TABLE OF CONTENTS

INTRODUCTION ...................................................................................................................1

PART ONE: DATA RELATING TO 

 DISABILITY PROGRAM OPERATIONS ...................................................................13

I. Applications ................................................................................................................15

II. Allowances ..................................................................................................................23

III. Continuing Disability Reviews ..................................................................................31

IV. Terminations ...............................................................................................................35

V. Benefi ciaries ................................................................................................................37

VI. Benefi ciary Characteristics .......................................................................................45

VII. Variations in State Agency Decision Making ...........................................................57

VIII. State Administrative Arrangements .........................................................................69

IX. Hearings and Appeals ................................................................................................73

X. Processing Times ........................................................................................................83

XI. Federal Courts ............................................................................................................87

XII. Data Sources and Notes .............................................................................................93

PART TWO: SELECTED ASPECTS OF 

 DISABILITY DECISION MAKING .............................................................................99

Explanation of Materials .....................................................................................................100

 I. How Disability Determinations are Made .............................................................101

II. Steps in the Social Security Disability 

 Application and Appeals Processes ..................................................................107

III. Agency Initiatives Since 2001 ..................................................................................111

IV. Major Social Security Act Disability Legislation ..................................................117
V. Chronology of Signifi cant Judicial, Legislative, and

 Agency Actions That Have Affected the Disability

 Adjudication Process .........................................................................................121

VI. Components Within the Social Security Administration

 With Responsibilities in the Disability Process .....................................................127

VII. Bibliography of Materials Related to Disability ...................................................133

GLOSSARY ..........................................................................................................................141

SOCIAL SECURITY ADVISORY BOARD ......................................................................147
CHARTS

I. APPLICATIONS

 Number of Applications, CY 1975-2004, Chart 1 .......................................................17

 Disability Insurance Application Rates, FY 2003, Chart 2 ..........................................18

 Workers Insured for Disability Benefi ts by Gender, CY 1975-2004, Chart 3 ............ 19

 SSI Adult Disability Application Rates by State, CY 2003, Chart 4 ...........................20

 SSI Child Disability Application Rates by State, CY 2003, Chart 5 ...........................21

 SSI Applicants by Age Group as Percentage of Population in 

 Poverty, CY 1974-2003, Chart 6 ............................................................................22

II. ALLOWANCES

 Allowance Rates at Each Level of Decision Making,

 DI and SSI Combined, FY 1977-2004, Chart 7 .................................................... 24

 State Agency Allowance Rates for Initial Claims, FY 1990-2004, Chart 8 ................ 25

 State Agency Allowance Rates for Reconsiderations, FY 1990-2004, Chart 9 .......... 25

 Hearing Decision Allowance Rates, FY 1990-2004, Chart 10 ................................... 26

 Disability Awards, CY 1975-2004, Chart 11 .............................................................. 27

 Incidence Rates for DI Worker Benefi ts, CY 1975-2003, Chart 12 ............................ 28

 Allowance Rates at Initial (FY 2003) and Hearing Levels (FY 2004) 

 by State, Chart 13 ................................................................................................. 29

 Disposition of DI and SSI Applications Filed in Calendar Year 2000, Chart 14 ........ 30

III. CONTINUING DISABILITY REVIEWS

 Number of Continuing Disability Reviews 

 Processed, FY 1990-2004, Chart 15 ......................................................................32

 Medical CDR Continuation Rates, by 

 Decision Level, FY 1995-2004, Chart 16 ..............................................................33

 Ten-Year Estimated Federal Savings from CDR Cessations

 in Fiscal Year 2004 by Program, Chart 17 .............................................................34

IV. TERMINATIONS

 Number of DI Worker Terminations, CY 1984-2004, Chart 18 ..................................36

 DI Worker Termination Rate, CY 1984-2004, Chart 19 ..............................................36

V. BENEFICIARIES

 DI and SSI Benefi ciaries, CY 1985-2025 (Projected), Chart 20 .................................38

 Disabled Worker Benefi ciaries as Percentage of Population 

 Insured for Disability by Gender, CY 1975-2004, Chart 21 ..................................39

 SSI Benefi ciaries as Percentage of Population by Age Group, 

 CY 1980-2004, Chart 22 ........................................................................................40

 Disabled Worker Benefi ciaries as of December 2003 as Percentage

 of State Population Ages 18 to 64, Chart 23 ..........................................................41
 SSI Disabled Adults as of December 2003 as Percentage of State Population 

 18 to 64 and of Population 18 to 64 

 Below 125% of Poverty Level, Chart 24 ...............................................................42

 SSI Disabled Children as of December 2003 as Percentage of State 

 Population Under 18 and of Population Under 18 

 Below 125% of Poverty Level, Chart 25 ...............................................................43

 Expected Time on DI Rolls, Chart 26 ..........................................................................44

VI. BENEFICIARY CHARACTERISTICS

 Trends in State Agency Initial DI Worker Awards

 by Major Cause of Disability, CY 1975-2004, Chart 27 .......................................46

 DI Worker Awards after All Appeals by Major 

 Cause of Disability CY 1995-2002, Chart 28 ........................................................47

 Number (and Percentage) of Benefi ciaries by Type of 

 Impairment, December 2002, Chart 29 ..................................................................48

 DI and SSI Benefi ciaries with Diagnosis of 

 Mental Impairment, CY 1986-2003, Chart 30 .......................................................49

 Share of DI Worker Benefi ciaries by Age 

 Group, CY 1983-2003, Chart 31 ............................................................................50

 Share of SSI Disabled Benefi ciaries under Age 65 

 by Age Group, CY 1980-2004, Chart 32 ...............................................................50

 Average Age of Newly Awarded DI Benefi ciaries by 

 Gender, CY 1960-2004, Chart 33 ..........................................................................51

 Average Age of Newly Awarded SSI Disabled Adult 

 Benefi ciaries by Gender, CY 1980-2004, Chart 34 ...............................................51

 Number of DI Worker Benefi ciaries by 

 Gender, CY 1970-2003, Chart 35 ..........................................................................52

 Number of SSI Disabled Benefi ciaries Ages 18-64 by Gender, 

 CY 1993-2003, Chart 36 ........................................................................................53

 SSI Disabled Child Benefi ciaries by Gender, CY 1993-2003, Chart 37 .....................53

 Average Monthly DI Worker Benefi t, CY 1960-2004, Chart 38 .................................54

 Monthly SSI Individual Federal Benefi t Rate, CY 1974-2004, Chart 39 ....................54

 DI Worker and SSI Benefi ciaries Ages 18 to 64 by 

 Years of Education, 2001, Chart 40 .......................................................................55

 Percentage of Benefi ciaries by Percent of Personal

 Income Received as Benefi ts 2001, Chart 41 ........................................................56

VII. VARIATIONS IN STATE AGENCY DECISION MAKING

 State Agency Initial Allowance Rates, FY 1980-2004, Chart 42 .................................58

 State Agency Initial Allowance Rates for DI and SSI by State, 

 FY 1980 and 2004, Chart 43 ..................................................................................59

 Percentage of State Agency DI Awards

 by Basis for Decision, FY 1975-2004, Chart 44 ....................................................60

 Variation in Basis for Initial Awards, FY 2003, Chart 45 ............................................61

 Percentage of State Agency Denials by 

 Basis for Decision, FY 1975-2004, Chart 46 .........................................................62

 Percentage of State Agency Initial Denials Based

 on Non-Severe Impairment, FY 2004, Chart 47 ....................................................63

 
 Percentage of State Agency Initial Denials Based on Ability

 to Perform Usual Work, FY 2004, Chart 48 ......................................................... 64

 Percentage of State Agency Initial Denials Based on 

 Ability to Perform Other Work, FY 2004, Chart 49 ............................................. 65

 Percentage of Initial-Level Claims with Consultative 

 Examinations, FY 2004, Chart 50 ......................................................................... 66

 Quality Assessment of State Agency Initial-Level Claim 

 Decisional Accuracy, FY 1992-2004, Chart 51 .................................................... 67

VIII. STATE ADMINISTRATIVE ARRANGEMENTS

 Minimum Salary Levels for Initial-Level State Agency

 Disability Examiners, FY 2004, Chart 52 ............................................................. 70

 State Agency Examiner Attrition Rates, FY 2004, Chart 53 ...................................... 71

IX. HEARINGS AND APPEALS

 Allowance Rates at Initial (Fiscal Year 2003) and Hearing (Fiscal Year 2004) 

 Levels by State, Chart 54 ...................................................................................... 74

 Frequency Distribution of the Number of ALJ Decisions 

 in FY 2002, SSA Cases, Chart 55 ......................................................................... 75

 Frequency of Distribution of ALJ Allowance Rates in FY 2002, 

 SSA Cases, Chart 56 ............................................................................................ 76

 Medical and Vocational Expert Participation in ALJ 

 Hearings, FY 1977-2004, Chart 57 ....................................................................... 77

 Cases with Representation at ALJ Hearings, FY 1977-2004, Chart 58 ...................... 78

 Appeals Council Workloads, FY 2005, Chart 59 ........................................................ 79

 Appeals Council Dispositions, FY 1975-2005, Chart 60 ............................................ 80

 Appeals Council Requests for Review, FY 1995-2005, Chart 61 .............................. 81

X. PROCESSING TIMES

 Average Initial Claim Processing Time, FY 1991-2004, Chart 62 ............................. 84

 DI and SSI Applications Pending in State Agencies at

 End of FY 1985-2004, Chart 63 ............................................................................ 84

 Average Hearing-Level Processing Time, FY 1985-2005, Chart 64 .......................... 85

 Cases Pending in Hearing Offi ces at End of FY 1985-2005, Chart 65 ....................... 85

XI. FEDERAL COURTS

 New Disability Cases Brought to District Courts, FY 1993-2004, Chart 66 .............. 88

 Federal District Court Actions, FY 1995-2004, Chart 67 ........................................... 89

 Social Security Cases Commenced and Terminated in 

 U.S. Courts of Appeals, FY 1997-2004, Chart 68 ................................................ 90

 DI and SSI Disability Determinations and Appeals, FY 2005, Chart 69 .................... 91

1

I. INTRODUCTION

Background

In January 2001, the Social Security Advisory Board issued the fi rst edition of Disability 

Decision Making: Data and Materials. At that time the Board had spent over 3 years studying 

the question of how the Social Security Administration (SSA) could improve its service to the 

public. During the course of that study it became clear that the administration of the agency’s 

disability programs was at the heart of SSA’s service delivery problems. In 2006 we fi nd that 

many of these problems continue to exist.

Over the past 5 years we have closely tracked the progress that the Social Security 

Administration has made as it has worked to improve its disability determination processes. 

While strides have been made and SSA continues to diligently pursue high-quality service, 

much work remains to be done. SSA is now implementing major changes. These include 

converting the disability program from a largely paper-based operation to a completely electronic 

environment and a signifi cant restructuring of the adjudicatory processes. As the changes are 

implemented, the Board believes it will be useful to have available this compilation of data 

concerning the state of the disability programs.

The Social Security Disability Insurance (SSDI) and the Supplemental Security Income 

(SSI) programs provide essential income support (approximately $120 billion annually) to 

approximately 11.6 million people with disabilities and their dependents. Administration of 

the disability programs accounts for nearly two-thirds of the agency’s administrative budget, or 

about $6 billion. In terms of executive management time and attention, the disability programs 

consume even more of the agency’s resources than these numbers suggest. By comparison, the 

payment of retirement and survivors benefi ts, the issuance of Social Security numbers, and other 

basic functions run smoothly. While these other functions are core business processes of the 

Social Security Administration, they do not present the enormous management challenges that 

are presented by the SSDI and SSI disability programs.

The Social Security Advisory Board continued to look at the disability program and issued 

a second report in January 2001, Charting the Future of Social Security’s Disability Programs: 

The Need for Fundamental Change. The purpose of that report was to provide the then new 

administration and Congress with a framework for considering the fundamental changes that we 

believed were needed. We again called for a look at whether or not disability decisions were 

consistent and fair and if disability policy was being developed in a coherent fashion. The report 

also asked: is Social Security’s defi nition of disability appropriately aligned with the Nation’s 

disability policy? Another report, The Social Security Defi nition of Disability, released in 

October 2003, chronicled the background of the program, how it had changed, and the various 

attempts to build in work incentives. The Board concluded that the time has come for the Nation 

to address the contradictions created by the existing defi nition of disability.

Because we believe that more work must be done to improve the disability process and the 

adjudicative standards, we have updated this document, Disability Decision Making: Data and 

Materials. It is intended to provide background information to help policymakers and the public 

gain a fuller understanding of how SSA’s disability programs are being administered and of the 

major problems that are inherent in the current process.
2

The data in this report raise signifi cant questions, including issues about consistency and 

equity in decision making. SSA has, over the years, attempted a series of major initiatives that 

focused on streamlining the disability decision making process. In 1994, SSA developed A Plan 

for a New Disability Claim Process – better known as “Disability Redesign.” This plan was to 

be implemented over a 6-year time span. Most of the projects ended in late 2001; however, some 

of the more promising changes were implemented in 10 States as a “prototype” for possible 

later implementation on a nationwide basis. In 2000, the Hearings Process Improvement (HPI) 

initiative was implemented, and later modifi ed in March 2001. Aspects of HPI remain in place in 

SSA. However, even under this modifi ed structure, there is still a general perception that HPI’s 

net result did not improve the process.

The Long-Standing Concern: Consistency and Equity in Decision Making

Concern about consistency and equity in decision making goes back to the early days of the 

Disability Insurance program. In the fall of 1959, only 3 years after the program was enacted, 

the Ways and Means Subcommittee on the Administration of the Social Security Program (the 

Harrison Subcommittee) held a series of hearings that focused in part on variation in decision 

making among the States. During these hearings, the Social Security Administration’s Deputy 

Commissioner, George Wyman, told the Subcommittee that the objective of achieving reasonable 

consistency represented “a real challenge.” However, as explained by former Commissioner 

of Social Security Robert Ball, who at that time was Deputy Director of the Bureau of OldAge and Survivors Insurance, the agency had developed a set of medical guidelines for use in 

adjudication. These guides were developed for the express purpose of achieving “as high degree 

of equity in the application of this law across the country as possible.”

Yet, the program rules continued to grow in complexity and the number of decisions being made at 

the appeals levels has increased. In the mid-1970s the House Ways and Means and the Senate Finance 

Committees conducted an in-depth examination of the administration of the DI and SSI disability 

programs. The concern of the Committees was heightened by the issuance of a GAO report in 1976 

that raised serious questions about consistency in disability decision making by the State agencies.

In their reports on proposed legislation (which ultimately was enacted as the Social Security 

Disability Amendments of 1980) both Committees expressed concerns. The Ways and Means 

Committee stated that “signifi cant improvements in Federal management and control over State 

performance are necessary to ensure uniform treatment of all claimants and to improve the quality 

of decision making under the Nation’s largest Federal disability program.” The Finance Committee 

report expressed unease about “State-to-State, ALJ-to-ALJ variations and about the high rate of 

reversal of denials which occurs at various stages of adjudication, for it indicates that possibly different 

standards and rules for disability determinations are being used at the different locations and stages of 

adjudication.”

The 1980 legislation incorporated several amendments aimed at addressing these concerns, 

including (1) giving SSA authority to establish performance standards and administrative requirements 

and procedures for State Disability Determination Services (DDSs), with the option of taking over the 

work of a DDS if the Commissioner fi nds that the State is substantially failing to make determinations 

in a manner consistent with regulations and other written guidelines; (2) requiring the agency to 

review a percentage of DDS decisions before payment begins; and (3) requiring the Commissioner 

to implement a program of own motion review of disability decisions made by administrative law 

judges (ALJs).
3

In the Social Security Disability Benefi ts Reform Act of 1984 the Congress again sought to 

improve consistency between the DDSs and the ALJs. The Act required the Commissioner to 

establish uniform regulatory standards to be applied at all levels of determination, review, and 

adjudication.

Legislation enacted in 1986 required the appointment of a special Disability Advisory 

Council to study and make recommendations with respect to the DI and SSI disability programs. 

One of the primary concerns expressed by the Advisory Council in its 1988 report was the lack 

of uniformity in the determination of disability. The Advisory Council recommended a number 

of measures to address this including:

• more effective use by the agency of its authority, through pre-effectuation review of 

decisions, to ensure the accuracy and uniformity of DDS decisions;

• establishment by the agency of more precise standards and criteria for determining 

eligibility;

• exercise by the agency of its full authority and obligation under the law to ensure that the 

States faithfully perform their administrative role on behalf of the Federal government;

• alteration of SSA’s quality assurance system to ensure that reviews are not conducted by 

the same region in which the cases originate;

• efforts to determine why State agency decisions differ if for reasons that cannot be 

explained by differences in applicant pools or court orders;

• expedited promulgation of regulations so as to promote the use of a standard set of 

criteria by the DDS and the ALJ;

• action by the Congress to require the Department of Justice to prepare a study of possible 

alternatives to the current method of court review of disability cases. This included a 

recommendation that an evaluation of other types of courts and alternative placement of 

court review in the appeals process should be undertaken to determine potential impacts 

on timeliness, accuracy and nationwide uniformity of decisions; and

• study by SSA of the Medical Improvement Review Standard to assess whether or not the 

standard is the best way to measure someone’s ability to work.

In response to the Advisory Council’s report, staff in SSA’s Offi ce of Program and Integrity 

Reviews undertook a statistical analysis of State agency data. The major fi nding of this internal 

study, which was never published, was that “in general, more than half the differences in 

fi ling and allowance rates among States are associated with different characteristics of State 

populations.” The study observed that differing fi ling and allowance rates were therefore 

appropriate and refl ected expected variation among the States. It was noted, however, that there 

were several States where the actual allowance rate varied signifi cantly from the “expected” rate 

and, with respect to those States, more intensive analysis was warranted.

Although they did not specifi cally address the issue of consistency among States or between 

levels of decision making, other studies undertaken by SSA in the 1990s analyzed the reasons 

for fl uctuations in the growth of the Disability Insurance program. In 1992, the Department of 

Health and Human Services issued the “709 Report,” a report prompted by the forecasts of the 

impending exhaustion of the DI Trust Fund following the sharp increase in awards in the late 
4

1980s and early 1990s.1 The report speculated on the reasons for program growth, but could 

not quantify the extent to which various factors – economic, demographic, and program policy 

– contributed to the increased DI rolls. Follow-on studies were conducted and SSA issued the 

February 1996 Report on Rising Cost of Social Security Disability Insurance Benefi ts. This 

report, drawing on earlier fi ndings of a study conducted by Lewin-VHI, Inc. under contract with 

the Department of HHS,2 provided additional explanation for the growth in program rolls. The 

report also outlined SSA’s plan to fundamentally redesign the disability program in order to 

improve overall disability program management and achieve more uniform, effi cient, and timely 

disability decisions.

The 1990s saw several examinations of the disability program that focused on the 

inconsistency in decision making. In 1995 and 1997, the Social Security Subcommittee of the 

House Ways and Means Committee conducted hearings on the issue, and the Congressional 

Research Service and GAO both issued reports. Today, the GAO continues to focus on the 

disability programs. Since 2001, GAO has issued 22 reports that address various aspects of 

the programs, with most of them discussing recommendations for steps to achieve greater 

consistency across the program and for strengthening management oversight.

Disability Redesign and Process Unifi cation

In September 1994, in response to a growing disability claims workload and a shrinking 

agency workforce, the Social Security Administration developed a plan to redesign the disability 

determination process. The original redesign plan included 83 initiatives to be implemented over 

a 6 year period. According to the plan, the new disability determination process would result in 

a reduction of the average processing time for an initial claim from about 150 days to somewhere 

around 60 days. Because the defi nition of disability remained unchanged, program costs were 

expected to remain neutral. In addition, it was expected that administrative costs would decline 

over the implementation period and that those savings would be reinvested in the program.3

By 1997, it was clear that the redesign initiative was far too complicated, and progress was 

slow. In February 1997, SSA reassessed its approach and decided to focus on a much smaller 

number of integrated projects. Most of the projects were terminated by late 2001, but a number 

of States continued to implement certain aspects of the redesign, including the elimination of the 

reconsideration step of the appeals process and the “single decision maker” approach of allowing 

disability examiners to adjudicate most cases without a mandatory concurrence by a doctor. It 

was expected that these procedures in the 10 prototype States would eventually be implemented 

nationwide. However, these changes are now planned to be eliminated in favor of a new 

initiative described later in this report.

The redesign activity included a “process unifi cation” plan as one of the key changes for 

improving consistency within the decision making process. SSA proposed to develop a single 

____________________ _________________

1Section 709 of the Social Security Act requires that the Board of Trustees report to Congress on recommendations 

for statutory changes for alleviating fi nancing inadequacy whenever it projects that any of the Social Security or 

Medicare Trust Funds will drop below 20 percent of a year’s benefi ts.

2The results of this study are discussed in Growth in Disability Benefi ts: Explanations and Policy Implications, 

edited by Kalman Rupp and David C. Stapleton (W.E. Upjohn Institute for Employment Research, 1998).

3Plan for a New Disability Claim Process, Social Security Administration, September 1994.
5

presentation of all substantive policies used in the determination process that would be binding 

on all decision makers. In 1996, the agency issued a series of 9 Social Security Rulings (SSRs) 

that addressed the areas that the agency had identifi ed as being responsible for major differences 

in decision making between the State agencies and the ALJs. Nationwide, over 14,000 SSA 

and DDS employees were trained on the rulings. This was intended to be the model for an 

ongoing process of joint training between the DDS adjudicators and the ALJs. Since then, SSA 

has continued to use SSRs as a key policy interpretation tool; however, no coordinated, crosscomponent nationwide training initiative has been implemented.

SSA has struggled with balancing productivity with the cost and level of effort that is needed 

to fully document claims and clearly explain how these “process unifi cation rulings” were 

considered during the disability decision making process. DDS instructions tell adjudicators to 

incorporate within the case analysis a detailed explanation of how they evaluated key elements 

of the rulings. Yet, we have heard repeatedly over the years that the DDSs are not funded 

adequately to permit proper implementation of this rationale process. GAO noted the same 

fi nding in a July 2004 report.4

Attempts at Improving and Streamlining the Appellate Process

Improving the hearings process has been a long-standing, but thus far unachievable, goal for 

SSA. Claimants wait far too long for a hearing before an administrative law judge. At the close 

of fi scal year 2005, the average processing time at the hearing level was 415 days, and there were 

708,164 cases waiting for a decision. Prior efforts at process unifi cation had started to narrow 

the gap in allowance rates between the DDSs and the ALJs, and allowance rates at the hearing 

level fell during the period 1996-1998. However, they have been on the increase since then. As 

the pending caseload has grown from 264,978 at the end of 1999 to 708,164 at the end of 2005, 

the allowance rate has climbed from 63 percent to 72 percent.

In January 1992, the Strategic Priority Workgroup – a team of SSA executives and staff 

tasked with studying SSA’s hearings and appeals process – issued a report entitled Improve 

the Appeals Process. This was the 37th report on how to improve the appeals process. The 

workgroup noted that the appeals workload was growing and would continue to do so. It found 

that the appeals process took too long, with the average processing time in fi scal year 1991 being 

229 days. The workgroup noted that the allowance rate at the ALJ level had risen to 63 percent.

The Strategic Priority Workgroup laid out the following goals: by the year 2005, all 

reconsideration claims would be processed in 60 days; all hearing requests would be processed 

in 120 days; manual processes would be streamlined; documentation of evidence and decision 

justifi cations would be improved; and the appeals system would be modernized through enhanced 

automation. Since the report, a few of the workgroup’s recommendations have been implemented 

in some form; e.g., ALJ peer review, the use of personal computers, and deciding some cases 

without a formal hearing. Others, such as a “one hat” role for the ALJ (that is, narrowing the 

__________________ _________________

4More Effort Needed to Assess Consistency of Disability Decisions; GAO 04 656, July 2004.
6

responsibilities of the ALJ to be a decision maker only), and ensuring that SSA is using all 

legally acceptable methods for managing the work of the ALJs, are issues with which the agency 

still struggles.

Between 1990 and 1993, hearing receipts grew by 64 percent, yet dispositions increased by 

only 26 percent. Pending workloads increased by 95 percent from 1991 to1993, and 34 percent 

from 1993 to 1994. By 1994, SSA began to develop plans for the Short Term Disability Project 

under which the entire agency joined to assist in addressing the growing backlog of hearings.

By 1998 productivity was up, ALJ staffi ng was at its peak and the backlog had declined 

by over 163,000 cases. Yet, average processing time had not declined. In August 1999, the 

Hearings Process Improvement (HPI) initiative was unveiled. HPI was intended to reduce 

hand-offs, streamline processes, and improve accountability and service delivery. Phase I of 

HPI, consisting of 37 offi ces, was implemented in January 2000 and rollout to all offi ces was 

originally scheduled to be completed by November 2000.

HPI implementation did not go well and roll out was slowed down. Despite modifi cations 

to the plan, there was widespread discontent, confusion over roles and responsibilities, and a 

strong feeling that the restructuring had created signifi cant anxiety for the employees. As a 

result hearing offi ce performance was adversely affected. Most aspects of the initiative were 

effectively abandoned by 2002.

The Defi nition of Disability and SSA’s Administrative Structure Make 

Consistency and Equity Diffi cult to Achieve

It is important to point out that both the defi nition of disability and the administrative 

structure of SSA’s disability program make consistent and fair decisions diffi cult to achieve. The 

statute requires a determination not only that the claimant has a severe medical impairment but 

also that, in combination with his or her individual vocational and educational circumstances, 

it precludes engaging in substantial gainful activity. Although the agency has issued extensive 

regulations to guide decision makers, determining whether that standard is met requires 

substantial judgment and analysis, particularly with regard to the nature and suffi ciency of 

evidence that is needed to document the case and render a determination. Most adjudicators 

agree that there are a sizeable number of diffi cult cases in which the same evidence may lead 

different decision makers to different conclusions.

The administrative structure for determining disability involves different levels of 

government and different processes, depending upon the stage of an individual’s claim. 

Although SSA is responsible for the program, the law requires that initial determinations of 

disability be made by agencies administered by the 50 States, District of Columbia, Guam, 

Puerto Rico, and the Virgin Islands. This State-based administrative mechanism was established 

by the Congress in 1954 on the theory that the arrangement would provide coordination with 

existing State vocational rehabilitation agencies and was necessary in order to secure the 

cooperation of the medical profession, which already had a working relationship with the 

rehabilitation agencies. In fact, although most State disability agencies are still part of their State 

departments of rehabilitation, the close coordination of the disability determination process and 

the delivery of vocational rehabilitation services that was originally envisioned has not been 

achieved.

In addition, the relationship of the State agencies with the medical profession has changed over the 
7

years as more health care is delivered through group providers and less through personal physicians. 

Direct access to practicing physicians to discuss a claimant’s condition happens less and less and more 

of the “conversation” is carried on through securing records from medical librarians and offi ce staff. 

The increasing use of electronic medical evidence has changed the dynamic as well.

Although the State agencies are required to follow the policy guidance of the Social Security 

Administration and are fully funded by the Federal government, there are few Federal requirements 

relating to their administrative practices. The agencies follow State established personnel policies with 

respect to salaries, benefi ts and educational requirements; and they do their own hiring, provide most 

of the training for adjudicators, and establish their own internal quality assurance procedures. Also, 

reimbursement rates for purchasing medical evidence and diagnostic tests vary from State to State. 

By regulation, an individual whose claim is denied by the State agency may ask the agency to 

reconsider the decision and may present new evidence. After the reconsideration decision (or, after the 

initial decision, in those States where there is no reconsideration step5), the statute gives individuals 

who are dissatisfi ed with the agency decision the right to request a hearing. Hearings are conducted 

by the agency’s corps of administrative law judges. New evidence is frequently introduced at this 

stage, and since an ALJ hearing is a de novo proceeding, it is essentially a complete readjudication of 

the case. Currently, about a quarter of all case allowances are made at this level. Although ALJs must 

follow the agency’s regulations and rulings, they exercise decisional independence to ensure a fair 

hearing.

Individuals whose claims are denied at the ALJ level may appeal their cases to the Appeals 

Council, which is the fi nal step in the administrative appeals process. At this stage, claimants may 

continue to introduce new evidence and raise new issues. In addition, the Appeals Council may 

exercise its “own motion” authority and review a case within 60 days of the date of the ALJ’s decision. 

All of the case reviews conducted by the Appeals Council are done on a pre-effectuation basis. As part 

of this “own motion” authority, a sample of ALJ allowances are selected for review, based on a profi le 

of error-prone cases. In fi scal year 2003, 7,255 ALJ allowances were found to meet the error profi le 

criteria and underwent this review. These particular cases are fi rst reviewed by SSA’s Offi ce of Quality 

Assurance (OQA), which forwards to the Appeals Council those cases in which it disagrees with the 

ALJ decision. If, after review, the Appeals Council agrees with OQA’s assessment, it can reverse the 

decision or remand the case to the ALJ.

SSA has published regulations making several changes to the administrative adjudication process. 

These regulations fi rst become effective on August 1, 2006 but will be gradually implemented over a 

period of years. They are described in more detail in Part Two of this report.

Many Factors Have Been Identifi ed as Affecting the Dynamics and 

the Consistency of Decision Making

Over the years policy makers and administrators have identifi ed many factors, in addition to the 

inherent subjectivity of the statutory defi nition of disability, that may affect the consistency of disability

_________________________ ________________________

5The reconsideration step has been eliminated in the 10 “prototype” States. These States are operating under a set of 

changes introduced by SSA in October 1999 that are aimed at improving the disability determination process. These testing 

regulations are due to expire on September 30, 2006. 
8

decision making. These include:

• economic differences among the States;

• demographic differences among the States;

• differences in health status and access to care;

• State public policy actions (e.g., eliminating general assistance programs; requiring 

individuals to fi le for SSA’s disability programs as a condition of eligibility for State 

benefi ts);

• differences in assessing the accuracy of State decision making among SSA’s regional 

Offi ces of Quality Assurance; 

• differences in quality assurance procedures applied to ALJs and State agencies;

• hearing offi ce differences in administrative practices (e.g., variation in use of and training 

of vocational and medical experts at ALJ hearings);

• differences in the training given to ALJs and State adjudicators; 

• differences in State agency training practices;

• the fact that most claimants are never seen by an adjudicator until they have an ALJ 

hearing;

• involvement of attorneys and other claimant representatives at the ALJ hearing;

• changes in the adjudicative climate (the “message” sent by SSA, the Congress, or others 

to those who adjudicate claims);

• rules that allow claimants to introduce new evidence and allegations at each stage of the 

appeals process;

• lack of clear and unifi ed policy guidance from SSA;

• insuffi cient funding and staffi ng for the State agencies and hearing offi ces; and

• SSA pressures on State agencies and on ALJs to meet productivity goals.

Court Cases – Infl uence on Program Policy

The 1980s and much of the 1990s were somewhat turbulent for SSA, from a program policy 

perspective, as a result of a high volume of landmark court decisions. These court decisions have 

affected the way SSA makes decisions and have shaped subsequent policy development. They 

have increased differences in decision making among different regions of the country as well 

as differences in decision making between DDSs and ALJs. The 1985 decision by the Second 

Circuit in Stieberger v. Heckler (615 F. Supp. 1315) overturned SSA’s prior practice of not 

following the policy underlying decisions in circuit court cases when it adjudicated other cases 

within the same circuit. After this decision, SSA adopted its current policy of acquiescence. 

When there is a circuit court decision that the agency is unwilling to implement nationwide, it 

issues an acquiescence ruling stating that the agency will comply with the decision only within 

the issuing circuit. Initially these acquiescence rulings applied only to the ALJ level, but a 

regulation in 1990 extended them to State agencies.

In response to various court decisions and changing perceptions of how disability should be 

determined, SSA has implemented a number of policies that have introduced increased levels 

of judgment into the disability determination process.6 The 1996 “process unifi cation rulings” 

require all adjudicators to assess such subjective factors as the weight that should be given to the 

____________________ ___________________

6Court cases include Schisler v. Bowen, 787 F. Supp. 76 (2nd Cir. 1986), which dealt with treating source opinion 

and Hyatt v. Heckler, 579 F. Supp. 985 (4th Cir. 1986), which dealt with assessment of pain.
9

opinion of a treating source and the credibility of statements made with respect to allegations of 

pain and other symptoms. These rulings are intended to improve consistency in decision making 

between the DDSs and hearing offi ces. However, the operational implementation of the rulings 

has proven to be labor intensive and costly. As a result, implementation of the rulings is uneven 

across the country.

There have also been court decisions upholding agency policy. In 2002, SSA withstood a 

challenge to its interpretation of the statutory defi nition of disability. In Barnhart v. Walton, the 

Supreme Court agreed that the statute requires that not only must a claimant’s impairment meet 

the duration requirement but also the claimant’s inability to work because of that impairment 

must last, or be expected to last, for 12 months. 2003 saw another Supreme Court challenge to 

SSA’s rules for determining disability. The Court ruled in Barnhart v. Thomas that the agency’s 

denial of benefi ts to a claimant who was still able to do her previous work was in accord with 

the law and did not require a determination by the agency of whether or not that type of work 

continued to be available in the national economy.

Critical Data for an Ongoing, In-Depth Assessment of 

the Disability Determination Process

Although there have been attempts in the past to shed light on aspects of the disability 

programs, those attempts have often been hampered in their analysis because there is little data 

available to help those outside of the agency understand in even a rudimentary way how the 

disability programs are operating. It is in response to this lack of information that the Social 

Security Advisory Board has assembled and updated this compendium of basic historical data. 

The Board considers these data to be essential to its continuing efforts to help Congress, the 

President, SSA, and the public to understand and address important issues of policy and public 

service.

The charts that are included in this document refl ect the information that we have been able 

to assemble at this time. All of the charts are the work of the Board’s staff. The data that were 

used in preparing them were provided by the Social Security Administration at the request of 

the Board or have appeared in SSA publications. Presentation of the charts generally follows 

the sequence of the disability determination process, from initial application through the 

administrative and judicial appeals processes. In summary, the charts show:

• variations in applications over time;

• variations in awards and allowance rates;

• variations in benefi t termination rates over time;

• changes in the number of benefi ciaries and variations in prevalence of disability;

• trends in continuing disability reviews;

• changes in the characteristics of benefi ciaries;

• variations in DDS decision making;

• variations in State administrative arrangements;

• trends in characteristics of hearings;

• trends in Appeals Council actions; and

• trends in Federal court actions.

Although the data used in the charts were originally collected for the use of the Board itself, 
10

we believe it is important to share them widely with individuals who are engaged in the 

administration of the disability programs, policy makers, and the public. We recognize that 

far more data than collected here are required to present a full picture of how the disability 

programs are operating. However, we believe the charts that are included in this document raise 

fundamental questions for which there are no clear answers. These questions are important not 

only for understanding the past, but also for thinking about whether there is a need for policy or 

administrative changes in order to improve disability decision making for claimants in the future. 

The questions include:

• What have been the reasons for the wide variations in the number of applications 

for DI and SSI disability over the years?

• What explains the variations in State agency and ALJ allowance rates?

• What are the reasons for the large number of State agency decisions that are 

reversed at the ALJ level?

• Why is the allowance rate among States as wide-ranging as it is?

• How effective is the Listing of Impairments? What accounts for the signifi cant 

decline over the years in the percentage of DDS awards that are based on medical 

listings and the signifi cant increase in awards on the basis of vocational factors? 

• How have differences in State administrative arrangements and practices affected 

the quality of decision making?

• How has the increased presence of attorneys as claimant representatives affected 

the appeals process?

• How does the increasing use of outside vocational experts at the ALJ level affect 

decision making and what are the implications of increasing the presence of 

vocational specialists in the DDSs?

• What has been the impact of various Federal court decisions as well as the 

agency’s acquiescence ruling policy?

• Is it reasonable to expect greater consistency in decision making than the statistics 

in these charts seem to show currently exists?

These questions are particularly critical now that SSA has, once again, announced changes 

to its adjudicative process that are intended to streamline decision making, and as it also plans 

to implement a more comprehensive quality assurance system to mitigate the variability in 

decisional outcomes.

The high degree of variability in outcomes that has persisted for many years seems to be 

inconsistent with a program that is intended to operate uniformly throughout the U.S., and with 

one that is based on a Federal statutory defi nition of disability that has not changed in over 

30 years. As noted earlier in this section, there are many reasons that can be put forward as 

explanations for the differences among States and between the DDSs and the ALJs. But perhaps 

more importantly, how much variability is acceptable and expected, given demographic patterns, 

employment opportunities, and access to health care?

The disability rolls are projected to grow over the coming decades as baby boomers reach 

an age of increased likelihood of becoming disabled. These growing workloads will make it 

increasingly important for the agency to have clear and workable policies, as well as sound 

administrative rules and guidelines. This will require a better understanding than now exists of 
11

the factors that infl uence the dynamics of the disability rolls.

The agency currently has no effective mechanism in place to provide consistent and 

reliable information on the extent to which the variation may also represent a failure to apply 

program policies and procedures in a uniform way across the country and throughout the 

disability system. Clarifying the issue of horizontal equity, i.e., whether or not similarly 

situated individuals are receiving similar treatment, is essential to evaluating the fairness and 

effectiveness of the administrative structure of the disability program. It is also essential to 

evaluating the program from the standpoint of the contributors and taxpayers who pay the costs 

of the program. It is not justifi able for programs that cost nearly $120 billion in fi scal year 2005 

to lack such basic information.

We believe that SSA urgently needs a new quality assurance management system that will 

routinely produce the information the agency needs to guide disability policy and procedures and 

to ensure accuracy and consistency in decision making. Such a system is essential to provide 

ongoing evaluation of agency initiatives such as the Commissioner’s recently promulgated 

regulations for changes to the administrative review process for adjudicating initial disability 

claims. The system should incorporate all stages of the decision making process and should 

produce data that will enhance SSA’s ability to analyze specifi c problems and help the agency to 

develop appropriate solutions. The information should be made available to all those who are 

concerned with the disability programs – both inside and outside of SSA.
12
13

PART ONE

Data Relating to Disability

Program Operations
14
15

I. Applications
16
Chart 1

The number of applications for DI and SSI disability benefi ts has varied greatly over the 

years, although the overall trend has been upward since 1989. The numbers of DI applications 

increased sharply in the early 1990s and fell between 1995 and 1998. Since 2001, DI 

applications have been higher than their earlier peak in 1994.

SSI applications increased even more rapidly in the early 1990s. Much of that rapid growth 

was due to the Supreme Court’s Zebley decision, which loosened the criteria for determining 

disability for children. Legislation in 1996 modifi ed the impact of the Zebley decision and made 

other changes. SSI applications declined sharply from 1995 to 1997.

Past studies have shown some relationship between applications and unemployment, 

particularly for DI. Observers of the program also cite other factors affecting applications, 

including, for example, increases in the number of workers insured for Disability Insurance, 

efforts by State and local governments to shift welfare caseloads and spending to the Federal 

government, court decisions, changes in regulations, and adjudicative climate.

Numbers for DI and SSI are not additive because some applicants apply for benefi ts under 

both programs.

0.0

0.5

1.0

1.5

2.0

2.5

SSI DI

1975 1980 1985 1990 1995 2000 2004

Number of Applications

Calendar Years 1975 - 2004

Millions

17
18

Application rates (benefi t applications received as a percentage of the population insured for 

disability benefi ts) ranged from 0.8 percent in Hawaii to 2.8 percent in Mississippi. The highest 

DI application rates are generally in the Southeast.

Chart 2

0.8% to 0.9% (5)

1.0% to 1.4% (31)

1.5% to 1.9% (10)

2.0% to 2.8% (5)

Initial disability claims as percentage 

of insured population

Disability Insurance Application Rates

Fiscal Year 2003
19

Chart 3

0

20

40

60

80

100

Male Female

1975 1980 1985 1990 1995 2000 2004

Workers Insured for Disability Benefits by Gender

Calendar Years 1975 - 2004

Millions

The number of workers insured for disability benefi ts increased by 72 percent between 1975 

and 2004. The number of insured men grew by 43 percent, while the number of insured women 

grew by 123 percent. Women were 36 percent of the insured population in 1975, 47 percent in 

2004.
20

Chart 4

SSI adult application rates as a percentage of the population ages 18 to 64 show a similar 

pattern to DI application rates. Application rates, ranging from 0.5 percent to 1.9 percent, are 

higher than our last report on this subject in 1999, when they ranged from 0.3 percent to 1.5 

percent.

Viewed as a percentage of the population ages 18 to 64 living in households with income 

below 125 percent of the poverty level, application rates still cover a wide range, from 3.8 percent 

to 10.8 percent. This is also higher than in 1999, when the range was from 2.7 percent to 

7.6 percent.

SSI Adult Disability Application Rates by State 

Calendar Year 2003

SSI claims filed ages 18-64 as 

percentage of State population ages 18-64

0.5% to 0.7% (13)

0.8% to 0.9% (22)

 1% to 1.1% (9)

1.3% to 1.9% (7)

3.8% to 5.2% (12) 

5.3% to 6.3% (12)

6.6% to 7.3% (13)

SSI claims filed ages 18 to 64 as

percentage of State population ages 

18 to 64 below 125% of poverty level

7.4% to 10.8% (14)
21

Chart 5

Expressed as a percentage of the population under 18 living in households with income 

below 125 percent of the poverty level in 2003, SSI child disability application rates range from 

1.1 percent to 5.3 percent, higher overall than in 1999, when they ranged from 0.7 percent to 

4.1 percent. 

SSI claims filed under age 18 as 

percentage of State population under age 18 

0.4% to 0.5% (19)

0.6% to 0.7% (10)

0.8% to 1.6% (13)

0.2% to 0.3% (9)

SSI Child Disability Application Rates by State 

Calendar Year 2003

Disability application rates for SSI children as a percentage of the population are highest 

in the Southeast but are also high in States such as Pennsylvania and Ohio. The range of 

application rates, 0.2 percent to 1.6 percent, is narrower than in 1999, when it was 0.2 percent to 

1.8 percent.

SSI claims filed under age 18 as 

percentage of State population under 

age 18 below 125% of poverty level

1.1% to 1.7% (14)

2.0% to 3.0% (19)

3.1% to 3.7% (11)

4.0% to 5.3% (7)
22

From 1975 through 1989, the number of children applying for SSI equaled 1 percent or less 

of children in poverty. That percentage began a sharp increase in 1990, the year of the Zebley

decision, reaching 3.5 percent in 1994 before beginning to decline. It did not decline to its pre1990 levels, however, falling only to 2.4 percent in 1997 before beginning to rise again. In 2002 

and 2003 it stood at 3.4 percent, nearly the level it reached in 1994.

The number of adults ages 18 to 64 applying for SSI as a percentage of adults in poverty fell 

from an initial high of 10.8 percent in 1974 to 4.6 percent in 1982 before beginning to rise again. 

Between 1985 and 2002 it was in the 6 to 8 percent range. In 2003 it rose to 8.3 percent.

Chart 6

0

2

4

6

8

10

12

Applicants ages 18 to 64

as percent of population 

ages 18 to 64 in poverty

1974 1978 1982 1986 1990 1994 1998 2003

SSI Applicants by Age Group

as Percentage of Population in Poverty

Calendar Years 1974 - 2003

Percent

Applicants under 18 as

percent of population 

under 18 in poverty
23

II. Allowances II. Allowances
Chart 7

In the last 25 years, the percentage of claims adjudicated at the ALJ level that are allowed 

has been considerably higher than the percentage allowed by the DDSs at the initial level. The 

allowance rates for both levels have shown large variations, sometimes moving in tandem, 

sometimes not.

A revised process was introduced in 10 States at the beginning of FY 2000, under which 

initial denials could be appealed directly to the hearing level without a reconsideration.

The hearing level allowance rate shown here is the percentage of dispositions, which 

included dismissals. (Dismissals are cases disposed of without a hearing, usually because the 

claimant’s request for a hearing was not timely or the claimant does not appear for the hearing. 

Dismissal rates have been fairly steady at 10 to 15 percent of dispositions.) The allowance 

rate includes all forms of Social Security and SSI cases reaching the hearing level, but the vast 

majority involve disability issues. In 2004, only 0.4 percent of hearing decisions dealt with 

retirement or survivors claims.

10

20

30

40

50

60

70

80

1977 1981 1985 1989 1993 1997 2001 2004

Reconsiderations

Initial Level

Hearing Level

Allowance Rates at Each Level

of Decision Making, DI and SSI Combined

Fiscal Years 1977 - 2004

Percent

24
25

Chart 8

Chart 9

The percentage of DI, SSI, and concurrent applications allowed by State agencies at the 

initial level grew between 1996 and 2001 and fell in the 2 following years. Growth in State 

agency allowance rates can be attributed to a variety of factors, including the impact of the 1996 

process unifi cation rulings as well as a change in the adjudicative climate.

A revised process was introduced in FY 2000 in 10 States, under which initial denials could 

be appealed directly to the hearing level without a reconsideration.

0

10

20

30

40

50

60

70

80

90

1990 1992 1994 1996 1998 2000 2002 2004

State Agency Allowance Rates for Initial Claims

Fiscal Years 1990 - 2004

Percent

DI SSI Concurrent

0

10

20

30

40

50

60

70

80

90

DI SSI Concurrent

1990 1992 1994 1996 1998 2000 2002 2004

Percent

State Agency Allowance Rates for Reconsiderations

Fiscal Years 1990 - 2004
26

Chart 10

ALJ hearing decision allowance rates fell in the period 1995 to 1997, but they have risen 

since then. Note that allowance rates for SSI claimants are considerably lower than for DI. The 

rates shown here are the percentage of hearing decisions, excluding dismissals.

A revised process was introduced in FY 2000 in 10 States, under which initial denials could 

be appealed directly to the hearing level without a reconsideration.

0

10

20

30

40

50

60

70

80

90

DI SSI Concurrent

1990 1992 1994 1996 1998 2000 2002 2004

Hearing Decision Allowance Rates

Fiscal Years 1990 - 2004

Percent
27

Chart 11

The number of DI worker and SSI disability awards has increased greatly since 1982. 

Awards declined slightly in the mid-1990s but have risen since then.

0

100

200

300

400

500

600

700

800

900

1975 1980 1985 1990 1995 2004

 DI Worker SSI 18 to 64 SSI Under 18

Thousands

Disability Awards

 Calendar Years 1975 - 2004

2000
28

Chart 12

The DI gross incidence rate (the ratio of annual awards to the population insured for 

disability benefi ts) has varied widely. It stood at 7.2 per thousand in 1975 and fell to a low of 

3.3 per thousand in 1982. It rose again to 5.4 per thousand in 1992 and fell to 4.6 in 1997. Since 

2000, it has risen from 4.7 to 5.6.

The incidence rate is a common indicator of the status of the disability system. This chart 

shows for DI benefi ts both the gross incidence rate and the age-sex adjusted rate. The adjusted 

rate factors out the effects of the changes in the population in terms of both age and sex. It 

shows what the incidence rate would have been assuming that the age and sex distribution of the 

population in each year was the same as in 1998.

0

1

2

3

4

5

6

7

8

Age-sex adjusted per 1000 exposed

Gross rate per 1000 exposed

1975 1980 1985 1990 2000 2003

Incidence Rates for DI Worker Benefits 

Calendar Years 1975 - 2003

Incidence rate per 1,000

1995
29

0 20 40 60 80 100

Hearing

Initial

NH

HI

NJ

NV

DC

DE

AZ

MA

RI

PA

CA

AK

VT

MN

ME

WA

NM

NY

ID

IL

TX

VA

CT

WI

AR

MI

IA

FL

NE

MD

OK

OR

MO

NC

KS

KY

IN

LA

WY

SC

ND

MT

UT

SD

WV

AL

OH

GA

MS

CO

TN

Allowance Rates at Initial (Fiscal Year 2003) 

and Hearing Levels (Fiscal Year 2004) by State

Percent

 The darker bars on this 

chart show the initial-level 

allowance rates by State for 

2003, arrayed in order from 

lowest to highest. The lighter 

bars show the hearing-level 

allowance rates for 2004 for 

the same States. There is no 

apparent correlation between 

initial-level allowance rates 

and hearing-level allowance 

rates.

Chart 13
Chart 14

Appeal allowance

253,319

DDS denial - no appeal

792,272 DDS reconsideration 

allowance

85,049

DDS initial allowance

822,975

40%

Appeal denial

120,146

4%

6%

12%

38%

Disposition of DI and SSI Applications 

Filed in Calendar Year 2000

30
31

III. Continuing Disability III. Continuing Disability 

Reviews Reviews
32

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

1990 1992 1994 1996 1998 2000 2002 2004

Number of Continuing Disability Reviews Processed

Fiscal Years 1990 - 2004

Millions

Mailers Medical CDRs Total

CDRs are conducted for benefi ciaries of both DI and SSI. SSA uses statistical profi ling to 

identify benefi ciaries’ probability of medical improvement. Those with higher probability are 

scheduled for medical CDRs. Field offi ces contact these benefi ciaries and ask them to provide 

updated information on their conditions and their treatment sources. The fi eld offi ces then 

send the cases to a State agency for decision. Benefi ciaries with a lower probability of medical 

improvement are sent mailers with questions designed to raise issues of medical improvement. 

Benefi ciaries send their responses to the mailer to a data operations center where they are 

reviewed. If the answers to a mailer indicate that medical improvement may have occurred, the 

benefi ciary is scheduled for a full medical CDR.

SSA received additional funding, outside its discretionary spending cap, for processing the 

backlog of CDRs. The funding, which was received from FY 1996 to FY 2002, ensured that 

the agency was fully funded to enable it to carry out its 7-year plan to become current with this 

workload. In 2003, carryover funding of $39 million allowed the agency to process about 100 

thousand more CDRs than it would have been able to do otherwise.

In FY 2004 SSA spent $543 million to process 1.6 million CDRs. SSA’s appropriation for 

2004 enabled it to remain current with its DI CDRs, but it was not able to process all the SSI 

CDRs that came due.

Chart 15
33

Chart 16

Continuation rates for medical CDRs vary somewhat by program, but the continuance rate 

at the initial level is high. Benefi ciaries who receive an unfavorable decision at the initial level 

may request a reconsideration. The decision at this level is made by a hearing offi cer at the 

State agency. Favorable decision rates by hearing offi cers are much higher than for initial claim 

reconsiderations. Benefi ciaries who receive an unfavorable decision from a hearing offi cer 

may request a hearing before an administrative law judge and have recourse to an agency-level 

appeal after the hearing and can take their case to court after an agency-level appeal.

Data on the charts refl ect results as of January 2005 and are subject to change until all 

appeals are fi nal.

0

20

40

60

80

100

Appeals

Reconsideration

Initial

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Fiscal Year of Initial DDS Decision

Percent

SSI Adult

Appeals 

Reconsideration 

Initial 

Fiscal Year of Initial DDS Decision

Percent

Medical CDR Continuation Rates by Decision Level,

Fiscal Years 1995 - 2004

0

20

40

60

80

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

DI Worker

0

20

40

60

80

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Initial

Reconsideration

Appeals

SSI Child

Percent

Fiscal Year of Initial DDS Decision
34

Chart 17

This chart shows the estimated reduction in benefi t payments over a ten-year period resulting 

from initial CDR cessations in fi scal year 2004. The estimated reduction is based on a projected 

total of 65,100 ultimate cessations after all appeals. The CDR workload in 2003 had a great 

majority of SSI cases. Of the ultimate cessations, 51,200 are expected to be SSI and 13,900 

OASDI. Although most CDRs do not result in cessation, SSA’s CDR process has been yielding 

a favorable ratio of savings to costs. For fi scal year 2004, SSA estimates the ratio of savings to 

administrative costs at $10.5 to $1. This is calculated by dividing the estimated present value of 

total life time benefi ts saved with respect to CDR cessations ($5.7 billion) by the $543 million 

spent on periodic CDRs in FY 2004.

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Ten-Year Estimated Federal Savings from

CDR Cessations in Fiscal Year 2004 by Program

Millions of dollars

Medicaid

Medicare 

(part B)

Medicare 

(part A)

SSI

OASDI
35

IV. Terminations
36

Chart 18

0

100

200

300

400

500

600

Other

Conversion

Death

Recovery

1984 1988 1992 1996 2000 2004

Thousands

Number of DI Worker Terminations

Calendar Years 1984 - 2004

DI benefi ts for disabled workers can be terminated for reasons that are grouped into 

4 categories: death; recovery (either medical recovery or return to work); conversion to 

retirement benefi ts at full retirement age; and other (switching to retirement benefi ts prior to full 

retirement age, withdrawal of application, or erroneous entitlement).

While there has been a general upward trend in the number of terminations of disabled 

worker benefi ts since 1990, the termination rate (the number of terminations per 1,000 

benefi ciaries) has generally declined. These trends in terminations and termination rates refl ect 

the overall growth in the number of DI benefi ciaries as well as the increasing proportion of 

younger benefi ciaries. The spike in recoveries in 1997 is a result of legislation to eliminate drug 

addicts and alcoholics from the DI rolls.

0

30

60

90

120

150

Other

Conversion

Death

Recovery

1984 1988 1992 1996 2000 2004

Terminations per 1,000

DI Worker Termination Rate

Calendar Years 1984 - 2004

Chart 19
37

V. Beneficiaries
38

Chart 20

The number of DI benefi ciaries more than doubled between 1985 and 2004. In the same 

period, the number of SSI benefi ciaries under 18 increased fourfold, and the number of SSI 

benefi ciaries aged 18 to 64 more than doubled.

Some benefi ciaries receive both DI and SSI benefi ts. Currently, about 1.4 million disabled 

benefi ciaries receive both Social Security and SSI benefi ts.

The DI fi gures on this chart include dependents. There are now about 6.3 million DI worker 

benefi ciaries and about 1.8 million spouses and children receiving benefi ts.

0

2

4

6

8

10

12

14

1985 1995 2005 2015 2025

DI and SSI Beneficiaries

Calendar Years 1985 - 2025 (Projected)

DI

SSI 18 to 64

SSI Children

Actual Projected

Millions
39

Chart 21

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

DI workers Male Female

1975 1980 1985 1990 1995 2000 2004

Disabled Worker Beneficiaries as Percentage of

Population Insured for Disability by Gender

Calendar Years 1975 - 2004

Percent

This chart shows the prevalence rate for DI worker benefi ts. Since 1989 there has been 

a steady increase in the percentage of the population insured for disability that is receiving 

disability benefi ts. Prevalence rates among the male and female populations have drawn closer 

together.
40

0.0

0.5

1.0

1.5

2.0

2.5

18 to 64 Under 18

1980 1984 1988 1992 1996 2000 2004

Percent

SSI Beneficiaries as Percentage 

of Population by Age Group

Calendar Years 1980 - 2004

Chart 22

Since 1980, the percentage of the adult population receiving SSI disability benefi ts has nearly 

doubled, and the percentage of children receiving SSI benefi ts has increased more than fourfold. 

For both groups, growth was most rapid in the early 1990s. For adults, there has been slight 

change since 1995. The percentage of children receiving benefi ts began to decline in 1997 then 

rose again in 2001.
41

Chart 23

DI worker benefi ciaries as a percentage of State population ages 18 to 64 range from 

1.8 percent in Utah to 6.3 percent in West Virginia.

012345678

WY

WI

WV

WA

VA

VT

UT

TX

TN

SD

SC

RI

PR

PA

OR

OK

OH

ND

NC

NY

NM

NJ

NH

NV

NE

MT

MO

MS

MN

MI

MA

MD

ME

LA

KY

KS

IA

IN

IL

ID

HI

GA

FL

DC

DE

CT

CO

CA

AR

AZ

AK

AL

Disabled Worker Beneficiaries as of December 2003

as Percentage of State Population Ages 18 to 64

Percent
42

Chart 24

The percentage of State population ages 18 to 64 receiving SSI benefi ts in 2003 ranged from 

1 percent in Utah to 4.8 percent in West Virginia. The median for all States was 1.8 percent. The 

5 lowest States were 1.2 percent or less. The 5 highest States were 3.5 percent or more.

Considering only population 18 to 64 in households below 125 percent of the poverty level, 

rates in 2003 ranged from 8.6 percent in Utah to 25.3 percent in Kentucky. In 27 States, the 

rate was less than 15 percent. In 7 it was 20 percent or higher. The median for all States was 

14.7 percent. The 5 lowest States were at 9.3 percent or less. The 5 highest States were at 23.1 

percent or more.

0 5 10 15 20 25 30

WY

WI

WV

WA

VA

VT

UT

TX

TN

SD

SC

RI

PA

OR

OK

OH

ND

NC

NY

NM

NJ

NH

NV

NE

MT

MO

MS

MN

MI

MA

MD

ME

LA

KY

KS

IA

IN

IL

ID

HI

GA

FL

DC

DE

CT

CO

CA

AR

AZ

AK

AL

SSI Disabled Adults as of December 2003 as Percentage of State 

Population 18 to 64 and of Population 18 to 64 

Below 125% of Poverty Level

Total population

Population below

125% of poverty

Percent
43

Chart 25

There was a wide variation among States in the percentage of the population under 18 

receiving SSI disability benefi ts in 2003. The median was 1.1 percent. The 5 lowest States were 

at 0.6 percent or less. The 5 highest States were at 2.5 percent or more.

Looking just at the population under 18 living in households with income below 125 percent 

of the poverty level, the median was 6.0 percent. The 5 lowest States were at 3.3 percent or less. 

The 5 highest States were at 9.5 percent or more.

0 2 4 6 8 10 12

WY

WI

WV

WA

VA

VT

UT

TX

TN

SD

SC

RI

PA

OR

OK

OH

ND

NC

NY

NM

NJ

NH

NV

NE

MT

MO

MS

MN

MI

MA

MD

ME

LA

KY

KS

IA

IN

IL

ID

HI

GA

FL

DC

DE

CT

CO

CA

AR

AZ

AK

AL

SSI Disabled Children as of December 2003 as Percentage of 

State Population Under 18 and of Population 

Under 18 Below 125% of Poverty Level

Total population

Population below

125% of poverty

Percent
44

0

5

10

15

20

25

Female

Male

Expected Time on DI Rolls

20 30 40 50

Age at entitlement

Duration in years

19.5

21.4

16.2

18.4

12.1

14.0

7.7 8.6

Chart 26

This chart shows the average duration on DI worker benefi ts prior to termination due to 

death, recovery, or attainment of age 65, based on disability experience between 1996 and 2000.

Technically, the chart shows length of entitlement, which is defi ned as meeting all 

requirements for the receipt of benefi ts, including the fi ling of an application. It is not equivalent 

to receipt of benefi ts, since benefi ts may be suspended during a period of entitlement for a 

number of reasons. Some examples of reasons for suspension are refusal of a disabled person to 

accept rehabilitation services or inability to locate the benefi ciary.
45

VI. Beneficiary Characteristics
Chart 27

 Mental impairment has become the largest single reason for State agency disability awards. 

Other major causes are cancer, impairments of the musculoskeletal system, and impairments of 

the circulatory system. The percentage of cases awarded on the basis of circulatory impairments, 

however, has declined substantially over the years.

0

05

10

15

20

25

30

35

Musculoskeletal

Circulatory

All mental impairments

Cancer

1975 1980 1985 1990 1995 2000 2004

Percent

Trends in State Agency Initial DI Worker Awards

by Major Cause of Disability

Calendar Years 1975 - 2004

46
Chart 28

 Unlike at the State agency level, musculoskeletal cases are equal to mental impairments in 

the share of DI worker awards after all appeals. Comparable data are not available before 1995.

0

5

10

15

20

25

30

1995 1996 1997 1998 1999 2000 2001 2002

Cancer

All mental impairments

Musculoskeletal

Percent 

Circulatory

DI Worker Awards After All Appeals 

by Major Cause of Disability

Calendar Years 1995 - 2002

47
48

Chart 29

Other

1,332,072 

(22.7%)

Mental retardation

298,500 

(5.1%)

Other mental impairments

1,662,590 

(28.3%)

Cardiovascular system

579,778 

(9.9%)

Musculoskeletal

1,430,357 

(24.4%)

Nervous system and

sense organs

565,244 

(9.6%)

DI Worker Beneficiaries

Mental retardation

869,025

(22%)

Other

854,523 

(21.6%)

Other mental impairments

1,355,689 

(34.3%)

Cardiovascular system

184,006 

(4.7%)

Musculoskeletal

382,844 

(9.7%)

Nervous system

and sense organs

307,161 

(7.8%)

SSI Beneficiaries Ages 18 to 64

Mental retardation

230,532 

(24.0%)

Nervous system

and sense organs

93,141 

(9.7%)

Other mental impairments

387,535 

(40.4%)

Congenital anomalies

48,074 

(5.0%)

Other

200,097 

(20.9%)

SSI Beneficiaries Under Age 18

Number (and Percentage) of Benefi ciaries 

by Type of Impairment, December 2002
Chart 30

The 1980s saw signifi cant changes in legislation, regulation, and adjudicative standards for 

mental disabilities. Since the mid-1980s, the number of benefi ciaries with a diagnosis of mental 

impairment (either retardation or other) has grown signifi cantly in both the DI and SSI programs. 

The growth in the SSI program has been particularly pronounced.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1986 1990 1994 1998 2003

Other mental impairments Mental retardation

Millions

DI Beneficiaries with

Diagnosis of Mental Impairment

Calendar Years 1986 - 2003

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1986 1990 1994 1998 2003

Millions

Other mental impairments Mental retardation

SSI Beneficiaries with

Diagnosis of Mental Impairment

Calendar Years 1986 - 2003

49
Chart 31

50

Chart 32

Between 1983 and 2003, the 40 to 49 age group of DI benefi ciaries grew to 25 percent from 

14 percent of the total, while the 60 to 64 age group fell to 23 percent from 36 percent of the 

total. DI benefi ciaries are converted to retirement benefi ts at the age at which they can receive 

unreduced retirement benefi ts.

 While the number of benefi ciaries in every age group of SSI disability benefi ciaries 

has grown, some age groups have grown more rapidly than others. Benefi ciaries under age 18 

were 11 percent of the total benefi ciary population in 1980 and had grown to 20 percent of the 

population by 2004. Benefi ciaries in the 35-to-49 age group were 20 percent of the benefi ciary 

population in 1980 and had grown to 28 percent by 2004.

0

20

40

60

80

100

1980 1986 1992 1998 2004

Share of SSI Disabled Beneficiaries 

under Age 65 by Age Group

Calendar Years 1980 - 2004

Age 50-64

Age 35-49

Age 18-34

Age 0-17

Percent

0

20

40

60

80

100

1983 1987 1991 1995 1999 2003

Percent

Share of DI Worker Beneficiaries by Age Group 

Calendar Years 1983 - 2003

Age under 30

Age 60-64

Age 50-59

Age 40-49

Age 30-39
51

Chart 33

Chart 34

Until recently, there was a marked downward trend in the age of newly awarded DI 

benefi ciaries. The average age of newly awarded adult SSI benefi ciaries has been consistently 

lower than that of new DI benefi ciaries.

30

40

50

60

1960 1970 1980 1990 2000 2004

Average Age of Newly Awarded 

DI Beneficiaries by Gender

Calendar Years 1960 - 2004

Age

Male Female

54.5

52.5 52.1 52.8

51.2 51.1

48.1 48.4 49.6 49.2 50.0 49.7

30

40

50

60

1980 1990 2000 2004

Age

Average Age of Newly Awarded SSI

Disabled Adult Beneficiaries by Gender

Calendar Years 1980 - 2004

Male Female

41.8

46.0

41.4

45.1

43.1 44.5 43.1 44.3
52

Chart 35

0

1

2

3

4

1970 1980 1990 2000 2003

Number of DI Worker Beneficiaries by Gender

Calendar Years 1970 - 2003

Millions

Male Female

Females comprise an increasingly large proportion of DI worker benefi ciaries. In 1970, they 

were 28 percent of DI worker benefi ciaries (and 33 percent of the insured population). In 2003 

they were 45 percent of the benefi ciaries (and 47 percent of the insured population).
53

Number of SSI Disabled Beneficiaries

Age 18-64 by Gender

Calendar Years 1993 - 2003

Male Female

Millions

0

1

2

3

4

1993 1995 1997 1999 2001 2003

 Females are a majority of SSI disabled benefi ciaries between ages 18 and 64. In the years 

shown, they have increased from 55 percent to 57 percent of this age group of benefi ciaries, 

compared to 50 to 51 percent of this age group in the entire population. 

Chart 36

Chart 37

 For benefi ciaries under age 18, on the other hand, males are in the majority, with 63 to 65 

percent of the total in each of the years shown. By comparison, males were 51 percent of the age 

group in the entire population. 

0

1

2

3

4

1993 1995 1997 1999 2001 2003

SSI Disabled Child

Beneficiaries by Gender

Calendar Years 1993 - 2003

Male Female

Millions
54

 Expressed in 2004 dollars, the average benefi t increased from $553 in 1960 to $755 in 

1973, refl ecting in part several ad hoc benefi t increases in the late 1960s and early 1970s. The 

subsequent increase has been gradual.

Chart 38

0

100

200

300

400

500

600

700

800

900

1000

Average Monthly DI Worker Benefit

Calendar Years 1960 - 2004

(Constant 2004 Dollars)

 Dollars

1960 1965 1970 1975 1980 1985 1990 1995 2000 2004

Chart 39

0

100

200

300

400

500

600

700

800

900

1000

1974 1980 1985 1990 1995 2000 2004

Monthly SSI Individual 

Federal Benefit Rate

Calendar Years 1974 -2004

(Constant 2004 Dollars)

Dollars

 Expressed in constant dollars, the SSI Federal benefi t rate has been fairly fl at since the 

program began.
55

Chart 40

0

5

10

15

20

25

30

35

40

0–8 9–11 12 13–15 16 or more

Years of education

Percent

DI Worker and SSI Beneficiaries Ages 18 to 64

by Years of Education

2001

DI Worker SSI Ages 18-64

9.7

20.5

14.5

24.5

37.6 36.4

27.8

14.2

10.4

4.4

 SSI disability benefi ciaries have less education than DI worker benefi ciaries. While slightly 

more than one third of both groups have 12 years of education, a larger percentage of SSI 

benefi ciaries have less than that, and one fi fth have eight years or less.
Chart 41

0

5

10

15

20

25

30

35

40

45

50

DI Worker SSI Ages 18-64

Under 25% 25-49% 50-74% 75-99% 100%

Percent of beneficiaries

Benefits as percent of income

Percentage of Beneficiaries by Percent of 

Personal Income Received as Benefits

2001

20.2

16.6

12.9 14.7 15.8

10.8

22.1

10.8

28.9

47.1

 Disability benefi ts are a large part of benefi ciaries’ total personal income. For half of DI 

worker benefi ciaries, disability benefi ts were 75 percent or more of total personal income in 

2001. For almost half of SSI benefi ciaries, they are the only source of personal income.

 For families with disabled worker benefi ciaries, Social Security benefi ts comprised 45 

percent of family income. For families with an SSI benefi ciary ages 18 to 64, SSI benefi ts were 

49 percent of family income.

56
VII. Variations in State 

Agency Decision Making

57
58

 State agency allowance and denial rates vary widely from State to State. For example, 

in 2004, allowance rates for DI-only applicants ranged from a high of over 65 percent in 

New Hampshire to a low of 31 percent in Tennessee. For SSI-only disability claims in 2004, 

allowance rates ranged from 60 percent in New Hampshire to 25 percent in Mississippi. And 

for concurrent DI-SSI claims, allowance rates ranged from 51 percent in New Hampshire to 17 

percent in Colorado.

Chart 42

State Agency Initial Allowance Rates

Fiscal Years 1980 - 2004

0

10

20

30

40

50

60

70

1980 1985 1990 1995 2000 2004

DI Claims

Percent

Lowest 

State

National 

Average

Highest 

State

0

10

20

30

40

50

60

70

Lowest 

State

National 

Average

Highest 

State

1980 1985 1990 1995 2000 2004

Concurrent Claims

Percent

0

10

20

30

40

50

60

70

1980 1985 1990 1995 2000 2004

SSI-only Claims

Percent

Lowest 

State

National 

Average

Highest 

State
Chart 43

 State agency initial allowance rates have also varied over time. For example, Nebraska 

went from having one of the highest allowance rates in 1980 to a somewhat below average 

allowance rate in 2004. Over that same period, New Hampshire’s allowance rate increased by 

22 percentage points. Between 1980 and 2004, allowance rates increased by 20 percent or more 

in 17 States and decreased by 20 percent or more in 4 States.

WY

WV

WI

WA

VT

VA

UT

TX

TN

SD

SC

RI

PA

OR

OK

OH

NY

NV

NM

NJ

NH

NE

ND

NC

MT

MS

MO

MN

MI

ME

MD

MA

LA

KY

KS

IN

IL

ID

IA

HI

GA

FL

DE

DC

CT

CO

CA

AZ

AR

AL

AK

State Agency Initial Allowance Rates

for DI and SSI by State

Fiscal Years 1980 and 2004

FY 1980

FY 2004

0 10 20 30 40 50 60 70

Percent

59
Chart 44

0

10

20

30

40

50

60

70

80

90

100

1975 1980 1985 1990 1995 2000 2004

Percentage of State Agency DI Awards

by Basis for Decision

Fiscal Years 1975 - 2004

Meets listing

Vocational considerations

Equals listing

Percentage of awards

 Since 1983, the percentage of initial-level DI cases awarded on the basis of meeting or 

equaling the medical listings has declined from 82 percent to 49 percent. The percentage based 

on vocational (or functional) evaluation has nearly tripled, from 18 percent of all initial DI 

awards in 1983 to 51 percent in 2004.

60
Chart 45

Variation in Basis for Initial Awards

Fiscal Year 2003

 These charts show the variation among State agencies in the basis for awarding benefi ts. 

For example, in 2003, North Dakota made 65 percent of its initial DI awards on the basis that 

the claimant met the medical listings, while New York awarded only 33 percent of its claims on 

that basis. New York and Washington made 60 percent of their DI awards based on vocational 

factors, while Indiana and Hawaii made only 30 percent of their awards on that basis.

0

10

20

30

40

50

60

70

80

NY VT MN NM WI Average IL SD IN OK ND

Percent

Meets the Medical Listings

33.4 33.8 34.9 35.2 36.8

45.0

55.8 57.7 57.9 58.1

64.8

0

10

20

30

40

50

60

70

80

ID WA ND OK OR Average DC SC WI HI VT

Percent

Equals the Medical Listings

2.3 3.0 3.2 3.5 3.6

8.0

13.7 14.1 16.8 18.0 21.1

0

10

20

30

40

50

60

70

80

IN HI ND MD GA Average NM KY MN NY WA

Percent

Vocational Considerations

29.8 30.4 32.1 32.6 33.5

47.1

57.0 57.1 57.6 59.5 59.7

61
Chart 46

 The reasons for denials by State agencies have varied widely over the years. Denials for 

non-severe impairments went from 8 percent of denials in 1975 to 43 percent in 1981 to 15 

percent in 2004. Denials for ability to perform the claimant’s usual work went from 44 percent 

of denials in 1975 to 19 percent in 1981 to 31 percent in 2004. Denials for ability to perform 

other work – the most complex and judgmental denials – went from 18 percent in 1975 to 11 

percent in 1981 to 35 percent in 2004.

0

5

10

15

20

25

30

35

40

45

50

Other

Able to perform other work

Able to perform usual work Impairment not severe

Duration

1975 1980 1985 1990 1995 2000 2004

Percentage of State Agency Denials 

by Basis for Decision

Fiscal Years 1975 - 2004

Percent

62
Chart 47

 One of the early steps in the sequential evaluation of disability is the determination of 

whether an impairment is severe. State agencies vary widely in the degree to which they deny 

claims because the impairment is not severe. For DI and concurrent (DI-SSI) applications, 

denials for this reason in 2004 ranged from 7 percent of all denials in Delaware to 32 percent in 

Mississippi. For SSI adult applications, denials for this reason ranged from 2 percent in North 

Carolina to 34 percent in Mississippi.

0 5 10 15 20 25 30 35 40

SSI

DI/Concurrent

WY

WV

WI

WA

VT

VA

UT

TX

TN

SD

SC

RI

PA

OR

OK

OH

NY

NV

NM

NJ

NH

NE

ND

NC

MT

MS

MO

MN

MI

ME

MD

MA

LA

KY

KS

IN

IL

ID

IA

HI

GA

FL

DE

DC

CT

CO

CA

AZ

AR

AL

AK

Percentage of State Agency Initial Denials 

Based on Non-Severe Impairment 

Fiscal Year 2004

Percent

63
Chart 48

 At a later step in the sequential evaluation of disability, the examiner determines if the 

claimant can perform his or her usual work. State agencies vary widely in the degree to which 

they deny claims for this reason. For DI and concurrent applications, denials for this reason in 

2004 ranged from 10 percent of all denials in North Carolina to 45 percent in Georgia. For SSI 

adult applications, denials for this reason ranged from 4 percent in North Carolina to 29 percent 

in Georgia.

0 10 20 30 40 50

SSI 

WY

WV

WI

WA

VT

VA

UT

TX

TN

SD

SC

RI

PA

OR

OK

OH

NY

NV

NM

NJ

NH

NE

ND

NC

MT

MS

MO

MN

MI

ME

MD

MA

LA

KY

KS

IN

IL

ID

IA

HI

GA

FL

DE

DC

CT

CO

CA

AZ

AR

AL

AK

Percentage of State Agency Initial Denials 

Based on Ability to Perform Usual Work 

Fiscal Year 2004

Percent

DI/Concurrent 

64
Chart 49

 At the fi nal step in the sequential evaluation, the examiner determines if the claimant can 

do work other than his or her usual past work. State agencies vary widely in the degree to which 

they deny claims for this reason. For DI and concurrent applications, denials for this reason 

in fi scal year 2004 ranged from 19 percent of all denials in Mississippi to 65 percent in North 

Carolina. For SSI adult applications, denials for this reason ranged from 24 percent in Arizona to 

67 percent in North Carolina.

0 10 20 30 40 50 60 70 80

SSI 

DI/Concurrent

WY

WV

WI

WA

VT

VA

UT

TX

TN

SD

SC

RI

PA

OR

OK

OH

NY

NV

NM

NJ

NH

NE

ND

NC

MT

MS

MO

MN

MI

ME

MD

MA

LA

KY

KS

IN

IL

ID

IA

HI

GA

FL

DE

DC

CT

CO

CA

AZ

AR

AL

AK

Percent

Percentage of State Agency Initial Denials Based 

on Ability to Perform Other Work 

Fiscal Year 2004

65
 To supplement medical evidence of record or when such evidence is not available, DDSs 

procure consultative examinations. In fi scal year 2003, the use of consultative examinations 

for initial disability decisions ranged from 14 percent in Vermont to 64 percent in Indiana. The 

national average was 47 percent.

Chart 50

0

10

20

30

40

50

60

70

80

VT HI AK SD MA Average OK WY TN NY IN

Percentage of Initial-Level Claims 

with Consultative Examinations 

Fiscal Year 2004

Percent

13.9

25.8 26.4 26.9 28.7

46.5

53.4 54.2

61.4 62.5 64.0

66
0

20

40

60

80

100

Overall

Denials

Allowances

1992 1994 1996 1998 2000 2002 2004

Percent

Quality Assessment of State Agency

Initial-Level Claim Decisional Accuracy

Fiscal Years 1992 - 2004

Chart 51

 Despite all the variations in DDS decision making, SSA’s Offi ce of Quality Assurance has 

found a remarkably high level of DDS initial claims accuracy.

 SSA reviews random samples of each State’s allowances and denials. The samples are 

designed to produce accuracy rate estimates in which one can be confi dent that 95 percent of all 

samples of a similar size will produce an accuracy rate estimate that is within 5 percentage points 

of the accuracy rate that would be obtained if all allowances and denials were reviewed.

67
68
VIII. State Administrative 

Arrangements

69
0 $10,000 $20,000 $30,000 $40,000 $50,000

WY

WV

WI

WA

VT

UT

TX

TN

SD

SC

RI

PA

OR

OK

OH

NY

NV

NM

NJ

NH

NE

ND

NC

MT

MS

MO

MN

MI

ME

MD

MA

LA

KY

KS

IN

IL

ID

IA

HI

GA

FL

DE

DC

CT

CO

CA

AZ

AR

AL

AK

Minimum Salary Levels for Initial-Level 

State Agency Disability Examiners 

Fiscal Year 2004

Chart 52

 Minimum salary for full-time non-trainee initial disability examiners varies widely, from 

$21,238 in South Dakota to $45,684 in Connecticut. (Comparable data were not available for 

Virginia.)

70
Chart 53

 The overall average DDS examiner attrition rate in 2004 was 12.9 percent. The range in 

2004 was from zero percent in Rhode Island and North Dakota to 32 percent in Utah. The rate 

can vary widely from year to year especially in small States, where a few losses amount to a 

large percentage. Some States have historically high rates due to low salaries. It is believed by 

many in the DDSs that it takes at least 2 years before an examiner has suffi cient experience to 

work without close supervision.

 For purposes of comparison, Offi ce of Personnel Management data for 2004 show an overall 

separation rate (including transfers) of 17 percent for the Federal executive branch and 6 percent 

for the Social Security Administration.

0 5 10 15 20 25 30 35

WY

WV

WI

WA

VT

VA

UT

TX

TN

SD

SC 

RI

PA

OR

OK

OH

NY

NV

NM

NJ

NH

NE

ND

NC

MT

MS

MO

MN

MI

ME

MD

MA

LA

KY

KS

IN

IL

ID

IA

HI

GA

FL

DE

DC

CT

CO

CA

AZ

AR

AL

AK

State Agency Examiner Attrition Rates

Fiscal Year 2004

Percent

71
72
IX. Hearings and Appeals

73
 There is a wide range from State to State in the hearing-level allowance rates on disability 

claims. In 2004 allowance rates ranged from 48 percent in Alaska to 82 percent in Connecticut. 

Percentages shown are percentages of decisions and do not include dismissals. Further analysis 

shows there is no overall correlation between the initial-level and the hearing-level allowance 

rates.

0 20 40 60 80 100

CT

NH

ME

VT

AL

UT

MD

MT

IL

WA

WY

ID

TN

MA

NC

GA

SC

RI

KS

NJ

CO

IN

FL

NY

WV

MN

NM

NE

OK

VA

OH

AZ

ND

MO

MI

NV

WI

DE

MS

OR

DC

AR

SD

TX

PA

KY

IA

CA

HI

LA

AK

Allowance Rates at Initial (Fiscal Year 2003) and 

Hearing (Fiscal Year 2004) Levels by State 

Percent

Initial level

Hearing level

Chart 54

74
 This chart shows how many of the 1,144 administrative law judges (ALJs) working in 

2002, issued a number of decisions falling within certain ranges. (The fi gures displayed are 

for decisions in SSA cases in FY 2002.) For example, 159 ALJs issued between 351 and 400 

decisions, and 129 issued between 401 and 450.

 The middle 50 percent of ALJs issued between 235 and 436 decisions on SSA cases in FY 

2002. The bottom 10 percent issued 153 or fewer. The top 10 percent issued 531 or more.

 There are several possible reasons for low numbers of decisions by judges. Some judges 

spent much of their time on Medicare cases, and the SSA cases shown on this chart refl ect only 

a small percentage of their work. Some judges produced few cases due to the time they spent 

on management or union duties or on details or other assignments. Some new ALJs began 

processing cases at the end of calendar year 2001 and did not become fully productive until later 

in calendar year 2002. Other judges left the agency during the year and may have produced a 

small number of cases.

 There are also possible reasons for high numbers of decisions. For example, some ALJs 

have been involved in initiatives to identify cases that can be allowed without a hearing.

Chart 55

0

20

40

60

80

100

120

140

160

180

1251 - 1300

1301 - 1350

1201 - 1250

851 - 900

951 - 1000

101 - 150

151 - 200

201 - 250

251 - 300

301 - 350

351 - 400

451 - 500

501 - 550

551 - 600

601 - 650

651 - 700

701 - 750

751 - 800

801 - 850

901 - 950

51 - 100

1 - 50

1001 - 1050

1051 - 1100

1101 - 1150

1151 - 1200

0

401 - 450

Frequency Distribution of the 

Number of ALJ Decisions in Fiscal Year 2002, SSA Cases

Number of ALJs

Number of decisions

75
Chart 56

 This chart shows how many of the 1,144 ALJs working in 2002 have decision allowance 

rates within a particular range. (The rates displayed are for decisions in SSA cases in FY 2002.) 

For example, 118 ALJs had allowance rates between 61 and 65 percent, and 134 had allowance 

rates between 66 and 70 percent.

 The allowance rates for decisions (that is, excluding dismissals) of the middle 50 percent 

of ALJs ranged between 57 percent and 80 percent in FY 2002. The bottom 10 percent had 

allowance rates of 47 percent or less. The top 10 percent had allowance rates of 89 percent or 

more.

 ALJs who made few decisions, as shown on the previous chart, might easily have either very 

high or very low allowance rates with little effect on the overall allowance rate. ALJs involved 

in initiatives to identify cases that can be allowed without a hearing may have high allowance 

rates.

 There is no overall correlation between allowance rates and the number of decisions shown 

in Chart 55.

0

20

40

60

80

100

120

140

160

96 to 100

11 to 15

16 to 20

21 to 25

26 to 30

31 to 35

36 to 40

41 to 45

46 to 50

51 to 55

56 to 60

61 to 65

66 to 70

71 to 75

76 to 80

81 to 85

86 to 90

91 to 95

6 to 10

0 to 1

1 to 5

Number of ALJs

Allowance rates (percent)

Frequency of Distribution of ALJ Allowance Rates in

Fiscal Year 2002

SSA Cases

76
 The use of vocational experts has increased greatly since 1980. (The adoption of the 

vocational regulations in 1979 was supposed to reduce their use. Later court decisions and 

regulatory changes contributed to increased use.) Vocational experts are now used in more than 

half of all ALJ hearings. Over the same period, the use of medical experts has grown from about 

4 percent of hearings to more than 17 percent.

Chart 57

0

10

20

30

40

50

60

70

Medical expert

Vocational expert

1977 1982 1987 1992 1997 2002 2004

Percent

Medical and Vocational Expert

Participation in ALJ Hearings

Fiscal Years 1977 - 2004

77
 The percentage of DI and SSI claimants represented by attorneys at ALJ hearings has nearly 

doubled since 1977. The fi gures for attorney and non-attorney representatives are not additive, 

since some claimants may have both types of representatives. Representation varies greatly 

with the type of claim. In FY 2004, 84 percent of DI-only claimants had an attorney, 80 percent 

of DI-SSI concurrent claimants had an attorney, and 60 percent of SSI-only claimants had an 

attorney. Non-attorney representatives were present in 10 percent of DI-only claims, 13 percent 

of concurrent claims, and 13 percent of SSI-only claims. 

 Until recently, attorney fees could be withheld and paid directly from past-due benefi ts only 

in Social Security, but not in SSI, claims; and fees could be withheld only for attorneys, not for 

non-attorney representatives. The Social Security Protection Act of 2004 extended, for a period 

of 5 years, withholding of attorney fees to SSI cases. The Act also authorized, for a period of 

5 years, a national demonstration project to allow non-attorney representatives the option of fee 

withholding under both DI and SSI claims for a period of 5 years. The demonstration project 

began February 28, 2005, and fee withholding for SSI benefi ts became effective for cases 

effectuated on or after the same date.

Chart 58

0

10

20

30

40

50

60

70

80

90

100

Non-attorney

Attorney

1977 1982 1987 1992 1997 2002 2004

Cases With Representation at ALJ Hearings

Fiscal Years 1977 - 2004

Percent

78
Chart 59

 In addition to dealing with requests for review or appeals from hearing-level decisions, the 

Appeals Council: 

• reviews new court cases to determine whether they should be defended on the record 

or whether the Commissioner should seek a voluntary remand and prepares the 

certifi ed administrative record for new court cases of appealed SSA decisions 

• processes remands from the courts 

• reviews fi nal court decisions and makes recommendations as to whether appeal 

should be sought

79

Requests

for review

dispositions

New

court cases

processed

Court 

remands

processed

Final decisions

after court

remand processed

Thousands of cases

Appeals Council Workloads

Fiscal Year 2005

0

20

40

60

80

100
Chart 60

 Over the years, most of the cases handled by the Appeals Council have been either denied 

or remanded back to the ALJ level. The number of cases being remanded back to the ALJs has 

grown considerably, accounting for 26 percent of the Appeals Council dispositions in 2005.

0

10

20

30

40

50

60

70

80

90

100

Allowed

Dismissed

Remanded

Denied

1975 1980 1985 1990 1995 2000 2005

Thousands of cases

Appeals Council Dispositions

Fiscal Years 1975 - 2005

80
Chart 61

 With dispositions exceeding receipts, the number of requests for review pending at the 

Appeals Council has dropped since 1999 to less than a third of what it was in that year. 

Processing time has fallen to half of what it was at its peak in 2000.

0

20

40

60

80

100

120

140

160

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Appeals Council Requests for Review

Fiscal Years 1995 - 2005

Pending cases Dispositions Receipts

Thousands

81
82
X. Processing Times

83
0

20

40

60

80

100

120

140

SSI

DI

1991 1993 1995 1997 1999 2001 2004

Average Initial Claim Processing Time

Fiscal Years 1991 - 2004

Number of days

2003

 Processing time shown is the time from the date of the application to the date the award or 

denial notice is generated. It includes fi eld offi ce and processing center as well as State agency 

time.

Chart 62

Chart 63

 The State agency workload soared between 1989 and 1992, largely due to a recession 

(which tends to increase the relative economic value of disability benefi ts), the Supreme Court’s 

Zebley decision that liberalized the defi nition of eligibility for children, and changes in SSA’s 

regulations for determining whether an individual has a mental impairment. The result was an 

increase in processing times and in the number of applications pending in the State agencies at 

the end of the year. Although the pending workload declined in the mid-1990s, it is now higher 

than it was in the early 1990s, and roughly double what it was in the latter half of the 1980s.

0

100

200

300

400

500

600

700

1985 1990 1995 2000 2004

Thousands of applications

DI and SSI Applications Pending in State 

Agencies at End of 

Fiscal Years 1985 - 2004

84
Chart 64

Chart 65

0

50

100

150

200

250

300

350

400

450

1985 1990 1995 2000 2005

Number of days

Average Hearing-Level 

Processing Time

Fiscal Years 1985 - 2005

 Average hearing offi ce processing times for Social Security and SSI cases (nearly all of 

which are disability cases) soared in the mid-1990s, as the wave of initial claims fi led in the early 

1990s made their way through the system. After falling to 274 days in 2000, processing times 

have risen to 422 days in 2005. The size of the pending workload in hearing offi ces has also 

risen, and both processing times and pending levels are substantially higher than they were in the 

mid-1990s. Since 1985, processing times have more than doubled and the pending caseload has 

grown 6 times over.

 The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required the 

transfer of Medicare hearings from SSA to the Department of Health and Human Services not 

later than October 1, 2005. In 2004 SSA received 57,564 requests for Medicare hearings and 

disposed of 64,082. At the end of 2004, SSA had 28,675 Medicare cases pending.

0

100

200

300

400

500

600

700

800

1985 1990 1995 2000 2005

Thousands of cases

Cases Pending in Hearing Offices 

at End of Fiscal Years

1985 - 2005

85
86
XI. Federal Courts

87
0

2000

4000

6000

8000

10000

SSI

DI

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

New Disability Cases Brought 

to District Courts 

Fiscal Years 1993-2004

Number of cases

Chart 66

 Trends at the district court level refl ect activity at the administrative level. As the 2003 

Judicial Business of the United States Courts commented, “Following a seven-year period in 

which the Social Security Administration used additional resources to process administratively 

a large backlog of Social Security claims (thereby causing case fi lings related to these claims to 

increase each year since 1999), Social Security fi lings declined . . . in 2003.” In 2004, DI and 

SSI cases accounted for 5.3 percent of all new cases brought to the district courts.

88
 Since 1995, Federal courts have reversed relatively few agency decisions. The reversal rate 

was about 6 percent over the entire period. However, between 1996 and 2001 the rate of cases 

remanded back to the agency for further action rose from 37 percent to 59 percent. In 2004 

the remand rate stood at 46 percent. In 2004, 67 percent of court remands were subsequently 

allowed by the agency.

Chart 67

0

2000

4000

6000

8000

10000

Affirmances Reversals Remands

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Federal District Court Actions

Fiscal Years 1995 - 2004

Number of cases

0

10

20

30

40

50

60

70

Affirmances Reversals Remands

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Percent Distribution of Federal District Court Actions

Fiscal Years 1995 - 2004

Percent of cases

89
 The number of Social Security cases appealed to U.S. courts of appeals has varied somewhat 

over the years shown but has not exceeded 2 percent of the cases taken to those courts.

Chart 68

0

200

400

600

800

1000

Number Terminated

Number Commenced

1997 1998 1999 2000 2001 2002 2003 2004

Number of cases

Social Security Cases Commenced and Terminated 

in U.S. Courts of Appeals

Fiscal Years 1997-2004

90
Allow

36%

Allow

14%

Allow

62%

Allow

2%

Allow

5%

Deny

64%

Reverse

50%

Allow

32%

Allow

1%

Deny

86%

Deny

24%

Deny

71%

Deny

74%

Deny

38%

Dismiss

13%

Dismiss

30%

Dismiss

8%

Dismiss

2%

Dismiss

3%

Remand

25%

Remand

22%

Remand

45%

Deny

42%

Continue

93%

Terminate

7%

Affirm

50%

Percent of distribution of all claim allowances at 

each adjudicative level.

Initial Decisions 69.8

Reconsiderations 5.9

Hearing Level 24.1

Appeals Council 0.2

 100.0

.

DI and SSI Disability

Determinations and Appeals

Fiscal Year 2005*

Initial Claims Continuing Disability Reviews

 * Includes all Title II and Title XVI disability determinations. The data relate to workloads 

processed (but not necessarily received) in fi scal year 2005. That is, the cases processed at 

each adjudicative level may include cases received at one or more of the lower adjudicative 

levels prior to FY 2005.

** Includes non-State CDR mailer continuations. Also includes 16,696 CDRs where there 

was “no decision.” The continuance and termination rates are computed without the “no 

decision” cases.

Chart 69

Initial Level

2,570,831

Reconsiderations

565,560

Initial CDRs

1,518,235**

Reconsiderations

56,611

ALJ

Dispositions

509,390

Appeals

Council

89,499

Appeals

Council

3,973

Federal Court Decisions on 

Applications and CDRs

12,360

ALJ

Dispositions

14,972

91
92
XII. DATA SOURCES AND NOTES

Chart 1. DI: www.ssa.gov/OACT/STATS/table6c7.html

 SSI: Annual Report of the Supplemental Security Income Program, table IV.B1.

Chart 2. District Offi ce Workload Report (DOWR) State summaries for FY 2003; insured 

population estimates as of December 31, 2002 by SSA, Offi ce of Research, 

Evaluation, and Statistics. (Note: DOWR category includes applications for disabled 

workers, children, widows and widowers, end-stage renal disease, and Medicarequalifi ed government employees.)

Chart 3. www.ssa.gov/OACT/STATS/table4c2DI.

Chart 4. SSI Annual Statistical Report, 2003, table 45; 

 http://ferret.bls.census.gov/macro/032004/pov/new46_100125_05.htm.

 http://www.census.gov/popest/states/asrh/SC-est2004-01.html

Chart 5. SSI Annual Statistical Report, 2003, table 45; 

 http://ferret.bls.census.gov/macro/032004/pov/new46_100125_03.htm.

 http://www.census.gov/popest/states/asrh/SC-est2004-01.html

Chart 6. SSI Annual Statistical Report, 2003, table 41; 

 http://www.census.gov/hhes/poverty/histpov/hstpov3.html

Chart 7. SSA, Offi ce of Disability Programs, State Agency Operations Report, and Offi ce 

of Hearings and Appeals, Hearing Offi ce Tracking System and OHA Case Control 

System.

 Note: A revised process was introduced October 1, 1999 in 10 States, under 

which initial denials could be appealed directly to the hearing level without a 

reconsideration. Hearing level data include all forms of cases reaching the hearing 

level, including those involving Social Security retirement and SSI aged issues,but not 

Medicare. The vast majority involve disability issues.

Chart 8. SSA, Offi ce of Disability Programs, State Agency Operations Report.

Chart 9. SSA, Offi ce of Disability Programs, State Agency Operations Report.

 Note: A revised process was introduced October 1, 1999, in ten States, under 

which initial denials could be appealed directly to the hearing level without a 

reconsideration.

Chart 10. SSA, Offi ce of Hearings and Appeals, Key Workload Indicator Reports.

Chart 11. DI: http://www.ssa.gov/OACT/STATS/table6c7.html

 SSI: Annual Report of the Supplemental Security Income Program, 2005, table IV.B2.

93
Chart 12. SSA, Actuarial Study 114, table 4, updated to 2003 by Offi ce of the Chief Actuary, 

July 2004.

Chart 13. SSA, Offi ce of Disability Programs, State Agency Operations Report; Offi ce of 

Hearings and Appeals, Case Control System.

 Note: A revised process was introduced October 1, 1999, in ten States under 

which initial denials could be appealed directly to the hearing level without a 

reconsideration.

 Chart 14. Annual Statistical Report on the Social Security Disability Insurance Program, 2003, 

tables 52-55; SSI Annual Statistical Report, 2003, tables 53-56.

Chart 15. SSA, Offi ce of Disability Program, CDR Control File and State Agency Operations 

Report. 

Chart 16. SSA, Annual Report of Continuing Disability Reviews, Fiscal Year 2004, Appendix A, 

table A5.

Note: The data shown for SSI children are for CDRs other than reviews of low-birthweight children and redeterminations at age 18. The Personal Responsibility and 

Work Opportunity Reconciliation Act of 1996 required SSA to perform a CDR not 

later than 12 months after birth for recipients whose low birth weight is a contributing 

factor material to the determination of their disability. The same act required SSA 

to redetermine the eligibility of SSI benefi ciaries using adult initial criteria during 

the one-year period beginning with the benefi ciary’s 18th birthday. (The Balanced 

Budget Act of 1997 later gave the agency more leeway in scheduling those reviews 

and redeterminations.)

Chart 17. SSA, Report to Congress on Continuing Disability Reviews, Fiscal Year, 2004, 

Appendix B.

Chart 18. SSA, Actuarial Study 114, table 5, updated by Offi ce of Chief Actuary, December, 

2004.

Chart 19. SSA, Actuarial Study 114, table 5, updated by Offi ce of Chief Actuary, December, 

2004.

Chart 20. Annual Report of the Supplemental Security Income Program, 2005, table IV.B6; 

2000 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors 

Insurance and Disability Insurance Trust Funds, table II.F19; 2005 Annual Report of 

the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability 

Insurance Trust Funds, table IV.B2 (intermediate projections beginning 2005).

Chart 21. Annual Statistical Supplement, 1980, table 44, 1982 table 31, 1999 table 4.C2; 

http://www.ssa.gov/OACT/STATS/table4c2DI; http://www.ssa.gov/OACT/STATS/

DIbenies.html.

94
Chart 22. Annual Report of the Supplemental Security Income Program, 2005, table IV.B6; 

http://eire.census.gov/popest/data/states/ST-EST2003-01.php

Chart 23. Annual Statistical Supplement, 2004, table 5.J14; 

 http://www.census.gov/popest/states/asrh/SC-est2004-01.html.

Chart 24. SSI Annual Statistical Report, 2003, table 9; 

 http://www.census.gov/popest/states/asrh/SC-est2004-01.html; 

 http://ferret.bls.census.gov/macro/032004/pov/new46_100125_05.htm

Chart 25. SSI Annual Statistical Report, 2003, table 9; 

 http://www.census.gov/popest/states/asrh/SC-est2004-01.html; 

 http://ferret.bls.census.gov/macro/032004/pov/new46_100125_03.htm

Chart 26. SSA, Offi ce of the Chief Actuary, Actuarial Study 118, table 25.

Chart 27. SSA, Offi ce of Disability Program, 831 fi le.

Chart 28. SSA, Annual Statistical Supplement 2003, table 6.C3

Chart 29. SSA, Annual Statistical Report on the Social Security Disability Program, 2003 Table 

21; SSA, SSI Annual Statiscal Report, 2003, table 25 

Chart 30. SSA, Annual Statistical Supplement, table 5.D5; SSI Annual Statistical Report, table 25.

Chart 31. SSA, Annual Statistical Supplement, table 5.A1, table 70 (1985), table 67 (1984).

Chart 32. SSA, Annual Report of the Supplemental Security Income Program, table IV.B6.

Chart 33. SSA, Offi ce of Research, Evaluation, and Statistics, 831 fi le.

Chart 34. SSA, Offi ce of Chief Actuary, from 10 percent sample fi le.

Chart 35. SSA, Annual Statistical Supplement, table 5.D3.

Chart 36. SSA, Annual Statistical Supplement, table 7.E3.

Chart 37. SSA, Annual Statistical Supplement 2003, table 7.E3

Chart 38. SSA, Annual Statistical Report on the Social Security Disability Program, 2003, 

 table 3; 2004 benefi t fi gure from http://www.ssa.gov/pressoffi ce/basicfact.htm; 

converted to constant dollars using CPI-W from http://www.ssa.gov/OACT/STATS/

cpiw.html.

Chart 39. SSA, Annual Report of the Supplemental Security Income Program, 2005, table 

IV.A2; converted to constant dollars using CPI-W from http://www.ssa.gov/OACT/

STATS/cpiw.html.

95
Chart 40. SSA, Annual Report on the Social Security Disability Program, 2003, table 62; SSI 

Annual Statistical Report, 2003, table 35.

Chart 41. SSA, Annual Statistical Report on the Social Security Disability Programs, 2003, 

tables 63 and 65; SSI Annual Statistical Report, 2003, table 35. SSI data are for noninstitutionalized recipients.

Chart 42. SSA, Offi ce of Disability Programs, State Agency Operations Report.

Chart 43. SSA, Offi ce of Disability Programs, State Agency Operations Report.

Chart 44. SSA, Offi ce of Disability Programs, 831 fi le. Initial DDS determinations for DI only. 

Does not include SSI. Percentages do not refl ect effects of reconsideration, ALJ, or 

higher appellate decisions.

Chart 45. SSA, Offi ce of Disability Programs, 831 fi le.

Chart 46. SSA, Offi ce of Disability Programs, 831 fi le. Data include only initial DDS 

determinations for DI-only and concurrent claims. “Other” category includes denials 

for failure to attend a scheduled consultative examination, failure to cooperate in 

submitting evidence of disability, and failure to follow prescribed treatment.

Chart 47. SSA, Offi ce of Disability Programs, 831 fi le. Data are for adult claims only.

Chart 48. SSA, Offi ce of Disability Programs, 831 fi le. Data are for adult claims only.

Chart.49. SSA, Offi ce of Disability Programs, 831 fi le. Data are for adult claims only.

Chart 50. SSA, Offi ce of Disability Programs, State Agency Operations Report.

Chart 51. SSA, Offi ce of Quality Assurance; 1995 Accountability Report, p. III-31; ODPQ 

web: Federal Quality Assurance Review, Initial Disability Determinations, Regional 

Accuracy Rates by Decision/Documentation Return Categories, fi scal year reports; 

http://eis.ba.ssa.gov/odpq/reports/net_ovr.htm.

Chart 52. SSA, Offi ce of Disability Determinations

Chart 53. SSA, Offi ce of Disability Determinations

Chart 54. OHA Case Control System.

Chart 55. SSA, Offi ce of Hearings and Appeals

Chart 56. SSA, Offi ce of Hearings and Appeals

Chart 57. SSA, OHA case control system

96
Chart 58. SSA, OHA case control system

Chart 59. Offi ce of Hearings and Appeals Annual Report, FY 2005, pp. 9-10.

Chart 60. Offi ce of Hearings and Appeals, Key Workload Indicators, FY 2005, pp. 23.

Chart 61. Offi ce of Hearings and Appeals, Key Workload Indicators, FY 2005 pp.19-23.

Chart 62. SSA, Disability and Supplemental Security Income claims systems.

Chart 63. SSA, Disability and Supplemental Security Income claims systems.

Chart 64. Offi ce of Hearings and Appeals, Key Workload Indicator Reports.

Chart 65. Offi ce of Hearings and Appeals, Key Workload Indicator Reports.

Chart 66. SSA, Offi ce of General Counsel docket system.

Chart 67. Judicial Business of the United States Courts, table C-2A.

Chart 68. Judicial Business of the United States Courts, table B-1A.

Chart 69. SSA, Offi ce of Disability and Income Security Programs.

97
98
PART TWO

Selected Aspects of

Disability Decision Making

99
EXPLANATION OF MATERIALS

 The Board recognizes that signifi cant background information is necessary in order to 

understand the complexities of the disability programs, including how they have developed 

and how they are administered. We hope that the following materials will be helpful in this 

regard. The intent of the materials in Part Two of this report is not to provide a comprehensive 

handbook, but simply to make available a selection of materials that describe some of the major 

aspects of the disability program. We believe that the information presented here will be useful 

to readers of this report, and other Board reports on the disability program. (For a complete 

listing of SSAB publications, please refer to our website at www.ssab.gov.)

 The materials provide a description of how disability determinations are made, reviewing 

in some detail the complex process of how adjudicators apply Social Security’s defi nition of 

disability, using the agency’s rules for sequential evaluation of an individual’s impairment. We 

also include a description of the multiple steps that claimants must follow in applying for DI and 

SSI benefi ts. These steps are further complicated for those individuals who appeal their cases 

through the administrative and judicial appeals process.

 There is also an overview of the major initiatives that the Social Security Administration 

has undertaken to improve the disability decision making process since our last edition of this 

report in 2001. Development and implementation of an electronic disability case processing 

system, (eDib), was accelerated in early 2002 and will facilitate several agency initiatives. In 

addition, the reader will fi nd a description of SSA’s Disability Service Improvement (DSI) 

changes designed to capitalize on the effi ciencies gained from SSA’s recent implementation of its 

electronic case processing system.

 Other background information includes:

● a summary of major disability legislation;

● a chronology of signifi cant judicial and legislative actions, and agency rules that have 

 affected the way disability determinations are made;

● a description of the various SSA components that have substantive responsibilities in the 

 disability process;

● a bibliography of materials related to disability; and

● a glossary that explains the terms used in this and other Board reports on disability issues.

100
101

I. HOW DISABILITY 

DETERMINATIONS ARE MADE

The Defi nition of Disability

The Social Security Act defi nes disability as the inability to do any substantial gainful activity 

by reason of any medically determinable physical or mental impairment which can be expected 

to result in death or which has lasted or can be expected to last for a continuous period of not 

less than 12 months. The defi nition is the same for adults in both the Disability Insurance 

(DI) program and the Supplemental Security Income (SSI) program. Children under age 18 

may be found disabled under the SSI program. To be eligible, children must have a medically 

determinable physical or mental impairment (or combination of impairments) that causes marked 

and severe functional limitations and that can be expected to cause death or that has lasted or can 

be expected to last for a continuous period of not less than 12 months.

There is no universal statutory defi nition of disability. There are hundreds of Federal, State, 

and private disability programs, each with its own specifi c and different defi nition of disability. 

The majority of these programs stress the degree of illness or injury as the primary qualifying 

criterion.

When enacted, the Social Security disability program was structured essentially as an early 

retirement program. Benefi ts were limited to those individuals aged 50 and over, computed in a 

manner analogous to retirement benefi ts, and based on a fi nding that the inability to work would 

be of a “long-lasting or indefi nite duration.” The underlying premise was that if a person has 

a disability, he or she is unemployable. This model has resulted in a defi nition of disability in 

which the primary eligibility requirement is the inability to work due to a medically determinable 

physical or mental impairment. While subsequent amendments removed the age limitation 

and established the 12-month duration requirement, the basic defi nition equating disability and 

inability to work continues.

The Sequential Evaluation

As a result of Social Security’s unique defi nition of disability, adjudicators must routinely 

deal with the interplay of complex medical, legal, and vocational concepts. The 5-step sequential 

evaluation process that SSA requires all adjudicators to follow is a deceivingly simple schematic 

for a process that, because of the diverse impact of impairments on individual human beings, is 

extraordinarily complex.

Each step of the sequential process requires adjudicators to obtain and consider more and 

different types of evidence. At the fi rst step only the amount of earnings is needed. At step 5, 

the last step, non-medical evidence of eligibility, medical evidence, and vocational evidence are 

required. Each step of the sequential process requires progressively more complex judgments by 

adjudicators and requires progressively diffi cult assessments of increasingly subjective factors.

Although not a formal step in the sequential evaluation process, the 12-month duration 

requirement is considered at every step of the sequential evaluation process except the fi rst one. 

With the exception of SSI statutorily blind individuals, any severe or disabling impairment 
preventing an individual from working must have lasted or be expected to last for at least 12 

continuous months or the impairment must be expected to result in death.

The 5 sequential evaluation steps are followed in order as shown below.

1. Is the individual engaging in substantial gainful activity (SGA)?

If the individual is working and earning an average of $860 or more a month (or performing 

substantial services if self-employed), the claim is denied without considering medical factors. 

The amount of earnings used to determine if an individual is engaging in substantial gainful 

activity is established by regulation and is periodically updated.

According to SSA’s work-oriented defi nition of disability, an impairment is signifi cant only 

to the extent that it prevents work. By engaging in SGA, an individual with an otherwise severe 

medical condition has demonstrated that he or she is not disabled.

2. Does the individual have a severe impairment?

Once the claimant has established that he or she is not presently engaging in SGA, the next 

step in the process is to establish the existence of a severe medical condition. Fundamental to 

the disability determination process is the statutory requirement that to be found disabled, an 

individual must have a medically determinable impairment “of such severity” that it prevents 

him or her from working.

If an impairment (or combination of impairments) does not signifi cantly limit an individual’s 

physical or mental ability to perform basic work activities, it is considered to be not severe. If 

the adjudicator determines that an impairment is not severe, a fi nding is made that the individual 

is not disabled irrespective of age, education, or previous work history.

If it is determined that the individual has a severe impairment, benefi ts are not awarded 

summarily. Instead, the claim progresses to the next step in the sequential evaluation.

3. Does the individual have an impairment that meets or equals (i.e., is equivalent to) an 

 impairment described in SSA’s Listing of Impairments?

According to Robert M. Ball, Commissioner of Social Security from 1962 to 1973, “The key 

administrative decision, which was made in the early days of the disability program, and which 

has governed disability determinations since, was to adopt what may be called a ‘screening 

strategy.’ The idea was to screen quickly the large majority of cases that could be allowed 

on reasonably objective medical tests and then deal individually with the troublesome cases 

that didn’t pass the screen. What is wanted from a physician is not his opinion as to whether 

someone is ‘disabled’ or whether he ‘can work,’ but objective evidence about a condition.” 

The listing step of the sequential process requires the most exacting and objective level of 

proof. It is the only step where benefi ts may be awarded solely on the basis of medical factors. 

If an individual is not working and his or her impairment is one of the listed impairments, or 

an impairment of equal severity, a fi nding of disability is justifi ed without consideration of the 

individual’s age, education, or previous work history.

102
The Listing of Impairments is a medical reference base for the determination of those 

physical or mental impairments which are considered severe enough to prevent an individual 

from working. Most of the listed impairments are permanent impairments or expected to result 

in death. For the other listings, the required evidence must show that the 12-month duration 

requirement will be, or has been met. The listings serve several important purposes. They 

are an effective screening device for those impairments that are obviously disabling, they 

provide public awareness of the criteria for disability, they serve as a benchmark of severity for 

adjudicators, and they promote national uniformity and consistency at all adjudicative levels.

The Listing of Impairments is organized according to disorders of 14 body systems: growth 

impairments; musculoskeletal; special senses and speech; respiratory; cardiovascular; digestive; 

genito-urinary; hematological; endocrine; impairments that affect multiple body systems; 

neurological; mental; malignant neoplastic diseases; and the immune system. Each section 

has a general introduction with defi nitions of key concepts. Evaluation criteria provided for 

impairment categories are selected to establish fi ndings that would confi rm the presence and 

severity of the impairment, yet not exclude from consideration the variations of individual 

reaction to illness and injury. In some disorders the fi ndings that establish the diagnosis are 

considered to be suffi cient to establish the presence of a disabling impairment. In others, specifi c 

fi ndings with discrete values must accompany diagnostic fi ndings before the same conclusion 

can be drawn.

By comparing the clinical signs, symptoms, and laboratory fi ndings from the evidence of 

record with those in a listing, the adjudicator can determine whether the listing is met. On 

the other hand, determining whether an impairment or combination of impairments is equal 

in severity and duration to a listed impairment requires medical expertise as well as skill in 

applying diffi cult program concepts. An equivalence decision is justifi able under the following 

circumstances.

● When one or more of the specifi c medical fi ndings for a listed impairment is missing 

from the evidence, but the evidence includes other medical fi ndings of equal or greater 

clinical signifi cance relating to the same impairment.

● When an impairment does not appear in the listings, but the medical fi ndings and the 

severity of the unlisted impairment are comparable in severity and in duration to a listed 

impairment.

● When there are multiple impairments, none of which meet or equal a listed impairment, 

but the combined severity of the multiple impairments is equal in severity and duration to 

a listed impairment.

In deciding the medical equivalence, regulations require that adjudicators consider the 

opinion of program physicians or psychologists. A Social Security Ruling (SSR 86-8) was issued 

in 1986 and was designed to clarify the application of the equals concept. Apart from a slight 

increase in the number of allowances made on the basis of equaling the listing in the early 1990s, 

the number of “equals” decisions has remained at less than 10 percent of all allowance decisions.

103
Residual Functional Capacity

Failing to establish that the individual’s impairment meets or equals the listings does not 

mean that a claim will be denied. Benefi ts may still be awarded if it is found that the reason 

an individual is not working is because of a severe impairment. Since the severity of the 

impairment must be the primary basis for a fi nding of disability, an assessment of the individual’s 

medically-based functional limitations and remaining capacities must be completed before a 

decision can be rendered at step 4 or step 5 of the sequential evaluation process.

Residual Functional Capacity (RFC) is an administrative assessment requiring a thorough 

analysis of all relevant evidence. The purpose of the RFC assessment is to determine the extent 

to which the individual’s impairment(s) reduces the ability to engage in specifi c work-related 

physical and/or mental functions. This residual capacity assessment is meant to refl ect the most 

a person can do, despite any limitations. Disability examiners may participate and have input 

into the RFC assessment at the initial and reconsideration level; however, regulations provide 

that program physicians or psychologists are responsible for the actual completion of the RFC.7

When establishing the RFC, the adjudicator must consider limitations and restrictions 

imposed by all of the individual’s impairments including any that are considered to be “not 

severe.” While a “not severe” impairment, by itself, would not have more than a minimal 

impact on work-related function, it could, when considered in combination with other, severe 

impairments, reduce the range of work an individual could do at all or prevent an individual 

from performing past work. Adjudicator conclusions about an individual’s functional ability 

must be supported by specifi c medical facts. But statements from the individual or others about 

functioning must also be considered. Any inconsistencies must be resolved or explained. The 

RFC assessment must include a discussion of why any symptoms, such as pain, that result 

in limitations can or cannot be reasonably accepted as consistent with the medical evidence. 

Medical source opinions must be considered and discussed in the RFC assessment, and particular 

importance must be given to any opinion expressed by the individual’s treating source. When 

a treating source gives an opinion that discusses the consequences or the implications of an 

individual’s impairment and the opinion is supported by the medical evidence, it must be given 

controlling weight by the adjudicator.

The adjudicator must arrive at a conclusion that expresses the individual’s physical capacity 

for such activities as walking, standing, lifting and carrying. In cases involving mental 

impairments, adjudicators have to consider such capabilities as the individual’s ability to 

understand, to carry out and remember instructions, and to respond appropriately to supervision, 

coworkers, and work pressures.

4. Can the individual, despite any functional limitations imposed by a severe impairment, 

perform work that he or she did in the past?

Once the RFC assessment is completed, a determination must be made as to whether, 

considering the impairment-induced functional loss, the individual retains the capability to 

perform relevant work that he or she has done in the past 15 years. At this step, the vocational 

_________________________

7In the 10 prototype DDSs, “single decision maker” disability examiners are permitted to adjudicate most cases 

without a mandatory concurrence by a doctor. SSI child cases and cases involving a mental impairment may not be 

adjudicated without a doctor’s concurrence. 

104
issues are narrow and do not consider the effect of age or educational level. If the adjudicator 

determines that the individual is able to meet the physical and mental demands of any prior work, 

a fi nding will be made that the individual is not disabled irrespective of age or education.

If it is determined that the individual does not have the functional capacity to perform past 

relevant work, the adjudicator moves on to the fi fth and fi nal step of the process.

5. Can the individual do any other type of work?

At step 5, the burden is on the Social Security Administration to determine whether or not, 

given the individual’s remaining functional abilities, there are suffi cient jobs in the national 

economy that the person can perform. Using the RFC assessment, the adjudicator consults the 

Medical-Vocational Guidelines – commonly known as the vocational grids. These grids were 

developed to provide a framework for determining whether or not the claimant’s remaining 

functional abilities, in combination with age, education, and work experience signifi cantly limit 

the number of jobs that she/he may be capable of performing. SSA published the grids in 1979 

using vocational data supported by major government publications, such as the U.S. Department 

of Labor’s Dictionary of Occupational Titles.

The vocational grids will direct a fi nding of disabled or not disabled only when all of the 

applicable criteria of a specifi c rule are met. For example, according to Vocational Rule 201.03, 

a claimant who is limited to sedentary work because of physical impairments, is of advanced 

age (55 or older), and has a limited education (11th grade or less) will be found not disabled 

provided the previous work was skilled or semi-skilled and those skills are transferable to a new 

job setting.8 

The medical-vocational guidelines, which are based solely on strength requirements, function 

as reference points – or guiding principles – for cases involving severe non-exertional impairments. 

If a claimant’s impairment is non-exertional (e.g., postural, manipulative, or environmental 

restrictions; mental impairment) or if he or she has a combination of exertional and non-exertional 

limitations, the vocational rules will not direct the conclusion of the claim. Instead, the adjudicator 

will use the principles of the guidelines to evaluate the relevant facts of the case. This is often a 

diffi cult area for adjudicators and results in much more subjective decision making.

When SSA developed the grids, the agency calculated the number of unskilled jobs that exist 

in the national economy at the various functional levels (sedentary, light, medium, heavy, and 

very heavy). Non-exertional limitations impact on the number of jobs (range of work) that an 

individual is able to do at the various functional levels. In the example cited above, the grids 

direct a fi nding of not disabled for the claimant with exertional limitations restricting him or her 

to sedentary work. If, however, the same claimant also has signifi cant limitations of fi ngering 

and feeling (a non-exertional limitation), the decision outcome may change. Since fi ngering is 

needed to perform most unskilled sedentary jobs and to perform certain skilled and semiskilled 

jobs at all exertional levels, the adjudicator will have to determine whether there are jobs “in 

signifi cant numbers” that the claimant can do.

____________________

8On November 4, 2005, SSA published a Notice of Proposed Rulemaking that would revise the defi nitions of the 

age categories used as one criterion in determining disability. SSA proposes to raise the starting age of each age 

category by 2 years. In this example, the advanced age group would begin at age 57, not at age 55.

105
In claims reaching this stage of the sequential process, vocational issues are the most 

complicated. Adjudicators primarily rely on the Dictionary of Occupational Titles (DOT) as 

well as other companion publications.9 However, in some DDSs, disability examiners have 

access to a Vocational Specialist (VS) and may request assistance from the VS in a particularly 

diffi cult case. At the hearing level, the administrative law judge may request the testimony of a 

Vocational Expert (VE) in cases involving complicated vocational issues. If there is a confl ict in 

the occupational information supplied by the DOT and the Vocational Specialist or Expert, the 

adjudicator must resolve that confl ict and provide a basis for relying on the VE or VS statements 

rather than on the DOT information.

The percentage of DI claims awarded by State agencies on the basis of vocational factors has 

nearly tripled, increasing from 18 percent of all awards in 1983 to 51 percent in 2004. At the 

hearing level, over 80 percent of awards are based on vocational factors. Denials based on the 

claimant’s ability to perform usual work have risen from nearly 19 percent in 1981 to 31 percent 

by 2004. Denials based on the ability to perform other work have increased from 11 percent in 

1981 to 34.5 percent in 2004.

_________________________ ________________________

9The Dictionary of Occupational Titles was last updated in 1991 and is no longer maintained by the Department 

of Labor. SSA, however, continues to use it as one of its sources of data about job requirements in the national 

economy. Although this information is fundamental to the sequential evaluation process and SSA’s medicalvocational regulatory guidelines, the agency has not vigorously pursued alternatives.

106
II. STEPS IN THE SOCIAL SECURITY DISABILITY 

APPLICATION AND APPEALS PROCESSES10

Initial Application

Field Offi ce Role

A claimant fi les an application for Social Security Disability Insurance (DI) and 

Supplemental Security Income (SSI) disability benefi ts in one of SSA’s 1,300 fi eld offi ces. The 

application asks for information that will enable SSA staff to determine whether the claimant 

meets the nondisability requirements for entitlement. For DI cases, these requirements include 

such factors as whether or not the claimant is insured for disability benefi ts. In SSI cases, 

individuals must provide proof of citizenship status and documentation of their income and 

resources.

The fi eld offi ce is also responsible for obtaining information from the claimant about her 

or his impairment and how it limits the ability to do work. Information about the claimant’s 

medical sources, tests, and medications is collected, as well as information about the individual’s 

past work, education and training. The completeness of the information on this “Disability 

Report” can infl uence whether the claimant’s application is ultimately approved or denied and 

affects the speed with which the decision is made.

To collect more thorough information at the disability interview, SSA has developed a 

“disability claim starter kit.” This kit is sent out in advance of the interview and provides the 

claimant with preparatory materials for the interview. The claimant or the representative can 

complete the forms and worksheets contained in the kit and mail them to the fi eld offi ce, or use 

the Internet to transmit the information to SSA. Telephone interviews and Disability Reports 

fi led over the Internet now comprise a growing number of the applications fi led. As a result, 

fewer applicants are actually being seen in the fi eld offi ces.

DDS Role

After securing the Disability Report, the SSA fi eld offi ce sends it to a Disability 

Determination Service (DDS), a State-run agency that makes disability determinations for SSA. 

There, a disability examiner, using SSA’s regulations, policies, and procedures, develops the 

relevant medical evidence and then, working with a physician and/or a psychologist, evaluates 

the medical and non-medical aspects of the case and determines whether the claimant is 

disabled under the Social Security law. While these State agencies are not under SSA’s direct 

administrative control, SSA does provide program standards, leadership, and oversight.

The claimant is required to establish that he or she is disabled by providing medical and other 

evidence of a disabling condition. However, the DDS is responsible for making every reasonable 

effort to help the claimant get medical reports from the claimant’s physicians, as well as

_________________________

10This section describes the disability application and appeals process in effect as of December 2005. In March 

2006, the Commissioner of Social Security issued regulations that will signifi cantly alter many of these processes. 

Section III of this report summarizes the changes.

107
hospitals, clinics, or institutions where the person has been treated. The DDS pays a fee for any 

medical reports that it needs and requests.

If additional medical information is needed before a case can be decided, the claimant may 

be asked to attend a special examination called a “consultative examination,” paid for by the 

DDS. (SSA pays the DDS for the cost of these examinations, as well as for the cost of obtaining 

medical reports.) This examination is particularly important in the case of applicants who may 

not have a current medical provider or in cases where the necessary information is not readily 

available. SSA requires that every reasonable effort be made to obtain the evidence from the 

claimant’s treating sources before a consultative examination is scheduled.

In making a decision on a claim, the DDS conducts the process in an informal, nonadversarial manner. Claimants are not seen in person by the State agency adjudicators, but 

telephone contacts are not unusual. The claimant may present information he or she feels is 

helpful to the case. The information that the claimant provides and all the evidence that SSA and 

the State agency obtain from medical and other sources will be considered. The individual may 

submit the information, or it may be provided by the claimant’s representative.

Once a decision is rendered, the claimant receives a written notice. The reasons for the 

allowance or the denial determination are stated in the notice. The claimant is also informed 

of the right to appeal the determination. When a claim is approved, the award letter shows the 

amount of the benefi t and when payments start.

Administrative Appeals

Individuals who receive an unfavorable initial disability decision have the right to appeal. 

There are four levels of appeal: (1) reconsideration by the State agency; (2) hearing by an 

administrative law judge (ALJ); (3) review by the Appeals Council; and (4) review by Federal 

courts. At each level of appeal, claimants or their appointed representative must fi le the appeal 

request in writing within 60 days from the date the notice of unfavorable decision is received. If 

the claimant does not take the next step within the stated time period, he or she loses the right to 

further administrative review and the right to judicial review of this particular claim, unless good 

cause can be shown for failure to make a timely request.

Reconsideration

Generally, reconsideration is the fi rst level of appeal in the administrative review process and 

consists of a case review by the DDS. It is similar to the initial determination process except 

that it is assigned to a different disability examiner and physician/psychologist team at the DDS. 

Claimants are given the opportunity to present additional evidence to supplement the information 

that was submitted at the time of the original determination.

If the reconsideration team concurs with the initial denial of benefi ts, the individual may then 

request a hearing before an administrative law judge.

Administrative Law Judge Hearing

Administrative law judges (ALJs) are based in the 140 hearing offi ces located throughout 

the Nation. At the hearing, claimants and their representatives may appear in person (or by 

108
videoconference), submit new evidence, examine the evidence used in making the determination 

under appeal, and present and question witnesses. The ALJ may request medical and vocational 

experts to testify at the hearing and may require the claimant to undergo a consultative medical 

examination. The ALJ issues a decision based on the hearing record, and, in cases where the 

claimant waives the right to appear at the hearing, the ALJ makes a decision based on the 

evidence that is in the fi le and any new evidence that has been submitted for consideration.

The decision making process is different between the DDSs and ALJs. That is, DDSs 

conduct a paper review of a claimant’s medical and vocational evidence, while ALJs hold faceto-face hearings and have the opportunity to observe the claimants fi rsthand. And, since the 

case record is not closed after the reconsideration, ALJs often receive information that was not 

previously available to the DDS and was not considered in that determination. Many experts 

contend that these are some of the differences in the decision making process that contribute to 

the high number of DDS decisions that are reversed at the hearing level.

Appeals Council Review

The fi nal administrative appeals step is to the Appeals Council. If the claimant is dissatisfi ed 

with the hearing decision, he or she may request that the Appeals Council review the case. The 

Council, made up of administrative appeals judges, may also, on its own motion, review a 

decision within 60 days of the ALJ’s decision.

The Appeals Council considers the evidence of record, any allowable additional evidence 

submitted by the claimant, and the ALJ’s fi ndings and conclusions. The Council may grant, 

deny, or dismiss a request for review. If it agrees to review the case, the Council may uphold, 

modify, or reverse the ALJ’s action, or it may remand it to the ALJ so that he or she may hold 

another hearing and issue a new decision. The Appeals Council may also remand a case in which 

additional evidence is needed or additional action by the ALJ is required.

The Appeals Council’s decision, or the decision of the ALJ if the request for Appeals Council 

review is denied, is binding unless the claimant fi les an action in a Federal District Court.

Judicial Appeals

Federal District Court

Claimants may fi le an action in a Federal District Court within 60 days after the date 

they receive notice of the Appeals Council’s action. In fi scal year 2004, 14,977 cases, or 

approximately 21 percent of Appeals Council decisions, were appealed to the courts.

Social Security cases comprised about 5.3 percent of the district court caseload in 2004, 

and it took an average of about 11 months for the courts to render decisions on Social Security 

appeals. The SSA appeals to district court have declined somewhat in the past few years. 

However, as the baby boomers enter their “disability prone” years, this workload is likely to 

increase.

109
Circuit Court; Supreme Court

If the U.S. District Court reviews the case record and does not fi nd in favor of the claimant, 

the claimant can continue with the legal appeals process to the U.S. Circuit Court of Appeals and 

ultimately to the Supreme Court of the United States. The Social Security Administration may, 

similarly, appeal district or circuit court decisions that are favorable to the claimant.

110
III. AGENCY INITIATIVES SINCE 2001

At a hearing before the Social Security Subcommittee of the House Committee on Ways 

and Means in May 2002, the Commissioner of Social Security announced modifi cations to 

agency initiatives that deal with delays and backlogs in the adjudication of Social Security 

claims. She acknowledged concerns that the Hearings Process Improvement plan had created 

additional bottlenecks in the process, and also announced that several changes would be made 

at the hearings level including: instituting early ALJ screening to identify claims that could be 

decided on the record; developing a short-form for fully favorable decisions; allowing bench 

decisions immediately following a hearing; creating a law clerk position; ending the hearing 

offi ce technician rotation requirement; expanding videoconferencing of hearings; using speech 

recognition technology; and digitally recording hearings. The Commissioner also announced 

that the 10 State prototype initiative would be modifi ed to eliminate the claimant conference 

requirement, and that other elements, such as the single decision maker, would be made available 

nationwide. In addition, the Commissioner indicated that the agency would accelerate the 

development of an electronic claims folder.

In September of 2003 at another hearing before the Social Security Subcommittee, the 

Commissioner announced the broad outline of a “new approach” to disability adjudication. She 

stated that, after a period of consultation with various interested parties, she would issue a Notice 

of Proposed Rulemaking detailing the plans for the new approach. The notice was published 

in the July 27, 2005 Federal Register with a 90 day comment period.11 Final regulations were 

published on March 31, 2006. SSA plans to to implement the new regulations gradually, regionby-region, starting with the Boston region and only after each State has fully implemented the 

new electronic disability process (eDib).

Electronic Disability Processing (eDib)

The new electronic disability processing system will affect all levels of the disability claims 

process and result in a program which, in nearly all cases, will have no paper folders. The initial 

application and supporting documents will be entered into the eDib system at the fi eld offi ce 

and transmitted electronically to the State Disability Determination Service. Currently, all SSA 

fi eld offi ces are using this electronic system for initial claims and reconsiderations. There is also 

increased emphasis on Internet and telephone claims.

At the DDS level, the claim is received electronically and medical evidence is incorporated 

into an electronic folder by scanning paper evidence (locally or through the use of a remote 

contractor), or by receipt of electronic evidence directly from the medical providers (by fax, 

through a secure website, or by transmission of evidence in a native electronic format). As of the 

end of March 2006, 33 DDSs had fully implemented eDib to the extent that for nearly all cases 

electronic folders had completely replaced paper ones. The electronic folder is expected to be 

fully implemented in 2006. A new electronic case processing system that is integrated into SSA’s 

eDib system has also been developed for the appeals process.

_________________________

11The Social Security Advisory Board submitted comments on these regulations. The Board’s comments can be 

seen on its website: www.ssab.gov.

111
The implementation of a thoroughly electronic disability claim system, including an 

electronic claims folder, is expected to result in many improvements to the process including:

• reduced delays in transmitting claims folders among and within offi ces;

• quicker receipt of medical evidence;

• substantial savings in postage and storage costs;

• elimination of time-consuming rearrangement of folder contents to meet the needs of 

different stages of the process;

• elimination of the problem of lost folders that can both cause delays in processing and 

prevent proper evaluation of prior claims;

• elimination (because of the use of digital recording) of the problem of lost or inaudible 

hearing tapes that can require re-hearing of cases;

• facilitation of simultaneous rather than sequential case evaluation where multiple reviews 

are required (for example, where a case involves both orthopedic and mental issues); and

• facilitation of case consultation or other review by individuals located remotely from the 

offi ce with jurisdiction over the case.

Disability Service Improvement

The “new approach” to adjudication described in the July 27, 2005 Federal Register notice, 

and renamed Disability Service Improvement (DSI) in the March 31, 2006 fi nal regulations has 

the expressed objectives of:

• reducing average disability determination processing time;

• increasing decisional consistency and accuracy;

• ensuring that the right decision is made as early in the process as possible;

• ensuring that adjudicators at every step of the process are held responsible for quality of 

adjudication; and

• ensuring that claimants provide all material evidence on a timely basis.

The major elements of the new approach are:

• a “quick decision” process designed to identify and approve within 20 days claims for 

which an allowance is obviously appropriate;

• creation of a Medical and Vocational Expert System (MVES) that would be a network 

of medical and vocational experts (including both Federal and State employees and 

consultants) to provide consultation and evaluation for claims at all levels, and the 

establishment of Federal standards for the qualifi cation and payment rates for medical 

and vocational experts;

• replacing the reconsideration step of the appeals process (which is handled by State 

Disability Determination Services) with a new reviewing offi cial step that would be 

handled by a Federal employee (an attorney) often in consultation with the MVES;

• replacing the Appeals Council with a Decision Review Board that would select and 

review a sample of hearing cases and eliminating the right of claimants who are 

dissatisfi ed with the results of a hearing to request further administrative review (except 

where the hearing request was dismissed without a decision and in certain other limited 

cases);

• the introduction of several new or modifi ed procedural rules (including rules relating to 

112
the specifi city and clarity of decision notices), the responsibility of adjudicators to explain 

how their decision relates to determinations at earlier stages, the completeness and 

timeliness of evidence, the bases for seeking good cause determinations (for example, for 

missing fi ling or evidence submission deadlines), and the closing of the record;

• the adoption of a new system of in-line and end-of-line quality review and increased 

Federal involvement in training of those involved in the adjudicatory process at all levels; 

and

• the establishment of a Disability Program Policy Council with representation from all 

components involved in the program including all levels of adjudication to make policy 

and procedural recommendations.

Quick Decisions – Under the DSI regulations, States will establish a quick disability 

determination process for those who are obviously disabled. Appropriate claims will be 

identifi ed and referred directly to special units in the State agencies for expedited action. Claims 

will be directed to these units by the Social Security Administration on the basis of a predictivemodel software screening tool that identifi es claims that have a high probability of being allowed 

and that have readily available evidence. States would be required within 20 days either to allow 

these claims or reassign them to the regular adjudication system. States are required to complete 

State-level processing of at least 98 percent of all Quick Decision Cases within 20 days. The 

MVES will have to verify that there is suffi cient medical evidence to support the decision.

MVES and Standards – Under the existing adjudication system, claims are jointly 

adjudicated by lay disability examiners employed by the State and by medical or psychological 

consultants who are State employees or contractors. In certain “single decision maker” States 

certain categories of cases are now adjudicated by disability examiners alone. Where there 

is insuffi cient medical evidence to reach a decision, States also contract with outside medical 

sources to conduct consultative examinations of the claimant. Some States also employ 

vocational specialists. At the hearing level, a consultative examination can also be requested 

(generally arranged and paid for by the State agency), and the administrative law judge can also 

utilize a medical or vocational expert (arranged and paid for by the hearing offi ce).

The new DSI regulations will establish a Medical and Vocational Expert System that oversees 

a national network of medical and vocational experts. Qualifi cation standards are to be issued by 

the Commissioner. State medical and vocational consultants who meet those standards may be 

a part of the MVES and must, in any case, meet the standards by one year after the standards are 

published in order for States to continue receiving reimbursement for their compensation. The 

MVES will be used by all levels of administrative adjudication to meet their needs for medical 

and vocational expertise and payment for their services will be at rates set by the Commissioner. 

The prototype experiment under which several States are making decisions as single decision 

makers (without a medical consultant signoff) will end.

Federal Reviewing Offi cial – State Disability Determination Services will no longer provide 

reconsideration for claimants dissatisfi ed with the initial decision. Instead, claimants denied at 

the initial level by the State agency will have the opportunity to appeal to a Federal reviewing 

offi cial. The reviewing offi cial will make a new decision on the claim on the basis of the 

evidence in the fi le and issue a written explanation of the reasons for agreeing or disagreeing 

with the State agency decision. As in the existing State-level reconsideration process, there will 

be no face-to-face meeting with the claimant. Claimants will be permitted to submit additional 

113
evidence, and the reviewing offi cial will also be able to obtain this evidence, using subpoena 

power if necessary. The reviewing offi cial will affi rm the original decision of the State agency, 

or reverse that decision. Reviewing offi cials will not remand cases back to the State agency 

but may ask the State agency to provide additional evidence or to clarify its decision. If there 

is new and material evidence, the reviewing offi cial will be required to consult with a medical, 

vocational, or psychological expert in the MVES. Such consultation will also be required if 

the reviewing offi cial’s decision is to reverse the State agency denial. The introduction to the 

regulations indicates an intent on the part of SSA to use attorneys for the reviewing offi cial 

position and to send a copy of each reviewing offi cial decision to the State agency for quality 

management purposes.

Administrative Law Judge Hearing – Claimants wishing to appeal an unfavorable 

reviewing offi cial decision can ask for a hearing before an administrative law judge who would 

make a new decision on the claim. The regulations do not modify the basic structure of the 

administrative law judge hearing but do propose a number of signifi cant procedural changes. 

The administrative law judge will set a time and place for the hearing, and the claimant will be 

notifi ed at least 75 days in advance of the hearing date. The claimant will have to submit any 

additional evidence to be considered at the hearing no later than 5 days prior to the hearing. 

Evidence can be submitted after this deadline only if certain good cause requirements are shown. 

The proposed regulations specifi cally authorize administrative law judges to require prehearing 

statements from the claimant, to subpoena testimony and documents, and to conduct pre- and 

post-hearing conferences (generally by telephone). Failure to appear at these conferences could 

result in a dismissal. The administrative law judge would be required to include in the decision 

a discussion of why it accepted or differed from the decision of the reviewing offi cial. The 

introduction to the regulations indicates that this discussion would be used to provide feedback to 

the reviewing offi cial.

Decision Review Board – Under current regulations, claimants who are dissatisfi ed with the 

results of a hearing may request a review of the hearing decision by the Appeals Council. The 

Council may accept or decline the request for review. The Council may also, on its own motion, 

decide to review hearing decisions including decisions that were unfavorable to the claimant 

and decisions that were favorable. Under the new regulations, claimants would no longer have 

the right to request an administrative review of the hearing decision. Instead, the Appeals 

Council would be replaced by a Decision Review Board (DRB) that would select the cases (both 

allowances and denials) to review. The DRB could also review, for the purpose of clarifying 

policy, cases that deal with problematic issues. The DRB would be composed of administrative 

law judges and administrative appeals judges.

Between 60 thousand and 70 thousand hearing cases each year are dismissed without a 

hearing decision for a variety of reasons such as failure of the claimant to appear or cooperate, 

late fi ling, or absence of an issue appropriate for a hearing. Dismissals are not subject to appeal 

to the court, but claimants currently have the right to ask the Appeals Council to review the 

dismissal. If the administrative law judge dismisses the request for a hearing, the claimant 

would have 30 days from the notice of dismissal to ask the administrative law judge to vacate 

the dismissal. If the administrative law judge upholds the dismissal, the claimant could ask for a 

review by the Decision Review Board.

The Social Security Act provides that claimants may seek relief in Federal District Court 

if they are dissatisfi ed with the fi nal decision of the Commissioner after exhausting the 

114
administrative appeals available. Under the prior regulations, the decision becomes eligible 

for appeal to the court when the Appeals Council has made an adverse decision on the case or 

has rejected the claimant’s request for Appeals Council review. Under the new regulations, the 

administrative law judge’s decision will be the fi nal decision of the Commissioner unless the 

Decision Review Board selects the claim for review. If the Decision Review Board selects the 

claim for review, it must reach a decision within 90 days of notifying the claimant that it has 

taken jurisdiction. If it does not reach a decision within 90 days, the administrative law judge’s 

decision becomes fi nal and subject to appeal to the court.

Closing of the Record – Under current regulations, new evidence can be introduced at any 

point in the administrative adjudication process with the exception that, at the Appeals Council 

level of review, the evidence must relate to the claimant’s eligibility for periods prior to the date 

of the hearing decision, and must be new and material. At the court level, the statute permits the 

court to admit new and material evidence but only if there is good cause for its not having been 

previously provided.

The new regulations would generally require evidence to be submitted by 5 days prior to the 

date of the hearing Exceptions would be made only if the claimant is unable (for specifi ed “good 

cause” reasons) to submit the evidence by the deadline No new evidence can be submitted 

once the Decision Review Board decides to review an ALJ decision. Claimants may submit a 

statement indicating why they disagree with the hearing decision. If the Decision Review Board 

fi nds that the ALJ decision is not supported by substantial evidence, it will remand the case to the 

ALJ for further development. Courts would continue to be allowed to accept new and material 

evidence on a good cause basis since that is authorized by statute.

Reopening – Once a decision on a Social Security claim has become fi nal it is not subject 

to revision, but, under certain specifi ed conditions, a “fi nal” claim can be reopened. Under 

current regulations, a fi nal decision can be reopened for any reason within 12 months of the 

initial decision and within 4 years for certain good cause reasons, including new and material 

evidence. The decision can be reopened at any time for more limited reasons such as when 

evidence indicates that fraud was involved, or if the issue relates to the crediting of wages. The 

new regulations retain existing re-opening rules except that the fi nal ALJ hearing decision can be 

re-opened for good cause only within six months of the hearing decision, and new and material 

evidence will not constitute good cause for re-opening the hearing decision.

115
116
IV. MAJOR SOCIAL SECURITY ACT 

DISABILITY LEGISLATION

Aid to Permanently and Totally Disabled, 1950 (P.L. 734, 81st Congress)

The Social Security Amendments of 1950 provided for Federal fi nancial assistance to States 

for programs designed for “aid to the permanently and totally disabled.” Aid in this case meant 

“money payments to, or medical care on behalf of, or any type of remedial care recognized under 

State law in behalf of” needy disabled adults. The conference committee report noted that it was 

assumed that States would assure that “every individual for whom vocational rehabilitation is 

feasible will have an opportunity to be rehabilitated.”

Disability Freeze, 1954 (P.L. 761, 83rd Congress) and 1952 (P.L. 590, 82nd Congress)

The Social Security Amendments of 1954 included a provision designed to prevent the 

erosion of retirement and survivors benefi ts as a result of a worker having a period of disability. 

This disability freeze excluded from benefi t computations any quarter in which the worker 

was disabled. For purposes of the freeze, disability was defi ned as the “inability to engage in 

any substantial gainful activity by reason of any medically determinable physical or mental 

impairment which can be expected to result in death or be of long-continued and indefi nite 

duration” or blindness.

This legislation did not create a program of disability benefi ts. The law specifi ed that the 

determinations of disability would be made by State agencies under agreements with the Social 

Security Administration. (A similar freeze provision was enacted into law in the 1952 Social 

Security amendments but expired before it went into effect. That legislation defi ned disability as 

the inability to engage in any substantial gainful activity by reason of any medically determinable 

physical or mental impairment “which can be expected to be permanent,” or blindness.)

Social Security Disability Program, 1956 (P.L. 880, 84th Congress)

In its report on the 1956 amendments, the House Ways and Means Committee said, “...the 

covered worker forced into retirement after age 50 and prior to age 65 should not be required to 

become virtually destitute before he is eligible for benefi ts....there is as great a need to protect 

the resources, the self-reliance, the dignity and the self-respect of disabled workers as of any 

other group.”

The 1956 amendments provided for Social Security Disability Insurance (DI) benefi ts for 

workers between the ages of 50 and 65 who were found to be unable to engage in substantial 

gainful activity due to a medically determinable physical or mental impairment which is 

expected to result in death or which is of long-continued and indefi nite duration.

Benefi ts for the dependents of disabled workers were added in 1958 (P.L. 85-840), and 

benefi ts were extended to workers under age 50 in 1960 (P.L. 86-778).

Changes in the Defi nition of Disability, 1965 (P.L. 89-97)

The Social Security Amendments of 1965 changed the duration of disability required for 

benefi ts from “long-continued and indefi nite duration” to “has lasted or can be expected to last 

for a continuous period of not less than 12 months.”

117
These amendments also changed the defi nition of disability for the blind over age 55 by 

specifying that they would be eligible if unable to engage in work requiring skills comparable to 

those of past occupations.

Clarifi cation of Defi nition, 1967 (P.L. 90-248)

In response to a series of court decisions, the Social Security Amendments of 1967 clarifi ed 

the defi nition of disability by specifying that a person must not only be unable to do his or her 

previous work but also be unable, considering age, education and work experience, to do any 

work that exists in the national economy, whether or not a vacancy exists or the person would 

be hired to fi ll such a job. The amendments also specifi ed that the disability had to result from 

“anatomical, physiological, or psychological abnormalities that are demonstrable by medically 

acceptable clinical and laboratory diagnostic techniques.”

Federal SSI Program, 1972 (P.L. 92-603) 

The Federally-aided State programs of aid to the aged, blind and disabled were replaced 

by the Supplemental Security Income program to be administered by the Social Security 

Administration. Disability benefi ts were also provided for children with impairments of 

comparable severity to those of adults. States were permitted to provide supplementary 

payments, administered either by the states or by SSA.

Social Security Disability Reforms of 1980 (P.L. 96-265)

The Disability Insurance and the SSI disability programs experienced rapid and unanticipated 

growth in the 1970s. The Social Security Disability reforms of 1980 included provisions that 

limited the amount of benefi ts under the DI program and made a number of changes in the way 

the programs were administered.

A major provision of the amendments limited total DI benefi ts to the lesser of 85 percent 

of Average Indexed Monthly Earnings or 150 percent of the Primary Insurance Amount. The 

amendments required SSA to review a specifi ed percentage of State DDS allowances on a preeffectuation basis; provided for the agency to partially or completely take over from a State DDS 

the function of making disability determinations if the DDS failed to follow Federal regulations 

and guidelines or if the State no longer wished to make the determinations; required the agency 

to make own-motion reviews of ALJ decisions; and required continuing disability reviews of DI 

benefi ts for non-permanently disabled benefi ciaries at least every three years.

The amendments contained a number of provisions designed to encourage DI and SSI 

disability benefi ciaries to return to work, including continuation of benefi ts while the benefi ciary 

is in vocational rehabilitation, the disregard of certain work-related expenses, and expeditious reentitlement to benefi ts for individuals whose attempts to return to work prove unsuccessful. The 

amendments also included temporary authority for return-to-work demonstration projects. This 

authority was extended several times.

Procedural Amendments of 1983 (P.L. 97-455)

These amendments required that benefi ciaries found to be no longer eligible be given the 

opportunity for an evidentiary hearing at the reconsideration level. In addition, the amendments 

provided for the continuation of benefi t payments during appeal of a termination decision 

through the ALJ level. These provisions were adopted on a temporary basis and were extended 

several times and ultimately made permanent.

118
The Disability Benefi ts Reform Act of 1984 (P.L. 98-460)

The report of the Senate Finance Committee noted that “the review process mandated under 

the 1980 amendments has resulted in some signifi cant problems and dislocations which were not 

anticipated and which contributed to an unprecedented degree of confusion in the operation of 

the program.”

The Disability Benefi ts Reform Act of 1984 made a number of changes in the program. 

Included in the changes was the establishment of a medical improvement standard for 

terminating benefi ts in most cases. This act also wrote into the law, for a temporary period, 

SSA’s criteria for evaluating pain and required the consideration of the cumulative effect of 

multiple disabilities. The Secretary of HHS, in conjunction with the National Academy of 

Sciences, was required to conduct a study on the use of subjective evidence of pain as well 

as on the state of the art of preventing, reducing or coping with pain. The Secretary was also 

required to establish uniform standards for determining disability that would apply at all levels of 

determination, review, and adjudication.

Another provision required the publication of revised mental impairment criteria and the 

suspension of periodic reviews of mental impairment cases pending that publication. Other 

provisions related to the disability determination and review processes, including a continuation 

of the provisions relating to face-to-face reconsiderations in continuing disability reviews and 

payments during appeal. The amendments added a new requirement for a pre-review notice to 

benefi ciaries informing them that their continuing eligibility was being reexamined.

Procedural Amendment of 1990 (P.L. 101-508)

The Omnibus Budget Reconciliation Act of 1990 changed the percentage of favorable State 

agency decisions that must be reviewed by SSA from 65 percent to 50 percent and also stated 

that a suffi cient number of unfavorable determinations should be reviewed to ensure a high 

degree of accuracy. This legislation also made permanent the provisions for continued payment 

during appeal of adverse continuing disability reviews.

Benefi ts for Drug Addicts and Alcoholics were restricted in 1994 (P.L. 103-296) and 

subsequently eliminated in 1996 (P.L. 104-121)

Following widespread allegations that the DI and SSI disability programs were being used 

by drug addicts and alcoholics to support their substance abuse, Congress ordered the General 

Accounting Offi ce to study the issue. The GAO report said the number of substance abusers on 

the rolls had increased signifi cantly and that SSA had not adequately enforced the requirement 

that they receive treatment for the addiction.12 Congress consequently placed restrictions on 

benefi t eligibility for addicts and alcoholics in 1994. These restrictions included: requiring the 

appointment of a representative payee for all addicts and alcoholics, mandatory treatment for the 

addiction or alcoholism, suspension of benefi ts for refusing available treatment, and termination 

of benefi ts after 36 months of benefi ts for SSI benefi ciaries and 36 months of treatment for DI 

benefi ciaries.

_________________________

12 U.S. General Accounting Offi ce. Social Security: Major Changes Needed for Disability Benefi ts for Addicts. 

HEHS 94-128. May 1994.

119
In 1996, the Contract with America Advancement Act provided that individuals could not 

be found disabled for purposes of DI or SSI if drug addiction or alcoholism was a “contributing 

factor material to the determination of disability.” Drug addicts and alcoholics who were 

disabled as a result of other causes would still be eligible.

Restrictions on SSI Childhood Disability, 1996 (P.L. 104-193)

In the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Welfare 

Reform), a stricter defi nition of eligibility for childhood disability benefi ts was enacted. This 

new standard provided that the child have “a medically determinable physical or mental 

impairment which results in marked and severe functional limitations.” Individual functional 

assessments were eliminated, as was the reference in the listings to “maladaptive behavior.”

Ticket to Work, 1999 (P.L. 106-170)

The Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA) created a 

program under which Social Security and SSI disability benefi ciaries could receive a ticket with 

which to obtain vocational rehabilitation and other employment support services from providers 

of their choice.

It also provided for expedited re-entitlement to benefi ts for persons who were terminated 

due to work activity and extended the period during which a disabled benefi ciary could continue 

receiving Medicare benefi ts while working. The Ticket Act expanded state authority originally 

granted under the 1997 Balanced Budget Act to provide Medicaid coverage to working people 

with disabilities who, because of income and assets, would not otherwise qualify for Medicaid 

coverage. This program is commonly referred to as “Medicaid Buy-in” because working 

individuals pay a premium for Medicaid coverage. TWWIIA also provided for several 

demonstration projects including one to examine the effect of a benefi t reduction of $1 for each 

$2 of earnings for DI benefi ciaries.

Social Security Protection Act of 2004, (P.L. 108-203)

The Social Security Protection Act of 2004 included a wide variety of provisions, some of 

which were related to the work incentives and assistive services stemming from the Ticket to 

Work and Work Incentives Improvement Act of 1999. These included a technical amendment 

to the Ticket Act, expanded waiver authority in connection with demonstration projects and 

mandated that SSA issue a receipt to disabled benefi ciaries each time they report their work and 

earnings. The Act also allows Benefi ts Planning, Assistance and Outreach (BPAO) services and 

Protection and Advocacy (P&A) services to be provided to benefi ciaries in SSI 1619(b) States, 

those individuals receiving a (SSI) State supplement payment, and those that are in an extended 

period of Medicare eligibility.

120
V. CHRONOLOGY OF SIGNIFICANT JUDICIAL, 

LEGISLATIVE, AND AGENCY ACTIONS THAT 

HAVE AFFECTED THE DISABILITY 

ADJUDICATION PROCESS

Following is a chronology of major court cases, legislation and agency regulations and 

rulings that have affected the way disability determinations are made. Over the years, there 

have been a variety of external factors that have affected the amount and type of litigation. For 

example, the Legal Services Corporation, which once was responsible for numerous class action 

suits, was in 1996 restricted from undertaking class actions. The Equal Access to Justice Act of 

1980 (EAJA), which provides for government payment of a claimant’s attorney fees if it is found 

that the government’s position is not substantially justifi ed or that it litigated in bad faith has 

had an impact on court case activity. In a large portion of district court cases that are lost by the 

agency, a fee petition under EAJA is fi led and settled.

1960 In Kerner v. Flemming, the Second Circuit Court of Appeals held that when a claimant 

had shown that he could not do his past work, the burden of proof shifted to the 

government to show what the claimant could do and what employment opportunities 

there were for someone who was limited in the same way as the applicant. The change in 

the burden of proof gradually crept into all levels of disability adjudication over the next 

5 years.

1963 The Fifth Circuit Court of Appeals required the consideration of pain even though the 

cause of the pain cannot be demonstrated by objective clinical and laboratory fi ndings. 

By 1967, 4 other circuit courts of appeals had issued similar holdings.

1965 Appeals courts in 2 circuits required the government to show that jobs are available in the 

claimant’s area when denying a claim on the basis of ability to do other work.

1967 The Congress responded to court decisions on pain by defi ning impairment for 

DI purposes as one “that results from anatomical, physiological or psychological 

abnormalities which are demonstrable by medically acceptable clinical and laboratory 

diagnostic fi ndings.” It also stated that disability included inability to “engage in any 

kind of substantial gainful work which exists in the national economy,” regardless of 

whether such work was available locally. Judicial reversals of appealed SSA decisions 

dropped from about 59 percent in 1967 to about 30 percent in 1973.

The Fourth Circuit in Leftwich v. Gardner held that a claimant was under a disability 

despite the fact that his work activity under regulations constituted “substantial gainful 

activity.” In the 1967 amendments, Congress enacted specifi c regulatory authority to 

override this holding.

1970 In Goldberg v. Kelly, the Supreme Court held that due process required that public 

assistance recipients have an opportunity for an evidentiary hearing before termination of 

their benefi ts.

121
1971 In Richardson v. Perales, the Supreme Court held that a written report of a consultative 

physician could constitute substantial evidence to support a decision adverse to an 

applicant for disability benefi ts.

1975 In Cardinale v. Mathews, the District Court for the District of Columbia decided that 

SSA’s procedures for reducing or terminating SSI benefi ts did not properly apply the 

principles of the Goldberg decision of 1970. The SSI procedures did not require advance 

notice and an offer of a hearing when a reduction of benefi ts resulted from a change in 

Federal law, a clerical or mechanical error, or facts supplied by the benefi ciary. The 

Court found that all those exceptions violated the constitutional requirement for due 

process.

1976 In Mathews v. Eldridge, the Supreme Court stated that Goldberg standards did not apply 

to DI benefi ts.

1980 The reports of the Ways and Means and Finance Committees on the 1980 amendments 

stated that the courts should follow the statutory “substantial evidence rule” in giving 

deference to administrative agency evaluations of the evidence. Congress was also 

concerned about the large number of court remands and enacted a requirement of 

a showing of good cause when remanding cases at the request of the agency and a 

requirement, in the case of court remands for additional evidence, that there must be a 

showing that there was new and material evidence and that there was good cause for 

failure to incorporate it into the record previously.

1981 The Ninth Circuit Court of Appeals in Finnegan v. Mathews restricted SSA’s ability 

to terminate SSI payments to benefi ciaries who had been grandfathered into the SSI 

program from the former State-run program. SSA issued a non-acquiescence ruling, a 

statement that it would not apply the decision beyond the case at hand, on the grounds 

that the court’s standard would be impossible to administer.

1982 The Ninth Circuit Court of Appeals in Patti v. Schweiker ruled that SSA could not 

terminate benefi ts to an SSI disability benefi ciary unless it showed that the benefi ciary’s 

condition had improved. SSA issued a non-acquiescence ruling.

1983 Congress provided for a due process hearing before termination of benefi ts of disability 

benefi ciaries.

 The Supreme Court in Heckler v. Campbell upheld SSA’s use of its vocational grid 

regulations. The Second Circuit had earlier held its use invalid. SSA had published in 

1979 regulations designed to aid in more objective assessment of applicants’ residual 

functional capacity and vocational factors (age, education, and work experience) in 

determining ability to work. The regulations provided a vocational “grid” as a way of 

meeting the burden of showing that there are jobs in the national economy that a claimant 

can perform.

1984 In the Hyatt class action, the District Court for the Western District of North Carolina 

found SSA’s policy on pain to be contrary to Fourth Circuit law and enjoined the agency 

from refusing to follow the law of the circuit.

122
 By the end of 1984, every circuit court had held that SSA should apply a medical 

improvement standard before terminating disability benefi ts. The Ninth Circuit enjoined 

SSA to follow its rulings in Finnegan and Patti. District courts received 28,000 disability 

appeals (compared to 5,000 in 1975), many of them appeals of benefi t terminations. The 

rate of reversals and remands increased to 62 percent (compared to 19 percent in 1975).

The Disability Benefi ts Reform Act of 1984 required substantial evidence of improvement 

and ability to work as grounds to terminate benefi ts. The Act also incorporated into the 

statute an amendment that was based on SSA’s policies on the evaluation of pain. This 

amendment, which was to apply to decisions made through 1987, required medical signs 

or fi ndings showing the existence of an impairment that could be expected to produce the 

pain alleged. The Act also provided for a Commission on Pain to study the question, with 

the expectation that it would recommend the extension or replacement of the temporary 

amendment on pain.

1985 In Stieberger v. Heckler, the District Court for the Southern District of New York ruled in 

a class action suit that SSA had violated the rights of claimants by not following circuit 

court law on the weight to give to evidence from the claimant’s treating physician. The 

Court issued an injunction against denying or terminating benefi ts under policies that did 

not conform to circuit court law. The Stieberger class action was fi nally settled in 1992.

SSA began its policy of issuing acquiescence rulings explaining how it would apply 

the decisions of courts of appeals that it determined contained a holding that confl icted 

with its national rules for adjudicating claims. These rulings were binding only on the 

administrative law judges.

1986 In Schisler v. Heckler, the Second Circuit Court of Appeals stated that a treating 

physician’s opinion on the subject of medical disability is binding unless contradicted by 

substantial evidence.

The Supreme Court in Bowen v. Yuckert upheld SSA’s use of a minimum threshold of 

medical disability when denying benefi ts based on a non-severe impairment at step 2 of 

the sequential evaluation process.

The Commission on Pain (established in 1984) recommended additional research to 

obtain more reliable data and to develop methods to assess pain. It also recommended 

that the policy embodied in the 1984 temporary amendment on pain be continued until 

that research was completed.

1988 SSA issued a new ruling on pain that restated the existing policy in the 1984 amendments 

and provided guidance on how to develop evidence of pain and how to apply the policy at 

each step of the sequential evaluation process.

1989 Reviewing the Hyatt class action case on remand, the District Court for the Western 

District of North Carolina found that SSA’s published policies and instructions on pain, 

including its 1988 ruling, did not conform to circuit law. The District Court ordered those 

policies and instructions to be cancelled and drafted a new ruling on pain to be distributed 

to North Carolina adjudicators.

123
1990 The Supreme Court’s Sullivan v. Zebley decision ruled that SSA’s policy regarding 

disability determinations for children erroneously held children to a stricter defi nition of 

disability than adults. As a result of the Zebley decision, SSA issued regulations requiring 

an individualized functional assessment for children who did not meet or equal the 

medical listings.

SSA issued regulations explaining how it would implement the acquiescence policy it 

adopted in 1985 and stated that acquiescence rulings now applied to the State agencies.

Several circuit courts overruled the provision of law that required that widow(er)s had 

to meet or equal the medical listings. In the 1990 Reconciliation Act, Congress settled 

the matter by providing that widow(er)s would have the same eligibility requirements as 

workers, and thus would be evaluated under the full 5 steps of sequential evaluation in 

order to determine eligibility for benefi ts.

1991 SSA issued new regulations on the evaluation of pain and other symptoms and on the 

evaluation of opinions of claimants’ treating physicians. The pain regulation restated 

existing policy and included guidance on how this policy would be applied during 

the sequential evaluation process. The regulation on treating source opinion said the 

agency would give controlling weight to such opinions when they were well supported 

by medically acceptable clinical and laboratory diagnostic techniques and were not 

inconsistent with other substantial evidence in the case record.

1992- Four Statewide class action suits were fi led against State DDSs and/or SSA 

1997 alleging that improper policies and procedures were utilized in making disability 

determinations. The States involved were Iowa, Nebraska, Oregon, and Utah. The 

issues included development and consideration of treating source medical evidence and 

opinion; evaluation of subjective symptoms, including pain; evaluation of the credibility 

of an individual’s statements; appropriate use of vocational resources and evaluation of 

vocational evidence; and Federal oversight of the DDSs. All cases were settled with 

agreements which included redeterminations of certain previously denied claims and 

ongoing communications with plaintiffs’ representatives to discuss concerns related to the 

disability determination process.

1993 The Second Circuit Court of Appeals in Schisler v. Sullivan found that SSA’s 1991 

regulations on the opinions of treating physicians, while they departed in some ways from 

the Court’s earlier opinion, were a valid use of the agency’s regulatory power.

1994 A settlement was reached in the Hyatt class action case, under which 77,717 cases would 

be re-adjudicated by the agency under the 1991 regulations.

1996 SSA issued a set of 9 Social Security rulings commonly called process unifi cation rulings 

and provided training on the rulings for all disability adjudicators. The subjects of the 

rulings included the weight to be given to treating source opinions and other medical 

opinions, the evaluation of pain and other symptoms, the assessment of credibility and 

residual functional capacity, and the application of Federal court decisions.

1997 Following the enactment of the Personal Responsibility and Work Opportunity 

124
Reconciliation Act of 1996 (PRWORA), SSA issued interim fi nal rules to implement 

the childhood disability provisions. In accordance with the statutory amendments, the 

interim fi nal rules modifi ed the 1990 Zebley decision and deleted references to the former 

standard of “comparable severity.” Other revisions to the rules, including the elimination 

of the individualized functional assessment and the deletion of references to “maladaptive 

behavior,” were made as well. The interim fi nal rules defi ned the statutory standard 

of “marked and severe functional limitations” in terms of “listing-level severity,” i.e., 

an impairment that meets, medically equals, or functionally equals the severity of an 

impairment in the Listing of Impairments.

2001 SSA published fi nal rules to implement the childhood disability provisions of the 

PRWORA. The fi nal regulations continued to defi ne the statutory standard of “marked 

and severe functional limitations” as being marked limitations in two areas of functioning 

or an extreme limitation in one area, but they renamed and reorganized the broad areas 

of functioning (called “domains”). The fi nal rules also added a new domain, “health and 

physical well-being.”

2002 In Barnhart v. Walton, the Supreme Court held that SSA’s interpretation of the statutory 

defi nition of disability, which requires that a claimant’s impairment related inability to 

work must last, or be expected to last, 12 months, was based upon a lawful construction 

of the statute and entitled to deference. The Court also upheld SSA’s regulation 

precluding a fi nding of disability when a claimant returns to work within the 12 month 

period after onset of an impairment and prior to the agency making the initial decision on 

the application.

2003 In Barnhart v. Thomas, the Supreme Court held that SSA’s determination that a claimant 

was not disabled because she could return to her previous work, without investigating 

whether or not the previous work existed in signifi cant numbers within the national 

economy, was a reasonable interpretation of the Social Security Act and was entitled to 

deference.

 In the class action case of Encarnacion v. Barnhart, the Second Circuit Court of Appeals 

held that the Commissioner’s regulations requiring consideration of the combined impact 

of a child’s impairments are consistent with the Act. The Court stated that SSA’s policy 

of considering the impact of combined impairments within domains, but not across 

domains, when determining marked and severe functional limitations in children, was not 

a “plainly erroneous procedure.”

2004 SSA published a fi nal rule designed to conform existing Medicare eligibility regulations 

to a change made by the Ticket to Work and Work Incentives Improvement Act of 1999. 

The change allows for working disabled individuals, who engage in substantial gainful 

activity (SGA) after completing a trial work period, to receive continued Medicare 

entitlement for 78 months, an increase of 54 months beyond the previous limit of 24 

months.

125
126
VI. COMPONENTS WITHIN THE SOCIAL 

SECURITY ADMINISTRATION WITH 

RESPONSIBILITIES IN THE 

DISABILITY PROCESS

Nearly every staff component of the Social Security Administration has a role in 

administering the Social Security disability program. SSA employees are involved in many 

facets of the process, from writing informational pamphlets to holding administrative hearings. 

Outlined below is a list of SSA components and their responsibilities in the disability process. 

Offi ce of the Commissioner 

• The Commissioner is directly responsible for all programs administered by SSA, 

including the disability programs. She provides executive leadership to SSA. Among 

other things, her offi ce is responsible for development of disability policy, administrative 

and program direction, and program interpretation and evaluation. The Commissioner is 

responsible for ensuring to the public, the Congress, and the President that the disability 

programs are working as the law requires.

• The Executive Director for Disability Service Improvement reports directly to the 

Commissioner and serves as an advisor to the Commissioner on new initiatives for the 

disability program and helps draft legislation for these new initiatives.

Offi ce of Operations 

The Offi ce of Operations oversees the operation of SSA’s fi eld and regional offi ces, as well 

as several other components that provide support to the fi eld structure. The organizations listed 

here are the public face of SSA.

• Field offi ce employees take disability claims, provide information to claimants and 

potential claimants, and meet with the public to provide information about the disability 

programs.

• Regional offi ces have oversight responsibilities for the DDSs in their regions. They are 

the primary liaison between SSA and the DDSs. Some of their duties include: managing 

DDS workload and budget issues, providing support to DDS automation activities, 

and monitoring DDS performance. In addition, they also answer fi eld offi ce and DDS 

questions.

• The Offi ce of Central Operations (OCO) processes certain disability claims and 

maintains disability benefi ciary rolls after entitlement. OCO is responsible for the 

adjudication of disability claims fi led by persons in foreign countries.

• The Offi ce of Disability Determinations (ODD) is SSA’s lead component for State DDS 

workload and budget. By working closely with the regional offi ces, ODD provides 

guidance and oversight of the national disability workload and budget. Its responsibilities 

include:

▪ Developing and submitting budget proposals to SSA’s Offi ce of Budget for disability 

programs, initiatives, and mandates. This includes developing budgets for DDS 

operations and automation activities, based on DDS submissions.

127
▪ Planning, coordinating, and managing systems-related activities for DDS automation 

initiatives, including the development of user specifi cations.

▪ Analyzing, planning, distributing, and monitoring all DDS funding on a State-byState basis including establishing and monitoring workload and productivity targets 

for each DDS.

▪ Operating a fully functioning Federal Disability Determination Services that 

processes DDS workloads on a temporary or transitional basis and also evaluates the 

impact of policy and procedural changes in DDS operations.

Offi ce of Disability and Income Security Programs 

The staff components of the Offi ce of Disability and Income Security Programs carry much 

of the responsibility for program policy of the disability programs. Those offi ces and their 

responsibilities include:

• Offi ce of Income Security Programs

▪ The Offi ce of Income Security Programs develops, coordinates and promulgates 

Retirement and Survivors Insurance and Supplemental Security Income policies, as 

well as non-medical administrative policies that affect the adjudication of disability 

claims. It plays an important role in the disability program in that many individuals 

who fi le for retirement benefi ts also fi le for disability, and most individuals who apply 

for SSI are disabled.

▪ The offi ce develops agreements with States and other agencies that govern State 

supplementation programs and Medicaid eligibility. Additionally, OISP plays an 

important role as SSA’s lead for coordinating Medicare issues with the Centers for 

Medicare and Medicaid Services.

• Offi ce of Disability Programs 

▪ This offi ce plans, develops, evaluates, and issues the policies and procedures for 

the disability program. This includes providing guidance to the medical personnel 

working in central and regional offi ces as well as in the DDSs.

▪ It coordinates and provides policies, procedures, and process requirements in support 

of the electronic disability process (eDib).

▪ The offi ce conducts data analyses and develops studies to identify areas where policy 

clarifi cation is needed.

▪ It develops training programs for disability adjudicators.

• Offi ce of Employment Support Programs 

▪ The Offi ce of Employment Support Programs develops and administers policies 

that are designed to promote the employment of benefi ciaries with disabilities. 

In addition, OESP is responsible for the implementation of legislation related to 

employment support programs.

▪ The offi ce provides operational advice, technical support and direction to central 

offi ce, regional offi ce, and fi eld components in the implementation of employment 

support programs.

▪ It provides assistance in educating the public about disability program work 

incentives, rehabilitation, and other forms of employment support.

128
• Offi ce of Program Development and Research

The Offi ce of Program Development and Research provides broad program analysis 

and development in support of the disability programs. The offi ce carries out its mission 

by:

▪ Directing studies of program policy issues related to the development and evaluation 

of disability program initiatives and legislative and policy proposals.

▪ Identifying trends in the disability programs and compiling and analyzing data on 

aspects of the programs.

▪ Designing, implementing, and evaluating disability demonstration projects that target 

special populations and program issues.

• Offi ce of International Programs

▪ Staff in this offi ce develop and implement policies and coordinate activities relating 

to the operation of Social Security programs (including the disability programs) 

outside of the United States.

▪ OIP negotiates and administers international Social Security agreements which 

include the disability program.

▪ The offi ce provides training programs and technical consultation on Social Security 

programs, including the disability program, to Social Security offi cials and other 

experts outside of the United States.

Offi ce of Disability Adjudication and Review

The Offi ce of Disability Adjudication and Review provides the mechanisms by which 

individuals and organizations dissatisfi ed with determinations affecting their rights to and 

amounts of benefi ts may administratively appeal these determinations.

• The Offi ce of the Chief Administrative Law Judge manages and administers the 

nationwide network of hearing offi ces and supporting regional offi ces. The Chief 

Administrative Law Judge maintains channels of communication between the Deputy 

Commissioner and the Regional Chief Administrative Law Judges and the ALJ corps.

• The Offi ce of Appellate Operations consists of the Appeals Council and its support staff.

• The Offi ce of Policy, Planning and Evaluation plans, analyzes, and develops policy for 

the disability adjudication and review process.

Offi ce of Quality Performance

The Offi ce of Quality Performance directs the development of the agency quality 

management program, including in-line and end-of-line quality performance management. It 

works with other components to direct the agency-wide quality performance management 

program. It also provides oversight for SSA’s computer matching operations. 

• The Offi ce of Quality Control reviews, evaluates, and assesses the integrity and quality 

of the administration of SSA programs. It assesses the review of claims by the State 

DDSs, the Federal reviewing offi cials, the hearing offi ces, and the disability review 

boards. It recommends corrective changes in programs, policies, procedures, or 

legislation aimed at quality and productivity improvement or program simplifi cation.

129
• The Offi ce of Continuous Improvement promotes the sharing of information across 

organizational boundaries that allows managers to make informed decisions. It identifi es 

and addresses emerging quality issues and works with operating components to 

implement and facilitate quality improvements at all levels.

• The Offi ce of Quality Data Management serves as a clearinghouse for quality data 

management activities.

Offi ce of Budget, Finance, and Management

• The Offi ce of Budget prepares budgets and full-time equivalent allocations for all 

components within SSA, as well as for the DDSs.

• With input from other SSA components, the Offi ce of Acquisition and Grants prepares 

and manages contracts and grants for research projects, and other initiatives that that 

relate to disability.

• The Offi ce of Facilities Management manages offi ce space and fi le storage facilities on 

behalf of the agency. This includes fi eld offi ces, hering offi ces, and the program service 

centers where retirement, survivors and disability claims are processed.

Offi ce of the Chief Actuary 

• This offi ce prepares long- and short-range estimates regarding prevalence of disability, 

numbers of disability applicants, benefi ciaries, etc.

• It prepares long- and short-range estimates of the disability Trust Fund.

• It prepares cost estimates for legislative proposals.

• The offi ce provides program and other statistics to other SSA components for use in 

conducting studies, audits, and drafting policy statements.

Offi ce of the Chief Information Offi cer 

• The Offi ce of the Chief Information Offi cer develops the Information Resource 

Management Plan and defi nes the Information Technology vision and strategy for 

the Social Security Administration, which includes systems that operate the disability 

programs.

• The offi ce shapes the application of technology in support of SSA’s Strategic Plan. This 

is done with an eye on the future information technology needs of the Social Security 

programs, including the disability programs. The offi ce provides oversight of major 

information technology acquisitions to ensure they are consistent with SSA architecture 

and with the budget, and is responsible for the development of SSA information 

technology security policies.

Offi ce of the Chief Strategic Offi cer 

• This offi ce coordinates with all SSA components to develop and manage SSA’s Strategic 

Plan, which includes initiatives for the disability programs. 

• It also directs the development of SSA’s Annual Performance Plan and Annual 

Performance Report, and tracks SSA performance in relation to established performance 

measures, including disability program goals.

130
Offi ce of Communications 

• The Offi ce of Communications produces pamphlets, booklets, fact sheets, videos, and 

information kits about disability benefi ts.

• The offi ce is the primary liaison with the press, other government and non-government 

agencies, and disability advocates on issues relating to SSA’s activities.

• It responds to Congressional and White House correspondence and public inquiries on a 

variety of program issues, including requests from individuals regarding their claims for 

disability benefi ts.

Offi ce of the General Counsel 

• This offi ce defends SSA in disability cases before the courts.

• It works with other SSA components to write and interpret disability policy for the 

agency, based on court decisions, Congressional mandates, and agency initiatives.

• The offi ce advises the Commissioner on legal matters, including ones involving the 

disability program, and is responsible for providing all legal advice to the Commissioner, 

Deputy Commissioner, and all subordinate organizational components (except the Offi ce 

of the Inspector General) of SSA regarding the operation and administration of SSA.

Offi ce of Human Resources 

• The Offi ce of Human Resources is responsible for personnel services for the components 

that handle disability issues.

• It plans and produces training on disability and non-disability issues.

Offi ce of Legislation and Congressional Affairs 

• This offi ce serves as the focal point for all legislative activity in SSA, including those 

related to the disability programs. It analyzes legislative and regulatory initiatives and 

develops specifi c positions and amendments.

• With input from other SSA components, the offi ce develops legislative proposals 

regarding the disability programs. It is responsible for briefi ng Congressional staffs on 

SSA’s proposals and responding to questions raised about the disability programs.

• The offi ce answers questions from other SSA components regarding disability legislation. 

It provides advisory service to SSA offi cials on legislation of interest to SSA pending in 

Congress.

• It responds to other government organizations (e.g., the White House) about disability 

issues.

Offi ce of Policy 

• The Offi ce of Policy studies “big picture” disability issues (e.g., the effects of raising 

the retirement age on the Disability Insurance program) and works with other SSA 

components, Congress, advocates, and other government agencies to develop policy 

alternatives.

• It collects data related to Social Security disability programs and evaluates data for 

planning and other information purposes.

131
Offi ce of Systems 

• The Offi ce of Systems coordinates the planning and implementation of SSA’s computer 

infrastructure, software development, and electronic service delivery.

• It is responsible for the development of eDib (an agency-wide disability case processing 

system) and for the design and implementation of the electronic claims fi le.

• SSA’s telecommunications network services all components, including the DDSs, 

by providing electronic transmission of mission critical instructions, broadcasts, and 

administrative messages.

Offi ce of the Inspector General 

• This offi ce conducts audits of disability programs to ensure fi scal and program integrity, 

and also to ensure that program directives are met.

• It conducts fraud investigations of disability-related cases and issues.

132
133

VII. BIBLIOGRAPHY OF MATERIALS 

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137

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Wittenburg, David, and Pamela Loprest. “Ability or Inability to Work: Challenges in Moving 

Towards a More Work-Focused Disability Defi nition for Social Security Administration 
139

(SSA) Disability Programs.” Briefi ng paper prepared for the Ticket to Work and Work 

Incentives Advisory Panel, undated. www.ssa.gov/work/panel/panel_documents/pdf_

versions/Disability%20Defi nition-%20Draft2.pdf

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Wolfe, Jeffrey S., and Lisa B. Proszek. “Interaction Dynamics in Federal Administrative 

Decision Making: The Role of the Inquisitorial Judge and the Adversarial Lawyer.” The 

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Third Era of Social Security.” Social Security Bulletin 58 (1995): 1, 48-56.

As ongoing sources of information and data on the Social Security disability programs, we 

recommend the following websites:

• Social Security Advisory Board: www.ssab.gov

• Disability Research Institute: www.dri.uiuc.edu/

• SSA Offi ce of Policy: www.ssa.gov/policy/

• SSA Offi ce of the Chief Actuary: www.ssa.gov/OACT
140
141

Glossary

Administrative law judge (ALJ): SSA Administrative law judges conduct hearings and make 

decisions on cases appealed by claimants.

Administrative review process: The procedures followed in determining eligibility for and 

entitlement to benefi ts. The administrative review process consists of several steps, which 

usually must be requested within certain time limits and in the following order: 1) The DDS 

makes the initial decision on disability, and an SSA fi eld offi ce makes the initial decision on 

non-disability factors, such as insured status, income, and resources. 2) Reconsideration: When 

an individual disagrees with the initial determination, the individual may ask for an independent 

reexamination of her/his case. 3) Hearing before an administrative law judge (ALJ): When an 

individual disagrees with the reconsidered determination, he or she may request a hearing before 

an ALJ. 4) Appeals Council review: When an individual disagrees with the decision or dismissal 

of the ALJ, he or she may request that the Appeals Council review that decision. The Appeals 

Council may agree to or reject the request for review and may also initiate a review on its own 

motion. Individuals who disagree with a fi nal administrative decision may pursue their appeals 

through the Federal District Court, the Circuit Court of Appeals, and the Supreme Court. See 

the description of Disability Service Improvement in the section titled “Agency Initiatives Since 

2001” for a discussion of changes that will be made in the administrative review process.

ALJ: See administrative law judge.

Allowance rate: The percentage of claims allowed in a given time period. At the hearing level, 

allowance rates are computed either as a percentage of dispositions (including dismissals) or as a 

percentage of decisions (excluding dismissals).

Appeals Council: The organization that makes the fi nal decision in the administrative review 

process. See administrative review process. 

Attrition rate: The number of full-time staff separations during a fi scal year divided by the 

average full-time staff level for the year.

Average: Values shown as averages in this chart book are arithmetic means.

Award: An action adding an individual to the Social Security benefi t rolls.

Benefi ciary: An individual on the Social Security benefi t rolls.

Claimant: An individual who has applied for benefi ts and whose claim is still pending.

Concurrent claim: A claim for both Title II (OASDI) and Title XVI (SSI) benefi ts.

Consultative examination (CE): A physical or mental examination purchased by SSA from 

a treating source or another medical source. The examination is usually purchased when the 

claimant’s medical sources cannot or will not provide SSA with suffi cient medical evidence 

about the individual’s impairment.
142

Continuing disability review: A periodic reevaluation of a disabled benefi ciary’s impairments 

to determine if the person is still disabled within the meaning of the law. See medical 

improvement review standard.

Conversion: The simultaneous cessation of payment of a specifi c type of benefi t and a switch 

over to entitlement of the benefi ciary to another type of benefi t. Title II disabled worker 

benefi ciaries are converted to retirement benefi ts when they attain normal retirement age.

Cost per case: Total funding obligated by a DDS divided by the total number of cases processed 

by the DDS.

DDS: See Disability Determination Services.

Decision Review Board (DRB): As part of Disability Service Improvement, the Decision 

Review Board will be phased in as a replacement for the Appeals Council in the administrative 

review process. The DRB will select and review a sample of hearing cases. With some 

exceptions, claimants who are dissatisfi ed with the results of a hearing will not be able to request 

administrative review by the DRB.

Decisional accuracy: SSA measures the accuracy of DDS initial decisions through a quality 

assurance review process. This process randomly samples DDS decisions to capture 70 initial 

allowances and 70 initial denials per quarter for each DDS. The accuracy rate is based on 

the percentage of cases sampled that have neither a decisional defi ciency (where the case 

fi le contains suffi cient documentation to support an opposite decision) nor a documentation 

defi ciency (where the medical documentation in fi le is not suffi cient to support any disability 

determination).

Disability Insurance (DI): Disability Insurance under Title II of the Social Security Act.

DI worker: An individual entitled to Disability Insurance benefi ts based on her/his own earnings 

record.

Disability: For purposes of Title II (OASDI) benefi ts and of Title XVI (SSI) benefi ts for adults, 

disability is the inability to engage in any substantial gainful activity by reason of any medically 

determinable impairment which can be expected to result in death or can be expected to last for a 

continuous period of not less than 12 months. A person must not only be unable to do his or her 

previous work but cannot, considering age, education, and work experience, engage in any other 

kind of substantial gainful work that exists in the national economy. It is immaterial whether 

such work exists in the immediate area, or whether a specifi c job vacancy exists, or whether the 

worker would be hired if he or she applied for work. For SSI disabled child benefi ts, a child 

under age 18 is considered disabled if he or she has any medically determinable physical or 

mental impairment(s) which result(s) in marked and severe functional limitations, and which can 

be expected to last for a continuous period of not less than 12 months.

Disability Determination Services (DDS): The State agency which makes the initial and 

reconsideration determination of whether or not a claimant is disabled or a benefi ciary continues 

to be disabled within the meaning of the law.
143

Disability examiner: An employee of a State DDS who collects and analyzes medical evidence 

and, in conjunction with a medical professional, makes the determination on a claimant’s 

disability.

Disability Service Improvement (DSI): The new approach to disability adjudication put into 

effect by regulation on March 31, 2006. Disability Service Improvement will be implemented in 

SSA’s Boston region in August 2006 and is expected to be implemented in all of SSA’s regions 

over a period of about 5 years.

Duration: To be eligible for benefi ts, a claimant must have a disabling impairment that has 

lasted or is expected to last for a continuous period of at least 12 months or to result in death. 

See sequential evaluation process.

eDib: SSA’s electronic disability case processing system that allows the agency to process claims 

in a fully electronic environment. Paper copies of any evidence or documents are converted to 

and stored in an electronic format.

Equals the listing: A step in the sequential evaluation process. An impairment may be found to 

be “medically equivalent” to an impairment(s) found in the Listing of Impairments if the relevant 

medical signs, symptoms, and laboratory fi ndings are equal in severity to those of a listed 

impairment. See sequential evaluation and Listing of Impairments.

Examiner: See Disability examiner.

Federal Reviewing Offi cial: As part of Disability Service Improvement, attorneys will function 

as Federal Reviewing Offi cials and will review the initial determination upon the request of the 

claimant. This review replaces the reconsideration step of the administrative review process. 

Hearing: The level following reconsideration in the administrative review process. The hearing 

is a de novo procedure at which the claimant and/or the representative may appear in person, 

submit new evidence, examine the evidence used in making the determination under review, give 

testimony, and present and question witnesses. The hearing is on the record but is informal and 

non-adversarial.

Hearing offi ce: One of the 140 offi ces around the country where hearings are held.

Incidence: The number of persons awarded benefi ts in a specifi ed period of time, per 1,000 of a 

specifi ed population. For DI benefi ts, the incidence rate is the number of awards in a given year 

per 1,000 persons insured for disability benefi ts.

Listing of Impairments: The Listing of Impairments contains specifi c medical fi ndings 

that either establish a diagnosis or confi rm the existence of an impairment. The Listing of 

Impairments is divided into 2 parts─Part A describes, for each major body system, impairments 

that are considered severe enough to prevent an adult from doing any gainful activity. Part B 

contains additional criteria that apply only to the evaluation of impairments of persons under the 

age of 18. An impairment that meets or equals the criteria in the listings is suffi cient to establish 

that an individual who is not working is disabled within the meaning of the law. See sequential 

evaluation.
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Medical and Vocational Expert System: Part of Disability Service Improvement, a network of 

medical and vocational experts to provide consultation and evaluation for claims at all levels.

Medical expert (ME): A physician or mental health professional who provides impartial expert 

opinion at the hearing level of the SSA disability claims process. 

Medical improvement review standard: The evaluation criteria used to determine whether or 

not a benefi ciary continues to be disabled. Medical improvement will be found when there is a 

decrease in the medical severity of a benefi ciary’s impairment and that decrease is related to the 

ability to work. See continuing disability review.

Meets the listing: A step in the sequential evaluation process. When the specifi c medical 

fi ndings in a particular listing are documented by the required medical signs, symptoms, and 

laboratory fi ndings, then the individual will be found to meet the relevant listing. See sequential 

evaluation process and Listing of Impairments.

Non-severe impairment: An impairment that does not signifi cantly limit a person’s physical or 

mental ability to perform basic work activities. See sequential evaluation process.

Other work: Work that exists in the national economy, other than the work a person has done 

previously. See sequential evaluation process.

Prevalence: The total number of persons receiving benefi ts per 1,000 of a specifi ed population. 

For DI benefi ts, the prevalence rate is the total number of benefi ciaries per 1,000 persons insured 

for disability benefi ts.

Quick Disability Determinations: A process, part of Disability Service Improvement, designed 

to identify and approve within 20 days claims for which an allowance is obviously appropriate.

Reconsideration: An independent reexamination by the DDS of all evidence on record related 

to a case. It is based on the evidence submitted for the initial determination plus any additional 

evidence and information that the claimant or the representative may submit in connection with 

the reconsideration. This determination is made by a different adjudicative team from the one 

who made the original determination. See administrative review process.

Sequential evaluation process: The 5-step process used in determining whether an individual 

meets the defi nition of disability in the law. The steps are: 1) Substantial gainful activity─If 

the claimant is, in fact, continuing to work and that work is found to be substantial gainful 

activity the process ends, with a fi nding that he or she is not disabled. 2) Medical severity─If 

it is determined that the claimant’s medical impairments do not signifi cantly limit the ability 

to perform basic work activities, the process ends, with a fi nding that he or she is not disabled. 

3) Listing of Impairments─If a claimant has an impairment that meets the criteria listed in the 

regulations, or has an impairment or combination of impairments that is medically equivalent, 

the process ends, with a fi nding that he or she is disabled. 4) Relevant past work─If a claimant’s 

impairments do not prevent performance of relevant work he or she has done in the past, the 

process ends, with a fi nding that he or she is not disabled. 5) Other work─At this step, if a 

claimant, considering age, education, and work experience, cannot do other work which exists in 

the national economy, he or she is found disabled, otherwise he or she is found not disabled. See 

also duration.
145

Supplemental Security Income (SSI): Supplemental Security Income, Title XVI of the Social 

Security Act, is a Federal program that provides benefi ts to low-income aged, blind, and disabled 

individuals whose income and asset do not exceed specifi ed limits.

State agency: A common term for Disability Determination Services.

Substantial gainful activity: A level of work or earnings that makes an individual ineligible for 

disability benefi ts.

Termination: The ending of entitlement to a type of benefi t. Disabled workers’ benefi ts are 

most commonly terminated because of death, conversion to a retirement benefi t at the normal 

retirement age, or recovery from their disabling condition.

Usual work: A claimant’s past relevant work. See sequential evaluation process.

Vocational considerations: Age, education, and work experience, considered at the fi nal step of 

the sequential evaluation process. See sequential evaluation process.

Vocational expert (VE): A professional expert on the availability and occupational 

requirements of jobs in the labor market who provides impartial expert opinion at the hearing 

level of the SSA disability claims process. 

Zebley: The Supreme Court’s Sullivan v. Zebley decision ruled that SSA’s policy regarding 

disability determinations for children in the Supplemental Security Income (SSI) program 

erroneously held children to a stricter defi nition of disability than adults. As a result of the 

Zebley decision, SSA issued regulations requiring an individualized functional assessment for 

children who did not meet or equal the medical listings. In 1997, Congress enacted legislation 

establishing a new defi nition of disability for SSI children that eliminated the individualized 

functional assessment and replaced it with a statutory standard of “marked and severe functional 

limitations.” 
146
147

SOCIAL SECURITY ADVISORY BOARD

Establishment of the Board 

In 1994, when the Congress passed legislation establishing the Social Security 

Administration as an independent agency, it also created a 7-member bipartisan Advisory 

Board to advise the President, the Congress, and the Commissioner of Social Security on 

matters relating to the Social Security and Supplemental Security Income (SSI) programs. 

The conference report on the legislation passed both Houses of Congress without opposition. 

President Clinton signed the Social Security Independence and Program Improvements Act of 

1994 into law on August 15, 1994 (P.L. 103-296). 

Advisory Board members are appointed to 6-year terms, made up as follows: 3 appointed by 

the President (no more than 2 from the same political party); and 2 each (no more than 1 from 

the same political party) by the Speaker of the House (in consultation with the Chairman and 

the Ranking Minority Member of the Committee on Ways and Means) and by the President pro 

tempore of the Senate (in consultation with the Chairman and Ranking Minority Member of the 

Committee on Finance). Presidential appointees are subject to Senate confi rmation. 

Board members serve staggered terms. The statute provides that the initial members of the 

Board serve terms that expire over the course of the fi rst 6-year period. The Board currently 

has 2 vacancies. The Chairman of the Board is appointed by the President for a 4-year term, 

coincident with the term of the President, or until the designation of a successor.

The Chairman of the Board is appointed by the President for a 4-year term, coincident with 

the term of the President, or until the designation of a successor.

Hal Daub, Chairman

Hal Daub is currently a partner in the law fi rm of Blackwell Sanders Peper Martin in Omaha, 

Nebraska and Washington, D.C. Previously, he was President and Chief Executive Offi cer of the 

American Health Care Association and the National Center for Assisted Living. He served as 

Mayor of Omaha, Nebraska from 1995 to 2001, and was an attorney, principal, and international 

trade specialist with the accounting fi rm of Deloitte & Touche from 1989 to 1994. Mr. Daub 

was elected to the U.S. Congress in 1980, and reelected in 1982, 1984, and 1986. While there 

he served on the House Ways and Means Committee, the Public Works and Transportation 

Committee, and the Small Business Committee. In 1992, Mr. Daub was appointed by President 

George H.W. Bush to the National Advisory Council on the Public Service. From 1997 to 1999, 

he served on the Board of Directors of the National League of Cities, and from 1999 to 2001, he 

served on the League’s Advisory Council. He was also elected to serve on the Advisory Board of 

the U.S. Conference of Mayors, serving a term from 1999 to 2001. From 1971 to 1980, 

Mr. Daub was vice president and general counsel of Standard Chemical Manufacturing 

Company, an Omaha-based livestock feed and supply fi rm. A former U.S. Army Infantry 

Captain, he is a Distinguished Eagle Scout, 33rd Degree Mason, is active in the Salvation Army, 

Optimists International and many other charitable and philanthropic organizations. He is the 

current chairman-elect of the Community Health Charities of America. Mr. Daub is a graduate 

of Washington University in St. Louis, Missouri, and received his law degree from the University 

of Nebraska. Term of offi ce: January 2002 to September 2006.
148

Dorcas R. Hardy

Dorcas R. Hardy is President of DRHardy & Associates, a government relations and public 

policy fi rm serving a diverse portfolio of clients. After her appointment as Assistant Secretary of 

Human Development Services, Ms. Hardy served as Commissioner of Social Security from 

1986 to 1989 and was appointed by President Bush to chair the Policy Committee for the 

2005 White House Conference on Aging. Ms. Hardy has launched and hosted her own 

primetime, weekly television program, “Financing Your Future,” on Financial News Network 

and UPI Broadcasting and “The Senior American,” an NET political program for older 

Americans. She speaks and writes widely about domestic and international retirement fi nancing 

issues and entitlement program reforms and is the author of Social Insecurity: The Crisis in 

America’s Social Security System and How to Plan Now for Your Own Financial Survival, 

Random House, 1992. Ms. Hardy consults with seniors’ organizations, public policy groups and 

businesses to promote redesign and modernization of the Social Security, Medicare and disability 

insurance systems. Additionally, she has chaired a Task Force to rebuild vocational rehabilitation 

services for disabled veterans for the Department of Veterans Affairs. She received her B.A. 

from Connecticut College, her M.B.A. from Pepperdine University and completed the Executive 

Program in Health Policy and Financial Management at Harvard University. She is a Certifi ed 

Senior Advisor and serves on the Board of Directors of The Options Clearing Corporation, 

Wright Investors Service Managed Funds, and First Coast Service Options. First term of offi ce: 

April 2002 to September 2004. Current term of offi ce: October 2004 to September 2010.

Barbara B. Kennelly

Barbara B. Kennelly became President and Chief Executive Offi cer of the National 

Committee to Preserve Social Security and Medicare in April 2002 after a distinguished 23-

year career in elected public offi ce. Mrs. Kennelly served 17 years in the United States House 

of Representatives representing the First District of Connecticut. During her Congressional 

career, Mrs. Kennelly was the fi rst woman elected to serve as the Vice Chair of the House 

Democratic Caucus. Mrs. Kennelly was also the fi rst woman to serve on the House Committee 

on Intelligence and to chair one of its subcommittees. She was the fi rst woman to serve as Chief 

Majority Whip, and the third woman in history to serve on the 200-year-old Ways and Means 

Committee. During the 105th Congress, she was the ranking member of the Subcommittee on 

Social Security. Prior to her election to Congress, Mrs. Kennelly was Secretary of the State 

of Connecticut. After serving in Congress, Mrs. Kennelly was appointed to the position of 

Counselor to the Commissioner at the Social Security Administration (SSA). As Counselor, 

Mrs. Kennelly worked closely with the Commissioner of Social Security, Kenneth S. Apfel, and 

members of Congress to inform and educate the American people on the choices they face to 

ensure the future solvency of Social Security. Mrs. Kennelly served on the Policy Committee for 

the 2005 White House Conference on Aging. Mrs. Kennelly received a B.A. in Economics from 

Trinity College, Washington, D.C. She earned a certifi cate from the Harvard Business School on 

completion of the Harvard-Radcliffe Program in Business Administration and a Master’s Degree 

in Government from Trinity College, Hartford. Term of offi ce: January 2006 to September 2011.

David Podoff

David Podoff was a senior advisor to the late Senator Daniel Patrick Moynihan on Social 

Security and other issues while serving as Minority Staff Director and Chief Economist for 

the Senate Committee on Finance. While on the Committee staff he was involved in major 

legislative debates with respect to the long-term solvency of Social Security, health care reform, 

the constitutional amendment to balance the budget, the debt ceiling, plans to balance the budget, 

the Finance Committee he was a Senior Economist with the Joint Economic Committee and 
directed various research units in the Social Security Administration’s Offi ce of Research and 

Statistics. He has taught economics at the Baruch College of the City University of New York, 

the University of Massachusetts and the University of California in Santa Barbara. He received 

his Ph.D. in economics from the Massachusetts Institute of Technology and a B.B.A. from the 

City University of New York. Term of offi ce: October 2000 to September 2006. 

Sylvester J. Schieber

Sylvester J. Schieber is Vice President/U.S. Director of Benefi ts Consulting at Watson Wyatt 

Worldwide, where he specializes in analysis of public and private retirement policy issues and 

the development of special surveys and data fi les. From 1981 to 1983, Mr. Schieber was the 

Director of Research at the Employee Benefi t Research Institute. Earlier, he worked for the 

Social Security Administration as an economic analyst and as Deputy Director at the Offi ce 

of Policy Analysis. Mr. Schieber is the author of numerous journal articles, policy analysis 

papers, and several books including: Retirement Income Opportunities in An Aging America: 

Coverage and Benefi t Entitlement, Social Security: Perspectives on Preserving the System

and The Real Deal: The History and Future of Social Security. He served on the 1994 - 1996 

Advisory Council on Social Security. He received his Ph.D. from the University of Notre Dame. 

First term of offi ce: January 1998 to September 2003. Current term of offi ce: October 2003 to 

September 2009.

Members of the Staff

Joe Humphreys, Staff Director

Katherine Thornton, Deputy Staff Director

Joel Feinleib

Beverly Rollins

George Schuette

Jean Von Ancken

David Warner

149