Category Archives: Social Security Disability

PAST RELEVANT WORK & DISABILITY AFTER SSR 24-2p

November 15, 2024Alberts Law, Social Security Disability, Topics of Interest24-2p, Adult, alberts law, Disability, Past Relevant Work, PRW, Residual Functional Capacity, RFC, Social Security Administrationalberts

Past relevant work (PRW) almost always is an issue when the Social Security Administration makes a disability determination. Social Security Ruling 24-2p went into effect on June 22, 2024 in order to achieve more consistent application of regulations involving this issue. Due to the role that past relevant work has in disability cases, one needs to understand what SSR 24-2p says before filing a claim with the SSA.

The new ruling is titled “Title II and Title XVI: How We Evaluate Past Relevant Work.” More specifically, the SSA’s focus is on a person’s residual functional capacity (RFC) and the extent to which it permits the individual to perform PRW. This needs to be viewed in the context of the sequential evaluation that the Social Security Administration uses to decide if someone is disabled.

Past Relevant Work in the Sequential Evaluation Process

Looking at initial disability determinations in cases involving adults, the SSA employs a five-step sequential evaluation process to reach its decision. While a claimant can be found disabled after any step, she or he can only win a disability case after either Step 3 or Step 5.

Very few cases win at Step 3. To do so, a person must meet or equal a listing found in the SSA’s Blue Book, which details Listing of Impairments, with criteria for meeting each listing; the focus here is again on initial determinations for adults. In addition, an impairment that is medically equivalent to a listing’s criteria results in a finding of disability. The degree of difficulty inherent in equaling any specific impairment in Step 3 ensures that most claims pass Step 4 in order to have a chance of surviving Step 5, resulting in a favorable disability determination. Due to the importance of Step 4 as well as the SSR enacted in 2024 to explain how SSA makes its decision at this step, the following focuses on Step 4’s role in the sequential evaluation.

The Importance of SSR 24-2p

The Social Security Administration’s issuance of SSR 24-2p on June 22, 2024 defines how Past Relevant Work is to be evaluated from that date forward. A question-and-answer format was used to provide guidance on how a determination of whether or not claimants retain “residual functional capacity,” or RFC, to perform their PRW.

When this social security ruling went into effect, it rescinded and replaced SSR 82-61 (which looked at how a job or occupation is generally performed) and SSR 82-62 (which concerned a claimant’s PRW, in general). SSR 24-2p also rescinded Social Security Ruling 86-8 (“The Sequential Evaluation Process”), which basically means that the process returns to the status quo prior to SSR 86-8.

The importance of these changes is that the latest SSR now applies to new, as well as pending, claims that existed on June 22, 2024 – the new Step 4 now is followed in these claims. Only appeals in federal court that were decided under the prior rulings are to be decided as if the old rulings remained effective. However, if a federal court remands such a case, the SSA will apply SSR 24-2p to the claim on remand. The extent to which SSR 24-2p has supplanted the other ruling is important to understand because the former sets forth how Step 4 will be analyzed; the new ruling states the manner in which claims involving past relevant work and a person’s alleged disability are viewed together at this step of the sequential evaluation process.

Residual Functional Capacity & Past Relevant Work

However, before proceeding to Step 4, there is a term that is used in the last two steps that needs to be defined. As has been mentioned previously, the ability to do past relevant work is decided by applying a claimant’s residual functional capacity to the demands of the person’s past relevant work.

Essentially, RFC is what a person retains in terms of the ability to perform work-related activities despite all medically substantiated physical and/or mental impairments. If past relevant work cannot be done in light of the individual’s RFC, then Step 5 again applies the residual functional capacity to a determination, often developed with the help of testimony of a vocational expert, of the person’s ability to do any other work found in significant numbers anywhere in the national economy. If PRW is eliminated and no other jobs exist, the person would be disabled based on the sequential evaluation process.

Review of the Definition of Disability in Social Security Cases

Before taking a more in-depth review of the evaluation of past relevant work at Step 4, one needs to understand what disability means in the context of a Social Security case since this is the overriding issue of all of these cases. A claimant must be unable to engage in Substantial Gainful Activity (SGA) due to the presence of one or more medically determinable physical and/or mental impairments that would be expected to result in death or that has lasted or would be expected to last for at least 12 consecutive months.

SSR 24-2p and its 10 Questions & Answers regarding Step 4

At this point, attention will focus of Social Security Ruling 24-2p and how it will be used by the Social Security Administration to determine if a disability claimant retains sufficient residual functional capacity to meet the demands of the individual’s prior relevant work. In doing so, the 10 questions and answers found in SSR 24-2p will be reviewed, albeit not in the order that they are listed in the new ruling. The idea is to look at each one methodically to reach the ultimate decision regarding the ability to do PRW as it is decided by the end of Step 4 of the 5-step sequential evaluation process.

Question 1 Defines Past Relevant Work

The work must have been done in the last five years at Substantial Gainful Activity level for a period long enough to learn how to do it. As will be seen here, the underlined phrases are developed in the answers found in SSR 24-2p.

Questions 8 and 9 – How Work History is Determined for Step 4

For a disability claimant, Questions 8 and 9 may be the most crucial in terms of the ruling’s guide answers because they involve information primarily received from the claimant. These look at an account of the person’s work history and contain information to develop which jobs will be classified as past relevant work. In addition, the answers are used in the determination of whether or not the claimant retains residual functional capacity to perform any PRW at the time that the disability determination is made.

Question 8 involves evidence about work history. It also notes that the claimant generally is the primary source of this information. The individual must provide statements that sufficiently explain the work performed, including the skill level that was required. Question 9 stresses the need for the explanation of the mental and physical demands of the past relevant work. If the claimant provides a sufficient work history, then the SSA will not seek more information from third parties (including employers and co-workers). However, before the SSA contacts any third parties, the claimant must give permission. In general, a claimant is likely to be better off granting permission if asked, as opposed to relying on an insufficiently developed work history.

In addition, Question 9 summarizes what the SSA considers when determining the capacity to perform PRW. Residual Functional Capacity as well as a claimant’s statements about the reasons that he or she is unable to do the work are reviewed. Supplementary information about the requirements of the relevant jobs also is mentioned. As noted in Question 7 (which is discussed, below), vocational experts or specialists often are the sources here.

Question 2 Explains What Are the “Last Five Years” of Work

The Social Security Administration seeks the last five years of a person’s work history as well as jobs during that period that lasted for at least 30 consecutive days. The “last five years” of the work history is defined in the answer to Question 2 of SSR 24-2p. For specificity, one can consult the table with the answer, in which the meaning of “the last five years” is linked to specific fact patterns.

In general, the two most common definitions set the end of this period on the date that of the SSA determination or its decision regarding the person’s claim. There also is a footnote in SSR 24-2p that references SSR 18-1p. This deals with situations in an earlier date – the Established Onset Date – defines the endpoint of this critical five-year period. The guidance found in the new ruling must be applied so that a claim focuses on the correct period for a person’s work history.

Question 3: PRW Excludes Work Done for Less than 30 Calendar Days

Meanwhile, Question 3 looks at something that is excluded from Past Relevant Work. In general, a job held for less than 30 consecutive calendar days is not considered regardless of whether or not it would meet SGA or if it had been done on a full-time basis. The work started and stopped in for less than 30 consecutive calendar days is not viewed as PRW, according to SSR 24-2p.

The new ruling does make allowances for “gig economy” work often done by independent contractors and the self-employed in which there may be multiple work assignments throughout a 30-day period when the individual jobs were of the same type. Cumulatively, they are deemed sufficient to learn the work in question, even though no single assignment meets the time requirement. This recognizes the increasing contribution of freelancing, non-permanent workers to the national economy. According to Investopedia, 38 percent of the U.S. workforce in 2023 was comprised of gig workers – the Social Security Administration is aware of their prevalence and has made this adjustment to account for these jobs.

After the work history for the relevant five-year period has been developed, the SSA looks at the listed employment to see which jobs qualify as Past Relevant Work, which is the focus of this step of the evaluation process. For adults, PRW must meet the requirements for Substantial Gainful Activity (SGA). This was mentioned in passing, above. More specifically, SGA generally is defined by average monthly “countable earnings” that equal or exceed the amounts for a given year which are shown in the Earnings Guidelines in POMS DI 10501.015. While there are exceptions to the earnings requirement, this is the basic rule when applying SGA to a person’s work history to see what can qualify as PRW.

Question 4: How Long is “Long Enough to Learn?”

Also, as discussed above, even if done at SGA level, a job still has to last long enough for the individual to learn how to perform the work involved. The type of job determines how long is sufficient, with the shortest period being the aforementioned 30 consecutive calendar days. However, learning how to do a job entails acquiring the necessary information, skills, and sufficient facility to perform adequately. The time required to learn how to perform any work is based on the type of work and its complexity. The Social Security Administration looks at what is known as Specific Vocational Preparation (SVP) when determining how long this takes.

SVP is set forth in the Dictionary of Occupational Titles (DOT), which has long been a main source used by the SSA in its disability determinations. The DOT established nine SVP levels. SVP 1 and 2 represent unskilled work while jobs at SVP 3 and 4 are considered semi-skilled; those above SVP 4 are classified as skilled occupations. Specific Vocational Preparation levels correspond with the amount of time needed to learn particular jobs. The capacity to learn how to perform a job at SGA level for at least the length of time dictated by the job’s SVP determines which jobs, if any, in a claimant’s work history meet the definition of Past Relevant Work. This leads to the pivotal issue of a claimant’s ability to handle PRW despite averring that she or he disabled under the Social Security Act.

Questions 5 -7 Focus on the Issue of the Ability to Perform PRW

SSR 24-2p poses three questions (numbered 5 through 7) in making the decision about a person’s ability to perform Past Relevant Work. Question 5 is general in nature, summarizing how the individual’s ability to perform PRW is determined. The next two questions deal with the specifics of how this is analyzed.

Question 6 states the first consideration, which is if the claimant can perform PRW as this individual actually performed it. This acknowledges that there are occasions when functional demands of work as someone actually performed it differ from how the position generally is performed throughout the national economy. If Residual Functional Capacity exists to handle PRW as it actually was performed by the claimant, then the person is not disabled for Social Security purposes. This finding essentially ends the sequential evaluation process at Step 4.

When the individual lacks the RFC to perform Past Relevant Work as he or she actually performed it, SSR 24-2p moves to Question 7. This is similar to the previous question in that both focus on PRW; however, this analyzes PRW while considering how the work is generally performed in the national economy.

Use of “Reliable Sources of Information” to Describe Occupations (Question 7)

The Social Security Administration relies on “reliable sources of job information” to determine how a job is generally performed and then decides if the person retains the RFC to perform any PRW as generally done in the national economy. For reliable sources, the SSA often uses vocational experts to explain the job requirements as well as providing an opinion regarding the claimant’s capacity to perform the work in question. Ultimately, the Social Security Administration makes the final decision regarding whether or not the individual can perform Past Relevant Work. If the claimant can handle the work based on the answer to either Question 6 or 7, then Step 5 in the sequential evaluation process will become inconsequential.

Question 10: Summarizing Determinations Regarding PRW

Finally, there is Question 10 in SSR 24-2p. The answer actually is a concise summary of the determinations involving Past Relevant Work found in Step 4 of the sequential evaluation process. First, a claimant’s RFC must be defined. Then, PRW must be determined. Residual Functional Capacity is used to decide if the person still can do this work. If the RFC precludes the claimant from engaging in Past Relevant Work, the initial disability determination moves to Step 5 of the sequential evaluation, when the claimant could be found disabled under SSA rules if there is no job anywhere in the national economy that she or he has the RFC to perform at Substantial Gainful Activity level. However, the case does not reach Step 5 if the claimant cannot survive Step 4. Because it explains the evaluation of Past Relevant Work, SSR 24-2p must be understood by claimants and their representatives.

The ABLE Account & Its Use for Disabled Individuals

September 22, 2018Alberts Law, Estate Planning, Social Security DisabilityABLE account, direct deposits, disabled individual, Medicaid, Michael Alberts, SSIalberts

An ABLE account is a savings account that allows an individual with a qualifying disability to pay for numerous disability-related expenses while not affecting eligibility for “means-tested” benefits such as Supplemental Security Income (SSI) and Medical Assistance (as Medicaid is known in Pennsylvania). In other words, when set up and administered according to the applicable laws and regulations, this account will not cause the disabled person to have countable income or assets that are too high to receive certain public benefits that are based on the recipient being virtually destitute. Before reviewing some important details about the ABLE account, we first should look at the federal and state laws that created this tool.

The ABLE Act of 2014

President Obama signed the Achieving a Better Life Experience (ABLE) Act of 2014 on December 19, 2014. Its two main purposes were “[t]o encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life” and “[t]o provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, (medical) benefits.” This amended the Internal Revenue Code (IRC) to allow qualified ABLE programs in Section 529A.

Federal law now permitted disabled individuals and their family members to access tax-free savings and investment options as an incentive to save funds to be used to support the health, independence, and quality of life of the individuals with disabilities. However, states would have to establish programs to permit individuals to establish these ABLE accounts – this means that a person must make sure that a state also passed legislation before trying to set up an account. Since states need to follow the definitions regarding ABLE accounts, the IRC is the starting point in understanding the meaning of this savings tool for disabled individuals.

After the passage of the new law, the Internal Revenue Code allows an individual with a “qualifying” disability to have a tax-preferred savings account that would not affect eligibility for SSI or Medical Assistance. The framework for Section 529A accounts was based on the IRC’s 529 college-savings plans and permits payments, including an ABLE account’s earnings, to pay for “qualified” expenses. The meanings of “qualifying” and “qualified” need to be defined.

“Individual with a Qualifying Disability”

A person must meet the definition of an individual with a qualifying disability to have an ABLE account. Section 529A(e) of the Internal Revenue Code provides guidance here. An individual must be entitled to benefits based on blindness or disability under title II (Social Security Disability) or XVI (SSI) of the Social Security Act, and this condition had to start prior to the person reaching the age of 26. There is an exception to this definition, though.

This involves the person submitting a disability certification to the Secretary of the Treasury (or an official designated by the Secretary) for the year in question. The certification can be submitted by the individual, a parent, or a guardian of the individual.

It would state that the person has a medically determinable physical and/or mental impairment causing “marked and severe” functional limitations, which is expected to last (or has lasted) at least 12 consecutive months or is expected to result in death (if this is likely to occur prior to the 12-month period) or is blind as defined by the Social Security Act. The certification must include that the disabling impairment began before the person’s 26th birthday and needs to include a copy of a physician’s diagnosis of the relevant impairment(s). If any of these are done to the satisfaction of the Treasury secretary, the individual would have a qualifying disability under the criteria of the ABLE Act.

“Qualified Disability Expenses (QDE)”

As for Qualified Disability Expenses (QDE), these must be related to the beneficiary’s disability and are made for the benefit of an eligible individual who is the designated beneficiary. Under IRC Section 529A(e)(5), these can include the following eleven categories of expenses: education; housing; transportation; employment training and support; assistive technology and personal support services; health, prevention and wellness; financial management and administrative services; legal fees; expenses for oversight and monitoring; funeral and burial expenses; and other miscellaneous expenses approved by the Secretary of the Treasury (or a designee of the Secretary) under regulations and consistent with the purposes of this section.

If the person is receiving SSI, distributions from an ABLE account could trigger a one-third reduction in SSI due to in-kind expense rule when they pay for shelter expenses. However, according POMS SI 01130.740 from the Social Security Administration, the beneficiary’s SSI benefits will not be impacted as long as any funds from an ABLE account that are used to pay housing expenses are spent in the same calendar month that those funds are withdrawn.

In addition, a person who uses funds from the account for purposes that are not considered to be Qualified Disability Expenses faces another type of penalty. Amounts for “non-qualified expenses” are likely to be subject to federal and state tax consequences. Although the IRS has not provided much specific guidance, it has indicated that “Qualified Disability Expenses” will be interpreted broadly and will include “basic living expenses.”

Post-2014 Federal and Pennsylvania Legislation

There also were two federal amendments in December, 2017: the ABLE to Work Act and the ABLE Financial Planning Act. The first change allows individuals with disabilities to save additional amounts in their accounts above the annual maximum contribution of $15,000 for 2018 if they earn income while the latter amendment permits rollovers from a regular 529 account for college savings to an ABLE account. More expansive changes on the federal level have been mentioned but not enacted to date. The more important development in Pennsylvania after the passage of the initial federal law is the Pennsylvania Achieving a Better Life Experience (ABLE) Act, which was signed into law as of April 16, 2016 and introduced the ABLE program to this state.

Pennsylvania’s law follows the federal legislation. For this reason, most of the following aspects of Pennsylvania’s program will reference federal law, regulations, and rules. However, state-specific choices will be identified as pertaining to an ABLE account established pursuant to Pennsylvania’s program, as overseen by its Department of the Treasury.

The ABLE Account is Only One Tool to be Considered

There is an important thought to keep in mind before deciding to set up an ABLE account. The individual needs to remember that this is only one option for seeking to enhance the life of someone who is disabled. Any decisions about which tools merit consideration will depend on the situation, which includes the needs of the disabled person and the financial ability to implement whichever tool(s) seem to be most advantageous.

In addition to an ABLE account, there are various special needs trusts that can be useful. These include first-party (d)(4)(C) pooled special needs trusts, third-party pooled special needs trusts, first-party (d)(4)(A) non-pooled special needs trusts, and third-party non-pooled special needs trusts. Depending on the circumstances, each of these can be the “right” choice. For example, when proceeds from life insurance or an inheritance are involved, then an ABLE account would not be the best choice. Instead, this is a case in which the third-party special needs trust makes more sense.

At the same time, ABLE accounts have their own benefits as tools to enhance the lives of people with disabilities. An ABLE account allows individuals to live more independently and is ideal for avoiding the need for spend down. It also preserves small amounts of money while not incurring the expense of creating a first-party special needs trust. An additional strength is that permits beneficiaries who otherwise would refuse to give up control of their own funds to preserve SSI and Medical Assistance eligibility to retain this eligibility without surrendering control.

Additionally, the account allows a disabled individual who works to accumulate of wages over time and, as noted previously, avoids the penalty of the SSI one-third reduction rule for receiving assistance with housing expenses. Also, while an individual is able to withdraw and spend money any time for any reason, an even bigger benefit of an ABLE account is being able to save over time so that the account can grow and provide the opportunity to pay for more major or future disability expenses.

Overall, these planning tools share an ability to protect eligibility for SSI and Medical Assistance while providing a means to pay costs for goods and services that can enhance the disabled person’s quality of life. However, each is covered by its own rules and regulations, which means that any choice among this group can be beneficial depending on the circumstances (as noted in the prior paragraph when life insurance or an inheritance is the reason behind the plan) and when it is managed properly.

Furthermore, they generally are not mutually exclusive and can co-exist in ways to provide more benefits together than any of them could on an individual basis. As will be detailed, ABLE accounts offer flexibility in the ways that they help their beneficiaries. On the other hand, an individual is limited to having only one ABLE account (POMS SI 01130.740). A special needs trust can be used to handle additional assets, and, when it is a third-party special needs trust (whether pooled or non-pooled), it also can avoid payback provisions for Medical Assistance that ABLE accounts are likely to face. The best advice is to avoid thinking that the existence of one of these tools renders the others irrelevant. Since each has its own strengths and weaknesses, a combination of them, when possible, should be considered.

Setting Up an ABLE Account

While knowing what can be done with an ABLE account is important, anyone who wants to obtain its benefits should know some of the steps and requirements involved in setting up the account. Enrolling in Pennsylvania’s ABLE program (known as PA ABLE) is the starting point. The beneficiary of the PA ABLE account has to have a disability that began before the age of 26 and must be eligible each year that she or he is in the program. During the enrollment process, the individual is asked to certify that, if the disabling condition changes to make the person ineligible for an ABLE account, the person will notify the PA ABLE program. Based on that certification, PA ABLE assumes that eligibility continues unless notified of any change.

The person who actually sets up the account can be any of the following: the beneficiary, the designated beneficiary’s parent, her or his legal guardian, or an agent acting under power of attorney. Then, after the account has been created, any person can contribute to the account – this includes the beneficiary designated on the account. Because any “person” can make contributions, one needs to bear in mind how a person is defined legally. The IRS defines a “person” as an individual, trust, estate, partnership, association, company, or corporation under 26 U.S.C. S7701(a)(1).

Federal law establishes assets that can fund an ABLE account. Cash assets are permitted while real estate and other non-cash assets cannot be used (26 USC 529A).

In addition, when an account has been established, deposits into the ABLE account are irrevocable. However, POMS SI 01130.740 does specify that funds in an ABLE account can be transferred to another qualifying beneficiary if that person is a sibling (which includes brothers and sisters, stepbrothers and stepsisters, and half-brothers and half-sisters). Furthermore, the ABLE account can be transferred without tax consequences as long as the sibling is an individual with a qualifying disability. Otherwise, the transfer is considered a non-qualified withdrawal, which will incur federal and state income taxes on earnings plus an added 10-percent federal tax.

Contributions when the beneficiary receives SSI need to be handled carefully. In this situation, gifts should be deposited directly into the beneficiary’s account because, if the funds are given to the SSI recipient to deposit, the gift likely will affect the SSI to be received.

To help others make gifts, the beneficiary can provide account information for others to make contributions that will be credited to the correct account. If the beneficiary has a Ugift code, this can be given to family and friends to allow direct contributions to the individual’s PA ABLE account using the website at UgiftABLE.com.

Some ABLE “Contributions” Actually Are Counted as Income

While funds that are deposited directly into the account are contributions to that account, the fact that the money never touched the designated beneficiary’s hands before it was placed in the ABLE account cannot hide what would be income if paid to an SSI recipient before it was deposited into the account (see SI 01130.740C.1.a). A payment owed to the designated beneficiary is income that will reduce the SSI entitlement in the month that it is received, regardless of whether the money is paid to the individual or deposited into the ABLE account, instead.

If something would have been income when received by the beneficiary, direct deposits won’t change this. The individual will be seen as being paid income and then making a contribution to her or his ABLE account. SSI is affected when income (even if it is a direct deposit) is received. The direct deposit essentially is viewed as a two-step process. Because the funds are defined as income for someone who gets SSI, Social Security’s regulations make sure that the money will be treated as income at first. Then, the direct deposit itself is viewed as the beneficiary depositing this income into the ABLE account, which is considered a first-party contribution to the account.

This contribution is not counted as income but will reviewed under the SSI resource rules beginning with the start of the next month. This treatment of direct deposits often is seen with government benefits (such as SSD payments and VA benefits), pensions, and mandatory support payments (including child support and alimony). The existence of the ABLE account does not alter the fact that income has been received by a beneficiary but can shield this amount from being counted as a resource in the months that follow.

PA ABLE’s Investment Options for ABLE Accounts

The program for each state provides different investment options. The choice of investment options can be changed twice annually. The beneficiary or the person designated with signing authority over the account must make financial records available that show all account activity according to 26 USC Section 529A.

PA ABLE’s savings program currently has seven investment options, and contributions can be made to one, or a combination, of these options. Six are asset-allocation options with varying blends of stocks, bonds, and cash while the final one is an FDIC-insured interest-bearing checking account with a debit card provided through Fifth Third Bank.

Also, one should bear in mind that contributions are not deductible for federal tax purposes, but there can be tax incentives offered by states for in-state eligible beneficiaries. (POMS SI 01130.740). For non-residents of Pennsylvania, they need to check with their state benefits agency to verify that the PA ABLE savings account will not affect the benefits’ treatment where they reside.

In 2018, the following numbers define thresholds involving ABLE accounts. A total of $15,000 can be contributed annually, although federal law permits account owners who are employed to exceed this total. The maximum applies to the total amount contributed by everyone – it is not an amount per each contributor. In addition to the limit on annual contributions, there is a maximum amount for an account, beyond which no further contributions can be made. This is $511,758 in 2018; while no further contributions would be possible, the account funds still can earn interest so the total balance could exceed this maximum.

Two final items should be noted. First, when someone contributes to a PA ABLE account, the person is entitled to an equivalent deduction from the Pennsylvania personal income tax for that year. Finally, a person can rollover money currently in a 529 college savings account into a PA ABLE account, as long as the annual contribution limit is not exceeded.

The 2017 amendments introduced some important changes regarding contributions to these accounts – some of them have been mentioned already. The ABLE to Work Act allows the designated beneficiary to contribute an amount beyond the current contribution limitation, up to the lesser of the Federal Poverty Line for a one-person household ($12,060 for 2018) or the beneficiary’s compensation during the tax year.

The law also allows the beneficiary of the ABLE account who contributes to the account to claim a nonrefundable tax credit for eligible taxpayers who make qualified retirement savings contributions. The idea behind these is that people who have incentives to contribute to their accounts will become less dependent on the government over time.

ABLE Accounts and the Treatment of SSI & Medical Assistance

Other ways that ABLE accounts are made more attractive to qualifying individuals concern the treatment of SSI and Medical Assistance. With SSI, disbursements for qualifying expenses, coupled with an account balance not exceeding $100,000, will not affect SSI eligibility while, if the account balance does exceed $100,000, SSI eligibility is suspended but not terminated and will resume when the balance drops below $100,000 (POMS SI 01130.740). As for Medical Assistance, the beneficiary remains eligible if disbursements are for qualified expenses, and the account does not exceed the state’s aggregate contribution limit adopted from its 529 college-savings plan (26 USC Section 529A (b)(6)).

Operation of an ABLE Account

In terms of the operation of the account, an eligible individual generally has complete control of the account and can enter into contracts without needing a trustee or a representative to handle these affairs. For minors or adults who lack the capacity to contract, a parent, guardian or person with a Power of Attorney must open and handle the account.

An eligible beneficiary or person with signing authority (such as the beneficiary’s parent, legal guardian, or agent acting under power of attorney) is responsible for documenting disbursements and must categorize these in order to determine federal income tax obligations (IRS Notice 2015-81). Also, disbursements can be made by checks or credit cards, according to POMS SI 01130.740.

As for fees in Pennsylvania, there is no fee to open an account, and the initial contribution has a minimum of $25. There is an annual account maintenance fee of $60, with $15 deducted from an account each quarter. Using electronic delivery of statements reduces the total to $45 per year. Other fees may be assessed depending on the beneficiary’s choice among the six asset-allocation options, and Fifth Third Bank may assess banking charges if the option of the checking account is chosen. (See PA ABLE).

Fees vary with each state’s ABLE program. Set up and ongoing costs are nominal and are typically less than those associated with setting up a special needs trust. In addition, there is an account maintenance fee of $15 per quarter, which may be reduced to $11.25 per quarter if you choose to have program statements and information sent electronically. For the Fifth Third Bank checking account option there is an additional fee of $2.00 per month, which is waived if you elect to receive bank statements electronically or maintain an average monthly balance of $250. Additional bank fees may apply.

When an ABLE Account Terminates

Finally, the issue of what happens when an ABLE account ends needs to be considered. A person can keep an account open after she or he is no longer a qualifying individual as a buffer in case the person’s condition again becomes disabling so that the person is considered a qualified individual who is eligible for an ABLE account. When the individual is not qualified for an account, no one can make contributions to it, and withdrawals from it are treated as paying for non-qualified expenses.

When the beneficiary of an ABLE account dies in Pennsylvania, the funds in it can pay for any unpaid Qualified Disability Expenses, in addition to funeral and burial expenses. There are questions regarding whether or not the account should be part of the qualified individual’s estate. Until this is decided on the federal level, Pennsylvania will allow an account to be transferred to a sibling who is an individual with a qualifying disability.

If the assets in the account become part of the deceased beneficiary’s estate, investment gains while the assets are in the estate will face income taxation. However, prior to this, the account can be used to pay for Qualified Disability Expenses (which include funeral and burial expenses) to benefit from tax-free treatment.

Under Pennsylvania law, the Department of Human Services (DHS), which administers the state Medical Assistance program, cannot file a claim against a PA ABLE account. When these assets become part of the estate, the DHS then can file a claim to be repaid. Actually, there are two types of repayments for Medical Assistance to review.

The Pennsylvania DHS can make a claim against assets from a PA ABLE account that have become part of the estate of the disabled person who owned the account. This is limited to a decedent who was at least 55 years old and received Medical Assistance for nursing facility services, home and community-based services, and related hospital and prescription drug services paid after turning 55. Additionally, DHS repayment may be delayed when there is a surviving spouse, a child under 21, or a disabled child of any age.

The second type of payback is equivalent to payback from self-settled special needs trusts. The amount subject to payback is calculated from the date that the ABLE account was created and equals the amount of Medical Assistance paid by the DHS minus any premiums paid by, or on behalf of, the beneficiary to a Medicaid Buy-In program. Also, Qualified Disability Expenses that remain outstanding (including funeral and burial expenses) reduce the funds available for payback. The Medical Assistance repayment will total the extent to which the remaining funds cover the DHS claim.

This has been a look at a complicated but potentially useful financial tool for individuals who are disabled. With an ABLE account, there are a few points to remember. The individual can have only one account. Any disbursements from the account should be for Qualified Disability Expenses (QDE), and – due to income-tax consequences – the person must keep track of QDE and non-qualifying withdrawals that are not tax free. In addition, contributions have to be tracked because there is a maximum amount that can be contributed to the account each year. At this point, there is one final point of emphasis: an ABLE account can face Medical Assistance payback claims after the death of the disabled individual. This list touches on just some of what is important when setting up, running, and ultimately terminating such an account.

Workers Compensation Offset & Social Security Disability

October 1, 2017Alberts Law, Social Security Disabilityalberts law, Offset, Social Security Disability, Workers Compensationalberts

If you receive Workers Compensation when you also qualify for Social Security Disability (SSD) in Pennsylvania, your SSD award may be subject to Workers Compensation offset. Basically, your SSD could be reduced as a result.

A few points should be noted at the start. First, Supplemental Security Income (SSI) and Social Security retirement benefits are not subject to an offset generally. For example, SSI is affected in the usual manner: Workers Compensation is considered unearned income so, after the first $20 is this income is deducted, the rest reduces SSI dollar for dollar.

Second, Pennsylvania applies the Workers Compensation offset in the same way that all but approximately 14 other states do. These other states reduce the Workers Compensation award that is paid to someone receiving SSD. This only is possible if a state’s Worker Compensation law required this type of reduction under its law prior to February 18, 1981. For the purpose of this article, we will review the majority approach, specifically as Pennsylvania applies it. Also, since this is an introduction to the concept of offset, it will focus on a disabled individual without discussing this concept’s application when dependents also receive payments due to the disabled worker’s earnings record. Section 504 of the Social Security Handbook can be reviewed for its look at family benefits and additional details about concepts introduced here.

Workers Compensation Offset for a Disabled Individual

The standard rule is the total received in Workers Compensation and SSD cannot be more than 80 percent of the amount that you earned when fully employed. This amount officially is known as the “applicable limit.” To ensure that this is the maximum amount received, the Social Security Administration reduces your SSD income by the amount lowers the sum of these two payments by the necessary amount so that the maximum percentage is not exceeded. The reduction in your Social Security Disability is what is called the Workers Compensation offset.

The idea may not sound complicated, but the limit of 80 percent of your previous income level has to be defined and calculated. At this point, the idea is not as straightforward as the general rule might make it seem. The Social Security Administration calculates the maximum amount of combined benefits permitted by federal law so that it can reduce the SSD paid in a given month to keep this amount from exceeding the maximum. The impact of the Workers Compensation offset actually impacts people who earned less income because their benefits will be closer to the income that they earned while higher earners have a larger gap between earnings and the sum of the benefits that they possibly can receive.

Average Current Earnings & Workers Compensation Offset

When it comes to calculating the income that is used to determine if there will be a Workers Compensation offset, the SSA actually uses three methods of calculation to find your pre-injury income (which is called your “average current earnings”), which is the starting point in this process. Your “average current earnings” will be the highest income level produced by three methods of calculation.

The first calculation by Social Security is the average monthly wage – the “unindexed Primary Insurance Amount” – on which your Social Security Disability benefit is based. Then, there is the “high 5” calculation, which is the five consecutive years that add up to your earnings for this length of time; average monthly earnings are determined based on this amount. Finally, the average monthly earnings for either the calendar year in which you became disabled or any of the five calendar years prior to that is calculated – this result is known as the “high one.” Whichever of the three calculated amounts of average current earnings is highest will be used for the next step in finding the W必利勁
orkers Compensation offset. The “high one” tends to result in the highest value and ends up being the amount used.

Determining the Workers Compensation Offset

Next, the SSA uses its determination of your average current earnings and calculates 80 percent of it to set the combined dollar limit for your monthly SSD award plus your Workers Compensation amount. The Social Security Disability income will be reduced by the necessary amount to keep the total amount of benefits that you receive from exceeding the maximum. Potentially, your SSD could continue to be subject to the Workers Compensation offset until you reach full retirement age, at which point the SSA replaces your SSD with Social Security retirement benefits.

Monthly benefits are not the only category that can be affected under the federal law. Often, people receiving Workers Compensation will trade monthly payments for a lump sum. If this occurs, you would not avoid facing the Workers Compensation offset, but, since your regular SSD payments are received on a monthly basis, the Social Security Administration must alter the way that it handles the calculation of the average current earnings.

Adjustments Required for Payment of a Lump Sum

The general principle involves dividing this lump sum by the amount of Workers Compensation that you were getting each month. The possible reduction of SSD benefits focuses on the monthly amount that was being received by viewing its receipt as continuing for the number of months that is the result of this formula. To attempt to minimize the impact of the offset when a lump-sum settlement has been reached, a person might agree an amount replacing a lower Workers Compensation amount that would have been received monthly until the individual would reach Social Security’s retirement age (e.g., age 65 currently) so that the average current earnings that could trigger the offset are reduced.

An additional consideration is that the SSA may exclude medical and legal benefits that are part of the lump sum. If these amounts are subtracted out of the settlement, the reduced Workers Compensation settlement will yield fewer months for the offset potentially to be in effect after this total is divided by monthly amount currently being paid. However, you need to realize that the Social Security Administration may want to see the documentation of such a settlement before its acceptance.

In practice, the Workers Compensation offset has numerous potential pitfalls, and you have to be aware of these when you receive Social Security Disability benefits. If you take a chance without being sure that you have the implications explained to you by someone whom you trust, you may cost yourself some income to which you would have been entitled if you had understood the concepts that apply as well as how they apply to your situation.

Past Relevant Work and Disability according to Social Security

July 5, 2017Alberts Law, Social Security Disabilityalberts, Past Relevant Work, Social Security Disabilityalberts

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

May 15, 2016Alberts Law, Estate Planning, Social Security Disabilityalberts law, estate planning, self-funded, special needs trust, SSIalberts

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 65^th 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 65^th 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 犀利士
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

August 9, 2015Alberts Law, Social Security Disabilityalberts law, sequential evaluation, Social Security Disabilityalberts

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

June 28, 2015Alberts Law, Social Security Disabilityalberts law, Continuing Disability Review, Social Security Disabilityalberts

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 犀利士5mg
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

September 29, 2014Alberts Law, Social Security DisabilityMichael Alberts, Representative Payee, Social Security Disabilityalberts

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

May 30, 2014Alberts Law, Social Security Disabilityalberts law, Social Security Disability, substance abusealberts

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

April 9, 2014Alberts Law, Social Security Disabilityadverse evidence, alberts law, duties, Social Security Disabilityalberts

[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.