The Sequential Evaluation Process
The Social Security Administration (SSA) follows a five-step sequential evaluation process to determine whether you are disabled for purposes of either of the two disability programs operated by SSA — SSI or Social Security disability. If it finds that you are disabled or not disabled at a step then the determination is over and it does not go on to the next step. Those five steps are:
- You are not engaging in “substantial gainful activity” (SGA); and
- You have a “severe” medically determinable impairment; and
- Your impairment meets or “equals” one of the impairments described in the Social Security regulations known as the “Listing of Impairments;” or
- Considering your “residual functional capacity” (RFC), you are unable to do your “past relevant work” (PRW); and
- You cannot make an adjustment to other work that exists in significant numbers, considering your RFC, age, education, and work experience.
Be careful about the terms identified by quotation marks and the initials that go with some of them. These terms have precise meanings in the law, and these meanings are not necessarily the meanings you would expect.
In addition, to be found disabled you must meet the “duration requirement.” That is, your disability must last for 12 full months.
In summary, there are two main routes to a finding of disability on an SSI or Social Security disability application:
- Your impairment must meet or equal an impairment described in the Listing of Impairments — the sequential evaluation process culminates at Step 3.
- You must meet all the other requirements of the sequential evaluation process culminating at step 5.
There are six ways that you may be found not disabled. That is, you are not disabled if you:
- Are working at the SGA level (Step 1).
- Have no medically determinable impairment (Step 2).
- Have a medically determinable impairment, but it does not significantly limit your physical or mental ability to do basic work activities (Step 2).
- Fail to meet the duration requirement.
- Are capable of past relevant work (Step 4).
- Are capable of other work (Step 5).
There are a few exceptions:
There are also “non-disability” requirements for eligiblity for the Social Security disability program. That is, you must have worked and paid enough Social Security taxes to earn sufficient work quarters (QCs) to qualify. For the SSI program, there are income and asset requirements.
Step 1: Substantial Gainful Activity
To be substantial gainful activity, work must be both “substantial” and “gainful.” “Substantial work activity. . . involves doing significant physical or mental activities.” Work may not be substantial when:
- You are unable “to do ordinary or simple tasks satisfactorily without more supervision or assistance than is usually given other people doing similar work.”
- You are doing work “that involves minimal duties that make little or no demands” on you and that are of “little or no use” to your employer or to the operation of a self-employed business.
SSA defines gainful activity broadly: “Work activity is gainful if it is the kind of work usually done for pay or profit, whether or not a profit is realized.” Nevertheless, when you are an employee of someone else, whether work is “gainful” is usually determined by looking only at your earnings.
But if you are self-employed, SSA looks carefully at a your work activity and its value to the business, even if you are working at a loss (as so many unimpaired self-employed people do from time to time). SSA also does not want to let employed claimants slip past this step if they are in a position to control the timing or amount of their income (e.g., when claimants are working for relatives).
Work is evaluated “without regard to legality.” Thus, illegal activity may be substantial gainful activity.
Whether you are employed by someone else or self-employed, SSA allows deduction from earnings for what it calls “impairment–related work expenses,” which are usually payments you make for drugs or medical treatment for the disabling impairment but may also include payments for some transportation costs, vehicle modification, attendant care services, residential modification,etc. However, the work expense rules must be reviewed carefully before making a deduction because some expenses you wouldn’t expect are included (such as payment for treatment for the disabling impairment that you have to pay whether you work or not) and some expenses that you might expect to qualify are excluded (such as payment for health insurance).
In determining if work is substantial gainful activity, SSA averages income according to rules that consider the nature of the work, the period of time worked, and whether the SGA level changed during the time the claimant worked.
The SGA level, which was $300 per month during all of the 1980s and $500 per month from 1990 until July 1999, when it was raised to $700, is becoming considerably more generous than it used to be because of cost-of-living increases that have been applied beginning with the year 2001. For example, for the year 2010, average countable earnings of more than $1,000 per month show that work was substantial gainful activity.
You can find the SGA amount for the current year on the Internet at www.ssa.gov/cola/.
At step two of the sequential evaluation process, SSA determines whether you have a “severe” impairment. This step was intended to weed out frivolous cases involving either (1) no medically determinable impairments or (2) slight medically determinable impairments that impose only minor limitations on ability to work. Virtually any reduction in residual functional capacity (what you can still do even with your impairments) satisfies the requirement that there be a severe medically determinable impairment. As such, medically determinable impairments are divided into two categories:
- slight impairments that are referred to in SSA’s peculiar lingo as “nonsevere” impairments and
- all other impairments that are, therefore, “severe.”
Even subjective symptoms, as long as they arise from a medically determinable impairment, must be considered in assessing whether an impairment, or group of impairments, reduces your ability to do basic work activity. If an adjudicator is “unable to determine clearly” the effect of an impairment on your ability to do basic work activities, the adjudicator is directed to proceed with the next steps of the sequential evaluation process. Thus, close cases are to be decided in favor of finding an impairment to be severe.
On the other hand, “[n]o symptom or combination of symptoms can be the basis for a finding of disability, no matter how genuine the individual’s complaints may appear to be, unless there are medical signs and laboratory findings demonstrating the existence of a medically determinable physical or mental impairment.” That is, when there is no “medically determinable impairment,” you may be found not disabled at this step of the sequential evaluation process. Nevertheless, as a rule, if a doctor has enough information to make a legitimate diagnosis, you have a medically determinable impairment. When there is a controversy over which diagnosis is correct, if medical signs or laboratory findings show any abnormality, the claimant has a medically determinable impairment even if the doctors do not agree on which diagnosis is best.
The Duration Requirement
Unless your impairment is expected to result in death, it must have lasted or be expected to last for a continuous period of 12 months. The duration requirement is not usually a problem for impairments that wax and wane or have short periods of remission but have active periods sufficient to preclude engaging in substantial gainful activity on a sustained basis. However, the regulation specifically prohibits tacking together unrelated severe impairments to meet the duration requirement.
Denials based on the duration requirement usually occur in those cases where, at the time of the decision, the duration requirement is not met and the impairment is the sort that is likely to improve within 12 months. For those impairments that may or may not improve before the duration requirement is met, sometimes a state agency decision maker will delay a case just to see if you continue to be disabled. Because of the slow progress of the administrative process, the 12 months usually have passed by the time you actually attend a hearing, thus permitting an accurate retrospective evaluation.
Once the twelve-month duration requirement is met, you may ask for a finding of a closed period of disability in the situation where your condition has improved to the degree that you are able to return to work.
In order to be found disabled at step 3 of the sequential evaluation process, your medical signs, findings, and symptoms must meet or “medically equal” one of the set of medical signs, findings and symptoms found in the Listing of Impairments. The Listing of Impairments is a set of medical criteria for disability found in the Social Security disability regulations.
Even if your impairment is not in the Listing of Impairments, it is possible to argue that your impairments are medically equivalent to an impairment in the Listing. This comes up in four situations: (1) you do not have one of the essential findings stated in the Listings for your particular impairment but you have other findings; (2) you have all the essential findings but one or more of the findings is not quite severe enough and you have other findings; (3) your impairment is not described in the Listings but it may be as severe as an analogous impairment that appears in the Listings; or (4) you have a combination of impairments, none of which meet the Listings but the cumulative total of your impairments could still equal the Listings.
It is possible to compare medical findings, symptoms and limitations in functioning to see if one claimant, whose impairment does not appear in the Listings, is as disabled as another claimant whose impairment meets a particular Listing. However, before an ALJ can find that your impairment medically equals a Listed Impairment, the decision maker must receive the opinion of a medical expert hired by SSA.
You are not disabled if you can still do your “past relevant work.” This means that you must prove that you are incapable of doing any work that you have performed in the last 15 years (or in the 15 years before your disability insured status requirement was last met, if that date is earlier), if that work was done at the “substantial gainful activity” level and lasted long enough for you to learn how to do it. Thus, you have to identify your easiest job and then figure out why you cannot still do that kind of work.
If you had an easy job in the past 15 years that you can still do, then you will be found not disabled unless you can put together an argument that the impairments meet or medically equal one of the impairments in the Listing of Impairments (Step 3).
If you retain the capacity to do a job as it is ordinarily done, then you will be found not disabled even though your actual past job required greater exertion and you are unable to do that particular job. The “job as it is ordinarily done” rule will not be applied to your benefit, however. If your own past work was easier than the way the job is ordinarily done, SSA will examine the actual job requirements as you performed them in determining whether you can perform past relevant work. This rule applies even if the past job was done only part-time, as long as it was substantial gainful activity.
Determining whether you can do past relevant work is accomplished by comparing your current residual functional capacity with the physical and mental demands of past relevant work.
Determining whether you can make an adjustment to other work that exists in significant numbers in the national economy is the most complicated step in the sequential evaluation process.
This step considers your remaining work capacity, age, education and work experience. SSA has provided an important tool for determining whether or not you are disabled because of medical-impairments and vocational factors: the Medical-Vocational Guidelines. The Medical-Vocational Guidelines, popularly known as the “grids,” provide that the older you are, the easier it is to be found disabled.
Exceptions to the Five-Step Sequential Evaluation
There are three other ways to be found disabled without completing the standard five-step sequential evaluation process. If you fit one of three special medical-vocational profiles, you are found disabled without proceeding to step five and without consulting the Medical-Vocational Guidelines.
A claimant is disabled who:
- Has a severe, medically determinable impairment;
- Is age 55 or older;
- Has an 11th grade education or less; and
- Has no past relevant work experience.
Profile #2 (the “worn-out worker”):
A claimant is disabled who:
- Has no more than a sixth grade education;
- Worked 35 years at arduous unskilled labor; and
- Is unable to do the arduous unskilled labor done in the past.
A claimant is disabled who:
- Is not working at SGA level.
- Has a lifetime commitment (30 years or more) to a field of work that is unskilled, or is skilled or semi-skilled but with no transferable skills.
- Can no longer perform this past work because of a severe impairment.
- Is closely approaching retirement age (age 60 or older).
- Has no more than a limited education.
There are two ways to be found not disabled even though the sequential disability evaluation process has been completed and SSA has concluded that you are, in fact, disabled. You will not be found disabled if:
- Without good reason, you do not follow prescribed treatment. A determination finding a claimant not disabled on this basis is made only after SSA finds that you are otherwise disabled. The treatment must be prescribed by your own physician and this treatment must be “clearly expected to restore” your ability to work.
- Drug addiction or alcoholism is “a contributing factor material to the determination of disability.” This issue is addressed only after it is determined that you are disabled when considering all impairments, including any impairments involving drug addiction or alcoholism. Then SSA looks at your impairments again to consider whether you would still be disabled if you stopped using drugs or alcohol.
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