[Federal Register Volume 65, Number 156 (Friday, August 11, 2000)]
[Proposed Rules]
[Pages 49208-49215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20395]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Regulations No. 4 and 16]
RIN 0960-AF12


Old-Age, Survivors, and Disability Insurance and Supplemental 
Security Income for the Aged, Blind, and Disabled; Substantial Gainful 
Activity Amounts; ``Services'' for Trial Work Period Purposes--Monthly 
Amounts; Student Earned Income Exclusion

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: We are proposing to automatically adjust each year, based on 
any increases in the national average wage index, the average monthly 
earnings guideline we use to determine whether work done by persons 
with impairments other than blindness is substantial gainful activity; 
provide that we will ordinarily find that an employee whose average 
monthly earnings are not greater than the ``primary substantial gainful 
activity amount'' (currently $700) has not engaged in substantial 
gainful activity without considering other information beyond the 
employee's earnings; increase the minimum amount of monthly earnings 
that we consider shows that a person receiving title II Social Security 
benefits based on disability is performing or has performed 
``services'' during a trial work period, and automatically adjust the 
amount each year thereafter; increase the maximum monthly and yearly 
Student Earned Income Exclusion amounts we use in determining 
Supplemental Security Income Program eligibility and payment amounts, 
and automatically adjust the monthly and yearly exclusion amounts each 
year thereafter.
    We propose these revised rules as part of our efforts to encourage 
individuals with disabilities to test their ability to work and keep 
working. We expect that these changes will provide greater incentives 
for many beneficiaries to attempt to work or, if already working, to 
continue to work or increase their work effort.

DATES: In order for us to consider your comments on these specific 
proposals, we must receive them by October 10, 2000.

ADDRESSES: Submit comments in writing to the Commissioner of Social 
Security, P.O. Box 17703, Baltimore, MD 21235-7703; send by fax to 
(410) 966-2830; send by E-mail to ``[email protected]''; or deliver 
to the Office of Process and Innovation Management, Social Security 
Administration, L2109 West Low Rise, 6401 Security Boulevard, 
Baltimore, MD 21235-6401, between 8:00 a.m. and 4:30 p.m. on regular 
business days. Comments received may be inspected during these same 
hours by arranging with the contact person shown below. Electronic 
Version: The electronic file of this document is available on the date 
of publication in the Federal Register on the Internet site for the 
Government Printing Office at: http://www.access.gpo.gov/sudocs/aces/aces140.html. It is also available at SSAOnline at www.ssa.gov.

FOR FURTHER INFORMATION CONTACT: For information specifically about 
these proposed rules, contact Ray Marzoli, Office of Employment Support 
Programs, Social Security Administration, 6401 Security Boulevard, 
Baltimore, Maryland 21235-6401, (410) 965-9826 or TTY (410) 966-6210. 
For information about eligibility or filing for benefits, call our 
national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or 
visit our Internet web site at SSAOnline at www.ssa.gov.

SUPPLEMENTARY INFORMATION:

Clarity of This Regulation

Executive Order 12866 and the President's memorandum of June 1, 1998, 
require each agency to write all your substantive comments on this 
proposed rule, we invite your comments

[[Page 49209]]

on how to make this proposed rule easier to understand. For example:
--Have we organized the material to suite your needs?
--Are the requirements in the rule clearly stated?
--Does the rule contain technical language or jargon that isn't clear?
--Would a different format (grouping and order of sections, use of 
headings, paragraphing) make the rule easier to understand?
--Would more (but shorter) sections be better?
--Could we improve clarity by adding tables, lists, or diagrams?
--What else could we do to make the rule easier to understand?

Background

    The Social Security and the Supplemental Security Income programs 
(titles II and XVI of the Social Security Act (the Act)) provide 
benefits to disabled and blind individuals. Disability is generally 
defined under both programs as, ``* * * inability to engage in any 
substantial gainful activity by reason of any medically determinable 
physical or mental impairment * * *.'' The Medicare and Medicaid 
programs (titles XVIII and XIX of the Act) provide related medical 
benefits to disabled and blind individuals.

The Substantial Gainful Activity Amount

    Under 20 CFR Secs. 404.1572 and 416.972, the term ``substantial 
gainful activity'' means work activity that involves significant 
physical or mental effort and that is done for pay or profit. Work 
activity is gainful if it is the kind of work usually performed for pay 
or profit, whether or not profit is realized. Sections 223(d)(4)(A) and 
1614(a)(3)(E) of the Social Security Act require the Commissioner to 
prescribe by regulations the criteria for determining when earnings 
demonstrate ability to engage in substantial gainful activity for a 
person with an impairment other than blindness.
    In evaluating initial claims for disability, we make a 
determination whether the applicant for either Social Security benefits 
or Supplemental Security Income benefits is engaging in substantial 
gainful activity. We find applicants not to be disabled if they are 
working and performing substantial gainful activity, regardless of 
their medical condition. In addition, after an individual becomes 
entitled to title II Social Security benefits based on disability, we 
consider whether a person's earnings demonstrate the ability to engage 
in substantial gainful activity in determining ongoing entitlement to 
disability benefits. (We do not use substantial gainful activity as a 
measure for continuing eligibility for Supplemental Security Income 
benefits.) Under our current rules, if an individual's average monthly 
earnings were more than $700, we would ordinarily consider that the 
person engaged in substantial gainful activity. This earnings guideline 
level applies to all employees including those in sheltered workshops 
or comparable facilities and, in certain circumstances, to the self-
employed.
    We are proposing to provide for annual indexing of this level after 
reassessing the current earnings guidelines as part of our effort to 
improve incentives to encourage individuals with disabilities to work. 
We propose to adjust annually the substantial gainful activity amount 
for people with impairments other than blindness. Beginning January 1, 
2001, the guideline would be the larger of the previous year's amount 
or an increased amount based on the Social Security national average 
wage index (See section 209(k)(1) of the Act).
    Finally, because the Social Security Administration is committed to 
maintaining the substantial gainful activity amount as an indicator of 
an individual's ability to work, we will periodically review this level 
to determine if it continues to be a reasonable and meaningful 
indicator. These reviews will include collection and analysis of data, 
such as the number of beneficiaries (1) who earn wages, (2) with wages 
that exceed the trial work period services level, and (3) with wages 
that exceed the substantial gainful activity level; the duration of 
employment above the substantial gainful amount; and the average 
earnings of individuals achieving substantial gainful activity.
    We use earnings guidelines to evaluate a person's work activity to 
determine whether the work activity is substantial gainful activity and 
therefore whether that person may be considered disabled under the law. 
A consistent method of adjusting substantial gainful activity earnings 
guidelines will benefit applicants and beneficiaries in future years. 
The national average wage index is a measure of wage growth and, 
therefore, provides a logical basis for adjusting the earnings 
guidelines used to indicate ability to work. Indexing would ensure that 
the substantial gainful activity amount is a uniformly representative 
indicator over time of an individual's ability to work.
    Under this proposal, the substantial gainful activity amount would 
never be lower than the previous year's amount. However, there may be 
years when no increase results from the calculation. For a detailed 
discussion of how we calculate annual automatic adjustments, see our 
notice regarding cost-of-living increases and other determinations for 
the year 2000 that was published in the Federal Register for October 
25, 1999 (64 FR 57507). Every October, we publish in the Federal 
Register an updated version of this notice that includes new 
adjustments.
    We also propose to amend Secs. 404.1574(b)(2) and (4) and 
416.974(b)(2) and (4) to clarify, consistent with our longstanding 
policy, that ordinarily we will find any individual, whether engaged in 
competitive or sheltered work, to be engaging in substantial gainful 
activity when his or her earnings exceed the amounts for such earnings 
set out in Secs. 404.1574(b)(2) and 416.974(b)(2). As a result of these 
clarifications, we intend to rescind the Iamarino v. Heckler 
Acquiescence Ruling, AR 87-4(8), when these proposed rules are 
published as final rules.

The ``Secondary Substantial Gainful Activity Amount''

    Under our current rules, if an employee has earnings from work 
activities that average less than $300 a month, we generally consider 
that he or she is not engaging in substantial gainful activity. We 
refer to this $300 earnings guideline as the ``secondary substantial 
gainful activity amount'' to distinguish it from the ``primary 
substantial gainful activity amount'' discussed in the previous 
section.
    We do not further evaluate work activity below the secondary 
substantial gainful activity amount unless there is evidence to the 
contrary showing that the person may be engaging in substantial gainful 
activity (e.g., an employee might be in a position to defer or suppress 
earnings). We examine further the work activity of employees who earned 
between the primary and secondary substantial gainful activity levels 
because our current rules provide that these earnings are not high or 
low enough to determine if substantial gainful activity exists. We are 
required to determine whether the work is substantial gainful activity 
by developing additional evidence. (A different rule currently applies 
to individuals employed in sheltered workshops or comparable 
facilities. For these people, earnings that are not greater than the 
primary substantial gainful activity amount ordinarily establish that 
their work is not substantial gainful activity.)

[[Page 49210]]

    Because our experience suggests that the secondary substantial 
gainful activity amount is not as useful a tool as we would have liked, 
we propose to discontinue its use. Under this proposal, we would 
ordinarily consider that an employee whose earnings are equal to or 
less than the primary substantial gainful activity amount is not 
engaging in substantial gainful activity. We would perform additional 
development beyond looking at earnings only when circumstances indicate 
that such an employee may be engaging in substantial gainful activity 
or might be in a position to defer or suppress earnings. This 
regulatory change would not change our evaluation guidelines for the 
self-employed.
    Our experience suggests that this regulatory change would affect 
few applicants and beneficiaries because few employees have been found 
to have performed substantial gainful activity on the basis of these 
secondary rules unless they were also in a position to defer or 
suppress earnings. We are making this proposal in order to simplify our 
rules and to improve our work efficiency. This proposed change would 
also eliminate the need for us to distinguish for earnings guidelines 
purposes between those employees who are in sheltered workshops or 
comparable facilities and those who are not. To discontinue these 
complex secondary guidelines, as proposed, would contribute toward 
improved public understanding of Social Security.

Services for the Trial Work Period

    The trial work period is a work incentive. During the trial work 
period, a title II beneficiary may test his or her ability to work and 
still be considered disabled. We will not consider services performed 
during the trial work period as showing that the disability has ended 
until services have been performed in at least 9 months (not 
necessarily consecutive) in a rolling 60-month period.
    Section 222(c)(2) of the Act provides that, for purposes of the 
trial work period, ``the term `services' means activity (whether legal 
or illegal) which is performed for remuneration or gain or is 
determined by the Commissioner of Social Security to be of a type 
normally performed for remuneration or gain.'' As established in 
regulations, Sec. 404.1592(b), we currently consider any month in which 
an employee earns more than $200 from his or her work to be a month of 
services for the trial work period.
    We are proposing to revise this level as part of our effort to 
improve incentives to encourage individuals with disabilities to work. 
We propose to increase the monthly amount of earnings we consider to be 
``services'' in a trial work period from $200 to $530 for the year 
2001. We also propose, for each year thereafter, to adjust the amount 
to the higher of the previous year's amount or an increased amount 
based on the Social Security national average wage index.
    Although the dollar amount which ordinarily represents substantial 
gainful activity has increased since 1990, the $200 amount that 
represents a month of trial work period services has remained the same 
since 1990. Beneficiaries are currently faced with exhausting months of 
a trial work period while earning as little as $200 a month, even on an 
intermittent basis. As a result, when beneficiaries are finally able to 
reach a higher earnings level, they may have already used up many or 
all of their 9 months of trial work. Increasing the trial work period 
services amount to $530 would allow more beneficiaries with 
disabilities to more realistically test their ability to work and would 
likely lead to work at levels closer to or at substantial gainful 
activity.
    Automatic indexing would ensure that the trial work period services 
amount is a uniformly representative indicator over time of a trial 
work attempt. We would calculate the adjustments in essentially the 
same manner as we are proposing for increasing the substantial gainful 
activity amount. Under this proposal, the trial work period amount 
would never be lower than the previous year's amount. However, there 
may be years when no increase results from the calculation. For a 
detailed discussion of how we calculate annual automatic adjustments, 
see the Federal Register for October 25, 1999, cited above. Every 
October, we publish in the Federal Register an updated version of this 
notice that includes new adjustments.
    The legislative history of the trial work period provision 
indicates that Congress recognized and intended that the amount that 
constitutes trial work need not constitute substantial gainful 
activity. Congress enacted the trial work period as part of the Social 
Security Amendments of 1960. The accompanying House Ways and Means 
Committee report states, ``Your committee intends that any months in 
which a disabled person works for gain, or does work of a nature 
generally performed for gain, be counted as a month of trial work. Thus 
the services rendered in a month need not constitute substantial 
gainful activity in order for the month to be counted as part of the 
trial-work effort.'' H.R. Rep. No. 86-1799, at 13 (1960). This proposal 
would maintain the distinction between the trial work period services 
amount and the substantial gainful activity amount intended by Congress 
while providing disabled beneficiaries with greater incentives to test 
their ability to work.

The Student Earned Income Exclusion

    Section 1612 of the Social Security Act establishes the definition 
of ``income'' for purposes of the Supplemental Security Income program. 
This section also states what is excluded from income. Section 
1612(b)(1) provides an exclusion from earned income, subject to the 
limitations (as to amount or otherwise) prescribed by the Commissioner, 
for a child who is a student regularly attending a school, college, or 
university, or a course of vocational or technical training designed to 
prepare him or her for gainful employment. With this section, Congress 
recognized that students with disabilities incur special expenses to go 
to school. Under the current regulations, Sec. 416.1112(c)(3), 
Supplemental Security Income child beneficiaries who are students can 
currently exclude up to $400 a month of earned income with an annual 
limit of $1,620. By being excluded, this earned income has no effect on 
eligibility or benefits under the Supplemental Security Income program. 
These amounts have been in place since 1974 when the Supplemental 
Security Income program began.
    In response to increases in school expenses since that time, we are 
proposing to revise these levels as part of our effort to help 
Supplemental Security Income beneficiaries who are students finance 
their school attendance and encourage them to work. We propose to 
increase the earned income exclusion amount, beginning January 1, 2001, 
to $1,290 a month with an annual limit of $5,200. We are also proposing 
to make automatic adjustments to these amounts each year thereafter to 
the higher of the previous year's amounts or increased amounts based on 
the cost-of-living.
    The cost-of-living adjustments would ensure that the amounts 
account for price inflation. We are proposing to use a similar method 
to that currently used to calculate annual cost-of-living adjustments 
in the Supplemental Security Income program Federal benefit rates. The 
only differences are that this calculation would use the calendar year 
2001 amounts as the base amounts and any increases in these amounts 
would be rounded to the nearest $10. Under this proposal, these amounts 
would never be lower than the previous year's amounts. However,

[[Page 49211]]

there may be years when no increases result from the calculation. For a 
detailed discussion of how we calculate annual automatic adjustments, 
see the Federal Register for October 25, 1999, cited above. Every 
October, we publish in the Federal Register an updated version of this 
notice that includes new adjustments.

Proposed Regulations

    We propose to revise Secs. 404.1574(b)(2) and (4), and 
416.974(b)(2) and (4) to adjust annually the earnings guidelines that 
we use to determine whether a non-blind employee is engaged in 
substantial gainful activity. Beginning January 2001, the guideline 
would be the higher of the previous year's amount or an increased 
amount based on the Social Security national average wage index. We 
also propose to amend Secs. 404.1574(b)(2) and (4) and 416.974(b)(2) 
and (4) to clarify, consistent with our longstanding policy, that this 
guideline applies to earnings from sheltered work. (This standard also 
applies to the self-employed in certain circumstances by cross-
references that have been and continue to be present in Secs. 404.1575 
and 416.975.)
    We also propose to revise Secs. 404.1574(b)(3) and (6), and 
416.974(b)(3) and (6) to provide, beginning January 2001, that we will 
ordinarily find that an employee whose average monthly earnings are 
equal to or less than the ``primary substantial gainful activity 
amount'' set forth in Secs. 404.1574(b)(2) and 416.974(b)(2) has not 
engaged in substantial gainful activity without considering other 
information beyond the employee's earnings. We also propose to make 
conforming changes to Secs. 404.1574(b)(4) and 416.974(b)(4).
    We also propose to revise Sec. 404.1592 to increase from $200 to 
$530 the minimum amount of monthly earnings that we consider shows that 
a person is performing or has performed ``services'' for counting trial 
work period months, effective January 1, 2001. We also propose to 
adjust the amount annually to the higher of the previous year's amount 
or an increased amount based on the Social Security national average 
wage index, beginning January 1, 2002.
    We also propose to revise Sec. 416.1112(c)(3) to increase the 
maximum amount of the student earned income exclusion to $1,290 a 
month, not to exceed $5,200 per year, effective January 2001. We also 
propose to adjust these amounts annually to the higher of the previous 
year's amounts or increased amounts calculated in essentially the same 
manner as the annual cost-of-living adjustments to the Supplemental 
Security Income Program federal benefit rates, beginning January 1, 
2002. This calculation would use the 2001 amounts as the base amounts 
and any increases in these amounts would be rounded to the nearest $10.

Regulatory Procedures

Paperwork Reduction Act

    These regulations impose no new reporting/record-keeping 
requirements necessitating clearance by OMB.

Executive Order 12866

    Based on the costs associated with these proposed rules, the Social 
Security Administration has determined that they do not require an 
assessment of costs and benefits to society per Executive Order 12866 
because they do not meet the definition of a ``significant regulatory 
action.'' These proposed rules also do not meet the definition of a 
``major rule'' under 5 U.S.C. 801ff because the Social Security 
Administration's budget baseline assumes that substantial gainful 
activity amounts will keep pace with growth in average wages, and other 
provisions do not result in costs that exceed the threshold for what 
constitutes a ``major rule''. In addition, the Social Security 
Administration has determined, as required under the aforementioned 
statute, that these regulations do not create any unfunded mandates for 
State or local entities under sections 202-205 of the Unfunded Mandates 
Act of 1995. The Office of Management and Budget has reviewed these 
proposed rules.
    We have also determined that these proposed rules meet the plain 
language requirement of Executive Order 12866 and the President's 
memorandum of June 1, 1998. However, as noted earlier, we invite your 
comments on how to make these rules easier to understand.

Regulatory Flexibility Act

    We certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
primarily affect individuals who are applying for or receiving title II 
or title XVI benefits because of blindness or disability, and States 
which administer the Medicaid program and/or pay supplemental benefits 
to Supplemental Security Income eligible individuals.

(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; 96.006, 
Supplemental Security Income)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Death benefits, Disability 
benefits, Old-Age, Survivors and Disability Insurance, Reporting and 
record keeping requirements, Social Security.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and record keeping 
requirements, Supplemental Security Income.

    Dated: June 27, 2000.
Kenneth S. Apfel,
Commissioner of Social Security.
    For the reasons stated in the preamble, the Social Security 
Administration proposes to amend parts 404 and 416 of chapter III of 
title 20 of the Code of Federal Regulations as follows:

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-    )

    1. The authority citation for subpart P of part 404 continues to 
read as follows:

    Authority: Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a) 
and (i), 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 (i), 
422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 
Stat. 2105, 2189.

    2. Section 404.1574 is amended by revising paragraphs (b)(2), 
(b)(3), (b)(4), and (b)(6) to read as follows:


Sec. 404.1574  Evaluation guides if you are an employee.

* * * * *
    (b) * * *
    (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 sheltered 
work, see paragraph (b)(4) of this section) 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, they are more than an amount 
determined for each calendar year to be 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

[[Page 49212]]

before the year for which the amount is being calculated to the 
national average wage index for 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
                     For months:                       earnings 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. Beginning January 1, 2001, if your 
earnings are equal to or less than the amount(s) determined under 
paragraph (b)(2)(ii) of this section for the year(s) in which you work, 
we will generally consider that the earnings from your work as an 
employee will show that you have not engaged in substantial gainful 
activity. Before January 1, 2001, if your earnings were less than the 
amount(s) in Table 2 of this section for the year(s) in which you 
worked, we will generally consider that the earnings from your work as 
an employee will show that you have not engaged in substantial gainful 
activity.

                                 TABLE 2
------------------------------------------------------------------------
                                                          Your monthly
                     For months:                       earnings averaged
                                                           less than:
------------------------------------------------------------------------
In calendar years before 1976........................               $130
In calendar year 1976................................                150
In calendar year 1977................................                160
In calendar year 1978................................                170
In calendar year 1979................................                180
In calendar years 1980-1989..........................                190
In calendar years 1990-2000..........................                300
------------------------------------------------------------------------

    (4) Before January 1, 2001, if you worked in a sheltered workshop. 
Before January 1, 2001, if you worked in a sheltered workshop or a 
comparable facility especially set up for severely impaired persons, we 
will ordinarily consider that your earnings from this work show that 
you have engaged in substantial gainful activity if your earnings 
averaged more than the amounts in Table 1 of this section. Average 
monthly earnings from a sheltered workshop or a comparable facility 
that are equal to or less than those amounts indicated in paragraph 
(b)(2) of this section will ordinarily show that you have not engaged 
in substantial gainful activity without the need to consider other 
information, as described in paragraph (b)(6) of this section, 
regardless of whether they are more or less than those indicated in 
paragraph (b)(3) of this section. When your earnings from a sheltered 
workshop or comparable facility are equal to or less than those amounts 
indicated in paragraph (b)(2), we will consider the provisions of 
paragraph (b)(6) of this section only if there is evidence showing that 
you may have engaged in substantial gainful activity.
* * * * *
    (6) Earnings that are not high enough to ordinarily show that you 
engaged in substantial gainful activity.
    (i) Before January 1, 2001, if your average monthly earnings were 
between the amounts shown in paragraphs (b)(2) and (3) of this section, 
we will generally consider other information in addition to your 
earnings (see paragraph (b)(6)(iii) of this section). This rule 
generally applies to employees who did not work in a sheltered workshop 
or a comparable facility, although we may apply it to some people who 
work in sheltered workshops or comparable facilities (see paragraph 
(b)(4) of this section).
    (ii) Beginning January 1, 2001, if your average monthly earnings 
are equal to or less than the amounts determined under paragraph (b)(2) 
of this section, we will generally not consider other information in 
addition to your earnings unless there is evidence indicating that you 
may be engaging in substantial gainful activity or that you are in a 
position to defer or suppress your earnings.
    (iii) 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.
* * * * *
    3. Section 404.1592 is amended by revising paragraph (b) to read as 
follows:


Sec. 404.1592  The trial work period.

* * * * *
    (b) What we mean by services. When used in this section, services 
means any activity, even though it is not substantial gainful activity, 
which is done in employment or self-employment for pay or profit, or is 
the

[[Page 49213]]

kind normally done for pay or profit. We generally do not consider work 
to be services when it is done without remuneration or merely as 
therapy or training, or when it is work usually done in a daily routine 
around the house, or in self-care.
    (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 of this section 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 40 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 more
                      For months                              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
------------------------------------------------------------------------
                                                         Or you work in
            For months              Your net earnings  the business more
                                      are more than      than  (hours)
------------------------------------------------------------------------
In calendar years before 1979.....                $50                 15
In calendar years 1979-1989.......                 75                 15
In calendar years 1990-2000.......                200                 40
In calendar year 2001.............                530                 40
------------------------------------------------------------------------

* * * * *

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND AND 
DISABLED

    1. The authority citation for Subpart I of Part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5), 1611, 1614, 1619, 1631(a), (c) and 
(d)(1), and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 
1382, 1382c, 1382h, 1383(a), (c) and (d)(1), 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, 1382h note).

    2. Section 416.974 is amended by revising paragraphs (b)(2), 
(b)(3), (b)(4) and (b)(6) to read as follows:


Sec. 416.974  Evaluation guides if you are an employee.

* * * * *
    (b) * * *
    (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 sheltered 
work, see paragraph (b)(4) of this section) show that you engaged in 
substantial gainful activity if:
    (i) Before January 1, 2001, they averaged more than the amount(s) 
in Table 1 for the time(s) in which you worked.
    (ii) Beginning January 1, 2001, they are more than an amount 
determined for each calendar year to be 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 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.

[[Page 49214]]



                                 Table 1
------------------------------------------------------------------------
                                                          Your monthly
                     For months:                       earnings 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. Beginning January 1, 2001, if your 
earnings are equal to or less than the amount(s) determined under 
paragraph (b)(2)(ii) of this section for the year(s) in which you work, 
we will generally consider that the earnings from your work as an 
employee will show that you have not engaged in substantial gainful 
activity. Before January 1, 2001, if your earnings were less than the 
amount(s) in Table 2 of this section for the year(s) in which you 
worked, we will generally consider that the earnings from your work as 
an employee will show that you have not engaged in substantial gainful 
activity.

                                 Table 2
------------------------------------------------------------------------
                                                          Your monthly
                     For months:                       earnings averaged
                                                           less than:
------------------------------------------------------------------------
In calendar years before 1976........................               $130
In calendar year 1976................................                150
In calendar year 1977................................                160
In calendar year 1978................................                170
In calendar year 1979................................                180
In calendar years 1980-1989..........................                190
In calendar years 1990-2000..........................                300
------------------------------------------------------------------------

    (4) Before January 1, 2001, if you worked in a sheltered workshop. 
Before January 1, 2001, if you worked in a sheltered workshop or a 
comparable facility especially set up for severely impaired persons, we 
will ordinarily consider that your earnings from this work show that 
you have engaged in substantial gainful activity if your earnings 
averaged more than the amounts in the table in paragraph (b)(2) of this 
section. Average monthly earnings from a sheltered workshop or a 
comparable facility that are equal to or less than those amounts 
indicated in paragraph (b)(2) of this section will ordinarily show that 
you have not engaged in substantial gainful activity without the need 
to consider other information, as described in paragraph (b)(6) of this 
section, regardless of whether they are more or less than those 
indicated in paragraph (b)(3) of this section. When your earnings from 
a sheltered workshop or comparable facility are equal to or less than 
those amounts indicated in paragraph (b)(2), we will consider the 
provisions of paragraph (b)(6) of this section only if there is 
evidence showing that you may have engaged in substantial gainful 
activity.
* * * * *
    (6) Earnings that are not high enough to ordinarily show that you 
engaged in substantial gainful activity.
    (i) Before January 1, 2001, if your average monthly earnings were 
between the amounts shown in paragraphs (b)(2) and (3) of this section, 
we will generally consider other information in addition to your 
earnings (see paragraph (b)(6)(iii) of this section). This rule 
generally applies to employees who did not work in a sheltered workshop 
or a comparable facility, although we may apply it to some people who 
work in sheltered workshops or comparable facilities (see paragraph 
(b)(4) of this section).
    (ii) Beginning January 1, 2001, if your average monthly earnings 
are equal to or less than the amounts determined under paragraph (b)(2) 
of this section, we will generally not consider other information in 
addition to your earnings unless there is evidence indicating that you 
may be engaging in substantial gainful activity or that you are in a 
position to defer or suppress your earnings.
    (iii) 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.
* * * * *
    3. The authority citation for Subpart K of Part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 
1621, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 
1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, and 1383); sec. 211, 
Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

    4. Section 416.1112 is amended by revising paragraph (c)(3) to read 
as follows:


Sec. 416.1112  Earned income we do not count.

* * * * *
    (c) * * *

[[Page 49215]]

    (3) If you are a blind or disabled child who is a student regularly 
attending school as described in Sec. 416.1861:
    (i) 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.
    (ii) Before January 1, 2002, the amounts indicated in Table 1 of 
this section.

                                 Table 1
------------------------------------------------------------------------
                                                       But not more than
            For months               Up to per month     in a calendar
                                                              year
------------------------------------------------------------------------
In calendar years before 2001.....               $400             $1,620
In calendar year 2001.............              1,290              5,200
------------------------------------------------------------------------

* * * * *
[FR Doc. 00-20395 Filed 8-10-00; 8:45 am]
BILLING CODE 4191-02-U