Category Archives: Social Security Disability

Past Relevant Work and Disability according to Social Security

Past Relevant Work (PRW) can prevent you from being found disabled by the Social Security Administration, but claimants often do not understand what this means and why it can be so important in deciding a disability claim. In the five-step sequential evaluation to determine whether or not a claimant is disabled, this issue does not arise until Step 4 but will end the case for someone found capable of doing PRW – this person cannot be disabled.

The Basic Definition of Past Relevant Work

At its most basic level, Past Relevant Work examines your current capacity to perform past work, which may show the ability to do Substantial Gainful Activity (SGA) now. To define Past Relevant Work, you focus on a specific portion of your past work – this is the “relevant” part. The Social Security Administration uses a 15-year window here. This window “closes” at the earlier of two dates: the “date last insured,” which is the last day that you met the requirements to be eligible for Social Security benefits, and the date that the disability determination is made. Then, you look at all of your work from whichever date applies to the date ending 15 years prior to this date.

However, not all of your past work within this timeframe is necessarily relevant (SSR 82-62).The general rule of thumb is that you had to have earnings that at least equaled the amount set as Substantial Gainful Activity (SGA) when you did the work. Relevant work also means that you performed the work long enough to know how to do the job. The level of skill required by a job provides the guidance here. For example, unskilled positions usually are considered to take no more than 30 days to learn. As a job becomes more complex to learn, you would need to earnings at SGA level for a longer period of time. Being able to explain what you had to do at a particular job is important because this demonstrates the necessary skill level, which, in turn, affects how long you had to do a job at SGA level for it to be considered PRW.

Past Relevant Work becomes very important if you are not found to meet or equal one of the SSA’s listed impairments because, while PRW cannot lead to a finding that you are disabled, it can eliminate the possibility of being found disabled. For example, if the Administrative Law Judge (ALJ) at a hearing decides that you did something that would be Past Relevant Work and also decides that your functional capacities at the time of the hearing would allow you to do this job now, then you are not disabled. Everything that would qualify as PRW during the prior 15 years must be beyond your functional capacities for your disability claim to reach the fifth and final step of the sequential evaluation (i.e., whether or not a claimant can do any job found in significant numbers in the national economy).

The SSA chose fifteen years as the lookback period for a specific reason. The theory is that jobs and their requirements gradually change over time with societal and technological changes occurring. What employers will need to do a particular position has to adjust to these changing demands. The thinking is that, after 15 years, a comparison between what you had to do then versus what you would have to do in the same work now is unrealistic.

Past Relevant Work: Viewed from Two Perspectives by Social Security

Past Relevant Work is viewed from two potentially different perspectives. First, an ALJ at a hearing wants to know how you performed this work (SSA – POMS: DI 25005.020 – PRW as the Claimant Performed It – 04/27/2017). This could be very different from the standard definition since one employer’s needs may differ from another’s. Being able to explain how you did a job on a function-by-function basis is crucial here. Another reason is that your work as you did it may not be among the standard definitions found in the Dictionary of Occupational Titles (the “DOT”) because many jobs are composed of various elements of different jobs. These “composite” positions are not found in the DOT.

As long as you can perform all of the essential parts of the job as you did it, you usually are not considered disabled. There is enough flexibility in the concept of Past Relevant Work that part-time work could be considered PRW under certain circumstances as could work performed during a 4-day week instead of the 5-day week that is part of the standard SGA definition. While you may be able to do PRW as you actually performed it, this flexibility regarding defining your Past Relevant Work might not preclude a finding of disability at Step 5. For example, an inability to work a 40-hour week could significantly erode your occupational base, leading to a favorable disability determination here.

The second way that Past Relevant Work is evaluated does focus on how the work generally is performed in the national economy. The DOT remains the starting point for this definition. A decision on disability should consider and discuss PRW from both perspectives.

In the context of the SSA’s sequential evaluation of disability claims, Past Relevant Work could be irrelevant if a final determination on a claim is made in any of the 3 prior steps (Code of Federal Regulations § 404.1560). However, since there is no guarantee that this will happen, a case must be approached with the idea that Step 4 will be reached. This means that a claimant’s PRW needs to be developed. The main source of documentation for vocational evidence of Past Relevant Work should be the claimant, who can describe past employment in terms of the tasks, responsibilities, and other factors that comprised the work. If the claimant cannot or, for some reason, will not provide this information and if no other source for this vocational information is available, the claim generally will be denied.

How the Ability to Do Past Relevant Work is Determined

After the information about PRW is determined, it is used to decide if you are able to do your Past Relevant Work. Your Residual Functional Capacity (RFC) – what you can do despite any and all limitations due to your impairments – is determined prior to Step 4. RFC is described on a function-by-function basis. This is compared to the physical and mental demands of your PRW at this point. The issue is whether the RFC will permit the claimant to do the Past Relevant Work as the claimant actually performed it or as it generally is done in the national economy. The facts of the case are used to decide how these comparisons are made.

In the end, if PRW cannot be done under either test, then the disability determination moves to Step 5. This is the final step, which looks at the ability to do any work at SGA level that is found in the national economy in significant numbers.

It is important to remember that a decision regarding Past Relevant Work does not occur in a vacuum. There must be a current comparison point, which is why mental and physical Residual Functional Capacity must be established prior to Step 4. For example, at a hearing, the Administrative Law Judge will determine the claimant’s functional limitations, looking at capacities to sit, stand, walk, lift, and carry (among other physical abilities). They are compared to the physical demands of PRW. If there is evidence of mental or emotional impairments that affect a person’s RFC, then the ALJ needs to know job responsibilities and duties from the PRW that would be likely to produce tension and anxiety, for example. Again, this is a function-by-function comparison of current Residual Functional Capacity with the claimant’s Past Relevant Work and what it required the person to do.

Quick Tips to Remember about the Development of Past Relevant Work

If you apply for disability, you always must bear in mind that you are the primary source of your work experience (Code of Federal Regulations § 404.1565). You need to give a detailed description of jobs that you performed. Then, you have to give credible testimony of the work requirements that you no longer can meet as well as the reasons why you cannot perform them anymore. Your testimony is not the only consideration, though. Disability decisions rely on medical evidence so the evaluation of medical evidence must support your reasons. Other sources that may influence any decision about your current ability to do PRW may come from a Vocational Expert at your hearing and even the somewhat outdated Dictionary of Occupational Titles, providing an overview of how your Past Relevant Work generally is performed in the national economy.

Taken together, all of these things lead to the decision at Step 4 of the sequential evaluation. The decision maker should state the relative weight given to medical and non-medical factors in the determination regarding your ability to do your Past Relevant Work. In doing this, your Residual Functional Capacity must be explained as well as the factual findings of the physical and mental demands of the past work being considered. In the final analysis, you need to remember that you will give much of the information needed to make this decision so you cannot afford to treat your Past Relevant Work as an afterthought. While no finding regarding this issue can ensure a favorable disability determination, a decision not to fully develop your Past Relevant Work can easily doom your disability claim.

A Self-Funded Special Needs Trust, an Exception for Medicaid (MA) & SSI Eligibility

In 1993, Congress passed a law (often called OBRA ’93) that allows some disabled individuals to be the beneficiaries of what is known as “self-funded” Special Needs Trust (SNT) under the Social Security Act. This is set out in Title 42 of Section 1396p(d)(4(A) of the U.S. Code. Since the law can be somewhat confusing, the Social Security Administration (SSA) developed a review process with 8 steps when its staff evaluates a trust under this law.

In terms of terminology, we are looking at self-funded Special Needs Trusts. Another type of trust is called a “supplemental needs” trust. This developed from cases, not specific legislation. While OBRA ’93 permitted assets of disabled individuals to be used in certain types of trusts, a supplemental needs trust has created by a third party with the assets of the third party. However, we only look at self-funded SNTs here.

In reviewing the steps used by the SSA, these also provide a practical way to quickly determine if a person who might meet SSA’s definition of disability could be the beneficiary of a self-funded SNT. If it survives this quick test, then you still must pay attention to the remaining details for SNTs. After all, a person with the trust generally can’t benefit if leads to ineligibility for government benefits based on need, such as Supplemental Security Income (SSI) and Medicaid (generally known as Medical Assistance, or MA, in Pennsylvania).

The first step looks at the age of the disabled individual. A Special Needs Trust that holds the assets of a disabled person must be created before the person reaches 65. The trust can continue after the individual’s 65th birthday, but it must exist as a self-funded SNT before that date.

Next, the SSA focuses on the source of the trust’s assets. There must be assets in the Special Needs Trust that a person meeting the SSI definition for disability, which generally involves a medical impairment that prevents the person from engaging in full-time employment for a period expected to last at least 12 consecutive months. If not (on either count), a self-funded SNT cannot exist.

The third requirement of the SSA is that the person meeting the definition of “disabled” is the trust’s only beneficiary. This does not mean that the trustee can’t make direct payments to third parties if these do not pay for anything defined as food or shelter by the SSA. However, the trust can’t give benefits to third parties during the disabled person’s life. Also, the trust can’t be terminated during the individual’s life (unless the trust’s property – often called the corpus or principal – could be paid only to the states or creditors for goods or services that were provided by them to the disabled person.

In addition, Social Security reviews how the trust was created in the fourth step of its evaluation. Specifically, only the following can place the person’s assets into the trust: a parent, grandparent, a legal guardian, or a court. The disabled individual cannot place assets into the self-funded Special Needs Trust. However, parents and grandparents may be allowed use a small amount of their money to start the trust, after which the disabled person (or a person with legal authority, such as via a Power of Attorney, to exercise control over the disabled person’s assets) may transfer property into the trust. As for a court, it must issue an order creating the trust; anything less (like merely stating approval of the trust) is insufficient. Basically, action by an appropriate party must be taken to start  the SNT. The reason that the agent under a Power of Attorney isn’t an appropriate party is that the disabled person gave the agent permission to act  here and has control over the existence of the relationship.

The fifth step in establishing the self-funded Special Needs Trust is that the document must require reimbursement from the trust after the disabled beneficiary’s death to all states that made Medicaid payments for the individual. No other debts can be paid until all of these amounts have been repaid. This is why these trusts are called payback trusts, with the repayment not limited to Medicaid received during a specific timeframe in the trust document.

If the criteria in the first five steps are not met, this still could be a “pooled” trust, which was created in the same legislation (OBRA ’93). This bears some similarity to a bank account controlled by the bank. However, the strengths and weaknesses of this type of trust account merit more detailed explanation than can be given in a paragraph. What is probably most notable is that the disabled person can work with a nonprofit organization to set up the pooled trust account. For now, it should be noted that the SSA goes to the eighth step when a pooled trust might be involved.

As noted in the first step, assets of the disabled person must be in the trust before the person’s 65th birthday. The sixth step looks at additions to the Special Needs Trust after the person has reached 65. In general, the regular SSI and MA rules apply so, after the month of the addition, it will count as a resource. In the month that it was placed in the trust, it might be considered income or a resource, depending how it became part of the trust. Annuity and support payments can be exceptions to the rule if there was a right to receive payments prior to age 65, with the rights to payments assigned irrevocably to the SNT before that age.

There is no issue regarding increases in the principal of the self-funded Special Needs Trust due to assets of the disabled individual placed in the trust before turning 65. Interest, dividends, and any other earnings from that part of the trust are not considered additions.

This leads to Step 7, which focuses on assets in the trust before the individual reached 65. If someone has legal authority to revoke or terminate the trust and any of its funds are then available for food or shelter needs, the principal is considered a resource for SSI eligibility. Also, when a person can use the principal for support and/or maintenance, it again is a resource. Finally, when the disabled beneficiary has an interest that can be sold, this person has a resource. The SSA provides the example of an individual who has the right to monthly payments. Unless a spendthrift provision is in the trust, the right to these payments could be sold for a lump sum that also would count as a resource.

Step 8 does not involve the self-funded Special Needs Trust because it looks at assets placed in trust after 65. It looks at whether these assets qualify as a pooled trust. Since this is a different exception to SSI and MA rules from OBRA ’93, it won’t be examined here. However, it is important to remember that this other exception is available if an SNT is no longer a possibility.

The Sequential Evaluation – How Disability Determinations are Made

In every disability determination, the Social Security Administration applies what is known as the 5-step sequential evaluation. We will look at this process in the context of a hearing with an Administrative Law Judge (ALJ), but the sequential evaluation is used during each stage that a decision must be made regarding whether or not an individual meets the criteria for being found to be disabled.

The first step in the sequential evaluation involves the issue of Substantial Gainful Activity (SGA), which generally is determined by earnings. If you are working at the time of your hearing and earn more than the monthly SGA level, then you are not currently disabled. There are times when you may be working now but had not worked during most of the period prior to your hearing (which usually is more than 1 year). This could allow you to be found to have a “closed” period of disability that ended when you began to work. As a result, you could receive retroactive disability benefits for the months of the closed period, even though you are ineligible for monthly benefits. However, for any period of disability, the remaining steps of the sequential evaluation have to lead to the determination that you are (or were) disabled.

Assuming that your health prevents you from engaging in substantial gainful activity, the ALJ will move to Step 2 of the sequential evaluation. This focuses on whether you have at least 1 “severe” impairment, which is a health problem that causes some restriction of a work-related activity. You need medical documentation of this impairment. There also is a time element involved – you must have been severely impaired for an entire year. If you have had a severe impairment for less than 12 continuous months, you still can get through Step 2 if your impairment is expected to last for at least one year or to result in death prior to one year. In general, the ALJ will find 1 or more severe impairments, as this is a minimal test in the process. Things become more difficult after this point.

When the sequential evaluation reaches Step 3, attention turns to whether or not you have a listing-level impairment or if your condition, considering all limitations caused by all of your impairments (even those that would not be seen as “severe” when viewed alone), is equivalent to a listing. These listings are found in the Social Security regulations and can be broke into 2 categories, physical and mental. To meet a listing, you must meet certain criteria spelled out in that listing. On occasion, a person might have an impairment (or a combination of impairments) not covered by a particular listing. A listing could be met based on medical equivalence. For example, a recent case found that Listing 11.03 (non-convulsive epilepsy) could be applied to someone suffering from migraines (for which there is no listing). If a listing is met, you are disabled, and you do not have to go through the rest of the sequential evaluation. Most cases are not decided at this point, though.

The next step is not actually one of the 5 steps in the sequential evaluation. Before the ALJ looks at the fourth step of the process, the ALJ has to decide your residual functional capacity (RFC), which looks at the work-related abilities that you retain despite your impairments. Depending on your impairments, you could have a physical RFC and a mental RFC. However, if your impairments are only exertional (which means that they are related to strength), there are medical-vocational grids that the ALJ can use to determine if there are any jobs that you can do. When both exertional and non-exertional impairments (such as depression) are present, these grids can be used as a framework for deciding your case but cannot dictate the disability determination as they can when you only have exertional impairments. When the grids can‘t be used to decide the case, the ALJ needs the help of a person who is called a “vocational expert” to finish the sequential evaluation.

The ALJ’s determination of your RFC becomes crucial at Step 4 of the sequential evaluation that looks at your Past Relevant Work (PRW). At this stage, the vocational expert is asked whether you could do any of your prior jobs (which generally are jobs that you performed at SGA level for more than a few months during the past 15 years of your work history) based on your current RFC. If you are found to be able to do so, then you are not disabled. If you can’t do any of your PRW, then your claim reaches the final “official” step.

At Step 5 of the sequential evaluation, the ALJ asks the vocational expert questions about a hypothetical worker. These are based on your RFC. Generally, an ALJ may present 2 or 3 hypotheticals to the vocational expert, who is supposed to know if there are any jobs in the national economy that exist in “significant numbers” that you could do on a full-time basis, basically. One of the hypothetical workers represents the ALJ’s view of you, although you are not told which is supposedly you. However, if the vocational expert can find no jobs for that hypothetical person, then you are disabled

Although you may be disabled at what would appear to be the end of the sequential evaluation, there is a last test that you must pass. This involves alcohol or other drugs. If a person is using any of these, the ALJ will decide if this usage is a “substantial and material contributing factor” to your being disabled. In other words, would you still be disabled if you stopped using alcohol or other drugs? If this would not affect your ability to perform SGA, the decision that you are disabled would be the final decision in your case.

Focus on the Continuing Disability Review

When you are found to be disabled, you should expect to face continuing disability reviews in the future. After any disability determination, a date known as a diary will be scheduled for a review. Generally, they are supposed to be three or seven years after the most recent disability finding. Some disabling impairments, such as many mental illnesses, are considered more likely to improve so a three-year review may be set. Others – like low intellectual functioning – generally remain throughout one’s life, but the law requires reviews so they probably would be set for review seven years after the most recent disability determination. The likelihood of improvement is the key so a condition initially found disabling but viewed as one that probably won’t last beyond than the one-year requirement in the Social Security Administration’s disability definition may be revisited within a year of the current decision.

At times, insufficient funding has made review less likely than the law dictates. Recently, Congress increased funding for continuing disability reviews so people who have escaped review in the past should be aware that they might be not so lucky in the near future.

A continuing disability review (CDR) will focus on your medical condition instead of your financial situation. There are various factors considered in this decision regarding whether or not your condition continues to prevent you from working enough to remain disabled under the agency’s rules and regulations. The basic issue is if there has been any medical improvement in your impairment(s) that led to you being found disabled. If there has been improvement, the next issue is if the medical improvement has affected your ability to work. However, even when there has been no medical improvement, there is another factor: do any exceptions to medical improvement (which will be discussed briefly later) apply? If there is no medical improvement applicable exception, you remain disabled.

What happens if the continuing disability review shows that you have medically improved – and the improvement is related to your ability to work – or an exception to medical improvement applies? You may lose your disability benefits. In general, this only occurs if the SSA finds that you can do substantial gainful activity (which is basically working 8 hours a day for 5 days each week). Also, even when your condition has improved, you still may be disabled because the SSA then has to decide if your condition meets its current disability rules. In the end, most people actually keep receiving benefits after a CDR.

The definition of “medical improvement” in a continuing disability review is any decrease in the medical severity of your impairment(s) that were present during the most recent determination that found you disabled, often referred to as the “most recent comparison point.” If you have not been reviewed after your initial disability determination, that initial decision is the comparison point regarding any improvement. However, if you had a CDR after the first decision, your condition at the prior continuing disability review is now the comparison point. Medical improvement could be found based on improvements in your symptoms (which you report), signs (as observed by medical professionals), and/or laboratory findings associated with your impairment(s).

Medical improvement alone doesn’t mean that your disability has ended. Improvement must be related to your ability to work. If the impairments that led to the finding of disability at the most recent comparison point now are less severe, your improved condition won’t not affect your disability status if your functional capacity to perform basic work activities hasn’t increased.

Even if your functional abilities have increased, you must be able to perform substantial gainful activity defined by the SSA in the year of the continuing disability review to end your disability benefits. Unless your capacity to work improves to this extent or one of the exceptions (which will be mentioned later) applies to you, your benefits will continue. What is “functional capacity to do basic work activities?”

Disability looks at the inability to do any substantial gainful activity due to any medically determinable physical or mental impairment. “Basic work activities” are abilities and aptitudes required by most jobs. They include exertional abilities, such as walking, standing, pushing, pulling, reaching, and carrying. Nonexertional abilities and aptitudes include seeing, hearing, speaking, remembering, using judgment, handling changes, and dealing with supervisors and coworkers. A person with no impairments can do all of these, basically, and has an unlimited functional capacity for basic work activities.

Disabling impairments result in some limitation to the functional capacity for at least one of these basic work activities. Residual functional capacity (RFC) is what you can do despite limitations caused by an impairment. If you can’t perform substantial gainful activity based on your RFC, you are disabled. Your RFC is used to determine whether you can do your past work or, considering your age, education, and work experience, other work at the level of substantial gainful activity.

In a continuing disability review, the Administration must determine if any medical improvement is related to your ability to work when there is a decrease in medical severity shown by symptoms, signs, and laboratory findings. The SSA assesses your residual functional capacity based on the current severity of the impairment(s) present at your last favorable medical decision.

The new residual functional capacity is compared to your residual functional capacity during your prior disability decision. An increase in your residual functional capacity is based on actual changes in the signs, symptoms, or laboratory findings – otherwise, any medical improvement isn’t considered related to your ability to do work.

There are additional factors and considerations that can be part of the continuing disability review. Generally, the most important of these are any exceptions to medical improvement. There are two groups of exceptions to medical improvement reviewed at a continuing disability review. The first focuses on current impairments and the ability to do substantial gainful activity. The Administration looks at evidence that you no longer are disabled – or, perhaps, never should have been considered disabled. There must be substantial evidence of any of these.

One exception arises if you benefited from advances in medical or vocational therapy or technology related to your ability to work. There also may be new or improved diagnostic or evaluative techniques showing your impairment is not as disabling as it was found to be during your most recent favorable decision. A third exception involves substantial evidence showing a prior disability decision was in error, although this only can be found when conditions for reopening a prior decision are met.

The second category of exceptions to medical improvement not involving medical improvement or substantial gainful activity also can lead to an end of your benefits at a continuing disability review. One involves a prior determination or decision was fraudulently obtained. The Administration looks at physical, mental, educational, or language limitations that you had at the prior determination. Another exception concerns not cooperating with the SSA. If asked for medical or other evidence or told to go to a medical examination, you will be found no longer disabled if you ignore such “requests,” provided you lack good cause for the failure. The third exception in this group seems obvious: if the SSA cannot find you and has questions regarding your disability, your payments will be suspended. Finally, your failure to follow prescribed treatment which would be expected to restore your ability to engage in substantial gainful activity, unless you show good cause for this, will end your entitlement to benefits.

If you are notified your Social Security disability benefits are to be ceased after an unfavorable continuing disability review, your benefits will continue for two more months to allow you time to arrange other support. (You also may be able to contest the decision.) The only exception to the two-month rule is if your benefits are ending for failure to cooperate – in that case, they would cease immediately.

Duties of a Representative Payee

A representative payee appointed by the Social Security Administration only has authority over the beneficiary’s funds that come from Social Security Disability (SSD) or Supplemental Security Income (SSI) and is appointed when the SSA decides the person cannot manage their funds. This means that your authority begins and ends with these payments – you are responsible for acting in the best interest of the beneficiary when using the funds. You also have no control over money from any other source so you cannot affect how it is used.

You must consider the SSA’s guidelines for spending priorities when using the beneficiary’s funds. You first have to look at the beneficiary’s needs for personal maintenance, which include housing, medical care, food, clothing, and personal-care items. Also, you must know the individual’s reasonably foreseeable needs in determining how to use these payments. Both of these point out that a representative payee needs to have contact with the beneficiary in order to have enough information to make reasonable decisions.

Those considerations apply to both SSD and SSI while a few other areas, such as providing for legal dependents, apply only to SSD. Any funds that remain should be saved or invested and, any account must show that you hold any funds for the sole benefit of the disability recipient. An added responsibility with SSI is that you must limit how much is saved because countable resources, including funds in savings accounts, cannot be more than $2000 for an individual.

Conserving some funds may be difficult, but it can be vital to provide some safety net when unexpected needs arise. The basic rules for SSD payments are that the SSA’s preferred investments are US Savings Bonds and other low-risk investments; also, payees should look to the laws of their states regarding investing funds held by in trust by trustees for guidance. After savings reached $500, a payee is to place additional savings in interest-bearing accounts. For SSI, this threshold is set at $150.

Whether the beneficiary receives SSD or SSI, you as the payee have another option for deciding how to use the conserved funds – you also can look to the state’s law regarding how trustees are supposed to make investment decisions for guidance. This points out that, like a trustee, a representative payee is a fiduciary, who must exercise a high standard of care in managing the funds of another.

In Pennsylvania, trustees follow the Prudent Investor Rule so payees can follow this, too. This permits investment in every kind of property and type of investment, including mutual funds, considering factors like the needs of the beneficiary for current and future distributions and current income and resources. Pennsylvania also requires a fiduciary to diversify investments unless reasonably determining that not diversifying is in the beneficiary’s interest.

With SSD and SSI, the requirements for handling the recipient’s funds tend to be similar, but the SSI program is a federal welfare program with additional restrictions. The monthly SSI benefit amount is below the poverty level, and the program’s main purpose is helping the beneficiary meet daily living expenses. As savings increase, the SSA may question if these needs are being met or if the beneficiary might have additional income or resources that could affect eligibility. If conserved funds are at least 3 times SSI’s Federal Benefit Rate for the year, you probably should expect the agency to look into the reasons. You may face being replaced as the payee and, possibly, be found to have misused benefits that you would have to repay. Generally, the SSA wants $9 of every $10 received for the beneficiary spent to meet basic needs.

While you have similar investment options with SSD and SSI, the resource limit of $2000 for an SSI recipient means you must track the value of countable resources because the SSA reviews this for financial eligibility. You need to know which resources are counted and which are excluded, too.

Low-risk investments that are preferred investments of conserved SSD funds can be made with conserved SSI funds. However, any interest, which would not be much, could cause problems. When an SSI recipient receives unearned income, the first $20 from any source is not counted. After this, monthly SSI is reduced by $1 for every $1 of unearned income. Then, in the month after the interest income is counted, what remains is added to the countable resources. Depending on how close a person is to the resource limit of $2000 for individuals (and $3000 for couples), the small return on investment could be big enough to push them over the resource limit.

Therefore, a payee must know how to convert a countable resource into an excluded one. There are a number of possibilities, but the SSI program’s rules and regulations are complicated. For example, you could set up a burial fund for the SSI beneficiary. This amount is kept separate from other funds and is to be used only for burial expenses. If the amount that used for this purpose is no more than $1500, then this would not count among resources that determine SSI eligibility, and interest earned is not counted as income. You also might purchase a burial space for the individual because this is not a countable resource.

Next, you might look at insurance. If you buy burial insurance, you would not cause a problem because this has no cash surrender value so it is not counted as a resource. However, if life insurance is purchased for an SSI recipient (who would be the policy owner), you face headaches. Any cash surrender value makes this a resource. Circumstances determine if it will be a countable resource. The basic rule is life insurance policies with face values totaling no more than $1500 will not have their cash surrender values counted as resources.

The burial fund that you established two paragraphs ago to exclude resources will be affected. While the face values of the life insurance results in its cash surrender value being excluded as a resource, the part of the amount in the burial fund now will be counted. Because the cash surrender value of the insurance has been excluded, the $1500 exclusion for the burial fund is reduced by the face value of any life insurance policy of the beneficiary.

Potential landmines like this exist for a payee, especially with SSI. You have to do your homework or consult with someone so you know what you can do and its impact. You also need to discuss possible decisions with the beneficiary to get input whenever possible. If you do not talk with the person receiving the disability payments, forgetting your duty to act in that person’s interests, the Social Security Administration may make you an ex-payee. This should give you an idea of the both importance of the representative payee and of making sure you know what you can and cannot do when you accept this position.

The Impact of Substance Abuse in a Social Security Disability Case

A person cannot be found disabled by the Social Security Administration due to substance abuse, whether it involves drug addiction or alcoholism. However, a person can be disabled despite the use of drugs or alcohol. The key legal issue is if substance abuse is a “contributing factor material to the determination of disability.”


Another issue with substance abuse involves the mindset of some Administrative Law Judges, who often do not want to find someone who uses drugs or alcohol disabled. Deciding that a person who has a history of using drugs or alcohol is not disabled regardless of any others facts in a case is a misapplication of the law, but it can occur.

This is a bigger problem when the history of substance abuse is more recent or ongoing. However, even if drug abuse or alcoholism is ongoing, you still could be disabled if you have other impairments that prevent you from working. It is the impact of substance abuse on your other impairments that must be considered under current Social Security law.


During a hearing, an Administrative Law Judge (ALJ) goes through five steps in evaluating your disability claim. In most cases, if you are found disabled due to physical or mental impairments resulting in limitations that make full-time work of any kind impossible, then you are entitled to disability payments. However, when alcohol or other drugs enter the picture, you may be found to meet the definition of disability during the five-step sequential evaluation, but you face an additional question that could prevent you from receiving those disability payments: Is substance abuse a contributing factor that is material to the finding that you are disabled? What this really is asking is whether you would be unable to work on a full-time basis if you stopped using drugs or alcohol. As long as your work-related limitations that remain after the impact of any substance abuse is removed make you unable to work, you are disabled.


According to the Code of Federal Regulations, when substance abuse is involved, the ALJ at your hearing has to look at your current physical and mental impairments that caused limitations in your ability to function at work and then decide which of them would continue to exist even if you stopped using drugs or alcohol. If at least one impairment remains that causes limitations that are disabling, then you are disabled regardless of the impact of substance abuse on other impairments. If no limitations from any of your impairments remain that would leave you unable to work after the impact of the use of alcohol or other drugs is removed, then substance abuse is a contributing factor material to the determination of disability — this means is that you cannot be found disabled.


It is important to note that the cause of any of your impairments does not matter. For example, you could have cirrhosis of the liver due to alcoholism, and the cirrhosis may prevent you from being able to work. If you no longer drink, then there is no need to consider the impact of continued use of alcohol. You could be found disabled by the Social Security Administration despite the fact that substance abuse caused the disabling condition.


However, when you have a potentially disabling condition but your substance abuse is ongoing, the situation becomes more complicated. The general belief is that you would bear the burden of proving that, even if you stopped using alcohol or other drugs, you would be disabled. This makes the determination of disability difficult under these circumstances.


Ultimately, not using drugs for a period of time is the strongest proof that substance abuse is not the reason that you should be found disabled. There is no “bright line” test for how long would be long enough. Of course, the longer the period involved, the better for your case because there will be more evidence of your actual condition without the effect of any continuing substance abuse. This helps to eliminate speculation and guesswork regarding the impact of alcohol or other drugs. If you remain incapable of working after you have been clean for some period of time, your case becomes much easier to prove. You would be wise to consider this before you apply for disability. Remember, if you really believe that you are disabled and that substance abuse does not contribute to this disability, you do not want to give the Social Security Administration an excuse to deny your claim.

Proposed Regulations About Adverse Evidence

[Note: After this post was written, the regulation requiring notice of all evidence, in its entirety, related to whether or not the claimant is blind or disabled became reality. It officially went into effect on April 20, 2015.]


Recently, the National Organization of Social Security Claimants’ Representatives printed an article that detailed regulations being proposed by the Social Security Administration that would require a person applying for disability to disclose all evidence related to the determination of disability. Adverse evidence could not be screened out. While this has been discussed for years, such a regulation seems likely to be adopted in some form in the near future.

The idea behind this is that a person should not be able to pick and choose only the most favorable evidence to submit in a case. If you have applied for disability and provide evidence, you cannot edit what you have submitted under the current regulations. Pulling out only favorable information would not be permitted. If a document with helpful information also contains adverse evidence regarding your claimed disability, you would have to include everything in order to get the favorable facts into your disability file.

What is proposed is that, when you submit evidence from a source, you have to submit all of the evidence from that source. Instead of requiring that each report or medical test be entered into your file without anything edited from it, the new regulations would require that you must introduce everything from that source’s records about you whenever you add evidence from a new source. While the idea is to prevent the hiding of adverse evidence that will have a negative effect on your case, this also opens the possibility that a great deal of irrelevant information will have to be reviewed by the SSA. For example, even the most routine medical tests during a hospital stay would be in your file, which could lead to more important data virtually being buried.

In addition, the proposed regulations would require you, after applying for disability, to either inform the SSA about or actually submit all evidence that you know that exists and relates to whether or not you are disabled. The present regulations state that you have to bring to the attention of the Social Security Administration everything that shows that you are disabled.

The wording of both versions seems to suggest that the SSA will follow up on your information and get the records if you do not. However, nothing in either version states that it has to do this, even though the regulations have included the requirement that the Social Security Administration is to work to develop the record for your case. Will the SSA pursue this obligation more thoroughly when you disclose adverse evidence that may prove that you are not disabled? There is no way to know this at the moment. However, in what is supposed to be a non-adversarial process, the proposed changes would give you the obligation of providing evidence against yourself.

Also, there are changes in the role of an attorney or anyone who is representing you in your case. Your representative would have to help to obtain the information that you would be required to submit under the new regulations. The use of “help” seems to suggest that your representative would have an active role in the development of factors in your favor as well as those that are adverse to you. Potentially, this might lead some claimants to withhold information from representatives in an attempt to prevent adverse evidence winding up in the file. The regulations now state that the representative is to obtain and submit evidence that you want to have in your Social Security file – the proposals would introduce a definite change in the process, and these changes could have unwanted consequences regarding your disability claim.

None of this is to suggest that adverse evidence should be hidden so that individuals who actually do not qualify for disability end up being found disabled. On the other hand, the implications of major changes in any system should receive strong consideration before those changes are put into effect to determine if the “new” system presents an overall improvement upon what currently exists.

The Impact of Current Resource & Income Limits on SSI Recipients

Supplemental Security Income, often referred to as SSI, is a federal welfare program that focuses on assisting the elderly and disabled who do not qualify for benefits under the various programs that are comprise Social Security. SSI recipients can receive a monthly income equal to the Federal Benefit Rate. This currently is less than 75 percent of the federal poverty guidelines. While that is not much, it at least is subject to cost-of-living adjustments. Meanwhile, much of this program seems completely frozen in time.

Because the SSI program is basically a welfare program, it has strict limits on earnings and resources that permit eligibility for these benefits. During 2013, Representative Raúl Grijalva of Arizona introduced legislation to raise resources that are counted when determining financial eligibility for SSI as well as the monthly exclusions of both unearned and earned incomes (“income disregards”) by approximately 550 percent. While this proposal may sound excessive, it is not so extravagant when viewed in the context of history of the program.

The starting point for Supplemental Security Income dates back to the presidency of Richard Nixon, who signed legislation creating the program in 1972. Since that time, the National Senior Citizens Law Center estimates that the cost of living has grown by more than 5-and-a-half times the amount from 1972. Meanwhile, the rate of growth of countable resources, as well as both types of income disregards, has been anemic, at best.

Countable resources did experience a growth spurt in the latter half of the 1980s. When the program began, these resources, which generally consider bank accounts, cash, and similar types of property, could not exceed $1500 for an individual and $2250 for a couple who both received SSI. This was true from 1974 through 1984 before these amounts were permitted to grow. In fact, for a five-year span from 1985 into 1989, the level of countable resources increased, reaching $2000 for individuals and $3000 for a couple receiving SSI. This amounted to the resource level – so long stagnant – increasing by one third in half of a decade.

However, an even more noteworthy situation has occurred during the 25 years that followed. Countable resources have remained at the 1989 level. Due to this, SSI recipients often are unable to afford to have cars and other common household equipment repaired because repair costs have advanced with the times — liquid assets such as savings accounts need to be tapped to pay for these. Meanwhile, a person on SSI continues to be allowed have relatively small amounts of such resources for emergency expenditures. People on SSI have little room to maneuver when unexpected problems arise because their incomes generally are far below the poverty level while lack virtually any resources to have the flexibility needed to handle emergencies.

The income disregards tell much the same story. In fact, these situations have been even worse over time. In a month, a person who receives SSI can receive unearned income, such as dividends, interest, or capital gains, totaling $20 before this type of income would result in a dollar-for-dollar deduction from SSI. While there was the brief five-year period when countable resource amounts did increase, the unearned income disregard of $20 today is the same amount as the unearned income disregard established at the program’s inception in 1974. Assuming that the cost of living has jumped 550 percent during this time frame, this means, relatively speaking,  that the unearned income disregard has plummeted to a level that is roughly equivalent to $3.64 in 1974, based on the cost of living from that year to the present time.

As for the earned income disregard, it may be $65 per month instead of $20 per month, but it did not have to climb to that level. Again, today’s amount equals the value from 1974, four decades ago. It should be noted that the earned income disregard can be as much as $85 if there is no unearned income and that earned income above the disregarded amount reduces SSI benefits by 50 cents for every dollar earned. However, this does not change the basic fact that recipients of SSI have fallen even farther behind the rest of the population in keeping pace with the cost of living.

What can be gained by raising the threshold levels mentioned here? It would not be a forced transfer of wealth but, instead, would allow SSI recipients to actually be able to use their resources and any additional income to help themselves. At the very least, providing fair increases in the current levels for countable resources and income disregards can offer new, if only modest, possibilities to those who are forced by law to remain deeply impoverished to do more for themselves while not taking anything away from others, an idea that would seem worthy of consideration.

Social Security Disability: The Trial Work Period and Beyond

The trial work period (TWP) often is misunderstood by people who receive Social Security Disability (SSD) benefits and want to supplement this income by working. You need to be aware of the impact of the TWP before you accept even a part-time job because you could end up losing your SSD benefits and, at some point, find yourself unable to remain in the workforce, leaving you without a steady income.

The trial work period can be difficult to understand because, as often is the case with the Social Security Administration, it often is a lengthy process that has various exceptions. Knowing what the trial work period really means and what rights you have after the end of your TWP can help you to protect yourself from significant difficulties later on.

The first thing to remember is that a trial work period applies only if you receive Social Security Disability. Anyone who only receives Supplemental Security Income, for example, does not have to worry about the meaning of a trial work period. However, you receive SSD (which, in general, is based on your work record), you need to be aware of the impact of completing a TWP.

As suggested above, you really must understand what a “trial work period” actually is before you make plans to attempt to get a job to increase your income.. The Social Security Administration allows people who are disabled to try to return to the work. The TWP looks at work during any period of 60 consecutive months after a person becomes eligible for SSD benefits. If, within any 60-month period after this, there are nine months in which your earnings are at or above a specific amount set by the Social Security Administration prior to each year, then you have completed the trial work period.

SSD recipients sometimes assume that this income level equals the amount for Substantial Gainful Activity (SGA), which are the standard usually used in disability determinations. Actually, income earned during any of the nine months needed to complete a trial work period is around 72 percent of the SGA level. For example, if you worked in 2012 (when SGA was $1010 per month) and earned at least $720 in four months and then earned at least $750 in another four months this year (when SGA equaled earnings of $1050), then you will complete your trial work period after the first month in 2014 that you earn $770 since your earnings in nine months from 2012 into 2014 would be at or above the levels set by the Social Security Administration. It also is important to remember that, counting the initial month of the TWP (which is when your earned income first was greater than the permissible monthly amount), you have to be concerned for 60 consecutive months that your gross earnings do not exceed the monthly level during eight additional months within this period

However, even though the trial work period will end when you have “excessive” income in nine of 60 (or fewer) months, all is not lost in terms of benefits. After the TWP ends, you are entitled to an “Extended Period of Eligibility” (EPE), which lasts for 36 months immediately following the final month of your trial work period. You are eligible for your SSD benefits in any month of this three-year period that your earnings drop below the Substantial Gain Activity level (which is higher than TWP earnings, as explained above). SGA earnings will rise to $1070 in 2014. This payment of SSD benefits will occur during the EPE as long as you have not had a medical improvement that ends your disabling condition – this improvement would end any right to disability benefits. During your Extended Period of Eligibility, you will not receive SSD in any month when your gross earnings are above the Substantial Gainful Activity level. However, because your earned income (and not your health) is the reason that you are not disabled, your case is viewed accordingly. Since your disabling impairment continues, whenever your gross earnings fall below the SGA level, you will receive your monthly SSD payment without having to reapply for disability.

Once the 3-year EPE ends, your right to SSD also can end quickly. In the 37th month after the trial work period ended, you still can receive your SSD benefits as long as you remain medically disabled. Your SSD benefits can continue on a monthly basis until there is a month when your earnings reach the SGA level. When this occurs, you would receive your full SSD benefits for three more months, at which time these payments generally end. There is an exception to this rule, however.

For the first five years after your Extended Period of Eligibility ends, if you cannot continue working at the SGA level due to the disabling impairment that originally made you eligible for SSD, you can request to have your benefits reinstated without being forced to reapply, which would mean starting from the beginning as you did when you first are awarded disability benefits. Instead of a new application, you would request Expedited Re-Instatement, which is a potential way to regain disability benefits that stopped only because of your work and earnings.

The major point to gain from understanding the trial work period and the steps after its completion is that you do not have to avoid working (or attempt to hide this fact from the government) if you receive Social Security Disability. Instead, this shows how you can test your ability to work again, allowing you to find out what your capabilities are despite having a disabling impairment. It also highlights the importance of knowing what the consequences of making this decision if you do not take the time to learn what is permitted under the regulations of the Social Security Administration.

Disability Claims and Unemployment Compensation

At first glance, a disability claim filed with the Social Security Administration and a claim for Unemployment Compensation benefits would seem to be contradictory. After all, when a person files for disability, the individual basically is stating that she is unable to work for health reasons. To file for Unemployment Compensation, that same person is saying that she is “able and available” to work. However, the current position of the Social Security Administration (SSA) is that these two claims can coexist, allowing one person to file for both benefits at the same time.

This policy is found in a memorandum, dated November 15, 2006, which was written by Frank Cristaudo when he was the Chief Administrative Law Judge for the Office of Disability Adjudication and Review (ODAR). He issued the policy to clarify an issue with which some of ODAR’s Administrative Law Judges continue to struggle, even after this directive. There may seem to be something inconsistent when a person collects Unemployment Compensation, reporting to Pennsylvania’s Department of Labor and Industry that they can work, while the same person tells a federal agency that he or she is entitled to benefits because a disability prevents work. However, the issue is not as simple – or inconsistent – as this would seem.

Disability, according to the definition of the Social Security Administration, does not mean that someone is not capable of doing any work. Basically, what disability means when an individual in terms of a claim for benefits filed with the SSA is that the person cannot perform work activities on a full-time basis, which is termed “substantial gainful activity.” This does not mean that this person is unable to do any work at all.

As for Unemployment Compensation in Pennsylvania and many other states, when a person is able and available for work, this includes part-time work and not necessarily a full-time job. In this situation, there are two definitions of work being used, and neither definition actually rules out the other one.

The memorandum does advise Administrative Law Judges that Unemployment Compensation and the work being sought to qualify of this benefit should be considered in determining whether a person is disabled, but it is only one of many factors. In part, the Chief Administrative Law Judge acknowledged the reality that disability determinations by the Social Security Administration generally involve a lengthy process that can force an individual to make the decision to apply for both benefits just to survive the financial hardships that can occur while awaiting a final decision regarding a disability claim.

In fact, one of the SSA’s own regulations directs individuals who apply for Supplemental Security Income (SSI) to apply for all benefits, which includes Unemployment Compensation, for which they could be eligible. To force a person to apply for this and then automatically deny the disability claim because the individual did what was required would lack logic, at the very least.

A final note for the moment involves how receiving Unemployment Compensation affects someone who is receiving SSI, which is a needs-based program (akin to federal welfare), versus someone who gets Social Security Disability (SSD), which is based on a person’s work record. The person who receives SSI and has received Unemployment Compensation will lose some of the SSI payments that would have been received because there is a deduction from the federal payment when there is additional income, such as Unemployment Compensation, available to the individual because this means that there is less need for the SSI, which is based on need.

However, SSD benefits are not tested against a person’s additional income or resources when determining monthly payments. Therefore, the level of Social Security Disability paid to the disabled individual will not be adjusted due to the receipt of Unemployment Compensation. Also, certain other types of income – for example, Worker’s Compensation – cause an offset that is deducted from SSD benefits because Pennsylvania that would require repayment of Worker’s Compensation benefits in this instance if the recipient later is found to have been disabled by the Social Security Administration during the period that the other income was received. Since eligibility for Unemployment Compensation is not based on injury or illness, it does not trigger an offset involving disability benefits.

As always, if there are questions or any need for clarification regarding what can seem to be a complicated system of rules and regulations, you can contact me about these issues.