# AR 87-4(8): AR 87-4(8): Iamarino v. Heckler, 795 F.2d 59 (8th Cir. 1986) Positive Presumption of Substantial Gainful Activity (SGA) for Sheltered Work

> Federal · Rulings · Rescinded

URL: https://www.frixlaw.com/law-library/statutes/SSA_SSR_AR_AR_87_4_8

## Section

- **Citation:** AR 87-4(8)
- **Heading:** AR 87-4(8): Iamarino v. Heckler, 795 F.2d 59 (8th Cir. 1986) Positive Presumption of Substantial Gainful Activity (SGA) for Sheltered Work
- **Jurisdiction:** Federal
- **Kind:** Rulings
- **Status:** Rescinded
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Social Security Rulings / AR / Eighth Circuit Court / AR 87-4(8)

## Text

AR 87-4(8) (Rescinded 8/10/2000)

EFFECTIVE DATE: 8/31/87

ISSUE:

Whether there is a positive presumption of SGA for average nonthly
earnings from sheltered work of more than $300 which is different from the
positive presumption of SGA for similar earnings from competitive work.

STATUTE/REGULATION/RULING CITATION:

Sections 223(d)(4) and 1614(a)(3)(D) of the Social Security Act (42 U.S.C.
423(d)(4) and 1382c(a)(3)(D)); 20 C.F.R. Sections 404.1574(b)(2);
404).1574(b)(3); 404.1574(b)(4); 404.1574(b)(6); 416.974(b)(2);
416.974(b)(3); 416.974(b)(4); 416.974(b)(6)

CIRCUIT:

EIGHTH (ARKANSAS, IOWA, MINNESOTA, MISSOURI, NEBRASKA, NORTH DAKOTA, SOUTH
DAKOTA)

Iamarino v. Heckler , 795 F.2d 59 (8th Cir. 1986)

APPLICABILITY OF RULING:

DESCRIPTION OF CASE:

In August 1981 Joseph A. Iamarino entered the Goodwill Industries Work
Adjustment Program, a program designed to help individuals acquire the
work habits, attitudes and behaviors needed to obtain and maintain a job
in the community. He stayed in this program until April 1982, when he
transferred into the Goodwill Industries Client Employment Program. In
October 1982, he was placed in a competitive job from which he was
terminated after a week.

Mr. Iamarino filed for disability benefits on November 23, 1982, alleging
an onset date of October 29, 1982. His application was denied initially
and on reconsideration. Subsequent to his hearing before the
administrative law judge (ALJ), but before a decision was rendered, Mr.
Iamarino notified the ALJ that the onset date of his disability was
actually prior to June 23, 1981. The ALJ allowed Mr. Iamarino's claim but
determined that October 29, 1982, was the onset date, reasoning that Mr.
Iamarino had been engaged in SGA up to that date. On July 27, 1984, the
Appeals Council denied Mr. Iamarino's request for review, establishing the
decision of the ALJ as the Secretary's final decision. The district court
affirmed. Mr
ity was
actually prior to June 23, 1981. The ALJ allowed Mr. Iamarino's claim but
determined that October 29, 1982, was the onset date, reasoning that Mr.
Iamarino had been engaged in SGA up to that date. On July 27, 1984, the
Appeals Council denied Mr. Iamarino's request for review, establishing the
decision of the ALJ as the Secretary's final decision. The district court
affirmed. Mr. Iamarino then appealed to the United States Court of Appeals
for the Eighth Circuit.

HOLDING:

The court of appeals found that Mr. Iamarino's earnings from his
sheltered work at Goodwill Industries for the period between August 1981,
and April 14, 1982, did not constitute substantial gainful activity. This
conclusion arose from the court's compari- son of rules concerning SGA in
competitive employment with the rules concerning SGA in sheltered
employment. For competitive employment, the court pointed out that the
Secretary's regulations contain both a negative and a positive
presumption. The negative presumption for competitive employment is
contained in 20 C.F.R. Section 404.1574(b)(3) and states that ordinarily
average monthly earnings below $190.00 in calendar years after 1979 will
not constitute SGA. [1] The
positive presumption for competitive employment is contained in 20 C.F.R.
Section 404.1574(b)(2) and states that average monthly earnings over
$300.00 in calendar years after 1979 will ordinarily constitute SGA. As to
average monthly earnings from competitive employment between the above
amounts, no presumption applies and there must be comparisons of the work
at issue with working the community. The court pointed out that 20 C.F.R.
Section 404.1574(b)(4) contains a negative presumption for sheltered work,
namely that average monthly earnings of $300 or less will not ordinarily
constitute SGA. It then concluded that 20 C.F.R
from competitive employment between the above
amounts, no presumption applies and there must be comparisons of the work
at issue with working the community. The court pointed out that 20 C.F.R.
Section 404.1574(b)(4) contains a negative presumption for sheltered work,
namely that average monthly earnings of $300 or less will not ordinarily
constitute SGA. It then concluded that 20 C.F.R. Section 404.1574(b)(6),
while not specifically addressing sheltered work, dictates an
interpretation that there must be a middle ground where no presumption,
positive or negative applies, just as there is for competitive
employment.

STATEMENT AS TO HOW IAMARINO DIFFERS FROM SOCIAL SECURITY
POLICY:

Under SSA's interpretation of 20 C.F.R. Section 404.1574(b)(6) and
416.974(b)(6), (which explains that where average monthly earnings are
between $190.00 and $300.00, informa- tion in addition to earnings must be
considered in determining whether SGA has been performed) the middle
ground addressed by the court where no presumption is applied does not
exist for sheltered work. SSA's policy is that sheltered work producing
$300 or less in average monthly earnings is ordinarily no SGA and that
sheltered work producing $300.01 in average monthly earnings is ordinarily
SGA. (Both these amounts represent actual earnings after deductions of
subsidies, impairment-related work expenses, etc.)

The court of appeals rejected SSA's interpretation stating that:

EXPLANATION OF HOW SSA WILL APPLY THE DECISION WITHIN THE CIRCUIT:

This ruling applies only to cases in which the claimant resides in
Arkansas, Minnesota, Missouri, Nebraska, North Dakota or South Dakota at
the time of the determination or decision at any level of administrative
review, i.e., initial, reconsideration, administrative law judge hearing
and Appeals Council review where a person is working in sheltered
employment and earning on the average more than $300 monthly.
y to cases in which the claimant resides in
Arkansas, Minnesota, Missouri, Nebraska, North Dakota or South Dakota at
the time of the determination or decision at any level of administrative
review, i.e., initial, reconsideration, administrative law judge hearing
and Appeals Council review where a person is working in sheltered
employment and earning on the average more than $300 monthly.

There is a middle ground between the $300 average monthly amount from
sheltered work which ordinarily presumed to be not SGA and an unspecified
upper limit. [2] If average
monthly earnings from sheltered work fall in this middle ground, SSA must
generally compare the time, energy, skill, responsibility and pay of the
sheltered work and work in the community to determine whether earnings
show that a person had engaged in substantial gainful activity. Earnings
in this middle ground may not be presumed to be SGA.

EFFECTIVE DATE:

Date of Publication 8/31/87

[1] Since Mr. Iamarino's claim
was for title II disability benefits, the court discussed only the
applicable provisions of Regulation No. 4 of 20 C.F.R., and not those of
Regulation No. 16. however, since the provisions are the same, the courts
ruling would apply to title XVI cases, as well as title II cases.

[2] Since the court did not
specify an upper limit, all cases involving earnings from sheltered work
averaging in excess of $300 a month after all appropriate deductions will
require individualized adjudication. No presumption of SGA may be
applied.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/SSA_SSR_AR_AR_87_4_8. Check the current official text before relying on it. Not legal advice.