[Federal Register Volume 68, Number 110 (Monday, June 9, 2003)]
[Proposed Rules]
[Pages 34341-34344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14273]


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RAILROAD RETIREMENT BOARD

20 CFR Part 220

RIN 3220-AB50


Determining Disability

AGENCY: Railroad Retirement Board.

ACTION: Proposed rule.

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SUMMARY: The Board proposes to amend its regulations to index the 
amount of earnings used to determine if an individual is engaged in 
substantial gainful activity (SGA) to any increase in the Social 
Security national average wage index and to increase from $200 to $530 
the minimum amount of monthly earnings to count during a trial work 
period and then index that amount to the Social Security national 
average wage index.

DATES: In order for us to consider your comments on these specific 
proposals, the Board must receive them by August 8, 2003.

ADDRESSES: Submit comments in writing to the Secretary to the Board, 
Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 
60611-2092.

FOR FURTHER INFORMATION CONTACT: Marguerite P. Dadabo, Assistant 
General Counsel, (312) 751-4945, TDD (312) 751-4701.

SUPPLEMENTARY INFORMATION: The Railroad Retirement Act provides for 
disability annuities for employees, widow(er)s, and children of 
deceased railroad employees who are unable to engage in any regular 
employment because of a physical or mental impairment. Regular 
employment is defined by reference to the definition of substantial 
gainful activity under the Social Security Act. Sections 220.141 and 
220.142 of the Board's regulations reflect this definition and define 
``substantial gainful activity'' (SGA) as work activity that involves 
doing significant physical or mental activities for pay or profit. Work 
activity is gainful if it is the kind of work usually done for pay or 
profit, whether or not profit is realized. Section 220.143 sets forth 
earnings levels at which the Board considers a person to be engaged in 
SGA regardless of the severity of his or her impairment. The amount of 
average monthly earnings that ordinarily demonstrates SGA was increased 
effective July 1, 1999, when the Board raised from $500 to $700 the 
average monthly earnings guidelines used to determine whether work done 
by a person is substantial gainful activity.
    The Board proposes to issue regulations that would increase certain 
thresholds for disabled workers. Under the proposal, the average 
monthly earnings guideline, which is used to determine whether work 
done by disabled workers (other than those who are blind) is 
substantial gainful activity, would be increased to $740.00 for 
calendar year 2001 and would thereafter be automatically adjusted each 
year based on increases in the Social Security national average wage 
index. See 42 U.S.C. 409(k)(1). The amount that is used to determine if 
a disabled individual has performed ``services'' during a trial work 
period also would be subject to an automatic annual adjustment. These 
changes would conform to changes in the regulations of the Social 
Security Administration that became final effective January 29, 2001 
(65 FR 82905, December 29, 2000).
    In order to be eligible for disability benefits, an applicant must 
not be performing substantial gainful activity. A beneficiary's ongoing 
eligibility for disability benefits is also subject to this rule. 
Therefore, the Board has established both upper and lower thresholds as 
guidelines for determining, respectively, what is prima facie evidence 
of engaging in SGA and what is prima facie evidence of not engaging in 
SGA. Except for those who work in sheltered workshops, disabled workers 
with earnings between the two thresholds are subject to further 
examination. Currently, the upper and lower thresholds are $700 and 
$300, respectively. For those working in sheltered workshops, earnings 
below the upper threshold are prima facie evidence that the worker is 
not performing SGA.
    Under the Board's proposal, beginning January 1, 2002, the upper 
threshold would be adjusted annually, based on the Social Security 
national wage index, to conform to the SGA level determined by the 
Social Security Administration (SSA) and published in the Federal 
Register each October as part of SSA's notice that includes new 
adjustments. Under this proposal, the SGA amount would never be lower 
than the previous year's amount. However, there may be years in which 
there is no increase.
    As part of this proposal, the Board also plans to eliminate the 
lower SGA threshold so that earnings below the upper threshold would be 
prima facie evidence that a disabled worker is not engaging in SGA, 
regardless of whether the worker is working in competitive employment 
or in a sheltered workshop.
    The Board also proposes to increase the monthly amount that a 
disabled worker may earn within a trial work period without 
jeopardizing the amount of time remaining in the trial work period. 
Currently, a disabled worker may test his or her ability to work and 
still be considered disabled by working during a trial work period. A 
disabled beneficiary will continue to be considered disabled until the 
beneficiary performs ``service'' in at least nine months within a 
rolling 60-month period. Since 1990, the Board has considered any month 
in which at least more than $200 is earned to be a month of service.
    Under the proposed rule, the threshold amount would be increased to 
$530 for 2001, and then would be adjusted annually thereafter based on 
the Social Security national average wage index to conform to the 
amount

[[Page 34342]]

determined by the Social Security Administration and published in the 
Federal Register every October. The Board notes that while the SGA 
amount has increased since 1990, during the same period, the trial work 
period services amount has remained unchanged. As with the change 
proposed for the SGA threshold amount, the trial work period amount 
would never be lower than the previous year's amount.

Proposed Regulations--Background

    The Board proposes to revise Sec. Sec.  220.143(b)(2) and (b)(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 average monthly earnings 
considered to be substantial gainful activity will be increased from 
$700 to $740. Beginning January 2002, the guideline would be the higher 
of the previous year's amount or an increased amount as computed and 
published by the Social Security Administration based on the Social 
Security national average wage index.
    The Board also proposes to amend Sec. Sec.  220.143(b)(2) and 
(b)(4) to clarify 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 Sec.  220.144 of this part.
    The Board proposes to revise Sec. Sec.  220.143(b)(3) and (b)(6) to 
provide, beginning January 2002, 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 Sec.  
220.143(b)(2) has not engaged in substantial gainful activity without 
considering other information beyond the employee's earnings. The Board 
also proposes to make conforming changes to Sec.  220.143(b)(4).
    The Board proposes to revise Sec.  220.170 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.

Collection of Information Requirements

    The amendments to this part do not impose information collection 
and recordkeeping requirements. Consequently, it need not be reviewed 
by the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

Regulatory Impact Statement

    Prior to publication of this proposed rule, the Board submitted the 
rule to the Office of Management and Budget for review pursuant to 
Executive Order 12866. Executive Order 12866 directs agencies to assess 
all costs and benefits of available regulatory alternatives and when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for rules that 
constitute significant regulatory action, including rules that have an 
economic effect of $100 million or more annually. This proposed rule is 
not a major rule in terms of the aggregate costs involved. 
Specifically, we have determined that this proposed rule is not a major 
rule with economically significant effects because it would not result 
in increases in total expenditures of $100 million or more per year.
    The amendments made by this proposed rule are not significant. The 
amendments to Sec. Sec.  220.143 and 220.170 will index the amount of 
earnings used to determine if an individual is engaged in substantial 
gainful activity (SGA) to any increase in the Social Security national 
average wage index, and increases from $200 to 530% the minimum amount 
of monthly earnings to count during a trial work period, and then index 
that amount to the Social Security national average wage index.
    Both the Regulatory Flexibility Act and the Unfunded Mandates Act 
of 1995 define ``agency'' by referencing the definition of ``agency'' 
contained in 5 U.S.C. 551(l). Section 551(l)(E) excludes from the term 
``agency'' an agency that is composed of representatives of the parties 
or of representatives of organizations of the parties to the disputes 
determined by them. The Railroad Retirement Board falls within this 
exclusion (45 U.S.C. 231f(a)) and is therefore exempt from the 
Regulatory Flexibility Act and the Unfunded Mandates Act.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a rule that imposes substantial 
direct compliance costs on State and local governments, preempts State 
law, or otherwise has Federalism implications. We have reviewed this 
final rule under the threshold criteria of Executive Order 13132 and 
have determined that it would not have a substantial direct effect on 
the rights, roles, and responsibilities of States or local governments.
    In accordance with the provisions of Executive Order 12866, this 
regulation has been found not to be a significant amendment by the 
Office of Management and Budget.

List of Subjects in 20 CFR Part 220

    Railroad Retirement.

    For the reasons stated in the preamble, the Railroad Retirement 
Board proposes to amend part 220 of chapter II of title 20 of the Code 
of Federal Regulations as follows:

PART 220--DETERMINING DISABILITY

    1. The authority citation for part 220 continues to read as 
follows:

    Authority: 45 U.S.C. 231a; 45 U.S.C. 231f.

Subpart L--Substantial Gainful Activity

    2. Section 220.143 is amended by revising paragraphs (b)(2), 
(b)(3), (b)(4), and (b)(6) to read as follows:


Sec.  220.143  Evaluation guides for an employed claimant.

* * * * *
    (b)* * * (1) * * *
    (2) Earnings that will ordinarily show that the claimant has 
engaged in substantial gainful activity. The Board will consider that 
the earnings from the employed claimant show that the claimant engaged 
in substantial gainful activity if:
    (i) Before January 1, 2002, the earnings averaged more than the 
amount(s) in Table 1 of this section for the time(s) in which the 
claimant worked.
    (ii) Beginning January 1, 2002, the earnings are more than an 
amount determined for each calendar year to be the larger of:
    (A) The amount for the previous year, or
    (B) The amount established by the Social Security Administration to 
constitute substantial gainful activity for such year.

   Table 1.--Amounts Indicating Substantial Gainful Activity Performed
------------------------------------------------------------------------
                                                               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

[[Page 34343]]

 
In calendar year 1979......................................          280
In calendar years 1980-1989................................          300
January 1990-June 1999.....................................          500
July 1999-December 2000....................................          700
In Calendar year 2001......................................          740
------------------------------------------------------------------------

    (3) Earnings that will ordinarily show that the claimant has not 
engaged in substantial gainful activity. Beginning January 1, 2001, if 
the claimant's 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 the claimant works, the Board will generally consider that the 
earnings from the claimant's work as an employee will show the claimant 
has not engaged in substantial gainful activity. Before January 1, 
2001, if the claimant's earnings were less than the amount(s) in Table 
2 of this section for the year(s) in which the claimant worked, the 
Board will generally consider that the earnings from the claimant's 
work as an employee will show that the claimant has not engaged in 
substantial gainful activity.

 Table 2.--Amounts Indicating Substantial Gainful Activity Not Performed
------------------------------------------------------------------------
                                                               Monthly
                                                               earnings
                        For months:                            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, 2002, if the claimant worked in a sheltered 
workshop. Before January 1, 2002, if the claimant worked in a sheltered 
workshop or a comparable facility especially set up for severely 
impaired persons, the Board will ordinarily consider that the 
claimant's earnings from this work show that the claimant has engaged 
in substantial gainful activity if the claimant's 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 the claimant has 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 the claimant's earnings from a 
sheltered workshop or comparable facility are equal to or less than 
those amounts indicated in paragraph (b)(2), the Board will consider 
the provisions of paragraph (b)(6) of this section only if there is 
evidence showing that the claimant may have engaged in substantial 
gainful activity.
* * * * *
    (6) Earnings that are not high enough to ordinarily show that the 
claimant engaged in substantial gainful activity.
    (i) Before January 1, 2002, if the claimant's average monthly 
earnings were between the amounts shown in paragraphs (b)(2) and (3) of 
this section, the Board will generally consider other information in 
addition to the claimant's 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 the Board 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, 2002, if the claimant's average monthly 
earnings are equal to or less than the amounts determined under 
paragraph (b)(2) of this section, the Board will generally not consider 
other information in addition to the claimant's earnings unless there 
is evidence indicating that the claimant may be engaging in substantial 
gainful activity or that the claimant is in a position to defer or 
suppress his or her earnings.
    (iii) Examples of other information the Board may consider include, 
whether--
    (A) The claimant's work is comparable to that of unimpaired people 
in the claimant's 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) The claimant's 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 the claimant's 
community.

Subpart N--Trial Work Period and Reentitlement Period for 
Annuitants Disabled for Any Regular Employment

    3. Section 220.170 is amended by revising paragraph (b) to read as 
follows:


Sec.  220.170  The trial work period.

* * * * *
    (b) What the Board means 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 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 the claimant is an employee. The Board will consider the 
claimant's work as an employee to be services if:
    (i) Before January 1, 2002, the claimant's earnings in a month were 
more than the amount(s) indicated in Table 1 of this section for the 
year(s) in which the claimant worked.
    (ii) Beginning January 1, 2002, the claimant's 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) The amount established by the Social Security Administration 
for such year as constituting the amount of monthly earnings used to 
determine whether a person has performed services for counting trial 
work period months.
    (2) If the claimant is self-employed. The Board will consider the 
claimant's activities as a self-employed person to be services if:
    (i) Before January 1, 2002, the claimant's net earnings in a month 
were more than the amount(s) indicated in Table 2 of this section for 
the year(s) in which the claimant worked, or the hours the claimant 
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 the claimant worked.
    (ii) Beginning January 1, 2002, the claimant worked more than 40 
hours a month in the business, or the claimant's 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) The amount established by the Social Security Administration 
for such year as constituting the amount of monthly earnings used to 
determine

[[Page 34344]]

whether a person has performed services for counting trial work period 
months.

                     Table 1.--For Non-Self Employed
------------------------------------------------------------------------
                                                           You earn more
                       For months:                             than:
------------------------------------------------------------------------
In calendar years before 1979...........................             $50
In calendar years 1979-1989.............................              75
In calendar years 1990-2001.............................             200
In calendar year 2001...................................             530
------------------------------------------------------------------------


                     Table 2.--For the Self-Employed
------------------------------------------------------------------------
                                                             Or you work
                                                  Your net      in the
                  For months:                     earnings     business
                                                  are more    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
------------------------------------------------------------------------

* * * * *

    Dated: May 30, 2003.

    By Authority of the Board.
Beatrice Ezerski,
Secretary to the Board.
[FR Doc. 03-14273 Filed 6-6-03; 8:45 am]
BILLING CODE 7905-01-P