AR 98-1(8): AR 98-1 (8): Newton v. Chater , 92 F.3d 688 (8th Cir. 1996) — Entitlement to Trial Work Period Before Approval of an Award for Benefits and Before Twelve Months Have Elapsed Since Onset of Disability — Titles II and XVI of the Social Security Act.

AR 98-1 (8) (Rescinded 6/10/2002 — 67 FR 39781)

EFFECTIVE/PUBLICATION DATE: 2/23/98

Acquiescence Ruling 98-1(8)

Issue:

Whether a person's return to substantial gainful activity (SGA) within 12

months of the onset date of his or her disability, and prior to an award

of benefits, precludes an award of benefits and entitlement to a trial

work period.

Statute/Regulation/Ruling Citation:

Sections 222(c), 223, 1614(a)(3) and (4) and 1619 of the Social Security

Act (42 U.S.C. 422(c), 423, 1382c(a)(3) and (4) and 1382h); 20 CFR

404.1505, 404.1520(b), 404.1592, 416.262, 416.905, 416.906, 416.920(b),

416.924(b); Social Security Ruling (SSR) 82-52.

Circuit:

Eighth (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, South

Dakota).

Newton v. Chater , 92 F.3d 688 (8th Cir. 1996).

Applicability of Ruling:

This Ruling applies to determinations or decisions at all administrative

levels (i.e., initial, reconsideration, Administrative Law Judge (ALJ)

hearing and Appeals Council review).

Description of Case:

Donald A. Newton applied for disability insurance benefits and

Supplemental Security Income (SSI) on April 22, 1993, alleging disability

since October 30, 1992, based on illiteracy, memory lapses, alcoholism and

hypertension. The applications were denied initially and on

reconsideration. From June to September 1994, Mr. Newton worked in a

foundry as a grinder and a metal beater for at least 40 hours per week and

earned between $6.50 and $7.26 per hour. In October 1994, he worked for

one week at a wood products firm. In November 1994, a hearing was held

before an ALJ who issued a decision in February 1995 denying disability

benefits.

ed initially and on

reconsideration. From June to September 1994, Mr. Newton worked in a

foundry as a grinder and a metal beater for at least 40 hours per week and

earned between $6.50 and $7.26 per hour. In October 1994, he worked for

one week at a wood products firm. In November 1994, a hearing was held

before an ALJ who issued a decision in February 1995 denying disability

benefits.

The ALJ found that Mr. Newton was not disabled under step one of the

five-step sequential evaluation process due to his performance of

substantial gainful activity from June to September 1994. The ALJ also

cited this 1994 work activity as evidence that Mr. Newton's alleged

impairments did not prevent him from performing his past relevant work.

The Appeals Council denied Mr. Newton's request for review in May 1995 and

the district court affirmed the ALJ's decision in December 1995. On his

appeal to the United States Court of Appeals for the Eighth Circuit, Mr.

Newton argued, among other things, that he was entitled to a trial work

period for the work he performed in 1994 and that the evidence supported a

finding of disability.

Holding:

The Eighth Circuit reversed the judgment of the district court and

directed that the case be remanded to the Social Security Administration

(SSA) for further administrative proceedings. The court of appeals

determined that the ALJ erred in considering Mr. Newton's work from June

to September 1994 as evidence of substantial gainful activity to support a

finding of no disability without first determining whether he was entitled

to a trial work period during those

months. [1] The court stated that

under the Social Security Act (the Act) and SSA's regulations,

roceedings. The court of appeals

determined that the ALJ erred in considering Mr. Newton's work from June

to September 1994 as evidence of substantial gainful activity to support a

finding of no disability without first determining whether he was entitled

to a trial work period during those

months. [1] The court stated that

under the Social Security Act (the Act) and SSA's regulations,

The court found that the provision of SSR 82-52 which precludes a finding

of disability where a claimant returns to substantial gainful activity

before an award of benefits and before 12 months have elapsed since the

date of onset of an impairment which prevented substantial gainful

activity "is inconsistent with the statutory provisions governing the

start of a trial work period." The Eighth Circuit held:

In support of its holding, the Eighth Circuit cited two other court of

appeals decisions in which the courts reached a similar conclusion on this

issue — Walker v. Secretary of Health and Human Services , 943

F.2d 1257 (10th Cir. 1991), for which SSA published Acquiescence Ruling (AR) 92-6(10) ,

and McDonald v. Bowen , 818 F.2d 559 (7th Cir. 1987), for which SSA

published AR 88-3(7) .

Statement As To How Newton Differs From Social Security

Policy

SSR 82-52 contains a clear statement of SSA policy on this

issue [3] as follows:

The Eighth Circuit held that, under the Act and regulations, entitlement

to a trial work period is not conditioned upon a prior award of benefits

and/or the lapse of a 12-month period of disability. This raises the

possibility that, on remand of the case to SSA, should Mr. Newton

establish the onset of an impairment that could otherwise be the basis for

a finding of disability, Mr

lows:

The Eighth Circuit held that, under the Act and regulations, entitlement

to a trial work period is not conditioned upon a prior award of benefits

and/or the lapse of a 12-month period of disability. This raises the

possibility that, on remand of the case to SSA, should Mr. Newton

establish the onset of an impairment that could otherwise be the basis for

a finding of disability, Mr. Newton may receive a benefit award and a

trial work period even if he returned to work demonstrating an ability to

engage in substantial gainful activity before the lapse of the 12-month

period after the onset date of such impairment and before a decision by

SSA to award benefits.

Explanation of How SSA Will Apply The Newton Decision Within

The Circuit

This Ruling applies only to cases in which the claimant resides in

Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota or South

Dakota at the time of the determination or decision at any administrative

level, i.e., initial, reconsideration, ALJ hearing or Appeals Council

review.

This Ruling applies to claims for title II benefits based on disability.

It also applies to claims for title XVI benefits based on disability as

explained below.

A claim for title II disability insurance benefits, widow(er)'s insurance

benefits based on disability or child's insurance benefits based on

disability in which the claimant returns to work within 12 months of the

established onset date of an impairment which could otherwise be the basis

for a finding of disability should be allowed and the claimant granted a

trial work period if the following conditions are met: (1) the claimant

establishes that, at the time he or she returned to work and thereafter,

the impairment was still expected to last for at least 12 consecutive

months from the date of onset; (2) the claimant returns to work after the

waiting period (if a waiting period is applicable) and after the

established onset date (but within the 12-month period following such

onset

ons are met: (1) the claimant

establishes that, at the time he or she returned to work and thereafter,

the impairment was still expected to last for at least 12 consecutive

months from the date of onset; (2) the claimant returns to work after the

waiting period (if a waiting period is applicable) and after the

established onset date (but within the 12-month period following such

onset date); and (3) the return to work demonstrating an ability to engage

in substantial gainful activity occurs either before or after approval of

the award.

A claim for title XVI benefits based on disability in which the claimant

returns to work within 12 months of the established onset date of an

impairment which could otherwise be the basis for a finding of disability

should be allowed and the claimant granted section 1619

status [4] if the following

conditions are met: (1) the claimant establishes that, at the time he or

she returned to work and thereafter, the impairment was still expected to

last for at least 12 consecutive months from the date of onset; (2) the

claimant returns to work in a month subsequent to the month of established

onset (but within the 12-month period following such onset date); (3) the

claimant is eligible for "regular" SSI benefits under section 1611 of the

Act (or a federally administered State supplementary payment) based on the

impairment (disregarding the effect that the claimant's return to work

within 12 months after onset would otherwise have on eligibility for such

benefits or payment) for at least one month in the period preceding the

month in which he or she returns to work; (4) the claimant meets all other

nondisability requirements for section 1619 status; and (5) the return to

work demonstrating an ability to engage in substantial gainful activity

occurs either before or after approval of the award.

would otherwise have on eligibility for such

benefits or payment) for at least one month in the period preceding the

month in which he or she returns to work; (4) the claimant meets all other

nondisability requirements for section 1619 status; and (5) the return to

work demonstrating an ability to engage in substantial gainful activity

occurs either before or after approval of the award.

[1] Section 222(c)(2) of the Act

provides that "any services rendered by an individual during a period of

trial work shall be deemed not to have been rendered by such individual in

determining whether disability has ceased in a month during such

period."

[2] Section 222(c)(3) of the Act

provides, in pertinent part, that "[a] period of trial work for any

individual shall begin with the month in which he becomes entitled to

disability insurance benefits . . . ." Under section 222(c)(4) of the Act,

a trial work period ends with the ninth month, in any period of 60

consecutive months, in which the individual renders services (whether or

not the nine months are consecutive), or, if earlier, with the month in

which disability ceases.

[3] SSR 91-7c superseded SSR

82-52, but only to the extent that SSR 82-52 discussed former procedures

used to determine disability in children. The issue in this AR does not

relate to those former procedures and the cited policy statement in SSR

82-52 remains in effect.

ervices (whether or

not the nine months are consecutive), or, if earlier, with the month in

which disability ceases.

[3] SSR 91-7c superseded SSR

82-52, but only to the extent that SSR 82-52 discussed former procedures

used to determine disability in children. The issue in this AR does not

relate to those former procedures and the cited policy statement in SSR

82-52 remains in effect.

[4] Pursuant to statutory

amendments made by Public Law 99-643, effective July 1, 1987, the trial

work period provisions no longer apply to title XVI disability claims.

Beginning July 1, 1987, a disabled individual, who was eligible to receive

"regular" SSI benefits under section 1611 of the Act (or a federally

administered State supplementary payment) for a month and subsequently has

earnings ordinarily considered to represent substantial gainful activity,

will move directly to section 1619 status rather than be accorded a trial

work period. This Ruling extends to such individuals, i.e., a claim for

title XVI benefits based on disability should be allowed and the claimant

granted section 1619 status if the claimant would otherwise be eligible

for section 1619 status and the same conditions set out above for title II

claims based on disability are met.