[Federal Register Volume 63, Number 35 (Monday, February 23, 1998)]
[Notices]
[Pages 9037-9039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4468]


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SOCIAL SECURITY ADMINISTRATION

[Social Security Acquiescence Ruling 98-1(8)]


Newton v. Chater; 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

AGENCY: Social Security Administration.

ACTION: Notice of Social Security Acquiescence Ruling.

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SUMMARY: In accordance with 20 CFR 402.35(b)(2), the Commissioner of 
Social Security gives notice of Social Security Acquiescence Ruling 98-
1(8).

EFFECTIVE DATE: February 23, 1998.

FOR FURTHER INFORMATION CONTACT:
Gary Sargent, Litigation Staff, Social Security Administration, 6401 
Security Boulevard, Baltimore, MD 21235, (410) 965-1695.

SUPPLEMENTARY INFORMATION: Although not required to do so pursuant to 5 
U.S.C. 552(a)(1) and (a)(2), we are publishing this Social Security 
Acquiescence Ruling in accordance with 20 CFR 402.35(b)(2).
    A Social Security Acquiescence Ruling explains how we will apply a 
holding in a decision of a United States Court of Appeals that we 
determine conflicts with our interpretation of a provision of the 
Social Security Act (the Act) or regulations when the Government has 
decided not to seek further review of that decision or is unsuccessful 
on further review.
    We will apply the holding of the Court of Appeals decision as 
explained in this Social Security Acquiescence Ruling to claims at all 
levels of administrative adjudication within the Eighth Circuit. This 
Social Security Acquiescence Ruling will apply to all determinations 
and decisions made on or after February 23, 1998. If we made a 
determination or decision on your application for benefits between 
August 9, 1996, the date of the Court of Appeals decision, and February 
23, 1998, the effective date of this Social Security Acquiescence 
Ruling, you may request application of the Ruling to your claim if you 
first demonstrate, pursuant to 20 CFR 404.985(b) or 416.1485(b), that 
application of the Ruling could change our prior determination or 
decision.
    If this Social Security Acquiescence Ruling is later rescinded as 
obsolete, we will publish a notice in the Federal Register to that 
effect as provided for in 20 CFR 404.985(e) or 416.1485(e). If we 
decide to relitigate the issue covered by this Social Security 
Acquiescence

[[Page 9038]]

Ruling as provided for by 20 CFR 404.985(c) or 416.1485(c), we will 
publish a notice in the Federal Register stating that we will apply our 
interpretation of the Act or regulations involved and explaining why we 
have decided to relitigate the issue.

(Catalog of Federal Domestic Assistance Program Nos. 96.001 Social 
Security - Disability Insurance; 96.002 Social Security - Retirement 
Insurance; 96.004 Social Security - Survivors Insurance; 96.005 
Special Benefits for Disabled Coal Miners; 96.006 Supplemental 
Security Income.)

    Dated: December 22, 1997.
Kenneth S. Apfel,
Commissioner of Social Security.

Acquiescence Ruling 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.
    Issue: Whether a person's return to substantial gainful activity 
(SGA) within 12 months of the onset date of his or her disability, and 
prior to an award of benefits, precludes an award of benefits and 
entitlement to a trial work period.
    Statute/Regulation/Ruling Citation: Sections 222(c), 223, 
1614(a)(3) and (4) and 1619 of the Social Security Act (42 U.S.C. 
422(c), 423, 1382c(a)(3) and (4) and 1382h); 20 CFR 404.1505, 
404.1520(b), 404.1592, 416.262, 416.905, 416.906, 416.920(b), 
416.924(b); Social Security Ruling (SSR) 82-52.
    Circuit: Eighth (Arkansas, Iowa, Minnesota, Missouri, Nebraska, 
North Dakota, South Dakota).
    Newton v. Chater, 92 F.3d 688 (8th Cir. 1996).
    Applicability of Ruling: This Ruling applies to determinations or 
decisions at all administrative levels (i.e., initial, reconsideration, 
Administrative Law Judge (ALJ) hearing and Appeals Council review).
    Description of Case: Donald A. Newton applied for disability 
insurance benefits and Supplemental Security Income (SSI) on April 22, 
1993, alleging disability since October 30, 1992, based on illiteracy, 
memory lapses, alcoholism and hypertension. The applications were 
denied initially and on reconsideration. From June to September 1994, 
Mr. Newton worked in a foundry as a grinder and a metal beater for at 
least 40 hours per week and earned between $6.50 and $7.26 per hour. In 
October 1994, he worked for one week at a wood products firm. In 
November 1994, a hearing was held before an ALJ who issued a decision 
in February 1995 denying disability benefits.
    The ALJ found that Mr. Newton was not disabled under step one of 
the five-step sequential evaluation process due to his performance of 
substantial gainful activity from June to September 1994. The ALJ also 
cited this 1994 work activity as evidence that Mr. Newton's alleged 
impairments did not prevent him from performing his past relevant work. 
The Appeals Council denied Mr. Newton's request for review in May 1995 
and the district court affirmed the ALJ's decision in December 1995. On 
his appeal to the United States Court of Appeals for the Eighth 
Circuit, Mr. Newton argued, among other things, that he was entitled to 
a trial work period for the work he performed in 1994 and that the 
evidence supported a finding of disability.
    Holding: The Eighth Circuit reversed the judgment of the district 
court and directed that the case be remanded to the Social Security 
Administration (SSA) for further administrative proceedings. The court 
of appeals determined that the ALJ erred in considering Mr. Newton's 
work from June to September 1994 as evidence of substantial gainful 
activity to support a finding of no disability without first 
determining whether he was entitled to a trial work period during those 
months.1 The court stated that under the Social Security Act 
(the Act) and SSA's regulations,
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    \1\ Section 222(c)(2) of the Act provides that ``any services 
rendered by an individual during a period of trial work shall be 
deemed not to have been rendered by such individual in determining 
whether disability has ceased in a month during such period.''

    . . . a trial work period starts in the month that entitlement 
to disability benefits begins, which is the month following five 
consecutive months of being under a disability that has lasted or is 
expected to last a total of twelve continuous months. (Emphasis in 
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original.)2

    \2\ Section 222(c)(3) of the Act provides, in pertinent part, 
that ``[a] period of trial work for any individual shall begin with 
the month in which he becomes entitled to disability insurance 
benefits . . . .'' Under section 222(c)(4) of the Act, a trial work 
period ends with the ninth month, in any period of 60 consecutive 
months, in which the individual renders services (whether or not the 
nine months are consecutive), or, if earlier, with the month in 
which disability ceases.
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    The court found that the provision of SSR 82-52 which precludes a 
finding of disability where a claimant returns to substantial gainful 
activity before an award of benefits and before 12 months have elapsed 
since the date of onset of an impairment which prevented substantial 
gainful activity ``is inconsistent with the statutory provisions 
governing the start of a trial work period.'' The Eighth Circuit held:

    The language in the statutes and regulations does not require 
that a trial work period be conditioned on a prior receipt of 
benefits and/or the lapse of a twelve month period of disability.

    In support of its holding, the Eighth Circuit cited two other court 
of appeals decisions in which the courts reached a similar conclusion 
on this issue -- Walker v. Secretary of Health and Human Services, 943 
F.2d 1257 (10th Cir. 1991), for which SSA published Acquiescence Ruling 
(AR) 92-6(10), and McDonald v. Bowen, 818 F.2d 559 (7th Cir. 1987), for 
which SSA published AR 88-3(7).

Statement As To How Newton Differs From Social Security Policy

    SSR 82-52 contains a clear statement of SSA policy on this 
issue3 as follows:
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    \3\ SSR 91-7c superseded SSR 82-52, but only to the extent that 
SSR 82-52 discussed former procedures used to determine disability 
in children. The issue in this AR does not relate to those former 
procedures and the cited policy statement in SSR 82-52 remains in 
effect.

    When the [individual's] return to work demonstrating ability to 
engage in SGA occurs before approval of the award and prior to the 
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lapse of the 12-month period after onset, the claim must be denied.

    The Eighth Circuit held that, under the Act and regulations, 
entitlement to a trial work period is not conditioned upon a prior 
award of benefits and/or the lapse of a 12-month period of disability. 
This raises the possibility that, on remand of the case to SSA, should 
Mr. Newton establish the onset of an impairment that could otherwise be 
the basis for a finding of disability, Mr. Newton may receive a benefit 
award and a trial work period even if he returned to work demonstrating 
an ability to engage in substantial gainful activity before the lapse 
of the 12-month period after the onset date of such impairment and 
before a decision by SSA to award benefits.

Explanation of How SSA Will Apply The Newton Decision Within The 
Circuit

    This Ruling applies only to cases in which the claimant resides in 
Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota or South 
Dakota at the time of the determination or decision at any 
administrative level, i.e., initial, reconsideration, ALJ hearing or 
Appeals Council review.
    This Ruling applies to claims for title II benefits based on 
disability. It also applies to claims for title XVI benefits based on 
disability as explained below.

[[Page 9039]]

    A claim for title II disability insurance benefits, widow(er)'s 
insurance benefits based on disability or child's insurance benefits 
based on disability in which the claimant returns to work within 12 
months of the established onset date of an impairment which could 
otherwise be the basis for a finding of disability should be allowed 
and the claimant granted a trial work period if the following 
conditions are met:
    (1) the claimant establishes that, at the time he or she returned 
to work and thereafter, the impairment was still expected to last for 
at least 12 consecutive months from the date of onset;
    (2) the claimant returns to work after the waiting period (if a 
waiting period is applicable) and after the established onset date (but 
within the 12-month period following such onset date); and
    (3) the return to work demonstrating an ability to engage in 
substantial gainful activity occurs either before or after approval of 
the award.
    A claim for title XVI benefits based on disability in which the 
claimant returns to work within 12 months of the established onset date 
of an impairment which could otherwise be the basis for a finding of 
disability should be allowed and the claimant granted section 1619 
status4 if the following conditions are met:
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    \4\ Pursuant to statutory amendments made by Public Law 99-643, 
effective July 1, 1987, the trial work period provisions no longer 
apply to title XVI disability claims. Beginning July 1, 1987, a 
disabled individual, who was eligible to receive ``regular'' SSI 
benefits under section 1611 of the Act (or a federally administered 
State supplementary payment) for a month and subsequently has 
earnings ordinarily considered to represent substantial gainful 
activity, will move directly to section 1619 status rather than be 
accorded a trial work period. This Ruling extends to such 
individuals, i.e., a claim for title XVI benefits based on 
disability should be allowed and the claimant granted section 1619 
status if the claimant would otherwise be eligible for section 1619 
status and the same conditions set out above for title II claims 
based on disability are met.
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    (1) the claimant establishes that, at the time he or she returned 
to work and thereafter, the impairment was still expected to last for 
at least 12 consecutive months from the date of onset;
    (2) the claimant returns to work in a month subsequent to the month 
of established onset (but within the 12-month period following such 
onset date);
    (3) the claimant is eligible for ``regular'' SSI benefits under 
section 1611 of the Act (or a federally administered State 
supplementary payment) based on the impairment (disregarding the effect 
that the claimant's return to work within 12 months after onset would 
otherwise have on eligibility for such benefits or payment) for at 
least one month in the period preceding the month in which he or she 
returns to work;
    (4) the claimant meets all other nondisability requirements for 
section 1619 status; and
    (5) the return to work demonstrating an ability to engage in 
substantial gainful activity occurs either before or after approval of 
the award.
[FR Doc. 98-4468 Filed 2-20-98; 8:45 am]
BILLING CODE 4190-29-F