program. The services can be part of a Medicaid eligibility 
determination agreement or a separate agreement. Under either agreement 
we will--
    (a) Give the State basic information relevant to Medicaid 
eligibility from individuals' applications for SSI benefits;
    (b) Give the State answers to certain purely Medicaid-related 
questions (in addition to any that may be necessary under 
Sec. 416.2111(b)), such as whether the SSI applicant has any unpaid 
medical expenses for the current month or the previous 3 calendar 
months;
    (c) Conduct statistical or other studies for the State; and
    (d) Provide other services the State and we agree on.



Sec. 416.2161  Charges to States.

    (a) States with Medicaid eligibility determination agreement. A 
State with which we have an agreement to make Medicaid eligibility 
determinations is charged in the following manner:

[[Page 1156]]

    (1) If making Medicaid determinations and providing basic SSI 
application information for a State causes us additional cost, the State 
must pay half of that additional cost. ``Additional cost'' in this 
section means cost in addition to costs we would have had anyway in 
administering the SSI program.
    (2) The State must pay half our additional cost caused by providing 
any information that we collect for Medicaid purposes and by any other 
services directly related to making Medicaid eligibility determinations.
    (3) The State must pay our full additional cost for statistical or 
other studies and any other services that are not directly related to 
making Medicaid eligibility determinations.
    (b) States without Medicaid eligibility determination agreement. A 
State with which we do not have an agreement to make Medicaid 
eligibility determinations is charged in the following manner:
    (1) If providing basic SSI application information causes us 
additional cost, the State must pay our full additional cost.
    (2) The State must pay our full additional cost caused by providing 
any information that we collect for Medicaid purposes and for 
statistical or other studies and any other services.



Sec. 416.2166  Changing the agreement.

    The State and we can agree in writing to change the agreement at any 
time.



Sec. 416.2171  Duration of agreement.

    An agreement under this subpart is automatically renewed for 1 year 
at the end of the term stated in the agreement and again at the end of 
each 1-year renewal term, unless--
    (a) The State and we agree in writing to end it at any time;
    (b) Either the State or we end it at any time without the other's 
consent by giving written notice at least 90 days before the end of a 
term, or 120 days before any other ending date selected by whoever wants 
to end the agreement; or
    (c)(1) The State fails to pay our costs as agreed;
    (2) We notify the State in writing, at least 30 days before the 
ending date we select, why we intend to end the agreement; and
    (3) The State does not give a good reason for keeping the agreement 
in force beyond the ending date we selected. If the State does provide a 
good reason, the termination will be postponed or the agreement will be 
kept in force until the end of the term.



Sec. 416.2176  Disagreements between a State and us.

    (a) If a State with which we have an agreement under this subpart 
and we are unable to agree about any question of performance under the 
agreement, the State may appeal the question to the Commissioner of 
Social Security. The Commissioner or his or her designee will, within 90 
days after receiving the State's appeal, give the State either a written 
decision or a written explanation of why a decision cannot be made 
within 90 days, what is needed before a decision can be made, and when a 
decision is expected to be made.
    (b) The Commissioner's decision will be the final decision of the 
Social Security Administration.

[53 FR 12941, Apr. 20, 1988, as amended at 62 FR 38456, July 18, 1997]



        Subpart V_Payments for Vocational Rehabilitation Services

    Authority: Secs. 702(a)(5), 1615, 1631(d)(1) and (e), and 1633(a) of 
the Social Security Act (42 U.S.C. 902(a)(5), 1382d, 1383(d)(1) and (e), 
and 1383b(a)).

    Source: 48 FR 6297, Feb. 10, 1983, unless otherwise noted.

                           General Provisions



Sec. 416.2201  General.

    In general, sections 1615(d) and (e) of the Social Security Act (the 
Act) authorize payment from the general fund for the reasonable and 
necessary costs of vocational rehabilitation (VR) services provided 
certain disabled or blind individuals who are eligible for supplemental 
security income (SSI) benefits, special SSI eligibility status, or 
federally administered State supplementary payments. In this subpart, 
such benefits, status, or payments are referred to

[[Page 1157]]

as disability or blindness benefits (see Sec. 416.2203). Subject to the 
provisions of this subpart, payment may be made for VR services provided 
an individual during a month(s) for which the individual is eligible for 
disability or blindness benefits, including the continuation of such 
benefits under section 1631(a)(6) of the Act, or for which the 
individual's disability or blindness benefits are suspended (see 
Sec. 416.2215). Paragraphs (a) and (b) of this section describe the 
cases in which the State VR agencies and alternate participants can be 
paid for the VR services provided such an individual under this subpart. 
The purpose of sections 1615(d) and (e) of the Act is to make VR 
services more readily available to disabled or blind individuals and 
ensure that savings accrue to the general fund. Payment will be made for 
VR services provided on behalf of such an individual in cases where--
    (a) The furnishing of the VR services results in the individual's 
completion of a continuous 9-month period of substantial gainful 
activity (SGA) as specified in Secs. 416.2210 through 416.2211; or
    (b) The individual continues to receive disability or blindness 
benefits, even though his or her disability or blindness has ceased, 
under section 1631(a)(6) of the Act because of his or her continued 
participation in an approved VR program which we have determined will 
increase the likelihood that he or she will not return to the disability 
or blindness rolls (see Sec. 416.2212).

[68 FR 40124, July 7, 2003]



Sec. 416.2202  Purpose and scope.

    This subpart describes the rules under which the Commissioner will 
pay the State VR agencies or alternate participants for VR services. 
Payment will be provided for VR services provided on behalf of disabled 
or blind individuals under one or more of the provisions discussed in 
Sec. 416.2201.
    (a) Sections 416.2201 through 416.2203 describe the purpose of these 
regulations and the meaning of terms we frequently use in them.
    (b) Section 416.2204 explains how State VR agencies or alternate 
participants may participate in the payment program under this subpart.
    (c) Section 416.2206 describes the basic qualifications for 
alternate participants.
    (d) Sections 416.2208 through 416.2209 describe the requirements and 
conditions under which we will pay a State VR agency or alternate 
participant under this subpart.
    (e) Sections 416.2210 through 416.2211 describe when an individual 
has completed a continuous period of SGA and when VR services will be 
considered to have contributed to that period.
    (f) Section 416.2212 describes when payment will be made to a VR 
agency or alternate participant because an individual's disability or 
blindness benefits are continued based on his or her participation in a 
VR program which we have determined will increase the likelihood that he 
or she will not return to the disability rolls.
    (g) Sections 416.2214 through 416.2215 describe services for which 
payment will be made.
    (h) Section 416.2216 describes the filing deadlines for claims for 
payment for VR services.
    (i) Section 416.2217 describes the payment conditions.
    (j) Section 416.2218 describes the applicability of these 
regulations to alternate participants.
    (k) Section 416.2219 describes how we will make payment to State VR 
agencies or alternate participants for rehabilitation services.
    (l) Sections 416.2220 and 416.2221 describe the audits and the 
prepayment and postpayment validation reviews we will conduct.
    (m) Section 416.2222 discusses confidentiality of information and 
records.
    (n) Section 416.2223 provides for the applicability of other Federal 
laws and regulations.
    (o) Section 416.2227 provides for the resolution of disputes.

[48 FR 6297, Feb. 10, 1983, as amended at 55 FR 8456, Mar. 8, 1990; 59 
FR 11916, Mar. 15, 1994; 62 FR 38456, July 18, 1997; 68 FR 40124, July 
7, 2003]



Sec. 416.2203  Definitions.

    For purposes of this subpart:

[[Page 1158]]

    Accept the recipient as a client for VR services means that the 
State VR agency determines that the individual is eligible for VR 
services and places the individual into an active caseload status for 
development of an individualized written rehabilitation program.
    Act means the Social Security Act, as amended.
    Alternate participants means any public or private agencies (except 
participating State VR agencies (see Sec. 416.2204)), organizations, 
institutions, or individuals with whom the Commissioner has entered into 
an agreement or contract to provide VR services.
    Blindness means ``blindness'' as defined in section 1614(a)(2) of 
the Act.
    Commissioner means the Commissioner of Social Security or the 
Commissioner's designee.
    Disability means ``disability'' as defined in section 1614(a)(3) of 
the Act.
    Disability or blindness benefits, as defined for this subpart only, 
refers to regular SSI benefits under section 1611 of the Act (see 
Sec. 416.202), special SSI cash benefits under section 1619(a) of the 
Act (see Sec. 416.261), special SSI eligibility status under section 
1619(b) of the Act (see Sec. 416.264), and/or a federally administered 
State supplementary payment under section 1616 of the Act or section 
212(b) of Public Law 93-66 (see Sec. 416.2001), for which an individual 
is eligible based on disability or blindness, as appropriate.
    Medical recovery for purposes of this subpart is established when a 
disabled or blind recipient's eligibility ceases for any medical reason 
(other than death). The determination of medical recovery is made by the 
Commissioner in deciding a recipient's continuing eligibility for 
benefits.
    Place the recipient into an extended evaluation process means that 
the State VR agency determines that an extended evaluation of the 
individual's VR potential is necessary to determine whether the 
individual is eligible for VR services and places the individual into an 
extended evaluation status.
    SGA means substantial gainful activity performed by an individual as 
defined in Secs. 416.971 through 416.975 of this subpart or 
Sec. 404.1584 of this chapter.
    Special SSI eligibility status refers to the special status 
described in Secs. 416.264 through 416.269 relating to eligibility for 
Medicaid.
    State means any of the 50 States of the United States, the District 
of Columbia, or the Northern Mariana Islands. It includes the State VR 
agency.
    Vocational rehabilitation services has the meaning assigned to it 
under title I of the Rehabilitation Act of 1973.
    VR agency means an agency of the State which has been designated by 
the State to provide vocational rehabilitation services under title I of 
the Rehabilitation Act of 1973.
    We, us, and our refer to the Social Security Administration (SSA).

[48 FR 6297, Feb. 10, 1983, as amended at 55 FR 8456, Mar. 8, 1990; 55 
FR 19423, May 9, 1990; 59 FR 1637, Jan. 12, 1994; 59 FR 11916, Mar. 15, 
1994; 61 FR 31026, June 19, 1996; 62 FR 38456, July 18, 1997; 68 FR 
40125, July 7, 2003]



Sec. 416.2204  Participation by State VR agencies or alternate 
participants.

    (a) General. In order to participate in the payment program under 
this subpart through its VR agency(ies), a State must have a plan which 
meets the requirements of title I of the Rehabilitation Act of 1973, as 
amended. An alternate participant must have a similar plan and otherwise 
qualify under Sec. 416.2206.
    (b) Participation by States. (1) The opportunity to participate 
through its VR agency(ies) with respect to disabled or blind recipients 
in the State will be offered first to the State in accordance with 
paragraph (c) of this section, unless the State has notified us in 
advance under paragraph (e)(1) of this section of its decision not to 
participate or to limit such participation.
    (2) A State with one or more approved VR agencies may choose to 
limit participation of those agencies to a certain class(es) of disabled 
or blind recipients. For example, a State with separate VR agencies for 
the blind and disabled may choose to limit participation to the VR 
agency for the blind. In such a case, we would give the State, through 
its VR agency for the blind, the opportunity to participate with respect 
to blind recipients in the State in accordance with paragraph (d) of 
this section. We would arrange for VR services for disabled recipients 
in the State through an alternate participant(s). A

[[Page 1159]]

State that chooses to limit participation of its VR agency(ies) must 
notify us in advance under paragraph (e)(1) of this section of its 
decision to limit such participation.
    (3) If a State chooses to participate by using a State agency other 
than a VR agency with a plan for VR services approved under title I of 
the Rehabilitation Act of 1973, as amended, that State agency may 
participate only as an alternate participant.
    (c) Opportunity for participation through State VR agencies. (1) 
Unless a State has decided not to participate or to limit participation, 
we will give the State the opportunity to participate through its VR 
agency(ies) with respect to disabled or blind recipients in the State by 
referring such recipients first to the State VR agency(ies) for 
necessary VR services. A State, through its VR agency(ies), may 
participate with respect to any recipient so referred by accepting the 
recipient as a client for VR services or placing the recipient into an 
extended evaluation process and notifying us under paragraph (c)(2) of 
this section of such acceptance or placement.
    (2)(i) In order for the State to participate with respect to a 
disabled or blind recipient whom we referred to a State VR agency, the 
State VR agency must notify the appropriate Regional Commissioner (SSA) 
in writing or through electronic notification of its decision either to 
accept the recipient as a client for VR services or to place the 
recipient into an extended evaluation process. The notice must be 
received by the appropriate Regional Commissioner (SSA) no later than 
the close of the fourth month following the month in which we referred 
the recipient to the State VR agency. If we do not receive such notice 
with respect to a recipient whom we referred to the State VR agency, we 
may arrange for VR services for that recipient through an alternate 
participant.
    (ii) In any case in which a State VR agency notifies the appropriate 
Regional Commissioner (SSA) in writing within the stated time period 
under paragraph (c)(2)(i) of this section of its decision to place the 
recipient into an extended evaluation process, the State VR agency also 
must notify that Regional Commissioner in writing upon completion of the 
evaluation of its decision whether or not to accept the recipient as a 
client for VR services. If we receive a notice of a decision by the 
State VR agency to accept the recipient as a client for VR services 
following the completion of the extended evaluation, the State may 
continue to participate with respect to such recipient. If we receive a 
notice of a decision by the State VR agency not to accept the recipient 
as a client for VR services following the completion of the extended 
evaluation, we may arrange for VR services for that recipient through an 
alternate participant.
    (d) Opportunity for limited participation through State VR agencies. 
If a State has decided under paragraph (e)(1) of this section to limit 
participation of its VR agency(ies) to a certain class(es) of disabled 
or blind recipients in the State, we will give the State the opportunity 
to participate with respect to such class(es) of disabled or blind 
recipients by referring such recipients first to the State VR 
agency(ies) for necessary VR services. The State, through its VR 
agency(ies), may participate with respect to any recipient so referred 
by accepting the recipient as a client for VR services or placing the 
recipient into an extended evaluation process and notifying us under 
paragraph (c)(2) of this section of such acceptance or placement.
    (e) Decision of a State not to participate or to limit 
participation. (1) A State may choose not to participate through its VR 
agency(ies) with respect to any disabled or blind recipients in the 
State, or it may choose to limit participation of its VR agency(ies) to 
a certain class(es) of disabled or blind recipients in the State. A 
State which decides not to participate or to limit participation must 
provide advance written notice of that decision to the appropriate 
Regional Commissioner (SSA). Unless a State specifies a later month, a 
decision not to participate or to limit participation will be effective 
beginning with the third month following the month in which the notice 
of the decision is received by the appropriate Regional Commissioner 
(SSA). The notice of the State decision must be submitted by an official 
authorized to act

[[Page 1160]]

for the State for this purpose. A State must provide to the appropriate 
Regional Commissioner (SSA) an opinion from the State's Attorney 
General, verifying the authority of the official who sent the notice to 
act for the State. This opinion will not be necessary if the notice is 
signed by the Governor of the State.
    (2)(i) If a State has decided not to participate through its VR 
agency(ies), we may arrange for VR services through an alternate 
participant(s) for disabled or blind recipients in the State.
    (ii) If a State has decided to limit participation of its VR 
agency(ies) to a certain class(es) of disabled or blind recipients, we 
may arrange for VR services through an alternate participant(s) for the 
class(es) of disabled or blind recipients in the State excluded from the 
scope of the State's participation.
    (3) A State which has decided not to participate or to limit 
participation may participate later through its VR agency(ies) in 
accordance with paragraph (c) of this section, provided that such 
participation will not conflict with any previous commitment which we 
may have made to an alternate participant(s) under paragraph (e)(2) of 
this section. A State which decides to resume participation under 
paragraph (c) of this section must provide advance written notice of 
that decision to the appropriate Regional Commissioner (SSA). Unless a 
commitment to an alternate participant(s) requires otherwise, a decision 
of a State to resume participation under paragraph (c) of this section 
will be effective beginning with the third month following the month in 
which the notice of the decision is received by the appropriate Regional 
Commissioner (SSA) or, if later, with a month specified by the State. 
The notice of the State decision must be submitted by an official 
authorized to act for the State as explained in paragraph (e)(1) of this 
section.
    (f) Use of alternate participants. The Commissioner, by written 
agreement or contract, may arrange for VR services through an alternate 
participant(s) for any disabled or blind recipient in the State with 
respect to whom the State is unwilling to participate through its VR 
agency(ies). In such a case, we may refer the recipient to such 
alternate participant for necessary VR services. The Commissioner will 
find that a State is unwilling to participate with respect to any of the 
following disabled or blind recipients in that State:
    (1) A disabled or blind recipient whom we referred to a State VR 
agency under paragraph (c) or (d) of this section if we do not receive a 
notice within the stated time period under paragraph (c)(2)(i) of this 
section of a decision by the VR agency either to accept the recipient as 
a client for VR services or to place the recipient into an extended 
evaluation process;
    (2) A disabled or blind recipient with respect to whom we receive a 
notice under paragraph (c)(2)(ii) of this section of a decision by the 
VR agency not to accept the recipient as a client for VR services 
following the completion of the extended evaluation;
    (3) The class(es) of disabled or blind recipients excluded from the 
scope of the State's participation if the State has decided to limit 
participation of its VR agency(ies); and
    (4) All disabled or blind recipients in the State if the State has 
decided not to participate through its VR agency(ies).

[59 FR 11917, Mar. 15, 1994]



Sec. 416.2206  Basic qualifications for alternate participants.

    (a) General. We may arrange for VR services through an alternate 
participant by written agreement or contract as explained in 
Sec. 416.2204(f). An alternate participant may be a public or private 
agency, organization, institution or individual (that is, any entity 
whether for-profit or not-for-profit), other than a State VR agency.
    (1) An alternate participant must--
    (i) Be licensed, certified, accredited, or registered, as 
appropriate, to provide VR services in the State in which it provides 
services; and
    (ii) Under the terms of the written contract or agreement, have a 
plan similar to the State plan described in Sec. 416.2204(a) which shall 
govern the provision of VR services to individuals.

[[Page 1161]]

    (2) We will not use as an alternate participant any agency, 
organization, institution, or individual--
    (i) Whose license, accreditation, certification, or registration is 
suspended or revoked for reasons concerning professional competence or 
conduct or financial integrity;
    (ii) Who has surrendered such license, accreditation, certification, 
or registration pending a final determination of a formal disciplinary 
proceeding; or
    (iii) Who is precluded from Federal procurement or nonprocurement 
programs.
    (b) Standards for the provision of VR services. An alternate 
participant's plan must provide, among other things, that the provision 
of VR services to individuals will meet certain minimum standards, 
including, but not limited to, the following:
    (1) All medical and related health services furnished will be 
prescribed by, or provided under the formal supervision of, persons 
licensed to prescribe or supervise the provision of these services in 
the State;
    (2) Only qualified personnel and rehabilitation facilities will be 
used to furnish VR services; and
    (3) No personnel or rehabilitation facility described in paragraph 
(a)(2)(i), (ii), or (iii) of this section will be used to provide VR 
services.

[59 FR 11918, Mar. 15, 1994]

                           Payment Provisions



Sec. 416.2208  Requirements for payment.

    (a) The State VR agency or alternate participant must file a claim 
for payment in each individual case within the time periods specified in 
Sec. 416.2216;
    (b) The claim for payment must be in a form prescribed by us and 
contain the following information:
    (1) A description of each service provided;
    (2) When the service was provided; and
    (3) The cost of the service;
    (c) The VR services for which payment is being requested must have 
been provided during the period specified in Sec. 416.2215;
    (d) The VR services for which payment is being requested must have 
been provided under a State plan for VR services approved under title I 
of the Rehabilitation Act of 1973, as amended, or, in the case of an 
alternate participant, under a negotiated plan, and must be services 
that are described in Sec. 416.2214;
    (e) The individual must meet one of the VR payment provisions 
specified in Sec. 416.2201;
    (f) The State VR agency or alternate participant must maintain, and 
provide as we may require, adequate documentation of all services and 
costs for all disabled or blind recipients with respect to whom a State 
VR agency or alternate participant could potentially request payment for 
services and costs under this subpart; and
    (g) The amount to be paid must be reasonable and necessary and be in 
compliance with the cost guidelines specified in Sec. 416.2217.

[48 FR 6297, Feb. 10, 1983, as amended at 55 FR 8456, Mar. 8, 1990; 59 
FR 11918, Mar. 15, 1994]



Sec. 416.2209  Responsibility for making payment decisions.

    The Commissioner will decide:
    (a) Whether a continuous period of 9 months of SGA has been 
completed;
    (b) Whether a disability or blindness recipient whose disability or 
blindness has ceased should continue to receive benefits under section 
1631(a)(6) of the Social Security Act for a month after October 1984 or, 
in the case of a blindness recipient, for a month after March 1988, 
based on his or her continued participation in a VR program;
    (c) If and when medical recovery has occurred;
    (d) Whether documentation of VR services and expenditures is 
adequate;
    (e) If payment is to be based on completion of a continuous 9-month 
period of SGA, whether the VR services contributed to the continuous 
period of SGA;
    (f) Whether a VR service is a service described in Sec. 416.2214; 
and
    (g) What VR costs were reasonable and necessary and will be paid.

[55 FR 8456, Mar. 8, 1990, as amended at 59 FR 11918, Mar. 15, 1994; 61 
FR 31026, June 19, 1996; 68 FR 40125, July 7, 2003]

[[Page 1162]]



Sec. 416.2210  What we mean by ``SGA'' and by ``a continuous period 
of 9 months''.

    (a) What we mean by ``SGA''. In determining whether an individual's 
work is SGA, we will follow the rules in Secs. 416.972 through 416.975. 
We will follow these same rules for individuals who are statutorily 
blind, but we will evaluate the earnings in accordance with the rules in 
Sec. 404.1584(d) of this chapter.
    (b) What we mean by ``a continuous period of 9 months''. A 
continuous period of 9 months ordinarily means a period of 9 consecutive 
calendar months. Exception: When an individual does not perform SGA in 9 
consecutive calendar months, he or she will be considered to have done 
so if--
    (1) The individual performs 9 months of SGA within 10 consecutive 
months and has monthly earnings that meet or exceed the guidelines in 
Sec. 416.974(b)(2), or Sec. 404.1584(d) of this chapter if the 
individual is statutorily blind, or
    (2) The individual performs at least 9 months of SGA within 12 
consecutive months, and the reason for not performing SGA in 2 or 3 of 
those months was due to circumstances beyond his or her control and 
unrelated to the impairment (e.g., the employer closed down for 3 
months).
    (c) What work we consider. In determining if a continuous period of 
SGA has been completed, all of an individual's work activity may be 
evaluated for purposes of this section, including work performed before 
October 1, 1981, during a trial work period, and after eligibility for 
disability or blindness payments ended. We will ordinarily consider only 
the first 9 months of SGA that occurs. The exception will be if an 
individual who completed 9 months of SGA later stops performing SGA, 
received VR services and then performs SGA for a 9-month period. See 
Sec. 416.2215 for the use of the continuous period in determining 
payment for VR services.

[48 FR 6297, Feb. 10, 1983, as amended at 55 FR 8457, Mar. 8, 1990]



Sec. 416.2211  Criteria for determining when VR services will be
considered to have contributed to a continuous period of 9 months.

    The State VR agency or alternate participant may be paid for VR 
services if such services contribute to the individual's performance of 
a continuous 9-month period of SGA. The following criteria apply to 
individuals who received more than just evaluation services. If a State 
VR agency or alternate participant claims payment for services to an 
individual who received only evaluation services, it must establish that 
the individual's continuous period or medical recovery (if medical 
recovery occurred before completion of a continuous period) would not 
have occurred without the services provided. In applying the criteria 
below, we will consider services described in Sec. 416.2214 that were 
initiated, coordinated or provided, including services before October 1, 
1981.
    (a) Continuous period without medical recovery. If an individual who 
has completed a ``continuous period'' of SGA has not medically recovered 
as of the date of completion of the period, the determination as to 
whether VR services contributed will depend on whether the continuous 
period began one year or less after VR services ended or more than one 
year after VR services ended.
    (1) One year or less. Any VR services which significantly motivated 
or assisted the individual in returning to, or continuing in, SGA will 
be considered to have contributed to the continuous period.
    (2) More than one year. (i) If the continuous period was preceded by 
transitional work activity (employment or self-employment which 
gradually evolved, with or without periodic interruption, into SGA), and 
that work activity began less than a year after VR services ended, any 
VR services which significantly motivated or assisted the individual in 
returning to, or continuing in, SGA will be considered to have 
contributed to the continuous period.
    (ii) If the continuous period was not preceded by transitional work 
activity that began less than a year after VR services ended, VR 
services will be considered to have contributed to the continuous period 
only if it is reasonable to conclude that the work activity which 
constitutes a continuous period could not have occurred without the VR 
services (e.g., training).

[[Page 1163]]

    (b) Continuous period with medical recovery occurring before 
completion. (1) If an individual medically recovers before a continuous 
period has been completed, VR services under paragraph (a) of this 
section will not be payable unless some VR services contributed to the 
medical recovery. VR services will be considered to have contributed to 
the medical recovery if--
    (i) The individualized written rehabilitation program (IWRP), or in 
the case of an alternate participant, a similar document, included 
medical services; and
    (ii) The medical recovery occurred, at least in part, because of 
these medical services. (For example, the individual's medical recovery 
was based on improvement in a back condition which, at least in part, 
stemmed from surgery initiated, coordinated or provided under an IWRP).
    (2) In some instances, the State VR agency or alternate participant 
will not have provided, initiated, or coordinated medical services. If 
this happens, payment for VR services may still be possible under 
paragraph (a) of this section if: (i) The medical recovery was not 
expected by us; and (ii) the individual's impairment is determined by us 
to be of such a nature that any medical services provided would not 
ordinarily have resulted in, or contributed to, the medical cessation.

[48 FR 6297, Feb. 10, 1983, as amended at 59 FR 11918, Mar. 15, 1994]



Sec. 416.2212  Payment for VR services in a case where an individual
continues to receive disability or blindness benefits based on 
participation in an approved VR program.

    Section 1631(a)(6) of the Act contains the criteria we will use in 
determining if an individual whose disability or blindness has ceased 
should continue to receive disability or blindness benefits because of 
his or her continued participation in an approved VR program. A VR 
agency or alternate participant can be paid for the cost of VR services 
provided to an individual if the individual was receiving benefits based 
on this provision in a month(s) after October 1984 or, in the case of a 
blindness recipient, in a month(s) after March 1988. If this requirement 
is met, a VR agency or alternate participant can be paid for the costs 
of VR services provided within the period specified in Sec. 416.2215, 
subject to the other payment and administrative provisions of this 
subpart.

[55 FR 8457, Mar. 8, 1990, as amended at 61 FR 31026, June 19, 1996]



Sec. 416.2214  Services for which payment may be made.

    (a) General. Payment may be made for VR services provided by a State 
VR agency in accordance with title I of the Rehabilitation Act of 1973, 
as amended, or by an alternate participant under a negotiated plan, 
subject to the limitations and conditions in this subpart. VR services 
for which payment may be made under this subpart include only those 
services described in paragraph (b) of this section which are--
    (1) Necessary to determine an individual's eligibility for VR 
services or the nature and scope of the services to be provided; or
    (2) Provided by a State VR agency under an IWRP, or by an alternate 
participant under a similar document, but only if the services could 
reasonably be expected to motivate or assist the individual in returning 
to, or continuing in, SGA.
    (b) Specific services. Payment may be made under this subpart only 
for the following VR services:
    (1) An assessment for determining an individual's eligibility for VR 
services and vocational rehabilitation needs by qualified personnel, 
including, if appropriate, an assessment by personnel skilled in 
rehabilitation technology, and which includes determining--
    (i) The nature and extent of the physical or mental impairment(s) 
and the resultant impact on the individual's employability;
    (ii) The likelihood that an individual will benefit from vocational 
rehabilitation services in terms of employability; and
    (iii) An employment goal consistent with the capacities of the 
individual and employment opportunities;
    (2) Counseling and guidance, including personal adjustment 
counseling, and those referrals and other services necessary to help an 
individual secure needed services from other agencies;

[[Page 1164]]

    (3) Physical and mental restoration services necessary to correct or 
substantially modify a physical or mental condition which is stable or 
slowly progressive and which constitutes an impediment to suitable 
employment at or above the SGA level;
    (4) Vocational and other training services, including personal and 
vocational adjustment, books, tools, and other training materials, 
except that training or training services in institutions of higher 
education will be covered under this section only if maximum efforts 
have been made by the State VR agency or alternate participant to secure 
grant assistance in whole or in part from other sources;
    (5) Maintenance expenses that are extra living expenses over and 
above the individual's normal living expenses and that are incurred 
solely because of and while the individual is participating in the VR 
program and that are necessary in order for the individual to benefit 
from other necessary VR services;
    (6) Travel and related expenses necessary to transport an individual 
for purpose of enabling the individual's participation in other 
necessary VR services;
    (7) Services to family members of a disabled or blind individual 
only if necessary to the successful vocational rehabilitation of that 
individual;
    (8) Interpreter services and note-taking services for an individual 
who is deaf and tactile interpreting for an individual who is deaf and 
blind;
    (9) Reader services, rehabilitation teaching services, note-taking 
services, and orientation and mobility services for an individual who is 
blind;
    (10) Telecommunications, sensory, and other technological aids and 
devices;
    (11) Work-related placement services to secure suitable employment;
    (12) Post-employment services necessary to maintain, regain or 
advance into suitable employment at or above the SGA level;
    (13) Occupational licenses, tools, equipment, initial stocks, and 
supplies;
    (14) Rehabilitation technology services; and
    (15) Other goods and services that can reasonably be expected to 
motivate or assist the individual in returning to, or continuing in, 
SGA.

[59 FR 11919, Mar. 15, 1994]



Sec. 416.2215  When services must have been provided.

    (a) In order for the VR agency or alternate participant to be paid, 
the services must have been provided--
    (1) After September 30, 1981;
    (2) During a month(s) for which--
    (i) The individual is eligible for disability or blindness benefits 
or continues to receive such benefits under section 1631(a)(6) of the 
Act (see Sec. 416.2212); or
    (ii) The disability or blindness benefits of the individual are 
suspended due to his or her ineligibility for the benefits (see subpart 
M of this part concerning suspension for ineligibility); and
    (3) Before completion of a continuous 9-month period of SGA or 
termination of disability or blindness benefits, whichever occurs first 
(see subpart M of this part concerning termination of benefits).
    (b) If an individual who is receiving disability or blindness 
benefits under this part, or whose benefits under this part are 
suspended, also is entitled to disability benefits under part 404 of 
this chapter, the determination as to when services must have been 
provided may be made under this section or Sec. 404.2115 of this 
chapter, whichever is advantageous to the State VR agency or alternate 
participant that is participating in both VR programs.

[61 FR 31026, June 19, 1996]



Sec. 416.2216  When claims for payment for VR services must be made
(filing deadlines).

    The State VR agency or alternate participant must file a claim for 
payment in each individual case within the following time periods:
    (a) A claim for payment for VR services based on the completion of a 
continuous 9-month period of SGA must be filed within 12 months after 
the month in which the continuous 9-month period of SGA is completed.
    (b) A claim for payment for VR services provided to an individual 
whose disability or blindness benefits were continued after disability 
or blindness

[[Page 1165]]

has ceased because of that individual's continued participation in a VR 
program must be filed as follows:
    (1) If a written notice requesting that a claim be filed was sent to 
the State VR agency or alternate participant, a claim must be filed 
within 90 days following the month in which VR services end, or if 
later, within 90 days after receipt of the notice.
    (2) If no written notice was sent to the State VR agency or 
alternate participant, a claim must be filed within 12 months after the 
month in which VR services end.

[55 FR 8457, Mar. 8, 1990, as amended at 61 FR 31026, June 19, 1996; 68 
FR 40125, July 7, 2003]



Sec. 416.2217  What costs will be paid.

    In accordance with section 1615(d) and (e) of the Social Security 
Act, the Commissioner will pay the State VR agency or alternate 
participant for the VR services described in Sec. 416.2214 which were 
provided during the period described in Sec. 416.2215 and which meet the 
criteria in Sec. 416.2211 or Sec. 416.2212, but subject to the following 
limitations:
    (a) The cost must have been incurred by the State VR agency or 
alternate participant;
    (b) The cost must not have been paid or be payable from some other 
source. For this purpose, State VR agencies or alternate participants 
will be required to seek payment or services from other sources in 
accordance with the ``similar benefit'' provisions under 34 CFR part 
361, including making maximum efforts to secure grant assistance in 
whole or part from other sources for training or training services in 
institutions of higher education. Alternate participants will not be 
required to consider State VR services a similar benefit.
    (c)(1) The cost must be reasonable and necessary, in that it 
complies with the written cost-containment policies of the State VR 
agency or, in the case of an alternate participant, it complies with 
similar written policies established under a negotiated plan. A cost 
which complies with these policies will be considered necessary only if 
the cost is for a VR service described in Sec. 416.2214. The State VR 
agency or alternate participant must maintain and use these cost-
containment policies, including any reasonable and appropriate fee 
schedules, to govern the costs incurred for all VR services, including 
the rates of payment for all purchased services, for which payment will 
be requested under this subpart. For the purpose of this subpart, the 
written cost-containment policies must provide guidelines designed to 
ensure--
    (i) The lowest reasonable cost for such services; and
    (ii) Sufficient flexibility so as to allow for an individual's 
needs.
    (2) The State VR agency shall submit to us before the end of the 
first calendar quarter of each year a written statement certifying that 
cost-containment policies are in effect and are adhered to in procuring 
and providing goods and services for which the State VR agency requests 
payment under this subpart. Such certification must be signed by the 
State's chief financial official or the head of the VR agency. Each 
certification must specify the basis upon which it is made, e.g., a 
recent audit by an authorized State, Federal or private auditor (or 
other independent compliance review) and the date of such audit (or 
compliance review). In the case of an alternate participant, these 
certification requirements shall be incorporated into the negotiated 
agreement or contract. We may request the State VR agency or alternate 
participant to submit to us a copy(ies) of its specific written cost-
containment policies and procedures (e.g., any guidelines and fee 
schedules for a given year), if we determine that such additional 
information is necessary to ensure compliance with the requirements of 
this subpart. The State VR agency or alternate participant shall provide 
such information when requested by us.
    (d) The total payment in each case, including any prior payments 
related to earlier continuous 9-month periods of SGA made under this 
subpart, must not be so high as to preclude a ``net saving'' to the 
general funds (a ``net saving'' is the difference between the estimated 
savings to the general fund, if payments for disability or blindness 
remain reduced or eventually terminate, and the total amount we pay to 
the State VR agency or alternate participant);

[[Page 1166]]

    (e) Any payment to the State VR agency for either direct or indirect 
VR expenses must be consistent with the cost principles described in OMB 
Circular No. A-87, published at 46 FR 9548 on January 28, 1981 (see 
Sec. 416.2218(a) for cost principles applicable to alternate 
participants);
    (f) Payment for VR services or costs may be made under more than one 
of the VR payment provisions described in Secs. 416.2211 and 416.2212 of 
this subpart and similar provisions in Secs. 404.2111 and 404.2112 of 
subpart V of part 404. However, payment will not be made more than once 
for the same VR service or cost; and
    (g) Payment will be made for administrative costs and for counseling 
and placement costs. This payment may be on a formula basis, or on an 
actual cost basis, whichever the State VR agency prefers. The formula 
will be negotiated. The payment will also be subject to the preceding 
limitations.

[48 FR 6297, Feb. 10, 1983. Redesignated and amended at 55 FR 8457, 
8458, Mar. 8, 1990; 55 FR 14916, Apr. 19, 1990; 59 FR 11919, Mar. 15, 
1994; 61 FR 31027, June 19, 1996; 62 FR 38456, July 18, 1997; 68 FR 
40125, July 7, 2003]

                        Administrative Provisions



Sec. 416.2218  Applicability of these provisions to alternate 
participants.

    When an alternate participant provides rehabilitation services under 
this subpart, the payment procedures stated herein shall apply except 
that:
    (a) Payment must be consistent with the cost principles described in 
45 CFR part 74 or 41 CFR part 1-15 as appropriate; and
    (b) Any disputes, including appeals of audit determinations, shall 
be resolved in accordance with applicable statutes and regulations which 
will be specified in the negotiated agreement or contract.

[48 FR 6297, Feb. 10, 1983. Redesignated at 55 FR 8457, Mar. 8, 1990]



Sec. 416.2219  Method of payment.

    Payment to the State VR agencies or alternate participants pursuant 
to this subpart will be made either by advancement of funds or by 
payment for services provided (with necessary adjustments for any 
overpayments and underpayments), as decided by the Commissioner.

[55 FR 8458, Mar. 8, 1990]



Sec. 416.2220  Audits.

    (a) General. The State or alternate participant shall permit us and 
the Comptroller General of the United States (including duly authorized 
representatives) access to and the right to examine records relating to 
the services and costs for which payment was requested or made under 
these regulations. These records shall be retained by the State or 
alternate participant for the periods of time specified for retention of 
records in the Federal Procurement Regulations (41 CFR parts 1-20).
    (b) Audit basis. Auditing will be based on cost principles and 
written guidelines in effect at the time services were provided and 
costs were incurred. The State VR agency or alternate participant will 
be informed and given a full explanation of any questioned items. They 
will be given a reasonable time to explain questioned items. Any 
explanation furnished by the State VR agency or alternate participant 
will be given full consideration before a final determination is made on 
questioned items in the audit report.
    (c) Appeal of audit determinations. The appropriate SSA Regional 
Commissioner will notify the State VR agency or alternate participant in 
writing of his or her final determination on the audit report. If the 
State VR agency (see Sec. 416.2218(b) for alternate participants) 
disagrees with that determination, it may request reconsideration in 
writing within 60 days after receiving the Regional Commissioner's 
notice of the determination. The Commissioner will make a determination 
and notify the State VR agency of that decision in writing, usually, no 
later than 45 days from the date of the appeal. The decision by the 
Commissioner will be final and conclusive unless the State VR agency 
appeals that decision in writing in accordance with 45 CFR part 16 to 
the Department of Health and Human

[[Page 1167]]

Services' Departmental Appeals Board within 30 days after receiving it.

[48 FR 6297, Feb. 10, 1983, as amended at 55 FR 8458, Mar. 8, 1990; 62 
FR 38456, July 18, 1997]



Sec. 416.2221  Validation reviews.

    (a) General. We will conduct a validation review of a sample of the 
claims for payment filed by each State VR agency or alternate 
participant. We will conduct some of these reviews on a prepayment basis 
and some on a postpayment basis. We may review a specific claim, a 
sample of the claims, or all the claims filed by any State VR agency or 
alternate participant, if we determine that such review is necessary to 
ensure compliance with the requirements of this subpart. For each claim 
selected for review, the State VR agency or alternate participant must 
submit such records of the VR services and costs for which payment has 
been requested or made under this subpart, or copies of such records, as 
we may require to ensure that the services and costs meet the 
requirements for payment. For claims for cases described in 
Sec. 416.2201(a), a clear explanation or existing documentation which 
demonstrates how the service contributed to the individual's performance 
of a continuous 9-month period of SGA must be provided. For claims for 
cases described in Sec. 416.2201 (b) or (c), a clear explanation or 
existing documentation which demonstrates how the service was reasonably 
expected to motivate or assist the individual to return to or continue 
in SGA must be provided. If we find in any prepayment validation review 
that the scope or content of the information is inadequate, we will 
request additional information and will withhold payment until adequate 
information has been provided. The State VR agency or alternate 
participant shall permit us (including duly authorized representatives) 
access to, and the right to examine, any records relating to such 
services and costs. Any review performed under this section will not be 
considered an audit for purposes of this subpart.
    (b) Purpose. The primary purpose of these reviews is--
    (1) To ensure that the VR services and costs meet the requirements 
for payment under this subpart;
    (2) To assess the validity of our documentation requirements; and
    (3) To assess the need for additional validation reviews or 
additional documentation requirements for any State VR agency or 
alternate participant to ensure compliance with the requirements under 
this subpart.
    (c) Determinations. In any validation review, we will determine 
whether the VR services and costs meet the requirements for payment and 
determine the amount of payment. We will notify in writing the State VR 
agency or alternate participant of our determination. If we find in any 
postpayment validation review that more or less than the correct amount 
of payment was made for a claim, we will determine that an overpayment 
or underpayment has occurred and will notify the State VR agency or 
alternate participant that we will make the appropriate adjustment.
    (d) Appeals. If the State VR agency or alternate participant 
disagrees with our determination under this section, it may appeal that 
determination in accordance with Sec. 416.2227. For purposes of this 
section, an appeal must be filed within 60 days after receiving the 
notice of our determination.

[59 FR 11920, Mar. 15, 1994]



Sec. 416.2222  Confidentiality of information and records.

    The State or alternate participant shall comply with the provisions 
for confidentiality of information, including the security of systems, 
and records requirements described in 20 CFR part 401 and pertinent 
written guidelines (see Sec. 416.2223).



Sec. 416.2223  Other Federal laws and regulations.

    Each State VR agency and alternate participant shall comply with the 
provisions of other Federal laws and regulations that directly affect 
its responsibilities in carrying out the vocational rehabilitation 
function.

[[Page 1168]]



Sec. 416.2227  Resolution of disputes.

    (a) Disputes on the amount to be paid. The appropriate SSA official 
will notify the State VR agency or alternate participant in writing of 
his or her determination concerning the amount to be paid. If the State 
VR agency (see Sec. 416.2218(b) for alternate participants) disagrees 
with that determination, the State VR agency may request reconsideration 
in writing within 60 days after receiving the notice of determination. 
The Commissioner will make a determination and notify the State VR 
agency of that decision in writing, usually, no later than 45 days from 
the date of the State VR agency's appeal. The decision by the 
Commissioner will be final and conclusive upon the State VR agency 
unless the State VR agency appeals that decision in writing in 
accordance with 45 CFR part 16 to the Department of Health and Human 
Services' Departmental Appeals Board within 30 days after receiving the 
Commissioner's decision.
    (b) Disputes on whether there was a continuous period of SGA and 
whether VR services contributed to a continuous period of SGA. The rules 
in paragraph (a) of this section will apply, except that the 
Commissioner's decision will be final and conclusive. There is no right 
of appeal to the Departmental Appeals Board.
    (c) Disputes on determinations made by the Commissioner which affect 
a disabled or blind beneficiary's rights to benefits. Determinations 
made by the Commissioner which affect an individual's right to benefits 
(e.g., determinations that disability or blindness benefits should be 
terminated, denied, suspended, continued or begun at a different date 
than alleged) cannot be appealed by a State VR agency or alternate 
participant. Because these determinations are an integral part of the 
disability or blindness benefits claims process, they can only be 
appealed by the beneficiary or applicant whose rights are affected or by 
his or her authorized representative. However, if an appeal of an 
unfavorable determination is made by the individual and is successful, 
the new determination would also apply for purposes of this subpart. 
While a VR agency or alternate participant cannot appeal a determination 
made by the Commissioner which affects a beneficiary's or applicant's 
rights, the VR agency can furnish any evidence it may have which would 
support a revision of a determination.

[48 FR 6297, Feb. 10, 1983, as amended at 55 FR 8458, Mar. 8, 1990; 62 
FR 38456, July 18, 1997]



PART 418_MEDICARE SUBSIDIES--Table of Contents



Subpart A [Reserved]

   Subpart B_Medicare Part B Income-Related Monthly Adjustment Amount

            Introduction, General Provisions, and Definitions

Sec.
418.1001  What is this subpart about?
418.1005  Purpose and administration.
418.1010  Definitions.

      Determination of the Income-Related Monthly Adjustment Amount

418.1101  What is the income-related monthly adjustment amount?
418.1105  What is the threshold?
418.1110  What is the effective date of our initial determination about 
          your income-related monthly adjustment amount?
418.1115  What are the modified adjusted gross income ranges?
418.1120  How do we determine your income-related monthly adjustment 
          amount?
418.1125  How will the income-related monthly adjustment amount affect 
          your total Medicare Part B premium?
418.1130  [Reserved]
418.1135  What modified adjusted gross income information will we use to 
          determine your income-related monthly adjustment amount?
418.1140  What will happen if the modified adjusted gross income 
          information from IRS is different from the modified adjusted 
          gross income information we used to determine your income-
          related monthly adjustment amount?
418.1145  How do we determine your income-related monthly adjustment 
          amount if IRS does not provide information about your modified 
          adjusted gross income?
418.1150  When will we use your amended tax return filed with IRS?

 Determinations Using a More Recent Tax Year's Modified Adjusted Gross 
                                 Income

418.1201  When will we determine your income-related monthly adjustment 
          amount based on the modified adjusted gross income information 
          that you provide for a more recent tax year?

[[Page 1169]]

418.1205  What is a major life-changing event?
418.1210  What is not a major life-changing event?
418.1215  What is a significant reduction in your income?
418.1220  What is not a significant reduction in your income?
418.1225  Which more recent tax year will we use?
418.1230  What is the effective date of an income-related monthly 
          adjustment amount initial determination that is based on a 
          more recent tax year?
418.1235  When will we stop using your more recent tax year's modified 
          adjusted gross income to determine your income-related monthly 
          adjustment amount?
418.1240  Should you notify us if the information you gave us about your 
          modified adjusted gross income for the more recent tax year 
          changes?
418.1245  What will happen if you notify us that your modified adjusted 
          gross income for the more recent tax year changes?
418.1250  What evidence will you need to support your request that we 
          use a more recent tax year?
418.1255  What kind of major life-changing event evidence will you need 
          to support your request for us to use a more recent tax year?
418.1260  What major life-changing event evidence will we not accept?
418.1265  What kind of significant modified adjusted gross income 
          reduction evidence will you need to support your request?
418.1270  What modified adjusted gross income evidence will we not 
          accept?

          Determinations and the Administrative Review Process

418.1301  What is an initial determination regarding your income-related 
          monthly adjustment amount?
418.1305  What is not an initial determination regarding your income-
          related monthly adjustment amount?
418.1310  When may you request that we make a new initial determination?
418.1315  How will we notify you and what information will we provide 
          about our initial determination?
418.1320  What is the effect of an initial determination?
418.1322  How will a Medicare prescription drug coverage income-related 
          monthly adjustment amount determination for the effective year 
          affect your Medicare Part B?
418.1325  When may you request a reconsideration?
418.1330  Can you request a reconsideration when you believe the IRS 
          information we used is incorrect?
418.1335  What should you do if our initial determination is based on 
          modified adjusted gross income information you believe to be 
          incorrect?
418.1340  What are the rules for our administrative review process?
418.1345  Is reopening of an initial or reconsidered determination made 
          by us ever appropriate?
418.1350  What are the rules for review of a reconsidered determination 
          or an administrative law judge decision?
418.1355  What are the rules for reopening a decision by an 
          administrative law judge of the Office of Medicare Hearings 
          and Appeals (OMHA) or by the Medicare Appeals Council (MAC)?

 Subpart C_Income-Related Monthly Adjustments to Medicare Prescription 
                         Drug Coverage Premiums

            Introduction, General Provisions, and Definitions

418.2001  What is this subpart about?
418.2005  Purpose and administration.
418.2010  Definitions.

      Determination of the Income-Related Monthly Adjustment Amount

418.2101  What is the income-related monthly adjustment amount?
418.2105  What is the threshold?
418.2110  What is the effective date of our initial determination about 
          your income-related monthly adjustment amount?
418.2112  Paying your income-related monthly adjustment amount.
418.2115  What are the modified adjusted gross income ranges?
418.2120  How do we determine your income-related monthly adjustment 
          amount?
418.2125  How will the income-related monthly adjustment amount affect 
          your total Medicare prescription drug coverage premium?
418.2135  What modified adjusted gross income information will we use to 
          determine your income-related monthly adjustment amount?
418.2140  What will happen if the modified adjusted gross income 
          information from the IRS is different from the modified 
          adjusted gross income information we used to determine your 
          income-related monthly adjustment amount?
418.2145  How do we determine your income-related monthly adjustment 
          amount if the IRS does not provide information about your 
          modified adjusted gross income?
418.2150  When will we use your amended tax return filed with the IRS?

 Determinations Using a More Recent Tax Year's Modified Adjusted Gross 
                                 Income

418.2201  When will we determine your income-related monthly adjustment

[[Page 1170]]

          amount based on the modified adjusted gross income information 
          that you provide for a more recent tax year?
418.2205  What is a major life-changing event?
418.2210  What is not a major life-changing event?
418.2215  What is a significant reduction in your income?
418.2220  What is not a significant reduction in your income?
418.2225  Which more recent tax year will we use?
418.2230  What is the effective date of an income-related monthly 
          adjustment amount initial determination based on a more recent 
          tax year?
418.2235  When will we stop using your more recent tax year's modified 
          adjusted gross income to determine your income-related monthly 
          adjustment amount?
418.2240  Should you notify us if the information you gave us about your 
          modified adjusted gross income for the more recent tax year 
          changes?
418.2245  What will happen if you notify us that your modified adjusted 
          gross income for the more recent tax year changes?
418.2250  What evidence will you need to support your request that we 
          use a more recent tax year?
418.2255  What kind of evidence of a major life-changing event will you 
          need to support your request for us to use a more recent tax 
          year?
418.2260  What major life-changing event evidence will we not accept?
418.2265  What kind of evidence of a significant modified adjusted gross 
          income reduction will you need to support your request?
418.2270  What modified adjusted gross income evidence will we not 
          accept?

          Determinations and the Administrative Review Process

418.2301  What is an initial determination regarding your income-related 
          monthly adjustment amount?
418.2305  What is not an initial determination regarding your income-
          related monthly adjustment amount?
418.2310  When may you request that we make a new initial determination?
418.2315  How will we notify you and what information will we provide 
          about our initial determination?
418.2320  What is the effect of an initial determination?
418.2322  How will a Medicare Part B income-related monthly adjustment 
          amount determination for the effective year affect your 
          Medicare prescription drug coverage?
418.2325  When may you request a reconsideration?
418.2330  Can you request a reconsideration when you believe that the 
          IRS information we used is incorrect?
418.2332  Can you request a reconsideration when you believe that the 
          CMS information we used is incorrect?
418.2335  What should you do if we base our initial determination on 
          modified adjusted gross income information you believe to be 
          incorrect?
418.2340  What are the rules for our administrative review process?
418.2345  Is reopening of an initial or reconsidered determination made 
          by us ever appropriate?
418.2350  What are the rules for review of a reconsidered determination 
          or an ALJ decision?
418.2355  What are the rules for reopening a decision by an ALJ of the 
          Office of Medicare Hearings and Appeals (OMHA) or by the 
          Medicare Appeals Council (MAC)?

                   Subpart D_Medicare Part D Subsidies

            Introduction, General Provisions, and Definitions

418.3001  What is this subpart about?
418.3005  Purpose and administration of the program.
418.3010  Definitions.

          Eligibility for a Medicare Prescription Drug Subsidy

418.3101  How do you become eligible for a subsidy?
418.3105  Who does not need to file an application for a subsidy?
418.3110  What happens when you apply for a subsidy?
418.3115  What events will make you ineligible for a subsidy?
418.3120  What happens if your circumstances change after we determine 
          you are eligible for a subsidy?
418.3123  When is a change in your subsidy effective?
418.3125  What are redeterminations?

                          Filing of Application

418.3201  Must you file an application to become eligible for a subsidy?
418.3205  What makes an application a claim for a subsidy?
418.3210  What is a prescribed application for a subsidy?
418.3215  Who may file your application for a subsidy?
418.3220  When is your application considered filed?
418.3225  How long will your application remain in effect?
418.3230  When will we use your subsidy inquiry as your filing date?

[[Page 1171]]

                                 Income

418.3301  What is income?
418.3305  What is not income?
418.3310  Whose income do we count?
418.3315  What is earned income?
418.3320  How do we count your earned income?
418.3325  What earned income do we not count?
418.3330  What is unearned income?
418.3335  What types of unearned income do we count?
418.3340  How do we count your unearned income?
418.3350  What types of unearned income do we not count?

                                Resources

418.3401  What are resources?
418.3405  What types of resources do we count?
418.3410  Whose resources do we count?
418.3415  How do we determine countable resources?
418.3420  How are funds held in financial institution accounts counted?
418.3425  What resources do we exclude from counting?

                      Adjustments and Terminations

418.3501  What could cause us to increase or reduce your subsidy or 
          terminate your subsidy eligibility?
418.3505  How would an increase, reduction or termination affect you?
418.3510  When would an increase, reduction or termination start?
418.3515  How could you qualify for a subsidy again?

          Determinations and the Administrative Review Process

418.3601  When do you have the right to administrative review?
418.3605  What is an initial determination?
418.3610  Is there administrative or judicial review for administrative 
          actions that are not initial determinations?
418.3615  Will we mail you a notice of the initial determination?
418.3620  What is the effect of an initial determination?
418.3625  What is the process for administrative review?
418.3630  How do you request administrative review?
418.3635  Can anyone request administrative review on your behalf?
418.3640  How do we determine if you had good cause for missing the 
          deadline to request administrative review?
418.3645  Can you request that the decision-maker be disqualified?
418.3650  How do we make our decision upon review?
418.3655  How will we notify you of our decision after our review?
418.3665  Can your request for a hearing or case review be dismissed?
418.3670  How will you be notified of the dismissal?
418.3675  How does our decision affect you?
418.3678  What is the process for correcting Agency clerical errors?
418.3680  What happens if your case is remanded by a Federal court?

    Source: 70 FR 77675, Dec. 30, 2005, unless otherwise noted.

Subpart A [Reserved]



   Subpart B_Medicare Part B Income-Related Monthly Adjustment Amount

    Authority: Secs. 702(a)(5) and 1839(i) of the Social Security Act 
(42 U.S.C. 902(a)(5) and 1395r(i)).

    Source: 71 FR 62931, Oct. 27, 2006, unless otherwise noted.

            Introduction, General Provisions, and Definitions



Sec. 418.1001  What is this subpart about?

    This subpart relates to section 1839(i) of the Social Security Act 
(the Act), as added by section 811 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Pub. L. 108-173). Section 
1839(i) establishes an income-related monthly adjustment to the Medicare 
Part B premium. Beneficiaries enrolled in Medicare Part B who have 
modified adjusted gross income over a threshold amount established in 
the statute will pay an income-related monthly adjustment amount in 
addition to the Medicare Part B standard monthly premium and any 
applicable premium increases as described in 42 CFR 408.20. The 
regulations in this subpart explain how we decide whether you are 
required to pay an income-related monthly adjustment amount, and if you 
are, the amount of your adjustment. The rules are divided into the 
following groups of sections:
    (a) Sections 418.1001 through 418.1010 contain the introduction, a 
statement of the general purpose of the income-related monthly 
adjustment amount, general provisions that apply to the income-related 
monthly adjustment

[[Page 1172]]

amount, and definitions of terms that we use in this subpart.
    (b) Sections 418.1101 through 418.1150 describe what information 
about your modified adjusted gross income we will use to determine if 
you are required to pay an income-related monthly adjustment amount. In 
these sections, we also describe how the income-related monthly 
adjustment amount will affect your total Medicare Part B premium.
    (c) Sections 418.1201 through 418.1270 contain an explanation of the 
standards that you must meet for us to grant your request to use 
modified adjusted gross income information that you provide for a more 
recent tax year rather than the information described in paragraph (b) 
of this section. These sections explain when we may consider such a 
request, and the evidence that you will be required to provide. These 
sections also explain when income-related monthly adjustment amount 
determinations based on information you provide will be effective, and 
how long they will remain in effect. Additionally, these sections 
describe how retroactive adjustments of the income-related monthly 
adjustment amount will be made based on information you provide, updated 
information you provide, and information we later receive from the 
Internal Revenue Service (IRS).
    (d) Sections 418.1301 through 418.1355 contain the rules that we 
will apply when you disagree with our determination regarding your 
income-related monthly adjustment amount. These sections explain your 
appeal rights and the circumstances under which you may request that we 
make a new initial determination of your income-related monthly 
adjustment amount.

[71 FR 62931, Oct. 27, 2006, as amended at 78 FR 57259, Sept. 18, 2013]



Sec. 418.1005  Purpose and administration.

    (a) The purpose of the income-related monthly adjustment amount is 
to reduce the Federal subsidy of the Medicare Part B program for 
beneficiaries with modified adjusted gross income above an established 
threshold. These beneficiaries will pay a greater share of actual 
program costs. Medicare Part B premiums paid by beneficiaries cover 
approximately 25 percent of total Medicare Part B program costs and the 
remaining 75 percent of program costs are subsidized by the Federal 
Government's contributions to the Federal Supplementary Medical 
Insurance Trust Fund. The reduction in the Medicare Part B premium 
subsidy results in an increase in the total amount that affected 
beneficiaries pay for Medicare Part B coverage. A beneficiary with 
modified adjusted gross income above the threshold amount will pay:
    (1) The Medicare Part B standard monthly premium; plus
    (2) Any applicable increase in the standard monthly premium for late 
enrollment or reenrollment; plus
    (3) An income-related monthly adjustment amount.
    (b) The Centers for Medicare & Medicaid Services (CMS) in the 
Department of Health and Human Services (HHS) publishes the Medicare 
Part B standard monthly premium each year. CMS also establishes rules 
for entitlement to a nonstandard premium, as well as premium penalties 
for late enrollment or reenrollment (42 CFR 408.20 through 408.27).
    (c) We use information that we get from IRS to determine if 
beneficiaries who are enrolled in Medicare Part B are required to pay an 
income-related monthly adjustment amount. We also change income-related 
monthly adjustment amount determinations using information provided by a 
beneficiary under certain circumstances. In addition, we notify 
beneficiaries when the social security benefit amounts they receive will 
change based on our income-related monthly adjustment amount 
determination.



Sec. 418.1010  Definitions.

    (a) Terms relating to the Act and regulations. For the purposes of 
this subpart:
    (1) Administrator means the Administrator of the Centers for 
Medicare & Medicaid Services (CMS) in HHS.
    (2) CMS means the Centers for Medicare & Medicaid Services in HHS.
    (3) Commissioner means the Commissioner of Social Security.
    (4) HHS means the Department of Health and Human Services which 
oversees the Centers for Medicare &

[[Page 1173]]

Medicaid Services, the Office of Medicare Hearings and Appeals (OMHA) 
and the Medicare Appeals Council (MAC).
    (5) IRS means the Internal Revenue Service in the Department of the 
Treasury.
    (6) MAC means the Medicare Appeals Council in HHS.
    (7) OMHA means the Office of Medicare Hearings and Appeals in HHS.
    (8) Section means a section of the regulations in this part unless 
the context indicates otherwise.
    (9) The Act means the Social Security Act, as amended.
    (10) Title means a title of the Act.
    (11) We, our, or us means the Social Security Administration (SSA).
    (b) Miscellaneous. For the purposes of this subpart:
    (1) Amended tax return means a Federal income tax return for which 
an amended tax return using the required IRS form(s) has been filed by 
an individual or couple and accepted by IRS.
    (2) Effective year means the calendar year for which we make an 
income-related monthly adjustment amount determination.
    (3) Federal premium subsidy is the portion of the full cost of 
providing Medicare Part B coverage that is paid by the Federal 
Government through transfers into the Federal Supplementary Medical 
Insurance Trust Fund.
    (4) Income-related monthly adjustment amount is an additional amount 
of premium that you will pay for Medicare Part B coverage if you have 
income above the threshold. The amount of your income-related monthly 
adjustment amount is based on your modified adjusted gross income.
    (5) Medicare Part B standard monthly premium means the monthly 
Medicare Part B premium amount which is set annually by CMS, according 
to regulations in 42 CFR 408.20 through 408.27.
    (6) Modified adjusted gross income is your adjusted gross income as 
defined by the Internal Revenue Code, plus the following forms of tax-
exempt income:
    (i) Tax-exempt interest income;
    (ii) Income from United States savings bonds used to pay higher 
education tuition and fees;
    (iii) Foreign earned income;
    (iv) Income derived from sources within Guam, American Samoa, or the 
Northern Mariana Islands; and
    (v) Income from sources within Puerto Rico.
    (7) Modified adjusted gross income ranges are the groupings of 
modified adjusted gross income above the threshold. There are four 
ranges for most individuals, based on their tax filing status. There are 
two ranges for those with a tax filing status of married, filing 
separately, who also lived with their spouse for part of the year. The 
dollar amounts of the modified adjusted gross income ranges are 
specified in Sec. 418.1115.
    (8) Non-standard premium means a Medicare Part B premium that some 
beneficiaries pay for Medicare Part B, rather than the standard premium. 
The rules for applying a non-standard premium are in 42 CFR 408.20(e). 
The non-standard premium does not apply to beneficiaries who must pay an 
income-related monthly adjustment amount.
    (9) Premium is a payment that an enrolled beneficiary pays for 
Medicare Part B coverage. The rules that CMS uses to annually establish 
the premium amount are found in 42 CFR 408.20 through 408.27.
    (10) Representative means, for the purposes of the initial 
determination and reconsidered determination, an individual as defined 
in Sec. 404.1703 of this chapter, and for purposes of an ALJ hearing or 
review by the MAC, an individual as defined in 42 CFR 405.910.
    (11) Tax filing status means the filing status shown on your 
individual income tax return. It may be single, married filing jointly, 
married filing separately, head of household, or qualifying widow(er) 
with dependent child.
    (12) Tax year means the year for which your Federal income tax 
return has been filed or will be filed with the IRS.
    (13) Threshold means a modified adjusted gross income amount above 
which the beneficiary will have to pay an income-related monthly 
adjustment amount described in paragraph (b)(4) of this section. The 
dollar amount of the threshold is specified in Sec. 418.1105.
    (14) You or your means the person or representative of the person 
who is

[[Page 1174]]

subject to the income-related monthly adjustment amount.

      Determination of the Income-Related Monthly Adjustment Amount



Sec. 418.1101  What is the income-related monthly adjustment amount?

    (a) The income-related monthly adjustment amount is an amount that 
you will pay in addition to the Medicare Part B standard monthly premium 
plus any applicable increase in that premium as described in 42 CFR 
408.22 for your Medicare Part B coverage when your modified adjusted 
gross income is above the threshold described in Sec. 418.1105.
    (b) Your income-related monthly adjustment amount is based on your 
applicable modified adjusted gross income as described in Sec. 418.1115 
and your tax filing status.
    (c) We will determine your income-related monthly adjustment amount 
using the method described in Sec. 418.1120.

[71 FR 62931, Oct. 27, 2006, as amended at 78 FR 57259, Sept. 18, 2013]



Sec. 418.1105  What is the threshold?

    (a) The threshold is a level of modified adjusted gross income above 
which the beneficiary will have to pay the income-related monthly 
adjustment amount.
    (b) From January 1, 2011 through December 31, 2019, the modified 
adjusted gross income threshold is $170,000 for individuals with a 
Federal income tax filing status of married filing jointly. The 
threshold is $85,000 for individuals with any other filing status.
    (c) Starting on January 1, 2020, the threshold amounts will resume 
adjustment for inflation as required by section 1839(i)(5) of the Act. 
In each year thereafter, CMS will set all modified adjusted gross income 
threshold amounts for the following year by increasing the preceding 
year's threshold amounts by any percentage increase in the Consumer 
Price Index rounded to the nearest $1,000. CMS will publish the amounts 
in the Federal Register in September of each year. Published threshold 
amounts will be effective January 1 of the next calendar year, for the 
full calendar year.

[71 FR 62931, Oct. 27, 2006, as amended at 78 FR 57259, Sept. 18, 2013]



Sec. 418.1110  What is the effective date of our initial determination 
about your income-related monthly adjustment amount?

    (a) Generally, an income-related monthly adjustment amount will be 
effective for all months that you are enrolled in Medicare Part B during 
the year for which we determine you must pay an income-related monthly 
adjustment amount. We will follow the rules in 42 CFR part 408, subpart 
C, regarding premium collections to withhold your income-related monthly 
adjustment amount from a benefit payment or to determine if you will be 
billed directly.
    (b) When we have used modified adjusted gross income information 
from IRS for the tax year 3 years prior to the effective year to 
determine your income-related monthly adjustment amount and modified 
adjusted gross income information for the tax year 2 years prior later 
becomes available from IRS, we will review the new information to 
determine if we should revise our initial determination. If we revise 
our initial determination, the effective date of the new initial 
determination will be January 1 of the effective year, or the first 
month you were enrolled or re-enrolled in Medicare Part B if later than 
January.
    (c) When we use your amended tax return, as described in 
Sec. 418.1150, the effective date will be January 1 of the year(s) that 
is affected, or the first month in that year that you were enrolled or 
reenrolled in Medicare Part B if later than January.

    Example: You are enrolled in Medicare Part B throughout 2011. We use 
your 2009 modified adjusted gross income as reported to us by IRS to 
determine your 2011 income-related monthly adjustment amount. In 2012 
you submit to us a copy of your 2009 amended tax return that you filed 
with IRS. The modified adjusted gross income reported on your 2009 
amended tax return is significantly less than originally reported to 
IRS. We use the modified adjusted gross income that was reported on your 
2009 amended tax return to determine your income-related monthly 
adjustment amount. That income-related monthly adjustment amount is 
effective January 1,

[[Page 1175]]

2011. We will retroactively adjust for any differences between the 
amount paid in 2011 and the amount that should have been paid based on 
the amended tax return.
    (d) When we use evidence that you provide which proves that the IRS 
modified adjusted gross income information we used is incorrect, as 
described in Sec. 418.1335, the effective date will be January of the 
year(s) that is affected or the first month in that year that you were 
enrolled or reenrolled in Medicare Part B if later than January.
    (e) When we use information from a more recent tax year that you 
provide due to a major life-changing event, as described in 
Sec. 418.1201, the effective date is described in Sec. 418.1230.



Sec. 418.1115  What are the modified adjusted gross income ranges?

    (a) We list the modified adjusted gross income ranges for the 
calendar years 2011 through and including 2019 for each Federal tax 
filing category in paragraphs (b), (c) and (d) of this section. We will 
use your modified adjusted gross income amount together with your tax 
filing status to determine the amount of your income-related monthly 
adjustment for these calendar years.
    (b) For calendar years 2011 through and including 2019, the modified 
adjusted gross income ranges for individuals with a Federal tax filing 
status of single, head of household, qualifying widow(er) with dependent 
child, and married filing separately when the individual has lived apart 
from his/her spouse for the entire tax year for the year we use to make 
our income-related monthly adjustment amount determination are as 
follows:
    (1) Greater than $85,000 and less than or equal to $107,000;
    (2) Greater than $107,000 and less than or equal to $160,000;
    (3) Greater than $160,000 and less than or equal to $214,000; and
    (4) Greater than $214,000.
    (c) For calendar years 2011 through and including 2019, the modified 
adjusted gross income ranges for individuals who are married and filed a 
joint tax return for the tax year we use to make the income-related 
monthly adjustment amount determination are as follows:
    (1) Greater than $170,000 and less than or equal to $214,000;
    (2) Greater than $214,000 and less than or equal to $320,000;
    (3) Greater than $320,000 and less than or equal to $428,000; and
    (4) Greater than $428,000.
    (d) For calendar years 2011 through and including 2019, the modified 
adjusted gross income ranges for married individuals who file a separate 
return and have lived with their spouse at any time during the tax year 
we use to make the income-related monthly adjustment amount 
determination are as follows:
    (1) Greater than $85,000 and less than or equal to $129,000; and
    (2) Greater than $129,000.
    (e) In 2019, CMS will set all modified adjusted gross income ranges 
for 2020 and publish them in the Federal Register. In each year 
thereafter, CMS will set all modified adjusted gross income ranges by 
increasing the preceding year's ranges by any percentage increase in the 
Consumer Price Index rounded to the nearest $1,000 and will publish the 
amounts for the following year in September of each year.

[78 FR 57259, Sept. 18, 2013]



Sec. 418.1120  How do we determine your income-related monthly
adjustment amount?

    (a) We will determine your income-related monthly adjustment amount 
by using your tax filing status and modified adjusted gross income.
    (b) Tables of applicable percentage. The tables in paragraphs (b)(1) 
through (b)(3) of this section contain the modified adjusted gross 
income ranges for calendar years 2011 through and including 2019 in the 
column on the left in each table. The middle column in each table shows 
the percentage of the unsubsidized Medicare Part B premium that will be 
paid by individuals with modified adjusted gross income that falls 
within each of the ranges. The column on the right in each table shows 
the percentage of the Medicare Part B premium that will be subsidized by 
contributions from the Federal Government. We use your tax filing status 
and your modified adjusted gross income for the tax year to determine 
which income-related monthly adjustment

[[Page 1176]]

amount to apply to you. The dollar amount of income-related monthly 
adjustment for each range will be set annually for each year after 2019 
as described in paragraph (c) of this section. The modified adjusted 
gross income ranges will be adjusted annually after 2019 as described in 
Sec. 418.1115(e).
    (1) General table of applicable percentages. If, for the tax year, 
we use your filing status for your Federal income taxes for the tax year 
is single; head of household; qualifying widow(er) with dependent child; 
or married filing separately and you lived apart from your spouse for 
the entire tax year, we will use the general table of applicable 
percentages. When your modified adjusted gross income for the year we 
use is in the range listed in the left column in the following table, 
then the Federal Government's Part B premium subsidy of 75 percent is 
reduced to the percentage listed in the right column.
    You will pay an amount based on the percentage listed in the center 
column.

------------------------------------------------------------------------
                                         Beneficiary     Federal premium
   Modified adjusted gross income        percentage          subsidy
       effective in 2011-2019             (percent)         (percent)
------------------------------------------------------------------------
More than $85,000 but less than or                  35                65
 equal to $107,000..................
More than $107,000 but less than or                 50                50
 equal to $160,000..................
More than $160,000 but less than or                 65                35
 equal to $214,000..................
More than $214,000..................                80                20
------------------------------------------------------------------------

    (2) Table of applicable percentages for joint returns. If, for the 
tax year, we use your Federal tax filing status is married filing 
jointly for the tax year and your modified adjusted gross income for 
that tax year is in the range listed in the left column in the following 
table, then the Federal Government's Part B premium subsidy of 75 
percent is reduced to the percentage listed in the right column. You 
will pay an amount based on the percentage listed in the center column.

------------------------------------------------------------------------
                                         Beneficiary     Federal premium
   Modified adjusted gross income        percentage          subsidy
       effective in 2011-2019             (percent)         (percent)
------------------------------------------------------------------------
More than $170,000 but less than or                 35                65
 equal to $214,000..................
More than $214,000 but less than or                 50                50
 equal to $320,000..................
More than $320,000 but less than or                 65                35
 equal to $428,000..................
More than $428,000..................                80                20
------------------------------------------------------------------------

    (3) Table of applicable percentages for married individuals filing 
separate returns. If, for the tax year, we use your Federal tax filing 
status is married filing separately, you lived with your spouse at some 
time during that tax year, and your modified adjusted gross income is in 
the range listed in the left column in the following table, then the 
Federal Government's Part B premium subsidy of 75 percent is reduced to 
the percentage listed in the right column. You will pay an amount based 
on the percentage listed in the center column.

------------------------------------------------------------------------
                                         Beneficiary     Federal premium
   Modified adjusted gross income        percentage          subsidy
       effective in 2011-2019             (percent)         (percent)
------------------------------------------------------------------------
More than $85,000 but less than or                  65                35
 equal to $129,000..................
More than $129,000..................                80                20
------------------------------------------------------------------------

    (c) For each year after 2019, CMS will annually publish in the 
Federal Register the dollar amounts for the income-related monthly 
adjustment amount described in paragraph (b) of this section.

[78 FR 57259, Sept. 18, 2013]

[[Page 1177]]



Sec. 418.1125  How will the income-related monthly adjustment amount
affect your total Medicare Part B premium?

    (a) If you must pay an income-related monthly adjustment amount, 
your total Medicare Part B premium will be the sum of:
    (1) The Medicare Part B standard monthly premium, determined using 
the rules in 42 CFR 408.20; plus
    (2) Any applicable increase in the Medicare Part B standard monthly 
premium as described in 42 CFR 408.22; plus
    (3) Your income-related monthly adjustment amount.
    (b) The nonstandard Medicare Part B premium amount described in 42 
CFR 408.20 does not apply to individuals who must pay an income-related 
monthly adjustment amount. Such individuals must pay the full Medicare 
Part B standard monthly premium plus any applicable penalties for late 
enrollment or reenrollment plus the income-related adjustment.

[71 FR 62931, Oct. 27, 2006, as amended at 78 FR 57260, Sept. 18, 2013]



Sec. 418.1130  [Reserved]



Sec. 418.1135  What modified adjusted gross income information will
we use to determine your income-related monthly adjustment amount?

    (a) In general, we will use your modified adjusted gross income 
provided by IRS for the tax year 2 years prior to the effective year of 
the income-related monthly adjustment amount determination. Modified 
adjusted gross income is based on information you provide to IRS when 
you file your Federal income tax return.
    (b) We will use your modified adjusted gross income for the tax year 
3 years prior to the effective year of the income-related monthly 
adjustment amount determination when IRS does not provide the 
information specified in paragraph (a) of this section. If IRS can 
provide modified adjusted gross income for the tax year 3 years prior to 
the income-related monthly adjustment amount effective year, we will 
temporarily use that information to determine your income-related 
monthly adjustment amount and make adjustments as described in 
Sec. 418.1110(b) to all affected income-related monthly adjustment 
amounts when information for the year specified in paragraph (a) of this 
section is provided by IRS.
    (c) When we have used the information in paragraph (b) of this 
section, you may provide us with evidence of your modified adjusted 
gross income for the year in paragraph (a) of this section. You must 
provide a retained copy of your signed Federal income tax return for 
that year, if available. If you filed a return for that year, but did 
not retain a copy, you must request a transcript or a copy of your 
return from IRS and provide it to us. When we use this evidence, we will 
later confirm this information with IRS records.
    (d) When you meet the conditions specified in Sec. 418.1150 because 
you have amended your Federal income tax return, or when you believe we 
have used information provided by IRS which is incorrect, as described 
in Sec. 418.1335, we will use information that you provide directly to 
us regarding your modified adjusted gross income.
    (e) We may use information that you give us about your modified 
adjusted gross income for a more recent tax year than those discussed in 
paragraphs (a) or (b) of this section as described in Secs. 418.1201 
through 418.1270.
    (f) If you fail to file an income tax return for any year after 2004 
and IRS informs us that you had modified adjusted gross income above the 
threshold applicable 2 years after the tax year when you failed to file 
an income tax return, we will impose the highest income-related 
adjustment percentage applicable to your income filing status for the 
effective year. If we later determine that the amount of the income-
related monthly adjustment amount imposed was inconsistent with your 
modified adjusted gross income, we will correct it. The rules in 42 CFR 
408.40 through 408.92 will apply to the collection of any retroactive 
premiums due.

[[Page 1178]]



Sec. 418.1140  What will happen if the modified adjusted gross income
information from IRS is different from the modified adjusted gross 
income information we used to determine your income-related monthly
adjustment amount?

    In general, we will use modified adjusted gross income information 
from IRS to determine your income-related monthly adjustment. We will 
make retroactive adjustments to your income-related monthly adjustment 
amount as described in paragraphs (a), (b), and (d) of this section.
    (a) When we have used modified adjusted gross income from the tax 
year 3 years prior to the effective year as described in 
Sec. 418.1135(b), and IRS provides modified adjusted gross income 
information from the tax year 2 years prior to the effective year, we 
will use the new information to make an initial determination for the 
effective year. We will make retroactive adjustments back to January 1 
of the effective year, or the first month you were enrolled or 
reenrolled in Medicare Part B if later than January.
    (b) When we have used the modified adjusted gross income information 
that you provided for the tax year 2 years prior to the effective year 
and the modified adjusted gross income information we receive from IRS 
for that same year is different from the information you provided, we 
will use the modified adjusted gross income information provided to us 
by IRS to make a new initial determination. We will make retroactive 
adjustments back to January 1 of the effective year, or the first month 
you were enrolled or reenrolled in Medicare Part B if later than 
January.
    (c) When we have used information from your amended Federal tax 
return that you provide, as explained in Sec. 418.1150, or you provide 
proof that the information IRS provided to us is incorrect as described 
in Sec. 418.1335, we will not make any adjustments to your income-
related monthly adjustment amount for the effective year or years based 
on IRS information we receive later from IRS.
    (d) When we use modified adjusted gross income information that you 
provided due to a qualifying life-changing event and we receive 
different information from IRS, we will use the IRS information to make 
retroactive corrections to all months in the effective year(s) during 
which you were enrolled in Medicare Part B, except when paragraph (c) of 
this section applies.
    (e) When we used the table in Sec. 418.1120(b)(3) to determine your 
income-related monthly adjustment amount, and you lived apart from your 
spouse throughout that year, we will ask you for a signed statement or 
attestation that you lived apart from your spouse throughout that year. 
We will also ask you to provide information about the addresses of you 
and your spouse during that year. If you provide a signed statement or 
attestation that you lived apart from your spouse throughout that year, 
and information about your respective addresses that year, we will use 
the table in Sec. 418.1120(b)(1) to determine your income-related 
monthly adjustment amount.



Sec. 418.1145  How do we determine your income-related monthly
adjustment amount if IRS does not provide information about your
modified adjusted gross income?

    In general, if we do not receive any information for you from IRS 
showing that you had modified adjusted gross income above the threshold 
in the tax year we request, we will not make an income-related monthly 
adjustment amount determination.



Sec. 418.1150  When will we use your amended tax return filed with
IRS?

    You may provide your amended tax return for a tax year we used 
within 3 calendar years following the close of the tax year for which 
you filed the amended tax return. You must provide us with your retained 
copy of your amended U.S. Individual Income Tax Return on the required 
IRS form and a copy of the IRS letter confirming the amended tax return 
was filed or a transcript from IRS if they did not send a letter. If you 
cannot provide your retained copy of the amended tax return, you must 
obtain a copy of the return from IRS. We will then make any necessary 
retroactive corrections as defined in Sec. 418.1110(c) to your income-
related monthly adjustment amount.

[[Page 1179]]

 Determinations Using a More Recent Tax Year's Modified Adjusted Gross 
                                 Income



Sec. 418.1201  When will we determine your income-related monthly 
adjustment amount based on the modified adjusted gross income 
information that you provide for a more recent tax year?

    We will use a more recent tax year than the years described in 
Sec. 418.1135(a) or (b) to reduce or eliminate your income-related 
monthly adjustment amount when all of the following occur:
    (a) You experience a major life-changing event as defined in 
Sec. 418.1205; and
    (b) That major life-changing event results in a significant 
reduction in your modified adjusted gross income for the year which you 
request we use and the next year, if applicable. For purposes of this 
section, a significant reduction in your modified adjusted gross income 
is one that results in the decrease or elimination of your income-
related monthly adjustment amount; and
    (c) You request that we use a more recent tax year's modified 
adjusted gross income; and
    (d) You provide evidence as described in Secs. 418.1255 and 
418.1265.



Sec. 418.1205  What is a major life-changing event?

    For the purposes of this subpart, we will consider the following to 
be major life-changing events:
    (a) Your spouse dies;
    (b) You marry;
    (c) Your marriage ends through divorce or annulment;
    (d) You or your spouse stop working or reduce the hours you work;
    (e) You or your spouse experiences a loss of income-producing 
property, provided the loss is not at the direction of you or your 
spouse (e.g., due to the sale or transfer of the property) and is not a 
result of the ordinary risk of investment. Examples of the type of 
property loss include, but are not limited to: Loss of real property 
within a Presidentially or Gubernatorially-declared disaster area, 
destruction of livestock or crops by natural disaster or disease, loss 
from real property due to arson, or loss of investment property as a 
result of fraud or theft due to a criminal act by a third party;
    (f) You or your spouse experiences a scheduled cessation, 
termination, or reorganization of an employer's pension plan;
    (g) You or your spouse receives a settlement from an employer or 
former employer because of the employer's closure, bankruptcy, or 
reorganization.

[71 FR 62931, Oct. 27, 2006, as amended at 75 FR 41086, July 15, 2010]



Sec. 418.1210  What is not a major life-changing event?

    We will not consider events other than those described in 
Sec. 418.1205 to be major life-changing events. Certain types of events 
are not considered major life-changing events for the purposes of this 
subpart, such as:
    (a) Events that affect your expenses, but not your income; or
    (b) Events that result in the loss of dividend income because of the 
ordinary risk of investment.

[71 FR 62931, Oct. 27, 2006, as amended at 75 FR 41086, July 15, 2010]



Sec. 418.1215  What is a significant reduction in your income?

    For purposes of this subpart, we will consider a reduction in your 
income to be significant if your modified adjusted gross income 
decreases; and
    (a) The decrease reduces the percentage of the income-related 
monthly adjustment amount you must pay according to the Table of 
Applicable Percentages in Sec. 418.1120; or
    (b) The decrease reduces your modified adjusted gross income to an 
amount below the threshold described in Sec. 418.1105 and eliminates any 
income-related monthly adjustment amount you must pay.



Sec. 418.1220  What is not a significant reduction in your income?

    For purposes of this subpart, we will not consider a reduction in 
your income to be significant unless the reduction affects the amount of 
income-related monthly adjustment you must pay.

[[Page 1180]]



Sec. 418.1225  Which more recent tax year will we use?

    We will consider evidence of your modified adjusted gross income 
that you provide for a tax year that is more recent than the year 
described in Sec. 418.1135 (a) or (b) when you meet all of the 
requirements described in Sec. 418.1201. We will always ask you for your 
retained copy of your filed Federal income tax return for the more 
recent year you request that we use and will use that information to 
make an initial determination. If you have not filed your Federal income 
tax return for the more recent year you request that we use, you must 
provide us with evidence that is equivalent to a copy of a filed Federal 
income tax return. Evidence that is equivalent to a copy of a filed 
Federal income tax return is defined in Sec. 418.1265(c).



Sec. 418.1230  What is the effective date of an income-related 
monthly adjustment amount initial determination that is based on 
a more recent tax year?

    (a) Subject to paragraph (b) of this section, when your modified 
adjusted gross income for the more recent tax year is significantly 
reduced as a result of a major life-changing event, our initial 
determination is generally effective on January 1 of the year in which 
you make your request. If your first month of enrollment or reenrollment 
in Medicare Part B is after January of the year for which you make your 
request, our initial determination is effective on the first day of your 
Medicare Part B enrollment or reenrollment.
    (b) We will make a determination about your income-related monthly 
adjustment amount for the year preceding the year that you make your 
request in the limited circumstances explained in Sec. 418.1310(a)(4). 
When we make a determination for the preceding year, our initial 
determination is generally effective on January 1 of that year. If your 
first month of enrollment or reenrollment in Medicare Part B is after 
January of that year, our initial determination is effective on the 
first day of your Medicare Part B enrollment or reenrollment.
    (c) Our initial determination will be effective January 1 of the 
year following the year you make your request, when your modified 
adjusted gross income will not be significantly reduced as a result of 
one or more of the events described in Sec. 418.1205(a) through (g) 
until the year following the year you make your request.

[71 FR 62931, Oct. 27, 2006, as amended at 75 FR 41086, July 15, 2010; 
78 FR 57260, Sept. 28, 2013]



Sec. 418.1235  When will we stop using your more recent tax year's 
modified adjusted gross income to determine your income-related monthly
adjustment amount?

    We will use your more recent tax year's modified adjusted gross 
income to determine your income-related monthly adjustment amount 
effective with the month and year described in Sec. 418.1230 and for 
each year thereafter until one of the following occurs:
    (a) We receive your modified adjusted gross income from IRS for the 
more recent tax year we used or a later tax year;
    (b) Your more recent tax year modified adjusted gross income that we 
used is for a tax year more than 3 years prior to the income-related 
monthly adjustment amount effective year;
    (c) You request we use a more recent tax year based on another major 
life-changing event as described in Sec. 418.1201; or
    (d) You notify us of a change in your modified adjusted gross income 
for the more recent tax year we used as described in Sec. 418.1240.



Sec. 418.1240  Should you notify us if the information you gave us 
about your modified adjusted gross income for the more recent tax 
year changes?

    If you know that the information you provided to us about the more 
recent tax year that we used has changed, you should tell us so that we 
can determine if your income-related monthly adjustment amount should be 
eliminated or adjusted. We will accept new modified adjusted gross 
income information at any time after your request until the end of the 
calendar year following the more recent tax year(s) that we used.

[[Page 1181]]

For us to make a new initial determination using your new modified 
adjusted gross income information, you must provide evidence as 
described in Sec. 418.1265 to support the reduction or increase in your 
modified adjusted gross income. If you amend your Federal income tax 
return for the more recent tax year we used, we will use the rules in 
Sec. 418.1150.



Sec. 418.1245  What will happen if you notify us that your modified 
adjusted gross income for the more recent tax year changes?

    (a) If you notify us that your modified adjusted gross income for 
the more recent tax year has changed from what is in our records, we may 
make a new initial determination for each effective year involved. To 
make a new initial determination(s) we will take into account:
    (1) The new modified adjusted gross income information for the more 
recent tax year you provide; and
    (2) Any modified adjusted gross income information from IRS, as 
described in Sec. 418.1135, that we have available for each effective 
year; and
    (3) Any modified adjusted gross income information from you, as 
described in Sec. 418.1135, that we have available for each effective 
year.
    (b) For each new initial determination that results in a change in 
your income-related monthly adjustment amount, we will make retroactive 
adjustments that will apply to all enrolled months of the effective 
year.
    (c) We will continue to use a new initial determination described in 
paragraph (a) of this section to determine additional yearly income-
related monthly adjustment amount(s) until an event described in 
Sec. 418.1235 occurs.
    (d) We will make a new determination about your income-related 
monthly adjustment amount when we receive modified adjusted gross income 
for the effective year from IRS, as described in Sec. 418.1140(d).



Sec. 418.1250  What evidence will you need to support your request 
that we use a more recent tax year?

    When you request that we use a more recent tax year to determine 
your income-related monthly adjustment amount, we will ask for evidence 
of the major life-changing event and how the event significantly reduced 
your modified adjusted gross income as described in Secs. 418.1255 and 
418.1265. Unless we have information in our records that raises a doubt 
about the evidence, additional evidence documenting the major life-
changing event(s) will not be needed.



Sec. 418.1255  What kind of major life-changing event evidence will 
you need to support your request for us to use a more recent tax year?

    (a) If your spouse died and we do not have evidence of the death in 
our records, we will require proof of death as described in 
Sec. 404.720(b) or (c) or Sec. 404.721 of this chapter.
    (b) If you marry and we do not have evidence of the marriage in our 
records, we will require proof of marriage as described in Secs. 404.725 
through 404.727 of this chapter.
    (c) If your marriage ends and we do not have evidence that the 
marriage has ended in our records, we will require proof that the 
marriage has ended as described in Sec. 404.728(b) or (c) of this 
chapter.
    (d) If you or your spouse stop working or reduce your work hours, we 
will require evidence documenting the change in work activity. Examples 
of acceptable documentation include, but are not limited to, documents 
we can corroborate such as a signed statement from your employer, proof 
of the transfer of your business, or your signed statement under penalty 
of perjury, describing your work separation or a reduction in hours.
    (e) If you or your spouse experiences a loss of income-producing 
property, we will require evidence documenting the loss. Examples of 
acceptable evidence include, but are not limited to, insurance claims or 
an insurance adjuster's statement. If the claim of loss is due to 
criminal fraud or theft by a third party, we will also require proof of 
conviction for the fraud or theft, such as a court document.
    (f) If you or your spouse experiences a scheduled cessation, 
termination, or reorganization of an employer's pension plan, we will 
require evidence documenting the change in or loss of the

[[Page 1182]]

pension. An example of acceptable evidence includes, but is not limited 
to, a statement from your pension fund administrator explaining the 
reduction or termination of your benefits.
    (g) If you or your spouse receives a settlement from an employer or 
former employer because of the employer's closure, bankruptcy, or 
reorganization, we will require evidence documenting the settlement and 
the reason(s) for the settlement. An example of acceptable evidence 
includes, but is not limited to, a letter from the former employer 
stating the settlement terms and how they affect you or your spouse.

[71 FR 62931, Oct. 27, 2006, as amended at 75 FR 41086, July 15, 2010]



Sec. 418.1260  What major life-changing event evidence will we not 
accept?

    (a) We will not accept evidence of death that fails to meet the 
requirements in Secs. 404.720 through 404.721 of this chapter.
    (b) We will not accept evidence of marriage that fails to meet the 
requirements in Secs. 404.725 through 404.727 of this chapter.
    (c) We will not accept evidence that your marriage has ended if the 
evidence fails to meet the requirements in Sec. 404.728 of this chapter.
    (d) We will not accept documents supporting loss of income from 
income-producing property, or failure of or loss from a defined benefit 
pension plan unless the documents are original documents or copies from 
the original source.
    (e) We will not accept evidence of work reduction or work stoppage 
that cannot be substantiated.



Sec. 418.1265  What kind of significant modified adjusted gross 
income reduction evidence will you need to support your request?

    (a) You must provide evidence that one or more of the major life-
changing events described in Sec. 418.1205 resulted in a significant 
reduction in your modified adjusted gross income for the tax year you 
request we use.
    (b) The preferred evidence is your retained copy of your filed 
Federal income tax return, your retained copy of your amended tax return 
with an IRS letter of receipt of the amended tax return, your copy of 
proof of a correction of the IRS information we used or a copy of your 
return or amended or proof of a correction of tax return information 
that you obtain from IRS for the more recent tax year you request we 
use.
    (c) When a copy of your filed Federal income tax return is not 
available for the more recent tax year in which your modified adjusted 
gross income was significantly reduced, we will accept equivalent 
evidence. Equivalent evidence is the appropriate proof(s) in paragraphs 
(c)(1), (2) and (3) of this section, plus your signed statement under 
penalty of perjury that the information you provide is true and correct. 
When the major life-changing event changes your tax filing status, or 
the income-related monthly adjustment amount determination could be 
affected by your tax filing status, you will also be required to sign a 
statement regarding your intended income tax filing status for the tax 
year you request we use.
    (1) If you experience one or more of the events described in 
Sec. 418.1205(a), (b), or (c), you must provide evidence as to how the 
event(s) significantly reduced your modified adjusted gross income. 
Examples of the type of evidence include, but are not limited to, 
evidence of your spouse's modified adjusted gross income and/or your 
modified adjusted gross income for the tax year we use.
    (2) If you experience one or more of the events described in 
Sec. 418.1205(d), (e), (f), or (g), you must provide evidence of how the 
event(s) significantly reduced your modified adjusted gross income, such 
as a statement explaining any modified adjusted gross income changes for 
the tax year we used and a copy of your filed Federal income tax return 
(if you have filed one).
    (3) If your spouse experiences one or more of the events described 
in Sec. 418.1205(d), (e), (f), or (g), you must provide evidence of the 
resulting significant reduction in your modified adjusted gross income. 
The evidence requirements are described in paragraph (c)(2) of this 
section.
    (d) When we use information described in paragraph (c) of this 
section, we will request that you provide your

[[Page 1183]]

retained copy of your Federal income tax return for the year we used 
when you file your taxes. We will use that information to make timely 
adjustments to your Medicare premium, if necessary. We will later verify 
the information you provide when we receive information about that tax 
year from IRS, as described in Sec. 418.1140(d).

[71 FR 62931, Oct. 27, 2006, as amended at 75 FR 41087, July 15, 2010]



Sec. 418.1270  What modified adjusted gross income evidence will
we not accept?

    We will not accept a correction or amendment of your income tax 
return without a letter from IRS acknowledging the change. We will also 
not accept illegible or unsigned copies of income tax returns or 
attestations or other statements of income unless they are provided 
under penalty of perjury.

          Determinations and the Administrative Review Process



Sec. 418.1301  What is an initial determination regarding your income-
related monthly adjustment amount?

    An initial determination is the determination we make about your 
income-related monthly adjustment amount that is subject to 
administrative review. For the purposes of administering the income-
related monthly adjustment amount, initial determinations include but 
are not limited to determinations about:
    (a) The amount of your income-related monthly adjustment amount 
based on information provided by IRS; and
    (b) Any change in your income-related monthly adjustment amount 
based on one of the circumstances listed in Sec. 418.1310(a)(1) through 
(a)(4).



Sec. 418.1305  What is not an initial determination regarding your 
income-related monthly adjustment amount?

    Administrative actions that are not initial determinations may be 
reviewed by us, but they are not subject to the administrative review 
process as provided by Secs. 418.1320 through 418.1325 and 
Secs. 418.1340 through 418.1355, and they are not subject to judicial 
review. These actions include, but are not limited to, our dismissal of 
a request for reconsideration as described in Sec. 418.1330 and our 
dismissal of a request for a new initial determination as described in 
Sec. 418.1310(d).



Sec. 418.1310  When may you request that we make a new initial 
determination?

    (a) You may request that we make a new initial determination in the 
following circumstances:
    (1) You provide a copy of your filed Federal income tax return for 
the tax year 2 years prior to the effective year when IRS has provided 
information for the tax year 3 years prior to the effective year. You 
may request a new initial determination beginning with the date you 
receive a notice from us regarding your income-related monthly 
adjustment amount until the end of the effective year, with one 
exception. If you receive the notice during the last 3 months of a 
calendar year, you may request a new initial determination beginning 
with the date you receive the notice until March 31 of the following 
year. We will follow the rules and procedures in Secs. 418.1110(b) and 
418.1140(b) to make a new initial determination and any necessary 
retroactive adjustments back to January 1 of the effective year, or the 
first month you were enrolled in Medicare Part B in the effective year 
if later than January.
    (2) You provide a copy of an amended tax return filed with IRS, as 
defined in Sec. 418.1010(b)(1). We will use your amended tax return for 
the same tax year as the year used to determine your income-related 
monthly adjustment amount. You must request the new initial 
determination within the timeframe described in Sec. 418.1150.
    (3) You provide proof that the tax return information about your 
modified adjusted gross income or tax filing status IRS gave us is 
incorrect. We will use proof that you obtain from IRS of a correction of 
your tax return information for the same tax year instead of the 
information that was provided to us by IRS, as explained in 
Sec. 418.1335(a). You may request a new initial determination at any 
time after you receive a notice from us regarding your income-related 
monthly adjustment

[[Page 1184]]

amount if you have such proof. We will use the rules and procedures in 
Sec. 418.1335.
    (4) You have a major life-changing event. You may request a new 
initial determination based on a major life-changing event when you meet 
all the requirements described in Sec. 418.1201. You may make such a 
request at any time during the calendar year in which you experience a 
significant reduction in your modified adjusted gross income caused by a 
major life-changing event. When you have a major life-changing event 
that occurs in the last 3 months of a calendar year and your modified 
adjusted gross income for that year is significantly reduced as a result 
of the event, you may request that we make a new initial determination 
based on your major life-changing event from the date of the event until 
March 31 of the next year. We will follow the rules in Sec. 418.1230 
when we make a new initial determination based on your major life-
changing event.
    (b) If a request for a new initial determination based on any of the 
circumstances in paragraph (a) of this section is made after the time 
frame provided for each type of listed circumstance, we will review the 
request under the rules in Sec. 404.911 of this chapter to determine if 
there is good cause for a late request.
    (c) We will notify you of the new initial determination as described 
in Sec. 418.1315.
    (d) We will dismiss your request to make a new initial determination 
if it does not meet one of the circumstances specified in paragraphs 
(a)(1) through (a)(4) of this section. Our dismissal of your request for 
a new initial determination is not an initial determination subject to 
further administrative or judicial review.



Sec. 418.1315  How will we notify you and what information will we 
provide about our initial determination?

    (a) We will mail a written notice of all initial determinations to 
you. The notice of the initial determination will state the important 
facts and give the reasons for our conclusions. Generally, we will not 
send a notice if your income-related monthly adjustment amount stops 
because of your death.
    (b) The written notice that we send will tell you:
    (1) What our initial determination is;
    (2) What modified adjusted gross income information we used to make 
our determination;
    (3) The reason for our determination;
    (4) The effect of the initial determination; and
    (5) Your right to a reconsideration or a new initial determination.



Sec. 418.1320  What is the effect of an initial determination?

    An initial determination is binding unless you request a 
reconsideration within the time period described in Secs. 404.909 and 
404.911 of this chapter or we revise the initial determination or issue 
a new initial determination.



Sec. 418.1322  How will a Medicare prescription drug coverage income-
related monthly adjustment amount determination for the effective year
affect your Medicare Part B?

    If we make an income-related monthly adjustment amount determination 
for you for the effective year under subpart C of this part (Medicare 
Prescription Drug Coverage Income-Related Monthly Adjustment Amount), we 
will apply that income-related monthly adjustment amount determination 
under this subpart to determine your Part D income-related monthly 
adjustment amount for the same effective year. Therefore, if you become 
enrolled in Medicare Part B in the effective year after we make an 
income-related monthly adjustment amount determination about your 
Medicare prescription drug coverage, the income-related monthly 
adjustment amount determination for your Medicare prescription drug 
coverage will also be used to determine your Medicare Part B income-
related monthly adjustment amount. Any change in your net benefit due 
will be accompanied by a letter explaining the change in your net 
benefit and your right to appeal the change.

[75 FR 75890, Dec. 7, 2010]

[[Page 1185]]



Sec. 418.1325  When may you request a reconsideration?

    If you are dissatisfied with our initial determination about your 
income-related monthly adjustment amount, you may request that we 
reconsider it. In addition, a person who shows that his or her rights 
may be adversely affected by the initial determination may request a 
reconsideration. We may accept requests for reconsideration that are 
filed by electronic or other means that we determine to be appropriate. 
Subject to the provisions of this section and Sec. 418.1330, when you 
request a reconsideration, we will use the rules in Secs. 404.907 
through 404.922 of this chapter.



Sec. 418.1330  Can you request a reconsideration when you believe that
the IRS information we used is incorrect?

    If you request a reconsideration solely because you believe that the 
information that IRS gave us is incorrect, we will dismiss your request 
for a reconsideration and notify you to obtain proof of a correction 
from IRS and request a new initial determination (Sec. 418.1335). Our 
dismissal of your request for reconsideration is not an initial 
determination subject to further administrative or judicial review.



Sec. 418.1335  What should you do if our initial determination is based
on modified adjusted gross income information you believe to be 
incorrect?

    If you believe that IRS or you provided incorrect modified adjusted 
gross income information to us that we used to determine your income-
related monthly adjustment amount, you can request information from us 
on how to contact IRS regarding the information we used.
    (a) If IRS determines that the information it provided is not 
correct, IRS will provide you with documentation of the error, such as a 
copy of your Federal income tax return. If you would like us to use the 
revised or corrected information to determine your income-related 
monthly adjustment amount, you will need to request that we use that 
information and provide us with the IRS documentation confirming the 
error. We will make any necessary retroactive corrections as described 
in Sec. 418.1110(d) to your income-related monthly adjustment amount.
    (b) If you provided information to us about your modified adjusted 
gross income that we used to determine your income-related monthly 
adjustment amount, and that information is not correct, you may provide 
revised or corrected information. We will use the revised or corrected 
information if it reduces or eliminates your income-related monthly 
adjustment amount. We will make any necessary retroactive corrections as 
described in Sec. 418.1110 to your income-related monthly adjustment 
amount. If you are providing corrected information about a more recent 
tax year's modified adjusted gross income that we used due to your major 
life-changing event, as described in Sec. 418.1240, we will use the 
rules in Sec. 418.1245 to determine how it will affect your income-
related monthly adjustment amount.



Sec. 418.1340  What are the rules for our administrative review process?

    To the extent that they are not inconsistent with the rules in this 
subpart for making initial determinations and reconsidered 
determinations, we will use the same rules for the administrative review 
process that we use for determinations and decisions about your rights 
regarding non-medical issues under title II of the Act, as described in 
subpart J of part 404 of this chapter. We will accept oral requests as 
well as the written requests required in subpart J of part 404 of this 
chapter for requesting administrative review of our determination. If 
you are dissatisfied with our reconsidered determination, you may 
request review in accordance with Sec. 418.1350 for this subpart. A 
request for a new initial determination, described in Sec. 418.1310, is 
not the same as a request for reconsideration or further administrative 
review.



Sec. 418.1345  Is reopening of an initial or reconsidered determination
made by us ever appropriate?

    We may reopen an initial or reconsidered determination made by us 
when the conditions for reopening are met as described in Sec. 404.988 
of this chapter. We

[[Page 1186]]

will use the rules in Secs. 404.987 through 404.991a of this chapter 
when we reopen determinations made by us.



Sec. 418.1350  What are the rules for review of a reconsidered 
determination or an administrative law judge decision?

    You may request a hearing before an OMHA administrative law judge 
consistent with HHS' regulations at 42 CFR part 405. You may seek 
further review of the administrative law judge's decision by requesting 
MAC review and judicial review in accordance with HHS' regulations.

[78 FR 57260, Sept. 18, 2013]



Sec. 418.1355  What are the rules for reopening a decision by an 
administrative law judge of the Office of Medicare Hearings and
Appeals (OMHA) or by the Medicare Appeals Council (MAC)?

    The rules in 42 CFR 405.980 through 405.986 govern reopenings of 
decisions by an administrative law judge of the OMHA and decisions by 
the MAC. A decision by an administrative law judge of the OMHA may be 
reopened by the administrative law judge or by the MAC. A decision by 
the MAC may be reopened only by the MAC.



 Subpart C_Income-Related Monthly Adjustments to Medicare Prescription 
                         Drug Coverage Premiums

    Authority: Secs. 702(a)(5), 1860D-13(a) and (c) of the Social 
Security Act (42 U.S.C. 902(a)(5), 1395w-113(a) and (c)).

    Source: 75 FR 75891, Dec. 7, 2010, unless otherwise noted.

            Introduction, General Provisions, and Definitions



Sec. 418.2001  What is this subpart about?

    This subpart implements sections 1860D-13(a)(7) and 1860D-13(c)(4) 
of the Social Security Act (the Act), as added by section 3308 of the 
Affordable Care Act (Pub. L. 111-148). Section 3308(a) establishes an 
income-related monthly adjustment to Medicare prescription drug coverage 
premiums. Persons enrolled in Medicare prescription drug plans, Medicare 
Advantage plans with prescription drug coverage, Programs of All-
Inclusive Care for the Elderly plans, and cost plans offering 
prescription drug coverage who have modified adjusted gross income over 
a threshold amount established in the statute will pay an income-related 
monthly adjustment amount in addition to their Medicare prescription 
drug coverage plan's monthly premium and any applicable premium 
increases as described in 42 CFR 423.286. The regulations in this 
subpart explain how we determine whether you are required to pay an 
income-related monthly adjustment amount, and if you are, the amount of 
your adjustment. We have divided the rules into the following groups of 
sections:
    (a) Sections 418.2001 through 418.2010 contain the introduction, a 
statement of the general purpose of the income-related monthly 
adjustment amount, general provisions that apply to the income-related 
monthly adjustment amount, and definitions of terms that we use in this 
subpart.
    (b) Sections 418.2101 through 418.2150 describe what information 
about your modified adjusted gross income we will use to determine if 
you are required to pay an income-related monthly adjustment amount. In 
these sections, we also describe how the income-related monthly 
adjustment amount will affect your total Medicare prescription drug 
coverage premium.
    (c) Sections 418.2201 through 418.2270 contain an explanation of the 
standards that you must meet for us to grant your request to use 
modified adjusted gross income information that you provide for a more 
recent tax year rather than the information described in paragraph (b) 
of this section. These sections explain when we may consider such a 
request, and the evidence that you will be required to provide. These 
sections also explain when an income-related monthly adjustment amount 
determination based on information you provide will be effective, and 
how long it will remain in effect. Additionally, these sections describe 
how we make retroactive adjustments of the income-related monthly 
adjustment amount based on information you provide, updated information 
you provide,

[[Page 1187]]

and information we later receive from the Internal Revenue Service.
    (d) Sections 418.2301 through 418.2355 explain how we will notify 
you of our determination regarding your income-related monthly 
adjustment amount and contain the rules that we will apply when you 
disagree with our determination. These sections explain your appeal 
rights and the circumstances under which you may request that we make a 
new initial determination of your income-related monthly adjustment 
amount.



Sec. 418.2005  Purpose and administration.

    (a) The purpose of the income-related monthly adjustment amount is 
for beneficiaries who have modified adjusted gross income above an 
established threshold to reimburse the Federal Government for a portion 
of the Federal subsidy of the Medicare prescription drug coverage. 
Persons who have modified adjusted gross income above the thresholds 
described in Sec. 418.2105 will pay an income-related monthly adjustment 
amount in addition to the premium for their prescription drug coverage. 
The income-related monthly adjustment amount due will be determined 
based on the base beneficiary premium amount that represents 25.5 
percent of the cost of the basic Medicare prescription drug coverage. 
The application of an income-related monthly adjustment amount results 
in an increase in the total amount that those who are affected pay for 
Medicare prescription drug coverage plans. A person who has modified 
adjusted gross income above the threshold amount will pay:
    (1) The Medicare prescription drug coverage plan monthly premium; 
plus
    (2) Any applicable increase for late enrollment or reenrollment;
    (3) An income-related monthly adjustment amount; and
    (b) The Centers for Medicare & Medicaid Services in the Department 
of Health and Human Services establishes rules for eligibility for 
Medicare prescription drug coverage and enrollment in Medicare 
prescription drug coverage plans, as well as premium penalties for late 
enrollment or reenrollment (42 CFR 423.30 through 423.56).
    (c) We use information from CMS about enrollment in Medicare 
prescription drug coverage plans to determine the records that we must 
send to the IRS.
    (d) We use information that we get from the IRS to determine if 
persons enrolled in Medicare prescription drug coverage plans are 
required to pay an income-related monthly adjustment amount. We also 
change income-related monthly adjustment amount determinations using 
information you provide under certain circumstances. In addition, we 
notify beneficiaries when the social security benefit amounts they 
receive will change based on our income-related monthly adjustment 
amount determination.



Sec. 418.2010  Definitions.

    (a) Terms relating to the Act and regulations. For the purposes of 
this subpart:
    (1) Administrator means the Administrator of CMS in HHS.
    (2) ALJ means administrative law judge.
    (3) CMS means the Centers for Medicare & Medicaid Services in HHS.
    (4) Commissioner means the Commissioner of Social Security.
    (5) HHS means the Department of Health and Human Services, which 
oversees the Centers for Medicare & Medicaid Services (CMS), the Office 
of Medicare Hearings and Appeals (OMHA) and the Medicare Appeals Council 
(MAC)
    (6) IRS means the Internal Revenue Service in the Department of the 
Treasury.
    (7) MAC means the Medicare Appeals Council in HHS.
    (8) Medicare Prescription Drug Coverage Plan means a Medicare 
prescription drug plan, a Medicare Advantage plan with prescription drug 
coverage, a Program for All-inclusive Care for the Elderly plan offering 
qualified prescription drug coverage, or a cost plan offering qualified 
prescription drug coverage.
    (9) OMHA means the Office of Medicare Hearings and Appeals in HHS.
    (10) Section means a section of the regulations in this part unless 
the context indicates otherwise.

[[Page 1188]]

    (11) The Act means the Social Security Act, as amended.
    (12) Title means a title of the Act.
    (13) We, our, or us means the Social Security Administration (SSA).
    (b) Miscellaneous. For the purposes of this subpart:
    (1) Amended tax return means a Federal income tax return for which 
an individual or couple has filed an amended tax return that has been 
accepted by the IRS.
    (2) Effective year means the calendar year for which we make an 
income-related monthly adjustment amount determination.
    (3) Federal premium subsidy is the portion of the cost of providing 
Medicare prescription drug coverage that is paid by the Federal 
Government. The Federal Government pays this amount to Medicare 
Prescription Drug coverage Plans from payments made into the Medicare 
Prescription Drug Account in the Federal Supplementary Medical Insurance 
Trust Fund.
    (4) Income-related monthly adjustment amount is an additional amount 
of premium that you will pay for Medicare prescription drug coverage if 
you have modified adjusted gross income above the threshold described in 
418.2105.
    (5) Modified adjusted gross income is your adjusted gross income as 
defined by the Internal Revenue Code, plus the following forms of tax-
exempt income:
    (i) Tax-exempt interest income;
    (ii) Income from United States savings bonds used to pay higher 
education tuition and fees;
    (iii) Foreign earned income;
    (iv) Income derived from sources within Guam, American Samoa, or the 
Northern Mariana Islands; and
    (v) Income from sources within Puerto Rico.
    (6) Modified adjusted gross income ranges are the groupings of 
modified adjusted gross income above the threshold. There are four 
ranges for most individuals, based on their tax filing status. There are 
two ranges for those with a tax filing status of married, filing 
separately, who also lived with their spouse for part of the year. The 
dollar amounts of the modified adjusted gross income ranges are 
specified in Sec. 418.2115.
    (7) Premium is a payment that an enrolled beneficiary pays for 
Medicare prescription drug coverage to a Medicare prescription drug 
plan, a Medicare Advantage plan with prescription drug coverage, a 
Program of All-Inclusive Care for the Elderly Plan offering qualified 
prescription drug coverage, or a cost plan offering qualified 
prescription drug coverage. The rules that CMS use annually to establish 
premium amounts for Medicare prescription drug coverage are contained in 
42 CFR 423.286.
    (8) Representative means, for the purposes of the initial 
determination and reconsidered determination, an individual as defined 
in Sec. 404.1703 of this chapter, and for purposes of an ALJ hearing or 
review by the MAC, an individual as defined in 42 CFR 423.560.
    (9) Tax filing status means the filing status shown on your 
individual income tax return. It may be single, married filing jointly, 
married filing separately, head of household, or qualifying widow(er) 
with dependent child.
    (10) Tax year means the year for which you have filed or will file 
your Federal income tax return with the IRS.
    (11) Threshold means a modified adjusted gross income amount above 
which you will have to pay an income-related monthly adjustment amount 
described in paragraph (b)(4) of this section. The dollar amount of the 
threshold is specified in Sec. 418.2105.
    (12) You or your means the person or representative of the person 
who is subject to the income-related monthly adjustment amount.

      Determination of the Income-Related Monthly Adjustment Amount



Sec. 418.2101  What is the income-related monthly adjustment amount?

    (a) The income-related monthly adjustment amount is an amount that 
you will pay in addition to the Medicare prescription drug coverage plan 
monthly premium, plus any applicable increase in that premium as 
described in 42 CFR 423.286, for your Medicare prescription drug 
coverage plan when your modified adjusted gross income is

[[Page 1189]]

above the threshold described in Sec. 418.2105.
    (b) Your income-related monthly adjustment amount is based on your 
applicable modified adjusted gross income as described in Sec. 418.2115 
and your tax filing status.
    (c) We will determine your income-related monthly adjustment amount 
using the method described in Sec. 418.2120.



Sec. 418.2105  What is the threshold?

    (a) The threshold is a level of modified adjusted gross income above 
which you will have to pay the income-related monthly adjustment amount.
    (b) For calendar years 2011 through and including 2019, the modified 
adjusted gross income threshold is $85,000 for individuals with a 
Federal income tax filing status of single, married filing separately, 
head of household, and qualifying widow(er) with dependent child. The 
threshold is $170,000 for individuals with a Federal income tax filing 
status of married filing jointly.
    (c) Starting at the end of calendar year 2019 and for each calendar 
year thereafter, CMS will set the threshold amounts for the following 
year. CMS will publish the threshold amounts annually in the Federal 
Register. Published threshold amounts will be effective January 1 of the 
next calendar year, and remain unchanged for the full calendar year.



Sec. 418.2110  What is the effective date of our initial determination
about your income-related monthly adjustment amount?

    (a) Generally, an income-related monthly adjustment amount 
determination will be effective for all months that you are enrolled in 
a prescription drug coverage plan during the year for which we determine 
you must pay an income-related monthly adjustment amount.
    (b) When we have used modified adjusted gross income information 
from the IRS for the tax year 3 years prior to the effective year to 
determine your income-related monthly adjustment amount, and modified 
adjusted gross income information for the tax year 2 years prior later 
becomes available from the IRS, we will review the new information to 
determine if we should revise our initial determination concerning the 
income-related monthly adjustment amount. If we revise our initial 
determination, the effective date of the new initial determination will 
be January 1 of the effective year, or the first month your enrollment 
or re-enrollment in a Medicare prescription drug coverage plan became 
effective if later than January.
    (c) When we use your amended tax return, as described in 
Sec. 418.2150, the effective date will be January 1 of the year(s) that 
is affected, or the first month in that year that your enrollment or re-
enrollment in a Medicare prescription drug coverage plan became 
effective if later than January.

    Example: You are enrolled in Medicare prescription drug coverage 
throughout 2011. We use your 2009 modified adjusted gross income as 
reported to us by the IRS to determine your 2011 income-related monthly 
adjustment amount. In 2012, you submit to us a copy of your 2009 amended 
tax return that you filed with the IRS. The modified adjusted gross 
income reported on your 2009 amended tax return is significantly less 
than originally reported to the IRS. We use the modified adjusted gross 
income reported on your 2009 amended tax return to determine your 
income-related monthly adjustment amount. That income-related monthly 
adjustment amount is effective January 1, 2011. We will retroactively 
correct any differences between the amount paid in 2011 and the amount 
you should have paid based on the amended tax return.

    (d) When we use evidence that you provide to proves the IRS modified 
adjusted gross income information we used was incorrect, as described in 
Sec. 418.2335, the effective date will be January of the year(s) that is 
affected or the first month in that year that your enrollment or re-
enrollment in a Medicare prescription drug coverage plan became 
effective if later than January.
    (e) When we use information from a more recent tax year that you 
provide due to a major life-changing event, as described in 
Sec. 418.2201, the effective date is described in Sec. 418.2230.



Sec. 418.2112  Paying your income-related monthly adjustment amount.

    (a) We will deduct the income-related monthly adjustment amount from 
your Social Security benefits if they are sufficient to cover the amount 
owed. If

[[Page 1190]]

the amount of your Social Security benefits is not sufficient to pay the 
full amount of your income-related monthly adjustment amount, CMS will 
bill you for the full amount owed.
    (b) If you do not receive Social Security or Railroad Retirement 
Board benefits, but you receive benefits from the Office of Personnel 
Management, the Office of Personnel Management will deduct the income-
related monthly adjustment amount from your benefits if they are 
sufficient to cover the amount owed. If the amount of your Office of 
Personnel Management benefits is not sufficient to pay the full amount 
of your income-related monthly adjustment amount, CMS will bill you for 
the full amount owed.
    (c) If you do not receive Social Security, Railroad Retirement 
Board, or Office of Personnel Management benefits, CMS will bill you for 
your income-related monthly adjustment amount.



Sec. 418.2115  What are the modified adjusted gross income ranges?

    (a) We list the modified adjusted gross income ranges for the 
calendar years 2011 through and including 2019 for each Federal tax 
filing category in paragraphs (b), (c) and (d) of this section. We will 
use your modified adjusted gross income amount together with your tax 
filing status to determine the amount of your income-related monthly 
adjustment for these calendar years.
    (b) For calendar years 2011 through and including 2019, the modified 
adjusted gross income ranges for individuals with a Federal tax filing 
status of single, head of household, qualifying widow(er) with dependent 
child, and married filing separately when the individual has lived apart 
from his/her spouse for the entire tax year for the year we use to make 
our income-related monthly adjustment amount determination are as 
follows:
    (1) Greater than $85,000 and less than or equal to $107,000;
    (2) Greater than $107,000 and less than or equal to $160,000;
    (3) Greater than $160,000 and less than or equal to $214,000; and
    (4) Greater than $214,000.
    (c) For calendar years 2011 through and including 2019, the modified 
adjusted gross income ranges for individuals who are married and filed a 
joint tax return for the tax year we use to make the income-related 
monthly adjustment amount determination are as follows:
    (1) Greater than $170,000 and less than or equal to $214,000;
    (2) Greater than $214,000 and less than or equal to $320,000;
    (3) Greater than $320,000 and less than or equal to $428,000; and
    (4) Greater than $428,000.
    (d) For calendar years 2011 through and including 2019, the modified 
adjusted gross income ranges for married individuals who file a separate 
return and have lived with their spouse at any time during the tax year 
we use to make the income-related monthly adjustment amount 
determination are as follows:
    (1) Greater than $85,000 and less than or equal to $129,000; and
    (2) Greater than $129,000.
    (e) In 2019, CMS will set all modified adjusted gross income ranges 
for 2020 and publish them in the Federal Register. In each year 
thereafter, CMS will set all modified adjusted gross income ranges and 
publish the amounts for each range prior to the beginning of each 
subsequent year.



Sec. 418.2120  How do we determine your income-related monthly 
adjustment amount?

    (a) We will determine your income-related monthly adjustment amount 
by using your tax filing status and modified adjusted gross income.
    (b) Tables of applicable percentage. The tables in paragraphs (b)(1) 
through (b)(3) of this section contain the modified adjusted gross 
income ranges for calendar years 2011 through and including 2019, and 
the corresponding percentage of the cost of basic Medicare prescription 
drug coverage that individuals with modified adjusted gross incomes that 
fall within each of the ranges will pay. The monthly dollar amounts will 
be determined by CMS using the formula in Sec. 1860D-13(a)(7)(B) of the 
Act. Based on your tax filing status for the tax year we use to make a 
determination about your income-related monthly adjustment amount, we

[[Page 1191]]

will determine which table is applicable to you. We will use your 
modified adjusted gross income to determine which income-related monthly 
adjustment amount to apply to you. The dollar amounts used for each of 
the ranges of income-related monthly adjustment will be set annually 
after 2019 as described in paragraph (c) of this section. The modified 
adjusted gross income ranges will be adjusted annually after 2019 as 
described in Sec. 418.2115(e).
    (1) General table of applicable percentages. If your filing status 
for your Federal income taxes for the tax year we use is single; head of 
household; qualifying widow(er) with dependent child; or married filing 
separately and you lived apart from your spouse for the entire tax year, 
we will use the general table of applicable percentages. When your 
modified adjusted gross income for the year we use is in the range 
listed in the left column in the following table, you will pay an amount 
based on the percentage listed in the right column, which represents a 
percentage of the cost of basic Medicare prescription drug coverage.

------------------------------------------------------------------------
                                                            Beneficiary
  Modified adjusted gross income effective in 2011-2019     percentage
                                                             (percent)
------------------------------------------------------------------------
More than $85,000 but less than or equal to $107,000....              35
More than $107,000 but less than or equal to $160,000...              50
More than $160,000 but less than or equal to $214,000...              65
More than $214,000......................................              80
------------------------------------------------------------------------

    (2) Table of applicable percentages for joint returns. If your 
Federal tax filing status is married filing jointly for the tax year we 
use and your modified adjusted gross income for that tax year is in the 
range listed in the left column in the following table, you will pay an 
amount based on the percentage listed in the right column, which 
represents a percentage of the cost of basic Medicare prescription drug 
coverage.

------------------------------------------------------------------------
                                                            Beneficiary
  Modified adjusted gross income effective in 2011-2019     percentage
                                                             (percent)
------------------------------------------------------------------------
More than $170,000 but less than or equal to $214,000...              35
More than $214,000 but less than or equal to $320,000...              50
More than $320,000 but less than or equal to $428,000...              65
More than $428,000......................................              80
------------------------------------------------------------------------

    (3) Table of applicable percentages for married individuals filing 
separate returns. If, for the tax year we use, your Federal tax filing 
status is married filing separately, you lived with your spouse at some 
time during that tax year, and your modified adjusted gross income is in 
the range listed in the left column in the following table, you will pay 
an amount based on the percentage listed in the right column, which 
represents a percentage of the cost of basic Medicare prescription drug 
coverage.

------------------------------------------------------------------------
                                                            Beneficiary
  Modified adjusted gross income effective in 2011-2019     percentage
                                                             (percent)
------------------------------------------------------------------------
More than $85,000 but less than or equal to $129,000....              65
More than $129,000......................................              80
------------------------------------------------------------------------

    (c) For each year after 2019, CMS will announce the modified 
adjusted gross income ranges for the income-related monthly adjustment 
amount described in paragraph (b) of this section.



Sec. 418.2125  How will the income-related monthly adjustment amount
affect your total Medicare prescription drug coverage premium?

    (a) If you must pay an income-related monthly adjustment amount, 
your total Medicare prescription drug coverage premium will be the sum 
of:
    (1) Your prescription drug coverage monthly premium, as determined 
by your plan; plus
    (2) Any applicable increase in the prescription drug coverage 
monthly premium as described in 42 CFR 423.286; plus
    (3) Your income-related monthly adjustment amount.
    (b) Regardless of the method you use to pay your Medicare 
prescription drug coverage premiums to your Medicare prescription drug 
coverage plan, you will pay any income-related monthly adjustment amount 
you owe using the method described in 418.2112.



Sec. 418.2135  What modified adjusted gross income information will 
we use to determine your income-related monthly adjustment amount?

    We will follow the rules in Sec. 418.1135, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to

[[Page 1192]]

the corresponding regulation in this subpart.



Sec. 418.2140  What will happen if the modified adjusted gross income 
information from the IRS is different from the modified adjusted gross 
income information  we used to determine your income-related monthly 
adjustment amount?

    We will follow the rules in Sec. 418.1140, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2145  How do we determine your income-related monthly 
adjustment amount if the IRS does not provide information about
your modified adjusted gross  income?

    We will follow the rules in Sec. 418.1145, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2150  When will we use your amended tax return filed with the IRS?

    We will follow the rules in Sec. 418.1150, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.

 Determinations Using a More Recent Tax Year's Modified Adjusted Gross 
                                 Income



Sec. 418.2201  When will we determine your income-related monthly
adjustment amount based on the modified adjusted gross income 
information that you provide for a more recent tax year?

    We will follow the rules in Sec. 418.1201, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2205  What is a major life-changing event?

    We will follow the rules in Sec. 418.1205, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2210  What is not a major life-changing event?

    We will follow the rules in Sec. 418.1210, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2215  What is a significant reduction in your income?

    We will follow the rules in Sec. 418.1215, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2220  What is not a significant reduction in your income?

    We will follow the rules in Sec. 418.1220, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2225  Which more recent tax year will we use?

    We will follow the rules in Sec. 418.1225, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2230  What is the effective date of an income-related monthly 
adjustment amount initial determination based on a more recent 
tax year?

    We will follow the rules in Sec. 418.1230, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2235  When will we stop using your more recent tax year's 
modified adjusted gross income to determine your income-related
monthly adjustment amount?

    We will follow the rules in Sec. 418.1235, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to

[[Page 1193]]

the corresponding regulation in this subpart.



Sec. 418.2240  Should you notify us if the information you gave us
about your modified adjusted gross income for the more recent 
tax year changes?

    We will follow the rules in Sec. 418.1240, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2245  What will happen if you notify us that your modified 
adjusted gross income for the more recent tax year changes?

    (a) If you notify us that your modified adjusted gross income for 
the more recent tax year has changed from what is in our records, we may 
make a new initial determination for each effective year involved. To 
make a new initial determination(s) we will take into account:
    (1) The new modified adjusted gross income information for the more 
recent tax year you provide; and
    (2) Any modified adjusted gross income information from the IRS, as 
described in Sec. 418.2135, that we have available for each effective 
year; and
    (3) Any modified adjusted gross income information from you, as 
described in Sec. 418.2135, that we have available for each effective 
year.
    (b) For each new initial determination that results in a change in 
your income-related monthly adjustment amount, we will make retroactive 
corrections that will apply to all enrolled months of the effective 
year.
    (c) We will continue to use a new initial determination described in 
paragraph (a) of this section to determine additional yearly income-
related monthly adjustment amount(s) until an event described in 
Sec. 418.2235 occurs.
    (d) We will make a new determination about your income-related 
monthly adjustment amount when we receive modified adjusted gross income 
for the effective year from the IRS, as described in Sec. 418.1140(d).



Sec. 418.2250  What evidence will you need to support your request 
that we use a more recent tax year?

    We will follow the rules in Sec. 418.1250, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2255  What kind of evidence of a major life-changing event
will you need to support your request for us to use a more recent 
tax year?

    We will follow the rules in Sec. 418.1255, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2260  What major life-changing event evidence will we not
accept?

    We will follow the rules in Sec. 418.1260, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2265  What kind of evidence of a significant modified 
adjusted gross income reduction will you need to support your request?

    We will follow the rules in Sec. 418.1265, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2270  What modified adjusted gross income evidence will we
not accept?

    We will follow the rules in Sec. 418.1270, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.

          Determinations and the Administrative Review Process



Sec. 418.2301  What is an initial determination regarding your 
income-related monthly adjustment amount?

    We will follow the rules in Sec. 418.1301, except that any 
references in that section to regulations in subpart B of this

[[Page 1194]]

part shall be treated as references to the corresponding regulation in 
this subpart.



Sec. 418.2305  What is not an initial determination regarding your 
income-related monthly adjustment amount?

    We will follow the rules in Sec. 418.1305, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2310  When may you request that we make a new initial 
determination?

    We will follow the rules in Sec. 418.1310, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2315  How will we notify you and what information will 
we provide about our initial determination?

    We will follow the rules in Sec. 418.1315, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2320  What is the effect of an initial determination?

    We will follow the rules in Sec. 418.1320, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2322  How will a Medicare Part B income-related monthly 
adjustment amount determination for the effective year affect your
Medicare prescription drug  coverage?

    If we make an income-related monthly adjustment amount determination 
for you for the effective year under subpart B of this part (Medicare 
Part B Income-Related Monthly Adjustment Amount), we will apply that 
income-related monthly adjustment amount determination under this 
subpart to determine your Part D income-related monthly adjustment 
amount for the same effective year. Therefore, if you obtain Medicare 
prescription drug coverage in the effective year after we make an 
income-related monthly adjustment amount determination about your 
Medicare Part B, the income-related monthly adjustment amount 
determination we made for your Medicare Part B will also apply to your 
Medicare prescription drug coverage. Any change in your net benefit due 
will be accompanied by a letter explaining the change in your net 
benefit and your right to appeal the change.



Sec. 418.2325  When may you request a reconsideration?

    We will follow the rules in Sec. 418.1325, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2330  Can you request a reconsideration when you believe 
that the IRS information we used is incorrect?

    If you request a reconsideration solely because you believe that the 
information that the IRS gave us is incorrect, we will dismiss your 
request for a reconsideration and notify you to obtain proof of a 
correction from the IRS and request a new initial determination 
(Sec. 418.2335). Our dismissal of your request for reconsideration is 
not an initial determination subject to further administrative or 
judicial review.



Sec. 418.2332  Can you request a reconsideration when you believe 
that the CMS information we used is incorrect?

    If you request a reconsideration solely because you believe that the 
information that CMS gave us about your participation in a Medicare 
prescription drug coverage plan is incorrect, we will dismiss your 
request for a reconsideration and notify you that you must contact CMS 
to get your records corrected. Our dismissal of your request for 
reconsideration is not an initial determination subject to further 
administrative or judicial review.

[[Page 1195]]



Sec. 418.2335  What should you do if we base our initial determination
on modified adjusted gross income information you believe to be 
incorrect?

    We will follow the rules in Sec. 418.1335, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2340  What are the rules for our administrative review 
process?

    We will follow the rules in Sec. 418.1340, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2345  Is reopening of an initial or reconsidered 
determination made by us ever appropriate?

    We will follow the rules in Sec. 418.1345, except that any 
references in that section to regulations in subpart B of this part 
shall be treated as references to the corresponding regulation in this 
subpart.



Sec. 418.2350  What are the rules for review of a reconsidered 
determination or an ALJ decision?

    You may request a hearing before an OMHA administrative law judge 
consistent with HHS' regulations at 42 CFR part 423. You may seek 
further review of the administrative law judge's decision by requesting 
MAC review and judicial review in accordance with HHS' regulations.



Sec. 418.2355  What are the rules for reopening a decision by an ALJ
of the Office of Medicare Hearings and Appeals (OMHA) or by the Medicare
Appeals Council  (MAC)?

    The rules in 42 CFR 423.1980 through 423.1986 govern reopenings of 
decisions by an administrative law judge of the OMHA and decisions by 
the MAC. A decision by an administrative law judge of the OMHA may be 
reopened by the administrative law judge or the MAC. A decision by the 
MAC may be reopened only by the MAC.



                   Subpart D_Medicare Part D Subsidies

    Authority: Secs. 702(a)(5) and 1860D-1, 1860D-14 and -15 of the 
Social Security Act (42 U.S.C. 902(a)(5),1395w-101, 1395w-114, and -
115).

            Introduction, General Provisions, and Definitions



Sec. 418.3001  What is this subpart about?

    This subpart D relates to sections 1860D-1 through 1860D-24 of title 
XVIII of the Social Security Act (the Act) as added by section 101 of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (Pub. L. 108-173). Sections 1860D-1 through 1860D-24 established 
Part D of title XVIII of the Act to create a Medicare program known as 
the Voluntary Prescription Drug Benefit Program. Section 1860D-14, 
codified into the Act by section 101, includes a provision for subsidies 
of prescription drug premiums and of Part D cost-sharing requirements 
for Medicare beneficiaries whose income and resources do not exceed 
certain levels. The regulations in this subpart explain how we decide 
whether you are eligible for a Part D premium subsidy as defined in 42 
CFR 423.780 and cost-sharing subsidy as defined in 42 CFR 423.782. The 
rules are divided into the following groups of sections according to 
subject content:
    (a) Sections 418.3001 through 418.3010 contain the introduction, a 
statement of the general purpose underlying the subsidy program for the 
Voluntary Prescription Drug Benefit Program under Medicare Part D, 
general provisions that apply to the subsidy program, a description of 
how we administer the program, and definitions of terms that we use in 
this subpart.
    (b) Sections 418.3101 through 418.3125 contain the general 
requirements that you must meet in order to be eligible for a subsidy. 
These sections set forth the subsidy eligibility requirements of being a 
Medicare beneficiary, of having income and resources below certain 
levels, and of filing an application. These sections also explain when 
we will redetermine your eligibility for a subsidy and the period 
covered by a redetermination.

[[Page 1196]]

    (c) Sections 418.3201 through 418.3230 contain the rules that relate 
to the filing of subsidy applications.
    (d) Sections 418.3301 through 418.3350 contain the rules that 
explain how we consider your income (and your spouse's income, if 
applicable) and define what income we count when we decide whether you 
are eligible for a subsidy.
    (e) Sections 418.3401 through 418.3425 contain the rules that 
explain how we consider your resources (and your spouse's resources, if 
applicable) and define what resources we count when we decide whether 
you are eligible for a subsidy.
    (f) Sections 418.3501 through 418.3515 contain the rules that 
explain when we will adjust or when we will terminate your eligibility 
for a subsidy.
    (g) Sections 418.3601 through 418.3680 contain the rules that we 
apply when you appeal our determination regarding your subsidy 
eligibility or our determination of whether you should receive a full or 
partial subsidy. They also contain the rules that explain that our 
decision is binding unless you file an action in Federal district court 
seeking review of our final decision and what happens if your case is 
remanded by a Federal court



Sec. 418.3005  Purpose and administration of the program.

    The purpose of the subsidy program is to offer help with the costs 
of prescription drug coverage for individuals who meet certain income 
and resources requirements under the law as explained in this subpart. 
The Centers for Medicare & Medicaid Services (CMS) in the Department of 
Health and Human Services has responsibility for administration of the 
Medicare program, including the new Medicare Part D Voluntary 
Prescription Drug Benefit Program. We notify Medicare beneficiaries who 
appear to have limited income, based on our records, about the 
availability of the subsidy if they are not already eligible for this 
help, and take applications for and determine the eligibility of 
individuals for a subsidy.



Sec. 418.3010  Definitions.

    (a) Terms relating to the Act and regulations.
    (1) CMS means the Centers for Medicare & Medicaid Services in the 
Department of Health and Human Services.
    (2) Commissioner means the Commissioner of Social Security.
    (3) Section means a section of the regulations in part 418 of this 
chapter unless the context indicates otherwise.
    (4) The Act means the Social Security Act, as amended.
    (5) Title means a title of the Act.
    (6) We, our or us means the Social Security Administration (SSA).
    (b) Miscellaneous.
    (1) Claimant means the person who files an application for himself 
or herself or the person on whose behalf an application is filed.
    (2) Date you receive a notice means 5 calendar days after the date 
on the notice, unless you show us you did not receive it within the 5-
day period.
    (3) Decision means the decision we make after a hearing.
    (4) Determination means the initial determination that we make as 
defined in Sec. 418.3605.
    (5) Family size, for purposes of this subpart, means family size as 
defined in 42 CFR 423.772.
    (6) Federal poverty line, for purposes of this subpart, has the same 
meaning as Federal poverty line in 42 CFR 423.772.
    (7) Full-benefit dual eligible individual for purposes of this 
subpart, has the same meaning as full-benefit dual eligible individual 
in 42 CFR 423.772.
    (8) Medicare beneficiary means an individual who is entitled to or 
enrolled in Medicare Part A (Hospital Insurance) or enrolled in Part B 
(Supplementary Medical Insurance) or both under title XVIII of the Act.
    (9) Periods of limitations ending on Federal non-workdays Title 
XVIII of the Act and regulations in this subpart require you to take 
certain actions within specified time periods or you may lose your right 
to a portion of or your entire subsidy. If any such period ends on a 
Saturday, Sunday, Federal legal holiday, or any other day all or part of 
which is declared to be a nonworkday for Federal employees by statute or 
Executive Order, you will have until the next Federal workday to take 
the prescribed action.

[[Page 1197]]

    (10) Representative or personal representative means a personal 
representative as defined in 42 CFR 423.772.
    (11) State, unless otherwise indicated, means:
    (i) A State of the United States; or
    (ii) The District of Columbia.
    (12) Subsidy eligible individual, for purposes of this subpart, has 
the same meaning as subsidy eligible individual as defined in 42 CFR 
423.773.
    (13) Subsidy means an amount CMS will pay on behalf of Medicare 
beneficiaries who are eligible for a subsidy of their Medicare Part D 
costs. The amount of a subsidy for a Medicare beneficiary depends on the 
beneficiary's income as related to household size, resources, and late 
enrollment penalties (if any) as explained in 42 CFR 423.780 and 42 CFR 
423.782. We do not determine the amount of the subsidy, only whether or 
not the individual is eligible for a full or partial subsidy.
    (14) United States when used in a geographical sense means:
    (i) The 50 States; and
    (ii) The District of Columbia
    (1) You or your means the person who applies for the subsidy, the 
person for whom an application is filed or anyone who may consider 
applying for a subsidy.

          Eligibility for a Medicare Prescription Drug Subsidy



Sec. 418.3101  How do you become eligible for a subsidy?

    Unless you are deemed eligible as explained in Sec. 418.3105 and 42 
CFR 423.773(c), you are eligible for a Medicare Part D prescription drug 
subsidy if you meet all of the following requirements:
    (a) You are entitled to or enrolled in Medicare Part A (Hospital 
Insurance) or enrolled in Medicare Part B (Supplementary Medical 
Insurance) or both under title XVIII of the Act.
    (b) You are enrolled in a Medicare prescription drug plan or 
Medicare Advantage plan with prescription drug coverage. We can also 
determine your eligibility for a subsidy before you enroll in one of the 
above programs. However, as explained in Sec. 418.3225(b), if we 
determine that you would be eligible for a subsidy before you have 
enrolled in a Medicare prescription drug plan or Medicare Advantage plan 
with prescription drug coverage, you must enroll in one of these plans 
to actually receive a subsidy.
    (c) You reside in the United States as defined in Sec. 418.3010.
    (d) You (and your spouse, if applicable) meet the income 
requirements as explained in Secs. 418.3301 through 418.3350 and 42 CFR 
423.773.
    (e) You (and your spouse, if applicable) meet the resources 
requirements as explained in Secs. 418.3401 through 418.3425 and 42 CFR 
423.773.
    (f) You or your personal representative file an application for a 
subsidy as explained in Secs. 418.3201 through 418.3230.



Sec. 418.3105  Who does not need to file an application for a subsidy?

    Regulations in 42 CFR 423.773(c) explain who is deemed eligible and 
does not need to file an application for a subsidy to be eligible for 
this assistance. Full-benefit dual eligible beneficiaries are in this 
category. If beneficiaries have deemed eligibility status because they 
receive Medicaid coverage, are enrolled in a Medicare Savings Program 
within their State, or receive SSI and have Medicare, then their subsidy 
is effective with the first month they have deemed eligibility status.



Sec. 418.3110  What happens when you apply for a subsidy?

    (a) When you or your personal representative apply for a subsidy, we 
will ask for information that we need to determine if you meet all the 
requirements for a subsidy. You must give us complete information. If, 
based on the information you present to us, you do not meet all the 
requirements for eligibility listed in Sec. 418.3101, or if one of the 
events listed in Sec. 418.3115 exists, or you fail to submit information 
we request, we will deny your claim.
    (b) If you meet all the requirements for eligibility listed in 
Sec. 418.3101, or you meet all the requirements except for enrollment in 
a Medicare Part D plan or Medicare Advantage plan with prescription drug 
coverage, we will send you a notice telling you the following:

[[Page 1198]]

    (1) You are eligible for a full or partial subsidy for a period not 
to exceed 1 year;
    (2) What information we used to make this determination including 
how we calculated your income and resources;
    (3) What you may do if your circumstances change as described in 
Sec. 418.3120; and
    (4) Your appeal rights.
    (c) If you are not already enrolled with a Medicare prescription 
drug plan or a Medicare Advantage plan with prescription drug coverage, 
you must enroll in order to receive your subsidy.
    (d) If you do not meet all the requirements for eligibility listed 
in Sec. 418.3101 or if Sec. 418.3115 applies to you except for 
enrollment in a Medicare Part D plan or Medicare Advantage plan with 
prescription drug coverage as described in Sec. 418.3225, we will send 
you a notice telling you the following:
    (1) You are not eligible for a subsidy;
    (2) The information we used to make this determination including how 
we calculated your income or resources;
    (3) You may reapply if your situation changes; and
    (4) Your appeal rights.



Sec. 418.3115  What events will make you ineligible for a subsidy?

    Generally, even if you meet the other requirements in Secs. 418.3101 
through 418.3125, we will deny your claim or you will lose your subsidy 
if any of the following apply to you:
    (a) You lose entitlement to or are not enrolled in Medicare Part A 
and are not enrolled in Medicare Part B.
    (b) You do not enroll or lose your enrollment in a Medicare Part D 
plan or Medicare Advantage plan with prescription drug coverage.
    (c) You do not give us information we need to determine your 
eligibility and if eligible, whether you should receive a full or 
partial subsidy; or you do not give us information we need to determine 
whether you continue to be eligible for a subsidy and if eligible, 
whether you should receive a full or partial subsidy.
    (d) You knowingly give us false or misleading information.



Sec. 418.3120  What happens if your circumstances change after we 
determine you are eligible for a subsidy?

    (a) After we determine that you are eligible for a subsidy, your 
subsidy eligibility could change if:
    (1) You marry.
    (2) You and your spouse, who lives with you, divorce.
    (3) Subject to the provisions of paragraph (b)(4) of this section, 
your spouse, who lives with you, dies.
    (4) You and your spouse separate (i.e., you or your spouse move out 
of the household and you are no longer living with your spouse) unless 
the separation is a temporary absence as described in Sec. 404.347 of 
this chapter.
    (5) You and your spouse resume living together after having been 
separated.
    (6) You and your spouse, who lives with you, have your marriage 
annulled.
    (7) You (or your spouse, who lives with you, if applicable) expect 
your estimated annual income to increase or decrease in the next 
calendar year.
    (8) You (or your spouse, who lives with you, if applicable) expect 
your resources to increase or decrease in the next calendar year.
    (9) Your family size as defined in 42 CFR 423.772 has changed or 
will change (other than a change resulting from one of the events in 
paragraphs (a)(1) through (6) of this section).
    (10) You become eligible for one of the programs listed in 42 CFR 
423.773(c).
    (b)(1) When you report one of the events listed in paragraphs (a)(1) 
through (a)(6) of this section, or we receive such a report from another 
source (e.g., a data exchange of reports of death), we will send you a 
redetermination form upon receipt of the report. You must return the 
completed form within 90 days of the date of the form.
    (2) When you report one of the events listed in paragraphs (a)(7) 
through (a)(9) of this section or we receive such a report from another 
source (e.g., a data exchange involving income records), we will send 
you a redetermination form between August and December to evaluate the 
change. You must return the completed form to us within 30 days of the 
date of the form.

[[Page 1199]]

    (3) If we increase, decrease, or terminate your subsidy as a result 
of the redetermination, we will send you a notice telling you:
    (i) Whether you can receive a full or partial subsidy as described 
in 42 CFR 423.780 and 423.782.
    (ii) How we calculated your income and resources;
    (iii) When the change in your subsidy is effective;
    (iv) Your appeal rights;
    (v) What to do if your situation changes.
    (4) If your spouse who lives with you dies, your spouse's death may 
result in changes in your income or resources that could decrease or 
eliminate your subsidy. If we are informed of the death of your spouse 
and the death would cause a decrease in or elimination of your subsidy, 
we will notify you that we will not immediately change your subsidy 
because of your spouse's death. We will defer your redetermination for 1 
year from the month following the month we are notified of the death of 
your spouse, unless we receive a report of another event specified in 
418.3120(a) that would affect your eligibility for a subsidy.
    (c) If you become eligible for one of the programs listed in 42 CFR 
423.773(c), CMS will notify you of any change in your subsidy.

[70 FR 77675, Dec. 30, 2005, as amended at 75 FR 81845, Dec. 29, 2010]



Sec. 418.3123  When is a change in your subsidy effective?

    (a) If we redetermine your subsidy as described in 
Sec. 418.3120(b)(1), any change in your subsidy will be effective the 
month following the month of your report.
    (b) If we redetermine your subsidy as described in 
Sec. 418.3120(b)(2), any change in your subsidy will be effective in 
January of the next year.
    (c) If you do not return the redetermination form described in 
Sec. 418.3120(b)(1), we will terminate your subsidy effective with the 
month following the expiration of the 90-day period described in 
Sec. 418.3120(b)(1).
    (d) If you do not return the redetermination forms described in 
Sec. 418.3120(b)(2), we will terminate your subsidy effective in January 
of the next year.
    (e) Special rule for widows and widowers. If your spouse who lives 
with you dies and the changes in your income or resources resulting from 
your spouse's death would decrease or eliminate your subsidy, we will 
defer your next redetermination for 1 year from the month following the 
month we are notified of the death of your spouse, unless we receive a 
report of another event specified in 418.3120(a) that would affect your 
eligibility for a subsidy.

[70 FR 77675, Dec. 30, 2005, as amended at 75 FR 81845, Dec. 29, 2010]



Sec. 418.3125  What are redeterminations?

    (a) Redeterminations defined. A redetermination is a periodic review 
of your eligibility to make sure that you are still eligible for a 
subsidy and if so, to determine whether you should continue to receive a 
full or partial subsidy. This review deals with evaluating your income 
and resources (and those of your spouse, who lives with you) and will 
not affect past months of eligibility. It will be used to determine your 
future subsidy eligibility and whether you should receive a full or 
partial subsidy for future months. We will redetermine your eligibility 
if we made the initial determination of your eligibility or if you are 
deemed eligible because you receive SSI benefits. Rules regarding 
redeterminations of initial eligibility determinations made by a State 
are described in 42 CFR 423.774.
    (b) When we make redeterminations. (1) We will redetermine your 
subsidy eligibility within one year after we determine that you are 
eligible for the subsidy.
    (2) After the first redetermination, we will redetermine your 
subsidy eligibility at intervals determined by the Commissioner. The 
length of time between redeterminations varies depending on the 
likelihood that your situation may change in a way that affects your 
eligibility and whether you should receive a full or partial subsidy.
    (3) We may also redetermine your eligibility and whether you should 
receive a full or partial subsidy when you tell us of a change in your 
circumstances described in Sec. 418.3120.

[[Page 1200]]

    (4) We may redetermine your eligibility when we receive information 
from you or from data exchanges with Federal and State agencies that may 
affect whether you should receive a full or partial subsidy or your 
eligibility for the subsidy.
    (5) We will also redetermine eligibility on a random sample of cases 
for quality assurance purposes. For each collection of sample cases, all 
factors affecting eligibility and/or whether you should receive a full 
or partial subsidy may be verified by contact with primary repositories 
of information relevant to each individual factor (e.g., we may contact 
employers to verify wage information). Consequently, we may contact a 
variety of other sources, in addition to recontacting you, to verify the 
completeness and accuracy of our information.

                          Filing of Application



Sec. 418.3201  Must you file an application to become eligible for
a subsidy?

    Unless you are a person covered by Sec. 418.3105, in addition to 
meeting other requirements, you or your personal representative must 
file an application to become eligible for a subsidy. If you believe you 
may be eligible for a subsidy, you should file an application. Filing a 
subsidy application does not commit you to participate in the Part D 
program. Filing an application will:
    (a) Permit us to make a formal determination on your eligibility for 
the subsidy and whether you should receive a full or partial subsidy;
    (b) Assure that you can receive the subsidy for any months that you 
are eligible and are enrolled in a Medicare Part D plan or Medicare 
Advantage plan with prescription drug coverage; and
    (c) Give you the right to appeal if you disagree with our 
determination.



Sec. 418.3205  What makes an application a claim for a subsidy?

    We will consider your application a claim for the subsidy if:
    (a) You, or someone acting on your behalf as described in 
Sec. 418.3215, complete an application on a form prescribed by us;
    (b) You, or someone acting on your behalf as described in 
Sec. 418.3215, file the application with us pursuant to Sec. 418.3220; 
and
    (c) You are alive on the first day of the month in which the 
application is filed.



Sec. 418.3210  What is a prescribed application for a subsidy?

    If you choose to apply with SSA, you must file for the subsidy on an 
application prescribed by us. A prescribed application may include a 
printed form, an application our employees complete on computer screens, 
or an application available online on our Internet Web site 
(www.socialsecurity.gov). See Sec. 418.3220 for places where an 
application for the subsidy may be filed and when it is considered 
filed.



Sec. 418.3215  Who may file your application for a subsidy?

    You or your personal representative (as defined in 42 CFR 423.772) 
may complete and file your subsidy application.



Sec. 418.3220  When is your application considered filed?

    (a) General rule. We consider an application for a subsidy as 
described in Sec. 418.3210 to be filed with us on the day it is received 
by either one of our employees at one of our offices or by one of our 
employees who is authorized to receive it at a place other than one of 
our offices or it is considered filed on the day it is submitted 
electronically through our Internet Web site. If a State Medicaid agency 
forwards to us a subsidy application that you gave to it, we will 
consider the date you submitted that application to the State Medicaid 
agency as the filing date. (See 42 CFR 423.774 for applications filed 
with a State Medicaid agency.)
    (b) Exceptions. (1) When we receive an application that is mailed, 
we will assume that we received it 5 days earlier (unless you can show 
us that you did not receive it within the 5 days) and use the earlier 
date as the application filing date if it would result in another month 
of subsidy eligibility.
    (2) We may consider an application to be filed on the date a written 
or oral inquiry about your subsidy eligibility

[[Page 1201]]

is made, or the date we receive a partially completed Internet subsidy 
application from our Internet Web site where the requirements set forth 
in Sec. 418.3230 are met.



Sec. 418.3225  How long will your application remain in effect?

    (a) Your application will remain in effect until our determination 
or decision has become final and binding under Sec. 418.3620. If you 
appeal our initial determination, the determination does not become 
final until we issue a decision on any appeal you have filed under 
Sec. 418.3655 (see Sec. 418.3675) or dismiss the request for a hearing 
under Sec. 418.3670.
    (b) If, at the time your application is filed or before our 
determination or decision becomes final and binding, you meet all the 
requirements for a subsidy as described in 42 CFR 423.773 except for 
enrollment in a Medicare Part D plan or Medicare Advantage plan with 
prescription drug coverage, we will send you a notice advising you of 
your eligibility for the subsidy and the requirement to enroll in such a 
plan.
    (c) If you are not entitled to Medicare Part A and/or enrolled in 
Medicare Part B at the time your subsidy application is filed but you 
appear to be in an enrollment period, we will send you a notice advising 
you that we will not make a determination on your application until you 
become entitled to Medicare Part A and/or enrolled in Medicare Part B. 
If you are not entitled to Medicare Part A and/or enrolled in Medicare 
Part B at the time your application is filed and you do not appear to be 
in an enrollment period, we will send you a notice advising you that you 
are not eligible for the subsidy because you are not entitled to 
Medicare Part A and/or enrolled in Medicare Part B and explain your 
appeal rights.



Sec. 418.3230  When will we use your subsidy inquiry as your filing
date?

    If you or your personal representative (as defined in 42 CFR 
423.772) make an oral or written inquiry about the subsidy, or partially 
complete an Internet subsidy application on our Web site, we will use 
the date of the inquiry or the date the partial Internet application was 
started as your filing date if the following requirements are met:
    (a) The written or oral inquiry indicates your intent to file for 
the subsidy, or you submit a partially completed Internet application to 
us;
    (b) The inquiry, whether in person, by telephone, or in writing, is 
directed to an office or an official described in Sec. 418.3220, or a 
partially completed Internet subsidy application is received by us;
    (c) You or your personal representative (as defined in 42 CFR 
423.772) file an application (as defined in Sec. 418.3210) within 60 
days after the date of the notice we will send in response to the 
inquiry. The notice will say that we will make an initial determination 
of your eligibility for a subsidy, if an application is filed within 60 
days after the date of the notice. We will send the notice to you. Where 
you are a minor or adjudged legally incompetent and your personal 
representative made the inquiry, we will send the notice to your 
personal representative; and
    (d) You are alive on the first day of the month in which the 
application is filed.

                                 Income



Sec. 418.3301  What is income?

    Income is anything you and your spouse, who lives with you, receive 
in cash or in-kind that you can use to meet your needs for food and 
shelter. Income can be earned income or unearned income.



Sec. 418.3305  What is not income?

    Some things you receive are not considered income because you cannot 
use them to meet your needs for food or shelter. The things that are not 
income for purposes of determining eligibility and whether you should 
receive a full or partial subsidy are described in Sec. 416.1103 of this 
chapter.



Sec. 418.3310  Whose income do we count?

    (a) We count your income. If you are married and live with your 
spouse in the month you file for a subsidy, or when we redetermine your 
eligibility for a subsidy as described in Sec. 418.3125, we count your 
income and your spouse's income regardless of whether

[[Page 1202]]

one or both of you apply or are eligible for the subsidy.
    (b) We will determine your eligibility based on your income alone if 
you are not married or if you are married but you are separated from 
your spouse (i.e., you or your spouse move out of the household and you 
are no longer living with your spouse) at the time you apply for a 
subsidy or when we redetermine your eligibility for a subsidy as 
described in Sec. 418.3125.
    (c) If your subsidy is based on your income and your spouse's income 
and we redetermine your subsidy as described in Sec. 418.3120(b)(1), we 
will stop counting the income of your spouse in the month following the 
month that we receive a report that your marriage ended due to death, 
divorce, or annulment; or a report that you and your spouse stopped 
living together.
    (d) If your subsidy is based on your income and your spouse's 
income, we will continue counting the income of both you and your spouse 
if one of you is temporarily away from home as described in Sec. 404.347 
of this chapter.



Sec. 418.3315  What is earned income?

    Earned income is defined in Sec. 416.1110 of this chapter and may be 
in cash or in kind. We may count more of your earned income than you 
actually receive. We count gross income, which is more than you actually 
receive, if amounts are withheld from earned income because of a 
garnishment, or to pay a debt or other legal obligation such as taxes, 
or to make any other similar payments.



Sec. 418.3320  How do we count your earned income?

    (a) Wages. We count your wages at the earliest of the following 
points: when you receive them, when they are credited to you, or when 
they are set aside for your use.
    (b) Net earnings from self-employment. We count net earnings from 
self-employment on a taxable year basis. If you have net losses from 
self-employment, we deduct them from your other earned income. We do not 
deduct the net losses from your unearned income.
    (c) Payments for services performed in a sheltered workshop or work 
activities center. We count payments you receive for services performed 
in a sheltered workshop or work activities center when you receive them 
or when they are set aside for your use.
    (d) In-kind earned income. We count the current market value of in-
kind earned income. For purposes of this part, we use the definition of 
current market value in Sec. 416.1101 of this chapter. If you receive an 
item that is not fully paid for and you are responsible for the unpaid 
balance, only the paid-up value is income to you (see example in 
Sec. 416.1123(c) of this chapter).
    (e) Certain honoraria and royalties. We count honoraria for services 
rendered and royalty payments that you receive in connection with any 
publication of your work. We will consider these payments as available 
to you when you receive them, when they are credited to your account, or 
when they are set aside for your use, whichever is earliest.
    (f) Period for which earned income is counted. For purposes of 
determining subsidy eligibility and, if eligible, whether you should 
receive a full or partial subsidy, we consider all of the countable 
earned income you receive (or expect to receive) during the year for 
which we are determining your eligibility for this subsidy. However, in 
the first year that you or your spouse apply for the subsidy, we 
consider all of the countable earned income you and your living-with 
spouse receive (or expect to receive) starting in the month for which we 
determine your eligibility based on your application for a subsidy 
through the end of the year for which we are determining your 
eligibility. If we count your income for only a portion of the year, the 
income limit for subsidy eligibility will be adjusted accordingly. For 
example, if we count your income for 6 consecutive months of the year 
(July through December), the income limit for subsidy eligibility will 
be half of the income limit applicable for the full year.



Sec. 418.3325  What earned income do we not count?

    (a) While we must know the source and amount of all of your earned 
income, we do not count all of it to determine your subsidy eligibility 
and whether you should receive a full or

[[Page 1203]]

partial subsidy. We apply these income exclusions in the order listed in 
paragraph (b) of this section to your income. We never reduce your 
earned income below zero or apply any unused earned income exclusion to 
unearned income.
    (b) For the year or partial year that we are determining your 
eligibility for the subsidy, we do not count as earned income:
    (1) Any refund of Federal income taxes you or your living-with 
spouse receive under section 32 of the Internal Revenue Code (relating 
to the earned income tax credit) and payment you receive from an 
employer under section 3507 of the Internal Revenue Code (relating to 
advance payments of earned income tax credit);
    (2) Earned income which is received infrequently or irregularly as 
explained in Sec. 416.1112(c)(2) of this chapter;
    (3) Any portion of the $20 per month exclusion described in 
Sec. 416.1124(c)(12) of this chapter which has not been excluded from 
your combined unearned income (or the combined unearned income of you 
and your living-with spouse);
    (4) $65 per month of your earned income (or the combined earned 
income you and your living-with spouse receive in that same year);
    (5) Earned income you use to pay impairment-related work expenses 
described in Sec. 416.976 of this chapter, if you are receiving a social 
security disability insurance benefit, your disabling condition(s) does 
not include blindness and you are under age 65. We consider that you 
attain age 65 on the day before your 65th birthday. In lieu of 
determining the actual amount of these expenses, we will assume that the 
value of these work expenses is equal to a standard percentage of your 
total earned income per month if you tell us that you have impairment-
related work expenses. The amount we exclude will be equal to the 
average percentage of gross earnings excluded for SSI recipients who 
have such expenses. Initially, the exclusion for impairment-related work 
expenses will be 16.3 percent of the gross earnings. We may adjust the 
percentages if the average percentage of gross earnings excluded for 
supplemental security income (SSI) recipients changes. If we make such a 
change we will publish a notice in the Federal Register. If excluding 
impairment-related work expenses greater than the standard percentage of 
your earned income would affect your eligibility or subsidy amount, you 
may establish that your actual expenses are greater than the standard 
percentage of your total earned income. You may do so by contacting us 
and providing evidence of your actual expenses. The exclusion of 
impairment-related work expenses also applies to the earnings of your 
living-with spouse if he or she is receiving a social security 
disability insurance benefit, the disabling condition(s) does not 
include blindness and he or she is under age 65;
    (6) One-half of your remaining earned income (or combined earned 
income of you and your living-with spouse); and
    (7) Earned income as described in Sec. 416.1112(c)(8) of this 
chapter that you use to meet any expenses reasonably attributable to the 
earning of the income if you receive a social security disability 
insurance benefit based on blindness and you are under age 65. We 
consider that you attain age 65 on the day before your 65th birthday. In 
lieu of determining the actual amount of these expenses, we will assume 
that the value of these expenses is equal to a standard percentage of 
your total earned income per month. The amount we exclude will be equal 
to the average percentage of gross earnings excluded for SSI recipients 
who have such expenses. Initially, the exclusion for blind work expenses 
will be 25 percent of the gross earnings. We may adjust the percentages 
if the average percentage of gross earnings excluded for SSI recipients 
changes. If we make such a change we will publish a notice in the 
Federal Register. If excluding work expenses greater than the standard 
percentage of your earned income would affect your eligibility or 
subsidy amount, you may establish that your actual expenses are greater 
than the standard percentage of your earned income. You may do so by 
contacting us and providing evidence of your actual expenses. The 
exclusion of work expenses also applies to the earnings of

[[Page 1204]]

your living-with spouse if he or she receives a social security 
disability insurance benefit based on blindness and is under age 65.



Sec. 418.3330  What is unearned income?

    Unearned income is all income that is not earned income. We describe 
some of the types of unearned income we count in Sec. 418.3335.



Sec. 418.3335  What types of unearned income do we count?

    (a) Some of the types of unearned income we count are described in 
Sec. 416.1121(a) through (g) of this chapter.
    (b) For claims filed before January 1, 2010, and redeterminations 
that are effective before January 1, 2010, we also count in-kind support 
and maintenance as unearned income. In-kind support and maintenance is 
any food and shelter given to you or that you receive because someone 
else pays for it.

[70 FR 77675, Dec. 30, 2005, as amended at 75 FR 81845, Dec. 29, 2010]



Sec. 418.3340  How do we count your unearned income?

    (a) When income is received. We count unearned income as available 
to you at the earliest of the following points: when you receive it, 
when it is credited to your account, or when it is set aside for your 
use.
    (b) When income is counted. For purposes of determining eligibility 
and whether you should receive a full or partial subsidy, we consider 
all of the countable unearned income you and your living-with spouse 
receive (or expect to receive) during the year for which we are 
determining your eligibility for this benefit. However, in the first 
year you or your spouse apply for the subsidy, we consider all of the 
countable unearned income both you and your living-with spouse receive 
(or expect to receive) starting in the month for which we determine 
eligibility for you or your living-with spouse based on an application 
for the subsidy. If we count your income for only a portion of the year, 
the income limits for subsidy eligibility will be adjusted accordingly. 
For example, if we count your income for 6 consecutive months of the 
year (July through December), the income limit for subsidy eligibility 
will be half of the income limit applicable for the full year.
    (c) Amount considered as income. We may include more or less of your 
income than you actually receive.
    (1) We include more than you actually receive where another benefit 
payment (such as a social security benefit) has been reduced to recover 
an overpayment. In such a situation, you are repaying a legal obligation 
through the withholding of portions of your benefit amount, and the 
amount of this withholding is part of your unearned income.
    (2) We also include more than you actually receive if amounts are 
withheld from unearned income because of a garnishment, or to pay a debt 
or other legal obligation, or to make any other payment such as payment 
of your Medicare premiums.
    (3) We include less than you actually receive if part of the payment 
is for an expense you had in getting the payment. For example, if you 
are paid for damages you receive in an accident, we subtract from the 
amount of the payment your medical, legal, or other expenses connected 
with the accident. If you receive a retroactive check from a benefit 
program, we subtract legal fees connected with the claim. We do not 
subtract from any taxable unearned income the part you have to use to 
pay personal income taxes. The payment of taxes is not an expense you 
have in getting income.
    (d) Retroactive benefits. We count retroactive monthly benefits such 
as social security benefits as unearned income in the year you receive 
the retroactive benefits.
    (e) Certain veterans benefits. If you receive a veterans benefit 
that includes an amount paid to you because of a dependent, we do not 
count as your unearned income the amount paid to you because of the 
dependent. If you are a dependent of an individual who receives a 
veterans benefit and a portion of the benefit is attributable to you as 
a dependent, we count the amount attributable to you as your unearned 
income if you reside with the veteran or you receive your own separate 
payment from the Department of Veterans Affairs.

[[Page 1205]]

    (f) Social Security cost-of-living adjustment. We will not count as 
income the amount of the cost-of-living adjustment for social security 
benefits for any month through the month following the month in which 
the annual revision of the Federal poverty guidelines is published.



Sec. 418.3350  What types of unearned income do we not count?

    (a) For claims filed on or after January 1, 2010 and 
redeterminations that are effective on or after January 1, 2010, we do 
not count as income in-kind support and maintenance.
    (b) While we must know the source and amount of all of your unearned 
income, we do not count all of it to determine your eligibility for the 
subsidy. We apply to your unearned income the exclusions in 
Sec. 418.3350(c) in the order listed. However, we do not reduce your 
unearned income below zero, and we do not apply any unused unearned 
income exclusion to earned income except for the $20 per month exclusion 
described in Sec. 416.1124(c)(12) of this chapter. For purposes of 
determining eligibility for a subsidy and whether you should receive a 
full or partial subsidy, we treat the $20 per month exclusion as a $240 
per year exclusion.
    (c) We do not count as income the unearned income described in 
Sec. 416.1124(b) and (c) of this chapter, except for paragraph (c)(13).
    (d) We do not count as income any dividends or interest earned on 
resources you or your spouse owns.

[75 FR 81846, Dec. 29, 2010]

                                Resources



Sec. 418.3401  What are resources?

    For purposes of this subpart, resources are cash or other assets 
that an individual owns and could convert to cash to be used for his or 
her support and maintenance.



Sec. 418.3405  What types of resources do we count?

    (a) We count liquid resources. Liquid resources are cash, financial 
accounts, and other financial instruments that can be converted to cash 
within 20 workdays, excluding certain non-workdays as explained in 
Sec. 416.120(d) of this chapter. Examples of resources that are 
ordinarily liquid include: stocks, bonds, mutual fund shares, promissory 
notes, mortgages, life insurance policies (for claims filed before 
January 1, 2010, and redeterminations that are effective before January 
1, 2010), financial institution accounts (including savings, checking, 
and time deposits, also known as certificates of deposit), retirement 
accounts (such as individual retirement accounts or 401(k) accounts), 
revocable trusts, funds in an irrevocable trust if the trust beneficiary 
can direct the use of the funds, and similar items. We will presume that 
these types of resources can be converted to cash within 20 workdays and 
are countable as resources for subsidy determinations. However, if you 
establish that a particular resource cannot be converted to cash within 
20 workdays, we will not count it as a resource.
    (b) We count the equity value of real property as a resource 
regardless of whether it can be sold within 20 workdays. However, we do 
not count the home that is your principal place of residence and the 
land on which it is situated as a resource as defined in 
Sec. 418.3425(a).

[70 FR 77675, Dec. 30, 2005, as amended at 75 FR 81846, Dec. 29, 2010]



Sec. 418.3410  Whose resources do we count?

    (a) We count your resources. We count the resources of both you and 
your spouse regardless of whether one or both of you apply or are 
eligible for the subsidy if you are married and live with your spouse as 
of the month for which we determine your eligibility based on an 
application for a subsidy, as of the month for which we redetermine your 
eligibility for a subsidy as described in Sec. 418.3125, or as of the 
month for which we determine your eligibility due to a change you 
reported as described in Sec. 418.3120.
    (b) We will determine your eligibility based on your resources alone 
if you are not married or if you are married but you are separated from 
your spouse at the time you apply for a subsidy or

[[Page 1206]]

at the time we redetermine your eligibility for a subsidy as described 
in Sec. 418.3125.
    (c) If your subsidy is based on the resources of you and your spouse 
and we redetermine your subsidy as described in Sec. 418.3120(b)(1), we 
will stop counting the resources of your spouse in the month following 
the month that we receive a report that your marriage ended due to 
death, divorce, or annulment; or a report that you and your spouse 
stopped living together.
    (d) If your subsidy is based on the resources of you and your 
spouse, we will continue counting the resources of both you and your 
spouse if one of you is temporarily away from home as described in 
Sec. 404.347 of this chapter.



Sec. 418.3415  How do we determine countable resources?

    (a) General rule. Your countable resources are determined as of the 
first moment of the month for which we determine your eligibility based 
on your application for a subsidy or for which we redetermine your 
eligibility for a subsidy. A resource determination is based on what 
assets you (and your living-with spouse, if any) have, what their values 
are, and whether they are excluded as of the first moment of the month. 
We will use this amount as your countable resources at the point when we 
determine your eligibility for the subsidy unless you report to us that 
the value of your resources has changed as described in Sec. 418.3120.
    (b) Equity value. Resources, other than cash, are evaluated 
according to your (and your spouse's, if any) equity in the resources. 
For purposes of this subpart, the equity value of an item is defined as 
the price for which that item, minus any encumbrances, can reasonably be 
expected to sell on the open market in the particular geographic area 
involved.
    (c) Relationship of income to resources. Cash you receive during a 
month is evaluated under the rules for counting income during the month 
of receipt. If you retain the cash until the first moment of the 
following month, the cash is countable as a resource unless it is 
otherwise excludable.



Sec. 418.3420  How are funds held in financial institution accounts
counted?

    (a) Owner of the account. Funds held in a financial institution 
account (including savings, checking, and time deposits also known as 
certificates of deposit) are considered your resources if you own the 
account and can use the funds for your support and maintenance. We 
determine whether you own the account and can use the funds by looking 
at how the account is held.
    (b) Individually-held account. If you are designated as the sole 
owner by the account title and you can withdraw and use funds from that 
account for your support and maintenance, all of that account's funds 
are your resource regardless of the source. For as long as these 
conditions are met, we presume that you own 100 percent of the funds in 
the account. This presumption is not rebuttable.
    (c) Jointly-held account. (1) If you are the only subsidy claimant 
or subsidy recipient who is an account holder on a jointly held account, 
we presume that all of the funds in the account belong to you. If more 
than one subsidy claimant or subsidy recipient are account holders, we 
presume that the funds in the account belong to those individuals in 
equal shares.
    (2) If you disagree with the ownership presumption as described in 
paragraph (c)(1) of this section, you may rebut the presumption. 
Rebuttal is a procedure which permits you to furnish evidence and 
establish that some or all of the funds in a jointly-held account do not 
belong to you.



Sec. 418.3425  What resources do we exclude from counting?

    In determining your resources (and the resources of your spouse, if 
any) the following items shall be excluded:
    (a) Your home. For purposes of this exclusion, a home is any 
property in which you (and your spouse, if any) have an ownership 
interest and which serves as your principal place of residence. This 
property includes the shelter in which an individual resides, the land 
on which the shelter is located, and outbuildings;

[[Page 1207]]

    (b) Non-liquid resources, other than nonhome real property. Non-
liquid resources are resources that are not liquid resources as defined 
in Sec. 418.3405. Irrevocable burial trusts and the irrevocable portion 
of prepaid burial contracts are considered non-liquid resources;
    (c) Property of a trade or business which is essential to the means 
of self-support as provided in Sec. 416.1222 of this chapter;
    (d) Nonbusiness property which is essential to the means of self-
support as provided in Sec. 416.1224 of this chapter;
    (e) Stock in regional or village corporations held by natives of 
Alaska during the twenty-year period in which the stock is inalienable 
pursuant to the Alaska Native Claims Settlement Act (see Sec. 416.1228 
of this chapter);
    (f) For claims filed on or after January 1, 2010, and 
redeterminations that are effective on or after January 1, 2010, life 
insurance owned by an individual (and spouse, if any);
    (g) Restricted allotted Indian lands as provided in Sec. 416.1234 of 
this chapter;
    (h) Payments or benefits provided under a Federal statute where 
exclusion is required by such statute;
    (i) Disaster relief assistance as provided in Sec. 416.1237 of this 
chapter;
    (j) Funds up to $1,500 for the individual and $1,500 for the spouse 
who lives with the individual if these funds are expected to be used for 
burial expenses of the individual and spouse;
    (k) Burial spaces, as provided in Sec. 416.1231(a) of this chapter;
    (l) Title XVI or title II retroactive payments as provided in 
Sec. 416.1233 of this chapter;
    (m) Housing assistance as provided in Sec. 416.1238 of this chapter;
    (n) Refunds of Federal income taxes and advances made by an employer 
relating to an earned income tax credit, as provided in Sec. 416.1235 of 
this chapter;
    (o) Payments received as compensation incurred or losses suffered as 
a result of a crime, as provided in Sec. 416.1229 of this chapter;
    (p) Relocation assistance from a State or local government, as 
provided in Sec. 416.1239 of this chapter;
    (q) Dedicated financial institution accounts as provided in 
Sec. 416.1247 of this chapter;
    (r) A gift to, or for the benefit of, an individual who has not 
attained 18 years of age and who has a life-threatening condition, from 
an organization described in section 501(c)(3) of the Internal Revenue 
Code of 1986 which is exempt from taxation under section 501(a) of such 
Code. The resource exclusion applies to any in-kind gift that is not 
converted to cash, or to a cash gift that does not exceed $2,000; and
    (s) Funds received and conserved to pay for medical and/or social 
services as provided in Sec. 416.1103 of this chapter.

[70 FR 77675, Dec. 30, 2005, as amended at 75 FR 81846, Dec. 29, 2010]

                      Adjustments and Terminations



Sec. 418.3501  What could cause us to increase or reduce your subsidy
or terminate your subsidy eligibility?

    (a) Certain changes in your circumstances could cause us to increase 
or reduce your subsidy or terminate your subsidy eligibility. These 
changes include (but are not limited to) changes to:
    (1) Your income;
    (2) Your spouse's income if you are married and living with your 
spouse;
    (3) Your resources;
    (4) Your spouse's resources if you are married and living with your 
spouse; and
    (5) Your family size.
    (b) We will periodically review your circumstances (as described in 
Sec. 418.3125) to make sure you are still eligible for a subsidy and, if 
eligible, whether you should receive a full or partial subsidy.
    (c) If you report that your circumstances have changed or we receive 
other notice of such a change after we determine that you are eligible, 
we will review your circumstances as described in Sec. 418.3120 to 
determine if you are still eligible.



Sec. 418.3505  How would an increase, reduction or termination 
affect you?

    (a) An increase in your subsidy means that you would be able to pay 
a lower premium to participate in the Medicare Part D prescription drug 
program. An increased subsidy may also result

[[Page 1208]]

in a reduction in any deductible or copayments for which you are 
responsible.
    (b) A reduction in your subsidy means that you would have to begin 
to pay a premium or a higher premium to participate in the Medicare Part 
D prescription drug program. You may also have to begin to pay a 
deductible and higher copayments or increase the amounts of these 
payments.
    (c) A termination means that you would no longer be eligible for a 
subsidy under the Medicare Part D prescription drug program.



Sec. 418.3510  When would an increase, reduction or termination start?

    We are required to give you a written notice of our proposed action 
before increasing, reducing, or terminating your subsidy. We will not 
give this advance notice where we have factual information confirming 
your death, such as through a report by your surviving spouse, a legal 
guardian, a close relative, or a landlord. The notice will tell you the 
first month that we plan to make the change. The notice will also give 
you appeal rights which are explained in detail in Secs. 418.3601 
through 418.3670. Your appeal rights for a reduction or termination will 
include the right to continue to receive your subsidy at the previously 
established level until there is a decision on your appeal request if 
your appeal is filed within 10 days after you receive our notice. You 
will not be required to pay back any subsidy you received while your 
appeal was pending.



Sec. 418.3515  How could you qualify for a subsidy again?

    Unless you subsequently qualify as a deemed eligible person (per 42 
CFR 423.773(c)), you must file a new application for a subsidy and meet 
all the requirements in Sec. 418.3101.

          Determinations and the Administrative Review Process



Sec. 418.3601  When do you have the right to administrative review?

    You have the right to an administrative review of the initial 
determination we make about your eligibility and about your continuing 
eligibility for a subsidy and any other matter that gives you the right 
to further review as discussed in Sec. 418.3605. If you are married and 
living with your spouse and your spouse's eligibility for a subsidy may 
be adversely affected by our decision upon review, we will notify your 
spouse before our review and give him or her the opportunity to present 
additional information for us to consider.



Sec. 418.3605  What is an initial determination?

    Initial determinations are the determinations we make that are 
subject to administrative and judicial review. The initial determination 
will state the relevant facts and will give the reasons for our 
conclusions. Examples of initial determinations that are subject to 
administrative and judicial review include but are not limited to:
    (a) The initial calculation of your income and/or resources;
    (b) The determination about whether or not you are eligible for a 
subsidy and if so, whether you receive a full or partial subsidy;
    (c) The determination to reduce your subsidy; and
    (d) The determination to terminate your subsidy.



Sec. 418.3610  Is there administrative or judicial review for
administrative actions that are not initial determinations?

    Administrative actions that are not initial determinations may be 
reviewed by us, but they are not subject to the administrative or 
judicial review process as provided by these sections. For example, 
changes in your prescription drug program or voluntary disenrollment in 
the Part D program are not initial determinations that are subject to 
the administrative review process.



Sec. 418.3615  Will we mail you a notice of the initial determination?

    (a) We will mail a written notice of the initial determination to 
you at your last known address. Generally, we will not send a notice if 
your premium subsidy stops because of your death or if the initial 
determination is a redetermination that your eligibility for a

[[Page 1209]]

subsidy and the amount of your subsidy has not changed.
    (b) The written notice that we send will tell you:
    (1) What our initial determination is;
    (2) The reasons for our determination; and
    (3) The effect of our determination on your right to further review.
    (c) We will mail you a written notice before increasing, reducing, 
or terminating your subsidy. The notice will tell you the first month 
that we plan to make the change and give you appeal rights. Your appeal 
rights for a reduction or termination will include the right to continue 
to receive your subsidy at the previously established level until there 
is a decision on your appeal request if your appeal is filed within 10 
days after you receive our notice.



Sec. 418.3620  What is the effect of an initial determination?

    An initial determination is binding unless you request an appeal 
within the time period stated in Sec. 418.3630(a) or we revise it as 
provided in Sec. 418.3678.



Sec. 418.3625  What is the process for administrative review?

    The process for administrative review of initial determinations is 
either a hearing conducted by telephone or a case review. We will 
provide you with a hearing by telephone when you appeal the initial 
determination made on your claim, unless you choose not to participate 
in a telephone hearing. If you choose not to participate in a telephone 
hearing, the review will consist of a case review. The hearing will be 
conducted by an individual who was not involved in making the initial 
determination. The individual who conducts the hearing will make the 
final decision after the hearing. If you are dissatisfied after we have 
made a final decision, you may file an action in Federal district court.
    (a) Notice scheduling the telephone hearing. Once you request a 
telephone hearing, we will schedule the hearing and send you a notice of 
the date and time of the hearing at least 20 days before the hearing. 
The notice will contain a statement of the specific issues to be decided 
and tell you that you may designate a personal representative (as 
defined in 42 CFR 423.772) to represent you during the proceedings. The 
notice will explain the opportunity and procedure for reviewing your 
file and for submitting additional evidence prior to the hearing. It 
also will provide a brief explanation of the proceedings, of the right 
and process to subpoena witnesses and documents, of the procedures for 
requesting a change in the time or date of your hearing, and of the 
procedure for requesting interpreter services.
    (b) Opportunity to review your file. Prior to the telephone hearing, 
you will be able to review the information that was used to make an 
initial determination in your case. You can provide us with additional 
information you wish to have considered at the hearing.
    (c) Hearing waived, rescheduled, or missed. If you decide you do not 
want a hearing by telephone or if you are not available at the time of 
the scheduled hearing, the decision in your case will be made by a case 
review. This means that the decision will be based on the information in 
your file and any additional information you provide. You may ask for a 
change in the time and date of the telephone hearing; this should be 
done at the earliest possible opportunity prior to the hearing. Your 
request must state your reason(s) for needing the change in time or date 
and state the new time and date you want the hearing to be held. We will 
change the time and date, but not necessarily to your preferred time or 
date, of the telephone hearing if you have good cause. If you miss the 
scheduled hearing and the decision in your case is decided by a case 
review, we will provide a hearing, at your written request, if we decide 
you had good cause for missing the scheduled hearing. Examples of good 
cause include, but are not limited to, the following:
    (1) You have attempted to obtain a representative but need 
additional time;
    (2) Your representative was appointed within 30 days of the 
scheduled hearing and needs additional time to prepare for the hearing;
    (3) Your representative has a prior commitment to be in court or at 
another administrative hearing on the date scheduled for your hearing;

[[Page 1210]]

    (4) A witness who will testify to facts material to your case would 
be unavailable to participate in the scheduled hearing and the evidence 
cannot be obtained any other way;
    (5) You are unrepresented, and you are unable to respond to the 
notice of hearing because of any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) that you may have; or
    (6) You did not receive notice of the hearing appointment.
    (d) Witnesses at hearing. When we determine that it is reasonably 
necessary for the full presentation of a case, we may issue a subpoena 
to compel the production of certain evidence or testimony.



Sec. 418.3630  How do you request administrative review?

    (a) Time period for requesting review. You must request 
administrative review within 60 days after the date you receive notice 
of the initial determination (or within the extended time period if we 
extend the time as provided in paragraph (c) of this section). You can 
request administrative review in person, by phone, fax, or mail. If you 
miss the time frame for requesting administrative review, you may ask us 
for more time to request a review. The process for requesting an 
extension is explained further in paragraph (c) of this section.
    (b) Where to file your request. You can request administrative 
review by mailing or faxing a request or calling or visiting any Social 
Security office.
    (c) When we will extend the time period to request administrative 
review. If you want a review of the initial determination but do not 
request one within 60 days after the date you receive notice of the 
initial determination, you may ask us for more time to request a review. 
Your request for an extension must explain why it was not filed within 
the stated time period. If you show us that you had good cause for 
missing the deadline, we will extend the time period. To determine 
whether good cause exists, we use the standards explained in 
Sec. 418.3640.



Sec. 418.3635  Can anyone request administrative review on your 
behalf?

    Your personal representative (as defined in 42 CFR 423.772) may 
request administrative review on your behalf. That person can send 
additional information to us on your behalf and participate in the 
hearing.



Sec. 418.3640  How do we determine if you had good cause for missing
the deadline to request administrative review?

    (a) In determining whether you have shown that you have good cause 
for missing a deadline to request review we consider:
    (1) What circumstances kept you from making the request on time;
    (2) Whether our action misled you;
    (3) Whether you did not understand the requirements of the Act 
resulting from amendments to the Act, other legislation, or court 
decisions; and
    (4) Whether you had any physical, mental, educational, or linguistic 
limitations (including any lack of facility with the English language) 
which prevented you from filing a timely request or from understanding 
or knowing about the need to file a timely request for review.
    (b) Examples of circumstances where good cause may exist include, 
but are not limited to, the following situations:
    (1) You were seriously ill and were prevented from contacting us in 
person, in writing, or through a friend, relative, or other person.
    (2) There was a death or serious illness in your immediate family.
    (3) Important records were destroyed or damaged by fire or other 
accidental cause.
    (4) You were trying very hard to find necessary information to 
support your claim but did not find the information within the stated 
time periods.
    (5) You asked us for additional information explaining our action 
within the time limit, and within 60 days of receiving the explanation 
you requested a review.
    (6) We gave you incorrect or incomplete information about when and 
how to request administrative review.
    (7) You did not receive notice of the initial determination.

[[Page 1211]]

    (8) You sent the request to another Government agency in good faith 
within the time limit and the request did not reach us until after the 
time period had expired.
    (9) Unusual or unavoidable circumstances exist, including the 
circumstances described in paragraph (a)(4) of this section, which show 
that you could not have known the need to file timely, or which 
prevented you from filing timely.



Sec. 418.3645  Can you request that the decision-maker be disqualified?

    The person designated to conduct your hearing will not conduct the 
hearing if he or she is prejudiced or partial with respect to any party 
or has any interest in the matter pending for decision. If you object to 
the person who will be conducting your hearing, you must notify us at 
your earliest opportunity. The Commissioner or the Commissioner's 
designee will decide whether to appoint another person to conduct your 
hearing.



Sec. 418.3650  How do we make our decision upon review?

    After you request review of our initial determination, we will 
review the information that we considered in making the initial 
determination and any other information we receive. We will make our 
decision based on this information. The issues that we will review are 
the issues with which you disagree. We may consider other issues, but we 
will provide you with advance notice of these other issues as explained 
in Sec. 418.3625. If you are dissatisfied with our final decision, you 
may file an action in Federal district court.



Sec. 418.3655  How will we notify you of our decision after our 
review?

    We will mail a written notice of our decision on the issue(s) you 
appealed to you at your last known address. Generally, we will not send 
a notice if your subsidy stops because of your death. The written notice 
that we send will tell you:
    (a) What our decision is;
    (b) The reasons for our decision;
    (c) The effect of our decision; and
    (d) Your right to judicial review of the decision.



Sec. 418.3665  Can your request for a hearing or case review be
dismissed?

    We will dismiss your request for a hearing or case review under any 
of the following conditions:
    (a) At any time before notice of the decision is mailed, you ask 
that your request for administrative review be withdrawn; or
    (b) You failed to request administrative review timely and did not 
have good cause for missing the deadline for requesting review.



Sec. 418.3670  How will you be notified of the dismissal?

    We will mail a written notice of the dismissal of your request for 
administrative review to you at your last known address. The dismissal 
is not subject to judicial review and is binding on you unless we vacate 
it. The decision-maker may vacate any dismissal of your request for 
administrative review if, within 60 days after the date you receive the 
dismissal notice, you request that the dismissal be vacated and show 
good cause why the request should not be dismissed. The decision-maker 
shall advise you in writing of any action he or she takes.



Sec. 418.3675  How does our decision affect you?

    Our decision is binding unless you file an action in Federal 
district court seeking review of our final decision or we revise it as 
provided in Sec. 418.3678. You may file an action in Federal district 
court within 60 days after the date you receive notice of the decision. 
You may request that the time for filing an action in Federal district 
court be extended. The request must be in writing and it must give the 
reasons why the action was not filed within the stated time period. The 
request must be filed with the decision-maker who issued the final 
decision in your case. If you show that you had good cause for missing 
the deadline, we will extend the deadline. We will use the standards in 
Sec. 418.3640 to decide if you had good cause to miss the deadline.



Sec. 418.3678  What is the process for correcting Agency clerical
errors?

    If we become aware within 60 days of the date of our initial 
determination or

[[Page 1212]]

our decision following a case review or telephone hearing, that a 
clerical error was made in determining whether or not you are eligible 
for a subsidy (either in whole or in part), we may issue a revised 
initial determination which would be effective back to the date you 
originally filed your application or the effective date of a subsidy 
changing event, provided you meet the requirements in Sec. 418.3101. We 
may revise an initial determination or decision regardless of whether 
such revised determination or decision is favorable or unfavorable to 
you. If the revised determination or decision (which is a new initial 
determination) is not favorable to you, you will not be responsible for 
paying back any subsidy received prior to the revised determination or 
decision. We will mail you a notice of the revised determination which 
will explain to you that we have made a revised determination and that 
this determination replaces an earlier determination, how this 
determination affects your subsidy eligibility, and your right to 
request a hearing.



Sec. 418.3680  What happens if your case is remanded by a Federal
court?

    When a Federal court remands a case to the Commissioner for further 
consideration, the decision-maker (as described in Sec. 418.3625) acting 
on behalf of the Commissioner, may make a decision. That component will 
follow the procedures in Sec. 418.3625, unless we decide that we can 
make a decision that is fully favorable to you without another hearing. 
Any issues relating to your subsidy may be considered by the decision-
maker whether or not they were raised in the administrative proceedings 
leading to the final decision in your case.

[70 FR 77675, Dec. 30, 2005, as amended at 75 FR 33169, June 11, 2010]



PART 421_NATIONAL INSTANT CRIMINAL BACKGROUND CHECK SYSTEM (NICS)
--Table of Contents



Sec.
421.100  What is this part about?
421.105  Definitions of terms used in this part.
421.110  Identifying records relevant to the NICS.
421.120  NICS reporting requirements.
421.130  Removal of an individual's record from the NICS.
421.140  Notice requirements for an affected individual.
421.150  Requesting relief from the Federal firearms prohibitions.
421.151  Evidentiary requirements and processing a request for relief.
421.152  Timing of processing a request for relief.
421.155  Burden of proof in requests for relief.
421.160  Granting a request for relief.
421.165  Actions on a request for relief.
421.170  Judicial review following a denial of a request for relief.

    Authority: 42 U.S.C. 902(a)(5); sec. 101, Pub. L. 110-180, 121 Stat. 
2559, 2561 (18 U.S.C. 922 note).

    Source: 81 FR 91713, Dec. 19, 2016, unless otherwise noted.



Sec. 421.100  What is this part about?

    The rules in this part relate to the Brady Handgun Violence 
Prevention Act (Brady Act), as amended by the NICS Improvement 
Amendments Act of 2007 (NIAA) (Pub. L. 110-180). The Brady Act required 
the Attorney General to establish the National Instant Criminal 
Background Check System (NICS), which allows a Federal firearms licensee 
to determine whether the law prohibits a potential buyer from possessing 
or receiving a firearm. Among other things, the NIAA requires a Federal 
agency that has any records demonstrating that a person falls within one 
of the categories in 18 U.S.C. 922(g) or (n) to report the pertinent 
information contained in the record to the Attorney General for 
inclusion in the NICS. The rules in this part define key terms and 
explain which records we will report to the NICS. They also explain how 
we will provide oral and written notification to our title II and title 
XVI beneficiaries who meet the requisite criteria. Finally, the rules in 
this part explain how beneficiaries who meet the requisite criteria may 
apply for relief from the Federal firearms prohibitions, and how we will 
process a request for relief.



Sec. 421.105  Definitions of terms used in this part.

    For the purposes of this part:
    Adjudicated as a mental defective, in accordance with 18 U.S.C. 
922(g)(4), as amended, means a determination by a

[[Page 1213]]

court, board, commission, or other lawful authority that a person, as a 
result of marked subnormal intelligence, or mental illness, 
incompetency, condition, or disease: Is a danger to himself or others; 
or lacks the mental capacity to contract or manage his own affairs.
    Affected individual means an individual:
    (1) Who has been found disabled based on a finding that the 
individual's impairment(s) meets or medically equals the requirements of 
one of the Mental Disorders Listing of Impairments (section 12.00 of 
appendix 1 to subpart P of part 404 of this chapter) under the rules in 
part 404, subpart P, of this chapter, or under the rules in part 416, 
subpart I, of this chapter; and
    (2) For whom we need to make a capability finding under the rules in 
part 404, subpart U, of this chapter, or under the rules in part 416, 
subpart F, of this chapter, as a result of a mental impairment.
    Commencement of the adjudication process means, with respect to an 
affected individual, the beginning of the process we use to determine 
whether, as a result of a mental impairment:
    (1) An individual is capable of managing his or her own benefits; or
    (2) Whether his or her interests would be better served if we 
certified benefit payments to another person as a representative payee, 
under the rules in part 404, subpart U, of this chapter, or the rules in 
part 416, subpart F, of this chapter.
    Full retirement age has the meaning used in Sec. 404.409 of this 
chapter.
    NICS means the National Instant Criminal Background Check System 
established by the Brady Handgun Violence Prevention Act, Public Law 
103-159, 107 Stat. 1536 (codified at 18 U.S.C. 922 note), as amended.
    Primary diagnosis code means the code we use to identify an 
individual's primary medical diagnosis in our records. The primary 
diagnosis refers to the basic condition that renders an individual 
disabled under the rules in part 404, subpart P, of this chapter, or 
under the rules in part 416, subpart I, of this chapter.
    Us or We means the Social Security Administration.



Sec. 421.110  Identifying records relevant to the NICS.

    (a) In accordance with the requirements of the NIAA, we will 
identify the records of individuals whom we have ``adjudicated as a 
mental defective.'' For purposes of the Social Security programs 
established under titles II and XVI of the Social Security Act, we have 
``adjudicated as a mental defective'' any individual who meets the 
criteria in paragraphs (b)(1) through (5) of this section.
    (b) During our claim development and adjudication process, or when 
we take certain post-entitlement or post-eligibility actions, we will 
identify any individual who:
    (1) Has filed a claim based on disability;
    (2) Has been determined to be disabled based on a finding that the 
individual's impairment(s) meets or medically equals the requirements of 
one of the Mental Disorders Listing of Impairments (section 12.00 of 
appendix 1 to subpart P of part 404 of this chapter) under the rules in 
part 404, subpart P, of this chapter, or under the rules in part 416, 
subpart I, of this chapter;
    (3) Has a primary diagnosis code in our records based on a mental 
impairment;
    (4) Has attained age 18, but has not attained full retirement age; 
and
    (5) Requires that his or her benefit payments be made through a 
representative payee because we have determined, under the rules in part 
404, subpart U, of this chapter, or the rules in part 416, subpart F, of 
this chapter, that he or she is mentally incapable of managing benefit 
payments.
    (c) We will apply the provisions of this section to:
    (1) Capability findings that we make in connection with initial 
claims on or after December 19, 2017 under the rules in part 404, 
subpart U, of this chapter or the rules in part 416, subpart F, of this 
chapter; or
    (2) Capability findings that we make in connection with continuing 
disability reviews (including age-18 disability redeterminations under 
Sec. 416.987 of this chapter) on or after December 19, 2017 under the 
rules in part 404, subpart U, of this chapter, or the rules in part 416, 
subpart F, of this chapter. We

[[Page 1214]]

will apply the provisions of this paragraph (c)(2) only with respect to 
capability findings in which we appoint a representative payee for an 
individual in connection with a continuing disability review.



Sec. 421.120  NICS reporting requirements.

    On not less than a quarterly calendar basis, we will provide 
information about any individual who meets the criteria in Sec. 421.110 
to the Attorney General, or his or her designate, for inclusion in the 
NICS. The information we will report includes the name of the 
individual, his or her full date of birth, his or her sex, and his or 
her Social Security number. We will also report any other information 
that the Attorney General determines Federal agencies should report to 
the NICS.



Sec. 421.130  Removal of an individual's record from the NICS.

    (a) General. We will identify when the record of an individual that 
we previously identified for submission to the NICS under Sec. 421.110 
should be removed from the NICS database. We will notify the Attorney 
General, or his or her designate, that an individual's record should be 
removed from the NICS database only in the circumstances in paragraphs 
(b)(1) through (4) of this section.
    (b) We will notify the Attorney General, or his or her designate, 
that an individual's record should be removed from the NICS when:
    (1) We find that an individual whom we previously required to have 
benefit payments made through a representative payee is now capable of 
managing his or her benefit payments without the need for a 
representative payee;
    (2) We are notified that the individual has died;
    (3) We receive information that we reported an individual's record 
to the NICS in error (e.g., we reported to the NICS the record of an 
individual who does not have a primary diagnosis code in our records 
that is based on a mental impairment, or we reported the record of an 
individual who does not have a representative payee); or
    (4) We grant the individual's request for relief under the rules in 
Secs. 421.150 through 421.165, or a Federal court grants the 
individual's request for relief under the rules in Sec. 421.170.



Sec. 421.140  Notice requirements for an affected individual.

    At the commencement of the adjudication process, we will provide 
both oral and written notice to an affected individual that:
    (a) A finding that he or she meets the criteria in 
Sec. 421.110(b)(1) through (5), when final, will prohibit the individual 
from purchasing, possessing, receiving, shipping, or transporting 
firearms and ammunition, pursuant to 18 U.S.C. 922(d)(4) and (g)(4);
    (b) Any person who knowingly violates the prohibitions in 18 U.S.C. 
922(d)(4) or (g)(4) may be imprisoned for up to 10 years or fined up to 
$250,000, or both, pursuant to 18 U.S.C. 924(a)(2); and
    (c) Relief from the Federal firearms prohibitions imposed by 18 
U.S.C. 922(d)(4) and (g)(4) by virtue of our adjudication is available 
under the NIAA.



Sec. 421.150  Requesting relief from the Federal firearms prohibitions.

    (a) When our adjudication that an individual meets the criteria in 
Sec. 421.110(b)(1) through (5) becomes final, he or she may apply for 
relief from the Federal firearms prohibitions imposed by Federal law as 
a result of our adjudication. If such an individual requests relief from 
us, we will apply the rules in Secs. 421.150 through 421.165.
    (b) An application for relief filed under this section must be in 
writing and include the information required by Sec. 421.151. It may 
also include any other supporting data that we or the applicant deem 
appropriate. When an individual requests relief under this section, we 
will also obtain a criminal history report on the individual before 
deciding whether to grant the request for relief.



Sec. 421.151  Evidentiary requirements and processing a request
for relief.

    (a) When we decide whether to grant an application for relief, we 
will consider:
    (1) The circumstances regarding the firearms prohibitions imposed;
    (2) The applicant's record, which must include the applicant's 
mental

[[Page 1215]]

health records and a criminal history report; and
    (3) The applicant's reputation, developed through witness statements 
or other evidence.
    (b) Evidence. The applicant must provide the following evidence to 
us in support of a request for relief:
    (1) A current statement from the applicant's primary mental health 
provider assessing the applicant's current mental health status and 
mental health status for the 5 years preceding the date of the request 
for relief; and
    (2) Written statements and any other evidence regarding the 
applicant's reputation.
    (c) Evidentiary requirements--(1) A current statement from the 
applicant's primary mental health provider submitted under paragraph 
(b)(1) of this section. We will consider a statement from the 
applicant's primary mental health provider to be current if it is based 
on a complete mental health assessment that was conducted during the 90-
day period immediately preceding the date we received the applicant's 
request for relief under paragraph (b)(1) of this section. The statement 
must specifically address:
    (i) Whether the applicant has ever been a danger to himself or 
herself or others; and
    (ii) Whether the applicant would pose a danger to himself or herself 
or others if we granted the applicant's request for relief and the 
applicant purchased and possessed a firearm or ammunition.
    (2) Written statements regarding the applicant's character submitted 
under paragraph (b)(2) of this section. The statements must 
specifically:
    (i) Identify the person supplying the information;
    (ii) Provide the person's current address and telephone number;
    (iii) Describe the person's relationship with and frequency of 
contact with the applicant;
    (iv) Indicate whether the applicant has a reputation for violence in 
the community; and
    (v) Indicate whether the applicant would pose a danger to himself or 
herself or others if we granted the applicant's request for relief and 
the applicant purchased and possessed a firearm or ammunition.
    (3) The applicant may obtain written statements from anyone who 
knows the applicant, including but not limited to clergy, law 
enforcement officials, employers, friends, and family members, as long 
as the person providing the statement has known the applicant for a 
sufficient period, has had recent and frequent contact with the 
beneficiary, and can attest to the beneficiary's good reputation. The 
individual submitting the written statement must describe his or her 
relationship with the applicant and provide information concerning the 
length of time he or she has known the applicant and the frequency of 
his or her contact with the applicant. The applicant must submit at 
least one statement from an individual who is not related to the 
applicant by blood or marriage.



Sec. 421.152  Timing of processing a request for relief.

    (a) An individual may request relief at any time after our 
adjudication that results in that person becoming prohibited by 18 
U.S.C. 922(d)(4) or (g)(4) becomes final.
    (b) We will process an application for relief under Sec. 421.150 
when the applicant has provided us with all the necessary evidence 
required under Sec. 421.151(b)(1) through (3).



Sec. 421.155  Burden of proof in requests for relief.

    An applicant who requests relief under Sec. 421.150 must prove that 
he or she is not likely to act in a manner dangerous to public safety 
and that granting relief from the prohibitions imposed by 18 U.S.C. 
922(d)(4) and (g)(4) will not be contrary to the public interest.



Sec. 421.160  Granting a request for relief.

    (a) We may grant an applicant's request for relief if the applicant 
establishes, to our satisfaction, that the circumstances regarding the 
disability, and the applicant's record and reputation, are such that the 
applicant will not be likely to act in a manner dangerous to public 
safety, and that the granting of the relief would not be contrary to the 
public interest.

[[Page 1216]]

    (b) We will not grant an applicant's request for relief if the 
applicant is prohibited from possessing firearms by the law of the State 
in which the applicant resides.



Sec. 421.165  Actions on a request for relief.

    (a) After the applicant submits the evidence required under 
Sec. 421.151 and any other evidence he or she wants us to consider, we 
will review the evidence, which will include any evidence from our 
records that we determine is appropriate. A decision maker who was not 
involved in making the finding that the applicant's benefit payments be 
made through a representative payee will review the evidence and act on 
the request for relief. We will notify the applicant in writing of our 
action regarding the request for relief.
    (b) If we deny an applicant's request for relief, we will send the 
applicant a written notice that explains the reasons for our action. We 
will also inform the applicant that if he or she is dissatisfied with 
our action, he or she has 60 days from the date he or she receives the 
notice of our action to file a petition seeking judicial review in 
Federal district court.
    (c) If we grant an applicant's request for relief, we will send the 
applicant a written notice that explains the reasons for our action. We 
will inform the applicant that we will notify the Attorney General, or 
his or her delegate, that the individual's record should be removed from 
the NICS database. We will also notify the applicant that he or she is 
no longer prohibited under 18 U.S.C. 922(g)(4) from purchasing, 
possessing, receiving, shipping, or transporting firearms or ammunition 
based on the prohibition that we granted the applicant relief from. We 
will notify the Attorney General, or his or her delegate, that the 
applicant's record should be removed from the NICS database after we 
grant the applicant's request for relief.
    (d)(1) The NIAA requires us to process each application for relief 
not later than 365 days after the date we receive it. We consider the 
application date for the request for relief to be the date on which all 
evidence required under Sec. 421.151(a) is submitted.
    (2) If we fail to resolve an application for relief within that 
period for any reason, including a lack of appropriated funds, we will 
be deemed to have denied the relief request without cause. In accordance 
with the NIAA, judicial review of any petition brought under this 
paragraph (d) shall be de novo.



Sec. 421.170  Judicial review following a denial of a request for relief.

    (a) Judicial review of our action denying an applicant's request for 
review is available according to the standards contained in 18 U.S.C. 
925(c). An individual for whom we have denied an application for relief 
may file a petition for judicial review with the United States district 
court for the district in which he or she resides.
    (b) If, on judicial review, a Federal court grants an applicant's 
request for relief, we will notify the Attorney General that the 
individual's record should be removed from the NICS database.



PART 422_ORGANIZATION AND PROCEDURES--Table of Contents



      Subpart A_Organization and Functions of the Social Security 
                             Administration

Sec.
422.1  Organization and functions.
422.5  District offices and branch offices.

                      Subpart B_General Procedures

422.101  Material included in this subpart.
422.103  Social security numbers.
422.104  Who can be assigned a social security number.
422.105  Presumption of authority of nonimmigrant alien to engage in 
          employment.
422.106  Filing applications with other government agencies.
422.107  Evidence requirements.
422.108  Criminal penalties.
422.110  Individual's request for change in record.
422.112  Employer identification numbers.
422.114  Annual wage reporting process.
422.120  Earnings reported without a social security number or with an 
          incorrect employee name or social security number.
422.122  Information on deferred vested pension benefits.
422.125  Statements of earnings; resolving earnings discrepancies.
422.130  Claim procedure.
422.135  Reports by beneficiaries.

[[Page 1217]]

422.140  Reconsideration of initial determination.

Subpart C_Procedures of the Office of Disability Adjudication and Review

422.201  Material included in this subpart.
422.203  Hearings.
422.205  Review by Appeals Council.
422.210  Judicial review.

                       Subpart D_Claims Collection

422.301  Scope of this subpart.
422.303  Interest, late payment penalties, and administrative costs of 
          collection.
422.305  Report of overdue program overpayment debts to consumer 
          reporting agencies.
422.306  Report of overdue administrative debts to credit reporting 
          agencies.
422.310  Collection of overdue debts by administrative offset.
422.315  Review of our records related to the debt.
422.317  Review of the debt.

    Subpart E_Collection of Debts by Administrative Wage Garnishment

422.401  What is the scope of this subpart?
422.402  What special definitions apply to this subpart?
422.403  When may we use administrative wage garnishment?
422.405  What notice will we send you about administrative wage 
          garnishment?
422.410  What actions will we take after we send you the notice?
422.415  Will we reduce the amount that your employer must withhold from 
          your pay when withholding that amount causes financial 
          hardship?
422.420  May you inspect and copy our records related to the debt?
422.425  How will we conduct our review of the debt?
422.430  When will we refund amounts of your pay withheld by 
          administrative wage garnishment?
422.435  What happens when we decide to send an administrative wage 
          garnishment order to your employer?
422.440  What are your employer's responsibilities under an 
          administrative wage garnishment order?
422.445  May we bring a civil action against your employer for failure 
          to comply with our administrative wage garnishment order?

                Subpart F_Applications and Related Forms

422.501  Applications and other forms used in Social Security 
          Administration programs.
422.505  What types of applications and related forms are used to apply 
          for retirement, survivors, and disability insurance benefits?
422.510  Applications and related forms used in the health insurance for 
          the aged program.
422.512  Applications and related forms used in the black lung benefits 
          program.
422.515  Forms used for withdrawal, reconsideration and other appeals, 
          and appointment of representative.
422.520  Forms related to maintenance of earnings records.
422.525  Where applications and other forms are available.
422.527  Private printing and modification of prescribed applications, 
          forms, and other publications.

Subpart G_Administrative Review Process Under the Coal Industry Retiree 
                       Health Benefit Act of 1992

422.601  Scope and purpose.
422.602  Terms used in this subpart.
422.603  Overview of the review process.
422.604  Request for detailed information.
422.605  Request for review.
422.606  Processing the request for review.
422.607  Limited reopening of assignments.

                  Subpart H_Use of SSA Telephone Lines

422.701  Scope and purpose.
422.705  When SSA employees may listen-in to or record telephone 
          conversations.
422.710  Procedures SSA will follow.

               Subpart I_Administrative Claims Collection

422.801  Scope of this subpart.
422.803  Collection activities.
422.805  Demand for payment.
422.807  Interest, penalties, and administrative costs.
422.809  Collection in installments.
422.810  Salary offset for current employees.
422.811  Discretionary referral for cross-servicing.
422.813  Mandatory referral for cross-servicing.
422.815  Referral of administrative debts to the Department of the 
          Treasury.
422.817  Required certification.
422.819  Fees.
422.821  Administrative offset.
422.822  Notification of intent to collect by administrative offset.
422.823  Debtor rights to review or copy records, submit repayment 
          proposals, or request administrative review.
422.824  Non-centralized administrative offset.
422.825  Centralized administrative offset.
422.827  Offset against tax refunds.

[[Page 1218]]

422.829  Federal salary offset.
422.833  Administrative wage garnishment for administrative debts.
422.835  Debt reporting and use of credit reporting agencies.
422.837  Contracting with private collection contractors and with 
          entities that locate and recover unclaimed assets.
422.839  Offset against amounts payable from civil service retirement 
          and disability fund and the Federal employees' retirement 
          system.
422.842  Liquidation of collateral.
422.846  Bases for compromise.
422.848  Suspension and termination of collection activities.
422.850  Referrals to the Department of Justice.

Subpart J_Protecting the Public and Our Personnel To Ensure Operational 
                              Effectiveness

422.901  Scope and purpose.
422.902  Definition of personnel for purposes of this subpart.
422.903  Prohibited conduct.
422.904  Notice of the ban.
422.905  Appeal rights.
422.906  Periodic request for review of ban decision.
422.907  Posting requirement.

    Source: 32 FR 13653, Sept. 29, 1967, unless otherwise noted.



      Subpart A_Organization and Functions of the Social Security 
                             Administration

    Authority: Secs. 205, 218, 221, and 701-704 of the Social Security 
Act (42 U.S.C. 405, 418, 421, and 901-904).



Sec. 422.1  Organization and functions.

    (a) General. A complete description of the organization and 
functions of the Social Security Administration (pursuant to 5 U.S.C. 
552(a), as amended by Pub. L. 90-23, the Public Information Act) was 
published in the Federal Register of July 15, 1967 (32 FR 10458), and 
was subsequently revised on April 16, 1968 (33 FR 5828), and amended on 
July 18, 1968 (33 FR 10292). Further amendments to or revisions of the 
description will be published in the Federal Register when and if 
required by changes in the organization or functions of the Social 
Security Administration. Such description (referred to as the SSA 
Statement of Organization, Functions, and Delegations of Authority) is 
printed and kept up to date in the Social Security Administration 
Organizational Manual, a copy of which is maintained in each district 
office and branch office of the Social Security Administration and is 
available for inspection and copying.
    (b) Information included in description. This description includes 
information about the organization and functions of each component of 
the Social Security Administration. It also includes a listing of all 
district offices and branch offices within the organization of the 
Bureau of District Office Operations, and a listing of field offices 
within the organization of the Bureau of Hearings and Appeals where the 
public may secure information, make submittals or requests, or obtain 
decisions.

[34 FR 435, Jan. 11, 1969, as amended at 62 FR 38456, July 18, 1997]



Sec. 422.5  District offices and branch offices.

    There are over 700 social security district offices and branch 
offices located in the principal cities and other urban areas or towns 
of the United States. In addition, there are over 3,300 contact 
stations, located in population and trading centers, which are visited 
on a regularly, recurring, preannounced basis. A schedule of these 
visits can be obtained from the nearest district office or branch 
office. The address of the nearest district office or branch office can 
be obtained from the local telephone directory or from the post office. 
Each district office and branch office has a list of all district 
offices and branch offices throughout the country and their addresses. 
The principal officer in each district office is the manager. The 
principal officer in each branch office is the officer-in-charge. Each 
district office and branch office also has a list of field offices of 
the Bureau of Hearings and Appeals and their addresses. The 
administrative hearing examiner is the principal officer in each field 
office. For procedures relating to claims see Sec. 422.130, subpart J of 
part 404 of this chapter, and Sec. 404.1520 of this chapter (the latter 
relating to disability determinations). For procedures on request for 
hearing by an Administrative Law Judge and review by

[[Page 1219]]

the Appeals Council see subpart C of this part 422.



                      Subpart B_General Procedures

    Authority: Secs. 205, 232, 702(a)(5), 1131, and 1143 of the Social 
Security Act (42 U.S.C. 405, 432, 902(a)(5), 1320b-1, and 1320b-13), and 
sec. 7213(a)(1)(A) of Pub. L. 108-458.



Sec. 422.101  Material included in this subpart.

    This subpart describes the procedures relating to applications for 
and assignment of social security numbers, maintenance of earnings 
records of individuals by the Social Security Administration, requests 
for statements of earnings or for revision of earnings records, and 
general claims procedures, including filing of applications, submission 
of evidence, determinations, and reconsideration of initial 
determinations.



Sec. 422.103  Social security numbers.

    (a) General. The Social Security Administration (SSA) maintains a 
record of the earnings reported for each individual assigned a social 
security number. The individual's name and social security number 
identify the record so that the wages or self-employment income reported 
for or by the individual can be properly posted to the individual's 
record. Additional procedures concerning social security numbers may be 
found in Internal Revenue Service, Department of the Treasury regulation 
26 CFR 31.6011(b)-2.
    (b) Applying for a number--(1) Application. An individual needing a 
Social Security number may apply for one by completing a prescribed 
application and submitting the required evidence. An individual outside 
the United States (U.S.) may apply for a Social Security number card at 
the Department of Veterans Affairs Regional Office, Manila, Philippines, 
at any U.S. Foreign Service post, or at a U.S. military post outside the 
United States. (See Sec. 422.106 for special procedures for filing 
applications with other government agencies.) Additionally, a U.S. 
resident may apply for a Social Security number for a nonresident 
dependent when the number is necessary for U.S. tax purposes or some 
other valid reason, the evidence requirements of Sec. 422.107 are met, 
and we determine that a personal interview with the dependent is not 
required.
    (2) Birth registration document. We may enter into an agreement with 
officials of a State, including, for this purpose, the District of 
Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, and New York City, 
to establish, as part of the official birth registration process, a 
procedure to assist us in assigning Social Security numbers to newborn 
children. Where an agreement is in effect, a parent, as part of the 
official birth registration process, need not complete a prescribed 
application and may request that we assign a Social Security number to 
the newborn child.
    (3) Immigration form. We may enter into an agreement with the 
Department of State (DOS) and the Department of Homeland Security (DHS) 
to assist us by collecting enumeration data as part of the immigration 
process. Where an agreement is in effect, an alien need not complete a 
prescribed application and may request, through DOS or DHS, as part of 
the immigration process, that we assign a Social Security number and 
issue a Social Security number card to him or her. An alien will request 
the assignment of a Social Security number through this process in the 
manner provided by DOS and DHS.
    (c) How numbers are assigned--(1) Application. If you complete a 
prescribed application, we will require you to furnish evidence, as 
necessary, to assist us in establishing your age, U.S. citizenship or 
alien status, true identity, and previously assigned Social Security 
number(s), if any. (See Sec. 422.107 for evidence requirements.) We may 
require you to undergo a personal interview before we assign a Social 
Security number. If you request evidence to show that you have filed a 
prescribed application for a Social Security number card, we may furnish 
you with a receipt or equivalent document. We will electronically screen 
the data from the prescribed application against our files. If we find 
that you have not been assigned a Social Security number previously, we 
will assign one to you and issue a Social Security number card.

[[Page 1220]]

However, if we find that you have been assigned a Social Security number 
previously, we will issue a replacement Social Security number card.
    (2) Request on birth registration document. Where a parent has 
requested a social security number for a newborn child as part of an 
official birth registration process described in paragraph (b)(2) of 
this section, the State vital statistics office will electronically 
transmit the request to SSA's central office in Baltimore, MD, along 
with the child's name, date and place of birth, sex, mother's maiden 
name, father's name (if shown on the birth registration), address of the 
mother, and birth certificate number. This birth registration 
information received by SSA from the State vital statistics office will 
be used to establish the age, identity, and U.S. citizenship of the 
newborn child. Using this information, SSA will assign a number to the 
child and send the social security number card to the child at the 
mother's address.
    (3) Request on immigration document. Where an alien has requested a 
social security number as part of the immigration process described in 
paragraph (b)(3) of this section, Department of Homeland Security will 
electronically transmit to SSA's central office in Baltimore, MD, the 
data elements collected for immigration purposes, by both Department of 
Homeland Security and DOS, that SSA needs to assign the alien a social 
security number along with other data elements as agreed upon by SSA and 
DOS or Department of Homeland Security. The data elements received by 
SSA will be used to establish the age, identity, and lawful alien status 
or authority to work of the alien. Using this data, SSA will assign a 
social security number to the alien and send the social security number 
card to him/her at the address the alien provides to DOS or Department 
of Homeland Security (or to the sponsoring agency of a refugee, if no 
personal mailing address is available).
    (d) Social security number cards. A person who is assigned a social 
security number will receive a social security number card from SSA 
within a reasonable time after the number has been assigned. (See 
Sec. 422.104 regarding the assignment of social security number cards to 
aliens.) Social security number cards are the property of SSA and must 
be returned upon request.
    (e) Replacement of social security number card-- (1) When we may 
issue you a replacement card. We may issue you a replacement Social 
Security number card, subject to the limitations in paragraph (e)(2) of 
this section. You must complete a prescribed application to receive a 
replacement Social Security number card. We follow the evidence 
requirements in Sec. 422.107 when we issue you a replacement Social 
Security number card.
    (2) Limits on the number of replacement cards. There are limits on 
the number of replacement social security number cards we will issue to 
you. You may receive no more than three replacement social security 
number cards in a year and ten replacement social security number cards 
per lifetime. We may allow for reasonable exceptions to these limits on 
a case-by-case basis in compelling circumstances. We also will consider 
name changes (i.e., verified legal changes to the first name and/or 
surname) and changes in alien status which result in a necessary change 
to a restrictive legend on the SSN card (see paragraph (e)(3) of this 
section) to be compelling circumstances, and will not include either of 
these changes when determining the yearly or lifetime limits. We may 
grant an exception if you provide evidence establishing that you would 
experience significant hardship if the card were not issued. An example 
of significant hardship includes, but is not limited to, providing SSA 
with a referral letter from a governmental social services agency 
indicating that the social security number card must be shown in order 
to obtain benefits or services.
    (3) Restrictive legend change defined. Based on a person's 
immigration status, a restrictive legend may appear on the face of an 
SSN card to indicate that work is either not authorized or that work may 
be performed only with Department of Homeland Security (DHS) 
authorization. This restrictive legend appears on the card above the 
individual's name and SSN. Individuals without work authorization in the 
U.S.

[[Page 1221]]

receive SSN cards showing the restrictive legend, ``Not Valid for 
Employment;'' and SSN cards for those individuals who have temporary 
work authorization in the U.S. show the restrictive legend, ``Valid For 
Work Only With DHS Authorization.'' U.S. citizens and individuals who 
are permanent residents receive SSN cards without a restrictive legend. 
For the purpose of determining a change in restrictive legend, the 
individual must have a change in immigration status or citizenship which 
results in a change to or the removal of a restrictive legend when 
compared to the prior SSN card data. An SSN card request based upon a 
change in immigration status or citizenship which does not affect the 
restrictive legend will count toward the yearly and lifetime limits, as 
in the case of Permanent Resident Aliens who attain U.S. citizenship.

[55 FR 46664, Nov. 6, 1990, as amended at 63 FR 56554, Oct. 22, 1998; 69 
FR 55076, Sept. 13, 2004; 70 FR 74651, Dec. 16, 2005; 71 FR 43056, July 
31, 2006; 80 FR 47833, Aug. 10, 2015]



Sec. 422.104  Who can be assigned a social security number.

    (a) Persons eligible for SSN assignment. We can assign you a social 
security number if you meet the evidence requirements in Sec. 422.107 
and you are:
    (1) A United States citizen; or
    (2) An alien lawfully admitted to the United States for permanent 
residence or under other authority of law permitting you to work in the 
United States (Sec. 422.105 describes how we determine if a nonimmigrant 
alien is permitted to work in the United States); or
    (3) An alien who cannot provide evidence of alien status showing 
lawful admission to the U.S., or an alien with evidence of lawful 
admission but without authority to work in the U.S., if the evidence 
described in Sec. 422.107(e) does not exist, but only for a valid 
nonwork reason. We consider you to have a valid nonwork reason if:
    (i) You need a social security number to satisfy a Federal statute 
or regulation that requires you to have a social security number in 
order to receive a Federally-funded benefit to which you have otherwise 
established entitlement and you reside either in or outside the U.S.; or
    (ii) You need a social security number to satisfy a State or local 
law that requires you to have a social security number in order to 
receive public assistance benefits to which you have otherwise 
established entitlement, and you are legally in the United States.
    (b) Annotation for a nonwork purpose. If we assign you a social 
security number as an alien for a nonwork purpose, we will indicate in 
our records that you are not authorized to work. We will also mark your 
social security card with a legend such as ``NOT VALID FOR EMPLOYMENT.'' 
If earnings are reported to us on your number, we will inform the 
Department of Homeland Security of the reported earnings.

[68 FR 55308, Sept. 25, 2003]



Sec. 422.105  Presumption of authority of nonimmigrant alien to engage
in employment.

    (a) General rule. Except as provided in paragraph (b) of this 
section, if you are a nonimmigrant alien, we will presume that you have 
permission to engage in employment if you present a Form I-94 issued by 
the Department of Homeland Security that reflects a classification 
permitting work. (See 8 CFR 274a.12 for Form I-94 classifications.) If 
you have not been issued a Form I-94, or if your Form I-94 does not 
reflect a classification permitting work, you must submit a current 
document authorized by the Department of Homeland Security that verifies 
authorization to work has been granted e.g., an employment authorization 
document, to enable SSA to issue an SSN card that is valid for work. 
(See 8 CFR 274a.12(c)(3).)
    (b) Exception to presumption for foreign academic students in 
immigration classification F-1. If you are an F-1 student and do not 
have a separate DHS employment authorization document as described in 
paragraph (a) of this section and you are not authorized for curricular 
practical training (CPT) as shown on your Student and Exchange Visitor 
Information System (SEVIS) Form I-20, Certificate of Eligibility for 
Nonimmigrant (F-1) Student Status, we will not presume you have 
authority to engage in employment without additional evidence. Before we 
will assign an SSN to you that is valid for

[[Page 1222]]

work, you must give us proof (as explained in Sec. 422.107(e)(2)) that:
    (1) You have authorization from your school to engage in employment, 
and
    (2) You are engaging in, or have secured, employment.

[69 FR 55075, Sept. 13, 2004]



Sec. 422.106  Filing applications with other government agencies.

    (a) Agreements. In carrying out its responsibilities to assign 
social security numbers, SSA enters into agreements with the United 
States Attorney General, other Federal officials, and State and local 
welfare agencies. An example of these agreements is discussed in 
paragraph (b) of this section.
    (b) States. SSA and a State may enter into an agreement that 
authorizes employees of a State or one of its subdivisions to accept 
social security number card applications from some individuals who apply 
for or are receiving welfare benefits under a State-administered Federal 
program. Under such an agreement, a State employee is also authorized to 
certify the application to show that he or she has reviewed the required 
evidence of the applicant's age, identity, and U.S. citizenship. The 
employee is also authorized to obtain evidence to assist SSA in 
determining whether the applicant has previously been assigned a number. 
The employee will then send the application to SSA which will issue a 
social security number card.

[55 FR 46665, Nov. 6, 1990, as amended at 63 FR 56555, Oct. 22, 1998]



Sec. 422.107  Evidence requirements.

    (a) General. To obtain an original Social Security number card, you 
must submit convincing evidence of your age, U.S. citizenship or alien 
status, and true identity, as described in paragraphs (b) through (e) of 
this section. If you apply for a replacement Social Security number 
card, you must submit convincing evidence of your true identity, as 
described in paragraph (c) of this section, and you may also be required 
to submit convincing evidence of your age and U.S. citizenship or alien 
status, as described in paragraphs (b), (d), and (e) of this section. If 
you apply for an original or replacement Social Security number card, 
you are also required to submit evidence to assist us in determining the 
existence and identity of any previously assigned Social Security 
number(s). We will not assign a Social Security number or issue an 
original or replacement card unless we determine that you meet all of 
the evidence requirements. We require an in-person interview if you are 
age 12 or older and are applying for an original Social Security number, 
unless you are an alien who requests a Social Security number as part of 
the immigration process described in Sec. 422.103(b)(3). We may require 
an in-person interview of other applicants. All paper or other tangible 
documents submitted as evidence must be originals or copies of the 
original documents certified by the custodians of the original records 
and are subject to verification. We may also verify your eligibility 
factors, as described in paragraphs (b) through (e) of this section, 
through other means, including but not limited to data matches or other 
agreements with government agencies or other entities that we determine 
can provide us with appropriate and secure verification of your 
eligibility factors.
    (b) Evidence of age. An applicant for an original social security 
number is required to submit convincing evidence of age. An applicant 
for a replacement social security number card may also be required to 
submit evidence of age. Examples of the types of evidence which may be 
submitted are a birth certificate, a religious record showing age or 
date of birth, a hospital record of birth, or a passport. (See 
Sec. 404.716.)
    (c) Evidence of identity. (1) If you apply for an original Social 
Security number or a replacement Social Security number card, you are 
required to submit convincing evidence of your identity. Evidence of 
identity may consist of a driver's license, identification card, school 
record, medical record, marriage record, passport, Department of 
Homeland Security document, or other similar evidence serving to 
identify you. The evidence must contain sufficient information to 
identify you, including your name and:
    (i) Your age, date of birth, or parents' names; or

[[Page 1223]]

    (ii) Your photograph or physical description.
    (2) A birth record is not sufficient evidence to establish identity 
for these purposes.
    (d) Evidence of U.S. citizenship. Generally, an applicant for an 
original or replacement social security number card may prove that he or 
she is a U.S. citizen by birth by submitting a birth certificate or 
other evidence, as described in paragraphs (b) and (c) of this section, 
that shows a U.S. place of birth. Where a foreign-born applicant claims 
U.S. citizenship, the applicant for a social security number or a 
replacement social security number card is required to present 
documentary evidence of U.S. citizenship. If required evidence is not 
available, a social security number card will not be issued until 
satisfactory evidence of U.S. citizenship is furnished. Any of the 
following is generally acceptable evidence of U.S. citizenship for a 
foreign-born applicant:
    (1) Certificate of naturalization;
    (2) Certificate of citizenship;
    (3) U.S. passport;
    (4) U.S. citizen identification card issued by the Department of 
Homeland Security;
    (5) Consular report of birth (State Department form FS-240 or FS-
545); or
    (6) Other verification from the Department of Homeland Security, 
U.S. Department of State, or Federal or State court records confirming 
citizenship.
    (e) Evidence of alien status--(1) General evidence rules. When a 
person who is not a U.S. citizen applies for an original social security 
number or a replacement social security number card, he or she is 
required to submit, as evidence of alien status, a current document 
issued by the Department of Homeland Security in accordance with that 
agency's regulations. The document must show that the applicant has been 
lawfully admitted to the United States, either for permanent residence 
or under authority of law permitting him or her to work in the United 
States, or that the applicant's alien status has changed so that it is 
lawful for him or her to work. If the applicant fails to submit such a 
document, a social security number card will not be issued. If the 
applicant submits an unexpired Department of Homeland Security 
document(s) which shows current authorization to work, a social security 
number will be assigned or verified and a card which can be used for 
work will be issued. If the authorization of the applicant to work is 
temporary or subject to termination by the Department of Homeland 
Security, the SSA records may be so annotated. If the document(s) does 
not provide authorization to work and the applicant wants a social 
security number for a work purpose, no social security number will be 
assigned. If the applicant requests the number for a nonwork purpose and 
provides evidence documenting that the number is needed for a valid 
nonwork purpose, the number may be assigned and the card issued will be 
annotated with a nonwork legend. The SSA record will be annotated to 
show that a number has been assigned and a card issued for a nonwork 
purpose. In that case, if earnings are later reported to SSA, the 
Department of Homeland Security will be notified of the report. SSA may 
also notify that agency if earnings are reported for a social security 
number that was valid for work when assigned but for which work 
authorization expired or was later terminated by the Department of 
Homeland Security SSA may also annotate the record with other remarks, 
if appropriate.
    (2) Additional evidence rules for F-1 students--(i) Evidence from 
your designated school official. If you are an F-1 student and do not 
have a separate DHS employment authorization document as described in 
Sec. 422.105(a) and you are not authorized for curricular practical 
training (CPT) as shown on your SEVIS Form I-20, Certificate of 
Eligibility for Nonimmigrant (F-1) Student Status, you must give us 
documentation from your designated school official that you are 
authorized to engage in employment. You must submit your SEVIS Form I-
20, Certificate of Eligibility for Nonimmigrant (F-1) Student Status. 
You must also submit documentation from your designated school official 
that includes:
    (A) The nature of the employment you are or will be engaged in, and

[[Page 1224]]

    (B) The identification of the employer for whom you are or will be 
working.
    (ii) Evidence of your employment. You must also provide us with 
documentation that you are engaging in, or have secured, employment; 
e.g., a statement from your employer.
    (f) Failure to submit evidence. If the applicant does not comply 
with a request for the required evidence or other information within a 
reasonable time, SSA may attempt another contact with the applicant. If 
there is still no response, a social security number card will not be 
issued.
    (g) Inability to verify eligibility factors. We will not issue an 
original or replacement Social Security number card when you present 
invalid or expired documents or when we are unable to verify the 
required evidence through other means, as described in paragraph (a) of 
this section. Invalid documents are either forged documents that 
supposedly were issued by the custodian of the record, or properly 
issued documents that were improperly changed after they were issued. An 
expired document is one that was valid for only a limited time and that 
time has passed.

[55 FR 46665, Nov. 6, 1990, as amended at 60 FR 32446, June 22, 1995; 62 
FR 38456, July 18, 1997; 63 FR 56555, Oct. 22, 1998; 68 FR 55308, Sept. 
25, 2003; 69 FR 55076, Sept. 13, 2004; 70 FR 74651, Dec. 16, 2005; 80 FR 
47834, Aug. 10, 2015]



Sec. 422.108  Criminal penalties.

    A person may be subject to criminal penalties for furnishing false 
information in connection with earnings records or for wrongful use or 
misrepresentation in connection with social security numbers, pursuant 
to section 208 of the Social Security Act and sections of title 18 
U.S.C. (42 U.S.C. 408; 18 U.S.C. 1001 and 1546).

[39 FR 10242, Mar. 19, 1974]



Sec. 422.110  Individual's request for change in record.

    (a) Application. If you wish to change the name or other personal 
identifying information you previously submitted in connection with an 
application for a Social Security number card, you must complete a 
prescribed application, except as provided in paragraph (b) of this 
section. You must prove your identity, and you may be required to 
provide other evidence. (See Sec. 422.107 for evidence requirements.) 
You may complete a request for change in records in the manner we 
designate, including at any Social Security office, or, if you are 
outside the U.S., to the Department of Veterans Affairs Regional Office, 
Manila, Philippines, or to any U.S. Foreign Service post or U.S. 
military post. If your request is for a change of name on the card (that 
is, verified legal changes to the first name or surname, or both), we 
may issue you a replacement Social Security number card bearing the same 
number and the new name. We will grant an exception to the limitations 
specified in Sec. 422.103(e)(2) for replacement Social Security number 
cards representing a change in name or, if you are an alien, a change to 
a restrictive legend shown on the card. (See Sec. 422.103(e)(3) for the 
definition of a change to a restrictive legend.)
    (b) Assisting in enumeration. We may enter into an agreement with 
officials of the Department of State and the Department of Homeland 
Security to assist us by collecting, as part of the immigration process, 
information to change the name or other personal identifying information 
you previously submitted in connection with an application or request 
for a social security number card. If your request is to change a name 
on the card (i.e., verified legal changes to the first name and/or 
surname) or to correct the restrictive legend on the card to reflect a 
change in alien status, we may issue you a replacement card bearing the 
same number and the new name or legend. We will grant an exception from 
the limitations specified in Sec. 422.103(e)(2) for replacement social 
security number cards representing a change of name or, if you are an 
alien, a change to a restrictive legend shown on the card. (See 
Sec. 422.103(e)(3) for the definition of a change to a restrictive 
legend.)

[71 FR 43056, July 31, 2006, as amended at 80 FR 47834, Aug. 10, 2015]

[[Page 1225]]



Sec. 422.112  Employer identification numbers.

    (a) General. Most employers are required by section 6109 of the 
Internal Revenue Code and by Internal Revenue Service (IRS) regulations 
at 26 CFR 31.6011(b)-1 to obtain an employer identification number (EIN) 
and to include it on wage reports filed with SSA. A sole proprietor who 
does not pay wages to one or more employees or who is not required to 
file any pension or excise tax return is not subject to this 
requirement. To apply for an EIN, employers file Form SS-4, 
``Application for Employer Identification Number,'' with the IRS. For 
the convenience of employers, Form SS-4 is available at all SSA and IRS 
offices. Household employers, agricultural employers, and domestic 
corporations which elect social security coverage for employees of 
foreign subsidiaries who are citizens or residents of the U.S. may be 
assigned an EIN by IRS without filing an SS-4.
    (b) State and local governments. When a State submits a modification 
to its agreement under section 218 of the Act, which extends coverage to 
periods prior to 1987, SSA will assign a special identification number 
to each political subdivision included in that modification. SSA will 
send the State a Form SSA-214-CD, ``Notice of Identifying Number,'' to 
inform the State of the special identification number(s). The special 
number will be used for reporting the pre-1987 wages to SSA. The special 
number will also be assigned to an interstate instrumentality if pre-
1987 coverage is obtained and SSA will send a Form SSA-214-CD to the 
interstate instrumentality to notify it of the number assigned.

[60 FR 42433, Aug. 16, 1995, as amended at 64 FR 33016, June 21, 1999]



Sec. 422.114  Annual wage reporting process.

    (a) General. Under the authority of section 232 of the Act, SSA and 
IRS have entered into an agreement that sets forth the manner by which 
SSA and IRS will ensure that the processing of employee wage reports is 
effective and efficient. Under this agreement, employers are instructed 
by IRS to file annual wage reports with SSA on paper Forms W-2, ``Wage 
and Tax Statement,'' and Forms W-3, ``Transmittal of Income and Tax 
Statements,'' or equivalent W-2 and W-3 magnetic media reports. Special 
versions of these forms for Puerto Rico, Guam, American Samoa, the 
Virgin Islands, and the Commonwealth of the Northern Mariana Islands are 
also filed with SSA. SSA processes all wage reporting forms for updating 
to SSA's earnings records and IRS tax records, identifies employer 
reporting errors and untimely filed forms for IRS penalty assessment 
action, and takes action to correct any reporting errors identified, 
except as provided in paragraph (c) of this section. SSA also processes 
Forms W-3c, ``Transmittal of Corrected Income Tax Statements,'' and W-
2c, ``Statement of Corrected Income and Tax Amounts'' (and their 
magnetic media equivalents) that employers are required to file with SSA 
when certain previous reporting errors are discovered.
    (b) Magnetic media reporting requirements. Under IRS regulations at 
26 CFR 301.6011-2, employers who file 250 or more W-2 wage reports per 
year must file them on magnetic media in accordance with requirements 
provided in SSA publications, unless IRS grants the employer a waiver. 
Basic SSA requirements are set out in SSA's Technical Instruction 
Bulletin No. 4, ``Magnetic Media Reporting.'' Special filing 
requirements for U.S. territorial employers are set out in SSA Technical 
Instruction Bulletins No. 5 (Puerto Rico), No. 6 (Virgin Islands), and 
No. 7 (Guam and American Samoa). At the end of each year, SSA mails 
these technical instructions to employers (or third parties who file 
wage reports on their behalf) for their use in filing wage reports for 
that year.
    (c) Processing late and incorrect magnetic media wage transmittals. 
If an employer's transmittal of magnetic media wage reports is received 
by SSA after the filing due date, SSA will notify IRS of the late filing 
so that IRS can decide whether to assess penalties for late filing, 
pursuant to section 6721 of the Internal Revenue Code. If reports do not 
meet SSA processing requirements (unprocessable reports) or are out of 
balance on critical money amounts, SSA will return them to the employer

[[Page 1226]]

to correct and resubmit. In addition, beginning with wage reports filed 
for tax year 1993, if 90 percent or more of an employer's magnetic media 
wage reports have no social security numbers or incorrect employee names 
or social security numbers so that SSA is unable to credit their wages 
to its records, SSA will not attempt to correct the errors, but will 
instead return the reports to the employer to correct and resubmit (see 
also Sec. 422.120(b)). An employer must correct and resubmit incorrect 
and unprocessable magnetic media wage reports to SSA within 45 days from 
the date of the letter sent with the returned report. Upon request, SSA 
may grant the employer a 15-day extension of the 45-day period. If an 
employer does not submit corrected reports to SSA within the 45-day (or, 
if extended by SSA, 60-day) period, SSA will notify IRS of the late 
filing so that IRS can decide whether to assess a penalty. If an 
employer timely resubmits the reports as corrected magnetic media 
reports, but they are unprocessable or out of balance on W-2 money 
totals, SSA will return the resubmitted reports for the second and last 
time for the employer to correct and return to SSA. SSA will enclose 
with the resubmitted and returned forms a letter informing the employer 
that he or she must correct and return the reports to SSA within 45 days 
or be subject to IRS penalties for late filing.
    (d) Paper form reporting requirements. The format and wage reporting 
instructions for paper forms are determined jointly by IRS and SSA. 
Basic instructions on how to complete the forms and file them with SSA 
are provided in IRS forms materials available to the public. In 
addition, SSA provides standards for employers (or third parties who 
file wage reports for them) to follow in producing completed reporting 
forms from computer software; these standards appear in SSA publication, 
``Software Specifications and Edits for Annual Wage Reporting.'' 
Requests for this publication should be sent to: Social Security 
Administration, Office of Financial Policy and Operations, Attention: 
AWR Software Standards Project, P.O. Box 17195, Baltimore, MD 21235.
    (e) Processing late and incorrect paper form reports. If SSA 
receives paper form wage reports after the due date, SSA will notify IRS 
of the late filing so that IRS can decide whether to assess penalties 
for late filing, pursuant to section 6721 of the Internal Revenue Code. 
SSA will ask an employer to provide replacement forms for illegible, 
incomplete, or clearly erroneous paper reporting forms, or will ask the 
employer to provide information necessary to process the reports without 
having to resubmit corrected forms. (For wage reports where earnings are 
reported without a social security number or with an incorrect name or 
social security number, see Sec. 422.120.) If an employer fails to 
provide legible, complete, and correct W-2 reports within 45 days, SSA 
may identify the employers to IRS for assessment of employer reporting 
penalties.
    (f) Reconciliation of wage reporting errors. After SSA processes 
wage reports, it matches them with the information provided by employers 
to the IRS on Forms 941, ``Employer's Quarterly Federal Tax Return,'' 
for that tax year. Based upon this match, if the total social security 
or medicare wages reported to SSA for employees is less than the totals 
reported to IRS, SSA will write to the employer and request corrected 
reports or an explanation for the discrepancy. If the total social 
security or medicare wages reported to SSA for employees is more than 
the totals reported to IRS, IRS will resolve the difference with the 
employer. If the employer fails to provide SSA with corrected reports or 
information that shows the wage reports filed with SSA are correct, SSA 
will ask IRS to investigate the employer's wage and tax reports to 
resolve the discrepancy and to assess any appropriate reporting 
penalties.

[60 FR 42433, Aug. 16, 1995]



Sec. 422.120  Earnings reported without a social security number or
with an incorrect employee name or social security number.

    (a) Correcting an earnings report. If an employer reports an 
employee's wages to SSA without the employee's social security number or 
with a different

[[Page 1227]]

employee name or social security number than shown in SSA's records for 
him or her, SSA will write to the employee at the address shown on the 
wage report and request the missing or corrected information. If the 
wage report does not show the employee's address or shows an incomplete 
address, SSA will write to the employer and request the missing or 
corrected employee information. SSA notifies IRS of all wage reports 
filed without employee social security numbers so that IRS can decide 
whether to assess penalties for erroneous filing, pursuant to section 
6721 of the Internal Revenue Code. If an individual reports self-
employment income to IRS without a social security number or with a 
different name or social security number than shown in SSA's records, 
SSA will write to the individual and request the missing or corrected 
information. If the employer, employee, or self-employed individual does 
not provide the missing or corrected report information in response to 
SSA's request, the wages or self-employment income cannot be identified 
and credited to the proper individual's earnings records. In such cases, 
the information is maintained in a ``Suspense File'' of uncredited 
earnings. Subsequently, if identifying information is provided to SSA 
for an individual whose report is recorded in the Suspense File, the 
wages or self-employment income then may be credited to his or her 
earnings record.
    (b) Returning incorrect reports. SSA may return to the filer, 
unprocessed, an employer's annual wage report submittal if 90 percent or 
more of the wage reports in that submittal are unidentified or 
incorrectly identified. In such instances, SSA will advise the filer to 
return corrected wage reports within 45 days to avoid any possible IRS 
penalty assessment for failing to file correct reports timely with SSA. 
(See also Sec. 422.114(c).) Upon request, SSA may grant the employer a 
15-day extension of the 45-day period.

[60 FR 42434, Aug. 16, 1995]



Sec. 422.122  Information on deferred vested pension benefits.

    (a) Claimants for benefits. Each month, SSA checks the name and 
social security number of each new claimant for social security benefits 
or for hospital insurance coverage to see whether the claimant is listed 
in SSA's electronic pension benefit record. This record contains 
information received from IRS on individuals for whom private pension 
plan administrators have reported to IRS, as required by section 6057 of 
the Internal Revenue Code, as possibly having a right to future 
retirement benefits under the plan. SSA sends a notice to each new 
claimant for whom it has pension benefit information, as required by 
section 1131 of the Act. If the claimant filed for the lump-sum death 
payment on the social security account of a relative, SSA sends the 
claimant the pension information on the deceased individual. In either 
case, SSA sends the notice after it has made a decision on the claim for 
benefits. The notice shows the type, payment frequency, and amount of 
pension benefit, as well as the name and address of the plan 
administrator as reported to the IRS. This information can then be used 
by the claimant to claim any pension benefits still due from the pension 
plan.
    (b) Requesting deferred vested pension benefit information from SSA 
files. Section 1131 of the Act also requires SSA to provide available 
pension benefit information on request. SSA will provide this pension 
benefit information only to the individual who has the pension coverage 
(or a legal guardian or parent, in the case of a minor, on the 
individual's behalf). However, if the individual is deceased, the 
information may be provided to someone who would be eligible for any 
underpayment of benefits that might be due the individual under section 
204(d) of the Act. All requests for such information must be in writing 
and should contain the following information: the individual's name, 
social security number, date of birth, and any information the requestor 
may have concerning the name of the pension plan involved and the month 
and year coverage under the plan ended; the name and address of the 
person to whom the information is to be sent; and the requester's 
signature under the following statement: ``I am the individual to whom 
the information applies (or ``I am related to the individual as

[[Page 1228]]

his or her ______''). I know that if I make any representation which I 
know is false to obtain information from Social Security records, I 
could be punished by a fine or imprisonment or both.'' Such requests 
should be sent to: Social Security Administration, Office of Central 
Records Operations, P.O. Box 17055, Baltimore, Maryland 21235.

[60 FR 42434, Aug. 16, 1995]



Sec. 422.125  Statements of earnings; resolving earnings discrepancies.

    (a) Obtaining a statement of earnings and estimated benefits. An 
individual may obtain a statement of the earnings on his earnings record 
and an estimate of social security benefits potentially payable on his 
record either by writing, calling, or visiting any social security 
office, or by waiting until we send him one under the procedure 
described in Sec. 404.812 of this chapter. An individual may request 
this statement by completing the proper form or by otherwise providing 
the information the Social Security Administration requires, as 
explained in Sec. 404.810(b) of this chapter.
    (b) Statement of earnings and estimated benefits. Upon receipt of 
such a request or as required by section 1143(c) of the Social Security 
Act, the Social Security Administration will provide the individual, 
without charge, a statement of earnings and benefit estimates or an 
earnings statement. See Secs. 404.811 through 404.812 of this chapter 
concerning the information contained in these statements.
    (c) Detailed earnings statements. A more detailed earnings statement 
will be furnished upon request, generally without charge, where the 
request is program related under Sec. 402.170 of this part. If the 
request for a more detailed statement is not program related under 
Sec. 402.170 of this part, a charge will be imposed according to the 
guidelines set out in Sec. 402.175 of this part.
    (d) Request for revision of earnings records. If an individual 
disagrees with a statement of earnings credited to his social security 
account, he may request a revision by writing to the Bureau of Data 
Processing and Accounts, Social Security Administration, Baltimore, MD 
21235, or by calling at or writing to any social security district 
office or branch office or, if the individual is in the Philippines, by 
calling at or writing to the Veterans' Administration Regional Office, 
Manila, Philippines. Upon receipt of a request for revision, the Social 
Security Administration will initiate an investigation of the 
individual's record of earnings. Form OAR-7008, ``Statement of 
Employment for Wages and Self-Employment,'' is used by the Social 
Security Administration for obtaining information from the individual 
requesting a revision to aid the Administration in the investigation. 
These forms are available at any of the sources listed in this 
paragraph. If an individual receives a Form OAR-7008 from the Bureau of 
Data Processing and Accounts, the completed form should be returned to 
that office. In the course of the investigation the district office or 
branch office, where appropriate, contacts the employer and the employee 
or the self-employed individual, whichever is applicable, for the 
purpose of obtaining the information and evidence necessary to reconcile 
any discrepancy between the allegations of the individual and the 
records of the Administration. See subpart I of part 404 of this chapter 
for requirements for filing requests for revision, and for limitation on 
the revision of records of earnings.
    (e) Notice to individual of determination. After the investigation 
has been completed and a determination affecting the individual's 
earnings record has been made, the Social Security Administration will 
notify the individual in writing of the status of his earnings record 
and inform him at the same time of the determination made in his case 
and of his right to a reconsideration if he is dissatisfied with such 
determination (see Sec. 422.140).
    (f) Notice to individual of adverse adjustment of his account. 
Written notice is given to an individual or his survivor in any case 
where the Social Security Administration adversely adjusts the 
individual's self-employment income. Where, subsequent to the issuance 
of a statement of earnings to an individual, an adverse adjustment is 
made of an amount of wages included in the statement, written notice of 
the adverse adjustment is given to the individual or

[[Page 1229]]

his survivor. Written notice of the adverse adjustment is also given to 
the survivor if the statement of earnings had been given to such 
survivor. The individual or his survivor is requested to notify the 
Social Security Administration promptly if he disagrees, and he is 
informed that the adjustment will become final unless he notifies the 
Administration of his disagreement (if any) within 6 months from the 
date of the letter, or within 3 years, 3 months, and 15 days after the 
year to which the adjustment relates, whichever is later.

[32 FR 13653, Sept. 29, 1967, as amended at 35 FR 7891, May 22, 1970; 35 
FR 8426, May 29, 1970; 39 FR 26721, July 23, 1974; 41 FR 50998, Nov. 19, 
1976; 50 FR 28568, July 15, 1985; 57 FR 54919, Nov. 23, 1992; 61 FR 
18078, Apr. 24, 1996; 65 FR 16816, Mar. 30, 2000]



Sec. 422.130  Claim procedure.

    (a) General. The Social Security Administration provides facilities 
for the public to file claims and to obtain assistance in completing 
them. An appropriate application form and related forms for use in 
filing a claim for monthly benefits, the establishment of a period of 
disability, a lump-sum death payment, or entitlement to hospital 
insurance benefits or supplementary medical insurance benefits can be 
obtained from any district office, branch office, contact station, or 
resident station of the Social Security Administration, from the 
Division of Foreign Claims, Post Office Box 1756, Baltimore, MD 21203, 
or from the Veteran's Administration Regional Office, Manila, 
Philippines. See Sec. 404.614 of this chapter for offices at which 
applications may be filed. See 42 CFR part 405, subpart A, for 
conditions of entitlement to hospital insurance benefits and 42 CFR part 
405, subpart B, for information relating to enrollment under the 
supplementary medical insurance benefits program.
    (b) Submission of evidence. An individual who files an application 
for monthly benefits, the establishment of a period of disability, a 
lump-sum death payment, or entitlement to hospital insurance benefits or 
supplementary medical insurance benefits, either on his own behalf or on 
behalf of another, must establish by satisfactory evidence the material 
allegations in his application, except as to earnings shown in the 
Social Security Administration's records (see subpart H of part 404 of 
this chapter for evidence requirements in nondisability cases and 
subpart P of part 404 of this chapter for evidence requirements in 
disability cases). Instructions, report forms, and forms for the various 
proofs necessary are available to the public in district offices, branch 
offices, contact stations, and resident stations of the Social Security 
Administration, and the Veteran's Administration Regional Office, 
Manila, Philippines. These offices assist individuals in preparing their 
applications and in obtaining the proofs required in support of their 
applications.
    (c) Determinations and notice to individuals. In the case of an 
application for benefits, the establishment of a period of disability, a 
lump-sum death payment, a recomputation of a primary insurance amount, 
or entitlement to hospital insurance benefits or supplementary medical 
insurance benefits, after obtaining the necessary evidence, we will 
determine, based on the preponderance of the evidence (see Secs. 404.901 
and 416.1401 of this chapter) as to the entitlement of the individual 
claiming or for whom is claimed such benefits, and will notify the 
applicant of the determination and of his right to appeal. Section 
404.1503 of this chapter has a discussion of the respective roles of 
State agencies and the Administration in the making of disability 
determinations and information regarding initial determinations as to 
entitlement or termination of entitlement in disability claims. See 
section 1869(a) of the Social Security Act for determinations under the 
health insurance for the aged program and sections 1816 and 1842 of the 
Act for the role of intermediaries, carriers, and State agencies in 
performing certain functions under such program, e.g., payment of claims 
pursuant to an agreement with the Social Security Administration.

[32 FR 13653, Sept. 29, 1967, as amended at 44 FR 34942, June 18, 1979; 
65 FR 16816, Mar. 30, 2000; 71 FR 16461, Mar. 31, 2006; 73 FR 76945, 
Dec. 18, 2008; 76 FR 24812, May 3, 2011]

[[Page 1230]]



Sec. 422.135  Reports by beneficiaries.

    (a) A recipient of monthly benefits and a person for whom a period 
of disability has been established are obligated to report to the Social 
Security Administration the occurrence of certain events which may 
suspend or terminate benefits or which may cause a cessation of a period 
of disability. (See Secs. 404.415 et seq. and 404.1571 of this chapter.)
    (b) A person who files an application for benefits receives oral and 
written instructions about events which may cause a suspension or 
termination, and also appropriate forms and instruction cards for 
reporting such events. Pursuant to section 203(h)(1)(A) of the Act, 
under certain conditions a beneficiary must, within 3 months and 15 days 
after the close of a taxable year, submit to the Social Security 
Administration and annual report of his earnings and of any substantial 
services in self-employment performed during such taxable year. The 
purpose of the annual report is to furnish the Social Security 
Administration with information for making final adjustments in the 
payment of benefits for that year. An individual may also be requested 
to submit other reports to the Social Security Administration from time 
to time.

[32 FR 13653, Sept. 29, 1967, as amended at 65 FR 16816, Mar. 30, 2000]



Sec. 422.140  Reconsideration of initial determination.

    If you are dissatisfied with an initial determination with respect 
to entitlement to monthly benefits, a lump-sum death payment, a period 
of disability, a revision of an earnings record, with respect to any 
other right under title II of the Social Security Act, or with respect 
to entitlement to hospital insurance benefits or supplementary medical 
insurance benefits, you may request that we reconsider the initial 
determination. The information in Sec. 404.1503 of this chapter as to 
the respective roles of State agencies and the Social Security 
Administration in making disability determinations is also generally 
applicable to the reconsideration of initial determinations involving 
disability. However, in cases in which a disability hearing as described 
in Secs. 404.914 through 404.918 and Secs. 416.1414 through 416.1418 of 
this chapter is available, the reconsidered determination may be issued 
by a disability hearing officer or the Associate Commissioner for 
Disability Programs or his or her delegate. After the initial 
determination has been reconsidered, we will mail you written notice and 
inform you of your right to a hearing before an administrative law judge 
(see Sec. 422.201).

[76 FR 24812, May 3, 2011]



Subpart C_Procedures of the Office of Disability Adjudication and Review

    Authority: Secs. 205, 221, and 702(a)(5) of the Social Security Act 
(42 U.S.C. 405, 421, and 902(a)(5)); 30 U.S.C. 923(b).



Sec. 422.201  Material included in this subpart.

    This subpart describes in general the procedures relating to 
hearings before an administrative law judge of the Office of Disability 
Adjudication and Review, review by the Appeals Council of the hearing 
decision or dismissal, and court review in cases decided under the 
procedures in parts 404, 405, 408, 410, and 416 of this chapter. It also 
describes the procedures for requesting such hearing or Appeals Council 
review, and for instituting a civil action for court review for cases 
decided under these parts. Procedures related to hearings before an 
administrative law judge, review by the Appeals Council, or court review 
in claims adjudicated under the procedures in part 405 of this chapter 
are explained in subparts D, E, and F of part 405 of this chapter. For 
detailed provisions relating to hearings before an administrative law 
judge, review by the Appeals Council, and court review, see the 
following references as appropriate to the matter involved:
    (a) Title II of the Act, Secs. 404.929 through 404.983 of this 
chapter;
    (b) Title VIII of the Act, Secs. 408.1040 through 408.1060 of this 
chapter;
    (c) Title XVI of the Act, Secs. 416.1429 through 416.1483 of this 
chapter;

[[Page 1231]]

    (d) Part B of title IV of the Federal Mine Safety and Health Act of 
1977 as amended, Secs. 410.630 through 410.670.

[41 FR 53791, Dec. 9, 1976, as amended at 44 FR 34942, June 18, 1979; 54 
FR 4268, Jan. 30, 1989; 71 FR 16462, Mar. 31, 2006; 76 FR 24812, May 3, 
2011]



Sec. 422.203  Hearings.

    (a) Right to request a hearing. (1) After a reconsidered or a 
revised determination (i) of a claim for benefits or any other right 
under title II of the Social Security Act; or (ii) of eligibility or 
amount of benefits or any other matter under title XVI of the Act, 
except where an initial or reconsidered determination involving an 
adverse action is revised, after such revised determination has been 
reconsidered; or (iii) as to entitlement under part A or part B of title 
XVIII of the Act, or as to the amount of benefits under part A of such 
title XVIII (where the amount in controversy is $100 or more); or of 
health services to be provided by a health maintenance organization 
without additional costs (where the amount in controversy is $100 or 
more); or as to the amount of benefits under part B of title XVIII 
(where the amount in controversy is $500 or more); or as to a 
determination by a peer review organization (PRO) under title XI (where 
the amount in controversy is $200 or more); or as to certain 
determinations made under section 1154, 1842(1), 1866(f)(2), or 1879 of 
the Act; any party to such a determination may, pursuant to the 
applicable section of the Act, file a written request for a hearing on 
the determination. After a reconsidered determination of a claim for 
benefits under part B of title IV (Black Lung benefits) of the Federal 
Mine Safety and Health Act of 1977 (30 U.S.C. 921 through 925), a party 
to the determination may file a written request for hearing on the 
determination.
    (2) After (i) a reconsidered or revised determination that an 
institution, facility, agency, or clinic does not qualify as a provider 
of services, or (ii) a determination terminating an agreement with a 
provider of services, such institution, facility, agency, or clinic may, 
pursuant to section 1866 of the Act, file a written request for a 
hearing on the determination.
    (3) After (i) a reconsidered or revised determination that an 
independent laboratory, supplier of portable X-ray services, or end-
stage renal disease treatment facility or other person does not meet the 
conditions for coverage of its services or (ii) a determination that it 
no longer meets such conditions has been made, such laboratory, 
supplier, treatment facility may, under 42 CFR 498.40 of this chapter, 
file a written request for a hearing on the determination. (For hearing 
rights of independent laboratories, suppliers of portable X-ray 
services, and end-stage renal disease treatment facilities and other 
person see 42 CFR 498.5.)
    (b) Request for hearing. (1) A request for a hearing under paragraph 
(a) of this section may be made on Form HA-501, ``Request for Hearing,'' 
or Form HA-501.1, ``Request for Hearing, part A Hospital Insurance 
Benefits,'' or by any other writing requesting a hearing. The request 
shall be filed at an office of the Social Security Administration, 
usually a district office or a branch office, or at the Veterans' 
Administration Regional Office in the Philippines (except in title XVI 
cases), or at a hearing office of the Office of Hearings and Appeals, or 
with the Appeals Council. A qualified railroad retirement beneficiary 
may, if he prefers, file a request for a hearing under part A of title 
XVIII with the Railroad Retirement Board. Form HA-501 may be obtained 
from any social security district office or branch office, from the 
Office of Hearings and Appeals, Social Security Administration, P.O. Box 
3200, Arlington, VA 22203, or from any other office where a request for 
a hearing may be filed.
    (2) Unless for good cause shown an extension of time has been 
granted, a request for hearing must be filed within 60 days after the 
receipt of the notice of the reconsidered or revised determination, or 
after an initial determination described in 42 CFR 498.3 (b) and (c) 
(see Secs. 404.933, 410.631, and 416.1433 of this chapter and 42 CFR 
405.722, 498.40, and 417.260.)
    (c) Hearing decision or other action. Generally, the administrative 
law judge will either decide the case after hearing (unless hearing is 
waived) or, if appropriate, dismiss the request for

[[Page 1232]]

hearing. With respect to a hearing on a determination under paragraph 
(a)(1) of this section, the administrative law judge may certify the 
case with a recommended decision to the Appeals Council for decision. If 
the determination on which the hearing request is based relates to the 
amount of benefits under part A or B of title XVIII of the Act, to 
health services to be provided by a health maintenance organization 
without additional costs, or to PRO determinations, the administrative 
law judge shall dismiss the request for hearing if he or she finds that 
the amount in controversy is less than $100 for appeals arising under 
part A or concerning health maintenance organization benefits; less than 
$200 for appeals arising from PRO determinations; and less than $500 for 
appeals arising under part B. The administrative law judge, or an 
attorney advisor under Secs. 404.942 or 416.1442 of this chapter, must 
base the hearing decision on the preponderance of the evidence offered 
at the hearing or otherwise included in the record.

[41 FR 53791, Dec. 9, 1976, as amended at 44 FR 34942, June 18, 1979; 51 
FR 308, Jan. 3, 1986; 54 FR 4268, Jan. 30, 1989; 73 FR 76945, Dec. 18, 
2008]



Sec. 422.205  Review by Appeals Council.

    (a) Any party to a hearing decision or dismissal may request a 
review of such action by the Appeals Council. The Health Care Financing 
Administration or, as appropriate, the Office of the Inspector General 
is a party to a hearing on a determination under Sec. 422.203 (a)(2) and 
(a)(3) and to administrative appeals involving matters under section 
1128(b)(6) of the Act (see 42 CFR 498.42). This request may be made on 
Form HA-520, ``Request for Review of Hearing Decision/Order,'' or by any 
other writing specifically requesting review. Form HA-520 may be 
obtained from any social security district office or branch office, from 
the Office of Hearings and Appeals Social Security Administration, P.O. 
Box 3200, Arlington, VA 22203, or at any other office where a request 
for a hearing may be filed. (For time and place of filing, see 
Secs. 404.968, 410.661, and 416.1468 of this chapter, and 42 CFR 
405.724, 498.82 and 417.261.)
    (b) Whenever the Appeals Council reviews a hearing decision under 
Secs. 404.967 or 404.969, 410.662, 416.1467, or 416.1469 of this 
chapter, or 42 CFR 405.724 or 417.261 or 473.46 and the claimant does 
not appear personally or through representation before the Council to 
present oral argument, such review will be conducted by a panel of not 
less than two members of the Council designated in the manner prescribed 
by the Chairman or Deputy Chairman of the Council. In the event of 
disagreement between a panel composed of only two members, the Chairman 
or Deputy Chairman, or his delegate, who must be a member of the 
Council, shall participate as a third member of the panel. When the 
claimant appears in person or through representation before the Council 
in the location designated by the Council, the review will be conducted 
by a panel of not less than three members of the Council designated in 
the manner prescribed by the Chairman or Deputy Chairman. Concurrence of 
a majority of a panel shall constitute the decision of the Appeals 
Council unless the case is considered as provided under paragraph (e) of 
this section.
    (c) The denial of a request for review of a hearing decision 
concerning a determination under Sec. 422.203(a)(1) shall be by such 
appeals officer or appeals officers or by such member or members of the 
Appeals Council as may be designated in the manner prescribed by the 
Chair or Deputy Chair. The denial of a request for review of a hearing 
dismissal, the dismissal of a request for review, the denial of a 
request for review of a hearing decision whenever such hearing decision 
after such denial would not be subject to judicial review as explained 
in Sec. 422.210(a), or the refusal of a request to reopen a hearing or 
Appeals Council decision concerning a determination under 
Sec. 422.203(a)(1) shall be by such member or members of the Appeals 
Council as may be designated in the manner prescribed by the Chair or 
Deputy Chair.
    (d) A review or a denial of review of a hearing decision or a 
dismissal of a request for review with respect to requests by parties 
under 42 CFR 498.82 or 1001.128 in accordance with Sec. 498.83 will be 
conducted by a panel of at least two

[[Page 1233]]

members of the Appeals Council designated by the Chairman or Deputy 
Chairman and one person from the U.S. Public Health Service designated 
by the Surgeon General, Public Health Service, Department of Health and 
Human Services, or his delegate. This person shall serve on an ad hoc 
basis and shall be considered for this purpose as a member of the 
Appeals Council. Concurrence of a majority of the panel shall constitute 
the decision of the Appeals Council unless the case is considered as 
provided under paragraph (e) of this section.
    (e) On call of the Chairman, the Appeals Council may meet en banc or 
a representative body of Appeals Council members may be convened to 
consider any case arising under paragraph (b), (c), or (d) of this 
section. Such representative body shall be comprised of a panel of not 
less than five members designated by the Chairman as deemed appropriate 
for the matter to be considered, including a person from the U.S. Public 
Health Service in a matter under paragraph (d) of this section. The 
Chairman or Deputy Chairman shall preside, or in his absence, the 
Chairman shall designate a member of the Appeals Council to preside. A 
majority vote of the designated panel, or of the members present and 
voting shall constitute the decision of the Appeals Council.
    (f) The Chairman may designate an administrative law judge to serve 
as a member of the Appeals Council for temporary assignments. An 
administrative law judge shall not be designated to serve as a member on 
any panel where such panel is conducting review on a case in which such 
individual has been previously involved.

[41 FR 53792, Dec. 9, 1976, as amended at 44 FR 34942, June 18, 1979; 54 
FR 4268, Jan. 30, 1989; 60 FR 7120, Feb. 7, 1995]



Sec. 422.210  Judicial review.

    (a) General. A claimant may obtain judicial review of a decision by 
an administrative law judge if the Appeals Council has denied the 
claimant's request for review, or of a decision by the Appeals Council 
when that is the final decision of the Commissioner. A claimant may also 
obtain judicial review of a reconsidered determination, or of a decision 
of an administrative law judge, where, under the expedited appeals 
procedure, further administrative review is waived by agreement under 
Secs. 404.926, 410.629d, or 416.1426 of this chapter or 42 CFR 405.718a-
e as appropriate. For judicial review as to the amount of benefits under 
part A or part B of title XVIII of the Social Security Act, or of health 
services to be provided by a health maintenance organization without 
additional cost, the amount in controversy must be $1,000 or more as 
provided under section 1869(b) and section 1876(c)(5)(B) of the Act. For 
judicial review of a determination by a PRO, the amount in controversy 
must be $2,000 or more. An institution or agency may obtain judical 
review of a decision by the Appeals Council that it is not a provider of 
services, or of a decision by the Appeals Council terminating an 
agreement entered into by the institution or agency with the 
Commissioner (see section 1866(b)(2) of the Act). The Social Security 
Act does not provide for a right to judicial review of a final decision 
of the Commissioner regarding the status of an entity which is not a 
``provider of services'', such as an independent laboratory. Providers 
of services or other persons may seek judicial review of a final 
administrative determination made pursuant to section 1128(b)(6) of the 
Act. There are no amount-in-controversy limitations on these rights of 
appeal.
    (b) Court in which to institute civil action. Any civil action 
described in paragraph (a) of this section must be instituted in the 
district court of the United States for the judicial district in which 
the claimant resides or where such individual or institution or agency 
has his principal place of business. If the individual does not reside 
within any such judicial district, or if such individual or institution 
or agency does not have his principal place of business within any such 
judicial district, the civil action must be instituted in the District 
Court of the United States for the District of Columbia.
    (c) Time for instituting civil action. Any civil action described in 
paragraph (a) of this section must be instituted within 60 days after 
the Appeals Council's notice of denial of request for review of

[[Page 1234]]

the administrative law judge's decision or notice of the decision by the 
Appeals Council is received by the individual, institution, or agency, 
except that this time may be extended by the Appeals Council upon a 
showing of good cause. For purposes of this section, the date of receipt 
of notice of denial of request for review of the presiding officer's 
decision or notice of the decision by the Appeals Council shall be 
presumed to be 5 days after the date of such notice, unless there is a 
reasonable showing to the contrary. Where pursuant to the expedited 
appeals procedures an agreement has been entered into under 42 CFR 
405.718c, a civil action under section 205(g) of the Act must be 
commenced within 60 days from the date of the signing of such agreement 
by, or on behalf of, the Commissioner, except where the time described 
in the first sentence of this paragraph (c) has been extended by the 
Commissioner upon a showing of good cause. Where pursuant to the 
expedited appeals procedures an agreement has been entered into under 
Sec. 404.926, Sec. 410.629d, or Sec. 416.1426 of this chapter, a civil 
action under section 205(g) of the Act must be commenced within 60 days 
after the date the individual receives notice (a signed copy of the 
agreement will be mailed to the individual and will constitute notice) 
of the signing of such agreement by, or on behalf of, the Commissioner, 
except where the time described in this paragraph (c) has been extended 
by the Commissioner upon a showing of good cause.
    (d) Proper defendant. Where any civil action described in paragraph 
(a) of this section is instituted, the person holding the Office of the 
Commissioner shall, in his official capacity, be the proper defendant. 
Any such civil action properly instituted shall survive notwithstanding 
any change of the person holding the Office of the Commissioner or any 
vacancy in such office. If the complaint is erroneously filed against 
the United States or against any agency, officer, or employee of the 
United States other than the Commissioner, the plaintiff will be 
notified that he has named an incorrect defendant and will be granted 60 
days from the date of receipt of such notice in which to commence the 
action against the correct defendant, the Commissioner.

[41 FR 53792, Dec. 9, 1976, as amended at 44 FR 34942, June 18, 1979; 49 
FR 46370, Nov. 26, 1984; 49 FR 48036, Dec. 10, 1984; 54 FR 4268, Jan. 
30, 1989; 62 FR 38456, July 18, 1997]



                       Subpart D_Claims Collection

    Authority: Secs. 204(f), 205(a), 702(a)(5), and 1631(b) of the 
Social Security Act (42 U.S.C. 404(f), 405(a), 902(a)(5), and 1383(b)); 
5 U.S.C. 5514; 31 U.S.C. 3711(e); 31 U.S.C. 3716.

    Source: 62 FR 64278, Dec. 5, 1997, unless otherwise noted.



Sec. 422.301  Scope of this subpart.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
this subpart describes the procedures relating to collection of:
    (1) Overdue administrative debts, and
    (2) Overdue program overpayments described in Secs. 404.527 and 
416.590 of this chapter.
    (b) This subpart does not apply to administrative debts owed by 
employees of the Social Security Administration, including, but not 
limited to, overpayment of pay and allowances.
    (c) The following exceptions apply only to Federal salary offset as 
described in Sec. 422.310(a)(1).
    (1) We will not use this subpart to collect a debt while the 
debtor's disability benefits are stopped during the reentitlement 
period, under Sec. 404.1592a(a)(2) of this chapter, because the debtor 
is engaging in substantial gainful activity.
    (2) We will not use this subpart to collect a debt while the 
debtor's Medicare entitlement is continued because the debtor is deemed 
to be entitled to disability benefits under section 226(b) of the Social 
Security Act (42 U.S.C. 426(b)).
    (3) We will not use this subpart to collect a debt if the debtor has 
decided to participate in the Ticket to Work and Self-Sufficiency 
Program and the debtor's ticket is in use as described in Secs. 411.170 
through 411.225 of this chapter.

[71 FR 38070, July 5, 2006]

[[Page 1235]]



Sec. 422.303  Interest, late payment penalties, and administrative 
costs of collection.

    We may charge the debtor with interest, late payment penalties, and 
our costs of collection on delinquent debts covered by this subpart when 
authorized by our regulations issued in accordance with the Federal 
Claims Collection Standards (31 CFR 901.9).

[71 FR 38070, July 5, 2006]



Sec. 422.305  Report of overdue program overpayment debts to consumer 
reporting agencies.

    (a) Debts we will report. We will report to consumer reporting 
agencies all overdue program overpayment debts over $25.
    (b) Notice to debtor. Before we report any such debt to a consumer 
reporting agency, we will send the debtor written notice of the 
following:
    (1) We have determined that payment of the debt is overdue;
    (2) We will refer the debt to a consumer reporting agency at the 
expiration of not less than 60 calendar days after the date of the 
notice unless, within that 60-day period, the debtor pays the full 
amount of the debt or takes either of the actions described in 
paragraphs (b)(6) or (b)(7) of this section;
    (3) The specific information we will provide to the consumer 
reporting agency, including information that identifies the debtor 
(e.g., name, address, and social security number) and the amount, 
status, and history of the debt;
    (4) The debtor has the right to a complete explanation of the debt;
    (5) The debtor may dispute the accuracy of the information to be 
provided to the consumer reporting agency;
    (6) The debtor may request a review of the debt by giving us 
evidence showing that he or she does not owe all or part of the amount 
of the debt or that we do not have the right to collect it; and
    (7) The debtor may request an installment payment plan.
    (c) Disputing the information that we would send to consumer 
reporting agencies. If a debtor believes that the information we propose 
to send to consumer reporting agencies is incorrect, the debtor may ask 
us to correct such information. If, within 60 calendar days from the 
date of our notice described in paragraph (b) of this section, the 
debtor notifies us that any information to be sent to consumer reporting 
agencies is incorrect, we will not send the information to consumer 
reporting agencies until we determine the correct information.

[62 FR 64278, Dec. 5, 1997, as amended at 66 FR 67081, Dec. 28, 2001]



Sec. 422.306  Report of overdue administrative debts to credit 
reporting agencies.

    (a) Debts we will report. We will report to credit reporting 
agencies all overdue administrative debts over $25. Some examples of 
administrative debts are as follows: debts for civil monetary penalties 
imposed under section 1140(b) of the Act, debts for unpaid fees for 
reimbursable services performed by SSA (e.g., disclosures of 
information), and contractor debts.
    (b) Notice to debtor. Before we report any administrative debt to a 
credit reporting agency, we will send the debtor written notice of the 
following:
    (1) We have determined that payment of the debt is overdue;
    (2) We will refer the debt to a credit reporting agency at the 
expiration of not less than 60 calendar days after the date of the 
notice unless, within that 60-day period, the debtor pays the full 
amount of the debt or takes either of the actions described in 
paragraphs (b)(6) or (b)(7) of this section;
    (3) The specific information we will provide to the credit reporting 
agency, including information that identifies the debtor (e.g., name, 
address, social security number, and employer identification number) and 
the amount, status, and history of the debt;
    (4) The debtor has the right to a complete explanation of the debt;
    (5) The debtor may dispute the accuracy of the information to be 
provided to the credit reporting agency;
    (6) The debtor may request a review of the debt by giving us 
evidence showing that he or she does not owe all or part of the amount 
of the debt or that we do not have the right to collect it; and

[[Page 1236]]

    (7) The debtor may request an installment payment plan.

[62 FR 64278, Dec. 5, 1997, as amended at 71 FR 38070, July 5, 2006]



Sec. 422.310  Collection of overdue debts by administrative offset.

    (a) Referral to the Department of the Treasury for offset. (1) We 
recover overdue debts by offsetting Federal and State payments due the 
debtor through the Treasury Offset Program (TOP). TOP is a Government-
wide delinquent debt matching and payment offset process operated by the 
Department of the Treasury, whereby debts owed to the Federal Government 
are collected by offsetting them against Federal and State payments owed 
the debtor. Federal payments owed the debtor include current 
``disposable pay,'' defined in 5 CFR 550.1103, owed by the Federal 
Government to a debtor who is an employee of the Federal Government. 
Deducting from such disposable pay to collect an overdue debt owed by 
the employee is called ``Federal salary offset'' in this subpart.
    (2) Except as provided in paragraphs (b) and (c) of Sec. 422.301, we 
will use Federal salary offset to collect overdue debts from Federal 
employees, including employees of the Social Security Administration. A 
Federal employee's involuntary payment of all or part of a debt 
collected by Federal salary offset does not amount to a waiver of any 
rights which the employee may have under any statute or contract, unless 
a statute or contract provides for waiver of such rights.
    (b) Debts we refer. We refer for administrative offset all 
qualifying debts that meet or exceed the threshold amounts used by the 
Department of the Treasury for collection from State and Federal 
payments, including Federal salaries.
    (c) Notice to debtor. Before we refer any debt for collection by 
administrative offset, we will send the debtor written notice that 
explains all of the following:
    (1) The nature and amount of the debt.
    (2) We have determined that payment of the debt is overdue.
    (3) We will refer the debt for administrative offset (except as 
provided in paragraph (c)(9) of this section) at the expiration of not 
less than 60 calendar days after the date of the notice unless, within 
that 60-day period:
    (i) The debtor pays the full amount of the debt, or
    (ii) The debtor takes any of the actions described in paragraphs 
(c)(6) or (c)(7) of this section.
    (4) The frequency and amount of any Federal salary offset deduction 
(the payment schedule) expressed as a fixed dollar amount or percentage 
of disposable pay.
    (5) The debtor may inspect or copy our records relating to the debt. 
If the debtor or his or her representative cannot personally inspect the 
records, the debtor may request and receive a copy of such records.
    (6) The debtor may request a review of the debt by giving us 
evidence showing that the debtor does not owe all or part of the amount 
of the debt or that we do not have the right to collect it. The debtor 
may also request review of any payment schedule for Federal salary 
offset stated in the notice. If the debtor is an employee of the Federal 
Government and Federal salary offset is proposed, an official designated 
in accordance with 5 U.S.C. 5514(a)(2) will conduct the review.
    (7) The debtor may request to repay the debt voluntarily through an 
installment payment plan.
    (8) If the debtor knowingly furnishes any false or frivolous 
statements, representations, or evidence, the debtor may be subject to:
    (i) Civil or criminal penalties under applicable statutes;
    (ii) Appropriate disciplinary procedures under applicable statutes 
or regulations, when the debtor is a Federal employee.
    (9) We will refer the debt for Federal salary offset at the 
expiration of not less than 30 calendar days after the date of the 
notice unless, within that 30 day period the debtor takes any actions 
described in paragraphs (c)(3)(i), (c)(6) or (c)(7) of this section.
    (d) Federal salary offset: amount, frequency and duration of 
deductions. (1) We may collect the overdue debt from an employee of the 
Federal Government through the deduction of an

[[Page 1237]]

amount not to exceed 15% of the debtor's current disposable pay each 
payday.
    (2) Federal salary offset will begin no sooner than the first payday 
following 30 calendar days after the date of the notice to the debtor 
described in paragraph (c) of this section.
    (3) Once begun, Federal salary offset will continue until we recover 
the full amount of the debt, the debt is otherwise resolved, or the 
debtor's Federal employment ceases, whichever occurs first.
    (4) After Federal salary offset begins, the debtor may request a 
reduction in the amount deducted from disposable pay each payday. When 
we determine that the amount deducted causes financial harm under the 
rules in Sec. 422.415(b), (c), and (d) of this chapter, we will reduce 
that amount.
    (e) Refunds. We will promptly refund to the debtor any amounts 
collected that the debtor does not owe. Refunds do not bear interest 
unless required or permitted by law or contract.

[71 FR 38070, July 5, 2006, as amended at 76 FR 65109, Oct. 20, 2011]



Sec. 422.315  Review of our records related to the debt.

    (a) Notification by the debtor. The debtor may request to inspect or 
copy our records related to the debt.
    (b) Our response. In response to a request from the debtor described 
in paragraph (a) of this section, we will notify the debtor of the 
location and time at which the debtor may inspect or copy our records 
related to the debt. We may also, at our discretion, mail to the debtor 
copies of the records relating to the debt.



Sec. 422.317  Review of the debt.

    (a) Notification and presentation of evidence by the debtor. A 
debtor who receives a notice described in Sec. 422.305(b), 
Sec. 422.306(b), or Sec. 422.310(c) has a right to have a review of the 
debt and the payment schedule for Federal salary offset stated in the 
notice. To exercise this right, the debtor must notify us and give us 
evidence that he or she does not owe all or part of the debt, or that we 
do not have the right to collect it, or that the payment schedule for 
Federal salary offset stated in the notice would cause financial 
hardship.
    (1) If the debtor notifies us and presents evidence within 60 
calendar days from the date of our notice (except as provided for 
Federal salary offset in paragraph (a)(3) of this section), we will not 
take the action described in our notice unless and until review of all 
of the evidence is complete and we send the debtor the findings that all 
or part of the debt is overdue and legally enforceable.
    (2) If the debtor notifies us and presents evidence after that 60 
calendar-day period expires (except as provided for Federal salary 
offset in paragraph (a)(4) of this section) and paragraph (b) of this 
section does not apply, the review will occur, but we may take the 
actions described in our notice without further delay.
    (3) If the debtor notifies us and presents evidence within 30 
calendar days from the date of our notice, we will not refer the debt 
for Federal salary offset unless and until review of all of the evidence 
is complete and we send the debtor the findings that all or part of the 
debt is overdue and legally enforceable and (if appropriate) the 
findings on the payment schedule for Federal salary offset.
    (4) If the debtor notifies us and presents evidence after that 30 
calendar-day period expires and paragraph (b) of this section does not 
apply, the review will occur, but we may refer the debt for Federal 
salary offset without further delay.
    (b) Good cause for failure to timely request review. (1) If we 
decide that the debtor has good cause for failing to request review 
within the applicable period mentioned in paragraphs (a)(1) and (a)(3) 
of this section, we will treat the request for review as if we received 
it within the applicable period.
    (2) We will determine good cause under the rules in 
Sec. 422.410(b)(1) and (2) of this chapter.
    (c) Review of the evidence. The review will cover our records and 
any evidence and statements presented by the debtor.
    (d) Special rules regarding Federal salary offset. (1) When we use 
Federal salary offset to collect a debt owed by an employee of the 
Federal Government,

[[Page 1238]]

an official designated in accordance with 5 U.S.C. 5514(a)(2) will 
conduct the review described in this section and will issue the 
findings.
    (2) In addition to the requirements in paragraphs (a) and (b) of 
this section, the Federal employee must submit the request for review in 
writing. The request must
    (i) Be signed by the employee,
    (ii) Explain with reasonable specificity the facts and evidence that 
support the employee's position, and
    (iii) Include the names of any witnesses.
    (3) In reviewing the payment schedule described in the notice to the 
Federal employee, the reviewing official must apply the rules in 
Sec. 422.415(b), (c), and (d) of this chapter regarding financial 
hardship.
    (4) The reviewing official will review our records and any 
documents, written statements, or other evidence submitted by the debtor 
and issue written findings.
    (5) The reviewing official will complete the review within 60 
calendar days from the date on which the request for review and the 
debtor's evidence are received. If the reviewing official does not 
complete the review within that 60-day period and the debt was referred 
to the Department of the Treasury for Federal salary offset, we will 
notify the Department of the Treasury to suspend Federal salary offset. 
Offset will not begin or resume before we send the debtor findings that 
all or part of the debt is overdue and legally enforceable or (if 
appropriate) findings on the payment schedule.
    (e) The findings. (1) Following the review described in paragraphs 
(c) or (d) of this section, we will send the written findings to the 
debtor. The findings will state the nature and origin of the debt, the 
analysis, findings and conclusions regarding the amount and validity of 
the debt, and, when appropriate, the repayment schedule for Federal 
salary offset. Issuance of these findings will be the final action on 
the debtor's request for review.
    (2) If the findings state that an individual does not owe the debt, 
or the debt is not overdue, or we do not have the right to collect it, 
we will not send information about the debt to consumer or other credit 
reporting agencies or refer the debt to the Department of the Treasury 
for administrative offset. If we had referred the debt to the Department 
of the Treasury for administrative offset, we will cancel that action. 
If we had informed consumer or credit reporting agencies about the debt, 
we will inform them of the findings.
    (3) If the findings state that the payment schedule for Federal 
salary offset would cause financial hardship, we will notify the debtor 
and the Department of the Treasury of the new payment schedule.

[71 FR 38071, July 5, 2006]



    Subpart E_Collection of Debts by Administrative Wage Garnishment

    Authority: Secs. 205(a), 702(a)(5) and 1631(d)(1) of the Social 
Security Act (42 U.S.C. 405(a), 902(a)(5) and 1383(d)(1)) and 31 U.S.C. 
3720D.

    Source: 68 FR 74184, Dec. 23, 2003, unless otherwise noted.



Sec. 422.401  What is the scope of this subpart?

    This subpart describes the procedures relating to our use of 
administrative wage garnishment under 31 U.S.C. 3720D to recover past 
due debts that you owe.



Sec. 422.402  What special definitions apply to this subpart?

    (a) Administrative wage garnishment is a process whereby we order 
your employer to withhold a certain amount from your disposable pay and 
send the withheld amount to us. The law requires your employer to comply 
with our garnishment order.
    (b) Debt means any amount of money or property that we determine is 
owed to the United States and that arises from a program that we 
administer or an activity that we perform. These debts include program 
overpayments made under title II or title XVI of the Social Security Act 
and any other debt that meets the definition of ``claim'' or ``debt'' at 
31 U.S.C. 3701(b).
    (c) Disposable pay means that part of your total compensation 
(including,

[[Page 1239]]

but not limited to, salary or wages, bonuses, commissions, and vacation 
pay) from your employer after deduction of health insurance premiums and 
amounts withheld as required by law. Amounts withheld as required by law 
include such things as Federal, State and local taxes but do not include 
amounts withheld under court order.
    (d) We, our, or us means the Social Security Administration.
    (e) You means an individual who owes a debt to the United States 
within the scope of this subpart.



Sec. 422.403  When may we use administrative wage garnishment?

    (a) General. Subject to the exceptions described in paragraph (b) of 
this section and the conditions described in paragraphs (c) and (d) of 
this section, we may use administrative wage garnishment to collect any 
debt that is past due. We may use administrative wage garnishment while 
we are taking other action regarding the debt, such as, using tax refund 
offset under Secs. 404.520-404.526 and 416.580-416.586 of this chapter 
and taking action under subpart D of this part.
    (b) Exceptions. (1) We will not use this subpart to collect a debt 
from salary or wages paid by the United States Government.
    (2) If you have been separated involuntarily from employment, we 
will not order your employer to withhold amounts from your disposable 
pay until you have been reemployed continuously for at least 12 months. 
You have the burden of informing us about an involuntary separation from 
employment.
    (3) We will not use this subpart to collect a debt while your 
disability benefits are stopped during the reentitlement period, under 
Sec. 404.1592a(a)(2) of this chapter, because you are engaging in 
substantial gainful activity.
    (4) We will not use this subpart to collect a debt while your 
Medicare entitlement is continued because you are deemed to be entitled 
to disability benefits under section 226(b) of the Social Security Act 
(42 U.S.C. 426(b)).
    (5) We will not use this subpart to collect a debt if you have 
decided to participate in the Ticket to Work and Self-Sufficiency 
Program and your ticket is in use as described in Secs. 411.170 through 
411.225 of this chapter.
    (c) Overpayments under title II of the Social Security Act. This 
subpart applies to overpayments under title II of the Social Security 
Act if all of the following conditions are met:
    (1) You are not receiving title II benefits.
    (2) We have completed our billing system sequence (i.e., we have 
sent you an initial notice of the overpayment, a reminder notice, and a 
past-due notice) or we have suspended or terminated collection activity 
in accordance with applicable rules, such as, the Federal Claims 
Collection Standards in 31 CFR 903.2 or 31 CFR 903.3.
    (3) We have not made an installment payment arrangement with you or, 
if we have made such an arrangement, you have failed to make any payment 
for two consecutive months.
    (4) You have not requested waiver pursuant to Sec. 404.506 or 
Sec. 404.522 of this chapter or, after a review conducted pursuant to 
those sections, we have determined that we will not waive collection of 
the overpayment.
    (5) You have not requested reconsideration of the initial 
overpayment determination pursuant to Secs. 404.907 and 404.909 of this 
chapter or, after a review conducted pursuant to Sec. 404.913 of this 
chapter, we have affirmed all or part of the initial overpayment 
determination.
    (6) We cannot recover your overpayment pursuant to Sec. 404.502 of 
this chapter by adjustment of benefits payable to any individual other 
than you. For purposes of this paragraph, an overpayment will be deemed 
to be unrecoverable from any individual who was living in a separate 
household from yours at the time of the overpayment and who did not 
receive the overpayment.
    (d) Overpayments under title XVI of the Social Security Act. This 
subpart applies to overpayments under title XVI of the Social Security 
Act if all of the following conditions are met:
    (1) You are not receiving benefits under title XVI of the Social 
Security Act.
    (2) We are not collecting your title XVI overpayment by reducing 
title II benefits payable to you.
    (3) We have completed our billing system sequence (i.e., we have 
sent you

[[Page 1240]]

an initial notice of the overpayment, a reminder notice, and a past-due 
notice) or we have suspended or terminated collection activity under 
applicable rules, such as, the Federal Claims Collection Standards in 31 
CFR 903.2 or 31 CFR 903.3.
    (4) We have not made an installment payment arrangement with you or, 
if we have made such an arrangement, you have failed to make any payment 
for two consecutive months.
    (5) You have not requested waiver pursuant to Sec. 416.550 or 
Sec. 416.582 of this chapter or, after a review conducted pursuant to 
those sections, we have determined that we will not waive collection of 
the overpayment.
    (6) You have not requested reconsideration of the initial 
overpayment determination pursuant to Secs. 416.1407 and 416.1409 of 
this chapter or, after a review conducted pursuant to Sec. 416.1413 of 
this chapter, we have affirmed all or part of the initial overpayment 
determination.
    (7) We cannot recover your overpayment pursuant to Sec. 416.570 of 
this chapter by adjustment of benefits payable to any individual other 
than you. For purposes of this paragraph, if you are a member of an 
eligible couple that is legally separated and/or living apart, we will 
deem unrecoverable from the other person that part of your overpayment 
which he or she did not receive.



Sec. 422.405  What notice will we send you about administrative wage 
garnishment?

    (a) General. Before we order your employer to collect a debt by 
deduction from your disposable pay, we will send you written notice of 
our intention to do so.
    (b) Contents of the notice. The notice will contain the following 
information:
    (1) We have determined that payment of the debt is past due;
    (2) The nature and amount of the debt;
    (3) Information about the amount that your employer could withhold 
from your disposable pay each payday (the payment schedule);
    (4) No sooner than 60 calendar days after the date of the notice, we 
will order your employer to withhold the debt from your disposable pay 
unless, within that 60-day period, you pay the full amount of the debt 
or take either of the actions described in paragraphs (b)(6) or (7) of 
this section;
    (5) You may inspect and copy our records about the debt (see 
Sec. 422.420);
    (6) You may request a review of the debt (see Sec. 422.425) or the 
payment schedule stated in the notice (see Sec. 422.415); and
    (7) You may request to pay the debt by monthly installment payments 
to us.
    (c) Mailing address. We will send the notice to the most current 
mailing address that we have for you in our records.
    (d) Electronic record of the notice. We will keep an electronic 
record of the notice that shows the date we mailed the notice to you and 
the amount of your debt.



Sec. 422.410  What actions will we take after we send you the notice?

    (a) General. (1) We will not send an administrative wage garnishment 
order to your employer before 60 calendar days elapse from the date of 
the notice described in Sec. 422.405.
    (2) If paragraph (b) of this section does not apply and you do not 
pay the debt in full or do not take either of the actions described in 
Sec. 422.405(b)(6) or (7) within 60 calendar days from the date of the 
notice described in Sec. 422.405, we may order your employer to withhold 
and send us part of your disposable pay each payday until your debt is 
paid.
    (3) If you request review of the debt or the payment schedule after 
the end of the 60 calendar day period described in paragraph (a)(2) of 
this section and paragraph (b) of this section does not apply, we will 
conduct the review. However, we may send the administrative wage 
garnishment order to your employer without further delay. If we sent the 
administrative wage garnishment order to your employer and we do not 
make our decision on your request within 60 calendar days from the date 
that we received your request, we will tell your employer to stop 
withholding from your disposable pay. Withholding will not resume before 
we conduct the review and notify you of our decision.

[[Page 1241]]

    (4) We may send an administrative wage garnishment order to your 
employer without further delay if:
    (i) You request an installment payment plan after receiving the 
notice described in Sec. 422.405, and
    (ii) We arrange such a plan with you, and
    (iii) You fail to make payments in accordance with that arrangement 
for two consecutive months.
    (b) Good cause for failing to request review on time. If we decide 
that you had good cause for failing to request review within the 60-day 
period mentioned in paragraph (a)(2) of this section, we will treat your 
request for review as if we received it within that 60-day period.
    (1) Determining good cause. In determining whether you had good 
cause, we will consider--
    (i) Any circumstances that kept you from making the request on time;
    (ii) Whether our action misled you;
    (iii) Whether you had any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) which prevented you from making a request on time or from 
understanding the need to make a request on time.
    (2) Examples of good cause. Examples of facts supporting good cause 
include, but are not limited to, the following.
    (i) Your serious illness prevented you from contacting us yourself 
or through another person.
    (ii) There was a death or serious illness in your family.
    (iii) Fire or other accidental cause destroyed important records.
    (iv) You did not receive the notice described in Sec. 422.405.
    (v) In good faith, you sent the request to another government agency 
within the 60-day period, and we received the request after the end of 
that period.
    (3) If we issued the administrative wage garnishment order. If we 
determine that you had good cause under paragraph (b) of this section 
and we already had sent an administrative wage garnishment order to your 
employer, we will tell your employer to stop withholding from your 
disposable pay. Withholding will not resume until we conduct the review 
and notify you of our decision.



Sec. 422.415  Will we reduce the amount that your employer must 
withhold from your pay when withholding that amount causes financial
hardship?

    (a) General. Unless paragraph (d) of this section applies, we will 
reduce the amount that your employer must withhold from your pay when 
you request the reduction and we find financial hardship. In any event, 
we will not reduce the amount your employer must withhold each payday 
below $10. When we decide to reduce the amount that your employer 
withholds, we will give you and your employer written notice.
    (1) You may ask us at any time to reduce the amount due to financial 
hardship.
    (2) If you request review of the payment schedule stated in the 
notice described in Sec. 422.405 within the 60-day period stated in the 
notice, we will not issue a garnishment order to your employer until we 
notify you of our decision.
    (b) Financial hardship. We will find financial hardship when you 
show that withholding a particular amount from your pay would deprive 
you of income necessary to meet your ordinary and necessary living 
expenses. You must give us evidence of your financial resources and 
expenses.
    (c) Ordinary and necessary living expenses. Ordinary and necessary 
living expenses include:
    (1) Fixed expenses such as food, clothing, housing, utilities, 
maintenance, insurance, tax payments;
    (2) Medical, hospitalization and similar expenses;
    (3) Expenses for the support of others for whom you are legally 
responsible; and
    (4) Other reasonable and necessary miscellaneous expenses which are 
part of your standard of living.
    (d) Fraud and willful concealment or failure to furnish information. 
(1) We will not reduce the amount that your employer withholds from your 
disposable pay if your debt was caused by:
    (i) Your intentional false statement, or
    (ii) Your willful concealment of, or failure to furnish, material 
information.

[[Page 1242]]

    (2) ``Willful concealment'' means an intentional, knowing and 
purposeful delay in providing, or failure to reveal, material 
information.



Sec. 422.420  May you inspect and copy our records related to the
debt?

    You may inspect and copy our records related to the debt. You must 
notify us of your intention to review our records. After you notify us, 
we will arrange with you the place and time the records will be 
available to you. At our discretion, we may send copies of the records 
to you.



Sec. 422.425  How will we conduct our review of the debt?

    (a) You must request review and present evidence. If you receive a 
notice described in Sec. 422.405, you have the right to have us review 
the debt. To exercise this right, you must request review and give us 
evidence that you do not owe all or part of the debt or that we do not 
have the right to collect it. If you do not request review and give us 
this evidence within 60 calendar days from the date of our notice, we 
may issue the garnishment order to your employer without further delay. 
If you request review of the debt and present evidence within that 60 
calendar-day period, we will not send a garnishment order to your 
employer unless and until we consider all of the evidence and send you 
our findings that all or part of the debt is overdue and we have the 
right to collect it.
    (b) Review of the evidence. If you request review of the debt, we 
will review our records related to the debt and any evidence that you 
present.
    (c) Our findings. Following our review of all of the evidence, we 
will send you written findings, including the supporting rationale for 
the findings. Issuance of these findings will be our final action on 
your request for review. If we find that you do not owe the debt, or the 
debt is not overdue, or we do not have the right to collect it, we will 
not send a garnishment order to your employer.



Sec. 422.430  When will we refund amounts of your pay withheld by 
administrative wage garnishment?

    If we find that you do not owe the debt or that we have no right to 
collect it, we will promptly refund to you any amount withheld from your 
disposable pay under this subpart that we received and cancel any 
administrative wage garnishment order that we issued. Refunds under this 
section will not bear interest unless Federal law or contract requires 
interest.



Sec. 422.435  What happens when we decide to send an administrative
wage garnishment order to your employer?

    (a) The wage garnishment order. The wage garnishment order that we 
send to your employer will contain only the information necessary for 
the employer to comply with the order. This information includes:
    (1) Your name, address, and social security number,
    (2) The amount of the debt,
    (3) Information about the amount to be withheld, and
    (4) Information about where to send the withheld amount.
    (b) Electronic record of the garnishment order. We will keep an 
electronic record of the garnishment order that shows the date we mailed 
the order to your employer.
    (c) Employer certification. Along with the garnishment order, we 
will send your employer a certification form to complete about your 
employment status and the amount of your disposable pay available for 
withholding. Your employer must complete the certification and return it 
to us within 20 days of receipt.
    (d) Amounts to be withheld from your disposable pay. After receipt 
of the garnishment order issued under this section, your employer must 
begin withholding from your disposable pay each payday the lesser of:
    (1) The amount indicated on the order (up to 15% of your disposable 
pay); or
    (2) The amount by which your disposable pay exceeds thirty times the 
minimum wage as provided in 15 U.S.C. 1673(a)(2).

[[Page 1243]]

    (e) Multiple withholding orders. If your disposable pay is subject 
to more than one withholding order, we apply the following rules to 
determine the amount that your employer will withhold from your 
disposable pay:
    (1) Unless otherwise provided by Federal law or paragraph (e)(2) of 
this section, a garnishment order issued under this section has priority 
over other withholding orders served later in time.
    (2) Withholding orders for family support have priority over 
garnishment orders issued under this section.
    (3) If at the time we issue a garnishment order to your employer 
amounts are already being withheld from your pay under another 
withholding order, or if a withholding order for family support is 
served on your employer at any time, the amounts to be withheld under 
this section will be the lesser of:
    (i) The amount calculated under paragraph (d) of this section; or
    (ii) The amount calculated by subtracting the amount(s) withheld 
under the withholding order(s) with priority from 25% of your disposable 
pay.
    (4) If you owe more than one debt to us, we may issue multiple 
garnishment orders. If we issue more than one garnishment order, the 
total amount to be withheld from your disposable pay under such orders 
will not exceed the amount set forth in paragraph (d) or (e)(3) of this 
section, as appropriate.
    (f) You may request that your employer withhold more. If you request 
in writing that your employer withhold more than the amount determined 
under paragraphs (d) or (e) of this section, we will order your employer 
to withhold the amount that you request.



Sec. 422.440  What are your employer's responsibilities under an 
administrative wage garnishment order?

    (a) When withholding must begin. Your employer must withhold the 
appropriate amount from your disposable pay on each payday beginning on 
the first payday after receiving the garnishment order issued under this 
section. If the first payday is within 10 days after your employer 
receives the order, then your employer must begin withholding on the 
first or second payday after your employer receives the order. 
Withholding must continue until we notify your employer to stop 
withholding.
    (b) Payment of amounts withheld. Your employer must promptly pay to 
us all amounts withheld under this section.
    (c) Other assignments or allotments of pay. Your employer cannot 
honor an assignment or allotment of your pay to the extent that it would 
interfere with or prevent withholding under this section, unless the 
assignment or allotment is made under a family support judgement or 
order.
    (d) Effect of withholding on employer pay and disbursement cycles. 
Your employer will not be required to vary its normal pay and 
disbursement cycles in order to comply with the garnishment order.
    (e) When withholding ends. When we have fully recovered the amounts 
you owe, including interest, penalties, and administrative costs that we 
charge you as allowed by law, we will tell your employer to stop 
withholding from your disposable pay. As an added precaution, we will 
review our debtors' accounts at least annually to ensure that 
withholding has been terminated for accounts paid in full.
    (f) Certain actions by an employer against you are prohibited. 
Federal law prohibits an employer from using a garnishment order issued 
under this section as the basis for discharging you from employment, 
refusing to employ you, or taking disciplinary action against you. If 
your employer violates this prohibition, you may file a civil action 
against your employer in a Federal or State court of competent 
jurisdiction.



Sec. 422.445  May we bring a civil action against your employer for 
failure to comply with our administrative wage garnishment order?

    (a) We may bring a civil action against your employer for any amount 
that the employer fails to withhold from your disposable pay in 
accordance with Sec. 422.435(d), (e) and (f). Your employer may also be 
liable for attorney fees, costs of the lawsuit and (in the court's 
discretion) punitive damages.

[[Page 1244]]

    (b) We will not file a civil action against your employer before we 
terminate collection action against you, unless earlier filing is 
necessary to avoid expiration of any applicable statute of limitations 
period. For purposes of this section, ``terminate collection action'' 
means that we have terminated collection action in accordance with the 
Federal Claims Collection Standards (31 CFR 903.3) or other applicable 
standards. In any event, we will consider that collection action has 
been terminated if we have not received any payments to satisfy the debt 
for a period of one year.



                Subpart F_Applications and Related Forms

    Authority: Sec. 1140(a)(2)(A) of the Social Security Act. 42 U.S.C. 
1320b-10(a)(2)(A) (Pub. L. 103-296, Sec. 312(a)).



Sec. 422.501  Applications and other forms used in Social Security
Administration programs.

    This subpart lists the applications and some of the related forms 
prescribed by the Social Security Administration for use by the public 
in applying for benefits under titles II and XVIII of the Social 
Security Act and the black lung benefits program (Part B, title IV of 
the Federal Coal Mine Health and Safety Act of 1969, as amended).

[38 FR 11450, May 8, 1973]



Sec. 422.505  What types of applications and related forms are used
to apply for retirement, survivors, and disability insurance benefits?

    (a) Applications. Prescribed applications include our traditional 
pre-printed forms, and applications our employees complete on computer 
screens based on information you give us. We then print a copy on paper, 
have you sign it and process the signed application electronically. You 
may also use SSA's Internet website to submit an SSA-approved 
application to us. You can complete an Internet application on a 
computer (or other suitable device, such as an electronic kiosk) and 
electronically transmit the form to us using an SSA-approved electronic 
signature. If, however, we do not have an approved electronic signature 
established when you file your Internet application, you must print and 
sign the completed application and deliver the form to us.
    (b) Related forms. The following are some related forms:

SSA-3--Marriage Certification. (For use in connection with Application 
for Wife's or Husband's Insurance Benefits, (Form SSA-2))
SSA-11--Request to be Selected as Payee. (For use when an individual 
proposing to be substituted for the current payee files an application 
to receive payment of benefits on behalf of disabled child, or a child 
under 18, or an incapable or incompetent beneficiary or for himself/
herself if he/she has a payee.)
SSA-21--Supplement to Claim of Person Outside of the United States. (To 
be completed by or on behalf of a person who is, was, or will be outside 
the United States.)
SSA-25--Certificate of Election for Reduced Spouse's Benefits. (For use 
by a wife or husband age 62 to full retirement age who has an entitled 
child in his or her care and elects to receive reduced benefits for 
months during which he or she will not have a child in his or her care.)
SSA-721--Statement of Death by Funeral Director. (This form may be used 
as evidence of death (see Sec. 404.704 of this chapter).)
SSA-760--Certificate of Support (Parent's, Husband's or Widower's). (For 
use in collecting evidence of support.)
SSA-766--Statement of Self-Employment Income. (For use by a claimant to 
establish insured status based on self-employment income in the current 
year.)
SSA-783--Statement Regarding Contributions. (This form may be used as 
evidence of total contributions for a child.)
SSA-787--Physician's/Medical Officer's Statement of Patient's Capability 
to Manage Benefits. (This form may be used to request evidence of 
capability from various medical sources.)
SSA-824--Report on Individual with Mental Impairment. (For use in 
obtaining medical evidence from medical sources when the claimant has 
been treated for a mental impairment.)
SSA-827--Authorization for Source to Release Information to the Social 
Security Administration. (To be completed by a disability claimant to 
authorize release of medical or other information.)
SSA-1002--Statement of Agricultural Employer (Years Prior to 1988). (For 
use by employer to provide evidence of annual wage payments for 
agricultural work.)
SSA-1372--Student's Statement Regarding School Attendance. (For use in 
connection

[[Page 1245]]

with request for payment of child's insurance benefits for a child who 
is age 18 through 19 and a full-time student.
SSA-1724--Claim for Amount Due in the Case of a Deceased Beneficiary. 
(For use in requesting amounts payable under title II to a deceased 
beneficiary.)
SSA-3368--Disability Report--Adult. (For use in recording information 
about the claimant's condition, source of medical evidence and other 
information needed to process the claim to a determination or decision.)
SSA-3369--Disability Report--Work History. (For use in recording work 
history information.)
SSA-3826-F4--Medical Report--General. (For use in helping disability 
claimants in obtaining medical records from their doctors or other 
medical sources.)
SSA-3827--Medical Report--(Individual with Childhood Impairment). (For 
use in requesting information to determine if an individual's impairment 
meets the requirements for payment of childhood disability benefits.)
SSA-4111--Certificate of Election for Reduced Widow(er)s Benefits. (For 
use by applicants for certain reduced widow's or widower's benefits.)
SSA-7156--Farm Self-Employment Questionnaire. (For use in connection 
with claims for benefits based on farm income to determine whether the 
income is covered under the Social Security Act.)
SSA-7160--Employment Relationship Questionnaire. (For use by an 
individual and the alleged employer to determine the individual's 
employment status.)
SSA-7163--Questionnaire about Employment or Self-Employment Outside the 
United States. (To be completed by or on behalf of a beneficiary who is, 
was, or will be employed or self-employed outside the United States.)

[69 FR 499, Jan. 6, 2004, as amended at 70 FR 14978, Mar. 24, 2005]



Sec. 422.510  Applications and related forms used in the health
insurance for the aged program.

    (a) Application forms. The following forms are prescribed for use in 
applying for entitlement to benefits under the health insurance for the 
aged program:

SSA-18--Application for Hospital Insurance Entitlement. (For use by 
individuals who are not entitled to retirement benefits under title II 
of the Social Security Act or under the Railroad Retirement Act. This 
form may also be used for enrollment in the supplementary medical 
insurance benefits plan.)
SSA-40--Application for Enrollment in the Supplementary Medical 
Insurance Program. (This form is mailed directly to beneficiaries at the 
beginning of their initial enrollment period.)
SSA-40A--Application for Enrollment in Supplementary Medical Insurance. 
(For use by civil service employees who are not eligible for enrollment 
in the hospital insurance plan.)
SSA-40B--Application for Medical Insurance. (For general use in 
requesting medical insurance protection.)
SSA-40C--Application for Enrollment. (This form is mailed to 
beneficiaries as a followup on Form SSA-40 (Application for Enrollment 
in the Supplementary Medical Insurance Program).)
SSA-40F--Application for Medical Insurance. (For use by beneficiaries 
residing outside the United States.)


An individual who upon attainment of age 65 is entitled to a monthly 
benefit based on application OA-C1, SSA-2, OA-C7, OA-C10, SSA-10A, OA-
C13, or SSA-14 is automatically entitled to hospital insurance 
protection. (For conditions of entitlement to hospital insurance 
benefits, see 42 CFR part 405, subpart A. For medical insurance 
protection, an applicant must request supplementary medical insurance 
coverage (see Forms SSA-40, SSA-40A, SSA-40B, SSA-40C, and SSA-40F under 
Sec. 422.510(a)). (For conditions of entitlement to supplementary 
medical insurance benefits, see 42 CFR part 405, subpart B.)
    (b) Related forms. The following are the prescribed forms for use in 
requesting payment for services under the hospital insurance benefits 
program and the supplementary medical insurance benefits program and 
other related forms:

SSA-1453--Inpatient Hospital and Extended Care Admission and Billing. 
(To be completed by hospital for payment of hospital expenses for 
treatment of patient confined in hospital.)
SSA-1483--Provider Billing for Medical and Other Health Services. (To be 
completed by hospital for payment of hospital expenses for treatment of 
patient who is not confined in the hospital.)
SSA-1484--Explanation of Accommodation Furnished. (To be completed by 
the hospital to explain accommodation of a patient in other than a 
semiprivate (two- to four-bed) room.)
SSA-1486--Inpatient Admission and Billing--Christian Science Sanatorium. 
(To be completed by a Christian Science sanatorium

[[Page 1246]]

for payment for treatment of patients confined in the sanatorium.)
SSA-1487--Home Health Agency Report and Billing. (For use by an 
organization providing home health services.)
SSA-1490--Request for Medicare Payment. (For use by patient or physician 
to request payment for medical expenses.)
SSA-1554--Provider Billing for Patient Services by Physicians. (For use 
by hospital for payment for services provided by hospital-based 
physicians.)
SSA-1556--Prepayment Plan for Group Medical Practices Dealing Through a 
Carrier. (For use by organizations (which have been determined to be 
group practice prepayment plans for medicare purposes) for reimbursement 
for medical services provided to beneficiaries.)
SSA-1660--Request for Information--Medicare Payment For Services to a 
Patient Now Deceased. (For use in requesting amounts payable under title 
XVIII to a deceased beneficiary.)
SSA-1739--Request for Enrollment Card Information by Foreign 
Beneficiary. (Used to notify beneficiaries approaching age 65 who reside 
in foreign countries that they are eligible to enroll for SMI. They 
return this form if they wish additional information and an application, 
SSA-40F.)
SSA-1966--Health Insurance Card. (This card is issued to a person 
entitled to benefits under the health insurance for the aged program and 
designates whether he is entitled to hospital insurance benefits or 
supplementary medical insurance benefits or both.
SSA-1980--Carrier or Intermediary Request for SSA Assistance.
SSA-2384--Third Party Premium Billing Request. (For use by a 
nonbeneficiary enrollee who must pay premiums by direct remittance and 
is having his premium notices sent to a third party to assure 
continuance of supplementary medical insurance.)

[32 FR 18030, Dec. 16, 1967, as amended at 38 FR 11451, May 8, 1973; 44 
FR 34943, June 18, 1979]



Sec. 422.512  Applications and related forms used in the black lung
benefits program.

    (a) Application forms. The following forms are prescribed for use in 
applying for entitlement to benefits under part B of title IV of the 
Federal Coal Mine Health and Safety Act of 1969, as amended by the Black 
Lung Benefits Act of 1972:

SSA-46--Application for Benefits Under the Federal Coal Mine Health and 
Safety Act of 1969, as Amended (Coal Miner's Claim of Total Disability).
SSA-47--Application for Benefits Under the Federal Coal Mine Health and 
Safety Act of 1969, as Amended (Widow's Claim).
SSA-48--Application for Benefits Under the Federal Coal Mine Health and 
Safety Act of 1969, as Amended (Child's Claim).
SSA-49--Application for Benefits Under the Federal Coal Mine Health and 
Safety Act of 1969, as Amended (Parent's, Brother's and Sister's Claim).

    (b) Related forms. The following are some related forms:

SSA-50--Request To Be Selected as Payee. (For use when the individual 
proposing to be substituted for current payee files application to 
receive payment of black lung benefits on behalf of himself, a disabled 
child or child under age 18, a student beneficiary, or an incompetent 
beneficiary.)
SSA-2179--Report by Person Entitled to Black Lung Benefits. (For use by 
person entitled to black lung benefits to report events which affect 
benefits.)
SAA-2210--Statement of Coal Mine Employment by United Mine Workers of 
America.
SSA-2325--Medical Report (Pneumoconiosis).

[38 FR 11451, May 8, 1973]



Sec. 422.515  Forms used for withdrawal, reconsideration and other
appeals, and appointment of representative.

    The following is a list of forms prescribed by the Social Security 
Administration for use by the public to request a withdrawal of an 
application, a reconsideration of an initial determination, a hearing, a 
review of an administrative law judge's decision, or for use where a 
person is authorized to represent a claimant.

SSA-521--Request for Withdrawal of Application. (For use by an 
individual to cancel his application.)
SSA-561--Request for Reconsideration. (For use by an individual who 
disagrees with an initial determination concerning (a) entitlement to 
benefits or any other right under title II of the Social Security Act, 
or (b) entitlement to hospital insurance benefits or supplementary 
medical insurance benefits under title XVIII of the act, or (c) 
entitlement to black lung benefits under title IV of the Federal Coal 
Mine Health and Safety Act. See Sec. 422.140 for a discussion of the 
reconsideration procedure.)
SSA-1696--Appointment of Representative. (For use by person other than 
an attorney authorized by a claimant to act for him in a claim or 
related matter.)
SSA-1763--Request for Termination of Supplementary Medical Insurance. 
(For use by

[[Page 1247]]

an enrollee in requesting that his supplementary medical insurance 
coverage be terminated.)
SSA-1965--Request for Hearing--Part B Medicare Claim. (For use by an 
individual enrollee or his assignee to obtain a hearing before a hearing 
officer designated by the carrier concerning benefits payable under part 
B of title XVIII.)
HA-501--Request for Hearing. (For use by an individual or institution to 
obtain a hearing on a claim for title II benefits before an 
administrative law judge of the Social Security Administration.)

    Note: This form is also used to request a hearing regarding 
entitlement to hospital insurance benefits or supplementary medical 
insurance benefits under title XVIII of the act. (See Sec. 422.203 for a 
discussion of the hearing procedure.)

HA-501.1--Request for Hearing--Part A Health Insurance. (For use by an 
individual or institution to obtain a hearing before an administrative 
law judge of the Social Security Administration concerning the amount of 
hospital insurance benefits under title XVIII.)
HA-512.1--Notice by Attorney of Appointment as Representative. (For use 
by an attorney authorized by a claimant to act for him in a claim or 
related matter.)
HA-520--Request for Review of Hearing Examiner's Action. (For use by an 
individual or institution to obtain a review of a decision by an 
administrative law judge of the Social Security Administration.)

[38 FR 11452, May 8, 1973]



Sec. 422.520  Forms related to maintenance of earnings records.

    The following forms are used by the Social Security Administration 
and by the public in connection with the maintenance of earnings records 
of wage-earners and self-employed persons:

SS-4--Application for Employer Identification Number.
SS-4A--Agricultural Employer's Application. (For use by employers of 
agricultural workers to request an employer identification number under 
the FICA.)
SS-5--Application for a Social Security Number (or Replacement of Lost 
Card).
SS-15--Certificate Waiving Exemption From Taxes Under the FICA. (For use 
by certain nonprofit organizations requesting coverage of its 
employees.)
SS-15a--List of Concurring Employees. (To be signed by each employee who 
concurs in the filing of the Certificate Waiving Exemption From Taxes 
Under the FICA, Form SS-15.)
SSI-21--Social Security and Your Household Employee. (For use by 
employers of household workers to request information from the Internal 
Revenue Service Center regarding filing employee tax returns.)
OA-702--Social Security Number Card.
Form 2031--Waiver Certificate To Elect Social Security Coverage for Use 
by Ministers, Certain Members of Religious Orders, and Christian Science 
Practitioners.
Form 4029--Application for Exemption from Tax on Self-Employment Income 
and Waiver of Benefits. (To be completed by self-employed individuals 
who are members of certain recognized religious sects (or division 
thereof) and do not wish to pay FICA taxes or participate in the 
programs provided under titles II and XVIII.)
Form 4361--Application for Exemption From Self-Employment Tax for Use by 
Ministers, Members of Religious Orders, and Christian Science 
Practitioners.
Form 4415--Election To Exempt From Self-Employment Coverage Fees 
Received by Certain Public Officers and Employees of a State or 
Political Subdivision Thereof.
OAAN-5028--Evidence of Application for Social Security Number Card.
OAAN-7003--Request for Change in Social Security Records. (For use by an 
individual to change information given on original application for a 
social security number.)
OAR-7004--Request for Statement of Earnings. (For use by worker to 
obtain a statement of earnings recorded in his earnings record.)
OAR-7008--Request for Correction of Earnings Record. (For use by an 
individual who wishes to have his earnings record revised.)
SSA-7011--Statement of Employer. (For use by an employer to provide 
evidence of wage payments in cases of a wage discrepancy in an 
individual's earnings record.)

[38 FR 11452, May 8, 1973]



Sec. 422.525  Where applications and other forms are available.

    All applications and related forms prescribed for use in the 
programs administered by the Social Security Administration pursuant to 
the provisions of titles II and XVIII of the act, and part B of title IV 
of the Federal Coal Mine Health and Safety Act of 1969 are printed under 
the specifications of the Administration and distributed free of charge 
to the public, institutions, or organizations for the purposes described 
therein. All prescribed forms can be obtained upon request from any 
social security district office or branch office (see Sec. 422.5). Forms 
appropriate for use in requesting payment for services provided

[[Page 1248]]

under the health insurance for the aged and disabled programs can also 
be obtained from the intermediaries or carriers (organizations under 
contract with the Social Security Administration to make payment for 
such services) without charge. Form 2031 (Waiver Certificate to Elect 
Social Security Coverage for Use by Ministers, Certain Members of 
Religious Orders, and Christian Science Practitioners), Form 4029 
(Application for Exemption From Tax on Self-Employment Income and Waiver 
of Benefits), Form 4361 (Application for Exemption From Self-Employment 
Tax for Use by Ministers, Members of Religious Orders, and Christian 
Science Practitioners), Form 4415 (Election to Exempt From Self-
Employment Coverage Fees Received by Certain Public Officers and 
Employees of a State or a Political Subdivision Thereof), Form SS-4 
(Application for Employer Identification Number), Form SS-4A 
(Agricultural Employer's Application for Identification Number), Form 
SS-5 (Application for a Social Security Number (or Replacement of Lost 
Card)), Form SS-15 (Certificate Waiving Exemption From Taxes Under the 
FICA), and Form SS-15a (List of Concurring Employees) can also be 
obtained without charge from offices of the Internal Revenue Service. 
For other offices where applications and certain other forms can be 
obtained, see subparts B and C of this part 422.

[38 FR 11452, May 8, 1973]



Sec. 422.527  Private printing and modification of prescribed
applications, forms, and other publications.

    Any person, institution, or organization wishing to reproduce, 
reprint, or distribute any application, form, or publication prescribed 
by the Administration must obtain prior approval if he or she intends to 
charge a fee. Requests for approval must be in writing and include the 
reason or need for the reproduction, reprinting, or distribution; the 
intended users of the application, form, or publication; the fee to be 
charged; any proposed modification; the proposed format; the type of 
machinery (e.g., printer, burster, mail handling), if any, for which the 
application, form, or publication is being designed; estimated printing 
quantity; estimated printing cost per thousand; estimated annual usage; 
and any other pertinent information required by the Administration. 
Forward all requests for prior approval to: Office of Publications 
Management, 6401 Security Boulevard, Baltimore, MD 21235-6401.

[72 FR 73261, Dec. 27, 2007]



Subpart G_Administrative Review Process Under the Coal Industry Retiree 
                       Health Benefit Act of 1992

    Authority: 26 U.S.C. 9701-9708.

    Source: 58 FR 52916, Oct. 13, 1993, unless otherwise noted.



Sec. 422.601  Scope and purpose.

    The regulations in this subpart describe how the Social Security 
Administration (SSA) will conduct reviews of assignments it makes under 
provisions of the Coal Industry Retiree Health Benefit Act of 1992 (the 
Coal Act). Under the Coal Act, certain retired coal miners and their 
eligible family members (beneficiaries) are assigned to particular coal 
operators (or related persons). These operators are then responsible for 
paying the annual health and death benefit premiums for these 
beneficiaries as well as the annual premiums for certain unassigned coal 
miners and eligible members of their families. We will notify the 
assigned operators of these assignments and give each operator an 
opportunity to request detailed information about an assignment and to 
request review of an assignment. We also inform the United Mine Workers 
of America (UMWA) Combined Benefit Fund Trustees of each assignment made 
and the unassigned beneficiaries so they can assess appropriate annual 
premiums against the assigned operators. This subpart explains how 
assigned operators may request such additional information, how they may 
request review of an assignment, and how reviews will be conducted.



Sec. 422.602  Terms used in this subpart.

    Assignment means our selection of the coal operator or related 
person to be charged with the responsibility of paying the annual health 
and death benefit

[[Page 1249]]

premiums of certain coal miners and their eligible family members.
    Beneficiary means either a coal industry retiree who, on July 20, 
1992, was eligible to receive, and receiving, benefits as an eligible 
individual under the 1950 or the 1974 UMWA Benefit Plan, or an 
individual who was eligible to receive, and receiving, benefits on July 
20, 1992 as an eligible relative of a coal industry retiree.
    Evidence of a prima facie case of error means documentary evidence, 
records, and written statements submitted to us by the assigned operator 
(or related person) that, standing alone, shows our assignment was in 
error. The evidence submitted must, when considered by itself without 
reference to other contradictory evidence that may be in our possession, 
be sufficient to persuade a reasonable person that the assignment was 
erroneous. Examples of evidence that may establish a prima facie case of 
error include copies of Federal, State, or local government tax records; 
legal documents such as business incorporation, merger, and bankruptcy 
papers; health and safety reports filed with Federal or State agencies 
that regulate mining activities; payroll and other employment business 
records; and information provided in trade journals and newspapers.
    A related person to a signatory operator means a person or entity 
which as of July 20, 1992, or, if earlier, the time immediately before 
the coal operator ceased to be in business, was a member of a controlled 
group of corporations which included the signatory operator, or was a 
trade or business which was under common control with a signatory 
operator, or had a partnership interest (other than as a limited 
partner) or joint venture with a signatory operator in a business within 
the coal industry which employed eligible beneficiaries, or is a 
successor in interest to a person who was a related person.
    We or us refers to the Social Security Administration.
    You as used in this subpart refers to the coal operator (or related 
person) assigned premium responsibility for a specific beneficiary under 
the Coal Act.

[58 FR 52916, Oct. 13, 1993, as amended at 62 FR 38456, July 18, 1997]



Sec. 422.603  Overview of the review process.

    Our notice of assignment will inform you as the assigned operator 
(or related person) which beneficiaries have been assigned to you, the 
reason for the assignment, and the dates of employment on which the 
assignment was based. The notice will explain that, if you disagree with 
the assignment for any beneficiary listed in the notice of assignment, 
you may request from us detailed information as to the work history of 
the miner and the basis for the assignment. Such request must be filed 
with us within 30 days after you receive the notice of assignment, as 
explained in Sec. 422.604. The notice will also explain that if you 
still disagree with the assignment after you have received the detailed 
information, you may submit evidence that shows there is a prima facie 
case of error in that assignment and request review. Such request must 
be filed with us within 30 days after you receive the detailed 
information, as explained in Sec. 422.605. Alternatively, you may 
request review within 30 days after you receive the notice of 
assignment, even if you have not first requested the detailed 
information. In that case, you still may request the detailed 
information within that 30-day period. (See Sec. 422.606(c) for further 
details.)



Sec. 422.604  Request for detailed information.

    (a) General. After you receive our notice of assignment listing the 
beneficiaries for whom you have premium responsibility, you may request 
detailed information as to the work histories of any of the listed 
miners and the basis for the assignment. Your request for detailed 
information must:
    (1) Be in writing;
    (2) Be filed with us within 30 days of receipt of that notice of 
assignment. Unless you submit evidence showing a later receipt of the 
notice, we will assume the notice was received by you within 5 days of 
the date appearing on the notice. We will consider the request to be 
filed as of the date we receive it. However, if we receive the request 
after the 30-day period, the postmark date on the envelope may be used 
as the filing date. If there is no postmark or the

[[Page 1250]]

postmark is illegible, the filing date will be deemed to be the fifth 
day prior to the day we received the request; and
    (3) Identify the individual miners about whom you are requesting the 
detailed information.
    (b) The detailed information we will provide. We will send you 
detailed information as to the work history and the basis for the 
assignment for each miner about whom you requested such information. 
This information will include the name and address of each employer for 
whom the miner has worked since 1978 or since 1946 (whichever period is 
appropriate), the amount of wages paid by each employer and the period 
for which the wages were reported. We will send you the detailed 
information with a notice informing you that you have 30 days from the 
date you receive the information to submit to SSA evidence of a prima 
facie case of error (as defined in Sec. 422.602) and request review of 
the assignment if you have not already requested review. The notice will 
also inform you that, if you are seeking evidence to make a case of 
prima facie error, you may include with a timely filed request for 
review a written request for additional time to obtain and submit such 
evidence to us. Under these circumstances, you will have 90 days from 
the date of your request to submit the evidence before we determine 
whether we will review the assignment.



Sec. 422.605  Request for review.

    We will review an assignment if you request review and show that 
there is a prima facie case of error regarding the assignment. This 
review is a review on the record and will not entail a face-to-face 
hearing. We will review an assignment if:
    (a) You are an assigned operator (or related person);
    (b) Your request is in writing and states your reasons for believing 
the assignment is erroneous;
    (c) Your request is filed with us no later than 30 days from the 
date you received the detailed information described in Sec. 422.604, or 
no later than 30 days from the date you received the notice of 
assignment if you choose not to request detailed information. Unless you 
submit evidence showing a later receipt of the notice, we will assume 
you received the detailed information or the notice of assignment within 
5 days of the date shown thereon. We will consider the request to be 
filed as of the date we receive it. However, if we receive the request 
after the 30-day period, the postmark date on the envelope may be used 
as the filing date. If there is no postmark or the postmark is 
illegible, the filing date will be deemed to be the fifth day prior to 
the day we received the request; and
    (d) Your request is accompanied by evidence establishing a prima 
facie case of error regarding the assignment. If your request for review 
includes a request for additional time to submit such evidence, we will 
give you an additional 90 days from the date of your request for review 
to submit such evidence to us.



Sec. 422.606  Processing the request for review.

    Upon receipt of your written request for review of an assignment and 
where relevant, the expiration of any additional times allowed under 
Secs. 422.605(d) and 422.606(c), we will take the following action:
    (a) Request not timely filed. If your request is not filed within 
the time limits set out in Sec. 422.605(c), we will deny your request 
for review on that basis and send you a notice explaining that we have 
taken this action;
    (b) Lack of evidence. If your request is timely filed under 
Sec. 422.605(c) but you have not provided evidence constituting a prima 
facie case of error, we will deny your request for review on that basis 
and send you a notice explaining that we have taken this action;
    (c) Request for review without requesting detailed information. If 
your request is filed within 30 days after you received the notice of 
assignment and you have not requested detailed information, we will not 
process your request until at least 30 days after the date you received 
the notice of assignment. You may still request detailed information 
within that 30-day period, in which case we will not process your 
request for review until at least 30 days

[[Page 1251]]

after you received the detailed information, so that you may submit 
additional evidence if you wish;
    (d) Reviewing the evidence. If your request meets the filing 
requirements of Sec. 422.605 and is accompanied by evidence constituting 
a prima facie case of error, we will review the assignment. We will 
review all evidence submitted with your request for review, together 
with the evidence used in making the assignment. An SSA employee who was 
not involved in the original assignment will perform the review. The 
review will be a review on the record and will not involve a face-to-
face hearing.
    (e) Original decision correct. If, following this review of the 
evidence you have submitted and the evidence in our file, we make a 
determination that the assignment is correct, we will send you a notice 
explaining the basis for our decision. We will not review the decision 
again, except as provided in Sec. 422.607.
    (f) Original decision erroneous. If, following this review of the 
evidence you have submitted and the evidence in our file, we make a 
determination that the assignment is erroneous, we will send you a 
notice to this effect. We will then determine who the correct operator 
is and assign the affected beneficiary(s) to that coal operator (or 
related person). If no assigned operator can be identified, the affected 
beneficiary(s) will be treated as ``unassigned.'' We will notify the 
UMWA Combined Benefit Fund Trustees of the review decision so that any 
premium liability of the initial assigned operator can be adjusted.



Sec. 422.607  Limited reopening of assignments.

    On our own initiative, we may reopen and revise an assignment, 
whether or not it has been reviewed as described in this subpart, under 
the following conditions:
    (a) The assignment reflects an error on the face of our records or 
the assignment was based upon fraud; and
    (b) We sent to the assigned operator (or related person) notice of 
the assignment within 12 months of the time we decided to reopen that 
assignment.



                  Subpart H_Use of SSA Telephone Lines

    Authority: Secs. 205(a) and 702(a)(5) of the Social Security Act (42 
U.S.C. 405 and 902(a)(5)).

    Source: 63 FR 57058, Oct. 26, 1998, unless otherwise noted.



Sec. 422.701  Scope and purpose.

    The regulations in this subpart describe the limited circumstances 
under which SSA is authorized to listen-in to or record telephone 
conversations. The purpose of this subpart is to inform the public and 
SSA employees of those circumstances and the procedures that SSA will 
follow when conducting telephone service observation activities.



Sec. 422.705  When SSA employees may listen-in to or record telephone 
conversations.

    SSA employees may listen-in to or record telephone conversations on 
SSA telephone lines under the following conditions:
    (a) Law enforcement/national security. When performed for law 
enforcement, foreign intelligence, counterintelligence or communications 
security purposes when determined necessary by the Commissioner of 
Social Security or designee. Such determinations shall be in writing and 
shall be made in accordance with applicable laws, regulations and 
Executive Orders governing such activities. Communications security 
monitoring shall be conducted in accordance with procedures approved by 
the Attorney General. Line identification equipment may be installed on 
SSA telephone lines to assist Federal law enforcement officials in 
investigating threatening telephone calls, bomb threats and other 
criminal activities.
    (b) Public safety. When performed by an SSA employee for public 
safety purposes and when documented by a written determination by the 
Commissioner of Social Security or designee citing the public safety 
needs. The determination shall identify the segment of the public 
needing protection and cite examples of the possible harm from which the 
public requires protection. Use of SSA telephone lines identified for 
reporting emergency and other

[[Page 1252]]

public safety-related situations will be deemed as consent to public 
safety monitoring and recording. (See Sec. 422.710(a)(1))
    (c) Public service monitoring. When performed by an SSA employee 
after the Commissioner of Social Security or designee determines in 
writing that monitoring of such lines is necessary for the purposes of 
measuring or monitoring SSA's performance in the delivery of service to 
the public; or monitoring and improving the integrity, quality and 
utility of service provided to the public. Such monitoring will occur 
only on telephone lines used by employees to provide SSA-related 
information and services to the public. Use of such telephone lines will 
be deemed as consent to public service monitoring. (See 
Sec. 422.710(a)(2) and (c)).
    (d) All-party consent. When performed by an SSA employee with the 
prior consent of all parties for a specific instance. This includes 
telephone conferences, secretarial recordings and other administrative 
practices. The failure to identify all individuals listening to a 
conversation by speaker phone is not prohibited by this or any other 
section.



Sec. 422.710  Procedures SSA will follow.

    SSA component(s) that plan to listen-in to or record telephone 
conversations under Sec. 422.705(b) or (c) shall comply with the 
following procedures.
    (a) Prepare a written certification of need to the Commissioner of 
Social Security or designee at least 30 days before the planned 
operational date. A certification as used in this section means a 
written justification signed by the Deputy Commissioner of the 
requesting SSA component or designee, that specifies general information 
on the following: the operational need for listening-in to or recording 
telephone conversations; the telephone lines and locations where 
monitoring is to be performed; the position titles (or a statement about 
the types) of SSA employees involved in the listening-in to or recording 
of telephone conversations; the general operating times and an 
expiration date for the monitoring. This certification of need must 
identify the telephone lines which will be subject to monitoring, e.g., 
SSA 800 number voice and text telephone lines, and include current 
copies of any documentation, analyses, determinations, policies and 
procedures supporting the application, and the name and telephone number 
of a contact person in the SSA component which is requesting authority 
to listen-in to or record telephone conversations.
    (1) When the request involves listening-in to or recording telephone 
conversations for public safety purposes, the requesting component head 
or designee must identify the segment of the public needing protection 
and cite examples of the possible harm from which the public requires 
protection.
    (2) When the request involves listening-in to or recording telephone 
conversations for public service monitoring purposes, the requesting 
component head or designee must provide a statement in writing why such 
monitoring is necessary for measuring or monitoring the performance in 
the delivery of SSA service to the public; or monitoring and improving 
the integrity, quality and utility of service provided to the public.
    (b) At least every 5 years, SSA will review the need for each 
determination authorizing listening-in or recording activities in the 
agency. SSA components or authorized agents involved in conducting 
listening-in or recording activities must submit documentation as 
described in Sec. 422.710(a) to the Commissioner of Social Security or a 
designee to continue or terminate telephone service observation 
activities.
    (c) SSA will comply with the following controls, policies and 
procedures when listening-in or recording is associated with public 
service monitoring.
    (1) SSA will provide a message on SSA telephone lines subject to 
public service monitoring that will inform callers that calls on those 
lines may be monitored for quality assurance purposes. SSA will also 
continue to include information about telephone monitoring activities in 
SSA brochures and/or pamphlets as notification that some incoming and 
outgoing SSA telephone calls are monitored to ensure SSA's clients are 
receiving accurate and courteous service.

[[Page 1253]]

    (2) SSA employees authorized to listen-in to or record telephone 
calls are permitted to annotate personal identifying information about 
the calls, such as a person's name, Social Security number, address and/
or telephone number. When this information is obtained from public 
service monitoring as defined in Sec. 422.705(c), it will be used for 
programmatic or policy purposes; e.g., recontacting individuals to 
correct or supplement information relating to benefits, for assessment 
of current/proposed policies and procedures, or to correct SSA records. 
Privacy Act requirements must be followed if data are retrievable by 
personal identifying information.
    (3) SSA will take appropriate corrective action, when possible, if 
information obtained from monitoring indicates SSA may have taken an 
incorrect action which could affect the payment of or eligibility to SSA 
benefits.
    (4) Telephone instruments subject to public service monitoring will 
be conspicuously labeled.
    (5) Consent from both parties is needed to tape record SSA calls for 
public service monitoring purposes.
    (d) The recordings and records pertaining to the listening-in to or 
recording of any conversations covered by this subpart shall be used, 
safeguarded and destroyed in accordance with SSA records management 
program.



               Subpart I_Administrative Claims Collection

    Authority: Sec. 97, Pub. L. 97-365, 96 Stat. 1749; Sec. 104, Pub. L. 
104-134, 110 Stat. 1321; 5 U.S.C. 552; 5 U.S.C. 553; 31 U.S.C. 3711; 31 
U.S.C. 3716; 31 U.S.C. 3717; 31 U.S.C. 3720A; 31 U.S.C. 3720B; 31 U.S.C. 
3720C; 31 U.S.C. 3720D; 31 U.S.C. 3720E; 31 CFR parts 901-904; 31 CFR 
part 285; 5 U.S.C. 5514; 5 CFR part 550; 42 U.S.C. 902(a)(5).

    Source: 80 FR 61734, Oct. 14, 2015, unless otherwise noted.



Sec. 422.801  Scope of this subpart.

    (a) The regulations in this part are issued under the Debt 
Collection Act of 1982, as amended by the Debt Collection Improvement 
Act of (DCIA) 1996 (31 U.S.C. 3701, et seq.) and the Federal Claims 
Collection Standards (31 CFR parts 901-904) issued pursuant to the DCIA 
by the Department of the Treasury (Treasury) and the Department of 
Justice (DOJ). These authorities prescribe government-wide standards for 
administrative collection, compromise, suspension, or termination of 
agency collection action, disclosure of debt information to credit 
reporting agencies, referral of claims to private collection contractors 
for resolution, and referral to the DOJ for litigation to collect debts 
owed the Government. The regulations under this part also are issued 
under the Commissioner's general rule-making authority in the Social 
Security Act at section 702(a)(5), 42 U.S.C. 902(a)(5), the Treasury's 
regulations implementing the DCIA (31 CFR part 285), and related 
statutes and regulations governing the offset of Federal salaries (5 
U.S.C. 5512, 5514; 5 CFR part 550, subpart K) and the administrative 
offset of tax refunds (31 U.S.C. 3720A).
    (b) This subpart describes the procedures relating to the 
collection, compromise, and suspension of administrative debts owed to 
us, the Social Security Administration (SSA).
    (c) Administrative debts include claims against current employees, 
separated employees, and non-employee debtors.
    (1) Employee debts include salary overpayments; advanced sick and 
annual leave, advanced religious compensatory time, overpayments of 
health benefit premiums, leave buy back, emergency employee payments, 
travel, and transit subsidies.
    (2) Non-employee debts include vendor overpayments, reimbursable 
agreements, Supplemental Security Income Medicaid determinations, and 
economic recovery payments.
    (d) This subpart does not apply to programmatic overpayments 
described in subparts D and E of this part, and Sec. Sec. 404.527 and 
Sec. 416.590 of this title.
    (e) This subpart does not apply to civil monetary penalties arising 
from sections 1129 and 1140 of the Social Security Act and collected 
pursuant to part 498 of this title.



Sec. 422.803  Collection activities.

    (a) We will collect all administrative debts arising out of our 
activities or that are referred or transferred to us, the Social 
Security Administration, for

[[Page 1254]]

collection actions. We will send an initial written demand for payment 
no later than 30 days after an appropriate official determines that a 
debt exists.
    (b) In accordance with 31 CFR 285.12(c) and (g), we transfer legally 
enforceable administrative debts that are 120 calendar days or more 
delinquent to Treasury for debt collection services (i.e., cross-
servicing). This requirement does not apply to any debt that:
    (1) Is in litigation or foreclosure;
    (2) Will be disposed of under an approved asset sale program within 
one year of becoming eligible for sale;
    (3) Has been referred to a private collection contractor for a 
period acceptable to the Secretary of the Treasury;
    (4) Is at a debt collection center for a period of time acceptable 
to Treasury (see paragraph (c) of this section);
    (5) Will be collected under internal offset procedures within three 
years after the debt first became delinquent; or
    (6) Is exempt from this requirement based on a determination by 
Treasury that exemption for a certain class of debt is in the best 
interest of the United States.
    (c) Pursuant to 31 CFR 285.12(h), we may refer debts less than 120 
calendar days delinquent to Treasury or, with the consent of Treasury, 
to a Treasury-designated debt collection center to accomplish efficient, 
cost effective debt collection. Referrals to debt collection centers 
will be at the discretion of, and for a period acceptable to, the 
Secretary of the Treasury. Referrals may be for servicing, collection, 
compromise, suspension, or termination of collection action.
    (d) We may refer delinquent administrative debts to Treasury for 
offset through the Treasury Offset Program (TOP). Administered by 
Treasury, TOP's centralized offset process permits Treasury to withhold 
funds payable by the United States to a person to collect and satisfy 
delinquent debts the person owes Federal agencies and States.
    (e) We may collect an administrative debt by using Administrative 
Wage Garnishment.
    (f) We may collect an administrative debt by using Federal Salary 
Offset.



Sec. 422.805  Demand for payment.

    (a) Written demand for payment. (1) We will make a written demand, 
as described in paragraph (b) of this section, promptly to a debtor in 
terms that inform the debtor of the consequences of failing to cooperate 
with us to resolve the debt.
    (2) We will send a demand letter no later than 30 days after the 
appropriate official determines that the debt exists. We will send the 
demand letter to the debtor's last known address.
    (3) When necessary to protect the Government's interest, we may take 
appropriate action under this part, including immediate referral to DOJ 
for litigation, before sending the written demand for payment.
    (b) Demand letters. The specific content, timing, and number of 
demand letters will depend upon the type and amount of the debt and the 
debtor's response, if any, to our letters or telephone calls.
    (1) The written demand for payment will include the following 
information:
    (i) The nature and amount of the debt, including the basis for the 
indebtedness;
    (ii) The date by which payment should be made to avoid late charges 
and enforced collection, which must be no later than 30 days from the 
date the demand letter is mailed;
    (iii) Where applicable, the standards for imposing any interest, 
penalties, or administrative costs as specified under Sec. 422.807;
    (iv) The rights, if any, the debtor may have to:
    (A) Seek review of our determination of the debt, and for purposes 
of salary offset or Administrative Wage Garnishment, request a hearing. 
To request a hearing see Secs. 422.810(h) and 422.833(f)); and
    (B) Enter into a reasonable repayment agreement when necessary and 
authorized.
    (v) An explanation of how the debtor may exercise any of the rights 
described in paragraph (b)(1)(iv) of this section;
    (vi) The name, address, and phone number of a contact person or 
office to address any debt-related matters; and
    (vii) Our remedies to enforce payment of the debt, which may 
include:

[[Page 1255]]

    (A) Garnishing the debtor's wages through Administrative Wage 
Garnishment;
    (B) Offsetting any Federal or State payments due the debtor, 
including income tax refunds, salary, certain benefit payments;
    (C) Referring the debt to a private collection contractor;
    (D) Reporting the debt to a credit bureau or other automated 
database;
    (E) Referring the debt to the DOJ for litigation; and
    (F) Referring the debt to the Department of the Treasury for any of 
the collection actions described in paragraphs (b)(1)(vii)(A) through 
(E) of this section.
    (2) The written demand for payment should also include the following 
information:
    (i) The debtor's right to review our records pertaining to the debt, 
or, if the debtor or the debtor's representative cannot personally 
review the records, to request and receive copies of such records;
    (ii) Our willingness to discuss alternative methods of payment with 
the debtor;
    (iii) If a Federal employee, the debtor may be subject to 
disciplinary action under 5 CFR part 752 or other applicable authority;
    (iv) Any amounts collected and ultimately found to not be owed by 
the debtor will be refunded;
    (v) For salary offset, up to 15 percent of the debtor's current 
disposable pay may be deducted every pay period until the debt is paid 
in full; and
    (vi) Dependent upon applicable statutory authority, the debtor may 
be entitled to consideration for a waiver.
    (c) Evidence retention. We will retain evidence of service 
indicating the date of mailing of the demand letter. The evidence of 
service may be retained electronically so long as the manner of 
retention is sufficient for evidentiary purposes.
    (d) Pursue offset. Prior to, during, or after the completion of the 
demand process, if we determine to pursue, or are required to pursue 
offset, the procedures applicable to offset should be followed (see 
Sec. 422.821). The availability of funds for debt satisfaction by offset 
and our determination to pursue collection by offset will release us 
from the necessity of further compliance with paragraphs (a), (b), and 
(c) of this section.
    (e) Communications from debtors. Where feasible, we will respond 
promptly to communications from debtors within 30 days, and will advise 
debtors who dispute debts to furnish available evidence to support their 
contentions.
    (f) Exception. This section does not require duplication of any 
notice already contained in a written agreement, letter, or other 
document signed by, or provided to, the debtor.



Sec. 422.807  Interest, penalties, and administrative costs.

    (a) Except as provided in paragraphs (g), (h), and (i) of this 
section, we will charge interest, penalties, and administrative costs on 
delinquent debts owed to the United States. These charges will continue 
to accrue until the debtor pays the debt in full or otherwise resolves 
the debt through compromise, termination, or an approved waiver.
    (b) Interest. We will charge interest on delinquent administrative 
debts owed the agency as follows:
    (1) Interest will accrue from the date of delinquency or as 
otherwise provided by law. For debts not paid by the date specified in 
the written demand for payment made under Sec. 422.805, the date of 
delinquency is the date of mailing of the notice. The date of 
delinquency for an installment payment is the due date specified in the 
payment agreement.
    (2) Unless a different rate is prescribed by statute, contract, or a 
repayment agreement, the rate of interest charged will be the rate 
established annually by the Treasury pursuant to 31 U.S.C. 3717. We may 
charge a higher rate if necessary to protect the rights of the United 
States, and the Commissioner has determined and documented a higher rate 
for delinquent debt is required to protect the Government's interests.
    (3) Unless prescribed by statute or contract, the initial rate of 
interest charged will remain fixed for the duration of the indebtedness. 
A debtor who defaults on a repayment agreement may seek to enter into a 
new agreement. If we agree to a new agreement,

[[Page 1256]]

we may require additional financial information and payment of interest 
at a new rate that reflects the Treasury rate in effect at the time the 
new agreement is executed or at a higher rate consistent with paragraph 
(b)(2) of this section. Interest will not be compounded. That is, we 
will not charge interest on the interest, penalties, or administrative 
costs required by this section, except as permitted by statute or 
contract. If, however, the debtor defaults on a previous repayment 
agreement, we will add charges that accrued but were not collected under 
the defaulted agreement to the principal of any new repayment agreement.
    (c) Penalty. Unless otherwise established by contract, repayment 
agreement, or statute, we will charge a penalty pursuant to 31 U.S.C. 
3717(e)(2) and 31 CFR 901.9 on the amount due on a debt that is 
delinquent for more than 90 days. This charge will accrue from the date 
of delinquency.
    (d) Administrative costs. We will assess administrative costs 
incurred for processing and handling delinquent debts. We will base the 
calculation of administrative costs on actual costs incurred or a valid 
estimate of the actual costs. Calculation of administrative costs will 
include all direct (personnel, supplies, etc.) and indirect collection 
costs, including the cost of providing a hearing or any other form of 
administrative review requested by a debtor and any costs charged by a 
collection agency under Sec. 422.837. We will assess these charges 
monthly or per payment period throughout the period that the debt is 
overdue. Such costs may also be in addition to other administrative 
costs if collection is being made for another Federal agency or unit.
    (e) Cost of living adjustment. When there is a legitimate reason to 
do so, such as when calculating interest and penalties on a debt would 
be extremely difficult because of the age of the debt, we may increase 
an administrative debt by the cost of living adjustment in lieu of 
charging interest and penalties under this section. The cost of living 
adjustment is the percentage by which the Consumer Price Index for the 
month of June of the calendar year preceding the adjustment exceeds the 
Consumer Price Index for the month of June of the calendar year in which 
the debt was determined or last adjusted. We will manually compute such 
increases to administrative debts.
    (f) Priority. When a debt is paid in partial or installment 
payments, amounts received will be applied first to outstanding 
penalties, second to administrative charges, third to interest, and last 
to principal.
    (g) Waiver. (1) We will waive the collection of interest and 
administrative costs imposed pursuant to this section on the portion of 
the debt that is paid within 30 days after the date on which interest 
began to accrue. Excepting debt affected by fraud or other misconduct, 
we may extend this 30-day period on a case-by-case basis if we determine 
that such action is in the best interest of the Government or is 
otherwise warranted by equity and good conscience.
    (2) We may waive interest, penalties, and administrative charges 
charged under this section, in whole or in part, without regard to the 
amount of the debt, based on:
    (i) The criteria set forth at Sec. 422.846 (b)(1) for the compromise 
of debts; or
    (ii) A determination by the agency that collection of these charges 
is:
    (A) Against equity and good conscience; or
    (B) Not in the best interest of the United States.
    (h) Review. (1) Except as provided in paragraph (h)(2) of this 
section, administrative review of a debt will not suspend the assessment 
of interest, penalties, and administrative costs. While agency review of 
a debt is pending, the debtor may either pay the debt or be liable for 
interest and related charges on the uncollected debt. When agency review 
results in a final determination that any amount was properly a debt and 
the debtor failed to pay the full amount of the disputed debt, we will 
collect from the debtor the amount determined to be due, and interest, 
penalties and administrative costs on the debt amount. We will calculate 
and assess interest, penalties, and administrative costs under this 
section starting from the date the debtor was first made aware of the 
debt and ending when the debt is repaid.

[[Page 1257]]

    (2) Exception. Interest, penalties, and administrative cost charges 
will not be imposed on a debt for periods during which collection 
activity has been suspended under Sec. 422.848(c)(1) pending agency 
review or consideration of waiver, if a statute prohibits collection of 
the debt during this period. This exception does not apply to interest, 
penalties, and administrative cost charges on debts affected by fraud or 
other misconduct unless a statute so requires.
    (i) Common law or other statutory authority. We may impose and waive 
interest and related charges on debts not subject to 31 U.S.C. 3717 in 
accordance with the common law or other statutory authority.



Sec. 422.809  Collection in installments.

    Whenever feasible, we will collect the total amount of a debt in one 
lump sum payment. If a debtor claims a financial inability to pay a debt 
in one lump sum, by funds or Administrative Offset, we may accept 
payment in regular installments provided the debtor establishes the 
financial need and no evidence indicates that fraud or similar fault 
affected the debt. We will request financial statements from debtors who 
represent that they are unable to pay in one lump sum and independently 
verify such representations as described in Sec. 422.846.
    (a) When we agree to accept payments in regular installments, we 
will obtain a legally enforceable written agreement from the debtor that 
specifies all the terms and conditions of the agreement and includes a 
provision accelerating the debt in the event of a default.
    (b) The size and frequency of the payments will reasonably relate to 
the size of the debt and the debtor's ability to pay. Whenever feasible, 
the installment agreement will provide for full payment of the debt, 
including interest and charges, in three years or less.
    (c) When appropriate, the agreement will include a provision 
identifying security obtained from the debtor for the deferred payments, 
such as a surety bond or confession of judgment supporting a lien on any 
property of the debtor.
    (d) An approved installment agreement does not prevent the use of 
Administrative Wage Garnishment or other collection tools in this 
subpart.



Sec. 422.810  Salary offset for current employees.

    (a) Purpose. This part prescribes the Social Security 
Administration's (SSA) standards and procedures for the collection of 
debts owed by current SSA employees to SSA through involuntary salary 
offset.
    (b) Authority. 5 U.S.C. 5514; 5 CFR part 550.
    (c) Scope. (1) This part applies to internal collections of debt by 
Administrative Offset from the current pay accounts of SSA employees 
without his or her consent. The part does not apply to current SSA 
employees indebted to another Federal agency or employees who separate 
from SSA.
    (2) The procedures contained in this part do not apply to any case 
where an employee consents to collection through deduction(s) from the 
employee's pay account, or to debts arising under the Internal Revenue 
Code or the tariff laws of the United States, or where another statute 
explicitly provides for or prohibits collection of a debt by salary 
offset (e.g., travel advances in 5 U.S.C. 5705 and employee training 
expenses in 5 U.S.C. 4108).
    (3) This part does not preclude an employee from requesting a waiver 
of an erroneous payment under 5 U.S.C. 5584, 10 U.S.C. 2774, or 32 
U.S.C. 716, or in any way questioning the amount or validity of a debt. 
Similarly, this part does not preclude an employee from requesting 
waiver of the collection of a debt under any other applicable statutory 
authority.
    (4) Provided a debt is not affected by fraud and does not exceed 
$100,000, nothing in this part precludes the compromise of the debt or 
the suspension or termination of collection actions in accordance with 
Secs. 422.846 and 422.848 of this title.
    (d) Definitions.
    Administrative Offset means withholding funds payable by the United 
States to, or held by the United States for, a person to satisfy a debt 
owed by the payee.

[[Page 1258]]

    Agency means an executive department or agency, a military 
department, the United States Postal Service, the Postal Rate 
Commission, the United States Senate, the United States House of 
Representatives, a court, court administrative office, or 
instrumentality in the judicial or legislative branches of the 
Government, or a Government Corporation.
    Creditor agency means the agency to which the debt is owed or SSA, 
including a debt collection center when acting on behalf of a creditor 
agency in matters pertaining to the collection of a debt.
    Day means calendar day. For purposes of computation, the last day of 
the period will be included unless it is a Saturday, Sunday, or a 
Federal holiday, in which case the next business day will be considered 
the last day of the period.
    Debt means an amount of funds or other property determined by an 
appropriate official of the Federal Government to be owed to the United 
States from any person, organization, or entity or any other debt that 
meets the definition of ``claim'' or ``debt'' under 31 U.S.C. 3701(b), 
excluding program overpayments made under title II or title XVI of the 
Social Security Act.
    Debt collection center means the Department of the Treasury 
(Treasury) or other Government agency or division designated by the 
Secretary of the Treasury with authority to collect debts on behalf of 
creditor agencies in accordance with 31 U.S.C. 3711(g).
    Debtor means an employee currently employed by SSA who owes a 
delinquent non-tax debt to the United States.
    Delinquent debt means a debt that the debtor does not pay or 
otherwise resolve by the date specified in the initial demand for 
payment, or in an applicable written repayment agreement or other 
instrument, including a post-delinquency repayment agreement.
    Disposable pay means that part of the debtor's current basic, 
special, incentive, retired, and retainer pay, or other authorized pay 
remaining after deduction of amounts we are required by law to withhold. 
For purposes of calculating disposable pay, legally required deductions 
that must be applied first include: Tax levies pursuant to the Internal 
Revenue Code (title 26, United States Code); properly withheld taxes; 
Federal Insurance Contributions Act (FICA); Medicare; health, dental, 
vision, and life insurance premiums; and Thrift Savings Plan and 
retirement contributions. Amounts deducted under garnishment orders, 
including child support garnishment orders, are not legally permissible 
deductions when calculating disposable pay as specified in 5 CFR 
550.1103.
    Employee means any individual currently employed by SSA, as defined 
in this section, including seasonal and temporary employees and current 
members of the Armed Forces or a Reserve of the Armed Forces (Reserves).
    Evidence of service means information retained by the agency 
indicating the nature of the document to which it pertains, the date of 
mailing the document, and the address and name of the debtor to whom it 
is being sent. A copy of the dated and signed notice provided to the 
debtor pursuant to this part may be considered evidence of service for 
purposes of this part. We may retain evidence of service electronically 
so long as the manner of retention is sufficient for evidentiary 
purposes.
    Hearing means a review of the documentary evidence to confirm the 
existence or amount of a debt or the terms of a repayment schedule. If 
we determine that the issues in dispute cannot be resolved by such a 
review, such as when the validity of the claim turns on the issue of 
credibility or veracity, we may provide an oral hearing.
    Hearing official means an administrative law judge or appropriate 
alternate.
    Paying agency means the agency employing the employee and 
authorizing the payment of his or her current pay.
    Salary offset means an Administrative Offset to collect a debt under 
5 U.S.C. 5514 owed by a current SSA employee through deductions at one 
or more officially established pay intervals from the current pay 
account of the current SSA employee without his or her consent.
    Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt owed by an employee to the agency or another agency 
as required or permitted by 5 U.S.C. 5584, 8346(b), 10

[[Page 1259]]

U.S.C. 2774, 32 U.S.C. 716, or any other law.
    (e) General rule. (1) Whenever an employee owes us a delinquent 
debt, we may, subject to paragraph (e)(3) of this section, involuntarily 
offset the amount of the debt from the employee's disposable pay.
    (2) Except as provided in paragraph (e)(3) of this section, prior to 
initiating collection through salary offset under this part, we will 
first provide the employee with the following:
    (i) A notice as described in paragraph (f) of this section; and
    (ii) An opportunity to petition for a hearing, and, if a hearing is 
provided, to receive a written decision from the hearing official within 
60 days on the following issues:
    (A) The determination concerning the existence or amount of the 
debt; and
    (B) The repayment schedule, unless it was established by written 
agreement between the employee and us.
    (3) The provisions of paragraph (e)(2) of this section do not apply 
to:
    (i) Any adjustment to pay arising out of an employee's election of 
coverage or a change in coverage under a federal benefits program 
requiring periodic deduction from pay, if the amount to be recovered was 
accumulated over four pay periods or less;
    (ii) A routine intra-agency adjustment of pay that is made to 
correct an overpayment of pay attributable to clerical or administrative 
errors or delays in processing pay documents, if the overpayment 
occurred within four pay periods preceding the adjustment and, at the 
time of such adjustment, or as soon thereafter as practical, the 
individual is provided a notice of the nature and the amount of the 
adjustment and point of contact for contesting such adjustment; or
    (iii) Any adjustment to collect a debt amount in accordance with the 
amount stated in 5 U.S.C. 5514 as amended by the DCIA, if, at the time 
of such adjustment, or as soon thereafter as practical, the individual 
is provided a notice of the nature and the amount of the adjustment and 
a point of contact for contesting such adjustment.
    (f) Notice requirements before offset. (1) At least 30 days before 
the initiation of salary offset under this part, we will send a notice 
to the employee's last known address, informing the debtor of the 
following:
    (i) We have reviewed the records relating to the debt and have 
determined that a debt is owed, the amount of the debt, and the facts 
giving rise to the debt;
    (ii) Our intention to collect the debt by means of deduction from 
the employee's current disposable pay until the debt and all accumulated 
interest, penalties, and administrative costs are paid in full;
    (iii) The amount, stated either as a fixed dollar amount or as a 
percentage of pay not to exceed 15 percent of disposable pay, the 
frequency, the commencement date, and the duration of the intended 
deductions;
    (iv) An explanation of our policies concerning the assessment of 
interest, penalties, and administrative costs, stating that such 
assessments must be made unless waived in accordance with 31 CFR 901.9 
and Sec. 422.807 of this part;
    (v) The employee's right to review and copy all of our records 
pertaining to the debt or, if the employee or the employee's 
representative cannot personally review the records, to request and 
receive copies of such records;
    (vi) If not previously provided, the opportunity to establish a 
schedule for the voluntary repayment of the debt through offset or to 
enter into an agreement to establish a schedule for repayment of the 
debt in lieu of offset provided the agreement is in writing, signed by 
both the employee and us, and documented in our files;
    (vii) The right to a hearing conducted by an impartial hearing 
official with respect to the existence and amount of the debt, or the 
repayment schedule, so long as a petition is filed by the employee as 
prescribed in paragraph (h) of this section;
    (viii) Time limits and other procedures or conditions for reviewing 
our records pertaining to the debt, establishing an alternative 
repayment agreement, and requesting a hearing;
    (ix) The name, address, and telephone number of the person or office 
who may be contacted concerning the procedures for reviewing our 
records, establishing

[[Page 1260]]

an alternative repayment agreement, and requesting a hearing;
    (x) The name and address of the office to send the petition for a 
hearing;
    (xi) A timely and properly filed petition for a hearing will suspend 
the commencement of the collection proceeding;
    (xii) We will initiate action to effect salary offset not less than 
30 days from the date of mailing the notice, unless the employee 
properly files a timely petition for a hearing,
    (xiii) A final decision on a hearing, if one is requested, will be 
issued at the earliest practical date, but not later than 60 days after 
the filing of the petition requesting the hearing unless the employee 
requests and the hearing official grants a delay in the proceeding;
    (xiv) Notice that an employee who knowingly makes false or frivolous 
statements or submits false or frivolous representations or evidence may 
be subject to disciplinary procedures under chapter 75 of title 5, 
United States Code, Part 752 of title 5, CFR, or any other applicable 
statutes or regulations;
    (xv) Any other rights and remedies available to the employee under 
statutes or regulations governing the program for which the collection 
is being made;
    (xvi) Unless there are applicable contractual or statutory 
provisions to the contrary, amounts paid on or deducted for the debt 
that are later waived or found not owed to the United States will be 
promptly refunded to the employee; and
    (xvii) Proceedings with respect to such debt are governed by 5 
U.S.C. 5514.
    (2) We will retain evidence of service indicating the date of 
mailing of the notice.
    (g) Review of records relating to the debt. (1) To review or copy 
our records relating to the debt, the employee must send a written 
request stating his or her intention. We must receive the written 
request within 15 days from the employee's receipt of the notice.
    (2) In response to a timely request as described in paragraph (1) of 
this section, we will notify the employee of the location and time when 
the employee may review and copy such records. If the employee or 
employee's representative is unable to review personally such records as 
the result of geographical or other constraints, we will arrange to send 
copies of such records to the employee.
    (h) Hearings--(1) Petitions for hearing. (i) To request a hearing 
concerning the existence or amount of the debt or the offset schedule 
established by us, the employee must send a written petition to the 
office we identified in the notice (see paragraph (f)(1)(x) of this 
section) within 15 days of receipt of the notice.
    (ii) The petition must:
    (A) Be signed by the employee;
    (B) Fully identify and explain with reasonable specificity all the 
facts, evidence, and witnesses, if any, that the employee believes 
support his or her position; and
    (C) Specify whether an oral or paper hearing is requested. If an 
oral hearing is requested, the request should explain why the matter 
cannot be resolved by a paper hearing, which is a determination of the 
request for reconsideration based upon a review of the written record.
    (iii) The timely filing of a petition for hearing will suspend any 
further collection proceedings.
    (2) Failure to timely request a hearing. (i) If the petition for 
hearing is filed after the 15-day period provided in paragraph (h)(1)(i) 
of this section, we may grant the request if the employee can establish 
either that the delay was the result of circumstances beyond the 
employee's control or that the employee failed to receive actual notice 
of the filing deadline.
    (ii) An employee waives the right to a hearing and will have his or 
her disposable pay offset in accordance with the offset schedule 
established by us, if the employee:
    (A) Fails to file a timely request for a hearing unless such failure 
is excused; or
    (B) Fails to appear at an oral hearing of which the employee was 
notified unless the hearing official determines that the failure to 
appear was due to circumstances beyond the employee's control.
    (3) Form of hearings--(i) General. After the employee requests a 
hearing, the hearing official must notify the employee of the type of 
hearing that will

[[Page 1261]]

occur. If an oral hearing will occur, the notice will state the date, 
time, and location of the hearing. If a paper hearing will occur, the 
employee will be notified and required to submit evidence and arguments 
in writing to the hearing official by the date specified in the notice, 
after which the record will be closed.
    (ii) Oral hearing. An employee who requests an oral hearing will be 
provided an oral hearing if the hearing official determines that the 
matter cannot be resolved by review of documentary evidence alone 
because an issue of credibility or veracity is involved. Where an oral 
hearing is appropriate, the hearing is not an adversarial adjudication 
and need not take the form of an evidentiary hearing (e.g., the formal 
rules of evidence need not apply). Oral hearings may take the form of, 
but are not limited to:
    (A) Informal conferences with the hearing official in which the 
employee and agency representative will be given full opportunities to 
present evidence, witnesses, and arguments;
    (B) Informal meetings in which the hearing official interviews the 
employee by phone or videoconferencing; or
    (C) Formal written submissions with an opportunity for oral 
presentations.
    (iii) Paper hearing. If the hearing official determines that an oral 
hearing is not necessary, the hearing official will make the 
determination based upon a review of the available written record.
    (iv) Record. The hearing official will maintain a summary record of 
any hearing conducted under this part. Witnesses who testify in oral 
hearings will do so under oath or affirmation.
    (4) Written decision--(i) Date of decision. The hearing officer will 
issue a written opinion stating his or her decision. This opinion is 
based upon documentary evidence and information developed at the 
hearing, as soon as practicable after the hearing, but not later than 60 
days after the date on which the hearing petition was received by the 
creditor agency. This is dependent upon whether the employee requested a 
delay in the proceedings and the hearing official grants it, in which 
case the 60-day decision period will be extended by the number of days 
by which the hearing was postponed. The recipient of an employee's 
request for a hearing must forward the request expeditiously to the 
hearing official to avoid jeopardizing the hearing official's ability to 
issue a decision within this 60-day period.
    (ii) Content of decision. The written decision will include:
    (A) A statement of the facts presented to support the origin, 
nature, and amount of the debt;
    (B) The hearing official's findings, analysis, and conclusions, 
including a determination whether the employee's petition for hearing 
was baseless and resulted from an intent to delay the creditor agency's 
collection activity; and
    (C) The terms of any repayment schedule, if applicable.
    (5) Failure to appear. In the absence of good cause shown, an 
employee who fails to appear at a hearing will be deemed, for the 
purpose of this part, to admit the existence and amount of the debt as 
described in the notice. If the representative of the creditor agency 
fails to appear, the hearing official will proceed with the hearing as 
scheduled and make a determination based upon oral testimony presented 
and the documentary evidence submitted by both parties. With the 
agreement of both parties, the hearing official will schedule a new 
hearing date, and both parties will be given notice of the time and 
place of the new hearing.
    (i) Obtaining the services of a hearing official. The office 
designated in paragraph (f)(1)(x) of this section will schedule a 
hearing, if one is requested by an employee, before a hearing official.
    (1) When we cannot provide a prompt and appropriate hearing before 
an administrative law judge or a hearing official furnished pursuant to 
another lawful arrangement, the office designated in paragraph (f)(1)(x) 
of this section may contact an agent of any agency designated in 5 CFR 
part 581, appendix A to arrange for a hearing official.
    (2)(i) When another agency is the creditor agency, not SSA, it is 
the responsibility of that agency to arrange for a hearing if one is 
requested. We will provide a hearing official upon the

[[Page 1262]]

request of a creditor agency when the debtor is employed by us and the 
creditor agency cannot provide a prompt and appropriate hearing before a 
hearing official furnished pursuant to another lawful arrangement.
    (ii) Services rendered to a creditor agency under paragraph 
(i)(2)(i) of this section will be provided on a fully reimbursable basis 
pursuant to the Economy Act of 1932, as amended by 31 U.S.C. 1535.
    (3) The determination of a hearing official designated under this 
section is considered an official certification regarding the existence 
and amount of the debt for purposes of executing salary offset under 5 
U.S.C. 5514 and this part. A creditor agency may make a certification to 
the Secretary of the Treasury under 5 CFR 550.1108 or a paying agency 
under 5 CFR 550.1109 regarding the existence and amount of the debt 
based on the certification of a hearing official. If a hearing official 
determines that a debt may not be collected via salary offset, but we 
find that the debt is still valid, we may still seek collection of the 
debt through other means, such as offset of other Federal payments or 
litigation.
    (j) Voluntary repayment agreement in lieu of salary offset. (1)(i) 
In response to the notice, the employee may propose to establish an 
alternative schedule for the voluntary repayment of the debt by 
submitting a written request. An employee who wishes to repay the debt 
without salary offset will also submit a proposed written repayment 
agreement. The proposal will admit the existence of the debt, and the 
agreement must be in such form that it is legally enforceable. The 
agreement must:
    (A) Be in writing;
    (B) Be signed by both the employee and the agency;
    (C) Specify all the terms of the arrangement for payment; and
    (D) Contain a provision accelerating the debt in the event of 
default by the employee, but such an increase may not result in a 
deduction that exceeds 15 percent of the employee's disposable pay 
unless the employee has agreed in writing to a deduction of a greater 
amount.
    (ii) Any proposal under paragraph (j)(1)(i) of this section must be 
received within 30 days of the date of the notice.
    (2) In response to a timely request as described in paragraph (j)(1) 
of this section, we will notify the employee whether the proposed 
repayment schedule is acceptable. It is within our discretion to accept 
a proposed alternative repayment schedule and to set the necessary terms 
of a voluntary repayment agreement.
    (3) No voluntary repayment agreement will be binding on us unless it 
is in writing and signed by the employee and us.
    (k) Special review. (1) At any time, an employee subject to salary 
offset or a voluntary repayment agreement may request a special review 
by the agency of the amount of the salary offset or voluntary repayment 
installments based on materially changed circumstances, such as, but not 
limited to, catastrophic illness, divorce, death, or disability.
    (2)(i) In determining whether an offset would prevent the employee 
from meeting essential subsistence expenses (e.g., food, housing, 
clothing, transportation, and medical care), the employee must submit a 
detailed statement and supporting documents for the employee, his or her 
spouse, and dependents indicating:
    (A) Income from all sources;
    (B) Assets and liabilities;
    (C) Number of dependents;
    (D) Food, housing, clothing, transportation, and medical expenses; 
and
    (E) Exceptional and unusual expenses, if any.
    (ii) When requesting a special review under this section, the 
employee must file an alternative proposed offset or payment schedule 
and a statement, with supporting documents as described in paragraph 
(k)(2)(i) of this section, stating why the current salary offset or 
payments result in an extreme financial hardship to the employee.
    (3)(i) We will evaluate the statement and supporting documents and 
determine whether the original offset or repayment schedule impose 
extreme financial hardship on the employee.
    (ii) Within 30 calendar days of the receipt of the request and 
supporting

[[Page 1263]]

documents, we will notify the employee in writing of such determination, 
including, if appropriate, a revised offset or repayment schedule.
    (4) If the special review results in a revised offset or repayment 
schedule, we will do a new certification based on the result of the 
review.
    (l) Procedures for salary offset--(1) Method and source of 
deductions. Unless the employee and the agency have agreed to an 
alternative repayment arrangement under paragraph (j) of this section, 
the agency will collect a debt in a lump sum or by installment 
deductions at officially established pay intervals from an employee's 
current pay account.
    (2) Limitation on amount of deduction. Ordinarily, the size of 
installment deductions must bear a reasonable relationship to the size 
of the debt and the employee's ability to pay. However, the amount 
deducted for any pay period must not exceed 15 percent of the disposable 
pay from which the deduction is made unless the employee has agreed in 
writing to the deduction of a greater amount, as outlined in paragraph 
(j) of this seciton.
    (3) Duration of deductions--(i) Lump sum. If the amount of the debt 
is equal to or less than 15 percent of the employee's disposable pay for 
an officially established pay interval, the agency will collect the debt 
in one lump-sum deduction including lump-sum annual leave amounts.
    (ii) If the employee is deemed financially unable to pay in one lump 
sum or the amount of the debt exceeds 15 percent of the employee's 
disposable pay for an officially established pay interval, the agency 
will collect the debt in installments. Except as provided in paragraphs 
(k)(5) and (6) of this section, installment deductions must be made over 
a period no longer than the anticipated period of active duty or 
employment.
    (4) When deductions may begin. (i) Deductions will begin on the date 
stated in the notice, unless the agency and individual have agreed to an 
alternative repayment agreement under paragraph (j) of this section or 
the employee has filed a timely request for a hearing.
    (ii) If the employee files a timely petition for hearing as provided 
in paragraph (h) of this section, the agency will begin deductions after 
the hearing official has provided the employee with a hearing and a 
final written decision has been rendered in favor of the agency.
    (5) Liquidation from final check. If an employee retires, resigns, 
or the period of employment ends before collection of the debt is 
completed, the agency will offset the remainder under 31 U.S.C. 3716 
from subsequent agency payments of any nature (e.g., final salary 
payment or lump-sum leave) due the employee as of the date of 
separation.
    (6) Recovery from other payments due a separated employee. If the 
debt cannot be satisfied by offset from any final payment due the 
employee on the date of separation, we will liquidate the debt, where 
appropriate, by Administrative Offset under 31 U.S.C. 3716 from later 
payments of any kind due the former employee (e.g., lump-sum leave 
payment).
    (m) Exception to internal salary offset. SSA may follow 
Administrative Offset notification requirements when attempting the 
collection of delinquent travel advances and training expenses, not 
those associated with Federal employee salary offset. Once the 
notification procedures have been followed, SSA has the authority to 
withhold all or part of an employee's salary, retirement benefits, or 
other amount due the employee including lump-sum payments to recover the 
amounts owed. No statutory or regulatory limits exist on the amount that 
can be withheld or offset.
    (n) Salary offset when we are the paying agency but not the creditor 
agency. When we are the paying agency and another agency is the creditor 
agency, the creditor agency must provide written certification to 
Treasury that the employee owes the debt, the amount and basis of the 
debt, the date on which payment(s) is due, the date the Government's 
right to collect the debt first accrued, and that the Office of 
Personnel Management has approved the creditor agency's regulations 
implementing 5 U.S.C. 5514. We are not required or authorized to review 
the merits of the determination with respect

[[Page 1264]]

to the amount or validity of the debt certified by the creditor agency.
    (o) Interest, penalties, and administrative costs. Debts owed will 
be assessed interest, penalties, and administrative costs in accordance 
with Sec. 422.807.
    (p) Non-waiver of rights. An employee's involuntary payment of all 
or any portion of a debt collected under this part will not be construed 
as a waiver of any rights the employee may have under 5 U.S.C. 5514 or 
any other provision of law or contract unless there are statutory or 
contractual provisions to the contrary.
    (q) Refunds. (1) We will promptly refund any amounts paid or 
deducted under this part when:
    (i) A debt is waived or otherwise found not owed to us; or
    (ii) We are directed by administrative or judicial order to refund 
amount deducted from the employee's current pay.
    (2) Unless required or permitted by law or contract, refunds will 
not bear interest.
    (r) Additional administrative collection action. Nothing contained 
in this part is intended to preclude the use of any other appropriate 
administrative remedy.



Sec. 422.811  Discretionary referral for cross-servicing.

    We may refer legally enforceable non-tax administrative debts that 
are less than 120 calendar days delinquent to the Department of the 
Treasury (Treasury) or to Treasury-designated ``debt collection 
centers'' in accordance with 31 CFR 285.12 to accomplish efficient, cost 
effective debt collection.



Sec. 422.813  Mandatory referral for cross-servicing.

    (a) Pursuant to the cross-servicing process, creditor agencies must 
transfer any eligible debt more than 120 calendar days delinquent to the 
Department of the Treasury (Treasury) for debt collection services. As 
one such agency, pursuant to 31 CFR 285.12, we are required to transfer 
to Treasury any legally enforceable nontax debt in excess of $25. We may 
transfer to Treasury any combination of legally enforceable nontax debts 
less than $25 that exceeds $25 (in the case of a debtor whose taxpayer 
identification number (TIN) is unknown, the applicable threshold is 
$100) that has or have been delinquent for a period of 120 calendar 
days. Treasury will take appropriate action on behalf of the creditor 
agency to collect, compromise, suspend, or terminate collection of the 
debt, including use of debt collection centers and private collection 
contractors to collect the debt or terminate collection action.
    (b) Debts not eligible for mandatory referral of paragraph (a) of 
this section include:
    (1) Debts owed by a Federal agency;
    (2) Debts owed by a deceased debtor;
    (3) Debts not legally enforceable: A debt is considered legally 
enforceable for purposes of referral to the Treasury's Bureau of the 
Fiscal Service if there has been a final agency determination that the 
debt is due and there are no legal bars to collection;
    (4) Debts that are the subject of an administrative appeal until the 
appeal is concluded and the amount of the debt is fixed;
    (5) Debts owed by a debtor who has filed for bankruptcy protection 
or the debt has been discharged in bankruptcy proceeding; or
    (6) Debts that are less than $25 (including interest, penalties, and 
administrative costs).
    (c) A debt is considered delinquent for purposes of this section if 
it is 120 calendar days past due and is legally enforceable. A debt is 
past due if it has not been paid by the date specified in the agency's 
initial written demand for payment or applicable agreement or instrument 
(including a post-delinquency payment agreement) unless other 
satisfactory payment arrangements have been made. A debt is legally 
enforceable if there has been a final agency determination that the 
debt, in the amount stated, is due and there are no legal bars to 
collection action. Where, for example, a debt is the subject of a 
pending administrative review process required by statute or regulation 
and collection action during the review process is prohibited, the debt 
is not considered legally enforceable for purposes of mandatory transfer 
to the Treasury and is not to be transferred

[[Page 1265]]

even if the debt is more than 120 calendar days past due. When a final 
agency determination is made after an administrative appeal or review 
process, the creditor agency must transfer such debt to Treasury, if 
more than 120 calendar days delinquent, within 30 days after the date of 
the final decision.
    (d) We may also refer debts owed by a foreign country upon 
consultation with our Office of the General Counsel.



Sec. 422.815  Referral of administrative debts to the Department 
of the Treasury.

    (a) Agencies are required by law to transfer delinquent, nontax, and 
legally enforceable debts to Department of the Treasury (Treasury) for 
collection through cross-servicing and through centralized 
Administrative Offset. Additionally, we may transfer debts to the 
Treasury for collection through Administrative Wage Garnishment. 
Agencies need not make duplicate referrals to Treasury for all these 
purposes; we may refer a debt to Treasury for purposes of simultaneous 
collection by cross-servicing, centralized Administrative Offset, and 
Administrative Wage Garnishment where applicable. However, in some 
instances a debt exempt from cross-servicing collection may be subject 
to collection by centralized Administrative Offset, so simultaneous 
referrals are not always appropriate.
    (b) When we refer or transfer administrative debts to Treasury, or 
Treasury-designated debt collection centers under the authority of 31 
U.S.C. 3711(g), Treasury will service, collect, or compromise the debts, 
or Treasury will suspend or terminate the collection action, in 
accordance with the statutory requirements and authorities applicable to 
the collection of such debts.
    (c) Debts that are not required for referral include:
    (1) Debts delinquent for 120 calendar days or less;
    (2) Debts less than $100 and we are unable to obtain the debtor's 
taxpayer identification number;
    (3) Debts in litigation or foreclosure as defined in 31 CFR 
285.12(d)(2);
    (4) Debts that have been referred to a private collection contractor 
for a period acceptable to Treasury;
    (5) Debts that will be disposed of under an approved asset sale 
program as defined in 31 CFR 285.12(d)(3)(i);
    (6) Debts that will be collected under internal offset procedures 
within three years after the debt first became delinquent;
    (7) Debts at a debt collection center for a period of time 
acceptable to Treasury; or
    (8) Debts exempt from this requirement based on a determination by 
the Secretary of the Treasury that exemption for a certain class of debt 
is in the best interest of the United States. Federal agencies may 
request that the Secretary of the Treasury exempt specific classes of 
debts. Any such request by an agency must be sent to the Fiscal 
Assistant Secretary of the Treasury by the agency's Chief Financial 
Officer.



Sec. 422.817  Required certification.

    Before referring delinquent administrative debts to the Department 
of the Treasury (Treasury) for collection, we will certify, in writing, 
that:
    (a) The debts we are transferring are valid and legally enforceable;
    (b) There are no legal bars to collection; and
    (c) We have complied with all prerequisites to a particular 
collection action under the laws, regulations, or policies applicable to 
us, unless we agree that Treasury will do so on our behalf.



Sec. 422.819  Fees.

    Federal agencies operating Department of the Treasury-designated 
debt collection centers are authorized to charge a fee for services 
rendered regarding referred or transferred debts. The fee may be paid 
out of amounts collected and may be added to the debt as an 
administrative cost.



Sec. 422.821  Administrative offset.

    (a) Scope. (1) Administrative Offset is the withholding of funds 
payable by the United States to, or held by the United States for, a 
person to satisfy a debt. We will use Administrative Offset to recover 
administrative debts.
    (2) This section does not apply to:
    (i) Debts arising under the Social Security Act;

[[Page 1266]]

    (ii) Payments made under the Social Security Act, except as provided 
for in 31 U.S.C. 3716(c), and 31 CFR 285.4;
    (iii) Debts arising under, or payments made under the Internal 
Revenue Code or the tariff laws of the United States;
    (iv) Offsets against Federal salaries to the extent these standards 
are inconsistent with regulations published to implement such offsets 
under 5 U.S.C. 5514 and 31 U.S.C. 3716 (see 5 CFR part 550, subpart K; 
31 CFR 285.7; Secs. 422.810 and 422.829 of this part);
    (v) Offsets under 31 U.S.C. 3728 against a judgment obtained by a 
debtor against the United States;
    (vi) Offsets or recoupments under common law, State law, or Federal 
statutes specifically prohibiting offsets or recoupments for particular 
types of debts; or
    (vii) Offsets in the course of judicial proceedings, including 
bankruptcy.
    (3) Unless otherwise provided for by contract or law, debts or 
payments that are not subject to Administrative Offset under 31 U.S.C. 
3716 may be collected by Administrative Offset under the common law or 
other applicable statutory authority.
    (4) In bankruptcy cases, the agency may seek legal advice from the 
Office of the General Counsel concerning the impact of the Bankruptcy 
Code, particularly 11 U.S.C. 106, 362, and 553, on pending or 
contemplated collections by offset.
    (b) [Reserved]



Sec. 422.822  Notification of intent to collect by administrative
offset.

    (a) Prior to initiation of collection by Administrative Offset, we 
will:
    (1) Send the debtor a notice by mail or hand-delivery. The notice 
will include the type and amount of the debt, the intention of the 
agency using internal offset or non-centralized Administrative Offset to 
collect the debt 30 days after the date of the notice, and the name of 
the Federal agency from which the creditor agency wishes to collect in 
the case of a non-centralized Administrative Offset. Additionally, if 
the debt is not satisfied by offset within the Social Security 
Administration or by agreement with another Federal agency, the notice 
will include the intent to refer the debt to the Department of the 
Treasury (Treasury) for collection through centralized Administrative 
Offset, including offset of tax refunds 60 days after the date of the 
notice as well as an explanation of the debtor's rights under 31 U.S.C. 
3716.
    (2) Give the debtor the opportunity:
    (i) To make a voluntary payment;
    (ii) To review and copy agency records related to the debt;
    (iii) For a review within the agency of the determination of 
indebtedness;
    (iv) To make a written agreement to repay the debt.
    (b) The procedures set forth in paragraph (a) of this section are 
not required when:
    (1) The offset is in the nature of a recoupment;
    (2) The debt arises under a contract subject to the Contracts 
Disputes Act or Federal Acquisition Regulations;
    (3) In the case of a non-centralized Administrative Offset (see 
Sec. 422.824), the agency first learns of the existence of the amount 
owed by the debtor when there is insufficient time before payment would 
be made to the debtor/payee to allow for prior notice and an opportunity 
for review. When prior notice and an opportunity for review are omitted, 
we will give the debtor such notice and an opportunity for review as 
soon as practicable and will promptly refund any money ultimately found 
not to have been owed to the agency; or
    (4) The agency previously has given a debtor any of the notice and 
review opportunities required under this part, with respect to a 
particular debt. Subsequently, any interest accrued or any installments 
coming due after we initiate an offset would not require a new notice 
and opportunity to review.
    (c) The notice will be included as part of a demand letter issued 
under Sec. 422.805 to advise the debtor of all debt collection 
possibilities that the agency will seek to employ.



Sec. 422.823  Debtor rights to review or copy records, submit repayment
proposals, or request administrative review.

    (a) A debtor who intends to review or copy our records with respect 
to the debt must notify us in writing within 30 days of the date of the 
notice as described in section Sec. 422.822. In response,

[[Page 1267]]

we will notify the debtor of the location, time, and any other 
conditions for reviewing and copying. The debtor may be liable for 
reasonable copying expenses.
    (b) In response to the notice as described in section Sec. 422.822, 
the debtor may propose a written agreement to repay the debt as an 
alternative to Administrative Offset. Any debtor who wishes to do this 
must submit a written proposal for repayment of the debt, which we must 
receive within 30 days of the date of the notice as described in section 
Sec. 422.822 or 15 days after the date of a decision adverse to the 
debtor. In response, we will notify the debtor whether we need 
additional information, for example, financial status information. We 
will obtain any necessary authorization required to approve the 
agreement, and we will issue a written determination whether the 
proposed agreement is acceptable. In exercising our discretion, we will 
balance the Government's interest in collecting the debt against 
fairness to the debtor.
    (c) A debtor must request an administrative review of the debt 
within 30 days of the date of the notice as described in section 
Sec. 422.822 for purposes of a proposed collection by non-centralized 
Administrative Offset pursuant to Sec. 422.824. A debtor must request an 
administrative review of the debt within 60 days of the date of the 
notice as described in section Sec. 422.822 for purposes of a proposed 
collection by centralized Administrative Offset for offset against other 
Federal payments that would include tax refunds pursuant to 
Sec. 422.825.
    (1) For purposes of this section, whenever we are required to 
provide a debtor a review within the agency, we will give the debtor a 
reasonable opportunity for an oral hearing, either by telephone or in 
person, when the debtor requests reconsideration of the debt and we 
determine that the question of the indebtedness cannot be resolved by 
review of the documentary evidence.
    (2) Unless otherwise required by law, an oral hearing under this 
section is not required to be a formal evidentiary hearing, although we 
will carefully document all significant matters discussed at the 
hearing.
    (3) An oral hearing is not required with respect to debts where 
determinations of indebtedness rarely involve issues of credibility or 
veracity, and we have determined that a review of the written record is 
adequate to correct prior mistakes.
    (4) In those cases when an oral hearing is not required by this 
section, we will provide the debtor a paper hearing, that is, a 
determination of the request for reconsideration based upon a review of 
the written record.



Sec. 422.824  Non-centralized administrative offset.

    (a) Unless otherwise prohibited by law, when centralized 
Administrative Offset under Sec. 422.825 is not available or 
appropriate, we may collect a past due, legally enforceable, nontax 
delinquent debt by conducting non-centralized Administrative Offset 
internally or in cooperation with the agency certifying or authorizing 
payments to the debtor. Generally, non-centralized Administrative 
Offsets are ad hoc case-by-case offsets that an agency conducts at its 
own discretion, internally or in cooperation with a second agency 
certifying or authorizing payments to the debtor. In these cases, we may 
make a request directly to a payment-authorizing agency to offset a 
payment due a debtor to collect a delinquent debt. We adopt the 
procedures in 31 CFR 901.3(c) so that we may request the Department of 
the Treasury or any other payment-authorizing agency to conduct a non-
centralized Administrative Offset.
    (b) Administrative Offset may be initiated only after:
    (1) The debtor has been sent a notice of the type and amount of the 
debt, the intention to initiate Administrative Offset to collect the 
debt, and an explanation of the debtor's rights under 31 U.S.C. 3716; 
and
    (2) The debtor has been given:
    (i) The opportunity to review and copy records related to the debt;
    (ii) The opportunity for a review within the department of the 
determination of indebtedness; and
    (iii) The opportunity to make a written agreement to repay the debt.
    (c) The agency may omit the requirements under paragraph (b) of this 
section when:

[[Page 1268]]

    (1) Offset is in the nature of a recoupment (i.e., the debt and the 
payment to be offset arise out of the same transaction or occurrence);
    (2) The debt arises under a contract as set forth in Cecile 
Industries, Inc. v. Cheney, 995 F.2d 1052 (Fed. Cir. 1993) (notice and 
other procedural protections set forth in 31 U.S.C. 3716(a) do not 
supplant or restrict established procedures for contractual offsets 
covered by the Contracts Disputes Act); or
    (3) In the case of non-centralized Administrative Offset conducted 
under paragraph (a) of this section, the agency first learns of the 
existence of the amount owed by the debtor when there is insufficient 
time before payment would be made to the debtor to allow for prior 
notice and an opportunity for review. When prior notice and an 
opportunity for review are omitted, we will give the debtor such notice 
and an opportunity for review as soon as practical and will promptly 
refund any money ultimately found not to have been owed to the 
Government.
    (d) When the debtor previously has been given any of the required 
notice and review opportunities with respect to a particular debt, such 
as under Sec. 422.805, we need not duplicate such notice and review 
opportunities before Administrative Offset may be initiated.
    (e) Before requesting that a payment-authorizing agency conduct non-
centralized Administrative Offset, we will:
    (1) Provide the debtor with due process as set forth in paragraph 
(b) of this section; and
    (2) Provide the payment-authorizing agency written certification 
that the debtor owes the past due, legally enforceable delinquent debt 
in the amount stated and that we have fully complied with this section.
    (f) When a creditor agency requests that we, as the payment 
authorizing agency, conduct non-centralized Administrative Offset, we 
will comply with the request, unless the offset would not be in the best 
interest of the United States with respect to the program of the agency, 
or would otherwise be contrary to law. Appropriate use should be made of 
the cooperative efforts of other agencies in effecting collection by 
Administrative Offset, including salary offset.
    (g) When collecting multiple debts by non-centralized Administrative 
Offset, we will apply the recovered amounts to those debts in accordance 
with the best interests of the United States, as determined by the facts 
and circumstances of the particular case, particularly the applicable 
statute of limitations.



Sec. 422.825  Centralized administrative offset.

    (a) Mandatory referral. After we provide and meet the notice and 
review opportunity requirements of Sec. 422.822, we will refer debts 
that are over 120 calendar days delinquent to the Department of the 
Treasury (Treasury) for collection through centralized Administrative 
Offset 61 days after the date of the notice provided in accordance with 
Sec. 422.822. If the debtor seeks review, referral of the debt must 
occur within 30 days of the final decision upholding our decision to 
offset the debt if the debt is more than 120 calendar days delinquent.
    (b) Discretionary referral. After we provide and meet the notice and 
review opportunity requirements of Sec. 422.822, and the debtor does not 
request administrative review or the result of the review is 
unsuccessful for the debtor, we may refer a debt that is less than 120 
calendar days delinquent.
    (c) Procedures for referral. We will refer debts to Treasury for 
collection in accordance with Treasury procedures set forth in 31 CFR 
285.5 and 31 CFR 901.3(b).



Sec. 422.827  Offset against tax refunds.

    We will take action to effect Administrative Offset against tax 
refunds due to debtors in accordance with the provisions of 31 U.S.C. 
3720A through referral for centralized Administrative Offset under 
Sec. 422.825.



Sec. 422.829  Federal salary offset.

    (a) Referral to the Department of the Treasury for offset. (1) The 
Department of the Treasury (Treasury) will recover overdue 
administrative debts by offsetting Federal payments due the debtor 
through the Treasury Offset Program (TOP). TOP is a government-wide 
delinquent debt matching and payment

[[Page 1269]]

offset process operated by Treasury, whereby debts owed to the Federal 
Government are collected by offsetting them against Federal payments 
owed the debtor. Federal payments owed the debtor include current 
``disposable pay,'' defined in 5 CFR 550.1103, owed by the Federal 
Government to a debtor who is an employee of the Federal Government. 
Deducting from such disposable pay to collect an overdue debt owed by 
the employee is called ``Federal Salary Offset'' in this subpart.
    (2) Treasury will use Federal Salary Offset to collect overdue 
administrative debts from Federal employees, including employees of the 
Social Security Administration. A Federal employee's involuntary payment 
of all or part of a debt collected by Federal Salary Offset does not 
amount to a waiver of any rights that the employee may have under any 
statute or contract, unless a statute or contract provides for waiver of 
such rights.
    (b) Debts we will refer. We will refer all qualifying administrative 
debts that meet or exceed the threshold amounts used by Treasury for 
collection from Federal payments, including Federal salaries.
    (c) Notice to debtor. Before we refer any administrative debt for 
collection by Administrative Offset, we will send the debtor a notice 
that explains all of the following:
    (1) The nature and amount of the debt;
    (2) That we have determined that payment of the debt is overdue; and
    (3) That we will refer the debt for Administrative Offset (except as 
provided in paragraph (c)(9) of this section) at the expiration of not 
less than 60 calendar days after the date of the notice unless, within 
that 60-day period:
    (i) The debtor pays the full amount of the debt, or
    (ii) The debtor takes any of the actions described in paragraphs 
(c)(6) or (c)(7) of this section.
    (4) The frequency and amount of any Federal Salary Offset deduction 
(the payment schedule) expressed as a fixed dollar amount or percentage 
of disposable pay.
    (5) The debtor may review or copy our records relating to the debt. 
If the debtor or his or her representative cannot personally review the 
records, the debtor may request and receive a copy of such records.
    (6) The debtor may request a review of the debt by giving us 
evidence showing that the debtor does not owe all or part of the amount 
of the debt or that we do not have the right to collect it. The debtor 
may also request review of any payment schedule for Federal Salary 
Offset stated in the notice. If the debtor is an employee of the Federal 
Government and Federal Salary Offset is proposed, an official designated 
in accordance with 5 U.S.C. 5514(a)(2) will conduct the review.
    (7) The debtor may request to repay the debt voluntarily through an 
installment payment plan.
    (8) If the debtor knowingly furnishes any false or frivolous 
statements, representations, or evidence, the debtor may be subject to 
appropriate disciplinary procedures under applicable statutes or 
regulations when the debtor is a Federal employee.
    (9) We will refer the debt for Federal Salary Offset at the 
expiration of not less than 60 calendar days after the date of the 
notice unless, within that 60 day period, the debtor takes any actions 
described in paragraphs (c)(3)(i), (c)(6), or (c)(7) of this section.
    (d) Federal Salary Offset: amount, frequency and duration of 
deductions. (1) Treasury may collect the overdue debt from an employee 
of the Federal Government through the deduction of an amount not to 
exceed 15 percent of the debtor's current disposable pay each payday.
    (2) Federal Salary Offset will begin not less than 60 calendar days 
after the date of the notice to the debtor described in paragraph (c) of 
this section.
    (3) Once begun, Federal Salary Offset will continue until Treasury 
recovers the full amount of the debt, the debt is otherwise resolved, or 
the debtor's Federal employment ceases, whichever occurs first.
    (4) After Federal Salary Offset begins, the debtor may request a 
reduction in the amount deducted from disposable pay each payday. When 
Treasury determines that the amount deducted causes financial harm under 
the rules in Sec. 422.833(j), they will reduce that amount. Treasury 
will not reduce

[[Page 1270]]

the amount from the debtor's disposable pay if the debt was caused by:
    (A) An intentional false statement by the debtor, or
    (B) The debtor's willful concealment of, or failure to furnish, 
material information.
    (2) ``Willful concealment'' means an intentional, knowing and 
purposeful delay in providing, or failure to reveal, material 
information.
    (e) Refunds. Treasury will promptly refund to the debtor any amounts 
collected that the debtor does not owe. Refunds do not bear interest 
unless required or permitted by law or contract.



Sec. 422.833  Administrative wage garnishment for administrative 
debts.

    (a) Purpose. This part prescribes the standards and procedures for 
collecting money from a debtor's disposable pay by means of 
Administrative Wage Garnishment to satisfy delinquent non-tax debts owed 
to us, the Social Security Administration.
    (b) Authority. These standards and procedures are authorized under 
the wage garnishment provisions of the Debt Collection Improvement Act 
of 1996, codified at 31 U.S.C. 3720D, and the Department of the 
Treasury's (Treasury) Administrative Wage Garnishment regulation at 31 
CFR 285.11.
    (1) This part will apply notwithstanding any provision of State law.
    (2) Nothing in this part precludes the compromise of a debt or the 
suspension or termination of collection action in accordance with 
Sec. 422.803 of this title or other applicable law or regulation, and 
the Commissioner has retained the authority. The Department of Justice 
has exclusive authority to suspend or terminate collection action on a 
debt affected by fraud.
    (3) The receipt of payments pursuant to this part does not preclude 
us from pursuing other debt collection remedies, including the offset of 
Federal or State payments to satisfy delinquent non-tax debt owed to the 
United States. We will pursue such debt collection remedies separately 
or in conjunction with Administrative Wage Garnishment.
    (4) This section does not apply to the collection of delinquent non-
tax debts owed to the United States from the wages of Federal employees 
from their Federal employment. Federal pay is subject to the Federal 
Salary Offset procedures set forth in 5 U.S.C. 5514 and other applicable 
laws.
    (5) Nothing in this section requires us to duplicate notices or 
administrative proceedings required by contract or other laws or 
regulations.
    (c) Definitions. In this section, the following definitions will 
apply:
    (1) Business day means Monday through Friday. For purposes of 
computation, the last day of the period will be included unless it is a 
Federal legal holiday, in which case the next business day following the 
holiday will be considered the last day of the period.
    (2) Day means calendar day. For purposes of computation, the last 
day of the period will be included unless it is a Saturday, Sunday, or a 
Federal legal holiday, in which case the next business day will be 
considered the last day of the period.
    (3) Debt means an amount of funds or other property determined by an 
appropriate official of the Federal Government to be owed to the United 
States from any person, organization, or entity or any other debt that 
meets the definition of ``claim'' or ``debt'' under 31 U.S.C. 3701(b), 
excluding program overpayments made under title II or title XVI of the 
Social Security Act.
    (4) Debtor means an individual who owes a delinquent non-tax debt to 
the United States.
    (5) Delinquent debt means any non-tax debt that has not been paid by 
the date specified in the agency's initial written demand for payment, 
or applicable payment agreement or instrument, unless other satisfactory 
payment arrangements have been made. For purposes of this part, 
``delinquent'' and ``overdue'' have the same meaning.
    (6) Disposable pay means that part of the debtor's compensation 
(including, but not limited to, salary, bonuses, commissions, and 
vacation pay) from an employer remaining after the deduction of health 
insurance premiums and any amounts required by law to be withheld. For 
purposes of this part, ``amounts required by law to be withheld'' 
include amounts for deductions such as social security taxes and 
withholding taxes, but do not include any

[[Page 1271]]

amount withheld pursuant to a court order.
    (7) Employer means a person or entity that employs the services of 
others and that pays their wages or salaries. The term employer 
includes, but is not limited to, State and local Governments, but does 
not include an agency of the Federal Government as defined by 31 CFR 
285.11(c).
    (8) Garnishment means the process of withholding amounts from an 
employee's disposable pay and paying those amounts to a creditor in 
satisfaction of a withholding order.
    (9) Hearing means a review of the documentary evidence concerning 
the existence or amount of a debt or the terms of a repayment schedule, 
provided such repayment schedule is established other than by a written 
agreement entered into pursuant to this part. If the hearing official 
determines that the issues in dispute cannot be resolved solely by 
review of the written record, such as when the validity of the debt 
turns on the issue of credibility or veracity, an oral hearing may be 
provided.
    (10) Hearing official means an administrative law judge or 
appropriate alternate.
    (11) Treasury means the Department of the Treasury.
    (12) Withholding order for purposes of this part means ``Wage 
Garnishment Order (SF329B).'' Also for purposes of this part, the terms 
``wage garnishment order'' and ``garnishment order'' have the same 
meaning as ``withholding order.''
    (d) General rule. (1) Except as provided in paragraph (d)(2) of this 
section, whenever an individual owes a delinquent debt, the agency or 
another Federal agency collecting a debt on our behalf (see 
Sec. 422.803) may initiate administrative proceedings to garnish the 
wages of the delinquent debtor.
    (2) Treasury will not garnish the wages of a debtor who we know has 
been involuntarily separated from employment until the debtor has been 
re-employed continuously for at least 12 months. The debtor has the 
burden to inform the agency of the circumstances surrounding an 
involuntary separation from employment.
    (e) Notice--(1) Notice requirements. At least 30 days before the 
initiation of garnishment proceedings, Treasury will mail, by first 
class mail, to the debtor's last known address, a notice informing the 
debtor of:
    (i) The nature and amount of the debt;
    (ii) The intention to initiate proceedings to collect the debt 
through deductions from pay until the debt and all accumulated interest, 
penalties, and administrative costs are paid in full;
    (iii) The debtor's right:
    (A) To review and copy our records related to the debt;
    (B) To enter into a written repayment which is agreeable to the 
agency;
    (C) To a hearing, in accordance with paragraph (f) of this section, 
concerning the existence or the amount of the debt or the terms of the 
proposed repayment schedule under the garnishment order, except that the 
debtor is not entitled to a hearing concerning the proposed repayment 
schedule if the terms were established by written agreement pursuant to 
paragraph (1)(iii)(B) of this section; and
    (iv) The periods within which the debtor may exercise his or her 
rights.
    (2) Treasury will keep a copy of the dated notice. The notice may be 
retained electronically so long as the manner of retention is sufficient 
for evidentiary purposes.
    (f) Hearing--(1) In general. Upon timely written request of the 
debtor, Treasury will provide a paper or oral hearing concerning the 
existence or amount of the debt, or the terms of a repayment schedule 
established other than by written agreement under paragraph 
(e)(1)(iii)(B) of this section.
    (2) Request for hearing. (i) The request for a hearing must be 
signed by the debtor, state each issue being disputed, and identify and 
explain with reasonable specificity all facts and evidence that the 
debtor believes support the debtor's position. Supporting documentation 
identified by the debtor should be attached to the request.
    (ii) Effect of timely request: Subject to paragraph (e)(10) of this 
section, if the debtor's written request is received

[[Page 1272]]

on or before the 15 business days following the mailing of the notice 
required under this part, a withholding order will not be issued under 
paragraph (g) of this section until the debtor has been provided the 
requested hearing, and a decision in accordance with paragraphs (e)(7) 
and (8) of this section has been rendered.
    (iii) Failure to timely request a hearing: If the debtor's written 
request is received after the 15th business day following the mailing of 
the notice required under this part, Treasury will provide a hearing to 
the debtor. However, Treasury may not delay the issuance of a 
withholding order unless they determine that the delay in submitting 
such request was caused by factors beyond the control of the debtor, or 
receive information that they determine justifies a delay or 
cancellation of the withholding order.
    (3) Oral hearing. (i) For purposes of this section, a debtor will be 
provided a reasonable opportunity for an oral hearing when the hearing 
official determines that the issues in dispute cannot be resolved by 
review of the documentary evidence, such as when the validity of the 
claim turns on the issue of credibility or veracity.
    (ii) If the hearing official decides to have a hearing, a debtor can 
specify to Treasury whether he or she wants to appear in person or by 
telephone. At the debtor's option, the oral hearing may be conducted in 
person or by telephone conference. The hearing official will notify the 
debtor of the date, time, and in the case of an in-person hearing, the 
location of the hearing. All travel expenses incurred by the debtor in 
connection with an in-person hearing will be borne by the debtor.
    (4) Paper hearing. (i) If the hearing official determines an oral 
hearing is not required by this section, the hearing official will 
afford the debtor a paper hearing, that is, the issues in dispute will 
be decided based upon a review of the written record.
    (ii) The hearing official will notify the debtor of the deadline for 
the submission of additional evidence if necessary for a review of the 
record.
    (5) Burden of proof. (i) Treasury has the initial burden of proving 
the existence or amount of the debt.
    (ii) Thereafter, if the debtor disputes the existence or amount of 
the debt, the debtor must present Treasury preponderant evidence that no 
debt exists or that the amount is incorrect. Debtors challenging the 
terms of a repayment schedule must provide preponderant evidence to 
Treasury that the terms of the repayment schedule are unlawful, would 
cause the debtor financial hardship, or that operation of law prohibits 
collection of the debt.
    (6) Record. The hearing official will maintain a summary record of 
any hearing provided under this part. A hearing is not required to be a 
formal evidentiary-type hearing, but witnesses who testify in an oral 
hearing must do so under oath or affirmation.
    (7) Date of decision. (i) The hearing official will issue a written 
decision, as soon as practicable, but no later than 60 days after the 
date on which the request for the hearing was received by the agency.
    (ii) If the hearing official is unable to provide the debtor with a 
hearing and render a decision within 60 days after the receipt of the 
request for such hearing:
    (A) A withholding order may not be issued until the hearing is held 
and a decision is rendered; or
    (B) A withholding order previously issued to the debtor's employer 
must be suspended beginning on the 61st day after the receipt of the 
hearing request and continuing until a hearing is held and a decision is 
rendered.
    (8) Content of decision. The written decision will include:
    (i) A summary of the facts presented;
    (ii) The hearing official's findings, analysis, and conclusions; and
    (iii) The terms of any repayment schedule, if applicable.
    (9) Final agency action. The hearing official's decision will be the 
final agency action for the purposes of judicial review under the 
Administrative Procedure Act. 5 U.S.C. 701 et seq.
    (10) Failure to appear. In the absence of good cause shown, a debtor 
who fails to appear at a hearing will be deemed as not having timely 
filed a request for a hearing.
    (g) Withholding order. Unless Treasury receives information that 
determines a justified delay or cancellation

[[Page 1273]]

of a withholding order, Treasury will send, by first class mail, an SF-
329A ``Letter to Employer & Important Notice to Employer,'' an SF-329B 
``Wage Garnishment Order,'' an SF-329C ``Wage Garnishment Worksheet,'' 
and an SF-329D ``Employer Certification'' to the debtor's employer 
within 30 days after the debtor fails to make a timely request for a 
hearing or, if the timely request for a hearing is made by the debtor, 
within 30 days after a final decision is made by the agency to proceed 
with garnishment.
    (h) Certification by employer. The employer must complete and return 
the SF-329D ``Employer Certification'' within 20 days of receipt.
    (i) Amounts withheld. (1) After receipt of a withholding order 
issued under this part, the employer will deduct from all disposable pay 
paid to the debtor during each pay period the amount of garnishment 
described in paragraph (h)(2) of this section. The employer may use the 
SF-329C ``Wage Garnishment Worksheet'' to calculate the amount to be 
deducted from the debtor's disposable pay.
    (2) Subject to paragraphs (h)(3)(i) and (h)(4) of this section, the 
amount of garnishment will be the lesser of:
    (i) The amount indicated on the garnishment order up to 15 percent 
of the debtor's disposable pay; or
    (ii) The amount set forth in 15 U.S.C. 1673(a)(2) (Maximum allowable 
garnishment). The amount set forth at 15 U.S.C. 1673(a)(2) is the amount 
by which a debtor's disposable pay exceeds an amount equivalent to 
thirty times the minimum wage. See 29 CFR 870.10.
    (3)(i) Except as provided in paragraph (h)(3)(ii) of this section, 
when a debtor's pay is subject to multiple withholding orders, unless 
otherwise provided by Federal law, withholding orders issued pursuant to 
this part will have priority over other withholding orders that are 
served later.
    (ii) Notwithstanding the foregoing, withholding orders for family 
support will have priority over withholding orders issued under this 
part.
    (iii) If amounts are being withheld from a debtor's pay pursuant to 
a withholding order served on an employer before a withholding order 
issued pursuant to this part, or if a withholding order for family 
support is served on an employer at any time, the amounts withheld 
pursuant to a withholding order issued under this part will be the 
lesser of:
    (A) The amount calculated under paragraph (h)(3)(iii)(B) of this 
section; or
    (B) An amount equal to 25 percent of the debtor's disposable pay 
less the amount(s) withheld under the withholding order(s) with 
priority.
    (4) If the debtor owes more than one debt to the agency, Treasury 
will issue multiple withholding orders provided that the total amount 
garnished from the debtor's pay for such orders does not exceed the 
amount set forth in paragraph (h)(2) of this section.
    (5) An amount greater than that set forth in paragraphs (h)(2) or 
(3) of this section may be withheld with the debtor's written consent.
    (6) The employer will promptly pay all amounts withheld in 
accordance with the withholding order issued pursuant to this part.
    (7) The employer is not required to vary its normal pay and 
disbursement cycles in order to comply with the withholding order.
    (8) Any assignment or allotment by an employee will be void to the 
extent it interferes with or prohibits execution of the withholding 
order issued under this part, except for any assignment or allotment 
made pursuant to a family support judgment or order.
    (9) The employer will withhold the appropriate amount from the 
debtor's wages for each pay period until the employer receives 
notification from the agency to discontinue wage withholding.
    (10) The withholding order, SF-329B ``Wage Garnishment Order,'' sent 
to the employer under paragraph (g) of this section, requires the 
employer to commence wage withholding on the first payday after the 
employer receives the order. However, if the first payday is within 10 
days after receipt of the order, the employer may elect to begin 
deductions on the second payday.
    (11) An employer may not discharge, refuse to employ, or take 
disciplinary action against any debtor because of the issuance of a 
withholding order under this part.

[[Page 1274]]

    (j) Financial hardship. (1) A debtor whose wages are subject to a 
withholding order may, at any time, request a review by Treasury of the 
amount garnished, based on materially changed circumstances, such as 
disability, divorce, or catastrophic illness, which result in financial 
hardship.
    (2) A debtor requesting review under paragraph (i)(1) of this 
section will submit the basis for the claim that the current amount of 
garnishment results in a financial hardship to the debtor, along with 
supporting documentation. Treasury will consider any information 
submitted in accordance with this part.
    (3) If Treasury finds financial hardship, to reflect the debtor's 
financial condition, Treasury will downwardly adjust the amount 
garnished by an amount and for a period established by the agency. 
Treasury will notify the employer of any adjustments in the amount to be 
withheld.
    (k) Fraud and willful concealment or failure to furnish information. 
Treasury will not reduce the amount that the employer withholds from 
disposable pay if the debt was caused by an intentional false statement.
    (l) Refunds. (1) If the hearing official, pursuant to a hearing 
under this part, determines that a debt is not legally due and owing to 
the United States, Treasury will promptly refund any amount collected by 
means of Administrative Wage Garnishment.
    (2) Unless required by Federal law or contract, refunds under this 
part will not bear interest.
    (m) Ending garnishment. (1) Once Treasury has fully recovered the 
amounts owed by the debtor, including interest, penalties, and 
administrative costs assessed pursuant to and in accordance with 
Sec. 422.803 of this title, Treasury will send the debtor's employer 
notification to discontinue wage withholding.
    (2) At least annually, Treasury will review debtors' accounts to 
ensure that garnishment has ended for accounts that have been paid in 
full.
    (n) Employers' responsibilities and right of action. (1) The 
employer of a debtor subject to wage withholding pursuant to this part 
will pay the agency as directed in a withholding order issued under this 
part.
    (2) Treasury may bring suit against an employer for any amount that 
the employer fails to withhold from wages owed and payable to a debtor 
in accordance with paragraphs (g) and (i) of this section, plus 
attorney's fees, costs, and, if applicable, punitive damages.
    (3) A suit under this section may not be filed before the end of the 
collection action involving a particular debtor, unless earlier filing 
is necessary to avoid expiration of any applicable statute of 
limitations period. For purposes of this section, ``end of collection 
action'' occurs when we have completed taking collection action in 
accordance with part 422, subpart I of this title or other applicable 
law or regulation.
    (4) Notwithstanding any other provision or action referred to in 
this section, the end of the collection action will be deemed to occur 
one (1) year after the agency does not receive any payment of wages that 
were subject to a garnishment order issued under this part.



Sec. 422.835  Debt reporting and use of credit reporting agencies.

    (a) Reporting delinquent debts. (1) We may report delinquent debts 
over $25 to credit bureaus or other automated databases.
    (2) We will report administrative debts owed by individuals to 
consumer reporting agencies pursuant to 5 U.S.C. 552a(b)(12). We may 
disclose only the individual's name, address, and Social Security number 
and the nature, amount, status, and history of the debt.
    (3) Once we refer a debt to the Department of the Treasury 
(Treasury) for collection, Treasury may handle any subsequent reporting 
to or updating of a credit bureau or other automated database.
    (4) Where there is reason to believe that a debtor has filed a 
bankruptcy petition, prior to proceeding under this paragraph (a), we 
will contact the Office of the General Counsel for legal advice 
concerning the impact of the Bankruptcy Code, particularly with respect 
to the applicability of the automatic stay, 11 U.S.C. 362, and the 
procedures for obtaining relief from such stay.

[[Page 1275]]

    (5) If the debtor has not received prior notice under Sec. 422.805, 
before reporting a delinquent debt under this section, we will provide 
the debtor at least 60 days notice including:
    (i) The amount and nature of the debt;
    (ii) That the debt is delinquent and that we intend to report the 
debt to a credit bureau;
    (iii) The specific information that we will disclose;
    (iv) The right to dispute the accuracy and validity of the 
information being disclosed; and
    (v) If a previous opportunity was not provided, the right to request 
review of the debt or rescheduling of payment.
    (b) Use of credit reporting agencies. We may use credit-reporting 
agencies to determine a debtor's ability to repay a debt and to locate 
debtors. In the case of an individual, we may disclose, as a routine use 
under 5 U.S.C. 552a(b)(3), only the individual's name, address, and 
Social Security number, and the purpose for which the information will 
be used.



Sec. 422.837  Contracting with private collection contractors and 
with entities that locate and recover unclaimed assets.

    (a) Subject to the provisions of paragraph (b) of this section, we 
may contract with private collection contractors to recover delinquent 
debts, if:
    (1) We retain the authority to resolve disputes, compromise debts, 
suspend or terminate collection action, and, as appropriate, to refer 
debts to the Department of Justice for review and litigation;
    (2) The private collection contractor is not allowed to offer the 
debtor, as an incentive for payment, the opportunity to pay the debt 
less the private collection contractor's fee, unless we have granted 
such authority prior to the offer;
    (3) The contract provides that the private collection contractor is 
subject to the Privacy Act of 1974 to the extent specified in 5 U.S.C. 
552a(m) and to applicable Federal and State laws and regulations 
pertaining to debt collection practices, including, but not limited, to 
the Fair Debt Collection Practices Act, 15 U.S.C. 1692; and
    (4) The private collection contractor is required to account for all 
amounts collected.
    (b) We will use government-wide debt collection contracts to obtain 
debt collection services provided by private collection contractors. 
However, we may refer debts to private collection contractors pursuant 
to a contract between the agency and the private collection contractor 
only if such debts are not subject to the requirement to transfer debts 
to the Treasury for debt collection under 31 U.S.C. 3711(g) and 31 CFR 
285.12(e).
    (c) Debts arising under the Social Security Act (which can be 
collected by private collection contractors only by Department of the 
Treasury (Treasury) after the debt has been referred to Treasury for 
collection) are excluded from this section.
    (d) We may fund private collection contractor contracts in 
accordance with 31 U.S.C. 3718(d) or as otherwise permitted by law. A 
contract under paragraph (a) of this section may provide that the fee a 
private collection contractor charges the agency for collecting the debt 
is payable from the amounts collected.
    (e) We may enter into contracts for locating and recovering assets 
of the United States, including unclaimed assets. However, before 
entering into a contract to recover assets of the United States that may 
be held by a State Government or financial institution, we must 
establish procedures that are acceptable to the Secretary of the 
Treasury.
    (f) We enter into contracts for debtor asset and income search 
reports. In accordance with 31 U.S.C. 3718(d), such contracts may 
provide that the fee a contractor charges the agency for such services 
may be payable from the amounts recovered unless otherwise prohibited by 
statute.



Sec. 422.839  Offset against amounts payable from civil service
retirement and disability fund and the Federal employees' retirement
system.

    Upon providing the Office of Personnel Management (OPM) written 
certification that a debtor has been afforded the procedures provided in 
Sec. 422.823 of this part, we may request

[[Page 1276]]

OPM to offset a debtor's anticipated or future benefit payments under 
the Civil Service Retirement and Disability Fund (Fund) and the Federal 
Employees' Retirement System (FERS) in accordance with regulations 
codified at 5 CFR 831.1801 through 831.1808, and 5 CFR part 845 Subpart 
D. Upon receipt of such a request, OPM will identify and ``flag'' a 
debtor's account in anticipation of the time when the debtor requests, 
or becomes eligible to receive, payments from the Fund or FERS.



Sec. 422.842  Liquidation of collateral.

    (a)(1) If the debtor fails to pay the debt(s) within a reasonable 
time after demand and if such action is in the best interests of the 
United States, we will liquidate security or collateral through the 
exercise of a power of sale in the security instrument or a non-judicial 
foreclosure and apply the proceeds to the applicable debt(s).
    (2) Collection from other sources, including liquidation of security 
or collateral, is not a prerequisite to requiring payment by a surety, 
insurer, or guarantor unless such action is expressly required by 
statute or contract.
    (3) We will give the debtor reasonable notice of the sale and an 
accounting of any surplus proceeds and will comply with other 
requirements under law or contract.
    (b) Where there is reason to believe that a bankruptcy petition has 
been filed with respect to a debtor, we will contact the Office of the 
General Counsel for legal advice concerning the impact of the Bankruptcy 
Code, particularly with respect to the applicability of the automatic 
stay, 11 U.S.C. 362, and the procedures for obtaining relief from such 
stay prior to proceeding under paragraph (a) of this section.



Sec. 422.846  Bases for compromise.

    (a) Scope and application--(1) Scope. The standards set forth in 
this subpart apply to the compromise of administrative debts pursuant to 
31 U.S.C. 3711. We may exercise such compromise authority for debts 
arising out of activities of, or referred or transferred for collection 
services to, the agency when the amount of the debt then due, exclusive 
of interest, penalties, and administrative costs, does not exceed 
$100,000 or any higher amount authorized by the Attorney General.
    (2) Application. Unless otherwise provided by law, when the 
principal balance of a debt, exclusive of interest, penalties, and 
administrative costs, exceeds $100,000 or any higher amount authorized 
by the Attorney General, the authority to accept a compromise rests with 
the Department of Justice (DOJ). We will evaluate the compromise offer 
using the factors set forth in this subpart. If an offer to compromise 
any debt in excess of $100,000 is acceptable to the agency, we will 
refer the debt to the Civil Division or other appropriate litigating 
division in the DOJ using a Claims Collection Litigation Report (CCLR). 
A CCLR may be obtained from the DOJ's National Central Intake Facility. 
The referral will include appropriate financial information and a 
recommendation for the acceptance of the compromise offer. DOJ approval 
is not required if we reject a compromise offer.
    (b) Bases for compromise--(1) Compromise. We may compromise a debt 
if the agency cannot collect the full amount based upon the debtor's 
inability to pay, inability to collect the full debt, the cost of 
collection, or if we are doubtful that the debt can be proven in court.
    (i) Inability to pay. We may compromise a debt if the debtor is 
unable to pay the full amount in a reasonable time, as verified through 
credit reports or other financial information. In determining a debtor's 
inability to pay the full amount of the debt within a reasonable time, 
we will obtain and verify the debtor's claim of inability to pay by 
using credit reports and/or a current financial statement from the 
debtor, executed under penalty of perjury, showing the debtor's assets, 
liabilities, income, and expenses. We may use a financial information 
form used in connection with the agency's programs or may request 
suitable forms from the DOJ or the local United States Attorney's 
Office. We also may consider other relevant factors such as:
    (A) Age and health of the debtor;
    (B) Present and potential income;
    (C) Inheritance prospects;

[[Page 1277]]

    (D) The possibility that assets have been concealed or improperly 
transferred by the debtor; and
    (E) The availability of assets or income that may be realized by 
enforced collection proceedings.
    (ii) Inability to collect full debt. We may compromise a debt if the 
Government is unable to collect the debt in full within a reasonable 
time by enforced collection proceedings.
    (A) In determining the Government's ability to enforce collection, 
we will consider the applicable exemptions available to the debtor under 
State and Federal law, and we may also consider uncertainty as to the 
price any collateral or other property will bring at a forced sale.
    (B) A compromise affected under this section should be for an amount 
that bears a reasonable relation to the amount that can be recovered by 
enforced collection procedures, with regard to any exemptions available 
to the debtor and the time that collection will take.
    (iii) Cost of collection. We may compromise a debt if the cost of 
collecting the debt does not justify the enforced collection of the full 
amount.
    (A) The amount accepted in compromise of such debts may reflect an 
appropriate discount for the administrative and litigation costs of 
collection, with consideration given to the time it will take to effect 
collection. Collection costs may be a substantial factor in the 
settlement of small debts.
    (B) In determining whether the costs of collection justify enforced 
collection of the full amount, we will consider whether continued 
collection of the debt, regardless of cost, is necessary to further an 
enforcement principal, such as the Government's willingness to pursue 
aggressively defaulting and uncooperative debtors.
    (iv) Doubtful debt can be proven in court. We may compromise a debt 
if there is significant doubt concerning the Government's ability to 
prove its case in court.
    (A) If significant doubt exists concerning the Government's ability 
to prove its case in court for the full amount claimed, either because 
of the legal issues involved or because of a legitimate dispute as to 
the facts, then the amount accepted in compromise should fairly reflect 
the probabilities of successful prosecution to judgment, with due regard 
to the availability of witnesses and other evidentiary support for the 
Government's claim.
    (B) In determining the litigation risks involved, we will consider 
the probable amount of court costs and attorney fees a court may impose 
pursuant to the Equal Access to Justice Act, 28 U.S.C. 2412, if the 
Government is unsuccessful in litigation.
    (2) Installments. We may not accept compromises payable in 
installments. This is not an advantageous form of compromise in terms of 
time and administrative expense. If, however, payment in installments is 
necessary in cases of compromise based on paragraphs (b)(1)(i) through 
(iii) of this section, we will obtain a legally enforceable written 
agreement providing that, in the event of default, the full original 
principal balance of the debt prior to compromise, less sums paid 
thereon, is reinstated. In cases of compromise based on paragraph 
(b)(1)(iv) of this section, we will consult with the Office of the 
General Counsel concerning the appropriateness of including such a 
requirement in the legally enforceable written agreement. Whenever 
possible, we will obtain security for repayment in the manner set forth 
in Sec. 422.809.
    (c) Enforcement policy. Subject to the Commissioner's approval, we 
may compromise statutory penalties, forfeitures, or claims established 
as an aid to enforcement and to compel compliance if our enforcement 
policy, in terms of deterrence and securing compliance, present, and 
future, will be adequately served by the agency's acceptance of the sum 
to be agreed upon.
    (d) Joint and several liability. (1) When two or more debtors are 
jointly and severally liable, we will pursue collection against all 
debtors, as appropriate. We will not attempt to allocate the burden of 
payment between the debtors but will proceed to liquidate the 
indebtedness as quickly as possible.
    (2) We will ensure that a compromise agreement with one debtor does 
not automatically release the agency's claim against the remaining 
debtor(s). The amount of a compromise with one

[[Page 1278]]

debtor will not be considered a precedent or binding in determining the 
amount that will be required from other debtors jointly and severally 
liable on the claim.
    (e) Further review of compromise offers. If we are uncertain whether 
to accept a firm, written, substantive compromise offer on a debt that 
is within the agency's statutory compromise authority, we may use a CCLR 
with supporting data and particulars concerning the debt to refer the 
offer to the DOJ's Civil Division or other appropriate litigating 
division. The DOJ may act upon such an offer or return it to the agency 
with instructions or advice.
    (f) Consideration of tax consequences to the Government. In 
negotiating a compromise, we will consider the tax consequences to the 
Government. In particular, we will consider requiring a waiver of tax-
loss-carry-forward and tax-loss-carry-back rights of the debtor. For 
information on discharge of indebtedness reporting requirements, see 
Sec. 422.848(e).
    (g) Mutual release of the debtor and the Government. In all 
appropriate instances, a compromise that is accepted will be implemented 
by means of a mutual release. The terms of such mutual release will 
provide that the debtor is released from further non-tax liability on 
the compromised debt in consideration of payment in full of the 
compromise amount, and the Government and its officials, past and 
present, are released and discharged from any and all claims and causes 
of action arising from the same transaction that the debtor may have. In 
the event a mutual release is not executed when a debt is compromised, 
unless prohibited by law, the debtor is still deemed to have waived any 
and all claims and causes of action against the Government and its 
officials related to the transaction giving rise to the compromised 
debt.



Sec. 422.848  Suspension and termination of collection activities.

    (a) Scope and application--(1) Scope. The standards set forth in 
this subpart apply to the suspension or termination of collection 
activity pursuant to 31 U.S.C. 3711 on debts that do not appear to be 
fraudulent or that do not exceed $100,000, or such other amount as the 
Attorney General may direct, exclusive of interest, penalties, and 
administrative costs, after deducting the amount of partial payments or 
collections, if any. Prior to referring a debt to the Department of 
Justice (DOJ) for litigation, we may suspend or terminate collection 
under this subpart with respect to such debts that arise out of the 
activities of, or are referred or transferred for collection services 
to, the agency.
    (2) Application. (i) If the debt stems from a claim that appears to 
be fraudulent, false, or misrepresented by a party with an interest in 
the claim or after deducting the amount of partial payments or 
collections, the principal amount of the debt exceeds $100,000, or such 
other amount as the Attorney General may direct, exclusive of interest, 
penalties, and administrative costs, the authority to suspend or 
terminate rests solely with the DOJ.
    (ii) If we believe that suspension or termination of any debt that 
relates to a claim that appears to be fraudulent, false, or 
misrepresented by a party with an interest in the claim or that exceeds 
$100,000 may be appropriate, we will use the Claims Collection 
Litigation Report to refer the debt to the Civil Division or other 
appropriate litigating division in the DOJ. The referral will specify 
the reasons for our recommendation. If, prior to referral to the DOJ, we 
determine that a debt is plainly erroneous or clearly without merit, we 
may terminate collection activity regardless of the suspected fraud or 
amount involved without obtaining the DOJ's concurrence.
    (b) Suspension of collection activity. (1) We may suspend collection 
activity on a debt when:
    (i) The debtor cannot be located;
    (ii) The debtor's financial condition is not expected to improve; or
    (iii) The debtor has requested a legally permissible waiver or 
review of the debt.
    (2) Financial condition. Based on the current financial condition of 
a debtor, we may suspend collection activity on a debt when the debtor's 
future prospects justify retention of the debt for periodic review and 
collection activity, and:

[[Page 1279]]

    (i) No applicable statute of limitations has expired; or
    (ii) Future collection can be effected by Administrative Offset, 
notwithstanding the expiration of the applicable statute of limitations 
for litigation of claims, with due regard to any statute of limitation 
for Administrative Offset prescribed by 31 U.S.C. 3716(e)(1); or
    (iii) The debtor agrees to pay interest on the amount of the debt on 
which collection will be suspended and suspension is likely to enhance 
the debtor's ability to pay the full amount of the principal of the debt 
with interest at a later date.
    (3) Waiver or review. (i) We will suspend collection activity during 
the time required for consideration of the debtor's request for waiver 
or administrative review of the debt if the statute under which the 
request is sought prohibits us from collecting the debt during that 
time.
    (ii) If the statute under which the waiver or administrative review 
request is sought does not prohibit collection activity pending 
consideration of the request, we may use discretion, on a case-by-case 
basis, to suspend collection. We will ordinarily suspend collection 
action upon a request for waiver or review if we are prohibited by 
statute or regulation from issuing a refund of amounts collected prior 
to agency consideration of the debtor's request. However, we will not 
suspend collection when we determine that the request for waiver or 
review is frivolous or was made primarily to delay collection.
    (4) Bankruptcy. Upon learning that a bankruptcy petition has been 
filed with respect to a debtor, we must suspend collection activity on 
the debt, pursuant to the provisions of 11 U.S.C. 362, 1201, and 1301, 
unless we can clearly establish that the automatic stay has been lifted 
or is no longer in effect. In such cases, we will consult our Office of 
the General Counsel for advice. When appropriate, the Offices of the 
Regional Chief Counsel will take the necessary legal steps to ensure 
that no funds or money are paid by the agency to the debtor until relief 
from the automatic stay is obtained.
    (c) Termination of collection activity. (1) We may terminate 
collection activity when:
    (i) We are unable to collect any substantial amount through our own 
efforts or through the efforts of others;
    (ii) We are unable to locate the debtor;
    (iii) Costs of collection are anticipated to exceed the amount 
recoverable;
    (iv) The debt is legally without merit or enforcement of the debt is 
barred by any applicable statute of limitations;
    (v) The debt cannot be substantiated; or
    (vi) The debt against the debtor has been discharged in bankruptcy.
    (2)(i) Collection activity will not be terminated before we have 
pursued all appropriate means of collection and determined, based upon 
the results of the collection activity, that the debt is uncollectible.
    (ii) Termination of collection activity ceases active collection of 
the debt. The termination of collection activity does not preclude us 
from retaining a record of the account for purposes of:
    (A) Selling the debt, if the Secretary of the Department of the 
Treasury (Treasury) determines that such sale is in the best interest of 
the United States;
    (B) Pursuing collection at a subsequent date in the event there is a 
change in the debtor's status or a new collection tool becomes 
available;
    (C) Offsetting against future income or assets not available at the 
time of termination of collection activity; or
    (D) Screening future applicants for prior indebtedness.
    (3) We will terminate collection activity on a debt that has been 
discharged in bankruptcy, regardless of the amount. We may continue 
collection activity, however, subject to the provisions of the 
Bankruptcy Code, for any payments provided under a plan of 
reorganization. Offset and recoupment rights may survive the discharge 
of the debtor in bankruptcy and, under some circumstances, claims also 
may survive the discharge. For example, when we are a known creditor of 
a debtor, the claims of the agency may survive a discharge if we did not 
receive notice of the bankruptcy proceeding or the

[[Page 1280]]

debt was affected by fraud. When we believe that the agency has claims 
or offsets that may have survived the discharge of the debtor, we will 
contact the Office of the General Counsel for legal advice.
    (d) Exception to termination. When a significant enforcement policy 
is involved or recovery of a judgment is a prerequisite to the 
imposition of administrative sanctions, we may refer debts to the DOJ 
for litigation even though termination of collection activity may 
otherwise be appropriate.
    (e) Discharge of indebtedness; reporting requirements. (1)(i) Before 
discharging a delinquent debt, also referred to as close out of the 
debt, we will take all appropriate steps to collect the debt in 
accordance with 31 U.S.C. 3711(g)(9), and Secs. 422.803 and 422.810 of 
this part, including, as applicable, Administrative Offset; tax refund 
offset; Federal Salary Offset; credit bureau reporting; Administrative 
Wage Garnishment; litigation; foreclosure; and referral to the Treasury, 
Treasury-designated debt collection centers, or private collection 
contractors.
    (ii) Discharge of indebtedness is distinct from termination or 
suspension of collection activity under this subpart, and is governed by 
the Internal Revenue Code. When collection action on a debt is suspended 
or terminated, the debt remains delinquent and further collection action 
may be pursued at a later date in accordance with the standards set 
forth in this part and 31 CFR parts 900 through 904.
    (iii) When we discharge a debt in full or in part, further 
collection action is prohibited. Therefore, before discharging a debt, 
we must:
    (A) Make the determination that collection action is no longer 
warranted; and
    (B) Terminate debt collection action.
    (2) In accordance with 31 U.S.C. 3711(i), we will use competitive 
procedures to sell a delinquent debt upon termination of collection 
action if the Secretary of the Treasury determines such a sale is in the 
best interests of the United States. Since the discharge of a debt 
precludes any further collection action, including the sale of a 
delinquent debt, we may not discharge a debt until the requirements of 
31 U.S.C. 3711(i) have been met.
    (3) Upon discharge of indebtedness, we must report the discharge to 
the Internal Revenue Service (IRS) in accordance with the requirements 
of 26 U.S.C. 6050P and 26 CFR 1.6050P-1. We may request that Treasury or 
Treasury-designated debt collection centers file such a discharge report 
to the IRS on our behalf.
    (4) When discharging a debt, we must request that litigation counsel 
release any liens of record securing the debt.



Sec. 422.850  Referrals to the Department of Justice.

    (a) Prompt referral. (1)(i) We will promptly refer to the Department 
of Justice (DOJ) for litigation debts on which aggressive collection 
activity has been taken in accordance with Sec. 422.803, and that cannot 
be compromised, or on which collection activity cannot be suspended or 
terminated, in accordance with Sec. 422.848.
    (ii) We may refer debts arising out of activities of, or referred or 
transferred for collection services to, the agency to DOJ for 
litigation.
    (2)(i) Debts for which the principal amount is over $100,000 or such 
other amount as the Attorney General may direct, exclusive of interest, 
penalties, and administrative costs will be referred to the Civil 
Division or other division responsible for litigating such debts at the 
DOJ.
    (ii) Debts for which the principal amount is $1,000,000 or less, or 
such other amount as the Attorney General may direct, exclusive of 
interest, penalties, and administrative costs will be referred to the 
Nationwide Central Intake Facility at the DOJ as required by the Claims 
Collections Litigation Report (CCLR) instructions.
    (3)(i) Consistent with aggressive agency collection activity and the 
standards contained in this part and 31 CFR parts 900 through 904, debts 
will be referred to the DOJ as early as possible and, in any event, well 
within the period for initiating timely lawsuits against the debtors.
    (ii) We will make every effort to refer delinquent debts to the DOJ 
for litigation within one year of the date such debts last became 
delinquent. In the

[[Page 1281]]

case of guaranteed or insured loans, we will make every effort to refer 
these delinquent debts to the DOJ for litigation within one year from 
the date the debt was known to the agency.
    (4) The DOJ has exclusive jurisdiction over debts referred to it 
pursuant to this subpart. Upon referral of a debt to the DOJ, we will:
    (i) Immediately terminate the use of any administrative collection 
activities to collect the debt;
    (ii) Advise the DOJ of the collection tools utilized and the results 
of activities to date; and
    (iii) Refrain from having any contact with the debtor and direct all 
debtor inquiries concerning the debt to the DOJ.
    (5) After referral of a debt under this subpart, we will immediately 
notify the DOJ of any payments credited by the agency to the debtor's 
account. Pursuant to 31 CFR 904.1(b), after referral of the debt under 
this subpart, the DOJ will notify the agency of any payment received 
from the debtor.
    (b) Claims Collection Litigation Report. (1)(i) Unless excepted by 
the DOJ, we will complete a CCLR and associated signed Certificate of 
Indebtedness to refer all administratively uncollectible claims to the 
DOJ for litigation.
    (ii) We will complete all sections of the CCLR appropriate to each 
debt as required by the CCLR instructions and furnish such other 
information as may be required in specific cases.
    (2) We will indicate clearly on the CCLR the actions that we wish 
the DOJ to take with respect to the referred debt. We may indicate 
specifically any of a number of litigation activities the DOJ may choose 
to pursue, including enforced collection, judgment lien only, renew 
judgment lien only, renew judgment lien and enforced collection, program 
enforcement, foreclosure only, and foreclosure and deficiency judgment.
    (3) We will also use the CCLR to refer a debt to the DOJ for the 
purpose of obtaining any necessary approval of a proposal to compromise 
a debt or to suspend or terminate administrative collection activity on 
a debt.
    (c) Preservation of evidence. We will maintain and preserve all 
files and records that may be needed by the DOJ to prove our claim in 
court. When referring debts to the DOJ for litigation, certified copies 
of the documents that form the basis for the claim should be provided 
along with the CCLR. Upon its request, the original documents will be 
provided to the DOJ.
    (d) Minimum amount of referrals. (1) Except as provided in paragraph 
(d)(2) of this section, we will not refer for litigation claims of less 
than $2,500 exclusive of interest, penalties, and administrative costs, 
or such other amount as the Attorney General may prescribe.
    (2) We will not refer claims of less than the minimum amount unless:
    (i) Litigation to collect such smaller amount is important to ensure 
compliance with the agency's policies and programs;
    (ii) The agency is referring the claim solely for the purpose of 
securing a judgment against the debtor, which will be filed as a lien 
against the debtor's property pursuant to 28 U.S.C. 3201 and returned to 
the agency for enforcement; or
    (iii) The debtor has the clear ability to pay the claim and the 
Government can enforce payment effectively, with due regard for the 
exemptions available to the debtor under State and Federal law and the 
judicial remedies available to the Government.
    (3) We will consult with the Financial Litigation Staff of the 
Executive Office for United States Attorneys at DOJ prior to referring 
claims valued at less than the minimum amount.



Subpart J_Protecting the Public and Our Personnel To Ensure Operational 
                              Effectiveness

    Authority: Sec. 702(a)(4)-(5) of the Social Security Act (42 U.S.C. 
902(a)(4)-(5)).

    Source: 76 FR 54702, Sept. 2, 2011, unless otherwise noted.



Sec. 422.901  Scope and purpose.

    The regulations in this subpart describe the process we will follow 
when we decide whether to ban you from entering our offices. Due to 
increasing reports of threats to our personnel and

[[Page 1282]]

the public, we are taking steps to increase the level of protection we 
provide to our personnel and to the public. The purpose of this subpart 
is to inform the public and our personnel of the conduct that will 
subject an individual to a ban and the procedures we will follow when 
banning an individual from entering our offices. We expect that the 
regulations will result in a safer environment for our personnel and the 
public who visit our facilities, while ensuring that our personnel can 
continue to serve the American people with as little disruption to our 
operations as possible.



Sec. 422.902  Definition of personnel for purposes of this subpart.

    We will construe the term ``personnel'' broadly to mean persons 
responsible for or engaged in carrying out the responsibilities, 
programs, or services of or on behalf of the agency. Personnel includes, 
but is not limited to, our employees, contractors, consultants, and 
examiners and State disability determination services (DDS) employees, 
contractors, consultants, and examiners.



Sec. 422.903  Prohibited conduct.

    We will ban you from entering our offices if you:
    (a) Physically or verbally assault our personnel or a member of the 
public in our occupied space;
    (b) Use force or threats of force against our personnel or offices, 
including but not limited to communicating threats in person or by 
phone, facsimile, mail, or electronic mail;
    (c) Engage in disruptive conduct that impedes our personnel from 
performing their duties; or
    (d) Engage in disruptive conduct that impedes members of the public 
from obtaining services from our personnel.



Sec. 422.904  Notice of the ban.

    If an agency manager makes a decision in writing that you pose a 
threat to the safety of our personnel, visitors, office, or the 
operational effectiveness of the agency, we will send you a notice 
banning you from our offices. The notice will contain the following 
information:
    (a) Type of restriction. If we ban you from entering our offices, 
the ban will apply to all of our offices, and you must obtain all future 
service through alternate means. We will provide you in-person service 
only if you establish that there are no alternate means available. You 
must direct your request for in-person service to the manager of the 
office you are requesting to visit. If we determine that an office visit 
is warranted, we will schedule an appointment for you and send you a 
certified letter notifying you of the date, time, and location of the 
appointment.
    (b) Prohibited conduct. We will provide you with specific details of 
the prohibited conduct that served as the basis for our decision to ban 
you.
    (c) Alternate means of service. If you are banned from entering our 
offices, you still have several means to receive services:
    (1) You may use the online services available through our Web site 
at http://www.socialsecurity.gov;
    (2) You may call your local office. Your notice will include the 
contact information for your local office. You should ask to speak with 
the office manager or a supervisor;
    (3) You may call our national toll-free number at 1-800-772-1213 
between the hours of 7 a.m. and 7 p.m., Monday through Friday. You 
should not attempt to schedule an in-person appointment through this 
number. If you are deaf or hard of hearing, you may call our toll-free 
TTY number at 1-800-325-0778;
    (4) You may write to your local office. You should address all 
correspondence to the attention of the office manager;
    (5) With your written consent, another person may call, write, or 
visit us to conduct business on your behalf.
    (d) Appeal rights. The notice will provide you with information on 
how to appeal the ban.
    (e) Periodic request for review of ban decision. The notice will 
provide you with information on how to request review of the ban 
determination every three years from the date of the ban notice, or if 
you appeal the ban, the date of the appeal decision.

[[Page 1283]]



Sec. 422.905  Appeal rights.

    You may appeal our decision to ban you. You must submit your appeal 
in writing to the address identified in the notice within 60 days of the 
date of the notice. You should identify your name, address, Social 
Security number, and the office that issued the notice of the ban. The 
appeal should clearly state why we should reconsider our decision and 
provide any supporting documentation. We may allow an additional 10 days 
for the late filing of an appeal if you show good cause for the late 
filing. The ban will remain in effect while the appeal is pending. We 
will notify you of our decision in writing.



Sec. 422.906  Periodic request for review of ban decision.

    You may request review of our ban decision every three years. The 
three-year cycle to request review will begin on the date we issued 
notice of the ban, or if you appealed, the date of our appeal decision. 
You must submit your request for review of a ban decision in writing to 
the address identified in the original notice of the ban. Your request 
for review should identify your name, address, Social Security number, 
and office that issued the notice of the ban. Your request should 
clearly state why we should lift the ban and provide relevant 
documentation that supports removal of the restriction, including 
medical documentation, applicable psychiatric evaluations, work history, 
and any criminal record. You must prove by a preponderance of the 
evidence (meaning that it is more likely than not) that you no longer 
pose a threat to the safety of our personnel or visitors or the 
operational effectiveness of the agency. We will notify you of our 
decision in writing.



Sec. 422.907  Posting requirement.

    We will post the regulation in this subpart in a conspicuous place 
in our offices that serve the public.



PART 423_SERVICE OF PROCESS--Table of Contents



Sec.
423.1  Suits against the Social Security Administration and its 
          employees in their official capacities.
423.3  Other process directed to the Social Security Administration or 
          the Commissioner.
423.5  Process against Social Security Administration officials in their 
          individual capacities.
423.7  Acknowledgment of mailed process.
423.9  Effect of regulations in this part.

    Authority: Sec. 701 and 702(a)(5) of the Social Security Act (42 
U.S.C. 901 and 902(a)(5)).

    Source: 60 FR 18992, Apr. 14, 1995, unless otherwise noted.



Sec. 423.1  Suits against the Social Security Administration and its
employees in their official capacities.

    (a) Suits involving claims arising under Titles II, VIII, and/or 
XVI. In cases seeking judicial review of final Agency decisions on 
individual claims for benefits under titles II, VIII, and/or XVI of the 
Social Security Act, summonses and complaints to be served by mail on 
the Social Security Administration or the Commissioner of Social 
Security should be sent to the office in the Social Security 
Administration's Office of the General Counsel that is responsible for 
the processing and handling of litigation in the particular jurisdiction 
in which the complaint has been filed. The names, addresses, and 
jurisdictional responsibilities of these offices are published in the 
Federal Register, and are available on-line at the Social Security 
Administration's Internet site, http://www.socialsecurity.gov.
    (b) Other suits. In cases that do not involve claims described in 
paragraph (a) of this section, summonses and complaints to be served by 
mail on the Social Security Administration or the Commissioner of Social 
Security should be sent to the General Counsel, Social Security 
Administration, Room 617, Altmeyer Building, 6401 Security Boulevard, 
Baltimore, MD 21235.

[70 FR 73136, Dec. 9, 2005]



Sec. 423.3  Other process directed to the Social Security Administration
or the Commissioner.

    Subpoenas and other process (other than summonses and complaints) 
that are required to be served on the Social Security Administration or 
the Commissioner of Social Security in his or

[[Page 1284]]

her official capacity should be served as follows:
    (a) If authorized by law to be served by mail, any mailed process 
should be sent to the General Counsel, Social Security Administration, 
Room 611, Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 
21235.
    (b) If served by an individual, the process should be delivered to 
the mail room staff in the Office of the General Counsel, Room 611, 6401 
Security Blvd., Baltimore, MD 21235 or, in the absence of that staff, to 
any Deputy General Counsel or secretary to any Deputy General Counsel of 
the Social Security Administration.



Sec. 423.5  Process against Social Security Administration officials
in their individual capacities.

    Process to be served on Social Security Administration officials in 
their individual capacities must be served in compliance with the 
requirements for service of process on individuals who are not 
governmental officials. The Office of the General Counsel is authorized 
but not required to accept process to be served on Social Security 
Administration officials in their individual capacities if the suit 
relates to an employee's official duties.



Sec. 423.7  Acknowledgment of mailed process.

    The Social Security Administration will not provide a receipt or 
other acknowledgment of process received, except for a return receipt 
associated with certified mail and, where required, the acknowledgment 
described in rule 4(e) of the Federal Rules of Civil Procedure (28 
U.S.C. App. 4(e)).



Sec. 423.9  Effect of regulations in this part.

    The regulations in this part are intended solely to identify Social 
Security Administration officials who are authorized to accept service 
of process. Litigants must comply with all requirements pertaining to 
service of process that are established by statute and court rule even 
though they are not repeated in this part.

                        PARTS 424	428 [RESERVED]



PART 429_ADMINISTRATIVE CLAIMS UNDER THE FEDERAL TORT CLAIMS ACT 
AND RELATED STATUTES--Table of Contents



 Subpart A_Claims Against the Government Under the Federal Tort Claims 
                                   Act

Sec.
429.101  What is this subpart about?
429.102  How do I file a claim under this subpart?
429.103  Who may file my claim?
429.104  What evidence do I need to submit with my claim?
429.105  What happens when you receive my claim?
429.106  What happens if my claim is denied?
429.107  If my claim is approved, how do I obtain payment?
429.108  What happens if I accept an award, compromise, or settlement 
          under this subpart?
429.109  Are there any penalties for filing false claims?
429.110  Are there any limitations on SSA's authority under this 
          subpart?

 Subpart B_Claims Under the Military Personnel and Civilian Employees' 
                           Claims Act of 1964

429.201  What is this subpart about?
429.202  How do I file a claim under this subpart?
429.203  When is a claim allowable?
429.204  Are there any restrictions on what is allowable?
429.205  What is not allowable under this subpart?
429.206  What if my claim involves a commercial carrier or an insurer?
429.207  What are the procedures for filing a claim?
429.208  How do you determine the award? Is the settlement of my claim 
          final?
429.209  Are there any restrictions on attorney's fees?
429.210  Do I have any appeal rights under this subpart?
429.211  Are there any penalties for filing false claims?

    Authority: Section 702(a)(5) of the Social Security Act (42 U.S.C. 
902(a)(5)); 28 U.S.C. 2672; 28 CFR 14.11; 31 U.S.C. 3721.

    Source: 69 FR 48768, Aug. 11, 2004, unless otherwise noted.

[[Page 1285]]



 Subpart A_Claims Against the Government Under the Federal Tort Claims 
                                   Act



Sec. 429.101  What is this subpart about?

    (a) This subpart applies only to claims filed under the Federal Tort 
Claims Act, as amended, 28 U.S.C. 2671-2680 (FTCA), for money damages 
against the United States for damage to or loss of property or personal 
injury or death that is caused by the negligent or wrongful act or 
omission of an employee of the Social Security Administration (SSA). The 
loss, damage, injury or death must be caused by the employee in the 
performance of his or her official duties, under circumstances in which 
the United States, if a private person, would be liable in accordance 
with the law of the place where the act or omission occurred. This 
subpart does not apply to any tort claims excluded from the FTCA under 
28 U.S.C. 2680.
    (b) This subpart is subject to and consistent with the regulations 
on administrative claims under the FTCA issued by the Attorney General 
at 28 CFR part 14.



Sec. 429.102  How do I file a claim under this subpart?

    (a) Filing an initial claim. You must either file your claim on a 
properly executed Standard Form 95 or you must submit a written 
notification of the incident accompanied by a claim for the money 
damages in a sum certain for damage to or loss of property you believe 
occurred because of the incident. For purposes of this subpart, we 
consider your claim to be filed on the date we receive it at the address 
specified in paragraph (c) of this section. If you mistakenly send your 
claim to another Federal agency, we will not consider it to be filed 
until the date that we receive it. If you mistakenly file a claim meant 
for another Federal agency with SSA, we will transfer it to the 
appropriate Federal agency, if possible. If we are unable to determine 
the appropriate agency, we will return the claim to you.
    (b) Filing an amendment to your claim. You may file an amendment to 
your properly filed claim at any time before the SSA Claims Officer (as 
defined in Sec. 429.201(d)(3)) makes a final decision on your claim or 
before you bring suit under 28 U.S.C. 2675(a). You must submit an 
amendment in writing and sign it. If you file a timely amendment, SSA 
has 6 months in which to finally dispose of the amended claim. Your 
option to file suit does not begin until 6 months after you file the 
amendment.
    (c) Where to obtain claims forms and file claims. You can obtain 
claims forms by writing to the Social Security Administration, Office of 
the General Counsel, Office of General Law, 6401 Security Boulevard, 
Room 617 Altmeyer Building, Baltimore, Maryland 21235-6401. You may also 
file your claim with the Social Security Administration at this same 
address.

[69 FR 48768, Aug. 11, 2004, as amended at 74 FR 16327, Apr. 10, 2009; 
79 FR 7577, Feb. 10, 2014]



Sec. 429.103  Who may file my claim?

    (a) Claims for damage to or loss of property. If you are the owner 
of the property interest that is the subject of the claim, you, your 
duly authorized agent, or your legal representative may file the claim.
    (b) Claims for personal injury. If you suffered the injury, you, 
your duly authorized agent, or your legal representative may file the 
claim.
    (c) Claims based on death. The executor or administrator of your 
estate or any other person legally entitled to do so may file the claim.
    (d) Claims for loss wholly compensated by an insurer with the rights 
of a subrogee. The insurer may file the claim. When an insurer presents 
a claim asserting the rights of a subrogee, the insurer must present 
with the claim appropriate evidence that it has the rights of a 
subrogee.
    (e) Claims for loss partially compensated by an insurer with the 
rights of a subrogee. You and the insurer may file, jointly or 
separately. When an insurer presents a claim asserting the rights of a 
subrogee, the insurer must present with the claim appropriate evidence 
that it has the rights of a subrogee.
    (f) Claims by authorized agents or other legal representatives. Your 
duly authorized agent or other legal representative

[[Page 1286]]

may submit your claim, provided satisfactory evidence is submitted 
establishing that person has express authority to act on your behalf. A 
claim presented by an agent or legal representative must be presented in 
your name. If the claim is signed by the agent or legal representative, 
it must show the person's title or legal capacity and must be 
accompanied by evidence that the person has the authority to file the 
claim on your behalf as agent, executor, administrator, parent, guardian 
or other representative.



Sec. 429.104  What evidence do I need to submit with my claim?

    (a) Property damage. To support a claim for property damage, either 
real or personal, you may be required to submit the following evidence 
or information:
    (1) Proof of ownership.
    (2) A detailed statement of the amount claimed with respect to each 
item of property.
    (3) An itemized receipt of payment for necessary repairs or itemized 
written estimates of the cost of such repairs.
    (4) A statement listing date of purchase, purchase price, market 
value of the property as of date of damage, and salvage value, where 
repair is not economical.
    (5) Any other evidence or information that may have a bearing either 
on the responsibility of the United States for the injury to or loss of 
property or the damages claimed.
    (b) Personal injury. To support a claim for personal injury, 
including pain and suffering, you may be required to submit the 
following evidence or information:
    (1) A written report from your attending physician or dentist 
setting forth the nature and extent of your injury, nature and extent of 
treatment, any degree of temporary or permanent disability, your 
prognosis, period of hospitalization, and any diminished earning 
capacity. You may also be required to submit to a physical or mental 
examination by a physician employed or designated by SSA. If you submit 
a written request, we will provide you with a copy of the report of the 
examining physician provided you agree to make available to SSA any 
other physician's reports made of the physical or mental condition that 
is the subject of your claim.
    (2) Itemized bills for medical, dental, and hospital expenses 
incurred, or itemized receipts of payment for such expenses.
    (3) If your prognosis reveals that you will need future treatment, a 
statement of expected duration of and expenses for such treatment.
    (4) If you claim a loss of time from employment, a written statement 
from your employer showing actual time lost from employment, whether you 
are a full or part-time employee, and wages or salary you actually lost.
    (5) If you claim a loss of income and are self-employed, documentary 
evidence showing the amount of earnings you actually lost. For example, 
we may use income tax returns for several years prior to the injury in 
question and the year in which the injury occurred to indicate or 
measure lost income. A statement of how much it cost you to hire someone 
to do the same work you were doing at the time of the injury might also 
be used in measuring lost income.
    (6) Any other evidence or information that may have a bearing on 
either the responsibility of the United States for the personal injury 
or the damages claimed.
    (c) Claim based on death. To support the claim, we need the 
following evidence or information:
    (1) An authenticated death certificate or other believable 
documentation showing cause of death, date of death, and age at the time 
of death.
    (2) The decedent's employment or occupation at time of death, 
including monthly or yearly salary or earnings (if any), and the 
duration of last employment or occupation.
    (3) Full names, addresses, birth dates, kinship, and marital status 
of the decedent's survivors, including identification of those survivors 
who were dependent upon the decedent for support at the time of death.
    (4) Degree of support the decedent provided to each survivor 
dependent on the decedent for support at the time of death.

[[Page 1287]]

    (5) The decedent's general physical and mental condition before 
death.
    (6) Itemized bills for medical and burial expenses incurred, or 
itemized receipts of payments for such expenses.
    (7) If damages for pain and suffering prior to death are claimed, a 
physician's detailed statement specifying the injuries suffered, 
duration of pain and suffering, any drugs administered for pain and the 
decedent's physical condition in the interval between injury and death.
    (8) Any other evidence or information that may have a bearing on 
either the responsibility of the United States for the death or the 
damages claimed.
    (d) Time limit for submitting evidence. You must furnish all the 
evidence required by this section within a reasonable time. If you fail 
to furnish all the evidence necessary to determine your claim within 60 
days after being asked to do so, we may find that you have decided to 
abandon your claim.



Sec. 429.105  What happens when you receive my claim?

    When we receive your claim, we will investigate to determine its 
validity. After our investigation, we will forward your claim to the SSA 
Claims Officer with our recommendation as to whether your claim should 
be fully or partially allowed or denied.



Sec. 429.106  What happens if my claim is denied?

    (a) If your claim is denied, the SSA Claims Officer will send you, 
your agent, or your legal representative a written notice by certified 
or registered mail. The notice will include an explanation of why your 
claim was denied and will advise you of your right to file suit in an 
appropriate U.S. District Court not later than 6 months after the date 
of the mailing of the notice if you disagree with the determination.
    (b) Before filing suit and before expiration of the 6-month period 
after the date of the mailing of the denial notice, you, your duly 
authorized agent, or your legal representative may file a written 
request with SSA for reconsideration by certified or registered mail. If 
you file a timely request for reconsideration, SSA has 6 months from the 
date you file your request in which to finally dispose of your claim. 
Your right to file suit will not begin until 6 months after you file 
your request for reconsideration. Final SSA action on your request for 
reconsideration will occur in accordance with the provisions of 
paragraph (a) of this section.



Sec. 429.107  If my claim is approved, how do I obtain payment?

    (a) Claims under $2,500. If your claim is approved, you must 
complete a ``Voucher for Payment under the Federal Tort Claims Act,'' 
Standard Form 1145. If you are represented by an attorney, the voucher 
for payment (SF 1145) must designate both you and your attorney as 
``payees''; we will then mail the check to your attorney.
    (b) Claims in excess of $2,500. If your claim is approved, SSA will 
forward the appropriate Financial Management Service (FMS) Forms 194, 
195, 196, 197, and/or 197-A to the Judgment Fund Section, Financial 
Management Service, Department of the Treasury, Room 6D37, 3700 East-
West Highway, Hyattsville, Maryland 20782. FMS will then mail the 
payment to you.



Sec. 429.108  What happens if I accept an award, compromise, or 
settlement under this subpart?

    If you, your agent, or your legal representative accept any award, 
compromise, or settlement under this subpart, your acceptance is final 
and conclusive on you, your agent or representative, and any other 
person on whose behalf or for whose benefit the claim was filed. The 
acceptance constitutes a complete release of any claim against the 
United States and against any employee of the Government whose act or 
omission gave rise to the claim, by reason of the same subject matter.



Sec. 429.109  Are there any penalties for filing false claims?

    A person who files a false claim or makes a false or fraudulent 
statement in a claim against the United States may be imprisoned for not 
more than 5 years. (18 U.S.C. 287, 1001). In addition, that person may 
be liable for a civil penalty of not less than $5,000 and not more than 
$10,000 and damages of triple

[[Page 1288]]

the loss or damage sustained by the United States, as well as the costs 
of a civil action brought to recover any penalty or damages. (31 U.S.C. 
3729).



Sec. 429.110  Are there any limitations on SSA's authority under this 
subpart?

    (a) An award, compromise or settlement of a claim under this subpart 
in excess of $25,000 needs the prior written approval of the Attorney 
General or his designee. For the purposes of this paragraph, we treat a 
principal claim and any derivative or subrogated claim as a single 
claim.
    (b) An administrative claim may be adjusted, determined, 
compromised, or settled under this subpart only after consultation with 
the Department of Justice when, in the opinion of SSA:
    (1) A new precedent or a new point of law is involved;
    (2) A question of policy is or may be involved;
    (3) The United States is or may be entitled to indemnity or 
contribution from a third party and SSA is unable to adjust the third-
party claim; or
    (4) The compromise of a particular claim, as a practical matter, 
will or may control the disposition of a related claim in which the 
amount to be paid may exceed $25,000.
    (c) An administrative claim may be adjusted, determined, compromised 
or settled only after consultation with the Department of Justice when 
it is learned that the United States, or an employee, agent, or cost-
plus contractor of the United States, is involved in litigation based on 
a claim arising out of the same incident or transaction.



 Subpart B_Claims Under the Military Personnel and Civilian Employees' 
                           Claims Act of 1964



Sec. 429.201  What is this subpart about?

    (a) Scope and purpose. This subpart applies to all claims filed by 
or on behalf of employees of SSA for loss of, or damage to, personal 
property incident to their service with SSA under the Military Personnel 
and Civilian Employees Claims Act of 1964, as amended, 31 U.S.C. 3721 
(MPCECA). A claim must be substantiated and the possession of the 
property determined to be reasonable, useful, or proper.
    (b) Maximum payment under this part. The maximum amount that can be 
paid for any claim under the Act is $40,000 or, in extraordinary 
circumstances, $100,000, and property may be replaced in kind at the 
discretion of the Government.
    (c) Policy. SSA is not an insurer and does not underwrite all 
personal property losses that an employee may sustain incident to 
employment. We encourage employees to carry private insurance to the 
maximum extent practicable to avoid losses that may not be recoverable 
from SSA. The procedures set forth in this subpart are designed to 
enable you to obtain the proper amount of compensation from SSA and/or a 
private insurer for the loss or damage. If you fail to comply with these 
procedures it could reduce or preclude payment of your claim under this 
subpart.
    (d) Definitions. (1) ``Quarters,'' unless otherwise indicated, means 
a house, apartment, or other residence that is an SSA employee's 
principal residence.
    (2) ``State,'' unless otherwise indicated, is defined by 
Sec. 404.2(c)(5) of title 20 of the Code of Federal Regulations.
    (3) ``SSA Claims Officer'' means the SSA official designated to 
determine claims under the MPCECA. The current designee is the Associate 
General Counsel for General Law.



Sec. 429.202  How do I file a claim under this subpart?

    (a) Who may file. (1) You, your duly authorized agent, your legal 
representative, or your survivor may file the claim. If your survivor 
files the claim, the order of precedence for filing is spouse, child, 
parent, sibling.
    (2) You may not file a claim on behalf of a subrogee, assignee, 
conditional vendor, or other third party.
    (b) Where to file. You must file your claim with the Social Security 
Administration, Office of the General Counsel, Office of General Law, 
6401 Security Boulevard, Room 617 Altmeyer Building, Baltimore, Maryland 
21235-6401.
    (c) Evidence required. You are responsible for proving ownership or 
possession, the facts surrounding the loss or

[[Page 1289]]

damage, and the value of the property. Your claim must include the 
following:
    (1) A written statement, signed by you or your authorized agent, 
explaining how the damage or loss occurred. This statement must also 
include:
    (i) A description of the type, design, model number, or other 
identification of the property.
    (ii) The date you purchased or acquired the property and its 
original cost.
    (iii) The location of the property when the loss or damage occurred.
    (iv) The value of the property when lost or damaged.
    (v) The actual or estimated cost of the repair of any damaged item.
    (vi) The purpose of and authority for travel, if the loss or damage 
occurred while you were transporting your property or using a motor 
vehicle.
    (vii) All available information as to who was responsible for the 
loss or damage, if it was not you, and all information as to insurance 
contracts, whether in your name or in the name of the responsible party.
    (viii) Any other evidence about loss or damage that the SSA Claims 
Officer determines is necessary.
    (2) Copies of all available and appropriate documents such as bills 
of sale, estimates of repairs, or travel orders. In the case of damage 
to an automobile, you must submit at least two estimates of repair or a 
certified paid bill showing the damage incurred and the cost of all 
parts, labor, and other items necessary to the repair of the vehicle or 
a statement from an authorized dealer or repair garage showing that the 
cost of such repairs exceeds the value of the vehicle.
    (3) A copy of the power of attorney or other authorization if 
someone else files the claim on your behalf.
    (4) A statement from your immediate supervisor confirming that 
possession of the property was reasonable, useful, or proper under the 
circumstances and that the damage or loss was incident to your service.
    (d) Time limitations. You must file a written claim within 2 years 
after accrual of the claim. For purposes of this subpart, your claim 
accrues at the later of:
    (1) The time of the accident or incident causing the loss or damage;
    (2) The time the loss or damage should have been discovered by the 
claimant by the exercise of due diligence; or
    (3) Where valid circumstances prevented you from filing your claim 
earlier, the time that should be construed as the date of accrual 
because of a circumstance that prevents the filing of a claim. If war or 
armed conflict prevents you from filing the claim, your claim accrues on 
the date hostilities terminate and your claim must be filed within 2 
years of that date.

[69 FR 48768, Aug. 11, 2004, as amended at 74 FR 16327, Apr. 10, 2009; 
79 FR 7577, Feb. 10, 2014]



Sec. 429.203  When is a claim allowable?

    (a) A claim is allowable only if you were using the property 
incident to your service with SSA, with the knowledge and consent of a 
superior authority, and:
    (1) The damage or loss was not caused wholly or partially by the 
negligent or improper action or inaction of you, your agent, the members 
of your family, or your private employee (the standard to be applied is 
that of reasonable care under the circumstances); and
    (2) The possession of the property lost or damaged and the quantity 
and the quality possessed is determined to have been reasonable, useful, 
or proper under the circumstances; and
    (3) The claim is substantiated by proper and convincing evidence.
    (b) Claims that are otherwise allowable under this subpart will not 
be disallowed solely because you were not the legal owner of the 
property for which the claim is made.
    (c) Subject to the conditions in paragraph (a) of this section and 
the other provisions of this subpart, any claim you make for damage to, 
or loss of, personal property that occurs incident to your service with 
SSA may be considered and allowed. For the purpose of this subpart, if 
you were performing your official duties at an alternate work location 
under an approved flexiplace agreement, the alternate work location will 
be considered an official duty station even if it is located

[[Page 1290]]

in your principal residence. The alternate work location is not 
considered to be quarters. The following are examples of the principal 
types of claims that are allowable, but these examples are not exclusive 
and other types of claims are allowable, unless specifically excluded 
under this subpart:
    (1) Property damage in quarters or other authorized places. Claims 
are allowable for damage to, or loss of, property arising from fire, 
flood, hurricane, other natural disaster, theft, or other unusual 
occurrence, while such property is located at:
    (i) Quarters within a state that were assigned to you or otherwise 
provided in kind by the United States; or
    (ii) Any warehouse, office, working area, or other place (except 
quarters) authorized or apparently authorized for the reception or 
storage of property.
    (2) Transportation or travel losses. Claims are allowable for damage 
to, or loss of, property incident to transportation or storage of such 
property pursuant to order or in connection with travel under orders, 
including property in your custody or in the custody of a carrier, an 
agent or agency of the Government.
    (3) Mobile homes. Claims may be allowed for damage to, or loss of, 
mobile homes and their contents under the provisions of paragraph (c)(2) 
of this section. Claims for structural damage to mobile homes, other 
than that caused by collision, and damage to contents of mobile homes 
resulting from such structural damage, must contain conclusive evidence 
that the damage was not caused by structural deficiency of the mobile 
home and that it was not overloaded. Claims for damage to, or loss of, 
tires mounted on mobile homes are not allowable, except in cases of 
collision, theft, or vandalism.
    (4) Enemy action or public service. Claims are allowable for damage 
to, or loss of, property that directly result from:
    (i) Enemy action or threat of enemy action, or combat, guerrilla, 
brigandage, or other belligerent activity, or unjust confiscation by a 
foreign power or its nationals.
    (ii) Action you take to quiet a civil disturbance or to alleviate a 
public disaster.
    (iii) Efforts you make to save human life or Government property.
    (5) Property used for the benefit of the Government. Claims are 
allowable for damage to, or loss of, property when used for the benefit 
of the Government at the request of, or with the knowledge and consent 
of, superior authority, up to the amount not compensated by private 
insurance.
    (6) Clothing and accessories. Claims are allowable for damage to, or 
loss of, clothing and accessories a person customarily wears and devices 
such as eyeglasses, hearing aids, dentures, or prosthetics.
    (7) Expenses incident to repair. You may be reimbursed for the 
payment of any sales tax and other such fees incurred in connection with 
repairs to an item. The costs of obtaining estimates of repair (subject 
to the limitations set forth in Sec. 429.204(c)) are also allowable.



Sec. 429.204  Are there any restrictions on what is allowable?

    Claims of the type described in this section are only allowable 
subject to the restrictions noted:
    (a) Money or currency, including coin collections. Allowable only 
when lost because of fire, flood, hurricane, other natural disaster, 
theft from quarters (as limited by Sec. 429.203(c)(1)), or under other 
reasonable circumstances in which it would be in the Government's best 
interest to make payment. In cases involving theft from quarters, the 
evidence must conclusively show that your quarters were locked at the 
time of the theft. Reimbursement for loss of money or currency is 
limited to the amount it is determined reasonable for you to have had in 
your possession at the time of the loss.
    (b) Government property. Allowable only for property owned by the 
United States for which you are financially responsible to an agency of 
the Government other than SSA.
    (c) Estimate fees. Allowable for fees paid to obtain estimates of 
repairs only when it is clear that you could not have obtained an 
estimate without paying a fee. In that case, the fee is allowable only 
in an amount determined to be reasonable in relation to the value of the 
property or the cost of the repairs.

[[Page 1291]]

    (d) Automobiles and motor vehicles. (1) Claims may only be allowed 
for damage to, or loss of, automobiles and other motor vehicles if:
    (i) You were required by your supervisor to use a motor vehicle for 
official Government business (official Government business, as used 
here, does not include travel, or parking incident to travel, between 
quarters and office, quarters and an approved telecommuting center, or 
use of vehicles for the convenience of the owner. However, it does 
include travel, and parking incident thereto, between quarters and an 
assigned place of duty specifically authorized by your supervisor as 
being more advantageous to the Government); or
    (ii) Shipment of such motor vehicles was being furnished or provided 
by the Government, subject to the provisions of Sec. 429.206; or
    (2) When a claim involves damage to or loss of automobile or other 
motor vehicle, you will be required to present proof of insurance 
coverage, the deductible amount, and the amount, if any, you recovered 
from the insurer. If your claim is for an amount that exceeds the 
deductible on the insurance policy, the maximum allowable recovery will 
be for the amount of the deductible. If the vehicle is uninsured, the 
maximum allowed will be $500.00.
    (e) Computers and electronics. Claims may be allowed for loss of, or 
damage to, cellular phones, fax machines, computers and related hardware 
and software only when lost or damaged incident to fire, flood, 
hurricane, other natural disaster, theft from quarters (as limited by 
Sec. 429.203(c)(1)), other reasonable circumstances in which it would be 
in the Government's best interest to make payment, or unless being 
shipped as a part of a change of duty station paid for by the Agency. In 
incidents of theft from quarters, it must be conclusively shown that 
your quarters were locked at the time of the theft.
    (f) Alternate work locations. When a claim is filed for property 
damage or loss at a non-Government alternate work location at which you 
are working pursuant to an approved flexiplace work agreement, you are 
required to present proof of insurance coverage, the deductible amount, 
and the amount, if any, you recovered from the insurer. If your claim is 
for an amount that exceeds the deductible on the insurance policy, the 
maximum allowable recovery will be for the amount of the deductible. If 
the property is uninsured, the maximum allowed will be $1,000.00.



Sec. 429.205  What is not allowable under this subpart?

    Claims are not allowable for the following:
    (a) Unassigned quarters in United States. Property loss or damage in 
quarters you occupied within any state that were not assigned to you or 
otherwise provided in kind by the United States.
    (b) Business property. Property used for business or profit.
    (c) Unserviceable property. Wornout or unserviceable property.
    (d) Illegal possession. Property acquired, possessed, or transferred 
in violation of the law or in violation of applicable regulations or 
directives.
    (e) Articles of extraordinary value. Valuable articles, such as 
cameras, watches, jewelry, furs, or other articles of extraordinary 
value. This prohibition does not apply to articles in your personal 
custody or articles properly checked or inventoried with a common 
carrier, if you took reasonable protection or security measures.
    (f) Intangible property. Loss of property that has no extrinsic and 
marketable value but is merely representative or evidence of value, such 
as non-negotiable stock certificates, promissory notes, bonds, bills of 
lading, warehouse receipts, insurance policies, baggage checks, and bank 
books, is not compensable. Loss of a thesis, or other similar item, is 
compensable only to the extent of the out-of-pocket expenses you 
incurred in preparing the item such as the cost of the paper or other 
materials. No compensation is authorized for the time you spent in its 
preparation or for supposed literary value.
    (g) Incidental expenses and consequential damages. The MPCECA and 
this subpart authorize payment for loss of, or damage to, personal 
property only. Except as provided in Sec. 429.203(c)(7), consequential 
damages or other types

[[Page 1292]]

of loss or incidental expenses (such as loss of use, interest, carrying 
charges, cost of lodging or food while awaiting arrival of shipment, 
attorney fees, telephone calls, cost of transporting you or your family 
members, inconvenience, time spent in preparation of claim, or cost of 
insurance premiums) are not compensable.
    (h) Real property. Damage to real property is not compensable. In 
determining whether an item is considered to be an item of personal 
property, as opposed to real property, normally, any movable item is 
considered personal property even if physically joined to the land.
    (i) Commercial property. Articles acquired or held for sale or 
disposition by other commercial transactions on more than an occasional 
basis, or for use in a private profession or business enterprise.
    (j) Commercial storage. Property stored at a commercial facility for 
your convenience and at your expense.
    (k) Claims for minimum amount. Loss or damage amounting to less than 
$25.



Sec. 429.206  What if my claim involves a commercial carrier or an 
insurer?

    In the event the property that is the subject of the claim was lost 
or damaged while in the possession of a commercial carrier or was 
insured, the following procedures will apply:
    (a) Whenever property is damaged, lost, or destroyed while being 
shipped pursuant to authorized travel orders, the owner must file a 
written claim for reimbursement with the last commercial carrier known 
or believed to have handled the goods, or the carrier known to be in 
possession of the property when the damage or loss occurred, according 
to the terms of its bill of lading or contract, before submitting a 
claim against the Government under this subpart.
    (b) Whenever property is damaged, lost, or destroyed incident to 
your service and is insured in whole or in part, you must make demand in 
writing against the insurer for reimbursement under the terms and 
conditions of the insurance coverage, before filing a claim against the 
Government.
    (c) Failure to make a demand on a carrier or insurer or to make all 
reasonable efforts to protect and prosecute rights available against a 
carrier or insurer and to collect the amount recoverable from the 
carrier or insurer may result in reducing the amount recoverable from 
the Government by the maximum amount that would have been recoverable 
from the carrier or insurer had the claim been timely or diligently 
prosecuted. However, no deduction will be made where the circumstances 
of your service preclude reasonable filing of a claim or diligent 
prosecution, or the evidence indicates a demand was impracticable or 
would have been unavailing.
    (d) After you file a claim against the carrier or insurer, you may 
immediately submit a claim under this subpart, without waiting until the 
carrier or insurer finally approves or denies your claim.
    (1) Upon submitting your claim, you must certify whether you have 
not gained any recovery from a carrier or insurer, and enclose all 
pertinent correspondence.
    (2) If the carrier or insurer has not taken final action on your 
claim, you must immediately tell the carrier or insurer to address all 
correspondence regarding the claim to the SSA Claims Officer, and you 
must provide a copy of this notice to the SSA Claims Officer.
    (3) You must advise the SSA Claims Officer of any action the carrier 
or insurer takes on the claim and, upon request, must furnish all 
correspondence, documents, and other evidence pertinent to the matter.
    (e) You must assign to the United States, to the extent you accept 
any payment on the claim, all rights, title, and interest in any claim 
you may have against any carrier, insurer, or other party arising out of 
the incident on which your claim against the United States is based. 
After payment of the claim by the United States, you must, upon receipt 
of any payment from a carrier or insurer, pay the proceeds to the United 
States to the extent of the payment you received from the United States.
    (f) If you recover for the loss from the carrier or insurer before 
your claim under this subpart is settled, the amount of recovery will be 
applied to the claim as follows:

[[Page 1293]]

    (1) If you recover an amount that is greater than or equal to your 
total loss as determined under this subpart, no compensation is 
allowable under this subpart.
    (2) If you recover an amount that is less than such total loss, the 
allowable amount is determined by deducting the recovery from the amount 
of such total loss.
    (3) For this purpose, your total loss is determined without regard 
to the maximum payment limitations set forth in Sec. 429.201. However, 
if the resulting amount after making this deduction exceeds the maximum 
payment limitations, you will only be allowed the maximum amount set 
forth in Sec. 429.201.
    (g) In a claim arising from damage to an automobile or other motor 
vehicle, in no event may recovery exceed the reasonable deductible on 
the insurance policy.



Sec. 429.207  What are the procedures for filing a claim?

    (a) Form of claim. Your claim must be presented in writing (SSA Form 
1481 is available for this purpose). Any writing received by the SSA 
Claims Officer within the time limits set forth in Sec. 429.202(d) will 
be accepted and considered a claim under the MPCECA if it constitutes a 
demand for compensation from SSA. A demand is required to be for a 
specific sum of money.
    (b) Award. The SSA Claims Officer is authorized to settle claims 
filed under this subpart.
    (c) Notification. The deciding official will provide you with a 
written determination on your claim.



Sec. 429.208  How do you determine the award? Is the settlement 
of my claim final?

    (a) The amount allowable for damage to or loss of any item of 
property may not exceed the lowest of:
    (1) The amount you requested for the item as a result of its loss, 
damage, or the cost of its repair;
    (2) The actual or estimated cost of its repair; or
    (3) The actual value at the time of its loss, damage, or 
destruction. The actual value is determined by using the current 
replacement cost or the depreciated value of the item since you acquired 
it, whichever is lower, less any salvage value of the item in question, 
if you retain the item.
    (b) Depreciation in value is determined by considering the type of 
article involved, its cost, its condition when damaged or lost, and the 
time elapsed between the date you acquired it and the date of damage or 
loss.
    (c) Current replacement cost and depreciated value are determined by 
use of publicly available adjustment rates or through use of other 
reasonable methods at the discretion of the SSA Claims Officer.
    (d) Replacement of lost or damaged property may be made in kind 
wherever appropriate at the discretion of the SSA Claims Officer.
    (e) At the discretion of the SSA Claims Officer, you may be required 
to turn over an item alleged to have been damaged beyond economical 
repair to the United States, in which case no deduction for salvage 
value will be made in the calculation of actual value.
    (f) Settlement of claims under the Act are final and conclusive.



Sec. 429.209  Are there any restrictions on attorney's fees?

    No more than 10 percent of the amount in settlement of each 
individual claim submitted and settled under this subpart shall be paid 
or delivered to, or received by, any agent or attorney on account of 
services rendered in connection with that claim. A person violating this 
subsection shall be fined not more than $1,000.00 (31 U.S.C. 3721(i)).



Sec. 429.210  Do I have any appeal rights under this subpart?

    (a) Deciding Official. While you may not appeal the decision of the 
SSA Claims Officer in regard to claims under the MPCECA, the SSA Claims 
Officer may, at his or her discretion, reconsider his or her 
determination of a claim.
    (b) Claimant. You may request reconsideration from the SSA Claims 
Officer by sending a written request for reconsideration to the SSA 
Claims Officer within 30 days of the date of the original determination. 
You must clearly state the factual or legal basis upon which you base 
your request for a more

[[Page 1294]]

favorable determination. Reconsideration will be granted only for 
reasons not available or not considered during the original decision.
    (c) Notification. The SSA Claims Officer will send you a written 
determination on your request for reconsideration. If the SSA Claims 
Officer elects to reconsider your claim, the final determination on 
reconsideration is final and conclusive.



Sec. 429.211  Are there any penalties for filing false claims?

    A person who files a false claim or makes a false or fraudulent 
statement in a claim against the United States may be imprisoned for not 
more than 5 years (18 U.S.C. 287, 1001). In addition, that person may be 
liable for a civil penalty of not less than $5,000 and not more than 
$10,000 and damages of triple the loss or damage sustained by the United 
States, as well as the costs of a civil action brought to recover any 
penalty or damages (31 U.S.C. 3729).



PART 430_PERSONNEL--Table of Contents



    Authority: Section 702(a)(5) of the Social Security Act (42 U.S.C. 
902(a)(5))

                    Indemnification of SSA Employees



Sec. 430.101  Policy.

    (a) The Social Security Administration (SSA) may indemnify, in whole 
or in part, its employees (which for the purpose of this regulation 
includes former employees) for any verdict, judgment or other monetary 
award which is rendered against any such employee, provided that the 
conduct giving rise to the verdict, judgment or award was taken within 
the scope of his or her employment with SSA and that such 
indemnification is in the interest of the United States, as determined 
by the Commissioner, or his or her designee, in his or her discretion.
    (b) SSA may settle or compromise a personal damage claim against its 
employee by the payment of available funds, at any time, provided the 
alleged conduct giving rise to the personal damage claim was taken 
within the scope of employment and that such settlement or compromise is 
in the interest of the United States, as determined by the Commissioner, 
or his or her designee, in his or her discretion.
    (c) Absent exceptional circumstances, as determined by the 
Commissioner or his or her designee, SSA will not entertain a request 
either to agree to indemnify or to settle a personal damage claim before 
entry of an adverse verdict, judgment or monetary award.
    (d) When an employee of SSA becomes aware that an action has been 
filed against the employee in his or her individual capacity as a result 
of conduct taken within the scope of his or her employment, the employee 
should immediately notify SSA that such an action is pending.
    (e) The employee may, thereafter, request either:
    (1) Indemnification to satisfy a verdict, judgment or award entered 
against the employee; or
    (2) Payment to satisfy the requirements of a settlement proposal. 
The employee shall submit a written request, with documentation 
including copies of the verdict, judgment, award or settlement proposal, 
as appropriate, to the Deputy Commissioner or other designated official, 
who shall thereupon submit to the General Counsel, in a timely manner, a 
recommended disposition of the request. The General Counsel shall also 
seek the views of the Department of Justice. The General Counsel shall 
forward the request, the Deputy Commissioner's or other designated 
official's recommended disposition, and the General Counsel's 
recommendation to the Commissioner or his or her designee for decision.
    (f) Any payment under this section either to indemnify an SSA 
employee or to settle a personal damage claim shall be contingent upon 
the availability of appropriated funds.

[62 FR 39935, July 25, 1997]



PART 431_PROTECTION OF HUMAN SUBJECTS--Table of Contents



Sec.
431.101  To what does this policy apply?
431.102  Definitions for purposes of this policy.
431.103  Assuring compliance with this policy--research conducted or 
          supported by any Federal department or agency.

[[Page 1295]]

431.104  Exempt research.
431.105-431.106  [Reserved]
431.107  IRB membership.
431.108  IRB functions and operations.
431.109  IRB review of research.
431.110  Expedited review procedures for certain kinds of research 
          involving no more than minimal risk, and for minor changes in 
          approved research.
431.111  Criteria for IRB approval of research.
431.112  Review by institution.
431.113  Suspension or termination of IRB approval of research.
431.114  Cooperative research.
431.115  IRB records.
431.116  General requirements for informed consent.
431.117  Documentation of informed consent.
431.118  Applications and proposals lacking definite plans for 
          involvement of human subjects.
431.119  Research undertaken without the intention of involving human 
          subjects.
431.120  Evaluation and disposition of applications and proposals for 
          research to be conducted or supported by a Federal department 
          or agency.
431.121  [Reserved]
431.122  Use of Federal funds.
431.123  Early termination of research support: Evaluation of 
          applications and proposals.
431.124  Conditions.

    Authority: 5 U.S.C. 301; 42 U.S.C. 289(a).

    Source: 82 FR 7270, Jan. 19, 2017, unless otherwise noted.

    Effective Date Note: At 82 FR 7270, Jan. 19, 2017, part 431 was 
added, effective Jan. 19, 2018.



Sec. 431.101  To what does this policy apply?

    (a) Except as detailed in Sec. 431.104, this policy applies to all 
research involving human subjects conducted, supported, or otherwise 
subject to regulation by any Federal department or agency that takes 
appropriate administrative action to make the policy applicable to such 
research. This includes research conducted by Federal civilian employees 
or military personnel, except that each department or agency head may 
adopt such procedural modifications as may be appropriate from an 
administrative standpoint. It also includes research conducted, 
supported, or otherwise subject to regulation by the Federal Government 
outside the United States. Institutions that are engaged in research 
described in this paragraph and institutional review boards (IRBs) 
reviewing research that is subject to this policy must comply with this 
policy.
    (b) [Reserved]
    (c) Department or agency heads retain final judgment as to whether a 
particular activity is covered by this policy and this judgment shall be 
exercised consistent with the ethical principles of the Belmont 
Report.\62\
---------------------------------------------------------------------------

    \62\ The National Commission for the Protection of Human Subjects of 
Biomedical and Behavioral Research.- Belmont Report. Washington, DC: 
U.S. Department of Health and Human Services. 1979.
---------------------------------------------------------------------------

    (d) Department or agency heads may require that specific research 
activities or classes of research activities conducted, supported, or 
otherwise subject to regulation by the Federal department or agency but 
not otherwise covered by this policy comply with some or all of the 
requirements of this policy.
    (e) Compliance with this policy requires compliance with pertinent 
federal laws or regulations that provide additional protections for 
human subjects.
    (f) This policy does not affect any state or local laws or 
regulations (including tribal law passed by the official governing body 
of an American Indian or Alaska Native tribe) that may otherwise be 
applicable and that provide additional protections for human subjects.
    (g) This policy does not affect any foreign laws or regulations that 
may otherwise be applicable and that provide additional protections to 
human subjects of research.
    (h) When research covered by this policy takes place in foreign 
countries, procedures normally followed in the foreign countries to 
protect human subjects may differ from those set forth in this policy. 
In these circumstances, if a department or agency head determines that 
the procedures prescribed by the institution afford protections that are 
at least equivalent to those provided in this policy, the department or 
agency head may approve the substitution of the foreign procedures in 
lieu of the procedural requirements provided in this policy. Except when 
otherwise required by statute, Executive Order, or the department or

[[Page 1296]]

agency head, notices of these actions as they occur will be published in 
the Federal Register or will be otherwise published as provided in 
department or agency procedures.
    (i) Unless otherwise required by law, department or agency heads may 
waive the applicability of some or all of the provisions of this policy 
to specific research activities or classes of research activities 
otherwise covered by this policy, provided the alternative procedures to 
be followed are consistent with the principles of the Belmont 
Report.\63\ Except when otherwise required by statute or Executive 
Order, the department or agency head shall forward advance notices of 
these actions to the Office for Human Research Protections, Department 
of Health and Human Services (HHS), or any successor office, or to the 
equivalent office within the appropriate Federal department or agency, 
and shall also publish them in the Federal Register or in such other 
manner as provided in department or agency procedures. The waiver notice 
must include a statement that identifies the conditions under which the 
waiver will be applied and a justification as to why the waiver is 
appropriate for the research, including how the decision is consistent 
with the principles of the Belmont Report.
---------------------------------------------------------------------------

    \63\ Id.
---------------------------------------------------------------------------

    (j) Federal guidance on the requirements of this policy shall be 
issued only after consultation, for the purpose of harmonization (to the 
extent appropriate), with other Federal departments and agencies that 
have adopted this policy, unless such consultation is not feasible.
    (k) [Reserved]
    (l) Compliance dates and transition provisions:
    (1) For purposes of this section, the pre-2018 Requirements means 
this subpart as published in the 2016 edition of the Code of Federal 
Regulations.
    (2) For purposes of this section, the 2018 Requirements means the 
Federal Policy for the Protection of Human Subjects requirements 
contained in this subpart. The compliance date for Sec. 431.114(b) 
(cooperative research) of the 2018 Requirements is January 20, 2020.
    (3) Research initially approved by an IRB, for which such review was 
waived pursuant to Sec. 431.101(i), or for which a determination was 
made that the research was exempt before January 19, 2018, shall comply 
with the pre-2018 Requirements, except that an institution engaged in 
such research on or after January 19, 2018, may instead comply with the 
2018 Requirements if the institution determines that such ongoing 
research will comply with the 2018 Requirements and an IRB documents 
such determination.
    (4) Research initially approved by an IRB, for which such review was 
waived pursuant to Sec. 431.101(i), or for which a determination was 
made that the research was exempt on or after January 19, 2018, shall 
comply with the 2018 Requirements.
    (m) Severability: Any provision of this part held to be invalid or 
unenforceable by its terms, or as applied to any person or circumstance, 
shall be construed so as to continue to give maximum effect to the 
provision permitted by law, unless such holding shall be one of utter 
invalidity or unenforceability, in which event the provision shall be 
severable from this part and shall not affect the remainder thereof or 
the application of the provision to other persons not similarly situated 
or to other dissimilar circumstances.



Sec. 431.102  Definitions for purposes of this policy.

    (a) Certification means the official notification by the institution 
to the supporting Federal department or agency component, in accordance 
with the requirements of this policy, that a research project or 
activity involving human subjects has been reviewed and approved by an 
IRB in accordance with an approved assurance.
    (b) Clinical trial means a research study in which one or more human 
subjects are prospectively assigned to one or more interventions (which 
may include placebo or other control) to evaluate the effects of the 
interventions on biomedical or behavioral health-related outcomes.
    (c) Department or agency head means the head of any Federal 
department or agency, for example, the Secretary of

[[Page 1297]]

HHS, and any other officer or employee of any Federal department or 
agency to whom the authority provided by these regulations to the 
department or agency head has been delegated.
    (d) Federal department or agency refers to a federal department or 
agency (the department or agency itself rather than its bureaus, offices 
or divisions) that takes appropriate administrative action to make this 
policy applicable to the research involving human subjects it conducts, 
supports, or otherwise regulates (e.g., the U.S. Department of Health 
and Human Services, the U.S. Department of Defense, or the Central 
Intelligence Agency).
    (e)(1) Human subject means a living individual about whom an 
investigator (whether professional or student) conducting research:
    (i) Obtains information or biospecimens through intervention or 
interaction with the individual, and uses, studies, or analyzes the 
information or biospecimens; or (ii) Obtains, uses, studies, analyzes, 
or generates identifiable private information or identifiable 
biospecimens.
    (2) Intervention includes both physical procedures by which 
information or biospecimens are gathered (e.g., venipuncture) and 
manipulations of the subject or the subject's environment that are 
performed for research purposes.
    (3) Interaction includes communication or interpersonal contact 
between investigator and subject.
    (4) Private information includes information about behavior that 
occurs in a context in which an individual can reasonably expect that no 
observation or recording is taking place, and information that has been 
provided for specific purposes by an individual and that the individual 
can reasonably expect will not be made public (e.g., a medical record).
    (5) Identifiable private information is private information for 
which the identity of the subject is or may readily be ascertained by 
the investigator or associated with the information.
    (6) An identifiable biospecimen is a biospecimen for which the 
identity of the subject is or may readily be ascertained by the 
investigator or associated with the biospecimen.
    (7) Federal departments or agencies implementing this policy shall:
    (i) Upon consultation with appropriate experts (including experts in 
data matching and re-identification), reexamine the meaning of 
``identifiable private information,'' as defined in paragraph (e)(5) of 
this section, and ``identifiable biospecimen,'' as defined in paragraph 
(e)(6) of this section. This reexamination shall take place within 1 
year and regularly thereafter (at least every 4 years). This process 
will be conducted by collaboration among the Federal departments and 
agencies implementing this policy. If appropriate and permitted by law, 
such Federal departments and agencies may alter the interpretation of 
these terms, including through the use of guidance.
    (ii) Upon consultation with appropriate experts, assess whether 
there are analytic technologies or techniques that should be considered 
by investigators to generate ``identifiable private information,'' as 
defined in paragraph (e)(5) of this section, or an ``identifiable 
biospecimen,'' as defined in paragraph (e)(6) of this section. This 
assessment shall take place within 1 year and regularly thereafter (at 
least every 4 years). This process will be conducted by collaboration 
among the Federal departments and agencies implementing this policy. Any 
such technologies or techniques will be included on a list of 
technologies or techniques that produce identifiable private information 
or identifiable biospecimens. This list will be published in the Federal 
Register after notice and an opportunity for public comment. The 
Secretary, HHS, shall maintain the list on a publicly accessible Web 
site.
    (f) Institution means any public or private entity, or department or 
agency (including federal, state, and other agencies).
    (g) IRB means an institutional review board established in accord 
with and for the purposes expressed in this policy.
    (h) IRB approval means the determination of the IRB that the 
research has been reviewed and may be conducted at an institution within 
the constraints set forth by the IRB and by other institutional and 
federal requirements.

[[Page 1298]]

    (i) Legally authorized representative means an individual or 
judicial or other body authorized under applicable law to consent on 
behalf of a prospective subject to the subject's participation in the 
procedure(s) involved in the research. If there is no applicable law 
addressing this issue, legally authorized representative means an 
individual recognized by institutional policy as acceptable for 
providing consent in the nonresearch context on behalf of the 
prospective subject to the subject's participation in the procedure(s) 
involved in the research.
    (j) Minimal risk means that the probability and magnitude of harm or 
discomfort anticipated in the research are not greater in and of 
themselves than those ordinarily encountered in daily life or during the 
performance of routine physical or psychological examinations or tests.
    (k) Public health authority means an agency or authority of the 
United States, a state, a territory, a political subdivision of a state 
or territory, an Indian tribe, or a foreign government, or a person or 
entity acting under a grant of authority from or contract with such 
public agency, including the employees or agents of such public agency 
or its contractors or persons or entities to whom it has granted 
authority, that is responsible for public health matters as part of its 
official mandate.
    (l) Research means a systematic investigation, including research 
development, testing, and evaluation, designed to develop or contribute 
to generalizable knowledge. Activities that meet this definition 
constitute research for purposes of this policy, whether or not they are 
conducted or supported under a program that is considered research for 
other purposes. For example, some demonstration and service programs may 
include research activities. For purposes of this part, the following 
activities are deemed not to be research:
    (1) Scholarly and journalistic activities (e.g., oral history, 
journalism, biography, literary criticism, legal research, and 
historical scholarship), including the collection and use of 
information, that focus directly on the specific individuals about whom 
the information is collected.
    (2) Public health surveillance activities, including the collection 
and testing of information or biospecimens, conducted, supported, 
requested, ordered, required, or authorized by a public health 
authority. Such activities are limited to those necessary to allow a 
public health authority to identify, monitor, assess, or investigate 
potential public health signals, onsets of disease outbreaks, or 
conditions of public health importance (including trends, signals, risk 
factors, patterns in diseases, or increases in injuries from using 
consumer products). Such activities include those associated with 
providing timely situational awareness and priority setting during the 
course of an event or crisis that threatens public health (including 
natural or man-made disasters).
    (3) Collection and analysis of information, biospecimens, or records 
by or for a criminal justice agency for activities authorized by law or 
court order solely for criminal justice or criminal investigative 
purposes.
    (4) Authorized operational activities (as determined by each agency) 
in support of intelligence, homeland security, defense, or other 
national security missions.
    (m) Written, or in writing, for purposes of this part, refers to 
writing on a tangible medium (e.g., paper) or in an electronic format.



Sec. 431.103  Assuring compliance with this policy--research conducted 
or supported by any Federal department or agency.

    (a) Each institution engaged in research that is covered by this 
policy, with the exception of research eligible for exemption under 
Sec. 431.104, and that is conducted or supported by a Federal department 
or agency, shall provide written assurance satisfactory to the 
department or agency head that it will comply with the requirements of 
this policy. In lieu of requiring submission of an assurance, individual 
department or agency heads shall accept the existence of a current 
assurance, appropriate for the research in question, on

[[Page 1299]]

file with the Office for Human Research Protections, HHS, or any 
successor office, and approved for Federal-wide use by that office. When 
the existence of an HHS-approved assurance is accepted in lieu of 
requiring submission of an assurance, reports (except certification) 
required by this policy to be made to department and agency heads shall 
also be made to the Office for Human Research Protections, HHS, or any 
successor office. Federal departments and agencies will conduct or 
support research covered by this policy only if the institution has 
provided an assurance that it will comply with the requirements of this 
policy, as provided in this section, and only if the institution has 
certified to the department or agency head that the research has been 
reviewed and approved by an IRB (if such certification is required by 
Sec. 431.103(d)).
    (b) The assurance shall be executed by an individual authorized to 
act for the institution and to assume on behalf of the institution the 
obligations imposed by this policy and shall be filed in such form and 
manner as the department or agency head prescribes.
    (c) The department or agency head may limit the period during which 
any assurance shall remain effective or otherwise condition or restrict 
the assurance.
    (d) Certification is required when the research is supported by a 
Federal department or agency and not otherwise waived under 
Sec. 431.101(i) or exempted under Sec. 431.104. For such research, 
institutions shall certify that each proposed research study covered by 
the assurance and this section has been reviewed and approved by the 
IRB. Such certification must be submitted as prescribed by the Federal 
department or agency component supporting the research. Under no 
condition shall research covered by this section be initiated prior to 
receipt of the certification that the research has been reviewed and 
approved by the IRB.
    (e) For nonexempt research involving human subjects covered by this 
policy (or exempt research for which limited IRB review takes place 
pursuant to Sec. 431.104(d)(2)(iii), (d)(3)(i)(C), or (d)(7) or (8)) 
that takes place at an institution in which IRB oversight is conducted 
by an IRB that is not operated by the institution, the institution and 
the organization operating the IRB shall document the institution's 
reliance on the IRB for oversight of the research and the 
responsibilities that each entity will undertake to ensure compliance 
with the requirements of this policy (e.g., in a written agreement 
between the institution and the IRB, by implementation of an 
institution-wide policy directive providing the allocation of 
responsibilities between the institution and an IRB that is not 
affiliated with the institution, or as set forth in a research 
protocol).

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec. 431.104  Exempt research.

    (a) Unless otherwise required by law or by department or agency 
heads, research activities in which the only involvement of human 
subjects will be in one or more of the categories in paragraph (d) of 
this section are exempt from the requirements of this policy, except 
that such activities must comply with the requirements of this section 
and as specified in each category.
    (b) Use of the exemption categories for research subject to the 
requirements of subparts B, C, and D: Application of the exemption 
categories to research subject to the requirements of 45 CFR part 46, 
subparts B, C, and D, is as follows:
    (1) Subpart B. Each of the exemptions at this section may be applied 
to research subject to subpart B if the conditions of the exemption are 
met.
    (2) Subpart C. The exemptions at this section do not apply to 
research subject to subpart C, except for research aimed at involving a 
broader subject population that only incidentally includes prisoners.
    (3) Subpart D. The exemptions at paragraphs (d)(1), (4), (5), (6), 
(7), and (8) of this section may be applied to research subject to 
subpart D if the conditions of the exemption are met. Paragraphs 
(d)(2)(i) and (ii) of this section only may apply to research subject to 
subpart D involving educational tests or the observation of public 
behavior when the investigator(s) do not participate in the activities 
being observed. Paragraph (d)(2)(iii) of this section

[[Page 1300]]

may not be applied to research subject to subpart D.
    (c) [Reserved]
    (d) Except as described in paragraph (a) of this section, the 
following categories of human subjects research are exempt from this 
policy:
    (1) Research, conducted in established or commonly accepted 
educational settings, that specifically involves normal educational 
practices that are not likely to adversely impact students' opportunity 
to learn required educational content or the assessment of educators who 
provide instruction. This includes most research on regular and special 
education instructional strategies, and research on the effectiveness of 
or the comparison among instructional techniques, curricula, or 
classroom management methods.
    (2) Research that only includes interactions involving educational 
tests (cognitive, diagnostic, aptitude, achievement), survey procedures, 
interview procedures, or observation of public behavior (including 
visual or auditory recording) if at least one of the following criteria 
is met:
    (i) The information obtained is recorded by the investigator in such 
a manner that the identity of the human subjects cannot readily be 
ascertained, directly or through identifiers linked to the subjects;
    (ii) Any disclosure of the human subjects' responses outside the 
research would not reasonably place the subjects at risk of criminal or 
civil liability or be damaging to the subjects' financial standing, 
employability, educational advancement, or reputation; or
    (iii) The information obtained is recorded by the investigator in 
such a manner that the identity of the human subjects can readily be 
ascertained, directly or through identifiers linked to the subjects, and 
an IRB conducts a limited IRB review to make the determination required 
by Sec. 431.111(a)(7).
    (3)(i) Research involving benign behavioral interventions in 
conjunction with the collection of information from an adult subject 
through verbal or written responses (including data entry) or 
audiovisual recording if the subject prospectively agrees to the 
intervention and information collection and at least one of the 
following criteria is met:
    (A) The information obtained is recorded by the investigator in such 
a manner that the identity of the human subjects cannot readily be 
ascertained, directly or through identifiers linked to the subjects;
    (B) Any disclosure of the human subjects' responses outside the 
research would not reasonably place the subjects at risk of criminal or 
civil liability or be damaging to the subjects' financial standing, 
employability, educational advancement, or reputation; or
    (C) The information obtained is recorded by the investigator in such 
a manner that the identity of the human subjects can readily be 
ascertained, directly or through identifiers linked to the subjects, and 
an IRB conducts a limited IRB review to make the determination required 
by Sec. 431.111(a)(7).
    (ii) For the purpose of this provision, benign behavioral 
interventions are brief in duration, harmless, painless, not physically 
invasive, not likely to have a significant adverse lasting impact on the 
subjects, and the investigator has no reason to think the subjects will 
find the interventions offensive or embarrassing. Provided all such 
criteria are met, examples of such benign behavioral interventions would 
include having the subjects play an online game, having them solve 
puzzles under various noise conditions, or having them decide how to 
allocate a nominal amount of received cash between themselves and 
someone else.
    (iii) If the research involves deceiving the subjects regarding the 
nature or purposes of the research, this exemption is not applicable 
unless the subject authorizes the deception through a prospective 
agreement to participate in research in circumstances in which the 
subject is informed that he or she will be unaware of or misled 
regarding the nature or purposes of the research.
    (4) Secondary research for which consent is not required: Secondary 
research uses of identifiable private information or identifiable 
biospecimens, if at least one of the following criteria is met:

[[Page 1301]]

    (i) The identifiable private information or identifiable 
biospecimens are publicly available;
    (ii) Information, which may include information about biospecimens, 
is recorded by the investigator in such a manner that the identity of 
the human subjects cannot readily be ascertained directly or through 
identifiers linked to the subjects, the investigator does not contact 
the subjects, and the investigator will not re-identify subjects;
    (iii) The research involves only information collection and analysis 
involving the investigator's use of identifiable health information when 
that use is regulated under 45 CFR parts 160 and 164, subparts A and E, 
for the purposes of ``health care operations'' or ``research'' as those 
terms are defined at 45 CFR 164.501 or for ``public health activities 
and purposes'' as described under 45 CFR 164.512(b); or
    (iv) The research is conducted by, or on behalf of, a Federal 
department or agency using government-generated or government-collected 
information obtained for nonresearch activities, if the research 
generates identifiable private information that is or will be maintained 
on information technology that is subject to and in compliance with 
section 208(b) of the E-Government Act of 2002, 44 U.S.C. 3501 note, if 
all of the identifiable private information collected, used, or 
generated as part of the activity will be maintained in systems of 
records subject to the Privacy Act of 1974, 5 U.S.C. 552a, and, if 
applicable, the information used in the research was collected subject 
to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq.
    (5) Research and demonstration projects that are conducted or 
supported by a Federal department or agency, or otherwise subject to the 
approval of department or agency heads (or the approval of the heads of 
bureaus or other subordinate agencies that have been delegated authority 
to conduct the research and demonstration projects), and that are 
designed to study, evaluate, improve, or otherwise examine public 
benefit or service programs, including procedures for obtaining benefits 
or services under those programs, possible changes in or alternatives to 
those programs or procedures, or possible changes in methods or levels 
of payment for benefits or services under those programs. Such projects 
include, but are not limited to, internal studies by Federal employees, 
and studies under contracts or consulting arrangements, cooperative 
agreements, or grants. Exempt projects also include waivers of otherwise 
mandatory requirements using authorities such as sections 1115 and 1115A 
of the Social Security Act, as amended.
    (i) Each Federal department or agency conducting or supporting the 
research and demonstration projects must establish, on a publicly 
accessible Federal Web site or in such other manner as the department or 
agency head may determine, a list of the research and demonstration 
projects that the Federal department or agency conducts or supports 
under this provision. The research or demonstration project must be 
published on this list prior to commencing the research involving human 
subjects.
    (ii) [Reserved]
    (6) Taste and food quality evaluation and consumer acceptance 
studies:
    (i) If wholesome foods without additives are consumed, or
    (ii) If a food is consumed that contains a food ingredient at or 
below the level and for a use found to be safe, or agricultural chemical 
or environmental contaminant at or below the level found to be safe, by 
the Food and Drug Administration or approved by the Environmental 
Protection Agency or the Food Safety and Inspection Service of the U.S. 
Department of Agriculture.
    (7) Storage or maintenance for secondary research for which broad 
consent is required: Storage or maintenance of identifiable private 
information or identifiable biospecimens for potential secondary 
research use if an IRB conducts a limited IRB review and makes the 
determinations required by Sec. 431.111(a)(8).
    (8) Secondary research for which broad consent is required: Research 
involving the use of identifiable private information or identifiable 
biospecimens for secondary research use, if the following criteria are 
met:
    (i) Broad consent for the storage, maintenance, and secondary 
research

[[Page 1302]]

use of the identifiable private information or identifiable biospecimens 
was obtained in accordance with Sec. 431.116(a)(1) through (4), (a)(6), 
and (d);
    (ii) Documentation of informed consent or waiver of documentation of 
consent was obtained in accordance with Sec. 431.117;
    (iii) An IRB conducts a limited IRB review and makes the 
determination required by Sec. 431.111(a)(7) and makes the determination 
that the research to be conducted is within the scope of the broad 
consent referenced in paragraph (d)(8)(i) of this section; and (iv) The 
investigator does not include returning individual research results to 
subjects as part of the study plan. This provision does not prevent an 
investigator from abiding by any legal requirements to return individual 
research results.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Secs. 431.105-431.106  [Reserved]



Sec. 431.107  IRB membership.

    (a) Each IRB shall have at least five members, with varying 
backgrounds to promote complete and adequate review of research 
activities commonly conducted by the institution. The IRB shall be 
sufficiently qualified through the experience and expertise of its 
members (professional competence), and the diversity of its members, 
including race, gender, and cultural backgrounds and sensitivity to such 
issues as community attitudes, to promote respect for its advice and 
counsel in safeguarding the rights and welfare of human subjects. The 
IRB shall be able to ascertain the acceptability of proposed research in 
terms of institutional commitments (including policies and resources) 
and regulations, applicable law, and standards of professional conduct 
and practice. The IRB shall therefore include persons knowledgeable in 
these areas. If an IRB regularly reviews research that involves a 
category of subjects that is vulnerable to coercion or undue influence, 
such as children, prisoners, individuals with impaired decision-making 
capacity, or economically or educationally disadvantaged persons, 
consideration shall be given to the inclusion of one or more individuals 
who are knowledgeable about and experienced in working with these 
categories of subjects.
    (b) Each IRB shall include at least one member whose primary 
concerns are in scientific areas and at least one member whose primary 
concerns are in nonscientific areas.
    (c) Each IRB shall include at least one member who is not otherwise 
affiliated with the institution and who is not part of the immediate 
family of a person who is affiliated with the institution.
    (d) No IRB may have a member participate in the IRB's initial or 
continuing review of any project in which the member has a conflicting 
interest, except to provide information requested by the IRB.
    (e) An IRB may, in its discretion, invite individuals with 
competence in special areas to assist in the review of issues that 
require expertise beyond or in addition to that available on the IRB. 
These individuals may not vote with the IRB.



Sec. 431.108  IRB functions and operations.

    (a) In order to fulfill the requirements of this policy each IRB 
shall:
    (1) Have access to meeting space and sufficient staff to support the 
IRB's review and recordkeeping duties;
    (2) Prepare and maintain a current list of the IRB members 
identified by name; earned degrees; representative capacity; indications 
of experience such as board certifications or licenses sufficient to 
describe each member's chief anticipated contributions to IRB 
deliberations; and any employment or other relationship between each 
member and the institution, for example, full-time employee, part-time 
employee, member of governing panel or board, stockholder, paid or 
unpaid consultant;
    (3) Establish and follow written procedures for:
    (i) Conducting its initial and continuing review of research and for 
reporting its findings and actions to the investigator and the 
institution;
    (ii) Determining which projects require review more often than 
annually and which projects need verification

[[Page 1303]]

from sources other than the investigators that no material changes have 
occurred since previous IRB review; and
    (iii) Ensuring prompt reporting to the IRB of proposed changes in a 
research activity, and for ensuring that investigators will conduct the 
research activity in accordance with the terms of the IRB approval until 
any proposed changes have been reviewed and approved by the IRB, except 
when necessary to eliminate apparent immediate hazards to the subject.
    (4) Establish and follow written procedures for ensuring prompt 
reporting to the IRB; appropriate institutional officials; the 
department or agency head; and the Office for Human Research 
Protections, HHS, or any successor office, or the equivalent office 
within the appropriate Federal department or agency of
    (i) Any unanticipated problems involving risks to subjects or others 
or any serious or continuing noncompliance with this policy or the 
requirements or determinations of the IRB; and
    (ii) Any suspension or termination of IRB approval.
    (b) Except when an expedited review procedure is used (as described 
in Sec. 431.110), an IRB must review proposed research at convened 
meetings at which a majority of the members of the IRB are present, 
including at least one member whose primary concerns are in 
nonscientific areas. In order for the research to be approved, it shall 
receive the approval of a majority of those members present at the 
meeting.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec. 431.109  IRB review of research.

    (a) An IRB shall review and have authority to approve, require 
modifications in (to secure approval), or disapprove all research 
activities covered by this policy, including exempt research activities 
under Sec. 431.104 for which limited IRB review is a condition of 
exemption (under Sec. 431.104(d)(2)(iii), (d)(3)(i)(C), and (d)(7), and 
(8)).
    (b) An IRB shall require that information given to subjects (or 
legally authorized representatives, when appropriate) as part of 
informed consent is in accordance with Sec. 431.116. The IRB may require 
that information, in addition to that specifically mentioned in 
Sec. 431.116, be given to the subjects when in the IRB's judgment the 
information would meaningfully add to the protection of the rights and 
welfare of subjects.
    (c) An IRB shall require documentation of informed consent or may 
waive documentation in accordance with Sec. 431.117.
    (d) An IRB shall notify investigators and the institution in writing 
of its decision to approve or disapprove the proposed research activity, 
or of modifications required to secure IRB approval of the research 
activity. If the IRB decides to disapprove a research activity, it shall 
include in its written notification a statement of the reasons for its 
decision and give the investigator an opportunity to respond in person 
or in writing.
    (e) An IRB shall conduct continuing review of research requiring 
review by the convened IRB at intervals appropriate to the degree of 
risk, not less than once per year, except as described in 
Sec. 431.109(f).
    (f)(1) Unless an IRB determines otherwise, continuing review of 
research is not required in the following circumstances:
    (i) Research eligible for expedited review in accordance with 
Sec. 431.110;
    (ii) Research reviewed by the IRB in accordance with the limited IRB 
review described in Sec. 431.104(d)(2)(iii), (d)(3)(i)(C), or (d)(7) or 
(8);
    (iii) Research that has progressed to the point that it involves 
only one or both of the following, which are part of the IRB-approved 
study:
    (A) Data analysis, including analysis of identifiable private 
information or identifiable biospecimens, or
    (B) Accessing follow-up clinical data from procedures that subjects 
would undergo as part of clinical care.
    (2) [Reserved.]
    (g) An IRB shall have authority to observe or have a third party 
observe the consent process and the research.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)

[[Page 1304]]



Sec. 431.110  Expedited review procedures for certain kinds of
research involving no more than minimal risk, and for minor changes
in approved research.

    (a) The Secretary of HHS has established, and published as a Notice 
in the Federal Register, a list of categories of research that may be 
reviewed by the IRB through an expedited review procedure. The Secretary 
will evaluate the list at least every 8 years and amend it, as 
appropriate, after consultation with other federal departments and 
agencies and after publication in the Federal Register for public 
comment. A copy of the list is available from the Office for Human 
Research Protections, HHS, or any successor office.
    (b)(1) An IRB may use the expedited review procedure to review the 
following:
    (i) Some or all of the research appearing on the list described in 
paragraph (a) of this section, unless the reviewer determines that the 
study involves more than minimal risk;
    (ii) Minor changes in previously approved research during the period 
for which approval is authorized; or
    (iii) Research for which limited IRB review is a condition of 
exemption under Sec. 431.104(d)(2)(iii), (d)(3)(i)(C), and (d)(7) and 
(8).
    (2) Under an expedited review procedure, the review may be carried 
out by the IRB chairperson or by one or more experienced reviewers 
designated by the chairperson from among members of the IRB. In 
reviewing the research, the reviewers may exercise all of the 
authorities of the IRB except that the reviewers may not disapprove the 
research. A research activity may be disapproved only after review in 
accordance with the nonexpedited procedure set forth in Sec. 431.108(b).
    (c) Each IRB that uses an expedited review procedure shall adopt a 
method for keeping all members advised of research proposals that have 
been approved under the procedure.
    (d) The department or agency head may restrict, suspend, terminate, 
or choose not to authorize an institution's or IRB's use of the 
expedited review procedure.



Sec. 431.111  Criteria for IRB approval of research.

    (a) In order to approve research covered by this policy the IRB 
shall determine that all of the following requirements are satisfied:
    (1) Risks to subjects are minimized:
    (i) By using procedures that are consistent with sound research 
design and that do not unnecessarily expose subjects to risk, and
    (ii) Whenever appropriate, by using procedures already being 
performed on the subjects for diagnostic or treatment purposes.
    (2) Risks to subjects are reasonable in relation to anticipated 
benefits, if any, to subjects, and the importance of the knowledge that 
may reasonably be expected to result. In evaluating risks and benefits, 
the IRB should consider only those risks and benefits that may result 
from the research (as distinguished from risks and benefits of therapies 
subjects would receive even if not participating in the research). The 
IRB should not consider possible long-range effects of applying 
knowledge gained in the research (e.g., the possible effects of the 
research on public policy) as among those research risks that fall 
within the purview of its responsibility.
    (3) Selection of subjects is equitable. In making this assessment 
the IRB should take into account the purposes of the research and the 
setting in which the research will be conducted. The IRB should be 
particularly cognizant of the special problems of research that involves 
a category of subjects who are vulnerable to coercion or undue 
influence, such as children, prisoners, individuals with impaired 
decision-making capacity, or economically or educationally disadvantaged 
persons.
    (4) Informed consent will be sought from each prospective subject or 
the subject's legally authorized representative, in accordance with, and 
to the extent required by, Sec. 431.116.
    (5) Informed consent will be appropriately documented or 
appropriately waived in accordance with Sec. 431.117.
    (6) When appropriate, the research plan makes adequate provision for 
monitoring the data collected to ensure the safety of subjects.

[[Page 1305]]

    (7) When appropriate, there are adequate provisions to protect the 
privacy of subjects and to maintain the confidentiality of data.
    (i) The Secretary of HHS will, after consultation with the Office of 
Management and Budget's privacy office and other Federal departments and 
agencies that have adopted this policy, issue guidance to assist IRBs in 
assessing what provisions are adequate to protect the privacy of 
subjects and to maintain the confidentiality of data.
    (ii) [Reserved]
    (8) For purposes of conducting the limited IRB review required by 
Sec. 431.104(d)(7)), the IRB need not make the determinations at 
paragraphs (a)(1) through (7) of this section, and shall make the 
following determinations:
    (i) Broad consent for storage, maintenance, and secondary research 
use of identifiable private information or identifiable biospecimens is 
obtained in accordance with the requirements of Sec. 431.116(a)(1)-(4), 
(a)(6), and (d);
    (ii) Broad consent is appropriately documented or waiver of 
documentation is appropriate, in accordance with Sec. 431.117; and
    (iii) If there is a change made for research purposes in the way the 
identifiable private information or identifiable biospecimens are stored 
or maintained, there are adequate provisions to protect the privacy of 
subjects and to maintain the confidentiality of data.
    (b) When some or all of the subjects are likely to be vulnerable to 
coercion or undue influence, such as children, prisoners, individuals 
with impaired decision-making capacity, or economically or educationally 
disadvantaged persons, additional safeguards have been included in the 
study to protect the rights and welfare of these subjects.



Sec. 431.112  Review by Institution

    Research covered by this policy that has been approved by an IRB may 
be subject to further appropriate review and approval or disapproval by 
officials of the institution. However, those officials may not approve 
the research if it has not been approved by an IRB.



Sec. 431.113  Suspension or Termination of IRB Approval of Research.

    An IRB shall have authority to suspend or terminate approval of 
research that is not being conducted in accordance with the IRB's 
requirements or that has been associated with unexpected serious harm to 
subjects. Any suspension or termination of approval shall include a 
statement of the reasons for the IRB's action and shall be reported 
promptly to the investigator, appropriate institutional officials, and 
the department or agency head.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec. 431.114  Cooperative Research.

    (a) Cooperative research projects are those projects covered by this 
policy that involve more than one institution. In the conduct of 
cooperative research projects, each institution is responsible for 
safeguarding the rights and welfare of human subjects and for complying 
with this policy.
    (b)(1) Any institution located in the United States that is engaged 
in cooperative research must rely upon approval by a single IRB for that 
portion of the research that is conducted in the United States. The 
reviewing IRB will be identified by the Federal department or agency 
supporting or conducting the research or proposed by the lead 
institution subject to the acceptance of the Federal department or 
agency supporting the research.
    (2) The following research is not subject to this provision:
    (i) Cooperative research for which more than single IRB review is 
required by law (including tribal law passed by the official governing 
body of an American Indian or Alaska Native tribe); or
    (ii) Research for which any Federal department or agency supporting 
or conducting the research determines and documents that the use of a 
single IRB is not appropriate for the particular context.
    (c) For research not subject to paragraph (b) of this section, an 
institution participating in a cooperative project may enter into a 
joint review arrangement, rely on the review of another

[[Page 1306]]

IRB, or make similar arrangements for avoiding duplication of effort.



Sec. 431.115  IRB Records.

    (a) An institution, or when appropriate an IRB, shall prepare and 
maintain adequate documentation of IRB activities, including the 
following:
    (1) Copies of all research proposals reviewed, scientific 
evaluations, if any, that accompany the proposals, approved sample 
consent forms, progress reports submitted by investigators, and reports 
of injuries to subjects.
    (2) Minutes of IRB meetings, which shall be in sufficient detail to 
show attendance at the meetings; actions taken by the IRB; the vote on 
these actions including the number of members voting for, against, and 
abstaining; the basis for requiring changes in or disapproving research; 
and a written summary of the discussion of controverted issues and their 
resolution.
    (3) Records of continuing review activities, including the rationale 
for conducting continuing review of research that otherwise would not 
require continuing review as described in Sec. 431.109(f)(1).
    (4) Copies of all correspondence between the IRB and the 
investigators.
    (5) A list of IRB members in the same detail as described in 
Sec. 431.108(a)(2).
    (6) Written procedures for the IRB in the same detail as described 
in Sec. 431.108(a)(3) and (4).
    (7) Statements of significant new findings provided to subjects, as 
required by Sec. 431.116(c)(5).
    (8) The rationale for an expedited reviewer's determination under 
Sec. 431.110(b)(1)(i) that research appearing on the expedited review 
list described in Sec. 431.110(a) is more than minimal risk.
    (9) Documentation specifying the responsibilities that an 
institution and an organization operating an IRB each will undertake to 
ensure compliance with the requirements of this policy, as described in 
Sec. 431.103(e).
    (b) The records required by this policy shall be retained for at 
least 3 years, and records relating to research that is conducted shall 
be retained for at least 3 years after completion of the research. The 
institution or IRB may maintain the records in printed form, or 
electronically. All records shall be accessible for inspection and 
copying by authorized representatives of the Federal department or 
agency at reasonable times and in a reasonable manner.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec. 431.116  General Requirements for Informed Consent.

    (a) General. General requirements for informed consent, whether 
written or oral, are set forth in this paragraph and apply to consent 
obtained in accordance with the requirements set forth in paragraphs (b) 
through (d) of this section. Broad consent may be obtained in lieu of 
informed consent obtained in accordance with paragraphs (b) and (c) of 
this section only with respect to the storage, maintenance, and 
secondary research uses of identifiable private information and 
identifiable biospecimens. Waiver or alteration of consent in research 
involving public benefit and service programs conducted by or subject to 
the approval of state or local officials is described in paragraph (e) 
of this section. General waiver or alteration of informed consent is 
described in paragraph (f) of this section. Except as provided elsewhere 
in this policy:
    (1) Before involving a human subject in research covered by this 
policy, an investigator shall obtain the legally effective informed 
consent of the subject or the subject's legally authorized 
representative.
    (2) An investigator shall seek informed consent only under 
circumstances that provide the prospective subject or the legally 
authorized representative sufficient opportunity to discuss and consider 
whether or not to participate and that minimize the possibility of 
coercion or undue influence.
    (3) The information that is given to the subject or the legally 
authorized representative shall be in language understandable to the 
subject or the legally authorized representative.
    (4) The prospective subject or the legally authorized representative 
must be provided with the information that a reasonable person would 
want to

[[Page 1307]]

have in order to make an informed decision about whether to participate, 
and an opportunity to discuss that information.
    (5) Except for broad consent obtained in accordance with paragraph 
(d) of this section:
    (i) Informed consent must begin with a concise and focused 
presentation of the key information that is most likely to assist a 
prospective subject or legally authorized representative in 
understanding the reasons why one might or might not want to participate 
in the research. This part of the informed consent must be organized and 
presented in a way that facilitates comprehension.
    (ii) Informed consent as a whole must present information in 
sufficient detail relating to the research, and must be organized and 
presented in a way that does not merely provide lists of isolated facts, 
but rather facilitates the prospective subject's or legally authorized 
representative's understanding of the reasons why one might or might not 
want to participate.
    (6) No informed consent may include any exculpatory language through 
which the subject or the legally authorized representative is made to 
waive or appear to waive any of the subject's legal rights, or releases 
or appears to release the investigator, the sponsor, the institution, or 
its agents from liability for negligence.
    (b) Basic elements of informed consent. Except as provided in 
paragraph (d), (e), or (f) of this section, in seeking informed consent 
the following information shall be provided to each subject or the 
legally authorized representative:
    (1) A statement that the study involves research, an explanation of 
the purposes of the research and the expected duration of the subject's 
participation, a description of the procedures to be followed, and 
identification of any procedures that are experimental;
    (2) A description of any reasonably foreseeable risks or discomforts 
to the subject;
    (3) A description of any benefits to the subject or to others that 
may reasonably be expected from the research;
    (4) A disclosure of appropriate alternative procedures or courses of 
treatment, if any, that might be advantageous to the subject;
    (5) A statement describing the extent, if any, to which 
confidentiality of records identifying the subject will be maintained;
    (6) For research involving more than minimal risk, an explanation as 
to whether any compensation and an explanation as to whether any medical 
treatments are available if injury occurs and, if so, what they consist 
of, or where further information may be obtained;
    (7) An explanation of whom to contact for answers to pertinent 
questions about the research and research subjects' rights, and whom to 
contact in the event of a research-related injury to the subject;
    (8) A statement that participation is voluntary, refusal to 
participate will involve no penalty or loss of benefits to which the 
subject is otherwise entitled, and the subject may discontinue 
participation at any time without penalty or loss of benefits to which 
the subject is otherwise entitled; and
    (9) One of the following statements about any research that involves 
the collection of identifiable private information or identifiable 
biospecimens:
    (i) A statement that identifiers might be removed from the 
identifiable private information or identifiable biospecimens and that, 
after such removal, the information or biospecimens could be used for 
future research studies or distributed to another investigator for 
future research studies without additional informed consent from the 
subject or the legally authorized representative, if this might be a 
possibility; or
    (ii) A statement that the subject's information or biospecimens 
collected as part of the research, even if identifiers are removed, will 
not be used or distributed for future research studies.
    (c) Additional elements of informed consent. Except as provided in 
paragraph (d), (e), or (f) of this section, one or more of the following 
elements of information, when appropriate, shall also be provided to 
each subject or the legally authorized representative:
    (1) A statement that the particular treatment or procedure may 
involve risks to the subject (or to the embryo

[[Page 1308]]

or fetus, if the subject is or may become pregnant) that are currently 
unforeseeable;
    (2) Anticipated circumstances under which the subject's 
participation may be terminated by the investigator without regard to 
the subject's or the legally authorized representative's consent;
    (3) Any additional costs to the subject that may result from 
participation in the research;
    (4) The consequences of a subject's decision to withdraw from the 
research and procedures for orderly termination of participation by the 
subject;
    (5) A statement that significant new findings developed during the 
course of the research that may relate to the subject's willingness to 
continue participation will be provided to the subject;
    (6) The approximate number of subjects involved in the study;
    (7) A statement that the subject's biospecimens (even if identifiers 
are removed) may be used for commercial profit and whether the subject 
will or will not share in this commercial profit;
    (8) A statement regarding whether clinically relevant research 
results, including individual research results, will be disclosed to 
subjects, and if so, under what conditions; and
    (9) For research involving biospecimens, whether the research will 
(if known) or might include whole genome sequencing (i.e., sequencing of 
a human germline or somatic specimen with the intent to generate the 
genome or exome sequence of that specimen).
    (d) Elements of broad consent for the storage, maintenance, and 
secondary research use of identifiable private information or 
identifiable biospecimens. Broad consent for the storage, maintenance, 
and secondary research use of identifiable private information or 
identifiable biospecimens (collected for either research studies other 
than the proposed research or nonresearch purposes) is permitted as an 
alternative to the informed consent requirements in paragraphs (b) and 
(c) of this section. If the subject or the legally authorized 
representative is asked to provide broad consent, the following shall be 
provided to each subject or the subject's legally authorized 
representative:
    (1) The information required in paragraphs (b)(2), (b)(3), (b)(5), 
and (b)(8) and, when appropriate, (c)(7) and (9) of this section;
    (2) A general description of the types of research that may be 
conducted with the identifiable private information or identifiable 
biospecimens. This description must include sufficient information such 
that a reasonable person would expect that the broad consent would 
permit the types of research conducted;
    (3) A description of the identifiable private information or 
identifiable biospecimens that might be used in research, whether 
sharing of identifiable private information or identifiable biospecimens 
might occur, and the types of institutions or researchers that might 
conduct research with the identifiable private information or 
identifiable biospecimens;
    (4) A description of the period of time that the identifiable 
private information or identifiable biospecimens may be stored and 
maintained (which period of time could be indefinite), and a description 
of the period of time that the identifiable private information or 
identifiable biospecimens may be used for research purposes (which 
period of time could be indefinite);
    (5) Unless the subject or legally authorized representative will be 
provided details about specific research studies, a statement that they 
will not be informed of the details of any specific research studies 
that might be conducted using the subject's identifiable private 
information or identifiable biospecimens, including the purposes of the 
research, and that they might have chosen not to consent to some of 
those specific research studies;
    (6) Unless it is known that clinically relevant research results, 
including individual research results, will be disclosed to the subject 
in all circumstances, a statement that such results may not be disclosed 
to the subject; and
    (7) An explanation of whom to contact for answers to questions about 
the subject's rights and about storage and use of the subject's 
identifiable private

[[Page 1309]]

information or identifiable biospecimens, and whom to contact in the 
event of a research-related harm.
    (e) Waiver or alteration of consent in research involving public 
benefit and service programs conducted by or subject to the approval of 
state or local officials--(1) Waiver. An IRB may waive the requirement 
to obtain informed consent for research under paragraphs (a) through (c) 
of this section, provided the IRB satisfies the requirements of 
paragraph (e)(3) of this section. If an individual was asked to provide 
broad consent for the storage, maintenance, and secondary research use 
of identifiable private information or identifiable biospecimens in 
accordance with the requirements at paragraph (d) of this section, and 
refused to consent, an IRB cannot waive consent for the storage, 
maintenance, or secondary research use of the identifiable private 
information or identifiable biospecimens.
    (2) Alteration. An IRB may approve a consent procedure that omits 
some, or alters some or all, of the elements of informed consent set 
forth in paragraphs (b) and (c) of this section provided the IRB 
satisfies the requirements of paragraph (e)(3) of this section. An IRB 
may not omit or alter any of the requirements described in paragraph (a) 
of this section. If a broad consent procedure is used, an IRB may not 
omit or alter any of the elements required under paragraph (d) of this 
section.
    (3) Requirements for waiver and alteration. In order for an IRB to 
waive or alter consent as described in this subsection, the IRB must 
find and document that:
    (i) The research or demonstration project is to be conducted by or 
subject to the approval of state or local government officials and is 
designed to study, evaluate, or otherwise examine:
    (A) Public benefit or service programs;
    (B) Procedures for obtaining benefits or services under those 
programs;
    (C) Possible changes in or alternatives to those programs or 
procedures; or
    (D) Possible changes in methods or levels of payment for benefits or 
services under those programs; and
    (ii) The research could not practicably be carried out without the 
waiver or alteration.
    (f) General waiver or alteration of consent--(1) Waiver. An IRB may 
waive the requirement to obtain informed consent for research under 
paragraphs (a) through (c) of this section, provided the IRB satisfies 
the requirements of paragraph (f)(3) of this section. If an individual 
was asked to provide broad consent for the storage, maintenance, and 
secondary research use of identifiable private information or 
identifiable biospecimens in accordance with the requirements at 
paragraph (d) of this section, and refused to consent, an IRB cannot 
waive consent for the storage, maintenance, or secondary research use of 
the identifiable private information or identifiable biospecimens.
    (2) Alteration. An IRB may approve a consent procedure that omits 
some, or alters some or all, of the elements of informed consent set 
forth in paragraphs (b) and (c) of this section provided the IRB 
satisfies the requirements of paragraph (f)(3) of this section. An IRB 
may not omit or alter any of the requirements described in paragraph (a) 
of this section. If a broad consent procedure is used, an IRB may not 
omit or alter any of the elements required under paragraph (d) of this 
section.
    (3) Requirements for waiver and alteration. In order for an IRB to 
waive or alter consent as described in this subsection, the IRB must 
find and document that:
    (i) The research involves no more than minimal risk to the subjects;
    (ii) The research could not practicably be carried out without the 
requested waiver or alteration;
    (iii) If the research involves using identifiable private 
information or identifiable biospecimens, the research could not 
practicably be carried out without using such information or 
biospecimens in an identifiable format;
    (iv) The waiver or alteration will not adversely affect the rights 
and welfare of the subjects; and
    (v) Whenever appropriate, the subjects or legally authorized 
representatives will be provided with additional pertinent information 
after participation.

[[Page 1310]]

    (g) Screening, recruiting, or determining eligibility. An IRB may 
approve a research proposal in which an investigator will obtain 
information or biospecimens for the purpose of screening, recruiting, or 
determining the eligibility of prospective subjects without the informed 
consent of the prospective subject or the subject's legally authorized 
representative, if either of the following conditions are met:
    (1) The investigator will obtain information through oral or written 
communication with the prospective subject or legally authorized 
representative, or
    (2) The investigator will obtain identifiable private information or 
identifiable biospecimens by accessing records or stored identifiable 
biospecimens.
    (h) Posting of clinical trial consent form. (1) For each clinical 
trial conducted or supported by a Federal department or agency, one IRB-
approved informed consent form used to enroll subjects must be posted by 
the awardee or the Federal department or agency component conducting the 
trial on a publicly available Federal Web site that will be established 
as a repository for such informed consent forms.
    (2) If the Federal department or agency supporting or conducting the 
clinical trial determines that certain information should not be made 
publicly available on a Federal Web site (e.g. confidential commercial 
information), such Federal department or agency may permit or require 
redactions to the information posted.
    (3) The informed consent form must be posted on the Federal Web site 
after the clinical trial is closed to recruitment, and no later than 60 
days after the last study visit by any subject, as required by the 
protocol.
    (i) Preemption. The informed consent requirements in this policy are 
not intended to preempt any applicable Federal, state, or local laws 
(including tribal laws passed by the official governing body of an 
American Indian or Alaska Native tribe) that require additional 
information to be disclosed in order for informed consent to be legally 
effective.
    (j) Emergency medical care. Nothing in this policy is intended to 
limit the authority of a physician to provide emergency medical care, to 
the extent the physician is permitted to do so under applicable Federal, 
state, or local law (including tribal law passed by the official 
governing body of an American Indian or Alaska Native tribe).

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec. 431.117  Documentation of informed consent.

    (a) Except as provided in paragraph (c) of this section, informed 
consent shall be documented by the use of a written informed consent 
form approved by the IRB and signed (including in an electronic format) 
by the subject or the subject's legally authorized representative. A 
written copy shall be given to the person signing the informed consent 
form.
    (b) Except as provided in paragraph (c) of this section, the 
informed consent form may be either of the following:
    (1) A written informed consent form that meets the requirements of 
Sec. 431.116. The investigator shall give either the subject or the 
subject's legally authorized representative adequate opportunity to read 
the informed consent form before it is signed; alternatively, this form 
may be read to the subject or the subject's legally authorized 
representative.
    (2) A short form written informed consent form stating that the 
elements of informed consent required by Sec. 431.116 have been 
presented orally to the subject or the subject's legally authorized 
representative, and that the key information required by 
Sec. 431.116(a)(5)(i) was presented first to the subject, before other 
information, if any, was provided. The IRB shall approve a written 
summary of what is to be said to the subject or the legally authorized 
representative. When this method is used, there shall be a witness to 
the oral presentation. Only the short form itself is to be signed by the 
subject or the subject's legally authorized representative. However, the 
witness shall sign both the short form and a copy of the summary, and 
the person actually obtaining consent shall sign a copy of the summary. 
A copy of the summary shall be given to the subject

[[Page 1311]]

or the subject's legally authorized representative, in addition to a 
copy of the short form.
    (c)(1) An IRB may waive the requirement for the investigator to 
obtain a signed informed consent form for some or all subjects if it 
finds any of the following:
    (i) That the only record linking the subject and the research would 
be the informed consent form and the principal risk would be potential 
harm resulting from a breach of confidentiality. Each subject (or 
legally authorized representative) will be asked whether the subject 
wants documentation linking the subject with the research, and the 
subject's wishes will govern;
    (ii) That the research presents no more than minimal risk of harm to 
subjects and involves no procedures for which written consent is 
normally required outside of the research context; or
    (iii) If the subjects or legally authorized representatives are 
members of a distinct cultural group or community in which signing forms 
is not the norm, that the research presents no more than minimal risk of 
harm to subjects and provided there is an appropriate alternative 
mechanism for documenting that informed consent was obtained.
    (2) In cases in which the documentation requirement is waived, the 
IRB may require the investigator to provide subjects or legally 
authorized representatives with a written statement regarding the 
research.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)



Sec. 431.118  Applications and proposals lacking definite plans for 
involvement of human subjects.

    Certain types of applications for grants, cooperative agreements, or 
contracts are submitted to Federal departments or agencies with the 
knowledge that subjects may be involved within the period of support, 
but definite plans would not normally be set forth in the application or 
proposal. These include activities such as institutional type grants 
when selection of specific projects is the institution's responsibility; 
research training grants in which the activities involving subjects 
remain to be selected; and projects in which human subjects' involvement 
will depend upon completion of instruments, prior animal studies, or 
purification of compounds. Except for research waived under 
Sec. 431.101(i) or exempted under Sec. 431.104, no human subjects may be 
involved in any project supported by these awards until the project has 
been reviewed and approved by the IRB, as provided in this policy, and 
certification submitted, by the institution, to the Federal department 
or agency component supporting the research.



Sec. 431.119  Research undertaken without the intention of involving 
human subjects.

    Except for research waived under Sec. 431.101(i) or exempted under 
Sec. 431.104, in the event research is undertaken without the intention 
of involving human subjects, but it is later proposed to involve human 
subjects in the research, the research shall first be reviewed and 
approved by an IRB, as provided in this policy, a certification 
submitted by the institution to the Federal department or agency 
component supporting the research, and final approval given to the 
proposed change by the Federal department or agency component.



Sec. 431.120  Evaluation and disposition of applications and proposals
for research to be conducted or supported by a Federal department
or agency.

    (a) The department or agency head will evaluate all applications and 
proposals involving human subjects submitted to the Federal department 
or agency through such officers and employees of the Federal department 
or agency and such experts and consultants as the department or agency 
head determines to be appropriate. This evaluation will take into 
consideration the risks to the subjects, the adequacy of protection 
against these risks, the potential benefits of the research to the 
subjects and others, and the importance of the knowledge gained or to be 
gained.
    (b) On the basis of this evaluation, the department or agency head 
may approve or disapprove the application

[[Page 1312]]

or proposal, or enter into negotiations to develop an approvable one.



Sec. 431.121  [Reserved]



Sec. 431.122  Use of Federal funds.

    Federal funds administered by a Federal department or agency may not 
be expended for research involving human subjects unless the 
requirements of this policy have been satisfied.



Sec. 431.123  Early termination of research support: Evaluation of 
applications and proposals.

    (a) The department or agency head may require that Federal 
department or agency support for any project be terminated or suspended 
in the manner prescribed in applicable program requirements, when the 
department or agency head finds an institution has materially failed to 
comply with the terms of this policy.
    (b) In making decisions about supporting or approving applications 
or proposals covered by this policy the department or agency head may 
take into account, in addition to all other eligibility requirements and 
program criteria, factors such as whether the applicant has been subject 
to a termination or suspension under paragraph (a) of this section and 
whether the applicant or the person or persons who would direct or has/
have directed the scientific and technical aspects of an activity has/
have, in the judgment of the department or agency head, materially 
failed to discharge responsibility for the protection of the rights and 
welfare of human subjects (whether or not the research was subject to 
federal regulation).



Sec. 431.124  Conditions.

    With respect to any research project or any class of research 
projects the department or agency head of either the conducting or the 
supporting Federal department or agency may impose additional conditions 
prior to or at the time of approval when in the judgment of the 
department or agency head additional conditions are necessary for the 
protection of human subjects.

                        PARTS 432	437 [RESERVED]



PART 438_RESTRICTIONS ON LOBBYING--Table of Contents



                            Subpart A_General

Sec.
438.100  Conditions on use of funds.
438.105  Definitions.
438.110  Certification and disclosure.

                  Subpart B_Activities by Own Employees

438.200  Agency and legislative liaison.
438.205  Professional and technical services.
438.210  Reporting.

            Subpart C_Activities by Other than Own Employees

438.300  Professional and technical services.

                   Subpart D_Penalties and Enforcement

438.400  Penalties.
438.405  Penalty procedures.
438.410  Enforcement.

                          Subpart E_Exemptions

438.500  Secretary of Defense.

                        Subpart F_Agency Reports

438.600  Semi-annual compilation.
438.605  Inspector General report.

Appendix A to Part 438--Certification Regarding Lobbying
Appendix B to Part 438--Disclosure Form To Report Lobbying

    Authority: 5 U.S.C. 301.

    Source: 68 FR 28745, May 27, 2003, unless otherwise noted.



                            Subpart A_General



Sec. 438.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a 
Federal contract, grant, loan, or cooperative agreement to pay any 
person for influencing or attempting to influence an officer or employee 
of SSA, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with any of the following 
covered Federal actions: the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of

[[Page 1313]]

any Federal contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from SSA a Federal 
contract, grant, loan, or cooperative agreement must file with SSA a 
certification, set forth in appendix A to this part, that the person has 
not made, and will not make, any payment prohibited by paragraph (a) of 
this section.
    (c) Each person who requests or receives from SSA a Federal 
contract, grant, loan, or a cooperative agreement must file with SSA a 
disclosure form, set forth in appendix B to this part, if such person 
has made or has agreed to make any payment using non-appropriated funds 
(to include profits from any covered Federal action), which would be 
prohibited under paragraph (a) of this section if paid for with 
appropriated funds.
    (d) Each person who requests or receives from SSA a commitment 
providing for the United States to insure or guarantee a loan must file 
with SSA a statement, set forth in appendix A to this part, whether that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of SSA, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.
    (e) Each person who requests or receives from SSA a commitment 
providing for the United States to insure or guarantee a loan must file 
with SSA a disclosure form, set forth in appendix B to this part, if 
that person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of SSA, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.



Sec. 438.105  Definitions.

    For purposes of this part:
    Commissioner means the Commissioner of Social Security.
    Covered Federal action means any of the following Federal actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;
    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement. Covered 
Federal action does not include receiving from an agency a commitment 
providing for the United States to insure or guarantee a loan. Loan 
guarantees and loan insurance are addressed independently within this 
part.
    Federal contract means an acquisition contract awarded by the Social 
Security Administration, including those subject to the Federal 
Acquisition Regulation (FAR) (48 CFR chapter 1), and any other 
acquisition contract for real or personal property or services not 
subject to the FAR.
    Federal cooperative agreement means a cooperative agreement SSA 
enters into.
    Federal grant means an award of financial assistance in the form of 
money, or property in lieu of money, by the Federal Government or a 
direct appropriation made by law to any person. The term does not 
include technical assistance which provides services instead of money, 
or other assistance in the form of revenue sharing, loans, loan 
guarantees, loan insurance, interest subsidies, insurance, or direct 
United States cash assistance to an individual.
    Federal loan means a loan made by SSA. The term does not include 
loan guarantee or loan insurance.
    Indian tribe and tribal organization have the meaning provided in 
section 4 of the Indian Self-Determination and Education Assistance Act 
(25 U.S.C. 450B). Alaskan Natives are included under the definitions of 
Indian tribes in that Act.
    Influencing or attempting to influence means making, with the intent 
to influence, any communication to or appearance before an officer or 
employee of SSA, a Member of Congress, an officer or employee of 
Congress, or an employee of a Member of Congress in connection with any 
covered Federal action.
    Loan guarantee and loan insurance means SSA's guarantee or insurance 
of a loan made by a person.

[[Page 1314]]

    Local government means a unit of government in a State and, if 
chartered, established, or otherwise recognized by a State for the 
performance of a governmental duty, including a local public authority, 
a special district, an intrastate district, a council of governments, a 
sponsor group representative organization, and any other instrumentality 
of a local government.
    Officer or employee of SSA includes the following individuals who 
are employed by an agency:
    (1) An individual who is appointed to a position in the Government 
under title 5, U.S. Code, including a position under a temporary 
appointment;
    (2) A member of the uniformed services as defined in section 101(3), 
title 37, U.S. Code;
    (3) A special Government employee as defined in section 202, title 
18, U.S. Code; and,
    (4) An individual who is a member of a Federal advisory committee, 
as defined by the Federal Advisory Committee Act, title 5, U.S. Code 
appendix 2.
    Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated for profit or not for 
profit. This term excludes an Indian tribe, tribal organization, or any 
other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    Reasonable compensation means, with respect to a regularly employed 
officer or employee of any person, compensation that is consistent with 
the normal compensation for such officer or employee for work that is 
not furnished to, not funded by, or not furnished in cooperation with 
the Federal Government.
    Reasonable payment means, with respect to professional and other 
technical services, a payment in an amount that is consistent with the 
amount normally paid for such services in the private sector.
    Recipient includes all contractors, subcontractors at any tier, and 
subgrantees at any tier of the recipient of funds received in connection 
with a Federal contract, grant, loan, or cooperative agreement. The term 
excludes an Indian tribe, tribal organization, or any other Indian 
organization with respect to expenditures specifically permitted by 
other Federal law.
    Regularly employed means, with respect to an officer or employee of 
a person requesting or receiving a Federal contract, grant, loan, or 
cooperative agreement or a commitment providing for the United States to 
insure or guarantee a loan, an officer or employee who is employed by 
such person for at least 130 working days within one year immediately 
preceding the date of the submission that initiates agency consideration 
of such person for receipt of such contract, grant, loan, cooperative 
agreement, loan insurance commitment, or loan guarantee commitment. An 
officer or employee who is employed by such person for less than 130 
working days within one year immediately preceding the date of the 
submission that initiates agency consideration of such person shall be 
considered to be regularly employed as soon as he or she is employed by 
such person for 130 working days.
    SSA means the Social Security Administration.
    State means a State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, a territory or possession of the United 
States, an agency or instrumentality of a State, and a multi-State, 
regional, or interstate entity having governmental duties and powers.



Sec. 438.110  Certification and disclosure.

    (a) Each person must file a certification, and a disclosure form, if 
required, with each submission that initiates SSA consideration of that 
person for:
    (1) Award of a Federal contract, grant, or cooperative agreement 
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the 
United States to insure or guarantee a loan exceeding $150,000.
    (b) Each person must file a certification, and a disclosure form, if 
required, if he or she receives:
    (1) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or

[[Page 1315]]

    (2) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000, unless such person 
previously filed a certification, and a disclosure form, if required, 
under paragraph (a) of this section.
    (c) Each person must file a disclosure form at the end of each 
calendar quarter in which there occurs any event that requires 
disclosure or that materially affects the accuracy of the information 
contained in any disclosure form previously filed by that person under 
paragraphs (a) or (b) of this section. An event that materially affects 
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a covered 
Federal action; or
    (2) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted 
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to in 
paragraphs (a) or (b) of this section:
    (1) A subcontract exceeding $100,000 at any tier under a Federal 
contract;
    (2) A subgrant, contract, or subcontract exceeding $100,000 at any 
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under a 
Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under a 
Federal cooperative agreement, must file a certification, and a 
disclosure form, if required, to the next tier above.
    (e) All disclosure forms, but not certifications, must be forwarded 
from tier to tier until received by the person referred to in paragraphs 
(a) or (b) of this section. That person must forward all disclosure 
forms to SSA.
    (f) Any certification or disclosure form filed under paragraph (e) 
of this section will be treated as a material representation of fact 
upon which all receiving tiers must rely. All liability arising from an 
erroneous representation will be borne solely by the tier filing that 
representation and will not be shared by any tier to which the erroneous 
representation is forwarded. Submitting an erroneous certification or 
disclosure constitutes a failure to file the required certification or 
disclosure, respectively. If a person fails to file a required 
certification or disclosure, the United States may pursue all available 
remedies, including those authorized by section 1352, title 31, U.S. 
Code.
    (g) No reporting is required for an activity paid for with 
appropriated funds if that activity is allowable under either subpart B 
or C of this part.



                  Subpart B_Activities by Own Employees



Sec. 438.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in 
Sec. 438.100(a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement if 
the payment is for agency and legislative liaison activities not 
directly related to a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any 
information specifically requested by SSA or Congress is allowable at 
any time.
    (c) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable at any time only 
where they are not related to a specific solicitation for any covered 
Federal action:
    (1) Discussing with SSA (including individual demonstrations) the 
qualities and characteristics of the person's products or services, 
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the 
application or adaptation of the person's products or services for SSA's 
use.
    (d) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable only where they 
are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but 
necessary for

[[Page 1316]]

SSA to make an informed decision about initiation of a covered 
Federal 
action;
    (2) Technical discussions regarding the preparation of an 
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from SSA 
pursuant to the provisions of the Small Business Act, as amended by 
Public Law 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are 
allowable under this section.



Sec. 438.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in 
Sec. 438.100(a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement or 
an extension, continuation, renewal, amendment, or modification of a 
Federal contract, grant, loan, or cooperative agreement if payment is 
for professional or technical services rendered directly in the 
preparation, submission, or negotiation of any bid, proposal, or 
application for that Federal contract, grant, loan, or cooperative 
agreement or for meeting requirements imposed by or pursuant to law as a 
condition for receiving that Federal contract, grant, loan, or 
cooperative agreement.
    (b) For purposes of paragraph (a) of this section, professional and 
technical services are limited to advice and analysis directly applying 
any professional or technical discipline. For example, drafting of a 
legal document accompanying a bid or proposal by a lawyer is allowable. 
Similarly, technical advice provided by an engineer on the performance 
or operational capability of a piece of equipment rendered directly in 
the negotiation of a contract is allowable. However, communications with 
the intent to influence made by a professional (such as a licensed 
lawyer) or a technical person (such as a licensed accountant) are not 
allowable under this section unless they provide advice and analysis 
directly applying their professional or technical expertise and unless 
the advice or analysis is rendered directly and solely in the 
preparation, submission or negotiation of a covered Federal action. 
Thus, for example, communications with the intent to influence made by a 
lawyer that do not provide legal advice or analysis directly and solely 
related to the legal aspects of his or her client's proposal, but 
generally advocate one proposal over another are not allowable under 
this section because the lawyer is not providing professional legal 
services. Similarly, communications with the intent to influence made by 
an engineer providing an engineering analysis prior to the preparation 
or submission of a bid or proposal are not allowable under this section 
since the engineer is providing technical services but not directly in 
the preparation, submission or negotiation of a covered Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are 
allowable under this section.



Sec. 438.210  Reporting.

    No reporting is required with respect to payments of reasonable 
compensation made to regularly employed officers or employees of a 
person.



            Subpart C_Activities by Other Than Own Employees



Sec. 438.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in 
Sec. 438.100(a), does not apply in the case of any reasonable payment to 
a person, other than an officer or employee of a person requesting or 
receiving a covered Federal action, if the payment is for professional 
or technical services rendered directly in the preparation, submission, 
or negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or

[[Page 1317]]

pursuant to law as a condition for receiving that Federal contract, 
grant, loan, or cooperative agreement.
    (b) The reporting requirements in Sec. 438.110 (a) and (b) regarding 
filing a disclosure form by each person, if required, do not apply with 
respect to professional or technical services rendered directly in the 
preparation, submission, or negotiation of any commitment providing for 
the United States to insure or guarantee a loan.
    (c) For purposes of paragraph (a) of this section, professional and 
technical services are limited to advice and analysis directly applying 
any professional or technical discipline. For example, drafting of a 
legal document accompanying a bid or proposal by a lawyer is allowable. 
Similarly, technical advice provided by an engineer on the performance 
or operational capability of a piece of equipment rendered directly in 
the negotiation of a contract is allowable. However, communications with 
the intent to influence made by a professional (such as a licensed 
lawyer) or a technical person (such as a licensed accountant) are not 
allowable under this section unless they provide advice and analysis 
that directly apply to their professional or technical expertise and 
unless the advice or analysis is rendered directly and solely in the 
preparation, submission or negotiation of a covered Federal action. 
Thus, for example, communications with the intent to influence made by a 
lawyer that do not provide legal advice or analysis directly and solely 
related to the legal aspects of his or her client's proposal, but 
generally advocate one proposal over another are not allowable under 
this section because the lawyer is not providing professional legal 
services. Similarly, communications with the intent to influence made by 
an engineer providing an engineering analysis prior to the preparation 
or submission of a bid or proposal are not allowable under this section 
since the engineer is providing technical services but not directly in 
the preparation, submission or negotiation of a covered Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting 
or receiving a covered Federal action include consultants and trade 
associations.
    (f) Only those services expressly authorized by this section are 
allowable under this section.



                   Subpart D_Penalties and Enforcement



Sec. 438.400  Penalties.

    (a) Any person who makes an expenditure prohibited by this part is 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each prohibited expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
Appendix B to this part) to be filed or amended if required by this part 
is subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each failure.
    (c) A filing or amended filing on or after the date on which an 
administrative action for the imposition of a civil penalty is begun 
does not prevent the imposition of such civil penalty for a failure 
occurring before that date. An administrative action begins with respect 
to a failure when an investigating official determines in writing to 
begin an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the amount 
of any such penalty, by reason of a violation by any person, SSA will 
consider the nature, circumstances, extent, and gravity of the 
violation, the effect on the ability of the person to continue in 
business, any prior violations by the person, the degree of culpability 
of the person, the ability of the person to pay the penalty, and any 
other matters that may be appropriate.
    (e) First offenders under paragraphs (a) or (b) of this section are 
subject to a civil penalty of $10,000, absent aggravating circumstances. 
Second and subsequent offenses by persons are subject to an appropriate 
civil penalty between $10,000 and $100,000, as determined by

[[Page 1318]]

the Commissioner or his or her designee.
    (f) Imposition of a civil penalty under this section does not 
prevent the United States from seeking any other remedy that may apply 
to the same conduct that is the basis for the imposition of the civil 
penalty.



Sec. 438.405  Penalty procedures.

    We will impose and collect civil penalties pursuant to the 
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 
3812, to the extent these provisions are not inconsistent with the 
requirements in this part.



Sec. 438.410  Enforcement.

    The Commissioner of Social Security will take any actions necessary 
to ensure that the provisions in this part are vigorously implemented 
and enforced.



                          Subpart E_Exemptions



Sec. 438.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a 
covered Federal action from the prohibition whenever the Secretary 
determines, in writing, that such an exemption is in the national 
interest. The Secretary shall transmit a copy of each such written 
exemption to Congress immediately after making such a determination.
    (b) The Department of Defense may issue supplemental regulations to 
implement paragraph (a) of this section.



                        Subpart F_Agency Reports



Sec. 438.600  Semi-annual compilation.

    (a) The Commissioner of Social Security will collect and compile the 
disclosure reports (see appendix B to this part) and, on May 31 and 
November 30 of each year, submit to the Secretary of the Senate and the 
Clerk of the House of Representatives a report containing a compilation 
of the information contained in the disclosure reports received during 
the 6-month period ending on March 31 or September 30, respectively, of 
that year.
    (b) The report, including the compilation, will be available for 
public inspection 30 days after receipt of the report by the Secretary 
and the Clerk.
    (c) Information that involves intelligence matters will be reported 
only to the Select Committee on Intelligence of the Senate, the 
Permanent Select Committee on Intelligence of the House of 
Representatives and the Committee on Appropriations of the Senate and 
the House of Representatives in accordance with procedures agreed to by 
such committees. Such information will not be available for public 
inspection.
    (d) Information that is classified under Executive Order 12356 or 
any successor order will be reported only to the Committee on Foreign 
Relations of the Senate and the Committee on Foreign Affairs of the 
House of Representatives (whichever such committees have jurisdiction of 
matters involving such information) and to the Committees on 
Appropriations of the Senate and the House of Representatives in 
accordance with procedures agreed to by such committees. Such 
information will not be available for public inspection.
    (e) The first semi-annual compilation was submitted on May 31, 1990, 
and contains a compilation of the disclosure reports received from 
December 23, 1989 to March 31, 1990.
    (f) Major agencies designated by the Office of Management and Budget 
(OMB) were required to provide machine-readable compilations to the 
Secretary of the Senate and the Clerk of the House of Representatives by 
May 31, 1991. OMB provided detailed specifications in a memorandum to 
these agencies.
    (g) SSA will keep the originals of all disclosure reports in our 
official files.



Sec. 438.605  Inspector General report.

    (a) The Inspector General of Social Security, or other official as 
specified in paragraph (b) of this section, will prepare and submit to 
Congress each year an evaluation of SSA compliance with, and the 
effectiveness of, the requirements in this part. The evaluation may 
include any recommended changes that may be necessary to strengthen or 
improve the requirements.

[[Page 1319]]

    (b) The annual report will be submitted at the same time we submit 
our annual budget justification to Congress.
    (c) The annual report will include the following: All alleged 
violations covered by the report, the actions taken by the Commissioner 
in the year covered by the report with respect to those alleged 
violations and alleged violations in previous years, and the amounts of 
civil penalties imposed by SSA in the year covered by the report.



      Sec. Appendix A to Part 438--Certification Regarding Lobbying

 Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge and 
belief, that:
    (1) No Federal appropriated funds have been paid or will be paid, by 
or on behalf of the undersigned, to any person for influencing or 
attempting to influence an officer or employee of an agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been 
paid or will be paid to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of Congress, an 
officer or employee of Congress, or an employee of a Member of Congress 
in connection with this Federal contract, grant, loan, or cooperative 
agreement, the undersigned shall complete and submit Standard Form--LLL, 
``Disclosure Form to Report Lobbying,'' in accordance with its 
instructions.
    (3) The undersigned shall require that the language of this 
certification be included in the award documents for all subawards at 
all tiers (including subcontracts, subgrants, and contracts under 
grants, loans, and cooperative agreements) and that all subrecipients 
shall certify and disclose accordingly.
    This certification is a material representation of fact upon which 
reliance was placed when this transaction was made or entered into. 
Submission of this certification is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required certification shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

            Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and 
belief, that:
    If any funds have been paid or will be paid to any person for 
influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with this commitment 
providing for the United States to insure or guarantee a loan, the 
undersigned shall complete and submit Standard Form--LLL, ``Disclosure 
Form to Report Lobbying,'' in accordance with its instructions.
    Submission of this statement is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required statement shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

[[Page 1320]]



     Sec. Appendix B to Part 438--Disclosure Form To Report Lobbying
[GRAPHIC] [TIFF OMITTED] TR27MY03.000


[[Page 1321]]


[GRAPHIC] [TIFF OMITTED] TR27MY03.001

                        PARTS 440	497 [RESERVED]



PART 498_CIVIL MONETARY PENALTIES, ASSESSMENTS AND RECOMMENDED
EXCLUSIONS--Table of Contents



Sec.
498.100  Basis and purpose.
498.101  Definitions.

[[Page 1322]]

498.102  Basis for civil monetary penalties and assessments.
498.103  Amount of penalty.
498.104  Amount of assessment.
498.105  [Reserved]
498.106  Determinations regarding the amount or scope of penalties and 
          assessments.
498.107  [Reserved]
498.108  Penalty and assessment not exclusive.
498.109  Notice of proposed determination.
498.110  Failure to request a hearing.
498.114  Collateral estoppel.
498.115-498.125  [Reserved]
498.126  Settlement.
498.127  Judicial review.
498.128  Collection of penalty and assessment.
498.129  Notice to other agencies.
498.132  Limitations.
498.201  Definitions.
498.202  Hearing before an administrative law judge.
498.203  Rights of parties.
498.204  Authority of the administrative law judge.
498.205  Ex parte contacts.
498.206  Prehearing conferences.
498.207  Discovery.
498.208  Exchange of witness lists, witness statements and exhibits.
498.209  Subpoenas for attendance at hearing.
498.210  Fees.
498.211  Form, filing and service of papers.
498.212  Computation of time.
498.213  Motions.
498.214  Sanctions.
498.215  The hearing and burden of proof.
498.216  Witnesses.
498.217  Evidence.
498.218  The record.
498.219  Post-hearing briefs.
498.220  Initial decision.
498.221  Appeal to DAB.
498.222  Final decision of the Commissioner.
498.223  Stay of initial decision.
498.224  Harmless error.

    Authority: Secs. 702(a)(5), 1129, and 1140 of the Social Security 
Act (42 U.S.C. 902(a)(5), 1320a-8, and 1320b-10).

    Source: 60 FR 58226, Nov. 27, 1995, unless otherwise noted.



Sec. 498.100  Basis and purpose.

    (a) Basis. This part implements sections 1129 and 1140 of the Social 
Security Act (42 U.S.C. 1320a-8 and 1320b-10).
    (b) Purpose. This part provides for the imposition of civil monetary 
penalties and assessments, as applicable, against persons who--
    (1) Make or cause to be made false statements or representations or 
omissions or otherwise withhold disclosure of a material fact for use in 
determining any right to or amount of benefits under title II or 
benefits or payments under title VIII or title XVI of the Social 
Security Act;
    (2) Convert any payment, or any part of a payment, received under 
title II, title VIII, or title XVI of the Social Security Act for the 
use and benefit of another individual, while acting in the capacity of a 
representative payee for that individual, to a use that such person knew 
or should have known was other than for the use and benefit of such 
other individual; or
    (3) Misuse certain Social Security program words, letters, symbols, 
and emblems; or
    (4) With limited exceptions, charge a fee for a product or service 
that is available from SSA free of charge without including a written 
notice stating the product or service is available from SSA free of 
charge.

[60 FR 58226, Nov. 27, 1995, as amended at 61 FR 18079, Apr. 24, 1996; 
71 FR 28579, May 17, 2006]



Sec. 498.101  Definitions.

    As used in this part:
    Agency means the Social Security Administration.
    Assessment means the amount described in Sec. 498.104, and includes 
the plural of that term.
    Commissioner means the Commissioner of Social Security or his or her 
designees.
    Department means the U.S. Department of Health and Human Services.
    General Counsel means the General Counsel of the Social Security 
Administration or his or her designees.
    Inspector General means the Inspector General of the Social Security 
Administration or his or her designees.
    Material fact means a fact which the Commissioner of Social Security 
may consider in evaluating whether an applicant is entitled to benefits 
under title II or eligible for benefits or payments under title VIII or 
title XVI of the Social Security Act.
    Otherwise withhold disclosure means the failure to come forward to 
notify the SSA of a material fact when such person knew or should have 
known that the withheld fact was material

[[Page 1323]]

and that such withholding was misleading for purposes of determining 
eligibility or Social Security benefit amount for that person or another 
person.
    Penalty means the amount described in Sec. 498.103 and includes the 
plural of that term.
    Person means an individual, organization, agency, or other entity.
    Respondent means the person upon whom the Commissioner or the 
Inspector General has imposed, or intends to impose, a penalty and 
assessment, as applicable.
    Secretary means the Secretary of the U.S. Department of Health and 
Human Services or his or her designees.
    SSA means the Social Security Administration.
    SSI means Supplemental Security Income.

[60 FR 58226, Nov. 27, 1995, as amended at 61 FR 18079, Apr. 24, 1996; 
71 FR 28580, May 17, 2006]



Sec. 498.102  Basis for civil monetary penalties and assessments.

    (a) The Office of the Inspector General may impose a penalty and 
assessment, as applicable, against any person who it determines in 
accordance with this part--
    (1) Has made, or caused to be made, a statement or representation of 
a material fact for use in determining any initial or continuing right 
to or amount of:
    (i) Monthly insurance benefits under title II of the Social Security 
Act; or
    (ii) Benefits or payments under title VIII or title XVI of the 
Social Security Act; and
    (2)(i) Knew, or should have known, that the statement or 
representation was false or misleading, or
    (ii) Made such statement with knowing disregard for the truth; or
    (3) Omitted from a statement or representation, or otherwise 
withheld disclosure of, a material fact for use in determining any 
initial or continuing right to or amount of benefits or payments, which 
the person knew or should have known was material for such use and that 
such omission or withholding was false or misleading.
    (b) The Office of the Inspector General may impose a penalty and 
assessment, as applicable, against any representative payee who receives 
a payment under title II, title VIII, or title XVI for the use and 
benefit of another individual and who converts such payment, or any part 
thereof, to a use that such representative payee knew or should have 
known was other than for the use and benefit of such other individual.
    (c) The Office of the Inspector General may impose a penalty against 
any person who it determines in accordance with this part has made use 
of certain Social Security program words, letters, symbols, or emblems 
in such a manner that the person knew or should have known would convey, 
or in a manner which reasonably could be interpreted or construed as 
conveying, the false impression that a solicitation, advertisement or 
other communication was authorized, approved, or endorsed by the Social 
Security Administration, or that such person had some connection with, 
or authorization from, the Social Security Administration.
    (1) Civil monetary penalties may be imposed for misuse, as set forth 
in paragraph (c) of this section, of--
    (i) The words ``Social Security,'' ``Social Security Account,'' 
``Social Security Administration,'' ``Social Security System,'' 
``Supplemental Security Income Program,'' ``Death Benefits Update,'' 
``Federal Benefit Information,'' ``Funeral Expenses,'' ``Final 
Supplemental Program,'' or any combination or variation of such words; 
or
    (ii) The letters ``SSA,'' or ``SSI,'' or any other combination or 
variation of such letters; or
    (iii) A symbol or emblem of the Social Security Administration 
(including the design of, or a reasonable facsimile of the design of, 
the Social Security card, the check used for payment of benefits under 
title II, or envelopes or other stationery used by the Social Security 
Administration) or any other combination or variation of such symbols or 
emblems.
    (2) Civil monetary penalties will not be imposed against any agency 
or instrumentality of a State, or political subdivision of a State, that 
makes use

[[Page 1324]]

of any words, letters, symbols or emblems of the Social Security 
Administration or instrumentality of the State or political subdivision.
    (d) The Office of the Inspector General may impose a penalty against 
any person who offers, for a fee, to assist an individual in obtaining a 
product or service that the person knew or should have known the Social 
Security Administration provides free of charge, unless:
    (1) The person provides sufficient notice before the product or 
service is provided to the individual that the product or service is 
available free of charge and:
    (i) In a printed solicitation, advertisement or other communication, 
such notice is clearly and prominently placed and written in a font that 
is distinguishable from the rest of the text;
    (ii) In a broadcast or telecast such notice is clearly communicated 
so as not to be construed as misleading or deceptive.
    (2) Civil monetary penalties will not be imposed under paragraph (d) 
of this section with respect to offers--
    (i) To serve as a claimant representative in connection with a claim 
arising under title II, title VIII, or title XVI; or
    (ii) To prepare, or assist in the preparation of, an individual's 
plan for achieving self-support under title XVI.
    (e) The use of a disclaimer of affiliation with the United States 
Government, the Social Security Administration or its programs, or any 
other agency or instrumentality of the United States Government will not 
be considered as a defense in determining a violation of section 1140 of 
the Social Security Act.

[71 FR 28580, May 17, 2006]



Sec. 498.103  Amount of penalty.

    (a) Under Sec. 498.102(a), the Office of the Inspector General may 
impose a penalty of not more than $5,000 for each false statement or 
representation, omission, or receipt of payment or benefit while 
withholding disclosure of a material fact.
    (b) Under Sec. 498.102(b), the Office of the Inspector General may 
impose a penalty of not more than $5,000 against a representative payee 
for each time the representative payee receives a payment under title 
II, title VIII, or title XVI of the Social Security Act for the use and 
benefit of another individual, and who converts such payment, or any 
part thereof, to a use that such representative payee knew or should 
have known was other than for the use and benefit of such other 
individual.
    (c) Under Sec. 498.102(c), the Office of the Inspector General may 
impose a penalty of not more than $5,000 for each violation resulting 
from the misuse of Social Security Administration program words, 
letters, symbols, or emblems relating to printed media and a penalty of 
not more than $25,000 for each violation in the case that such misuse 
related to a broadcast or telecast.
    (d) Under Sec. 498.102(d), the Office of the Inspector General may 
impose a penalty of not more than $5,000 for each violation resulting 
from insufficient notice relating to printed media regarding products or 
services provided free of charge by the Social Security Administration 
and a penalty of not more than $25,000 for each violation in the case 
that such insufficient notice relates to a broadcast or telecast.
    (e) For purposes of paragraphs (c) and (d) of this section, a 
violation is defined as--
    (1) In the case of a mailed solicitation, advertisement, or other 
communication, each separate piece of mail which contains one or more 
program words, letters, symbols, or emblems or insufficient notice 
related to a determination under Sec. 498.102(c) or (d); and
    (2) In the case of a broadcast or telecast, each airing of a single 
commercial or solicitation related to a determination under 
Sec. 498.102(c) or (d).
    (f) [Reserved]
    (g)(1) The amount of the penalties described in paragraphs (a) 
through (d) of this section are the maximum penalties which may be 
assessed under these paragraphs for violations made after June 16, 2006, 
but before August 1, 2016.
    (2)(i) After August 1, 2016 penalties are adjusted in accordance 
with the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. 
L. 101-410), as amended by the Debt Collection Improvement Act of 1996 
(Pub. L. 104-134),

[[Page 1325]]

as further amended by the Bipartisan Budget Act of 2015, Section 701: 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015 (Section 701 of Pub. L. 114-74).
    (ii) The maximum penalties which may be assessed under this section 
is the larger of:
    (A) The amount for the previous calendar year; or
    (B) An amount adjusted for inflation, calculated by multiplying the 
amount for the previous calendar year by the percentage by which the 
Consumer Price Index for all urban consumers for the month of October 
preceding the current calendar year exceeds the Consumer Price Index for 
all urban consumers for the month of October of the calendar year two 
years prior to the current calendar year, adding that amount to the 
amount for the previous calendar year, and rounding the total to the 
nearest dollar.
    (iii) Notice of the maximum penalty which may be assessed under this 
section for calendar years after 2016 will be published in the Federal 
Register on an annual basis on or before January 15 of each calendar 
year.

[71 FR 28580, May 17, 2006, as amended at 81 FR 41440, June 27, 2016]



Sec. 498.104  Amount of assessment.

    A person subject to a penalty determined under Sec. 498.102(a) may 
be subject, in addition, to an assessment of not more than twice the 
amount of benefits or payments paid under title II, title VIII or title 
XVI of the Social Security Act as a result of the statement, 
representation, omission, or withheld disclosure of a material fact 
which was the basis for the penalty. A representative payee subject to a 
penalty determined under Sec. 498.102(b) may be subject, in addition, to 
an assessment of not more than twice the amount of benefits or payments 
received by the representative payee for the use and benefit of another 
individual and converted to a use other than for the use and benefit of 
such other individual. An assessment is in lieu of damages sustained by 
the United States because of such statement, representation, omission, 
withheld disclosure of a material fact, or conversion, as referred to in 
Sec. 498.102(a) and (b).

[71 FR 28581, May 17, 2006]



Sec. 498.105  [Reserved]



Sec. 498.106  Determinations regarding the amount or scope of
penalties and assessments.

    (a) In determining the amount or scope of any penalty and 
assessment, as applicable, in accordance with Sec. 498.103(a) and (b) 
and 498.104, the Office of the Inspector General will take into account:
    (1) The nature of the statements, representations, or actions 
referred to in Sec. 498.102(a) and (b) and the circumstances under which 
they occurred;
    (2) The degree of culpability of the person committing the offense;
    (3) The history of prior offenses of the person committing the 
offense;
    (4) The financial condition of the person committing the offense; 
and
    (5) Such other matters as justice may require.
    (b) In determining the amount of any penalty in accordance with 
Sec. 498.103(c) and (d), the Office of the Inspector General will take 
into account--
    (1) The nature and objective of the advertisement, solicitation, or 
other communication, and the circumstances under which they were 
presented;
    (2) The frequency and scope of the violation, and whether a specific 
segment of the population was targeted;
    (3) The prior history of the individual, organization, or entity in 
their willingness or refusal to comply with informal requests to correct 
violations;
    (4) The history of prior offenses of the individual, organization, 
or entity in their misuse of program words, letters, symbols, and 
emblems;
    (5) The financial condition of the individual or entity; and
    (6) Such other matters as justice may require.
    (c) In cases brought under section 1140 of the Social Security Act, 
the use of a disclaimer of affiliation with the United States 
Government, the Social Security Administration or its programs will not 
be considered as a mitigating factor in determining the

[[Page 1326]]

amount of a penalty in accordance with Sec. 498.106.

[60 FR 58226, Nov. 27, 1995, as amended at 61 FR 18080, Apr. 24, 1996; 
71 FR 28581, May 17, 2006]



Sec. 498.107  [Reserved]



Sec. 498.108  Penalty and assessment not exclusive.

    Penalties and assessments, as applicable, imposed under this part 
are in addition to any other penalties prescribed by law.

[61 FR 18080, Apr. 24, 1996]



Sec. 498.109  Notice of proposed determination.

    (a) If the Office of the Inspector General seeks to impose a penalty 
and assessment, as applicable, it will serve written notice of the 
intent to take such action. The notice will include:
    (1) Reference to the statutory basis for the proposed penalty and 
assessment, as applicable;
    (2) A description of the false statements, representations, other 
actions (as described in Sec. 498.102(a) and (b)), and incidents, as 
applicable, with respect to which the penalty and assessment, as 
applicable, are proposed;
    (3) The amount of the proposed penalty and assessment, as 
applicable;
    (4) Any circumstances described in Sec. 498.106 that were considered 
when determining the amount of the proposed penalty and assessment, as 
applicable; and
    (5) Instructions for responding to the notice, including
    (i) A specific statement of respondent's right to a hearing; and
    (ii) A statement that failure to request a hearing within 60 days 
permits the imposition of the proposed penalty and assessment, as 
applicable, without right of appeal.
    (b) Any person upon whom the Office of the Inspector General has 
proposed the imposition of a penalty and assessment, as applicable, may 
request a hearing on such proposed penalty and assessment.
    (c) If the respondent fails to exercise the respondent's right to a 
hearing within the time permitted under this section, and does not 
demonstrate good cause for such failure before an administrative law 
judge, any penalty and assessment, as applicable, becomes final.

[61 FR 18080, Apr. 24, 1996, as amended at 71 FR 28581, May 17, 2006]



Sec. 498.110  Failure to request a hearing.

    If the respondent does not request a hearing within the time 
prescribed by Sec. 498.109(a), the Office of the Inspector General may 
seek the proposed penalty and assessment, as applicable, or any less 
severe penalty and assessment. The Office of the Inspector General shall 
notify the respondent by certified mail, return receipt requested, of 
any penalty and assessment, as applicable, that has been imposed and of 
the means by which the respondent may satisfy the amount owed.

[61 FR 18080, Apr. 24, 1996]



Sec. 498.114  Collateral estoppel.

    In a proceeding under section 1129 of the Social Security Act that--
    (a) Is against a person who has been convicted (whether upon a 
verdict after trial or upon a plea of guilty or nolo contendere) of a 
Federal or State crime; and
    (b) Involves the same transactions as in the criminal action, the 
person is estopped from denying the essential elements of the criminal 
offense.

[61 FR 18080, Apr. 24, 1996, as amended at 71 FR 28581, May 17, 2006]



Secs. 498.115-498.125  [Reserved]



Sec. 498.126  Settlement.

    The Inspector General has exclusive authority to settle any issues 
or case, without the consent of the administrative law judge or the 
Commissioner, at any time prior to a final determination. Thereafter, 
the Commissioner or his or her designee has such exclusive authority.



Sec. 498.127  Judicial review.

    Sections 1129 and 1140 of the Social Security Act authorize judicial 
review of any penalty and assessment, as applicable, that has become 
final. Judicial review may be sought by a respondent only in regard to a 
penalty and assessment, as applicable, with respect to which the 
respondent requested a hearing, unless the failure or

[[Page 1327]]

neglect to urge such objection is excused by the court because of 
extraordinary circumstances.

[61 FR 18080, Apr. 24, 1996]



Sec. 498.128  Collection of penalty and assessment.

    (a) Once a determination has become final, collection of any penalty 
and assessment, as applicable, will be the responsibility of the 
Commissioner or his or her designee.
    (b) In cases brought under section 1129 of the Social Security Act, 
a penalty and assessment, as applicable, imposed under this part may be 
compromised by the Commissioner or his or her designee and may be 
recovered in a civil action brought in the United States District Court 
for the district where the violation occurred or where the respondent 
resides.
    (c) In cases brought under section 1140 of the Social Security Act, 
a penalty imposed under this part may be compromised by the Commissioner 
or his or her designee and may be recovered in a civil action brought in 
the United States district court for the district where, as determined 
by the Commissioner, the:
    (1) Violations referred to in Sec. 498.102(c) or (d) occurred; or
    (2) Respondent resides; or
    (3) Respondent has its principal office; or
    (4) Respondent may be found.
    (d) As specifically provided under the Social Security Act, in cases 
brought under section 1129 of the Social Security Act, the amount of a 
penalty and assessment, as applicable, when finally determined, or the 
amount agreed upon in compromise, may also be deducted from:
    (1) Monthly title II, title VIII, or title XVI payments, 
notwithstanding section 207 of the Social Security Act as made 
applicable to title XVI by section 1631(d)(1) of the Social Security 
Act;
    (2) A tax refund to which a person is entitled to after notice to 
the Secretary of the Treasury under 31 U.S.C. Sec. 3720A;
    (3) By authorities provided under the Debt Collection Act of 1982, 
as amended, 31 U.S.C. 3711, to the extent applicable to debts arising 
under the Social Security Act; or
    (4) Any combination of the foregoing.
    (e) Matters that were raised or that could have been raised in a 
hearing before an administrative law judge or in an appeal to the United 
States Court of Appeals under sections 1129 or 1140 of the Social 
Security Act may not be raised as a defense in a civil action by the 
United States to collect a penalty and assessment, as applicable, under 
this part.

[60 FR 58226, Nov. 27, 1995, as amended at 61 FR 18080, Apr. 24, 1996; 
71 FR 28581, May 17, 2006]



Sec. 498.129  Notice to other agencies.

    As provided in section 1129 of the Social Security Act, when a 
determination to impose a penalty and assessment, as applicable, with 
respect to a physician or medical provider becomes final, the Office of 
the Inspector General will notify the Secretary of the final 
determination and the reasons therefore.

[61 FR 18081, Apr. 24, 1996]



Sec. 498.132  Limitations.

    The Office of the Inspector General may initiate a proceeding in 
accordance with Sec. 498.109(a) to determine whether to impose a penalty 
and assessment, as applicable--
    (a) In cases brought under section 1129 of the Social Security Act, 
after receiving authorization from the Attorney General pursuant to 
procedures agreed upon by the Inspector General and the Attorney 
General; and
    (b) Within 6 years from the date on which the violation was 
committed.

[61 FR 18081, Apr. 24, 1996]



Sec. 498.201  Definitions.

    As used in this part--
    ALJ refers to an Administrative Law Judge of the Departmental 
Appeals Board.
    Civil monetary penalty cases refer to all proceedings arising under 
any of the statutory bases for which the Inspector General, Social 
Security Administration has been delegated authority to impose civil 
monetary penalties.

[[Page 1328]]

    DAB refers to the Departmental Appeals Board of the U.S. Department 
of Health and Human Services.

[61 FR 65468, Dec. 13, 1996]



Sec. 498.202  Hearing before an administrative law judge.

    (a) A party sanctioned under any criteria specified in Secs. 498.100 
through 498.132 may request a hearing before an ALJ.
    (b) In civil monetary penalty cases, the parties to a hearing will 
consist of the respondent and the Inspector General.
    (c) The request for a hearing must be:
    (1) In writing and signed by the respondent or by the respondent's 
attorney; and
    (2) Filed within 60 days after the notice, provided in accordance 
with Sec. 498.109, is received by the respondent or upon a showing of 
good cause, the time permitted by an ALJ.
    (d) The request for a hearing shall contain a statement as to the:
    (1) Specific issues or findings of fact and conclusions of law in 
the notice letter with which the respondent disagrees; and
    (2) Basis for the respondent's contention that the specific issues 
or findings and conclusions were incorrect.
    (e) For purposes of this section, the date of receipt of the notice 
letter will be presumed to be five days after the date of such notice, 
unless there is a reasonable showing to the contrary.
    (f) The ALJ shall dismiss a hearing request where:
    (1) The respondent's hearing request is not filed in a timely manner 
and the respondent fails to demonstrate good cause for such failure;
    (2) The respondent withdraws or abandons respondent's request for a 
hearing; or
    (3) The respondent's hearing request fails to raise any issue which 
may properly be addressed in a hearing under this part.

[61 FR 65468, Dec. 13, 1996]



Sec. 498.203  Rights of parties.

    (a) Except as otherwise limited by this part, all parties may:
    (1) Be accompanied, represented, and advised by an attorney;
    (2) Participate in any conference held by the ALJ;
    (3) Conduct discovery of documents as permitted by this part;
    (4) Agree to stipulations of fact or law which will be made part of 
the record;
    (5) Present evidence relevant to the issues at the hearing;
    (6) Present and cross-examine witnesses;
    (7) Present oral arguments at the hearing as permitted by the ALJ; 
and
    (8) Submit written briefs and proposed findings of fact and 
conclusions of law after the hearing.
    (b) Fees for any services performed on behalf of a party by an 
attorney are not subject to the provisions of section 206 of title II of 
the Social Security Act, which authorizes the Commissioner to specify or 
limit these fees.

[61 FR 65469, Dec. 13, 1996]



Sec. 498.204  Authority of the administrative law judge.

    (a) The ALJ will conduct a fair and impartial hearing, avoid delay, 
maintain order and assure that a record of the proceeding is made.
    (b) The ALJ has the authority to:
    (1) Set and change the date, time, and place of the hearing upon 
reasonable notice to the parties;
    (2) Continue or recess the hearing in whole or in part for a 
reasonable period of time;
    (3) Hold conferences to identify or simplify the issues, or to 
consider other matters that may aid in the expeditious disposition of 
the proceeding;
    (4) Administer oaths and affirmations;
    (5) Issue subpoenas requiring the attendance of witnesses at 
hearings and the production of documents at or in relation to hearings;
    (6) Rule on motions and other procedural matters;
    (7) Regulate the scope and timing of documentary discovery as 
permitted by this part;
    (8) Regulate the course of the hearing and the conduct of 
representatives, parties, and witnesses;
    (9) Examine witnesses;
    (10) Receive, exclude, or limit evidence;
    (11) Take official notice of facts;

[[Page 1329]]

    (12) Upon motion of a party, decide cases, in whole or in part, by 
summary judgment where there is no disputed issue of material fact; and
    (13) Conduct any conference or argument in person, or by telephone 
upon agreement of the parties.
    (c) The ALJ does not have the authority to:
    (1) Find invalid or refuse to follow Federal statutes or 
regulations, or delegations of authority from the Commissioner;
    (2) Enter an order in the nature of a directed verdict;
    (3) Compel settlement negotiations;
    (4) Enjoin any act of the Commissioner or the Inspector General; or
    (5) Review the exercise of discretion by the Office of the Inspector 
General to seek to impose a civil monetary penalty or assessment under 
Secs. 498.100 through 498.132.

[61 FR 65469, Dec. 13, 1996]



Sec. 498.205  Ex parte contacts.

    No party or person (except employees of the ALJ's office) will 
communicate in any way with the ALJ on any matter at issue in a case, 
unless on notice and opportunity for all parties to participate. This 
provision does not prohibit a person or party from inquiring about the 
status of a case or asking routine questions concerning administrative 
functions or procedures.

[61 FR 65469, Dec. 13, 1996]



Sec. 498.206  Prehearing conferences.

    (a) The ALJ will schedule at least one prehearing conference, and 
may schedule additional prehearing conferences as appropriate, upon 
reasonable notice to the parties.
    (b) The ALJ may use prehearing conferences to address the following:
    (1) Simplification of the issues;
    (2) The necessity or desirability of amendments to the pleadings, 
including the need for a more definite statement;
    (3) Stipulations and admissions of fact as to the contents and 
authenticity of documents and deadlines for challenges, if any, to the 
authenticity of documents;
    (4) Whether the parties can agree to submission of the case on a 
stipulated record;
    (5) Whether a party chooses to waive appearance at a hearing and to 
submit only documentary evidence (subject to the objection of other 
parties) and written argument;
    (6) Limitation of the number of witnesses;
    (7) The time and place for the hearing and dates for the exchange of 
witness lists and of proposed exhibits;
    (8) Discovery of documents as permitted by this part;
    (9) Such other matters as may tend to encourage the fair, just, and 
expeditious disposition of the proceedings; and
    (10) Potential settlement of the case.
    (c) The ALJ shall issue an order containing the matters agreed upon 
by the parties or ordered by the ALJ at a prehearing conference.

[61 FR 65469, Dec. 13, 1996]



Sec. 498.207  Discovery.

    (a) For the purpose of inspection and copying, a party may make a 
request to another party for production of documents which are relevant 
and material to the issues before the ALJ.
    (b) Any form of discovery other than that permitted under paragraph 
(a) of this section, such as requests for admissions, written 
interrogatories and depositions, is not authorized.
    (c) For the purpose of this section, the term documents includes 
information, reports, answers, records, accounts, papers, memos, notes 
and other data and documentary evidence. Nothing contained in this 
section will be interpreted to require the creation of a document, 
except that requested data stored in an electronic data storage system 
will be produced in a form accessible to the requesting party.
    (d)(1) A party who has been served with a request for production of 
documents may file a motion for a protective order. The motion for 
protective order shall describe the document or class of documents to be 
protected, specify which of the grounds in Sec. 498.207(d)(2) are being 
asserted, and explain how those grounds apply.

[[Page 1330]]

    (2) The ALJ may grant a motion for a protective order if he or she 
finds that the discovery sought:
    (i) Is unduly costly or burdensome;
    (ii) Will unduly delay the proceeding; or
    (iii) Seeks privileged information.
    (3) The burden of showing that discovery should be allowed is on the 
party seeking discovery.

[61 FR 65469, Dec. 13, 1996]



Sec. 498.208  Exchange of witness lists, witness statements and exhibits.

    (a) At least 15 days before the hearing, the parties shall exchange:
    (1) Witness lists;
    (2) Copies of prior written statements of proposed witnesses; and
    (3) Copies of proposed hearing exhibits, including copies of any 
written statements that the party intends to offer in lieu of live 
testimony in accordance with Sec. 498.216.
    (b)(1) Failure to comply with the requirements of paragraph (a) of 
this section may result in the exclusion of evidence or testimony upon 
the objection of the opposing party.
    (2) When an objection is entered, the ALJ shall determine whether 
good cause justified the failure to timely exchange the information 
listed under paragraph (a) of this section. If good cause is not found, 
the ALJ shall exclude from the party's case-in-chief:
    (i) The testimony of any witness whose name does not appear on the 
witness list; and
    (ii) Any exhibit not provided to the opposing party as specified in 
paragraph (a) of this section.
    (3) If the ALJ finds that good cause exists, the ALJ shall determine 
whether the admission of such evidence would cause substantial prejudice 
to the objecting party due to the failure to comply with paragraph (a) 
of this section. If the ALJ finds no substantial prejudice, the evidence 
may be admitted. If the ALJ finds substantial prejudice, the ALJ may 
exclude the evidence, or at his or her discretion, may postpone the 
hearing for such time as is necessary for the objecting party to prepare 
and respond to the evidence.
    (c) Unless a party objects by the deadline set by the ALJ's 
prehearing order pursuant to Sec. 498.206 (b)(3) and (c), documents 
exchanged in accordance with paragraph (a) of this section will be 
deemed authentic for the purpose of admissibility at the hearing.

[61 FR 65470, Dec. 13, 1996]



Sec. 498.209  Subpoenas for attendance at hearing.

    (a) A party wishing to procure the appearance and testimony of any 
individual, whose appearance and testimony are relevant and material to 
the presentation of a party's case at a hearing, may make a motion 
requesting the ALJ to issue a subpoena.
    (b) A subpoena requiring the attendance of an individual may also 
require the individual (whether or not the individual is a party) to 
produce evidence at the hearing in accordance with Sec. 498.207.
    (c) A party seeking a subpoena will file a written motion not less 
than 30 days before the date fixed for the hearing, unless otherwise 
allowed by the ALJ for good cause shown. Such request will:
    (1) Specify any evidence to be produced;
    (2) Designate the witness(es); and
    (3) Describe the address and location with sufficient particularity 
to permit such witness(es) to be found.
    (d) Within 20 days after the written motion requesting issuance of a 
subpoena is served, any party may file an opposition or other response.
    (e) If the motion requesting issuance of a subpoena is granted, the 
party seeking the subpoena will serve the subpoena by delivery to the 
individual named, or by certified mail addressed to such individual at 
his or her last dwelling place or principal place of business.
    (f) The subpoena will specify the time and place at which the 
witness is to appear and any evidence the witness is to produce.
    (g) The individual to whom the subpoena is directed may file with 
the ALJ a motion to quash the subpoena within 10 days after service.
    (h) When a subpoena is served by a respondent on a particular 
individual or particular office of the Office of the Inspector General, 
the OIG may comply by designating any of its representatives to appear 
and testify.

[[Page 1331]]

    (i) In the case of contumacy by, or refusal to obey a subpoena duly 
served upon any person, the exclusive remedy is specified in section 
205(e) of the Social Security Act (42 U.S.C. 405(e)).

[61 FR 65470, Dec. 13, 1996]



Sec. 498.210  Fees.

    The party requesting a subpoena will pay the cost of the fees and 
mileage of any witness subpoenaed in the amounts that would be payable 
to a witness in a proceeding in United States District Court. A check 
for witness fees and mileage will accompany the subpoena when served, 
except that when a subpoena is issued on behalf of the Inspector 
General, a check for witness fees and mileage need not accompany the 
subpoena.

[61 FR 65470, Dec. 13, 1996]



Sec. 498.211  Form, filing and service of papers.

    (a) Form. (1) Unless the ALJ directs the parties to do otherwise, 
documents filed with the ALJ will include an original and two copies.
    (2) Every document filed in the proceeding will contain a caption 
setting forth the title of the action, the case number, and a 
designation of the pleading or paper.
    (3) Every document will be signed by, and will contain the address 
and telephone number of the party or the person on whose behalf the 
document was filed, or his or her representative.
    (4) Documents are considered filed when they are mailed.
    (b) Service. A party filing a document with the ALJ will, at the 
time of filing, serve a copy of such document on every other party. 
Service upon any party of any document will be made by delivering a 
copy, or placing a copy of the document in the United States mail, 
postage prepaid and addressed, or with a private delivery service, to 
the party's last known address. When a party is represented by an 
attorney, service will be made upon such attorney. Proof of service 
should accompany any document filed with the ALJ.
    (c) Proof of service. A certificate of the individual serving the 
document by personal delivery or by mail, setting forth the manner of 
service, will be proof of service.

[61 FR 65470, Dec. 13, 1996]



Sec. 498.212  Computation of time.

    (a) In computing any period of time under this part or in an order 
issued thereunder, the time begins with the day following the act, event 
or default, and includes the last day of the period unless it is a 
Saturday, Sunday or legal holiday observed by the Federal Government, in 
which event it includes the next business day.
    (b) When the period of time allowed is less than 7 days, 
intermediate Saturdays, Sundays and legal holidays observed by the 
Federal Government will be excluded from the computation.
    (c) Where a document has been served or issued by placing it in the 
mail, an additional 5 days will be added to the time permitted for any 
response. This paragraph does not apply to requests for hearing under 
Sec. 498.202.

[61 FR 65470, Dec. 13, 1996]



Sec. 498.213  Motions.

    (a) An application to the ALJ for an order or ruling will be by 
motion. Motions will:
    (1) State the relief sought, the authority relied upon and the facts 
alleged; and
    (2) Be filed with the ALJ and served on all other parties.
    (b) Except for motions made during a prehearing conference or at a 
hearing, all motions will be in writing.
    (c) Within 10 days after a written motion is served, or such other 
time as may be fixed by the ALJ, any party may file a response to such 
motion.
    (d) The ALJ may not grant or deny a written motion before the time 
for filing responses has expired, except upon consent of the parties or 
following a hearing on the motion.
    (e) The ALJ will make a reasonable effort to dispose of all 
outstanding motions prior to the beginning of the hearing.
    (f) There is no right to appeal to the DAB any interlocutory ruling 
by the ALJ.

[61 FR 65470, Dec. 13, 1996]

[[Page 1332]]



Sec. 498.214  Sanctions.

    (a) The ALJ may sanction a person, including any party or attorney, 
for:
    (1) Failing to comply with an order or procedure;
    (2) Failing to defend an action; or
    (3) Misconduct that interferes with the speedy, orderly or fair 
conduct of the hearing.
    (b) Such sanctions will reasonably relate to the severity and nature 
of the failure or misconduct. Such sanction may include--
    (1) In the case of refusal to provide or permit discovery under the 
terms of this part, drawing negative factual inferences or treating such 
refusal as an admission by deeming the matter, or certain facts, to be 
established;
    (2) Prohibiting a party from introducing certain evidence or 
otherwise supporting a particular claim or defense;
    (3) Striking pleadings, in whole or in part;
    (4) Staying the proceedings;
    (5) Dismissal of the action; or
    (6) Entering a decision by default.
    (c) In addition to the sanctions listed in paragraph (b) of this 
section, the ALJ may:
    (1) Order the party or attorney to pay attorney's fees and other 
costs caused by the failure or misconduct; or
    (2) Refuse to consider any motion or other action that is not filed 
in a timely manner.

[61 FR 65471, Dec. 13, 1996]



Sec. 498.215  The hearing and burden of proof.

    (a) The ALJ will conduct a hearing on the record in order to 
determine whether the respondent should be found liable under this part.
    (b) In civil monetary penalty cases under Secs. 498.100 through 
498.132:
    (1) The respondent has the burden of going forward and the burden of 
persuasion with respect to affirmative defenses and any mitigating 
circumstances; and
    (2) The Inspector General has the burden of going forward and the 
burden of persuasion with respect to all other issues.
    (c) The burden of persuasion will be judged by a preponderance of 
the evidence.
    (d) The hearing will be open to the public unless otherwise ordered 
by the ALJ for good cause.
    (e)(1) A hearing under this part is not limited to specific items 
and information set forth in the notice letter to the respondent. 
Subject to the 15-day requirement under Sec. 498.208, additional items 
or information may be introduced by either party during its case-in-
chief, unless such information or items are inadmissible under 
Sec. 498.217.
    (2) After both parties have presented their cases, evidence may be 
admitted on rebuttal as to those issues presented in the case-in-chief, 
even if not previously exchanged in accordance with Sec. 498.208.

[61 FR 65471, Dec. 13, 1996]



Sec. 498.216  Witnesses.

    (a) Except as provided in paragraph (b) of this section, testimony 
at the hearing will be given orally by witnesses under oath or 
affirmation.
    (b) At the discretion of the ALJ, testimony (other than expert 
testimony) may be admitted in the form of a written statement. Any such 
written statement must be provided to all other parties along with the 
last known address of such witness, in a manner that allows sufficient 
time for other parties to subpoena such witness for cross-examination at 
the hearing. Prior written statements of witnesses proposed to testify 
at the hearing will be exchanged as provided in Sec. 498.208.
    (c) The ALJ will exercise reasonable control over the mode and order 
of witness direct and cross examination and evidence presentation so as 
to:
    (1) Make the examination and presentation effective for the 
ascertainment of the truth;
    (2) Avoid repetition or needless waste of time; and
    (3) Protect witnesses from harassment or undue embarrassment.
    (d) The ALJ may order witnesses excluded so that they cannot hear 
the testimony of other witnesses. This does not authorize exclusion of:
    (1) A party who is an individual;
    (2) In the case of a party that is not an individual, an officer or 
employee of

[[Page 1333]]

the party appearing for the entity pro se or designated as the party's 
representative; or
    (3) An individual whose presence is shown by a party to be essential 
to the presentation of its case, including an individual engaged in 
assisting the attorney for the Inspector General.

[61 FR 65471, Dec. 13, 1996]



Sec. 498.217  Evidence.

    (a) The ALJ will determine the admissibility of evidence.
    (b) Except as provided in this part, the ALJ will not be bound by 
the Federal Rules of Evidence, but may be guided by them in ruling on 
the admissibility of evidence.
    (c) Although relevant, evidence may be excluded if its probative 
value is substantially outweighed by the danger of unfair prejudice, 
confusion of the issues, or by considerations of undue delay or needless 
presentation of cumulative evidence.
    (d) Although relevant, evidence must be excluded if it is privileged 
under Federal law, unless the privilege is waived by a party.
    (e) Evidence concerning offers of compromise or settlement made in 
this action will be inadmissible to the extent provided in Rule 408 of 
the Federal Rules of Evidence.
    (f)(1) Evidence of crimes, wrongs or acts other than those at issue 
in the instant case is admissible in order to show motive, opportunity, 
intent, knowledge, preparation, identity, lack of mistake, or existence 
of a scheme.
    (2) Such evidence is admissible regardless of whether the crimes, 
wrongs or acts occurred during the statute of limitations period 
applicable to the acts which constitute the basis for liability in the 
case, and regardless of whether they were referenced in the IG's notice 
sent in accordance with Sec. 498.109.
    (g) The ALJ will permit the parties to introduce rebuttal witnesses 
and evidence as to those issues raised in the parties' case-in-chief.
    (h) All documents and other evidence offered or taken for the record 
will be open to examination by all parties, unless otherwise ordered by 
the ALJ for good cause.

[61 FR 65471, Dec. 13, 1996]



Sec. 498.218  The record.

    (a) The hearing shall be recorded and transcribed. Transcripts may 
be obtained following the hearing from the ALJ.
    (b) The transcript of testimony, exhibits and other evidence 
admitted at the hearing, and all papers and requests filed in the 
proceeding constitute the record for the decision by the ALJ.
    (c) The record may be inspected and copied (upon payment of a 
reasonable fee) by any person, unless otherwise ordered by the ALJ for 
good cause.

[61 FR 65471, Dec. 13, 1996]



Sec. 498.219  Post-hearing briefs.

    (a) Any party may file a post-hearing brief.
    (b) The ALJ may require the parties to file post-hearing briefs and 
may permit the parties to file reply briefs.
    (c) The ALJ will fix the time for filing briefs, which is not to 
exceed 60 days from the date the parties receive the transcript of the 
hearing or, if applicable, the stipulated record.
    (d) The parties' briefs may be accompanied by proposed findings of 
fact and conclusions of law.

[61 FR 65471, Dec. 13, 1996]



Sec. 498.220  Initial decision.

    (a) The ALJ will issue an initial decision, based only on the 
record, which will contain findings of fact and conclusions of law.
    (b) The ALJ may affirm, deny, increase, or reduce the penalties or 
assessments proposed by the Inspector General.
    (c) The ALJ will issue the initial decision to all parties within 60 
days after the time for submission of post-hearing briefs or reply 
briefs, if permitted, has expired. The decision will be accompanied by a 
statement describing the right of any party to file a notice of appeal 
with the DAB and instructions for how to file such appeal. If the ALJ 
cannot issue an initial decision within the 60 days, the ALJ will

[[Page 1334]]

notify the parties of the reason for the delay and will set a new 
deadline.
    (d) Unless an appeal or request for extension pursuant to 
Sec. 498.221(a) is filed with the DAB, the initial decision of the ALJ 
becomes final and binding on the parties 30 days after the ALJ serves 
the parties with a copy of the decision. If service is by mail, the date 
of service will be deemed to be five days from the date of mailing.

[61 FR 65472, Dec. 13, 1996]



Sec. 498.221  Appeal to DAB.

    (a) Any party may appeal the decision of the ALJ to the DAB by 
filing a notice of appeal with the DAB within 30 days of the date of 
service of the initial decision. The DAB may extend the initial 30-day 
period for a period of time not to exceed 30 days if a party files with 
the DAB a request for an extension within the initial 30-day period and 
shows good cause.
    (b) If a party files a timely notice of appeal with the DAB, the ALJ 
will forward the record of the proceeding to the DAB.
    (c) A notice of appeal will be accompanied by a written brief 
specifying exceptions to the initial decision and reasons supporting the 
exceptions, and identifying which finding of fact and conclusions of law 
the party is taking exception to. Any party may file a brief in 
opposition to exceptions, which may raise any relevant issue not 
addressed in the exceptions, within 30 days of receiving the notice of 
appeal and accompanying brief. The DAB may permit the parties to file 
reply briefs.
    (d) There is no right to appear personally before the DAB, or to 
appeal to the DAB any interlocutory ruling by the ALJ.
    (e) No party or person (except employees of the DAB) will 
communicate in any way with members of the DAB on any matter at issue in 
a case, unless on notice and opportunity for all parties to participate. 
This provision does not prohibit a person or party from inquiring about 
the status of a case or asking routine questions concerning 
administrative functions or procedures.
    (f) The DAB will not consider any issue not raised in the parties' 
briefs, nor any issue in the briefs that could have been, but was not, 
raised before the ALJ.
    (g) If any party demonstrates to the satisfaction of the DAB that 
additional evidence not presented at such hearing is relevant and 
material and that there were reasonable grounds for the failure to 
adduce such evidence at such hearing, the DAB may remand the matter to 
the ALJ for consideration of such additional evidence.
    (h) The DAB may remand a case to an ALJ for further proceedings, or 
may issue a recommended decision to decline review or affirm, increase, 
reduce, or reverse any penalty or assessment determined by the ALJ.
    (i) When the DAB reviews a case, it will limit its review to whether 
the ALJ's initial decision is supported by substantial evidence on the 
whole record or contained error of law.
    (j) Within 60 days after the time for submission of briefs or, if 
permitted, reply briefs has expired, the DAB will issue to each party to 
the appeal and to the Commissioner a copy of the DAB's recommended 
decision and a statement describing the right of any respondent who is 
found liable to seek judicial review upon a final decision.

[61 FR 65472, Dec. 13, 1996]



Sec. 498.222  Final decision of the Commissioner.

    (a) Except with respect to any penalty or assessment remanded to the 
ALJ, the DAB's recommended decision, including a recommended decision to 
decline review of the initial decision, shall become the final decision 
of the Commissioner 60 days after the date on which the DAB serves the 
parties to the appeal and the Commissioner with a copy of the 
recommended decision, unless the Commissioner reverses or modifies the 
DAB's recommended decision within that 60-day period. If the 
Commissioner reverses or modifies the DAB's recommended decision, the 
Commissioner's decision is final and binding on the parties. In either 
event, a copy of the final decision will be served on the parties. If 
service is by mail, the date of service will be deemed to be five days 
from the date of mailing.
    (b) There shall be no right to personally appear before or submit 
additional

[[Page 1335]]

evidence, pleadings or briefs to the Commissioner.
    (c)(1) Any petition for judicial review must be filed within 60 days 
after the parties are served with a copy of the final decision. If 
service is by mail, the date of service will be deemed to be five days 
from the date of mailing.
    (2) In compliance with 28 U.S.C. 2112(a), a copy of any petition for 
judicial review filed in any U.S. Court of Appeals challenging a final 
action of the Commissioner will be sent by certified mail, return 
receipt requested, to the SSA General Counsel. The petition copy will be 
time-stamped by the clerk of the court when the original is filed with 
the court.
    (3) If the SSA General Counsel receives two or more petitions within 
10 days after the final decision is issued, the General Counsel will 
notify the U.S. Judicial Panel on Multidistrict Litigation of any 
petitions that were received within the 10-day period.

[61 FR 65472, Dec. 13, 1996]



Sec. 498.223  Stay of initial decision.

    (a) The filing of a respondent's request for review by the DAB will 
automatically stay the effective date of the ALJ's decision.
    (b)(1) After issuance of the final decision, pending judicial 
review, the respondent may file a request for stay of the effective date 
of any penalty or assessment with the ALJ. The request must be 
accompanied by a copy of the notice of appeal filed with the Federal 
court. The filing of such a request will automatically act to stay the 
effective date of the penalty or assessment until such time as the ALJ 
rules upon the request.
    (2) The ALJ may not grant a respondent's request for stay of any 
penalty or assessment unless the respondent posts a bond or provides 
other adequate security.
    (3) The ALJ will rule upon a respondent's request for stay within 10 
days of receipt.

[61 FR 65472, Dec. 13, 1996]



Sec. 498.224  Harmless error.

    No error in either the admission or the exclusion of evidence, and 
no error or defect in any ruling or order or in any act done or omitted 
by the ALJ or by any of the parties is ground for vacating, modifying or 
otherwise disturbing an otherwise appropriate ruling or order or act, 
unless refusal to take such action appears to the ALJ or the DAB to be 
inconsistent with substantial justice. The ALJ and the DAB at every 
stage of the proceeding will disregard any error or defect in the 
proceeding that does not affect the substantial rights of the parties.

[61 FR 65472, Dec. 13, 1996]

                           PART 499 [RESERVED]

[[Page 1337]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  Chapter III Index
  List of CFR Sections Affected

[[Page 1339]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2017)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Guidance (Parts 200--
                299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300--
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
         X  Department of the Treasury (Parts 1000--1099)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)

[[Page 1340]]

    XXVIII  Department of Justice (Parts 2800--2899)
      XXIX  Department of Labor (Parts 2900--2999)
       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
     XXXVI  Office of National Drug Control Policy, Executive 
                Office of the President (Parts 3600--3699)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)
       LIX  Gulf Coast Ecosystem Restoration Council (Parts 5900--
                5999)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
        IV  Office of Personnel Management and Office of the 
                Director of National Intelligence (Parts 1400--
                1499)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600--3699)
    XXVIII  Department of Justice (Parts 3800--3899)

[[Page 1341]]

      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
     XXXVI  Department of Homeland Security (Parts 4600--4699)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)

[[Page 1342]]

     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
   LXXXIII  Special Inspector General for Afghanistan 
                Reconstruction (Parts 9300--9399)
    LXXXIV  Bureau of Consumer Financial Protection (Parts 9400--
                9499)
    LXXXVI  National Credit Union Administration (Parts 9600--
                9699)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
    XCVIII  Council of the Inspectors General on Integrity and 
                Efficiency (Parts 9800--9899)
      XCIX  Military Compensation and Retirement Modernization 
                Commission (Parts 9900--9999)
         C  National Council on Disability (Partys 10000--10049)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--199)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)

[[Page 1343]]

        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)

[[Page 1344]]

         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)

[[Page 1345]]

        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)

[[Page 1346]]

       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)

[[Page 1347]]

         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)

[[Page 1348]]

       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799) [Reserved]
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099) [Reserved]
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

[[Page 1349]]

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)

[[Page 1350]]

        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)

[[Page 1351]]

      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)

[[Page 1352]]

        IV  Office of Career, Technical and Adult Education, 
                Department of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599) 
                [Reserved]
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799) 
                [Reserved]
            Subtitle C--Regulations Relating to Education
        XI  [Reserved]
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  U.S. Copyright Office, Library of Congress (Parts 
                200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

[[Page 1353]]

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)
      VIII  Gulf Coast Ecosystem Restoration Council (Parts 1800--
                1899)

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)

[[Page 1354]]

       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--599)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)

[[Page 1355]]

        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
        IX  Denali Commission (Parts 900--999)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Administration for Children and Families, Department 
                of Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)

[[Page 1356]]

         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Health and Human Services (Parts 300--399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399) 
                [Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)

[[Page 1357]]

        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499) 
                [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

[[Page 1359]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2017)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
Afghanistan Reconstruction, Special Inspector     5, LXXXIII
     General for
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII

[[Page 1360]]

Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Career, Technical and Adult Education, Office of  34, IV
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazardous Investigation       40, VI
     Board
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X, XIII
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              5, LXXXIV; 12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, I
Defense Contract Audit Agency                     32, I

[[Page 1361]]

Defense Department                                2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III; 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
Denali Commission                                 45, IX
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Career, Technical and Adult Education, Office   34, IV
       of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Career, Technical, and Adult Education, Office  34, IV
       of
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99

[[Page 1362]]

  National Drug Control Policy, Office of         2, XXXVI; 21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV

[[Page 1363]]

Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Gulf Coast Ecosystem Restoration Council          2, LIX; 40, VIII
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X, XIII
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 5, XXXVI; 6, I; 8, 
                                                  I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Immigration and Customs Enforcement Bureau        19, IV
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Independent Counsel, Offices of                   28, VI

[[Page 1364]]

Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department                               2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Safety and Enforcement Bureau, Bureau of        30, II
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Independent Counsel, Offices of                 28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  2, XXIX; 5, XLII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI

[[Page 1365]]

  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I, VII
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Royalty Board                         37, III
  U.S. Copyright Office                           37, II
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Military Compensation and Retirement              5, XCIX
     Modernization Commission
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    5, C; 34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           2, XXXVI; 21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Geospatial-Intelligence Agency           32, I
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      5, IV; 32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III

[[Page 1366]]

National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 5, IV; 45, 
                                                  VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Privacy and Civil Liberties Oversight Board       6, X
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Safety and Environmental Enforcement, Bureau of   30, II
Saint Lawrence Seaway Development Corporation     33, IV

[[Page 1367]]

Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               2, X;5, XXI; 12, XV; 17, 
                                                  IV; 31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
U.S. Copyright Office                             37, II
Utah Reclamation Mitigation and Conservation      43, III
   Commission
[[Page 1368]]

Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I, VII
World Agricultural Outlook Board                  7, XXXVIII

[[Page 1369]]

                                     

                                     



                          Index to Chapter III



       Index to Chapter III--Social Security Acquiescence Rulings

    Editorial Note: This listing is provided for information purposes 
only. It is compiled and kept up-to-date by the Social Security 
Administration.

    This listing contains all Acquiescence Rulings (ARs) published in 
the Federal Register under the requirements of 20 CFR 402.35(b)(2) 
during the period from January 11, 1990, through April 1, 2017. The 
listing includes the AR number, title, publication date and the Federal 
Register reference number. (The parenthetical number that follows each 
AR number refers to the United States judicial circuit involved.) This 
notice also lists ARs which were rescinded during this period. In 
addition, SSA has included Federal Register references for three prior 
cumulative AR listing notices.
    SSA believes this publication will assist individuals in finding 
ARs.
    The CFR may not state the circuitwide standard in effect when SSA 
has determined that the holding in a decision of a United States Court 
of Appeals is at variance with SSA's national interpretation.

                          Acquiescence Rulings

    Published cumulative lists of ARs relating to claims under title II 
and title XVI of the Social Security Act and part B of the Black Lung 
Benefits Act were issued for ARs published prior to January 11, 1990.
    1. The first notice announcing 14 ARs issued during the period from 
January 23, 1986, through April 30, 1986, was published in the Federal 
Register on June 4, 1986 (51 FR 20354).
    2. A second notice announcing 12 additional ARs issued during the 
period from May 20, 1986, through March 31, 1987, was published in the 
Federal Register on August 7, 1987 (52 FR 29911).
    3. A third notice announcing 11 more ARs, issued during the period 
from May 1, 1987, through November 14, 1988, the withdrawal of one AR 
which was issued earlier, and the withdrawal of one of the ARs issued 
during this period was published in the Federal Register on July 10, 
1990 (55 FR 28302).

    AR 86-2R(2) Rosenberg v. Richardson, 538 F.2d 487 (2d Cir. 1976); 
Capitano v. Secretary of HHS, 732 F.2d 1066 (2d Cir. 1984)--Entitlement 
of a Deemed Widow When a Legal Widow is Entitled on the Same Earnings 
Record--Title II of the Social Security Act.
    Published: June 25, 1992, at 57 FR 28527.
    Note: The original AR for the Second Circuit Court of Appeals' 
holding in Rosenberg and Capitano (AR 86-2(2)), issued January 23, 1986, 
was rescinded and replaced by this revised AR.

    AR 86-19R(11) Woodson v. Schweiker, 656 F.2d 1169 (5th Cir. 1981)--
Interpretation of the Deemed Marriage Provision--Title II of the Social 
Security Act.
    Published: June 25, 1992, at 57 FR 28524.
    Note: The original AR applicable in the Eleventh Circuit for the 
Fifth Circuit Court of Appeals' holding in Woodson (AR 86-19(11)), 
issued May 22, 1986, was rescinded and replaced by this revised AR.

    AR 90-1(9) Paxton v. Secretary of Health and Human Services, 856 
F.2d 1352 (9th Cir. 1988)--Treatment of Dependent's Portion of Augmented 
Veterans Benefit Paid Directly To Veteran--Title XVI of the Social 
Security Act.
    Published: July 16, 1990, at 55 FR 28946. Rescinded--See section on 
Rescissions in this notice.

    AR 90-2(2) Ruppert v. Bowen, 871 F.2d 1172 (2d Cir. 1989)--
Evaluation of a Rental Subsidy as In-Kind Income for Supplemental 
Security Income (SSI) Benefit Calculation Purposes--Title XVI of the 
Social Security Act.
    Published: July 16, 1990, at 55 FR 28947.


[[Page 1370]]


    AR 90-3(4) Smith v. Bowen, 837 F.2d 635 (4th Cir. 1987)--Use of 
Vocational Expert or Other Vocational Specialist in Determining Whether 
a Claimant Can Perform Past Relevant Work--Titles II and XVI of the 
Social Security Act.
    Published: July 16, 1990, at 55 FR 28949. Rescinded--See section on 
Rescissions in this notice.

    AR 90-4(4) Culbertson v. Secretary of Health and Human Services, 859 
F.2d 319 (4th Cir. 1988), Young v. Bowen, 858 F.2d 951 (4th Cir. 1988)--
Waiver of Administrative Finality in Proceedings Involving Unrepresented 
Claimants Who Lack the Mental Competence to Request. Administrative 
Review--Titles II and XVI of the Social Security Act.
    Published: July 16, 1990, at 55 FR 28943.

    AR 90-5(2) Kier v. Sullivan, 888 F.2d 244 (2d Cir. 1989), rehearing 
denied, January 22, 1990--Assessment of Residual Functiona1 Capacity in 
Disabled Widows' Cases--Title II of the Social Security Act.
    Published: September 18, 1990, at 55 FR 38400. Rescinded--See 
section on Rescissions in this notice.

    AR 90-6(1) Cassus v. Secretary of Health and Human Services, 893 
F.2d 454 (lst Cir. 1990), rehearing denied, April 9, 1990--Assessment of 
Residual Functional Capacity in Disabled Widows' Cases--Title II of the 
Social Security Act.
    Published: September 18, 1990, at 55 FR 38398. Rescinded--See 
section on Rescissions in this notice.

    AR 90-7(9) Ruff v. Sullivan, 907 F.2d 915 (9th Cir. 1990)--
Assessment of Residual Functional Capacity in Disabled Widows? Cases--
Title II of the Social Security Act.
    Published: September 18, 1990, at 55 FR 38402. Rescinded--See 
section on Rescissions in this notice.

    AR 91-1(5) Lidy v. Sullivan, 911 F.2d 1075 (5th Cir. 1990)--Right to 
Subpoena an examining Physician for Cross-examination Purposes--Titles 
II and XVI of the Social Security Act.
    Published: December 31, 1991, at 56 FR 67625 as AR 91-X(5).
    Correction Notice Published: May 1, 1992, at 57 FR 18899--AR number 
changed to 91-1(5).

    AR 92-1(3) Mazza v. Secretary of Health and Human Services, 903 F.2d 
953 (3d Cir. 1990)--Order of Effectuation in Concurrent Application 
Cases (Title II/Title XVI).
    Published: January 10, 1992, at 57 FR 1190 as AR 91-X(3).
    Correction Notice Published: May 1, 1992, at 57 FR 18899--AR number 
changed to 92-1(3).

    AR 92-2(6) Difford v. Secretary of Health and Human Services, 910 
F.2d 1316 (6th Cir. 1990), rehearing denied, February 7, 1991--Scope of 
Review on Appeal in a Medical Cessation of Disability Case--Title II of 
the Social Security Act.
    Published: March 17, 1992, at 57 FR 9262.

    AR 92-3(4) Branham v. Heckler, 775 F.2d 1271 (4th Cir. 1985); 
Flowers v. U.S. Department of Health and Human Services, 904 F.2d 211 
(4th Cir. 1990)--What Constitutes a Significant-Work-Related Limitation 
of Function.
    Published: March 10, 1992, at 57 FR 8463. Rescinded--See section on 
Rescissions in this notice.

    AR 92-4(11) Bloodsworth v. Heckler, 703 F.2d 1233 (11th Cir. 1983)--
Judicial Review of an Appeals Council Dismissal of a Request for Review 
of an Administrative Law Judge (ALJ]) Decision.
    Published: April 8, 1992, at 57 FR 11961.

    AR 92-5(9) Quinlivan v. Sullivan, 916 F.2d 524 (9th Cir. 1990)--
Meaning of the Term ``Against Equity and Good Conscience'' in the Rules 
for Waiver of Recovery of an Overpayment--Titles II and XV of the Social 
Security Act; Title IV of the Federal Mine Safety and Health Act of 
1977.
    Published: June 22, 1992, at 57 FR 27783.

    AR 92-6(10) Walker v. Secretary of Health and Human Services, 943 
F.2d 1257 (l0th Cir. 1991)--Entitlement to Trial Work Period Before 
Approval of an Award for Benefits and Before Twelve Months Have Elapsed 
Since Onset of Disability--Titles II and XVI of the Social Security Act.
    Published: September 17, 1992, at 57 FR 43007.

    AR 92-7(9) Gonzales v. Sullivan, 914 F.2d 1197 (9th Cir. 1990)--
Effect of Initial Determination Notice Language on

[[Page 1371]]

the Application of Administrative Finality-Titles II and XVI of the 
Social Security Act.
    Published: September 30. 1992, at 57 FR 45061.

    AR 93-1(4) Branham v. Heckler, 775 F.2d 1271 (4th Cir. 1985); 
Flowers v. U.S. Department of Health and Human Services, 904 F.2d 211 
(4th Cir. 1990)--What Constitutes an Additional and Significant Work-
Related Limitation of Function--Titles II and XVI of the Social Security 
Act.
    Published: April 29, 1993, at 58 FR 25996.
    Note: The original AR for the Fourth Circuit Court of Appeals? 
holding in Branham and Flowers (AR 92-31(4)), issued March 10, 1992, was 
revised to reflect a regulatory change regarding the IQ Listing range. 
There were no other substantive changes to this AR. Rescinded--See 
section on Rescissions in this notice.

    AR 93-2(2) Conley v. Bowen, 859 F.2d 261 (2d Cir. 1988)--
Determination of Whether an Individual with a Disabling Impairment Has 
Engaged in Substantial Gainful Activity Following a Reentitlement 
Period--Title II of the Social Security Act.
    Published: May 17, 1993, at 58 FR 28887. Rescinded--See section on 
Rescissions in this notice.

    AR 93-3(6) Akers v. Secretary of Health and Human Services, 966 F.2d 
205 (6th Cir. 1992)--Attorney's Fees Based in Part on Continued Benefits 
Paid to Social Security Claimants--Title II of the Social Security Act.
    Published: July 29, 1993, at 58 FR 40662. Rescinded--See section on 
Rescissions in this notice.

    AR 93-4(2) Condon and Brodner v. Bowen, 853 F.2d 66 (2d Cir. 1988)--
Attorney's Fees Based in Part on Continued Benefits Paid to Social 
Security Claimants--Title II of the Social Security Act.
    Published: July 29, 1993, at 58 FR 40663. Rescinded--See section on 
Rescissions in this notice.

    AR 93-5(11) Shoemaker v. Bowen, 853 F.2d 858 (11th Cir. 1988)--
Attorney's Fees Based in Part on Continued Benefits Paid to Social 
Security Claimants-- Title II of the Social Security Act.
    Published: July 29, 1993, at 58 FR 40665. Rescinded--See section on 
Rescissions in this notice.

    AR 93-6(8) Brewster on Behalf of Keller v. Sullivan, 972 F.2d 898 
(8th Cir. 1992)-- Interpretation of the Secretary's Regulation Regarding 
Presumption of Death--Title II of the Social Security Act
    Published: August 16, 1993, at 58 FR 43369. Rescinded--See section 
on Rescissions in this notice.

    AR 94-1(10) Wolfe v. Sullivan, 988 F.2d 1025 (10th Cir. 1993)--
Contributions to Support re: Posthumous Illegitimate Child--Title II of 
the Social Security Act.
    Published: June 27, 1994, at 59 FR 33003.

    AR 94-2(4) Lively v. Secretary of Health and Human Services, 820 
F.2d 1391 (4th Cir. 1987)--Effect of Prior Disability Findings on 
Adjudication of a Subsequent Disability Claim Arising Under the Same 
Title of the Social Security Act--Titles Il and XVI of the Social 
Security Act.
    Published: July 7, 1994, at 59 FR 34849. Rescinded--See section on 
Rescissions in this notice.

    AR 95-1(6) Preslar v. Secretary of Health and Human Services, 14 
F.3d 1107 (6th Cir.1994)-- Definition of Highly Marketable Skills for 
Individuals Close to Retirement Age--Titles II and XVI of the Social 
Security Act.
    Published: May 4, 1995, at 60 FR 22091. Rescinded--See section on 
Rescissions in this notice.

    AR 95-2(9) Hodge v. Shalala, 27 F.3d 430 (9th Cir. 1994)--Workers' 
Compensation --Proration of a Lump-Sum Award for Permanent Disability 
Over the Remainder of an Individual's Working Life Under Oregon Workers' 
Compensation Law-Title II of the Social Security Act.
    Published: July 12, 1995, at 60 FR 35987.

    AR 96-1(6) DeSonier v. Sullivan, 906 F.2d 228 (6th Cir. 1990)--
Method of Application of State Intestate Succession Law in Determining 
Entitlement to Child?s Benefits--Title II of the Social Security Act.
    Published: June 3, 1996, at 61 FR 27942.


[[Page 1372]]


    AR 97-1(1) Parisi By Cooney v. Chater, 69 F.3d 614 (1st Cir. 1995)--
Reduction of Benefits Under the Family Maximum in Cases Involving Dual 
Entitlement--Title II of the Social Security Act.
    Published: January 13, 1997, at 62 FR 1792. Rescinded--See section 
on Rescissions in this notice.

    AR 97-2(9) Gamble v. Chater, 68 F.3d 319 (9th Cir. 1995)--Amputation 
of a Lower Extremity--When the Inability to Afford the Cost of a 
Prosthesis Meets the Requirements of Section 1.10C of the Listing of 
Impairments--Titles II and XVI of the Social Security Act.
    Published: January 13, 1997, at 62 FR 1791. Rescinded--See section 
on Rescissions in this notice.

    AR 97-3(1l) Daniels on Behalf of Daniels v. Sullivan, 979 F.2d 1516 
(11th Cir. 1992)--Application of a State's Intestacy Law Requirement 
that Paternity be Established During the Lifetime of the Father--Title 
II of the Social Security Act.
    Published: August 4, 1997, at 62 FR 41989.

    AR 97-4(9) Chavez v. Bowen, 844 F.2d 691 (9th Cir. 1988)--Effect of 
a Prior Final Decision That a Claimant is Not Disabled, And of Findings 
Contained Therein, On Adjudication of a Subsequent Disability Claim 
Arising Under the Same Title of the Social Security Act--Titles II and 
XVI of the Social Security Act.
    Published: December 3, 1997, at 62 FR 64038.

    AR 98-1(8) Newton v. Chater, 92 F.3d 688 (8th Cir. 1996)--
Entitlement to Trial Work Period Before Approval of an Award for 
Benefits and Before Twelve Months Have Elapsed Since Onset of 
Disability--Titles II and XVI of the Social Security Act.
    Published: February 23, 1998, at 63 FR 9037. Rescinded--See section 
on Rescissions in this notice.

    AR 98-2(8) Sird v. Chater, 105 F.3d 401 (8th Cir. 1997)--Mental 
Retardation--What Constitutes an Additional and Significant Work-Related 
Limitation of Function--Titles II and XVI of the Social Security Act.
    Published: February 24, 1998, at 63 FR 9279. Rescinded--See section 
on Rescissions in this notice.

    AR 98-3(6) Dennard v. Secretary of Health and Human Services, 907 
F.2d 598 (6th Cir. 1990)--Effect of a Prior Finding of the Demands of 
Past Work on Adjudication of a Subsequent Disability Claim Arising Under 
the Same Title of the Social Security Act--Titles II and XVI of the 
Social Security Act.
    Published: June 1, 1998. at 63 FR 29770.

    AR 98-4(6) Drummond v. Commissioner of Social Security, 126 F.3d 
1337 (6th Cir. 1997)--Effect of Prior Findings on Adjudication of a 
Subsequent Disability Claim Arising Under the Same Title of the Social 
Security Act--Titles II and XVI of the Social Security Act.
    Published: June 1, 1998, at 63 FR 29771.

    AR 98-5(8) State of Minnesota v. Apfel, 151 F.3d 742 (8th Cir. 
1998)--Coverage for Employees Under a Federal-State Section 218 
Agreement or Modification and Application of the Student Services 
Exclusion From Coverage to Services Performed by Medical Residents--
Title II of the Social Security Act.
    Published: October 30, 1998, at 63 FR 58444.

    AR 99-1(2) Florez on Behalf of Wallace v. Callahan, 156 F.3d 438 (2d 
Cir. 1998)-- Supplemental Security Income--Deeming of Income From a 
Stepparent to a Child When the Natural Parent is Not Living In the Same 
Household--Title XVI of the Social Security Act.
    Published: February 1, 1999, at 64 FR 4923. Rescinded--See section 
on Rescissions in this notice.

    AR 99-2(8) Kerns v. Apfel, 160 F.3d 464 (8th Cir. 1998)--Definition 
of Highly Marketable Skills for Individuals Close to Retirement Age--
Titles II and XVI of the Social Security Act.
    Published: March 11, 1999, at 64 FR 12205. Rescinded--See section on 
Rescissions in this notice.

    AR 99-3(5) McQueen v. Apfel, 168 F.3d 152 (5th Cir. 1999)-- 
Definition of Highly Marketable Skills for Individuals Close to 
Retirement Age--Titles II and XVI of the Social Security Act.
    Published: May 27, 1999, at 64 FR 28853. Rescinded--See section on 
Rescissions in this notice.


[[Page 1373]]


    AR 99-4(11) Bloodsworth v. Heckler, 703 F.2d 1233 (11th Cir. 1983)--
Judicial Review of an Appeals Council Dismissal of a Request for Review 
of an Administrative Law Judge Decision--Titles II and XVI of the Social 
Security Act.
    Published: October 26, 1999, at 64 FR 57687.
    Note: The original AR for the Eleventh Circuit Court of Appeals' 
holding in Bloodsworth (AR 92-4(11)), issued April 8, 1992, was revised 
to delete a parenthetical statement and to update the AR?s language. 
These revisions were technical corrections only and did not involve any 
substantive changes.

    AR 00-1(4) Albright v. Commissioner of the Social Security 
Administration, 174 F.3d 473 (4th Cir. 1999)--Effect of Prior Disability 
Findings on Adjudication of a Subsequent Disability Claim--Titles II and 
XVI of the Social Security Act.
    Published: January 12, 2000, at 65 FR 1936.

    AR 00-2(7) Hickman v. Apfel, 187 F.3d 683 (7th Cir. 1999)--
Evidentiary Requirements for Determining Medical Equivalence to a Listed 
Impairment-- Titles II and XVI of the Social Security Act.
    Published: May 3, 2000, at 65 FR 25783. Rescinded--See section on 
Rescissions in this notice.

    AR 00-3(10) Haddock v. Apfel, 196 F.3d 1084 (l0th Cir. 1999)--Use of 
Vocational Expert Testimony and the Dictionary of Occupational Titles 
Under 20 CFR 404.1566, 416.966-Titles II and XVI of the Social Security 
Act.
    Published: June 20, 2000, at 65 FR 38312. Rescinded--See section on 
Rescissions in this notice.

    AR 00-4(2) Curry v. Apfel, 209 F.3d 117 (2d Cir. 2000)--Burden of 
Proving Residual Functional Capacity at Step Five of the Sequential 
Evaluation Process for Determining Disabi1ity--Titles II and XVI of the 
Social Security Act.
    Published: September 11, 2000, at 65 FR 54879. Rescinded--See 
section on Rescissions in this notice.

    AR 00-5(6) Salamalekis v. Apfel, 221 F.3d 828 (6th Cir. 2000)--
Entitlement to Trial Work Period Before Approval of an Award of Benefits 
and Before 12 Months Have Elapsed Since the Alleged Onset of 
Disability--Titles II and XVI of the Social Security Act.
    Published: November 15, 2000, at 65 FR 69116. Rescinded--See section 
on Rescissions in this notice.

    AR 01-1(3) Sykes v. Apfel, 228 F.3d 259 (3d Cir. 2000)--Using the 
Grid Rules as a Framework for Decisionmaking When an Individual's 
Occupational Base is Eroded by a Nonexertional Limitation--Titles II and 
XVI of the Social Security Act.
    Published: January 25, 2001, at 66 FR 7829.

    AR 03-1(7) Blakes v. Barnhart, 331 F.3d 565 (7th Cir. 2003)--Cases 
Involving Sections 12.05 and 112.05 of the Listing of Impairments That 
Are Remanded By a Court for Further Proceedings Under Titles II and XVI 
of the Social Security Act.
    Published: December 23, 2003, at 68 FR 74279.

    AR 04-1(9) Howard on behalf of Wolff v. Barnhart, 341 F.3d 1006 (9th 
Cir. 2003)--Applicability of the Statutory Requirement for Pediatrician 
Review in Childhood Disability Cases to the Hearings and Appeals Levels 
of the Administrative Review Process Under Title XVI of the Social 
Security Act.
    Published: April 26, 2004, at 69 FR 22578.

    AR 05-1(9) Gillett-Netting v. Barnhart, 371 F.3d 593 (9th Cir. 
2004), rehearing denied, December 14, 2004 --Applicability of State Law 
and the Social Security Act in Determining Whether a Child Conceived by 
Artificial Means after an Insured Person's Death is Eligible for Child's 
Insurance Benefits--Tit1e II of the Social Security Act.
    Published: September 22, 2005, at 70 FR 55656.

    AR 06-1(2) Fowlkes v. Adamec, 432 F.3d 90 (2d Cir. 2005)--
Determining Whether an Individual is a Fugitive Felon Under the Social 
Security Act (Act)--'I'itles II and XVI of the Act.
    Published: April 6, 2006, at 71 FR 17551.

                   Rescissions Without Replacement ARs

    AR. 86-l(9) Summy v. Schweiker, 688 F.2d 1233 (9th Cir. 1982)--Third 
party payments for medical care or services--Title XVI of the Social 
Security Act.

[[Page 1374]]

    Notice of Rescission Published: July 5, 1994, at 59 FR 34444.

    AR 86-6(3) Aubrey v. Richardson, 462 F.2d 782 (3d Cir. 1972); 
Shelnutt v. Heckler, 723 F.2d 1131 (3d Cir. 1983)--Interpretation of the 
Secretary's Regulation Regarding Presumption of Death-- Title II of the 
Social Security Act.
    Notice of Rescission Published: July 14, 1995, at 60 FR 36327.

    AR 86-7(5) Autrey v. Harris, 639 F.2d 1233 (5th Cir. 1981); Wages v. 
Schweiker, 659 F.2d 59 (5th Cir. 1981)--Interpretation of the 
Secretary's Regulation Regarding Presumption of Death--Title II of the 
Social Security Act.
    Notice of Rescission Published: July 14, 1995, at 60 FR 36327.

    AR 86-8(6) Johnson v. Califano, 607 F.2d 1178 (6th Cir. 1979)--
Interpretation of the Secretary's Regulation Regarding Presumption of 
Death--Title II of the Social Security Act.
    Notice of Rescission Published: July 14, 1995, at 60 FR 36327.

    AR 86-9(9) Secretary of Health, Education and Welfare v. Meza, 386 
F.2d 389 (9th Cir. 1966); Gardner v. Wilcox, 370 F.2d 492 (9th Cir. 
1966)--Interpretation of the Secretary's Regulation Regarding 
Presumption of Death--Title II of the Social Security Act.
    Notice of Rescission Published: July 14, 1995, at 60 FR 36327.

    AR 86-10(10) Edwards v. Califano, 619 F.2d 865 (10th Cir. 1980)--
Interpretation of the Secretary's Regulation Regarding Presumption of 
Death--Title II of the Social Security Act.
    Notice of Rescission Published: July 14, 1995, at 60 FR 36327.

    AR 86-11(11) Autrey v. Harris, 639 F.2d 1233 (5th Cir. 1981)--
Interpretation of the Secretary's Regulation Regarding Presumption of 
Death--Title II of the Social Security Act.
    Notice of Rescission Published: July 14, 1995, at 60 FR 36327.

    AR 86-17(9) Owens v. Schweiker, 692 F.2d 80 (9th Cir. 1982)--Child?s 
Benefits--Title II of the Social Security Act.
    Notice of Rescission Published: October 28, 1998, at 63 FR 57727.

    AR 87-1(6) Webb v. Richardson, 472 F.2d 529 (6th Cir. 1972)--
Attorneys' Fees--Single Fee, Not to Exceed 25 Percent of Past-Due 
Benefits, Set by Tribunal Which Ultimately Upho1ds the Claim--Title II 
of the Social Security Act.
    Notice of Rescission Published: March 3, 1995, at 60 FR 11977.

    AR 87-2(11) Butterworth v. Bowen, 796 F.2d 1379 (11th Cir. 1986)--
The Conditions under Which the Appeals Council has the Right to Reopen 
and Revise Prior Decisions--Titles II and XVI of the Social Security 
Act.
    Notice of Rescission Published: July 7, 1998, at 63 FR 36726.

    AR 87-3(9) Hart v. Bowen, 799 F.2d 567 (9th Cir. 1986)--Current 
Market Value of an Installment Sa1es Contract as an Excess Resource.
    Notice of Rescission Published: February 9, 1995, at 60 FR 7782.

    AR 87-4(8) Iamarino v. Heckler, 795 F.2d 59 (8th Cir. 1986)--
Positive Presumption of Substantial Gainful Activity (SGA) for Sheltered 
Work.
    Notice of Rescission Published: July 11, 2000, at 65 FR 42793.

    AR 87-5(3) Velazquez v. Heckler, 802 F.2d 680 (3d Cir. 1986)--
Consideration of Vocational Factors in Past Work Determination.
    Notice of Rescission Published: July 16, 1990, at 55 FR 28943.

    AR 88-1(11) Patterson v. Bowen, 799 F.2d 1455 (11th Cir. 1986), 
rehearing denied, February 12, 1987--Use of the Age Factor in the 
Medical-Vocational Guidelines in Making Disability Decisions.
    Notice of Rescission Published: April 6, 2000, at 65 FR 18143.

    AR 88-3(7) McDonald v. Bowen, 800 F.2d 153 (7th Cir. 1986), amended 
on rehearing, 818 F.2d 559 (7th Cir. 1987)--Entitlement to Benefits 
Where a Person Returns to Work Less Than 12 Months After Onset of 
Disability.
    Notice of Rescission Published: June 10, 2002, at 67 FR 39781.

    AR 88-5(1) McCuin v. Secretary of Health and Human Services, 817 
F.2d 161 (1st Cir. 1987)--Reopening by the Appeals Council of Decisions 
of Administrative Law Judges under Titles II and XVI of the Social 
Security Act.

[[Page 1375]]

    Notice of Rescission Published: February 23, 1994, at 59 FR 8650.

    AR 88-7(5) Hickman v. Bowen, 803 F.2d 1377 (5th Cir. 1986)--
Evaluation of Loans of In-Kind Support and Maintenance for Supplemental 
Security Income Benefit Calculation Purposes.
    Notice of Rescission Published: September 8, 1992, at 57 FR 40918.

    AR 90-1(9) Paxton v. Secretary of Health and Human Services, 856 
F.2d 1352 (9th Cir.1988)--Treatment of Dependent's Portion of Augmented 
Veteran's Benefit Paid Directly To Veteran--Title XVI of the Social 
Security Act.
    Notice of Rescission Published: November 17, 1994, at 59 FR 59416.

    AR 90-3(4) Smith v. Bowen, 837 F.2d 635 (4th Cir. 1987)--Use of 
Vocational Expert or Other Vocational Specialist in Determining Whether 
a Claimant Can Perform Past Relevant Work--Titles II and XVI of the 
Social Security Act.
    Notice of Rescission Published: August 26, 2003, at 68 FR 51317.

    AR 90-5(2) Kier v. Sullivan, 888 F.2d 244 (2d Cir. 1989), rehearing 
denied, January 22, 1990--Assessment of Residual Functional Capacity in 
Disabled Widows? Cases--Title II of the Social Security Act.
    Notice of Rescission Published: May 22, 1991, at 56 FR 23592.

    AR 90-6(1) Cassas v. Secretary of Health and Human Services, 393 
F.2d 454 (1st Cir. 1990), rehearing denied, April 9, l990--Assessment of 
Residual Functional Capacity in Disabled Widows' Cases--Title II of the 
Social Security Act.
    Notice of Rescission Published: May 22, 1991, at 56 FR 23591.

    AR 90-7(9) Ruff v. Sullivan, 907 F.2d 915 (9th Cir. 1990)--
Assessment of Residual Functional Capacity in Disabled Widows' Cases--
Title II of the Social Security Act.
    Notice of Rescission Published: May 22, 1991, at 56 FR 23592.

    AR 92-3(4) Branham v. Heckler, 775 F.2d 1271 (4th Cir. 1985); 
Flowers v. U.S. Department of Health and Human Services, 904 F.2d 211 
(4th Cir. 1990)--What Constitutes a Significant Work-Related Limitation 
of Function.
    Notice of Rescission Published: August 21, 2000, at 65 FR 50784.

    AR 92-6(10) Walker v. Secretary of Health and Human Services, 943 
F.2d 1257 (10th Cir. 1991)--Entitlement to Trial Work Period Before 
Approval of an Award for Benefits and Before Twelve Months Have Elapsed 
Since Onset of Disability-Titles II and XVI of the Social Security Act.
    Notice of Rescission Published: June 10, 2002, at 67 FR 39871.

    AR 93-l(4) Branham v. Heckler, 775 F.2d 1271 (4th Cir. 1985); 
Flowers v. U.S. Department of Health and Human Services, 904 F.2d 211 
(4th Cir. 1990)--What Constitutes an Additional and Significant Work-
Related Limitation of Function--Titles II and XVI of the Social Security 
Act.
    Notice of Rescission Published: August 21, 2000, at 65 FR 50784.

    AR 93-2(2) Conley v. Bowen, 859 F.2d 261 (3d Cir. 1988)--
Determination of Whether an Individual With a Disabling Impairment Has 
Engaged in Substantial Gainful Activity Following a Reentitlement 
Period--Title II of the Social Security Act.
    Notice of Rescission Published: August 10, 2000, at 65 FR 42793.

    AR 93-3(6) Akers v. Secretary of Health and Human Services, 966 F.2d 
205 (6th Cir. 1992)--Attorney's Fees Based in Part on Continued Benefits 
Paid to Social Security Claimants--Title II of the Social Security Act.
    Notice of Rescission Published: April 14, 2000, at 65 FR 20239.

    AR 93-4(2) Condon and Brodner v. Bowen, 853 F.2d 66 (2d Cir. 1988)--
Attorney's Fees Based in Part on Continued Benefits Paid to Social 
Security Claimants--Title II of the Social Security Act.
    Notice of Rescission Published: April 14, 2000, at 65 FR 20239.

    AR 93-5(11) Shoemaker v. Bowen, 853 F.2d 858 (11th Cir.1988)--
Attorney's Fees Based in Part on Continued Benefits Paid to Social 
Security Claimants--Title II of the Social Security Act.
    Notice of Rescission Published: April 14, 2000, at 65 FR 20239.


[[Page 1376]]


    AR 93-6(8) Brewster on Behalf of Keller v. Sullivan, 972 F.2d 898 
(8th Cir. 1992)--Interpretation of the Secretary's Regulation Regarding 
Presumption of Death--Title II of the Social Security Act.
    Notice of Rescission Published: July 14, 1995, at 60 FR 36327.

    AR 94-2(4) Lively v. Secretary of Health and Human Services, 820 
F.2d 1391 (4th Cir. 1987)--Effect of Prior Disability Findings on 
Adjudication of a Subsequent Disability Claim Arising Under the Same 
Title of the Social Security Act--Titles II and XVI of the Social 
Security Act.
    Notice of Rescission Published: January 12, 2000, at 65 FR 1936.

    AR 95-1(6) Preslar v. Secretary of Health and Human Services, 14 
F.3d 1107 (6th Cir. 1994)--Definition of Highly Marketable Skills for 
Individuals Close to Retirement Age--Titles II and XVI of the Social 
Security Act.
    Notice of Rescission Published: April 6, 2000, at 65 FR 18144.

    AR 97-1(1) Parisi By Cooney v. Chater, 69 F.3d 814 (1st Cir. 1995)--
Reduction of Benefits Under the Family Maximum In Cases Involving Dual 
Entitlement--Title II of the Social Security Act.
    Notice of Rescission Published: October 27, 1999, at 64 FR 57919.

    AR 97-2(9) Gamble v. Chater, 68 F.3d 319 (9th Cir. 1995)--Amputation 
of a Lower Extremity--When the Inability to Afford the Cost or a 
Prosthesis Meets the Requirements of Section 1.10C of the Listing of 
Impairments--Titles II and XVI of the Social Security Act.
    Notice of Rescission Published: November 19, 2001, at 66 FR 58047.

    AR 98-1(8) Newton v. Chater, 92 F.3d 688 (8th Cir. 1996)--
Entitlement to Trial Work Period Before Approval of an Award for 
Benefits and Before Twelve Months Have Elapsed Since Onset of 
Disability--Titles II and XVI of the Social Security Act.
    Notice of Rescission Published: June 10, 2002, at 67 FR 39781.

    AR 98-2(8) Sird v. Chater, 105 F.3d 401 (8th Cir. 1997)--Mental 
Retardation--What Constitutes an Additional and Significant Work-Related 
Limitation of Function--Titles II and XVI of the Social Security Act.
    Notice of Rescission Published: August 21, 2000, at 65 FR 50784.

    AR 99-1(2) Florez on Behalf of Wallace v. Callahan, 156 F.3d 438 (2d 
Cir. 1998)--Supplemental Security Income--Deeming of Income From a 
Stepparent to a Child When the Natural Parent is Not Living in the Same 
Household--Title XVI of the Social Security Act.
    Notice of Rescission Published: May 15, 2008, at 73 FR 28181.

    AR 99-2(8) Kerns v. Apfel, 160 F.3d 164 (8th Cir. 1998)--Definition 
of Highly Marketable Skills for Individuals Close to Retirement Age-
Titles II and XVI of the Social Security Act.
    Notice of Rescission Published: April 6, 2000, at 65 FR 18144.

    AR 99-3(5) McQueen v. Apfel, 168 F.3d 152 (5th Cir. 1999)--
Definition of Highly Marketable Skills for Individuals Close to 
Retirement Age--Titles II and XVI of the Social Security Act.
    Notice of Rescission Published: April 6, 2000, at 65 FR 18144.

    AR 00-2(7) Hickman v. Apfel, 187 F.3d 683 (7th Cir. 1999)--
Evidentiary Requirements for Determining Medical Equivalence to a Listed 
Impairment--Titles II and XVI of the Social Security Act.
    Notice of Rescission Published: March 1, 2006, at 71 FR 10584.

    AR 00-3(10) Haddock v. Apfel, 196 F.3d 1084 (10th Cir. 1999)--Use of 
Vocational Expert Testimony and the Dictionary of Occupational Titles 
Under 20 CFR 404.1566, 416.966--Titles II and XVI of the Social Security 
Act.
    Notice of Rescission Published: December 4, 2000, at 65 FR 75758.

    AR 00-4(2) Curry v. Apfel, 209 F.3d 117 (2d Cir. 2000)--Burden of 
Proving Residual Functional Capacity at Step Five of the Sequential 
Evaluation Process for Determining Disability--Titles II and XVI of the 
Social Security Act.
    Notice of Rescission Published: August 26, 2003, at 68 FR 51317.

    AR 00-5(6) Salamalekis v. Apfel, 221 F.3d 828 (6th Cir. 2000)--
Entitlement to Trial Work Period Before Approval of an Award of Benefits 
and Before 12 Months Have Elapsed Since the Alleged

[[Page 1377]]

Onset of Disability--Titles II and XVI of the Social Security Act.
    Notice of Rescission Published: June 10, 2002, at 67 FR 39781.

    AR 12-1(8)  Petersen v. Astrue, 633 F.3d 633 (8th Cir. 2011)--
Whether a National Guard Technician Who Worked in Noncovered Employment 
is Exempt from the Windfall Elimination Provision (WEP)--Title II of the 
Social Security Act.
    Published: August 27, 2012, at 77 FR 51842.
    Correction Notice Published: September, 5, 2012 at 77 FR 54646.

    AR 14-1(8) Brock v.Astrue, 674 F.3d 1062 (8th Cir.2012)--Requiring 
Vocational Specialist (VS) or Vocational Expert (VE) Evidence When an 
Individual has a Severe Mental Impairment(s)--Titles II and XVI of the 
Social Security Act.
     Published: May 22, 2014, at 79 FR 29473.

    AR 15-1(4) Radford v. Colvin, 734 F.3d 288 (4th Cir. 2013)--Standard 
for Meeting Section 1.04A of the Listing of Impairments for Disorders of 
the Spine with Evidence of Nerve Root Compression--Titles II and XVI of 
the Social Security Act.
    Published: September 23, 2015, at 80 FR 57418.

    AR 16-1(7) Boley v. Colvin, 761 F.3d 803 (7th Cir. 2014)--Judicial 
Review of an Administrative Law Judge's Order Finding No Good Cause for 
a Late Hearing Request and Dismissing the Request as Untimely--Titles II 
and XVI of the Social Security Act.
    Published: March 14, 2016, at 81 FR 13438.

[[Page 1379]]

        ................................................................


List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations (CFR) that 
were made by documents published in the Federal Register since January 
1, 2012 are enumerated in the following list. Entries indicate the 
nature of the changes effected. Page numbers refer to Federal Register 
pages. The user should consult the entries for chapters, parts and 
subparts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult the 
annual edition of the monthly List of CFR Sections Affected (LSA). The 
LSA is available at www.fdsys.gov. For changes to this volume of the CFR 
prior to 2001, see the ``List of CFR Sections Affected, 1949-1963, 1964-
1972, 1973-1985, and 1986-2000'' published in 11 separate volumes. The 
``List of CFR Sections Affected 1986-2000'' is available at 
www.fdsys.gov.

                                  2012

20 CFR
                                                                   77 FR
                                                                    Page
Chapter III
404  Policy statement........................................4653, 13968
404.937  (b)(1) amended............................................10658
404.1500--404.1599 (Subpart P)  Authority citation revised.........10655
    Authority citation revised.....................................43494
404.1505  (a) amended..............................................43494
404.1512  (e) removed; (f) and (g) redesignated as new (e) and 
        (f); (a), (b)(6) and new (e) amended.......................10655
404.1519a  (a) and (b) introductory text revised; (b)(3) amended; 
        (b)(4) removed; (b)(5) redesignated as new (b)(4)..........10655
404.1520  (a)(3) amended...........................................10655
    (a)(4), (iv), (v) and (f) amended; (h) added...................43494
404.1520b  Added...................................................10655
404.1527  (b) revised; (c) removed; (d), (e) and (f) redesignated 
        as new (c), (d) and (e); new (c) introductory text, (2) 
        introductory text, new (d)(3), new (e) introductory text, 
        (2)(ii) and (iii) amended..................................10656
    (e)(1)(ii) amended.............................................43494
404.1545  (a)(3) amended...........................................10656
    (a)(5)(ii) amended.............................................43494
404.1560  (b) and (c)(1) amended...................................43494
404.1565  (b) amended..............................................43494
404.1569  Amended..................................................43494
404.1594  (f)(8) revised; (f)(9) added.............................43495
404.1500--404.1599 (Subpart P)  Appendix 1 amended.................35265
410  Removed.......................................................19079
411.130  Revised; interim...........................................1864
416  Policy statement........................................4653, 13968
416.905  (a) amended...............................................43495
416.912  (e) removed; (f) and (g) redesignated as new (e) and (f); 
        (a), (b)(6) and new (e) amended............................10656
416.919a  (a) and (b) introductory text revised; (b)(3) amended; 
        (b)(4) removed; (b)(5) redesignated as new (b)(4)..........10656
416.920  (a)(3) amended............................................10656
    (a)(4), (iv), (v) and (f) amended; (h) added...................43495
416.920b  Added....................................................10656
416.927  (b) revised; (c) removed; (d), (e) and (f) redesignated 
        as new (c), (d) and (e); new (c) introductory text, (2) 
        introductory text, new (d)(3), new (e) introductory text, 
        (2)(ii) and (iii) amended..................................10657
    (e)(1)(ii) amended.............................................43495
416.945  (a)(3) amended............................................10657
    (a)(5)(ii) amended.............................................43495
416.960  (b) introductory text and (c)(1) amended..................43495
416.965  (b) amended...............................................43495

[[Page 1380]]

416.969  Amended...................................................43495
416.987  (b) amended...............................................43495
416.994  (b)(5)(vii) revised; (b)(5)(viii) added...................43496
416.1437  (b)(1) amended...........................................10658
418.1322  Regulation at 75 FR 75890 confirmed......................43498
418.2001--418.2355 (Subpart C)  Regulation at 75 FR 75891 
        confirmed..................................................43498
418.3120  Regulation at 75 FR 81845 confirmed.......................2448
418.3123  Regulation at 75 FR 81845 confirmed.......................2448
418.3335  Regulation at 75 FR 81845 confirmed.......................2448
418.3345  Regulation at 75 FR 81846 confirmed.......................2448
418.3350  Regulation at 75 FR 81846 confirmed.......................2448
418.3405  Regulation at 75 FR 81846 confirmed.......................2448
418.3425  Regulation at 75 FR 81846 confirmed.......................2448

                                  2013

20 CFR
                                                                   78 FR
                                                                    Page
Chapter III
404.900  (a) amended; interim......................................57259
404.936  (h) amended; (c) revised..................................29626
    (h) amended....................................................45452
404.938  (b) revised...............................................29627
404.942  (g) revised...............................................45460
404.950  (a) and (e) revised.......................................29627
404.1513  (a)(2) amended...........................................46501
404.1501--404.1599 (Subpart P)  Appendix 1 amended; eff. 4-5-13.....7660
    Appendix 1 amended; eff. 4-29-13...............................18839
    Appendix 1 amended...............................46501, 54757, 72572
    Technical correction...........................................73696
404.1615  (c)(3) revised...........................................66639
404.2045  (a) amended..............................................46501
405.315  (c) revised...............................................29627
411.130  Regulation at 77 FR 1864 confirmed........................45453
416.645  (a) amended...............................................46501
416.913  (a)(2) amended............................................46502
416.1015  (c)(3) revised...........................................66639
416.1436  (h) amended; (c) revised.................................29628
    (h) amended....................................................45452
416.1438  (b) revised..............................................29628
416.1442  (g) revised..............................................45460
416.1450  (a) and (e) revised......................................29628
418.1001  (b) amended; interim.....................................57259
418.1101  (c) revised; interim.....................................57259
418.1105  (b) and (c) revised; interim.............................57259
418.1115  Revised; interim.........................................57259
418.1120  Revised; interim.........................................57259
418.1125  (b) removed; (c) redesignated as (b); interim............57260
418.1130  Removed; interim.........................................57260
418.1230  (a) removed; (b), (c) and (d) redesignated as (a), (b) 
        and (c); new (a) revised; interim..........................57260
418.1350  Revised; interim.........................................57260

                                  2014

20 CFR
                                                                   79 FR
                                                                    Page
Chapter III
403.120  (c) revised................................................7577
404.2  (c)(5)(vi) revised..........................................33684
404.501--404.545 (Subpart F)  Authority citation revised...........33684
404.515  (a) heading revised; (a) amended..........................33684
404.900  Regulation at 78 FR 57259 confirmed.......................11706
404.929  Revised...................................................35931
404.936  (d) through (h) redesignated as (e) through (i); new (d) 
        added; (b), (c)(1) and new (e) and (f) revised.............35931
    (h) amended....................................................41882
404.938  (b) revised...............................................35932
404.1018  (b)(1)(iv) amended.......................................33684
404.1022  (c) revised..............................................33684
404.1501--404.1599 (Subpart P)  Appendix 1 amended.................10662
404.1512  (b)(7) and (8) amended...................................33685
404.1501--404.1599 (Subpart P)  Appendix 1 amended.................61224
    Appendix 1 corrected...........................................67350
404.1614  (a) revised; (b) removed; (c) redesignated as new (b); 
        interim....................................................33682
404.1615  (c)(3) revised...........................................51243
405.315  (a), (b) and (c)(1) revised; (d) and (e) added............35932
    (e) amended....................................................41883
    (e) correctly amended..........................................44276
405.316  (a) and (b)(5) revised....................................35933
405.317  Revised...................................................35933
405.350  (a) amended...............................................35933
416.545  (b) amended...............................................33685
416.912  (b)(7) and (8) amended....................................33685

[[Page 1381]]

416.924  Regulation at 76 FR 41687 confirmed.......................36204
416.1014  (a) revised; (b) removed; (c) redesignated as new (b); 
        interim....................................................33683
416.1015  (c)(3) revised...........................................51243
416.1429  Revised..................................................35933
416.1436  (d) through (h) redesignated as (e) through (i); new (d) 
        added; (b), (c)(1) and new (e) and (f) revised.............35933
    (h) amended....................................................41883
416.1438  (b) revised..............................................35934
418.1001  Regulation at 78 FR 57259 confirmed......................11706
418.1101  Regulation at 78 FR 57259 confirmed......................11706
418.1105  Regulation at 78 FR 57259 confirmed......................11706
418.1115  Regulation at 78 FR 57259 confirmed......................11706
418.1120  Regulation at 78 FR 57259 confirmed......................11706
418.1125  Regulation at 78 FR 57260 confirmed......................11706
418.1130  Regulation at 78 FR 57260 confirmed......................11706
418.1230  Regulation at 78 FR 57260 confirmed......................11706
418.1350  Regulation at 78 FR 57260 confirmed......................11706
429.102  (c) revised................................................7577
429.202  (b) revised................................................7577
435  Removed; interim..............................................76078
437  Removed; interim..............................................76078

                                  2015

20 CFR
                                                                   80 FR
                                                                    Page
Chapter III
404.401--404.480 (Subpart E)  Authority citation revised...........34050
404.408a  (a) and (d) revised; (b)(6), (7) and (8) added...........34050
404.900  (b) revised; eff. 4-20-15.................................14835
404.903  (z) and (aa) revised........................................400
404.935  Revised; eff. 4-20-15.....................................14835
404.936  (i) amended...............................................37971
404.942  (g) revised...............................................31991
404.1512  (a), (b) and (c) revised; eff. 4-20-15...................14836
404.1501--404.1599 (Subpart P)  Appendix 1 amended......2, 19525, 21165, 
                                                                   28826
    Appendix 1 correctly amended...................................48248
404.1615  (c)(3) revised...........................................63093
404.1717  (a)(6) and (d)(1)(ii) revised..............................400
404.1740  (b)(1) and (2)(i) through (vi) revised; (b)(2)(vii) 
        added; eff. 4-20-15........................................14837
405.1  (c)(2) amended; eff. 4-20-15................................14837
405.331  (a) amended; eff. 4-20-15.................................14837
416.912  (a), (b) and (c) revised; eff. 4-20-15....................14837
416.924b  (b) revised..............................................19529
416.926a  (m)(6) and (7) removed; (m)(8) redesignated as new 
        (m)(6).....................................................19530
416.934  (j) and (k) added.........................................19530
416.1015  (c)(3) revised...........................................63093
416.1400  (b) revised; eff. 4-20-15................................14838
416.1403  (a)(24) and (25) added.....................................400
416.1435  Revised; eff. 4-20-15....................................14838
416.1436  (i) amended..............................................37971
416.1442  (g) revised..............................................31991
416.1517  (a)(6), (d)(1)(ii) and (f)(1) revised......................400
416.1540  (b)(1) and (2)(i) through (vi) revised; (b)(2)(vii) 
        added; eff. 4-20-15........................................14838
422.103  (b), (c)(1) and (e)(1) revised............................47833
422.107  (a), (c) and (g) revised; (e)(1) amended..................47834
422.110  (a) revised...............................................47834
422.801--422.850 (Subpart I)  Added................................61734
435  Regulation at 79 FR 76078 confirmed...........................69564
437  Regulation at 79 FR 76078 confirmed...........................69564

                                  2016

20 CFR
                                                                   81 FR
                                                                    Page
Chapter III
404.317  Amended...................................................19033
404.401  (a)(4) revised............................................19033
404.408  (a)(2)(ii) revised........................................19033
404.900  (b) amended...............................................90992
404.929  Amended...................................................90992
404.935  Revised...................................................90993
404.936  (i) amended...............................................41214
404.938  (a) and (b) revised.......................................90993
404.939  Revised...................................................90993
404.944  Revised...................................................90993
404.949  Revised...................................................90993
404.950  (c) and (d) revised.......................................90993
404.951  Revised...................................................90994

[[Page 1382]]

404.968  (a) introductory text amended.............................90994
404.970  Revised...................................................90994
404.976  (b)(1) revised.............................................6171
    Revised........................................................90994
404.979  Amended...................................................90994
404.1503b  Added...................................................65540
404.1520a  (c)(3), (4) and (d)(1) revised..........................66160
404.1574  (c)(1) amended; (c)(3) revised; (c)(4) removed; (c)(5) 
        redesignated as new (c)(4).................................71369
404.1575  (d)(1) amended; (d)(3) revised; (d)(4) removed; (d)(5) 
        redesignated as new (d)(4).................................71369
404.1592c  (a)(4)(i) and (c)(2) revised; eff. 4-17-17..............71369
404.1592e  (a)(1) revised..........................................71369
404.1501--404.1599 (Subpart P)  Appendix 1 amended.........32645, 37143, 
                                              43052, 51102, 66161, 86923
    Appendix 1 corrected...........................................86928
404.1615  (c)(3) revised...........................................73028
    Appendix 1 corrected...........................................64060
405  Removed.......................................................90994
416.1476  (b)(1) revised............................................6171
416.903b  Added....................................................65540
416.920a  (c)(3), (4) and (d)(1) revised...........................66178
416.926a  (m)(1) removed; (m)(2) through (6) redesignated as new 
        (m)(1) through (5).........................................37153
416.934  Heading and (h) revised...................................66178
416.974  (c)(3) revised; (c)(4) removed; (c)(5) redesignated as 
        new (c)(4).................................................71369
416.975  (d)(1) and (3) revised; (d)(4) removed; (d)(5) 
        redesignated as new (d)(4).................................71369
416.999a  (a)(4)(i) and (c)(2) revised; eff. 4-17-17...............71370
416.1015  (c)(3) revised...........................................73028
416.1400  (b) amended..............................................90995
416.1429  Amended..................................................90995
416.1435  Revised..................................................90995
416.1436  (i) amended..............................................41214
416.1438  (a) and (b) revised......................................90995
416.1439  Revised..................................................90995
416.1444  Revised..................................................90995
416.1449  Revised..................................................90996
416.1450  (c) and (d) revised......................................90996
416.1451  Revised..................................................90996
416.1468  (a) amended..............................................90996
416.1470  Revised..................................................90996
416.1476  Revised..................................................90997
416.1479  Amended..................................................90997
421  Added.........................................................91713
498.103  (g) added; interim........................................41440

                                  2017

   (Regulations published from January 1, 2017, through April 1, 2017)

20 CFR
                                                                   82 FR
                                                                    Page
Chapter III
404  Technical correction...........................................7648
404.906  (b)(2) amended.............................................5863
404.942  (f)(1) revised.............................................5863
404.1501--404.1599 (Subpart P)  Authority citation revised..........5863
404.1502  Revised...................................................5863
    (a) through (k) designations correctly added...................15132
404.1503  (e) removed...............................................5864
404.1504  Revised...................................................5864
    Corrected......................................................15132
404.1508  Removed...................................................5864
404.1512  Revised...................................................5864
404.1513  Revised...................................................5865
    (a)(2) introductory text and (iv) correctly amended............15132
404.1513a  Added....................................................5866
404.1518  (c) revised...............................................5866
404.1519g  (a) revised..............................................5866
404.1519h  Revised..................................................5866
404.1519i  Revised..................................................5866
404.1519n  (c)(6) revised...........................................5866
404.1520a  (b)(1) amended; (d)(1) revised...........................5867
404.1520b  Revised..................................................5867
404.1520c  Added....................................................5867
404.1521  Revised...................................................5868
404.1522  Revised...................................................5869
404.1523  Revised...................................................5869
404.1525  (c)(2) amended............................................5869
404.1526  (d) and (e) revised.......................................5869
    (d) corrected..................................................15132
404.1527  Revised...................................................5869
    (f)(1) corrected...............................................15132
404.1528  Removed...................................................5871
404.1529  (a) and (c)(3) introductory text revised; (c)(1) and (4) 
        amended.....................................................5871
404.1530  (a) revised...............................................5871
404.1579  (b)(1) and (4) amended....................................5871
404.1592f  (a) correctly revised; eff. 4-17-17......................7648
404.1594  (b)(1), Example 1, (b)(6) and (c)(3)(v) amended...........5871
404.1501--404.1599 (Subpart P)  Appendix 1 amended..................5872

[[Page 1383]]

404.1615  (d) removed; (e), (f) and (g) redesignated as new (d), 
        (e) and (f).................................................5872
404.1616  Revised...................................................5873
404.1617  Heading and (a) revised...................................5873
416.902  Revised....................................................5873
416.903  (e) removed; (f) redesignated as new (e); new (e) revised
                                                                    5874
416.904  Revised....................................................5874
    Heading corrected..............................................15132
416.908  Removed....................................................5874
416.912  Revised....................................................5874
416.913  Revised....................................................5875
416.913a  Added.....................................................5876
416.918  (c) revised................................................5877
416.919g  (a) revised...............................................5877
416.919h  Revised...................................................5877
416.919i  Revised...................................................5877
416.919n  (c)(6) revised............................................5877
416.920a  (b)(1) amended; (d)(1) revised............................5877
416.920b  Revised...................................................5877
416.920c  Added.....................................................5878
416.921  Revised....................................................5879
416.922  Revised....................................................5879
416.923  Revised....................................................5879
416.924a  (a) introductory text and (2) heading revised; (a)(1)(i) 
        and (iii) amended...........................................5879
416.924b  (b)(3) amended............................................5880
416.925  (c)(2) amended.............................................5880
416.926  (d) and (e) revised........................................5880
    (d) corrected..................................................15132
416.926a  (b)(3) amended............................................5880
416.927  Revised....................................................5880
    (f)(1) corrected...............................................15133
416.928  Removed....................................................5882
416.929  (a) and (c)(3) introductory text revised; (c)(1) and (4) 
        amended.....................................................5882
416.930  (a) revised................................................5882
416.993  (b) amended................................................5882
416.994  (b)(1)(i), Example 1, (vi) and (2)(iv)(E) amended..........5882
416.994a  (a)(2), (c)(2) and (d) amended; (i)(1) revised............5882
416.1015  (d) removed; (e) through (h) redesignated as new (d) 
        through (g).................................................5883
416.1016  Revised...................................................5883
416.1017  (a) revised...............................................5883
416.1406  (b)(2) amended............................................5883
416.1442  (f)(1) revised............................................5884
431  Added; eff. 1-19-18............................................7270


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