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.